<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995, or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
--------------------------------
Commission File Number 2-81060-S
--------------------------------
UNITED BANCORP
(Exact name of Registrant as specified in its Charter)
OREGON
(State or other jurisdiction of incorporation or organization)
555 S.E. KANE STREET
Roseburg, Oregon 97470
(Address of principal executive offices)
93-0612062
(IRS Employer Identification Number)
(503) 440-2629
(Registrants' telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Number of shares of common stock, par value $2.50, outstanding at June 30,
1995, was 440,442.
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UNITED BANCORP
FORM 10-Q
INDEX
PART I: FINANCIAL INFORMATION PAGE
--------------------- ----
Item 1: Financial Statements
--------------------
Consolidated Balance Sheets at June 30, 1995 and December 31,
1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Consolidated Income for the three months ended
June 30, 1995 and June 30, 1994 . . . . . . . . . . . . . . . . . . 5
Statements of Consolidated Income for the six months ended
June 30, 1995 and June 30, 1994 . . . . . . . . . . . . . . . . . . 7
Condensed Statements of Changes in Consolidated Cash Flows -
for the six months ended June 30, 1995 and June 30, 1994. . . . . . 9
Computation of Earnings per Share for the three months ended
June 30, 1995 and June 30, 1994 . . . . . . . . . . . . . . . . . . 11
Computation of Earnings per Share for the six months ended
June 30, 1995 and June 30, 1994 . . . . . . . . . . . . . . . . . . 12
Notes to Condensed Consolidated Financial Statements June 30,
1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 2. Management's Discussion and Analysis of Financial Conditions
and Results of Operation. . . . . . . . . . . . . . . . . . . . . . 14
Part II: OTHER INFORMATION
-----------------
Item 1: Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 2: Changes In Securities . . . . . . . . . . . . . . . . . . . . . . . 15
Item 3: Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . 15
Item 4: Submission of Matters to a Vote of Security Holders . . . . . . . . 15
Item 5: Other Information . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 6: Exhibits and reports on Form 8-K. . . . . . . . . . . . . . . . . . 16
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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<PAGE> 3
UNITED BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands of Dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
---------- ------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
------
Cash and cash equivalents:
Cash due from banks $4,169 $5,048)
Interest bearing deposits with bank 785 2,020
---------- -----------
Total cash and cash equivalents 4,954 7,068
Securities:
Held-to-maturity: (Fair value of $26,815
(26,197 in 1994) 26,879 27,551
Available-for-sale 19,275 31,456
---------- -----------
Total Securities 46,154 59,007
Loans: 41,674 33,775
Less allowance for loan losses (414) (483)
---------- -----------
Net loans 41,260 33,292
Bank premises, furniture and equipment 2,869 2,941
Accrued interest receivable and other assets 968 1,134
Deferred tax assets 116 415
---------- -----------
Total Assets 96,321 103,857
LIABILITIES
-----------
Deposits:
Demand 12,752 $12,317
Interest bearing 24,946 28,099
Savings 14,172 16,550
Time Certificates
Certificates of $100 or Larger 317 1,089
Certificates less than $100 11,922 10,331
---------- -----------
Total Deposits 64,109 68,386
</TABLE>
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<PAGE> 4
UNITED BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands of Dollars)
(Continued)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
---------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Federal funds purchased and securities sold under
agreements to repurchase 9,195 13,606
Bank Line of Credit 0 4,600
Notes Payable 11,798 7,092
Debt of Employee Stock Ownership Plan 276 240
Other liabilities 609 441
---------- -----------
Total Liabilities 85,987 94,365
STOCKHOLDER'S EQUITY
--------------------
Common stock $2.50 par value, 5,000,000 shares
authorized; 440,442 and 438,534 issued and
outstanding at June 30, 1995, and December 31,
1994, respectively 1,101 1,096
Additional paid-in capital 3,513 3,484
Retained Earnings 6,268 5,940
Deferred compensation under Employee Stock
Ownership Plan (276) (240)
Net unrealized gains (losses) on securities
available-for-sale, net of ($265) and $168
of deferred income tax expense, respectively (272) (788)
---------- -----------
Total stockholders' equity 10,334 9,492
---------- -----------
Total Liabilities and Stockholders' Equity $96,321 $103,857
========== ===========
See notes to condensed consolidated financial statements.
</TABLE>
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UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
1995 1994
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
Interest Income
Loans $977 $803
Federal funds sold and interest bearing deposits
with bank 14 25
Securities
Taxable 727 689
Exempt from Federal Income Taxes 98 93
---------- ---------
Total Interest Income 1,816 1,610
Interest Expense
Deposits 323 311
Federal funds purchased and securities sold
under agreements to repurchase 94 88
Notes Payable 192 108
---------- ---------
Total Interest Expense 609 507
Net Interest Income 1,207 1,103
Provision (Credit) for loan losses 30 0
---------- ---------
Net Interest Income after provision for
loan losses 1,177 1,103
Non-Interest Income
Service charges on deposit accounts 126 130
Other service charges, commissions and fees 41 43
Other Income 15 29
---------- ---------
Total Non-Interest Income 182 202
Non-Interest Expense
Salaries and employee benefits 575 486
Net Occupancy and Equipment 147 110
Losses (Gains) on sale of securities (49) 22
Other 355 428
---------- ---------
Total Non-Interest Expense 1,028 1,046
---------- ---------
</TABLE>
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<PAGE> 6
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands of Dollars)
(Continued)
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
1995 1994
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
Income Before Income Taxes 331 259
Provision for Income Taxes 106 62
---------- ---------
NET INCOME 225 197
========== =========
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 7
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1995 1994
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
Interest Income
Loans $1,903 $1,536
Federal funds sold and interest bearing
deposits with bank 48 44
Securities
Taxable 1,596 1,361
Exempt from Federal Income Taxes 193 154
---------- ---------
Total Interest Income 3,740 3,095
Interest Expense
Deposits 626 633
Federal funds purchased and securities sold
under agreements to repurchase 246 144
Notes Payable 386 181
---------- ---------
Total Interest Expense 1,258 958
Net Interest Income 2,482 2,137
Provision (Credit) for loan losses 30 0
---------- ---------
Net Interest Income after provision
for loan losses 2,452 2,137
Non-Interest Income
Service charges on deposit accounts 248 264
Other service charges, commissions and fees 85 98
Other Income 20 24
---------- ---------
Total Non-Interest Income 353 386
Non-Interest Expense
Salaries and employee benefits 1,129 1,022
Occupancy and Equipment 306 230
Losses (Gains) on sale of securities (107) 22
Other 720 759
---------- ---------
Total Non-Interest Expense 2,048 2,033
---------- ---------
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<PAGE> 8
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands of Dollars)
(Continued)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1995 1994
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
Income Before Income Taxes 757 490
Provision for Income Taxes 242 152
--------- ---------
NET INCOME 515 338
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 9
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1995 1994
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
------------------------------------------------
Cash flows from operating activities:
Net Income 515 338
Reconciliation of net income to net cash
provided by operating activities:
Loss on disposal of furniture and equipment 0 0
Depreciation and Amortization 152 108
Provision (Credit) for Loan Losses 30 0
Provision (Credit) for Deferred Income Taxes 0 0
Compensation paid in stock 0 22
Stock dividend received on FHLB stock (38) (28)
Amortization of securities' discounts and
premiums (15) 184
Net realized (Gains) losses on sale of
Available for Sale (107) (22)
Change in Assets and Liabilities:
Decrease (Increase) in accrued interest
receivable and other assets 166 (496)
Increase (Decrease) in other liabilities 168 336
---------- ---------
Net cash provided by operating activities 870 443
Cash flows from investing activities:
Securities:
Available for Sale:
Maturities 1,153 ----
Purchases 0 ----
Proceeds from sales of securities 10,627 ----
Held to Maturity:
Maurities 2,947 ----
Purchases (899) ----
Maturities of securities ---- 15,283
Purchase of securities ---- (11,926)
Proceeds from sales of securities ---- 2,923
Net (Increase) decrease in loans (7,998) (1,691)
Purchase of premises, furniture and equipment (81) (111)
---------- ---------
Net cash provided by (used in) investing
activities 5,748 4,479
</TABLE>
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<PAGE> 10
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands of Dollars)
(Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1995 1994
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
Cash flows from financing activities:
Net increase (Decrease) in demand deposits,
interest bearing transaction, and savings
accounts (5,096) (483)
Proceeds from sales of certificates of
deposit greater (less) than payments for
maturing time deposits 819 232
Proceeds from issuance of ESOP Debt 68 0
Stock purchase for ESOP (68) 0
Net increase (Decrease) in federal funds
purchased and securities sold under
repurchase agreements (9,011) (4,056)
Net borrowings from bank line of credit 0 0
Net advances from FHLB of Seattle 5,000 0
Repayment of notes, contracts payable,
debentures and debt under ESOP (249) 2,799
Retirement of Stock 0 0
Proceeds from issuance of stock 35 35
Cash dividends paid (185) (175)
---------- ---------
Net cash provided by (used in) financing
activities (8,732) (1,648)
Net increase (Decrease) in cash and cash
equivalents (2,114) 3,274
Cash and cash equivalents at beginning of the
year 7,068 4,941
---------- ---------
Cash and cash equivalents at the end of the
period 4,954 8,215
========== =========
NON CASH INVESTING AND FINANCING ACTIVITIES:
Net unrealized gains (losses) on securities
available-for-sale, net of ($265) and
$168 of deferred income tax expense
respectively 516 (516)
CASH PAID DURING THE YEAR FOR:
Interest 1,116 864
Income Taxes 191 70
See notes to condensed consolidated financial statements.
</TABLE>
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UNITED BANCORP AND SUBSIDIARIES
Computation of earnings per share
(In Thousands of Dollars, except per share data)
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1995 1994
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Primary:
Average shares outstanding 440,441 439,053
Net Income $225 $196
Per share amount $0.51 $0.45
========== ==========
</TABLE>
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UNITED BANCORP AND SUBSIDIARIES
Computation of earnings per share
(In Thousands of Dollars, except per share data)
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1995 1994
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Primary:
Average shares outstanding 440,224 439,053
Net Income $515 $338
Per share amount $1.17 $0.77
========== ==========
</TABLE>
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<PAGE> 13
UNITED BANCORP AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1995
Note A ---- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 - 01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six month
period ended June 30, 1995 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1995. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Company's annual report on Form 10-K for the year ended December 31,
1994.
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<PAGE> 14
UNITED BANCORP AND SUBSIDIARIES
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
Total assets at June 30, 1995 equaled $96.321 million, representing a decrease
from December 31, 1994 of $7.5 million or 7.26%. This was due primarily to the
Company's sale of over $10 million of its securities. The Company had incurred
short term debt in the fourth quarter of 1994 in order to purchase securities
at higher yields. When the bond market declined in the first quarter of 1995,
the value of the Company's portfolio increased. The Company, as a result of
the increase in the value of its securities, sold part of its portfolio and
paid in full a substantial part of its short term debt. The Company had $3
million of its US Agencies securities called by their issuers, which
contributed to a decrease in total assets. The call of these securities
resulted in a gain of $44,000.
Due to the lower interest rate environment, the Company has invested in
additional loans which are riskier, but which yield higher returns than its
securities portfolio. Loans have increased since December 31, 1994 by
$7,998,000 to $41.26 million representing a 23.9% increase. The Company
purchased an interest in $5.2 million in seasoned commercial real estate loans.
The loans are primarily located in the Willamette Valley region of the State of
Oregon and have an average yield of 8.7% and an average life of eight years.
The Company purchased these loans primarily from the proceeds of the Company's
sale and call of its securities. In addition, the Company experienced an
increase in its Home Equity loans of $1 million and its Commercial loans of
approximately $1 million. The Company increased its loan loss reserve by
$30,000 during the second quarter of 1995 to increase its loan loss reserves.
The Company had $98,000 in net charge offs during such quarter which
represented two-tenths of one percent of outstanding gross loans. At December
31, 1994, the loan loss reserve was $483,000 which represented 1.43% of
outstanding gross loans. The Company's loan loss reserve was $414,867 at June
30, 1995 which represented 0.97% of outstanding gross loans. The Company will
continue to increase its loan loss reserve in the second half of 1995 in order
that its loan loss reserve reflects the Company's historical rate of loan
losses.
Demand and Interest Bearing Deposits decreased by $2.7 million to $37.7 million
(a 6.73% decrease), while Savings Deposits decreased by $2.3 million to $14.1
million (a 14.3% decrease). The Company, in the view of management, believes
that, with interest rates rising over the last year, customers have continued
to transfer interest bearing deposit accounts into nonbanking products such
as mutual funds and treasury notes, which currently yield higher returns than
interest bearing deposit accounts and which, in turn, has resulted in a
decrease in Deposits. Other borrowings also decreased by approximately
$5 million to $20.9 million.
Interest income rose $644,000 for the six months ended June 30, 1995 compared
to the six months ended June 30, 1994. This was due primarily to interest
yields on earning assets rising from 6.33% in 1994 to 7.82% in 1995. The
average earning asset balance increased by $2.6 million for the period ended
June 30, 1995 compared to the period ended June 30, 1994 even though there was
a reduction in the securities portfolio. Interest income from loans increased
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<PAGE> 15
by $367,000. The average balance of loans increased by $5 million for the
period ended June 30, 1995 compared to the period ended June 30, 1994. Average
yield on loans increased from 8.89% in 1994 to 10.04% in 1995. Interest
expense on deposits and other funding liabilities increased $300,000 to $1.258
million for the six months ended June 30, 1995 compared to the six months ended
June 30, 1994. Net interest income increased $345,000 from $2.137 million for
the six months ended June 30, 1994 compared to $2.452 million for the six
months ended June 30, 1995.
Non Interest Income decreased during the first six months of 1995 by $33,000 to
$353,000 compared to the first six months of 1994 due primarily to a decrease
in income from service charges on deposit accounts. Non interest expenses
increased by $15,000 to $2.048 million also when compared to the first six
months of 1994. Salaries and employee benefits increased by $107,000 when
compared to the same period in 1994. The increase in salary expense is made up
of at least two factors. The Company reviewed its compensation policies and,
as a result, in some instances, increased salaries for certain of its
employees. It also hired personnel with higher qualifications as replacements
were needed, which resulted in additional salary expense and improvements in
efficiency. Occupancy expense increased $76,000 largely due to depreciation
on computer equipment purchased in 1994; and, other expenses decreased by
$39,000. These expenses were offset by a gain in the sale and call of
securities of $107,000. Total net income for the first six months of 1995
increased over the same period of 1994 by $177,000 or 52.37% to a total
of $515,000.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following matters were submitted to and approved by the
shareholders at an annual meeting of the shareholders held on
April 25, 1995:
The following nominees for election as directors, to hold office for
a three year term and until their successors are duly elected and
qualified, received the number of votes set forth opposite their
respective names:
Nominee For Against Withheld
------- --- ------- --------
Gary L. Kjensrud 315,252 0 0
Pete Martini 315,252 0 0
Richard D. Watkins 315,252 0 0
David A. Jackson 315,252 0 0
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<PAGE> 16
John Loosely, Williams C. Stiles, and Lauren Young continue to serve
as directors after this meeting, with their terms to expire in 1996
and until their successors are duly elected and qualified, and David
Geddes, Lance Short, Joseph Taucher, and Donna Wooley also continue
to serve as directors after the meeting, with their terms to expire
in 1997 and until their successors are duly elected and qualified.
The ratification of Coopers & Lybrand as auditor was approved by the
Company's shareholders, with shareholders owning 315,215 shares
voting in favor of such ratification and no shareholders either
voting against or withholding their votes.
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27 Financial Data Schedule (filed electronically only)
B. Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act if 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED BANCORP
REGISTRANT
Date: August 11, 1995 By: LINDA A. GANIM, TREASURER
-----------------------------
Linda Ganim, Treasurer
(Principal Accounting Officer)
Date: August 11, 1995 By: M. JOHN LOOSLEY
-----------------------------
M. John Loosley, President
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<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNITED
BANCORP'S JUNE 30, 1995 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000101032
<NAME> UNITED BANCORP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 4,954
<INT-BEARING-DEPOSITS> 785
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 19,275
<INVESTMENTS-CARRYING> 26,879
<INVESTMENTS-MARKET> 26,815
<LOANS> 41,674
<ALLOWANCE> 414
<TOTAL-ASSETS> 96,321
<DEPOSITS> 64,109
<SHORT-TERM> 9,195
<LIABILITIES-OTHER> 609
<LONG-TERM> 11,798
<COMMON> 1,101
0
0
<OTHER-SE> 9,233
<TOTAL-LIABILITIES-AND-EQUITY> 96,321
<INTEREST-LOAN> 1,903
<INTEREST-INVEST> 1,789
<INTEREST-OTHER> 48
<INTEREST-TOTAL> 3,740
<INTEREST-DEPOSIT> 626
<INTEREST-EXPENSE> 1,258
<INTEREST-INCOME-NET> 2,482
<LOAN-LOSSES> 30
<SECURITIES-GAINS> (107)
<EXPENSE-OTHER> 720
<INCOME-PRETAX> 757
<INCOME-PRE-EXTRAORDINARY> 757
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 515
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 1.17
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 483
<CHARGE-OFFS> 111
<RECOVERIES> 43
<ALLOWANCE-CLOSE> 414
<ALLOWANCE-DOMESTIC> 414
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
