United Bancorp, Inc. Reports Earnings of $0.58 per Share for the Year Ended December 31, 2010

MARTINS FERRY, Ohio, Jan. 26, 2011 /PRNewswire/ -- United Bancorp, Inc. (Nasdaq: UBCP), headquartered in Martins Ferry, Ohio reported net income of $733,033 for the quarter ended December 30, 2010, compared to $674,924 for the quarter ended December 30, 2009, an increase of 8.6%.  On a per share basis, the Company's three months diluted earnings were $0.15 for the 2010 period, as compared to $0.14 for the same period in 2009, an increase of 7.1%.  For the twelve months ended December 30, 2010 the Company reported net income of $2,827,367 for the year ended December 31, 2010, compared to $2,905,420 for the year ended December 31, 2009, a decrease of 2.7%.  On a per share basis, the Company's diluted earnings were $0.58 for 2010, as compared to $0.62 for 2009.

Randall M. Greenwood, Senior Vice President, CFO and Treasurer remarked, "The Company's net income in 2010 generated an annualized 0.63% return on average assets ("ROA") and a 7.82% return on average equity ("ROE"), compared to 0.63% ROA and 8.39% ROE for 2009.  Comparing the year ended December 31, 2010 to 2009, the Company's net interest margin was 4.02% compared to 3.98%, an increase of 4 basis points. Although the net interest margin increased, the Company's net interest income decreased by approximately $103,000 or less than 1.0%, due to a decrease in the Company's earning assets.  For the year ended December 31, 2010 the Company had an average balance in Cash and Cash equivalents of approximately $37.8 million compared to $10.4 million for the year ended December 31, 2009.   With this high level of available funding, the Company has been aggressive in the management of higher cost deposit funding, mainly allowing certificates of deposit to decrease.  While maintaining these larger cash balances resulted in a decrease in the earning assets of the Bank, this strategy increased the net interest margin of the Company, since the interest expense of the foregone certificates of deposit exceeded the rate of return on the cash and cash equivalents. Comparing the same periods, Customer Service Fees on deposits increased $40,000.  On the expense side, total noninterest expense increased $82,000 for the year ended December 31, 2010 as compared to 2009.  The increase in total noninterest expense was primarily due to the third quarter 2010 implementation of our new data processing system.  The Company incurred approximately $273,000 in one time direct expenses related to the installation of this new system. In addition, the Company incurred a $90,000 period over period increase in the provision for losses on foreclosed real estate and a period over period increase of $91,000 in our Provision for Loan Losses.  The increase in the provision for loan losses for the year ended December 31, 2010 was predicated primarily upon the economic challenges facing the banking industry. As an offset to these increased expenses, the Company's Federal Deposit Insurance Corporation premiums decreased approximately $352,000 from 2009 to 2010 and during 2010, the Company recognized a tax benefit resulting from the resolution of a tax contingency, which reduced federal income taxes by approximately $120,000."  

James W. Everson, UBCP's Chairman, President and CEO stated, "We have been prudent in the pricing of our depository products to manage our strong liquidity and asset size which is supported by our equity position that rates us as a 'Well Capitalized' company.  Unlike many within the financial sector, we do not have any significant amount in goodwill, no TARP equity or excessive asset growth, any of which could dictate recapitalization during these rather uncertain times.  We are pleased about our earnings performance which allows us to keep a balance between maintaining our 'Well Capitalized" status and making capital expenditure for future growth, while sufficiently accruing into our Loan Loss Provision as we manage our asset quality...plus cover our generous dividend payment policy."  Everson concluded by stating, "We are excited about our future.  Our new computer systems are performing to our expectations and should create greater efficiencies and allow for new and enhanced product development.  Our asset quality is now showing positive trends of improvement with a 16.6% decrease in Non-performing Loans. We shall be opening a new banking office in our Tiltonsville market in the second quarter of this year.  And, barring any unforeseen events, we see the continuation of the quarter over quarter growth in earnings trend which is supported by our recently completed 2011 budget process."

United Bancorp, Inc. is headquartered in Martins Ferry, Ohio with total assets of approximately $423.5 million and total shareholder's equity of approximately $35.9 million as of December 31, 2010.  Through its single bank charter with its twenty banking offices and an operations center, The Citizens Savings Bank through its Community Bank Division serves the Ohio Counties of Athens, Fairfield and Hocking and through its Citizens Bank Division serves Belmont, Carroll, Harrison, Jefferson and Tuscarawas. United Bancorp, Inc. is a part of the Russell Microcap Index and trades on The NASDAQ Capital Market tier of the NASDAQ Stock Market under the symbol UBCP, Cusip #909911109.

Certain statements contained herein are not based on historical facts and are "forward-looking statements" within the meaning of Section 21A of the Securities Exchange Act of 1934.  Forward-looking statements, which are based on various assumptions (some of which are beyond the Company's control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of these terms.  Actual results could differ materially from those set forth in forward-looking statements, due to a variety of factors, including, but not limited to, those related to the economic environment, particularly in the market areas in which the company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, changes in the financial and securities markets, including changes with respect to the market value of our financial  assets, and the availability of and costs associated with sources of liquidity.  The Company undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE United Bancorp, Inc.

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