United Bancorp, Inc. Reports Earnings of $465,000 for the Three Months Ended March 31, 2013

MARTINS FERRY, Ohio, April 25, 2013 /PRNewswire/ -- United Bancorp, Inc. (NASDAQ: UBCP), headquartered in Martins Ferry, Ohio reported net income of $465,000 for the three months ended March 31, 2013 compared to $455,000 for the three months ended December 31, 2012.  On a per share basis, the Company's diluted earnings were $0.09 for each of these linked quarterly ending periods.

Randall M. Greenwood, Senior Vice President, CFO and Treasurer remarked, "The Company's net income realized in the first quarter of 2013 generated an annualized 0.43% return on average assets ("ROA") and a 5.07% return on average equity ("ROE") compared to 0.40% ROA and 5.12% ROE for the three months ended December 31, 2012.  On a linked quarter basis, the Company's net interest margin was 3.89% at March 31, 2013 compared to 3.87% at December 31, 2012, an increase of 2 basis points.  Government mandated regulations relating to the Dodd-Frank Act continued to have a negative impact on our Courtesy Overdraft Program as customer service fees realized were lower on a quarter over quarter basis by approximately $54,000.  This was offset by a nominal increase in other service fees which resulted in a net reduction of $51,000 in service fee income for the three months ended March 31, 2013 as compared to the three months ended December 31, 2012.  The Company's first quarter 2013 earnings were positively impacted by a period over period decrease of $40,000 in its provision for loan losses. This decrease in the provision for loan losses is directly attributed to the continuing improvement in the overall credit quality of the loan portfolio.  Net loans of $53,000 were charged off during the first quarter of 2013, a decrease of $371,000 from the fourth quarter of 2012.  This improving trend of a dramatically lower level of net loans charged off is very positive and is directly reflected in the decrease of the provision for loan losses.  Even with a lower provision for loan losses, the allowance for loan losses increased by $265,000 or nearly 10%.  As a result of the booming activity of the oil and gas industry within our market areas, the Company has experienced a higher than normal influx of funds.  Some of these funds may be temporary in nature and it is projected that a portion of these funds will flow back out of the Company within the next three to six months.  While total transactional and savings deposits decreased $7.9 million from December 31, 2012 to March 31, 2013, the cumulative trend in deposit growth has been positive over the prior twelve months.  These deposit fluctuations are closely monitored and are incorporated into our monthly asset/liability and funds management strategy.  Also, in order to capitalize on its opportunities, the Company implemented a marketing strategy in June 2012 focusing on attracting a larger percentage of low cost funding at each of its banking locations, while continuing to allow higher cost term funding to flow out.  This will help lower the cost of funding on a going forward basis.  This strategy is having a positive impact as non interest bearing demand balances are up by $4.3 million, or 6.27%, while higher costing time deposit balances are down by $6.4 million, or 6.39%, during the same linked quarter period.  The Company continues to have a significant liquid position in cash-type investments which can be leveraged in future periods at higher yields when market conditions improve.  Each of these opportunities has the potential to lead to higher levels of profitability for our company."

James W. Everson, Chairman and CEO stated, "During this time of economic uncertainty, we continue to pursue a conservative posture in managing our assets and liabilities.  Due to the present interest rate environment being driven by the zero-rate monetary policy of the Federal Reserve, our current short term objective continues to be covering our overhead, maintaining our generous dividend payment, which has a current yield of 3.8%, and earning a limited return to our equity accounts until we see better opportunities to make sound investments without taking on excessive market risk.  Not wanting to take undue interest rate risk, we are keeping a higher level of liquidity in short term, low yielding funds as Cash and due from the Federal Reserve Bank which was $ $70.6 million at March 31, 2013.  The 25 basis point return that we are receiving on these funds is having a limiting effect on our earnings at present.  In this current environment, we believe it is imprudent to stretch investment maturities for higher yields.  As an alternative we are focused to aggressively, yet selectively, make loans in the markets that we serve and continue to see this as our only prudent and viable opportunity to generate an acceptable yield on our funds without adding to the risk position of our company.  We are pleased to report that average loans were $295.8 million during the first quarter of 2013 compared to $282.7 million for the fourth quarter of 2012, up $13.1 million or 4.6%.  The recent trend of exceptionally strong loan growth is highly encouraging and it is anticipated that this positive momentum will continue into this year with the additional resources that we have dedicated to our lending function over the past 12 months."  Everson concluded, "Community banking continues to be under siege by current monetary policies and regulations which have the potential to shrink the number of banks in our country.  We firmly believe that a community banking company as ours, with strong and conservative practices, will be positioned to weather this present storm and will be in a very sound position in future periods to grow and prosper.  This structural soundness could lead to positive growth opportunities. Our company is blessed with a strong and talented management group that is poised for succession, a strong capital base and financial statement, the latest in high tech and efficient operating systems and a geographically diverse spread of twenty modern office locations over four distinct economic areas within Ohio.  We take great pride in the fact that we are a strongly compliant SEC Registrant that is publically traded on the NASDAQ.  Today, although we may be suffering a little 'short term pain for long term gain', our long term goal is to be a strong and profitable survivor in this presently changing banking environment and to reward our owners with solid growth in their shareholder value."

United Bancorp, Inc. is headquartered in Martins Ferry, Ohio with total assets of approximately $428.1 million and total shareholder's equity of approximately $36.7 million as of March 31, 2013.  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.

SOURCE United Bancorp, Inc.