<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
/X/ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (Fee Required)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
COMMISSION FILE #0-16640
United Bancorp, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MICHIGAN 38-2606280
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
205 E. CHICAGO BOULEVARD, TECUMSEH, MI 49286
(Address of principal executive offices, including Zip code)
Registrant's telephone number, including area code: (517) 423-8373
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
(Title of Class)
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /X/
As of March 1, 1998, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $45,083,000 (common stock, no par value.)
As of March 1, 1998, there were outstanding 1,646,030 shares of the
registrant's common stock, no par value.
Documents Incorporated By Reference:
Portions of the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held April 21, 1998 are incorporated by reference.
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CROSS REFERENCE TABLE
<TABLE>
<CAPTION>
Page
ITEM NO. DESCRIPTION Numbers
- -----------------------------------------------------------------------------------------------------------
<S> <C>
PART I
1. Business 3
I Selected Statistical Information 5
II Securities Portfolio 5
III Loan Portfolio 6
(A) Types of Loans 6
(B) Maturities and Sensitivities of Loans to Changes in Interest 7
(C) Risk Elements 7
(D) Other Interest Bearing Assets 7
IV Summary of Loan Loss Experience 8
(A) Changes in Allowance for Loan Losses 8
(B) Allocation of Allowance for Loan Losses 9
V Deposits 9
VI Return on Equity and Assets 9
VII Short-term Borrowings 9
2. Properties 9
3. Legal Proceedings 10
4. Submission of Matters to a Vote of Security Holders 10
PART II
5. Market for Registrant's Common Equity and Related Stockholder Matters 10
6. Selected Financial Data 11
7. Management's Discussion and Analysis of Financial Condition and Results of Operations 11
7A. Quantitative and Qualitative Disclosures About Market Risk 12
8. Financial Statement and Supplementary Data 12
9. Changes in and disagreements with Accountants on Accounting and Financial Disclosure 12
PART III
10. Directors and Executive Officers of the Registrant 12
11. Executive Compensation 12
12. Security Ownership of Certain Beneficial Owners and Management 12
13. Certain Relationships and related Transactions 12
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 13
Signatures 15
Exhibit Index 16
</TABLE>
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PART I
ITEM 1 - BUSINESS
United Bancorp, Inc. (the "Company") was incorporated on May 31, 1985 as a
business corporation under the Michigan Business Corporation Act, pursuant to
the authorization and direction of the Directors of United Bank & Trust (the
"Bank").
The Company is a bank holding company registered with the Board of Governors of
the Federal Reserve System under the Bank Holding Company Act, with the Bank as
its only wholly-owned subsidiary. The Bank was acquired by the Company
effective January 1, 1986. The Company has corporate power to engage in such
activities as permitted to business corporations under the Michigan Business
Corporation Act, subject to the limitations of the Bank Holding Company Act and
regulations of the Federal Reserve System. In general, the Bank Holding Company
Act and regulations restrict the Company with respect to its own activities and
activities of any subsidiaries to the business of banking or such other
activities which are closely related to the business of banking.
United Savings Bank opened in 1933 as a result of a merging of charters of
Lilley State Bank and Tecumseh State Savings Bank. Since that time, the Bank
has grown from a single office in Tecumseh to fifteen offices located in three
counties in Southeast Michigan. The Bank changed its name to United Bank &
Trust on January 1, 1992, at the time it acquired Thompson Savings Bank in
Hudson, and remains the Company's sole subsidiary.
The Bank offers a full range of services to individuals, corporations,
fiduciaries and other institutions. Banking services include checking, NOW
accounts, savings, time deposit accounts, money market deposit accounts, safe
deposit facilities and money transfers. Lending operations provide real estate
loans, secured and unsecured business and personal loans, consumer installment
loans, credit card and check-credit loans, home equity loans, accounts
receivable and inventory financing, equipment lease financing and construction
financing.
The Bank's Trust & Investment Group offers a wide variety of fiduciary services
to individuals, corporations and governmental entities, including services as
trustee for personal, corporate, pension, profit sharing and other employee
benefit trusts. The department provides securities custody services as an
agent, acts as the personal representative for estates and as a fiscal, paying
and escrow agent for corporate customers and governmental entities.
The Bank offers the sale of nondeposit investment products through licensed
representatives in its banking offices. In addition, the Bank is a co-owner of
Michigan Banker's Title Insurance Company of Mid-Michigan LLC, and derives
income from the sale of title insurance to its loan customers.
Banking services are delivered through a system of fifteen banking offices plus
thirteen automated teller machines, in Lenawee, Washtenaw, and Monroe Counties,
Michigan. The business base of the area is primarily agricultural and light
manufacturing, with its manufacturing sector exhibiting moderate dependence on
the automotive and refrigeration and air conditioning industries. The Bank
maintains correspondent bank relationships with a small number of larger
banks, which involve check clearing operations, securities safekeeping,
transfer of funds, loan participation, and the purchase and sale of federal
funds and other similar services.
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Supervision and Regulation
As a bank holding company within the meaning of the Bank Holding Company Act,
the Company is required by said Act to file annual reports of its operations
and such additional information as the Board of Governors may require and is
subject, along with its subsidiaries, to examination by the Board of Governors.
The Federal Reserve is the primary regulator of the Company.
The Bank Holding Company Act requires every bank holding company to obtain
prior approval of the Board of Governors before it may merge with or
consolidate into another bank holding company, acquire substantially all the
assets of any bank, or acquire ownership or control of any voting shares of any
bank if after such acquisition it would own or control, directly or indirectly,
more than 5% of the voting shares of such bank holding company or bank. The
Board of Governors may not approve the acquisition by the Company of voting
shares or substantially all the assets of any bank located in any state other
than Michigan unless the laws of such other state specifically authorize such
an acquisition. The Bank Holding Company Act also prohibits a bank holding
company, with certain exceptions, from acquiring direct or indirect ownership
or control of more than 5% of the voting shares of any company which is not a
bank and from engaging in any business other than that of banking, managing and
controlling banks or furnishing services to banks and their subsidiaries.
However, holding companies may engage in, and may own shares of companies
engaged in, certain businesses found by the Board of Governors to be so closely
related to banking or the management or control of banks as to be a proper
incident thereto.
Under current regulations of the Board of Governors, a holding company and its
nonbank subsidiaries are permitted, among other activities, to engage, subject
to certain specified limitations, in such banking related business ventures as
sales and consumer finance, equipment leasing, computer service bureau and
software operations, data processing and services transmission, discount
securities brokerage, mortgage banking and brokerage, sale and leaseback and
other forms of real estate banking. The Bank Holding Company Act does not place
territorial restrictions on the activities of nonbank subsidiaries of bank
holding companies. In addition, federal legislation prohibits acquisition of
"control" of a bank or bank holding company without prior notice to certain
federal bank regulators. "Control" in certain cases may include the acquisition
of as little as 10% of the outstanding shares of capital stock.
Michigan's banking laws restrict the payment of cash dividends by a state bank
by providing, subject to certain exceptions, that dividends may be paid only
out of net profits then on hand after deducting therefrom its losses and bad
debts and no dividends may be paid unless the bank will have a surplus
amounting to not less than twenty percent (20%) of its capital after the
payment of the dividend.
United Bank & Trust is a Michigan banking corporation, and as such is subject
to the regulation of, and supervision and regular examination by, the Michigan
Financial Institutions Bureau ("FIB") and also the Federal Deposit Insurance
Corporation ("FDIC"). The FIB is the primary regulator of the Bank. Deposit
accounts of the Bank are insured by the FDIC. Requirements and restrictions
under the laws of the United States and the State of Michigan include the
requirement that banks maintain reserves against deposits, restrictions on the
nature and amount of loans which may be made by a bank and the interest that
may be charged thereon, restrictions on the payment of interest on certain
deposits and restrictions relating to investments and other activities of a
bank.
The Federal Reserve Board has established guidelines for risk-based capital by
bank holding companies. These guidelines establish a risk adjusted ratio
relating capital to risk-weighted assets and off-balance-sheet exposures.
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These capital guidelines primarily define the components of capital, categorize
assets into different risk classes, and include certain off-balance-sheet items
in the calculation of capital requirements. Tier I capital consists of
shareholders' equity less intangible assets and unrealized gain or loss on
securities available for sale, and Tier 2 capital consists of Tier 1 capital
plus qualifying loan loss reserves.
The capital ratios of the Company exceed the regulatory guidelines for well
capitalized institutions, and in conjunction with regulatory ratings, have
qualified the Bank for the lowest FDIC insurance rate available to insured
financial institutions. Information in Note 18 on Page A-29 of the Company's
Proxy provides additional information regarding the Company's capital ratios,
and is incorporated herein by reference.
Information regarding accounting standards adopted by the Company are discussed
on Pages A-20 and A-21 of the Company's Proxy, and is incorporated herein by
reference.
Competition
The banking business in the Bank's service area is highly competitive. In its
market, the Bank competes with credit unions, savings associations, and various
finance companies and loan production offices. This competition is in addition
to a number of community banks and subsidiaries of large multi-state,
multi-bank holding companies.
The Company believes that the market perceives a competitive benefit to an
independent, locally controlled commercial bank. Much of the Bank's competition
comes from affiliates of organizations controlled from outside the area.
Against these competitors, the Bank continues to expand its loan and deposit
portfolios. Coupled with the fact that the Company offers the only
locally-based trust department in Lenawee County, this local focus has provided
a significant competitive advantage.
Employees
On December 31, 1997, the Bank employed 149 full-time and 38 part-time
employees. This compares to 141 full time and 36 part time employees as of
December 31, 1996. The Company has no full time employees. Its operation and
business are carried out by officers and employees of the Bank, who are not
compensated by the Company.
I SELECTED STATISTICAL INFORMATION
(A) DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
(B) INTEREST RATES AND INTEREST DIFFERENTIAL:
The information required by these sections are contained on Pages A-3 and A-4
of the Company's Proxy Statement, and are incorporated herein by reference.
II SECURITIES PORTFOLIO
The following table reflects the amortized costs and yields of the Company's
securities portfolio for 1997. The average yield on tax exempt securities of
states and political subdivisions is adjusted to a taxable equivalent basis,
assuming a 34% marginal tax rate.
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Amortized Costs and Yields of Investments
<TABLE>
<CAPTION>
In thousands of dollars where applicable 0 - 1 1 - 5 5 - 10 Over 10
Available For Sale Year Years Years Years Total
---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
U.S. Treasury and Government Agencies (1) $ 996 $ 37,018 $ - $ - $ 38,014
Weighted average yield 5.89% 6.62% 6.60%
Other Securities (2) 1,787 2,333 - - 4,120
Weighted average yield 7.87% 6.50% 7.09%
----------------------------------------------------------------------
Total Securities $ 2,783 $ 39,351 $ - $ - $ 42,134
Weighted average yield 7.16% 6.61% 0.00% 0.00% 6.65%
Held to Maturity
Tax Exempt Securities of States and
Political Subdivisions $ 2,567 $ 18,140 $ 9,660 $ 4,468 $ 34,835
Weighted average yield 7.29% 8.00% 8.00% 8.67% 8.03%
Other Securities (2) 2,329 - - - 2,329
Weighted average yield 6.29% 6.29%
----------------------------------------------------------------------
Total Securities $ 4,896 $ 18,140 $ 9,660 $ 4,468 $ 37,164
Weighted average yield 6.81% 8.00% 8.00% 8.67% 7.92%
</TABLE>
(1) Reflects the scheduled amortization and an estimate of future
prepayments based on past and current experience of amortizing U.S.
agency securities.
(2) Reflects the scheduled amortization and an estimate of future
prepayments based on past and current experience of the issuer for
various collateralized mortgage obligations.
The Company's securities portfolio contains no concentrations by issuer greater
than 10% of shareholders' equity. Additional information concerning the
Company's securities portfolio is included on Page A-6 and in Note 4 on Page
A-22 of the Company's Proxy Statement, and is incorporated herein by reference.
III LOAN PORTFOLIO
(A) TYPES OF LOANS
The table below shows loans outstanding (net of unearned interest) at December
31. All loans are domestic and contain no concentrations by industry or
customer. Balances are stated in thousands of dollars.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Personal $ 70,308 $ 69,477 $ 57,418 $ 47,102 $ 36,105
Business and commercial mortgages 74,080 65,823 56,946 56,765 47,969
Tax exempt 1,482 1,078 1,224 1,513 1,975
Residential mortgage (1) 104,800 94,255 97,000 101,329 105,223
Construction loans 14,588 11,220 5,239 4,050 6,037
---------------------------------------------------------------
Total loans (1) $ 265,258 $ 241,853 $ 217,827 $ 210,759 $ 197,309
===============================================================
</TABLE>
(1) Includes loans held for sale
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(B) MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES
The following table presents the maturity of total loans outstanding, other
than residential mortgages and personal loans, as of December 31, 1997,
according to scheduled repayments of principal. All figures are stated in
thousands of dollars.
<TABLE>
<CAPTION>
0 - 1 1 - 5 After 5
Year Years Years Total
---- ----- ----- -----
<S> <C> <C> <C> <C>
Business - fixed rate $ 6,322 $ 21,017 $ 6,255 $ 33,594
Business - variable rate 11,772 15,755 12,959 40,486
Tax exempt - fixed rate 14 190 1,029 1,233
Tax exempt - variable rate 249 - - 249
Construction loans -fixed rate 8,707 1,181 118 10,006
Construction loans -variable rate 4,582 - - 4,582
-----------------------------------------------
Total fixed rate 15,043 22,388 7,402 44,833
Total variable rate 16,603 15,755 12,959 45,317
-----------------------------------------------
Total Loans $ 31,646 $ 38,143 $ 20,361 $ 90,150
===============================================
</TABLE>
(C) RISK ELEMENTS
Non-Accrual, Past Due and Restructured Loans
The following shows the effect on interest revenue of nonperforming loans for
the year ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1997
----
<S> <C>
Gross amount of interest that would have been recorded at original rate $ 12
Interest that was included in revenue 2
----------
Net impact on interest revenue $ 10
==========
</TABLE>
Additional information concerning nonperforming loans, the Bank's nonaccrual
policy, and loan concentrations is provided on Page A-7, in Note 1 on Page
A-19, Note 5 on Page A-23 and Note 6 on Page A-23 of the Company's Proxy
Statement, and is incorporated herein by reference.
At December 31, 1997, the Bank had no loans other than those disclosed above
which cause management to have serious doubts as to the ability of the
borrowers to comply with the present loan repayment terms and which may result
in disclosure of such loans pursuant to Item III.C.1.
(D) OTHER INTEREST BEARING ASSETS
As of December 31, 1997, there were no other interest bearing assets that would
be required to be disclosed under Item III, Parts (C)(1) or (C)(2) of the Loan
Portfolio listing if such assets were loans.
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IV SUMMARY OF LOAN LOSS EXPERIENCE
(A) CHANGES IN ALLOWANCE FOR LOAN LOSSES
The Bank's allowance for loan losses was 0.93% of total loans at December 31,
1997 and 0.96% at December 31, 1996. The table below summarizes changes in the
allowance for loan losses for the years 1993 through 1997, stated in thousands
of dollars.
CHANGES IN ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 2,320 $ 2,197 $ 2,127 $ 2,074 $ 1,871
------------------------------------------------------------
Charge-offs:
Business loans 95 25 6 19 45
Residential mortgages 7 - - 2 12
Personal loans 1,087 547 355 222 143
------------------------------------------------------------
Total charge-offs 1,189 572 361 243 200
------------------------------------------------------------
Recoveries:
Business loans 8 5 4 12 26
Residential mortgages - 9 - - -
Personal loans 73 53 66 35 42
------------------------------------------------------------
Total recoveries 81 67 70 47 68
------------------------------------------------------------
Net charge-offs 1,108 505 291 196 132
------------------------------------------------------------
Additions charged to operations 1,255 628 361 249 335
------------------------------------------------------------
Balance at end of period $ 2,467 $ 2,320 $ 2,197 $ 2,127 $ 2,074
============================================================
Ratio of net charge-offs to average loans 0.44% 0.22% 0.14% 0.09% 0.07%
</TABLE>
The allowance for loan losses is maintained at a level believed adequate by
Management to absorb losses inherent in the loan portfolio. Management's
determination of the adequacy of the allowance is based on an evaluation of the
portfolio, past loan loss experience, current economic conditions, volume,
amount and composition of the loan portfolio, and other factors. Management
increased the provision charged to earnings to $1,255,000 in 1997, compared to
$628,000 in 1996 and $361,000 in 1995. The allowance is based on the analysis
of the loan portfolio and a four year historical average of net charge offs to
average loans of 0.24% of the portfolio.
(B) ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
The following table presents the portion of the allowance for loan losses
applicable to each loan category in thousands of dollars, and the percent of
loans in each category to total loans, as of December 31.
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Allocation of Allowance for Loan Losses
<TABLE>
<CAPTION>
1997 1996 1995
----------------------- ------------------------- ------------------------
Amount Percent Amount Percent Amount Percent
----------------------- ------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Business $ 842 27.9% $ 1,012 27.2% $ 1,056 26.1%
Tax exempt - 0.6% - 0.4% - 0.6%
Residential mortgage 33 39.5% 27 39.0% 34 44.5%
Personal 792 26.5% 362 28.7% 230 26.4%
Construction - 5.5% - 4.6% - 2.4%
Unallocated 800 919 877
------------ -------------- ------------
Total $ 2,467 100.0% $ 2,320 100.0% $ 2,197 100.0%
======================= ========================= ========================
<CAPTION>
1994 1993
----------------------- -------------------------
Amount Percent Amount Percent
----------------------- -------------------------
<S> <C> <C> <C> <C>
Business $ 455 26.9% $ 642 24.3%
Tax exempt - 0.7% - 1.0%
Residential mortgage 57 48.1% 71 53.3%
Personal 169 22.3% 110 18.3%
Construction - 1.9% - 3.1%
Unallocated 1,446 1,251
------------ --------------
Total $ 2,127 100.0% $ 2,074 100.0%
======================= =========================
</TABLE>
The allocation method used takes into account specific allocations for
identified credits and a four year historical loss average in determining the
allocation for the balance of the portfolio.
V DEPOSITS
The information concerning average balances of deposits and the
weighted-average rates paid thereon, is included on Page A-3 and maturities of
time deposits is provided in Note 9 on Page A-24 of the Company's Proxy
Statement, and is incorporated herein by reference.
VI RETURN ON EQUITY AND ASSETS
Various ratios required by this section and other ratios commonly used in
analyzing bank holding company financial statements are included on Page A-2 of
the Company's Proxy Statement, and is incorporated herein by reference.
VII SHORT-TERM BORROWINGS
The information required by this section is contained in Note 11 on Page A-25
of the Company's Proxy Statement, and is incorporated herein by reference.
ITEM 2 - PROPERTIES
The executive offices of the Company are located at the main office of United
Bank & Trust, 205 East Chicago Boulevard, Tecumseh, Michigan. The Bank owns and
occupies the entire two-story building, which was built in 1980. The Bank
operates a 12,000 square foot operations and training center in Tecumseh, and
also operates
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three other banking offices in the Tecumseh area, two in the city of
Adrian, one each in the cities of Hudson and Morenci, one each in the villages
of Britton and Blissfield, and one each in Clinton, Rollin and Raisin Townships,
all in Lenawee County. In addition, the Bank operates one office from leased
space in Saline, Washtenaw County, Michigan, and owns and operates one office in
Dundee, Monroe County, Michigan. The Bank owns all of the buildings except for
the Saline office, and leases the land for one office in the city of Adrian. All
offices except Saline offer drive-up facilities.
ITEM 3 - LEGAL PROCEEDINGS
The Company is not involved in any material legal proceedings. The Bank is
involved in ordinary routine litigation incident to its business; however, no
such proceedings are expected to result in any material adverse effect on the
operations or earnings of the Bank. Neither the Bank nor the Company is
involved in any proceedings to which any director, principal officer, affiliate
thereof, or person who owns of record or beneficially more than five percent
(5%) of the outstanding stock of either the Company or the Bank, or any
associate of the foregoing, is a party or has a material interest adverse to
the Company or the Bank.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of 1997.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
PRICE RANGE FOR COMMON STOCK
The following table shows the high and low selling prices of common stock of
the Company for each quarter of 1997 and 1996 as reported by Investment
Management & Research, Inc. These prices do not reflect private trades not
involving Investment Management & Research, Inc. The common stock of the
Company is traded over the counter. The Company had 922 shareholders as of
December 31, 1997. The prices and dividends per share have been adjusted to
reflect the 1997 and 1996 stock dividends.
<TABLE>
<CAPTION>
1997 1996
-------------------------------- -----------------------------------
Market price Cash Market price Cash
------------------ dividends ------------------ dividends
Quarter High Low declared High Low declared
------- -------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st $33.33 $31.43 $0.229 $26.52 $25.40 $0.200
2nd 35.00 33.33 0.240 30.48 26.52 0.209
3rd 37.00 35.00 0.260 30.48 29.76 0.229
4th 37.00 37.00 0.380 31.43 30.48 0.371
</TABLE>
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ITEM 6 - SELECTED FINANCIAL DATA
The following table presents five years of financial data for the Company, for
the years ended December 31. (In thousands, except per share data).
<TABLE>
<CAPTION>
FINANCIAL CONDITION 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Assets
Cash and demand balances in other banks $ 10,406 $ 10,252 $ 10,017 $ 7,049 $ 6,304
Federal funds sold - 11,400 8,700 - 2,600
Securities available for sale 42,488 44,990 45,420 41,900 46,882
Securities held to maturity 37,164 33,348 30,495 32,896 35,624
Net loans 262,791 239,533 215,630 208,632 195,236
Other assets 17,422 13,847 13,174 13,784 12,367
-------------------------------------------------------------------
Total Assets $ 370,271 $ 353,370 $323,436 $ 304,261 $ 299,013
===================================================================
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Noninterest bearing deposits $ 31,924 $ 30,335 $ 29,565 $ 26,712 $ 25,145
Interest bearing certificates of deposit of
$100,000 or more 38,714 42,060 34,439 24,016 21,005
Other interest bearing deposits 246,197 225,308 221,168 213,556 220,997
-------------------------------------------------------------------
Total deposits 316,835 297,703 285,172 264,284 267,147
Short term borrowings 4,942 609 578 6,800 -
Other borrowings 10,000 20,000 6,000 6,000 6,000
Other liabilities 3,028 3,010 2,833 2,019 2,032
-------------------------------------------------------------------
Total Liabilities 334,805 321,322 294,583 279,103 275,179
Shareholders' Equity 35,466 32,048 28,853 25,158 23,834
-------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 370,271 $ 353,370 $323,436 $ 304,261 $ 299,013
===================================================================
RESULTS OF OPERATIONS
Interest income $ 27,705 $ 25,351 $ 23,492 $ 20,667 $ 20,908
Interest expense 12,893 11,614 11,084 9,419 9,910
-------------------------------------------------------------------
Net Interest Income 14,812 13,737 12,408 11,248 10,998
Provision for loan losses 1,255 628 361 249 335
Noninterest income 4,124 3,662 2,978 2,294 2,642
Noninterest expense 10,852 10,307 9,568 8,538 8,206
-------------------------------------------------------------------
Income before Federal income tax 6,829 6,464 5,457 4,755 5,099
Federal income tax 1,816 1,713 1,422 1,171 1,279
-------------------------------------------------------------------
Net Income $ 5,013 $ 4,751 $ 4,035 $ 3,584 $ 3,820
===================================================================
Earnings per share and earnings per common share
assuming dilution (1) $ 3.05 $ 2.89 $ 2.46 $ 2.18 $ 2.33
</TABLE>
(1) Per share data is based on average shares outstanding plus average
contingently issuable shares and has been adjusted to reflect the stock
split in 1994 and stock dividends paid in 1997, 1996 and 1993.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this section is contained on pages A-2 through A-12
of the Company's Proxy Statement, and is incorporated herein by reference.
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ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this section is contained on pages A-10 through
A-11 of the Company's Proxy Statement, and is incorporated herein by reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this section is contained on pages A-15 through
A-30 of the Company's Proxy Statement, and is incorporated herein by reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
The information required by this item is inapplicable, and therefore has been
omitted.
PART III
Some information called for by the items within this part is contained in the
Company's Proxy Statement for the Annual Meeting of Shareholders to be held
April 21, 1998, and is incorporated herein by reference, as follows:
<TABLE>
<CAPTION>
Pages in
Proxy
Statement
---------
<S> <C> <C>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 3-6
ITEM 11 - EXECUTIVE COMPENSATION 6-8
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 9-12
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
</TABLE>
Information appearing on page 5 and in Note 14 on Page A-26 of the Company's
Proxy Statement for the Annual Meeting of Shareholders to be held April 21,
1998, is incorporated herein by reference in response to this item.
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PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. The following financial statements of the Company and its
subsidiary, included in the Company's Proxy Statement are
incorporated herein by reference:
<TABLE>
<CAPTION>
Pages in
Proxy
Statement
---------
<S> <C>
Consolidated Balance Sheets - December 31, 1997 and 1996 A-15
Consolidated Statements of Income -
Years Ended December 31, 1997, 1996 and 1995 A-16
Consolidated Statements of Cash Flows -
Years Ended December 31, 1997, 1996 and 1995 A-17
Consolidated Statements of Changes in Shareholders' Equity -
Years Ended December 31, 1997, 1996 and 1995 A-18
Notes To Consolidated Financial Statements A-19
Report of Crowe, Chizek and Company LLP, Certified Public Accountants,
Dated January 23, 1998 A-14
</TABLE>
2. Not applicable.
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable, and
therefore have been omitted.
(b) No reports on Form 8-K were filed during the quarter ending December
31, 1997.
(c) Listing of Exhibits (numbered as in Item 601 of Regulation S-K):
Exhibit #
3(a) Restated Articles of Incorporation of United Bancorp, Inc., filed
as Exhibit (4)(a) to registrant's registration statement on Form
S-8 (File Number 333-03305) dated May 8, 1996, and incorporated
herein by reference.
3(b) Bylaws of United Bancorp, Inc., filed as Exhibit (4)(b) to
registrant's registration statement on Form S-8 (File Number
333-03305) dated May 8, 1996, and incorporated herein by
reference.
Page 13
<PAGE> 14
4(a) Restated Articles of Incorporation of United Bancorp, Inc., filed
as Exhibit (4)(a) to registrant's registration statement on Form
S-8 (File Number 333-03305) dated May 8, 1996, and incorporated
herein by reference.
4(b) Bylaws of United Bancorp, Inc., filed as Exhibit (4)(b) to
registrant's registration statement on Form S-8 (File Number
333-03305) dated May 8, 1996, and incorporated herein by
reference.
4(c) United Bancorp, Inc. Director Retainer Stock Plan, filed as
Appendix A to registrant's proxy statement dated March 25, 1996
(file number 0-16640) and incorporated herein by reference.
4(d) United Bancorp, Inc. Senior Management Bonus Deferral Stock Plan,
filed as Appendix B to registrant's proxy statement dated March
25, 1996 (file number 0-16640) and incorporated herein by
reference.
11 The information required by this section is incorporated by
reference in Note 1 on Page A-21 of the Company's Proxy
Statement.
13 Registrant's Annual Report to Shareholders for the fiscal year
ended December 31, 1997 included in the Company's Proxy Statement
(not deemed filed except for those portions which are
specifically incorporated herein by reference).
21 Listing of Subsidiaries, filed herewith.
27 Financial Data Schedule, filed herewith.
(d) All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable, and
therefore have been omitted.
Page 14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 Bancorp, Inc.
/S/ David S. Hickman March 11, 1998
--------------------------------- --------------
David S. Hickman, President and Date
Chief Executive Officer, Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated, on March 11, 1998.
/S/ John J. Wanke /S/ Dale L. Chadderdon
- ------------------------------------- ----------------------------------
John J. Wanke Dale L. Chadderdon, Senior Vice
Executive Vice President, Director President, Secretary and Treasurer
/S/ David N. Berlin /S/ James C. Lawson
- ------------------------------------- ----------------------------------
David N. Berlin, Director James C. Lawson, Director
/S/ L. Donald Bush /S/ Donald J. Martin
- ------------------------------------- ----------------------------------
L. Donald Bush, Director Donald J. Martin, Director
/S/ Joseph D. Butcko /S/ David E. Maxwell
- ------------------------------------- ----------------------------------
Joseph D. Butcko, Director David E. Maxwell, Director
/S/ Patrick D. Farver /S/ Richard R. Niethammer
- ------------------------------------- ----------------------------------
Patrick D. Farver, Director Richard R. Niethammer, Director
/S/ Charles E. Gross /S/ John R. Robertstad
- ------------------------------------- ----------------------------------
Charles E. Gross, Director John R. Robertstad, Director
/S/ Ann Hinsdale Knisel /S/ Jeffrey T. Robideau
- ------------------------------------- ----------------------------------
Ann Hinsdale Knisel, Director Jeffrey T. Robideau, Director
/S/ Jeffrey A. Kuhman /S/ Richard Whelan
- ------------------------------------- ----------------------------------
Jeffrey A. Kuhman, Director Richard Whelan, Director
/S/ James K. Whitehouse
----------------------------------
James K. Whitehouse, Director
Page 15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
<S> <C> <C>
Exhibit 21 Subsidiaries 17
Exhibit 27 Financial Data Schedule 18
</TABLE>
Page 16
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES
<TABLE>
<CAPTION>
NAME JURISDICTION OF INCORPORATION
- ---- -----------------------------
<S> <C>
United Bank & Trust Michigan
</TABLE>
Page 17
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 10,406
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 42,488
<INVESTMENTS-CARRYING> 37,164
<INVESTMENTS-MARKET> 38,287
<LOANS> 265,258
<ALLOWANCE> 2,467
<TOTAL-ASSETS> 370,271
<DEPOSITS> 316,835
<SHORT-TERM> 4,942
<LIABILITIES-OTHER> 3,028
<LONG-TERM> 10,000
0
0
<COMMON> 16,366
<OTHER-SE> 19,100
<TOTAL-LIABILITIES-AND-EQUITY> 370,271
<INTEREST-LOAN> 22,584
<INTEREST-INVEST> 5,121
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 27,705
<INTEREST-DEPOSIT> 12,012
<INTEREST-EXPENSE> 12,893
<INTEREST-INCOME-NET> 14,812
<LOAN-LOSSES> 1,255
<SECURITIES-GAINS> 5
<EXPENSE-OTHER> 10,852
<INCOME-PRETAX> 6,829
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,013
<EPS-PRIMARY> 3.05
<EPS-DILUTED> 3.05
<YIELD-ACTUAL> 4.68
<LOANS-NON> 71
<LOANS-PAST> 910
<LOANS-TROUBLED> 138
<LOANS-PROBLEM> 596
<ALLOWANCE-OPEN> 2,320
<CHARGE-OFFS> 1,189
<RECOVERIES> 81
<ALLOWANCE-CLOSE> 2,467
<ALLOWANCE-DOMESTIC> 1,667
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 800
</TABLE>
