<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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




For the quarterly period ended   September 30, 2000
                               -----------------------

Commission file number   2-78572
                       ------------



                     UNITED BANCORPORATION OF ALABAMA, INC.
        ---------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



           Delaware                                    63-0833573
--------------------------------------------------------------------------------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
 incorporation or organization)



         200 East Nashville Avenue, Atmore, Alabama        36502
        ----------------------------------------------------------------
           (Address of principal executive offices)      (Zip Code)



                                 (334) 368-2525
        ---------------------------------------------------------------
              (Registrant's telephone number, including area code)



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 report(s), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 30, 2000.

<TABLE>
<S>                                          <C>
                    Class A Common Stock.... 1,155,881 Shares
                    Class B Common Stock....       -0- Shares
</TABLE>

                     UNITED BANCORPORATION OF ALABAMA, INC.


<PAGE>   2


                                    FORM 10-Q

                    For the Quarter Ended September 30, 2000


                                      INDEX



<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                         PAGE
                                                                       ----

<S>                                                                    <C>
Item 1.  Financial Statements

          Condensed Consolidated Balance Sheets                           3

          Condensed Consolidated Statements of Earnings                   4

          Consolidated Statements of Cash Flows                           5

          Notes to Consolidated Financial Statements                      6

Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations                             7

Item 3. Quantitative and Qualitative Disclosures about Market Risk       12

PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K                                 15
</TABLE>


<PAGE>   3
                     UNITED BANCORPORATION OF ALABAMA, INC.
                                 AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

PRINT IN ALLWAYS, A2.I57, LM=.85, TM=.40


Part I - Financial Information
Item 1.

<TABLE>
<CAPTION>
                                                                      September 30,      December 31,
                                                                          2000               1999

<S>                                                                 <C>                <C>
Assets
Cash and due from banks                                             $    12,137,332         10,312,090
Federal funds sold                                                        1,145,000         22,645,000
                                                                    ---------------    ---------------
              Cash and cash equivalents                                  13,282,332         32,957,090
Securities available for sale, at fair value,
   (amortized cost of $48,195,847 and $44,310,451 respectively)          47,385,259         42,962,734
Investment securities held to maturity, at amortized cost,
  (market value of $14,185,427 and $15,152,215 respectively)             14,376,076         15,545,733

Loans                                                                   141,258,419        123,695,962
Less:  Unearned income                                                        4,003             19,448
           Allowance for loan losses                                      1,865,274          1,676,274
                                                                    ---------------    ---------------
              Net loans                                                 139,389,142        122,000,240

Premises and equipment, net                                               4,870,793          4,979,984
Interest receivable and other assets                                      3,494,881          3,521,463
                                                                    ---------------    ---------------
              Total assets                                          $   222,798,483        221,967,244
                                                                    ===============    ===============

Liabilities and Stockholders' Equity
Deposits:
  Non-interest bearing                                              $    29,340,368         29,211,226
  Interest bearing                                                      149,311,147        153,997,225
                                                                    ---------------    ---------------
              Total deposits                                            178,651,515        183,208,451

Securities sold under agreements to repurchase                           10,393,481          8,935,003
Other borrowed funds                                                     12,365,921          9,787,762
Accrued expenses and other liabilities                                    2,086,220          2,389,365
                                                                    ---------------    ---------------
              Total liabilities                                         203,497,137        204,320,581

Stockholders' equity:
  Class A common stock.  Authorized 5,000,000
  shares of $.01 par value; 1,155,881 and 1,149,281
  shares issued and outstanding                                              11,559             11,494
  Class B common stock of $.01 par value
  Authorized 250,000 shares;
  -0- shares issued and outstanding                                               0                  0
  Preferred stock of $.01 par value.  Authorized
  250,000 shares; -0- shares issued
  and outstanding                                                                 0                  0
Surplus                                                                   4,967,048          4,804,489
Net unrealized loss on securities
  available for sale                                                       (486,353)          (808,600)
Retained earnings                                                        15,265,672         14,104,870
                                                                    ---------------    ---------------
                                                                         19,757,926         18,112,253
Less 62,649 and 63,550 treasury shares, at cost                             456,580            465,590
                                                                    ---------------    ---------------
         Total stockholders' equity                                      19,301,346         17,646,663
                                                                    ---------------    ---------------
         Total liabilities and stockholders' equity                 $   222,798,483        221,967,244
                                                                    ===============    ===============
</TABLE>


                                       3

<PAGE>   4
                     UNITED BANCORPORATION OF ALABAMA, INC.
                                 AND SUBSIDIARY
                             CONDENSED CONSOLIDATED
                             STATEMENTS OF EARNINGS
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                                                   Three Months Ended              Nine Months Ended
                                                                       September 30                   September 30
                                                                   2000           1999            2000            1999

<S>                                                            <C>            <C>              <C>            <C>
Interest income:
  Interest and fees on loans                                   $  3,378,869      3,039,794       9,555,884      8,619,229
  Interest on investment securities available for sale:
    Taxable                                                         573,848        501,658       1,770,717      1,644,264
    Nontaxable                                                      172,888        130,775         505,222        363,745
  Interest on investment securities held to maturity:
    Taxable                                                          79,013         85,912         241,617        263,090
    Nontaxable                                                      118,910        129,681         370,994        399,463
                                                               ------------   ------------    ------------   ------------
   Total investment income                                          944,659        848,026       2,888,550      2,670,562
  Other interest income                                              83,073         29,110         378,153        114,656
                                                               ------------   ------------    ------------   ------------
      Total interest income                                       4,406,601      3,916,930      12,822,587     11,404,447

Interest expense:
  Interest on deposits                                            1,923,897      1,475,976       5,357,324      4,316,547
  Interest on other borrowed funds                                  297,896        289,692         869,180        793,631
                                                               ------------   ------------    ------------   ------------
      Total interest expense                                      2,221,793      1,765,668       6,226,504      5,110,178

      Net interest income                                         2,184,808      2,151,262       6,596,083      6,294,269

Provision for loan losses                                           120,000         99,000         355,000        397,000
                                                               ------------   ------------    ------------   ------------

      Net interest income after
        provision for loan losses                                 2,064,808      2,052,262       6,241,083      5,897,269

Noninterest income:
  Service charge on deposits                                        315,151        287,184         891,740        816,098
  Commission on credit life                                           7,188         11,579          28,693         38,016
  Investment securities gains and losses, net                        34,725             --          34,725         31,907
  Other                                                              63,391         64,004         231,824        228,697
                                                               ------------   ------------    ------------   ------------
      Total noninterest income                                      420,455        362,767       1,186,982      1,114,718

Noninterest expense:
  Salaries and benefits                                           1,003,784        996,246       2,953,547      2,976,239
  Net occupancy expense                                             325,430        256,561         960,053        726,585
  Other                                                             466,730        505,052       1,592,806      1,512,869
                                                               ------------   ------------    ------------   ------------
      Total non-interest expense                                  1,795,944      1,757,859       5,506,406      5,215,693

      Earnings before income tax expense                            689,319        657,170       1,921,659      1,796,294
Income tax expense                                                  164,740        177,145         487,829        460,960
                                                               ------------   ------------    ------------   ------------
      Net earnings                                             $    524,579        480,025       1,433,830      1,335,334
                                                               ============   ============    ============   ============

Basic earnings per share                                       $       0.48   $       0.46    $       1.31   $       1.29
Diluted earnings per share                                     $       0.48   $       0.46    $       1.30   $       1.28
Basic weighted average shares outstanding                         1,094,937      1,034,084       1,091,363      1,033,342
                                                               ============   ============    ============   ============
Diluted weighted average shares outstanding                       1,102,079      1,049,151       1,103,413      1,041,608
                                                               ============   ============    ============   ============


Statement of Comprehensive Income

Net Income                                                     $    524,579        480,025       1,433,830      1,335,334

Other comprehensive income, net of tax:
     Unrealized holding gains (losses) arising
        during the period                                           229,967       (167,291)        322,247       (873,730)
     Less:  Reclassification adjustment for gains
        (losses) included in net income                              20,835             --          20,835         19,144
                                                               ------------   ------------    ------------   ------------
Comprehensive income                                           $    733,711        312,734       1,735,242        442,460
                                                               ============   ============    ============   ============
</TABLE>


                                       4


<PAGE>   5
                     UNITED BANCORPORATION OF ALABAMA INC.
                                 AND SUBSIDIARY
                                  CONSOLIDATED
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 For the Nine Months Ended
                                                                                         September 30
                                                                                  2000              1999

<S>                                                                         <C>               <C>
Operating Activities
 Net Income                                                                     1,433,830        1,335,334
 Adjustments to Reconcile Net Income to Net Cash
  Provided by Operating Activities
   Provision for Loan Losses                                                      355,000          397,000
   Depreciation on Premises and Equipment                                         383,827          269,073
   Amortization of Investment Securities Held to Maturity                          29,671           40,315
   Amortization of Investment Securities Available for Sale                        47,879          154,825
   Gain on Sale of Investment Securities Available for Sale                       (34,725)         (31,907)
   Gain on Disposal of Premises and Equipment                                          --           (4,300)
   Increase in Interest Receivable
    and Other Assets                                                             (188,301)         (47,964)
   Decrease in Accrued Expenses
    and Other Liabilities                                                        (303,145)        (566,143)
  Earned compensation - stock option plan                                          34,350          150,040
                                                                            -------------    -------------
 Net Cash Provided  by Operating Activities                                     1,758,386        1,696,273
Investing Activities
  Proceeds From Sales of Investment Securities Available for Sale               4,627,751        7,499,650
  Proceeds From Maturities of Investment Securities Held to Maturity            1,139,986        1,114,598
  Proceeds From Maturities of Investment Securities Available for Sale          5,458,841       10,430,035
  Purchases of Investment Securities Available for Sale                       (13,985,142)      (9,119,497)
  Net Increase in Loans                                                       (17,743,902)     (25,462,465)
  Purchases of Premises and Equipment                                            (274,636)      (1,961,101)
  Proceeds From Sales of Premises and Equipment                                        --            4,300
                                                                            -------------    -------------
 Net Cash Used by Investing Activities                                        (20,777,101)     (17,494,480)
                                                                            -------------    -------------
Financing Activities
  Net (Decrease) Increase in Deposits                                          (4,556,936)      10,049,138
  Net Increase (Decrease)  in securities sold under
  agreement to repurchase                                                       1,458,478       (1,997,184)
  Proceeds from sale of stock under the Employee Stock Purchase Plan               19,714
  Exercise of  Stock Options                                                       73,600               --
  Cash Dividends                                                                 (273,058)        (258,394)
  Proceeds from Sale of Common Stock Class A                                       44,000           87,876
  Increase in Other Borrowed Funds                                              2,578,159        7,935,138
                                                                            -------------    -------------
 Net Cash (Used)  Provided  by Financing Activities                              (656,043)      15,816,574
                                                                            -------------    -------------
(Decrease) Increase  in Cash and Cash Equivalents                             (19,674,758)          18,367
Cash and Cash Equivalents at Beginning of Period                               32,957,090        9,030,901
                                                                            -------------    -------------
Cash and Cash Equivalents at End of Period                                     13,282,332        9,049,268
                                                                            =============    =============

Supplemental disclosures

Cash paid during the year for:                                                  5,900,750        4,622,628
     Interest
                                                                            =============    =============

     Income Taxes                                                                 512,263          468,543
                                                                            =============    =============
</TABLE>


                                       5

<PAGE>   6

                     UNITED BANCORPORATION OF ALABAMA, INC.,
                                 AND SUBSIDIARY

               Notes to Interim Consolidated Financial Statements

Note 1  - General

This report includes interim consolidated financial statements of United
Bancorporation of Alabama, Inc. (the "Corporation") and its wholly-owned
subsidiary United Bank (the "Bank"). The interim consolidated financial
statements in this report have not been audited. In the opinion of management,
all adjustments necessary to present fairly the financial position and the
results of operations for the interim periods have been made. All such
adjustments are of a normal recurring nature. The results of operations are not
necessarily indicative of the results of operations for the full year or any
other interim periods. For further information, refer to the consolidated
financial statements and footnotes included in the Company's annual report on
Form 10-K for the year ended December 31, 1999.


NOTE 2 - New Accounting Pronouncements

On December 3, 1999, the SEC staff issued Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements" (SAB 101). SAB 101 summarizes
certain of the staff's views in applying generally accepted accounting
principles to revenue recognition in financial statements. SAB 101, as amended,
is effective for financial statements for the fourth quarter of the fiscal year
beginning after December 15, 1999. Management does not expect SAB 101 to have an
impact on the financial statements of the Corporation.

In June 1998, the FASB issued SFAS 133, "Accounting for Derivative Instruments
and Hedging Activities", SFAS 133 establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognizes all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. SFAS 133, as
amended, is effective for financial statements for the first quarter of fiscal
years beginning after June 15, 2000. Management does not expect SFAS 133 to have
an impact on the financial statements of the Corporation.

NOTE 3 - Net Income per Share

Presented below is a summary of the components used to calculate diluted
earnings per share for the three months and nine months ended September 30, 2000
and 1999.

                                       6

<PAGE>   7

<TABLE>
<CAPTION>
                                                                   Three months                      Nine months
                                                                      ended                             ended
                                                                  September 30,                      September 30,
                                                             2000              1999              2000              1999

<S>                                                        <C>               <C>               <C>               <C>
Weighted average common shares outstanding                 1,094,937         1,034,084         1,091,363         1,033,342

Net effect of the assumed exercise of stock options
based on the treasury stock method using average               7,142            15,067            12,050             8,266
market price for the quarter

Total weighted average common shares and potential         1,102,079         1,049,151         1,103,413         1,041,608
common stock outstanding
</TABLE>


Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Results of Operations

The following financial review is presented to provide a comparative analysis of
the results of operations of United Bancorporation of Alabama, Inc. (the
"Corporation"), and its subsidiary for the nine months ended September 30, 2000,
and 1999. This review should be used in conjunction with the consolidated
financial statements included in the Form 10-Q.

Nine Months Ended September 30, 2000 and 1999 Compared

Net income after taxes for the nine months ended September 30, 2000 was
$1,433,830, an increase of $98,496 or 7.38%, as compared to $1,335,334 for the
same period in 1999. Basic earnings per share increased to $1.31 for the nine
months ended September 30, 2000 as compared to $1.29 in 1999.

Net interest income through the first nine months of 2000 increased to
$6,596,083 from $6,294,269. The net interest margin was 4.32% for the first nine
months of 2000 as compared to 4.46% for the same period in 1999. This decrease
was caused by interest bearing liabilities repricing faster than interest
earning assets.

Total interest income increased $1,418,140, or 12.43%, to $12,822,587 in 2000
from $11,404,447 in 1999. Average interest earning assets were $203,539,546 for
the first nine months 2000, as compared to $188,149,101 for the same period in
1999, an increase of $15,390,445, or 8.18 %. The average rate earned in 2000 on
earning assets was 8.41% as compared to 8.10% in 1999. The increase in average
rates earned was due to the increases in prime rate during the period.

Total interest expense increased by $1,116,326 in 2000 to $6,226,504 from
$5,110,178 in 1999. Average interest-bearing liabilities increased to
$168,475,408 in 2000 from $155,425,164 in 1999, an increase of $13,050,244, or
8.40%. The average rate paid rose to 4.94% in 2000, from 4.40% in


                                       7

<PAGE>   8
1999. The majority of the growth in assets and liabilities is attributable to
the Bank's growth in Baldwin County.

The allowance for loan losses consists of two portions: the classified portion
and the nonclassified portion. The classified portion is based on identified
problem loans and is calculated based on an assessment of credit risk related to
those loans. Specific loss estimate amounts are included in the allowance based
on assigned classifications as follows: substandard (10%), doubtful (50%), and
loss (100%).

The nonclassified portion of the allowance is for inherent losses which probably
exist as of the evaluation date even though they may not have been identified by
the more objective processes for the classified portion of the allowance. This
is due to the risk of error and inherent imprecision in the process. This
portion of the allowance is particularly subjective and requires judgments based
upon qualitative factors which do not lend themselves to exact mathematical
calculations. Some of the factors considered are changes in credit
concentrations, loan mix, historical loss experience, and general economic
environment in the Corporation's markets.

While the total allowance is described as consisting of a classified and a
nonclassified portion, these terms are primarily used to describe a process.
Both portions are available to support inherent losses in the loan portfolio.
Management realizes that general economic trends greatly affect loan losses, and
no assurances can be made that future charges to the allowance for loan losses
will not be significant in relation to the amount provided during a particular
period, or that future evaluations of the loan portfolio based on conditions
then prevailing will not require sizable charges to income. Management does,
however, consider the allowance for loan losses to be appropriate for the
reported periods.

The provision for loan losses decreased to $355,000 for the first nine months of
2000 as compared to $397,000 for the same period in 1999. Total charged off
loans amounted to $191,551 for the first nine months of 2000, while recoveries
amounted to $25,550 resulting in net charged off loans of $166,001. For the same
period in 1999, total charge offs were $253,093 and recoveries were $44,751
resulting in net charge offs of $208,342.

The allowance for possible loan losses represents 1.32% of gross loans at
September 30, 2000, as compared to 1.36% at year-end 2000. Loans on which the
accrual of interest had been discontinued amounted to $408,197 at September 30,
2000, as compared to $673,522 at December 31, 1999. Management believes that the
allowance for loan losses is appropriate considering the current composition of
the portfolio and management's assessment of the underlying credit risk.

Total noninterest income increased to $1,186,982 for the first nine months of
2000, as compared to $1,114,718 for the same period in 1999, an increase of
$72,264, or 6.48%. Investment security gains were $34,725 for the first nine
months of 2000, as compared to gains of $31,907 in 1999. Service charges on
deposits increased $75,642 or 9.27% to $891,740 in 2000 from $816,098 in 1999 as
the Bank raised overdraft fees and insufficient fund charges. Commissions on
credit life insurance decreased to $28,693 in 2000 from $38,016 in 1999, a
decrease of $9,323, or 24.52%.



                                       8

<PAGE>   9

Other income increased during the first nine months of 2000 to $231,824 from
$228,697 in 1999, an increase of $3,127, or 1.37%.

Total noninterest expense increased $290,713, or 5.57%, to $5,506,406 during the
first nine months of 2000, as compared to $5,215,693 for the same period in
1999. Salaries and benefits decreased to $2,953,547 in 2000 from $2,976,237 in
1999, a decrease of $22,692, or 0.76%. This decrease is primarily due to the
expense associated with the stock options, which decreased by $115,690, offset
by normal salary increases of $92,998 or 3.12% during the first nine month
period of 2000. Occupancy expense increased $233,468 or 32.13% to $960,053 in
2000 from $726,585 in 1999, primarily due to the opening of a new branch and the
expenses associated with it for the first nine months of 2000. Other expense
increased to $1,592,806 during the first nine months of 2000 from $1,512,869 in
the same period in 1999, an increase of $79,937, or 5.28%. A significant portion
of the increase was for data processing fees, which increased $38,892 or 21.11%
in the past nine months.

Earnings before taxes for the first nine months of 2000 increased $125,365, or
6.98%, to $1,921,659 from $1,796,294 for the same period in 1999. Income taxes
increased $26,869 or 5.83%. The effective tax rate was decreased to 25.39% from
25.66%. Net income after taxes increased $98,496 or 7.38% from $1,335,334 in
1999 to $1,433,830 in 2000.

Three Months Ended September 30, 2000 and 1999 Compared

Net earnings for the three months ended September 30, 2000 were $524,579, an
increase of $44,554, or 9.28% from $480,025, for the same period last year.
Basic earnings per share increased to $0.48 for the third quarter of 2000, from
$0.46 for the same period in 1999.

Total interest income increased $489,671 or 12.50% to $4,406,601 for the third
quarter of 2000, as compared to $3,916,930 for the same period in 1999. Interest
and fees on loans increased $339,075, or 11.15%, to $3,378,869 in 2000, from
$3,039,794 in 1999. The average rate earned on interest earning assets during
the third quarter of 2000 was 8.50%, as compared to 8.08% for the same period in
1999. This increase is related to the rise in interest rates over the past nine
months. Average interest earning assets increased to $205,603,056 in 2000, from
$191,847,407 in 1999, an increase of $13,755,649, or 7.17%.

Total interest expense increased by $456,125 or 25.83% from $1,765,668 in 1999
to $2,221,793. This increase was caused by both an increase in rates and an
increase in volume. The increase in rates was due to the changes in the federal
monetary policy by the Federal Reserve Board. Average interest bearing
liabilities for the third quarter of 2000 were $169,186,396, as compared to
$158,566,606 for the same period in 1999, an increase of $10,619,790 or 6.70%.

Net interest margin decreased to 4.20% from 4.43% in the previous third quarter.
This decrease is due to higher rates being paid and deposits generally repricing
faster than loans.

The provision for loan losses increased to $120,000 for the third quarter of
2000 as compared to


                                       9

<PAGE>   10
$99,000 for the same period in 1999, primarily due to the overall growth in the
loan portfolio. Total charged off loans for the three month period ended
September 30,2000 were $65,734, while recoveries were $14,893 resulting in net
charged off loans of $50,841.For the same period in 1999, total charge offs were
$105,812 and recoveries were $18,063 resulting in net charge offs of $87,749.

Total noninterest income increased to $420,455 for the third quarter of 2000 as
compared to $362,767 in 1999, an increase of $57,688, or 15.90%. Service charges
on deposits increased $27,967, or 9.74%, to $315,151 in 2000, from $287,184 in
1999. The increase in service charges was due to the increase in overdraft fees
and insufficient fund charges. There were $34,725 of investment securities gains
during the third quarter of 2000, compared to none in the third quarter of 1999.
The gain in 2000 resulted from securities sold to create liquidity to fund
loans. Commissions on credit life insurance decreased to $7,188 in 2000 from
$11,579 in 1999. Other income decreased during the third quarter of 2000 to
$63,391 from $64,004 in 1999, a decrease of $613, or 0.96% as a result of losses
on repossessed collateral.

Total noninterest expense increased $38,085, or 2.17%, to $1,795,944 during the
third quarter of 2000, as compared to $1,757,859 for the same period in 1999.
Salaries and benefits increased to $1,003,784 in 2000, from $996,246 in 1999, an
increase of $7,538, or 0.76%. Occupancy expense increased $68,869, or 26.84%, to
$325,430 in 2000 from $256,561 in 1999. This increase was associated with the
opening of a new branch in the fourth quarter of 1999. Other expense decreased
to $466,730 during the third quarter of 2000, as compared to $505,052 for the
same period in 1999, a decrease of $38,322 or 7.59%.

Earnings before taxes for the third quarter of 2000 increased by $32,149 or
4.89% to $689,319 from $657,170 for the same period in 1999. Income tax expense
decreased by $12,405 or 7.00%, to $164,740 for the three months ended September
30, 2000 from $177,145 for the same period in 1999. The effective tax rate for
the third quarter of 2000 was 23.90% compared to 26.96% for the same period in
1999. The decrease is primarily due to an increase in nontaxable interest income
from the investment portfolio of $31,342.

Financial Condition and Liquidity

Total assets on September 30, 2000, were $222,798,483, as compared to
$221,967,244 on December 31, 1999, an increase of $831,239, or 0.37%. Average
total assets for the first nine months of 2000 were $218,256,249. The loan
portfolio growth was funded largely by new deposits and Federal Home Loan Bank
advances. Net loans increased to $139,389,142 at September 30, 2000, from
$122,000,240 at year-end 1999, an increase of $17,388,902, or 14.25%. The loan
to deposit ratio on September 30, 2000, was 79.07%, as compared to 67.52% on
December 31, 1999.

Federal funds sold decreased to $1,145,000 on September 30, 2000, as compared to
$22,645,000 on December 31, 1999, a decrease of $21,500,000. This decrease was
caused by seasonal deposits that are deposited from October to January. These
deposits represent tax funds from a local public



                                       10

<PAGE>   11
entity, which are deposited on a daily basis, held for fifteen days, and then
distributed to local municipalities, the county, and the state under a
contract in effect until September of 2001. Investment securities held to
maturity decreased to $14,376,076 at September 30, 2000 as compared to
$15,545,733 at year-end. The investment securities available for sale increased
to $47,385,259 from $42,962,734 at December 31, 1999.

Under a contract between the Bank and another public entity that ends March 1,
2001,that entity maintains an account which had an account balance of
$15,871,912 at the end of September, 2000. If the contract is not renewed, the
Bank would seek to obtain funds to replace the loss of the account from FHLB
advances, sale of securities, other deposits from external sources, federal fund
lines and brokered deposits. Management does not anticipate any material
liquidity problems associated with this account.

Non-performing Assets: The following table sets forth the Corporation's
non-performing assets at September 30, 2000 and December 31, 1999. Under the
Corporation's nonaccrual policy, a loan is placed on nonaccrual status when
collectibility of principal and interest is in doubt or when principal and
interest is 90 days or more past due.


<TABLE>
<CAPTION>
                                                   September 30              December 31
          Description                                      2000                     1999
                                                          (Dollars in Thousands)

<S>                                                 <C>                      <C>
(A)       Loans accounted for on                       $    408                 $    674
          a nonaccrual basis

(B)       Loans which are contractually
          past due ninety days or more
          as to interest or principal
          payments (excluding balances
          included in (A) above).                            18                       28

(C)       Loans, the terms of which have been
          renegotiated to provide a reduction
          or deferral of interest or principal
          because of a deterioration in the
          financial position of the borrower.               139                      122

(D)       Other non-performing assets                       235                      257
</TABLE>


                                       11

<PAGE>   12
At September 30, 2000, loans with a total outstanding balance of $3,077,404 were
considered potential problem loans. Potential problem loans consist of those
loans for which management has serious doubts as to the borrower's ability to
comply with present loan repayment terms.

There may be additional loans in the Corporation's portfolio that may become
classified as conditions dictate. However, management is not aware of any such
loans that are material in amount at September 30, 2000. Regulatory examiners
may require the Bank to recognize additions to the allowance based upon their
judgments about information available to them at the time of their examination.

Total deposits decreased $4,556,936, or 2.49%, to $178,651,515 on September 30,
2000, from $183,208,451 at year-end 1999. Noninterest bearing deposits increased
to $29,340,368 at September 30, 2000, from $29,211,226 at year-end 1999, an
increase of $129,142, or 0.44%. Interest bearing deposits decreased $4,686,078,
or 3.04%, to $149,311,147 on September 30, 2000, from $153,997,225 at December
31, 1999. This decrease is primarily the result of a large decrease in one
public fund account combined with moderating growth in the emerging market of
Baldwin County. Excluding the decrease in public funds of $17,128,721, deposits
would have increased $12,442,643. The public fund is a tax collection agency
whose account balance peaks in December and January.

The Corporation relies primarily on internally generated capital growth to
maintain capital adequacy. Total stockholders' equity on September 30, 2000, was
$19,301,346 an increase of $1,654,683, or 9.38%, from $17,646,663 at year end
1999.

Primary capital to total assets at September 30, 2000, was 8.66%, as compared to
7.95% at year-end 1999. Total capital and allowances for loan losses to total
assets at September 30, 2000 were 9.50%, as compared to 8.71% at December 31,
1999. The Corporation's risk based capital was $21,633,000 or 14.66% at
September 30, 2000, as compared to $20,131,000 or 14.96% at year-end 1999. The
Corporation had excess risk based capital, 6.66% above the minimum requirement
of 8.00% at September 30, 2000, and 6.96% above the minimum at December 31,
1999.  Based on management's projections, internally generated capital should be
sufficient to satisfy capital requirements in the foreseeable future for
existing operations, but the continual growth into new markets may require the
Bank to access external funding sources. There can be no assurance that such
funding source will be available to the Corporation.


Item 3. Quantitative and Qualitative Disclosures about Market Risk


Market risk is the risk of loss from adverse changes in market prices and rates.
The Bank's market risk arises principally from interest rate risk inherent in
its lending, deposit and borrowing activities. Management actively monitors and
manages its interest rate risk exposure. Although



                                       12
<PAGE>   13

the Bank manages other risk, such as credit quality and liquidity risk, in the
normal course of business, management considers interest rate risk to be its
most significant market risk. Interest rate risk could potentially have the
largest material effect on the Bank's financial condition and results of
operations. Other types of market risks, such as foreign currency exchange rate
risk and commodity price risk, do not arise in the Bank's normal course of
business activities.

The Bank's profitability is affected by fluctuations in interest rates.
Management's goal is to maintain a reasonable balance between exposure to
interest rate fluctuations and earnings. A sudden and substantial increase in
interest rates may adversely impact the Bank's earnings to the extent that the
interest rates on interest-earning assets and interest-bearing liabilities do
not change at the same speed, to the same extent or on the same basis.

The Bank's Asset Liability Management Committee ("ALCO") monitors and considers
methods of managing the rate and sensitivity repricing characteristics of the
balance sheet components consistent with maintaining acceptable levels of
changes in the net portfolio value ("NPV") and net interest income. NPV
represents the market values of portfolio equity and is equal to the market
value of assets minus the market value of liabilities, with adjustments made for
off- balance sheet items over a range of assumed changes in market interest
rates. A primary purpose of the Bank's ALCO is to manage interest rate risk to
effectively invest the Bank's capital and to preserve the value created by its
core business operations. As such, certain management monitoring processes are
designed to minimize the impact of sudden and sustained changes in interest
rates on NPV and net interest income.

The Bank's exposure to interest rate risk is reviewed on a quarterly basis by
the Board of Directors and the ALCO. Interest rate risk exposure is measured
using interest rate sensitivity analysis to determine the Bank's change in NPV
in the event of hypothetical changes in interest rates. Further, interest rate
sensitivity gap analysis is used to determine the repricing characteristics of
the Bank's assets and liabilities. The ALCO is charged with the responsibility
of maintaining the level of sensitivity of the Bank's net interest margin within
Board approved limits.

Interest rate sensitivity analysis is used to measure the Bank's interest rate
risk by computing estimated changes in NPV of its cash flows from assets,
liabilities, and off-balance sheet items in the event of a range of assumed
changes in market interest rates. This analysis assesses the risk of loss in
market risk sensitive instruments in the event of a sudden and sustained 100 -
300 basis points increase or decrease in the market interest rates. The Bank
uses the Sendero Model Level II, which takes the current rate structure of the
portfolio and shocks for each rate level and calculates the new market value
equity at each level. The Bank's Board of Directors has adopted an interest rate
risk policy, which establishes maximum allowable decreases in net interest
margin in the event of a sudden and sustained increase or decrease in market
interest rates. The following table presents the Bank's projected change in NPV
for the various rate shock levels as of September 30, 2000. All market risk
sensitive instruments presented in this table are held to maturity or available
for sale. The Bank has no trading securities.


                                       13
<PAGE>   14
<TABLE>
<CAPTION>
         CHANGE IN                                                CHANGE IN                   CHANGE IN
       INTEREST RATES                MARKET VALUE                MARKET VALUE                MARKET VALUE
       (BASIS POINTS)                   EQUITY                      EQUITY                     EQUITY %
<S>                                <C>                          <C>                        <C>

            300                        $12,673                   $ (6,333)                      (33.0)

            200                         14,625                     (4,381)                      (23.0)

            100                         16,729                     (2,277)                      (12.0)

              0                         19,006                          0                           0

           (100)                        21,483                      2,477                        13.0

           (200)                        24,191                      5,185                        27.0

           (300)                        27,166                      8,160                        43.0
</TABLE>


The preceding table indicates that at September 30, 2000, in the event of a
sudden and sustained increase in prevailing market interest rates, the Bank's
NPV would be expected to decrease, and that in the event of a sudden decrease in
prevailing market interest rates, the Bank's NPV would be expected to increase.

Computation of prospective effects of hypothetical interest rate changes
included in these forward-looking statements are subject to certain risks,
uncertainties, and assumptions including relative levels of market interest
rates, loan prepayments and deposit decay rates, and should not be relied upon
as indicative of actual results. Further, the computations do not contemplate
any actions the Bank could undertake in response to changes in interest rates.



FORWARD LOOKING STATEMENTS

When used or incorporated by reference herein, the words "anticipate",
"estimate", "expect", "project", "target", "goal", and similar expressions, are
intended to identify forward-looking statements within the meaning of Section
27A of the Securities Act of 1933. Such forward-looking statements are subject
to certain risk, uncertainties, and assumptions including those set forth
herein. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those expected or projected. These forward-looking statements
speak only as of the date they are made. The Corporation expressly disclaims any
obligations or undertaking to publicly release any updates or revisions to any
forward-looking statement contained herein to reflect any change in the Bank's
expectations with regard to any change in events, conditions or circumstances on
which any such statement is based.




                                       14
<PAGE>   15

Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K.

         (A)      See Exhibit Index

         (B)      During the quarter ended September 30, 2000, the Corporation
                  did not file a Form 8-K Current Report with the Securities and
                  Exchange Commission.

                               S I G N A T U R E S

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.

                     UNITED BANCORPORATION OF ALABAMA, INC.

Date:  November 10, 2000                    /s/ ROBERT R. JONES III
       -----------------                    ---------------------------
                                            Robert R. Jones III
                                            President and CEO


                                       15
<PAGE>   16

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     EXHIBIT
-------                    -------
<S>                 <C>
27                  Financial Data Schedule
</TABLE>