United Bancorp, Inc. Reports Earnings of $1.492 Million for the Six Months Ended June 30, 2012

Jul 24, 2012, 12:00 ET from United Bancorp, Inc.

MARTINS FERRY, Ohio, July 24, 2012 /PRNewswire/ -- United Bancorp, Inc. (NASDAQ: UBCP), headquartered in Martins Ferry, Ohio reported net earnings of $1,492,000 for the six months ended June 30, 2012, compared to $1,490,000 for the six months ended June 30, 2011.  On a per share basis, the Company's diluted earnings were $0.30 for the six months ended June 30, 2012, as compared to $0.30 for the six months ended June 30, 2011.  For the three months ended June 30, 2012 the Company reported net earnings of $731,000, compared to $752,000 for the three months ended June 30, 2011, a decrease of 2.8%.  On a per share basis, the Company's three months diluted earnings were $0.15 for 2012 and 2011.

Randall M. Greenwood, Senior Vice President, CFO and Treasurer remarked, "The Company's earnings for the six months ended June 30, 2012 generated an annualized 0.70% return on average assets ("ROA") and a 8.21% return on average equity ("ROE"), compared to 0.70% ROA and 8.20% ROE for the six months ended June 30, 2011.  Comparing the six months ended June 30, 2012 to 2011, the Company's net interest margin was 3.94% compared to 4.23%, a decrease of 29 basis points. This decrease in the margin resulted in a $479,000 decrease in net interest income for the six months ended June 30, 2012 as compared to the same period in 2011. Comparing the same periods, customer service fees on deposit accounts decreased $6,000.  As the Company has implemented government mandated regulations from the Dodd-Frank Act regarding its courtesy overdraft program, the Company has seen a reduction in customer service fees and may continue to experience a decrease in these fees in future periods.  During the six months ended June 30, 2012 the Company did not sell any securities. However, during 2011, the Company recognized a gain on sale of securities of $370,000 for the six months ended June 30, 2011 and the Company received $100,000 of a BOLI benefit in excess of surrender value.  In 2011, the Company sold its government sponsored mortgage–backed securities portfolio to take advantage of the favorable rate environment on these short term investments and provide liquidity to restructure the Company's balance sheet.  On the expense side, the Company's 2012 earnings were positively impacted by a period over period decrease of $641,000 in our provision for loan losses. The decrease in the provision for loan losses was primarily due to overall improvement in the credit quality of the loan portfolio.  Net loans charged off decreased approximately $326,000 for the six months ended June 30, 2012 as compared to the same period in 2011.  Net loans of $773,000 were charged off during the six months ended June 30, 2012.  One out of area loan relationship accounted for $755,000 of the net loans charged off during the six months ended June 30, 2012. Other real estate owned decreased $192,000 from June 30, 2011 to June 30, 2012.  Nonaccrual loans to total loans decreased by 12 basis points or $311,000, going from 1.52% in 2011 to 1.40% for the same period in 2012.  This declining trend is very positive and the present level of nonaccrual loans to total loans is nearly half of that of our peer group." 

James W. Everson, Chairman, President & CEO stated, "Banking has always been a job of risk management.  Historically, bank management has been challenged to manage credit risk, investment risk, liquidity risk, interest-rate risk and information security risk.  To a large degree, these risks are within the control of our management team.  Effectively managing these various risks in the past and into the present has led to very acceptable levels of financial performance without having to participate in the government Troubled Asset Relief Program (TARP).  Today, there is another growing risk being instituted that is somewhat outside of bank management's control...."Government Risk".  Our focus going forward must be on the "G" risk and meeting the challenges imposed upon us by the Dodd-Frank Act, the Consumer Financial Protection Bureau and future regulatory burdens forcing us to comply with much more stringent capital requirements relating to guidelines being thrust upon us by the international Basel Committee on Banking Supervision or Basel III.  In addition, we must continue to meet the challenges of a zero based interest rate monetary policy being affected by the Federal Reserve for a historically unprecedented length of time, now in its fourth year."  Everson concluded, "Our long term goal is to grow shareholder value as we travel through these unchartered waters of continuing and impending regulatory reform and interest rate policy."

United Bancorp, Inc. is headquartered in Martins Ferry, Ohio with total assets of approximately $423.8 million and total shareholder's equity of approximately $36.4 million as of June 30, 2012.  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.

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 carry forward-looking statements, whether as a result of new information, future events or otherwise.

  

United Bancorp, Inc. ("UBCP")

For the Three Months Ended June 30,

%

2012

2011

Change

Earnings 

    Total interest income

$    4,629,175

$    5,211,582

-11.18%

    Total interest expense

993,390

1,219,591

-18.55%

    Net interest income

3,635,785

3,991,991

-8.92%

    Provision for loan losses

167,691

494,399

-66.08%

    Service charges on deposit accounts

485,917

578,817

-16.05%

    Net realized gains of sales on securities

-

-

---

    Net realized gains on sale of loans

5,461

12,673

56.91%

    BOLI benefit in excess of surrender value

-

100,000

---

    Net realized loss on sale of  other real

         estate and repossessions

(14,107)

(4,921)

-186.67%

    Other noninterest income

200,309

207,920

-3.66%

         Total noninterest income

677,580

894,489

-24.25%

    Deposit insurance premiums

68,310

120,057

-43.10%

    Provision for losses on foreclosed real       estate

52,160

48,784

---

    Other noninterest expense 

3,060,267

3,303,493

-7.36%

           (Excluding FDIC Insurance Premiums             and

           provision for losses on impairment of            foreclosed real estate)

          Total noninterest expense

3,180,737

3,472,334

-8.40%

    Income tax expense

233,482

167,456

39.43%

    Net income

$        731,455

$       752,291

-2.77%

Per share

    Earnings per common share - Basic

$              0.15

$             0.15

0.00%

    Earnings per common share - Diluted 

0.15

0.15

0.00%

    Cash dividends paid

0.14

0.14

0.00%

    Annualized yield based on quarter end close

6.22%

6.34%

Shares Outstanding

    Average - Basic

4,781,770

4,759,315

--------

    Average - Diluted 

4,862,269

4,789,314

--------

For the Six Months Ended June 30,

%

2012

2011

Change

Earnings 

    Total interest income

$     9,320,849

$ 10,249,640

-9.06%

    Total interest expense

2,025,786

2,475,336

-18.16%

    Net interest income

7,295,063

7,774,304

-6.16%

    Provision for loan losses

501,039

1,141,975

-56.13%

    Service charges on deposit accounts

1,016,451

1,022,916

-0.63%

    Net realized gains of sales on securities

-

370,145

---

    Net realized gains on sale of loans

9,347

42,569

-78.04%

    BOLI benefit in excess of surrender value

-

100,000

---

    Net realized losses on sale of  Other real

---

         estate and repossessions

(5,797)

(4,921)

17.80%

    Other noninterest income

397,865

428,156

-7.07%

         Total noninterest income

1,417,866

1,958,865

-27.62%

    Deposit Insurance premiums 

142,343

207,051

-31.25%

    Provision for losses on foreclosed real      estate

52,160

48,784

6.92%

    Other noninterest expense 

6,220,357

6,511,418

-4.47%

           (Excluding FDIC Insurance Premiums            and

           provision for losses on impairment of            foreclosed real estate)

         Total noninterest expense 

6,414,860

6,767,253

-5.21%

    Income tax expense

304,692

333,696

-8.69%

    Net income

$     1,492,338

$     1,490,245

0.14%

Per share

    Earnings per common share - Basic

$              0.30

$              0.30

0.00%

    Earnings per common share - Diluted 

0.30

0.30

0.00%

    Cash dividends paid

0.28

0.28

0.00%

Shares Outstanding

    Average - Basic

4,775,423

4,752,357

--------

    Average - Diluted 

4,853,181

4,782,356

--------

At quarter end 

    Total assets

$ 423,774,803

$ 419,052,312

1.13%

    Total assets (average)

428,804,000

427,344,000

0.34%

    Other real estate and repossessions      ("OREO")

1,983,383

2,175,333

-8.82%

    Gross loans

279,490,150

277,335,426

0.78%

    Allowance for loan losses

2,649,425

2,781,935

-4.76%

    Net loans

276,840,725

274,553,491

0.83%

    Non-accrual loans

3,905,257

4,216,656

-7.38%

    Net loans charged off 

772,682

1,098,756

-29.68%

    Average loans

279,058,000

278,130,000

0.33%

    Cash and due from Federal Reserve Bank

44,361,828

12,940,241

242.82%

    Securities and other restricted stock

74,805,967

103,821,945

-27.95%

    Total deposits

336,114,368

325,303,150

3.32%

       Non interest bearing demand

71,362,602

24,923,922

186.32%

       Interest bearing demand

82,156,325

107,942,271

-23.89%

       Savings

65,793,809

55,307,386

18.96%

       Time

116,801,632

137,129,571

-14.82%

    Advances from the Federal Home Loan      Bank

32,742,167

38,207,763

-14.30%

    Securities sold under agreements to       repurchase

10,933,250

11,990,381

-8.82%

    Shareholders' equity

36,382,413

36,354,232

0.08%

    Shareholders' equity (average)

36,351,000

36,354,000

-0.01%

Stock data

    Market value - last close (end of period)

$             9.01

$              8.83

2.04%

    Dividend payout ratio

93.33%

93.33%

0.00%

    Price earnings ratio

15.02

x

14.72

x

1.41%

    Book value (end of period)

7.59

7.61

-0.26%

    Market price to book value

118.71%

116.03%

2.31%

Key performance ratios 

    Return on average assets (ROA)

0.70%

0.70%

0.00%

    Return on average equity (ROE)

8.21%

8.20%

0.01%

    Net interest margin (federal tax equivalent))

3.94%

4.23%

-0.29%

    Interest expense to average assets

0.94%

1.16%

-0.22%

    Total allowance for loan losses

        to nonaccrual loans

67.84%

65.97%

1.87%

    Total allowance for loan losses

        to total loans

0.95%

1.00%

-0.05%

   Nonaccrual loans to total loans

1.40%

1.52%

-0.12%

   Nonaccrual loans and OREO to total assets

1.39%

1.53%

-0.14%

   Net charge-offs to average loans

0.55%

0.79%

-0.24%

   Equity to assets at period end

8.59%

8.68%

-0.09%

 

SOURCE United Bancorp, Inc.



RELATED LINKS

http://www.unitedbancorp.com