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 March 31,
2010





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 May 1, 2010, 5,274,890 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
                  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
                  22Item
      3
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  29Item
      4
                  Controls
      and Procedures
                  29PART
      II - OTHER INFORMATIONItem
      1
                  Legal
      Proceedings
                  30Item
      1A
                  Risk
      Factors
                  30Item
      2
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  30Item
      3
                  Defaults
      Upon Senior Securities
                  31Item
      4
                  Submission
      of Matters to a Vote of Security Holders
                  31Item
      5
                  Other
      Information
                  31Item
      6
                  Exhibits
                  31SIGNATURES
                  32


2


ITEM
1.  Financial Statements





United
Bancorp, Inc.


Condensed
Consolidated Balance Sheets


(In
thousands, except share data)





March 31,
                          
                          
                          December 31,2010
                          
                          
                          2009(Unaudited)AssetsCash
      and due from banks
                          
                          $
                          5,237
                          
                          
                          $
                          4,862Interest-bearing
      demand deposits
                          
                          
                          41,917
                          
                          
                          
                          11,409Federal
      funds sold
                          
                          
                          —
                          
                          
                          
                          15,000Cash
      and cash equivalents
                          
                          
                          47,154
                          
                          
                          
                          31,271Certificates
      of deposit in other financial institutions
                          
                          
                          11,272
                          
                          
                          
                          17,575Available-for-sale
      securities
                          
                          
                          89,201
                          
                          
                          
                          96,585Held-to-maturity
      securities
                          
                          
                          13,594
                          
                          
                          
                          14,277Loans,
      net of allowance for loan losses of $2,527 and $2,390 at March 31, 2010
      and December 31, 2009, respectively
                          
                          
                          257,963
                          
                          
                          
                          255,336Premises
      and equipment
                          
                          
                          8,637
                          
                          
                          
                          8,689Federal
      Home Loan Bank stock
                          
                          
                          4,810
                          
                          
                          
                          4,810Foreclosed
      assets held for sale, net
                          
                          
                          1,459
                          
                          
                          
                          1,378Intangible
      assets
                          
                          
                          631
                          
                          
                          
                          656Accrued
      interest receivable
                          
                          
                          2,101
                          
                          
                          
                          2,218Deferred
      income taxes
                          
                          
                          —
                          
                          
                          
                          333Bank-owned
      life insurance
                          
                          
                          10,119
                          
                          
                          
                          10,018Other
      assets
                          
                          
                          3,320
                          
                          
                          
                          2,824Total
      assets
                          
                          $
                          450,261
                          
                          
                          $
                          445,970Liabilities
      and Stockholders’ EquityLiabilitiesDepositsDemand
                          
                          $
                          130,642
                          
                          
                          $
                          130,363Savings
                          
                          
                          48,611
                          
                          
                          
                          45,497Time
                          
                          
                          165,735
                          
                          
                          
                          168,683Total
      deposits
                          
                          
                          344,988
                          
                          
                          
                          344,543Short-term
      borrowings
                          
                          
                          13,997
                          
                          
                          
                          10,277Federal
      Home Loan Bank advances
                          
                          
                          48,875
                          
                          
                          
                          49,128Subordinated
      debentures
                          
                          
                          4,000
                          
                          
                          
                          4,000Deferred
      income taxes
                          
                          
                          171
                          
                          
                          
                          —Interest
      payable and other liabilities
                          
                          
                          2,192
                          
                          
                          
                          2,811Total
      liabilities
                          
                          
                          414,223
                          
                          
                          
                          410,759Commitments
      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 5,370,304
      shares
                          
                          
                          5,370
                          
                          
                          
                          5,370Additional
      paid-in capital
                          
                          
                          22,178
                          
                          
                          
                          22,830Retained
      earnings
                          
                          
                          13,447
                          
                          
                          
                          12,761Stock
      held by deferred compensation plan; 163,969 and 155,198 shares at March
      31, 2010 and December 31, 2009, respectively
                          
                          
                          (1,558
                          )
                          
                          
                          (1,478
                          )Unearned
      ESOP compensation
                          
                          
                          (2,512
                          )
                          
                          
                          (2,512
                          )Accumulated
      other comprehensive income (loss)
                          
                          
                          167
                          
                          
                          
                          (507
                          )Treasury
      stock, at costMarch
      31, 2010 – 95,414 shares, December 31, 2009 – 113,493
    shares
                          
                          
                          (1,054
                          )
                          
                          
                          (1,253
                          )Total
      stockholders’ equity
                          
                          
                          36,038
                          
                          
                          
                          35,211Total
      liabilities and stockholders’ equity
                          
                          $
                          450,261
                          
                          
                          $
                          445,970





See
Notes to Condensed Consolidated Financial Statements


3


United
Bancorp, Inc.


Condensed
Consolidated Statements of Income


For
the Three Months Ended March 31, 2010 and 2009


(In
thousands, except per share data)


(Unaudited)





2010
                
                
                2009Interest
      and Dividend IncomeLoans
                
                $
                4,175
                
                
                $
                4,021SecuritiesTaxable
                
                
                809
                
                
                
                1,311Tax-exempt
                
                
                409
                
                
                
                433Federal
      funds sold
                
                
                11
                
                
                
                7Dividends
      on Federal Home Loan Bank and other stock
                
                
                126
                
                
                
                141Total
      interest and dividend income
                
                
                5,530
                
                
                
                5,913Interest
      ExpenseDeposits
                
                
                1,272
                
                
                
                1,582Federal
      funds purchased
                
                
                —
                
                
                
                8Borrowings
                
                
                532
                
                
                
                484Total
      interest expense
                
                
                1,804
                
                
                
                2,074Net
      Interest Income
                
                
                3,726
                
                
                
                3,839Provision
      for Loan Losses
                
                
                360
                
                
                
                324Net
      Interest Income After Provision for Loan Losses
                
                
                3,366
                
                
                
                3,515Noninterest
      IncomeCustomer
      service fees
                
                
                533
                
                
                
                512Net
      gains on loan sales
                
                
                13
                
                
                
                13Gain
      (loss) on sale of foreclosed assets
                
                
                (3
                )
                
                
                43Other
                
                
                233
                
                
                
                221Total
      noninterest income
                
                
                776
                
                
                
                789Noninterest
      ExpenseSalaries
      and employee benefits
                
                
                1,755
                
                
                
                1,622Net
      occupancy expense
                
                
                425
                
                
                
                399Professional
      fees
                
                
                188
                
                
                
                227Deposit
      insurance premiums
                
                
                102
                
                
                
                38Insurance
                
                
                95
                
                
                
                95Franchise
      and other taxes
                
                
                131
                
                
                
                124Advertising
                
                
                93
                
                
                
                93Printing
      and office supplies
                
                
                59
                
                
                
                81Amortization
      of intangible asset
                
                
                25
                
                
                
                38Other
                
                
                498
                
                
                
                592Total
      noninterest expense
                
                
                3,371
                
                
                
                3,309Income
      Before Federal Income Taxes
                
                
                771
                
                
                
                995Provision
      for Federal Income Taxes
                
                
                88
                
                
                
                194Net
      Income
                
                $
                683
                
                
                $
                801Basic
      Earnings Per Share
                
                $
                0.15
                
                
                $
                0.17Diluted
      Earnings Per Share
                
                $
                0.15
                
                
                $
                0.17Dividends
      per share
                
                $
                0.14
                
                
                $
                0.14




See
Notes to Condensed Consolidated Financial Statements


4


United
Bancorp, Inc.


Condensed
Consolidated Statements of Comprehensive Income


For
the Three Months Ended March 31, 2010 and 2009


(In
thousands)


(Unaudited)





2010
                
                
                2009Net
      Income
                
                $
                683
                
                
                $
                801Other
      comprehensive income, net of related tax effects:Unrealized
      holding gains on securities during the period, net of taxes of $347 and
      $22 in 2010 and 2009, respectively
                
                
                674
                
                
                
                42Comprehensive
      Income
                
                $
                1,357
                
                
                $
                843Accumulated
      Other Comprehensive Income (Loss)
                
                $
                167
                
                
                $
                (1,052
                )





See
Notes to Condensed Consolidated Financial Statements


5


United
Bancorp, Inc.


Condensed
Consolidated Statements of Cash Flows


For
the Three Months Ended March 31, 2010 and 2009


(In
thousands)


(Unaudited)





2010
                
                
                2009Operating
      ActivitiesNet
      income
                
                $
                683
                
                
                $
                801Items
      not requiring (providing) cashDepreciation
      and amortization
                
                
                195
                
                
                
                174Amortization
      of intangible asset
                
                
                25
                
                
                
                38Provision
      for loan losses
                
                
                360
                
                
                
                324Amortization
      of premiums and discounts on securities, net
                
                
                34
                
                
                
                23Gain
      on sale of loans
                
                
                (13
                )
                
                
                (13
                )Increase
      in value of bank-owned life insurance
                
                
                (101
                )
                
                
                (91
                )Amortization
      of mortgage servicing rights
                
                
                6
                
                
                
                14Loss
      (gain) on sale of foreclosed assets
                
                
                3
                
                
                
                (43
                )Expense
      related to share-based compensation plans
                
                
                52
                
                
                
                —Net
      change in accrued interest receivable and other assets
                
                
                (385
                )
                
                
                405Net
      change in accrued expenses and other liabilities
                
                
                (461
                )
                
                
                (2,292
                )Net
      cash provided by (used in) operating activities
                
                
                398
                
                
                
                (660
                )Investing
      ActivitiesSecurities
      available for sale:Maturities,
      prepayments and calls
                
                
                15,043
                
                
                
                23,499Purchases
                
                
                (5,989
                )
                
                
                (27,151
                )Net
      change in loans
                
                
                (3,077
                )
                
                
                1,286Net
      changes in certificates of deposit in other financial
      institutions
                
                
                6,303
                
                
                
                (16,084
                )Proceeds
      from sale of foreclosed assets
                
                
                20
                
                
                
                163Purchases
      of premises and equipment
                
                
                (143
                )
                
                
                (210
                )Net
      cash provided by (used in) investing activities
                
                
                12,157
                
                
                
                (18,497
                )





See
Notes to Condensed Consolidated Financial Statements


6


United
Bancorp, Inc.


Condensed
Consolidated Statements of Cash Flows (continued)


For
the Three Months Ended March 31, 2010 and 2009


(In
thousands)


(Unaudited)





2010
                
                
                2009Financing
      ActivitiesNet
      change in deposits
                
                $
                445
                
                
                $
                (302
                )Net
      change in short-term borrowings
                
                
                3,720
                
                
                
                4,619Net
      change in long-term debt
                
                
                (253
                )
                
                
                (155
                )Cash
      dividends paid
                
                
                (737
                )
                
                
                (704
                )Proceeds
      from purchase of shares by Dividend Reinvestment Plan
                
                
                103
                
                
                
                112Treasury
      stock issued (purchases)
                
                
                50
                
                
                
                (89
                )Net
      cash provided by financing activities
                
                
                3,328
                
                
                
                3,481Increase
      (Decrease) in Cash and Cash Equivalents
                
                
                15,883
                
                
                
                (15,676
                )Cash
      and Cash Equivalents, Beginning of Period
                
                
                31,271
                
                
                
                31,469Cash
      and Cash Equivalents, End of Period
                
                $
                47,154
                
                
                $
                15,793Supplemental
      Cash Flows InformationInterest
      paid on deposits and borrowings
                
                $
                1,817
                
                
                $
                2,112Supplemental
      Disclosure of Non-Cash Investing and Financing ActivitiesTransfers
      from loans to foreclosed real estate and other repossessed
      assets
                
                $
                104
                
                
                $
                436Unrealized
      gains on securities designated as available for sale, net of related tax
      effects
                
                $
                674
                
                
                $
                42





See
Notes to Condensed Consolidated Financial Statements


7


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





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 March 31, 2010,
and its results of operations and cash flows for the 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, 2009 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 three months ended March 31, 2010, 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, 2009 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.




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.




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.


8


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009




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.




Allowance
for Loan Losses




The
allowance for loan losses is established as losses are estimated to have
occurred through a provision for loan losses charged to income.  Loan
losses are charged against the allowance when management believes the
uncollectibility of a loan balance is confirmed.  Subsequent
recoveries, if any, are credited to the allowance.




The
allowance for loan losses is evaluated on a regular basis by management and is
based upon management’s periodic review of the collectibility of the loans in
light of historical experience, the nature and volume of the loan portfolio,
adverse situations that may affect the borrower’s ability to repay, estimated
value of any underlying collateral and prevailing economic
conditions.  This evaluation is inherently subjective as it requires
estimates that are susceptible to significant revision as more information
becomes available.




The
allowance consists of allocated and general components.  The allocated
component relates to loans that are classified as impaired.  For those
loans that are classified as impaired, an allowance is established when the
discounted cash flows (or collateral value or observable market price) of the
impaired loan is lower than the carrying value of that loan.  The
general component covers nonclassified loans and is based on historical
charge-off experience and expected loss given default derived from the Company’s
internal risk rating process.  Other adjustments may be made to the
allowance for pools of loans after an assessment of internal or external
influences on credit quality that are not fully reflected in the historical loss
or risking rating data.




A loan is
considered impaired when, based on current information and events, it is
probable that the Company will be unable to collect the scheduled payments of
principal or interest when due according to the contractual terms of the loan
agreement.  Factors considered by management in determining impairment
include payment status, collateral value and the probability of collecting
scheduled principal and interest payments when due.  Loans that
experience insignificant payment delays and payment shortfalls generally are not
classified as impaired.  Management determines the significance of
payment delays and payment shortfalls on a case-by-case basis, taking into
consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower’s
prior payment record and the amount of the shortfall in relation to the
principal and interest owed.  Impairment is measured on a loan-by-loan
basis for commercial and construction loans by either the present value of
expected future cash flows discounted at the loan’s effective interest rate, the
loan’s obtainable market price or the fair value of the collateral if the loan
is collateral dependent.




Groups of
loans with similar risk characteristics are collectively evaluated for
impairment based on the group’s historical loss experience adjusted for changes
in trends, conditions and other relevant factors that affect repayment of the
loans.  Accordingly, the Company does not separately identify
individual consumer and residential loans for impairment measurements, unless
such loans are the subject of a restructuring agreement due to financial
difficulties of the borrower.


9


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





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 March 31, 2010 and
2009, the ESOP held 259,996 and 283,635 unallocated shares, respectively, 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
compensation plans.




Three months ended
                      March 31,2010
                    
                    
                    2009BasicNet
      income (In thousands)
                    
                    $
                    683
                    
                    
                    $
                    801Weighted
      average common shares outstanding
                    
                    
                    4,665,937
                    
                    
                    
                    4,600,174Basic
      earnings per common share
                    
                    $
                    0.15
                    
                    
                    $
                    0.17DilutedNet
      income (In thousands)
                    
                    $
                    683
                    
                    
                    $
                    801Weighted
      average common shares outstanding for basic earnings per common
      share
                    
                    
                    4,665,937
                    
                    
                    
                    4,600,174Add:  Dilutive
      effects of stock options and nonvested shares
                    
                    
                    16,512
                    
                    
                    
                    —Average
      shares and dilutive potential common shares
                    
                    
                    4,682,449
                    
                    
                    
                    4,600,174Diluted
      earnings per common share
                    
                    $
                    0.15
                    
                    
                    $
                    0.17




Options
to purchase 53,714 and 55,529 shares of common stock at a weighted-average
exercise price of $10.34 per share were outstanding at March 31, 2010 and 2009,
respectively, but were not included in the computation of diluted earnings per
share 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.


10


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





Recent
Accounting Pronouncements




FASB ASC
860-10 concerning accounting for transfers of financial assets was issued in
June 2009 and changes the derecognition guidance for transferors of financial
assets, including entities that sponsor securitizations, to align that guidance
with the original intent of previous guidance.  FASB ASC 860-10 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 FASB ASC 860-10.




FASB ASC
860-10 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 FASB ASC 860-10 must be applied to transfers that occur on or
after the effective date.  Early application is
prohibited.  FASB ASC 860-10 also requires additional disclosures
about transfers of financial assets that occur both before and after the
effective date.  The Company adopted FASB ASC 860-10 effective January
1, 2010, as required, without material effect on its consolidated financial
statements.




FASB ASC
860-10 also improves 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, FASB ASC 860-10 changes how an
entity determines whether it is the primary beneficiary of a variable interest
entity (VIE) and whether that VIE should be consolidated.  FASB ASC
860-10 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
previously considered to be qualifying special purpose entities, to determine
the effect on its consolidated financial statements and related
disclosures.  FASB ASC 860-10 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 adopted FASB ASC 860-10 effective January 1,
2010, as required, without significant effect on its consolidated financial
statements.




Accounting
Standards Update (ASU) No. 2009-16 (formerly SFAS 166) modified the criteria to
qualify a transfer of a portion of a financial asset for sale
accounting.  This guidance eliminated non-prorata participations, such
as last-in, first-out loan participations, being accounted for as loan
sales.  Instead, these types of transactions will be accounted for as
secured borrowings, which would require the legally sold piece of the loan to
remain on the books of the seller and be offset with a
liability.  This could also have regulatory implications, such as
issues with lending limits and regulatory capital levels.  The Company
must apply ASU 2009-16 to new transactions and modifications of existing
transactions occurring on or after January 1, 2010.


11


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





Note
      2:
            Securities




The
amortized cost and approximate fair values, together with gross unrealized gains
and losses of securities are as follows:




Amortized
                  Cost
                
                
                Gross
                  Unrealized
                  Gains
                
                
                Gross
                  Unrealized
                  Losses
                
                
                Approximate
                  Fair Value(In thousands)Available-for-sale
      Securities:March
      31, 2010:U.S.
      government agencies
                
                $
                49,967
                
                
                $
                200
                
                
                $
                (54
                )
                
                $
                50,113State
      and political subdivisions
                
                
                25,998
                
                
                
                726
                
                
                
                (15
                )
                
                
                26,709Government
      sponsored entities mortgage-backed securities
                
                
                11,759
                
                
                
                614
                
                
                
                (3
                )
                
                
                12,370Equity
      securities
                
                
                4
                
                
                
                5
                
                
                
                —
                
                
                
                9$
                87,728
                
                
                $
                1,545
                
                
                $
                (72
                )
                
                $
                89,201December
      31, 2009:U.S.
      government agencies
                
                $
                57,664
                
                
                $
                35
                
                
                $
                (495
                )
                
                $
                57,204State
      and political subdivisions
                
                
                26,000
                
                
                
                421
                
                
                
                (77
                )
                
                
                26,344Government
      sponsored entities mortgage-backed securities
                
                
                12,466
                
                
                
                567
                
                
                
                (2
                )
                
                
                13,031Equity
      securities
                
                
                4
                
                
                
                2
                
                
                
                —
                
                
                
                6$
                96,134
                
                
                $
                1,025
                
                
                $
                (574
                )
                
                $
                96,585




Amortized
                  Cost
                
                
                Gross
                  Unrealized
                  Gains
                
                
                Gross
                  Unrealized
                  Losses
                
                
                Approximate
                  Fair Value(In
      thousands)Held-to-maturity
      Securities:March
      31, 2010:State
      and political subdivisions
                
                $
                13,594
                
                
                $
                405
                
                
                $
                —
                
                
                $
                13,999December
      31, 2009:State
      and political subdivisions
                
                $
                14,277
                
                
                $
                391
                
                
                $
                (25
                )
                
                $
                14,643


12


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





The
amortized cost and fair value of available-for-sale securities and
held-to-maturity securities at March 31, 2010, 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. Maturities for mortgage-backed
securities are presented in the table below based on their projected
maturities.




Available-for-sale
                  
                  
                  Held-to-maturityAmortized
                    Cost
                  
                  
                  Fair
                    Value
                  
                  
                  Amortized
                    Cost
                  
                  
                  Fair
                    Value(In
      thousands)Within
      one year
                  
                  $
                  125
                  
                  
                  $
                  126
                  
                  
                  $
                  1,213
                  
                  
                  $
                  1,234One
      to five years
                  
                  
                  2,894
                  
                  
                  
                  2,986
                  
                  
                  
                  3,290
                  
                  
                  
                  3,449Five
      to ten years
                  
                  
                  25,165
                  
                  
                  
                  25,987
                  
                  
                  
                  4,354
                  
                  
                  
                  4,534After
      ten years
                  
                  
                  59,540
                  
                  
                  
                  60,093
                  
                  
                  
                  4,737
                  
                  
                  
                  4,78287,724
                  
                  
                  
                  89,192
                  
                  
                  
                  13,594
                  
                  
                  
                  13,999Equity
      securities
                  
                  
                  4
                  
                  
                  
                  9
                  
                  
                  
                  —
                  
                  
                  
                  —Totals
                  
                  $
                  87,728
                  
                  
                  $
                  89,201
                  
                  
                  $
                  13,594
                  
                  
                  $
                  13,999





The
carrying value of securities pledged as collateral, to secure public deposits
and for other purposes, was $101.3 million and $81.5 million at March 31, 2010
and December 31, 2009, respectively.




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 at March 31, 2010 and December 31, 2009, was $7.9 million and $47.8
million, which represented approximately 7.7% and 43.0%, respectively, of the
Company’s available-for-sale and held-to-maturity investment
portfolio.




Based on
evaluation of available evidence, including recent changes in market interest
rates, credit rating information and information obtained from regulatory
filings, management believes the declines in fair value for these securities are
temporary.




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.


13


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





The
following tables show 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 March 31, 2010
and December 31, 2009:




March 31, 2010Less than 12 Months
                
                
                12 Months or More
                
                
                TotalDescription of
                  Securities
                
                Fair Value
                
                
                Unrealized
                  Losses
                
                
                Fair Value
                
                
                Unrealized
                  Losses
                
                
                Fair Value
                
                
                Unrealized
                  Losses(In thousands)US
      Government agencies
                
                $
                5,936
                
                
                $
                (54
                )
                
                $
                —
                
                
                $
                —
                
                
                $
                5,936
                
                
                $
                (54
                )Government
      sponsored entities mortgage-backed securities
                
                
                440
                
                
                
                (3
                )
                
                
                —
                
                
                
                —
                
                
                
                440
                
                
                
                (3
                )State
      and political subdivisions
                
                
                —
                
                
                
                —
                
                
                
                1,498
                
                
                
                (15
                )
                
                
                1,498
                
                
                
                (15
                )Total
      temporarily impaired securities
                
                $
                6,376
                
                
                $
                (57
                )
                
                $
                1,498
                
                
                $
                (15
                )
                
                $
                7,874
                
                
                $
                (72
                )




December 31, 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)US
      Government agencies
                
                $
                40,699
                
                
                $
                (495
                )
                
                $
                —
                
                
                $
                —
                
                
                $
                40,699
                
                
                $
                (495
                )Government
      sponsored entities mortgage-backed securities
                
                
                651
                
                
                
                (2
                )
                
                
                —
                
                
                
                —
                
                
                
                651
                
                
                
                (2
                )State
      and political subdivisions
                
                
                4,037
                
                
                
                (43
                )
                
                
                2,450
                
                
                
                (59
                )
                
                
                6,487
                
                
                
                (102
                )Total
      temporarily impaired securities
                
                $
                45,387
                
                
                $
                (540
                )
                
                $
                2,450
                
                
                $
                (59
                )
                
                $
                47,837
                
                
                $
                (599
                )


14


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





The
unrealized losses on the Company’s investments in U.S. Government agency,
mortgage-backed and municipal securities were caused primarily by interest rate
changes.  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 March 31, 2010.




Note
      3:
            Allowance
      for Loan Losses




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




Three months ended
                    March 31,2010
                  
                  
                  2009(In thousands)Beginning
      balance
                  
                  $
                  2,390
                  
                  
                  $
                  2,770Provision
      for loan losses
                  
                  
                  360
                  
                  
                  
                  324Loans
      charged-off
                  
                  
                  (311
                  )
                  
                  
                  (140
                  )Recoveries
      of previous charge-offs
                  
                  
                  88
                  
                  
                  
                  47Ending
      balance
                  
                  $
                  2,527
                  
                  
                  $
                  3,001




The
Company’s impaired loans totaled $7.1 million and $4.7 million at March 31, 2010
and December 31, 2009, respectively.  The Company reviews each
impaired loan to determine whether a specific allowance for loan loss is
necessary.   Based upon this review, an allowance for loan losses
of $1.6 million and $984,000 relates to impaired loans of $4.7 million and $3.3
million, at March 31, 2010 and December 31, 2009, respectively.  At
March 31, 2010 and December 31, 2009, impaired loans of $2.4 million and $1.4
million had no related allowance for loan losses.




Interest
income of $28,600 and $15,700 was recognized on average impaired loans of $5.9
million and $7.4 million for the three months ended March 31, 2010 and 2009,
respectively.  Interest income was recognized on impaired loans on a
cash basis for each of the three months ended March 31, 2010 and
2009.




At March
31, 2010 and December 31, 2009, accruing loans delinquent 90 days or more
(including impaired loans of $923,000 at March 31, 2010 and $477,000 at December
31, 2009) totaled $947,000 and $971,000, respectively.  Non-accruing
loans at March 31, 2010 and December 31, 2009 (including impaired loans of $4.7
million at March 31, 2010 and $4.2 million at December 31, 2009) were $5.8
million and $5.4 million, respectively.




15


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





Note
      4:
            Benefit
      Plans




Pension
expense includes the following:




Three months ended
                          March 31,2010
                        
                        
                        2009(In thousands)Service
      cost
                        
                        $
                        67
                        
                        
                        $
                        57Interest
      cost
                        
                        
                        45
                        
                        
                        
                        41Expected
      return on assets
                        
                        
                        (58
                        )
                        
                        
                        (38
                        )Amortization
      of prior service cost, transition liability, net gain and plan
      amendment
                        
                        
                        21
                        
                        
                        
                        30Pension
      expense
                        
                        $
                        75
                        
                        
                        $
                        90





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.




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




March 31,
                  
                  
                  December 31,2010
                  
                  
                  2009(Unaudited)(In
      thousands)Commitments
      to extend credit
                  
                  $
                  36,665
                  
                  
                  $
                  41,351Credit
      card and ready reserve lines
                  
                  
                  13,480
                  
                  
                  
                  13,477Standby
      letters of credit
                  
                  
                  664
                  
                  
                  
                  676


16


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





Note
      6:
            Fair
      Value Measurements




The
Company 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.  The Company also utilizes 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 assets measured at fair
value on a recurring basis and recognized in the accompanying consolidated
balance sheets, 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.


17


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





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 fair value hierarchy in which the fair value
measurements fall at March 31, 2010 and December 31, 2009:




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)March
      31, 2010U.S.
      government agencies
                  
                  $
                  50,113
                  
                  
                  $
                  —
                  
                  
                  $
                  50,113
                  
                  
                  $
                  —State
      and political subdivisions
                  
                  
                  26,709
                  
                  
                  
                  —
                  
                  
                  
                  26,709
                  
                  
                  
                  —Mortgage-backed
      securities
                  
                  
                  12,370
                  
                  
                  
                  —
                  
                  
                  
                  12,370
                  
                  
                  
                  —Equity
      securities
                  
                  
                  9
                  
                  
                  
                  —
                  
                  
                  
                  9
                  
                  
                  
                  —December
      31, 2009U.S.
      government agencies
                  
                  $
                  57,204
                  
                  
                  $
                  —
                  
                  
                  $
                  57,204
                  
                  
                  $
                  —State
      and political subdivisions
                  
                  
                  26,344
                  
                  
                  
                  —
                  
                  
                  
                  26,344
                  
                  
                  
                  —Mortgage-backed
      securities
                  
                  
                  13,031
                  
                  
                  
                  —
                  
                  
                  
                  13,031
                  
                  
                  
                  —Equity
      securities
                  
                  
                  6
                  
                  
                  
                  —
                  
                  
                  
                  6
                  
                  
                  
                  —





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




Impaired
Loans




Collateral
dependent 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, which are included in other assets, 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.


18


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009




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 fair value hierarchy in which the
fair value measurements fall at March 31, 2010 and December 31,
2009.




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)March
      31, 2010Impaired
      loans
                  
                  $
                  1,832
                  
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  1,832Foreclosed
      assets held for sale
                  
                  
                  104
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  104December
      31, 2009Impaired
      loans
                  
                  $
                  667
                  
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  667Mortgage
      servicing rights
                  
                  
                  267
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  267Foreclosed
      assets held for sale
                  
                  
                  1,002
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  1,002


19


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009





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.




March 31, 2010
                  
                  
                  December 31, 2009Carrying
                    Amount
                  
                  
                  Fair
                    Value
                  
                  
                  Carrying
                    Amount
                  
                  
                  Fair
                    Value(In thousands)Financial
      assetsCash
      and cash equivalents
                  
                  $
                  47,154
                  
                  
                  $
                  47,154
                  
                  
                  $
                  31,271
                  
                  
                  $
                  31,271Certificates
      of deposits in other financial institutions
                  
                  
                  11,272
                  
                  
                  
                  11,272
                  
                  
                  
                  17,575
                  
                  
                  
                  17,575Available-for-sale
      securities
                  
                  
                  89,201
                  
                  
                  
                  89,201
                  
                  
                  
                  96,585
                  
                  
                  
                  96,585Held-to-maturity
      securities
                  
                  
                  13,594
                  
                  
                  
                  13,999
                  
                  
                  
                  14,277
                  
                  
                  
                  14,643Loans,
      net of allowance for loan losses
                  
                  
                  257,963
                  
                  
                  
                  252,098
                  
                  
                  
                  255,336
                  
                  
                  
                  248,918Federal
      Home Loan Bank stock
                  
                  
                  4,810
                  
                  
                  
                  4,810
                  
                  
                  
                  4,810
                  
                  
                  
                  4,810Accrued
      interest receivable
                  
                  
                  2,101
                  
                  
                  
                  2,101
                  
                  
                  
                  2,218
                  
                  
                  
                  2,218Financial
      liabilitiesDeposits
                  
                  
                  344,988
                  
                  
                  
                  326,409
                  
                  
                  
                  344,543
                  
                  
                  
                  325,179Short-term
      borrowings
                  
                  
                  13,997
                  
                  
                  
                  13,783
                  
                  
                  
                  10,277
                  
                  
                  
                  10,264Federal
      Home Loan Bank advances
                  
                  
                  48,875
                  
                  
                  
                  49,632
                  
                  
                  
                  49,128
                  
                  
                  
                  49,540Subordinated
      debentures
                  
                  
                  4,000
                  
                  
                  
                  3,093
                  
                  
                  
                  4,000
                  
                  
                  
                  3,093Interest
      payable
                  
                  
                  385
                  
                  
                  
                  385
                  
                  
                  
                  398
                  
                  
                  
                  398




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 amounts approximate fair value.


20


United
Bancorp, Inc.


Notes
to Condensed Consolidated Financial Statements


For
the Three Months Ended March 31, 2010 and 2009




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.




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.




Interest
Payable




The
carrying amount approximates fair value.




Short-term
Borrowings, Federal Home Loan Bank Advances and Subordinated
Debentures




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 March 31, 2010 and December 31, 2009.


21


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 March 31, 2010,
as compared to December 31, 2009, and the results of operations for the three
months ended March 31, 2010, compared to the same period in
2009.  This discussion should be read in conjunction with the interim
condensed consolidated financial statements and related footnotes included
herein.




Introduction




The
Company’s earnings in the first quarter of 2010 generated an annualized 0.61%
return on average assets (“ROA”) and an annualized 7.69% return on average
equity (“ROE”), compared to 0.72% ROA and 9.46% ROE for the three months ended
March 31, 2009.  Comparing the quarter ended March 31, 2010 to 2009,
the Company’s net interest margin was 4.00% compared to 4.05%, which caused a
decrease in net interest income of approximately $113,000 or 2.9%.  As
the historically low interest rates continue into 2010, it will be challenging
to continue spreading the net interest margin by lowering the Company’s cost of
funds on an accelerated basis relative to the income generated by its
assets.  Comparing the same periods, customer service fees on deposits
increased $21,000.  On the expense side, the Company’s 2010 earnings
were affected by a period over period increase of $64,000 in FDIC Premiums and a
$36,000 increase in our provision for loan losses.  The net after-tax
per share impact of the additional FDIC Premiums expensed in the first quarter
of 2010 is approximately $0.01 per share.




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.




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.  The Company is not aware of any current recommendation by
regulatory authorities that would have such effect if implemented except as
discussed herein.


22


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations





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.




Current
Economic Conditions




The
current economic environment presents financial institutions with unprecedented
circumstances and challenges which in some cases have resulted in large declines
in the fair values of investments and other assets, constraints on liquidity and
significant credit quality problems, including severe volatility in the
valuation of real estate and other collateral supporting loans.  The
consolidated financial statements have been prepared using values and
information currently available to the Company.




Given the
volatility of current economic conditions, the values of assets and liabilities
recorded in the financial statements could change rapidly, resulting in material
future adjustments in asset values, the allowance for loan losses and capital
that could negatively impact the Company’s ability to meet regulatory capital
requirements and maintain sufficient liquidity.




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 judgment.




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.


23


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations





Analysis
of Financial Condition




Earning
Assets – Loans




At March
31, 2010, gross loans were $260.5 million, compared to $257.7 million at
December 31, 2009, an increase of $2.8 million or 1.1%.  The overall
increase in the loan portfolio was driven by a $2.3 million increase in
commercial and commercial real estate loans since December 31,
2009.




Installment
loans represented 17.9% of total loans at March 31, 2010, and 17.4% at December
31, 2009.  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 $1.2 million, or 2.6%, since
December 31, 2009.  The targeted lending areas encompass four separate
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 58.7% of total loans at March 31,
2010, compared to 58.5% at December 31, 2009.  Commercial and
commercial real estate loans have increased $2.3 million, or 1.5% since December
31, 2009.  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 23.6% of total loans at March 31, 2010 and 24.1% at December
31, 2009.  Real estate loans have decreased by $701,000 since December
31, 2009.  Real estate lending for the three months of 2010 has been
slow with respect to the Company’s adjustable-rate mortgage
products.  As of March 31, 2010, the Bank has approximately $28.8
million in fixed-rate loans that have been sold in the secondary
market.  The Company continues to service these loans for a fee that
is typically 25 basis points.  At March 31, 2010, 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 three months ended
March 31, 2010 were approximately $223,000, or 9.3%, of the beginning balance in
the allowance for loan losses.


24


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 or derivative securities other than those issued by
U.S. government agencies. Securities available for sale at March 31, 2010
decreased approximately $7.4 million, or 7.6%, from December 31, 2009
totals.  With the overall decreasing interest rate environment, the
Company has experienced a high level of called bond activity during the first
three months of 2010.  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”) in 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-backed securities.  As of March 31, 2010, the
Company had approximately $11.3 million of CD’s with an average yield of 2.05%
and an average term to maturity of 357 days. With the continued low interest
rate environment, the opportunity to invest in short term CD’s in other
financial institutions has been limited during the first three months of
2010.




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 March 31, 2010,
total core deposits increased approximately $1.3 million, or
0.4%.  The Company’s savings accounts increased $3.1 million, or 6.8%,
from December 31, 2009 totals.  The Company’s interest-bearing demand
deposits decreased $161,000, or 0.2%, noninterest-bearing demand deposits
increased $440,000, or 1.9%, while certificates of deposit under $100,000
decreased by $2.1 million, or 1.8%.




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 March 31, 2010, certificates of deposit greater than
$100,000 decreased $861,000, or 1.7%, from December 31, 2009
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 $3.7 million from December 31, 2009
totals.


25


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations





Results
of Operations for the Three Months Ended March 31, 2010 and 2009




Net
Income




Basic and
diluted earnings per share for the three months ended March 31, 2010 totaled
$0.15 compared with $0.17 for the three months ended March 31, 2009, a decrease
of 11.8%.  In dollars, the Company’s net income was $683,000 for the
three months ended March 31 2010, a decrease of $118,000, or 14.7% compared with
net income of $801,000 for the same quarter in 2009.




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 2.9%, or $113,000, for the
three months ended March 31, 2010 compared to the same period in 2009. As the
historically low interest rates continue into 2010, it will be challenging to
continue spreading the net interest margin by lowering the Company’s cost of
funds on an accelerated basis relative to the income generated by its
assets.




Provision
for Loan Losses




The
provision for loan losses was $360,000 for the three months ended March 31,
2010, compared to $324,000 for the same period in 2009.  The increase
in loan loss provision for the three-month period ended March 31, 2010, was
based upon an increase in nonperforming loans and consideration of the economic
challenges facing the banking industry.




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 March 31, 2010 was $776,000, a decrease of
$13,000 or 1.7%, compared to $789,000 for the same three-month period ended
March 31, 2009.  During the three-months ended March 31, 2010, the
decrease in noninterest income was caused by a decrease in gain on the sale of
foreclosed real estate $46,000 offset by an increase in customer service fees of
approximately $21,000.


26


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations





Noninterest
Expense




Noninterest
expense was $3.4 million for the three months ended March 31, 2010 an increase
of $62,000, or 1.9%, over the three months ended March 31,
2009.  Salaries and employee benefit expense increased $133,000, or
8.2%, for the period ended March 31, 2010 over the same period in
2009.  This increase was primarily due to normal merit increases, and
increases in benefit costs and restricted stock award
expenses.  Professional fees decreased $39,000 for the first quarter
of 2010 compared to the same period in 2009.  Occupancy and equipment
expense increased $26,000, or 6.5% for the first quarter of 2010 over the same
period in 2009.  Increased depreciation expense on computer hardware
and software and related service maintenance was the primary reason for the
increase.  Stationary and office supplies decreased $22,000 for the
first quarter of 2010 compared to the same period in 2009.




Federal
Income Taxes




The
provision for federal income taxes was $88,000 for the three months ended March
31, 2010, a decrease of $106,000 compared to the same period in
2009.  The decrease in tax expense was due primarily to a $224,000
decrease in pretax income.  The effective tax rate was 11.4% and 19.5%
for the three months ended March 31, 2010 and 2009, 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 $36.0 million at March 31, 2010 compared to $35.2 million at December
31, 2009, an $827,000 increase.  Total stockholders’ equity in
relation to total assets was 8.0% at both March 31, 2010 and December 31,
2009.  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.




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.


27


United
Bancorp, Inc.


Management’s
Discussion and Analysis of Financial


Condition
and Results of Operations





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
March 31, 2010.




March 31,2010(Unaudited)(Dollars in thousands)Tier
      1 capital
                  
                  $
                  38,412Total
      risk-based capital
                  
                  
                  40,941Risk-weighted
      assets
                  
                  
                  284,513Average
      total assets
                  
                  
                  446,506Total
      risk-based capital ratio
                  
                  
                  14.39
                  %Tier
      1 risk-based capital ratio
                  
                  
                  13.50
                  %Tier
      1 capital to average assets
                  
                  
                  8.60
                  %




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.


28


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, 2009.




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 March 31, 2010, 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 March 31, 2010 that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


29


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 for 10K for the year ended December 31, 2009, filed
on March 23, 2010.





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 YetBe
                      Purchased Underthe
                      Plans or ProgramsMonth
      #1
                      1/1/2010
      to
                      1/31/2010
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    1,735,810Month
      #2
                      2/1/2010
      to
                      2/28/2010
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    $
                    1,735,810Month
      #3
                      3/1/2010
      to
                      3/31/2010
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    $
                    1,735,810




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, eligible participants may defer fees and 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 along with any cash proceeds credited to the
account which have not yet been invested in the Company’s stock.  On
January 20, 2009, the Company purchased a total of 10,818 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.


30


United
Bancorp, Inc.


Part
II – Other Information





On June
27, 2008 UBCP was added to the Russell Microcap Index after the Russell
Investment Group reconstituted its comprehensive set of U.S. and global equity
indexes.  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 2009.




ITEM
3.                 Defaults
Upon Senior Securities




Not
applicable.





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




Not
applicable





ITEM
5.                 Other
Information




Not
applicable.





ITEM
6.                 Exhibits




EX-3.1
                Amended
      Articles of Incorporation of United Bancorp, Inc. (1)EX-3.2
                Amended
      Code of Regulations of United Bancorp, Inc. (2)EX-4.0
                Instruments
      Defining the Rights of Security Holders (See Exhibits 3.1 and
      3.2)EX
      10.0
                Purchase
      and Assumption Agreement dated September 18, 2008(3)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.(2)
                Incorporated
      by reference to Appendix C to the registrant’s Definitive Proxy Statement
      filed with the Securities and Exchange Commission on March 14,
      2001.(3)
                Incorporated
      by reference to Exhibit 2 to registrant’s Form 8-K filed with the
      Securities and Exchange Commission on September 24,
  2008


31


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: May 14, 2010
                    By:
                    /s/James W. EversonJames W. EversonChairman, President and Chief
                      Executive OfficerDate: May 14, 2010
                    By:
                    /s/Randall M. GreenwoodRandall M. GreenwoodSenior Vice President, Chief Financial
                      Officer and Treasurer


32


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)10.0
              
              Purchase
      and Assumption Agreement dated September 18, 200831.1
              
              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.