UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
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Commission File Number: 0-16540
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UNITED BANCORP, INC.
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(Exact name of registrant as specified in its charter.)
OHIO 34-1405357
---- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
201 SOUTH 4TH STREET, MARTINS FERRY, OHIO 43935-0010
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(Address of principal executive offices) (Zip Code)
(740) 633-0445
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No___
Indicate the number of shares outstanding of the issuer's classes of common
stock as of the latest practicable date.
COMMON STOCK, $1.00 PAR VALUE 3,111,884 SHARES AS OF APRIL 20, 2002
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UNITED BANCORP, INC.
TABLE OF CONTENTS
FORM 10-Q
PART I FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets.........................................................3
Condensed Consolidated Statements of Income...................................................4
Condensed Consolidated Statements of Shareholders' Equity.....................................5
Condensed Consolidated Statements of Cash Flows...............................................6
Notes to the Condensed Consolidated Financial Statements.................................7 - 13
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...............................................................14 - 21
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk........................22 - 23
PART II OTHER INFORMATION
ITEM 1.
Legal Proceedings............................................................................24
ITEM 2.
Changes in Securities and Use of Proceeds....................................................24
ITEM 3.
Default Upon Senior Securities...............................................................24
ITEM 4.
Submission of Matters to a Vote of Security Holders..........................................24
ITEM 5.
Other Information............................................................................24
ITEM 6.
Exhibits and Reports on Form 8-K.............................................................24
SIGNATURES.....................................................................................25
2
UNITED BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
PART I
FINANCIAL INFORMATION
MARCH 31, DECEMBER 31,
2002 2001
------------ -----------
Assets
Cash and due from financial institutions $ 10,001,336 $ 9,427,756
Federal funds sold 6,924,000 13,962,000
------------ -----------
Total cash and cash equivalents 16,925,336 23,389,756
Securities available for sale 111,766,506 114,044,617
Securities held to maturity
(Estimated fair value of $12,316,903 at 03/31/02 and $10,617,845 at 12/31/01) 12,021,824 10,378,811
Loans receivable
Commercial loans 23,364,138 21,502,207
Commercial real estate loans 63,559,011 61,962,953
Real estate loans 53,454,226 54,153,041
Installment loans 42,924,448 45,721,402
------------ -----------
Total loans receivable 183,301,823 183,339,603
Allowance for loan losses (2,948,205) (2,879,065)
------------ -----------
Net loans receivable 180,353,618 180,460,538
Premises and equipment, net 8,895,223 9,083,891
Accrued interest receivable and other assets 5,071,497 3,959,582
------------ -----------
Total Assets $335,034,004 $ 341,317,195
============ =============
LIABILITIES
Demand deposits
Noninterest-bearing $ 24,806,639 $ 26,297,805
Interest-bearing 46,013,057 42,423,962
Savings deposits 51,852,496 49,396,199
Time deposits - under $100,000 121,392,733 126,820,233
Time deposits - $100,000 and over 42,756,525 38,437,724
------------ -----------
Total deposits 286,821,450 283,375,923
Securities sold under agreements to repurchase 6,298,271 7,811,230
Other borrowed funds 12,089,709 18,415,229
Accrued expenses and other liabilities 981,578 1,240,618
------------ -----------
Total Liabilities 306,191,008 310,843,000
SHAREHOLDERS' EQUITY
Preferred stock, without par value: 2,000,000 authorized and unissued
Common stock - $1 Par Value: 10,000,000 shares authorized;
3,249,227 issued 3,249,227 3,249,227
Additional paid in capital 23,621,127 23,619,610
Treasury stock - 100,391 shares in 2002 and 85,791 shares in 2001 at cost (1,048,735) (864,775)
Shares held by deferred compensation plan - 36,952 shares at cost
in 2002 and 36,550 in 2001 (519,355) (517,838)
Retained earnings 5,315,349 5,044,540
Accumulated other comprehensive income (loss), net of tax (1,774,617) (56,569)
------------ -----------
Total Shareholders' Equity 28,842,996 30,474,195
------------ -----------
Total Liabilities and Shareholders' Equity $335,034,004 $ 341,317,195
============ =============
See accompanying notes to the condensed consolidated financial statements
3
UNITED BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2002 2001
---------- ----------
Interest and dividend income
Loans, including fees $3,725,942 $4,337,784
Taxable securities 1,546,438 1,521,706
Non-taxable securities 259,596 268,618
Other interest and dividend income 101,382 75,743
---------- ----------
Total interest and dividend income 5,633,358 6,203,851
Interest expense
Deposits
Demand 116,271 279,198
Savings 107,656 231,082
Time 2,079,499 2,330,829
Other borrowings 160,744 484,107
---------- ----------
Total interest expense 2,464,170 3,325,216
Net interest income 3,169,188 2,878,635
Provision for loan losses 157,500 195,000
---------- ----------
Net interest income after provision for loan losses 3,011,688 2,683,635
Noninterest income
Service charges on deposit accounts 218,818 212,131
Gains/losses on sales of securities 46,345 24,214
Other income 180,048 131,770
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Total noninterest income 445,211 368,115
Noninterest expense
Salaries and employee benefits 1,281,344 1,141,572
Occupancy and equipment 364,740 369,025
Other expenses 888,818 749,211
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Total noninterest expense 2,534,902 2,259,808
Income before income taxes 921,997 791,942
Income tax expense 241,839 186,609
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Net income $ 680,158 $ 605,333
========== ==========
Earnings per common share - Basic $ 0.22 $ 0.19
Earnings per common share - Diluted $ 0.22 $ 0.19
Dividends per common share $ 0.13 $ 0.12
See accompanying notes to the condensed consolidated financial statements
4
UNITED BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(UNAUDITED)
COMMON TREASURY
STOCK ADDITIONAL STOCK AND
PAID IN DEFERRED RETAINED
SHARES DOLLARS CAPITAL PLAN EARNINGS
------------ ------------ ------------ ------------ ------------
BALANCE AT JANUARY 1, 2001 3,192,020 $ 3,094,882 $ 21,699,632 $ (695,002) $ 5,852,284
Net income 605,333
Net change in unrealized gain/(loss) on
securities available for sale
Comprehensive income
Shares purchased for deferred compensation plan (4,852) 55,703 (55,703)
Purchases of treasury stock - 33,817 shares at cost (33,817) (347,111)
Cash dividends - $0.12 per share (394,768)
------------ ------------ ------------ ------------ ------------
BALANCE AT MARCH 31, 2001 3,153,351 $ 3,094,882 $ 21,755,335 $ (1,097,816) $ 6,062,849
============ ============ ============ ============ ============
BALANCE AT JANUARY 1, 2002 3,126,886 $ 3,249,227 $ 23,619,610 $ (1,382,613) $ 5,044,540
Net income 680,158
Net change in unrealized gain/(loss) on
securities available for sale
Comprehensive income (loss)
Shares purchased for deferred compensation plan (3,933) 47,197 (47,197)
Shares distributed from deferred compensation plan 3,531 (45,680) 45,680
Purchases of treasury stock - 14,600 shares at cost (14,600) (183,960)
Cash dividends - $0.13 per share (409,349)
------------ ------------ ------------ ------------ ------------
BALANCE AT MARCH 31, 2002 3,111,884 $ 3,249,227 $ 23,621,127 $ (1,568,090) $ 5,315,348
============ ============ ============ ============ ============
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME TOTAL
------------ ------------
BALANCE AT JANUARY 1, 2001 $ (1,272,709) $ 28,679,087
Net income 605,333
Net change in unrealized gain/(loss) on
securities available for sale 1,392,948 1,392,948
------------
Comprehensive income 1,998,281
Shares purchased for deferred compensation plan
Purchases of treasury stock - 33,817 shares at cost (347,111)
Cash dividends - $0.12 per share (394,768)
------------ ------------
BALANCE AT MARCH 31, 2001 $ 120,239 $ 29,935,489
============ ============
BALANCE AT JANUARY 1, 2002 $ (56,569) $ 30,474,195
Net income 680,158
Net change in unrealized gain/(loss) on
securities available for sale (1,718,048) (1,718,048)
------------
Comprehensive income (loss) (1,037,890)
Shares purchased for deferred compensation plan
Shares distributed from deferred compensation plan
Purchases of treasury stock - 14,600 shares at cost (183,960)
Cash dividends - $0.13 per share (409,349)
------------ ------------
BALANCE AT MARCH 31, 2002 $ (1,774,616) $ 28,842,996
============ ============
See accompanying notes to the condensed consolidated financial statements
5
UNITED BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 680,158 $ 605,333
Adjustments to reconcile net income to net cash
from operating activities
Depreciation and amortization 210,363 238,375
Provision for loan losses 157,500 195,000
Deferred taxes (151,710) 27,475
Federal Home Loan Bank stock dividend (49,500) (62,700)
Net realized gains on sales or calls of securities (46,345) (24,214)
(Accretion)/amortization of securities, net (11,078) (8,540)
Net realized (gains)/losses on sales of loans (37,461) (7,424)
Net realized (gains)/losses on sale of real estate (3,800) -
Amortization of mortgage servicing rights 16,987 13,680
Net changes in accrued interest receivable and other assets (75,376) (314,814)
Net changes in accrued expenses and other liabilities (259,040) (199,888)
------------ ------------
Net cash from operating activities 430,698 462,283
CASH FLOWS FROM INVESTING ACTIVITIES
Securities available for sale
Sales 6,025,781 3,773,516
Maturities, prepayments and calls 15,216,919 6,483,358
Purchases (21,466,778) (30,724,719)
Securities held to maturity
Maturities, prepayments and calls - 1,500,000
Purchases (1,637,004) (277,305)
Net change in loans (50,580) 4,537,958
Net purchases of premises and equipment (14,195) (340,549)
Proceeds from sale of real estate owned 17,000 -
------------ ------------
Net cash from investing activities (1,908,857) (15,047,741)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 3,445,527 (272,853)
Net change in short-term borrowings (8,628,816) 12,430,358
Proceeds from long term debt 956,544 -
Principal payments on long-term debt (166,207) (155,340)
Treasury stock purchases (183,960) (347,111)
Cash dividends paid (409,349) (394,768)
------------ ------------
Net cash from financing activities (4,986,261) 11,260,287
------------ ------------
Net change in cash and cash equivalents (6,464,420) (3,325,171)
Cash and cash equivalents at beginning of year 23,389,756 10,694,118
------------ ------------
Cash and cash equivalents at end of period $ 16,925,336 $ 7,368,947
============ ============
Interest paid $ 2,562,439 $ 3,323,910
Income taxes paid 65,346
See accompanying notes to the condensed consolidated financial statements
6
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements are prepared without audit
and reflect all adjustments which, in the opinion of management, are
necessary to present fairly the financial position of United Bancorp,
Inc. ("Company") at March 31, 2002, and its results of operations and
cash flows for the periods presented. All such adjustments are normal
and recurring in nature. The accompanying condensed consolidated
financial statements have been prepared in accordance with the
instructions of Form 10-Q and, therefore, do not purport to contain all
the necessary financial disclosures required by accounting principles
generally accepted in the United States of America that might otherwise
be necessary in the circumstances and should be read in conjunction
with the consolidated financial statements, and related notes thereto,
of the Company for the year ended December 31, 2001 included in its
annual report. Reference is made to the accounting policies of the
Company described in the notes to the consolidated financial statements
contained in its 2001 Annual Report to Shareholders. The Company has
consistently followed these policies in preparing this Form 10-Q.
PRINCIPLES OF CONDENSED CONSOLIDATION:
The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries, ("Banks") The Citizens
Savings Bank, Martins Ferry, Ohio ("CITIZENS") and The Community Bank,
Lancaster, Ohio ("COMMUNITY"). All significant intercompany
transactions and balances have been eliminated in consolidation.
NATURE OF OPERATIONS:
The Company's revenues, operating income and assets are
primarily from the banking industry. Accordingly, all of the Company's
banking operations are considered by Management to be aggregated in one
reportable operating segment. Customers are mainly located in Athens,
Belmont, Carroll, Fairfield, Harrison, Hocking, Jefferson, and
Tuscarawas Counties and the surrounding localities in northeastern,
eastern, southeastern, and central Ohio and include a wide range of
individuals, business and other organizations. CITIZENS conducts its
business through its main office in Martins Ferry, Ohio and nine
branches in Bridgeport, Colerain, Dellroy, Dover, Jewett, New
Philadelphia, St. Clairsville, Sherrodsville, and Strasburg, Ohio.
COMMUNITY conducts its business through its main office in Lancaster
and four branches in Amesville, Glouster, Lancaster, and Nelsonville,
Ohio. The Company's primary deposit products are checking, savings, and
term certificates of deposits, and its primary lending products are
residential mortgage, commercial, and installment loans. Substantially
all loans are secured by specific items of collateral including
business assets, consumer assets, and real estate. Commercial loans are
expected to be repaid from cash flow from operations of business. Real
estate loans are secured by both residential and commercial real
estate. Other financial instruments which potentially represent
concentrations of credit risk include deposit accounts in other
financial institutions.
USE OF ESTIMATES:
To prepare financial statements in conformity with accounting
principles generally accepted in the United States of America,
management makes estimates and assumptions based
7
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
on available information. These estimates and assumptions affect the
amounts reported in the financial statements and the disclosures
provided and future results could differ. The allowance for loan
losses, fair values of financial instruments and status of
contingencies are particularly subject to change.
INCOME TAXES:
Income tax expense is based on the effective tax rate expected
to be applicable for the entire year. Income tax expense is the total
of the current year income tax due or refundable and the change in
deferred tax assets and liabilities. Deferred tax assets and
liabilities are the expected future tax consequences of temporary
differences between the carrying amounts and tax bases of assets and
liabilities computed using enacted tax rates. A valuation allowance, if
needed, reduces deferred tax assets to the amount expected to be
realized.
EARNINGS AND DIVIDENDS PER SHARE:
Basic earnings per common share ("EPS") is net income divided
by the weighted-average number of shares outstanding during the period.
Diluted EPS includes the dilutive effect of additional potential common
shares issuable under stock options. Earnings and dividends per share
are restated for all stock dividends through the date of issuance of
the financial statements.
COMPREHENSIVE INCOME:
Comprehensive income consists of net income and other
comprehensive income. Other comprehensive income includes unrealized
gains and losses on securities available for sale which is also
recognized as a separate component of equity. Other comprehensive
income components net of related taxes are as follows:
THREE MONTHS ENDED
MARCH 31,
2002 2001
------------ ----------
Other comprehensive income:
Unrealized holding gains(losses) on available
for sale securities arising during period (2,558,177) 2,134,783
Reclassification adjustment for gains
later recognized in income (46,345) (24,214)
------------ ----------
(2,604,522) 2,110,569
Tax effect 886,474 (717,621)
------------ ----------
Other comprehensive income (loss) $ (1,718,048) $1,392,948
============ ==========
8
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SECURITIES:
Securities were as follows:
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
------------- ------------- ------------- -------------
AVAILABLE FOR SALE - MARCH 31, 2002
US Agency obligations $ 100,264,610 $ 26,647 $ (3,040,664) $ 97,250,593
State and Municipal obligations 10,379,788 297,544 (4,034) 10,673,298
Mortgage-backed securities 137,022 3,602 - 140,624
Other securities 3,675,319 26,672 - 3,701,991
------------- ------------- ------------- -------------
$ 114,456,739 $ 354,465 $ (3,044,698) $ 111,766,506
============= ============= ============= =============
AVAILABLE FOR SALE - DECEMBER 31, 2001
US Agency obligations $ 99,893,474 $ 508,193 $ (911,894) $ 99,489,773
State and Municipal obligations 10,463,516 293,400 (8,563) 10,748,353
Mortgage-backed obligations 148,938 3,794 - 152,732
Other securities 3,624,400 29,359 - 3,653,759
------------- ------------- ------------- -------------
$ 114,130,328 $ 834,746 $ (920,457) $ 114,044,617
============= ============= ============= =============
HELD TO MATURITY - March 31, 2002
State and Municipal obligations $ 12,021,823 $ 340,292 $ (45,212) $ 12,316,903
============= ============= ============= =============
HELD TO MATURITY - DECEMBER 31, 2001
State and Municipal obligations $ 10,378,811 $ 293,163 $ (54,129) $ 10,617,845
============= ============= ============= =============
Sales of securities available for sale were as follows:
THREE MONTHS ENDED
MARCH 31,
2002 2001
------------- -------------
Proceeds $ 6,025,781 $3,773,516
Gross gains 46,345 24,214
Gross losses - -
9
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SECURITIES: (CONTINUED)
Contractual maturities of securities at March 31, 2002 were as
follows:
AVAILABLE FOR SALE AMORTIZED ESTIMATED
COST FAIR VALUE
------------ ------------
US Agency obligations
Under 1 Year
1 - 5 Years 7,500,000 7,446,803
5 - 10 Years 22,114,178 21,693,191
Over 10 Years 70,650,432 68,110,599
------------ ------------
Total 100,264,610 97,250,593
------------ ------------
State and municipal obligations
Under 1 Year 4,438,101 4,522,635
1 - 5 Years 3,436,835 3,589,147
5 - 10 Years 1,902,409 1,953,488
Over 10 Years 602,443 608,028
------------ ------------
Total 10,379,788 10,673,298
Mortgage Backed securities
5 - 10 Years 137,022 140,624
------------ ------------
Total 137,022 140,624
------------ ------------
Other investments
Equity securities 3,675,319 3,701,991
------------ ------------
Total securities available for sale $114,456,739 $111,766,506
============ ============
HELD TO MATURITY
State and municipal obligations
1 - 5 Years 4,076,835 4,270,690
5 - 10 Years 3,261,342 3,374,486
Over 10 Years 4,683,647 4,671,727
------------ ------------
Total securities held to maturity $ 12,021,824 $ 12,316,903
============ ============
Securities with a carrying value of approximately $59,171,000 at March 31, 2002
and $58,818,000 at December 31, 2001 were pledged to secure public deposits,
repurchase agreements and other liabilities as required or permitted by law.
10
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. ALLOWANCE FOR LOAN LOSSES
The activity in the allowance for loan losses was as follows:
THREE MONTHS ENDED
MARCH 31,
2002 2001
---------- -----------
Beginning Balance $2,879,065 $ 2,790,133
Provision charged to operating expense 157,500 195,000
Loans charged-off (144,091) (254,002)
Recoveries 55,731 125,927
---------- -----------
Ending Balance $2,948,205 $ 2,857,058
========== ===========
Non-performing loans were as follows:
MARCH 31, DECEMBER 31,
2002 2001
---------- -----------
Loans past due over 90 days still on accrual $ 114,000 $ 157,000
Nonaccrual Loans 671,000 661,000
Loans considered impaired under the provisions of SFAS No. 114
were not material at March 31, 2002 and December 31, 2001.
Nonperforming loans include all impaired loans and smaller balance
homogenous loans, such as residential mortgage and consumer loans that
are collectively evaluated for impairment.
4. COMMITMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES
There are various contingent liabilities not reflected within
the financial statements, including claims and legal actions arising in
the ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these
matters is not expected to have a material effect on the Company's
financial condition or results of operations.
Some financial instruments are used in the normal course of
business to meet the financing needs of customers. These financial
instruments include commitments to extend credit, standby letters of
credit and financial guarantees. These involve, to varying degrees,
credit and interest-rate risk in excess of the amounts reported in the
financial statements.
Exposure to credit loss if the other party does not perform is
represented by the contractual amount for commitments to extend credit,
standby letters of credit and financial guarantees written. The same
credit policies are used for commitments and conditional obligations as
are used for loans. The amount of collateral obtained, if deemed
necessary, upon
11
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. COMMITMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES (CONTINUED)
extension of credit is based on management's credit evaluation.
Collateral varies, but may include accounts receivable, inventory,
property, equipment, income-producing commercial properties,
residential real estate and consumer assets.
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition established
in the commitment. Commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since many
of the commitments are expected to expire without being used, total
commitments do not necessarily represent future cash requirements.
Standby letters of credit and financial guarantees written are
conditional commitments to guarantee a customer's performance to a
third party.
A summary of the notional or contractual amounts of financial
instruments with off-balance sheet risk at March 31, 2002 and December
31, 2001 follows:
MARCH 31, DECEMBER 31,
2002 2001
----------- -----------
Commitments to extend credit $19,877,664 $18,779,162
Credit card and ready reserve lines 1,394,352 1,275,919
Standby letters of credit 460,000 471,000
At March 31, 2002, and included above, commitments to make
fixed-rate loans totaled $2,780,958 with the interest rates on those
fixed-rate commitments ranging from 4.75% to 9.75%. At December 31,
2001, commitments to make fixed rate loans totaled $2,416,731 with
interest rates on those fixed-rate commitments ranging from 6.50% to
10.00%.
5. NEW ACCOUNTING PRONOUNCEMENTS
On January 1, 2002, the Company adopted a Statement of
Financial Accounting Standards (SFAS) No. 144, which addresses
impairment and disposal of long-lived assets. The effect of this on the
financial position and results of operations of the Company is not
expected to be material.
In 2003, the Financial Accounting Standards Board will issue
Statement of Financial Accounting Standards No. 143, which addresses
the accounting for asset retirement obligations. The company does not
believe this standard will have a material affect on its financial
position or results of operations.
12
UNITED BANCORP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. EARNINGS PER SHARE
The factors used in the earnings per share computation were as
follows:
THREE MONTHS ENDED
MARCH 31,
2002 2001
---------- -----------
Basic
Net income $ 680,158 $ 605,333
========== ==========
Weighted average common shares outstanding 3,118,036 3,170,672
========== ==========
Basic earnings per common share $ 0.22 $ 0.19
========== ==========
DILUTED
Net income $ 680,158 $ 605,333
========== ==========
Weighted average common shares outstanding for
basic earnings per common share 3,118,036 3,170,672
Add: Dilutive effects of assumed exercise of stock
options 8,767 806
---------- ----------
Average shares and dilutive potential common shares 3,126,803 3,171,478
========== ==========
Diluted earnings per common share $ 0.22 $ 0.19
========== ==========
Number of stock options not considered in computing
diluted earnings per share due to antidilutive nature 20,056 21,780
13
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discusses the financial condition of the Company
as of March 31, 2002, as compared to December 31, 2001 and the results
of operations for the three months ended March 31, 2002 compared to the
same period in 2001. This discussion should be read in conjunction with
the interim condensed consolidated financial statements and related
footnotes included herein.
FORWARD-LOOKING STATEMENTS
When used in this document, the words or phrases "will likely
result," "are expected to," "will continue," " is anticipated,"
"estimated," "projected" or similar expressions are intended to
identify "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject
to certain risks and uncertainties including changes in economic
conditions in the Banks' market areas, changes in policies by
regulatory agencies, fluctuations in interest rates, demand for loans
in the Banks' market areas and competition, that could cause actual
results to differ materially from historical earnings and those
presently anticipated or projected. Factors listed above could affect
the Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any
statements expressed with respect to future periods.
The Company does not undertake, and specifically disclaims any
obligation, to publicly revise any forward-looking statements to
reflect events or circumstances after the date such statements were
made or to reflect the occurrence of anticipated or unanticipated
events.
14
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(UNAUDITED)
The following brief history of the Company and its subsidiary growth and
development highlights the continuing commitment to maintaining a presence as a
local "Hometown" community bank serving several diverse market areas.
>> 1902 Original banking charter granted for The German Savings Bank
(later changed to The Citizens Savings Bank).
>> 1974 Construction of a full-service branch banking facility 6
miles west in Colerain, Ohio.
>> 1978 Construction of a full-service branch banking facility 2
miles south in Bridgeport, Ohio.
>> 1980 Construction of a limited-service auto-teller banking
location in Martins Ferry, Ohio.
>> 1983 Creation of United Bancorp, Inc. as a single-bank holding
company through acquisition of 100% of the voting stock of The
Citizens Savings Bank of Martins Ferry, Ohio ("CITIZENS"). Also,
began operation of Automated Teller Machine ("ATM") in Aetnaville,
Ohio.
>> 1984 CITIZENS opened a newly constructed 21,500 square foot
main-office facility in Martins Ferry, Ohio, adjacent to the
auto-teller facility built in 1980.
>> 1986 United Bancorp, Inc. became a multi-bank holding company
through the acquisition of 100% of the voting stock of The
Citizens-State Bank of Strasburg, Strasburg, Ohio, merged into
CITIZENS in 1999.
>> 1990 CITIZENS converted from third-party data processing to
in-house data processing. CITIZENS constructed a full-service
branch bank 6 miles south of Strasburg in Dover, Ohio.
>> 1992 CITIZENS acquired two branch bank locations in New
Philadelphia and Sherrodsville, Ohio.
>> 1993 CITIZENS relocated Data Processing, Accounting and
Bookkeeping to a renovated Operations Center across from the main
office in Martins Ferry, Ohio.
>> 1994 CITIZENS purchased a branch bank in Dellroy, Ohio.
>> 1996 CITIZENS converted to check imaging and optical character
recognition for data processing.
>> 1997 CITIZENS opened a full-service Retail Banking Center inside
Riesbeck's Food Markets, Inc.'s St. Clairsville, Ohio store.
Additionally, CITIZENS introduced a Secondary Market Real Estate
Mortgage Program available for all locations and introduced a
MasterCard(R)Check Card to the local market area.
>> 1998 CITIZENS increased ATM network by four cash dispenser
machines in various Riesbecks' Food Markets.
>> 1998 Effective July 7, 1998, the acquisition of Southern Ohio
Community Bancorporation, Inc. was completed and The Community
Bank, Glouster, Ohio ("COMMUNITY") was added as a separate banking
charter to the Company.
>> 1999 January 28, 1999 CITIZENS acquired a full service banking
facility in Jewett, Ohio
>> 1999 March 1999 COMMUNITY opened a Loan Production Office in
Lancaster, Ohio.
>> 1999 CITIZENS established a full service brokerage division to be
known as Brokerage United with securities provided through Raymond
James Financial Services, Inc., member NASD/SIPC.
>> 1999 COMMUNITY moved their main office to Lancaster, Ohio.
>> 2000 COMMUNITY opened a new branch in Lancaster and their auto
teller for the main office.
>> 2000 CITIZENS and COMMUNITY introduced Electronic Banking.
>> 2001 CITIZENS and COMMUNITY introduced Electronic Cash Management
Services.
>> 2002 CITIZENS and COMMUNITY upgraded check image system.
15
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ANALYSIS OF FINANCIAL CONDITION
EARNING ASSETS - LOANS
At March 31, 2002, gross loans were $183,302,000 compared to
$183,340,000 at year-end 2001, a decrease of 0.02%. The decrease in
total outstanding loans was the result of a decline in the real estate
and installment portfolios. Management attributes the overall decrease
in loans to the general economic slow-down in the lending markets
served.
Installment loans decreased to 23.4% of total loans at March
31, 2002 compared to 24.9% at year-end 2001. The indirect lending type
of financing carries somewhat more risk than real estate lending,
however, it also provides for higher yields. The targeted lending areas
encompass four metropolitan areas, minimizing the risk to changes in
economic conditions in the communities housing the Company's 17 branch
locations. CITIZENS experienced a 6.3%, or $1,701,000 decline in
installment loans while COMMUNITY had a decrease of 5.8%, or $1,096,000
in installment loans. In general as the overall economy has slowed in
the markets we service, so has the demand for consumer based loans.
Also with interest rates depressed, Management has not been aggressive
to lower rates on these fixed rate loan products. Recently, Management
has employed the strategy of focusing on adjustable rate products to
position the Company for an eventual rise in interest rates.
Commercial and commercial real estate loans comprised 47.4% of
total loans at March 31, 2002 compared to 45.5% at December 31, 2001.
Commercial and commercial real estate loans have increased $3,458,000
or 4.1% since December 31, 2001. The Company has originated and
purchased participations in loans from other banks for out-of-area
commercial and commercial real estate loans to benefit from consistent
economic growth outside the Company's primary market area. The majority
of these loans are secured by real estate holdings comprised of hotels,
motels and churches located in various geographic locations, including
Columbus and the Akron-Canton, Ohio metropolitan areas. Out-of-area
loans at March 31, 2002 were 8.2% of total loans and 17.3% of total
commercial and commercial real estate loans compared to 6.4% and 13.9%
at year-end 2001.
Real estate loans were 29.2% of total loans at March 31, 2002
compared to 29.5% at year-end 2001. Real estate loans decreased 1.3%
since December 31, 2001. However, COMMUNITY actually experienced an
increase in real estate loans of 1.9% or $373,000. As previously
mentioned, management's position is to focus on adjustable rate
products as the overall rate environment reaches historical low levels
with the intent these products will adjust as interest rates rise.
The allowance for loan losses represents the amount which
management and the Board of Directors estimates is adequate to provide
for probable losses inherent in the loan portfolio. The allowance
balance and the provision charged to expense are reviewed by management
and the Board of Directors monthly using a risk evaluation model that
considers borrowers' past due experience, economic conditions and
various other circumstances that are subject to change over time.
Management believes the current balance of the allowance for loan
losses is adequate to absorb probable incurred credit losses associated
with the loan portfolio. Net charge-offs for the three months ended
March 31, 2002 were approximately $88,000, or 3.1%, of the beginning
balance in the allowance for loan losses. During the first three months
of 2002,
16
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
EARNING ASSETS -- LOANS (CONTINUED)
gross charge-offs were almost entirely consumer loans and totaled
approximately $141,000.
EARNING ASSETS -- SECURITIES AND FEDERAL FUNDS SOLD
The securities portfolio is comprised of U.S. Government
agency-backed securities, tax-exempt obligations of states and
political subdivisions and certain other investments. The Company does
not hold any collateralized mortgage-backed securities, other than
those issued by U.S. government agencies, or derivative securities. The
quality rating of obligations of state and political subdivisions
within Ohio is no less than Aaa, Aa or A, with all out-of-state bonds
rated at AAA. Board policy permits the purchase of certain non-rated
bonds of local schools, townships and municipalities, based on their
estimated levels of credit risk. Securities available for sale at March
31, 2002 decreased approximately $2,278,000, or 2.0% from year-end 2001
totals. Securities held to maturity at March 31, 2002 increased
approximately $1,643,000, or 15.8% compared to year-end 2001 totals.
SOURCES OF FUNDS -- DEPOSITS
The Company's primary source of funds is core deposits from
retail and business customers. These core deposits include all
categories of interest-bearing and noninterest-bearing deposits,
excluding certificates of deposit greater than $100,000. For the period
ended March 31, 2002, total core deposits decreased approximately
$873,000 primarily from a decrease of time deposits under $100,000 of
$5.4 million.
The Company has a strong deposit base from public agencies,
including local school districts, city and township municipalities,
public works facilities and others that may tend to be more seasonal in
nature resulting from the receipt and disbursement of state and federal
grants. These entities have maintained fairly static balances with the
Company due to various funding and disbursement timeframes.
Certificates of deposit greater than $100,000 are not
considered part of core deposits and as such are used to balance rate
sensitivity as a tool of funds management. At March 31, 2002,
certificates of deposit greater than $100,000 increased approximately
$4.3 million, or 11.2% from year-end 2001 totals.
SOURCES OF FUNDS -- SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND
OTHER BORROWINGS
Other interest-bearing liabilities include securities sold
under agreements to repurchase, sweep accounts, federal funds
purchased, Treasury, Tax & Loan notes payable and Federal Home Loan
Bank ("FHLB") advances. In the first three months of 2002, the Company
continued to utilize the FHLB programs to manage interest rate risk and
liquidity positions. The majority of the Company's repurchase
agreements are with local school districts and city and county
governments. Total other borrowings decreased approximately $7.8
million, or 29.9% from year-end 2001 totals.
17
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED MARCH 31, 2002
NET INCOME
Basic and diluted earnings per share for the three months
ended March 31, 2002 was $0.22, compared with $0.19 for the three
months ended March 31, 2001. Net income increased 12.4% for the three
months ended March 31, 2002, compared to the same period in 2001.
NET INTEREST INCOME
Net interest income, by definition, is the difference between
interest income generated on interest-earning assets and the interest
expense incurred on interest-bearing liabilities. Various factors
contribute to changes in net interest income, including volumes,
interest rates and the composition or mix of interest-earning assets in
relation to interest-bearing liabilities. Net interest income increased
10.1% for the three months ended March 31, 2002 compared to the same
period in 2001. The increase was a result of the Company having a
larger base of average earning assets somewhat offset by a decrease in
short-term interest rates. Management anticipates the impact to
continue over the next several quarters if short-term interest rates
continue at their current levels. However, as a result of the decline
in short term interest rates, Management was able to lower the
Company's overall cost of funds.
Total interest income for the three months ended March 31,
2002 was $5,633,358 compared to $6,203,851 for the same period in 2001.
Total interest income decreased $570,493, or 9.2%. The decrease can be
attributed to the overall lower interest rate environment that
currently exists.
Total interest expense for the three months ended March 31,
2002 when compared to the same three-month period ended March 31, 2001,
decreased 25.9%, or $861,000. The Company has experienced a decrease in
interest expense due to a decreased use of FHLB advances to fund
security purchases and the effect of a lower interest rate environment
on deposit products. Management has been proactive in lowering deposit
product interest rates since the overall interest rate environment
began to decrease in January of last year.
PROVISION FOR LOAN LOSSES
The total provision for loan losses was $157,500 for the three
months ended March 31, 2002 compared to $195,000 for the same period in
2001. Management decreased the provision in 2002 due to an anticipated
decrease in net charge-offs for the fiscal year related to the
continued improvement in portfolio quality. Additionally, the loan
portfolio balance remained almost unchanged since December 31, 2001.
NONINTEREST INCOME
Total noninterest income is made up of bank related fees and
service charges, as well as other income producing services provided,
sale of secondary market loans, ATM income, early redemption penalties
for certificates of deposits, safe deposit rental income, internet bank
service fees and other miscellaneous items. Noninterest income for the
three months ended March 31, 2002 was $445,000 compared to $368,000 for
the same three months period ended March 31, 2001. For the three months
ended March 31, 2002 compared to the same period in 2001, noninterest
income increased approximately
18
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NONINTEREST INCOME -- (CONTINUED)
20.9%. The Company's secondary market real estate loan program
increased $50,000 over the same period in 2001.
NONINTEREST EXPENSE
Noninterest expense for the three months ended March 31, 2002
increased $275,000 or 12.2% over the three months ended March 31, 2001.
Salary and benefit expense increased approximately $140,000 or 12.2%
for the three months ended March 31, 2002 as a result of rising health
care costs.
CAPITAL RESOURCES
Internal capital growth, through the retention of earnings, is
the primary means of maintaining capital adequacy for the Company.
Shareholders' equity at March 31, 2002 was $28,843,000 compared to
$30,474,000 at December 31, 2001, a 5.4% decrease. Total shareholders'
equity in relation to total assets was 8.61% at March 31, 2002 and
8.93% at December 31, 2001. In May 2001 our shareholders approved an
amendment to the Company's Articles of Incorporation to create a class
of preferred shares with 2,000,000 authorized shares. This will enable
the Company, at the option of the Board of Directors, to issue series
of preferred shares in a manner calculated to take advantage of
financing techniques which may provide a lower effective cost of
capital to the Company. The amendment also provides greater flexibility
to the Board of Directors in structuring the terms of equity securities
that may be issued by the Company.
The Company has a Dividend Reinvestment Plan ("The Plan") for
shareholders under which the Company's common stock will be purchased
by the Plan for participants with automatically reinvested dividends.
The Plan does not represent a change in the Company's dividend policy
or a guarantee of future dividends.
The Company maintains a deferred compensation plan for its
Directors. The plan permits the Directors to defer into a Rabbi Trust
all or a portion of their director fees. The plan is being accounted
for under the provisions of EITF 97-14.
The Company and Banks are subject to regulatory capital
requirements administered by federal banking agencies. Capital adequacy
guidelines and prompt corrective action regulations involve
quantitative measures of assets, liabilities and certain off-balance
sheet items calculated under regulatory accounting practices. Capital
amounts and classifications are also subject to qualitative judgments
by regulators about components, risk weightings and other factors and
the regulators can lower classifications in certain cases. Failure to
meet various capital requirements can initiate regulatory action that
could have a direct material effect on the Banks' operations.
The prompt corrective action regulations provide five
classifications, including well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized, although these terms are not used to represent
overall financial condition. If adequately capitalized, regulatory
approval is required to accept brokered deposits. If undercapitalized,
capital distributions are limited, as is asset growth and expansion and
plans for capital restoration are required.
19
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The minimum requirements are:
TOTAL TIER 1 TIER 1
CAPITAL TO CAPITAL TO CAPITAL TO
RISK-WEIGHTED RISK-WEIGHTED AVERAGE
ASSETS ASSETS ASSETS
----------------- ----------------- --------------
Well capitalized 10.00% 6.00% 5.00%
Adequately capitalized 8.00% 4.00% 4.00%
Undercapitalized 6.00% 3.00% 3.00%
The following table illustrates the Company's risk-weighted
capital ratios at March 31, 2002:
MARCH 31,
(IN THOUSANDS) 2002
----------
Tier 1 capital $ 30,513
Total risk-based capital $ 33,137
Risk-weighted assets $ 209,925
Average total assets $ 338,901
Tier 1 capital to average assets 9.00%
Tier 1 risk-based capital ratio 14.54%
Total risk-based capital ratio 15.79%
LIQUIDITY
Management's objective in managing liquidity is maintaining the
ability to continue meeting the cash flow needs of its customers, such as
borrowings or deposit withdrawals, as well as its own financial commitments. The
principal sources of liquidity are net income, loan payments, maturing
securities and sales of securities available for sale, federal funds sold and
cash and deposits with banks. Along with its liquid assets, the Company has
additional sources of liquidity available to ensure that adequate funds are
available as needed. These include, but are not limited to, the purchase of
federal funds, the ability to borrow funds under line of credit agreements with
correspondent banks and a borrowing agreement with the Federal Home Loan Bank of
Cincinnati, Ohio and the adjustment of interest rates to obtain depositors.
Management feels that it has the capital adequacy, profitability and reputation
to meet the current and projected needs of its customers.
For the three months ended March 31, 2002, the adjustments to
reconcile net income to net cash from operating activities consisted mainly of
depreciation and amortization of premises and equipment and intangibles, the
provision for loan losses, net amortization of securities and net changes in
other assets and liabilities. Cash and cash equivalents decreased as a result of
the purchasing of government agency securities. For a more detailed illustration
of sources and uses of cash, refer to the condensed consolidated statements of
cash flows.
20
UNITED BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INFLATION
Substantially all of the Company's assets and liabilities
relate to banking activities and are monetary in nature. The
consolidated financial statements and related financial data are
presented in accordance with GAAP in the United States of America
(GAAP). GAAP currently requires the Company to measure the financial
position and results of operations in terms of historical dollars, with
the exception of securities available for sale, impaired loans and
other real estate loans that are measured at fair value. Changes in the
value of money due to rising inflation can cause purchasing power loss.
Management's opinion is that movements in interest rates
affect the financial condition and results of operations to a greater
degree than changes in the rate of inflation. It should be noted that
interest rates and inflation do effect each other, but do not always
move in correlation with each other. The Company's ability to match the
interest sensitivity of its financial assets to the interest
sensitivity of its liabilities in its asset/liability management may
tend to minimize the effect of changes in interest rates on the
Company's performance.
REGULATORY MATTERS
The Company is subject to the regulatory requirements of The
Federal Reserve System as a multi-bank holding company. The affiliate
banks are subject to regulations of the Federal Deposit Insurance
Corporation (FDIC) and the State of Ohio, Division of Financial
Institutions.
21
UNITED BANCORP, INC.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The principal market risk affecting the Company is interest rate risk.
The Banks do not maintain a trading account for any class of financial
instrument and the Company is not affected by foreign currency exchange rate
risk or commodity price risk. Because the Banks do not hold any equity
securities other than stock in the Federal Home Loan Bank of Cincinnati, which
is not significant, the Company is not subject to equity price risk.
The Company, like other financial institutions, is subject to interest
rate risk to the extent that its interest-earning assets reprice differently
than its interest-bearing liabilities. One of the principal financial objectives
is to achieve long-term profitability while reducing its exposure to
fluctuations in interest rates. The Company has sought to reduce exposure of its
earnings to changes in market interest rates by managing assets and liability
maturities and interest rates primarily by originating variable-rate lending
products, or if issued with a fixed interest rate, as is the case with the
indirect automobile portfolio, the term is rather short in duration. Both the
variable interest rates inherent in the commercial, commercial real estate and
real estate loan portfolios, and the short duration loan products, mitigate the
Company's exposure to dramatic interest rate movements.
The Company's securities are all fixed rate and are weighted more
heavily towards available for sale which accounts for 90% of the portfolio
compared to the 10% for held to maturity securities. The Company primarily
invests in US Agency obligations and State and Municipal obligations and has a
modest amount invested in mortgage-backed securities. Due to total securities
approximating 37% of total assets and a significant portion of its loan
portfolio consisting of fixed rate loans, the Company is particularly sensitive
to periods of rising interest rates. In such periods, the Company's net interest
spread is negatively affected because the interest rate paid on deposits
increases faster than the rates earned on loans. Management is continuing to
originate variable rate loans as the primary means to manage this risk.
Management measures the Company's interest rate risk by computing
estimated changes in net interest income and the net portfolio value ("NPV") of
its cash flows from assets, liabilities and off-balance sheet items in the event
of a range of assumed changes in market interest rates. The following tables
present an analysis of the potential sensitivity of the Company's new present
value of its financial instruments to sudden and sustained changes in the
prevailing interest rates.
(Dollars in Thousands)
- ---------------------------------------------------------------------------
NET PORTFOLIO VALUE-MARCH 31, 2002
CHANGE IN RATES $ AMOUNT $ CHANGE % CHANGE
--------- ---------- --------
Up 200 $ 25,592 $(10,107) -28.31%
Up 100 $ 31,478 $ (4,221) -11.82%
Base $ 35,699
Down 100 $ 34,216 $ (1,483) -4.15%
Down 200 $ 32,068 $ (3,631) -10.17%
(Dollars in Thousands)
-------------------------------------------------------------------------
NET PORTFOLIO VALUE-DECEMBER 31, 2001
CHANGE IN RATES $ AMOUNT $ CHANGE % CHANGE
-------- -------- --------
Up 200 $ 38,205 $ (3,349) -8.06%
Up 100 $ 42,965 $ 1,411 3.40%
Base $ 41,554
Down 100 $ 37,711 $ (3,843) -9.25%
Down 200 $ 35,921 $ (5,633) -13.56%
22
UNITED BANCORP, INC.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (CONTINUED)
The Company's NPV is more sensitive to increasing rates than decreasing
rates. Such difference in sensitivity occurs principally because, as rates
increase, the effect is offset on a short-term basis by the rather fixed nature
of our consumer loans and investment securities. This occurs even though the
commercial, commercial real estate and real estate portfolios are comprised of
variable rate products. Also in a rising rate environment consumers tend not to
prepay fixed rate loans as quickly as they would have had rates not changed
dramatically. Moreover, the interest the Company pays on its deposits would
increase because deposits generally have shorter periods to reprice.
Certain shortcomings are inherent in the NPV method of analysis.
Certain assets such as adjustable-rate loans have features that restrict changes
in interest rates on a short-term basis and over the life of the asset. In
addition, the proportion of adjustable-rate loans in the Company's portfolio
could decrease in future periods if market interest rates remain at or decrease
below current levels due to refinancing activity. Further, in the event of a
change in interest rates, prepayment and early withdrawal levels would likely
deviate from those assumed in the analysis. Finally, the ability of many
borrowers to repay their adjustable-rate debt may decrease in the case of an
increase in interest rates.
23
UNITED BANCORP, INC.
OTHER INFORMATION
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2 Not Applicable
3(i)(ii) Articles of Incorporation of United Bancorp, Inc.
including amendments and By Laws, previously filed
with the Securities and Exchange Commission on
November 16, 1983.
4 Not applicable.
9 Not applicable.
10 Reference to special severance agreement on Page 9
of the Proxy Statement
11 Statement regarding computation of per share
earnings (included in Note 1 to the consolidated
financial statements on page 50 and Note 15 on Page
63 of the Annual Report To Shareholders.)
12 Not applicable.
13 Reference to the Annual Report To Shareholders for
the fiscal year ended December 31, 2001.
16 Not applicable.
18 Not applicable.
21.1 Reference to The Citizens Savings Bank, Martins
Ferry, Ohio, incorporated on December 31, 1902,
previously filed with the Securities and Exchange
Commission.
21.2 Reference to The Community Bank, Lancaster, Ohio,
incorporated on August 1, 1949, previously filed
with the Securities and Exchange Commission.
22 Not applicable.
23 Consents of Experts and Council, previously filed
with the Securities and Exchange Commission.
24 Not applicable.
99 Not applicable.
(b) The Company filed no reports on SEC Form 8-K during the last quarter of
the period covered by this report.
24
UNITED BANCORP, INC.
SIGNATURES
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 2, 2002 By: /s/ James W. Everson
- --------------------- -----------------------------
Date James W. Everson
Chairman, President & Chief Executive Officer
May 2, 2002 By: /s/ Randall M. Greenwood
- --------------------- -----------------------------
Date Randall M. Greenwood
Chief Financial Officer
25