10-K 1 k92221e10vk.txt ANNUAL REPORT FOR THE FISCAL YEAR ENDED 12/31/04 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM N/A TO N/A COMMISSION FILE NUMBER 0-16540 UNITED BANCORP, INC. ------------------------------------------------------ (Exact name of registrant as specified in its Charter.) OHIO 34-1405357 ------------------------------- ---------------------------------- (State or other jurisdiction of (IRS) Employer Identification No.) incorporation or organization) 201 SOUTH FOURTH STREET, MARTINS FERRY, OHIO 43935 -------------------------------------------- ---------- (Address of principal executive offices) (ZIP Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (740) 633-0445 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE N/A ---- --- (Title of class) (Name of each exchange on which registered) SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, PAR VALUE $1.00 A SHARE ------------------------------------- (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 (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), 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} INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS DEFINED IN EXCHANGE ACT RULE 12B-2). YES [ ] NO [X] THE AGGREGATE MARKET VALUE OF THE VOTING AND NON-VOTING COMMON EQUITY HELD BY NON-AFFILIATES OF THE REGISTRANT AS OF JUNE 30, 2004 WAS $46,327,776. REGISTRANT HAD 3,780,976 COMMON SHARES OUTSTANDING AS OF MARCH 5, 2005. DOCUMENTS INCORPORATED BY REFERENCE PORTIONS OF THE PROXY STATEMENT FOR THE ANNUAL SHAREHOLDERS MEETING TO BE HELD APRIL 20, 2005 ARE INCORPORATED BY REFERENCE INTO PART III. PORTIONS OF THE ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2004 ARE INCORPORATED BY REFERENCE INTO PARTS I AND II. PART I ITEM 1 BUSINESS BUSINESS United Bancorp, Inc. (Company) is a financial holding company headquartered in Martins Ferry, Ohio. The Company has two wholly owned subsidiary banks, The Citizens Savings Bank, Martins Ferry, Ohio (CITIZENS) and The Community Bank, Lancaster, Ohio (COMMUNITY), collectively "Banks". The Banks are located in northeastern, eastern, southeastern and south central Ohio and are engaged in the business of commercial and retail banking in Belmont, Harrison, Tuscarawas, Carroll, Athens, Hocking, and Fairfield counties and the surrounding localities. The Banks provide a broad range of banking and financial services, which include accepting demand, savings and time deposits and granting commercial, real estate and consumer loans. CITIZENS conducts its business through its main office in Martins Ferry, Ohio and nine branches located in Bridgeport, Colerain, Dellroy, Dover, Jewett, New Philadelphia, St. Clairsville, Sherrodsville, and Strasburg, Ohio. COMMUNITY conducts its business through its seven offices in Amesville, Glouster, Lancaster, and Nelsonsville, Ohio. COMMUNITY offers full service brokerage service provided through UVEST(R) member NASD/SIPC. The markets in which the Banks' operate continue to be highly competitive. CITIZENS competes for loans and deposits with other retail commercial banks, savings and loan associations, finance companies, credit unions and other types of financial institutions within the Mid-Ohio valley geographic area along the eastern border of Ohio, extending into the northern panhandle of West Virginia and the Tuscarawas and Carroll County geographic areas of northeastern Ohio. COMMUNITY also encounters similar competition for loans and deposits throughout the Athens, Hocking, and Fairfield County geographic areas of central and southeastern Ohio. The Company is regulated under the Bank Holding Company Act of 1956, as amended (the "BHC Act"), and is subject to the supervision and examination of the Board of Governors of the Federal Reserve System (the Federal Reserve Board). The BHC Act requires the prior approval of the Federal Reserve Board for a bank holding company to acquire or hold more than a 5% voting interest in any bank. The BHC Act allows interstate bank acquisitions anywhere in the country and interstate branching by acquisition and consolidation in those states that did not opt out by January 1, 1997. Other than as described more thoroughly below with respect to activities that are "financial in nature," the Company is generally prohibited by the Act from acquiring direct or indirect ownership or control of more than five percent of the voting shares of any company which is not a bank or bank holding company and from engaging directly or indirectly in activities other than those of managing or controlling banks or furnishing services to its subsidiaries. On November 12, 1999, the Gramm-Leach-Bliley Act (the "GLB Act") was enacted into law. The GLB Act made sweeping changes with respect to the permissible financial services, which various types of financial institutions may now provide. The Glass-Steagall Act, which had generally prevented banks from affiliation with securities and insurance firms, was repealed. Pursuant to the GLB Act, bank holding companies may elect to become a "financial holding company," provided that all of the depository institution subsidiaries of the bank holding company are "well capitalized" and "well managed" under applicable regulatory standards. The Company has elected to be a financial holding company. Under the GLB Act, a financial holding company may affiliate with securities firms and insurance companies and engage in other activities that are financial in nature. Activities that are "financial in nature" include securities underwriting, dealing and market-making, sponsoring mutual funds and investment companies, insurance underwriting and agency, merchant banking, and activities that the Federal Reserve Board has determined to be closely related to banking. The Company's banking subsidiaries are also subject to limitations with respect to transactions with affiliates. A substantial portion of the United Bancorp's cash revenues is derived from dividends paid by its subsidiary banks. The subsidiary banks' ability to pay dividends is subject to various legal and regulatory constraints. 2 The Company's banking subsidiaries are subject to primary supervision, regulation and examination by the Ohio Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC). Federal regulators adopted risk-based capital guidelines and leverage standards for banks and holding companies. A discussion of the impact of risk-based capital guidelines and leverage standards is presented in Note L to the audited consolidated financial statements of United Bancorp, Inc., captioned "Regulatory Capital." The Financial Reform, Recovery and Enforcement Act of 1989 (FIRREA) provides that a holding company's controlled insured depository institutions are liable for any loss incurred by the Federal Deposit Insurance Corporation in connection with the default of, or any FDIC-assisted transaction involving an affiliated insured bank or savings association. Noncompliance with laws and regulations by financial holding companies and banks can lead to monetary penalties and/or an increased level of supervision or a combination of these two items. Management is not aware of any current instances of material noncompliance with laws and regulations and does not anticipate any problems maintaining compliance on a prospective basis. Recent regulatory inspections and examinations of United Bancorp, Inc. and its subsidiary banks have not disclosed any material instances of noncompliance. The earnings and growth of United Bancorp are affected not only by general economic conditions, but also by the fiscal and monetary policies of the federal government and its agencies, particularly the Federal Reserve Board. The Federal Reserve Board's policies influence the amount of bank loans and deposits and the interest rates charged and paid thereon, and thus have an effect on earnings. The nature of future monetary policies and the effect of such policies on the future business and earnings of United Bancorp and its subsidiary banks cannot be predicted. The Banks have no single customer or related group of customers whose banking activities, whether through deposits or lending, would have a material impact on the continued earnings capabilities if those activities were removed. EMPLOYEES The Company itself, as a holding company, has no compensated employees. CITIZENS has 81 full time employees, with 19 of these serving in a management capacity and 35 part time employees. COMMUNITY has 32 full time employees, with 7 serving in a management capacity and 18 part time employees. The Company considers employee relations to be good at all subsidiary locations. INDUSTRY SEGMENTS United Bancorp and its subsidiaries are engaged in one line of business, banking. Item 8 of this 10-K provides financial information for United Bancorp's business. United Bancorp's internet website is www.unitedbancorp.com. I DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL Refer to Management's Discussion and Analysis "Average Balances, Net Interest Income and Yields Earned and Rates Paid" set forth at page 25 of our 2004 Annual Report, which is incorporated by reference. II INVESTMENT PORTFOLIO A Securities available for sale at year-end 2004 decreased $3,002,000, or 2.1% over 2003, while securities held to maturity increased $647,000, or 4.2%. In our planning process, management's prediction for 2004 was for a steady to slightly rising interest rate environment. In the first half of 2004, interest rates actually decreased to a level that caused a high volume of investment securities to be called. Management reinvested the funds into the Company's loan portfolio and a portion back into investment securities over the course of 2004. 3 The following table sets forth the carrying amount of securities at December 31, 2004, 2003 and 2002:

DECEMBER 31, ---------------------------- (In thousands) 2004 2003 2002 -------- -------- -------- AVAILABLE FOR SALE (AT MARKET) U.S. Govt. and agency obligations $ 74,192 $ 81,298 $ 93,263 Mortgage-backed securities 42,706 35,872 14,075 Collaterallized mortgage obligations 4,782 2,982 999 State and municipal obligations 16,118 20,642 20,714 Other securities 18 24 21 -------- -------- -------- $137,816 $140,818 $129,072 ======== ======== ======== HELD TO MATURITY (AT COST) State and municipal obligations $ 14,948 $ 15,594 $ 12,926 ======== ======== ========

4 B Contractual maturities of securities at year-end 2004 were as follows:

AVERAGE AMORTIZED ESTIMATED TAX EQUIVALENT AVAILABLE FOR SALE COST FAIR VALUE YIELD ------------ ------------ -------------- US AGENCY OBLIGATIONS 1 - 5 Years $ 1,499,781 $ 1,496,595 3.73% 5 - 10 Years 25,878,340 25,870,073 4.55% Over 10 Years 47,466,697 46,825,015 5.32% ------------ ------------ ---- Total 74,844,818 74,191,683 5.02% ------------ ------------ ---- MORTGAGE-BACKED SECURITIES 1 - 5 Years 861,804 860,044 3.62% 5 - 10 Years 11,477,285 11,389,315 3.79% Over 10 Years 30,639,319 30,456,975 4.24% ------------ ------------ ---- 42,978,408 42,706,334 4.22% ------------ ------------ ---- COLLATERIZED MORTGAGE OBLIGATION 1 - 5 Years 490,709 488,929 3.93% 5 - 10 Years 321,170 319,890 3.86% Over 10 Years 4,004,588 3,973,360 2.97% ------------ ------------ ---- 4,816,467 4,782,179 3.13% ------------ ------------ ---- STATE AND MUNICIPAL OBLIGATIONS Under 1 Year 472,245 473,986 4.93% 1 - 5 Years 730,750 774,423 6.89% 5 - 10 Years 6,443,682 6,506,911 8.05% Over 10 Years 8,488,748 8,362,713 5.40% ------------ ------------ ---- Total 16,135,425 16,118,033 5.63% ------------ ------------ ---- OTHER SECURITIES Equity securities 4,000 18,100 0.00% ------------ ------------ ---- TOTAL SECURITIES AVAILABLE FOR SALE $138,779,118 $137,816,329 5.80% ============ ============ ==== HELD TO MATURITY STATE AND MUNICIPAL OBLIGATIONS Under 1 Year $ 710,272 $ 722,415 7.62% 1 - 5 Years 2,440,849 2,571,536 7.20% 5 - 10 Years 4,671,363 4,916,720 6.78% Over 10 Years 7,125,036 7,264,334 6.70% ------------ ------------ ---- TOTAL SECURITIES HELD TO MATURITY $ 14,947,520 $ 15,475,005 6.85% ============ ============ ====

5 C Excluding holdings of U.S. Agency obligations, there were no investments in securities of any one issuer exceeding 10% of the Company's consolidated shareholders' equity at December 31, 2004. III LOAN PORTFOLIO A TYPES OF LOANS The amounts of gross loans outstanding at December 31, 2004, 2003, 2002, 2001 and 2000 are shown in the following table according to types of loans:

DECEMBER 31, ------------------------------------------------ 2004 2003 2002 2001 2000 -------- -------- -------- -------- -------- (In thousands) Commercial loans $ 35,309 $ 28,049 $ 21,060 $ 21,502 $ 20,415 Commercial real estate loans 83,103 68,902 69,287 61,963 64,812 Residential real estate loans 55,062 52,237 52,535 54,153 55,931 Installment loans 41,973 49,421 45,006 45,722 55,339 -------- -------- -------- -------- -------- Total loans $215,447 $198,609 $187,888 $183,340 $196,497 ======== ======== ======== ======== ========

Construction loans were not significant for the periods discussed. B MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES The following is a schedule of commercial and commercial real estate loans at December 31, 2004 maturing within the various time frames indicated:

ONE YEAR ONE THROUGH AFTER (In thousands) OR LESS FIVE YEARS FIVE YEARS TOTAL -------- ----------- ---------- -------- Commercial loans $ 17,116 $ 7,965 $ 10,228 $ 35,309 Commercial real estate loans 38,948 37,629 6,526 83,103 Total $ 56,064 $ 45,594 $ 16,754 $118,412

The following is a schedule of fixed rate and variable rate commercial and commercial real estate loans at December 31, 2004 due to mature after one year:

(In thousands) FIXED RATE VARIABLE RATE TOTAL > ONE YEAR ---------- ------------- ---------------- Commercial loans $ 8,301 $ 9,892 $ 18,193 Commercial real estate loans 5,770 38,385 44,155 ---------- ------------- ---------------- Total $ 14,071 $ 48,277 $ 62,348 ========== ============= ================

Variable rate loans are those loans with floating or adjustable interest rates. 6 C RISK ELEMENTS 1. NONACCRUAL, PAST DUE, RESTRUCTURED AND IMPAIRED LOANS The following schedule summarizes nonaccrual loans, accruing loans which are contractually 90 days or more past due, and impaired loans at December 31, 2004, 2003 and 2002:

DECEMBER 31, ------------------------------------------------------------------ (In thousands) 2004 2003 2002 ------ ------ ------ Nonaccrual basis (1) $1,106 $ 101 $ 685 Accruing loans 90 days or greater past due 500 655 85 Impaired loans (2) - - -

(1) There were no restructured loans at any of the dates indicated above. (2) Loans considered impaired under the provisions of SFAS No. 114 and interest recognized on a cash received basis were not considered material during any of the periods presented. The additional amount of interest income that would have been recorded on nonaccrual loans, had they been current, totaled $29,809, $907 and $ 6,270 for the years ended December 31, 2004, 2003 and 2002 Interest income is not reported when full loan repayment is doubtful, typically when the loan is impaired or payments are past due over 90 days. Payments received on such loans are reported as principal reductions. A loan is impaired when full payment under the loan terms is not expected. Impairment is evaluated in total for smaller-balance loans of similar nature such as residential mortgage, consumer, and credit card loans, and on an individual loan basis for other loans. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan's existing rate or at the fair value of collateral if repayment is expected solely from the collateral. 2. POTENTIAL PROBLEM LOANS The Company had no potential problem loans as of December 31, 2004 which have not been disclosed in Table C 1., but where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms and which may result in disclosure of such loans into one of the problem loan categories. 3. LOAN CONCENTRATIONS Refer to Page 54, Note K of Notes to Consolidated Financial Statements set forth in our 2004 Annual Report, which is incorporated herein by reference. IV SUMMARY OF LOAN LOSS EXPERIENCE For additional explanation of factors which influence management's judgment in determining amounts charged to expense, refer Pages 18 and 19 of the "Management Discussion and Analysis" and Notes to Consolidated Financial Statements set forth in our 2004 Annual Report, which is incorporated herein by reference. 7 A ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES The following schedule presents an analysis of the allowance for loan losses, average loan data and related ratios for the years ended December 31, 2004, 2003, 2002, 2001 and 2000:

(In thousands) 2004 2003 2002 2001 2000 -------- -------- -------- -------- -------- LOANS Loans outstanding $215,447 $198,608 $187,888 $183,340 $196,497 Average loans outstanding $208,658 $192,725 $184,131 $187,995 $190,386 ALLOWANCE FOR LOAN LOSSES Balance at beginning of year $ 2,843 $ 2,971 $ 2,879 $ 2,790 $ 3,110 Loan charge-offs: Commercial 58 250 135 268 125 Commercial real estate - 79 45 - 79 Residential real estate 16 28 84 67 275 Installment 645 459 507 728 716 -------- -------- -------- -------- -------- Total loan charge-offs 719 816 771 1,063 1,195 -------- -------- -------- -------- -------- Loan recoveries Commercial 4 3 17 27 2 Commercial real estate - - - - 28 Residential real estate 7 3 1 10 4 Installment 242 142 215 335 254 -------- -------- -------- -------- -------- Total loan recoveries 253 148 233 372 288 -------- -------- -------- -------- -------- Net loan charge-offs 466 668 538 691 907 Provision for loan losses 618 540 630 780 587 -------- -------- -------- -------- -------- Balance at end of year $ 2,995 $ 2,843 $ 2,971 $ 2,879 $ 2,790 ======== ======== ======== ======== ======== Ratio of net charge-offs to average

8 B ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES The following table allocates the allowance for possible loan losses at December 31, 2004, 2003, 2002, 2001 and 2000. Management adjusts the allowance periodically to account for changes in national trends and economic conditions in the Banks' service areas. The allowance has been allocated according to the amount deemed to be reasonably necessary to provide for the probability of losses being incurred within the following categories of loans at the dates indicated:

2004 --------------------- % OF LOANS ALLOWANCE TO TOTAL (In thousands) AMOUNT LOANS --------- ---------- Loan type Commercial $ 530 16.39% Commercial real estate 1,136 38.57% Residential real estate 313 25.56% Installment 532 19.48% Unallocated 484 N/A --------- ------ Total $ 2,995 100.00% ========= ======

2003 --------------------- % OF LOANS ALLOWANCE TO TOTAL (In thousands) AMOUNT LOANS --------- ---------- Loan type Commercial $ 452 14.13% Commercial real estate 1,005 34.69% Residential real estate 387 26.30% Installment 982 24.88% Unallocated 17 N/A --------- ------ Total $ 2,843 100.00% ========= ======

2002 --------------------- % OF LOANS ALLOWANCE TO TOTAL (In thousands) AMOUNT LOANS --------- ---------- Loan type Commercial $ 361 11.21% Commercial real estate 965 36.88% Residential real estate 403 27.96% Installment 879 23.95% Unallocated 363 N/A --------- ------ Total $ 2,971 100.00% ========= ======

2001 --------------------- % OF LOANS ALLOWANCE TO TOTAL (In thousands) AMOUNT LOANS --------- ---------- Loan type Commercial $ 325 11.73% Commercial real estate 872 33.80% Residential real estate 381 29.54% Installment 613 24.93% Unallocated 688 N/A --------- ------ Total $ 2,879 100.00% ========= ======

2000 --------------------- % OF LOANS ALLOWANCE TO TOTAL (In thousands) AMOUNT LOANS --------- ---------- Loan type Commercial $ 263 10.39% Commercial real estate 835 32.98% Residential real estate 461 28.46% Installment 781 28.17% Unallocated 450 N/A --------- ------ Total $ 2,790 100.00% ========= ======

9 V DEPOSITS A SCHEDULE OF AVERAGE DEPOSIT AMOUNTS AND RATES Refer to Management's Discussion and Analysis and Results of Operations "Average Balances, Net Interest Income and Yields Earned and Rates Paid" set forth in our 2004 Annual Report and incorporated herein by reference. B MATURITY ANALYSIS OF TIME DEPOSITS GREATER THAN $100,000. Refer to Note E of Notes to Consolidated Financial Statements set forth in our 2004 Annual Report and incorporated herein by reference. VI RETURN ON EQUITY AND ASSETS Our dividend payout ratio and equity to assets ratio:

DECEMBER 31, 2004 2003 2002 ---- ---- ---- Dividend Payout Ratio 56.47% 45.74% 50.00% Equity to Assets 8.26% 8.43% 8.89%

For other ratios refer to the inside front cover of our 2004 Annual Report to Shareholders, incorporated herein by reference. VII SHORT-TERM BORROWINGS Information concerning securities sold under agreements to repurchase is summarized as follows:

(In thousands) 2004 2003 2002 Balance at December 31, $12,612 $ 5,485 $ 7,010 Weighted average interest rate at December 31, 0.92% 0.80% 0.91% Average daily balance during the year $ 9,013 $ 8,766 $ 8,567 Average interest rate during the year 0.96% 0.83% 1.14% Maximum month-end balance during the year $12,632 $13,980 $11,659

Securities sold under agreements to repurchase are financing arrangements whereby the Company sells securities and agrees to repurchase the identical securities at the maturities of the agreements at specified prices. Information concerning the cash management line of credit from the Federal Home Loan Bank of Cincinnati, Ohio is summarized as follows:

(In thousands) 2004 2003 2002 ------- ------- --------- Balance at December 31, $32,500 $15,283 $ - Weighted average interest rate at December 31, 2.42% 1.11% 0.00% Average daily balance during the year $29,466 $ 7,103 $ 1,722 Average interest rate during the year 1.90% 1.45% 1.83% Maximum month-end balance during the year $36,895 $15,283 $ 6,799

No other individual component of the borrowed funds total comprised more than 30% of shareholders' equity and accordingly is not disclosed in detail. 10 SUPPLEMENTAL ITEM - EXECUTIVE OFFICERS OF THE REGISTRANT Pursuant to General Instruction G(3) of Form 10-K, the following information on the executive officers of the Company is included as an additional item in Part I:

Executive Officers Positions held with Company; Name Age Business Experience ---------------------- --- ----------------------------------------------------- James W. Everson 66 Chairman, President and Chief Executive Officer Alan M. Hooker 53 Executive Vice President - Administration Scott Everson 37 Senior Vice President and Chief Operating Officer Randall M. Greenwood 41 Senior Vice President and Chief Financial Officer, Treasurer James A. Lodes 58 Vice President - Lending Norman F. Assenza, Jr. 58 Vice President - Operations and Secretary Michael A. Lloyd 36 Vice President - Information Systems

Each individual has held the position noted during the past five years, except for the following: Scott A. Everson served as President and Chief Operating Officer from April 2002 to November 2004 and Senior Vice President, Operations and Retail Banking, of The Citizens Savings Bank from May 1999 to April 2002. Prior to that he served Assistant Vice President/Branch Manager Bridgeport Office from 1997 to May 1999. In addition, he is currently President and Chief Executive Office and a Director of The Citizens Savings Bank. He has held this position since November 2004. Michael A. Lloyd served as Senior Vice President Management Information Systems from October 1999 to April 2002 of the Citizens Savings Bank and prior to that he served as Vice President Management Information Systems from April 1999 to October 1999. He served as Data Processing Manager from 1994 to April 1999 for The Citizens Savings Bank. Each of these Executive Officers are serving at-will in their current positions. The Officers have held the positions for the following time periods: James W. Everson, 22 years, Alan M. Hooker, 6 years, Norman F. Assenza, Jr., 22 years, James A. Lodes, 9 years, and Randall M. Greenwood, 7 years. ITEM 2 PROPERTIES The Company owns and operates its Main Office in Martins Ferry, Ohio and the following offices:

Location Location Bridgeport, Ohio Owned Sherrodsville, Ohio Owned Colerain, Ohio Owned Glouster, Ohio Owned Jewett, Ohio Owned Glouster, Ohio Owned St. Clairsville, Ohio Leased Amesville, Ohio Owned Dover, Ohio Owned Nelsonville, Ohio Owned Dellroy, Ohio Owned Lancaster, Ohio Owned New Philadelphia, Ohio Owned Lancaster, Ohio Owned Strasburg, Ohio Owned Lancaster, Ohio Owned

Management believes the properties described above to be in good operating condition for the purpose for which it is used. The properties are unencumbered by any mortgage or security interest and is, in management's opinion, adequately insured. 11 ITEM 3 LEGAL PROCEEDINGS There are no material legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company or its subsidiaries is a party or to which any of its property is subject. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to shareholders for a vote during the fourth quarter of 2004. PART II ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Refer to Page 7, "Shareholder Information" of the 2004 Annual Report To Shareholders and refer to Page 55, Note N of the 2004 Annual Report To Shareholders for common stock trading ranges, cash dividends declared and information relating to dividend restrictions, which are incorporated herein by reference. ITEM 6 SELECTED CONSOLIDATED FINANCIAL DATA Refer to inside front cover, "Decade of Progress" of the 2004 Annual Report To Shareholders, which is incorporated herein by reference. ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Refer to Pages 14-28, "Management's Discussion and Analysis" of the 2004 Annual Report To Shareholders. CRITICAL ACCOUNTING POLICY The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the financial services industry. The application of these principles requires management to make certain estimates, assumptions and judgements that affect the amounts reported in the financial statements and footnotes. These estimates, assumptions and judgements are based on information available as of the date of the financial statements, and as this information changes, the financial statements could reflect different estimates, assumptions, and judgements. The procedures for assessing the adequacy of the allowance for loan losses reflect our evaluations of credit risk after careful consideration of all information available to management. In developing this assessment, management must rely on estimates and exercise judgement regarding matters where the ultimate outcome is unknown such as economic factors, development affecting companies in specific industries and issues with respect to single borrowers. Depending on changes in circumstances, future assessments of credit risk may yield materially different results, which may require an increase or a decrease in the allowance for loan losses. The allowance is regularly reviewed by management to determine whether the amount is considered adequate to absorb probable losses. This evaluation includes specific loss estimates on certain individually reviewed loans, statistical losses, estimates for loan pools that are based on historical loss experience, and general loss estimates that are based on the size, quality and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrower's ability to repay, and current economic and industry conditions. Also considered as part of that judgement is a review of each bank's trend in delinquencies and loan losses, and economic factors. The allowance for loan loss is maintained at a level believed adequate by management to absorb probable losses inherent in the loan portfolio. Management's evaluation of the adequacy of the allowance is an estimate based on management's current judgement about the credit quality of the loan portfolio. While the Company strives to reflect all known risk factors in its evaluation, judgement errors may occur. 12 The following table sets forth the Company's contractual obligations at December 31, 2004:

PAYMENT DUE BY PERIOD LESS THAN MORE THAN CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 1-3 YEARS 3-5 YEARS 5 YEARS Long term debt obligations $46,680,311 $34,640,410 $ 7,844,632 $ 1,244,731 $ 2,950,538 Operating lease obligations 39,452 18,000 21,452 - - Securities sold under agreements to repurchase 12,612,270 12,612,270 - - - Federal funds purchased 3,180,000 3,180,000 - - - Other borrowed funds 399,283 399,283 - - - Loan and standby letters of credit commitments 28,936,689 28,936,689 - - - ----------- ----------- ----------- ----------- ----------- Total $91,848,005 $79,786,652 $ 7,866,084 $ 1,244,731 $ 2,950,538 =========== =========== =========== =========== ===========

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Refer to Page 21-23 "Asset/Liability Management and Sensitivity to Market Risks" of the 2004 Annual Report to Shareholders, which is incorporated herein by reference. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Refer to Page 29-58 of the 2004 Annual Report To Shareholders, which is incorporated herein by reference. ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS Not applicable. ITEM 9A CONTROLS AND PROCEDURES The Company, under the supervision, and with the participation, of its management, including the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as of December 31, 2004, pursuant to the requirements of Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of December 31, 2004, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings. There was no change in the Company's internal control over financial reporting that occurred during the Company's fiscal quarter ended December 31, 2004 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. ITEM 9B OTHER INFORMATION None. 13 PART III ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning executive officers of the Company is set forth in Part I, "Supplemental Item - Executive Officers of Registrant." Other information responding to this Item 10 is included in the Registrant's Proxy Statement for the 2005 Annual Meeting of Shareholders and is incorporated by reference under the captions "Proposal 1 - Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance", on pages 6 through 10 and page 17, respectively. Information concerning The Audit Committee Financial Expert is included in the Registrant's Proxy Statement for the 2005 Annual Meeting of Shareholders under the caption "Committees of the Board - Audit Committee", pages 8 through 9 and is incorporated herein by reference. The Company's Board of Directors has adopted a Code of Ethics that applies to its Principal Executive, Principal Financial, and Principal Accounting Officers. A copy of the Company's Code of Ethics is posted and can be viewed on the Company's internet web site at http://www.unitedbancorp.com/. In the event the Company amends or waives any provision of its Code of Ethics which applies to its Principal Executive, Principal Financial, or Principal Accounting Officers, and which relates to any element of the code of ethics definition set forth in Item 406(b) of Regulation S-K, the Company shall post a description of the nature of such amendment or waiver on its internet web site. With respect to a waiver of any relevant provision of the code of ethics, the Company shall also post the name of the person to whom the waiver was granted and the date of the waiver grant. ITEM 11 EXECUTIVE COMPENSATION The information required by this item is incorporated by reference from the captions titled "Executive Compensation and Other Information" and "Compensation Committee Interlocks and Insider Participation in Compensation Decisions" on pages 10 through 14 and pages 15 and 16 respectively, of the Registrant's Proxy Statement for 2005 Annual Meeting of Shareholders. ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCK HOLDER MATTERS The information contained on pages 2 through 3 of the Registrant's Proxy Statement for the 2005 Annual Meeting of Shareholders relating to "Ownership of Voting Shares" is incorporated herein by reference. The following table is a disclosure of securities authorized for issuance under equity compensation plans:

EQUITY COMPENSATION PLAN INFORMATION NUMBER OF SECURITIES REMAINING AVAILABLE FOR NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE EXERCISE FUTURE ISSUANCE UNDER EQUITY ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING COMPENSATION PLANS OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND (EXCLUDING SECURITIES WARRANTS AND RIGHTS RIGHTS REFLECTED IN COLUMN (A)) -------------------------- ------------------------- ---------------------------- EQUITY COMPENSATION PLANS APPROVED BY SECURITY HOLDERS 106,845 $9.57 0 EQUITY COMPENSATION PLANS NOT APPROVED BY SECURITY HOLDERS TOTAL 106,845 $9.57 0

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is incorporated by reference from the caption titled "Compensation Committee Interlocks and Insider Participation in Compensation Decisions" and "Certain Transactions" on pages 15 and 16 of the Registrant's Proxy Statement for the 2005 Annual Meeting of Shareholders. 14 ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated by reference from the caption titled "Principal Accounting Firm Fees" on page 10 of the Registrant's Proxy Statement for the 2005 Annual Meeting of Shareholders. PART IV ITEM 15 EXHIBITS AND FINANCIAL STATEMENTS/SCHEDULES (a) The following Consolidated Financial Statements and related Notes to Consolidated Financial Statements, together with the report of Independent Registered Public Accounting Firm dated January 14, 2005, appear on pages 29 through 58 of the United Bancorp, Inc. 2004 Annual Report and are incorporated herein by reference. 1. Financial Statements Consolidated Statements of Financial Condition December 31, 2004 and 2003 Consolidated Statements of Earnings for the Years Ended December 31, 2004, 2003 and 2002 Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2004, 2003 and 2002 Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 203 and 2002 Notes to Consolidated Financial Statements for the Years Ended December 31, 2004, 2003 and 2002 Report of Independent Registered Public Accounting Firm 2. Financial Statement Schedules Financial statement schedules are omitted as they are not required or are not applicable or because the required information is included in the consolidated financial statements or notes thereto. 3. Exhibits required by Item 601 Regulation S-K Reference is made to the Exhibit Index of this Form 10-K. (b) Exhibits required by Item 601 Regulation S-K (c) See Item 15(a) (3) above. 15 UNITED BANCORP INC. 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. (Registrant) United Bancorp, Inc. By: /s/James W. Everson March 29, 2004 ------------------------------------------------- James W. Everson, Chairman, President & CEO 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 and on the dates indicated. By: /s/James W. Everson March 29, 2004 ------------------------------------------------- James W. Everson, Chairman, President & CEO By: /s/Randall M. Greenwood March 29, 2004 ------------------------------------------------- Randall M. Greenwood, Senior Vice President & CFO By: /s/Michael J. Arciello March 29, 2004 ------------------------------------------------- Michael J. Arciello, Director By: /s/Terry A. McGhee March 29, 2004 ------------------------------------------------- Terry A. McGhee, Director By: /s/John M. Hoopingarner March 29, 2004 ------------------------------------------------- John M. Hoopingarner, Director By: /s/Richard L. Riesbeck March 29, 2004 ------------------------------------------------- Richard L. Riesbeck, Director By: /s/L.E. Richardson, Jr. March 29, 2004 ------------------------------------------------- L.E. Richardson, Jr. , Director By: /s/Matthew C. Thomas March 29, 2004 ------------------------------------------------- Matthew C. Thomas, Director 16 EXHIBIT INDEX

Exhibit Number Exhibit Description 3.1 Amended Articles of Incorporation (1) 3.2 Amended Code of Regulations (2) 10.1 James W. Everson Change in Control Agreement (3) 10.2 Randall M. Greenwood Change in Control agreement (3) 10.3 Alan M. Hooker Change in Control Agreement (3) 10.4 Scott A. Everson Change in Control Agreement (3) 10.5 Norman F. Assenza Change in Control Agreement (3) 10.6 James A. Lodes Change in Control Agreement (3) 10.7 Michael A. Lloyd Change in Control Agreement (3) 10.8 United Bancorp, Inc. and Subsidiaries Director Supplemental Life Insurance Plan, covering Messrs. Hoopingarner, McGehee, Riesbeck and Thomas. (5) 10.9 United Bancorp, Inc. and Subsidiaries Senior Executive Supplemental Life Insurance Plan, covering James W. Everson, Alan M. Hooker, Scott A. Everson, Randall M. Greenwood, Norman F. Assenza, Michael A. Lloyd and James A. Lodes. (5) 10.10 United Bancorp, Inc. and United Bancorp, Inc. Affiliate Banks Directors Deferred Compensation Plan. (5) 10.11 United Bancorp, Inc. Stock Option Plan (4) 13 2004 Annual Report 21 Subsidiaries of the Registrant (5) 23 Consent of Grant Thornton, LLP 31.1 Rule 13a-14(a) Certification - CEO 31.2 Rule 13a-14(a) Certification - CFO 32.1 Section 1350 Certification - CEO 32.2 Section 1350 Certification - CFO

(1) Incorporated by reference to Appendix B to the registrant's Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001. (2) Incorporated by reference to Appendix C to the registrant's Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001. (3) Incorporated by reference to the registrant's 10-K filed with the Securities and Exchange Commission on March 27, 2003. (4) Incorporated by reference to Exhibit A to the registrant's Definitive Proxy Statement filed with the Securities and Exchange Commission on March 11, 1996. (5) Incorporated by reference to the registrant's 10-K filed with the Securities and Exchange Commission on March 29, 2004.