Attached files
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| EX-99.2 - UNITED BANCORP, INC. LETTER TO SHAREHOLDERS - UNITED BANCORP INC /MI/ | shareholderletter.htm |
| 8-K - UNITED BANCORP, INC. FORM 8K EARNINGS PRESS RELEASE Q4 2011 - UNITED BANCORP INC /MI/ | form8k2011earningsq4.htm |
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FOR IMMEDIATE RELEASE:
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CONTACT:
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Robert K. Chapman,
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January 27, 2012
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President and Chief Executive Officer
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United Bancorp, Inc.
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734-214-3801
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UNITED BANCORP, INC. ANNOUNCES UNAUDITED
FOURTH QUARTER AND FULL YEAR 2011 RESULTS
Company reports profitable quarter and full year
Quarterly revenues reach highest level of 2011
Increasing core earnings
Improving asset quality trends
ANN ARBOR, MI – United Bancorp, Inc. (UBMI.ob) reported consolidated net income of $2.3 million, or $0.16 per share of common stock, for the fourth quarter of 2011, compared to a consolidated net loss of $427,000, or $0.11 per share, for the fourth quarter of 2010. The Company’s net income for the twelve months ended December 31, 2011 was $917,000, improving from a net loss of $3.7 million for the same period of 2010. After accounting for preferred stock dividends, earnings (loss) per share was ($0.02) for the twelve months ended December 31, 2011 and ($0.89) per share for the same period of 2010.
Robert K. Chapman, President and Chief Executive Officer of United Bancorp, Inc. (“United” or the “Company”), noted that the fourth quarter of 2011 represented a significant improvement compared to the prior quarter, and helped the Company to achieve profitability for the year ended December 31, 2011. Chapman commented that the fourth quarter improvements in earnings levels, capital levels and lower levels of loan loss provision were all positive contributors to the Company’s financial results.
The Company’s core earnings for the fourth quarter of 2011, as measured by its pre-tax, pre-provision return on average assets, were at the highest quarterly level of the year. United’s pre-tax, pre-provision return on average assets of 1.59% for the fourth quarter of 2011 was up from 1.19% for the previous quarter and 1.44% for the full year of 2011. Mr. Chapman indicated that United’s four business lines – banking, wealth management, mortgage and structured finance – continued to make solid contributions to the Company’s profitability. The diversity in United’s revenue stream has resulted in noninterest income that represented 37.6% of the Company’s net revenues for the fourth quarter of 2011 and 36.4% for the twelve months ended December 31, 2011.
The Company’s provision for loan losses for the fourth quarter of 2011 was $250,000, compared to $4.9 million in the fourth quarter of 2010. For the twelve months ended December 31, 2011, the Company’s provision for loan losses of $12.2 million was down significantly from $21.5 million for the same period of 2010. At the same time, the Company’s nonperforming loans and nonperforming assets at December 31, 2011 were at their lowest levels since the second quarter of 2009.
Mr. Chapman announced that the Company opened its loan production office in Brighton, Michigan in December, 2011. He commented, “We are excited to establish a physical presence in Livingston County, which we believe will help us further expand the business relationships we have there and to build additional relationships. We have assembled a great team of experienced community financial services professionals from the area, and we look forward to building strong relationships with the Brighton community.” Mr. Chapman also announced that the Company will be opening a loan production office within the City of Monroe, Michigan sometime in the first half of 2012. This office will complement our Dundee, Michigan office and expands United’s footprint further in Monroe County.
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Results of Operations
The Company achieved consolidated net income of $2.3 million for the fourth quarter of 2011, bringing full year net income to $917,000 for 2011, improving from a full year loss of $3.7 million in 2010. The Company’s return on average assets for 2011 was 1.03% and 0.10%, respectively, for the three and twelve month periods ended December 31, 2011, compared to -0.20% and -0.42%, respectively, for the same periods of 2010. Return on average shareholders’ equity for 2011 of 9.89% and 0.98%, respectively, for the three and twelve months ended December 31, 2011, was up from -2.12% and -4.66% for the same periods of 2010.
Increased levels of net interest income and noninterest income in the fourth quarter of 2011 compared to each of the first three quarters of 2011 resulted in the highest quarterly level of net revenues since the third quarter of 2010. Net interest margin improved to 3.67% for the fourth quarter of 2011, up from 3.58% for the third quarter of 2011, and was higher than the full year 2011 net interest margin of 3.64%. At the same time, the twelve-month net interest margin of 3.64% was down from 3.79% for 2010, as a result of a decline in loan balances and continued elevated levels of investments and short-term liquid assets, and in spite of a relatively large increase in non-interest bearing deposits.
Noninterest income for the fourth quarter of 2011 reached its highest level of the year, at $4.6 million, bringing full year 2011 noninterest income to $17.2 million. While income from loan sales and servicing declined in the fourth quarter of 2011 compared to the same quarter of 2010, it was at the highest quarterly level of 2011. Total noninterest income for the twelve months ended December 31, 2011 improved by $913,000, or 5.6%, in 2011 as compared to the same period of 2010. Most categories of noninterest income contributed to this improvement, while deposit service charges continued the decline noted over the past two years.
Total noninterest expense for the fourth quarter of 2011 was up 7.2% from the same quarter of 2010, but decreased by 3.0% compared to the third quarter of 2011. Noninterest expense for the twelve month period ended December 31, 2011 was up 6.5% compared to the same period of 2011. The largest dollar amount of increase for 2011 was in salaries and employee benefits. The increase in compensation expenses reflect, in part, the reinstatement of the Company’s match portion of its 401(k) plan effective January 1, 2011, increased health and life insurance premiums, and continued higher levels of commissions and other compensation costs related to the generation of income from loan sales and servicing. In addition, the Company has increased its staffing levels modestly to accommodate its future anticipated growth, and salary increases were reinstated effective April 1, 2011. The Company did not pay increases to its employees in 2009 or 2010, and no cash bonuses were paid or accrued under our bonus plans in 2009, 2010 or 2011. Expenses relating to ORE properties, and attorney and other professional fees reflect costs related to the Company’s credit quality concerns. Expenses in those categories increased in the twelve months ended December 31, 2011 compared to the same period of 2010, while the fourth quarter 2011 expenses decreased from those experienced in the third quarter of 2011.
The Company’s provision for loan losses in the fourth quarter of 2011 was $250,000, down from $4.9 million for the fourth quarter of 2010. This significantly reduced level of provision for loan losses is a result of a decline in nonperforming loans, a reduction in nonperforming asset formation, and a slowdown in loan rating downgrades. In addition, the Company received appraisals during the fourth quarter of 2011 on certain previously impaired loans, and adjusted internal valuations of collateral as appropriate. For the twelve months ended December 31, 2011, United’s provision for loan losses of $12.2 million was down 43.6% from $21.5 million for the same period of 2010.
Balance Sheet
Total consolidated assets of the Company were $885.0 million at December 31, 2011, up from $861.7 million at December 31, 2010. Gross portfolio loans of $563.7 million decreased by 2.4% in the fourth
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quarter of 2011 and 4.8% over the twelve month period ended December 31, 2011 as a result of stagnant loan demand, charge-offs and the Company’s effective use of loan sales to mitigate credit and interest rate risk. The Company generally sells its fixed rate long-term residential mortgages on the secondary market, and retains adjustable rate mortgages in its loan portfolio. While the Company’s gross portfolio loans have declined by $28.3 million, or 4.8%, since December 31, 2010, the balance of loans serviced for others has increased by $80.1 million, or 12.2%, during the same period.
The Company continued to hold elevated levels of investments, federal funds sold and cash equivalents in order to protect the balance sheet during this prolonged period of economic uncertainty. United’s balances in federal funds sold and other short-term investments were $91.8 million at December 31, 2011, compared to $95.6 million at December 31, 2010. Securities available for sale of $173.2 million at December 31, 2011 were up 39.1% from December 31, 2010 levels, as the Company has begun to deploy some of its liquidity into investments.
Total deposits of $764.9 million at December 31, 2011 were up $30.9 million, or 4.2%, from $734.0 million at December 31, 2010, with non-interest bearing balances making up the greatest portion of the increase. The majority of the Company’s deposits are derived from core client sources, relating to long-term relationships with local individual, business and public clients. Public clients include local government and municipal bodies, hospitals, universities and other educational institutions. As a result of its strong core funding, the Company’s cost of interest-bearing deposits was 0.95% for the twelve month period ended December 31, 2011, down from 1.27% for the same period of 2010.
Asset Quality
The Company’s total nonperforming loans were $25.8 million at December 31, 2011, down 11.8% from December 31, 2010, and are at the lowest level in more than two years. Loan workout and collection efforts continue with all delinquent clients, in an effort to bring them back to performing status.
The Company’s ratio of allowance for loan losses to total portfolio loans at December 31, 2011 was 3.66%, and covered 80.0% of nonperforming loans, compared to 4.25% and 86.0%, respectively, at December 31, 2010. The Company’s allowance for loan losses has decreased by $4.5 million over the twelve months ended December 31, 2011, as the Company realized losses for which it had previously provided for in its allowance for loan losses. Net charge-offs of $16.7 million for the twelve months ended December 31, 2011 were 1.8% above levels experienced in the same period of 2010.
Net charge-offs for the fourth quarter of 2011 were $4.0 million, most of which represented specific reserves which had been provided for in previous quarters. These charge-offs, combined with minimal nonperforming asset formation, resulted in nonperforming assets of 3.33% of assets as of December 31, 2011, compared with 3.89% at December 31, 2010.
Capital Management
Under the terms of a Memorandum of Understanding (“MOU”) with the Federal Deposit Insurance Corporation (“FDIC”) and the Michigan Office of Financial and Insurance Regulation (“OFIR”), United Bank & Trust (the “Bank”) is required, among other things, to have and maintain its Tier 1 leverage capital ratio at a minimum of 9% for the duration of the MOU, and to maintain its ratio of total capital to risk-weighted assets at a minimum of 12% for the duration of the MOU. In December, 2010, the Company closed its public offering of common stock. As a result of the additional capital, the Bank was in compliance with the capital requirements of its MOU with the FDIC and OFIR at December 31, 2010, March 31, 2011 and June 30, 2011. At September 30, 2011, the Bank’s Tier 1 leverage capital ratio was 8.88%, and its ratio of total capital to risk-weighted assets was 14.47%. As a result of the strong earnings in the fourth quarter, along with a capital infusion of $500,000 by the Company, the Bank was once again in compliance with the capital requirements of its MOU. At December 31, 2011, the Bank’s Tier 1 leverage capital ratio was 9.20%, and its ratio of total capital to risk-weighted assets was 15.49%.
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About United Bancorp, Inc.
United Bancorp, Inc. is a community-based financial services company located in Washtenaw, Lenawee, Livingston and Monroe Counties in Michigan. United Bank & Trust is the Company’s only subsidiary, and the Bank provides financial solutions to its clients based on their unique circumstances and needs, through a line of business delivery system that includes banking, mortgage, structured finance and wealth management. For more information, visit the Company’s website at www.ubat.com.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and United Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as “begun,” “anticipates,” “believes,” “look forward,” “contribute,” “future,” “continue,” “in an effort,” “sometime,” “will,” and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to deployment of liquidity and loan demand, further expansion of, and development of new, business relationships, future growth of the Company and plans to open a loan production office. All statements referencing future time periods are forward-looking.
Management’s determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including mortgage servicing rights and deferred tax assets) and other real estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated or that other real estate owned can be sold at its carrying value or at all. Our ability to improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and on United Bancorp, Inc., specifically, are also inherently uncertain. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. United Bancorp, Inc. undertakes no obligation to update, clarify or revise forward-looking statements to reflect developments that occur or information obtained after the date of this report.
Risk factors include, but are not limited to, the risk factors described in “Item 1A – Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2010. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
Non-GAAP Financial Information
This press release includes disclosures about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets. These disclosures are non-GAAP financial measures. For additional information about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets, please see the unaudited consolidated financial statements and related footnotes that follow.
Unaudited Consolidated Financial Statements Follow.
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United Bancorp, Inc. and Subsidiary
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Comparative Consolidated Balance Sheet Data (Unaudited)
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Dollars in thousands
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Dec. 31,
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Sept. 30,
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Change this Qtr.
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Dec. 31,
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12-Month Change
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Period-end Balance Sheet
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2011
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2011
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$ | % | 2010 | $ | % | |||||||||||||||||||||
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Assets
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Cash and due from banks
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$ | 15,798 | $ | 15,894 | $ | (96 | ) | -0.6 | % | $ | 10,623 | $ | 5,175 | 48.7 | % | |||||||||||||
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Interest bearing bal. with banks
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91,428 | 99,420 | (7,992 | ) | -8.0 | % | 95,599 | (4,171 | ) | -4.4 | % | |||||||||||||||||
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Federal funds sold
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366 | - | 366 | 100.0 | % | - | 366 | 100.0 | % | |||||||||||||||||||
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Total cash & cash equivalents
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107,592 | 115,314 | (7,722 | ) | -6.7 | % | 106,222 | 1,370 | 1.3 | % | ||||||||||||||||||
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Securities available for sale
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173,197 | 164,945 | 8,252 | 5.0 | % | 124,544 | 48,653 | 39.1 | % | |||||||||||||||||||
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FHLB Stock
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2,571 | 2,571 | - | 0.0 | % | 2,788 | (217 | ) | -7.8 | % | ||||||||||||||||||
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Loans held for sale
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8,290 | 7,709 | 581 | 7.5 | % | 10,289 | (1,999 | ) | -19.4 | % | ||||||||||||||||||
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Portfolio loans
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Personal
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104,573 | 107,410 | (2,837 | ) | -2.6 | % | 108,544 | (3,971 | ) | -3.7 | % | |||||||||||||||||
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Business
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366,714 | 379,358 | (12,644 | ) | -3.3 | % | 392,577 | (25,863 | ) | -6.6 | % | |||||||||||||||||
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Residential mortgage
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92,415 | 90,832 | 1,583 | 1.7 | % | 90,864 | 1,551 | 1.7 | % | |||||||||||||||||||
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Total portfolio loans
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563,702 | 577,600 | (13,898 | ) | -2.4 | % | 591,985 | (28,283 | ) | -4.8 | % | |||||||||||||||||
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Allowance for loan losses
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20,633 | 24,357 | (3,724 | ) | -15.3 | % | 25,163 | (4,530 | ) | -18.0 | % | |||||||||||||||||
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Net loans
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543,069 | 553,243 | (10,174 | ) | -1.8 | % | 566,822 | (23,753 | ) | -4.2 | % | |||||||||||||||||
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Premises and equipment, net
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10,795 | 10,631 | 164 | 1.5 | % | 11,241 | (446 | ) | -4.0 | % | ||||||||||||||||||
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Bank owned life insurance
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13,819 | 13,710 | 109 | 0.8 | % | 13,391 | 428 | 3.2 | % | |||||||||||||||||||
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Other assets
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25,676 | 26,282 | (606 | ) | -2.3 | % | 26,413 | (737 | ) | -2.8 | % | |||||||||||||||||
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Total Assets
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$ | 885,009 | $ | 894,405 | $ | (9,396 | ) | -1.1 | % | $ | 861,710 | $ | 23,299 | 2.7 | % | |||||||||||||
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Liabilities
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Deposits
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Non-interest bearing
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$ | 139,346 | $ | 134,673 | $ | 4,673 | 3.5 | % | $ | 113,206 | $ | 26,140 | 23.1 | % | ||||||||||||||
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Interest bearing
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625,510 | 640,856 | (15,346 | ) | -2.4 | % | 620,792 | 4,718 | 0.8 | % | ||||||||||||||||||
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Total deposits
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764,856 | 775,529 | (10,673 | ) | -1.4 | % | 733,998 | 30,858 | 4.2 | % | ||||||||||||||||||
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Short term borrowings
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- | - | - | 0.0 | % | 1,234 | (1,234 | ) | -100.0 | % | ||||||||||||||||||
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FHLB advances outstanding
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24,035 | 24,054 | (19 | ) | -0.1 | % | 30,321 | (6,286 | ) | -20.7 | % | |||||||||||||||||
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Other liabilities
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2,344 | 3,016 | (672 | ) | -22.3 | % | 3,453 | (1,109 | ) | -32.1 | % | |||||||||||||||||
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Total Liabilities
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791,235 | 802,599 | (11,364 | ) | -1.4 | % | 769,006 | 22,229 | 2.9 | % | ||||||||||||||||||
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Shareholders' Equity
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93,774 | 91,806 | 1,968 | 2.1 | % | 92,704 | 1,070 | 1.2 | % | |||||||||||||||||||
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Total Liabilities and Equity
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$ | 885,009 | $ | 894,405 | $ | (9,396 | ) | -1.1 | % | $ | 861,710 | $ | 23,299 | 2.7 | % | |||||||||||||
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Three months ended Dec. 31,
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Twelve months ended Dec. 31,
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Average Balance Data
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2011 | 2010 |
% Change
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2011 | 2010 |
% Change
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Total loans
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$ | 582,956 | $ | 612,534 | -4.8 | % | $ | 583,388 | $ | 634,678 | -8.1 | % | ||||||||||||||||
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Earning assets
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841,457 | 818,646 | 2.8 | % | 837,643 | 834,642 | 0.4 | % | ||||||||||||||||||||
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Total assets
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881,480 | 863,555 | 2.1 | % | 876,007 | 874,768 | 0.1 | % | ||||||||||||||||||||
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Deposits
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762,706 | 747,188 | 2.1 | % | 752,516 | 757,236 | -0.6 | % | ||||||||||||||||||||
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Shareholders' Equity
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92,122 | 79,808 | 15.4 | % | 93,258 | 79,544 | 17.2 | % | ||||||||||||||||||||
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Asset Quality
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Net charge offs
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$ | 3,974 | $ | 3,258 | 22.0 | % | $ | 16,680 | $ | 16,387 | 1.8 | % | ||||||||||||||||
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Non-accrual loans
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25,754 | 28,661 | -10.1 | % | ||||||||||||||||||||||||
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Non-performing loans
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25,785 | 29,244 | -11.8 | % | ||||||||||||||||||||||||
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Non-performing assets
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29,455 | 33,548 | -12.2 | % | ||||||||||||||||||||||||
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Nonperforming loans/total loans
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4.57 | % | 4.94 | % | -7.4 | % | ||||||||||||||||||||||
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Nonperforming assets/total assets
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3.33 | % | 3.89 | % | -14.5 | % | ||||||||||||||||||||||
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Allowance for loan loss/total loans
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3.66 | % | 4.25 | % | -13.9 | % | ||||||||||||||||||||||
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Allowance/nonperforming loans
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80.0 | % | 86.0 | % | -7.0 | % | ||||||||||||||||||||||
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United Bancorp, Inc. and Subsidiary
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Comparative Consolidated Income Statement and Performance Data (Unaudited)
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Dollars in thousands except per share data
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Three months ended Dec. 31,
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Twelve months ended Dec. 31,
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Consolidated Income Statement
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2011
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2010
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% Change
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2011
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2010
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% Change
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Interest Income
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Interest and fees on loans
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$ | 8,155 | $ | 8,744 | -6.7 | % | $ | 32,408 | $ | 36,411 | -11.0 | % | ||||||||||||
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Interest on investment securities
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868 | 765 | 13.5 | % | 3,497 | 3,124 | 11.9 | % | ||||||||||||||||
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Interest on fed funds sold & bank balances
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56 | 58 | -3.4 | % | 260 | 235 | 10.6 | % | ||||||||||||||||
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Total interest income
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9,079 | 9,567 | -5.1 | % | 36,165 | 39,770 | -9.1 | % | ||||||||||||||||
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Interest Expense
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Interest on deposits
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1,127 | 1,526 | -26.1 | % | 5,096 | 7,353 | -30.7 | % | ||||||||||||||||
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Interest on short term borrowings
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54 | 21 | 157.1 | % | 65 | 144 | -54.9 | % | ||||||||||||||||
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Interest on FHLB advances
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211 | 285 | -26.0 | % | 953 | 1,190 | -19.9 | % | ||||||||||||||||
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Total interest expense
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1,392 | 1,832 | -24.0 | % | 6,114 | 8,687 | -29.6 | % | ||||||||||||||||
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Net Interest Income
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7,687 | 7,735 | -0.6 | % | 30,051 | 31,083 | -3.3 | % | ||||||||||||||||
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Provision for loan losses
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250 | 4,930 | -94.9 | % | 12,150 | 21,530 | -43.6 | % | ||||||||||||||||
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Net Interest Income After Provision
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7,437 | 2,805 | 165.1 | % | 17,901 | 9,553 | 87.4 | % | ||||||||||||||||
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Noninterest Income
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Service charges on deposit accounts
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471 | 555 | -15.1 | % | 1,971 | 2,191 | -10.0 | % | ||||||||||||||||
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Trust & Investment fee income
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1,299 | 1,191 | 9.1 | % | 5,079 | 4,518 | 12.4 | % | ||||||||||||||||
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Gains on securities transactions
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- | - | 0.0 | % | - | 31 | -100.0 | % | ||||||||||||||||
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Income from loan sales and servicing
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1,894 | 2,081 | -9.0 | % | 6,434 | 6,351 | 1.3 | % | ||||||||||||||||
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ATM, debit and credit card fee income
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557 | 505 | 10.3 | % | 2,176 | 1,940 | 12.2 | % | ||||||||||||||||
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Income from bank-owned life insurance
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108 | 111 | -2.7 | % | 428 | 451 | -5.1 | % | ||||||||||||||||
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Other income
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306 | 110 | 178.2 | % | 1,123 | 816 | 37.6 | % | ||||||||||||||||
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Total noninterest income
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4,635 | 4,553 | 1.8 | % | 17,211 | 16,298 | 5.6 | % | ||||||||||||||||
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Noninterest Expense
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Salaries and employee benefits
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4,870 | 4,724 | 3.1 | % | 18,971 | 17,217 | 10.2 | % | ||||||||||||||||
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Occupancy and equipment expense
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1,196 | 1,278 | -6.4 | % | 5,015 | 5,207 | -3.7 | % | ||||||||||||||||
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External data processing
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301 | 307 | -2.0 | % | 1,342 | 1,206 | 11.3 | % | ||||||||||||||||
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Advertising and marketing expenses
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143 | 136 | 5.1 | % | 625 | 610 | 2.5 | % | ||||||||||||||||
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Attorney & other professional fees
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336 | 191 | 75.9 | % | 1,678 | 1,561 | 7.5 | % | ||||||||||||||||
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Director fees
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65 | 60 | 8.3 | % | 370 | 325 | 13.8 | % | ||||||||||||||||
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Expenses relating to ORE property
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693 | 450 | 54.0 | % | 2,019 | 1,698 | 18.9 | % | ||||||||||||||||
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FDIC Insurance premiums
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294 | 401 | -26.7 | % | 1,315 | 1,806 | -27.2 | % | ||||||||||||||||
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Other expense
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917 | 678 | 35.3 | % | 3,283 | 2,867 | 14.5 | % | ||||||||||||||||
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Total noninterest expense
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8,815 | 8,225 | 7.2 | % | 34,618 | 32,497 | 6.5 | % | ||||||||||||||||
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Income (Loss) Before Federal Income Tax
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3,257 | (867 | ) | -475.7 | % | 494 | (6,646 | ) | -107.4 | % | ||||||||||||||
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Federal income tax (benefit)
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960 | (440 | ) | -318.2 | % | (423 | ) | (2,938 | ) | -85.6 | % | |||||||||||||
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Net Income (Loss)
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$ | 2,297 | $ | (427 | ) | -637.9 | % | $ | 917 | $ | (3,708 | ) | -124.7 | % | ||||||||||
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Performance Ratios
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Return on average assets
|
1.03 | % | -0.20 | % | 0.10 | % | -0.42 | % | ||||||||||||||||
|
Return on average equity
|
9.89 | % | -2.12 | % | 0.98 | % | -4.66 | % | ||||||||||||||||
|
Pre-tax, pre-provision ROA (1)
|
1.59 | % | 1.88 | % | -15.4 | % | 1.44 | % | 1.70 | % | -15.2 | % | ||||||||||||
|
Net interest margin (FTE)
|
3.67 | % | 3.81 | % | -3.5 | % | 3.64 | % | 3.79 | % | -3.9 | % | ||||||||||||
|
Efficiency ratio
|
70.9 | % | 66.3 | % | 7.0 | % | 72.6 | % | 67.8 | % | 7.0 | % | ||||||||||||
|
Common Stock Performance
|
||||||||||||||||||||||||
|
Basic & diluted earnings (loss) per share
|
$ | 0.16 | $ | (0.11 | ) | $ | (0.02 | ) | $ | (0.89 | ) | |||||||||||||
|
Book value per share
|
$ | 5.78 | $ | 5.72 | 1.1 | % | ||||||||||||||||||
|
Tangible book value per share
|
5.78 | 5.72 | 1.1 | % | ||||||||||||||||||||
|
Market value per share (2)
|
2.50 | 3.50 | -28.6 | % | ||||||||||||||||||||
6
|
United Bancorp, Inc. and Subsidiary
|
||||||||||||||||||||
|
Trends of Selected Consolidated Financial Data (Unaudited)
|
||||||||||||||||||||
|
In thousands except per share data
|
2011
|
2010
|
||||||||||||||||||
|
Balance Sheet Data
|
4th Qtr
|
3rd Qtr
|
2nd Qtr
|
1st Qtr
|
4th Qtr
|
|||||||||||||||
|
Period-end:
|
||||||||||||||||||||
|
Portfolio loans
|
$ | 563,702 | $ | 577,600 | $ | 575,296 | $ | 578,111 | $ | 591,985 | ||||||||||
|
Total loans
|
571,992 | 585,309 | 577,840 | 578,630 | 602,274 | |||||||||||||||
|
Allowance for loan losses
|
20,633 | 24,357 | 25,370 | 25,194 | 25,163 | |||||||||||||||
|
Earning assets
|
839,554 | 852,245 | 824,127 | 848,280 | 825,205 | |||||||||||||||
|
Total assets
|
885,009 | 894,405 | 862,099 | 885,476 | 861,710 | |||||||||||||||
|
Deposits
|
764,856 | 775,529 | 737,528 | 760,233 | 733,998 | |||||||||||||||
|
Shareholders' Equity
|
93,774 | 91,806 | 94,064 | 92,831 | 92,704 | |||||||||||||||
|
Average:
|
||||||||||||||||||||
|
Total loans
|
$ | 582,956 | $ | 583,042 | $ | 577,662 | $ | 589,974 | $ | 612,534 | ||||||||||
|
Earning assets
|
841,457 | 836,529 | 830,838 | 841,824 | 818,646 | |||||||||||||||
|
Total assets
|
881,480 | 876,095 | 869,523 | 879,695 | 863,555 | |||||||||||||||
|
Deposits
|
762,706 | 752,355 | 742,171 | 752,724 | 747,188 | |||||||||||||||
|
Shareholders' Equity
|
92,122 | 94,159 | 93,409 | 92,824 | 79,808 | |||||||||||||||
|
Income Statement Summary
|
||||||||||||||||||||
|
Net interest income
|
$ | 7,687 | $ | 7,437 | $ | 7,525 | $ | 7,402 | $ | 7,735 | ||||||||||
|
Non-interest income
|
4,635 | 4,256 | 4,395 | 3,925 | 4,553 | |||||||||||||||
|
Non-interest expense
|
8,815 | 9,084 | 8,501 | 8,218 | 8,225 | |||||||||||||||
|
Pre-tax, pre-provision income (1)
|
3,507 | 2,609 | 3,419 | 3,109 | 4,063 | |||||||||||||||
|
Provision for loan losses
|
250 | 6,000 | 3,100 | 2,800 | 4,930 | |||||||||||||||
|
Federal income tax
|
960 | (1,291 | ) | (42 | ) | (50 | ) | (440 | ) | |||||||||||
|
Net income (loss)
|
2,297 | (2,100 | ) | 361 | 359 | (427 | ) | |||||||||||||
|
Basic & diluted income (loss) per share
|
$ | 0.16 | $ | (0.19 | ) | $ | 0.01 | $ | 0.01 | $ | (0.11 | ) | ||||||||
|
Performance Ratios and Liquidity
|
||||||||||||||||||||
|
Return on average assets
|
1.03 | % | -0.95 | % | 0.17 | % | 0.17 | % | -0.20 | % | ||||||||||
|
Return on average common equity
|
9.89 | % | -8.85 | % | 1.55 | % | 1.57 | % | -2.12 | % | ||||||||||
|
Pre-tax, pre-provision ROA (1)
|
1.59 | % | 1.19 | % | 1.57 | % | 1.41 | % | 1.88 | % | ||||||||||
|
Net interest margin (FTE)
|
3.67 | % | 3.58 | % | 3.69 | % | 3.62 | % | 3.81 | % | ||||||||||
|
Efficiency ratio
|
70.9 | % | 77.0 | % | 70.7 | % | 71.8 | % | 66.3 | % | ||||||||||
|
Ratio of loans to deposits
|
73.7 | % | 74.5 | % | 78.0 | % | 76.0 | % | 80.7 | % | ||||||||||
|
Asset Quality
|
||||||||||||||||||||
|
Net charge offs
|
$ | 3,974 | $ | 7,013 | $ | 2,924 | $ | 2,769 | $ | 3,258 | ||||||||||
|
Non-accrual loans
|
25,754 | 29,392 | 28,099 | 25,451 | 28,661 | |||||||||||||||
|
Non-performing loans
|
25,785 | 29,778 | 31,237 | 27,777 | 29,244 | |||||||||||||||
|
Non-performing assets
|
29,455 | 34,081 | 36,204 | 32,418 | 33,548 | |||||||||||||||
|
Nonperforming loans/portfolio loans
|
4.57 | % | 5.16 | % | 5.43 | % | 4.80 | % | 4.94 | % | ||||||||||
|
Nonperforming assets/total assets
|
3.33 | % | 3.81 | % | 4.20 | % | 3.66 | % | 3.89 | % | ||||||||||
|
Allowance for loan loss/portfolio loans
|
3.66 | % | 4.22 | % | 4.41 | % | 4.36 | % | 4.25 | % | ||||||||||
|
Allowance/nonperforming loans
|
80.0 | % | 81.8 | % | 81.2 | % | 90.7 | % | 86.0 | % | ||||||||||
|
Market Data for Common Stock
|
||||||||||||||||||||
|
Book value per share
|
$ | 5.78 | $ | 5.63 | $ | 5.81 | $ | 5.72 | $ | 5.72 | ||||||||||
|
Market value per share (2)
|
||||||||||||||||||||
|
High
|
2.80 | 3.50 | 3.75 | 4.05 | 4.00 | |||||||||||||||
|
Low
|
2.20 | 2.90 | 3.00 | 3.35 | 2.65 | |||||||||||||||
|
Period-end
|
2.50 | 2.95 | 3.25 | 3.75 | 3.50 | |||||||||||||||
|
Period-end shares outstanding
|
12,697 | 12,697 | 12,692 | 12,692 | 12,667 | |||||||||||||||
|
Average shares outstanding
|
12,697 | 12,696 | 12,692 | 12,675 | 6,320 | |||||||||||||||
7
|
Trends of Selected Consolidated Financial Data (continued)
|
||||||||||||||||||||
|
2011
|
2010
|
|||||||||||||||||||
|
Capital and Stock Performance
|
4th Qtr
|
3rd Qtr
|
2nd Qtr
|
1st Qtr
|
4th Qtr
|
|||||||||||||||
|
Tier 1 Leverage Ratio
|
9.9 | % | 9.6 | % | 10.1 | % | 10.0 | % | 10.2 | % | ||||||||||
|
Tangible common equity to total assets
|
8.3 | % | 8.0 | % | 8.5 | % | 8.2 | % | 8.4 | % | ||||||||||
|
Total capital to risk-weighted assets
|
16.5 | % | 15.6 | % | 16.6 | % | 16.5 | % | 16.3 | % | ||||||||||
|
Period-end common stock market price/book value
|
43.2 | % | 52.4 | % | 55.9 | % | 65.6 | % | 61.2 | % | ||||||||||
|
(1)
|
In an attempt to evaluate the trends of net interest income, noninterest income and noninterest expense, the Company calculates pre-tax, pre-provision income (“PTPP Income”) and pre-tax, pre-provision return on average assets (“PTPP ROA”). PTPP Income adjusts net income by the amount of the Company’s federal income tax (benefit) and provision for loan losses, which is excluded because its level is elevated and volatile in times of economic stress. PTPP ROA measures PTPP Income as a percent of average assets. While this information is not consistent with, or intended to replace, presentation under generally accepted accounting principles, it is presented here for comparison.
Management believes that PTPP Income and PTPP ROA are useful and consistent measures of the Company’s earning capacity, as these financial measures enable investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle, particularly in times of economic stress.
|
| (2) | Market value per share is based on the last reported transaction on OTCBB before period end. |
8