10-K405 1 k68179e10-k405.txt ANNUAL REPORT FOR FISCAL YEAR ENDED 12/31/01 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, 2001 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 incorporation or organization) (IRS) Employer Identification No.) 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: COMMON STOCK, PAR VALUE $1.00 A SHARE NASDAQ REGULAR MARKET (SMALLCAP) ------------------------------------- ------------------------------------------- (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] THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT AS OF MARCH 5, 2002. COMMON STOCK, $1.00 PAR VALUE: $36,885,979 ------------------------------------------ THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S CLASSES OF COMMON STOCK AS OF MARCH 5, 2002. COMMON STOCK, $1.00 PAR VALUE: 3,148,836 SHARES ----------------------------------------------- DOCUMENTS INCORPORATED BY REFERENCE PORTIONS OF THE ANNUAL SHAREHOLDERS REPORT FOR THE YEAR ENDED DECEMBER 31, 2001 ARE INCORPORATED BY REFERENCE INTO PARTS I AND II, (INDEX ON PAGE 2) PORTIONS OF THE PROXY STATEMENT FOR THE ANNUAL SHAREHOLDERS MEETING TO BE HELD APRIL 17, 2002 ARE INCORPORATED BY REFERENCE INTO PART III (INDEX ON PAGE 2). UNITED BANCORP, INC. FORM 10-K INDEX OF ITEMS INCORPORATED BY REFERENCE WITHIN FORM 10-K

FORM 10-K PAGE # ITEM DESCRIPTION REFERENCE DESCRIPTION ------------------------------------------------------------------------------------------------------------------------------------ 3 Part I, Item 1, (a) Incorporated by reference to Pages 16-24 of the Annual Report To Shareholders. 3 Part I, Item 1, (b) Incorporated by reference to Page 48, Note 1 of the Annual Report To Shareholders. 4 Part I, Item 1, I Incorporated by reference to Pages 39-40 of the Annual Report To Shareholders. 5 Part I, Item 1, II, B Incorporated by reference to Page 52, Note 2 of the Annual Report To Shareholders. 7 Part I, Item 1, III, C, 4 Incorporated by reference to Page 59, Note 11 of the Annual Report To Shareholders. 7 Part I, Item 1, IV Incorporated by reference to Page 33-34 and Pages 48-49, Note 1 the Annual Report To Shareholders. 10 Part I, Item 1, V, A Incorporated by reference to Page 39 of the Annual Report To Shareholders. 10 Part I, Item 1, VI, A Incorporated by reference to Page 39 of the Annual Report To Shareholders. 11 Part I, Item 2 Incorporated by reference to Pages 16-24 of the Annual Report To Shareholders. 11 Part I, Item 3 Incorporated by reference to Page 50, Note 1 of the Annual Report To Shareholders. 11 Part II, Item 5 Incorporated by reference to Page 4 of the Annual Report To Shareholders. 12 Part II, Item 6 Incorporated by reference to inside back cover of the Annual Report To Shareholders. 12 Part II, Item 7 Incorporated by reference to Pages 28-42, of the Annual Report To Shareholders. 12 Part II, Item 7A Incorporated by reference to Pages 36-37 of the Annual Report To Shareholders. 12 Part II, Item 8 Incorporated by reference to Pages 43-64 of the Annual Report To Shareholders. 13 Part III, Item 10 Incorporated by reference to Pages 3-9 of the Proxy Statement. 13 Part III, Item 11 Incorporated by reference to Pages 10-12 of the Proxy Statement. 13 Part III, Item 12 Incorporated by reference to Pages 5-6 of the Proxy Statement. 13 Part III, Item 13 Not applicable. 14 Part IV, Item 14, (a), 1 Incorporated by reference to Pages 43-64 of the Annual Report To Shareholders. 14 Part IV, Item 14, (a), 2 Incorporated by reference to Page 64 of the Annual Report To Shareholders. 14 Part IV, Item 14, (a), 3, Exhibit 10 Incorporated by reference to Pages 9-10 of the Proxy Statement. 14 Part IV, Item 14, (a), 3, Exhibit 11 Incorporated by reference to Page 50 and Page 63 of the Annual Report To Shareholders.

2 UNITED BANCORP, INC. FORM 10-K PART I ITEM 1 DESCRIPTION OF BUSINESS (a) GENERAL DEVELOPMENT OF 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". For additional information about the Company's location and description of business, refer to Pages 16-20 and 21-24, Corporate Profile, in the Annual Report To Shareholders for the year ended December 31, 2001. (b) FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS Refer to Page 48, Note 1 of the Annual Report To Shareholders. (c) NARRATIVE DESCRIPTION OF BUSINESS The Company is a financial holding company as defined under the Bank Holding Company Act of 1956, as amended (the "BHC Act"). The BHC Act regulates acquisitions by the Company of voting shares or assets of any bank or other company. The Company is subject to the reporting requirements of, and examination and regulation by, the Board of Governors of the Federal Reserve System, as well as reporting requirements under the Securities and Exchange Commission Act of 1934. The Banks' are located in northeastern, eastern, and southeastern 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. In 1999, CITIZENS opened a full service brokerage division known as Brokerage United with securities provided through Raymond James Financial Services, Inc. member NASD/SIPC. COMMUNITY conducts its business through its seven offices in Amesville, Glouster, Lancaster, and Nelsonsville, Ohio. 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. On November 12, 1999, President Clinton signed the Graham-Leach-Bliley Act of 1999 ("GLB Act"), which is intended to modernize the financial services industry. The GLB Act sweeps away large parts of a regulatory framework that had its origins in the Depression Era of the 1930s. Effective March 11, 2000, new opportunities became available for banks, other depository institutions, insurance companies and securities firms to enter into combinations that permit a single financial service organization to offer customers a more complete array of financial products and services. The GLB Act provides a new regulatory framework for regulation through the financial holding company, which will have as its umbrella regulator the Federal Reserve Board. The functional regulation of the financial holding company's separately regulated subsidiaries will be conducted by their primary functional regulator. The GLB Act makes satisfactory or above Community Reinvestment Act compliance for insured depository institutions and their financial holding companies necessary in order for them to engage in new financial activities. The GLB Act provides a federal right to privacy of non-public personal information of individual customers. The Company and Banks are also subject to certain state laws that deal with the use and distribution of non-public personal information. 3 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) (c) NARRATIVE DESCRIPTION OF BUSINESS (CONTINUED) The Company's two subsidiary banks are subject to regulation by the Ohio Division of Financial Institutions and the Federal Deposit Insurance Corporation ("FDIC"). The regulations and restrictions affecting the Banks pertain to, among other things, allowable loans, guidelines for allowance for loan losses, accountability for fair and accurate disclosures to customers and regulatory agencies, permissible investments and limitations of risk and regulation of capital requirements for safe and sound operation of the financial institution. 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. The Company itself, as a shell holding company, has no compensated employees. CITIZENS has 78 full time employees, with 25 of these serving in a management capacity and 14 part time employees. COMMUNITY has 31 full time employees, with 12 serving in a management capacity and 7 part time employees. The Company considers employee relations to be good at all subsidiary locations. (d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS Not applicable. I DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL A Refer to Page 39 of the Annual Report To Shareholders B Refer to Page 39 of the Annual Report To Shareholders C Refer to Page 40 of the Annual Report To Shareholders 4 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) II INVESTMENT PORTFOLIO A The following table sets forth the carrying amount of securities at December 31, 2001, 2000 and 1999:

DECEMBER 31, ------------------------------- (In thousands) 2001 2000 1999 --------- --------- -------- AVAILABLE FOR SALE US Agency obligations $ 99,490 $ 75,685 $ 65,952 Mortgage-backed obligations 153 1,930 2,017 State and municipal obligations 10,748 13,434 14,187 Other securities 3,654 3,390 3,206 -------- -------- -------- $114,045 $ 94,439 $ 85,362 ======== ======== ======== HELD TO MATURITY US Agency obligations $ -- $ 2,496 $ 2,494 State and municipal obligations 10,379 8,306 7,300 -------- -------- -------- $ 10,379 $ 10,802 $ 9,794 ======== ======== ========

B Refer to Page 52, Note 2 of the Annual Report To Shareholders. C Excluding holdings of U.S. Agency, there were no investments in securities of any one issuer exceeding 10% of the Company's consolidated shareholders' equity at December 31, 2001. III LOAN PORTFOLIO A TYPES OF LOANS The amounts of gross loans outstanding at December 31, 2001, 2000, 1999, 1998 and 1997 are shown in the following table according to types of loans:

DECEMBER 31, ---------------------------------------------------- 2001 2000 1999 1998 1997 -------- -------- -------- -------- -------- (In thousands) Commercial loans $ 21,502 $ 20,415 $ 15,463 $ 12,912 $ 16,636 Commercial real estate loans 61,963 64,812 60,305 54,195 49,189 Real estate loans 54,153 55,931 51,357 49,438 49,857 Installment loans 45,722 55,339 53,391 47,676 55,795 -------- -------- -------- -------- -------- Total loans $183,340 $196,497 $180,516 $164,221 $171,477 ======== ======== ======== ======== ========

Construction loans were not significant for the periods discussed. 5 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) III LOAN PORTFOLIO (CONTINUED) 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, 2001 maturing within the various time frames indicated:

ONE YEAR ONE THROUGH AFTER (In thousands) OR LESS FIVE YEARS FIVE YEARS TOTAL ------------- ---------------- --------------- ------------ Commercial loans $ 18,298 $ 1,648 $ 1,556 $ 21,502 Commercial real estate loans 23,568 29,109 9,286 61,963 ------------- ---------------- --------------- ------------ Total $ 41,866 $ 30,757 $ 10,842 $ 83,465 ============= ================ =============== ============

The following is a schedule of fixed rate and variable rate commercial and commercial real estate loans at December 31, 2001 due to mature after one year:

(In thousands) FIXED RATE VARIABLE RATE TOTAL > ONE YEAR ------------- --------------- ---------------- Commercial loans $ 3,204 $ - $ 3,204 Commercial real estate loans 11,479 26,916 38,395 ------------- ---------------- --------------- Total $ 14,683 $ 26,916 $ 41,599 ============= ================ ===============

Variable rate loans are those loans with floating or adjustable interest rates. 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, troubled debt restructurings and impaired loans at December 31, 2001, 2000, 1999, 1998 and 1997:

DECEMBER 31, ------------------------------------------- (In thousands) 2001 2000 1999 1998 1997 ------- ------- ------- ------- ------- Nonaccrual basis $ 661 $ 793 $ 987 $ 399 $ 480 Accruing loans 90 days or greater past due 157 124 36 150 319 Troubled debt restructuring N/A N/A N/A N/A N/A Impaired loans (1) (1) (1) (1) (1)

(1) 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 $81,272 for the year-ended December 31, 2001. 6 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) III LOAN PORTFOLIO (CONTINUED) 1. NONACCRUAL, PAST DUE, RESTRUCTURED AND IMPAIRED LOANS (CONTINUED) 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, 2001 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. FOREIGN OUTSTANDING Not applicable. 4. LOAN CONCENTRATIONS Refer to Page 59, Note 11 of the Annual Report To Shareholders. D. OTHER INTEREST-BEARING ASSETS Not applicable. IV SUMMARY OF LOAN LOSS EXPERIENCE For additional explanation of factors which influence management's judgment in determining amounts charged to expense, refer to Pages 33-34, "Management Discussion and Analysis" and Pages 48 - 49, Note 1 of the Annual Report To Shareholders. 7 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) IV SUMMARY OF LOAN LOSS EXPERIENCE (CONTINUED) 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, 2001, 2000, 1999, 1998, and 1997:

(In thousands) 2001 2000 1999 1998 1997 ------------- ------------- -------------- -------------- ------------- LOANS Loans outstanding $ 183,340 $ 196,497 $ 180,516 $ 164,221 $ 171,477 Average loans outstanding $ 188,114 $ 190,386 $ 168,868 $ 168,626 $ 169,066 ALLOWANCE FOR LOAN LOSSES Balance at beginning of year $ 2,790 $ 3,110 $ 3,033 $ 3,039 $ 2,756 Loan charge-offs: Commercial 268 125 85 139 125 Commercial real estate 79 30 Real estate 67 275 21 51 20 Installment 728 716 807 861 661 ------------- ------------- -------------- -------------- ------------- Total loan charge-offs 1,063 1,195 943 1,051 806 ------------- ------------- -------------- -------------- ------------- Loan recoveries Commercial 27 2 50 87 32 Commercial real estate 28 12 - Real estate 10 4 3 9 3 Installment 335 254 228 151 122 ------------- ------------- -------------- -------------- ------------- Total loan recoveries 372 288 293 247 157 ------------- ------------- -------------- -------------- ------------- Net loan charge-offs 691 907 650 804 649 Provision for loan losses 780 587 727 798 932 ------------- ------------- -------------- -------------- ------------- Balance at end of year $ 2,879 $ 2,790 $ 3,110 $ 3,033 $ 3,039 ============= ============= ============== ============== ============= Ratio of net charge-offs to average loans outstanding for the year 0.37% 0.49% 0.38% 0.48% 0.38% ============= ============= ============== ============== =============

8 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) IV SUMMARY OF LOAN LOSS EXPERIENCE (CONTINUED) B ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES The following table allocates the allowance for possible loan losses at December 31, 2001, 2000, 1999, 1998, and 1997. 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:

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

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

1999 --------------------------- % OF LOANS (In thousands) ALLOWANCE TO TOTAL Loan type AMOUNT LOANS ----------- -------------- Commercial $ 195 8.57% Commercial real estate 439 33.40% Real estate 343 28.45% Installment 620 29.58% Unallocated 1,513 N/A ----------- -------------- Total $ 3,110 100.00% =========== ==============

1998 -------------------------- % OF LOANS (In thousands) ALLOWANCE TO TOTAL Loan type AMOUNT LOANS ------------ ------------- Commercial $ 215 7.87% Commercial real estate 432 33.00% Real estate 567 30.10% Installment 818 29.03% Unallocated 1,001 N/A ------------ ------------- Total $ 3,033 100.00% ============ =============

1997 --------------------------- % OF LOANS (In thousands) ALLOWANCE TO TOTAL Loan type AMOUNT LOANS ----------- -------------- Commercial $ 403 9.70% Commercial real estate 322 28.69% Real estate 606 29.07% Installment 1,200 32.54% Unallocated 508 N/A ----------- -------------- Total $ 3,039 100.00% =========== ==============

9 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) V DEPOSITS A SCHEDULE OF AVERAGE DEPOSIT AMOUNTS AND RATES (1) Refer to Page 39 of the Annual Report To Shareholders. (2) Refer to Page 39 of the Annual Report To Shareholders. (3) Refer to Page 39 of the Annual Report To Shareholders. (4) Refer to Page 39 of the Annual Report To Shareholders. (5) - (8) Not applicable. B OTHER CATEGORIES Not applicable. C FOREIGN DEPOSITS Not applicable. D MATURITY ANALYSIS OF TIME DEPOSITS GREATER THAN $100,000. The following schedule details the maturities of time certificates of deposit in amounts of $100,000 or more for the year ended December 31, 2001:

(In thousands) Three months or less $ 10,894 Over three through six months 7,604 Over six through twelve months 6,918 Over twelve months 13,022 ------------------ Total $ 38,438 ==================

E TIME DEPOSITS GREATER THAN $100,000 ISSUED BY FOREIGN OFFICES. Not applicable. VI RETURN ON EQUITY AND ASSETS The ratio of net income to daily average total assets and average shareholders' equity, and certain other ratios, were as follows:

DECEMBER 31, 2001 2000 1999 ---------- ---------- ----------- Dividend Payout Ratio 56.82% 58.82% 46.73% Equity to Assets 8.93% 8.85% 8.85%

(1) For other ratios refer to the inside back cover of the Annual Report To Shareholders. 10 UNITED BANCORP, INC. FORM 10-K ITEM 1 DESCRIPTION OF BUSINESS (CONTINUED) VII SHORT-TERM BORROWINGS Information concerning securities sold under agreements to repurchase is summarized as follows:

(In thousands) 2001 2000 1999 -------------- -------------- -------------- Balance at December 31, $ 7,811 $ 4,861 $ 5,788 Weighted average interest rate at December 31 1.39% 5.52% 3.80% Average daily balance during the year $ 10,695 $ 5,177 $ 7,306 Average interest rate during the year 3.59% 5.45% 4.30% Maximum month-end balance during the year $ 20,653 $ 6,117 $ 8,506

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) 2001 2000 1999 -------------- -------------- -------------- Balance at December 31, $ 10,100 $ 14,824 $ 19,145 Weighted average interest rate at December 31 2.05% 6.75% 4.75% Average daily balance during the year $ 14,783 $ 13,545 $ 9,363 Average interest rate during the year 4.01% 6.26% 5.55% Maximum month-end balance during the year $ 24,995 $ 20,217 $ 22,028

No other individual component of the borrowed funds total comprised more than 30% of shareholders' equity and accordingly are not disclosed in detail. ITEM 2 PROPERTIES Refer to Pages 16-20 and 21-24, "Corporate Profile" in the Annual Report To Shareholders. Management believes the properties described on Pages 16-20 and 21-24 of the Annual Report 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. ITEM 3 LEGAL PROCEEDINGS Refer to Page 50, Note 1 of the Annual Report To Shareholders. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No motions were submitted to shareholders for a vote during the fourth quarter of 2001. 11 UNITED BANCORP, INC. FORM 10-K PART II ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS Refer to Page 4, "Shareholder Information" of the Annual Report To Shareholders. ITEM 6 SELECTED FINANCIAL DATA Refer to inside back cover, "Five Year Performance Summary" and pages 26-27 of the Annual Report To Shareholders. ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Refer to Pages 28 - 42, "Management's Discussion and Analysis" of the Annual Report To Shareholders. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Refer to Pages 36 - 37, "Asset/Liability Management and Sensitivity to Market Risks" of the Annual Report To Shareholders. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Refer to Pages 43 - 64 of the Annual Report To Shareholders. ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS There were no changes in or disagreements with accountants. 12 UNITED BANCORP, INC. FORM 10-K PART III ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Refer to Pages 3 - 9 of the Proxy Statement. (b) Executive Officers of the Registrant: James W. Everson 63 Chairman, President and Chief Executive Officer Alan M. Hooker 50 Executive Vice President - Administration Norman F. Assenza, Jr. 55 Vice President - Operations and Secretary Randall M. Greenwood 37 Vice President - Chief Financial Officer, Treasurer James A. Lodes 55 Vice President - Lending (1) Each individual has held the position noted during the past five years, except for the following: Randall M. Greenwood served as a Business Assurance Manager of Coopers and Lybrand LLP of Columbus, Ohio from 1993 to November of 1997. He served as a Manager for BankOne Corporation in Columbus, Ohio from February 1991 to August 1993 and as a Supervisor at Coopers and Lybrand LLP in Columbus, Ohio from September 1986 through February 1991. He has served as Vice President - Chief Financial Officer of United Bancorp, Inc. and as Senior Vice President - Chief Financial Officer of The Citizens Savings Bank, Martins Ferry, Ohio since December 1997. Alan M. Hooker served as President of Fairfield National Division of the Park National Bank where he also served on their Advisory Board. He has held senior level banking positions with financial institutions in Washington, D.C., and Baltimore, Maryland. He has served as President and Chief Executive Officer of The Community Bank, Glouster, Ohio and as Executive Vice President - Administration of United Bancorp, Inc. since October 26, 1998. ITEM 11 EXECUTIVE COMPENSATION Refer to Pages 9 - 12 of the Proxy Statement. ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Refer to Pages 5-6 of the Proxy Statement. ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not Applicable. 13 UNITED BANCORP, INC. FORM 10-K PART IV ITEM 14 EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K (a) DOCUMENTS FILED AS PART OF FORM 10-K 1. The following consolidated financial statements appear in the 2001 Annual Report To Shareholders and are incorporated by reference: Report of Independent Auditors Page 43 Consolidated Balance Sheets Page 44 Consolidated Statements of Income Page 45 Consolidated Statements of Shareholders' Equity Page 46 Consolidated Statements of Cash Flow Page 47 Notes to the Consolidated Financial Statements Pages 48 - 64 2. The summary of selected quarterly results of operations appears on Page 64 in the 2001 Annual Report To Shareholders and is incorporated by reference. 3. Exhibits 2 Not Applicable 3 (i)(ii) Articles of Incorporation of United Bancorp, Inc. including amendments and By Laws, previously filed with the Securities and Exchange Commission on November 16, 1983. 4 Not applicable. 9 Not applicable. 10 Reference to special severance agreement on Page 9 of the Proxy Statement 11 Statement regarding computation of per share earnings (included in Note 1 to the consolidated financial statements on page 50 and Note 15 on Page 63 of the Annual Report To Shareholders.) 12 Not applicable. 13 Reference to the Annual Report To Shareholders for the fiscal year ended December 31, 2001. 16 Not applicable. 18 Not applicable. 21.1 Reference to The Citizens Savings Bank, Martins Ferry, Ohio, incorporated on December 31, 1902, previously filed with the Securities and Exchange Commission. 21.2 Reference to The Community Bank, Lancaster, Ohio, incorporated on August 1, 1949, previously filed with the Securities and Exchange Commission. 22 Not applicable. 23 Consents of Experts and Council. 24 Not applicable. 99 Not applicable. (b) The Company filed no reports on SEC Form 8-K during the last quarter of the period covered by this report. 14 UNITED BANCORP, INC. FORM 10-K 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: March 15, 2002 ------------------------------------- James W. Everson, Chairman, President & CEO By: March 15, 2002 ------------------------------------- Randall M. Greenwood, CFO By: March 15, 2002 ------------------------------------- Michael J. Arciello By: March 15, 2002 ------------------------------------- Terry A. McGhee By: March 15, 2002 ------------------------------------- John M. Hoopingarner By: March 15, 2002 ------------------------------------- Richard L. Riesbeck By: March 15, 2002 ------------------------------------- L.E. Richardson, Jr. By: March 15, 2002 ------------------------------------- Matthew C. Thomas

15 UNITED BANCORP, INC. FORM 10-K EXHIBIT INDEX

Exhibit No. Description SK Item 601 No. ----------- ----------- --------------- 1 Annual Report to Shareholders 13 2 Consents of Independent Auditors 23

16