##### Table of Contents



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 June 30, 2004 Commission file number 2-78572 UNITED BANCORPORATION OF ALABAMA, INC. 
  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)
 (251) 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 t was required to file such report(s), and (2) has been subject to
such filing requirements for the past 90 days.
Yesþ Noo Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes
o Noþ Indicate the number of shares outstanding of each of the issuers classes of
common stock as of August 6, 2004. Class A Common Stock
    
    2,217,330 Shares*Class B Common Stock
    
    -0- Shares
 *Reflects two-for-one stock split effective June 30, 2004.




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UNITED BANCORPORATION OF ALABAMA, INC. FORM 10-Q For the Quarter Ended June 30, 2004  
 INDEX PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Earnings
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    22PART II  OTHER INFORMATIONItem 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 6. Exhibits and Reports on Form 8-K
    
    
    23Certification of CEO Pursuant to Section 302Certification of Principal Accounting Officer Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906
  2




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PART 1  FINANCIAL INFORMATION 
 Item 1. Financial Statements United Bancorporation of Alabama, Inc.
and Subsidiary
Condensed Consolidated
Balance Sheets June 30,
    
    December 31,2004
    
    2003Unaudited
    
    AuditedAssets:Cash and due from banks
    
    $
    11,335,005
    
    
    $
    9,901,225Federal funds sold
    
    
    8,572,187
    
    
    
    14,546,400Cash and cash equivalents
    
    $
    19,907,192
    
    
    $
    24,447,625Securities available for sale (amortized cost of $58,261,890
and $52,908,801 respectively)
    
    
    57,851,362
    
    
    
    53,666,589Loans
    
    
    188,337,976
    
    
    
    164,147,155Allowance for loan losses
    
    
    2,337,496
    
    
    
    2,116,060Net loans
    
    
    186,000,480
    
    
    
    162,031,095Premises and equipment, net
    
    
    7,473,165
    
    
    
    7,581,389Interest receivable and other assets
    
    
    7,398,791
    
    
    
    7,393,911Total assets
    
    
    278,630,990
    
    
    
    255,120,609Liabilities and Stockholders Equity:Deposits:Non-interest bearing
    
    
    45,984,091
    
    
    
    42,687,610Interest bearing
    
    
    176,017,925
    
    
    
    156,717,972Total deposits
    
    
    222,002,016
    
    
    
    199,405,582Securities sold under agreements to repurchase
    
    
    16,155,653
    
    
    
    13,495,670Other borrowed funds
    
    
    10,243,126
    
    
    
    10,909,975Accrued expenses and other liabilities
    
    
    1,184,930
    
    
    
    2,216,445Note payable to Trust
    
    
    4,124,000
    
    
    
    4,124,000Total liabilities
    
    
    253,709,725
    
    
    
    230,151,672Stockholders equity:Class A common stock. Authorized 5,000,000
shares of $.01 par value; 2,363,762 and 1,181,881
shares issued respectively
    
    
    23,651
    
    
    
    11,819Class B common stock of $.01 par value.
Authorized 250,000 shares;
-0- shares issued and outstanding.
    
    
    0
    
    
    
    0Preferred stock of $.01 par value. Authorized
250,000 shares; -0- shares issued
and outstanding.
    
    
    0
    
    
    
    0Additional Paid in Capital
    
    
    5,444,550
    
    
    
    5,418,175Accumulated other comprehensive (loss)
income, net of tax
    
    
    (246,317
    )
    
    
    454,671Retained earnings
    
    
    20,538,648
    
    
    
    19,925,92625,760,532
    
    
    
    25,810,591Less: 147,706 and 74,583 treasury shares, at cost, respectively
    
    
    839,267
    
    
    
    841,654Total stockholders equity
    
    
    24,921,265
    
    
    
    24,968,937Total liabilities and stockholders equity
    
    $
    278,630,990
    
    
    $
    255,120,609
 3




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United Bancorporation of Alabama, Inc.
and Subsidiary
Condensed Consolidated Statements of Earnings and Comprehensive Income
(Unaudited) Three Months Ended
    
    Six Months EndedJune
    
    June2004
    
    2003
    
    2004
    
    2003Interest income:Interest and fees on loans
    
    $
    2,902,448
    
    
    $
    2,832,079
    
    
    $
    5,590,990
    
    
    $
    5,587,687Interest on investment securities available for sale:Taxable
    
    
    299,800
    
    
    
    261,742
    
    
    
    602,868
    
    
    
    572,437Nontaxable
    
    
    256,223
    
    
    
    226,480
    
    
    
    507,450
    
    
    
    467,151Total investment income
    
    
    556,023
    
    
    
    488,222
    
    
    
    1,110,318
    
    
    
    1,039,588Other interest income
    
    
    23,647
    
    
    
    34,833
    
    
    
    50,773
    
    
    
    50,875Total interest income
    
    
    3,482,118
    
    
    
    3,355,134
    
    
    
    6,752,081
    
    
    
    6,678,150Interest expense:Interest on deposits
    
    
    726,897
    
    
    
    808,012
    
    
    
    1,380,538
    
    
    
    1,664,902Interest on other borrowed funds
    
    
    138,277
    
    
    
    162,377
    
    
    
    283,038
    
    
    
    305,712Total interest expense
    
    
    865,174
    
    
    
    970,389
    
    
    
    1,663,576
    
    
    
    1,970,614Net interest income
    
    
    2,616,944
    
    
    
    2,384,745
    
    
    
    5,088,505
    
    
    
    4,707,536Provision for loan losses
    
    
    180,000
    
    
    
    162,704
    
    
    
    360,000
    
    
    
    348,704Net interest income after
provision for loan losses
    
    
    2,436,944
    
    
    
    2,222,041
    
    
    
    4,728,505
    
    
    
    4,358,832Noninterest income:Service charge on deposits
    
    
    586,878
    
    
    
    508,337
    
    
    
    1,175,120
    
    
    
    993,666Commission on credit life
    
    
    22,003
    
    
    
    24,800
    
    
    
    35,700
    
    
    
    33,575Investment securities gains, net
    
    
    20
    
    
    
    151,892
    
    
    
    3,288
    
    
    
    292,208Other
    
    
    139,142
    
    
    
    216,302
    
    
    
    330,645
    
    
    
    427,943Total noninterest income
    
    
    748,043
    
    
    
    901,331
    
    
    
    1,544,753
    
    
    
    1,747,392Noninterest expense:Salaries and benefits
    
    
    1,419,620
    
    
    
    1,313,938
    
    
    
    2,781,416
    
    
    
    2,618,086Net occupancy expense
    
    
    457,020
    
    
    
    434,593
    
    
    
    915,418
    
    
    
    815,618Other
    
    
    741,902
    
    
    
    548,499
    
    
    
    1,371,677
    
    
    
    1,207,681Total non-interest expense
    
    
    2,618,542
    
    
    
    2,297,030
    
    
    
    5,068,511
    
    
    
    4,641,385Earnings before income tax expense
    
    
    566,445
    
    
    
    826,342
    
    
    
    1,204,746
    
    
    
    1,464,839Income tax expense
    
    
    79,122
    
    
    
    237,263
    
    
    
    256,410
    
    
    
    407,473Net earnings
    
    $
    487,323
    
    
    $
    589,079
    
    
    $
    948,336
    
    
    $
    1,057,366Basic earnings per share
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.43
    
    
    $
    0.49Diluted earnings per share
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.43
    
    
    $
    0.48Basic weighted average shares outstanding
    
    
    2,214,779
    
    
    
    2,173,796
    
    
    
    2,214,719
    
    
    
    2,173,696Diluted weighted average shares outstanding
    
    
    2,217,128
    
    
    
    2,189,120
    
    
    
    2,217,068
    
    
    
    2,189,542Cash dividends per share
    
    $
    0.15
    
    
    $
    0.125
    
    
    $
    0.15
    
    
    $
    0.125Statement of Comprehensive IncomeNet Income
    
    
    487,323
    
    
    
    589,079
    
    
    $
    948,336
    
    
    $
    1,057,366Other Comprehensive Income, net of tax:Unrealized holding gain arising during the period
    
    
    (1,129,997
    )
    
    
    102,547
    
    
    
    (700,988
    )
    
    
    300,713Less: Reclassification adjustment for gains
included in net income.
    
    
    12
    
    
    
    151,892
    
    
    
    1,961
    
    
    
    292,208Comprehensive income
    
    $
    (642,686
    )
    
    $
    539,734
    
    
    $
    245,387
    
    
    $
    1,065,871
 4




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United Bancorporation of Alabama, Inc.
and Subsidiary
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2004 and 2003
(Unaudited) 2004
    
    2003Operating ActivitiesNet Income
    
    $
    948,336
    
    
    
    1,057,366Adjustments to Reconcile Net Income to Net CashProvided by Operating ActivitiesProvision for Loan Losses
    
    
    360,000
    
    
    
    348,704Depreciation on Premises and Equipment
    
    
    411,491
    
    
    
    368,527Accretion of Investment Securities Available for Sale
    
    
    94,777
    
    
    
    112,313Gain on Sale of Investment Securities Available for Sale
    
    
    (3,288
    )
    
    
    (292,208
    )(Gain) Loss on Disposal of Premises and Equipment
    
    
    (4,850
    )
    
    
    (13,400
    )(Increase) Decrease in Interest Receivable
and Other Assets
    
    
    (4,880
    )
    
    
    86,022Decrease in Accrued Expenses
and Other Liabilities
    
    
    (564,190
    )
    
    
    1,152,944Net Cash Provided by Operating Activities
    
    
    1,237,396
    
    
    
    2,820,268Investing ActivitiesProceeds From Sales of Investment Securities Available for Sale
    
    
    1,500,300
    
    
    
    6,466,368Proceeds From Maturities of Investment Securities Available for Sale
    
    
    4,843,440
    
    
    
    9,667,475Purchases of Investment Securities Available for Sale
    
    
    (11,788,315
    )
    
    
    (12,831,628
    )Net Increase in Loans
    
    
    (24,329,385
    )
    
    
    (4,893,205
    )Purchases of Premises and Equipment
    
    
    (319,521
    )
    
    
    (1,162,401
    )Proceeds From Sales of Premises and Equipment
    
    
    21,104
    
    
    
    13,400Net Cash Provided (Used) by Investing Activities
    
    
    (30,072,377
    )
    
    
    (2,739,991
    )Financing ActivitiesNet Increase in Deposits
    
    
    22,596,434
    
    
    
    9,193,466Net Increase in securities sold under agreement to repurchase
    
    
    2,659,983
    
    
    
    8,624,382Cash Dividends
    
    
    (332,215
    )
    
    
    (271,725
    )Net Transactions on Treasury Stock
    
    
    (2,387
    )
    
    
    4,712Proceeds from sale of common stock
    
    
    39,581
    
    
    
    Increase (Decrease) in Other Borrowed Funds
    
    
    (666,848
    )
    
    
    (2,139,672
    )Net Cash Provided by Financing Activities
    
    
    24,294,548
    
    
    
    15,411,163Increase (Decrease) in Cash and Cash Equivalents
    
    
    (4,540,433
    )
    
    
    15,491,440Cash and Cash Equivalents at Beginning of Period
    
    
    24,447,625
    
    
    
    9,087,315Cash and Cash Equivalents at End of Period
    
    $
    19,907,192
    
    
    
    24,578,755Supplemental disclosuresCash paid during the year for:Interest
    
    $
    1,672,764
    
    
    $
    2,050,259Income Taxes
    
    $
    230,000
    
    
    $
    483,000Noncash transactionsTransfer of loans to other real estate through foreclosure
    
    $
    230,001
    
    
    $
    920,000
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UNITED BANCORPORATION OF ALABAMA, INC.
AND SUBSIDIARY 
 Notes to Condensed Consolidated Financial Statements NOTE 1  General This report includes interim consolidated financial statements of United
Bancorporation of Alabama, Inc. (the Corporation or the Company) 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, 2003. 6




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NOTE 2  Net Earnings per Share Basic net earnings per share was computed by dividing net earnings by the
weighted average number of shares of common stock outstanding during the three
and six-month periods ended June 30, 2004 and 2003. Common stock
outstanding consists of issued shares less treasury stock. Diluted net
earnings per share for the three and six-month periods ended June 30, 2004 and
2003 were computed by dividing net earnings by the weighted average number of
shares of common stock and the dilutive effects of the shares subject to
options awarded under the Companys Stock Option Plan, based on the treasury
stock method using an average fair market value of the stock during the
respective periods. The earnings per share amount and average common shares and
potential common stock outstanding have been restated or adjusted to reflect
the two-for-one stock split effected as a 100% stock dividend as of June 30,
2004. Presented below is a summary of the components used to calculate diluted
earnings per share for the three and six months ended June 30, 2004 and 2003: Three Months Ended
    
    Six Months EndedJune
    
    June2004
    
    2003
    
    2004
    
    2003Diluted earnings per share
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.43
    
    
    $
    0.48Weighted average common
shares outstanding
    
    
    2,214,779
    
    
    
    2,173,796
    
    
    
    2,214,719
    
    
    
    2,173,696Effect of the assumed exercise of
stock options based on the
treasury stock method using
average market price
    
    
    2,349
    
    
    
    15,324
    
    
    
    2,349
    
    
    
    15,846Total weighted average common
shares and potential common
stock outstanding*
    
    
    2,217,128
    
    
    
    2,189,120
    
    
    
    2,217,068
    
    
    
    2,189,542
 *46,080 and 28,960 shares subject to outstanding options for the three and six
months ended June 30, 2004 and 2003, respectively, were not included in the
calculation of diluted earnings per share, as the exercise price of these
options was in excess of average market price. 7




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NOTE 3  Allowance for Loan Losses The following table summarizes the activity in the allowance for loan losses
for the six month periods ended June 30 ($ in thousands): 2004
    
    2003Balance at beginning of year
    
    
    2,117
    
    
    
    2,117Provision charged to expense
    
    
    360
    
    
    
    349Loans charged off
    
    
    188
    
    
    
    215Recoveries
    
    
    49
    
    
    
    45Balance at end of period
    
    
    2,338
    
    
    
    2,296
 At June 30, 2004 and 2003, the amounts of nonaccrual loans were $1,331,976 and
$2,299,823, respectively. NOTE 4  Operating Segments Statement of Financial Accounting Standard 131 (SFAS 131), Disclosures about
Segments of an Enterprise and Related Information,establishes standards for
the disclosure made by public business enterprises to report information about
operating segments in annual financial statements and requires those
enterprises to report selected information about operating segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The Corporation operates in only one segment  commercial banking. NOTE 5  New Accounting Standards In December 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 46 (revised December 2003) (FIN 46R), Consolidation of
Variable Interest Entities, which addresses how a business enterprise should
evaluate whether it has a controlling financial interest in an entity through
means other than voting rights and accordingly should consolidate the entity.
FIN 46R replaces No. 46, Consolidation of Variable Interest Entities, which was
issued in January 2003. The Company will be required to apply FIN 46R to all
entities subject to this interpretation no later than the end of the first
reporting period that ends after December 15, 2004. This interpretation must be
applied to those entities that are considered to be 8




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special-purpose entities no
later than as of the end of the first reporting period that ended after
December 15, 2003. For any variable interest entities (VIEs) that must be consolidated under FIN
No. 46R that were created before January 1, 2004, the assets, liabilities, and
noncontrolling interests of the VIE initially would be measured at their
carrying amounts with any difference between the net amount added to the
balance sheet and any previously recognized interest being recognized as the
cumulative effect of an accounting change. If determining the carrying amounts
is not practicable, fair value at the date FIN No. 46R first applies may be
used to measure the assets, liabilities and noncontrolling interest of the VIE. The Company has applied FIN No. 46R in accounting for United Bancorp Capital
Trust I (Trust), established on June 27, 2002. Accordingly, the accompanying
balance sheet includes, in other assets, the Companys investment in the Trust
of $124,000 and also includes, in Note payable to Trust, the balance owed the
Trust is $4,124,000. Except as
related to the Trust, the application of this interpretation is not expected to
have a material effect on the Companys consolidated financial statements. In May 2003, the FASB issued FASB Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity. This
statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity. The provisions of this
statement are effective for financial instruments entered into or modified
after May 31, 2003, and otherwise are effective at the beginning of the first
interim period beginning after June 15, 2003. It is implemented by reporting
the cumulative effect of a change in an accounting principle for financial
instruments created before May 15, 2003 and still existing at the beginning of
the interim period of adoption. The adoption of this new standard did not have
an impact on the consolidated financial position or results of operations of
the Company. In October 2003, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 03-3, which addresses accounting
for differences between contractual cash flows expected to be collected from an
investors initial investment in loans or debt securities (loans) acquired in a
transfer if those differences are attributable, at least in part, to credit
quality. It includes such loans acquired in purchase business combinations and
applies to all nongovernmental entities, including not-for-profit
organizations. This SOP does not apply to loans originated by the entity.
This SOP limits the yield that may be accreted (accretable yield) to the
excess of the investors estimate of undiscounted expected principal, interest,
and other cash flows (cash flows expected at acquisition to be collected) over
the investors initial investment in the loan. This SOP requires that the
excess of contractual cash flows over cash flows expected to be collected
(nonaccretable difference) not be recognized as an adjustment of yield, loss
accrual, or valuation allowance. This SOP prohibits investors from displaying
accretable yield and nonaccretable difference in the balance sheet. Subsequent
increases in cash flows expected to be collected generally would be recognized
prospectively through adjustment of the loans yield over its remaining life.
Decreases in cash flows expected to be collected 9




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would be recognized as
impairment. This SOP prohibits carrying over or creation of valuation
allowances in the initial accounting of all loans acquired in a transfer that
are within the scope of this SOP. The prohibition of the valuation allowance
carryover applies to the purchase of an individual loan, a pool of loans, a
group of loans, and loans acquired in a purchase business combination. This
SOP is effective for loans acquired in fiscal years beginning after December
15, 2004. Management is currently assessing the potential impact of this SOP
to the Consolidated Financial Statements. In March 2004, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) 105, which summarizes the views of the staff
regarding the application of generally accepted accounting principles to loan
commitments accounted for as derivative instruments. The SAB requires that the
fair value measurement of a loan commitment that is accounted for as a
derivative includes only differences between the guaranteed interest rate in
the loan commitment and a market interest rate, excluding any expected future
cash flows related to the customer relationship or loan servicing. This SAB is
effective for loan commitments entered into after March 31, 2004. The Company
adopted SAB 105 on April 1, 2004, and the effect was not material. 10




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NOTE 6  Stock Based Compensation The Company applies the intrinsic value-based method of accounting prescribed
by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations, in accounting for its fixed
plan stock options. As such, compensation expense is recorded if the current
market price on the date of grant of the underlying stock exceeds the exercise
price. Statement of Financial Accounting Standard (SFAS) No. 123 prescribes the
recognition of compensation expense based on the fair value of options on the
grant date and allows companies to apply APB No. 25 as long as certain pro
forma disclosures are made assuming hypothetical fair value method application. Had compensation expense for the Companys stock options been recognized based
on the fair value on the grant date under the methodology prescribed by SFAS
No. 123, the Companys net earnings and earnings per share for the three and
six months ended June 30, 2004, and 2003, would have been impacted as shown in
the following table: For the three months ended
    
    For the six months endedJune 30
    
    June 302004
    
    2003
    
    2004
    
    2003Reported net earnings
    
    $
    487,323
    
    
    $
    589,079
    
    
    $
    948,336
    
    
    $
    1,057,366Compensation expense, net of taxes
    
    
    3,410
    
    
    
    4,430
    
    
    
    8,271
    
    
    
    11,034Pro forma net earnings
    
    
    483,913
    
    
    
    584,649
    
    
    
    940,065
    
    
    
    1,046,332Reported basic earnings per share*
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.43
    
    
    $
    0.49Pro forma basic earnings per share*
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.42
    
    
    $
    0.48Reported diluted earnings per share*
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.43
    
    
    $
    0.48Pro forma diluted earnings per share*
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.42
    
    
    $
    0.48
 *Reflects two-for-one stock split effective June 30, 2004. NOTE 7  Subsequent Events On July 6, 2004, United Bank, the wholly owned subsidiary of United
Bancorporation of Alabama, Inc., expanded into Florida. United Bank now offers
full service banking in Jay, Florida and is evaluating expansion to additional
branches in other areas of Florida. 11




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS Critical Accounting Estimates The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require management to make estimates and assumptions. Management believes that
its determination of the allowance for loan losses is a critical accounting
policy and involves a higher degree of judgment and complexity than the Banks
other significant accounting policies. Further, these estimates can be
materially impacted by changes in market conditions or the actual or perceived
financial condition of the Banks borrowers, subjecting the Bank to significant
volatility of earnings. The allowance for loan losses is regularly evaluated by management and reviewed
by the Board of Directors for accuracy by taking into consideration factors
such as changes in the nature and volume of the loan portfolio; trends in
actual and forecasted portfolio credit quality, including delinquency,
charge-off and bankruptcy rates; and current economic conditions that may
affect a borrowers ability to pay. The use of different estimates or
assumptions could produce different provisions for loan losses. The allowance
for credit losses is established through the provision for loan losses, which
is a charge against earnings. Results of Operations The following financial review is presented to provide an analysis of the
results of operations of United Bancorporation of Alabama, Inc. (the
Corporation), and its principal subsidiary for the three and six months ended
June 30, 2004, and 2003, compared. This review should be used in conjunction
with the condensed consolidated financial statements included in the Form 10-Q. Six Months ended June 30, 2004 and 2003, Compared Summary Net income for the six months ended June 30, 2004, decreased by $109,030, or
10.31%, as compared to the same period in 2003. Net Interest Income Total interest income increased $73,931, or 1.11%, for the first six months of
2004 as compared to the same period in 2003. Average interest-earning assets
were $246,662,920 for the first six months of 2004, as compared to $202,862,155
for the same period in 2003, an increase of $43,800,765, or 21.59%. A
substantial portion of the
increase is due to increases in deposits by two existing Bank customers. The
average rate earned on interest earning assets in 2004 was 5.24% as compared to
5.87% in 2003, reflecting the continuing impact of the decrease in rates by the
Federal Reserve Board during previous years. 12




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Total interest expense decreased by $307,038, or 15.58%, in 2004, when compared
to the same period in 2003. Average interest bearing liabilities increased to
$197,366,640 in 2004 from $174,574,745 in 2003, an increase of $22,791,895, or
13.06%. The average rate paid fell to 1.69% in 2004 as compared to 2.26% in
2003. This decrease in interest expense can be attributed primarily to higher
interest rates paid in 2003 on slower repricing deposits, compared to lower
rates paid on deposits which have repriced in 2004 at the current lower
interest rates. Net interest margin decreased to 4.38% for the first six months of 2004 as
compared to 4.58% for the same period in 2003. This decrease is the result of
the interest earning assets repricing faster than the interest bearing
liabilities funding the portfolios. Noninterest Income Total noninterest income decreased $202,639 or 11.60% for the first six months
of 2004. Service charges on deposits increased $181,454, or 18.26%, for the
first six months of 2004. This increase is primarily due to an increase in
insufficient fund charges on checks, which increased $154,692 or 21.98%. Gains
on sale of investments decreased by $288,920 in 2004, compared to 2003,
when management elected capture the gains on securities given managements
assessment of a high probability that these interest bearing securities would
be called at par in future periods. Commissions on credit life insurance
increased $2,125 in 2004, or 6.33% as compared to 2003. Other income decreased
during the first six months of 2004 by $97,298 or 22.74%. This decrease is
partially attributed to a decrease of $37,720 in mortgage origination fees in
2004, and a gain on the sale of other real estate owned of $27,500 in 2003. Noninterest Expense Total noninterest expense increased $427,126, or 9.20% during the first six
months of 2004 as compared to 2003. Salaries and benefits increased $163,330
or 6.24% in the first six months of 2004 primarily due to the addition of two
new branches. Occupancy expense increased $99,800 or 12.24%, as the Bank
continues expansion into new markets. Other expenses increased $163,996, or
13.58%, during the first six months of 2004. This increase is due in part to
increased legal fees incurred during the quarter and subsequently reimbursed by
insurance, as well as increased marketing expenses promoting the celebration
of the Banks 100th anniversary. Provision for Loan Losses The provision for loan losses totaled $360,000 for the first six months of
2004 as compared to $348,704 for the same period in 2003. This slight increase
is due to the growth in the loan portfolio. See further discussion under
Allowance for Loan Losses below. 13




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##### Table of Contents



Income Taxes Earnings before taxes for the first six months of 2004 were $1,204,746 as
compared to $1,464,839 for the first six months of 2003, a decrease of
$260,093, or 17.76%. Income tax expense for the first six months decreased by
$151,063, to $256,410 or by 37.07%, when compared to $407,473 the same period
in 2003. The effective tax rate
decreased to 21.28% from 27.82%. This decrease is due to increases in
nontaxable income as the Bank reduced its income tax expense. Three Months Ended June 30, 2004, and 2003, Compared Summary Net income for the three months ended June 30, 2004 decreased $101,756, or
17.27%. Net Interest Income Total interest income increased $126,984, or 3.78%, in the second quarter of
2004 as compared to 2003. Average interest-earning assets were $254,255,961
for the second three months of 2004, as compared to $225,172,019 for the same
period in 2003, an increase of $29,083,942, or 12.92%. A substantial portion of
the increase is due to increases in deposits by two existing Bank customers.
The average rate earned during the second quarter of 2004 was 5.48% as compared
to 5.96% in 2003, reflecting the continuing impact of the decrease in rates by
the Federal Reserve Board during previous years, as loans and investments
continued to reprice in the lower rate environment. Total interest expense decreased by $105,215 or 10.84% in the second quarter of
2004, when compared to the same period in 2003. Average interest bearing
liabilities increased to $203,089,335 in 2004 from $176,013,878 in 2003, an
increase of $27,075,457, or 15.38%. The average rate paid fell to 1.70% in
2004 as compared to 2.21% in 2003. The net interest margin decreased to 4.60% for the second quarter of 2004, as
compared to 4.72% for the same period in 2003. This was due to interest rates
being higher during the second quarter of 2003 than in the second quarter of
2004, because the decrease in interest rates by the Federal Reserve Board did
not occur until the end of June 2003. Provision for Loan Losses The provision for loan losses totaled $180,000 for the second quarter of 2004
as compared to $162,704 for the same period in 2003. The provision reflected
both the growth and improvement in credit quality in the loan portfolio. See
further discussion under Allowance for Loan Losses below. Noninterest Income Total noninterest income decreased $153,288 or 17.01% for the second quarter of
2004. Service charges on deposits increased $78,541, or 15.45%, for the second
quarter of 2004 as compared to 2003. This increase is primarily due to an
increase in insufficient fund charges on checks, which 14




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increased $64,987.
Gains on sale of investments decreased by $151,872 in the second quarter of
2004 as compared to 2003, when management elected to capture the gains on
interest bearing securities given the assessment of a high probability that the
securities would be called at par in future periods. Commissions on credit life
insurance decreased $2,797, or 11.28% for the second quarter of 2004. Other
income decreased during the second quarter of 2004 by $77,160 or 35.67% as
compared to 2003. The majority of this decrease is from the sale of other real
estate owned of $12,500, the sale of a Bank vehicle for $13,800, and dividends
received of $20,390, all in 2003. Noninterest Expense Total noninterest expense increased $321,512, or 14.00%, during the second
quarter of 2004 compared to the same
quarter of 2003. Salaries and benefits increased $105,682, or 8.04%, in the
second quarter 2004. This increase is primarily due to the expansion of the
bank into new markets. Occupancy expense increased $22,427, or 5.16%, in the
second quarter of 2004. The additional expense can also be associated with
branch expansion. Other expenses increased $193,403 or 35.26% during the
second quarter of 2004 as compared to 2003. This increase is attributed to
increases in legal fees which were subsequently reimbursed and marketing. The
Bank has also overall increases in general operating expenses due to the
continued expansion, including the opening of a full service branch in Jay,
Florida. Income Taxes Earnings before taxes for the second quarter of 2004 were $566,445 as compared
to $826,342 in the second quarter of 2003, a decrease of $259,897 or 31.45%.
Income tax expense for the second quarter decreased $158,141 to $79,122, or, by
66.65%, when compared to $237,263 for the same period in 2003. The effective tax
rate decreased to 13.97% from 28.71% due to a one time adjustment of holding
company losses included in the tax calculation. Financial Condition and Liquidity Total assets on June 30, 2004, increased $23,510,381 or 9.22% from December 31,
2003. Average total assets for the first six months of 2004 were $268,937,800.
The ratio of loans (net of allowance) to deposits plus repurchase agreements
on June 30, 2004 was 78.10% as compared to 76.11% on December 31, 2003. Cash and Cash Equivalents Federal Funds Sold and interest bearing balances in other banks as of June 30,
2004 decreased to $8,572,187, or by 41.07%, from December 31, 2003. This
decrease is attributed to the increase in loans and the increase in investment
securities available for sale. 15




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##### Table of Contents



Loans Net loans increased by $23,969,385 or 14.79% at June 30, 2004, from
December 31, 2003. Agricultural lending attributed to the majority of this
loan growth. Agricultural loans are normally originated in the winter and
spring of the year with funding taking place through the fall. Allowance for Loan Losses The allowance for loan losses is maintained at a level which, in managements
opinion, is appropriate to provide for estimated losses in the portfolio at the
balance sheet date. Factors considered in determining the adequacy of the
allowance include historical loan loss experience, the amount of past due
loans, loans classified from the most recent regulatory examinations and
internal reviews, general economic conditions and the current portfolio mix.
The amount charged to operating expenses is that amount necessary to maintain
the allowance for loan losses at a level indicative of the associated risk, as
determined by management, of the current portfolio. 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 loan classifications as follows: monitor (5%), substandard
(15%), doubtful (50%), loss (100%) and specific reserves based on identifiable
losses. Any loan-categorized loss is charged off in the period in which the
loan is so categorized. 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 specific 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, non-accrual and
delinquent loans and the general economic environment in the Corporations
markets. However, unfavorable changes in the factors used by management to
determine the adequacy of the allowance, including increased loan delinquencies
and subsequent charge-offs, or the availability of new information, could
require additional provisions, in excess of normal provisions, to the allowance
for loan losses in future periods. 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 16




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be
appropriate for the reported periods. The allowance for possible loan losses represents 1.24% of gross loans at June
30, 2004, as compared to 1.29% at year-end 2003. This decrease was due to a
combination of improved credit quality of the loan portfolio, partially offset
by the growth in the agricultural portion of the portfolio. Loans on which the accrual of interest had been discontinued has decreased
to $1,331,976 at June 30, 2004, as compared to $2,265,047 at December 31, 2003.
This decrease is due primarily to several unrelated commercial and some
residential property loans either refinancing, paying off or being foreclosed
on. Net charged-off loans for the first six months of 2004 were $139,000, as
compared to $169,000 for the same period in 2003. Non-performing Assets: The following table sets forth the Corporations
non-performing assets at June 30, 2004 and December 31, 2003. 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 except for credit cards, which continue to
accrue interest after ninety days. The amount of impaired loans determined under SFAS No. 114 and 118 has been
considered in the summary of non-performing assets below. These credits were
considered in determining the adequacy of the allowance for loan losses and are
regularly monitored for changes within a particular industry or general
economic trends, which could cause the borrowers financial difficulties. At
June 30, 2004 the Bank had $37,726 in impaired loans, compared to $100,318 at
December 31, 2003. 17




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##### Table of Contents



June 30,
    
    December 31,2004
    
    2003(Dollars in Thousands)DescriptionA
    
    
    Loans accounted for on
a nonaccrual basis
    
    $
    1,332
    
    
    $
    2,265B
    
    
    Loans which are contractually
past due ninety days or more
as to interest or principal
payments (excluding balances
included in (A) above)
    
    $
    16
    
    
    $
    15C
    
    
    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.
    
    $
    303
    
    
    $
    229D
    
    
    Other non-performing assets
    
    $
    1,338
    
    
    $
    1,108
 The increase in other non-performing assets was due to foreclosure on three
parcels of other real estate. Investment Securities Total investments available for sale have increased $4,184,773 at June 30, 2004
as compared to December 31, 2003 due to the Bank investing federal funds into
higher yields in the investment portfolio. Premises and Equipment Premises and equipment decreased $108,224 during the first two quarters of
2004. The Banks establishment of a full-service branch in Florida was
accomplished with relatively little initial cost, because the branch was
established in facilities which were already operating as a Bank loan
production office in Jay, Florida. Deposits Total deposits increased $22,596,434, or 11.33%, at June 30, 2004 from December
31, 2003, including $3,296,481 of noninterest bearing deposits. Interest
bearing deposits increased $17,983,179 at June 30, 2004. The increase in
interest bearing deposits is primarily due to two 18




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accounts, one a public entity
and the other a private enterprise, which are existing customers with
long-standing relationships with the Bank. Liquidity One of the Banks goals is to provide adequate funds to meet changes in loan
demand or any potential increase in the normal level of deposit withdrawals.
This goal is accomplished primarily by generating cash from operating
activities and maintaining sufficient short-term assets. These sources,
coupled with a stable deposit base, allow the Bank to fund earning assets and
maintain the availability of funds. Management believes that the Banks
traditional sources of maturing loans and investment securities, cash from
operating activities and a strong base of core deposits are adequate to meet
the Banks liquidity needs for normal operations. To provide additional
liquidity, the Bank utilizes short-term financing through the purchase of
federal funds, and maintains a borrowing relationship with the Federal Home
Loan Bank to provide liquidity. Should the Banks traditional sources of
liquidity be constrained, forcing the Bank to pursue avenues of funding not
typically used, the Banks net interest margin could be impacted negatively.
The Corporations bank subsidiary has an Asset Liability Management Committee,
which has as its primary objective the maintenance of specific funding and
investment strategies to achieve short-term and long-term financial goals. The
Corporations
liquidity at June 30, 2004 is considered adequate by management. See Item 3
below. Capital Adequacy The Corporation has generally relied primarily on internally generated capital
growth to maintain capital adequacy. Total stockholders equity on June 30,
2004, was $24,921,264, a decrease of $47,673, or 0.19%, from December 31, 2003.
This net decrease is a combination of current period earnings, reduced by the
unrealized loss on securities available for sale and dividends to be paid. Primary capital to total assets at June 30, 2004, was 8.94%, as compared to
9.79% at year-end 2003. Total capital and allowances for loan losses to total
assets at June 30, 2004, was 9.78%, as compared to 10.62% at December 31, 2003.
The Corporations risk based capital was $31,630,000, or 14.77%, at June 30,
2004, as compared to $30,754,000, or 16.45%, at year-end 2003. The minimum
requirement is 8.00%. Based on managements projections, internally generated
capital and the capital previously raised by issuance of trust preferred
securities should be sufficient to satisfy capital requirements in the
foreseeable future for existing operations, and for some expansion efforts.
Continued growth into new markets may require the Corporation to further access
external funding sources. There can be no assurance that such funding source
will be available to the Corporation. In December 2003, the Financial Accounting Standards Board issued a revised
interpretation of FIN 46 (see Note 5 above), which required deconsolidation of
subordinated beneficial interests. As a result of FASBs Interpretation,
questions have been raised whether Trust Preferred Securities would still
qualify for treatment as Tier 1 Capital, which comprises substantially all of
the Corporations risk based capital, given the new accounting treatment. In
July of 2003, the 19




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##### Table of Contents



Federal Reserve instructed bank holding companies (BHCs) to
continue to include Trust Preferred Securities in Tier 1 Capital for regulatory
capital purposes, until notice is given to the contrary. Management does not
expect the final rules will result in the immediate elimination of existing
Trust Preferred Securities as Tier 1 Capital. On May 6, 2004, the Federal Reserve Board issued its notice of proposed
rulemaking which proposed to make permanent the Federal Reserves treatment of
Trust-preferred securities as Tier 1 capital. Some substantial commentators,
including the Banks primary federal regulator, the FDIC, have opposed this
treatment. In particular, the FDIC has advocated Tier 2 treatment for
BHC-issued trust preferred. The effect of converting the Corporations trust
preferred to Tier 2 would be to reduce the leverage ratio from 9.38% to 9.14%,
and to reduce the Tier 1 risk-based ratio from 13.68% to 11.75%; such a change
would not affect the total risk-based ratio. 
 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 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,
generally do not arise in the Banks normal course of business activities to
any significant extent. 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, 20




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##### Table of Contents



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
to maintain 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 HNC Asset Liability Model, 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 June 30, 2004. All
market risk sensitive instruments presented in this table are held to maturity
or available for sale. The Bank has no trading securities. Change in Interest Rates
    
    
    
    
    
    Change in Market
    
    Change in Market(Basis Points)
    
    Market Value Equity
    
    Value Equity
    
    Value Equity %300
    
    
    52,428
    
    
    
    7,699
    
    
    
    17200
    
    
    50,518
    
    
    
    5,789
    
    
    
    13100
    
    
    47,921
    
    
    
    3,192
    
    
    
    70
    
    
    44,729
    
    
    
    
    
    
    
    -100
    
    
    48,165
    
    
    
    3,436
    
    
    
    8-200
    
    
    44,148
    
    
    
    (581
    )
    
    
    (1
    )-300
    
    
    39,735
    
    
    
    (4,994
    )
    
    
    (11
    )
 The preceding table indicates that at June 30, 2004, in the event of a sudden
and sustained increase in prevailing market interest rates, the Banks NPV
would be expected to increase, and that in the event of a sudden decrease in
prevailing market interest rates, the Banks NPV would be expected to decrease.
The recent growth in variable rate loans has caused the Corporation to become
more asset sensitive over the period of a year, but the net interest margin
remains fairly stable in all interest rate environments tested. 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. 21




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##### Table of Contents



Item 4. Controls and Procedures Based on evaluation of the Corporations disclosure controls and procedures (as
such term is defined in Rules 13a-4(c) under the Securities Exchange Act of
1934, as amended (the Exchange Act), as of the end of the period covered by
this quarterly report, the principal executive officer and the principal
financial officer of the Corporation have concluded that as of such date the
Corporations disclosure controls and procedures were effective to ensure that
information the Corporation is required to disclose in its filings under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commissions rules and forms,
and to ensure that information required to be disclosed by the Corporation in
the reports that it files under the Exchange Act is accumulated and
communicated to the Corporations management, including its principal executive
officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure. The Corporation has engaged consultants to assist the Corporation in its
evaluation of internal controls in anticipation of the upcoming effectiveness
of regulations under Section 404 of the Sarbanes-Oxley Act of 2002. There was
no change in the Corporations internal controls over financial reporting
during the period covered by this quarterly report that has materially
affected, or is reasonably likely to materially affect, the Corporations
internal control over financial reporting. 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
Corporations expectations with regard to any change in events, conditions or
circumstances on which any such statement is based. 22




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##### Table of Contents



PART II  OTHER INFORMATION 
 Item 4. Submission of Matters to a Vote of Security Holders.  (a)
    
    A description of actions taken at the annual meeting of
security holders of United Bancorporation of Alabama, Inc. on May 5,
2004 was reported under Item 4 of the Corporations Form 10-Q for the
quarter ended March 31, 2004, and is incorporated by reference
herein. 
 Item 6. Exhibits and Reports on Form 8-K.  (a)
    
    Exhibits.  31.1
    
    Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of principal accounting officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, adopted pursuant to section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of principal accounting officer pursuant to 18 U.S.C.
Section 1350, adopted pursuant to section 906 of the Sarbanes-Oxley Act
of 2002   (b)
    
    The Corporation filed the following reports on Form 8-K during the
quarter ended June 30, 2004:  1.
    
    On June 1, 2004, the Corporation filed a report on Form 8-K to
report that KPMG, LLP, the independent public accountants previously
engaged by the Corporation, was terminating its relationship as the
Corporations independent accountants, and on June 18, 2004, the
Corporation filed an amendment to such report to reflect that KPMG,
LLP declined to stand for reelection as the Corporations independent
accountants. 23




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##### Table of Contents



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: August 6, 2004/s/ Robert R. Jones, IIIRobert R. Jones, IIIPresident and CEO 24




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##### Table of Contents



INDEX TO EXHIBITS EXHIBITNUMBER
    
    DESCRIPTION31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of principal accounting officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 200232.2
    
    Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002
 25