<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
---------------------
Commission file number 2-78572
----------------
UNITED BANCORPORATION OF ALABAMA, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 63-0833573
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
200 East Nashville Avenue,Atmore,Alabama 36502
(Address of principal executive offices) (Zip Code)
(334) 368-2525
(Registrant's 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 report(s), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of June 30, 1998.
Class A Common Stock.... 516,358 Shares
Class B Common Stock.... -0- Shares
Page 1 of 14
<PAGE> 2
UNITED BANCORPORATION OF ALABAMA, INC.
FORM 10-Q
For the Quarter Ended June 30, 1998
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
2
<PAGE> 3
UNITED BANCORPORATION OF ALABAMA, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30 December 31,
1998 1997
<S> <C> <C>
Assets
Cash and due from banks $ 8,581,906 8,465,030
Federal funds sold 5,510,000 2,710,000
------------ ------------
Cash and cash equivalents 14,091,906 11,175,030
Interest bearing deposits with other
financial institutions 100,045 100,920
Securities Available for sale 54,192,809 38,649,802
Investment securities (market values of $21,157,061 20,936,619 24,914,930
and $25,077,650, respectively)
Loans 92,996,258 87,237,875
Less: Unearned income 219,299 466,859
Allowance for loan losses 1,416,740 1,443,135
------------ ------------
Net loans 91,360,219 85,327,881
Premises and equipment, net 2,309,668 2,060,477
Interest receivable and other assets 2,522,457 2,316,032
------------ ------------
Total assets 185,513,723 164,545,072
============ ============
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $ 21,848,705 21,669,112
Interest bearing 132,138,729 113,612,701
------------ ------------
Total deposits 153,987,434 135,281,813
Securities sold under agreements to repurchase 10,437,694 8,972,154
Other borrowed funds 4,519,427 2,729,885
Accrued expenses and other liabilities 1,371,954 2,934,161
------------ ------------
Total liabilities 170,316,509 149,918,013
Stockholders' equity:
Class A common stock. Authorized 975,000
shares of $.01 par value; 548,160
shares issued and outstanding 5,482 5,482
Class B common stock of $.01 par value
Authorized 250,000 shares;
-0- shares issued and outstanding 0 0
Preferred stock of $.01 par value. Authorized
250,000 shares; -0- shares issued
and outstanding 0 0
Surplus 3,476,518 3,476,518
Net unrealized loss on investments on
available for sale investments 219,854 228,757
Retained earnings 11,960,950 11,381,892
------------ ------------
15,662,804 15,092,649
Less 31,775 and 31,775 treasury shares, at cost 465,590 465,590
------------ ------------
Total stockholders' equity 15,197,214 14,627,059
------------ ------------
Total liabilities and stockholders' equity 185,513,723 164,545,072
============ ============
</TABLE>
3
<PAGE> 4
UNITED BANCORPORATION OF ALABAMA, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June June
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans 2,360,106 2,014,385 4,599,545 3,902,119
Interest on investment securities Available for Sale:
Taxable 734,456 545,347 1,336,291 1,038,315
Nontaxable 74,879 58,510 148,965 116,067
Interest on investment securities Held to Maturity:
Taxable 186,546 250,777 400,545 505,845
Nontaxable 132,397 93,492 261,930 177,661
---------- ---------- ---------- ----------
Total investment income 1,128,278 948,126 2,147,731 1,837,888
Other interest income 89,048 54,716 171,148 158,052
---------- ---------- ---------- ----------
Total interest income 3,577,432 3,017,227 6,918,424 5,898,059
Interest expense:
Interest on deposits 1,537,295 1,207,990 2,939,340 2,382,514
Interest on other borrowed funds 191,126 114,266 366,669 215,101
---------- ---------- ---------- ----------
Total interest expense 1,728,421 1,322,256 3,306,009 2,597,615
Net interest income 1,849,011 1,694,971 3,612,415 3,300,444
Provision for loan losses 60,000 60,000 120,000 120,000
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 1,789,011 1,634,971 3,492,415 3,180,444
Noninterest income:
Service charge on deposits 246,547 236,867 487,781 480,449
Commission on credit life 9,088 21,642 20,625 34,493
Investment securities gains and losses, net -- (3,735) -- (10,321)
Other 69,046 122,603 154,042 317,418
---------- ---------- ---------- ----------
Total noninterest income 324,681 377,377 662,448 822,039
Noninterest expense:
Salaries and benefits 853,567 742,244 1,643,325 1,461,159
Net occupancy expense 218,565 209,495 436,685 422,105
Other 474,956 448,295 917,346 844,291
---------- ---------- ---------- ----------
Total non-interest expense 1,547,088 1,400,034 2,997,356 2,727,555
Earnings before income tax expense 566,604 612,314 1,157,507 1,274,928
Income tax expense 154,313 194,820 320,258 395,460
---------- ---------- ---------- ----------
Net earnings 412,291 417,494 837,249 879,468
========== ========== ========== ==========
Net earnings per share $ 0.80 $ 0.81 $ 1.62 $ 1.70
Weighted average shares outstanding 516,385 516,385 516,385 516,385
========== ========== ========== ==========
Statement of Comprehensive Income
Net Income 412,291 417,494 837,249 879,468
Other Comprehensive Income, net of tax:
Unrealized Holding gains (losses) arising during the period (1,439) 145,172 (5,876) 36,220
Less: Reclassification adjustment for gains (losses)
included in net income -- (2,241) -- (6,193)
---------- ---------- ---------- ----------
Comprehensive income 410,852 560,425 831,373 909,495
========== ========== ========== ==========
</TABLE>
4
<PAGE> 5
UNITED BANCORPORATION OF ALABAMA, INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Operating Activities
Net Income 837,249 $ 879,468
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities
Provision for Loan Losses 120,000 120,000
Depreciation on Premises and Equipment 148,516 154,911
Amortization of Investment Securities 34,284 26,522
Amortization of Investment Securities Available for Sale 85,053 32,883
(Gain) Loss on Sale of Investment Securities Available for Sale -- 10,321
(Gain) Loss on Sale of Other Real Estate -- --
(Gain)Loss on Disposal of Premises and Equipment (3,500) (171)
Writedown of Other Real Estate -- --
(Increase) Decrease in Interest Receivable
and Other Assets (352,503) (808,962)
Increase (Decrease) in Deferred Income Taxes -- --
Increase (Decrease) in Accrued Expenses
and Other Liabilities (1,562,207) 443,258
----------- ------------
Net Cash Provided (Used) by Operating Activities (693,108) 858,230
----------- ------------
Investing Activities
Proceeds From Interest-bearing Deposits in
Other Financial Institutions 875 788
Proceeds From Sales of Investment Securities Available for Sale -- 2,505,925
Proceeds From Maturities of Investment Securities 4,739,229 1,072,655
Proceeds From Maturities of Investment Securities Available for Sale 22,472,985 1,814,116
Purchases of Investment Securities (795,202) (817,477)
Purchases of Investment Securities Available for Sale (38,115,882) (7,216,667)
Net (Increase) Decrease in Loans (6,152,338) (5,246,350)
Purchases of Premises and Equipment (397,707) (126,351)
Proceeds From Sales of Premises and Equipment 3,500 171
Purchases of Other Real Estate 152,013 --
Proceeds From Sales of Other Real Estate -- 2,000
----------- ------------
Net Cash Provided (Used) by Investing Activities (18,092,528) (8,011,190)
----------- ------------
Financing Activities
Net Increase (Decrease) in Deposits, 18,705,621 5,408,952
Net Increase (Decrease) in securities sold under
agreement to repurchase 1,465,540 794,692
Cash Dividends (258,191) (258,193)
Purchase of Treasury Stock -- --
Increase (Decrease) in Other Borrowed Funds 1,789,542 663,923
----------- ------------
Net Cash Provided (Used) by Financing Activities 21,702,512 6,609,374
----------- ------------
Increase (Decrease) in Cash and Cash Equivalents 2,916,876 (543,586)
Cash and Cash Equivalents at Beginning of Period 11,175,030 8,789,453
----------- ------------
Cash and Cash Equivalents at End of Period 14,091,906 $ 8,245,867
=========== ============
Supplemental disclosures
Cash paid during the year for:
Interest 3,330,155 2,613,441
=========== ============
Income Taxes 191,500 347,053
=========== ============
</TABLE>
5
<PAGE> 6
UNITED BANCORPORATION OF ALABAMA, INC.
AND SUBSIDIARY
Noted to Interim Consolidated Financial Statements
Note 1 - General
The interim consolidated financial statements in this report have not been
audited. In the opinion of management, all adjustments necessary to present
fairly the financial position and the results of operations for the interim
periods have been made. All such adjustments are of a normal recurring nature.
The results of operations are not necessarily indicative of the results of
operations for the full year or any other interim periods. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended December
31, 1997.
NOTE 2 - New Accounting Pronouncement
Earnings per share are computed in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share." SFAS No. 128 requires
the replacement of previously reported primary and fully diluted earnings per
share under Accounting Principles Board Opinion No. 15 with basic earnings per
share and diluted earnings per share. Basic income per share is computed on the
weighted average number of shares outstanding in accordance with SFAS 128
Earnings per Share. The Company does not have stock options plans or other stock
based compensation plans that would result in potential common shares and thus
diluted earnings per share are identical to basic earnings per share.
Effective January 1, 1998 the Company adopted the (SFAS) No. 130 "Reporting
Comprehensive income, which requires disclosure, in financial statements format,
all non-owner changes in equity. Adoption of this statement requires the
presentation of comprehensive income, which includes the unrealized gain or loss
on investment securities.
In June, 1997 the FASB Issued Financial Accounting Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information,
("FAS131"). FAS131 requires that financial and descriptive information be
disclosed for each reportable operating segment based on the management
approach. The management approach focuses on financial information that an
enterprise's decision makers use to assess performance and make decisions about
resource allocation. The statement also prescribes the enterprise-wide
disclosures to be made about products, services, geographic areas and major
customers. FAS131 is effective for annual financial
6
<PAGE> 7
statements issued for periods beginning after December 15, 1997, and for interim
financial statements in the second year of application. The Company adopted
FAS131 as of January 1, 1998.
In June, 1998, the FASB issued Financial Accounting Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, ("FAS133"). FAS133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity reorganize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. This Statement is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. Presently, the
Corporation is unable to quantify the impact that the adoption of FAS 133 will
have on the consolidated financial statements of the Corporation.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Results of Operations
The following financial review is presented to provide an analysis of the
results of operations of United Bancorporation of Alabama, Inc. (the
"Corporation"), and its subsidiary for the six months ended June 30, 1998, and
1997, compared. This review should be used in conjunction with the consolidated
financial statements included in the Form 10-Q.
Net income for the six months ended June 30, 1998, was $837,249 a decrease of
$42,219, or 4.80%, as compared to $879,468 for the same period in 1997. Net
earnings per share decreased to $1.62 for the six months ended June 30, 1998, as
compared to $1.70 in 1997.
Total interest income increased $1,020,365, or 17.30%, to $6,918,424 in 1998
from $5,898,059 in 1997. Average interest earning assets were $178,655,696 for
the first six months 1998, as compared to $140,940,674 for the same period in
1997, an increase of $37,715,022, or 26.76%. The average rate earned in 1998 was
8.29% as compared to 8.44% in 1997, reflecting slightly lower interest rates
during 1998. Thus, the increase in total interest income in 1998 is attributed
to both the increase in earning assets, and not to the rate environment. Net
interest margin decreased to 4.33% for the first six months of 1998 as compared
to 4.72% for the same period in 1997. This decrease has been caused by the
flatting of the yield curve, which has caused bond and loans rates to drop and
deposit costs have risen. Therefore compressing net interest margin.
Total interest expense increased by $708,394, or 27.27%, in 1998 to $3,306,009
from $2,597,615 in 1997. Average interest bearing liabilities increased to
$150,130,350 in 1998 from $114,327,886 in 1997, an increase of $35,802,464, or
31.32%. The average rate paid rose to 4.78% in 1997, as compared to 4.58% in
1997.
The provision for loan losses remained constant at $120,000 for the first six
months of 1998 as compared to $120,000 for the same period in 1997. Net
charged-off loans for the first six months of 1998 were $146,395, as compared to
$55,380 for the same period in 1997.
The allowance for possible loan losses represents 1.52% of gross loans at June
30, 1998, as compared to 1.65% at year-end 1997. Loans on which the accrual of
interest had been discontinued was reduced to $307,548 at June 30, 1998, as
compared to $405,236 at December 31, 1997.
8
<PAGE> 9
Total noninterest income decreased to $662,448 for the first six months of 1998,
as compared to $822,039 for the same period in 1997, a decrease of $159,591, or
19.41%. Service charges on deposits increased $7,332, or 1.53%, to $487,781 in
1998 from $480,449 in 1997. Commissions on credit life decreased to $20,625 in
1998 from $34,493 in 1997, a decrease of $13,868, or 40.21%. Other income
decreased during the first six months of 1998 to $154,042 from $317,418 in 1997,
a decrease of $163,376 or 51.47%. This decrease is due to an insurance
settlement.
Total noninterest expense increased $269,801, or 9.89%, to $2,997,356 during the
first six months of 1998, as compared to $2,727,555 for the same period in 1997.
Salaries and benefits increased to $1,643,325 in 1998 from $1,461,159 in 1997,
an increase of $182,166, or 12.47%. Increase is salaries is due to two new
branch opeinings. Occupancy expense increased $14,580, or 3.45% to $436,685 in
1998 from $422,105 in 1997. This increase in cost is due to the opening of one
new branch. Other expenses increased to $916,930 during the first six months of
1998 from $844,291 for the same period in 1997, an increase of $72,639, or
8.60%.
Earnings before taxes for the first six months of 1998 decreased $117,421, or
9.21%, to $1,157,507 from $1,274,928 for the same period in 1997. Income tax
expense decreased to $320,258 in 1998 from $395,460 in 1997, a decrease of
$75,202, or 19.02%.
Three Months Ended June 30, 1998, and 1997, Compared
Net earnings for the three months ended June 30, 1998, decreased to $412,291,
from $417,494, a decrease of $5,203, or 1.25% Earnings per share decreased to
$.80 from $.81 in 1997.
Total interest income increased $560,205, or 18.57% to $3,577,432 for the second
quarter of 1998, as compared to $3,017,227 for the same period in 1997. Interest
and fees on loans increased $345,721 or 17.16%, to $2,360,106 in 1998, from
$2,014,385 in 1997. The average rate earned on interest earning assets during
the second quarter of 1998 was 8.19%, as compared to 8.52% for the same period
in 1997. Therefore the increase in interest earning is due to the increase in
earning assets. The net interest margin decreased to 4.36% for the second
quarter of 1998, as compared to 4.84% for the same period in 1997. Average
interest earning assets increased to $175,166,421 in 1998, from $142,145,367 in
1997, an increase of $33,021,054, or 23.23%.
9
<PAGE> 10
Total interest expense increased due to the large increase in interest bearing
liabilities. Total interest expense increased $406,165, or 30.72%. Total
interest expense for the second quarter of 1998 was $1,728,421, as compared to
$1,322,256 for the same period in 1996. Average interest bearing liabilities for
the second quarter of 1998 were $145,739,670, as compared to $115,043,453 for
the same period in 1996, an increase of $30,696,217, or 26.68%.
The provision for loan losses was unchanged at $60,000 for the second quarter of
1998 as compared to $60,000 for the same period in 1996. Net charge offs for the
second quarter of 1998 were $2,139 as compared to $46,352 net charge offs for
the same period in 1997.
Total noninterest income decreased to $324,681 for the second quarter of 1998 as
compared to $377,377 in 1997, a decrease of $52,696, or 13.96%. Service charges
on deposits increased $9,680, or 4.09%, to $246,547 in 1998, from $236,867 in
1997. Commissions on credit life insurance decreased to $9,088 in 1998 from
$21,642 in 1997. Other income decreased during the second quarter of 1998 to
$69,046 from $122,603 in 1997, a decrease of $53,557, or 43.68%. During the
second quarter of 1997 the Bank received an insurance rebate on Bond Policies of
$18,469 and a rebate on computer services of $21,325.
Total noninterest expense increased $147,054, or 10.50%, to $1,547,088 during
the second quarter of 1998, as compared to $1,400,034 for the same period in
1997. Salaries and benefits increased to $853,567 in 1998, from $742,244 in
1997, an increase of $111,323, or 15.00%. This increase has been caused by the
opening of a new branch and the introduction of several new services in the
bank. Occupancy expense increased $9,070, or 4.33%, to $218,565 in 1998 from
$209,495 in 1997. The occupancy expense increase is because the Lillian Branch
was in operation for the full quarter in 1998, last year the branch was only
opened in July of the third quarter. Other expenses increased to $474,956 during
the second quarter of 1998, as compared to $448,295 for the same period in 1997,
an increase of $26,661, or 5.95%.
Earnings before taxes for the second quarter of 1998 decreased by $45,294 or
7.40% to $567,020 from $612,314 for the same period in 1997. Income taxes
decreased to $154,313 in 1998 from $194,820 in 1997, a decrease of $40,507, or
20.79%.
Financial Condition and Liquidity
Total assets on June 30, 1998, were $185,513,723, as compared to $163,383,536 on
December 31, 1997, an increase of $ 22,130,187 or 13.54%. Average total assets
for the first six months of 1998 were $189,193,420. The loan to deposit ratio
(net loans) on June 30, 1998, excluding bankers acceptances and commercial
paper, was 59.33%, as compared to 63.07% on December 31, 1997.
10
<PAGE> 11
Fed Funds Sold increased to $5,510,000 on June 30, 1998, as compared to
$2,710,000 on December 31, 1997, a increase of $2,800,000. The investment
securities available for sale increased to $54,192,809 from $38,649,802 at
December 31, 1997. The investment securities held to maturity decreased from
$24,914,930 at December 31, 1997 to $20,936,619 in June of 1998.
Non-performing Assets: The following table sets forth the Corporation's
non-performing assets at June 30, 1998 and December 31, 1997. Under the
Corporation's nonaccrual policy, a loan is placed on nonaccrual status when
collectibility of principal and interest is in doubt or when principal and
interest is 90 days or more past due.
<TABLE>
<CAPTION>
June December
Description 1998 1997
(Dollars in Thousands)
<S> <C> <C> <C>
(A) Loans accounted for on
a nonaccrual basis $308 $405
(B) Loans which are contractually
past due ninety days or
more as to interest or
principal payments (excluding
balances included in (A) above) 9 15
(C) Loans, the terms of which have
been renegotiated to provide a
reduction or deferral of interest
or principal because of a
deterioration in the financial
position of the borrower 39 36
(D) Other non-performing assets 158 48
</TABLE>
Total deposits increased $ 18,705,621, or 13.83%, to $153,987,434 on June 30,
1998, from $135,281,813 at year end. Noninterest bearing deposits decreased to
$21,848,705 at June 30, 1998, from $21,669,112 at year end 1997, an increase of
$179,593, or .83%. Interest bearing deposits increased $18,526,028, or 16.31%,
to $132,138,729 on June 30, 1998, from $113,612,701 at December 31, 1997. This
increase is due to the Bank obtaining the Baldwin County Commission funds for a
period of three years the contract ends March 1, 2001. These accounts have had
an average balance of $14,019,211. Average total deposits for the first six
months of 1998 were $157,717,525.
11
<PAGE> 12
The Corporation relies primarily on internally generated capital growth to
maintain capital adequacy. Total stockholders' equity on June 30, 1998, was
$15,197,214, an increase of $570,155, or 3.89%, from $14,627,059 at year end
1997. This increase is due to earnings, the slight decline of the market value
of the available for sale portfolio, and the dividend declared of $258,193 at
June 30, 1998.
Primary capital to total assets at June 30, 1998, was 8.19%, as compared to
8.89% at year end 1997. Total capital and allowances for loan losses to total
assets at June 30, 1998, were 8.95%, as compared to 9.76% at December 31, 1997.
The Corporation's bank subsidiary, United Bank, had risk based capital of
$15,713,000, or 15.16%, at June 30, 1998, as compared to $15,316,000, or 16.24%
at year end 1997. United Bank had excess risk based capital of 7.16% at June 30,
1998, and 8.24% at December 31, 1997, based upon the minimum requirement of
8.00%. Based on management's projection, internal generated capital should be
sufficient to satisfy capital requirements in the foreseeable future, for
existing operations, but the continual growth into new markets may require the
Bank to access external funding sources.
Y2K
The Bank continues to test all mission critical software the test should be
final by the end of September 1998. The Corporation is not experiencing any
abnormal expenses associated with the year 2000. For further information refer
to Company's Form 10K.
Market Risk Disclosures
The Corporation's market risk has not materially changed in the last six months.
For further discussion refer to the Corporation's Form 10-K.
Forward Looking Statements
When used or incorporated by reference herein, the words "anticipate",
"estimate", "expect", "project", "target", "goal", and similar expressions, are
intended to identify forward-looking statements within the meaning of Section
27A of the Securities Act of 1933. Such forward-looking statements are subject
to certain risk, uncertainties, and assumptions including those set forth
herein. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those expected or projected. These forward-looking statements
speak only as of the date they are made. The Corporation expressly disclaims any
obligations or undertaking to publicly release any updates or revisions to any
forward-looking statement contained herein to reflect any change in the Bank's
expectations with regard to any change in events, conditions or circumstances on
which any such statement is based.
12
<PAGE> 13
PART II -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The annual meeting of security holders of United Bancorporation
of Alabama, Inc. was held May 6, 1998.
(b) The following directors were elected at the annual meeting of the
security holders of United Corporation of Alabama, Inc.:
<TABLE>
<CAPTION>
Nominees For Against Abstentions
----------- ----------- ----------- -----------
<S> <C> <C>
William C. Grissett 398,802 54 0
David D. Swift 370,831 28,025 0
</TABLE>
Those directors of the Corporation who were not standing for
re-election and whose terms of office continued after the 1997 Annual
Meeting are Robert R. Jones III, Leon Esneul, William J. Justice,
Bobby W. Sawyer and L. Walter Crim..
Item 6. Exhibits and Reports on Form 8-K.
(a) See Exhibit Index.
(b) During the quarter ended June 30, 1998 the Corporation did not
file a Form 8-K Current Report.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED BANCORPORATION OF ALABAMA, INC.
Date: August 12, 1998 /s/ Mitch Staples
---------------- ---------------------------------------
Mitch Staples
Treasurer (principal financial officer)
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S INTERIM FINANCIAL STATEMENTS FOR FISCAL PERIOD 6-30-98 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 8,581,906
<INT-BEARING-DEPOSITS> 100,045
<FED-FUNDS-SOLD> 5,510,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 54,192,809
<INVESTMENTS-CARRYING> 20,936,619
<INVESTMENTS-MARKET> 21,157,061
<LOANS> 92,996,258
<ALLOWANCE> 1,416,740
<TOTAL-ASSETS> 185,513,723
<DEPOSITS> 153,987,434
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,371,954
<LONG-TERM> 4,591,427
0
0
<COMMON> 5,482
<OTHER-SE> 15,191,732
<TOTAL-LIABILITIES-AND-EQUITY> 185,513,723
<INTEREST-LOAN> 4,599,545
<INTEREST-INVEST> 2,147,731
<INTEREST-OTHER> 171,148
<INTEREST-TOTAL> 6,918,424
<INTEREST-DEPOSIT> 2,939,340
<INTEREST-EXPENSE> 366,669
<INTEREST-INCOME-NET> 3,612,415
<LOAN-LOSSES> 120,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,997,356
<INCOME-PRETAX> 1,157,507
<INCOME-PRE-EXTRAORDINARY> 1,157,507
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 837,249
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
<YIELD-ACTUAL> 8.29
<LOANS-NON> 307,548
<LOANS-PAST> 9,000
<LOANS-TROUBLED> 39,000
<LOANS-PROBLEM> 0<F1>
<ALLOWANCE-OPEN> 1,443,135
<CHARGE-OFFS> 172,054
<RECOVERIES> 25,659
<ALLOWANCE-CLOSE> 1,416,740
<ALLOWANCE-DOMESTIC> 1,416,740
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>INFORMATION NOT CONTAINED IN FINANICAL STATEMENTS.
</FN>
</TABLE>
