UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q


(Mark
One)





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





For the
quarterly period ended  June 30,
2009





OR





 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    AND


EXCHANGE
ACT





For the
transition period from ____________ to _______________





Commission
File Number:  0-16540





UNITED BANCORP, INC.(Exact
      name of registrant as specified in its
charter)





Ohio
              
              34-1405357(State
      or other jurisdiction of
              
              (IRS
      Employer Identification No.)incorporation
      or organization)





201 South Fourth Street, Martins Ferry,
      Ohio  43935-0010(Address
      of principal executive offices)





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





N/A(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
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).   ̈
Yes      ̈
No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See definition of “accelerated filer”, “large accelerated
filer,” and “small reporting company” in Rule 12b-2 of the Exchange
Act.  (Check one):





Large
accelerated filer   ̈        Accelerated
filer   ̈        Non-accelerated
filer   ̈       Smaller
Reporting Company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)




Yes  ̈               No  x





Indicate
the number of shares outstanding of the issuer’s classes of common stock as of
the latest practicable date:  As of August 3 2009, 5,058,144 shares of
the Company’s common stock, $1.00 par value, were issued and
outstanding.





United
Bancorp, Inc.


Contents





PART
      I - FINANCIAL INFORMATIONItem
      1  Condensed Consolidated Balance Sheets
                    3Condensed
      Consolidated Statements of Income
                    4Condensed
      Consolidated Statements of Comprehensive Income (Loss)
                    5Condensed
      Consolidated Statements of Cash Flows
                    6Notes
      to Consolidated Financial Statements
                    8Item
      2  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                    25Item
      3  Quantitative and Qualitative Disclosures About Market
      Risk
                    34Item
      4  Controls and Procedures
                    34PART
      II - OTHER INFORMATIONItem
      1  Legal Proceedings
                    35Item
      1A  Risk Factors
                    35Item
      2  Unregistered Sales of Equity Securities and Use of
      Proceeds
                    35Item
      3  Defaults Upon Senior Securities
                    36Item
      4  Submission of Matters to a Vote of Security
      Holders
                    36Item
      5  Other Information
                    36Item
      6  Exhibits
                    37SIGNATURES
                    38




2


ITEM
1.  Financial Statements





United
Bancorp, Inc.


Condensed
Consolidated Balance Sheets


(In
thousands, except share data)


June
      30,
                                                    
                                                    
                                                    December
      31,2009
                                                    
                                                    
                                                    2008(Unaudited)AssetsCash
      and due from banks
                                                    
                                                    $
                                                    4,602
                                                    
                                                    
                                                    $
                                                    5,605Interest-bearing
      deposits
                                                    
                                                    
                                                    30,044
                                                    
                                                    
                                                    
                                                    6,684Federal
      funds sold
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    19,180Cash
      and cash equivalents
                                                    
                                                    
                                                    34,646
                                                    
                                                    
                                                    
                                                    31,469Certificates
      of deposit in other financial institutions
                                                    
                                                    
                                                    25,540
                                                    
                                                    
                                                    
                                                    —Available-for-sale
      securities
                                                    
                                                    
                                                    109,918
                                                    
                                                    
                                                    
                                                    129,416Held-to-maturity
      securities
                                                    
                                                    
                                                    15,274
                                                    
                                                    
                                                    
                                                    15,687Loans,
      net of allowance for loan losses of $3,291 and $2,770 at June 30, 2009 and
      December 31, 2008, respectively
                                                    
                                                    
                                                    235,947
                                                    
                                                    
                                                    
                                                    235,448Premises
      and equipment
                                                    
                                                    
                                                    8,710
                                                    
                                                    
                                                    
                                                    8,466Federal
      Home Loan Bank stock
                                                    
                                                    
                                                    4,810
                                                    
                                                    
                                                    
                                                    4,810Foreclosed
      assets held for sale, net
                                                    
                                                    
                                                    989
                                                    
                                                    
                                                    
                                                    1,407Intangible
      assets
                                                    
                                                    
                                                    707
                                                    
                                                    
                                                    
                                                    775Accrued
      interest receivable
                                                    
                                                    
                                                    2,258
                                                    
                                                    
                                                    
                                                    3,037Bank-owned
      life insurance
                                                    
                                                    
                                                    9,835
                                                    
                                                    
                                                    
                                                    9,653Other
      assets
                                                    
                                                    
                                                    2,205
                                                    
                                                    
                                                    
                                                    1,636Total
      assets
                                                    
                                                    $
                                                    450,839
                                                    
                                                    
                                                    $
                                                    441,804Liabilities
      and Stockholders’ EquityLiabilitiesDepositsDemand
                                                    
                                                    $
                                                    130,071
                                                    
                                                    
                                                    $
                                                    142,434Savings
                                                    
                                                    
                                                    43,387
                                                    
                                                    
                                                    
                                                    40,309Time
                                                    
                                                    
                                                    171,452
                                                    
                                                    
                                                    
                                                    164,302Total
      deposits
                                                    
                                                    
                                                    344,910
                                                    
                                                    
                                                    
                                                    347,045Short-term
      borrowings
                                                    
                                                    
                                                    11,021
                                                    
                                                    
                                                    
                                                    7,809Federal
      Home Loan Bank advances
                                                    
                                                    
                                                    49,447
                                                    
                                                    
                                                    
                                                    43,745Trade
      date security purchases
                                                    
                                                    
                                                    4,170
                                                    
                                                    
                                                    
                                                    —Subordinated
      debentures
                                                    
                                                    
                                                    4,000
                                                    
                                                    
                                                    
                                                    4,000Interest
      payable and other liabilities
                                                    
                                                    
                                                    3,702
                                                    
                                                    
                                                    
                                                    5,301Total
      liabilities
                                                    
                                                    
                                                    417,250
                                                    
                                                    
                                                    
                                                    407,900Commitments
      and Contingencies
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —Stockholders’
      EquityPreferred
      stock, no par value, authorized 2,000,000 shares; no shares
      issued
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —Common
      stock, $1 par value; authorized 10,000,000 shares; issued 5,190,304
      shares
                                                    
                                                    
                                                    5,190
                                                    
                                                    
                                                    
                                                    5,190Additional
      paid-in capital
                                                    
                                                    
                                                    24,381
                                                    
                                                    
                                                    
                                                    25,656Retained
      earnings
                                                    
                                                    
                                                    11,329
                                                    
                                                    
                                                    
                                                    9,856Stock
      held by deferred compensation plan; 152,108 and 132,906 shares at June 30,
      2009 and December 31, 2008, respectively
                                                    
                                                    
                                                    (1,467
                                                    )
                                                    
                                                    
                                                    (1,300
                                                    )Unearned
      ESOP compensation
                                                    
                                                    
                                                    (2,704
                                                    )
                                                    
                                                    
                                                    (2,718
                                                    )Accumulated
      other comprehensive loss
                                                    
                                                    
                                                    (1,609
                                                    )
                                                    
                                                    
                                                    (1,094
                                                    )Treasury
      stock, at costJune
      30, 2009 – 132,160 shares, December 31, 2008 – 164,442
    shares
                                                    
                                                    
                                                    (1,531
                                                    )
                                                    
                                                    
                                                    (1,686
                                                    )Total
      stockholders’ equity
                                                    
                                                    
                                                    33,589
                                                    
                                                    
                                                    
                                                    33,904Total
      liabilities and stockholders’ equity
                                                    
                                                    $
                                                    450,839
                                                    
                                                    
                                                    $
                                                    441,804




See
Notes to Condensed Consolidated Financial Statements
  3


United
Bancorp, Inc.


Condensed
Consolidated Statements of Income


(In
thousands, except per share data)


Unaudited





Three
      months ended
                                    
                                    
                                    Six
      months endedJune
      30,
                                    
                                    
                                    June
      30,2009
                                    
                                    
                                    2008
                                    
                                    
                                    2009
                                    
                                    
                                    2008Interest
      and dividend incomeLoans,
      including fees
                                    
                                    $
                                    4,168
                                    
                                    
                                    $
                                    4,342
                                    
                                    
                                    $
                                    8,189
                                    
                                    
                                    $
                                    8,682Taxable
      securities
                                    
                                    
                                    1,080
                                    
                                    
                                    
                                    1,646
                                    
                                    
                                    
                                    2,391
                                    
                                    
                                    
                                    3,420Non-taxable
      securities
                                    
                                    
                                    433
                                    
                                    
                                    
                                    446
                                    
                                    
                                    
                                    866
                                    
                                    
                                    
                                    893Federal
      funds sold
                                    
                                    
                                    10
                                    
                                    
                                    
                                    11
                                    
                                    
                                    
                                    17
                                    
                                    
                                    
                                    12Dividends
      on Federal Home Loan Bank stock and other
                                    
                                    
                                    170
                                    
                                    
                                    
                                    36
                                    
                                    
                                    
                                    311
                                    
                                    
                                    
                                    134Total
      interest and dividend income
                                    
                                    
                                    5,861
                                    
                                    
                                    
                                    6,481
                                    
                                    
                                    
                                    11,774
                                    
                                    
                                    
                                    13,141Interest
      expenseDepositsDemand
                                    
                                    
                                    100
                                    
                                    
                                    
                                    414
                                    
                                    
                                    
                                    294
                                    
                                    
                                    
                                    1,093Savings
                                    
                                    
                                    42
                                    
                                    
                                    
                                    35
                                    
                                    
                                    
                                    80
                                    
                                    
                                    
                                    65Time
                                    
                                    
                                    1,357
                                    
                                    
                                    
                                    1,531
                                    
                                    
                                    
                                    2,707
                                    
                                    
                                    
                                    3,238Borrowings
                                    
                                    
                                    528
                                    
                                    
                                    
                                    537
                                    
                                    
                                    
                                    1,020
                                    
                                    
                                    
                                    1,264Total
      interest expense
                                    
                                    
                                    2,027
                                    
                                    
                                    
                                    2,517
                                    
                                    
                                    
                                    4,101
                                    
                                    
                                    
                                    5,660Net
      interest income
                                    
                                    
                                    3,834
                                    
                                    
                                    
                                    3,964
                                    
                                    
                                    
                                    7,673
                                    
                                    
                                    
                                    7,481Provision
      for loan losses
                                    
                                    
                                    334
                                    
                                    
                                    
                                    395
                                    
                                    
                                    
                                    658
                                    
                                    
                                    
                                    563Net
      interest income after provision for loan losses
                                    
                                    
                                    3,500
                                    
                                    
                                    
                                    3,569
                                    
                                    
                                    
                                    7,015
                                    
                                    
                                    
                                    6,918Noninterest
      incomeService
      charges on deposit accounts
                                    
                                    
                                    574
                                    
                                    
                                    
                                    511
                                    
                                    
                                    
                                    1,086
                                    
                                    
                                    
                                    1,002Realized
      gains on sales of securities
                                    
                                    
                                    25
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    25
                                    
                                    
                                    
                                    —Realized
      gains on sales of loans
                                    
                                    
                                    37
                                    
                                    
                                    
                                    45
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    59Realized
      gains on sales of other real estate and repossessed assets
                                    
                                    
                                    36
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    79
                                    
                                    
                                    
                                    3Other
      income
                                    
                                    
                                    141
                                    
                                    
                                    
                                    202
                                    
                                    
                                    
                                    362
                                    
                                    
                                    
                                    450Total
      noninterest income
                                    
                                    
                                    813
                                    
                                    
                                    
                                    758
                                    
                                    
                                    
                                    1,602
                                    
                                    
                                    
                                    1,514Noninterest
      expenseSalaries
      and employee benefits
                                    
                                    
                                    1,665
                                    
                                    
                                    
                                    1,608
                                    
                                    
                                    
                                    3,287
                                    
                                    
                                    
                                    3,087Net
      occupancy expense
                                    
                                    
                                    404
                                    
                                    
                                    
                                    341
                                    
                                    
                                    
                                    803
                                    
                                    
                                    
                                    661Provision
      for losses on foreclosed real estate
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    155Professional
      services
                                    
                                    
                                    200
                                    
                                    
                                    
                                    182
                                    
                                    
                                    
                                    427
                                    
                                    
                                    
                                    372Insurance
                                    
                                    
                                    313
                                    
                                    
                                    
                                    105
                                    
                                    
                                    
                                    446
                                    
                                    
                                    
                                    208FDIC
      special assessment
                                    
                                    
                                    225
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    225
                                    
                                    
                                    
                                    —Franchise
      and other taxes
                                    
                                    
                                    122
                                    
                                    
                                    
                                    118
                                    
                                    
                                    
                                    246
                                    
                                    
                                    
                                    238Advertising
                                    
                                    
                                    93
                                    
                                    
                                    
                                    79
                                    
                                    
                                    
                                    186
                                    
                                    
                                    
                                    174Stationery
      and office supplies
                                    
                                    
                                    88
                                    
                                    
                                    
                                    86
                                    
                                    
                                    
                                    169
                                    
                                    
                                    
                                    151Amortization
      of intangible asset
                                    
                                    
                                    30
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    68
                                    
                                    
                                    
                                    —Other
      expenses
                                    
                                    
                                    427
                                    
                                    
                                    
                                    483
                                    
                                    
                                    
                                    1,019
                                    
                                    
                                    
                                    933Total
      noninterest expense
                                    
                                    
                                    3,567
                                    
                                    
                                    
                                    3,002
                                    
                                    
                                    
                                    6,876
                                    
                                    
                                    
                                    5,979Income
      before federal income taxes
                                    
                                    
                                    746
                                    
                                    
                                    
                                    1,325
                                    
                                    
                                    
                                    1,741
                                    
                                    
                                    
                                    2,453Federal
      income taxes
                                    
                                    
                                    74
                                    
                                    
                                    
                                    300
                                    
                                    
                                    
                                    268
                                    
                                    
                                    
                                    525Net
      income
                                    
                                    $
                                    672
                                    
                                    
                                    $
                                    1,025
                                    
                                    
                                    $
                                    1,473
                                    
                                    
                                    $
                                    1,928EARNINGS
      PER COMMON SHAREBasic
                                    
                                    $
                                    0.15
                                    
                                    
                                    $
                                    0.22
                                    
                                    
                                    $
                                    0.32
                                    
                                    
                                    $
                                    0.42Diluted
                                    
                                    $
                                    0.15
                                    
                                    
                                    $
                                    0.22
                                    
                                    
                                    $
                                    0.32
                                    
                                    
                                    $
                                    0.42DIVIDENDS
      PER COMMON SHARE
                                    
                                    $
                                    0.14
                                    
                                    
                                    $
                                    0.13
                                    
                                    
                                    $
                                    0.28
                                    
                                    
                                    $
                                    0.26




See
Notes to Condensed Consolidated Financial Statements




4


United
Bancorp, Inc.


Condensed
Consolidated Statements of Comprehensive Income (Loss)


(In
thousands)


Unaudited




Three
      months ended
                        
                        
                        Six
      months endedJune
      30,
                        
                        
                        June
      30,2009
                        
                        
                        2008
                        
                        
                        2009
                        
                        
                        2008Net
      income
                        
                        $
                        672
                        
                        
                        $
                        1,025
                        
                        
                        $
                        1,473
                        
                        
                        $
                        1,928Other
      comprehensive income (loss), net of tax:Unrealized
      holding losses on securities during theperiod,
      net of tax benefits of $279, $1,146,$257,
      and $686 for each respective period
                        
                        
                        (541
                        )
                        
                        
                        (2,225
                        )
                        
                        
                        (499
                        )
                        
                        
                        (1,331
                        )Reclassification
      adjustment for realized gainsincluded
      in income, net of taxes
                        
                        
                        (16
                        )
                        
                        
                        —
                        
                        
                        
                        (16
                        )
                        
                        
                        —Comprehensive
      income (loss)
                        
                        $
                        115
                        
                        
                        $
                        (1,200
                        )
                        
                        $
                        958
                        
                        
                        $
                        597Accumulated
      comprehensive loss
                        
                        $
                        (1,609
                        )
                        
                        $
                        (1,831
                        )
                        
                        $
                        (1,609
                        )
                        
                        $
                        (1,831
                        )





See
Notes to Condensed Consolidated Financial Statements


5


United
Bancorp, Inc.


Condensed
Consolidated Statements of Cash Flows


For
the Six Months Ended June 30, 2009 and 2008


(In
thousands)


(Unaudited)





2009
                
                
                2008Operating
      ActivitiesNet
      income
                
                $
                1,473
                
                
                $
                1,928Items
      not requiring (providing) cashAmortization
      of premiums and discounts on securities, net
                
                
                119
                
                
                
                40Depreciation
      and amortization
                
                
                365
                
                
                
                272Amortization
      of intangible asset
                
                
                68
                
                
                
                —Provision
      for loan losses
                
                
                658
                
                
                
                563Provision
      for losses on foreclosed assets
                
                
                —
                
                
                
                155Increase
      in value of bank-owned life insurance
                
                
                (182
                )
                
                
                (114
                )Federal
      Home Loan Bank stock dividends
                
                
                —
                
                
                
                (60
                )Gain
      on sale of securities
                
                
                (25
                )
                
                
                —Gain
      on called securities
                
                
                —
                
                
                
                (25
                )Gain
      on sale of loans
                
                
                (50
                )
                
                
                (59
                )Proceeds
      from sale of loans
                
                
                3,379
                
                
                
                2,460Loans
      originated for sale
                
                
                (3,329
                )
                
                
                (2,401
                )Gain
      on sale of foreclosed assets
                
                
                (79
                )
                
                
                (3
                )Deferred
      income taxes
                
                
                —
                
                
                
                510Amortization
      of mortgage servicing rights
                
                
                107
                
                
                
                43Net
      change in accrued interest receivable and other assets
                
                
                574
                
                
                
                (491
                )Net
      change in accrued expenses and other liabilities
                
                
                (2,156
                )
                
                
                (2,519
                )Net
      cash provided by operating activities
                
                
                922
                
                
                
                299Investing
      ActivitiesSecurities
      available for sale:Sales,
      maturities, prepayments and calls
                
                
                78,366
                
                
                
                72,311Purchases
                
                
                (55,327
                )
                
                
                (46,107
                )Securities
      held to maturity:Maturities,
      prepayments and calls
                
                
                430
                
                
                
                —Net
      change in loans
                
                
                (1,543
                )
                
                
                (89
                )Net
      change in certificates of deposit in other financial
      institutions
                
                
                (25,540
                )
                
                
                —Proceeds
      from sale of premises and equipment
                
                
                36
                
                
                
                —Purchases
      of premises and equipment
                
                
                (609
                )
                
                
                (325
                )Proceeds
      from sale of foreclosed assets
                
                
                935
                
                
                
                3Net
      cash provided by (used in) investing activities
                
                
                (3,252
                )
                
                
                25,793




See
Notes to Condensed Consolidated Financial Statements


6


United
Bancorp, Inc.


Condensed
Consolidated Statements of Cash Flows (continued)


For
the Six Months Ended June 30, 2009 and 2008


(In
thousands)


(Unaudited)





2009
                        
                        
                        2008Financing
      ActivitiesNet
      change in deposits
                        
                        $
                        (2,135
                        )
                        
                        $
                        (8,572
                        )Net
      change  in short-term borrowings
                        
                        
                        3,212
                        
                        
                        
                        (12,854
                        )Net
      change in long-term borrowings
                        
                        
                        5,702
                        
                        
                        
                        —Treasury
      stock issued, net of purchases
                        
                        
                        138
                        
                        
                        
                        174Proceeds
      from issuance of common stock
                        
                        
                        —
                        
                        
                        
                        99Cash
      dividends paid on common stock
                        
                        
                        (1,410
                        )
                        
                        
                        (1,308
                        )Net
      cash provided by (used in) financing activities
                        
                        
                        5,507
                        
                        
                        
                        (22,461
                        )Increase
      in Cash and Cash Equivalents
                        
                        
                        3,177
                        
                        
                        
                        3,631Cash
      and Cash Equivalents, Beginning of Period
                        
                        
                        31,469
                        
                        
                        
                        12,324Cash
      and Cash Equivalents, End of Period
                        
                        $
                        34,646
                        
                        
                        $
                        15,955Supplemental
      Cash Flows InformationInterest
      paid on deposits and borrowings
                        
                        $
                        4,154
                        
                        
                        $
                        5,892Federal
      income taxes paid
                        
                        $
                        227
                        
                        
                        $
                        150Supplemental
      Disclosure of Non-Cash Investing and Financing ActivitiesTransfers
      from loans to foreclosed assets held for sale
                        
                        $
                        436
                        
                        
                        $
                        131Unrealized
      losses on securities designated as available for sale, net of related tax
      effects
                        
                        $
                        (499
                        )
                        
                        $
                        (1,331
                        )Recognition
      of mortgage servicing rights
                        
                        $
                        —
                        
                        
                        $
                        30




See
Notes to Condensed Consolidated Financial Statements


7


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008





Note
      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 financial position of United Bancorp, Inc. (“Company”) at June 30, 2009, and
its results of operations and cash flows for the six and three month periods
presented.  All such adjustments are normal and recurring in
nature.  The accompanying condensed consolidated financial statements
have been prepared in accordance with the instructions for Form 10-Q and,
therefore, do not purport to contain all the necessary financial disclosures
required by accounting principles generally accepted in the United States of
America that might otherwise be necessary in the circumstances and should be
read in conjunction with the Company’s consolidated financial statements and
related notes for the year ended December 31, 2008 included in its Annual Report
on Form 10-K.  Reference is made to the accounting policies of the
Company described in the Notes to the Consolidated Financial Statements
contained in its Annual Report on Form 10-K.  The results of
operations for the six and three months ended June 30, 2009, are not necessarily
indicative of the results to be expected for the full year.  The
condensed consolidated balance sheet of the Company as of December 31, 2008 has
been derived from the audited consolidated balance sheet of the Company as of
that date.




Principles
of Consolidation




The
consolidated financial statements include the accounts of United Bancorp, Inc.
(“United” or “the Company”) and its wholly-owned subsidiary, The Citizens
Savings Bank of Martins Ferry, Ohio (“the Bank” or “Citizens”). The Company
operates in two divisions, The Community Bank, a division of The Citizens
Savings Bank and The Citizens Bank, a division of The Citizens Savings
Bank.  All intercompany transactions and balances have been eliminated
in consolidation.




On
September 19, 2008, Citizens acquired from the Federal Deposit Insurance
Corporation (“FDIC”) the deposits of three banking offices of a failed
institution in Belmont County, Ohio.  Deposits acquired totaled
approximately $39.3 million.  These acquired deposits included
approximately $9.0 million of brokered deposits that were originated by the
prior financial institution.  Immediately after the acquisition, the
Company lowered the interest rates on these brokered deposits and, as
anticipated, these deposit accounts were closed by December 31,
2008.




Nature
of Operations




The
Company’s revenues, operating income, and assets are almost exclusively derived
from banking.  Accordingly, all of the Company’s banking operations
are considered by management to be aggregated in one reportable operating
segment.  Customers are mainly located in Athens, Belmont, Carroll,
Fairfield, Harrison, Hocking, Jefferson, and Tuscarawas Counties and the
surrounding localities in northeastern, east-central and southeastern Ohio, and
include a wide range of individuals, businesses and other
organizations.  The Citizens Bank division conducts its business
through its main office in Martins Ferry, Ohio and twelve branches in
Bridgeport, Colerain, Dellroy, Dillonvale, Dover, Jewett, New Philadelphia, St.
Clairsville East, Saint Clairsville West, Sherrodsville, Strasburg, and
Tiltonsville, Ohio.  The Community Bank division conducts its business
through its main office in Lancaster, Ohio and seven offices in Amesville,
Glouster, Lancaster, and Nelsonville, Ohio.  The Company’s primary
deposit products are checking, savings, and term certificate accounts, and its
primary lending products are residential mortgage, commercial, and installment
loans.  Substantially all loans are secured by specific items of
collateral including business assets, consumer assets and real estate and are
not considered “sub prime” type loans.




8


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008





Commercial
loans are expected to be repaid from cash flow from operations of
businesses.  Real estate loans are secured by both residential and
commercial real estate.  Net interest income is affected by the
relative amount of interest-earning assets and interest-bearing liabilities and
the interest received or paid on these balances.  The level of
interest rates paid or received by the Company can be significantly influenced
by a number of environmental factors, such as governmental monetary policy, that
are outside of management’s control.




Use
of Estimates




To
prepare financial statements in conformity with accounting principles generally
accepted in the United States of America, 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 allowance
for loan losses and fair values of financial instruments are particularly
subject to change.




Securities




Available-for-sale
securities, which include any security for which the Company has no immediate
plan to sell but which may be sold in the future, are carried at fair
value.  Unrealized gains and losses are recorded, net of related
income tax effects, in other comprehensive income.




Held-to-maturity
securities, which include any security for which the Company has the positive
intent and ability to hold until maturity, are carried at historical cost
adjusted for amortization of premiums and accretion of discounts.




Amortization
of premiums and accretion of discounts are recorded as interest income from
securities.  Realized gains and losses are recorded as net security
gains (losses).  Gains and losses on sales of securities are
determined on the specific-identification method.




Allowance
for Loan Losses




The
allowance for loan losses is a valuation allowance for probable incurred credit
losses, increased by the provision for loan losses and decreased by charge-offs
less recoveries.  Management estimates the allowance balance required
based on past loan loss experience, the nature and volume of the portfolio,
information about specific borrower situations and estimated collateral values,
economic conditions and other factors.  Allocations of the allowance
may be made for specific loans, but the entire allowance is available for any
loan that, in management’s judgment, should be charged-off.  Loan
losses are charged against the allowance when management believes the
uncollectibility of a loan balance is confirmed.  The Company accounts
for impaired loans in accordance with Statement of Financial Accounting
Standards (“SFAS”) No. 114, “Accounting for Creditors for Impairment of a
Loan.”  SFAS 114 requires that impaired loans be measured based upon
the present value of expected future cash flows discounted at the loan’s
effective interest rate or, as an alternative, at the loan’s observable market
price or fair value of the collateral.  A loan is defined under SFAS
No. 114 as impaired when, based on current information and events, it is
probable that a creditor will be unable to collect all amounts due according to
the contractual terms of the loan agreement.  In applying the
provisions of SFAS No. 114, the Company considers its investment in one-to-four
family residential loans and consumer installment loans to be homogenous and
therefore excluded from separate identification for evaluation of
impairment.  With respect to the Company’s investment in
nonresidential and multi-family residential real estate loans, and its
evaluation of impairment thereof, such loans are generally collateral dependent
and, as a result, are carried as a practical expedient at the fair value of the
collateral.




9


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008





Collateral
dependent loans which are more than ninety days delinquent are considered to
constitute more than a minimum delay in repayment and are evaluated for
impairment under SFAS No. 114 at that time.




Earnings
Per Share




Basic
earnings per common share is computed based upon the weighted-average number of
common shares outstanding during the period, less shares in the ESOP which are
unallocated and not committed to be released.  At June 30, 2009, the
ESOP held 283,635 unallocated shares which were not included in weighted-average
common shares outstanding.  Diluted earnings per common share include
the dilutive effect of additional potential common shares issuable under the
Company’s stock option plans.




Three
      months ended
                      June
      30,
                    
                    
                    Six
      months ended
                      June
      30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008BasicNet
      income (In thousands)
                    
                    $
                    672
                    
                    
                    $
                    1,025
                    
                    
                    $
                    1,473
                    
                    
                    $
                    1,928Weighted
      average common shares outstanding
                    
                    
                    4,610,248
                    
                    
                    
                    4,579,773
                    
                    
                    
                    4,606,728
                    
                    
                    
                    4,575,930Basic
      earnings per common share
                    
                    $
                    0.15
                    
                    
                    $
                    0.22
                    
                    
                    $
                    0.32
                    
                    
                    $
                    0.42DilutedNet
      income (In thousands)
                    
                    $
                    672
                    
                    
                    $
                    1,025
                    
                    
                    $
                    1,473
                    
                    
                    $
                    1,928Weighted
      average common shares outstanding for basic earnings per common
      share
                    
                    
                    4,610,248
                    
                    
                    
                    4,579,773
                    
                    
                    
                    4,606,728
                    
                    
                    
                    4,575,930Add:  Dilutive
      effects of assumed exercise of stock options
                    
                    
                    —
                    
                    
                    
                    161
                    
                    
                    
                    —
                    
                    
                    
                    145Average
      shares and dilutive potential common shares
                    
                    
                    4,610,248
                    
                    
                    
                    4,579,934
                    
                    
                    
                    4,606,728
                    
                    
                    
                    4,576,075Diluted
      earnings per common share
                    
                    $
                    0.15
                    
                    
                    $
                    0.22
                    
                    
                    $
                    0.32
                    
                    
                    $
                    0.42Number
      of stock options not considered in computing diluted earnings per share
      due to antidilutive nature
                    
                    
                    55,529
                    
                    
                    
                    29,040
                    
                    
                    
                    55,529
                    
                    
                    
                    29,040


10


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Options
to purchase 55,529 shares of common stock at a weighted-average exercise price
of $10.34 per share were outstanding at June 30, 2009, but were not included in
the computation of diluted EPS because the options’ exercise price was greater
than the average market price of the common shares.  Options to
purchase 55,529 shares of common stock at a weighted-average exercise price of
$10.34 per share were outstanding at June 30, 2008, but 29,040 options to
purchase common stock were not included in the computation of diluted EPS
because the options’ exercise price was greater than the average market price of
the common shares.




Income
Taxes




The
Company is subject to income taxes in the U.S. federal jurisdiction, as well as
various state jurisdictions.  Tax regulations within each jurisdiction
are subject to the interpretation of the related tax laws and regulations and
require significant judgment to apply.  With few exceptions, the
Company is no longer subject to U.S. federal, state and local income tax
examinations by tax authorities for the years before 2005.




Recent
Accounting Pronouncements




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations,” which replaces SFAS No. 141.  The Statement applies to
all transactions or other events in which one entity obtains control of one or
more businesses.  It requires all assets acquired, liabilities assumed
and any noncontrolling interest to be measured at fair value at the acquisition
date.  The Statement requires certain costs such as
acquisition-related costs that were previously recognized as a component of the
purchase price, and expected restructuring costs that were previously recognized
as an assumed liability, to be recognized separately from the acquisition as an
expense when incurred.




SFAS No.
141(R) applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008 and may not be applied before that
date.  Management adopted SFAS No. 141(R) effective January 1, 2009,
as required, without material effect on the Company’s financial
statements.




Concurrent
with SFAS No. 141 (revised 2007), the FASB recently issued SFAS No. 160,“Noncontrolling
Interests in Consolidated Financial Statements, an Amendment of ARB
51.”  SFAS No. 160 amends ARB 51 to establish accounting and reporting
standards for the noncontrolling interest (formerly known as minority interest)
in a subsidiary and for the deconsolidation of a subsidiary.  A
subsidiary, as defined by SFAS No. 160, includes a variable interest entity that
is consolidated by a primary beneficiary.




A
noncontrolling interest in a subsidiary, previously reported in the statement of
financial position as a liability or in the mezzanine section outside of
permanent equity, will be included within consolidated equity as a separate line
item upon the adoption of SFAS No. 160.  Further, consolidated net
income will be reported at amounts that include both the parent (or primary
beneficiary) and the noncontrolling interest with separate disclosure on the
face of the consolidated statement of income of the amounts attributable to the
parent and to the noncontrolling interest.




SFAS No.
160 is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008.  Management adopted
SFAS No. 160 effective January 1, 2009, as required, without material effect on
the Company’s financial statements.




11


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




In April
2009, the FASB issued three new FASB Staff Positions (FSPs) to
address:  (1) determining whether a market is not active and a
transaction is not orderly, (2) recognition and presentation of
other-than-temporary impairments and (3) interim disclosures of fair value of
financial instruments, as follows:




FSP 157-4
“Determining When the Volume and Level of Activity for the Asset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not Orderly,”
addresses the criteria to be used in the determination of an active market in
determining whether observable transactions are Level 1 or Level 2 under the
framework established by FAS 157.  The FSP reiterates fair value is
based on the notion of exit price in an orderly transaction between willing
market participants at the valuation date.  The FSP is effective for
interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. The Company adopted FSP 157-4
as of June 30, 2009, without material effect on the Company’s consolidated
statements of financial position and results of operations.




FSP 115-2
and 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments”
addresses the FASB conclusion that changes were necessary to the process for
determining whether impairment on debt securities is
other-than-temporary.  The FSP replaces the requirement that an
entity’s management must assert it has both the intent and the ability to hold
an impaired debt security until recovery with a requirement that management
assert:




·
            It
      does not have the intent to sell the security;
  and


·
            It
      is more-likely-than-not it will not have to sell the security before
      recovery of its amortized cost basis less any current period credit
      losses




If those
two assertions are true, only the portion of the impairment due to credit loss
is recorded in income.  Other portions of the impairment (any portions
not related to credit loss) are recorded in other comprehensive
income.  Credit loss is defined in the FSP as the difference between
the present value of the cash flows expected to be collected and the amortized
cost basis.  If the present value of cash flows expected to be
collected is less than the amortized cost basis of the security, the entire
amortized cost basis of the security will not be recovered (that is, a credit
loss exists) and an other-than-temporary impairment shall be considered to have
occurred and the portion of the loss attributable to the credit loss is recorded
in net income.  The FSP is effective for interim and annual periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009. The Company adopted FSP 115-2 and 124-2 as of June 30,
2009, without material effect on the Company’s consolidated statements of
financial position and results of operations.




FSB 107-1
and APB 28-1 “Interim Disclosures About Fair Values of Financial Instruments”,
requires publicly traded companies to include disclosures about fair value in
interim financial statements for all financial instruments within the scope of
FAS 107.  The specific disclosures required include the method(s) and
significant assumptions used to estimate the fair value of financial
instruments, as well as changes in those methods and assumptions, and the
carrying values of those instruments.  The disclosures must clearly
identify how the carrying value reported in the disclosures relates to what is
reported in the statement of financial position.  The FSP is effective
for interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. The Company adopted FSP 107-1
and APB 28-1 as of June 30, 2009, without material effect on the Company’s
consolidated statements of financial position and results of
operation.


12


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




In May
2009, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events”, to
incorporate the accounting and disclosure requirements for subsequent events
into U.S. generally accepted accounting principles.  SFAS No. 165
introduces new terminology, defines a date through which management must
evaluate subsequent events, and lists the circumstances under which an entity
must recognize and disclose events or transactions occurring after the
balance-sheet date.  The Company adopted SFAS No. 165 as of June 30,
2009, which was the required effective date.




The
Company evaluated its June 30, 2009 financial statements for subsequent events
through August 13, 2009, the date the financial statements were
issued.  The Company is not aware of any subsequent events which would
require recognition or disclosure in the financial statements.




In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial
Assets: an Amendment of FASB Statement No. 140”.SFAS No. 166
changes the derecognition guidance for transferors of financial assets,
including entities that sponsor securitizations, to align that guidance with the
original intent of SFAS No. 140, “Accounting for the Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities”.  SFAS No. 166
also eliminates the exemption from consolidation for qualifying special-purpose
entities (QSPEs).  As a result, all existing QSPEs need to be
evaluated to determine whether the QSPE should be consolidated in accordance
with SFAS No. 166.




SFAS No.
166 is effective as of the beginning of a reporting entity’s first annual
reporting period beginning after November 15, 2009 (January 1, 2010 as to the
Company), for interim periods within that first annual reporting period, and for
interim and annual reporting periods thereafter. The recognition and measurement
provisions of SFAS No. 166 must be applied to transfers that occur on or after
the effective date.  Early application is prohibited.  SFAS
No. 166 also requires additional disclosures about transfers of financial assets
that occur both before and after the effective date.  The Company does
not believe that the adoption of SFAS No. 166 will have a significant effect on
its consolidated financial statements.




In June
2009, the FASB issued SFAS No.167, “Amendments to FASB Interpretation No.
46(R)”, to improve how enterprises account for and disclose their involvement
with variable interest entities (VIE’s), which are special-purpose entities, and
other entities whose equity at risk is insufficient or lack certain
characteristics.  Among other things, SFAS No. 167 changes how an
entity determines whether it is the primary beneficiary of a variable interest
entity (VIE) and whether that VIE should be consolidated.  SFAS No.
167 requires an entity to provide significantly more disclosures about its
involvement with VIEs.  As a result, the Company must comprehensively
review its involvements with VIEs and potential VIEs, including entities
previous considered to be qualifying special purpose entities, to determine the
effect on its consolidated financial statements and related
disclosures.




SFAS No.
167 is effective as of the beginning of a reporting entity’s first annual
reporting period that begins after November 15, 2009 (January 1, 2010 as to the
Company) and for interim periods within the first annual reporting
period.  Earlier application is prohibited.  The Company
does not believe that the adoption of SFAS No. 167 will have a significant
effect on its consolidated financial statements.




13




United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Note
      2:
            Securities




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




Amortized
                                  Cost
                                
                                
                                Gross
                                  Unrealized
                                  Gains
                                
                                
                                Gross
                                  Unrealized
                                  Losses
                                
                                
                                Approximate
                                  Fair
      Value(In
      thousands)Available-for-sale
      Securities:June
      30, 2009 (unaudited):U.S.
      government agencies
                                
                                $
                                69,498
                                
                                
                                $
                                142
                                
                                
                                $
                                (431
                                )
                                
                                $
                                69,209State
      and political subdivisions
                                
                                
                                26,965
                                
                                
                                
                                52
                                
                                
                                
                                (918
                                )
                                
                                
                                26,099Mortgage-backed
      securities
                                
                                
                                14,220
                                
                                
                                
                                392
                                
                                
                                
                                (6
                                )
                                
                                
                                14,606Equity
      securities
                                
                                
                                4
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                4$
                                110,687
                                
                                
                                $
                                586
                                
                                
                                $
                                (1,355
                                )
                                
                                $
                                109,918December
      31, 2008:U.S.
      government agencies
                                
                                $
                                86,458
                                
                                
                                $
                                928
                                
                                
                                $
                                —
                                
                                
                                $
                                87,386State
      and political subdivisions
                                
                                
                                26,970
                                
                                
                                
                                18
                                
                                
                                
                                (1,252
                                )
                                
                                
                                25,736Mortgage-backed
      securities
                                
                                
                                15,972
                                
                                
                                
                                319
                                
                                
                                
                                (1
                                )
                                
                                
                                16,290Equity
      securities
                                
                                
                                4
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                4$
                                129,404
                                
                                
                                $
                                1,265
                                
                                
                                $
                                (1,253
                                )
                                
                                $
                                129,416Amortized
                                  Cost
                                
                                
                                Gross
                                  Unrealized
                                  Gains
                                
                                
                                Gross
                                  Unrealized
                                  Losses
                                
                                
                                Approximate
                                  Fair
      Value(In
      thousands)Held-to-maturity
      Securities:June
      30, 2009 (unaudited):State
      and political subdivisions
                                
                                $
                                15,274
                                
                                
                                $
                                249
                                
                                
                                $
                                (101
                                )
                                
                                $
                                15,422December
      31, 2008:State
      and political subdivisions
                                
                                $
                                15,687
                                
                                
                                $
                                185
                                
                                
                                $
                                (175
                                )
                                
                                $
                                15,697




14


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




The
amortized cost and fair value of available-for-sale securities and
held-to-maturity securities at June 30, 2009, by contractual maturity, are
shown below.  Expected maturities will differ from contractual
maturities because issuers may have the right to call or prepay obligations with
or without call or prepayment penalties.




Available-for-sale
                  
                  
                  Held-to-maturityAmortized
                    Cost
                  
                  
                  Fair
                    Value
                  
                  
                  Amortized
                    Cost
                  
                  
                  Fair
                    Value(In
      thousands, unaudited)Within
      one year
                  
                  $
                  350
                  
                  
                  $
                  354
                  
                  
                  $
                  280
                  
                  
                  $
                  283One
      to five years
                  
                  
                  3,460
                  
                  
                  
                  3,498
                  
                  
                  
                  3,359
                  
                  
                  
                  3,456Five
      to ten years
                  
                  
                  20,645
                  
                  
                  
                  20,798
                  
                  
                  
                  5,828
                  
                  
                  
                  5,946After
      ten years
                  
                  
                  86,228
                  
                  
                  
                  85,264
                  
                  
                  
                  5,807
                  
                  
                  
                  5,737110,683
                  
                  
                  
                  109,914
                  
                  
                  
                  15,274
                  
                  
                  
                  15,422Equity
      securities
                  
                  
                  4
                  
                  
                  
                  4
                  
                  
                  
                  —
                  
                  
                  
                  —Totals
                  
                  $
                  110,687
                  
                  
                  $
                  109,918
                  
                  
                  $
                  15,274
                  
                  
                  $
                  15,422




The
carrying value of securities pledged as collateral, to secure public deposits
and for other purposes, was $82.9 million at June 30, 2009 and $89.7 million at
December 31, 2008.




Information
with respect to sales of available for sale securities and resulting gross
realized gains and losses was as follows:




Six
      months ended June 30,2009
                  
                  
                  2008(In
      thousands, unaudited)Proceeds
      from sale
                  
                  $
                  1,000
                  
                  
                  $
                  —Gross
      gains
                  
                  
                  —
                  
                  
                  
                  —Gross
      losses
                  
                  
                  25
                  
                  
                  
                  —





Certain
investments in debt securities are reported in the financial statements at an
amount less than their historical cost.  The total fair value of these
investments was $66.7 million at June 30, 2009, and $31.5 million at December
31, 2008, which represented approximately 53% and 22%, respectively, of the
Company’s available-for-sale and held-to-maturity investment portfolio at each
respective date.




Should
the impairment of any of these securities become other than temporary, the cost
basis of the investment will be reduced and the resulting loss recognized in net
income in the period the other-than-temporary impairment is
identified.




15




United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




The
following table shows the Company’s investments’ gross unrealized losses and
fair value, aggregated by investment category and length of time that individual
securities have been in a continuous unrealized loss position at June 30, 2009
and December 31, 2008.




June
      30, 2009Less
      than 12 Months
                    
                    
                    12
      Months or More
                    
                    
                    TotalDescription
      of
                      Securities
                    
                    Fair
      Value
                    
                    
                    Unrealized
                      Losses
                    
                    
                    Fair
      Value
                    
                    
                    Unrealized
                      Losses
                    
                    
                    Fair
      Value
                    
                    
                    Unrealized
                      Losses(In
      thousands, unaudited)US
      Government agency securities
                    
                    $
                    39,921
                    
                    
                    $
                    (431
                    )
                    
                    $
                    —
                    
                    
                    $
                    —
                    
                    
                    $
                    39,921
                    
                    
                    $
                    (431
                    )State
      and political subdivisions
                    
                    
                    22,705
                    
                    
                    
                    (794
                    )
                    
                    
                    3,357
                    
                    
                    
                    (225
                    )
                    
                    
                    26,062
                    
                    
                    
                    (1,019
                    )Mortgage-backed
      securities
                    
                    
                    732
                    
                    
                    
                    (6
                    )
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    732
                    
                    
                    
                    (6
                    )Total
      temporarily impaired securities
                    
                    $
                    63,358
                    
                    
                    $
                    (1,231
                    )
                    
                    $
                    3,357
                    
                    
                    $
                    (225
                    )
                    
                    $
                    66,715
                    
                    
                    $
                    (1,456
                    )







December
      31, 2008Less
      than 12 Months
                  
                  
                  12
      Months or More
                  
                  
                  TotalDescription
      of
                    Securities
                  
                  Fair
      Value
                  
                  
                  Unrealized
                    Losses
                  
                  
                  Fair
      Value
                  
                  
                  Unrealized
                    Losses
                  
                  
                  Fair
      Value
                  
                  
                  Unrealized
                    Losses(In
      thousands)Mortgage-backed
      securities
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  288
                  
                  
                  $
                  (1
                  )
                  
                  $
                  288
                  
                  
                  $
                  (1
                  )State
      and political subdivisions
                  
                  
                  31,249
                  
                  
                  
                  (1,427
                  )
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  31,249
                  
                  
                  
                  (1,427
                  )Total
      temporarily impaired securities
                  
                  $
                  31,249
                  
                  
                  $
                  (1,427
                  )
                  
                  $
                  288
                  
                  
                  $
                  (1
                  )
                  
                  $
                  31,537
                  
                  
                  $
                  (1,428
                  )




U.S.
Government Agencies




The
unrealized losses on the Company’s investments in direct obligations of U.S.
government agencies were primarily caused by changes in interest
rates.  The contractual terms of those investments do not permit the
issuer to settle the securities at a price less than the amortized cost bases of
the investments.  Because the Company does not intend to sell the
investments and it is not more likely than not the Company will be required to
sell the investments before recovery of their amortized cost bases, which may be
maturity, the Company does not consider those investments to be
other-than-temporarily impaired at June 30, 2009.


16


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Mortgage-backed
Securities




The
unrealized losses on the Company’s investment in mortgage-backed securities were
primarily caused by changes in interest rates.  The Company expects to
recover the amortized cost basis over the term of the
securities.  Because the decline in market value is attributable to
changes in interest rates and not credit quality, and because the Company does
not intend to sell the investments and it is not more likely than not the
Company will be required to sell the investments before recovery of their
amortized cost bases, which may be maturity, the Company does not consider those
investments to be other-than-temporarily impaired at June 30, 2009.




State
and Political Subdivisions




The
unrealized losses on the Company’s investments in securities of state and
political subdivisions were primarily caused by changes in interest
rates.  The contractual terms of those investments do not permit the
issuer to settle the securities at a price less than the amortized cost bases of
the investments.  Because the Company does not intend to sell the
investments and it is not more likely than not the Company will be required to
sell the investments before recovery of their amortized cost bases, which may be
maturity, the Company does not consider those investments to be
other-than-temporarily impaired at June 30, 2009.




Note
      3:
            Allowance
      for Loan Losses




The
activity in the allowance for loan losses was as follows:




Three
      months ended
                    June
      30,
                  
                  
                  Six
      months ended
                    June
      30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008(In
      thousands)Beginning
      balance
                  
                  $
                  3,001
                  
                  
                  $
                  2,540
                  
                  
                  $
                  2,770
                  
                  
                  $
                  2,447Provision
      for loan losses
                  
                  
                  334
                  
                  
                  
                  395
                  
                  
                  
                  658
                  
                  
                  
                  563Loans
      charged-off
                  
                  
                  (114
                  )
                  
                  
                  (141
                  )
                  
                  
                  (254
                  )
                  
                  
                  (263
                  )Recoveries
      of previous charge-offs
                  
                  
                  70
                  
                  
                  
                  76
                  
                  
                  
                  117
                  
                  
                  
                  123Ending
      balance
                  
                  $
                  3,291
                  
                  
                  $
                  2,870
                  
                  
                  $
                  3,291
                  
                  
                  $
                  2,870




The
Company’s impaired loans totaled $6.1 million and $7.5 million at June 30, 2009
and December 31, 2008, respectively.  The Company reviews each
impaired loan to determine whether a specific allowance for loan losses is
necessary.  Based upon this review, an allowance for loan losses of
$1.7 million and $1.5 million relates to impaired loans of $4.1 million and $5.5
million, at June 30, 2009 and December 31, 2008, respectively.  At
both June 30, 2009 and December 31, 2008, impaired loans of $2.0 million had no
related allowance for loan losses.


17


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Interest
income of approximately $59,000 and $100,000 was recognized on average impaired
loans of $7.0
million and $3.9 million for the six months ended June 30, 2009 and 2008,
respectively.  Interest income was recognized on impaired loans on a
cash basis for each of the six months ended June 30, 2009 and
2008.




At June
30, 2009 and December 31, 2008, accruing loans delinquent 90 days or more
(including impaired loans of $815,000 at June 30, 2009 and $1.1 million at
December 31, 2008) totaled $1.7 million and $1.6 million,
respectively.  Non-accruing loans at June 30, 2009 and December 31,
2008 (including impaired loans of $5.1 million at June 30, 2009 and $4.9 million
at December 31, 2008) were $6.6 million and $5.4 million,
respectively.




Note
      4:
            Benefit
      Plans




Pension
expense includes the following:




Three
      months ended
                    June
      30,
                  
                  
                  Six
      months ended
                    June
      30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008(In
      thousands)Service
      cost
                  
                  $
                  68
                  
                  
                  $
                  59
                  
                  
                  $
                  125
                  
                  
                  $
                  118Interest
      cost
                  
                  
                  41
                  
                  
                  
                  45
                  
                  
                  
                  82
                  
                  
                  
                  90Expected
      return on assets
                  
                  
                  (37
                  )
                  
                  
                  (59
                  )
                  
                  
                  (75
                  )
                  
                  
                  (118
                  )Amortization
      of prior service cost, transition liability, net gain and plan
      amendment
                  
                  
                  30
                  
                  
                  
                  15
                  
                  
                  
                  60
                  
                  
                  
                  30Pension
      expense
                  
                  $
                  102
                  
                  
                  $
                  60
                  
                  
                  $
                  192
                  
                  
                  $
                  120




In
addition to the Company’s normal pension expense in the table above, during the
six months ended June 30, 2008, the Company recorded an additional expense of
approximately $28,000 as certain participants in the Company’s defined benefit
plan were paid lump sum distributions from the plan.  Management does
not anticipate the Company will incur settlement accounting expense under the
provisions of SFAS No. 88 during 2009.




Note
      5:
            Off-Balance
      Sheet Activities




Some
financial instruments, such as loan commitments, credit lines, letters of credit
and overdraft protection, are issued to meet customer financing
needs.  These are agreements to provide credit or to support the
credit of others, as long as conditions established in the contracts are met,
and usually have expiration dates.  Commitments may expire without
being used.  Off-balance sheet risk to credit loss exists up to the
face amount of these instruments, although material losses are not
anticipated.  The same credit policies are used to make such
commitments as are used for loans, including obtaining collateral at exercise of
the commitment.


18


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




A summary
of the notional or contractual amounts of financial instruments with off-balance
sheet risk at the indicated dates is as follows:




June
      30,
                  
                  
                  December
      31,2009
                  
                  
                  2008(Unaudited)(In
      thousands)Commitments
      to extend credit
                  
                  $
                  31,383
                  
                  
                  $
                  26,110Credit
      card and ready reserve lines
                  
                  
                  13,717
                  
                  
                  
                  12,912Standby
      letters of credit
                  
                  
                  775
                  
                  
                  
                  820





Note
      6:
            Fair
      Value Measurements




The
Company accounts for fair value measurements in accordance with SFAS No. 157,
which defines fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements.




SFAS No.
157 defines fair value as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date.  SFAS No. 157 also establishes a
fair value hierarchy which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair
value.  The standard describes three levels of inputs that may be used
to measure fair value:




Level 1
            Quoted
      prices in active markets for identical assets or
    liabilities




Level 2
            Observable
      inputs other than Level 1 prices, such as quoted prices for similar assets
      or liabilities; quoted prices in markets that are not active; or other
      inputs that are observable or can be corroborated by observable market
      data for substantially the full term of the assets or
      liabilities




Level 3
            Unobservable
      inputs that are supported by little or no market activity and that are
      significant to the fair value of the assets or
  liabilities




Following
is a description of the valuation methodologies used for instruments measured at
fair value on a recurring basis and recognized in the accompanying consolidated
balance sheet, as well as the general classification of such instruments
pursuant to the valuation hierarchy.




Available-for-sale
Securities




Where
quoted market prices are available in an active market, securities are
classified within Level 1 of the valuation hierarchy.  The
Company has no available for-sale-securities classified as Level 1 of the
hierarchy.  If quoted market prices are not available, the Company
generally relies on prices obtained from independent pricing services or
brokers.  Securities measured with this valuation technique are
generally classified as Level 2 of the hierarchy, and their fair values are
estimated by using pricing models, quoted prices of securities with similar
characteristics or discounted cash flows using significant inputs observable in
the market.  Examples of Level 2 securities include U.S.
government agency bonds, mortgage-backed securities, state and political
subdivision bonds, and equity securities.  In certain cases where
Level 1 or Level 2 inputs are not available, securities are classified within
Level 3 of the hierarchy.  The Company has no securities classified as
Level 3 of the hierarchy.


19


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




The
following table presents the fair value measurements of assets recognized in the
accompanying consolidated balance sheets measured at fair value on a recurring
basis and the level within the SFAS No. 157 fair value hierarchy in which the
fair value measurements fall at June 30, 2009 and December 31,
2008:




Fair
      Value Measurements UsingFair
      Value
                  
                  
                  Quoted
      Prices
                    in
      Active
                    Markets
      for
                    Identical
                    Assets
                    (Level
      1)
                  
                  
                  Significant
                    Other
                    Observable
                    Inputs
                    (Level
      2)
                  
                  
                  Significant
                    Unobservable
                    Inputs
                    (Level
      3)(In
      thousands)June
      30, 2009U.S.
      government agencies
                  
                  $
                  69,209
                  
                  
                  $
                  —
                  
                  
                  $
                  69,209
                  
                  
                  
                  —State
      and political subdivisions
                  
                  
                  26,099
                  
                  
                  
                  —
                  
                  
                  
                  26,099
                  
                  
                  
                  —Mortgage-backed
      securities
                  
                  
                  14,606
                  
                  
                  
                  —
                  
                  
                  
                  14,606
                  
                  
                  
                  —Equity
      securities
                  
                  
                  4
                  
                  
                  
                  —
                  
                  
                  
                  4
                  
                  
                  
                  —December
      31, 2008U.S.
      government agencies
                  
                  $
                  87,386
                  
                  
                  $
                  —
                  
                  
                  $
                  87,386
                  
                  
                  $
                  —State
      and political subdivisions
                  
                  
                  25,736
                  
                  
                  
                  —
                  
                  
                  
                  25,736
                  
                  
                  
                  —Mortgage-backed
      securities
                  
                  
                  16,290
                  
                  
                  
                  —
                  
                  
                  
                  16,290
                  
                  
                  
                  —Equity
      securities
                  
                  
                  4
                  
                  
                  
                  —
                  
                  
                  
                  4
                  
                  
                  
                  —





Following
is a description of the valuation methodologies used for instruments measured at
fair value on a nonrecurring basis and recognized in the accompanying
consolidated balance sheet, as well as the general classification of such
instruments pursuant to the valuation hierarchy.




Impaired
Loans




Impaired
loans consisted primarily of loans secured by nonresidential real
estate.  Management has determined fair value measurements on impaired
loans primarily through evaluations of appraisals performed.  Due to
the nature of the valuation inputs, impaired loans are classified within Level 3
of the hierarchy.




Mortgage
Servicing Rights




Mortgage
servicing rights do not trade in an active, open market with readily observable
prices.  Accordingly, fair value is estimated using discounted cash
flow models.  Due to the nature of the valuation inputs, mortgage
servicing rights are classified within Level 3 of the hierarchy.




20


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Foreclosed
Assets Held for Sale




Assets
acquired through, or in lieu of, loan foreclosure are held for sale and are
initially recorded at fair value (based on current appraised value) at the date
of foreclosure, establishing a new cost basis.  Subsequent to
foreclosure, valuations are periodically performed by management and the assets
are carried at the lower of carrying amount or fair value less cost to
sell.  Management has determined fair value measurements on other real
estate owned primarily through evaluations of appraisals performed, and current
and past offers for the other real estate under evaluation.  Due to
the nature of the valuation inputs, foreclosed assets held for sale are
classified within Level 3 of the hierarchy.




The
following table presents the fair value measurements of assets recognized in the
accompanying consolidated balance sheets measured at fair value on a
nonrecurring basis and the level within the SFAS No. 157 fair value hierarchy in
which the fair value measurements fall at June 30, 2009 and December 31,
2008.




Fair Value Measurements UsingFair Value
                    
                    
                    Quoted Prices
                      in Active
                      Markets for
                      Identical
                      Assets
                      (Level 1)
                    
                    
                    Significant
                      Other
                      Observable
                      Inputs
                      (Level 2)
                    
                    
                    Significant
                      Unobservable
                      Inputs
                      (Level 3)(In thousands)June
      30, 2009Impaired
      loans
                    
                    $
                    1,700
                    
                    
                    $
                    ––
                    
                    
                    $
                    ––
                    
                    
                    $
                    1,700Mortgage
      servicing rights
                    
                    
                    287
                    
                    
                    
                    ––
                    
                    
                    
                    ––
                    
                    
                    
                    287Foreclosed
      assets held for sale
                    
                    
                    436
                    
                    
                    
                    ––
                    
                    
                    
                    ––
                    
                    
                    
                    436December
      31, 2008Impaired
      loans
                    
                    $
                    4,856
                    
                    
                    $
                    ––
                    
                    
                    $
                    ––
                    
                    
                    $
                    4,856Mortgage
      servicing rights
                    
                    
                    394
                    
                    
                    
                    ––
                    
                    
                    
                    ––
                    
                    
                    
                    394Foreclosed
      assets held for sale
                    
                    
                    208
                    
                    
                    
                    ––
                    
                    
                    
                    ––
                    
                    
                    
                    208


21


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




The
following table presents estimated fair values of the Company’s financial
instruments.  The fair values of certain of these instruments were
calculated by discounting expected cash flows, which involves significant
judgments by management and uncertainties.  Fair value is the
estimated amount at which financial assets or liabilities could be exchanged in
a current transaction between willing parties, other than in a forced or
liquidation sale.  Because no market exists for certain of these
financial instruments and because management does not intend to sell these
financial instruments, the Company does not know whether the fair values shown
below represent values at which the respective financial instruments could be
sold individually or in the aggregate.




June 30, 2009
                  
                  
                  December 31, 2008Carrying
                    Amount
                  
                  
                  Fair
                    Value
                  
                  
                  Carrying
                    Amount
                  
                  
                  Fair
                    Value(In thousands)Financial
      assetsCash
      and cash equivalents
                  
                  $
                  36,646
                  
                  
                  $
                  34,646
                  
                  
                  $
                  31,469
                  
                  
                  $
                  31,469Certificates
      of deposits in other financial institutions
                  
                  
                  25,540
                  
                  
                  
                  27,682
                  
                  
                  
                  ––
                  
                  
                  
                  ––Held-to-maturity
      securities
                  
                  
                  15,274
                  
                  
                  
                  15,422
                  
                  
                  
                  15,687
                  
                  
                  
                  15,697Loans,
      net of allowance for loan losses
                  
                  
                  235,947
                  
                  
                  
                  234,964
                  
                  
                  
                  235,448
                  
                  
                  
                  235,075Federal
      Home Loan Bank stock
                  
                  
                  4,810
                  
                  
                  
                  4,810
                  
                  
                  
                  4,810
                  
                  
                  
                  4,810Accrued
      interest receivable
                  
                  
                  2,258
                  
                  
                  
                  2,258
                  
                  
                  
                  3,037
                  
                  
                  
                  3,037Financial
      liabilitiesDeposits
                  
                  
                  344,910
                  
                  
                  
                  330,373
                  
                  
                  
                  347,045
                  
                  
                  
                  349,247Repurchase
      agreements
                  
                  
                  10,699
                  
                  
                  
                  10,699
                  
                  
                  
                  6,759
                  
                  
                  
                  6,759Federal
      Home Loan Bank advances
                  
                  
                  49,447
                  
                  
                  
                  49,724
                  
                  
                  
                  43,745
                  
                  
                  
                  44,327Subordinated
      debentures
                  
                  
                  4,000
                  
                  
                  
                  2,819
                  
                  
                  
                  4,000
                  
                  
                  
                  2,763Treasury
      tax and loan
                  
                  
                  322
                  
                  
                  
                  322
                  
                  
                  
                  1,050
                  
                  
                  
                  1,050Interest
      payable
                  
                  
                  416
                  
                  
                  
                  416
                  
                  
                  
                  469
                  
                  
                  
                  469




The
following methods and assumptions were used to estimate the fair value of each
class of financial instruments.




Cash
and Cash Equivalents, Accrued Interest Receivable and Federal Home Loan Bank
Stock




The
carrying amount approximates fair value.


22


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Certificates
of Deposit in other Financial Institutions




The fair
value of certificates of deposit in other financial institutions is estimated by
discounting the future cash flows using the current rates at which similar
certificates could be acquired from financial institutions with similar credit
ratings and for the same remaining maturities.  Certificates with
similar characteristics were aggregated for purposes of the
calculations.




Held-to-maturity
Securities




Fair
values equal quoted market prices, if available.  If quoted market
prices are not available, fair value is estimated based on quoted market prices
of similar securities.




Loans




The fair
value of loans is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.  Loans with
similar characteristics were aggregated for purposes of the
calculations.  The carrying amount of accrued interest approximates
its fair value.




Deposits




Deposits
include demand deposits, savings accounts, NOW accounts and certain money market
deposits.  The carrying amount approximates fair value.  The
fair value of fixed-maturity time deposits is estimated using a discounted cash
flow calculation that applies the rates currently offered for deposits of
similar remaining maturities.




Short-term
Borrowings, Interest Payable and Advances From Borrowers for Taxes and
Insurance




The
carrying amount approximates fair value.




Long-term
Debt and Federal Home Loan Bank Advances




Rates
currently available to the Company for debt with similar terms and remaining
maturities are used to estimate the fair value of existing debt.




Commitments
to Originate Loans, Letters of Credit and Lines of Credit




The fair
value of commitments to originate loans is estimated using the fees currently
charged to enter into similar agreements, taking into account the remaining
terms of the agreements and the present creditworthiness of the
counterparties.  For fixed-rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates.  The fair values of letters of credit and lines of
credit are based on fees currently charged for similar agreements or on the
estimated cost to terminate or otherwise settle the obligations with the
counterparties at the reporting date.  Fair values of commitments were
not material at June 30, 2009 and December 31, 2008.


23


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three and Six Months Ended June 30, 2009 and 2008




Note
      7:
            Subsequent
      Events




Subsequent
events have been evaluated through August 13, 2009, which is the date the
financial statements were issued.


24


United
Bancorp, Inc.


ITEM 2.
            Management’s Discussion and Analysis of Financial


Condition
and Results of Operations




The
following discusses the financial condition of the Company as of June 30, 2009,
as compared to December 31, 2008, and the results of operations for the six and
three month periods ended June 30, 2009, compared to the same periods in
2008.  This discussion should be read in conjunction with the interim
condensed consolidated financial statements and related footnotes included
herein.




Forward-Looking
Statements




When used
in this document, the words or phrases “will likely result,” “are expected to,”
“will continue,” “is anticipated,” “estimated,” “projected” or similar
expressions are intended to identify “forward looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.  Such
statements are subject to certain risks and uncertainties including changes in
economic conditions in the Bank’s market areas, changes in policies by
regulatory agencies, fluctuations in interest rates, demand for loans in the
Bank’s market areas and competition, that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected.  Factors listed above could affect the Company’s financial
performance and could cause the Company’s actual results for future periods to
differ materially from any statements expressed with respect to future
periods.




Except as
otherwise discussed herein, the Company is not aware of any trends, events or
uncertainties that will have or are reasonably likely to have a material effect
on its financial condition, results of operations, liquidity or capital
resources except as discussed herein.  Except as otherwise discussed
herein, the Company is not aware of any current recommendation by regulatory
authorities that would have such effect if implemented.




The
Company does not undertake, and specifically disclaims any obligation, to
publicly revise any forward-looking statements to reflect events or
circumstances after the date such statements were made or to reflect the
occurrence of anticipated or unanticipated events.




Introduction




The
Company's net interest margin of 4.00% for the six months ended June 30, 2009,
generated an increase of approximately $192,000 in net interest income over the
same period in 2008.  This increase was primarily driven by a
reduction in the Company's interest expense as interest rates remain at
historical low levels.  Overall, the composition of the Company's
balance sheet has changed during the past 12 months due to the September 2008
acquisition of approximately $30 million of net deposits from a failed bank. In
addition with interest rates at historical low levels the Company has also
experienced a high volume of called investment securities since December 31,
2008.  For the six months ended June 30, 2009, the Company experienced
a net $23.0 million in called investment securities.  With these two
items, as of June 30, 2009, the Company had liquidity of over $51.0 million
being maintained in lower yielding, short term investments.  Should
the economy and interest rates improve over the next 18 months, management
expects to be able to deploy this liquidity to meet projected increased loan
demand. However, in the near term, as overall interest rates remain low it will
become more of a challenge to maintain the Company's current net interest
margin. For the three months ended June 30, 2009, the Company's net
interest income decreased $130,000, or 3.3%, compared to the same period in
2008.


25


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations





Service
charge income on deposit accounts for 2009 increased $84,000. The Company’s six
month 2009 earnings level was accomplished despite a period over period increase
of $95,000 in the provision for loan losses, and an impairment loss on the
Company’s secondary market loan servicing asset of approximately $76,000, due to
the low interest rate environment and the related accelerating payoff of loan
balances.  Overall in 2009, the deposit insurance premiums assessed by
the Federal Deposit Insurance Corporation (FDIC) have increased dramatically in
response to a number of bank failures during the past 18 months.  The
FDIC’s regular insurance premiums increased approximately $240,000 during the
first six months of 2009 as compared to the same period in 2008.  This
level of assessment is expected to continue for the remainder of 2009 and
beyond. In addition, on May 22, 2009, the FDIC adopted a final rule to impose a
special 5 basis point assessment on total assets less Tier 1 capital on all
banks as of June 30, 2009, and authorized the FDIC to impose up to two
additional 5 basis point assessments in the third and fourth quarters of 2009.
This special assessment increased the Company’s FDIC insurance premium expense
by approximately $225,000 for the six months ended June 30, 2009. The Company’s
noninterest expense increased $897,000, or 15%, period over
period.  Excluding the effect of the FDIC insurance premiums, the
majority of this increase relates to additional staff and operating expenses
following our September 19, 2008 acquisition of three new banking offices from
the FDIC.




Critical
Accounting Policies




Management
makes certain judgments that affect the amounts reported in the financial
statements and footnotes.  These estimates, assumptions and judgments
are based on information available as of the date of the financial statements,
and as this information changes, the financial statements could reflect
different estimates, assumptions, and judgments.




The
procedures for assessing the adequacy of the allowance for loan losses reflect
our evaluation of credit risk after careful consideration of all information
available to management.  In developing this assessment, management
must rely on estimates and exercise judgment regarding matters where the
ultimate outcome is unknown, such as economic factors, developments affecting
companies in specific industries and issues with respect to single
borrowers.  Depending on changes in circumstances, future assessments
of credit risk may yield materially different results, which may require an
increase or a decrease in the allowance for loan losses.




The
allowance is regularly reviewed by management and the board to determine whether
the amount is considered adequate to absorb probable losses.  This
evaluation includes specific loss estimates on certain individually reviewed
loans, statistical loss estimates for loan pools that are based on historical
loss experience, and general loss estimates that are based on the size, quality
and concentration characteristics of the various loan portfolios, adverse
situations that may affect a borrower’s ability to repay and current economic
and industry conditions.  Also considered as part of that judgment is
a review of the Bank’s trend in delinquencies and loan losses, and economic
factors.




The
allowance for loan losses is maintained at a level believed adequate by
management to absorb probable loan losses inherent in the loan
portfolio.  Management’s evaluation of the adequacy of the allowance
is an estimate based on management’s current judgment about the credit quality
of the loan portfolio.  While the Company strives to reflect all known
risk factors in its evaluation, judgment errors may occur.


26


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations




Legislative
Developments




On May
22, 2009, the FDIC adopted a final rule to impose a special 5 basis point
assessment on all banks as of June 30, 2009. The 5 basis point assessment is
levied on the net of the Bank’s total assets less Tier 1 capital as of June 30,
2009. The Company recorded an expense of $225,000 for the June 30, 2009
assessment.  The final rule also permits the FDIC to impose up to two
additional 5 basis point assessments in the third and fourth quarters of
2009.




Analysis
of Financial Condition




Earning
Assets – Loans




At June
30, 2009, gross loans were $239.2 million, compared to $238.2 million at
December 31, 2008, an increase of $1.0 million.  The overall increase
in the loan portfolio was driven by a $3.3 million increase in consumer loans
since December 31, 2008.




Installment
loans represented 17.4% of total loans at June 30, 2009 and 16.1% at December
31, 2008.  This indirect lending type of financing carries somewhat
more risk than real estate lending, however it also provides for higher
yields.  Installment loans have increased $3.3 million or 8.5% since
December 31, 2008. The targeted lending areas encompass four metropolitan areas,
minimizing the risk to changes in economic conditions in the communities housing
the Company’s 20 branch locations.




Commercial
and commercial real estate loans comprised 57.6% of total loans at June 30, 2009
compared to 58.8% at December 31, 2008.  Commercial and commercial
real estate loans have decreased $2.4 million, or 1.7% since December 31,
2008.  The Company has originated and purchased participations in
loans from other banks for out-of-area commercial and commercial real estate
loans to benefit from consistent economic growth outside the Company’s primary
market area, but all within the state of Ohio.




Real
estate loans were 25.1% of total loans at both June 30, 2009 and at December 31,
2008.  Real estate loans increased $158,000 from December 31,
2008.  Real estate lending for the six months of 2009 has been slow
with respect to the Company’s adjustable-rate mortgage products.  As
of June 30, 2009, the Bank has approximately $30.9 million in fixed-rate loans
that it services for a fee that is typically 25 basis points.  At June
30, 2009, the Company did not hold any loans for sale.




The
allowance for loan losses represents the amount which management and the Board
of Directors estimates is adequate to provide for probable losses inherent in
the loan portfolio.  The allowance balance and the provision charged
to expense are reviewed by management and the Board of Directors monthly using a
risk evaluation 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 adequate to absorb probable incurred credit losses associated
with the loan portfolio.  Net charge-offs for the six months ended
June 30, 2009 were approximately $137,000, or 4.9%, of the beginning balance in
the allowance for loan losses.


27


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations




Earning
Assets - Securities and Federal Funds Sold




The
securities portfolio is comprised of 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.  Generally, the quality rating of
obligations of state and political subdivisions is Aaa, Aa or
A.  Board policy permits the purchase of certain non-rated bonds of
local schools, townships and municipalities, based on their estimated levels of
credit risk.  Securities available for sale at June 30, 2009 decreased
approximately $19.5 million, or 15.1%, from year-end 2008
totals.  With the overall decreasing interest rate environment, the
Company has experienced a high level of called bond activity during the first
six months of 2009.  While the Company has plans to reinvest a portion
of these funds in other available-for-sale securities, there is lag between the
time when bonds are called and the right investment opportunity is available to
the Company. Also, given the historically low interest rate environment at
present, the Company has implemented a strategy to invest in short term
certificates of deposit (“CD’s”) of other financial
institutions.  These CD’s are fully insured by the Federal Deposit
Insurance Corporation and offer an alternative to investing in longer term U.S
Government agency securities.  As of June 30, 2009, the Company had
approximately $25.5 million of CD’s with an average yield of 2.21% and an
average term to maturity of 199 days.




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, 2009,
total core deposits decreased approximately $6.3 million, or
2.1%.  The Company’s interest-bearing demand deposits decreased $9.1
million, or 7.7%, noninterest-bearing demand deposits decreased $3.2 million, or
13.5%, while certificates of deposit under $100,000 increased by $3.0 million,
or 2.5%.  The Company’s savings accounts increased $3.1 million, or
7.6%, from December 31, 2008 totals.




The
Companyhas a
strong deposit base from public agencies, including local school districts, city
and township municipalities, public works facilities and others that 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.




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, 2009, certificates of deposit greater than
$100,000 increased $4.2 million, or 9.0%, from year-end 2008
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 and Loan
notes payable and Federal Home Loan Bank (“FHLB”) advances.  The
majority of the Company’s repurchase agreements are with local school districts
and city and county governments.  The Company’s short-term borrowings
increased approximately $3.2 million from December 31, 2008 totals, while the
Federal Home Loan Bank advances increased  $5.7 million from December
31, 2008.  The Company took advantage of special long term lower rate
advances from the Federal Home Loan Bank.


28


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations




Results
of Operations for the Six Months Ended June 30, 2009 and 2008




Net
Income




Basic and
diluted earnings per share for the six months ended June 30, 2009 totaled $0.32,
compared with $0.42 for the six months ended June 30, 2008, a decrease of 23.8%.
In dollars, the Company’s net income was $1,473,000 for the six months ended
June 30, 2009, a decrease of $455,000, or 23.6%, compared to the same period in
2008.




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 2.6%, or $192,000, for the
six months ended June 30, 2009 compared to the same period in 2008, due
primarily to the effects of decreasing interest rates in the economy, which
resulted in a lower cost of funds during the six months ended June 30,
2009.




Provision
for Loan Losses




The
provision for loan losses was $658,000 for the six months ended June 30, 2009,
compared to $563,000 for the same period in 2008.  The increase in
loan loss provision for the six-month period ended June 30, 2009, was predicated
upon the increase in nonperforming loans and consideration of the impact on the
loan portfolio of the economic challenges facing the banking
industry.




Noninterest
Income




Total
noninterest incomeis comprised of bank
related fees and service charges, as well as other income producing services
provided, gains on sales of loans in the secondary market, gains and losses on
sales of repossessed assets, ATM income, early redemption penalties for
certificates of deposit, safe deposit rental income, internet bank service fees,
earnings on bank-owned life insurance and other miscellaneous
items.




Noninterest
income for the six months ended June 30, 2009 was $1,602,000, an increase of
$88,000, or 5.8%, compared to $1,514,000 for the six-month period ended June 30,
2008.  During the six-months ended June 30, 2009, the increase in
noninterest income was primarily driven by an increase in customer service fees
of $84,000 and an increase in gains on sale of foreclosed real estate of
approximately $76,000. These items were offset by an impairment charge of
approximately $76,000 related to the Company’s secondary market mortgage
servicing asset.  With interest rates at historical low levels, the
overall mortgage industry and the Company have seen an increase in mortgage
refinancing.  As the pace of mortgage refinancing increases the
computed value of the Company’s mortgage servicing asset has decreased in value
and resulted in the impairment charge previously mentioned.  As of
June 30, 2009, the Company’s mortgage servicing asset was approximately
$287,000, and it is currently valued at approximately 92 basis points of the
secondary market loans the Company services.


29


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations




Noninterest
Expense




Noninterest
expense was $6.9 million for the six months ended June 30, 2009 an increase of
$897,000, or 15.0%, over the six months ended June 30, 2008.  Overall
in 2009, the deposit insurance premiums assessed by the Federal Deposit
Insurance Corporation (FDIC) have increased dramatically in response to a record
number of bank failures during the past 18 months.  The FDIC’s regular
insurance premiums increased approximately $240,000 during the first six months
of 2009 as compared to the same period in 2008.  This level of
assessment is expected to continue for the remainder of 2009 and beyond. As
previously discussed, the FDIC on May 22, 2009, adopted a final rule to impose a
special 5 basis point assessment on all FDIC-insured banks as of June 30, 2009,
and authorized the FDIC to impose up to two additional 5 basis point assessments
in the third and fourth quarters of 2009. The   FDIC special
assessment increased the Company’s FDIC insurance premiums by approximately
$225,000 for the six months ended June 30, 2009.




The
Company has experienced an increase in noninterest expense due to the September
2008 acquisition of three branches of a failed bank.  With this
acquisition the Company expanded from 17 to 20 offices and and as a result
increased staff and general overhead from this expansion. Salaries and employee
benefits expense increased $200,000, or 6.5%, for the period ended June 30, 2009
over the same period in 2008.  This increase was due to the staffing
increase, normal merit increases, and increased incentive award expense and ESOP
expense.  Professional fees increased $55,000, for the first six
months of 2009 over the same period in 2008.  It is anticipated this
trend will continue for the remainder of 2009 as the Company is working out of
several problem credit situations.  Occupancy and equipment expense
increased $142,000, or 21.5% for the first six months of 2009 over the same
period in 2008,  due to increased depreciation expense on computer
hardware and software and related service maintenance.  Amortization
expense of intangible assets was $68,000 for the first six months of 2009,
relating to the intangible asset recorded in connection with the 2008
acquisition of a failed bank.




Federal
Income Taxes




The
provision for federal income taxes was $268,000 for the six months ended June
30, 2009, a decrease of  $257,000, or 49.0%, compared to the same
period in 2008.  The decrease in tax expense was due primarily to a
$712,000, or 29.0%, decrease in pretax income.  The effective tax
rates were 15.4% and 21.4% for the six months ended June 30, 2009 and 2008,
respectively.




Results
of Operations for the Three Months Ended June 30, 2009 and 2008




Net
Income




Basic and
diluted earnings per share for the three months ended June 30, 2009 totaled
$0.15 compared with $0.22, for the three months ended June 30, 2008, a decrease
of 31.8%.  In dollars, the Company’s net income was $672,000 for the
three months ended June 30, 2009 a decrease of $353,000, or 34.4% compared to
net income of $1,025,000 for the same quarter in 2008.


30


United
Bancorp, Inc.
 Management’s
Discussion and Analysis of Financial
 Condition
and Results of Operations


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 decreased 3.3%, or $130,000, for the
three months ended June 30, 2009 compared to the same period in 2008, due
primarily to the effects of decreasing interest rates in the economy, which
resulted in a higher rate of called investment securities and the timing of and
extent to which the Company reinvested those funds.




Provision
for Loan Losses




The
provision for loan losses was $334,000 for the three months ended June 30, 2009,
compared to $395,000 for the same period in 2008.  The provision
expense for the three months ended June 30, 2009 was predicated upon an analysis
of the level of nonperforming loans and consideration of the economic challenges
applied to the loan portfolio.




Noninterest
Income




Total
noninterest incomeis made up of bank
related fees and service charges, as well as other income producing services
provided, sales of loans in the secondary market, ATM income, early redemption
penalties for certificates of deposit, safe deposit rental income, internet bank
service fees, earnings on bank-owned life insurance and other miscellaneous
items.




Noninterest
income for the three months ended June 30, 2009 was $813,000, an increase of
$55,000, or 7.3%, compared to $758,000 for the same three-month period ended
June 30, 2008.  During the three-months ended June 30, 2009, the
increase in noninterest income was primarily driven by an increase in customer
service fees of approximately $63,000 and an increase in gains on sale of
foreclosed real estate of approximately $36,000. These items were offset by an
impairment charge of approximately $76,000 related to the Company’s secondary
market mortgage servicing asset.  With interest rates at historical
low levels, the overall mortgage industry and the Company have seen an increase
in mortgage refinancing.  As the pace of mortgage refinancing
increases the computed value of the Company’s mortgage servicing asset has
decreased in value and resulted in the impairment charge previously
mentioned.  As of June 30, 2009, the Company’s mortgage servicing
asset was approximately $287,000 and it is currently valued at approximately 92
basis points of the secondary market loans the Company services.




Noninterest
Expense




Noninterest
expense was $3.6 million for the three months ended June 30, 2009, an increase
of $565,000, or 18.8%, over the three months ended June 30,
2008.  This was primarily driven by increased insurance expense of
$208,000, or 198%, for the three months ended June 30, 2009 over the same period
in 2008.  This increase is due to the FDIC increasing the level of
deposit insurance premiums. As previously discussed, the FDIC also imposed a
special 5 basis point assessment on the Bank’s total assets less Tier 1 capital
as of June 30, 2009.  The Company has also experienced an increase in
noninterest expense due to the September 2008 branch
acquisition.  With this acquisition the Company expanded from 17 to 20
offices and as a result increased staff and general overhead from this
expansion. Salaries and employee benefits expense increased $57,000, or 3.5%,
for the three month period ended June 30, 2009 over the same period in
2008.  This increase was primarily due to staffing increases, normal
merit increases and increased incentive award and ESOP
expenses.  Professional fees increased $18,000, for the three month
period ended June 30, 2009 over the same period in 2008.  It is
anticipated this trend will continue for the remainder of 2009 as the Company is
working out of several problem credit situations.  Occupancy and
equipment expense increased $63,000, or 18.5% for the three months ended June
30, 2009 over the same period in 2008.  Increased depreciation expense
on computer hardware and software and related service maintenance was the
primary reason for the increase.  Amortization expense of intangible
assets was $30,000 for the three months ended June 30, 2009. This amortization
expense is due to the intangible asset in connection with the 2008 branch
acquisition.


31


United
Bancorp, Inc.
 Management’s
Discussion and Analysis of Financial
 Condition
and Results of Operations




Federal
Income Taxes




The
provision for federal income taxes was $74,000 for the three months ended June
30, 2009, a decrease of $226,000, or 75.3%, compared to the same period in
2008.  The decrease in tax expense was due primarily to a $579,000, or
43.7%, decrease in pretax income. The effective tax rates were 9.9% and 22.6%
for the three months ended June 30, 2009 and 2008, respectively.




Capital
Resources




Internal
capital growth, through the retention of earnings, is the primary means of
maintaining capital adequacy for the Company.  Stockholders’ equity
totaled $33.6 million at June 30, 2009 compared to $33.9 million at December 31,
2008, a $300,000 decrease.  Total stockholders’ equity in relation to
total assets was 7.5% at June 30, 2009 and 7.7% at December 31,
2008.  In 2001, our shareholders approved an amendment to the
Company’s Articles of Incorporation to create a class of preferred shares with
2,000,000 authorized shares.  This enables the Company, at the option
of the Board of Directors, to issue series of preferred shares in a manner
calculated to take advantage of financing techniques which may provide a lower
effective cost of capital to the Company.  The amendment also provides
greater flexibility to the Board of Directors in structuring the terms of equity
securities that may be issued by the Company.  Although this preferred
stock is a financial tool, it has not been utilized to date.




The
Company has 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.


32


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations




The
Company is subject to the regulatory requirements of The Federal Reserve System
as a bank holding company.  The Bank is subject to regulations of the
FDIC and the State of Ohio, Division of Financial Institutions.  The
most important of these various regulations address capital
adequacy.




The
minimums related to such capital requirements are:




Total
                  
                  
                  Tier 1
                  
                  
                  Tier 1Capital To
                  
                  
                  Capital To
                  
                  
                  Capital ToRisk-Weighted
                  
                  
                  Risk-Weighted
                  
                  
                  AverageAssets
                  
                  
                  Assets
                  
                  
                  AssetsWell
      capitalized
                  
                  
                  10.00
                  %
                  
                  
                  6.00
                  %
                  
                  
                  5.00
                  %Adequately
      capitalized
                  
                  
                  8.00
                  %
                  
                  
                  4.00
                  %
                  
                  
                  4.00
                  %Undercapitalized
                  
                  
                  6.00
                  %
                  
                  
                  3.00
                  %
                  
                  
                  3.00
                  %







The
following table illustrates the Company’s well-capitalized classification at
June 30, 2009.




June 30,2009(Unaudited)(Dollars
      in thousands)Tier
      1 capital
                  
                  $
                  38,463Total
      risk-based capital
                  
                  
                  41,754Risk-weighted
      assets
                  
                  
                  270,406Average
      total assets
                  
                  
                  449,992Total
      risk-based capital ratio
                  
                  
                  15.44
                  %Tier
      1 risk-based capital ratio
                  
                  
                  14.22
                  %Tier
      1 capital to average assets
                  
                  
                  8.55
                  %




Liquidity




Management’s
objective in managing liquidity is maintaining the ability to continue meeting
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, a borrowing agreement with the Federal Home Loan Bank of
Cincinnati and the adjustment of interest rates to obtain
depositors.  Management feels that it has the capital adequacy and
profitability to meet the current and projected liquidity needs of its
customers.


33




United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations




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 accounting principles generally
accepted in the United States of America (“U.S. GAAP”).  U.S. 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, certain impaired loans and certain other real estate and
loans that may be 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 affect 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
affect 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.




ITEM
3.          Quantitative and
Qualitative Disclosures About Market Risk




There has
been no significant change from disclosures included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008.




ITEM
4.          Controls and
Procedures




The
Company, under the supervision, and with the participation, of its management,
including the Company's Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to the requirements of Exchange Act
Rule 13a-15.  Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of June 30, 2009, in timely alerting them to
material information relating to the Company (including its consolidated
subsidiary) required to be included in the Company's periodic SEC
filings.




There was
no change in the Company's internal control over financial reporting that
occurred during the Company's fiscal quarter ended June 30, 2009 that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


34


United
Bancorp, Inc.
 Part
II – Other Information




ITEM
1.          Legal
Proceedings




None,
other than ordinary routine litigation incidental to the Company’s
business.





ITEM
1A.       Risk Factors




There
have been no material changes from risk factors as previously disclosed in Part
1 Item 1A of the Company’s Form 10-K for the year ended December 31, 2008, filed
on March 27, 2009.





ITEM
2.          Unregistered Sales
of Equity Securities and Use of Proceeds




ISSUER
PURCHASES OF EQUITY SECURITIES




Period
                    
                    (a)
                      Total Number of
                      Shares (or Units)
                      Purchased
                    
                    
                    (b)
                      Average Price Paid
                      Per Share (or Unit)
                    
                    
                    (c)
                      Total Number of
                      Shares (or Units)
                      Purchased as Part
                      Of Publicly
                      Announced Plans
                      Or Programs
                    
                    
                    (d)
                      Maximum Number or
                      Approximate Dollar
                      Value) of Shares (or
                      Units) that May Yet Be
                      Purchased Under the
                      Plans or ProgramsMonth
      #1
                      4/1/2009
      to
                      4/30/2009
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,734,810Month
      #2
                      5/1/2009
      to
                      5/31/2009
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,734,810Month
      #3
                      6/1/2009
      to
                      6/30/2009
                    
                    
                    13,156
                    
                    
                    $
                    8.45
                    
                    
                    
                    13,156
                    
                    
                    $
                    1,623,642




United
Bancorp maintains a stock repurchase program publicly announced by a press
release issued on November 18, 2008, under which its Board of Directors
authorized management to cause the Company to purchase up to $2 million of its
common shares over a two-year period.  Such authorization will expire
on November 18, 2010.




The
Company adopted the United Bancorp, Inc. Affiliate Banks Directors and Officers
Deferred Compensation Plan (the “Plan”), which is an unfunded deferred
compensation plan.  Amounts deferred pursuant to the Plan remain
unrestricted assets of the Company, and the right to participate in the Plan is
limited to members of the Board of Directors and Company
officers.  Under the Plan, Directors may defer up to 100% of their
fees and officers may defer up to 50% of their annual incentive award payable to
them by the Company, which are used to acquire common shares which are credited
to a participant’s respective account.  Except in the event of certain
emergencies, no distributions are to be made from any account as long as the
participant continues to be an employee or member of the Board of
Directors.  Upon termination of service, the aggregate number of
shares credited to the participant’s account are distributed to him or her in a
lump sum or over a period up to ten years per their prior election along with
any cash proceeds credited to the account which have not yet been invested in
the Company’s stock.  On June 19, 2009, the Company purchased a total
of 13,156 common shares for participant accounts.  No underwriting
fees, discounts, or commissions are paid in connection with the
Plan.  The shares allocated to participant accounts have not been
registered under the Securities Act of 1933 in reliance upon the exemption
provided by Section 4(2) thereof.


35


United
Bancorp, Inc.
 Part
II – Other Information




As of
June 30, 2009 the Company continues to be included in the Russell Microcap
Index.  Russell indexes are widely used by investment managers and
institutional investors for both index funds and as benchmarks for passive and
active investment strategies.  UBCP will hold its membership until
Russell reconstitutes its indexes in June 2010.




ITEM
3.          Defaults Upon
Senior Securities




Not
applicable.





ITEM
4.          Submission of
Matters to A Vote of Security Holders




On
Wednesday April 15, 2009, United Bancorp, Inc. held its annual meeting of
shareholders, at which meeting the following matters were voted
upon:





1.
            Proposal
      to elect seven nominees to the Corporation's Board of
      Directors.





The
results of the voting on this proposal are as follows:





Director
              For
              WithheldMichael
      A. Arciello
              3,982,273
              47,505James
      W. Everson
              3,975,813
              53,965John
      M. Hoopingarner
              3,973,991
              55,787Samuel
      J. Jones
              3,970,017
              59,761Terry
      A. McGhee
              3,976,271
              53,507Richard
      L. Riesbeck
              3,977,172
              52,607Matthew
      C. Thomas
              4,001,650
              28,128





ITEM
5.          Other
Information




Not
applicable.


36




United
Bancorp, Inc.


Part
II – Other Information




ITEM
6.          Exhibits




EX-3.1
              Amended
      Articles of Incorporation of United Bancorp, Inc. (1)EX-3.2
              Amended
      and restated Code of Regulations of United Bancorp,
Inc.EX-4.0
              Instruments
      Defining the Rights of Security Holders   (See Exhibits 3.1
      and 3.2)EX
      31.1
              Rule
      13a-14(a) Certification – CEOEX
      31.2
              Rule
      13a-14(a) Certification – CFOEX
      32.1
              Section
      1350 Certification – CEOEX
      32.2
              Section
      1350 Certification – CFO





(1)
            Incorporated
      by reference to Appendix B to the registrant’s Definitive Proxy Statement
      filed with the Securities and Exchange Commission on March 14,
      2001.


37


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.




/s/United
      Bancorp, Inc.Date:
                      August 12, 2009
                      
                      By:
                      /s/James W. EversonJames
      W. EversonChairman,
      President and Chief
                        Executive
      OfficerDate:
                      August 12, 2009
                      
                      By:
                      /s/Randall M. GreenwoodRandall
      M. GreenwoodSenior
      Vice President, Chief Financial
                        Officer
      and
Treasurer


38


Exhibit
Index





Exhibit No.
                  
                  Description3.1
                  
                  Amended
      Articles of Incorporation of United Bancorp, Inc.incorporated
      by reference to Appendix B to the registrant’s Definitive Proxy Statement
      filed with the Securities and Exchange Commission on March 14,
      2001.3.2
                  
                  Amended
      Code of Regulations of United Bancorp, Inc.incorporated
      by reference to Appendix C to the registrant’s Definitive Proxy Statement
      filed with the Securities and Exchange Commission on March 14,
      2001.4.0
                  
                  Instruments
      Defining the Rights of Security Holders (See Exhibits 3.1 and
      3.2)31.1
                  
                  Rule
      13a-14(a) Certification – Principal Executive Officer31.2
                  
                  Rule
      13a-14(a) Certification – Principal Financial Officer32.1
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of
      The Sarbanes-Oxley act of 2002.32.2
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of
      The Sarbanes-Oxley Act of
2002.