<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, 1999
COMMISSION FILE #0-16640
UNITED BANCORP, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2606280
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $64,834,000 (common stock, no par value.)
As of March 1, 2000, there were outstanding 1,819,193 shares of 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 18, 2000 are incorporated by reference.
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CROSS REFERENCE TABLE
<TABLE>
<CAPTION>
Page
ITEM NO. DESCRIPTION Numbers
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
PART I
1. Business 3
I Selected Statistical Information 5
(A) Distribution of Assets, Liabilities and Shareholders' Equity 5
(B) Interest Rates and Interest Differential 5
II Investment Portfolio 6
III Loan Portfolio 6
(A) Types of Loans 6
(B) Maturities and Sensitivities of Loans to Changes in Interest Rates 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 8
V Deposits 9
VI Return on Equity and Assets 9
VII Short-Term Borrowings 9
2. Properties 9
3. Legal Proceedings 9
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 10
7. Management's Discussion and Analysis of Financial Condition and Results of Operations 11
7A. Quantitative and Qualitative Disclosures About Market Risk 11
8. Financial Statements and Supplementary Data 11
9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 11
PART III
10. Directors and Executive Officers of the Registrant 11
11. Executive Compensation 11
12. Security Ownership of Certain Beneficial Owners and Management 11
13. Certain Relationships and Related Transactions 12
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 12
Signatures 14
Exhibit Index 15
</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
the Bank 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. The Bank also
sells credit and life insurance products.
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, insurance, 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.
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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. 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-31 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
beginning on Page 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, 1999, the Bank employed 160 full-time and 40 part-time
employees. This compares to 157 full time and 33 part time employees as of
December 31, 1998. 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.
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II INVESTMENT PORTFOLIO
The following table reflects the carrying values and yields of the Company's
securities portfolio for 1999.
Average yields are based on amortized costs and 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.
<TABLE>
<CAPTION>
Carrying Values and Yields of Investments
- -----------------------------------------
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) $ 2,016 $ 30,574 $ 3,442 $ -- $ 36,032
Weighted average yield 6.67% 6.18% 6.90% -- 6.28%
Obligations of states and political subdivisions 6,688 21,485 4,968 4,728 37,869
Weighted average yield 6.97% 7.43% 7.53% 8.35% 7.48%
Equity and other securities (2) 1,576 6,446 -- -- 8,022
Weighted average yield 8.00% 5.98% -- -- 6.37%
-----------------------------------------------------------
Total Securities $ 10,280 $ 58,505 $ 8,410 $ 4,728 $ 81,923
Weighted average yield 7.07% 6.61% 7.27% 8.35% 6.84%
</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.
As of December 31, 1999, 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 Pages A-24 and A-25 of the Company's Proxy Statement, and
is incorporated herein by reference.
III LOAN PORTFOLIO
(A) TYPES OF LOANS
The tables below shows loans outstanding (net of unearned interest) at December
31, and the percentage makeup of the portfolios. All loans are domestic and
contain no concentrations by industry or customer. Balances are stated in
thousands of dollars.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Personal $ 59,045 $ 58,797 $ 70,308 $ 69,477 $ 57,418
Business and commercial mortgage 99,832 82,521 74,080 65,823 56,946
Tax exempt 1,710 1,381 1,482 1,078 1,224
Residential mortgage (1) 114,150 104,903 104,800 94,255 97,000
Construction 33,530 22,647 14,588 11,220 5,239
------------------------------------------------------------------
Total loans (1) $ 308,267 $ 270,249 $ 265,258 $ 241,853 $ 217,827
==================================================================
Personal 19.1% 21.8% 26.5% 28.7% 26.4%
Business and commercial mortgage 32.4% 30.5% 27.9% 27.2% 26.1%
Tax exempt 0.6% 0.5% 0.6% 0.5% 0.6%
Residential mortgage 37.0% 38.8% 39.5% 39.0% 44.5%
Construction 10.9% 8.4% 5.5% 4.6% 2.4%
------------------------------------------------------------------
Total 100.0% 100.0% 100.0% 100.0% 100.0%
==================================================================
</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, 1999, 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 and commercial mortgage - fixed rate $ 815 $ 36,295 $ 15,356 $ 52,466
Business and commercial mortgage - variable rate 14,747 22,215 10,404 47,366
Tax exempt - fixed rate 22 569 981 1,572
Tax exempt - variable rate 138 -- -- 138
Construction -fixed rate 12,972 2,068 -- 15,040
Construction -variable rate 18,490 -- -- 18,490
------------------------------------------
Total fixed rate 13,809 38,932 16,337 69,078
Total variable rate 33,375 22,215 10,404 65,994
------------------------------------------
Total $ 47,184 $ 61,147 $ 26,741 $135,072
==========================================
</TABLE>
(C) RISK ELEMENTS
Non-Accrual, Past Due and Restructured Loans
The following shows the effect on interest revenue of nonaccrual and troubled
debt restructured loans as of December 31, 1999, in thousands of dollars:
<TABLE>
<S> <C>
Gross amount of interest that would have been recorded at original rate $ 90
Interest that was included in revenue (8)
----
Net impact on interest revenue $ 82
====
</TABLE>
Additional information concerning nonperforming loans, the Bank's nonaccrual
policy, and loan concentrations is provided on Pages A-7, A-8 and A-9, in Note 1
on Pages A-21 and A-22, Note 5 on Page A-25 and Note 6 on Page A-26 of the
Company's Proxy Statement, and is incorporated herein by reference.
At December 31, 1999, the Bank had three loans, other than those disclosed
above, for a total of $201,000 which would cause management to have serious
doubts as to the ability of the borrowers to comply with the present loan
repayment terms. These loans were included on the Bank's "watch list" and were
classified as impaired, however, payments are current.
(D) OTHER INTEREST BEARING ASSETS
As of December 31, 1999, other than $347,000 in other real estate, 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 table below summarizes changes in the allowance for loan losses for the
years 1995 through 1999, stated in thousands of dollars.
CHANGES IN ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $2,799 $2,467 $2,320 $2,197 $2,127
Charge-offs:
Business and commercial mortgage 166 9 95 25 6
Residential mortgage 10 -- 7 -- --
Personal 792 1,097 1,087 547 355
----------------------------------------------
Total charge-offs 968 1,106 1,189 572 361
----------------------------------------------
Recoveries:
Business and commercial mortgage 24 29 8 5 4
Residential mortgage -- -- -- 9 --
Personal 185 161 73 53 66
----------------------------------------------
Total recoveries 209 190 81 67 70
----------------------------------------------
Net charge-offs 759 916 1,108 505 291
----------------------------------------------
Additions charged to operations 1,260 1,248 1,255 628 361
----------------------------------------------
Balance at end of period $3,300 $2,799 $2,467 $2,320 $2,197
==============================================
Ratio of net charge-offs to average loans 0.27% 0.35% 0.44% 0.22% 0.14%
Allowance as percent of total loans 1.07% 1.04% 0.93% 0.96% 1.01%
</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. The provision
charged to earnings was $1,260,000 in 1999, compared to $1,248,000 in 1998 and
$1,255,000 in 1997. 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 0.32%
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, as of December 31. A
table showing the percent of loans in each category to total loans is included
in Section III (A), above.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Business and commercial mortgage $1,130 $ 864 $ 842 $1,012 $1,056
Tax exempt -- -- -- -- --
Residential mortgage 22 36 33 27 34
Personal 646 762 792 362 230
Construction -- -- -- -- --
Unallocated 1,502 1,137 800 919 877
----------------------------------------------
Total $3,300 $2,799 $2,467 $2,320 $2,197
==============================================
</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.
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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-27 of the Company's Proxy Statement, and is
incorporated herein by reference. There were no foreign deposits.
As of December 31, 1999, outstanding time certificates of deposit in amounts of
$100,000 or more were scheduled to mature as shown below. All amounts are in
thousands of dollars.
<TABLE>
<CAPTION>
Time
Certificates
------------
<S> <C>
Within three months $ 18,047
Over three through six months 2,463
Over six through twelve months 4,929
Over twelve months 7,006
--------
Total $ 32,445
========
</TABLE>
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 are incorporated herein by reference.
VII SHORT-TERM BORROWINGS
The information required by this section is contained in Note 10 on Page A-27 of
the Company's Proxy Statement, and is incorporated herein by reference. No
additional information is required as for all reporting periods, there were no
categories of short-term borrowings for which the average balance outstanding
during the period was 30% or more of shareholders' equity at the end of the
period.
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 three other banking offices in the Tecumseh area, two in the city
of Adrian, one each in the cities of Hudson and Morenci, one in the village of
Blissfield, and one each in Clinton, Rollin and Raisin Townships, all in Lenawee
County. In addition, the Bank operates one office each in the city of Saline and
the village of Manchester, Washtenaw County, Michigan, and owns and operates one
office in Dundee, Monroe County, Michigan. The Bank owns all of the buildings
except for the Manchester office, and leases the land for one office in the city
of Adrian. All offices except Manchester 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.
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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 1999.
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 1999 and 1998 as reported by Raymond James Financial
Services. These prices do not reflect private trades not involving Raymond James
Financial Services. The common stock of the Company is traded over the counter.
The Company had 1,022 shareholders as of December 31, 1999. The prices and
dividends per share have been adjusted to reflect the 1999 and 1998 stock
dividends.
<TABLE>
<CAPTION>
1999 1998
---------------------------------- -------------------------------------
Market price Cash Market price Cash
---------------------- dividends -------------------------- dividends
Quarter High Low declared High Low declared
------- ---------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1st $ 43.81 $ 41.90 $ 0.267 $ 35.83 $ 33.56 $ 0.236
2nd 47.00 43.81 0.280 40.00 35.83 0.248
3rd 47.00 47.00 0.300 41.90 40.00 0.267
4th 47.00 47.00 0.400 41.90 41.90 0.380
</TABLE>
ITEM 6 - SELECTED FINANCIAL DATA
The following tables present five years of financial data for the Company, for
the years ended December 31. (In thousands, except per share data).
<TABLE>
<CAPTION>
FINANCIAL CONDITION 1999 1998 1997 1996 1995
- -------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and demand balances in other banks $ 17,469 $ 12,348 $ 10,406 $ 10,252 $ 10,017
Federal funds sold -- -- -- 11,400 8,700
Securities available for sale 81,923 58,468 42,488 44,990 45,420
Securities held to maturity -- 36,919 37,164 33,348 30,495
Net loans 304,967 267,450 262,791 239,533 215,630
Other assets 23,162 18,510 17,422 13,847 13,174
----------------------------------------------------------
Total Assets $427,521 $393,695 $370,271 $353,370 $323,436
==========================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest bearing deposits $ 46,829 $ 42,468 $ 31,924 $ 30,335 $ 29,565
Interest bearing certificates of deposit of
$100,000 or more 32,445 31,108 38,714 42,060 34,439
Other interest bearing deposits 281,569 263,691 246,197 225,308 221,168
----------------------------------------------------------
Total deposits 360,843 337,267 316,835 297,703 285,172
Short term borrowings 19,300 3,874 4,942 609 578
Other borrowings 3,624 10,900 10,000 20,000 6,000
Other liabilities 2,790 2,890 3,028 3,010 2,833
----------------------------------------------------------
Total Liabilities 386,557 354,931 334,805 321,322 294,583
Shareholders' Equity 40,964 38,764 35,466 32,048 28,853
----------------------------------------------------------
Total Liabilities and Shareholders' Equity $427,521 $393,695 $370,271 $353,370 $323,436
==========================================================
</TABLE>
Page 10
<PAGE> 11
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS 1999 1998 1997 1996 1995
- ----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Interest income $29,408 $28,993 $27,705 $25,351 $23,492
Interest expense 12,254 13,032 12,893 11,614 11,084
------------------------------------------------------
Net Interest Income 17,154 15,961 14,812 13,737 12,408
Provision for loan losses 1,260 1,248 1,255 628 361
Noninterest income 6,142 5,400 4,124 3,662 2,978
Noninterest expense 15,102 13,208 10,852 10,307 9,568
------------------------------------------------------
Income before Federal income tax 6,934 6,905 6,829 6,464 5,457
Federal income tax 1,819 1,803 1,816 1,713 1,422
------------------------------------------------------
Net Income $ 5,115 $ 5,102 $ 5,013 $ 4,751 $ 4,035
======================================================
Basic and diluted earnings per share (1) (2) $ 2.81 $ 2.81 $ 2.76 $ 2.62 $ 2.23
Cash dividends declared per share (2) 1.25 1.13 1.01 0.92 0.74
</TABLE>
(1) Earnings per share data is based on average shares outstanding plus
average contingently issuable shares.
(2) Adjusted to reflect the stock dividends paid in 1999, 1998, 1997 and
1996.
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-14
of the Company's Proxy Statement, and is incorporated herein by reference.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this section is contained on pages A-10 through
A-13 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-17 through
A-33 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 18, 2000, and is incorporated herein by reference, as follows:
<TABLE>
<CAPTION>
Pages in Proxy
Statement
<S> <C>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 4-7
ITEM 11 - EXECUTIVE COMPENSATION 7-10
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 11-12
</TABLE>
Page 11
<PAGE> 12
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information appearing on page 6 and 7 and in Note 14 on Page A-29 of the
Company's Proxy Statement for the Annual Meeting of Shareholders to be held
April 18, 2000, is incorporated herein by reference in response to this item.
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, 1999 and 1998 A-17
Consolidated Statements of Income -
Years Ended December 31, 1999, 1998 and 1997 A-18
Consolidated Statements of Cash Flows -
Years Ended December 31, 1999, 1998 and 1997 A-19
Consolidated Statements of Changes in Shareholders' Equity -
Years Ended December 31, 1999, 1998 and 1997 A-20
Notes to Consolidated Financial Statements A-21 - A-33
Report of Independent Auditors, Crowe, Chizek and Company LLP,
Dated January 27, 2000 A-16
</TABLE>
2. Financial statement schedules are 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,
1999.
(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.
4(a) Restated Articles of Incorporation of United Bancorp, Inc., filed as
Exhibit (4)(a) to registrant's
Page 12
<PAGE> 13
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.
4(e) United Bancorp, Inc. 1999 Stock Option Plan, filed as Appendix B to
the Company's proxy statement dated March 24, 2000 and incorporated
herein by reference.
11 The information required by this section is incorporated by
reference in Note 1 on Page A-23 of the Company's Proxy Statement.
13 Registrant's Annual Report to Shareholders for the fiscal year ended
December 31, 1999 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 13
<PAGE> 14
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 8, 2000
----------------------------------- -------------
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 8, 2000.
/S/ John J. Wanke /S/ Dale L. Chadderdon
- ------------------------------------ ------------------------------------
John J. Wanke, President and Chief Dale L. Chadderdon, Senior Vice
Operating Officer, Director President, Secretary and Treasurer
/S/ David N. Berlin /S/ Jeffrey A. Kuhman
- ------------------------------------ ------------------------------------
David N. Berlin, Director Jeffrey A. Kuhman, Director
/S/ L. Donald Bush /S/ James C. Lawson
- ------------------------------------ ------------------------------------
L. Donald Bush, Director James C. Lawson, Director
/S/ Joseph D. Butcko /S/ Donald J. Martin
- ------------------------------------ ------------------------------------
Joseph D. Butcko, Director Donald J. Martin, Director
/S/ Patrick D. Farver /S/ David E. Maxwell
- ------------------------------------ ------------------------------------
Patrick D. Farver, Director David E. Maxwell, Director
/S/ John H. Foss /S/ Kathryn M. Mohr
- ------------------------------------ ------------------------------------
John H. Foss, Director Kathryn M Mohr, Director
/S/ Richard A. Gurdjian /S/ Richard R. Niethammer
- ------------------------------------ ------------------------------------
Richard A. Gurdjian, Director Richard R. Niethammer, Director
/S/ Scott F. Hill /S/ John R. Robertstad
- ------------------------------------ ------------------------------------
Scott F. Hill, Director John R. Robertstad, Director
/S/ Ann Hinsdale Knisel
- ------------------------------------
Ann Hinsdale Knisel, Director
Page 14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ ----------- --------
<S> <C> <C>
Exhibit 21 Subsidiaries 16
Exhibit 27 Financial Data Schedule 17
</TABLE>
Page 15
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES
<TABLE>
<CAPTION>
NAME JURISDICTION OF INCORPORATION
- ---- -----------------------------
<S> <C>
United Bank & Trust Michigan
</TABLE>
Page 16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 17,469
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 81,923
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<LOANS> 308,267
<ALLOWANCE> 3,300
<TOTAL-ASSETS> 427,521
<DEPOSITS> 360,843
<SHORT-TERM> 19,300
<LIABILITIES-OTHER> 2,790
<LONG-TERM> 3,624
0
0
<COMMON> 23,919
<OTHER-SE> 17,045
<TOTAL-LIABILITIES-AND-EQUITY> 427,521
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</TABLE>
