-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OwprWD9quaaShKzHDm6N3XF+sXtiDfYSrknmNge/S/l5VEefU1aSiqOVifzLjeLA cWuoLxp0iAiYmOghB90vbg== 0000950124-00-001601.txt : 20000328 0000950124-00-001601.hdr.sgml : 20000328 ACCESSION NUMBER: 0000950124-00-001601 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000327 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED BANCORP INC /MI/ CENTRAL INDEX KEY: 0000775345 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 382606280 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-16640 FILM NUMBER: 579177 BUSINESS ADDRESS: STREET 1: 205 E CHICAGO BLVD CITY: TECUMSEH STATE: MI ZIP: 49286 BUSINESS PHONE: 5174238373 MAIL ADDRESS: STREET 1: 205 E CHICAGO BLVD STREET 2: P O BOX 248 CITY: TECUMSEH STATE: MI ZIP: 49286 10-K405 1 FORM 10-K405 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. Page 1 2 CROSS REFERENCE TABLE
Page ITEM NO. DESCRIPTION Numbers - ---------------------------------------------------------------------------------------------------- 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
Page 2 3 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. Page 3 4 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. Page 4 5 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. Page 5 6 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.
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 - -------------------- ---- ----- ----- ----- ----- 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%
(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.
1999 1998 1997 1996 1995 ----- ----- ----- ---- ---- 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% ==================================================================
(1) Includes loans held for sale Page 6 7 (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.
0 - 1 1 - 5 After 5 Year Years Years Total ---- ----- ----- ----- 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 ==========================================
(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: 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 ====
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. Page 7 8 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
1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- 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%
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.
1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- 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 ==============================================
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. Page 8 9 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.
Time Certificates ------------ 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 ========
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. Page 9 10 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.
1999 1998 ---------------------------------- ------------------------------------- Market price Cash Market price Cash ---------------------- dividends -------------------------- dividends Quarter High Low declared High Low declared ------- ---------------------------------- ------------------------------------- 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
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).
FINANCIAL CONDITION 1999 1998 1997 1996 1995 - -------------------- ---- ---- ---- ---- ---- 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 ==========================================================
Page 10 11
RESULTS OF OPERATIONS 1999 1998 1997 1996 1995 - ----------------------- ---- ---- ---- ---- ---- 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
(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:
Pages in Proxy Statement 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
Page 11 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:
Pages in Proxy Statement 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
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 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 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 15 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO. - ------------ ----------- -------- Exhibit 21 Subsidiaries 16 Exhibit 27 Financial Data Schedule 17
Page 15 EX-21 2 SUBSIDIARIES 1 EXHIBIT 21 SUBSIDIARIES
NAME JURISDICTION OF INCORPORATION - ---- ----------------------------- United Bank & Trust Michigan
Page 16 EX-27 3 FINANCIAL DATA SCHEDULE
9 1,000 YEAR DEC-31-1999 DEC-31-1999 17,469 0 0 0 81,923 0 0 308,267 3,300 427,521 360,843 19,300 2,790 3,624 0 0 23,919 17,045 427,521 24,395 4,928 85 29,408 11,471 12,254 17,154 1,260 28 15,102 6,934 5,115 0 0 5,115 2.81 2.81 4.83 1,305 174 134 201 2,799 968 209 3,300 1,798 0 1,502
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