EXHIBIT 99.1
FOR IMMEDIATE RELEASE: CONTACT: Robert K. Chapman
July 25, 2008 United Bancorp, Inc.
734-214-3801
UNITED BANCORP, INC. ANNOUNCES
SECOND QUARTER 2008 EARNINGS
TECUMSEH, MI - United Bancorp, Inc. (UBMI), reported net income of $1,695,300 or
$.33 per share for the quarter ended June 30, 2008, compared to $2,267,200 or
$.43 per share for the same quarter of 2007. Earnings for the first six months
of 2008 were $3,583,400, or $.70 per share, compared to $3,993,200, or $.75 per
share for the same period of 2007.
Financial Performance
Additions to the Company's allowance for loan losses reduced net income during
the second quarter of 2008, resulting in a decline in net income from the prior
quarter and the same quarter of 2007. While loan quality and competitive pricing
pressure have continued to negatively impact the Company's net interest margin,
non-interest income has increased 12.8% over the same quarter of 2007 and now
represents 33% of total revenue. Robert K. Chapman, President and Chief
Executive Officer of United Bancorp, noted "We continue to address the issues of
tightening margin and credit quality resulting from the current economic
conditions, while building on our strengths to grow our noninterest income."
Asset Quality
In the second quarter of 2008, the Company's provision for loan loss was $1.65
million, up from $710,000 for the same quarter of 2007, bringing the provision
for the first six months of 2008 to $2.31 million. This compares to a provision
of $2.22 million for the same period of 2007, for an increase of 4.1%. The
increase in provision relates to the Company's recognition of potential losses
relating to a few large business loans and the Company's corresponding increase
in the amount of its Allowance for Loan Losses at June 30, 2008.
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 June 30, 2008, the Company's allowance for loan loss
was 1.96% of total loans, up slightly from the end of the first quarter, and up
from 1.19% at June 30, 2007. The Company's ratio of total nonperforming loans to
total loans increased from 2.48% at March 31, 2008 to 2.65% at June 30, 2008. At
the end of the current quarter, non-performing loans totaled $17.5 million,
compared to $16.2 million at the end of the first quarter of 2008 and $7.5
million one year earlier.
Financial Condition
Total consolidated assets of the Company of $798.9 million at June 30, 2008 were
up 2.2% from the same period last year. At the end of June, portfolio loan
balances reached $662.0 million, up 4.4% from June 30, 2007, and loan growth was
$28.0 million over the past year. Deposits at June 30, 2008 were $669.1 million,
for an increase of 1.9% 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)
June 30, December 31, June 30,
(Dollars in thousands except per share data) 2008 2007 2007
--------- ------------ --------
ASSETS
Cash and demand balances in other banks $ 16,481.0 $ 17,995.8 $ 19,138.9
Federal funds sold 2,050.0 11,130.0 --
------------- ------------ ------------
Total cash and cash equivalents 18,531.0 29,125.8 19,138.9
Securities available for sale 83,203.7 85,897.6 89,363.1
Loans held for sale 5,249.3 5,770.1 6,008.8
Portfolio loans
Personal 102,185.7 98,658.5 97,439.1
Business 464,657.8 451,717.5 447,302.0
Residential mortgage 95,170.3 94,154.0 89,315.1
------------- ------------ ------------
Total loans 662,013.8 644,530.0 634,056.2
Less allowance for loan losses 13,008.0 12,305.9 7,560.7
------------- ------------ ------------
Net loans 649,005.8 632,224.1 626,495.5
Premises and equipment, net 12,861.7 13,160.3 13,366.7
Goodwill 3,469.1 3,469.1 3,469.1
Bank owned life insurance 12,193.9 11,960.5 11,721.1
Accrued interest receivable and other assets 14,407.9 14,079.9 12,076.7
------------- ------------ ------------
TOTAL ASSETS $ 798,922.4 $ 795,687.4 $ 781,639.9
============= ============ ============
LIABILITIES
Deposits
Non-interest bearing $ 89,088.2 $ 77,877.9 $ 86,248.6
Interest bearing 579,966.2 593,659.3 570,617.8
------------- ------------ ------------
Total deposits 669,054.4 671,537.2 656,866.4
Fed funds borrowed -- -- 2,800.0
FHLB advances outstanding 51,462.0 44,611.1 42,135.7
Accrued interest payable and other liabilities 4,954.0 6,572.0 4,336.7
------------- ------------ ------------
TOTAL LIABILITIES 725,470.4 722,720.3 706,138.8
------------- ------------ ------------
SHAREHOLDERS' EQUITY
Common stock and paid in capital, no par value;
10,000,000 shares authorized; 5,052,443, 5,092,230 and
5,216,770 shares issued and outstanding, respectively 67,178.9 67,860.0 70,406.6
Retained earnings 6,346.3 4,814.2 5,319.0
Accumulated other comprehensive income, net of tax (73.2) 292.9 (224.5)
------------- ------------ ------------
TOTAL SHAREHOLDERS' EQUITY 73,452.0 72,967.1 75,501.1
------------- ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 798,922.4 $ 795,687.4 $ 781,639.9
============= ============ ============
Book value per share of common stock $ 14.54 $ 14.33 $ 14.47
(Per share values restated to reflect 2007 stock dividend)
3
UNITED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Quarter to Date Year to Date
----------------------- -----------------------
June 30, June 30, June 30, June 30,
(Dollars in thousands except per share data) 2008 2007 2008 2007
---------- ---------- ---------- ---------
INTEREST INCOME
Interest and fees on loans $ 10,567.0 $ 11,853.2 $ 21,899.0 $23,006.5
Interest on investment securities 922.4 1,011.4 1,886.4 2,085.3
Interest on federal funds sold 2.0 15.7 121.5 142.0
---------- ---------- ---------- ---------
Total interest income 11,491.4 12,880.3 23,906.9 25,233.8
INTEREST EXPENSE
Interest on deposits 3,480.0 4,807.5 7,888.0 9,365.4
Interest on federal funds purchased 68.9 80.0 75.6 86.9
Interest on FHLB advances 555.3 514.9 1,078.5 1,011.6
---------- ---------- ---------- ---------
Total interest expense 4,104.2 5,402.4 9,042.1 10,463.9
---------- ---------- ---------- ---------
NET INTEREST INCOME 7,387.2 7,477.9 14,864.8 14,769.9
Provision for loan losses 1,650.0 710.0 2,310.0 2,218.7
---------- ---------- ---------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,737.2 6,767.9 12,554.8 12,551.2
---------- ---------- ---------- ---------
NONINTEREST INCOME
Service charges on deposit accounts 893.7 878.3 1,716.9 1,688.3
Trust & Investment fee income 1,144.2 1,173.9 2,313.5 2,388.1
Gains on securities transactions 50.6 -- 103.8 0.8
Income from loan sales and servicing 808.2 392.9 1,416.5 769.0
ATM, debit and credit card fee income 590.5 532.2 1,119.9 1,003.9
Income from bank-owned life insurance 117.9 116.4 233.4 222.0
Other income 161.3 244.6 400.2 475.3
---------- ---------- ---------- ---------
Total noninterest income 3,766.4 3,338.3 7,304.2 6,547.4
NONINTEREST EXPENSE
Salaries and employee benefits 4,063.4 3,734.9 8,470.2 7,342.4
Occupancy and equipment expense 1,215.3 1,196.6 2,459.0 2,417.4
External data processing 459.9 431.8 875.8 723.1
Advertising and marketing 315.6 301.4 690.7 662.3
Other expense 1,193.8 1,325.7 2,554.4 2,534.9
---------- ---------- ---------- ---------
Total noninterest expense 7,248.0 6,990.4 15,050.1 13,680.1
---------- ---------- ---------- ---------
INCOME BEFORE FEDERAL INCOME TAX 2,255.6 3,115.8 4,808.9 5,418.5
Federal income tax 560.3 848.6 1,225.5 1,425.3
---------- ---------- ---------- ---------
NET INCOME $ 1,695.3 $ 2,267.2 $ 3,583.4 $ 3,993.2
========== ========== ========== =========
Basic and diluted earnings per share $ 0.33 $ 0.43 $ 0.70 $ 0.75
(Earnings per share restated to reflect 2007 stock
dividend)
4
UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Quarter to Date
------------------------------------------------------
June 30, Change
-------------------------- -------------------------
(Dollars in thousands except per share data) 2008 2007 Amount Percentage
------------ ----------- ----------- -----------
INCOME STATEMENT SUMMARY
Interest income $ 11,491.4 $ 12,880.3 $ (1,388.9) -10.8%
Interest expense 4,104.2 5,402.4 (1,298.2) -24.0%
------------ ----------- -----------
Net interest income 7,387.2 7,477.9 (90.7) -1.2%
Provision for loan losses 1,650.0 710.0 940.0 132.4%
Non-interest income 3,766.4 3,338.3 428.1 12.8%
Non-interest expense 7,248.0 6,990.4 257.6 3.7%
------------ ----------- -----------
Income before taxes 2,255.6 3,115.8 (860.2) -27.6%
Federal income tax 560.3 848.6 (288.3) -34.0%
------------ ----------- -----------
Net income $ 1,695.3 $ 2,267.2 $ (571.9) -25.2%
============ =========== ===========
PERFORMANCE RATIOS
Return on average assets (annualized) 0.86% 1.18% -0.32% -27.1%
Return on average equity (annualized) 9.29% 12.11% -2.82% -23.3%
Net interest margin (tax equivalent) 4.07% 4.22% -0.15% -3.5%
Efficiency ratio 63.6% 63.2% 0.45% -0.7%
BALANCE SHEET DATA
Period-end:
Portfolio loans $ 662,014 $ 634,056 $ 27,958 4.4%
Allowance for loan loss 13,008 7,561 5,447 72.0%
Deposits 669,054 656,866 12,188 1.9%
Total assets 798,922 781,640 17,283 2.2%
Average:
Loans 664,895 630,439 34,456 5.5%
Deposits 655,132 636,702 18,430 2.9%
Earning assets 765,808 709,649 56,159 7.9%
Total assets 797,715 768,165 29,550 3.8%
ASSET QUALITY
Net charge offs $ 689 $ 2,379 $ (1,690) -71.0%
Non-accrual loans 15,716 7,261 8,455 116.4%
Non-performing loans 17,528 7,514 10,014 133.3%
Non-performing assets 20,263 8,672 11,591 133.7%
Loans over 90 days past due/total loans 0.27% 0.04% 0.24% 644.2%
Nonperforming loans/total loans 2.65% 1.19% 1.46% 123.4%
Allowance for loan loss/total loans 1.96% 1.19% 0.77% 64.8%
Allowance for loan loss/nonperforming loans 74.2% 100.6% -26.4% -26.2%
STOCK PERFORMANCE
Basic and diluted earnings per share $ 0.33 $ 0.43 $ (0.10) -23.1%
Per-share closing price
High $ 20.00 $ 24.00 $ (4.00) -16.7%
Low 14.00 $ 21.75 (7.75) -35.6%
End of period 15.00 $ 21.75 (6.75) -31.0%
Shares outstanding 5,052,443 5,216,770 (164,327) -3.1%
Dividends per share $ 0.20 $ 0.20 $ -- 0.0%
Dividend payout ratio 60.6% 46.6% 13.99% 30.0%
Price/earnings ratio (prior four quarters) 13.6x 13.4x 0.3x 2.0%
Selling price/book value 103.2% 150.3% -47.1% -31.4%
Book value per share $ 14.54 $ 14.47 $ 0.07 0.5%
All per-share data is restated to reflect 100% stock dividend in 2007
5
UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Year to Date
---------------------------------------------------
June 30, Change
------------------------- -----------------------
(Dollars in thousands except per share data) 2008 2007 Amount Percentage
----------- ----------- ---------- ----------
INCOME STATEMENT SUMMARY
Interest income $ 23,906.9 $ 25,233.8 $ (1,326.9) -5.3%
Interest expense 9,042.1 10,463.9 (1,421.8) -13.6%
----------- ----------- ----------
Net Interest Income 14,864.8 14,769.9 94.9 0.6%
Provision for loan losses 2,310.0 2,218.7 91.3 4.1%
Non-interest income 7,304.2 6,547.4 756.8 11.6%
Non-interest expense 15,050.1 13,680.1 1,370.0 10.0%
----------- ----------- ----------
Income before taxes 4,808.9 5,418.5 (609.6) -11.3%
Federal income tax 1,225.5 1,425.3 (199.8) -14.0%
----------- ----------- ----------
Net income $ 3,583.4 $ 3,993.2 $ (409.8) -10.3%
=========== =========== ==========
PERFORMANCE RATIOS
Return on average assets (annualized) 0.90% 1.05% -0.15% -14.3%
Return on average equity (annualized) 9.82% 10.75% -0.93% -8.7%
Net interest margin (tax equivalent) 4.10% 4.23% -0.13% -3.2%
Efficiency ratio 66.4% 62.7% 3.71% -5.9%
BALANCE SHEET DATA
Period-end:
Portfolio loans $ 662,014 $ 634,056 $ 27,958 4.4%
Allowance for loan loss 13,008 7,561 5,447 72.0%
Deposits 669,054 656,866 12,188 1.9%
Total assets 798,922 781,640 17,283 2.2%
Average:
Loans 659,923 630,439 29,484 4.7%
Deposits 666,170 636,702 29,468 4.6%
Earning assets 765,257 709,649 55,608 7.8%
Total assets 802,997 768,165 34,832 4.5%
ASSET QUALITY
Net charge offs $ 1,611 $ 2,507 $ (896) -35.7%
Non-accrual loans 15,716 7,261 8,455 116.4%
Non-performing loans 17,528 7,514 10,014 133.3%
Non-performing assets 20,263 8,672 11,591 133.7%
Loans over 90 days past due/total loans 0.27% 0.04% 0.24% 644.2%
Nonperforming loans/total loans 2.65% 1.19% 1.46% 123.4%
Allowance for loan loss/total loans 1.96% 1.19% 0.77% 64.8%
Allowance for loan loss/nonperforming loans 74.2% 100.6% -26.4% -26.2%
STOCK PERFORMANCE
Basic and diluted earnings per share $ 0.70 $ 0.75 $ (0.05) -7.2%
Per-share closing price
High $ 22.00 $ 24.00 $ (2.00) -8.3%
Low 14.00 $ 21.75 (7.75) -35.6%
End of period 15.00 $ 21.75 (6.75) -31.0%
Shares outstanding 5,052,443 5,216,770 (164,327) -3.1%
Dividends per share $ 0.40 $ 0.40 $ - $ 0.0%
Dividend payout ratio 57.1% 53.1% 4.09% 7.7%
Price/earnings ratio (prior four quarters) 13.6x 13.4x 0.3x 2.0%
Selling price/book value 103.2% 150.3% -47.1% -31.4%
Book value per share $ 14.54 $ 14.47 $ 0.07 0.5%
All per-share data is restated to reflect 100% stock dividend in 2007
6
UNITED BANCORP, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Quarter Ended
-------------------------------------------------------------------------
June 30, March 31 December 31, September 30, June 30,
(Dollars in thousands except per share data) 2008 2008 2007 2007 2007
----------- ----------- -------------- -------------- -----------
INCOME STATEMENT SUMMARY
Interest income $ 11,491.4 $ 12,415.5 $ 13,077.9 $ 13,322.4 $ 12,880.3
Interest expense 4,104.2 4,937.9 5,666.6 5,742.4 5,402.4
----------- ----------- -------------- -------------- -----------
Net interest income 7,387.2 7,477.6 7,411.3 7,580.0 7,477.9
Provision for loan losses 1,650.0 660.0 5,801.0 617.5 710.0
Non-interest income 3,766.4 3,537.8 3,566.5 3,538.2 3,338.3
Non-interest expense 7,248.0 7,802.1 6,612.5 7,267.0 6,990.4
----------- ----------- -------------- -------------- -----------
Income (loss) before taxes 2,255.6 2,553.3 (1,435.7) 3,233.7 3,115.8
Federal income tax 560.3 665.2 (685.8) 895.4 848.6
----------- ----------- -------------- -------------- -----------
Net income (loss) $ 1,695.3 $ 1,888.1 $ (749.9) $ 2,338.3 $ 2,267.2
=========== =========== ============== ============== ===========
PERFORMANCE RATIOS
Return on average assets (annualized) 0.86% 0.94% -0.37% 1.18% 1.18%
Return on average equity (annualized) 9.29% 10.35% -3.97% 12.32% 12.11%
Net interest margin (tax equivalent) 4.07% 4.10% 4.06% 4.21% 4.22%
Efficiency ratio 63.6% 69.3% 59.0% 64.0% 63.2%
BALANCE SHEET DATA
Period-end:
Portfolio loans $ 662,014 $ 654,965 $ 644,530 $ 648,626 $ 634,056
Allowance for loan loss 13,008 12,047 12,306 7,714 7,561
Deposits 669,054 667,522 671,537 658,660 656,866
Total assets 798,922 797,874 795,687 788,297 781,640
Average:
Loans 664,895 654,940 650,606 648,026 630,439
Deposits 655,132 677,023 665,498 654,216 636,702
Earning assets 765,808 768,288 758,261 748,878 733,693
Total assets 797,715 801,301 797,472 784,135 768,165
ASSET QUALITY
Net charge offs $ 689 $ 919 $ 1,211 $ 464 $ 2,379
Non-accrual loans 15,716 13,253 13,695 7,467 7,261
Non-performing loans 17,528 16,235 15,150 8,999 7,514
Non-performing assets 20,263 18,626 17,415 10,978 8,672
Loans over 90 days past due/total loans 0.27% 0.46% 0.22% 0.23% 0.04%
Nonperforming loans/total loans 2.65% 2.48% 2.35% 1.39% 1.19%
Allowance for loan loss/total loans 1.96% 1.84% 1.91% 1.19% 1.19%
Allowance/nonperforming loans 74.2% 74.2% 81.2% 85.7% 100.6%
STOCK PERFORMANCE
Basic and diluted earnings per share $ 0.33 $ 0.37 $ (0.15) $ 0.45 $ 0.43
Per-share closing price
High $ 20.00 $ 22.00 $ 22.00 $ 22.50 $ 24.00
Low 14.00 17.00 17.00 20.20 21.75
End of period 15.00 18.00 17.00 20.75 21.75
Shares outstanding 5,052,443 5,084,943 5,092,230 5,133,444 5,216,770
Dividends per share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20
Dividend payout ratio 60.6% 53.9% 137.9% 44.4% 46.6%
Price/earnings ratio (prior four quarters) 13.6x 16.3x 16.1x 12.9x 13.4x
Selling price/book value 103.2% 123.6% 118.6% 141.1% 150.3%
Book value per share $ 14.54 $ 14.56 $ 14.33 $ 14.71 $ 14.47
All per-share data is restated to reflect 100% stock dividend in 2007
7