<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

/X/             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended               JUNE 30, 1998

/ /             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 4TH STREET, MARTINS FERRY, OHIO 43935-0010
              ----------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (740) 633-0445
                                 -------------- 
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
                                 --------------
            (Former name, former address and former fiscal year,
                        if changed since last report)

     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 the number of shares outstanding of the issuer's classes of common
stock as of the latest practicable date.
       COMMON STOCK, $1.00 PAR VALUE 2,667,314 SHARES AS OF JULY 27, 1998
       ------------------------------------------------------------------


<PAGE>   2


                              UNITED BANCORP, INC.
                                TABLE OF CONTENTS
                                    FORM 10-Q
                                                                       

PART I  FINANCIAL INFORMATION

   ITEM 1. Financial Statements (Unaudited)
     Condensed Consolidated Balance Sheets..................................3

     Condensed Consolidated Statements of Income............................4

     Condensed Consolidated Statements of Shareholders' Equity..............5

     Condensed Consolidated Statements of Cash Flows........................6

     Notes to Condensed Consolidated Financial Statements..............7 - 13

   ITEM 2  Management's Discussion and Analysis of Financial 
     Condition and Results of Operations..............................14 - 22

   ITEM 3  Quantitative and Qualitative Disclosures About 
     Market Risk......................................................22 - 23


PART II  OTHER INFORMATION

   ITEM 1.
     Legal Proceedings.....................................................24

   ITEM 2.
     Changes in Securities and Use of Proceeds.............................24

   ITEM 3.
     Default Upon Senior Securities........................................24

   ITEM 4.
     Submission of Matters to a Vote of Security Holders...................24

   ITEM 5.
     Other Information.....................................................24

   ITEM 6.
     Exhibits and Reports on Form 8-K......................................24

   SIGNATURES..............................................................25




                                                                               2

<PAGE>   3


                              UNITED BANCORP, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                            FORM 10-Q (IN THOUSANDS)

PART I  FINANCIAL INFORMATION

         ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                               JUNE 30,         DECEMBER 31,
                                                                                                1998               1997         
                                                                                             -----------        -----------
<S>                                                                                          <C>                <C>                
ASSETS                                                                                                                          
Cash and due from banks                                                                      $     5,760        $     7,536        
Federal funds sold                                                                                 4,115                300        
                                                                                             -----------        -----------
  Total cash and cash equivalents                                                                  9,875              7,836        
Securities available for sale                                                                     32,329             31,201        
Securities held to maturity                                                                                                        
(Estimated fair value of $26,415 at 06/30/98 and $28,750 at 12/31/97)                             25,726             27,992        
Loans receivable                                                                                                                   
  Commercial loans                                                                                12,440             14,385        
  Commercial real estate loans                                                                    48,194             45,593        
  Real estate loans                                                                               32,516             32,602        
  Installment loans                                                                               46,414             46,968        
                                                                                             -----------        -----------
    Total loans receivable                                                                       139,564            139,548        
Allowance for loan losses                                                                         (2,153)            (2,239)       
                                                                                             -----------        -----------
    Net loans receivable                                                                         137,411            137,309        
Premises and equipment, net                                                                        5,168              5,169        
Accrued interest receivable and other assets                                                       2,501              2,235        
                                                                                             -----------        -----------
                                                                                                                                   
  Total Assets                                                                               $   213,010        $   211,742        
                                                                                             ===========        ===========
LIABILITIES                                                                                                                        
Demand deposits                                                                                                                    
  Noninterest bearing                                                                        $    13,702        $    12,839        
  Interest bearing                                                                                27,734             26,527        
Savings deposits                                                                                  49,771             49,558        
Time deposits - under $100,000                                                                    67,831             70,339        
Time deposits - $100,000 and over                                                                 17,152             16,528        
                                                                                             -----------        -----------
    Total deposits                                                                               176,190            175,791        
Securities sold under agreements to repurchase                                                     6,891              8,392        
Other borrowed funds                                                                               5,834              4,278        
Accrued expenses and other liabilities                                                             1,226              1,357        
                                                                                             -----------        -----------
    Total Liabilities                                                                            190,141            189,818        
                                                                                                                                   
SHAREHOLDERS' EQUITY                                                                                                               
Common stock - $1 Par Value: 10,000,000 shares authorized;                                                                         
  2,238,314  issued and outstanding                                                                2,238              2,238        
Additional-paid-in-capital                                                                        15,459             15,459        
Retained earnings                                                                                  5,024              4,059        
Unrealized gain on securities available for sale, net of tax                                         148                168        
                                                                                             -----------        -----------
  Total Shareholders' Equity                                                                      22,869             21,924        
                                                                                             -----------        -----------
                                                                                                                                   
  Total Liabilities and Shareholders' Equity                                                 $   213,010        $   211,742        
                                                                                             -----------        -----------
</TABLE>



                                                                               3

See accompanying notes to the condensed consolidated financial statements.



<PAGE>   4


                              UNITED BANCORP, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
               FORM 10-Q (IN THOUSANDS - EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED        SIX MONTHS ENDED
                                                                                 JUNE 30,                 JUNE 30,
                                                                             1998        1997         1998        1997      
                                                                           --------    --------     --------    --------
<S>                                                                        <C>         <C>          <C>         <C>         
Interest and dividend income                                                                                                
  Loans, including fees                                                    $  3,203    $  3,101     $  6,409    $  6,105    
  Taxable securities                                                            581         590        1,209       1,175    
  Non-taxable securities                                                        320         278          601         555    
  Other interest and dividend income                                             86          35          144          56    
                                                                           --------    --------     --------    --------
      Total interest and dividend income                                      4,190       4,004        8,363       7,891    
                                                                                                                            
Interest expense                                                                                                            
  Deposits                                                                                                                  
    Demand                                                                      176         172          338         330    
    Savings                                                                     373         394          741         767    
    Time                                                                      1,204       1,126        2,415       2,231    
  Other borrowings                                                              148         116          356         226    
                                                                           --------    --------     --------    --------
      Total interest expense                                                  1,901       1,808        3,850       3,554    
                                                                                                                            
NET INTEREST INCOME                                                           2,289       2,196        4,513       4,337    
                                                                                                                            
Provision for loan losses                                                       102         111          204         222    
                                                                           --------    --------     --------    --------
                                                                                                                            
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                           2,187       2,085        4,309       4,115    
                                                                                                                            
Noninterest income                                                                                                          
  Service charges on deposit accounts                                           149         148          273         286    
  Other income                                                                  147          63          307         163    
                                                                           --------    --------     --------    --------
      Total noninterest income                                                  296         211          580         449    
                                                                                                                            
Noninterest expense                                                                                                         
  Salaries and employee benefits                                                779         718        1,575       1,416    
  Occupancy                                                                     217         146          430         303    
  Other expenses                                                                499         527          921       1,046    
                                                                           --------    --------     --------    --------
      Total noninterest expense                                               1,495       1,391        2,926       2,765    
                                                                                                                            
INCOME BEFORE INCOME TAXES                                                      988         905        1,963       1,799    
  Income tax expense                                                            215         212          462         428    
                                                                           --------    --------     --------    --------
                                                                                                                            
NET INCOME                                                                 $    773    $    693     $  1,501    $  1,371    
                                                                           ========    ========     ========    ========
                                                                             
Earnings per common share - Basic                                          $   0.34    $   0.31     $   0.67    $   0.61    
Earnings per common share - Diluted                                        $   0.34    $   0.31     $   0.66    $   0.61    
Dividends per common share                                                 $   0.12    $   0.10     $   0.24    $   0.20    
</TABLE>


                                                                               4

See accompanying notes to the condensed consolidated financial statements.

            
<PAGE>   5

                             UNITED BANCORP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
                           FORM 10-Q (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                       ACCUMULATED
                                                                                                          OTHER
                                                 COMMON      PAID IN      RETAINED    COMPREHENSIVE   COMPREHENSIVE
                                                  STOCK      CAPITAL      EARNINGS       INCOME           INCOME          TOTAL
                                                --------    ----------    ---------   -------------    ------------     ----------
<S>                                             <C>         <C>           <C>          <C>             <C>              <C>    
BALANCE AT JANUARY 1, 1996                      $  1,848    $    9,359    $   6,946                    $        299     $   18,452
  Net income                                                                  2,584    $     2,584                           2,584
  10% Stock dividend                                 184         2,355       (2,539)                                             -
  Cash paid in lieu of fractional shares                                 
    on 10% stock dividend                                                        (2)                                            (2)
  Other comprehensive income, net of tax:                                
      Unrealized gains/losses on securities                                                   (158)            (158)          (158)
                                                                                       -----------
  Comprehensive income                                                                       2,426
                                                                                       ===========
  Additional shares issued to fund                                       
    Dividend Reinvestment Program                      1            13                                                          14
  Cash dividends                                                               (874)                                          (874)
                                                --------    ----------    ---------                    ------------     ----------
BALANCE AT DECEMBER 31, 1996                       2,033        11,727        6,115                             141         20,016
                                                                         
  Net income                                                                  2,846          2,846                           2,846
  10% Stock dividend                                 203         3,710       (3,913)                                             -
  Cash paid in lieu of fractional shares                                 
    on 10% stock dividend                                                        (4)                                            (4)
  Proceeds and tax benefit from                                          
    exercise of stock options                          2            22                                                          24
  Other comprehensive income, net of tax:                                
      Unrealized gains/losses on securities                                                     27               27             27
                                                                                       -----------
  Comprehensive income                                                                       2,873
                                                                                       ===========
  Cash dividends                                                               (985)                                          (985)
                                                --------    ----------    ---------                    ------------     ----------
BALANCE AT DECEMBER 31, 1997                       2,238        15,459        4,059                             168         21,924
                                                                         
  Net income                                                                  1,501          1,501                           1,501
  Other comprehensive income, net of tax:                                
      Unrealized gains/losses on securities                                                    (20)             (20)           (20)
                                                                                       -----------
  Comprehensive income                                                                 $     1,481
                                                                                       ===========
  Cash dividends                                                               (536)                                          (536)
                                                --------    ----------    ---------                    ------------     ----------
BALANCE AT JUNE 30, 1998                        $  2,238    $   15,459    $   5,024                    $        148     $   22,869
                                                ========    ==========    =========                    ============     ==========
</TABLE>


                                                                               5

See accompanying notes to the condensed consolidated financial statements.


<PAGE>   6


                             UNITED BANCORP, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                    FORM 10-Q

<TABLE>
<CAPTION>
                                                                                              SIX MONTHS ENDED
                                                                                                   JUNE 30,
                                                                                             1998           1997
                                                                                          -------------------------
<S>                                                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                                $    1,501     $    1,371
Adjustments to reconcile net income to net cash                                                
    from operating activities                                                                  
      Depreciation and amortization                                                              246            229
      Amortization of intangibles                                                                 31             33
      Provision for loan losses                                                                  204            222
      Deferred taxes                                                                             210            (37)
      Federal Home Loan Bank stock dividend                                                      (31)           (22)
      (Accretion)/amortization of securities, net                                                (13)            (7)
      Gain on sale of other real assets and other real estate owned                              (36)            (5)
      Net changes in accrued interest receivable and other assets                               (748)          (428)
      Net changes in accrued expenses and other liabillities                                    (310)             6
                                                                                          ----------     ----------
      Net cash from operating activities                                                       1,054          1,362
                                                                                               
CASH FLOWS FROM INVESTING ACTIVITIES                                                           
Securities available for sale                                                                  
  Proceeds from sales                                                                              -              -
  Proceeds from maturities/calls                                                              11,248          5,502
  Purchases                                                                                  (12,345)        (5,424)
Securities held to maturity                                                                    
  Proceeds from maturities/calls                                                               2,600            681
  Purchases                                                                                     (353)          (393)
Net change in loans                                                                              (17)        (3,269)
Net purchases of premises and equipment                                                         (245)          (318)
Proceeds from sale of other real assets and other real estate owned                              178             30
                                                                                          ----------     ----------
      Net cash from investing activities                                                       1,066         (3,191)
                                                                                               
CASH FLOWS FROM FINANCING ACTIVITIES                                                           
Net change in deposits                                                                           399           (425)
Net change in short-term borrowings                                                           (3,456)         2,308
Proceeds from long-term debt                                                                   3,600            465
Principal payments on long-term debt                                                             (88)           (28)
Proceeds from exercise of stock options                                                            -             23
Tax benefit from exercise of stock options                                                         -              2
Cash dividends paid                                                                             (536)          (447)
                                                                                          ----------     ----------
      Net cash from financing activities                                                         (81)         1,898
                                                                                          ----------     ----------
                                                                                               
Net change in cash and cash equivalents                                                        2,039             69
                                                                                               
Cash and cash equivalents at beginning of year                                                 7,836          6,619
                                                                                          ----------     ----------

Cash and cash equivalents at end of period                                                $    9,875     $    6,688
                                                                                          ==========     ==========

     Interest paid                                                                        $    3,979     $    3,576
     Income taxes paid                                                                           484            504
</TABLE>


                                                                               6

See accompanying notes to the condensed consolidated financial statements.

<PAGE>   7
                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  These interim financial statements are prepared without audit
         and reflect all adjustments which, in the opinion of management, are
         necessary to present fairly the consolidated financial position of
         United Bancorp, Inc. ("Company") at June 30, 1998 and its results of
         operations and statements of cash flows for the periods presented.
         These adjustments are normal and recurring in nature. The accompanying
         condensed consolidated financial statements have been prepared in
         accordance with the instructions of Form 10-Q and, therefore, do not
         purport to contain all the necessary financial disclosures required by
         generally accepted accounting principles that might otherwise be
         necessary in the circumstances and should be read in conjunction with
         the 1997 United Bancorp, Inc. consolidated financial statements and
         related notes thereto included in its Annual Report to Shareholders for
         the year ended December 31, 1997. Reference is made to the accounting
         policies of the Company described in the notes to the consolidated
         financial statements contained in its 1997 Annual Report to
         Shareholders. The Company has consistently followed these policies in
         preparing this Form 10-Q.

         PRINCIPLES OF CONSOLIDATION:
                  The consolidated financial statements include the accounts of
         the Company and its wholly owned subsidiaries, ("Banks") The Citizens
         Savings Bank, Martins Ferry, Ohio ("CITIZENS") and The Citizens-State
         Bank of Strasburg, Strasburg, Ohio ("CITIZENS-STATE"). All significant
         intercompany transactions and balances have been eliminated in
         consolidation. The results of operations for the period ended June 30,
         1998 are not necessarily indicative of the operating results for the
         full year of 1998.

         NATURE OF OPERATIONS:
                  The Company's and Banks' revenues, operating income and assets
         are primarily from the banking industry. Loan customers are mainly
         located in Belmont, Jefferson, Tuscarawas and Carroll Counties and the
         surrounding localities in northeastern and eastern Ohio and include a
         wide range of individuals, business and other organizations. A major
         portion of loans are secured by various forms of collateral including
         real estate, business assets, consumer property and other items.
         Commercial loans are expected to be repaid from cash flows of the
         business. CITIZENS conducts its business through its main office in
         Martins Ferry, Ohio and three branches in Bridgeport, Colerain and St.
         Clairsville, Ohio. CITIZENS-STATE conducts its business through its
         main office in Strasburg, Ohio and its four branches located in Dover,
         New Philadelphia, Sherrodsville and Dellroy, Ohio.

         USE OF ESTIMATES:
                  To prepare financial statements in conformity with generally
         accepted accounting principles, management makes estimates and
         assumptions based on available information. These estimates and
         assumptions affect the amounts reported in the financial statements and
         the disclosures provided and future results could differ. The
         collectibility of loans, fair values of financial instruments and
         status of contingencies are particularly subject to change.


                                                                               7
<PAGE>   8

                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         INCOME TAXES:
                  The provision for income taxes is based on the effective tax
         rate expected to be applicable for the entire year. Income tax expense
         is the sum of the current-year income tax due or refundable and the
         change in deferred tax assets and liabilities. Deferred tax assets and
         liabilities are expected future tax consequences of temporary
         differences between the carrying amounts and tax basis of assets and
         liabilities, computed using enacted tax rates. A valuation allowance,
         if needed, reduces deferred tax assets to the amount expected to be
         realized.

         STOCK DIVIDENDS:
                  Dividends issued in stock are reported by transferring the
         market value of the stock issued from retained earnings to common stock
         and additional paid-in-capital. On August 19, 1997, a 10% stock
         dividend was approved for all shareholders of record on September 2,
         1997 and distributed on September 19, 1997. Additionally, on April 17,
         1996, a 10% stock dividend was approved for all shareholders of record
         on May 20, 1996 and distributed on June 20, 1996. All per share data
         has been retroactively adjusted for the 10% stock dividends in 1997 and
         1996.

         EARNINGS AND DIVIDENDS PER COMMON SHARE:
                  The Company adopted SFAS No. 128, "Earnings Per Share," on
         December 31, 1997. SFAS No. 128 requires dual presentation of basic and
         diluted earnings per share ("EPS") for entities with complex capital
         structures. All prior EPS data has been restated to conform to the new
         method. Basic EPS is based on net income divided by the
         weighted-average number of shares outstanding during the period.
         Diluted EPS shows the dilutive effect of additional common shares
         issuable under stock options. The weighted-average number of shares
         outstanding for basic EPS was 2,238,314 and 2,236,724 for the six
         months ended June 30, 1998 and 1997, respectively. The weighted-average
         number of shares outstanding for diluted EPS was 2,266,448 and
         2,253,603 for the six months ended June 30, 1998 and 1997,
         respectively. There was no per share dilution due to the stock options
         for the six months ended June 30, 1997. The per share dilution of the
         stock options was $0.01 for the period ended June 30, 1998.

         RECLASSIFICATIONS:
                  Some items in prior financial statements have been
         reclassified to conform to the current presentation.

         COMPLETED AFFILIATIONS - UNAUDITED
                  On July 7, 1998 the Company completed its merger with Southern
         Ohio Community Bancorporation, Inc. ("Southern"), whereby Southern's
         wholly owned subsidiary The Community Bank, Glouster, Ohio
         ("COMMUNITY") is now the Company's third banking charter. The merger
         provided for an exchange ratio of 11 Company common shares for each
         issued and outstanding share of Southern common stock. The transaction
         will be accounted for under the pooling of interest method of
         accounting, with Community being included in the Company's financial
         results beginning in the third quarter with all prior results restated
         to include the effect of Community. The following condensed unaudited
         pro forma financial information presents selected balance sheet amounts
         and operating results of the Company and Southern as though they had
         been combined during all periods presented below.

                                                                               8

<PAGE>   9

                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         PENDING AFFILIATIONS - UNAUDITED (CONTINUED)

<TABLE>
<CAPTION>
                                                            JUNE 30,             DECEMBER 31,
                                                  ---------------------------    ------------
                                                      1998           1997            1997        
                                                  ------------   ------------    ------------                                    
                                                    (In thousands, except per share amounts)         
        <S>                                       <C>            <C>             <C>              
         Net loans                                $    165,675   $    164,335    $    168,440  
         Total deposits                                227,481        219,225         223,488  
         Total assets                                  265,281        253,946         263,607  
                                                                                            
         Summary of Operations                                                               
         Net interest income                             5,708          5,617    $     11,392  
         Net income                                      1,365          1,444           2,848  
         Net income per share - Basic                     0.51           0.54            1.07  
         Net income per share - Diluted                   0.51           0.54            1.06  
</TABLE>

         IMPACT OF RECENT ACCOUNTING STANDARDS:
                  During the first quarter of 1998, the Company was required to
         adopt Statement of Financial Accounting Standards' ("SFAS") No. 130
         "Reporting Comprehensive Income" and SFAS No. 131 "Disclosures about
         Segments of an Enterprise and Related Information". SFAS No. 131 does
         not effect the Company's interim disclosure requirements. SFAS No. 130
         established standards for reporting and display of comprehensive income
         and its components in a full set of general-purpose financial
         statements. Comprehensive income includes both net income and other
         comprehensive income. Other comprehensive income relevant to the
         Company includes the change in unrealized gains and losses on
         securities available for sale. The statement requires the Company to
         classify items of other comprehensive income by their nature and
         display the accumulated balance of other comprehensive income
         separately from retained earnings and additional-paid-in-capital in the
         equity section of a statement of financial position. The Company
         elected to present comprehensive income and the accumulated balance in
         the Condensed Consolidated Statement of Shareholders' Equity for
         interim reporting purposes. The table below presents reclassification
         adjustments related to comprehensive income. Reclassification
         adjustments are needed when an item is included in net income in one
         period and comprehensive income in another accounting period.



                                                                               9
<PAGE>   10


                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


<TABLE>
<CAPTION>
                                                                 THREE MONTHS     SIX MONTHS                                    
                                                                    ENDED           ENDED          YEAR-ENDED      YEAR-ENDED   
                                                                   JUNE 30,        JUNE 30,        DECEMBER 31,    DECEMBER 31, 
                            (In thousands)                          1998            1998              1997            1996      
                                                               ------------------------------     -------------   ------------- 
         <S>                                                   <C>              <C>               <C>             <C>           
         Net Income                                            $          773   $       1,501     $       2,846   $       2,584 
                                                                                                                                
         Unrealized gain/(loss) arising in period                         (12)            (20)               27            (185)
         Reclassification for realized amount                               -               -                 -              27 
         Net unrealized gain/(loss) recognized in                                                                                
             other comprehensive income                                   (12)            (20)               27            (158) 
                                                               ------------------------------     -------------   -------------  
                                                                                                                                 
         Comprehensive Income                                  $          761   $       1,481     $       2,873   $       2,426  
                                                               ------------------------------     -------------   -------------  
</TABLE>

         IMPACT OF RECENT ACCOUNTING STANDARDS: (CONTINUED)


2.       SECURITIES:

                  The amortized cost and estimated fair values of securities are
         as follows:

<TABLE>
<CAPTION>
                                                                                    GROSS            GROSS                      
                             (IN THOUSANDS)                       AMORTIZED      UNREALIZED       UNREALIZED        ESTIMATED   
                                                                    COST            GAINS           LOSSES         FAIR VALUE   
                                                                 -----------    -------------    -------------    ------------- 
         <S>                                                     <C>            <C>              <C>              <C>           
         AVAILABLE FOR SALE - JUNE 30, 1998                                                                                     
         US Treasury obligations                                 $     2,786    $          25                     $       2,811 
         US Agency obligations                                        27,009              143    $         (10)          27,142 
         State and Municipal obligations                               1,413               42                             1,455 
         Other investments                                               895               26                               921 
                                                                 -----------    -------------    -------------    ------------- 
                                                                 $    32,103    $         236    $         (10)   $      32,329 
                                                                 ===========    =============    =============    ============= 
                                                                                                                                
         AVAILABLE FOR SALE - DECEMBER 31, 1997                                                                                 
         US Treasury obligations                                 $     3,263    $          45                     $       3,308 
         US Agency obligations                                        26,268              167    $          (9)          26,426 
         State and Municipal obligations                                 551               25                               576 
         Other investments                                               865               26                               891 
                                                                 -----------    -------------    -------------    ------------- 
                                                                 $    30,947    $         263    $          (9)   $      31,201 
                                                                 ===========    =============    =============    ============= 
                                                                                                                                
         HELD TO MATURITY - JUNE 30, 1998                                                                                       
         US Agency obligations                                   $     5,000    $         -      $          (6)   $       4,994 
         State and Municipal obligations                              20,726              714              (18)          21,422 
                                                                 -----------    -------------    -------------    ------------- 
                                                                 $    25,726    $         714    $         (24)   $      26,416 
                                                                 ===========    =============    =============    ============= 
                                                                                                                                
         HELD TO MATURITY - DECEMBER 31, 1997                                                                                   
         US Agency obligations                                   $     7,500                     $         (27)   $       7,473 
         State and Municipal obligations                              20,492    $         786               (1)          21,277 
                                                                 -----------    -------------    -------------    ------------- 
                                                                 $    27,992    $         786    $         (28)   $      28,750 
                                                                 ===========    =============    =============    ============= 
</TABLE>




                                                                              10

<PAGE>   11

                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q

2.       SECURITIES: (CONTINUED)

                  There were no sales of securities during the six months ended
         June 30, 1998 or 1997.

                  Contractual maturities of securities at June 30, 1998 were as
         follows:

<TABLE>
<CAPTION>
         AVAILABLE FOR SALE (IN THOUSANDS)              AMORTIZED     ESTIMATED             
                                                          COST        FAIR VALUE            
                                                       ----------     ----------                          
         <S>                                           <C>          <C>                     
         US Treasury obligations                                                            
           Under 1 Year                                $    2,786     $    2,811            
           1 - 2 Years                                          -              -            
                                                       ----------     ----------                          
           Total                                            2,786          2,811            
                                                       ----------     ----------                          
         US Agency obligations                                                              
           Under 1 Year                                     1,496          1,502            
           1 - 2 Years                                      1,000          1,006            
           2 - 5 Years                                      2,344          2,383            
           5 - 10 Years                                    22,169         22,251            
          Over 10 Years                                         -              -            
                                                       ----------     ----------                          
           Total                                           27,009         27,142            
                                                       ----------     ----------                          
         State and municipal obligations                                                    
           5 - 10  Years                                      556            582            
          Over 10 Years                                       857            873            
                                                       ----------     ----------                          
           Total                                            1,413          1,455            
                                                       ----------     ----------                          
         Other investments                                                                  
           Equity securities                                  895            921            
                                                       ----------     ----------                          
         Total securities available for sale           $   32,103     $   32,329            
                                                       ==========     ==========            
                                                                                            
         HELD TO MATURITY (IN THOUSANDS)                                                    
                                                                                            
         US Agency obligations                                                              
           Under 1 Year                                $    4,500     $    4,495                                   
           2 - 5 Years                                        500            499                                   
                                                       ----------     ----------                          
           Total                                            5,000          4,994                                   
                                                       ----------     ----------                          
         State and municipal obligations                                                                           
           Under 1 Year                                       790            798                                   
           1 - 2 Years                                      1,645          1,702                                   
           2 - 5 Years                                     10,425         10,802                                   
           5 - 10 Years                                     7,287          7,555                                   
           Over 10 Years                                      579            564                                   
                                                       ----------     ----------                          
           Total                                           20,726         21,421                                   
                                                       ----------     ----------                          
                                                                                                                   
         Total securities held to maturity             $   25,726     $   26,415                                   
                                                       ==========     ==========            
</TABLE>

                  Securities with a cost of approximately $30,540,000 at June
         30, 1998 and $28,578,000 at December 31, 1997 were pledged to secure
         public deposits, repurchase agreements and other liabilities as
         required or permitted by law.



                                                                              11

<PAGE>   12

                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q

3.       ALLOWANCE FOR LOAN LOSSES

                  The detail of the allowance for loan losses is summarized as
         follows:

<TABLE>
<CAPTION>
                             (IN THOUSANDS)                        1998           1997                       
                                                                ----------    -----------                    
         <S>                                                    <C>           <C>                            
         Balance January 1,                                     $    2,239    $     2,023                    
           Provision charged to operating expense                      204            222                    
           Loans charged-off                                          (305)           (86)                   
           Recoveries                                                   15             28                    
                                                                ----------    -----------                    
         Balance June 30,                                       $    2,153    $     2,187                    
                                                                ==========    ===========                    
</TABLE>

                  Loans considered impaired under the provisions of SFAS No. 114
         were not material at June 30, 1998 and December 31, 1997 or during the
         six months ended June 30, 1998 and 1997.

4.       COMMITMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES

                  There are various contingent liabilities not reflected within
         the financial statements, including claims and legal actions arising in
         the ordinary course of business. In the opinion of management, after
         consultation with legal counsel, the ultimate disposition of these
         matters is not expected to have a material effect on the Company's
         financial condition or results of operations.

                  Some financial instruments are used in the normal course of
         business to meet the financing needs of customers. These financial
         instruments include commitments to extend credit, standby letters of
         credit and financial guarantees. These involve, to varying degrees,
         credit and interest-rate risk in excess of the amounts reported in the
         financial statements.

                  Exposure to credit loss if the other party does not perform is
         represented by the contractual amount for commitments to extend credit,
         standby letters of credit and financial guarantees written. The same
         credit policies are used for commitments and conditional obligations as
         are used for loans. The amount of collateral obtained, if deemed
         necessary, upon extension of credit is based on management's credit
         evaluation. Collateral varies, but may include accounts receivable,
         inventory, property, equipment, income-producing commercial properties,
         residential real estate and consumer assets.

                  Commitments to extend credit are agreements to lend to a
         customer as long as there is no violation of any condition established
         in the commitment. Commitments generally have fixed expiration dates or
         other termination clauses and may require payment of a fee. Since many
         of the commitments are expected to expire without being used, total
         commitments do not necessarily represent future cash requirements.
         Standby letters of credit and financial guarantees written are
         conditional commitments to guarantee a customer's performance to a
         third party.

                                                                              12

<PAGE>   13

                              UNITED BANCORP, INC.
      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   FORM 10-Q

4.       COMMITMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES (CONTINUED)

                  A summary of the notional or contractual amounts of financial
         instruments with off-balance sheet risk at June 30, 1998 and December
         31, 1997 follows:

<TABLE>
<CAPTION>
                                                                 JUNE 30,     DECEMBER 31,             
                             (IN THOUSANDS)                        1998           1997                 
                                                                ----------    -----------              
         <S>                                                    <C>           <C>                      
         Commitments to extend credit                           $   14,765    $    15,776              
         Standby letters of credit                                     244            244              
</TABLE>

                  There were no fixed-rate commitments or standby letters of
         credit at June 30, 1998 or December 31, 1997.

                  At June 30, 1998 and December 31, 1997, reserves of $623,000
         and $692,000 were required as deposits with the Federal Reserve or as
         cash on hand. These reserves do not earn interest.



                                                                              13

<PAGE>   14


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS

                  In the following pages, Management presents an analysis of
         United Bancorp, Inc.'s ("Company") financial condition at June 30, 1998
         compared to December 31, 1997 and results of operations for the three
         and six months ended June 30, 1998 compared to the same periods in
         1997. This discussion is designed to provide shareholders with a more
         comprehensive review of the operating results and financial position
         than could be obtained from an examination of the financial statements
         alone. This analysis should be read in conjunction with the
         consolidated financial statements and related footnotes and the
         selected financial data included elsewhere in this report.

         FORWARD-LOOKING STATEMENTS
                  In addition to the historical information contained herein,
         the following discussion contains forward-looking statements, (as
         contained in the Safe Harbor under the Private Securities Litigation
         Reform Act) involving risks and uncertainties. Economic circumstances,
         the Company's operations and actual results could differ significantly
         from those discussed in the forward-looking statements. Some factors
         that could cause or contribute to such differences are discussed
         herein, but also include changes in the economy and interest rates in
         the nation and in the Company's general market area.

                  Some of the forward-looking Company statements included herein
         are statements regarding:

                  1.   Management's determination of the amount of the allowance
                       for loan losses and the provision for loan losses;
                  2.   The Company's intention to borrow additional funds as
                       opportunities to leverage excess capital arise;
                  3.   The sufficiency of the Company's liquidity and capital
                       reserves; and 
                  4.   The effect on the Company of amendments to core capital 
                       requirement regulations.

                  The Company is headquartered in Martins Ferry, Ohio, adjacent
         to the Ohio River on the eastern border of Ohio and the northern
         panhandle of West Virginia. It is located approximately 60 miles
         southwest of Pittsburgh, Pennsylvania and approximately 125 miles east
         of Columbus, Ohio.

                  Common stock of the Company was initially available through
         over-the-counter trading. In February 1994, the Company began trading
         on The Nasdaq SmallCaps Market tier of The Nasdaq Stock Market under
         the trading symbol UBCP.


                                                                              14
<PAGE>   15


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

                  The following brief history of the Company and its subsidiary
         growth and development highlights the continuing commitment to
         maintaining a presence as a local "Hometown" community bank serving
         several diverse market areas.

                  -    1902      Original banking charter granted for The
                                 German Savings Bank (later changed to The
                                 Citizens Savings Bank).
                  -    1974      Construction of a full-service branch banking 
                                 facility 6 miles west in Colerain, Ohio.
                  -    1978      Construction of a full-service branch banking 
                                 facility 2 miles south in Bridgeport, Ohio.
                  -    1980      Construction of a limited-service auto-teller 
                                 banking location in Martins Ferry, Ohio.
                  -    1983      Creation of United Bancorp, Inc. as a 
                                 single-bank holding company through acquisition
                                 of 100% of the voting stock of The Citizens
                                 Savings Bank of Martins Ferry, Ohio
                                 ("CITIZENS"). Also, began operation of
                                 Automated Teller Machine ("ATM") in Aetnaville,
                                 Ohio.
                  -    1984      CITIZENS opened a newly constructed 21,500
                                 square foot main-office facility in
                                 Martins Ferry, Ohio, adjacent to the
                                 auto-teller facility built in 1980.
                  -    1986      United Bancorp, Inc. became a multi-bank 
                                 holding company through the acquisition of 100%
                                 of the voting stock of The Citizens-State Bank
                                 of Strasburg, Strasburg, Ohio
                                 ("CITIZENS-STATE").
                  -    1990      CITIZENS converted from third-party data
                                 processing to in-house data processing.
                                 CITIZENS-STATE constructed a full-service
                                 branch bank 6 miles south of Strasburg in
                                 Dover, Ohio.
                  -    1991      CITIZENS began providing third party data
                                 processing services to affiliate bank
                                 CITIZENS-STATE. 
                  -    1992      CITIZENS-STATE acquired two branch bank 
                                 locations in New Philadelphia and 
                                 Sherrodsville, Ohio. 
                  -    1993      CITIZENS relocated Data Processing, Accounting 
                                 and Bookkeeping to a renovated Operations 
                                 Center across from the main office in Martins 
                                 Ferry, Ohio.
                  -    1994      CITIZENS-STATE purchased a branch bank in 
                                 Dellroy, Ohio.
                  -    1996      CITIZENS converted to check imaging and
                                 optical character recognition for data
                                 processing at all locations.
                  -    1997      CITIZENS opened a full-service Retail
                                 Banking Center inside Riesbeck's Food
                                 Markets, Inc.'s St. Clairsville, Ohio
                                 store. Additionally, CITIZENS introduced a
                                 Secondary Market Real Estate Mortgage
                                 Program available for all locations and
                                 introduced a MasterCard(R) Check Card to
                                 the local market area.
                  -    1998      CITIZENS-STATE introduced an indirect
                                 automobile lending program.
                  -    1998      CITIZENS increased ATM network by six cash
                                 dispenser machines in various Riesbecks'
                                 Food Markets.
                  -    1998      Effective July 7, 1998, the acquisition of
                                 Southern Ohio Community Bancorporation,
                                 Inc. was completed and The Community Bank,
                                 Glouster, Ohio ("Community") was added as
                                 a third banking charter to the Company.

                                                                              15
<PAGE>   16


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         FINANCIAL CONDITION

         EARNING ASSETS - LOANS
                  At June 30, 1998, gross loans were $139,564,000 compared to
         $139,548,000 at year-end 1997, a modest growth of $16,000. The
         relatively flat lending volume was the result of increased competition
         in our markets. However, a closer look at the components of total loans
         reveals that our different loan products have experienced rather
         different results relative to December 31, 1997. Real estate loan
         continues to decline slightly, as anticipated, due to the increased
         activity in the Secondary Market Real Estate program offered to all
         banking locations through their affiliation with CITIZENS. The current
         local indirect lending environment and the Banks' pricing strategies
         has allowed the total outstanding indirect automobile portfolio to
         remain fairly constant from December 31, 1997 to June 30, 1998.

                  Installment loans, with continued emphasis placed on the
         indirect automobile lending market, remained fairly static at 33.3% of
         total loans at June 30, 1998 compared to 33.7% at year-end 1997. The
         indirect lending type of financing carries somewhat more risk than real
         estate lending, however, it also provides for higher yields. The
         targeted lending areas encompass four metropolitan areas, minimizing
         the risk to changes in economic conditions in the communities housing
         the Company's nine branch locations. During the first quarter of 1998,
         CITIZENS-STATE introduced into their market an indirect automobile
         lending program. The results for the first two quarters have been in
         line with management's projections with total loans secured by
         automobiles increasing in excess of 11% from December 31, 1997.
         However, the indirect market for CITIZENS has seen increased
         competition during 1998 and as a result has experienced a 3% decrease
         in installment loan totals. Combined installment loans for the Company
         have remained relatively stable since December 31, 1997

                  Commercial real estate loans comprised 36.6% of total loans at
         June 30, 1998 compared to 32.7% at year-end 1997, an increase of
         approximately $2.6 million. Commercial loans were 6.8% and 10.3% of the
         total portfolio mix at June 30, 1998 and year-end 1997, respectively.
         In the recent quarter we have experienced some prepayment on commercial
         loans as commercial borrowers continue to be price sensitive in this
         area of lending. The Company has originated and bought participations
         in loans from other banks for out-of-area commercial and commercial
         real estate loans to benefit from consistent economic growth outside
         the area. The majority of these loans are secured by real estate
         holdings comprised of hotels, motels and churches located in various
         geographic locations, including Columbus and the Akron-Canton, Ohio
         metropolitan areas. Out of area loans at June 30, 1998 were 13.9% of
         total loans and 32.0% of total commercial and commercial real estate
         loans compared to 11.0% and 25.7% at year-end 1997. The Company has
         already seen the benefit of adding Community into the consolidated
         group. Even before the effective merger date of July 7, 1998, the
         Company has benefited from having a presence in Athens County, Ohio. As
         a stand alone charter Community did not have the legal lending capacity
         to handle the larger commercial customers and as a result could not bid
         for the larger commercial credits. However, with their affiliation
         pending during the first half of 1998, management at Community worked
         closely with the Company to successfully bid on some larger commercial
         credits.

                  Real estate loans were 23.3% of total loans at June 30, 1998
         compared to 23.4% at year-end 1997. As indicated above, the Banks'
         involvement in the secondary market program should yield increases in
         loan origination volume. It is anticipated that borrower preferences
         will favor the secondary market product offerings with a decline
         expected in real estate loans held within the loan portfolio.     

                                                                              16

<PAGE>   17


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         EARNING ASSETS - LOANS (CONTINUED)
                  The allowance for loan losses represents the amount which
         management and the Board of Directors estimates is adequate to provide
         for reasonably foreseeable losses inherent in the loan portfolio. The
         allowance balance and the annual provision charged to expense are
         reviewed by management and the Board of Directors monthly using a risk
         code model that considers borrowers past due experience, economic
         conditions and various other circumstances that are subject to change
         over time. Management believes the current balance of the allowance for
         loan losses is sufficient to deal with the probable losses associated
         with the loan portfolio. Net charge-offs for the six months ended June
         30, 1998 were $290,000, or 13.0%, of the beginning allowance for loan
         losses compared to $58,000, or 2.9%, of the beginning balance for loan
         losses for the six months ended June 30, 1997. As reported in the 1997
         Annual Report the longest steel strike in the Ohio Valley's history
         ended during the fourth quarter of 1997. The effect of this strike is
         apparent in the increased level of net charge-offs during the first two
         quarters of 1998. Management is closely monitoring charge-offs and
         expects a lower level of net charge-offs during the last two quarters
         of 1998.

         EARNING ASSETS - SECURITIES AND FEDERAL FUNDS SOLD
                  The securities portfolio is comprised of U.S. Treasury notes
         and other U.S. Government agency-backed securities, tax-exempt
         obligations of states and political subdivisions and certain other
         investments. The Company does not hold any collateralized
         mortgage-backed securities, other than those issued by U.S. government
         agencies, or derivative securities. The quality rating of obligations
         of state and political subdivisions within Ohio is no less than Aaa, Aa
         or A, with all out-of-state bonds rated at AAA. Board policy permits
         the purchase of certain non-rated bonds of local schools, townships and
         municipalities, based on their known levels of credit risk. Securities
         available for sale at June 30, 1998 increased approximately $1.1
         million, or 3.6% from year-end 1997 totals. This upward movement
         resulted primarily from the $12.3 million in purchases from funds that
         were available from loan payoffs and security calls/maturities for the
         six months ended June 30, 1998. Securities held to maturity decreased
         8.1% at June 30, 1998 compared to year-end 1997 totals. This was a
         result of increased level of maturities compared to six months ended
         June 30, 1997 and the reinvestment of these funds into available for
         sale securities

                  Short-term federal funds sold are used to manage interest rate
         sensitivity and to meet liquidity needs of the Company. At June 30,
         1998, federal funds sold totaled $4,115,000 compared to $300,000 at
         year-end 1997.

         SOURCES OF FUNDS - DEPOSITS
                  The Company's primary source of funds is core deposits from
         retail and business customers. These core deposits include all
         categories of interest-bearing and noninterest-bearing deposits,
         excluding certificates of deposit greater than $100,000. For the period
         ended June 30, 1998, total core deposits decreased approximately
         $225,000 primarily from a decrease of time deposits under $100,000 of
         $2.5 million offset by increases in interest bearing deposits of $1.2
         million and noninterest bearing deposits of $863,000. The Company has a
         strong deposit base from public agencies, including local school
         districts, city and township municipalities, public works facilities
         and others which may tend to be more seasonal in nature resulting from
         the receipt and disbursement of state and federal grants. These
         entities have maintained fairly static balances with the Company due to
         various funding and disbursement timeframes.

                                                                              17
<PAGE>   18


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         SOURCES OF FUNDS - DEPOSITS (CONTINUED)
                  Certificates of deposit greater than $100,000 are not
         considered part of core deposits and as such are used to balance rate
         sensitivity as a tool of funds management. At June 30, 1998,
         certificates of deposit greater than $100,000 increased approximately
         $624,000 or 3.8% over year-end 1997 totals.

         SOURCES OF FUNDS - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND 
         OTHER BORROWINGS
                  Other interest-bearing liabilities include securities sold
          under agreements to repurchase, sweep accounts, federal funds
          purchased, Treasury, Tax & Loan notes payable and Federal Home Loan
          Bank ("FHLB") advances. This general category increased a modest
          $55,000 or less than 1% from December 31, 1997. Of notable discussion,
          FHLB advances were primarily responsible for the growth and due to
          seasonal changes of repurchase agreements the decrease in this
          category offset the increase in FHLB advances. During the first six
          months, the Company matched fixed rate Federal Home Loan Bank funding
          to the growth in the commercial real estate portfolio as previously
          discussed.

         PERFORMANCE OVERVIEW

         NET INCOME
                  Basic earning per share for the three and six months ended
         June 30, 1998 was $0.34, and $0.67 representing a 9.7% and 9.8%
         increase in basic earnings for the three and six months ended June 30,
         1997. On an annualized basis, Return on Average Assets (ROA) was 1.39%
         and Return on Average Equity (ROE) was 13.3% compared to ROA of 1.32%
         and ROE of 13.2% for the six months ended June 30, 1997.

         NET INTEREST INCOME
                  Net interest income, by definition, is the difference between
         interest income generated on interest-earning assets and the interest
         expense incurred on interest-bearing liabilities. Various factors
         contribute to changes in net interest income, including volumes,
         interest rates and the composition or mix of interest-earning assets in
         relation to interest-bearing liabilities. Net interest income increased
         4.2% and 4.1% for the three and six months ended June 30, 1998 compared
         to the same periods in 1997.

                  Total interest income for the three and six months ended June
         30, 1998, when compared to the same three and six month periods ended
         June 30, 1997, increased 4.7%, and 6.0%. The main components of this
         increase were interest and fee income from loans, increasing 3.4% and
         5.1% for the three and six months ended June 30, 1998 compared to the
         same periods in 1997. Compared with June 30, 1997 average loans have
         increased approximately $6.6 million.

                  Total interest expense for the three and six months ended June
         30, 1998 when compared to the same three and six month periods ended
         June 30, 1997, increased 5.1% and 8.3%. This increase in interest
         expense was primarily the result of a higher volume of certificates of
         deposits and increased borrowings.

         PROVISION FOR LOAN LOSSES
                  The provision for loan losses is an operating expense recorded
         to maintain the related balance sheet allowance for loan losses at an
         amount considered adequate to cover losses that may occur in the normal
         course of lending.


                                                                              18
<PAGE>   19


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         PROVISION FOR LOAN LOSSES (CONTINUED)
                  The total provision for loan losses was $102,000 and $204,000
         for the three and six months ended June 30, 1998 compared to $111,000
         and $222,000 for the same periods in 1997. Management has maintained
         the relative level of the provision in relation to loan growth and mix
         within the loan portfolio experienced throughout the first six months
         of 1998. Although the net charge-offs have increased relative to the
         same period in 1997, management does not expect this trend to continue
         for the remainder of 1998

         NONINTEREST INCOME
                  Total noninterest income is made up of bank related fees and
         service charges, as well as other income producing services provided,
         sale of secondary market loans, ATM income, early redemption penalties
         for certificates of deposits, safe deposit rental income and other
         miscellaneous items. Noninterest income for the three and six months
         ended June 30, 1998 was $296,000 and 580,000 compared to $211,000 and
         $449,000 for the same three and six month periods ended June 30, 1997.
         As discussed in the Company's 1997 Annual Report, the introduction of
         the Secondary Market Real Estate Mortgage Program has dramatically
         increased the Company's noninterest income. Compared with the first two
         quarters of 1997, noninterest income increased approximately 29.0%. For
         the three months ended June 30, 1998 compared to the same period in
         1997, noninterest income increased approximately 40.3%

                  As reported in our March 31, 1998 Form 10-Q other recent
         developments have already added to the strong growth in noninterest
         income. In April 1998, six additional ATM's have been installed
         throughout the Riesbeck's Food Market retail distribution network. In
         addition, in March 1998 the Company initiated a surcharge throughout
         our entire ATM network to non-customers of our affiliate Banks.

         NONINTEREST EXPENSE
                  Noninterest expense for the three and six months ended June
         30, 1998 increased 7.5% and 5.8% over the three and six months ended
         June 30, 1997. Contributing to the increase was salaries and employee
         benefits, which increased by $61,000 for the three month ended June 30,
         1998 and $159,000 for the six months ended June 30, 1998. However, this
         is offset by decreases in other expenses on a quarter to quarter and
         year to date comparisons. Other expenses have decreased due in part to
         management's efforts to control overhead

         CAPITAL RESOURCES
                  Internal capital growth, through the retention of earnings, is
         the primary means of maintaining capital adequacy for the Company.
         Shareholders' equity at June 30, 1998 was $22,869,000 compared to
         $21,924,000 at December 31, 1997, a 4.3% increase. Total shareholders'
         equity in relation to total assets was 10.7% at June 30, 1998 and 10.4%
         at December 31, 1997.

                  In 1996, the Company established a Dividend Reinvestment Plan
         ("The Plan") for shareholders under which the Company's common stock
         will be purchased by the Plan for participants with automatically
         reinvested dividends. The Plan does not represent a change in the
         Company's dividend policy or a guarantee of future dividends.

                  Shareholders who do not wish to participate in the Plan
         continue to receive cash dividends, as declared in the usual and
         customary manner. The Company has approved the issuance of 150,000
         authorized and unissued shares of the Company's common stock for
         purchase under The Plan.



                                                                              19
<PAGE>   20


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         CAPITAL RESOURCES (CONTINUED)
         To date, all shares purchased by the Plan except for 797 shares
         purchased on October 21, 1996 have been purchased on the open market.
         The Company and Banks are subject to regulatory capital requirements
         administered by federal banking agencies. Capital adequacy guidelines
         and prompt corrective action regulations involve quantitative measures
         of assets, liabilities and certain off-balance sheet items calculated
         under regulatory accounting practices. Capital amounts and
         classifications are also subject to qualitative judgments by regulators
         about components, risk weightings and other factors and the regulators
         can lower classifications in certain cases. Failure to meet various
         capital requirements can initiate regulatory action that could have a
         direct material effect on the Banks' operations.

                  The prompt corrective action regulations provide five
         classifications, including well capitalized, adequately capitalized,
         undercapitalized, significantly undercapitalized and critically
         undercapitalized, although these terms are not used to represent
         overall financial condition. If adequately capitalized, regulatory
         approval is required to accept brokered deposits. If undercapitalized,
         capital distributions are limited, as is asset growth and expansion and
         plans for capital restoration are required. The minimum requirements
         are:

<TABLE>
<CAPTION>
                                                         TOTAL             TIER 1           TIER 1                         
                                                      CAPITAL TO         CAPITAL TO       CAPITAL TO                       
                                                     RISK-WEIGHTED      RISK-WEIGHTED       AVERAGE                        
                                                        ASSETS             ASSETS           ASSETS                         
                                                     -------------      -------------     ----------                       
                     <S>                                 <C>               <C>              <C>                            
                     Well capitalized                    10.00%            6.00%            5.00%                          
                     Adequately capitalized               8.00%            4.00%            4.00%                          
                     Undercapitalized                     6.00%            3.00%            3.00%                          
</TABLE>

                  The following table illustrates the Company's risk-weighted
         capital ratios at June 30, 1998:

<TABLE>
<CAPTION>
                                                                  JUNE 30,                           
                                     (IN THOUSANDS)                 1998                              
                                                                -----------                          
                     <S>                                        <C>                                                    
                     Tier 1 capital                             $    22,610                                            
                     Total risk-based capital                   $    24,419                                            
                     Risk-weighted assets                       $   144,352                                            
                     Average total assets                       $   215,304                                            
                                                                                                                       
                     Tier 1 capital to average assets                 10.50%                                           
                     Tier 1 risk-based capital ratio                  15.66%                                           
                     Total risk-based capital ratio                   16.92%                                           
</TABLE>




                                                                              20
<PAGE>   21


                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         LIQUIDITY
                  Management's objective in managing liquidity is to maintain
         the ability to continue to meet the cash flow needs of its customers,
         such as borrowings or deposit withdrawals, as well as its own financial
         commitments. The principal sources of liquidity are net income, loan
         payments, maturing securities and sales of securities available for
         sale, federal funds sold and cash and deposits with banks. Along with
         its liquid assets, the Company has additional sources of liquidity
         available to ensure that adequate funds are available as needed. These
         include, but are not limited to, the purchase of federal funds, the
         ability to borrow funds under line of credit agreements with
         correspondent banks and a borrowing agreement with the Federal Home
         Loan Bank of Cincinnati, Ohio and the adjustment of interest rates to
         obtain depositors. Management feels that it has the capital adequacy,
         profitability and reputation to meet the current and projected needs of
         its customers.

                  For the six months ended June 30, 1998, the adjustments to
         reconcile net income to net cash from operating activities consisted
         mainly of depreciation and amortization of premises and equipment and
         intangibles, the provision for loan losses, net amortization of
         securities and net changes in other assets and liabilities. The net
         increase in cash and cash equivalents of $2,039,000 was primarily the
         result of a net increase in cash from investing activities of
         $1,066,000, partially off-set by net cash utilized in financing
         activities of $81,000 related primarily to a decrease in repurchase
         agreements. The investing activity increase primarily related to
         investment maturities and calls. For a more detailed illustration of
         sources and uses of cash, refer to the condensed consolidated
         statements of cash flows.

         INFLATION
                  Substantially all of the Company's assets and liabilities
         relate to banking activities and are monetary in nature. The
         consolidated financial statements and related financial data are
         presented in accordance with Generally Accepted Accounting Principles
         (GAAP). GAAP currently requires the Company to measure the financial
         position and results of operations in terms of historical dollars, with
         the exception of securities available-for-sale which are measured at
         fair value. Changes in the value of money due to rising inflation can
         cause purchasing power loss.

                  Management's opinion is that movements in interest rates
         affects the financial condition and results of operations to a greater
         degree than changes in the rate of inflation. It should be noted that
         interest rates and inflation do effect each other, but do not always
         move in correlation with each other. The Company's ability to match the
         interest sensitivity of its financial assets to the interest
         sensitivity of its liabilities in its asset/liability management may
         tend to minimize the effect of changes in interest rates on the
         Company's performance.

                                                                              21

<PAGE>   22

                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q


         YEAR 2000
                  Many computer programs, which are in use today, use only two
         digits to indicate which year is represented. If such computer
         applications are not changed to allow the data field to reflect the
         change in the century, the application may fail or create erroneous
         results at the Year 2000 due to the improper sequence of the year from
         "99" to "00".

                  Management has conducted an evaluation of all significant
         computer systems used in the business of the Company to determine
         whether such systems will function at the change of the century.
         Management determined that most programs are or will be capable of
         identifying the turn of the century. In order to prevent potential
         credit quality issues, management is also assessing the Year 2000
         compliance status of major loan customers to determine whether or not
         such entities are taking steps to ensure their systems will function
         properly in the Year 2000. Management closely monitors the issue and
         full compliance is expected by the end of 1998. Management does not
         anticipate any material costs to be incurred to update its systems to
         be Year 2000 compliant.

         REGULATORY MATTERS
                  The Company is subject to the regulatory requirements of The
         Federal Reserve System as a multi-bank holding company. The affiliate
         banks are subject to regulations of the Federal Deposit Insurance
         Corporation (FDIC) and the State of Ohio, Division of Financial
         Institutions.

         ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                  The principal market risk affecting the Company is interest
         rate risk. The Banks do not maintain a trading account for any class of
         financial instrument and the Company is not affected by foreign
         currency exchange rate risk or commodity price risk. Because the Banks
         do not hold any equity securities other than stock in the Federal Home
         Loan Bank of Cincinnati, which is not significant, the Company is not
         subject to equity price risk.

                  The Company and its Banks, like other financial institutions,
         are subject to interest rate risk to the extent that its
         interest-earning assets reprice differently than its interest-bearing
         liabilities. One of the principal objectives is to achieve long-term
         profitability while reducing its exposure to fluctuations in interest
         rates. The Company has sought to reduce exposure of earnings to changes
         in market interest rates by managing assets and liability maturities
         and interest rates primarily by originating variable-rate lending
         products, or if issued with a fixed interest rate, as is the case with
         the indirect automobile portfolio, the term is rather short in
         duration. Both the variable interests rates inherent in the commercial,
         commercial real estate and real estate loan portfolios, and the short
         duration loan products, mitigate the Company's exposure to dramatic
         interest rate movements.

                  The Company's securities are all fixed rate and are evenly
         divided between held to maturity and available for sale. The Company
         primarily invests in US Treasury and Agency obligations and State and
         Municipal obligations and does not invest in any mortgage-backed
         securities. Because total securities approximate 27% of total assets,
         the Company could be sensitive to periods of rising interest rates.
         However, this risk is offset by the fact that approximately 14% of the
         total security portfolio matures in less than one year and another 4%
         matures within 1 to 2 years.

                                                                              22
<PAGE>   23

                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q

         ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
(CONTINUED)

                  Management measures the Company's interest rate risk by
         computing estimated changes in net interest income and the net
         portfolio value ("NPV") of its cash flows from assets, liabilities and
         off-balance sheet items in the event of a range of assumed changes in
         market interest rates. Presented in the Company's 1997 Annual Report as
         of December 31, 1997, is an analysis of the Company's interest rate
         risk as measured by changes in NPV for instantaneous and sustained
         parallel shifts of 50 basis points in market interest rates. Management
         believes that no events have occurred since December 31, 1997 which
         would significantly change the Company's NPV at June 30, 1998 under
         each assumed shifts of 50 basis points in market interest rates.

                  The Company's NPV is more sensitive to increasing rates than
         decreasing rates. Such difference in sensitivity occurs principally
         because, as rates rise, the effect is offset on a short-term basis by
         the rather fixed nature of our consumer loans. This occurs even though
         the commercial, commercial real estate and real estate portfolios are
         comprised of variable rate products Also in a rising rate environment
         consumers tend not to prepay fixed rate loans as quickly as they would
         have had rates not changed dramatically. Moreover, the interest the
         Company pays on its deposits would increase because deposits generally
         have shorter periods to reprice.

                  Certain shortcomings are inherent in the NPV method of
         analysis. Certain assets such as adjustable-rate loans have features
         that restrict changes in interest rates on a short-term basis and over
         the life of the asset. In addition, the proportion of adjustable-rate
         loans in the Company's portfolio could decrease in future periods if
         market interest rates remain at or decrease below current levels due to
         refinancing activity. Further, in the event of a change in interest
         rates, prepayment and early withdrawal levels would likely deviate from
         those assumed in the analysis. Finally, the ability of many borrowers
         to repay their adjustable-rate debt may decrease in the case of an
         increase in interest rates.




                                                                              23

<PAGE>   24
                              UNITED BANCORP, INC.
                                OTHER INFORMATION
                                    FORM 10-Q

         PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS
                  Not applicable.

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS
                  Not applicable.

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
                  Not applicable.

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                  The following matters were submitted to a vote of
                  security holders at the Annual Meeting of
                  Shareholders on April 15, 1998.

                  Compensation for outside directors to be set at $1,200 per
                  year as a retainer and $250 per meeting attended:
                  Roll Call:  Ayes 1,564,846   Nays 47,286   Abstaining  37,895

                  Number of Directors to be set at a minimum of nine
                  and a maximum of thirteen.

                  Roll Call:  Ayes 1,564,846   Nays 47,286   Abstaining  37,895

                  Election of Directors for the class of 2001 to include the
                  following;
                  Herman E. Borkoski   Ayes 1,674,608  Nays 0   Abstaining 2,419
                  John M. Hoopingarner Ayes 1,674,660  Nays 0   Abstaining 2,367
                  Richard L. Riesbeck  Ayes 1,649,894  Nays 0   Abstaining   133

                  Crowe, Chizek and Company LLP, Independent Certified
                  Public Accountants to continue to serve as the
                  Company's external audit firm for the fiscal year
                  1998.

                  Roll Call:  Ayes 1,639,260   Nays 7,297    Abstaining   3,470

         ITEM 5.  OTHER INFORMATION
                  Not applicable.

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8 K

                  (a)  Exhibits

                  (b)  Reports on Form 8 K

                           The Company filed no Form 8 Ks with the
                           Securities Exchange Commission during the
                           quarter ending June 30, 1998.


SEE ACCOMPANYING NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                                                              24

<PAGE>   25

                              UNITED BANCORP, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                    FORM 10-Q







                                                                              25

<PAGE>   26

                              UNITED BANCORP, INC.
                                OTHER INFORMATION
                                    FORM 10-Q


         SIGNATURES
         Pursuant to the requirements 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.



















                  August 7, 1998          By:   /s/ James W. Everson
         ----------------------------        -----------------------------------
                  Date                    James W. Everson
                                          Chairman, President & Chief Executive 
                                          Officer






                  August 7, 1998          By:   /s/ Randall M. Greenwood
         ----------------------------        -----------------------------------
                  Date                    Randall M. Greenwood
                                          Chief Financial Officer



SEE ACCOMPANYING NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                                                              26
<PAGE>   27
                                Exhibit Index
                                -------------

<TABLE>
<CAPTION>
Exhibit No.                     Description
-----------                     -----------
<S>                             <C>
    27                          Financial Data Schedule

</TABLE>