United Bancorp, Inc. Reports Earnings for the Three and Nine Months Ended September 30, 2010

Oct 27, 2010, 12:00 ET from United Bancorp, Inc.

MARTINS FERRY, Ohio, Oct. 27 /PRNewswire-FirstCall/ -- United Bancorp, Inc. (Nasdaq: UBCP), headquartered in Martins Ferry, Ohio reported net income of $711,000 for the quarter ended September 30, 2010, compared to $758,000 for the quarter ended September 30, 2009, a decrease of 6.2%.  On a per share basis, the Company's three months diluted earnings were $0.15 for the 2010 period, as compared to $0.16 for the same period in 2009.  For the nine months ended September 30, 2010 the Company reported net income of $2,094,000, compared to $2,230,000 for the nine months ended September 30, 2009, a decrease of $136,000 or 6.1%.  On a per share basis, the Company's nine months diluted earnings were $0.43 for 2010, as compared to $0.48 for 2009.

Randall M. Greenwood, Senior Vice President, CFO and Treasurer remarked, "The Company's earnings in the nine months ended September 30, 2010 generated an annualized 0.63% return on average assets ("ROA") and a 7.74% return on average equity ("ROE"), compared to 0.62% ROA and 8.21% ROE for the nine months ended September 30, 2009.  Comparing the nine months ended September 30, 2010 to 2009, the Company's net interest margin was 3.94% compared to 3.83%, an increase of 11 basis points. Although the net interest margin increased, the Company's net interest income decreased by approximately $133,000 or 1.2%, due to a decrease in the Company's earning assets. At September 30, 2010, the Company had approximately $41 million of liquidity in cash and cash equivalents to fund our future loan demand.  With this high level of available funding, the Company has not been aggressive in the retention of higher cost deposit funding, mainly certificates of deposit.  While this has resulted in a decrease in the earning assets of the Bank, it increased the net interest margin of the Company since the cost reduction of the certificates of deposit exceeded the rate of return on the cash and cash equivalents of the Company. Comparing the same periods, Customer Service Fees on deposits increased $47,000.  On the expense side, total noninterest expense increased $233,000 for the nine months ended September 30, 2010 as compared to 2009.  The increase in total noninterest expense was primarily due to the third quarter 2010 implementation of our new data processing system.  The Company incurred approximately $184,000 in direct expenses related to this new system which is non-recurring. In addition, the Company incurred a $70,000 period over period increase in losses on foreclosed real estate due to additional write-downs that were taken and a period over period increase of $55,000 in our Provision for Loan Losses.  The increase in the provision for loan losses for the nine months ended September 30, 2010 was predicated primarily upon the economic challenges facing the banking industry.  Asset quality improved in the current period with an 18.3% reduction in Non-Performing Loans.  During the third quarter of 2010, the Company recognized a tax benefit resulting from the resolution of a tax contingency, which reduced federal income taxes by approximately $120,000."  

James W. Everson, UBCP's Chairman, President and CEO stated, "We are pleased to report our financial performance to date is exceeding our 2010 budget projections which included higher than normal loan loss provisions, capital expenditure costs and FDIC Insurance premiums.  We anticipate greater operating efficiencies and cost savings from our recently installed core system as we further integrate it into our daily operations.  As we continue the current trend of reducing our non accruing loans and liquidating our 'Other Real Estate' holdings, we anticipate a normalization of our loan loss accruals to a level that will benefit future earnings."  Everson concluded, "We have had a policy of rewarding our shareholders through continued quarterly dividends since the inception of UBCP in 1983, reflecting on our positive growth.  During these tough economic times, we are pleased with the Company's earnings that allow us to keep a balance amongst maintaining our 'Well Capitalized' status and making capital expenditures for future growth, while sufficiently accruing into our Loan Loss Provision as we manage our asset quality ...plus cover this generous dividend payment policy."  

United Bancorp, Inc. is headquartered in Martins Ferry, Ohio with total assets of approximately $442.9 million and total shareholder's equity of approximately $36.6 million as of September 30, 2010.  Through its single bank charter with its twenty banking offices and an operations center, The Citizens Savings Bank through its Community Bank Division serves the Ohio Counties of Athens, Fairfield and Hocking and through its Citizens Bank Division serves Belmont, Carroll, Harrison, Jefferson and Tuscarawas. United Bancorp, Inc. is a part of the Russell Microcap Index and trades on The NASDAQ Capital Market tier of the NASDAQ Stock Market under the symbol UBCP, Cusip #909911109.

United Bancorp, Inc. ("UBCP")


For the Three Months Ended September 30,


%


2010


2009


Change

Earnings






   Total interest income

$                     5,403,458


$                   5,815,978


-7.09%

   Total interest expense

1,581,787


2,010,158


-21.31%

   Net interest income

3,821,671


3,805,820


0.42%

   Provision for loan losses

320,547


338,191


-5.22%

   Net interest income after provision for loan losses

3,501,124


3,467,629


0.97%

   Service charges on deposit accounts

568,087


592,647


-4.14%

   Net realized gains of sales on securities

47,342


-


N/A

   Net realized gains on sale of loans

48,690


56,148


-13.28%

   Net realized gains on sale of other






       real estate and repossessions

36,683


8,222


346.16%

   Other noninterest income

195,409


196,265


-0.44%

   Total noninterest income

896,211


853,282


5.03%

   Conversion Expenses

184,198


-


N/A

   FDIC Insurance Premiums

137,281


237,552


-42.21%

   Total noninterest expense






(Excluding FDIC Insurance Premiums and Conversion Expenses)

3,365,377


3,181,852


5.77%

   Income tax (credit) expense

(477)


143,940


-100.33%

   Net income

$                        710,956


$                      757,567


-6.15%

Per share






   Earnings per common share - Basic

$                              0.15


$                            0.16


-6.25%

   Earnings per common share - Diluted

0.15


0.16


-6.25%

   Cash Dividends paid

0.14


0.14


0.00%

Shares Outstanding






   Average - Basic

4,705,278


4,626,354


--------

   Average - Diluted

4,721,183


4,626,354


--------




For the Nine Months Ended September 30,


%


2010


2009


Change

Earnings






   Total interest income

$                   16,446,458


$                 17,589,791


-6.50%

   Total interest expense

5,100,915


6,111,145


-16.53%

   Net interest income

11,345,543


11,478,646


-1.16%

   Provision for loan losses

1,050,592


996,034


5.48%

   Net interest income after provision for loan losses

10,294,951


10,482,612


-1.79%

   Service charges on deposit accounts

1,726,154


1,678,807


2.82%

   Net realized gains of sales on securities

47,342


25,469


85.88%

   Net realized gains on sale of loans

92,327


105,825


-12.76%

   Net realized gains on sale of other






       real estate and repossessions

35,916


87,118


-58.77%

   Other noninterest income

629,415


558,272


12.74%

   Total noninterest income

2,531,154


2,455,491


3.08%

   Conversion Expense

184,198


-


N/A

   FDIC Insurance Premiums

376,844


682,515


-44.79%

   Total noninterest expense






(Excluding FDIC Insurance Premiums and Conversion Expenses)

9,968,387


9,613,652


3.69%

   Income tax expense

202,342


411,440


-50.82%

   Net income

2,094,334


2,230,496


-6.10%

Per share






   Earnings per common share - Basic

$                              0.43


$                            0.48


-10.42%

   Earnings per common share - Diluted

0.43


0.48


-10.42%

   Cash Dividends paid

0.42


0.42


0.00%

   Book value (end of period)

7.77


7.35


5.71%

Shares Outstanding






   Average - Basic

4,681,892


4,612,680


--------

   Average - Diluted

4,702,799


4,613,070


--------

At quarter end






   Total assets

$                 442,857,853


$               446,660,879


-0.85%

   Total assets (average)

443,307,000


450,761,000


-1.65%

   Other real estate and repossessions

1,741,215


1,035,696


68.12%

   Gross loans

277,510,941


247,039,663


12.33%

   Allowance for loan losses

2,755,115


2,925,953


-5.84%

   Net loans

274,755,826


244,113,710


12.55%

   Net loans charged off

686,000


840,440


-18.38%

   Non-performing loans

4,855,000


5,939,000


-18.25%

   Average loans

265,296,000


239,771,000


10.65%

   Securities and other required stock

96,243,231


123,764,262


-22.24%

   Shareholders' equity

36,632,770


35,045,140


4.53%

   Shareholders' equity (average)

36,088,000


34,011,000


6.11%

Stock data






   Market value - last close (end of period)

$                              8.01


$                            8.07


-0.74%

   Dividend payout ratio

97.67%


87.50%


11.62%

   Price earnings ratio

13.35

x

12.42

x

7.53%

Key performance ratios






   Return on average assets (ROA)

0.63%


0.62%


0.01%

   Return on average equity (ROE)

7.74%


8.21%


-0.47%

   Net interest margin (federal tax equivalent)

3.94%


3.83%


0.11%

   Interest expense to average assets

1.53%


1.81%


-0.27%

   Total allowance for loan losses






       to nonperforming loans

56.75%


49.27%


7.48%

   Total allowance for loan losses






       to total loans

0.99%


1.18%


-0.19%

  Nonperforming loans to total loans

1.75%


2.40%


-0.65%

  Nonperforming assets to total assets

1.49%


1.56%


-0.07%

  Net charge-offs to average loans

0.26%


0.35%


-0.09%

  Equity to assets at period end

8.27%


7.85%


0.43%



Certain statements contained herein are not based on historical facts and are "forward-looking statements" within the meaning of Section 21A of the Securities Exchange Act of 1934.  Forward-looking statements, which are based on various assumptions (some of which are beyond the Company's control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of these terms.  Actual results could differ materially from those set forth in forward-looking statements, due to a variety of factors, including, but not limited to, those related to the economic environment, particularly in the market areas in which the company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, changes in the financial and securities markets, including changes with respect to the market value of our financial assets, and the availability of and costs associated with sources of liquidity.  The Company undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE United Bancorp, Inc.



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http://www.unitedbancorp.com