EXHIBIT 99.1
FOR IMMEDIATE RELEASE: CONTACT: Robert K. Chapman
April 25, 2008 United Bancorp, Inc.
734-214-3801
UNITED BANCORP, INC. ANNOUNCES
FIRST QUARTER 2008 EARNINGS
TECUMSEH, MI - United Bancorp, Inc. (UBMI), reported net income of $1,888,100 or
$.37 per share for the quarter ended March 31, 2008, compared to $1,726,000 or
$.33 per share for the same quarter of 2007. Return on average shareholders'
equity (ROE) for the quarter was 10.35%, compared to 9.35% for the first quarter
of last year, and return on average assets (ROA) for the most recent quarter was
..94%, up from .92% for the same period last year.
Financial Performance
Net income for the quarter improved from that of one year ago, and was
significantly better than the earnings achieved in the fourth quarter of 2007.
For the quarter, total revenues increased by nearly 5%. United's net interest
income increased by 2.5% during the most recent quarter compared to a year ago
as growth in assets was offset by tightening interest spreads due to market rate
shifts and continued competition for funding.
Total noninterest income for the quarter of $3.54 million reflects an
improvement of 10.2% over first quarter 2007 levels, with income from loan sales
and servicing providing the largest increases. The Company's residential
mortgage business continued to expand as loan originations increased 45%
compared with the same period in 2007. In addition, the recently formed United
Structured Finance Company contributed to the Company's noninterest income
during the quarter, and the Company's wealth management group continued to
provide a significant contribution to revenue. Total noninterest expense
increased compared to the same period last year, with a significant portion of
that resulting from selective increases in staffing and higher benefit costs.
Asset Quality
The Company's provision for loan loss for the first quarter of 2008 was
$660,000, down significantly from $1.5 million for the same quarter of 2007. At
this level, the provision expense is also considerably below that of the fourth
quarter of 2007, when the Company's provision was $5.8 million. Management
continues to be concerned for economic conditions within Michigan and the market
areas of its banks, but remains diligent in addressing credit issues in its loan
portfolio. At March 31, 2008, the Company's allowance for loan loss was 1.84% of
total loans, substantially unchanged from the end of 2007, and up from 1.51% at
March 31, 2007. The Company's ratio of total nonperforming loans to total loans
increased from 2.35% at December 31, 2007 to 2.48% at March 31, 2008. At the end
of the current quarter, non-performing loans totaled $16.2 million, compared to
$10.9 million one year earlier and $15.2 million at the end of 2007.
Financial Condition
Total consolidated assets of the Company of $797.9 million at March 31, 2008
were up 4.9% from the same period last year, and increased by $2.2 million
during the most recent quarter. At the end of March, loan balances reached
$655.0 million, for an increase of $10.4 million in the quarter, and loan growth
was $43.1 million over the past year. Deposits at March 31, 2008 were $667.5
million, an increase of 4.9% compared with the prior year balance.
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.
###
UNITED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands except per share data) March 31, December 31, March 31,
2008 2007 2007
---------- ------------ ----------
ASSETS
Cash and demand balances in other banks $ 15,757.0 $ 17,996.0 $ 18,348.0
Federal funds sold -- 11,130.0 4,020.0
---------- ------------ ----------
Total cash and cash equivalents 15,757.0 29,126.0 22,368.0
Securities available for sale 90,739.2 85,897.6 90,990.7
Loans held for sale 6,070.4 5,770.1 3,258.5
Portfolio loans
Personal 98,293.4 98,658.5 92,574.6
Business 463,181.4 451,717.5 434,484.6
Residential mortgage 93,490.1 94,154.0 84,786.3
---------- ------------ ----------
Total loans 654,964.9 644,530.0 611,845.5
Less allowance for loan losses 12,046.9 12,305.9 9,229.4
---------- ------------ ----------
Net loans 642,918.0 632,224.1 602,616.1
Premises and equipment, net 13,211.7 13,160.3 13,358.2
Goodwill 3,469.1 3,469.1 3,469.1
Bank owned life insurance 12,076.0 11,960.5 11,604.8
Accrued interest receivable and other assets 13,632.8 14,079.7 12,807.0
---------- ------------ ----------
TOTAL ASSETS $797,874.2 $795,687.4 $760,472.4
========== ============ ==========
LIABILITIES
Deposits
Non-interest bearing $ 82,595.7 $ 77,877.9 $ 81,565.3
Interest bearing 584,926.7 593,659.3 554,847.3
---------- ------------ ----------
Total deposits 667,522.4 671,537.2 636,412.6
Short term borrowings 7,500.0 -- 76.6
FHLB advances outstanding 42,990.5 44,611.1 42,627.3
Accrued interest payable and other liabilities 5,768.5 6,572.0 6,078.7
---------- ------------ ----------
TOTAL LIABILITIES 723,781.4 722,720.3 685,195.2
---------- ------------ ----------
SHAREHOLDERS' EQUITY
Common stock and paid in capital, no par value;
10,000,000 shares authorized; 5,084,943, 5,092,230
and 5,242,572 shares issued and outstanding,
respectively 67,732.6 67,860.0 71,029.5
Retained earnings 5,672.8 4,814.2 4,110.4
Accumulated other comprehensive income, net of tax 687.4 292.9 137.3
---------- ------------ ----------
TOTAL SHAREHOLDERS' EQUITY 74,092.8 72,967.1 75,277.2
---------- ------------ ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $797,874.2 $795,687.4 $760,472.4
========== ============ ==========
Book value per share of common stock $ 14.56 $ 14.33 $ 14.36
(Per share values restated to reflect 2007 stock dividend)
UNITED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Quarter to Date
---------------------
(Dollars in thousands except per share data) March 31, March 31,
2008 2007
--------- ---------
INTEREST INCOME
Interest and fees on loans $11,332.0 $11,153.2
Interest on investment securities 964.0 1,074.0
Interest on federal funds sold 119.5 126.3
--------- ---------
Total interest income 12,415.5 12,353.5
INTEREST EXPENSE
Interest on deposits 4,407.9 4,558.0
Interest on federal funds purchased 6.7 6.8
Interest on FHLB advances 523.3 496.7
--------- ---------
Total interest expense 4,937.9 5,061.5
--------- ---------
NET INTEREST INCOME 7,477.6 7,292.0
Provision for loan losses 660.0 1,508.7
--------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,817.6 5,783.3
--------- ---------
NONINTEREST INCOME
Service charges on deposit accounts 823.2 810.1
Trust & Investment fee income 1,169.2 1,214.3
Gains (losses) on securities transactions 53.2 0.8
Income from loan sales and servicing 608.3 376.1
ATM, debit and credit card fee income 529.4 471.7
Income from bank-owned life insurance 115.5 105.6
Other income 239.0 230.5
--------- ---------
Total noninterest income 3,537.8 3,209.1
NONINTEREST EXPENSE
Salaries and employee benefits 4,406.8 3,607.5
Occupancy and equipment expense 1,243.7 1,220.8
External data processing 415.9 291.2
Advertising and marketing 375.1 360.9
Other expense 1,360.6 1,209.3
--------- ---------
Total noninterest expense 7,802.1 6,689.7
--------- ---------
INCOME BEFORE FEDERAL INCOME TAX 2,553.3 2,302.7
Federal income tax 665.2 576.7
--------- ---------
NET INCOME $ 1,888.1 $ 1,726.0
========= =========
Basic and diluted earnings per share $ 0.37 $ 0.33
(Earnings per share restated to reflect 2007 stock dividend)
UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Quarter to Date
------------------------------------------------
(Dollars in thousands except per share data) March 31, Change
----------------------- ----------------------
2008 2007 Amount Percentage
---------- ---------- --------- ----------
INCOME STATEMENT SUMMARY
Interest income $ 12,415.5 $ 12,353.5 $ 62.0 0.5%
Interest expense 4,937.9 5,061.5 (123.6) -2.4%
---------- ---------- ---------
Net interest income 7,477.6 7,292.0 185.6 2.5%
Provision for loan losses 660.0 1,508.7 (848.7) -56.3%
Non-interest income 3,537.8 3,209.1 328.7 10.2%
Non-interest expense 7,802.1 6,689.7 1,112.4 16.6%
---------- ---------- ---------
Income before taxes 2,553.3 2,302.7 250.6 10.9%
Federal income tax 665.2 576.7 88.5 15.3%
---------- ---------- ---------
Net income $ 1,888.1 $ 1,726.0 $ 162.1 9.4%
========== ========== =========
PERFORMANCE RATIOS
Return on average assets (annualized) 0.94% 0.92% 0.02% 2.2%
Return on average equity (annualized) 10.35% 9.35% 1.00% 10.7%
Net interest margin (tax equivalent) 4.10% 4.22% -0.12% -2.8%
Efficiency ratio 69.3% 62.3% 7.05% -11.3%
BALANCE SHEET DATA
Period-end:
Loans $ 654,965 $ 611,846 $ 43,119 7.0%
Allowance for loan loss 12,047 9,229 2,818 30.5%
Deposits 667,522 636,413 31,110 4.9%
Total assets 797,874 760,473 37,402 4.9%
Average:
Loans 654,940 605,872 49,068 8.1%
Deposits 677,023 632,500 44,523 7.0%
Earning assets 768,288 709,649 58,639 8.3%
Total assets 801,301 758,816 42,485 5.6%
ASSET QUALITY
Net charge offs $ 919 $ 182 $ 737 404.9%
Non-accrual loans 13,253 10,629 2,625 24.7%
Non-performing loans 16,235 10,855 5,380 49.6%
Nonperforming assets 18,626 11,966 6,660 55.7%
Loans over 90 days past due/total loans 0.46% 0.04% 0.42% 1137.9%
Nonperforming loans/total loans 2.48% 1.77% 0.70% 39.7%
Allowance for loan loss/total loans 1.84% 1.51% 0.33% 21.9%
Allowance for loan loss/nonperforming loans 74.2% 85.0% -10.8% -12.7%
STOCK PERFORMANCE
Basic and diluted earnings per share $ 0.37 $ 0.33 $ 0.05 14.2%
Per-share closing price
High $ 22.00 $ 23.50 $ (1.50) -6.4%
Low 17.00 $ 21.88 (4.88) -22.3%
End of period 18.00 $ 22.05 (4.05) -18.4%
Shares outstanding 5,084,943 5,242,572 (157,629) -3.0%
Dividends per share $ 0.20 $ 0.19 $ 0.01 5.3%
Dividend payout ratio 53.9% 58.5% -4.55% -7.8%
Price/earnings ratio (prior 12 months) 16.3x 13.7x 2.7x 19.5%
Selling price/book value 123.6% 153.6% -29.9% -19.5%
Book value per share $ 14.56 $ 14.36 $ 0.20 1.4%
All per-share data is restated to reflect 100% stock dividend in 2007
UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Quarter Ended
-------------------------------------------------------------------
(Dollars in thousands except per share data) March 31, December 31, September 30, June 30, March 31,
2008 2007 2007 2007 2007
---------- ------------ ------------- ---------- ----------
INCOME STATEMENT SUMMARY
Interest income $ 12,415.5 $ 13,077.9 $ 13,322.4 $ 12,880.3 $ 12,353.5
Interest expense 4,937.9 5,666.6 5,742.4 5,402.4 5,061.5
---------- ---------- ---------- ---------- ----------
Net interest income 7,477.6 7,411.3 7,580.0 7,477.9 7,292.0
Provision for loan losses 660.0 5,801.0 617.5 710.0 1,508.7
Non-interest income 3,537.8 3,566.5 3,538.2 3,338.3 3,209.1
Non-interest expense 7,802.1 6,612.5 7,267.0 6,990.4 6,689.7
---------- ---------- ---------- ---------- ----------
Income (loss) before taxes 2,553.3 (1,435.7) 3,233.7 3,115.7 2,302.7
Federal income tax 665.2 (685.8) 895.4 848.6 576.7
---------- ---------- ---------- ---------- ----------
Net income (loss) $ 1,888.1 $ (749.9) $ 2,338.3 $ 2,267.2 $ 1,726.0
========== ========== ========== ========== ==========
PERFORMANCE RATIOS
Return on average assets (annualized) 0.94% -0.37% 1.18% 1.18% 0.92%
Return on average equity (annualized) 10.35% -3.97% 12.32% 12.11% 9.35%
Net interest margin (tax equivalent) 4.10% 4.06% 4.21% 4.29% 4.22%
Efficiency ratio 69.3% 59.0% 64.0% 63.2% 62.3%
BALANCE SHEET DATA
Period-end:
Loans $ 654,965 $ 644,530 $ 648,626 $ 634,056 $ 611,846
Allowance for loan loss 12,047 12,306 7,714 7,561 9,229
Deposits 667,522 671,537 658,660 656,866 636,413
Total assets 797,874 795,687 788,297 781,640 760,473
Average:
Loans 654,940 650,606 648,026 630,439 605,872
Deposits 677,023 665,498 654,216 636,702 632,500
Earning assets 768,288 758,261 748,878 733,693 709,649
Total assets 801,301 797,472 784,135 768,165 758,816
ASSET QUALITY
Net charge offs $ 919 $ 1,211 $ 464 $ 2,379 $ 182
Non-accrual loans 13,253 13,695 7,467 7,261 10,629
Non-performing loans 16,235 15,150 8,999 7,514 10,855
Nonperforming assets 18,626 17,415 10,978 8,672 11,966
Loans over 90 days past due/total loans 0.46% 0.22% 0.23% 0.04% 0.04%
Nonperforming loans/total loans 2.48% 2.35% 1.39% 1.19% 1.77%
Allowance for loan loss/total loans 1.84% 1.89% 1.19% 1.19% 1.51%
Allowance/nonperforming loans 74.2% 81.2% 85.7% 100.6% 85.0%
STOCK PERFORMANCE
Basic and diluted earnings per share $ 0.37 $ (0.15) $ 0.45 $ 0.43 $ 0.33
Per-share closing price
High $ 22.00 $ 22.00 $ 22.50 $ 24.00 $ 23.50
Low 17.00 17.00 20.20 21.75 21.88
End of period 18.00 17.00 20.75 21.75 22.05
Shares outstanding 5,084,943 5,092,230 5,133,444 5,216,770 5,242,572
Dividends per share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.19
Dividend payout ratio 53.9% 137.9% 44.4% 46.6% 58.5%
Price/earnings ratio (prior 12 months) 16.3x 16.1x 12.9x 13.4x 13.7x
Selling price/book value 123.6% 118.6% 141.1% 150.3% 153.6%
Book value per share $ 14.56 $ 14.33 $ 14.71 $ 14.47 $ 14.36
All per-share data is restated to reflect 100% stock dividend in 2007
8