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ANN ARBOR, MI – United Bancorp, Inc. (OTCQB:UBMI) reported consolidated net income of $2.1 million, or $0.14 per share of common stock, for the second quarter of 2013, compared to $785,000, or $0.04 per share of common stock, for the second quarter of 2012. Consolidated net income for the first six months of 2013 was $4.0 million, or $0.27 per share of common stock, compared to $1.6 million, or $0.08 per share of common stock, for the first six months of 2012.

Highlights of the second quarter of 2013 included:

·	Improved profitability:

-	Net income of $2.1 million (0.92% return on average assets ("ROA")) for the quarter; year to date $4.0 million (0.90% ROA)

-	Core earnings, as measured by pre-tax, pre-provision income, were 1.59% of average assets

-	Earnings per share of common stock of $0.14 for the quarter and $0.27 year to date

·	Improving trends in credit quality metrics:

-	Nonperforming loans decreased by 5% in the quarter and 45% over the last twelve months

-	Allowance for loan losses was 3.55% of loans, representing over five times the year to date annualized net charge-offs

-	Ratio of allowance for loan losses to nonperforming loans at 155% at June 30, 2013

-	Nonperforming assets were 1.83% of total assets at June 30, 2013; lowest level since the third quarter of 2007

·	Noninterest income represented 43% of the Company's year to date combined net interest income and noninterest income, as a result of the Company's diverse revenue stream

·	Continued favorable trend in loan growth:

-	$19 million (3.1%) increase in the quarter

-	$42 million (7.2%) increase over the last twelve months

·	Capital planning and approval for planned partial Preferred Share redemption:

-	In July, the Company received regulatory approval to redeem half of its outstanding $20.6 million Preferred Shares; partial redemption is expected  to occur in the third quarter of 2013

-	Received $10.0 million commitment for a two-year revolving line of credit for the holding company; received regulatory approval to use up to $6.0 million borrowed on the line of credit toward funding of redemption of the Preferred Shares.

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Results of Operations

The Company's improvement in net income in the second quarter and first six months of 2013 compared to the same periods of 2012 resulted primarily from increased levels of noninterest income and reduced amounts in the Company's provision for loan losses, offset in part by increases in noninterest expense. ROA was 0.92% for the second quarter and 0.90% for the first six months of 2013, compared to 0.36% and 0.37%, respectively, for the comparable periods of 2012. Return on average shareholders' equity ("ROE") was 8.44% for the second quarter and 8.26% for the first six months of 2013, compared to 3.35% and 3.48%, respectively, for the same periods of 2012.

The Company's combined net interest income and noninterest income was up 4.9% in the second quarter and 6.0% in the first six months of 2013 compared to the same periods of 2012. The diversity in the Company's revenue stream has resulted in noninterest income that represented 43.4% of combined net interest income and noninterest income for the six months ended June 30, 2013, compared to 39.9% for the same period of 2012. At the same time, the makeup of that revenue stream varies from year to year, helping to protect the Company against swings within specific categories of net interest income.

The Company's provision for loan losses for the second quarter and first six months of 2013 was $600,000 and $1.6 million, respectively, down from $2.6 million and $4.7 million, respectively, for the same periods of 2012. The provision for loan losses provides for probable incurred credit losses inherent in the loan portfolio. The Company's net charge-offs of $757,000 in the second quarter of 2013 marginally exceeded the Company's provision for loan losses of $600,000 for the quarter, and were primarily associated with loans for which the Company carried specific reserves at March 31, 2013.

For the second quarter of 2013, net interest income of $7.8 million was up 3.4% compared to the same period of 2012, and net interest income of $15.1 million for the first half of 2013 was substantially unchanged from the same period of 2012. The Company's net interest margin was 3.68% and 3.57%, respectively, for the three and six month periods ended June 30, 2013, compared to 3.62% and 3.63%, respectively, for the same periods of 2012. The improvement in net interest margin in the second quarter of 2013 was a result of a shifting of asset mix, combined with continued low cost of funds.

The Company's mix of assets has evolved over recent quarters. Portfolio loan growth of $41.7 million in the twelve months ended June 30, 2013 has contributed to this shift in mix, and has helped to improve the Company's yield on its earning assets. The Company converted its loan production office in Brighton, Michigan to a full-service banking office in the second quarter of 2012, and opened a new loan production office within the City of Monroe, Michigan in July 2012. Both offices have contributed to increased lending activity, and the Monroe office was converted to a full-service banking office in July 2013. In addition, loan volumes within the Company's existing markets have improved modestly.

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The Company has held historically high levels of liquidity since 2009, but excess liquidity has gradually been reduced over the twelve months ended June 30, 2013. During the same period, the Company's subsidiary bank has reduced its average balances of FHLB advances and higher-cost deposits, and continues to fund its growth primarily with core deposits. As a result of its strong core funding, the Company's cost of interest-bearing deposits was 0.43% and 0.45%, respectively, for the second quarter and first six months of 2013, respectively, down from 0.65% and 0.66%, respectively, for the same periods of 2012.

Noninterest income of $5.6 million for the quarter ended June 30, 2013 improved by 7.0% compared to the second quarter of 2012, while noninterest income for the six months ended June 30, 2013 was 15.3% higher than the same period of 2012. While some categories of noninterest income decreased in the second quarter and first half of 2013 compared to the same periods of 2012, large increases in wealth management income and income from loan sales and servicing more than offset the decreases. While income from SBA loan sales and servicing comprise approximately 30% of the Company's total loan sales and servicing income, it has accounted for nearly 65% of the total dollar increase in income from loan sales and servicing in the first six months of 2013 compared to the same period of 2012. The Company's proceeds from the sale of loans originated for sale in the second quarter of 2013 was $97.9 million, down 4.1% from the first quarter of 2013.

Total noninterest expenses were up 7.9% in the second quarter and 5.7% in the first six months of 2013, respectively, compared to the same periods of 2012. The largest dollar increases were in compensation expense, and several categories of noninterest expense declined in the same period. The increases related to salaries and employee benefits reflect, in part, 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 expansion into Livingston and Monroe Counties, and moderate salary increases were implemented effective April 1, 2013. Expenses in the first six months of 2013 also included accruals for profit sharing and cash bonuses, reflecting the Company's improved earnings. Prior to 2013, the Company did not pay or accrue any cash bonus or other payout to executive officers under our bonus plans since 2008.

Advertising and marketing expenses in the second quarter and the first six months of 2013 increased by 58.7% and 47.5%, respectively, compared to the same periods of 2012. The increases partially reflect the Company's launch of a new branding initiative in the third quarter of 2012. The Company reduced its advertising and marketing expenditures by approximately 50% in 2009 compared to 2008, and remained at reduced levels until the launch of the branding initiative. This branding initiative represents a renewed emphasis on marketing, and the Company expects a continued trend toward more historic spending levels for marketing and advertising expense.

Expenses related to other real estate owned ("ORE") and other foreclosed properties increased by $76,000 in the second quarter of 2013 compared to the same quarter of 2012, but have declined by $689,000 in the first six months of 2013 compared to the same period of 2012. Those expenses included write-downs of the value and losses on the sale of property held as ORE, along with costs to maintain and carry those properties.

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During the first six months of 2012, the Company recorded $770,000 of probable incurred expenses relating to residential mortgages previously sold on the secondary market that subsequently defaulted, and $200,000 of probable incurred expenses was recorded in the first six months of 2013.

Attorney, accounting and other professional fees in the second quarter and first six months of 2013 declined by 54.7% and 38.6%, respectively, from comparable periods of 2012. Costs in the second quarter of 2012 included $299,000 of legal and accounting costs related to the sale of the Company's Preferred Shares by the U.S. Treasury. FDIC insurance premiums declined by 35.8% and 36.4%, respectively, during the three and six months ended June 30, 2013 compared to the same periods of 2012 as a result of lower base charges.

Balance Sheet

Total consolidated assets of the Company were $907.3 million at June 30, 2013, compared to $907.7 million at December 31, 2012 and $884.2 million at June 30, 2012. Total portfolio loans of $619.0 million increased by $32.3 million in the first six months of 2013, and by $41.7 million since June 30, 2012. The Company generally sells its fixed rate long-term residential mortgages on the secondary market, and retains adjustable rate mortgages in its loan portfolio. Loans serviced for others are not included in the accompanying consolidated financial statements. The unpaid principal balance of loans serviced for others at June 30, 2013 was $935.8 million, and has increased by $140.8 million, or 17.7%, in the twelve months ended June 30, 2013.

The Company's balances in federal funds sold and other short-term investments were $35.9 million at June 30, 2013, compared to $56.8 million at December 31, 2012 and $57.6 million at June 30, 2012. Securities available for sale of $195.1 million at June 30, 2013 were down $11.0 million from December 31, 2012 levels, but have increased by $3.3 million since June 30, 2012.

Total deposits of $792.1 million at June 30, 2013 were up $7.5 million from $784.6 million at December 31, 2012, with all of the growth in interest bearing deposit balances. The majority of The Company's deposits are derived from core client sources, relating to long-term relationships with local individual, business and public fund clients. Public fund clients include local government and municipal bodies, hospitals, universities and other educational institutions.

Asset Quality

The Company has achieved significant improvement in its credit quality measures in recent periods. Total nonperforming loans have declined by $2.5 million since December 31, 2012, and have declined by $11.7 million since June 30, 2012. Total nonperforming loans as a percent of total portfolio loans were 2.30% at June 30, 2013, down from 2.86% and 4.48% at December 31, 2012 and June 30, 2012, respectively, while the ratio of allowance for loan losses to nonperforming loans improved from 85.4% and 134.6%, respectively, at June 30, 2012 and December 31, 2012, to 154.8% at June 30, 2013. 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 loans was 3.55% at June 30, 2013, and the allowance for loan losses of $22.0 million at June 30, 2013 represented more than five times the Company's 2013 year to date annualized net charge-offs.

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Capital Planning and Preferred Share Redemption

In connection with the termination of its Memorandum of Understanding, the Board of Directors of United Bank & Trust (the "Bank") has resolved that the Bank will maintain a Tier 1 leverage ratio at a level equal to or exceeding 8.5% and that the Bank will not declare or pay any dividend to the Company unless the Board of Directors first determines that the Bank has produced stable earnings. The Bank's Tier 1 leverage ratio was 9.80% at June 30, 2013, after payment of a $2.0 million dividend to the Company in the second quarter of 2013. The Bank is the sole subsidiary of the Company.

The Company currently has outstanding 20,600 shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, Liquidation Preference Amount $1,000 per share (the "Preferred Shares"). Under the terms of the Preferred Shares, the dividend rate will increase from 5% to 9% in January 2014. The Company has cautiously evaluated its alternatives regarding a possible partial redemption of the Preferred Shares. The Company has continued its efforts to build its cash balance at the holding company to provide additional holding company liquidity. The Company's cash balance at the holding company was $8.1 million at June 30, 2013, and the Bank had $6.3 million of retained earnings that could be available to be paid in dividends to the Company at June 30, 2013. The Bank had Tier 1 capital of $11.7 million in excess of the required 8.5% Tier 1 leverage ratio at June 30, 2013. In the second quarter of 2013, the Company received a commitment of $10.0 million for a two-year secured revolving line of credit, of which the Company has received regulatory approval to use up to $6.0 million of borrowing toward funding of redemption of Preferred Shares.

On July 18, 2013, the Company announced that it intends to redeem half of the outstanding Preferred Shares. The partial redemption is expected to occur on or before September 30, 2013. The Company has received all necessary regulatory approvals to complete the planned partial redemption. The redemption price will be the stated liquidation preference amount of $1,000 per share, plus any accrued and unpaid dividends to but excluding the date of redemption. The Company anticipates the total cost of the partial redemption will be approximately $10.4 million. Excess cash at the holding company, retained earnings at the Bank available for dividend to the holding company and up to $6.0 million of the holding company's $10.0 million line of credit are sources of funding of the planned partial redemption of Preferred Shares. These sources of funding may also be available to fund a possible future redemption of the remaining Preferred Shares.

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.

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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 "trend," "initiative," "continue," "improving," "will," "anticipates," "future," "expect," "resolved," "intends," "planned," "approximately" and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties that 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 trends in credit quality measures, profitability trends, loan growth trends, anticipated future expansion of the Bank and future levels of marketing and advertising expense and the planned partial redemption of Preferred Shares and possible future redemption of the remaining Preferred Shares. Future redemption of the remaining Preferred Shares would require regulatory and board of directors approval. 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 successfully implement new programs and initiatives, increase efficiencies, utilize our deferred tax asset, address regulatory issues, respond to declines in collateral values and credit quality, and 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, 2012. 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
Comparative Consolidated Balance Sheet Data (Unaudited)
Dollars in thousands		June 30,			Mar. 31,								Dec. 31,									June 30,
Period-end Balance Sheet		2013			2013					Change			2012				Change					2012			Change
Assets
Cash and due from banks		$	18,608			$	13,316			$	5,292			$	13,769			$	4,839			$	16,225			$	2,383
Interest bearing bal. with banks			35,924				69,942				(34,018	)			56,843				(20,919	)			57,591				(21,667	)
Total cash & cash equivalents			54,532				83,258				(28,726	)			70,612				(16,080	)			73,816				(19,284	)
Securities available for sale			195,141				203,251				(8,110	)			206,129				(10,988	)			191,886				3,255
FHLB Stock			2,691				2,571				120				2,571				120				2,571				120
Loans held for sale			7,022				9,630				(2,608	)			13,380				(6,358	)			10,349				(3,327	)
Portfolio loans			618,974				600,121				18,853				586,678				32,296				577,279				41,695
Allowance for loan losses			22,001				22,158				(157	)			22,543				(542	)			22,097				(96	)
Net loans			596,973				577,963				19,010				564,135				32,838				555,182				41,791
Premises and equipment, net			10,500				10,455				45				10,719				(219	)			10,793				(293	)
Bank owned life insurance			14,440				14,340				100				14,241				199				14,028				412
Other assets			26,031				25,759				272				25,954				77				25,527				504
Total Assets		$	907,330			$	927,227			$	(19,897	)		$	907,741			$	(411	)		$	884,152			$	23,178
Liabilities
Deposits
Non-interest bearing		$	163,738			$	152,325			$	11,413			$	165,430			$	(1,692	)		$	161,307			$	2,431
Interest bearing			628,381				651,720				(23,339	)			619,213				9,168				600,081				28,300
Total deposits			792,119				804,045				(11,926	)			784,643				7,476				761,388				30,731
FHLB advances outstanding			11,999				19,999				(8,000	)			21,999				(10,000	)			23,775				(11,776	)
Other liabilities			4,810				4,182				628				3,702				1,108				3,876				934
Total Liabilities			808,928				828,226				(19,298	)			810,344				(1,416	)			789,039				19,889
Shareholders' Equity			98,402				99,001				(599	)			97,397				1,005				95,113				3,289
Total Liabilities and Equity		$	907,330			$	927,227			$	(19,897	)		$	907,741			$	(411	)		$	884,152			$	23,178
					Three months ended June 30,												Six months ended June 30,
Average Balance Data							2013				2012		% Change						2013				2012		% Change
Total loans						$	614,557			$	588,108				4.5	%		$	608,667			$	586,897				3.7	%
Earning assets							862,079				850,277				1.4	%			863,885				848,992				1.8	%
Total assets							905,384				888,830				1.9	%			905,367				890,911				1.6	%
Deposits							785,698				765,490				2.6	%			785,869				769,818				2.1	%
Shareholders' Equity							99,158				94,414				5.0	%			98,392				94,073				4.6	%
Asset Quality
Net charge offs						$	757			$	1,501				-49.6	%		$	2,142			$	3,186				-32.8	%
Nonaccrual loans							13,910				25,634				-45.7	%
Nonperforming loans							14,208				25,876				-45.1	%
Nonperforming assets							16,610				29,268				-43.2	%
Nonperforming loans/total loans							2.30	%			4.48	%			-48.8	%
Nonperforming assets/total assets							1.83	%			3.31	%			-44.7	%
Allowance for loan loss/total loans							3.55	%			3.83	%			-7.1	%
Allowance/nonperforming loans							154.8	%			85.4	%			81.3	%

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United Bancorp, Inc. and Subsidiary
Comparative Consolidated Income Statement and Performance Data (Unaudited)
Dollars in thousands except per share data		Three months ended June 30,												Six months ended June 30,
Consolidated Income Statement		2013				2012				% Change				2013				2012				% Change
Interest Income
Interest and fees on loans		$	7,681			$	7,852				-2.2	%		$	15,197			$	15,778				-3.7	%
Interest on investment securities			885				863				2.5	%			1,493				1,716				-13.0	%
Interest on fed funds sold & bank balances			29				43				-32.6	%			65				97				-33.0	%
Total interest income			8,595				8,758				-1.9	%			16,755				17,591				-4.8	%
Interest Expense
Interest on deposits			680				985				-31.0	%			1,415				2,041				-30.7	%
Interest on FHLB advances			91				207				-56.0	%			228				415				-45.1	%
Total interest expense			771				1,192				-35.3	%			1,643				2,456				-33.1	%
Net Interest Income			7,824				7,566				3.4	%			15,112				15,135				-0.2	%
Provision for loan losses			600				2,550				-76.5	%			1,600				4,650				-65.6	%
Net Interest Income After Provision			7,224				5,016				44.0	%			13,512				10,485				28.9	%
Noninterest Income
Service charges on deposit accounts			472				449				5.1	%			896				882				1.6	%
Trust & Investment fee income			1,487				1,311				13.4	%			2,891				2,536				14.0	%
Gains on securities transactions			11				-				0.0	%			39				4				875.0	%
Income from loan sales and servicing			2,767				2,592				6.8	%			5,819				4,496				29.4	%
ATM, debit and credit card fee income			561				559				0.4	%			1,057				1,066				-0.8	%
Income from bank-owned life insurance			100				106				-5.7	%			199				210				-5.2	%
Other income			249				261				-4.6	%			670				842				-20.4	%
Total noninterest income			5,647				5,278				7.0	%			11,571				10,036				15.3	%
Noninterest Expense
Salaries and employee benefits			6,223				5,221				19.2	%			12,100				10,222				18.4	%
Occupancy and equipment expense			1,357				1,320				2.8	%			2,705				2,638				2.5	%
External data processing			353				267				32.2	%			725				514				41.1	%
Advertising and marketing expenses			292				184				58.7	%			556				377				47.5	%
Attorney & other professional fees			349				770				-54.7	%			760				1,238				-38.6	%
Director fees			104				97				7.2	%			209				195				7.2	%
Expenses relating to ORE property and foreclosed  assets			259				183				41.5	%			427				1,116				-61.7	%
FDIC Insurance premiums			190				296				-35.8	%			376				591				-36.4	%
Other expense			747				810				-7.8	%			1,502				1,426				5.3	%
Total noninterest expense			9,874				9,148				7.9	%			19,360				18,317				5.7	%
Income Before Federal Income Tax			2,997				1,146				161.5	%			5,723				2,204				159.7	%
Federal income tax			910				361				152.1	%			1,694				577				193.6	%
Net Income		$	2,087			$	785				165.9	%		$	4,029			$	1,627				147.6	%
Performance Ratios
Return on average assets			0.92	%			0.36	%			0.57	%			0.90	%			0.37	%			0.53	%
Return on average equity			8.44	%			3.35	%			5.10	%			8.26	%			3.48	%			4.78	%
Pre-tax, pre-provision ROA (1)			1.59	%			1.67	%			-0.08	%			1.63	%			1.55	%			0.08	%
Net interest margin (FTE)			3.68	%			3.62	%			0.06	%			3.57	%			3.63	%			-0.06	%
Efficiency ratio			72.8	%			70.7	%			2.07	%			72.0	%			72.2	%			-0.16	%
Common Stock Performance
Basic & diluted earnings per share		$	0.14			$	0.04			$	0.10			$	0.27			$	0.08			$	0.19
Book value per share															6.13				5.88				0.25
Tangible book value per share															6.13				5.88				0.25
Market value per share (2)															5.40				3.40				2.00

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United Bancorp, Inc. and Subsidiary
Trends of Selected Consolidated Financial Data (Unaudited)
Dollars in thousands except per share data		2013								2012
Balance Sheet Data		2nd Qtr				1st Qtr				4th Qtr				3rd Qtr				2nd Qtr
Period-end:
Portfolio loans		$	618,974			$	600,121			$	586,678			$	591,808			$	577,279
Total loans			625,996				609,751				600,058				603,574				587,628
Allowance for loan losses			22,001				22,158				22,543				22,460				22,097
Earning assets			859,752				885,515				865,505				856,034				839,188
Total assets			907,330				927,227				907,741				898,581				884,152
Deposits			792,119				804,045				784,643				776,025				761,388
Shareholders' Equity			98,402				99,001				97,397				96,836				95,113
Average:
Total loans		$	614,557			$	602,711			$	595,726			$	595,736			$	588,108
Earning assets			862,079				865,711				861,263				847,743				850,277
Total assets			905,384				907,707				905,321				892,235				888,830
Deposits			785,698				786,042				945,688				766,627				765,490
Shareholders' Equity			99,158				97,637				96,833				95,483				94,414
Income Statement Summary
Net interest income		$	7,824			$	7,288			$	7,384			$	7,646			$	7,566
Non-interest income			5,647				5,924				5,891				5,564				5,278
Net revenue			13,471				13,212				13,275				13,210				12,844
Non-interest expense			9,874				9,486				9,586				9,300				9,148
Pre-tax, pre-provision income (1)			3,597				3,726				3,689				3,910				3,696
Provision for loan losses			600				1,000				1,700				2,000				2,550
Federal income tax			910				784				543				520				361
Net income			2,087				1,942				1,446				1,390				785
Basic & diluted income per share		$	0.14			$	0.13			$	0.09			$	0.09			$	0.04
Performance Ratios and Liquidity
Return on average assets			0.92	%			0.87	%			0.64	%			0.62	%			0.36	%
Return on average common equity			8.44	%			8.07	%			5.94	%			5.79	%			3.35	%
Pre-tax, pre-provision ROA (1)			1.59	%			1.66	%			1.62	%			1.74	%			1.67	%
Net interest margin (FTE)			3.68	%			3.46	%			3.45	%			3.63	%			3.62	%
Efficiency ratio			72.8	%			71.3	%			71.7	%			69.9	%			70.7	%
Ratio of loans to deposits			78.1	%			74.6	%			74.8	%			76.3	%			75.8	%
Asset Quality
Net charge offs		$	757			$	1,384			$	1,617			$	1,638			$	1,501
Nonaccrual loans			13,910				14,598				16,714				20,386				25,634
Nonperforming loans			14,208				14,978				16,751				20,792				25,876
Nonperforming assets			16,610				18,084				20,163				22,971				29,268
Nonperforming loans/portfolio loans			2.30	%			2.50	%			2.86	%			3.51	%			4.48	%
Nonperforming assets/total assets			1.83	%			1.95	%			2.22	%			2.56	%			3.31	%
Allowance for loan loss/portfolio loans			3.55	%			3.69	%			3.84	%			3.80	%			3.83	%
Allowance/nonperforming loans			154.8	%			147.9	%			134.6	%			108.0	%			85.4	%
Market Data for Common Stock
Book value per share		$	6.13			$	6.17			$	6.05			$	6.01			$	5.88
Market value per share (2)
High			6.00				5.99				4.65				4.20				3.55
Low			5.10				4.35				3.91				3.26				3.25
Period-end			5.40				5.10				4.50				4.20				3.40
Period-end shares outstanding			12,713				12,716				12,706				12,706				12,707
Average shares outstanding			12,713				12,709				12,706				12,706				12,701

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Trends of Selected Consolidated Financial Data (continued)
		2013								2012
Capital and Stock Performance		2nd Qtr				1st Qtr				4th Qtr				3rd Qtr				2nd Qtr
Tier 1 Leverage Ratio			10.7	%			10.5	%			10.2	%			10.1	%			9.9	%
Tangible common equity to total assets			8.6	%			8.5	%			8.5	%			8.5	%			8.4	%
Total capital to risk-weighted assets			16.5	%			16.8	%			16.7	%			16.4	%			16.4	%
Price/earnings ratio (TTM)			12.0	x			14.6	x			17.3	x			12.7	x			68.0	x
Period-end common stock market price/book value			88.2	%			82.6	%			74.3	%			69.9	%			57.8	%

(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 OTCQB before period end.