EXHIBIT 99.1
UNITED BANCORP, INC.
FOR IMMEDIATE RELEASE CONTACT: Robert K. Chapman
April 17, 2007 United Bancorp, Inc.
DRAFT 734-214-3801
UNITED BANCORP, INC. DECLARES CASH AND STOCK DIVIDENDS
AND ANNOUNCES FIRST QUARTER 2007 EARNINGS
TECUMSEH, MI - United Bancorp, Inc. (UBMI) announced that it has increased its
quarterly dividend amount to $0.40 per share and has declared a 100% stock
dividend. In addition, the Company reported net income of $1.726 million or
$0.65 per share for the quarter ended March 31, 2007, compared to $2.145 million
or $0.81 per share for the first quarter of 2006 and $2.197 million or $0.83 per
share for the fourth quarter of 2006.
Cash and Stock Dividends Declared
Robert K. Chapman, President and Chief Executive Officer of United Bancorp, Inc.
("United") announced that the board of directors of United Bancorp, Inc. has
declared a cash dividend of $0.40 per share payable April 30, 2007 to
shareholders of record April 20, 2007. This dividend represents an increase
of 5.3%, or $0.02 per share over the cash dividend paid in the first quarter
of this year.
In addition, the board of directors of United has declared a 100% stock dividend
payable May 31, 2007 to shareholders of record May 11, 2007. As a result of this
stock dividend, shareholders of United Bancorp, Inc. stock will receive one
additional share of stock for each share they currently own.
Financial Performance
Additions to the Company's allowance for loan losses reduced net income during
the first quarter of 2007, resulting in a decline in net income from prior
quarters. Net interest income for the first quarter of 2007 was up over the same
quarter last year. Noninterest income continues to improve, and expenses are
down from the same period last year. At the same time, United continues to grow
the company, and balances in the loan portfolio have increased by $56.0 million
from a year ago. Mr. Chapman noted that "While we experienced a decline in
earnings as a result of the additional provision for loan loss, our core
earnings remain strong."
The Company's interest income was up 12.0% in the first quarter compared to the
first quarter of 2006 while interest expense increased by 32.2%, and net
interest income increased by 1.2%. During the first quarter of this year, net
interest margin was 4.30%, down from 4.52% for the same period of 2006.
Chapman commented, "We continue to face the challenge of a flat to inverted
yield curve and the resulting negative pressure on our net interest income."
In the first quarter of 2007, the Company's provision for loan loss was $1.509
million, up from $365,900 for the first quarter of 2006. The increase in
provision relates to the Company's recognition of impairment of a few large
business loans and the Company's corresponding increase in the amount of its
Allowance for Loan Losses at March 31, 2007.
Total noninterest income for the first quarter increased $318,100 over the same
quarter of 2006, representing an improvement of 11.0% for the period. Continued
improvement in income from fees, wealth management services and mortgage loan
sales and servicing has contributed to the improvement in noninterest income.
Total noninterest expenses for the period were down 1.4% from the same quarter
last year. While some expense categories were higher than the prior year, the
increases were more than offset by declines in compensation expense and costs of
external data processing.
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Financial Condition
Loans totaled $615.1 million at March 31, 2007, up from $559.1 million at March
31, 2006. Deposit growth for the past year was somewhat slower than loan growth,
but new deposits of $33.2 million brought the quarter end total deposits to
$636.4 million. Total consolidated assets at March 31, 2007 were $760.5 million,
up from $718.3 million at the end of the first quarter of 2006. Loan growth for
the past twelve months was 10.0%, with deposit growth of 5.5% and total asset
growth of 5.9%.
About United Bancorp, Inc.
United Bancorp, Inc. is an independent financial holding company that is the
parent company for United Bank & Trust and United Bank & Trust - Washtenaw. The
subsidiary banks operate seventeen banking offices in Lenawee, Washtenaw and
Monroe counties, and United Bank & Trust maintains an active wealth management
group that serves the Company's market area. For more information, visit the
company's website at www.ubat.com.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOLLOW.
Safe Harbor Statement
This news release may contain certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21
B of the Securities Act of 1934, as amended, which are intended to be safe
harbors created thereby. Those statements 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 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 economic conditions in the
market area the Company conducts business which could materially impact credit
quality trends, 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
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to update, amend or clarify forward-looking statements,
whether as a result of new information, future events, or otherwise.
###
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UNITED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands except per share data)
March 31, December 31, March 31,
2007 2006 2006
-------------- -------------- --------------
ASSETS
Cash and demand balances in other banks $ 18,348 $ 17,606 $ 20,430
Federal funds sold 4,020 3,770 12,000
-------------- -------------- --------------
Total cash and cash equivalents 22,368 21,376 32,430
Securities available for sale 90,991 95,811 95,749
Loans held for sale 3,258 5,772 316
Portfolio loans
Personal 92,575 91,817 81,087
Business 434,485 420,433 402,755
Residential Mortgage 84,786 83,741 74,906
-------------- -------------- --------------
Total loans 615,104 601,763 559,064
Less allowance for loan losses 9,229 7,849 6,581
-------------- -------------- --------------
Net loans 605,875 593,914 552,483
Premises and equipment, net 13,358 13,215 12,737
Goodwill 3,469 3,469 3,469
Bank owned life insurance 11,605 11,499 11,190
Accrued interest receivable and other assets 12,808 11,705 10,268
-------------- -------------- --------------
TOTAL ASSETS $ 760,473 $ 750,989 $ 718,326
============== ============== ==============
LIABILITIES
Deposits
Non-interest bearing $ 81,565 $ 81,373 $ 88,943
Interest bearing deposits 554,847 546,629 514,234
-------------- -------------- --------------
Total deposits 636,413 628,002 603,177
Short term borrowings 77 77 76
FHLB Advances outstanding 42,627 40,945 39,228
Accrued interest payable and other liabilities 6,079 7,430 5,983
-------------- -------------- --------------
TOTAL LIABILITIES 685,195 676,453 648,464
-------------- -------------- --------------
SHAREHOLDERS' EQUITY
Common stock and paid in capital, no par value;
5,000,000 shares authorized; 2,621,286, 2,623,716 and
2,499,038 shares issued and outstanding, respectively 71,029 71,075 63,431
Retained earnings 4,110 3,393 6,839
Accumulated other comprehensive income (loss), net of tax 137 68 (409)
-------------- -------------- --------------
TOTAL SHAREHOLDERS' EQUITY 75,277 74,536 69,861
-------------- -------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 760,473 $ 750,989 $ 718,326
============== ============== ==============
Book value per share of common stock $ 28.72 $ 28.41 $ 26.62
(Per share values restated to reflect 2006 stock dividend)
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UNITED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
Year to Date
-------------------------------
March 31, March 31,
2007 2006
-------------- --------------
INTEREST INCOME
Interest and fees on loans $ 11,153.2 $ 10,075.7
Interest on investment securities 1,074.0 884.4
Interest on federal funds sold 126.3 70.9
-------------- --------------
Total interest income 12,353.5 11,031.0
INTEREST EXPENSE
Interest on deposits 4,558.0 3,343.8
Interest on fed funds purchased 6.8 40.4
Interest on FHLB advances 496.7 444.0
-------------- --------------
Total interest expense 5,061.5 3,828.2
-------------- --------------
NET INTEREST INCOME 7,292.0 7,202.8
Provision for loan losses 1,508.7 365.9
-------------- --------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,783.3 6,836.9
-------------- --------------
NONINTEREST INCOME
Service charges on deposit accounts 810.1 763.6
Trust & Investment fee income 959.9 992.8
Gains (losses) on securities transactions 0.8 (1.7)
Income from loan sales and servicing 376.1 181.7
ATM, debit and credit card fee income 471.7 430.8
Sales of nondeposit investment products 254.4 226.7
Income from bank-owned life insurance 105.6 98.6
Other income 230.5 198.5
-------------- --------------
Total noninterest income 3,209.1 2,891.0
NONINTEREST EXPENSE
Salaries and employee benefits 3,607.5 3,874.2
Occupancy and equipment expense 1,220.8 1,091.0
External data processing 291.2 350.0
Advertising and marketing 360.9 269.8
Other expense 1,209.3 1,197.7
-------------- --------------
Total noninterest expense 6,689.7 6,782.7
-------------- --------------
INCOME BEFORE FEDERAL INCOME TAX 2,302.7 2,945.2
Federal income tax 576.7 800.6
-------------- --------------
NET INCOME $ 1,726.0 $ 2,144.6
============== ==============
Basic and diluted earnings per share $ 0.650 $ 0.810
(Earnings per share restated to reflect 2006 stock dividend)
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UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
(Dollars in thousands except per share data)
Quarter to Date
----------------------------------------------------------------
March 31, Change
-------------------------------- ----------------------------
2007 2006 Amount Percentage
------------- --------------- -------------- ----------
FINANCIAL SUMMARY
Interest Income $ 12,353.5 $ 11,031.0 $ 1,322.5 12.0%
Interest Expense 5,061.5 3,828.2 1,233.3 32.2%
------------- --------------- --------------
Net Interest Income 7,292.0 7,202.8 89.2 1.2%
Provision for loan losses 1,508.7 365.9 1,142.7 312.3%
Non-interest income 3,209.1 2,891.0 318.1 11.0%
Non-interest expense 6,689.7 6,782.7 (93.0) -1.4%
------------- --------------- --------------
Income before taxes 2,302.7 2,945.2 (642.6) -21.8%
Federal income tax 576.7 800.6 (224.0) -28.0%
------------- --------------- --------------
Net income $ 1,726.0 $ 2,144.6 $ (418.6) -19.5%
============= =============== ==============
PERFORMANCE RATIOS
Return on average assets (annualized) 0.92% 1.21% -0.29% -24.0%
Return on average equity (annualized) 9.35% 12.62% -3.27% -25.9%
Net interest margin (tax equivalent) 4.30% 4.52% -0.22% -4.9%
Efficiency ratio 62.3% 65.0% -2.78% 4.3%
BALANCE SHEET DATA
Average earning assets 720,664 676,040 44,624 6.6%
Total loans 615,104 559,064 56,040 10.0%
Allowance for loan loss 9,229 6,581 2,648 40.2%
Average loans 605,872 558,796 47,075 8.4%
Total deposits 636,413 603,177 33,236 5.5%
Average deposits 632,500 598,105 34,395 5.8%
Total assets 760,473 718,326 42,147 5.9%
Average assets 758,816 717,888 40,928 5.7%
ASSET QUALITY
Net charge offs 128 145 (17) -11.9%
Non-accrual loans 10,629 4,052 6,576 162.3%
Non-performing loans 10,855 5,516 5,339 96.8%
Loans over 90 days past due/total loans 0.04% 0.10% -0.06% -63.7%
Nonperforming loans/total loans 1.76% 0.99% 0.78% 78.9%
Allowance for loan loss/total loans 1.50% 1.18% 0.32% 27.5%
Allowance for loan loss/nonperforming loans 85.0% 119.3% -34.3% -28.7%
STOCK PERFORMANCE
Earnings per share:
Basic and diluted $ 0.65 $ 0.81 $ (0.16) -19.7%
Market Value:
High $ 47.00 $ 58.62 $ (11.62) -19.8%
Low $ 43.75 $ 53.04 $ (9.29) -17.5%
Close $ 44.10 $ 56.19 $ (12.09) -21.5%
Shares outstanding 2,621,286 2,499,038 122,248 4.9%
Dividends/share $ 0.38 $ 0.35 $ 0.0280 8.0%
Dividend payout ratio 58.5% 43.5% 14.98% 34.4%
Price/Earnings ratio (annualized) 17.0x 17.4x (0.39) -2.3%
Selling price/Book 153.6% 211.0% -57.5% -27.2%
Book Value per share $ 28.72 $ 26.62 $ 2.0936 7.9%
All per-share data is restated to reflect 5% stock dividend in 2006
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UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
(Dollars in thousands except per share data)
Quarter Ended
-------------------------------------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2007 2006 2006 2006 2006
------------ ------------ ------------- ------------- --------------
FINANCIAL SUMMARY
Interest Income $ 12,353.5 12,374.0 12,167.2 11,484.0 11,031.0
Interest Expense 5,061.5 4,950.0 4,739.3 4,285.0 3,828.0
------------ ------------ ------------- ------------- --------------
Net Interest Income 7,292.0 7,424.0 7,427.9 7,199.0 7,203.0
Provision for loan losses 1,508.7 921.0 396.2 440.0 365.9
Non-interest income 3,209.1 3,110.0 3,122.8 3,051.0 2,890.9
Non-interest expense 6,689.7 6,598.0 6,742.3 6,791.0 6,782.7
------------ ------------ ------------- ------------- --------------
Income before taxes 2,302.7 3,015.0 3,412.2 3,019.0 2,945.3
Federal income tax 576.7 818.0 967.0 835.0 800.6
------------ ------------ ------------- ------------- --------------
Net income $ 1,726.0 $ 2,197.0 $ 2,445.2 2,184.0 2,144.7
============ ============ ============= ============= ==============
PERFORMANCE RATIOS
Return on average assets (annualized) 0.92% 1.18% 1.32% 1.20% 1.21%
Return on average equity (annualized) 9.35% 11.85% 13.52% 12.48% 12.62%
Net interest margin (tax equivalent) 4.30% 4.39% 4.43% 4.42% 4.52%
Efficiency ratio 62.3% 61.2% 62.6% 64.8% 65.7%
BALANCE SHEET DATA
Average earning assets 720,664 703,339 695,353 682,805 676,269
Total loans 615,104 601,763 592,382 574,996 559,064
Allowance for loan loss 9,229 7,849 6,994 6,868 6,581
Average loans 605,872 592,948 581,269 565,822 558,796
Total deposits 636,413 628,002 620,772 611,705 603,177
Average deposits 632,500 618,066 615,475 603,511 598,105
Total assets 760,473 750,989 739,896 731,019 718,326
Average assets 758,816 741,678 736,740 723,278 717,888
ASSET QUALITY
Net charge offs 128 66 270 153 145
Non-accrual loans 10,629 5,427 2,869 2,620 4,052
Non-performing loans 10,855 6,282 3,028 4,613 5,516
Non-performing assets 11,966 7,360 3,585 5,172 6,134
Loans over 90 days past due/total loans 0.04% 0.14% 0.03% 0.19% 0.10%
Nonperforming loans/total loans 1.76% 1.04% 0.51% 0.80% 0.99%
Allowance for loan loss/total loans 1.50% 1.30% 1.18% 1.19% 1.18%
Allowance for loan loss/non-performing 85.0% 124.9% 231.0% 148.9% 119.3%
STOCK PERFORMANCE
Earnings per share:
Basic and diluted $ 0.65 $ 0.83 $ 0.92 $ 0.82 $ 0.81
Market Value:
High $ 47.00 $ 45.00 $ 47.10 $ 56.05 $ 58.62
Low $ 43.75 $ 44.00 $ 43.73 $ 42.77 $ 53.04
Close $ 44.10 $ 45.00 $ 45.00 $ 45.07 $ 56.19
Shares outstanding 2,621,286 2,623,716 2,623,724 2,623,192 2,499,038
Dividends/share $ 0.38 $ 0.38 $ 0.37 $ 0.35 $ 0.35
Dividend payout ratio 58.5% 45.9% 40.1% 42.8% 43.5%
Price/Earnings ratio (annualized) 17.0x 13.6x 12.2x 13.7x 17.4x
Selling price/Book 153.6% 158.4% 161.1% 166.9% 211.1%
Book Value per share $ 28.72 $ 28.41 $ 27.94 $ 27.00 $ 26.62
All per-share data is restated to reflect 5% stock dividend in 2006
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