UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 SEPTEMBER 30, 2004

                                       or

              | | Transition Report Pursuant to Section 13 or 15(d)
                  of the Securities Exchange Act of 1934

                            -------------------------

                            COMMISSION FILE #0-16640

                              UNITED BANCORP, INC.
             (Exact name of registrant as specified in its charter)

                    MICHIGAN                        38-2606280
        (State or other jurisdiction of          (I.R.S. Employer
         incorporation or organization)        Identification No.)


                  205 E. CHICAGO BOULEVARD, TECUMSEH, MI 49286
          (Address of principal executive offices, including Zip Code)

       Registrant's telephone number, including area code: (517) 423-8373

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 shorter periods 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 by check mark whether the registrant is an accelerated filer as defined
in Rule 12b-2 of the Act.

                     Yes |X|                    No | |

As of October 31, 2004, there were outstanding 2,355,312 shares of the
registrant's common stock, no par value.


                                     Page 1




                              CROSS REFERENCE TABLE





ITEM NO.                                         DESCRIPTION                                            PAGE NO.
- ----------------------------------------------------------------------------------------------------------------
                                                                                                  
                                  PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
        (a)   Condensed Consolidated Balance Sheets                                                            3
        (b)   Condensed Consolidated Statements of Income                                                      4
        (c)   Condensed Consolidated Statements of Shareholders' Equity                                        5
        (d)   Condensed Consolidated Statements of Cash Flows                                                  6
        (e)   Notes to Condensed Consolidated Financial Statements                                             7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
        Executive Summary                                                                                      9
        Financial Condition                                                                                   10
        Liquidity and Capital Resources                                                                       13
        Results of Operations                                                                                 14

Item 3. Quantitative and Qualitative Disclosures about Market Risk                                            17
Item 4. Controls and Procedures                                                                               18


                                  PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                                                     19
Item 2. Changes in Securities and Use of Proceeds                                                             19
Item 3. Defaults Upon Senior Securities                                                                       19
Item 4. Submission of Matters to a Vote of Security Holders                                                   19
Item 5. Other Information                                                                                     20
Item 6. Exhibits and Reports on Form 8-K                                                                      20
Signatures                                                                                                    20
Exhibits                                                                                                      21




                                     Page 2



                                     PART I
                              FINANCIAL INFORMATION




ITEM 1 - FINANCIAL STATEMENTS
(A)   CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands of dollars                                         (unaudited)                    (unaudited)
                                                                September 30,   December 31,  September 30,
ASSETS                                                              2004           2003           2003
                                                                -------------   ------------  -------------
                                                                                     
Cash and demand balances in other banks                         $      20,478   $     21,425  $      24,266
Federal funds sold                                                      1,000             --         18,900
                                                                -------------   ------------  -------------
Total cash and cash equivalents                                        21,478         21,425         43,166

Securities available for sale                                         105,745        108,734        105,685

Loans held for sale                                                       990             90          1,583
Portfolio loans                                                       482,530        446,730        422,622
                                                                -------------   ------------  -------------
Total loans                                                           483,520        446,820        424,205
Less allowance for loan losses                                          5,734          5,497          5,363
                                                                -------------   ------------  -------------
Net loans                                                             477,786        441,323        418,842

Premises and equipment, net                                            13,876         14,734         14,381
Goodwill                                                                3,469          3,469          3,469
Bank-owned life insurance                                              10,593         10,250         10,131
Accrued interest receivable and other assets                            9,044          9,838          9,485
                                                                -------------   ------------  -------------
TOTAL ASSETS                                                    $     641,991   $    609,773  $     605,159
                                                                =============   ============  =============

LIABILITIES
Deposits
      Noninterest bearing                                       $      84,602   $     78,184  $      81,098
      Interest bearing deposits                                       447,106        424,399        424,334
                                                                -------------   ------------  -------------
Total deposits                                                        531,708        502,583        505,432

Federal funds purchased and other short term borrowings                    76          8,076             76
Other borrowings                                                       42,847         35,375         37,375
Accrued interest payable and other liabilities                          6,121          6,356          5,897
                                                                -------------   ------------  -------------
TOTAL LIABILITIES                                                     580,752        552,390        548,780

COMMITMENT AND CONTINGENT LIABILITIES

SHAREHOLDERS' EQUITY
Common stock and paid in capital, no par value;
      5,000,000 shares authorized; 2,355,312, 2,224,963 and
      2,225,041 shares issued and outstanding                          54,114         45,809         45,748
Retained earnings                                                       6,740         10,994          9,919
Accumulated other comprehensive income, net of tax                        385            580            712
                                                                -------------   ------------  -------------
TOTAL SHAREHOLDERS' EQUITY                                             61,239         57,383         56,379
                                                                -------------   ------------  -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      $     641,991   $    609,773  $     605,159
                                                                =============   ============  =============

The accompanying notes are an integral part of these condensed consolidated
financial statements.




                                     Page 3



(B)   CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)





                                                             Three Months Ended            Nine Months Ended
In thousands of dollars, except per share data                  September 30,                 September 30,
                                                          -----------------------       ------------------------
                                                            2004           2003           2004            2003
                                                          --------       --------       --------        --------
                                                                                            
INTEREST INCOME
Interest and fees on loans                                $  7,257       $  6,729       $ 20,916        $ 20,518
Interest on securities
      Taxable                                                  540            524          1,546           1,706
      Tax exempt                                               271            298            853             909
Interest on federal funds sold                                  14             52             33             182
                                                          --------       --------       --------        --------
Total interest income                                        8,082          7,603         23,348          23,315

INTEREST EXPENSE
Interest on deposits                                         1,649          1,591          4,612           5,126
Interest on short term borrowings                               20              1             27               1
Interest on other borrowings                                   487            446          1,442           1,439
                                                          --------       --------       --------        --------
Total interest expense                                       2,156          2,038          6,081           6,566
                                                          --------       --------       --------        --------
NET INTEREST INCOME                                          5,926          5,565         17,267          16,749
Provision for loan losses                                      229            248            795             857
                                                          --------       --------       --------        --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES          5,697          5,317         16,472          15,892

NONINTEREST INCOME
Service charges on deposit accounts                            764            707          2,091           1,927
Trust & Investment fee income                                  935            806          2,744           2,253
Gains (losses) on securities transactions                        4             --            (29)             85
Loan sales and servicing                                       270          1,016            970           2,649
ATM, debit and credit card fee income                          394            376          1,083           1,101
Income from sale of nondeposit investment products             178            252            546             513
Income from bank-owned life insurance                          102            131            342             131
Other income                                                   151            131            492             424
                                                          --------       --------       --------        --------
Total noninterest income                                     2,798          3,419          8,239           9,083

NONINTEREST EXPENSE
Salaries and employee benefits                               3,250          3,546         10,051          10,110
Occupancy and equipment expense, net                         1,008          1,015          3,014           3,000
External data processing                                       294            316            857             938
Advertising and marketing                                      113            114            335             340
Other expense                                                  888            839          2,740           2,676
                                                          --------       --------       --------        --------
Total noninterest expense                                    5,553          5,830         16,997          17,064
                                                          --------       --------       --------        --------
INCOME BEFORE FEDERAL INCOME TAX                             2,942          2,906          7,714           7,911
Federal income tax                                             839            840          2,144           2,361
                                                          --------       --------       --------        --------
NET INCOME                                                $  2,103       $  2,066       $  5,570        $  5,550
                                                          ========       ========       ========        ========

Basic earnings per share                                  $   0.88       $   0.88       $   2.35        $   2.36
Diluted earnings per share                                    0.88           0.87           2.33            2.34
Cash dividends declared per share of common stock             0.34           0.31           1.00            0.94

The accompanying notes are an integral part of these condensed consolidated
financial statements.




                                     Page 4




(C)   CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
In thousands of dollars




                                                                      Three Months Ended              Nine Months Ended
                                                                         September 30,                  September 30,
                                                                  ------------------------        ------------------------
TOTAL SHAREHOLDERS' EQUITY                                          2004            2003            2004            2003
                                                                  --------        --------        --------        --------
                                                                                                      
Balance at beginning of period                                    $ 59,410        $ 55,446        $ 57,383        $ 53,380

Net Income                                                           2,103           2,066           5,570           5,550
Other comprehensive income:
      Net change in unrealized gains (losses) on securities
      available for sale, net                                          529            (407)           (195)           (569)
                                                                  --------        --------        --------        --------
Total comprehensive income                                           2,632           1,659           5,375           4,981

Cash dividends declared                                               (824)           (756)         (2,387)         (2,190)
Common stock transactions                                               21              30             868             208
                                                                  --------        --------        --------        --------
Balance at end of period                                          $ 61,239         $56,379        $ 61,239        $ 56,379
                                                                  ========        ========        ========        ========

The accompanying notes are an integral part of these condensed consolidated financial statements.





                                     Page 5







(D)   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In thousands of dollars                                                               Nine Months Ended
                                                                                       September 30,
                                                                                --------------------------
                                                                                  2004             2003
                                                                                ---------        ---------
                                                                                           
Cash Flows from Operating Activities
Net income                                                                      $   5,570        $   5,550

Adjustments to Reconcile Net Income to Net Cash from Operating Activities
Depreciation and amortization                                                       1,927            2,196
Provision for loan losses                                                             795              857
Gain on sale of loans                                                                (792)          (3,077)
Proceeds from sales of loans originated for sale                                   56,135          189,432
Loans originated for sale                                                         (56,243)        (180,065)
(Gains) Losses on securities transactions                                              29              (85)
Change in accrued interest receivable and other assets                              1,570              (66)
Change in accrued interest payable and other liabilities                             (226)            (936)
                                                                                ---------        ---------
Net cash from operating activities                                                  8,765           13,806

Cash Flows from Investing Activities
Securities available for sale
      Purchases                                                                   (47,027)         (51,709)
      Sales                                                                         4,626            3,933
      Maturities and calls                                                         39,402           33,309
      Principal payments                                                            5,106            4,570
Net change in portfolio loans                                                     (37,123)            (607)
Net investment in bank-owned life insurance                                          (342)         (10,131)
Premises and equipment expenditures, net                                             (513)          (1,639)
Investment in limited partnership                                                      13               --
                                                                                ---------        ---------
Net cash from investing activities                                                (35,858)         (22,274)

Cash Flows from Financing Activities
Net change in deposits                                                             29,125           33,882
Net change in short term borrowings                                                (8,000)               1
Proceeds from other borrowings                                                      8,000            3,000
Principal payments on other borrowings                                               (528)          (7,492)
Proceeds from common stock transactions                                               868              208
Dividends paid                                                                     (2,319)          (2,384)
                                                                                ---------        ---------
Net cash from financing activities                                                 27,146           27,215
                                                                                ---------        ---------
Net change in cash and cash equivalents                                                53           18,747

Cash and cash equivalents at beginning of year                                     21,425           24,419
                                                                                ---------        ---------
Cash and cash equivalents at end of period                                      $  21,478        $  43,166
                                                                                =========        =========

Supplement Disclosure of Cash Flow Information:
Interest paid                                                                   $   6,066        $   6,727
Income tax paid                                                                     1,500            2,100
Loans transferred to other real estate                                                765              169

The accompanying notes are an integral part of these condensed consolidated
financial statements.





                                     Page 6




(E)   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements of United Bancorp,
Inc. (the "Company") have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The condensed consolidated balance sheet of the
Company as of December 31, 2003 has been derived from the audited consolidated
balance sheet of the Company as of that date. Operating results for the nine
month period ending September 30, 2004 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2004. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2003.

STOCK OPTIONS
In 2000, Shareholders approved the Company's 1999 Stock Option Plan (the "1999
Plan"). The plan is a non-qualified stock option plan as defined under Internal
Revenue Service regulations. Under the plan, directors and management of the
Company and subsidiaries are given the right to purchase stock of the Company at
a stipulated price, adjusted for stock dividends, over a specific period of
time. The 1999 Plan will continue in effect until the end of 2004. Approval for
the Company's 2005 Stock Option Plan (the "2005 Plan"), which will be effective
January 1, 2005, was secured at the Annual Meeting of Shareholders held April
20, 2004. The 1999 Plan is the only plan in effect during 2004.

The stock subject to the options are shares of authorized and unissued common
stock of the Company. As defined in the 1999 Plan, options representing no more
than 144,426 shares (adjusted for stock dividends declared) are to be made
available to the plan. Options under this plan are granted to directors and
certain key members of management at the then-current market price at the time
the option is granted. The options have a three-year vesting period, and with
certain exceptions, expire at the end of ten years, or three years after
retirement. The following is summarized option activity for the 1999 Plan,
adjusted for stock dividends:




                                                                   Options                   Weighted Average
                                                                 Outstanding                 Exercise Price
                                                                 -----------                 ----------------
                                                                                       
      Balance at January 1, 2004                                     102,403                 $          43.41
      Options granted                                                 23,423                            60.00
      Options exercised                                              (23,135)                           40.22
      Options forfeited                                                    -
                                                                 -----------
      Balance at September 30, 2004                                  102,691                 $          47.92
                                                                 ===========


Options granted under the 1999 Plan during the current year were 23,423 on
January 9, 2004. The weighted fair value of the options granted was $5.46. For
stock options outstanding at September 30, 2004, the range of average exercise
prices was $37.61 to $60.00 and the weighted average remaining contractual term
was 7.60 years. At September 30, 2004, 53,753 options were exercisable at the
weighted average exercise price of $42.16.

The following pro forma information presents net income and earnings per share
had the fair value method been used to measure compensation cost for stock
option grants. The exercise price of the option grants is equivalent to the
market value of the underlying stock at the grant date, adjusted for stock
dividends. Accordingly, no compensation cost was recorded for the period ended
September 30, 2004 and 2003.


                                     Page 7






                                                                         Three Months Ended             Nine Months Ended
In thousands of dollars, except per share data                             September 30,                  September 30,
                                                                   ---------------------------     --------------------------
                                                                       2004            2003            2004            2003
                                                                   -----------     -----------     -----------     -----------
                                                                                                       
Net income, as reported                                            $     2,103     $     2,066     $     5,570     $     5,550
Less: Total stock-based compensation cost,
net of taxes                                                                18              21              54              64
                                                                   -----------     -----------     -----------     -----------
Pro forma net income                                               $     2,085     $     2,045     $     5,516     $     5,486
                                                                   ===========     ===========     ===========     ===========

Earnings per share:
    Basic       As reported                                        $      0.88     $      0.88     $      2.35     $      2.36
    Basic         Pro forma                                               0.88            0.87            2.32            2.33

    Diluted     As reported                                        $      0.88     $      0.87     $      2.33     $      2.34
    Diluted       Pro forma                                               0.87            0.87            2.31            2.32




NOTE 2 - LOANS HELD FOR SALE
Mortgage loans serviced for others are not included in the accompanying
consolidated financial statements. The unpaid principal balance of mortgage
loans serviced for others was $259,554,000 and $249,884,000 at the end of
September, 2004 and 2003. The balance of loans serviced for others related to
servicing rights that have been capitalized was $256,936,000 and $245,476,000 at
September 30, 2004 and 2003.

Mortgage servicing rights activity in thousands of dollars for the nine months
ended September 30, 2004 and 2003 follows:




                                                                    2004          2003
                                                                  -------        -------
                                                                           
Balance at January 1                                              $ 1,832        $ 1,352
Amount capitalized year to date                                       323          1,289
Amount amortized year to date                                        (308)          (848)
                                                                  -------        -------
Balance at September 30                                           $ 1,847        $ 1,793
                                                                  =======        =======



No valuation allowance was considered necessary for mortgage servicing rights at
period end 2004 and 2003.

NOTE 3 - COMMON STOCK AND EARNINGS PER SHARE
Basic earnings per share are based upon the weighted average number of shares
outstanding plus contingently issuable shares during the year. Diluted earnings
per share further assumes the dilutive effect of additional common shares
issuable under stock options. During March of 2004 and 2003, the Company
declared 5% stock dividends payable in May 2004 and 2003. Earnings per share,
dividends per share and weighted average shares have been restated to reflect
these stock dividends. A reconciliation of basic and diluted earnings per share
follows:





                                                             Three Months Ended                 Nine Months Ended
In thousands of dollars, except per share data                  September 30,                     September 30,
                                                        ---------------------------       ---------------------------
                                                           2004             2003             2004             2003
                                                        ----------       ----------       ----------       ----------
                                                                                               
Net income                                              $    2,103       $    2,066       $    5,570       $    5,550
                                                        ==========       ==========       ==========       ==========
Basic earnings:
    Weighted average common shares outstanding           2,355,428        2,336,088        2,351,313        2,333,249
    Weighted average contingently issuable shares           21,705           19,219           21,317           18,962
                                                        ----------       ----------       ----------       ----------
    Total weighted average shares outstanding            2,377,133        2,355,308        2,372,630        2,352,211
                                                        ==========       ==========       ==========       ==========
    Basic earnings per share                            $     0.88       $     0.88       $     2.35       $     2.36
                                                        ==========       ==========       ==========       ==========





                                     Page 8






                                                      Three Months Ended             Nine Months Ended
      Diluted earnings:                                 September 30,                  September 30,
                                                 -------------------------       -------------------------
Weighted average common shares outstanding         2004            2003            2004            2003
                                                 ---------       ---------       ---------       ---------
                                                                                     
from basic earnings per share                    2,377,133       2,355,308       2,372,630       2,352,211
Dilutive effect of stock options                     6,696           6,487          17,905          14,627
                                                 ---------       ---------       ---------       ---------
Total weighted average shares outstanding        2,383,829       2,361,794       2,390,535       2,366,838
                                                 =========       =========       =========       =========
Diluted earnings per share                       $    0.88       $    0.87       $    2.33       $    2.34
                                                 =========       =========       =========       =========



A small number of shares represented by stock options granted are not included
in the above calculations as they are non-dilutive as of the date of this
report.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

This discussion provides information about the consolidated financial condition
and results of operations of United Bancorp, Inc. (the "Company") and its
subsidiary banks, United Bank & Trust ("UBT") and United Bank & Trust -
Washtenaw ("UBTW") for the three and nine month periods ending September 30,
2004 and 2003.

                                EXECUTIVE SUMMARY

The Company is a financial holding company registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") under the
Bank Holding Company Act. The Company has corporate power to engage in such
activities as permitted to business corporations under the Michigan Business
Corporation Act, subject to the limitations of the Bank Holding Company Act and
regulations of the Federal Reserve System. The Company's subsidiary banks offer
a full range of services to individuals, corporations, fiduciaries and other
institutions. Banking services include checking, NOW accounts, savings, time
deposit accounts, money market deposit accounts, safe deposit facilities and
money transfers. Lending operations provide real estate loans, secured and
unsecured business and personal loans, consumer installment loans, and
check-credit loans, home equity loans, accounts receivable and inventory
financing, equipment lease financing and construction financing.

While unemployment in Michigan is currently the third-highest of states in the
Nation, the markets served by the Banks are only marginally impacted. In
particular, the Ann Arbor market has much lower unemployment levels than does
the rest of the State. While recent downturns in the economy have impacted some
small companies, in general the Banks have not felt the impact of this decline.
In addition, the Company continues to gain market share in its market areas.

The Company's Banks offer the sale of nondeposit investment products through
licensed representatives in their banking offices, and sell credit and life
insurance products. In addition, the Company and/or the Banks are co-owners of
Michigan Banker's Title Insurance Company of Mid-Michigan LLC and Michigan
Bankers Insurance Center, LLC, and derive income from the sale of various
insurance products to banking clients. UBT operates a trust department, and
provides trust services to UBTW on a contract basis. The Trust & Investment
Group offers a wide variety of fiduciary services to individuals, corporations
and governmental entities, including services as trustee for personal,
corporate, pension, profit sharing and other employee benefit trusts. The
department provides securities custody services as an agent, acts as the
personal representative for estates and as a fiscal, paying and escrow agent for
corporate customers and governmental entities, and provides trust services for
clients of the Banks. These products help to diversify the Company's sources of
income.


                                     Page 9



Consolidated net income of $2,102,522 for the third quarter of 2004 resulted in
the best quarterly earnings in the Company's history, increasing more than 20%
over the second quarter of 2004. Consolidated net income for the first nine
months of 2004 is ahead of the same period last year by 0.3%, or just under
$20,000. Steady asset growth continued, as total assets reached $642.0 million,
for an increase of $36.8 million, or 6.1%, in the trailing 12 months. During the
most recent quarter, the Company's loan portfolio increased by $7.6 million,
deposits increased by $11.0 million, and assets under management by the Trust &
Investment Group of United Bank & Trust declined by $11.0 million.

Mortgage production at the subsidiary banks has continued to decline from the
record volumes experienced in 2002 and 2003. As a result, compared to the first
nine months of 2003, income from loan sales and servicing is down $1,679,000. At
the same time, net interest income is up nearly $500,000, and Trust & Investment
fee income has improved by 21.8%, over the first nine months of a year ago, as a
result of continued growth of the department. This strong performance, combined
with increases in other fee income categories and careful expense control,
helped to offset the decline in loan sales and servicing income.

For the most recent quarter, net interest income was up $250,000, while
noninterest income was down somewhat and expenses were down considerably. The
chart below shows the trends in the major components of earnings for the last
five quarters.




                                                                2004                               2003
                                                 -----------------------------------       ---------------------
in thousands of dollars, where appropriate       3rd Qtr       2nd Qtr       1st Qtr       4th Qtr       3rd Qtr
                                                 -------       -------       -------       -------       -------
                                                                                          
Net interest income                              $5,926        $5,676        $5,664        $5,579        $5,565
Provision for loan losses                           229           304           262           212           248
Noninterest income                                2,798         2,897         2,544         2,740         3,419
Noninterest expense                               5,553         5,812         5,632         5,606         5,830
Federal income tax provision                        839           707           598           664           840
Net income                                       $2,103        $1,751        $1,716        $1,837        $2,066
Return on average assets (a)                       1.30%         1.13%         1.12%         1.22%         1.37%
Return on average shareholders' equity (a)        13.80%        11.83%        11.71%        12.78%        14.61%



 (a)  annualized

                               FINANCIAL CONDITION

SECURITIES
Balances in the Company's investment securities portfolio continued to decline
during the third quarter of 2004, and although the mix has changed, the total
portfolio is generally at the same level as September 30, 2003. This decrease in
the portfolio from June 30 was a result of loan growth in excess of deposit
increases, and was primarily due to maturities and calls within the municipal
portfolios of the banks. The chart below shows the percentage composition of the
Company's investment portfolio as of the end of the current quarter for 2004 and
2003, as well as at December 31, 2003.





                                                                        9/30/2004   12/31/2003   9/30/2003
                                                                        ---------   ----------   ---------
                                                                                        
U.S. Treasury and agency securities                                          40.5%        37.5%       33.3%
Mortgage backed agency securities                                            23.4%        17.0%       19.0%
Obligations of states and political subdivisions                             33.2%        39.0%       39.1%
Corporate, asset backed, and other securities                                 2.9%         6.5%        8.6%
                                                                        ---------   ----------   ---------
    Total Securities                                                        100.0%       100.0%      100.0%
                                                                        =========   ==========   =========



                                    Page 10


The Company's current and projected tax position continues to make carrying
tax-exempt securities beneficial, and the Company does not anticipate being
subject to the alternative minimum tax in the near future. The investment in
local municipal issues also reflects the Company's commitment to the development
of the local area through support of its local political subdivisions.

Investments in U.S. Treasury and agency securities are considered to possess low
credit risk. Obligations of U.S. government agency mortgage-backed securities
possess a somewhat higher interest rate risk due to certain prepayment risks.
The corporate, asset backed and other securities portfolio also contains a
moderate level of credit risk. The municipal portfolio contains a small amount
of geographic risk, as less than 5% of that portfolio is issued by political
subdivisions located within Lenawee County, Michigan. The Company's portfolio
contains no "high risk" mortgage securities or structured notes.

LOANS
Loan balances increased by $7.6 million in the third quarter of 2004, and have
grown by $36.7 million since the end of 2003. During this period, the Banks have
experienced continued slowing of refinancing in the residential mortgage
portfolios into products that are sold on the secondary market. Personal loan
balances increased along with business loans and commercial mortgages, while
construction and development loans provided the largest portion of growth since
the end of the year.

The mix of the loan portfolio continues a long-term trend toward an increased
percentage of business loans, which include construction and development loans.
At the same time, the trend of declining percentages of residential mortgage
loans and personal loans continues. The table below shows total loans
outstanding, in thousands of dollars and their percentage of the total loan
portfolio. All loans are domestic and contain no significant concentrations by
industry or client.





                                     September 30, 2004         December 31, 2003           September 30, 2003
                                 ------------------------    ------------------------     ------------------------
Total loans:                      Balance      % of total    Balance       % of total     Balance       % of total
                                 --------      ----------    --------      ----------     --------      ----------
                                                                                      
Personal                         $ 73,978            15.3%   $ 70,301            15.7%    $ 70,663            16.7%
Business loans and
    commercial mortgages          268,347            55.5%    256,778            57.5%     236,633            55.8%
Tax exempt                          1,254             0.3%      1,476             0.3%       1,408             0.3%
Residential mortgage               76,920            15.9%     85,156            19.1%      85,023            20.0%
Construction & development         63,021            13.0%     33,109             7.4%      30,478             7.2%
                                 --------      ----------    --------      ----------     --------      ----------
    Total loans                  $483,520           100.0%   $446,820          100.00%    $424,205           100.0%
                                 ========      ==========    ========      ==========     ========      ==========


CREDIT QUALITY
The Company continues to maintain a high level of asset quality as a result of
actively monitoring delinquencies, nonperforming assets and potential problem
loans. The aggregate amount of nonperforming loans is presented in the table
below. For purposes of that summary, loans renewed on market terms existing at
the time of renewal are not considered troubled debt restructurings. The accrual
of interest income is discontinued when a loan becomes ninety days past due
unless it is both well secured and in the process of collection, or the
borrower's capacity to repay the loan and the collateral value appear
sufficient.


                                    Page 11



The following chart shows the aggregate amount of the Company's nonperforming
assets by type, in thousands of dollars.




                                                                 9/30/2004     6/30/2004     12/31/2003     9/30/2003
                                                                 ---------     ---------     ----------     ---------
                                                                                                
      Nonaccrual loans                                           $   4,368     $   2,789     $    3,635     $   3,633
      Loans past due 90 days or more                                 1,116         1,160            761           483
      Troubled debt restructurings                                       -             -              -             -
                                                                 ---------     ---------     ----------     ---------
          Total nonperforming loans                                  5,484         3,949          4,396         4,116
      Other real estate                                              1,104           945            593           502
                                                                 ---------     ---------     ----------     ---------
          Total nonperforming assets                             $   6,588      $  4,894     $    4,989     $   4,618
                                                                 =========     =========     ==========     =========
      Percent of nonperforming loans to total loans                   1.13%         0.83%          0.98%         0.97%
      Percent of nonperforming assets to total assets                 1.03%         0.77%          0.82%         0.76%



The Company's classification of nonperforming loans is generally consistent with
loans identified as impaired. The Company's total nonperforming assets have
increased from prior periods. This increase has occurred primarily in nonaccrual
loans, while loans past due ninety days or more are relatively flat and balances
in other real estate have increased as a result of the move of one property from
nonaccrual status to ORE. The increase in nonaccrual loans is the result of one
commercial loan that has been placed on nonaccrual status. Collection efforts
are underway with that credit, and the Company remains adequately secured. No
significant loss is anticipated with that loan. The amount listed in the table
above as other real estate reflects a small number of properties that were
acquired in lieu of foreclosure. Properties have been leased to a third party
with an option to purchase or are listed for sale, and no significant losses are
anticipated.

The Company's allowance for loan losses remains at a level consistent with its
estimated losses, and the allowance provides for currently estimated losses
inherent in the portfolio. An analysis of the allowance for loan losses, in
thousands of dollars, for the nine months ended September 30, 2004 and 2003
follows:





                                                                         2004           2003
                                                                       -------        -------
                                                                                
Balance at January 1                                                   $ 5,497        $ 4,975
Loans charged off                                                         (816)          (560)
Recoveries credited to allowance                                           258             91
Provision charged to operations                                            795            857
                                                                       -------        -------
Balance at September 30                                                $ 5,734        $ 5,363
                                                                       =======        =======



The following table presents the allocation of the allowance for loan losses
applicable to each loan category in thousands of dollars, as of September 30,
2004 and 2003, and December 31, 2003.




                                                                 9/30/2004    12/31/2003     9/30/2003
                                                                 ---------    ----------     ----------
                                                                                    
      Business and commercial mortgage                           $   4,935    $    4,775     $    4,679
      Tax exempt                                                         -             -              -
      Residential mortgage                                              45            37             36
      Personal                                                         713           685            648
      Construction                                                       -             -              -
      Unallocated                                                       41             -              -
                                                                 ---------    ----------     ----------
      Total                                                      $   5,734    $    5,497     $    5,363
                                                                 =========    ==========     ==========


Loans to finance residential mortgages make up 15.9% of the portfolio at
September 30, 2004, and are well-secured and have had historically low levels of
net losses. That percentage is down significantly from prior periods, however,
as loans have refinanced and many have been sold into the secondary market.
Personal and business loans, including business mortgages and development loans,
make up the balance of the portfolio. The personal loan portfolio consists of
direct and indirect installment, credit cards, home equity and unsecured
revolving line of credit loans. Installment loans consist primarily of loans for



                                    Page 12



consumer durable goods, principally automobiles. Indirect personal loans consist
of loans for automobiles, marine and manufactured housing, and make up a small
percent of the personal loans.

Business loans carry the largest balances per loan, and therefore, any single
loss would be proportionally larger than losses in other portfolios. Because of
this, the Company uses an independent loan review firm to assess the continued
quality of its business loan portfolios. This is in addition to the precautions
taken with credit quality in the other loan portfolios. Business loans contain
no significant concentrations other than geographic concentrations within the
market areas served by the Banks.

DEPOSITS
Deposit growth continued during the third quarter of 2004, as total deposits
increased at an annualized rate of 8.8%, and growth over the past twelve months
was 5.2%. Products such as money market deposit accounts, Cash Management
Checking and Cash Management Accounts continue to be very popular with clients,
aiding in continued deposit growth. At the same time, demand deposit balances
declined in the third quarter, although average balances continue their steady
growth. Although clients continue to evaluate alternatives to certificates of
deposit in search of the best yields on their funds, traditional banking
products continue to be an important part of the Company's product line.

The majority of the Company's deposits are derived from core client sources,
relating to long term relationships with local personal, business and public
clients. The Banks do not support their growth through purchased or brokered
deposits. The Banks' deposit rates are consistently competitive with other banks
in their market areas. The chart below shows the percentage makeup of the
deposit portfolio as of September 30, 2004 and 2003.




                                                       2004          2003
                                                      ------        ------
                                                              
Noninterest bearing deposits                            15.9%         16.0%
Interest bearing deposits                               84.1%         84.0%
                                                      ------        ------
    Total deposits                                     100.0%        100.0%
                                                      ======        ======



                         LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY, CASH EQUIVALENTS AND BORROWED FUNDS
The Company maintains correspondent accounts with a number of other banks for
various purposes. In addition, cash sufficient to meet the operating needs of
its banking offices is maintained at its lowest practical levels. At times, the
Banks are a participant in the federal funds market, either as a borrower or
seller. Federal funds are generally borrowed or sold for one-day periods. The
Banks also have the ability to utilize short term advances from the Federal Home
Loan Bank ("FHLB") and borrowings at the discount window of the Federal Reserve
Bank as additional short-term funding sources. Federal funds were used during
2003 and 2004. Short term advances and discount window borrowings were not
utilized during either year.

The Company periodically finds it advantageous to utilize longer term borrowings
from the Federal Home Loan Bank of Indianapolis. These long-term borrowings
served to provide a balance to some of the interest rate risk inherent in the
Company's balance sheet. No advances were added during the third quarter of
2004.


                                    Page 13



CAPITAL RESOURCES
The capital ratios of the Company exceed the regulatory guidelines for well
capitalized institutions. The following table shows the Company's capital ratios
and ratio calculations at September 30, 2004 and 2003, and December 31, 2003.
Dollars are shown in thousands.





                                                   Regulatory Guidelines              United Bancorp, Inc.
                                                   ---------------------      --------------------------------------
                                                   Adequate        Well       9/30/2004     12/31/2003     9/30/2003
                                                   --------       ------      ---------     ----------     ---------
                                                                                            
      Tier 1 capital to average assets                    4%           5%           9.2%           9.1%          8.9%
      Tier 1 capital to risk weighted assets              4%           6%          11.7%          11.7%         11.8%
      Total capital to risk weighted assets               8%          10%          12.8%          12.8%         13.0%

      Total shareholders' equity                                              $  61,239     $   57,383     $  56,379
      Intangible assets                                                          (3,469)        (3,469)       (3,469)
      Disallowed servicing assets                                                     -           (183)         (179)
      Unrealized (gain) loss on securities available for sale                      (385)          (580)         (712)
                                                                              ---------     ----------     ---------
          Tier 1 capital                                                         57,385         53,151        52,019
      Allowable loan loss reserves                                                5,734          5,440         5,251
                                                                              ---------     ----------     ---------
          Tier 2 capital                                                      $  63,119     $   58,591     $  57,270
                                                                              =========     ==========     =========



                             RESULTS OF OPERATIONS

Consolidated net income for the third quarter of 2004 was the best in the
Company's history, surpassing the earnings of the second quarter of 2004 by more
than 20%. The following discussion provides an analysis of these changes.

NET INTEREST INCOME
Net interest income continues to increase quarter over quarter, primarily as a
result of growth in the loan portfolio. The Company's year to date yield on
earning assets was down 32 basis points from the same period of 2003, while the
Company's cost of funds declined from nine-month 2003 levels by 24 basis points,
resulting in a reduction of tax equivalent spread of eight basis points. The
resulting spread and net interest margin marks the lowest point in the Company's
recent history. The following table shows the year to date daily average
consolidated balance sheets, interest earned (on a taxable equivalent basis) or
paid, and the annualized effective yield or rate, for the periods ended
September 30, 2004 and 2003.





          YIELD ANALYSIS OF CONSOLIDATED AVERAGE ASSETS AND LIABILITIES

                                                             Nine Months Ended September 30,
                                     --------------------------------------------------------------------------------
dollars in thousands                                 2004                                     2003
                                     -----------------------------------      ---------------------------------------
                                      Average      Interest      Yield/       Average       Interest        Yield/
ASSETS                                Balance        (b)        Rate (c)      Balance         (b)          Rate (c)
                                     --------      --------     --------      --------      --------       --------
                                                                                         
Interest earning assets (a)
Federal funds sold                   $  3,986      $     33         1.12%     $ 21,430      $    182           1.13%
Taxable securities                     75,687         1,546         2.72%       66,488         1,706           3.42%
Tax exempt securities (b)              29,128         1,275         5.84%       30,344         1,357           5.96%
Taxable loans                         463,297        20,875         6.01%      422,125        20,468           6.46%
Tax exempt loans (b)                    1,371            62         6.00%        1,401            75           7.15%
                                     --------      --------                   --------      --------
      Total int. earning assets (b)   573,469        23,791         5.53%      541,788        23,789           5.85%
Less allowance for loan losses         (5,661)                                  (5,198)
Other assets                           59,498                                   49,896
                                     --------                                 --------
TOTAL ASSETS                         $627,306                                 $586,486
                                     ========                                 ========




                                    Page 14



    YIELD ANALYSIS OF CONSOLIDATED AVERAGE ASSETS AND LIABILITIES (CONTINUED)




                                                             Nine Months Ended September 30,
                                       ------------------------------------------------------------------------------
dollars in thousands                                 2004                                     2003
                                       ------------------------------------     -------------------------------------
LIABILITIES AND                         Average      Interest       Yield/       Average       Interest       Yield/
SHAREHOLDERS' EQUITY                    Balance        (b)         Rate (c)      Balance         (b)         Rate (c)
                                       ---------     --------      --------     --------       --------      --------
                                                                                           
NOW accounts                           $ 113,481          433          0.51%    $ 98,512            502          0.68%
Savings deposits                         176,555        1,176          0.89%     162,594          1,244          1.02%
CDs $100,000 and over                     36,741          815          2.96%      26,390            787          3.98%
Other interest bearing deposits          105,907        2,188          2.76%     124,549          2,594          2.78%
                                       ---------     --------                   --------         ------
      Total int. bearing deposits        432,684        4,612          1.42%     412,045          5,126          1.66%
Short term borrowings                      2,589           27          1.41%          78              1          1.18%
Other borrowings                          42,175        1,442          4.56%      39,163          1,439          4.90%
                                       ---------     --------                   --------         ------
      Total int. bearing liabilities     477,448       6,082           1.70%     451,286          6,566          1.94%
                                                     --------                                    ------
Noninterest bearing deposits              84,402                                  73,394
Other liabilities                          5,840                                   6,733
Shareholders' equity                      59,616                                  55,073
                                       ---------                                --------
TOTAL LIABILITIES AND
      SHAREHOLDERS' EQUITY             $ 627,306                                $586,486
                                       =========                                ========
Net interest income (b)                               17,710                                     17,222
                                                     --------                                  --------
Net spread (b)                                                         3.83%                                     3.91%
                                                                   ========                                  ========
Net yield on interest earning assets (b)                               4.12%                                     4.24%
                                                                   ========                                  ========
Tax equivalent adjustment on interest income             (443)                                     (473)
                                                     --------                                  --------
Net interest income per income statement             $ 17,267                                  $ 16,749
                                                     ========                                  ========
Ratio of interest earning assets to
      interest bearing liabilities          1.20                                    1.20
                                       =========                                ========




 (a)  Non-accrual loans and overdrafts are included in the average balances of
      loans.
 (b)  Fully tax-equivalent basis, net of nondeductible interest impact; 34% tax
      rate.
 (c)  Annualized

As noted from the data in the following table, interest income for the first
nine months of 2004 was unchanged from the same period of 2003, while interest
expense declined significantly during the same period. As a result, net interest
income improved by more than $500,000 compared to the same period of 2003. Most
of that improvement occurred during the third quarter. During that time, net
interest income improved as a result of volume, more than offsetting the
reduction resulting from decreases in rates. This is a shift in the trend noted
in 2003 compared to 2002, when decreases in net interest income as a result of
lower rates more than offset improvements resulting from growth and volume. The
following table shows the effect of volume and rate changes on net interest
income for the nine months ended September 30, 2004 and 2003 on a taxable
equivalent basis, in thousands of dollars.





                                            2004 Compared to 2003                       2003 Compared to 2002
                                  -------------------------------------        -------------------------------------
                                       Increase (Decrease) Due To: (a)          Increase (Decrease) Due To: (a)
                                  -------------------------------------        -------------------------------------
                                   Volume         Rate            Net          Volume           Rate           Net
                                  -------        -------        -------        -------        -------        -------
                                                                                           
Interest earned on:
Federal funds sold                $  (146)       $    (3)       $  (149)       $   103        $   (48)       $    55
Taxable securities                    217           (377)          (160)            59           (493)          (434)
Tax exempt securities                 (54)           (28)           (82)          (142)          (151)          (293)
Taxable loans                       1,914         (1,507)           407          1,052         (2,275)        (1,223)
Tax exempt loans                       (2)           (11)           (13)           (17)            (5)           (22)
                                  -------        -------        -------        -------        -------        -------
      Total interest income       $ 1,929        $(1,926)       $     3        $ 1,055        $(2,972)       $(1,917)
                                  =======        =======        =======        =======        =======        =======




                                    Page 15






                                              2004 Compared to 2003                        2003 Compared to 2002
                                      -------------------------------------        -------------------------------------
                                         Increase (Decrease) Due To: (a)              Increase (Decrease) Due To: (a)
                                      -------------------------------------        -------------------------------------
                                       Volume         Rate            Net          Volume          Rate            Net
                                      -------        -------        -------        -------        -------        -------
                                                                                               
Interest paid on:
NOW accounts                          $    69        $  (138)       $   (69)       $    63        $  (196)       $  (133)
Savings deposits                          101           (168)           (67)           198           (495)          (297)
CDs $100,000 and over                     261           (233)            28           (121)          (159)          (280)
Other interest bearing deposits          (385)           (20)          (405)          (418)          (667)        (1,085)
Short term borrowings                      27             --             27             (5)            (1)            (6)
Other borrowings                          106           (104)             2            433           (184)           249
                                      -------        -------        -------        -------        -------        -------
      Total interest expense          $   179        $  (663)       $  (484)       $   150        $(1,702)       $(1,552)
                                      =======        =======        =======        =======        =======        =======
Net change in net interest
      income                          $ 1,750        $(1,263)       $   487        $   905        $(1,270)       $  (365)
                                      =======        =======        =======        =======        =======        =======



(a)   The change in interest due to both rate and volume has been allocated to
      volume and rate changes in proportion to the relationship of the absolute
      dollar amounts of the change in each.

NONINTEREST INCOME
Total noninterest income in the third quarter of 2004 was $100,000 below the
second quarter of the year, while income from loan sales and servicing declined
$175,000 for the same period. Year to date noninterest income is 9.3% below the
same period of 2003, as a result of continuing decline in income from loan sales
and servicing. Service charges on deposit accounts are up 11.3% over the first
nine months of 2003. No significant changes were made in the Company's service
charge structure during the period, and the increase reflects continued growth
of the Company's deposit base. The Trust & Investment Group of UBT continues to
provide significant contribution to the Company's noninterest income, through
ongoing growth and expansion. Growth of assets managed and market value
increases have improved Trust & Investment income by 29.1% over year to date
2003. In addition, income from sales of nondeposit investment products, while
not a large figure, is up 119.7% from the first nine months of last year.
Noninterest income for year to date 2004 includes $211,000 more income from
bank-owned life insurance than the same period of 2003.

The Banks generally market their production of fixed rate long-term mortgages in
the secondary market, and retain adjustable rate mortgages for their portfolios.
The Company maintains a portfolio of sold residential real estate mortgages,
which it continues to service. This servicing provides ongoing income for the
life of the loans. During 2004 and 2003, clients continued to exhibit a
preference for fixed rate loans as market rates declined, resulting in a greater
proportion of those loans originated by the Banks being sold in the secondary
market. However, the volume of residential mortgage lending and refinancing has
continued to slow, resulting in a reduction in income from loan sales and
servicing of $1.679 million from last year at this time. As the Company is
conservative in its approach to valuation of mortgage servicing rights, no
write-downs in mortgage servicing rights were required in 2004 or 2003 as a
result of declining market rates.

NONINTEREST EXPENSES
Total noninterest expenses were down 4.5% from the third quarter of 2003, and
year to date noninterest expenses are down 0.4% over the same period 2003. Most
categories of expense have experienced declines, with no category providing
significant improvements.

FEDERAL INCOME TAX
The Company has improved its effective tax rate from 2003 to 2004 as a result of
various tax strategies, including the purchase of bank-owned life insurance
during 2003. The effective tax rate was 27.8% for the first nine months of 2004,
compared to 29.8% for the same period of 2003.


                                     Page 16



NET INCOME
Improvements in net income for the third quarter of 2004 have resulted from
increased net interest income and reductions in expenses, while declines in
noninterest income result almost exclusively from reduction in volume of sales
of mortgages in the secondary market. The Company has managed to replace the
lost income with other sources, and Management is pleased to have matched 2003
earnings levels through nine months at a time when many financial services
companies are experiencing declines in net income.

CRITICAL ACCOUNTING POLICIES
Generally accepted accounting principles are complex and require management to
apply significant judgments to various accounting, reporting and disclosure
matters. The Company's Management must use assumptions and estimates to apply
these principles where actual measurement is not possible or practical. For a
complete discussion of the Company's significant accounting policies, see "Notes
to the Consolidated Financial Statements" in United Bancorp, Inc.'s 2003 Annual
Report on pages A-24 to A-27. Certain policies are considered critical because
they are highly dependent upon subjective or complex judgments, assumptions and
estimates. Changes in such estimates may have a significant impact on the
financial statements. Management has reviewed the application of these policies
with the Audit Committee of the Company's Board of Directors. For a discussion
of applying critical accounting policies, see Critical Accounting Policies" on
pages A-16 and A17 in United Bancorp, Inc.'s 2003 Annual Report.

FORWARD-LOOKING STATEMENTS
Statements contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations include forward-looking statements that are
based on management's beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, the economy, and about the
Company itself. Words such as "anticipate," "believe," "determine," "estimate,"
"expect," "forecast," "intend," "is likely," "plan," "project," "opinion,"
variations of such terms, and similar expressions are intended to identify such
forward-looking statements. The presentations and discussions of the provision
and allowance for loan losses, and determinations as to the need for other
allowances presented in this report are inherently forward-looking statements in
that they involve judgments and statements of belief as to the outcome of future
events. These statements are not guarantees of future performance and involve
certain risks, uncertainties, and assumptions that are difficult to predict with
regard to timing, extent, likelihood, and degree of occurrence. Therefore,
actual results and outcomes may materially differ from what may be expressed or
forecasted in such forward-looking statements. Internal and external factors
that may cause such a difference include changes in interest rates and interest
rate relationships; demand for products and services; the degree of competition
by traditional and non-traditional competitors; changes in banking laws and
regulations; changes in tax laws; changes in prices, levies, and assessments;
the impact of technological advances; governmental and regulatory policy
changes; the outcomes of pending and future litigation and contingencies; trends
in customer behavior and customer ability to repay loans; software failure,
errors or miscalculations; and the vicissitudes of the national economy. The
Company undertakes no obligation to update, amend or clarify forward-looking
statements, whether as a result of new information, future events, or otherwise.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FUNDS MANAGEMENT AND INTEREST RATE RISK
The composition of the Company's balance sheet consists of investments in
interest earning assets (loans and investment securities) that are funded by
interest bearing liabilities (deposits and borrowings). These financial
instruments have varying levels of sensitivity to changes in market interest
rates resulting in market risk. Policies place strong emphasis on stabilizing
net interest margin, with the goal of providing a sustained level of
satisfactory earnings. The Funds Management, Investment and Loan policies
provide

                                     Page 17



direction for the flow of funds necessary to supply the needs of depositors and
borrowers. Management of interest sensitive assets and liabilities is also
necessary to reduce interest rate risk during times of fluctuating interest
rates.

A number of measures are used to monitor and manage interest rate risk,
including interest sensitivity and income simulation analyses. An interest
sensitivity model is the primary tool used to assess this risk with supplemental
information supplied by an income simulation model. The simulation model is used
to estimate the effect that specific interest rate changes would have on twelve
months of pretax net interest income assuming an immediate and sustained up or
down parallel change in interest rates of 200 basis points. Key assumptions in
the models include prepayment speeds on mortgage related assets; cash flows and
maturities of financial instruments held for purposes other than trading;
changes in market conditions, loan volumes and pricing; and management's
determination of core deposit sensitivity. These assumptions are inherently
uncertain and, as a result, the models cannot precisely estimate net interest
income or precisely predict the impact of higher or lower interest rates on net
interest income. Actual results will differ from simulated results due to
timing, magnitude, and frequency of interest rate changes and changes in market
conditions.

Based on the results of the simulation model as of September 30, 2004, the
Company would expect a maximum potential reduction in net interest margin of
less than 13% if market rates decreased under an immediate and sustained
parallel shift of 200 basis points. The Company's interest sensitivity position
continues to be asset sensitive, continuing a trend evident throughout 2003. The
Company anticipates that interest rates will rise, and has positioned its
balance sheet to take advantage of this expected increase in rates. As a result,
current net interest income has been lowered in order to improve net interest
margin in the future.

The Company and each Bank maintains Funds Management Committees, which review
exposure to market risk on a regular basis. The Committees' overriding policy
objective is to manage assets and liabilities to provide an optimum and
consistent level of earnings within the framework of acceptable risk standards.
The Funds Management Committees are also responsible for evaluating and
anticipating various risks other than interest rate risk. Those risks include
prepayment risk, credit risk and liquidity risk. The Committees are made up of
senior members of management, and monitor the makeup of interest sensitive
assets and liabilities to assure appropriate liquidity, maintain interest
margins and to protect earnings in the face of changing interest rates and other
economic factors.

The Funds Management policies provide for a level of interest sensitivity which,
Management believes, allows the Banks to take advantage of opportunities within
their markets relating to liquidity and interest rate risk, allowing flexibility
without subjecting the Company to undue exposure to risk. In addition, other
measures are used to evaluate and project the anticipated results of
Management's decisions.

ITEM 4 - CONTROLS AND PROCEDURES

INTERNAL CONTROL
The Company maintains internal controls that contain self-monitoring mechanisms,
and actions are taken to correct deficiencies as they are identified. The Board,
operating through its Audit and Compliance Committee, provides oversight to the
financial reporting process. Even effective internal controls, no matter how
well designed, have inherent limitations, including the possibility of
circumvention or overriding of controls. Accordingly, even effective internal
controls can provide only reasonable assurance with respect to financial
statement preparation. Furthermore, the effectiveness of internal controls may
vary over time.


                                     Page 18




The Company's Audit and Compliance Committee is composed entirely of Directors
who are not officers or employees of the Company.

As of September 30, 2004, an evaluation was carried out under the supervision
and with the participation of United Bancorp's management, including our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934). Based on their
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that United Bancorp's disclosure controls and procedures as of the end
of the quarter ended September 30, 2004 are, to the best of their knowledge,
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. There have been no changes in the Company's
internal controls over financial reporting identified in connection with the
evaluation that occurred during the quarter ended September 30, 2004 that has
materially affected, or is likely to materially affect, the Company's internal
control over financial reporting.

As an accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act
of 1934, the Company is subject to Section 404 of the Sarbanes-Oxley Act of
2002, with regard to compliance and reporting for the period ending December 31,
2004. Work is underway to assure that all documentation and testing is completed
on a timely manner in order to assure full compliance with the requirements of
this regulation.


                                     PART II
                                OTHER INFORMATION

ITEM 1- LEGAL PROCEEDINGS

The Company is not involved in any material legal proceedings. The Company's
banking subsidiaries are involved in ordinary routine litigation incident to its
business; however, no such proceedings are expected to result in any material
adverse effect on the operations or earnings of the Banks. Neither the Banks nor
the Company are involved in any proceedings to which any director, principal
officer, affiliate thereof, or person who owns of record or beneficially five
percent (5%) or more of the outstanding stock of the Company, or any associate
of the foregoing, is a party or has a material interest adverse to the Company
or the Banks.

ITEM 2- CHANGES IN SECURITIES AND USE OF PROCEEDS AND ISSUER PURCHASES
        OF EQUITY SECURITIES

No changes in the securities of the Company occurred during the quarter ended
September 30, 2004. The Company did not repurchase any of its securities during
the quarter ended September 30, 2004.

ITEM 3- DEFAULTS UPON SENIOR SECURITIES

There have been no defaults upon senior securities relevant to the requirements
of this section during the quarter ended September 30, 2004.

ITEM 4- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter ended
September 30, 2004.

                                     Page 19



ITEM 5- OTHER INFORMATION

None.

ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K

(a)   Listing of Exhibits (numbered as in Item 601 of Regulation S-K):

      Exhibit 31.1     Certification of principal executive officer pursuant to
                       Rule 13a - 14(a) of the Securities Exchange Act of 1934,
                       as adopted pursuant to Section 302 of the Sarbanes-Oxley
                       Act of 2002.

      Exhibit 31.2     Certification of principal financial officer pursuant to
                       Rule 13a - 14(a) of the Securities Exchange Act of 1934,
                       as adopted pursuant to Section 302 of the Sarbanes-Oxley
                       Act of 2002.

      Exhibit 32.1     Certification pursuant to 18 U.S.C. Section 1350, as
                       adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                       of 2002.

(b) Reports on Form 8-K filed during the quarter ended September 30, 2004.

      Report on Form 8-K filed July 23, furnishing in Items 7(c) and 9 thereof,
      information on quarterly results of operations for the quarter ended June
      30.

      Report on Form 8-K filed September 15, furnishing in Items 8.01 and 9.01
      thereof, information regarding the declaration of cash dividends.


                                     Page 20



                                   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.

UNITED BANCORP, INC.
November 3, 2004


/S/ David S. Hickman
- -------------------------------------------------
David S. Hickman
Chairman and Chief Executive Officer
(Principal Executive Officer)



/S/ Dale L. Chadderdon
- -------------------------------------------------
Dale L. Chadderdon
Senior Vice President, Secretary & Treasurer
(Principal Financial Officer)


                                    Page 21





                                 EXHIBIT INDEX

Exhibit 31.1    Certification of principal executive officer pursuant to Rule
                13a-14(a) of the Securities Exchange Act of 1934, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2    Certification of principal financial officer pursuant to Rule
                13a-14(a) of the Securities Exchange Act of 1934, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1    Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.