<PAGE>
================================================================================

                                      2001
                                  ANNUAL REPORT

[PHOTO]                                                                  [PHOTO]

                          [UNITED BANCORP, INC. LOGO]
                              UNITED BANCORP, INC.
                               Martins Ferry, Ohio

                              www.unitedbancorp.com

================================================================================



<PAGE>

                                      2001



<PAGE>
                                   BANK NOTES
                                  October 2001

<Table>
<S>                                                                    <C>
In This Issue . . .

Chairman's Chambers                                                    Page 1

The Community Bank                                                     Pages 2-3

A View from the North                                                  Page 4

United Way Campaign                                                    Page 4

Compliance Clinic                                                      Page 5

Employee Picnic                                                        Pages 6-7

Mortgage Rates                                                         Page 8

Supplementary Insurance Benefits                                       Page 8

Vacation News                                                          Page 9

The Lighter Side                                                       Page 10
</Table>

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FROM THE CHAIRMAN'S CHAMBERS

WITH ALL OF THE RECENT EVENTS, WILL AMERICA EVER BE THE SAME?

                                 [FLAG PICTURE]

     What a difference a day makes, twenty-four little hours... was it Doris Day
who sang that? I know, many reading this are saying, "Who was Doris Day?" Life
was altered on the day of December 7, 1941 -- the day Pearl Harbor was attacked.
It was altered on the day of November 22, 1963 -- the day President John F.
Kennedy was assassinated. I guess there are not too many on our bank team who
can remember just where they were or what they were doing when Pearl Harbor was
devastated. I am too young to recall that event. But, I remember vividly that
ill-fated day when John F. Kennedy fell victim to an assassin's bullet.

     Marlene and I were just married a few months before November 22, 1963 and
on that early afternoon, I was interviewing Paul and Maxine Briggs for a home
improvement loan in the newly opened Consumer Loan Office at our old bank
location on the corner of Fourth and Walnut Streets. Back then, it was highly
improper to have music or radio playing in the bank or at least my mentor, Mr.
Harold Riethmiller, had me believing that. When what to my dismayed ears
occurred was loud radio playing in the bookkeeping department. Of course I had
to excuse myself to go remind those foolish ladies that radio playing was not
proper nor permitted... when I was told, "Listen to the news flash--President
Kennedy is dead." Life stopped for a moment, well actually for several days,
while we adjusted to the fact that America would never be the same. When I
returned to my office and shared the horrible news, my saddened customers left
to go home. We were all dismayed, and they wanted to go home and turn on the
TV. Yes, they did return, and we did close the loan
the next week.

     I guess much of the activity surrounding President Kennedy's political
career and his death is only known by what most of our bank associates have read
in the history books or have seen on the history channel. But, today we all have
another day etched into the history books and into our memories that we shall
never forget... just where we were and what we were doing on... 9-11!!!!,
another day in infamy.

     September 11, 2001 was to be The Citizens Bank Board of Directors' Annual
golf outing. To accommodate the early afternoon start, we scheduled our
Executive Committee meeting for 8:30 a.m. to be followed by our full board
meeting at 10:00 a.m. We were just getting into our Executive Committee meeting
when a tap came on the conference room door. It was John Assenza who said,
"Gentlemen, something is happening and you may want to go into Jim's office and
turn on the television." John Hoopingarner, Richard Riesbeck and Matt Thomas
joined me to see an immediate first time replay of that first horrific event.
And as we watched in wonderment, we witnessed the live performance of the tragic
hit of the second twin tower of the World Trade Center. Little did we know, at
that moment, the full impact of what was occurring. Nor could we remove
ourselves from watching the crumbling event unfold. As 10:00 a.m. neared, the
balance of our remaining board members arrived, some knowing from their car
radios that something terrible was happening. Needless to say, your Board of
Directors will forever remember where we were and what we were doing on that
ill-fated day that life altered again. We eventually held an abbreviated board
meeting, but cancelled our golf outing.

                          [STATUTE OF LIBERTY PICTURE]

     Yes, with all our recent events, America will never be the same. When you
stop and think about it, nothing is really ever the same... It is either better
or worse. History has proven that once we recovered from Pearl Harbor and the
assassination of John F. Kennedy, life slowly got better. And once we pick
ourselves up and get on with life, I strongly feel that America will again be
better. We shall always remember and grieve the losses experienced, but our
nation will again arise above itself. With flags displayed and flying high and
worn on our lapels and blouses, we shall build upon the kindred spirit of
patriotism that is abounding in this great land of ours. Yes, even our
government once filled with bipartisanship has unified and rallied together
behind our leaders. At the grass roots, I am finding people more considerate of
one another and really expressing concern for one another. Sure, we have to be
more vigilant today, but maybe we started to take too much for granted.

     Next month, we shall begin the holiday season, a time for thanksgiving and
of celebration. As we gather together let us celebrate that we are together once
again as a family and as a nation. And please remember to give thanks for all of
our continued rich blessings. And foremost, ask God to bless America and its
leaders.


                                                 /s/ JAMES W. EVERSON
                                                 Chairman, President & CEO


<PAGE>

[UNITED BANCORP LOGO] A LETTER FROM THE PRESIDENT                           2001


                                                              [PHOTO]

                                                           JAMES W. EVERSON
                                                          CHAIRMAN, PRESIDENT
                                                    AND CHIEF EXECUTIVE OFFICER

TO OUR PRESENT AND FUTURE
SHAREHOLDERS OF UNITED BANCORP INC....

         The year 2001 for all will be remembered as the most historic year
experienced. To paraphrase Charles Dickens, it certainly can be characterized as
one of.... "the best of times and the worst of times". For United Bancorp, Inc.
and its subsidiary banks, The Community Bank and The Citizens Savings Bank, we
look back at 2001 feeling good about our company's progress and accomplishments.
This past year was certainly historic with eleven interest rate drops totaling 4
3/4%. And it has been challenging to both preserve our bottom line and preserve
our customer relationships. I am proud of our Team Members who have met these
challenges and both grew our customer franchise and met our business plan and
earnings goals.

         Our reported earnings show improvement per our business plan developed
in 2000 when we expanded into Lancaster, Ohio with the opening of three new
locations. The Community Bank's earnings were a negative $154,136 compared to a
negative $389,514 in 2000, a $235,378 improvement or 60.4% improvement over the
prior year. As planned, The Community Bank posted a profitable fourth quarter
and will be profitable for the year 2002. Management's challenge is to bring
this affiliate's earnings in line with industry standards within the next three
years. The Citizens Savings Bank's year-to-date earnings were $3,337,545 or
$314,250 above the prior year. On a consolidated basis, United Bancorp, Inc.
earned $2,755,587 up 6.52% from the prior year's earnings of $2,586,975. On a
per share basis, basic earnings were $.88 for the twelve months ended December
31, 2001 compared to $.81 for the same period ended December 31, 2000, an
increase of 8.64%. Contributing to these increases were the overall growth in
earning assets and the Company's ability to maintain its net interest margin at
3.86% while interest rates decreased. Also contributing to the improved earnings
was an increase in non-interest income resulting in part from the many loan
re-financings during this year with the unprecedented rate drops imposed by The
Federal Reserve Bank.

         This past December 20th, shareholders of United Bancorp, Inc. received
a 5% share dividend plus a 5% increase in their fourth quarter dividend payment.
Your company and its lead bank, The Citizens Savings Bank of Martins Ferry, Ohio
have had a history of declaring stock splits and paying share dividends which
have rewarded shareholders for the Company's growth and performance.
Shareholders of the Citizens Savings Bank received a 100% share dividend in 1971
and 1981 and exchanged their stock on a four-for-one basis when UBCP was formed
in 1983. UBCP paid a 50% share dividend in 1987, a 100% share dividend in 1992
and 1993 plus 10% share dividends in 1994, 1996, 1997, and 5% share dividends in
1998, 1999, 2000 and 2001. Those holding one hundred shares of The Citizens
Savings Bank stock in 1970 now hold 15,529 shares of UBCP stock. In today's
dollars, an initial investment of $10,000 is now valued in excess of $200,000
with a current annualized cash dividend of over $8,000. The projected 52 cents
per share cash dividend provides a very attractive current yield of 4% based on
recent market pricings.



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT     1
<PAGE>

[CASH DIVIDENDS BAR CHART]

<Table>
<Caption>
YEAR                CASH DIVIDENDS
----                --------------
<S>                 <C>
2001                $1,590,220
2000                $1,545,547
1999                $1,477,686
1998                $1,254,340
1997                $1,035,889
</Table>

         Your Management Team and Board of Directors are pleased to report the
required voting power of UBCP was received to approve all of the proposals as
outlined in our proxy statement dated and mailed on March 16, 2001. We are
pleased that our shareholders approved the changes that were recommended by our
legal counsel and unanimously approved by your Board of Directors. Shareholders
approved the authorization of 2 million shares of preferred stock, the
elimination of cumulative voting, the addition of a super majority shareholder
vote and fair price provisions, the reduction of shareholder vote required to
amend and restate the Articles of Incorporation in the future from two-thirds of
the total voting power of shareholders to a majority of the voting power, plus
technical revisions to the Articles of Incorporation and the Amendment and
Restatement of the Code of Regulations as outlined in the Proxy Statement. We
firmly believe these changes give UBCP greater flexibility and place us in a
better position to take advantage of potential acquisition, capital raising and
other opportunities as they may arise.

         We are pleased with the continued growth and acceptance of both our
Voice Response Banking Programs and Internet Banking Programs introduced at each
affiliate bank. Today, our banks service over 2400 voice-response accounts and
facilitate 8,000 calls per month. Over 1,600 customers now use our banks'
Internet Services for cash management or access to their accounts, plus enjoy
electronic bill payment, current news, weather, stock pricing and shopping
opportunities, and much more. Click www.thecitizensbank.com or
www.the-communitybank.com to check us out. Internet Banking has really expanded
our ability to provide banking services. You will be receiving during the fourth
week of April an invitation to join a new banking service exclusively for United
Bancorp, Inc. shareholders, ShareLINK 100. This new account is being designed to
provide our shareholders who own one hundred or more shares of UBCP stock and
direct deposit their dividend payments, a fully secured personal banking venue
without regard to geographic location or time...24x7x365.

         Alan M. Hooker, Executive Vice President of United Bancorp, Inc. and
President and Chief Executive Officer of The Community Bank, and our Community
Bank affiliate were recognized this past year at the Annual Meeting of The Ohio
Bankers Association. The Community Bank was one of only twelve in Ohio to
receive a Bank Marketing Award of Merit for its 2000 grand opening campaign
under the theme, "Just What Lancaster Needs...another bank, The Community Bank".
Alan this past year was appointed to The Ohio Bankers Association Board of
Directors. I find this exciting having served as a member of the OBA board and
as its President during the 1980's

         In November of this past year, Joseph D. Kittle, Sr., retired to the
position of Director Emeritus of the Board of Directors of The Community Bank.
After serving in the Korean War and then working in construction, Joe
established a feed and animal supply business in Glouster, Ohio in 1952. It grew
into

2    UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

Kittle Farm Supply and Feed Mill through the years, and was sold in 1981. Joe
joined The Glouster Community Bank Board in 1985, and never missed a meeting
during his tenure as a board member. His commitment to the bank and the Glouster
community will long be remembered and always appreciated.

         January 27, 2002 marked the 100th Anniversary of the charter of The
Citizens Savings Bank. For 100 years, The Citizens Bank has been offering
Hometown Banking to families and businesses and providing financial services to
thousands of customers throughout the Ohio and Tuscarawas Valley's. Today, it is
the only locally owned financial institution in Martins Ferry. Harold H.
Riethmiller began his banking career with our bank in 1911 and became my banking
mentor in 1959 when I joined the bank as a student intern. Mr. Riethmiller ran
the bank as Cashier from 1918 and became the bank's first active President in
1940, retiring in January of 1973 when I was appointed The Citizens Bank's
fourth President. Our organization is quite unique with its consistency of
leadership for most of its 100 years.

         Our accomplishments over the first 100 years of service are the result
of many loyal shareholders and customers and the dedication of many who have
served from the front lines to the board room. Throughout this report, you will
see many of our current Team Members who are the foundation for continuing our
founders' vision into the next century of service.

Very truly yours,


/s/ JAMES W. EVERSON

James W. Everson
Chairman, President & Chief
Executive Officer

ceo@unitedbancorp.com
February 16th, 2002

                                                           [PHOTO]
                                             United Bancorp Officers (from left)
                                                    Randall M. Greenwood,
                                                       James A. Lodes,
                                                      James W. Everson,
                                                 Norman F. Assenza, Jr. and
                                                       Alan M. Hooker.



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT     3
<PAGE>

[UNITED BANCORP LOGO]  SHAREHOLDER INFORMATION                              2001

United Bancorp, Inc.'s common stock trades on The Nasdaq SmallCap Market tier of
The Nasdaq Stock Market under the symbol UBCP, CUSIP #90991109. At year-end
2001, there were 3,249,227 shares outstanding, held among approximately 1,500
shareholders of record. The following table sets forth the quarterly high and
low closing prices of the Company's common stock from January 1, 2001 to
December 31, 2001 compared to the same periods in 2000 as reported by the
NASDAQ. The price quotes have been adjusted for comparison purposes for the 5%
stock dividends distributed on December 20, 2001 and 2000. The price quotations
presented should not necessarily be relied on in determining the value of the
shareholders' investment.

<Table>
<Caption>
                                    2001                                2000
                      ---------------------------------   ---------------------------------
                      31-MAR   30-JUN   30-SEP   31-DEC   31-MAR   30-JUN   30-SEP   31-DEC
                      ------   ------   ------   ------   ------   ------   ------   ------
<S>                   <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
Market Price Range
     High ($)         12.381   12.810   13.333   14.000   13.038   13.606   10.885   11.905
     Low ($)           9.524    9.333   11.429   11.857    9.070    8.620    7.256    8.929

Cash Dividends
     Quarter ($)       0.123    0.123    0.124    0.130    0.117    0.117    0.118    0.124
     Cumulative ($)    0.123    0.246    0.370    0.500    0.117    0.234    0.352    0.476
</Table>

INVESTOR RELATIONS:
  A copy of the Company's Annual Report on form 10-K as filed with the SEC, will
be furnished free of charge upon written or E-mail request to:
  Randall M. Greenwood, CFO
  United Bancorp, Inc.
  201 South 4th Street
  PO Box 10
  Martins Ferry, OH 43935
  or
  cfo@unitedbancorp.com

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN:
  Shareholders may elect to reinvest their dividends in additional shares of
United Bancorp, Inc.'s common stock through the Company's Dividend Reinvestment
Plan. Shareholders may also invest optional cash payments of up to $5,000 per
quarter in our common stock at market price. To arrange automatic purchase of
shares with quarterly dividend proceeds, please contact:
  American Stock Transfer
  and Trust Company
  Attn: Dividend Reinvestment
  40 Wall Street,46th Floor
  New York, NY 10005
  1-800-278-4353

ANNUAL MEETING:
  The Annual Meeting of Shareholders will be held at 2:00 p.m., April 17, 2002
at the Corporate Offices in Martins Ferry, Ohio.

INTERNET:
  Please look us up at http//:www.unitedbancorp.com

INDEPENDENT AUDITORS:
  Crowe, Chizek and Company LLP
  Certified Public Accountants
  10 West Broad Street
  Columbus, OH 43215
  (614) 469-0001

CORPORATE OFFICES:
  The Citizens Savings Bank Building
  201 South 4th Street
  Martins Ferry, OH 43935
  (740) 633-0445
  (740) 633-1448 (FAX)

STOCK TRADING:
  UVEST Investment Services(R)
  Member NASD, SIPC
  740-633-2663
  Toll Free: 888-275-5566, Ext:197
  Located at: The Citizens Bank
  201 South Fourth Street
  Martins Ferry, Ohio 43935

  Advest, Inc.
  340 S. Hollywood Plaza
  Steubenville, OH 43952
  1-800-761-8008
  George Crim
  800-761-8008

  Stifel, Nicolaus & Company Inc.
  655 Metro Place South
  Dublin, OH 43017
  Steven Jefferis
  877-875-9352

TRANSFER AGENT AND REGISTRAR:
For transfers and general correspondence, please contact:
  American Stock Transfer
  and Trust Company
  40 Wall Street, 46th Floor
  New York, NY 10005
  1-800-937-5449

4    UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                           DIVIDEND AND STOCK HISTORY

<Table>
<Caption>
                                                                   Distribution Date of
                Cash Dividends                                         Dividends and
                  Declared(1)          Stock Dividends                   Exchanges
                --------------         ---------------             --------------------
<S>             <C>                 <C>                            <C>
1983              $     0.10                         --                            --
1984              $     0.10           4 for 1 Exchange(2)            January 2, 1984
1985              $     0.11                         --                            --
1986              $     0.13                         --                            --
1987              $     0.13         50% Stock Dividend               October 2, 1987
1988              $     0.14                         --                            --
1989              $     0.14                         --                            --
1990              $     0.16                         --                            --
1991              $     0.17                         --                            --
1992              $     0.18        100% Stock Dividend            September 10, 1992
1993              $     0.19        100% Stock Dividend             November 30, 1993
1994              $     0.21         10% Stock Dividend             September 9, 1994
1995              $     0.29                         --                            --
1996              $     0.31         10% Stock Dividend                 June 20, 1996
1997              $     0.36         10% Stock Dividend            September 19, 1997
1998              $     0.41          5% Stock Dividend             December 18, 1998
1999              $     0.46          5% Stock Dividend             December 20, 1999
2000              $     0.48          5% Stock Dividend             December 20, 2000
2001              $     0.50          5% Stock Dividend             December 20, 2001
</Table>

                            2002 ANTICIPATED DIVIDEND
                                  PAYABLE DATES

FIRST QUARTER
March 20, 2002

--------------------------------------------------------------------------------

SECOND QUARTER*
June 20, 2002

--------------------------------------------------------------------------------

THIRD QUARTER*
September 20, 2002

--------------------------------------------------------------------------------

FOURTH QUARTER*
December 20, 2002

--------------------------------------------------------------------------------

*Subject to action by Board of Directors

--------------------------------------------------------------------------------

(1) Adjusted for stock dividends and exchanges. Does not include dividends from
Southern Ohio Community Bancorporation, Inc. prior to the merger.

(2) Formation of United Bancorp, Inc. (UBCP). The Citizens Savings Bank share
holders received 4 shares of UBCP stock in exchange for 1 share of The Citizens
Savings Bank.

                            TOTAL RETURN PERFORMANCE

                                  [LINE GRAPH]



                                    UNITED BANCORP, INC. 2001 ANNUAL REPORT    5
<PAGE>

[UNITED BANCORP LOGO] DIRECTORS AND OFFICERS


         [PHOTO]                     [PHOTO]                    [PHOTO]
MICHAEL J. ARCIELLO(1,2)      HERMAN E. BORKOSKI(2)     JAMES W. EVERSON(1,2,3)




         [PHOTO]                     [PHOTO]                    [PHOTO]
  DR. LEON F. FAVEDE(2)          PAUL J. GERIG(3)           JOHN R. HERZIG(2)




         [PHOTO]                     [PHOTO]                    [PHOTO]
    DWAIN R. HICKS(2)            ALAN M. HOOKER(3)     JOHN M. HOOPINGARNER(1,2)

(1)=United Bancorp, Inc. (2)=The Citizens Savings Bank  (3)=The Community Bank



6    UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                                                                            2001


      [PHOTO]                        [PHOTO]                    [PHOTO]
 SAMUEL J. JONES(3)            PHILIP D. KASLER(3)         MICHAEL A. LEY(2)




      [PHOTO]                        [PHOTO]                    [PHOTO]
TERRY A. MCGHEE(1,3)       L. E. RICHARDSON, JR.(1,3)   ROBIN L. RHODES, M.D.(3)

                                     [PHOTO]
                            RICHARD L. RIESBECK(1,2)



      [PHOTO]                        [PHOTO]                    [PHOTO]
ERROL C. SAMBUCO(2)          MATTHEW C. THOMAS(1,2)    BARI J. WATKINS, PH.D.(3)


(1)=United Bancorp, Inc.   (2)=The Citizens Savings Bank  (3)=The Community Bank



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT     7
<PAGE>

<Table>
<S>                                 <C>
                                                  DIRECTORS OF UNITED BANCORP,INC.

Michael J. Arciello(2,3) ...................................Retired Vice President of Finance, Nickles Bakeries, Inc., Navarre, Ohio
James W. Everson(1) ...........................................Chairman, The Community Bank, Lancaster, Ohio - Chairman, President &
                                    Chief Executive Officer, United Bancorp, Inc. and The Citizens Savings Bank, Martins Ferry, Ohio
John M. Hoopingarner(1,3) .........................General Manager, Muskingum Watershed Conservancy District, New Philadelphia, Ohio
Terry A. McGhee(1,2) ..............................................President & Chief Executive Officer, Westerman Inc., Bremen, Ohio
L.E. Richardson, Jr. ..........................................................Retired President, The Community Bank, Glouster, Ohio
Richard L. Riesbeck(1,3) ..............................................President, Riesbeck Food Markets, Inc., St. Clairsville, Ohio
Matthew C. Thomas(2) ................................................President, M.C. Thomas Insurance Agency, Inc., Bridgeport, Ohio

                                                   OFFICERS OF UNITED BANCORP,INC.

James W. Everson ......................................................................Chairman, President & Chief Executive Officer
Alan M. Hooker ............................................................................Executive Vice President - Administration
Norman F. Assenza, Jr. ....................................................................Vice President - Operations and Secretary
Randall M. Greenwood ............................................................Vice President - Chief Financial Officer, Treasurer
James A. Lodes .............................................................................................Vice President - Lending

                                     DIRECTORS OF THE CITIZENS SAVINGS BANK, MARTINS FERRY, OHIO

Michael J. Arciello(2) .....................................Retired Vice President of Finance, Nickles Bakeries, Inc., Navarre, Ohio
Herman E. Borkoski(2) ...................................................President, Borkoski Funeral Homes, Inc., Tiltonsville, Ohio
James W. Everson(1)                                            Chairman, The Community Bank, Lancaster, Ohio - Chairman, President &
                                    Chief Executive Officer, United Bancorp, Inc. and The Citizens Savings Bank, Martins Ferry, Ohio
Dr. Leon F. Favede ....................................................................................Optometrist, Bridgeport, Ohio
John R. Herzig ..............................................................President, Toland-Herzig Funeral Homes, Strasburg, Ohio
Dwain R. Hicks ....................................................President, Hicks Consulting and Investing, New Philadelphia, Ohio
John M. Hoopingarner(1) ...........................General Manager, Muskingum Watershed Conservancy District, New Philadelphia, Ohio
Michael A. Ley ....................................................President and Owner, Robert's Men's Shops, New Philadelphia, Ohio
Richard L. Riesbeck(1) ................................................President, Riesbeck Food Markets, Inc., St. Clairsville, Ohio
Errol C. Sambuco(2) .................................................................................Consultant, Martins Ferry, Ohio
Matthew C. Thomas(1,2) ..............................................President, M.C. Thomas Insurance Agency, Inc., Bridgeport, Ohio
        John H. Clark, Jr., Director Emeritus; 1976-2001 .........................United Bancorp, Inc. and The Citizens Savings Bank
        Donald A. Davison, Director Emeritus 1963-1997 ...........................United Bancorp, Inc. and The Citizens Savings Bank
        Albert W. Lash, Director Emeritus 1975-1996 ..............................United Bancorp, Inc. and The Citizens Savings Bank

                                          DIRECTORS OF THE COMMUNITY BANK, LANCASTER, OHIO

James W. Everson(1) ...........................................Chairman, The Community Bank, Lancaster, Ohio - Chairman, President &
                                    Chief Executive Officer, United Bancorp, Inc. and The Citizens Savings Bank, Martins Ferry, Ohio
Paul J. Gerig ........................................................................Attorney at Law, Gerig and Gerig, Athens, Ohio
Alan M. Hooker(1) ..........................................President & Chief Executive Officer, The Community Bank, Lancaster, Ohio
Samuel J. Jones(1,2) .................................................................................Business Owner, Glouster, Ohio
Philip D. Kasler(2) ........................................................................Farming and Real Estate, Amesville, Ohio
Terry A. McGhee(1,2) ..............................................President & Chief Executive Officer, Westerman Inc., Bremen, Ohio
Robin L. Rhodes, M.D. ...........................................Physician, Pediatric Associates of Lancaster, Inc., Lancaster, Ohio
L. E. Richardson, Jr.(1)                             Retired President, Southern Ohio Community Bancorporation, Inc., Glouster, Ohio
Bari J. Watkins, Ph.D. ......................................................................Dean - Ohio University, Lancaster, Ohio
        Joseph D. Kittle, Director Emeritus 1985-2001 ............................................................The Community Bank
        Dean A. Kasler, Director Emeritus 1970-1999 ..............................................................The Community Bank
</Table>

(1)=Executive Committee   (2)=Audit Committee  (3)=Compensation Committee



8    UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

[UNITED BANCORP LOGO] MANAGEMENT TEAM                                       2001


OUR COMMUNITIES...YOUR HOMETOWN BANKS & STAFF

UNITED BANCORP, INC. . . . Provides its Team Members career growth and training.

UNITED BANCORP, INC. . . . Provides the latest in technology and financial
services in a centralized environment.

UNITED BANCORP,INC. . . . Earns the respect of its customers through support of
civic activities that make their communities better places to live.

    Whether a current shareholder of United Bancorp, Inc., a future shareholder,
or a customer of its affiliate banks-The Citizens Savings Bank or The Community
Bank-one would agree the presence of a strong corporate culture is critical for
long-term success. The statements above are part of United Bancorp, Inc's
MISSION STATEMENT. The Board of Directors, along with Senior Management, feel
strongly about the Mission Statement which is annually reviewed and reaffirmed
to instill its value and fundamental time-proven concepts.

    The primary objective of any company is the creation of shareholder value.
This is the centerpiece of our Mission Statement. Our mission is to earn the
respect of our shareholders through continued growth in shareholder value by
sustaining profitability and acquiring well managed and capitalized businesses
in the financial service industry. It is vital to develop strategies that make
attaining this goal possible.

    SERVICE is our primary product. Our success is measured by how well we meet
and exceed our customers' expectations. Customer satisfaction creates a benefit
for everyone-management, staff and shareholders. United Bancorp, Inc. and its
affiliate banks are proud of their reputation for stability, consistency and
integrity. Pride in our past history, however, does not mean we maintain an
inflexible view of the future. It means a commitment to the philosophy that has
made this Company successful. The rapidly changing environment of the banking
industry requires us to understand and integrate technological change and
enhance service delivery channels. Meeting this challenge will provide an
environment for our current and future team members to continue providing
quality products and services, which our customers have grown to expect from us.

    Our Annual Reports in previous years have provided a focus on our banking
customers and their geographic and industry diversification. We have
demonstrated Management's ability to establish and maintain strong relationships
with our customers through decades of service and consistency of quality
personnel. We have focused on delivery of the latest in Electronic Banking
technology and new products, such as our Internet Banking, Telephone Banking
and Cash Management programs. This year, our Annual Report focuses on the Team
Members of your company. Their daily commitment to our customers and our
organization make the difference in realizing the goals of our Mission
Statement. Our Team Members are our most valuable resource.



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT     9
<PAGE>

                             [PHOTO]

      Electronic Banking Committee (front row left to right)
   Linda Koledin, Scott Everson, Norman (John) Assenza (back row
left to right) Judy Leonard, Michael Lloyd, Richard Pollock, James
          Lodes, Jeffery Urban, Ida Neely and Thomas Buck

                         CUSTOMER SERVICE ENHANCEMENTS

    During the past 18 months, the Electronic Banking Committee has effectively
implemented critical electronic delivery channels to improve customers' access
to their accounts 24x7x365. This committee, with representatives from both
affiliate banks, has oversight responsibility on the implementation and
continued monitoring of the Company's Phone Banking System, Retail Internet and
Corporate Cash Management Programs. These programs offer consumers and
businesses better ways to control finances with greater convenience and accuracy
than ever before. Our Electronic Programs streamline routine banking tasks
safely and securely, while being flexible enough to suit the unique requirements
of each individual or business. Our Internet Banking Program is like having a
banking center in your home or office-anywhere, anytime.

                             TECHNOLOGICAL ADVANCES

    Changing technology enables us to develop new business practices and
procedures to take advantage of available automated tools and products.
Ultimately, successful implementation of these tools will help us better serve
our customers. We will continue to invest in new technology over the next
several years, in order to improve customer service. Managing technology is
Michael A. Lloyd, Senior Vice President-Management Information Systems of The
Citizens Savings Bank. Supervisor for the consolidated Item Processing of the
Company is Dolores A. Schafer, and Richard J. Pollock is in charge of Network
Administration for the 17 banking locations of both affiliate banks.

                                                           [PHOTO]
                                                 Item Processing (from left)
                                               Nicole Caraway, Jennifer Bland,
                                              Candy Rykowski and Dolores Shafer


        [PHOTO]                                         [PHOTO]
  Michael Lloyd, Richard                        Data Processing - Thomas
Pollock and Dolores Shafer                      Gibson and Jill Marshall


10   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                        FINANCIAL REPORTING & BOOKEEPING

    Consolidated Corporate Accounting, is located in the Operations Center of
The Citizens Savings Bank. It is responsible for United Bancorp's financial and
regulatory reporting requirements, development and maintenance of both
affiliates' Asset/Liability modeling systems, and overall funds management and
budget process.

Managing the Corporate Accounting area is Randall M. Greenwood, Senior Vice
President and Chief Financial Officer of The Citizens Savings Bank. Larry D.
Browning, Vice President and Treasurer, is responsible for the Asset/Liability
and budget systems of the Company and Matthew D. Jenkins, Assistant Vice
President and Controller, is in charge of the regulatory reporting and funds
management areas. Veronica L. Morris, Accounting Supervisor, oversees the
consolidated bookkeeping area.

                                                        [PHOTO]
                                    (from left) Matthew Jenkins, Larry Browning,
                                           Veronica Morris and Randall Greenwood

                          COMPLIANCE & HUMAN RESOURCES

    Realizing the need to have common policies and procedures, the Company has
put together the experienced team of Norman F. Assenza, Jr., Senior Vice
President-Regulatory Compliance and Secretary and Jean E. Huff, Vice
President-Human Resources and Assistant Secretary, both of The Citizens Savings
Bank.

    Utilizing this consolidated approach, the affiliates have a common
compliance-testing program that is reviewed and approved annually by the Audit
Committee. The coordination of employee benefits such as health, dental,
retirement and 401(k) programs is administered by United Bancorp, Inc. under the
direction of Jean E. Huff.

                                                           [PHOTO]
                                             Jean Huff and Norman (John) Assenza



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    11
<PAGE>

[PHOTO]
The Community Bank

                               THE COMMUNITY BANK
                              "COME GROW WITH US"

    Realizing the significant growth The Community Bank has experienced over the
past two years, the bank established several committees to handle the issues
that result from this expansion.

                               TRAINING COMMITTEE

    With growth comes the need for additional staff and identification of career
paths. With this in mind, a Training Committee, consisting of Alan M. Hooker,
President and CEO, Holly R. Shonebarger, Operations Specialist, Nancy J. Monks,
New Accounts Representative and Marissa D. Wagner, Receptionist was set in
place. This committee works closely with the Officers and Staff to develop and
deliver courses and programs. These range in scope from operational training to
product knowledge training and from sales training to supervisory skills
training.

                                                            [PHOTO]
                                                Training Committee (from left)
                                              Holly Shoneburger, Marissa Wagner,
                                                 Alan Hooker and Nancy Monks



12   UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

                            ASSET LIABILITY COMMITTEE

    With each Bank affiliate in a separate and distinct market, it is critical
to have local decision-making on pricing to stay competitive and maintain the
culture of the local bank making local decisions. The Community Bank's
Asset/Liability Committee serves that need with monthly discussions on loan and
deposit pricing as well as market surveys. All areas of the bank are
represented, and Alan M. Hooker, President and Chief Executive Officer, chairs
the committee whose members include Randall M. Greenwood, Vice President and CFO
of United Bancorp, Inc., Thomas E. Buck, Senior Vice President, and Ida M.
Neely, Treasurer of The Community Bank.

                                                         [PHOTO]
                                          Asset Liability Committee - Ida Neely,
                                               Thomas Buck and Alan Hooker


                  [PHOTO]
Ida Neely, Debbie Hinerman, Lori McElfresh,
      Angela Kempton and Thomas Buck

                     CONTINUOUS QUALITY IMPROVEMENT COMMITEE

    An additional challenge is to make sure the products and services are
delivered in an efficient and effective manner. The Continuous Quality
Improvement Committee regularly reviews procedures to make sure customers are
receiving timely service that is beyond their expectations. Chaired by Senior
Vice President, Thomas E. Buck, the Continuous Quality Improvement Committee is
made up of Debbie L. Hinerman, Manager, Nelsonville Office, Lori A. McElfresh,
Manager, East Main Street Office, Angela R. Kempton, Loan Administration Manager
and Ida M. Neely, Treasurer.



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    13


<PAGE>
                  [PHOTO]
The Citizens Savings Bank - Martins Ferry,Ohio


                           THE CITIZENS SAVINGS BANK
                        A Century of Service, 1902-2002

    Celebrating 100 years of service, The Citizens Savings Bank has a long
history of success developed through consistent and dedicated leadership. As
the bank moves forward into its second century of service, responding to
customers needs and differentiation of services offered will be necessary to
carry forward our rich tradition of growth and superior earnings performance.

                             COMMERCIAL LENDING TEAM
                               IN EASTERN REGION

    The Citizens Bank has established an experienced Lending Team to respond to
the needs of our local communities. This loan team is comprised of loan officers
who are knowledgeable and experienced in commercial credit, residential real
estate lending and consumer loans.

                                                  [PHOTO]
                                  Commercial Lending Team in Eastern Region
                            (left to right) James Everson, Michael Goclan, James
                                    Lodes, Bryan Ramsey and Scott Everson

14   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                           LOAN TEAM IN EASTERN REGION

    Also critical to the lending function is the support from Loan Operations
which is a strong, qualified group of experienced professionals. Our centralized
Loan Center serves all 10 banking locations of The Citizens Savings Bank and
provides support services, such as loan participations and secondary market
mortgage loan programs for The Community Bank.

                                                [PHOTO]
                            Loan Team in Eastern Region (left to right) Scott
                         Everson, Raye Ackerman, Lloyd Hood, Michael Goclan, Ray
                          Jablonski, James Everson, James Lodes and Bryan Ramsey

                  [PHOTO]
Marketing Committee (left to right) Scott Everson,
James Lodes, Linda Koledin and Jeffrey Urban

                               MARKETING COMMITTEE

    The Citizens Bank Marketing Committee, made up of Scott A. Everson, Senior
Vice President-Operations and Retail Banking, James A. Lodes, Senior Vice
President-Bank Lending, and Jeffrey K. Urban, Senior Vice President-Area Manager
of Northern and Central Regions, was established in January 2000 to meet the
challenges of promoting a positive image to the communities served and respond
to customer requirements. Linda J. Koledin joined the Bank Team as Marketing
Director in May 2001 to provide additional resources in this area. With an
internal Marketing presence now established, communication is enhanced and the
committee can respond promptly to advertising and promotional needs.


                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     15
<PAGE>

[UNITED BANCORP LOGO] THE CITIZENS SAVINGS BANK PROFILE                     2001


                             A CENTURY OF SERVICE AT
                           THE CITIZENS SAVINGS BANK
                                     [SEAL]

                                  ANNIVERSARY
                                   1902-2002

    In the year 1902, a group of hometown businessmen in Martins Ferry felt
there was room for another bank in the community in addition to the two already
established and proceeded to organize. On the 27th of January, 1902, a charter
was granted to The German Savings Bank of Martins Ferry, Ohio with an authorized
capital of $50,000. Martins Ferry is nestled among the scenic foothills along
the Upper Ohio Valley across the river from the greater metropolitan area of
Wheeling, West Virginia, 60 miles southwest of Pittsburgh, Pennsylvania and 125
miles east of Columbus, Ohio. The area has a strong network of transportation
including easy access to major interstate highway systems, nearby river and
railway transportation and within 45 minutes of the Pittsburgh International
Airport.

    Organization was completed by electing the original Board of Directors:
Attorney Edward E. McCombs, John E. Reynolds, Henry H. Rothermund, William M.
Lupton, Dr. Joseph W. Darrah, Chris A. Heil, Fred K. Dixon, Thomas J. Ball and
Dr. R.H. Wilson. The first officers were Edward E. McCombs, President; John E.
Reynolds, Vice President; William C. Bergundthal, Cashier; and William H. Wood,
Assistant Cashier. A room in the old Henderson Building located at the alley on
Hanover Street between Fourth and Fifth Streets, currently occupied by a local
realtor, was rented. A vault and counters were installed and the new Bank opened
for business on Saturday, April 26, 1902. This was the beginning of The Citizens
Savings Bank.

    Upon Mr. Bergundthal's death in 1918, Harold H. Riethmiller, who began his
banking career at the bank in 1911, was rehired by the Bank as Cashier. He had
previously worked for the Bank and had been working for 6 months at the
Citizens-Peoples Trust Company in Wheeling. Mr. Riethmiller brought with him an
assistant, David W. Thompson, who upon his death in 1966 was Vice President and
Cashier.

    In 1936 the Bank suffered a loss with the sudden death of Edward E. McCombs,
who had served as President and Attorney for the Bank during the 34 years since
its beginning. John E. Reynolds was then elected President with Attorney David
H. James as Vice President. Mr. Reynolds served as the bank's second President
until his death in 1940, at which time Harold H. Riethmiller was elected
President. Upon Harold H. Riethmiller's retirement in January of 1973, James W.
Everson, who began his banking career as a student intern with the Bank in 1959,
was elected as the Bank's fourth President and Chief Executive Officer.

                                    [PHOTO]
          Citizens Bank Senior Management Team (standing left to right)
      Michael Lloyd, Randall Greenwood, James Lodes, Norman (John) Assenza
      (seated left to right) Jeffery Urban, James Everson and Scott Everson


16   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

    May 1999, The Citizens Savings Bank and its affiliate, The Citizens-State
Bank of Strasburg, Ohio were merged into one Bank under the leadership of James
W. Everson continuing as Chairman and Harold W. Price as the bank's fifth
President and Chief Executive Officer since its founding in 1902. Harold W.
Price served as President and CEO for five months, suffering a fatal heart
attack on September 12th, 1999, after which James W. Everson was reappointed
Chairman, President and CEO.

    Continuing growth and increased business at The German Savings Bank brought
the need for larger quarters, and in 1917 the Bank relocated into a new banking
building on the corner of Fourth and Walnut streets where they were located
until February 21, 1984 when they moved to their current banking center located
one block south at the corner of Fourth and Hickory Street in Martins Ferry. The
First World War brought the name 'German' into bad repute, making a change in
name necessary. On May 1, 1918, the old German Savings Bank became The Citizens
Savings Bank of Martins Ferry, Ohio.

    In 1957, a total remodeling of the first level was completed at the Fourth
and Walnut location enlarging the banking lobby by taking the adjoining room
formerly occupied by the Mear Drug Store. In 1963, the Bank opened a Consumer
Loan Office at the Fourth and Walnut Street location by expanding into the space
occupied by the former Packer Insurance Agency.

    Upon James W. Everson becoming President in January 1973, the bank began an
expanded growth program. November 18, 1974 was the date the Bank's first branch
office was opened. A banking center was opened in Colerain, Ohio offering full
service banking to that area, including safe deposit boxes and a modern new home
for the Colerain, Ohio Post Office. On June 12, 1978, the Bank opened its second
full service branch at the corner of Howard and DeKalb Streets in Bridgeport,
Ohio.

    Recognizing the continued growth of the Bank, the Board of Directors
authorized the purchase in July 1979 of an .8 acre site formerly occupied by the
vacated Central School, one block south on the Corner of Fourth and Hickory
Streets, for the purpose of future expansion. A Phase I building program was
completed on May 12, 1980 with the opening of a limited-service four-station
auto teller with a two-station lobby and large off-street parking facility.

                                     [PHOTO]
   Pictured is a view of the inside of The Citizens Bank in Martins Ferry,Ohio



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    17
<PAGE>

                                     [PHOTO]
 Pictured is Corrina DeNoon, a customer service representative selecting a gift
              from the Salvation Army Gift Giving Tree for children

    In October of 1982, approval was granted by the State Banking Department and
the Federal Deposit Insurance Corporation to relocate the bank's Main Office to
the corner of Fourth and Hickory streets in Martins Ferry and ground was
immediately broken for a new banking center. As a result of 5 years of strategic
planning, The Citizens Savings Bank introduced a new era of banking to the Ohio
Valley on February 21, 1984 with the opening of their new 21,500 square foot
headquarters office located at the corner of Fourth and Hickory streets. This
new banking center offered state-of-the-art security with high-tech scanning and
alarm equipment, and the latest in electronic data processing programs for
banking. The new Bank building was designed by the architectural firm of Jack H.
Tribbie and Associates of Martins Ferry and was constructed by the Byrum
Construction Company of Martins Ferry. The new building was of colonial design
in keeping with the Bank's Colerain and Bridgeport offices, with the interior of
the Bank tastefully decorated in the Williamsburg period.

    On July 3, 1983, the Bank's Board of Directors positioned itself for
continued growth by forming United Bancorp, Inc. of Martins Ferry, Ohio, a
Citizens Savings Bank holding company. At formation, the shareholders of The
Citizens Savings Bank exchanged their stock on a one-for-four basis for shares
in the United Bancorp, Inc. On December 29, 1986, United Bancorp, Inc. became
one of Ohio's then 21 multi-bank holding companies by acquiring the outstanding
shares of stock of The $12.5 Million Asset based Citizens-State Bank of
Strasburg, Ohio. Under the leadership of James W. Everson as Chairman and
Charles E. Allensworth as President and CEO, The Citizens-State Bank then grew
from its one office in Strasburg by opening a new banking center at 2909 N.
Wooster Avenue in Dover, Ohio in February 1990; the purchase of their offices in
New Philadelphia and Sherrodsville in April 1992; and the purchase of its
Dellroy Office in June 1994. Harold W. Price was appointed President and CEO of
The Citizens-State Bank of Strasburg in April 1993. The Citizens Savings Bank of
Martins Ferry further expanded into St. Clairsville with an in store location at
Riesbeck's Food Market in July 1997 and purchased a full service banking center
in Jewett, Ohio in January 1999. United Bancorp entered Northern Athens County
in July 1998 when The $47.8 million asset based Community Bank of Glouster was
purchased, expanding United Bancorp, Inc. to a three bank holding company.
Today, The Community Bank is headquartered in Lancaster, Ohio with three
locations in addition to its two offices in Glouster and offices in Amesville
and Nelsonville, Ohio

    As space in the new headquarters became occupied, property across from the
new Main Office on the other corner of Fourth and Hickory Streets was acquired
in 1993 to support the continued growth. It was renovated into a modern
Operations Center now housing the Data and Item Processing Equipment for
the affiliate banks of United Bancorp, Inc. and the offices for United Bancorp,
Inc.'s Accounting Group. With the introduction of 24 x 7 x 365 Automated Call
Center and Internet Banking in 2001, the Accounting and Operations Center was
further expanded through and purchase and renovation of the adjoining property
formerly



18   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                                     [PHOTO]
                Jeff Urban covering items in a staff meeting in
                        our Northern and Central Region

known as the Fullerton Bakery Building. Today the Accounting and Operations
Center Building supports the back room operations for the seventeen banking
offices of The Citizens Bank and The Community Bank of Lancaster.

    On April 21, 1999 the $74.1 million asset based Citizens-State Bank of
Strasburg was merged into The Citizens Savings Bank. This expanded customer
service under the charter of The Citizens Savings Bank to 10 locations in
Belmont, Carroll, Harrison and Tuscarawas counties. Harold W. Price, who had
served as President and CEO of The Citizens-State Bank of Strasburg was
appointed The Citizens Savings Bank's fifth President and CEO with James W.
Everson continuing as Chairman, in addition to serving as Chairman of The
Community Bank and Chairman, President and CEO of United Bancorp. Everson was
reappointed Chairman, President and CEO of The Citizens Savings Bank five months
later upon Harold W. Price's sudden death.

    The growth and success of The Citizens Savings Bank and the United Bancorp,
Inc. have been attributed to the association of many dedicated men and women.
Having served on the Board of Directors are Edward E. McCombs, 1902-1936; John
E. Reynolds, 1902-1940; Dr. J.W. Darrah, 1902- 1937; J.A. Crossley, 1902-1903;
William M. Lupton, 1902-1902; F.K. Dixon, 1902-1909; Dr. R.H. Wilson, 1902-1905;
C.A. Heil, 1903-1909; David Coss, 1904-1938; L.L. Scheele, 1905-1917; A.T.
Selby, 1906-1954; H.H. Rothermund, 1907-1912; Dr. J.G. Parr, 1912-1930; T.E.
Pugh, 1920-1953; J.J. Weiskircher, 1925-1942; David H. James, 1925-1963; Dr.
C.B. Messerly, 1931-1957; H.H. Riethmiller, 1936-1980; E.M. Nickles, 1938-1968;
L.A. Darrah, 1939-1962; R.L. Heslop, 1941-1983; Joseph E. Weiskircher,
1943-1975; Edward M. Selby, 1953-1976; David W. Thompson, 1954-1966; Dr. Charles
D. Messerly, 1957-1987; James M. Blackford, 1962-1968; John H. Morgan,
1967-1976; Emil F. Snyder, 1968-1975; James H. Cook, 1976-1986; Paul Ochsenbein,
1978-1991; David W. Totterdale, 1981-1995; Albert W. Lash, 1975-1996; Premo R.
Funari, 1976-1997; Donald A. Davison, 1963-1997; Harold W. Price, 1999-1999; and
John H. Clark, Jr., l976-2001.

    Today, The Citizens Savings Bank is Martins Ferry's only

                                    [PHOTO]
                        Pictured are the Director of the
                      United Way of the Upper Ohio Valley
          Chris Marshall, Mike Goclan, James Everson and James Lodes,
   celebrating at the bank's annual Plaza West Fest in St. Clairsville, Ohio



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    19
<PAGE>

                                     [PHOTO]
       Dee Graham and her grandson Frankie Carpenter participating in the
                       2001 Martins Ferry Christmas Parade

locally owned financial institution. The general objective of The Citizens
Savings Bank as outlined in its Mission Statement which was adopted by its Board
of Directors on June 8, 1982 and renewed annually is to remain an independent
state-chartered commercial bank and expand its asset base and market share
through acquisitions and new branch construction where financially feasible.
Currently serving on the bank's board of directors are Michael J. Arciello,
Retired Vice President of Finance, Nickles Bakery, Inc; Herman E. Borkoski,
President, Borkoski Funeral Homes, Inc; James W. Everson, Chairman, The
Community Bank of Lancaster, Chairman, President and Chief Executive Officer of
United Bancorp, Inc. and The Citizens Savings Bank; Dr. Leon F. Favede,
Optometrist; John R. Herzig, President, Toland-Herzig Funeral Homes; Dwain R.
Hicks, President, Hicks Consulting and Investing; John M. Hoopingarner, General
Manager and Secretary-Treasurer of the Muskingum Watershed Conservancy District;
Michael A. Ley, President and Owner, Robert's Men's Shops; Richard L. Riesbeck,
President of Riesbeck Food Markets, Inc.; Errol C. Sambuco, Consultant; and
Matthew C. Thomas, President, M. C. Thomas Insurance Agency Inc.

                                     [PHOTO]
                       Randy Greenwood & son Matthew, Pat
                    Ketzell, Rosemary Bayliss & granddaughter
               Brittany & Nancy Strama passing out balloons at the
              Bank's Annual Plaza West Fest in St.Clairsville, Ohio



20   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

[UNITED BANCORP LOGO] THE COMMUNITY BANK PROFILE                            2001


    COMMUNITY was established in August 1945 with corporate offices in downtown
Glouster, Ohio, in Athens County. Its founder was L.E. Richardson, a local
entrepreneur. At that time, Athens County was booming with the industries of
gas, oil and coal mining. COMMUNITY was then known as The Glouster Community
Bank. The bank played a vital role in the region as it developed, earning a
reputation for friendliness, quality customer service and responsiveness to the
individual financial needs of its customers, as well as the community. More than
25 years later, Richardson turned over the day-to-day management of the bank to
his son, L.E. Richardson, Jr., in 1971.

    With that foundation, COMMUNITY acquired the First National Bank of
Amesville, Ohio in 1976. The bank's prosperity continued, and, in 1978, a
three-lane Auto Bank drive-up facility was constructed on the west side of
Glouster.

    In 1984, the bank created a holding company, Southern Ohio Community
Bancorp, Inc. in anticipation of future growth and diversification of products
and services.

    In 1987, the service area was expanded once again. A modular office in
Nelsonville served the village and the surrounding communities. A few years
later, on December 6, 1993 a ribbon cutting ceremony was held for a newly
constructed Nelsonville office. The brick building, which replaced the mobile
bank unit, features four drive-up lanes and a drive-up ATM. Night deposit and
safe deposit box services were also introduced to the Nelsonville area.

    COMMUNITY has a long and rich association with Hocking College. The two-year
college combines academics with hands-on technical learning, and attracts
students from all over the United States and the world. COMMUNITY is pleased to
meet the financial needs of Hocking College's faculty, staff and students. To
enhance customer service, COMMUNITY has two automatic teller machines on the
2,300-acre Nelsonville campus, one at the Student Center and the other in the
School of Nursing building.

    In 1996, COMMUNITY completed an extensive renovation of its downtown
Glouster office, including the addition of a 24-hour access ATM in the
vestibule.

    In 1998, COMMUNITY became affiliated with United Bancorp, Inc. of Martins
Ferry, Ohio, when United Bancorp purchased The Glouster Community Bank and its
holding company, Southern Ohio Community Bancorp, Inc.

              [PHOTO]
Pictured is a view of the inside of
The Community Bank in Lancaster,Ohio



                                   UNITED BANCORP, INC. 2000 ANNUAL REPORT    21
<PAGE>

                                                         [PHOTO]
                                             Ida Neely and Lori McElfresh at the
                                                 Lancaster/Fairfield County
                                              Chamber of Commerce Annual Meeting

    That acquisition led to COMMUNITY establishing a Loan Production Office
(LPO) in 1998 in Lancaster, Ohio. This LPO provided the opportunity for
COMMUNITY to build its franchise along the U.S. Route 33 corridor from Athens
County through Fairfield County.

    Lancaster, the county seat of Fairfield County, is approximately 30 miles
southeast of Columbus, Ohio and is considered a bedroom community to Columbus.
According to the city's Economic Development Office, Fairfield County is the
fourth fastest growing county in Ohio and is ranked among the top six counties
for growth potential.

    To strengthen COMMUNITY'S presence is this fast growing area, the bank
undertook significant expansion efforts in Fairfield County under the leadership
of Alan M. Hooker. Hooker was named President and CEO of COMMUNITY in October
1998. A well-known Lancaster resident, he brought to COMMUNITY more than 30
years of bank management experience.

    COMMUNITY opened its first Fairfield County banking office in December
1999. The

                                    [PHOTO]
                   Pictured is the AutoBank In Lancaster,Ohio



22   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

East Main Street Banking Office in Lancaster offers full service banking with
extended evening and Saturday hours. The office features a three-lane drive-up,
a drive-up ATM and night depository.

    In January 2000, COMMUNITY relocated its Main Office from Glouster to
downtown Lancaster. This substantial investment significantly strengthened
COMMUNITY'S presence in Fairfield County. Formerly a furniture store, the
historic 1919 building was restored to as near the original appearance as
possible. The building was further enhanced with a Verdin Company clock. The
435-pound timepiece is attached to the southeast corner of the building. The
interior of the building was converted from a

                                                              [PHOTO]
                                                       Angela Wright helping out
                                                         the Salvation Army

                                    [PHOTO]



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    23
<PAGE>

furniture store to a modern full service banking office. Of special note is the
historical mural of Fairfield County landmarks, painted by local stencil artist
Cheryl Fey, which graces the main stairway. The renovation added greatly to the
city's business district, as the Main Office complements the downtown
revitalization that also was completed in 2000.

    COMMUNITY'S Auto Bank, located across the street from the Main Office, also
was opened in January 2000. The structure is unique to the market, because of
its walk-in lobby. It also features a four-lane drive-thru, night depository and
automatic teller machine.

    In July 2000, COMMUNITY opened its Community Room, also unique to the area.
The Community Room has grown quickly into a convenient and frequently used
location for meeting of area civic organizations. It is also a popular gallery
for local artists to display their talents.

    From the rolling hills of Athens County to the bustling commerce of
Fairfield County, COMMUNITY continues to play a vital role in the lives of its
customers and the region it serves. The bank not only has built upon its
customer base through the years, but upon its reputation for friendliness,
quality customer service and responsiveness to the individual financial needs of
its customers and the communities it proudly serves.



24   UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

[UNITED BANCORP LOGO] TABLE OF CONTENTS - FINANCIAL                         2001


                                TABLE OF CONTENTS

<Table>


<S>                                                                              <C>
     DECADE OF PROGRESS ......................................................   26

     MANAGEMENT DISCUSSION AND ANALYSIS ......................................   28

     REPORT OF INDEPENDENT AUDITORS ..........................................   43

     FINANCIAL STATEMENTS ....................................................   44

     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ..........................   48

     FIVE YEAR PERFORMANCE SUMMARY ...............................  INSIDE BACK COVER
</Table>

--------------------------------------------------------------------------------

FOR THE TWELVE MONTHS ENDED DECEMBER 31,

<Table>
<Caption>

                                                      2001                 2000        CHANGE
                                               -----------          -----------       --------
<S>                                            <C>                  <C>                <C>
EARNINGS
  Total interest income                        $24,595,769          $23,734,085        3.63%
  Total interest expense                        12,348,548           12,336,669        0.10%
  Net interest income                           12,247,221           11,397,416        7.46%
  Provision for loan losses                         780,00              587,000       32.88%
  Total noninterest income                       1,606,046            1,368,986       17.32%
  Total noninterest expense                      9,382,984            8,711,655        7.71%
  Net income                                     2,755,587            2,586,975        6.52%

PER SHARE
  Earnings per common share - Basic            $      0.88          $      0.81        8.64%
  Earnings per common share - Diluted                 0.88                 0.81        8.64%
  Cash Dividends paid                                 0.50                 0.48        4.17%
  Book value (end of period)                          9.75                 8.98        8.57%

SHARES OUTSTANDING
  Average - Basic                                3,142,949            3,205,822          --
  Average - Diluted                              3,147,295            3,206,997          --
</Table>



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    25
<PAGE>

[UNITED BANCORP LOGO] DECADE OF PROGRESS

<Table>
<Caption>


(Unaudited)
(as originally reported)(1)
                                                                       1991                   1992                   1993
                                                               ------------           ------------           ------------
<S>                                                            <C>                    <C>                    <C>
Interest and dividend income                                   $ 11,699,233           $ 12,166,789           $ 11,656,336
Interest expense                                                  6,712,916              5,948,713              5,259,839
                                                               ------------           ------------           ------------
Net interest income                                               4,986,317              6,218,076              6,396,497
Provision for loan losses                                           222,000                302,000                270,500
                                                               ------------           ------------           ------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES               4,764,317              5,916,076              6,125,997
Noninterest income, including security gains/(losses)               505,476                603,325                878,731
Noninterest expense                                               3,625,772              4,457,545              4,799,745
                                                               ------------           ------------           ------------
INCOME BEFORE INCOME TAXES                                        1,644,021              2,061,856              2,204,983
Income tax expense                                                  361,021                490,352                477,205
NET INCOME                                                     $  1,283,000           $  1,571,504           $  1,727,778
                                                               ============           ============           ============

Total assets                                                   $135,881,746           $164,675,155           $171,682,025
Deposits                                                        118,059,873            145,648,647            152,334,470
Shareholders' equity                                             12,990,023             14,078,527             15,375,942
Loans receivable, net                                            77,137,769             79,642,462             86,696,640
Term federal funds                                                1,000,000                     --                     --
Allowance for loan losses                                           846,824              1,039,360              1,256,322
Net charge-offs                                                      96,032                109,464                 53,538
Full time employees (average equivalents)                                71                     83                     80
Banking locations                                                      Five                  Seven                  Seven

Earnings per common share - Basic(2)                           $       0.48           $       0.57           $       0.64
Earnings per common share - Diluted(2)                                 0.48                   0.57                   0.64
Dividends per share(2)                                                 0.17                   0.18                   0.19
Book value per share(2)                                                4.78                   5.18                   5.65
Market value range per share(2)                                   4.02-4.48              4.25-5.88             6.18-11.44

Cash dividends paid                                            $    462,000           $    483,000           $    512,400
Return on average assets(ROA)                                          0.95%                  1.01%                  1.04%
Return on average equity(ROE)                                         10.21%                 11.60%                 11.73%
</Table>

----------

(1) Not restated for the July 7, 1998 Acquisition of Southern Ohio Community
    Bancorporation, Inc.

(2) All years restated for common share dividends.

26   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>


                                                                            2001

<Table>
<Caption>

        1994           1995             1996            1997             1998             1999              2000            2001
------------   ------------     ------------    ------------     ------------     ------------      ------------    ------------
<S>            <C>              <C>             <C>              <C>              <C>               <C>             <C>
$ 12,283,260   $ 14,351,522     $ 15,006,091    $ 16,205,162     $ 21,126,421     $ 21,638,690      $ 23,734,085    $ 24,595,769
   5,439,213      6,575,486        6,747,357       7,346,629        9,657,844        9,844,827        12,336,669      12,348,548
------------   ------------     ------------    ------------     ------------     ------------      ------------    ------------
   6,844,047      7,776,036        8,258,734       8,858,533       11,468,577       11,793,863        11,397,416      12,247,221
     281,000        465,000          455,400         444,000          797,957          726,806           587,000         780,000
------------   ------------     ------------    ------------     ------------     ------------      ------------    ------------
   6,563,047      7,311,036        7,803,334       8,414,533       10,670,620       11,067,057        10,810,416      11,467,221
     805,355        876,285          920,951       1,027,166        1,581,139        1,285,519         1,368,986       1,606,046
   4,867,794      5,174,452        5,289,273       5,654,659        8,007,689        8,189,260         8,711,655       9,382,984
------------   ------------     ------------    ------------     ------------     ------------      ------------    ------------
   2,500,608      3,012,869        3,435,012       3,787,040        4,244,070        4,163,316         3,467,747       3,690,283
     545,523        768,577          851,023         940,472        1,089,091        1,003,062           880,772         934,696
------------   ------------     ------------    ------------     ------------     ------------      ------------    ------------
$  1,955,085   $  2,244,292     $  2,583,989    $  2,846,568     $  3,154,979     $  3,160,254      $  2,586,975       2,755,587
============   ============     ============    ============     ============     ============      ============       =========

$185,634,119   $191,199,526     $202,364,858    $211,742,313     $285,492,897     $298,764,079      $323,885,801    $341,317,195
 163,312,482    166,604,359      171,512,241     175,791,296      229,110,372      235,539,865       267,552,875     283,375,923
  16,518,060     18,451,873       20,016,011      21,924,638       27,320,749       25,297,973        28,679,087      30,474,195
 106,952,378    120,907,269      130,637,621     137,308,856      161,187,833      177,406,092       193,707,099     180,460,538
          --             --               --              --               --               --                --              --
   1,437,734      1,775,383        2,022,987       2,238,522        3,033,105        3,109,821         2,790,133       2,879,065
      99,588        127,351          207,796         228,465          803,374          650,090           906,688         691,068
          82             83               84              86              112              135               136             130
       Eight          Eight            Eight            Nine         Thirteen        Seventeen         Seventeen       Seventeen

$       0.71   $       0.82     $       0.95    $       1.04     $       0.97     $       0.97      $       0.81            0.88
        0.71           0.82             0.95            1.03             0.94             0.97              0.81            0.88
        0.21           0.29             0.32            0.36             0.41             0.46              0.48            0.50
        6.08           6.79             7.36            8.07             8.42             7.80              8.98            9.75
 12.07-15.30     8.67-13.26       9.96-16.27     12.71-22.53      15.43-24.48      11.56-22.46        7.26-13.61      9.33-14.00

$    564,472   $    776,136     $    876,153    $    988,820     $  1,254,340     $  1,477,686      $  1,549,657    $  1,590,220
        1.11%          1.18%            1.32%           1.38%            1.17%            1.09%             0.83%           0.82%
       12.24%         12.85%           13.49%          13.56%           11.80%           11.94%             9.88%           9.13%
</Table>



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    27
<PAGE>

[UNITED BANCORP LOGO] MANAGEMENT'S DISCUSSION AND ANALYSIS                  2001


In the following pages, management presents an analysis of United Bancorp,
Inc.'s financial condition and results of operations as of and for the year
ended December 31,2001 as compared to prior years. This discussion is designed
to provide shareholders with a more comprehensive review of the operating
results and financial position than could be obtained from an examination of the
financial statements alone. This analysis should be read in conjunction with the
consolidated financial statements and related footnotes and the selected
financial data included elsewhere in this report.

When used in this discussion or future filings by the Company with the
Securities and Exchange Commission, or other public or shareholder
communications, or in oral statements made with approval of an authorized
executive officer, the words or phrases "will likely result,""are expected
to,""will continue,""is anticipated,""estimate,""project,""believe," or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and to advise
readers that various factors, including regional and national economic
conditions, changes in levels of market interest rates, credit risks of lending
activities and competitive and regulatory factors, could affect the Company's
financial performance and could cause the Company's actual results for future
periods to differ materially from those anticipated or projected.

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

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

FINANCIAL CONDITION

OVERVIEW

    For the year ended December 31, 2001, the Company and its competitors faced
an interest rate environment that is historical in nature with eleven interest
rate decreases by the Federal Open Market Committee ("FOMC"). This dropped the
bank prime lending rate from 7.5% at December 31, 2000 to 4.75% at December 31,
2001. With a slowing economy and the tragic events of September 11, 2001, the
FOMC reacted with the interest rate cuts to help stimulate a struggling economy.
The financial events that have taken place in 2001 significantly impacted both
the Company's loan/deposit pricing and liquidity management. It also impacted
how our customers responded to those decisions. As would be expected our
customers wanted to "lock-in" their loan rates for longer terms, while the
depository preferences were for shorter term certificates of deposits and liquid
transaction accounts.

    For the year ended December 31, 2001, the Company's total assets increased
$17,431,394, or 5.4% over December 31, 2000 totals. Average total earning assets
increased $27,046,000, or 9.3% over $289,766,000 for 2000.

<Table>
<Caption>

                              [TOTAL ASSETS CHART]
                                 (In Thousands)


YEAR                      TOTAL ASSETS
----                      ------------
<S>                         <C>
2001                        $341,317
2000                        $323,886
1999                        $298,764
1998                        $285,493
1997                        $263,607
</Table>



28   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

<Table>
<Caption>

                                [LOANS NET CHART]
                                 (In Thousands)

YEAR                  LOAN NET
----                  --------
<S>                   <C>
2001                  $180,461
2000                  $193,707
1999                  $177,406
1998                  $161,188
1997                  $168,439
</Table>


EARNING ASSETS - LOANS

    Gross loans totaled $183,340,000 at year-end 2001, representing a 6.7%
decrease from $196,497,000 at year-end 2000. However, average loans only
decreased by $2,272,320, or 1.2% from 2000 to 2001.

    Installment loans decreased $9,617,000, or 17.4%, real estate loans
decreased $1,779,000, or 3.2% and commercial real estate loans decreased
$2,849,000 from December 31, 2000. Commercial loans increased $3,087,000 from
December 31, 2000. As discussed previously the overall slow down in the economy
coupled with historical low interest rates caused management to be cautious in
growing loans during this period of uncertainty. Consumers and businesses during
the past year became extremely price and term sensitive and were looking for
longer term fixed rate loans. Management priced our loan products competitively
but not overly aggressively as it was felt the economy would rebound over the
next several years and with that would come higher interest rates. Based upon
the Asset/Liability model utilized by the Company, Management decided not to
over extend into fixed-rate products with rates at or near historical low levels
during 2001.

    Loan production for CITIZENS and COMMUNITY during 2001 yielded different
results. 2001 was a contrast to 2000. During 2000, the Company experienced a
slow down in prepayments and refinancing on commercial real estate and residen-
tial real estate loans as interest rates increased in the first half of the year
and held constant for the remainder of the year.

    The Company's installment lending portfolio decreased by 17.4% from December
31, 2000 to December 31, 2001. These loans represented 24.9% of the total
portfolio at year-end 2001 compared to 28.2% at year-end 2000. The targeted
installment lending areas encompass the geographic areas serviced by the
affiliate Banks, which are diverse, reducing the risk to changes in economic
conditions. Competition for installment loans in 2001 principally came from the
captive finance companies offering low to zero percent financing for extended
terms. With a large share of the consumers being lured to the captive finance
companies offering the promotional low rates, the remaining market share to
compete for was vastly smaller. Management did not feel it was prudent, given
the competition and low yield that were available, to aggressively price our
installment loan product to capture this residual business.

    However, Management has responded to direct competition through customer
service enhancements by extending our customer service hours into the evening to
provide our customers with the ability to arrange financing at their
convenience. In addition, customers may access the Company's 24/7 Internet
Banks' and view rates and even inquire about financing at their convenience.
They can leave an e-mail and a loan officer will return their call and provide
the information requested.

    The commercial business and commercial real estate portfolio represented
approximately 45.5% of the total loan portfolio at December 31, 2001 compared to
43.4% for December 31, 2000. The Company's commercial loan portfolio grew by
$3,087,000, or 15.12%. However, the commercial real estate loan portfolio's
decrease of $2,849,000 partially offset the growth. Management is pleased with
the modest overall increase in the commercial and commercial real estate loan
portfolios given the interest rate environment. The Company was able to retain
the majority of its corporate accounts during a time when the industry was
experiencing a high rate of loan refinancing. To protect the Company's future
net interest margin and mitigate its exposure to rising interest rates in future
reporting periods, certain interest rate



                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     29
<PAGE>


<Table>
<Caption>

                          [TOTAL EARNING ASSETS CHART]
                                 (In Thousands)

YEAR        TOTAL EARNING ASSETS
----        --------------------
<S>               <C>
2001              $307,763
2000              $301,738
1999              $276,452
1998              $267,076
1997              $244,362
</Table>

floors and wider repricing indices were established during 2001. This strategy
may have in the short term caused our price sensitive customers to seek
alternative financing arrangements. However, in Management's view, this will
help preserve the Company's net interest margins and future earning increases if
and when interest rates increase and the Company is not locked into historical
low rates on its financial assets.

    Residential real estate loans are comprised of 1, 3 and 5 year adjustable
rate mortgages financing to 1-4 family units. The Company does offer fixed rate
real estate loans through our Secondary Market Real Estate Mortgage Program. The
fixed rate mortgages are originated and serviced by CITIZENS but are sold
immediately in the secondary market. Therefore, our customers enjoy the
convenience of working and paying with a local bank and are able to obtain
long-term fixed-rate financing for their home. Once these loans are originated
they are immediately sold in what is referred to as the secondary market. Since
the loans are sold, the Company does not assume any interest rate risk in this
portfolio. This arrangement is quite common in banks and without such an option
our customers would look elsewhere for their home financing needs. As the
overall interest rate environment increased during 2000, consumer preferences
shifted from fixed rate loan products to variable rate loans. However, with the
historical low interest rates in 2001 the Company's Secondary Market Program
experienced a high volume of activity.

    The interest rate environment was favorable to the fixed-rate mortgage loan
product and resulted in a high volume of customers refinancing. The Company
recognized gains on the sale of secondary market loans of $71,421 in 2001.
However, the residential real estate portfolio declined. In 2000, the Company
experienced a loss of $27,544 in this program.

    COMMUNITY continued their growth from the previous years, with an increase
in loans of $1,165,000 or 2.4%. The increase this past year is due to the
continued expansion of COMMUNITY into the Fairfield County market. COMMUNITY'S
loan growth came primarily in the real estate portfolio of $2,042,000 and in the
commercial real estate portfolio of $1,803,000. This growth was offset by a
decrease of $2,889,000 in the consumer portfolio.

    CITIZENS bank, experienced a decrease in loans for 2001. Total loans
decreased $12,323,000, or 8.35% from December 31, 2000. The decrease primarily
came in the consumer portfolio of $6,729,000 and the commercial real estate
portfolio of $4,652,000.

    The allowance for loan losses represents the amount which management and the
Board of Directors estimates as adequate to provide for probable incurred losses
in the loan portfolio. The allowance balance and the annual provision charged to
expense are reviewed by management and the Board of Directors monthly using a
risk grading model that considers borrowers' past due experience, economic
conditions and various other circumstances that are subject to change over time.
The loan loss policy for installment loans requires a charge-off if the loan
reaches 120-day delinquent status or if notice of bankruptcy is received. The
Company follows lending policies, which establish criteria for determining the
repayment capacity of borrowers, requirements for down payments and current
market appraisals or other valuations of collateral when loans are originated.
Installment lending also utilizes credit scoring to help in the determination of
credit quality and pricing.

    The Company recognizes interest income on the accrual basis, except for
certain loans which are placed on non-accrual status, when



30   UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

<Table>
<Caption>

                        [RETURN ON AVERAGE ASSETS CHART]
                                    (Percent)

                      RETURN ON
YEAR                AVERAGE ASSETS
----                --------------
<S>                     <C>
2001                    0.82%
2000                    0.83%
1999                    1.09%
1998                    1.17%
1997                    1.10%
</Table>

in the opinion of Management, doubt exists as to collectability. The Company's
policy is to not allow loans greater than 90 days past due to accrue interest
unless the loan is both well secured and in the process of collection. When a
loan is placed on a non-accrual status, interest income may be recognized as
cash payment is received.

    Management and the Board of Directors believe the current balance of the
allowance for loan losses is sufficient to deal with probable incurred losses.
Net charge-offs to average loans for the year-ended 2001 was 0.21% compared to
0.49% for 2000. Refer to section Provision for Loan Losses for further
discussion on the Company's credit quality.

EARNING ASSETS - SECURITIES AND FEDERAL FUNDS SOLD

    The securities portfolio is comprised of US government agency-backed
securities, tax-exempt obligations of states and political subdivisions and
certain other investments. The Company does not hold any collateralized
mortgage-backed securities, other than those issued by US Government agencies.
The Company does not hold any derivative securities. The quality rating of
obligations of state and political subdivisions within Ohio is no less than Aaa,
Aa, or A, with all out-of-state bonds rated at AAA. Board policy permits the
purchase of certain non-rated bonds of local schools, townships and
municipalities, based on their known levels of credit risk.

    Securities available for sale at year-end 2001 increased $19,606,000, or
20.8% over 2000, while securities held to maturity decreased $423,000, or 3.9%.
Management anticipated that a slow down in the economy would cause interest
rates to decline in 2001. With that assumption on interest rates, Management
purchased approximately $31 million of government callable agency securities
with at least a year "call protection". This strategy enabled the Company to
lock into fixed rate securities prior to interest rates decreasing in 2001. As
discussed previously, Management anticipated that a slow down in the economy
would result in a lower number of loan originations. In addition, Management
expected lower interest rates which would increase the risk of loans refinanced.
The Company temporarily borrowed from its correspondent banks to purchase the
$31 million of securities until cash flow came back to the Company from loans
that were repaid.

    While Management did predict lower interest rates in 2001, the degree on
which interest rates decreased was not anticipated. As a result, the Company's
investment securities were called at a faster pace and loans decreased more than
anticipated which resulted in increased liquidity. At December 31, 2001 the
Company had approximately $13,962,000 in Fed Funds Sold.

<Table>
<Caption>


                               [NET INCOME CHART]
                                 (In Thousands)

YEAR            NET INCOME
----            ----------
<S>               <C>
2001              $2,756
2000              $2,587
1999              $3,160
1998              $3,155
1997              $2,848
</Table>


                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     31
<PAGE>

SOURCES OF FUNDS - DEPOSITS

    The Company's primary source of funds is core deposits from retail and
business customers. These core deposits include all categories of
interest-bearing deposits, excluding certificates of deposit greater than
$100,000. During 2001, deposits increased $6,803,000 or 2.9%. Deposit growth for
CITIZENS and COMMUNITY was $2,856,000 and $3,947,000, respectively, for the year
ended December 31, 2001. The Company continues to benefit from strong depository
growth as a direct result of the expansion of COMMUNITY into Fairfield County
(Lancaster).

    The Company maintains strong deposit relationships with public agencies,
including local school districts, city and township municipalities, public works
facilities and others, which may tend to be more seasonal in nature resulting
from the receipt and disbursement of state and federal grants. These entities
have maintained relatively stable balances with the Company due to various
funding and disbursement time-frames.

    Certificates of deposit greater than $100,000 are not considered part of
core deposits and, as such, are used as a tool to balance funding requirements.
At year-end 2001, certificates of deposit greater than $100,000 increased
$9,020,000 or 30.7% over year-end 2000 totals. COMMUNITY accounted for
approximately 84% of this growth.

    Generally, the repricing structure and duration of the Company's earning
assets and interest paying liabilities is such as to create a negative GAP
position for interest rate management. Refer to section Asset/Liability
Management and Sensitivity to Market Risks for further discussion.

    The attraction and retention of core deposits continues to pose a challenge
to the Company and the overall banking industry. Alternative financial products
are continuously being introduced by our competition whether through traditional
banks or brokerage service companies.

    During 2001, the Company observed a "flight to safety" effect for deposit
products. As the economy weakened and the stock market declined and the events
of September 11, 2001 unfolded, our customers seem to have modified their
investment strategies. The Company experienced a consumer preference to maintain
liquidity in traditional bank product accounts during this time of economic
uncertainty.

SOURCES OF FUNDS - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER
BORROWED FUNDS

    Other interest-bearing liabilities include securities sold under agreements
to repurchase, federal funds purchased Treasury, Tax & Loan notes payable and
Federal Home Loan Bank advances. Securities sold under agreements to repurchase
increased by $2,948,000, while other borrowed funds decreased significantly by
$9,351,476 or 60.7%.

    FHLB Cash Management and Federal Funds purchased totaled approximately $10.2
million at December 31, 2001 compared with $15.2 million as of December 31,
2000, a decrease of $5.0 million.

                              PERFORMANCE OVERVIEW
                                  2001 TO 2000

NET INCOME

    The Company reported earnings of $2,756,000 in 2001 compared with $2,587,000
in 2000. This earnings performance equates to a 0.82% Return on Average Assets
("ROA") and 9.13% Return on Average Equity ("ROE") for 2001 compared to .83% and
9.88% for 2000. Basic and Diluted Earnings per share ("EPS") was $0.88 for 2001
compared to $0.81 for 2000. Per share amounts for all periods have been restated
to reflect the 5% stock dividends dis-

<Table>
<Caption>

                                                [RETURN ON AVERAGE EQUITY CHART]
                                                            (Percent)

                                        YEAR            RETURN ON AVERAGE EQUITY
                                        ----            ------------------------
<S>                                                     <C>
                                        2001                     9.13%
                                        2000                     9.88%
                                        1999                    11.94%
                                        1998                    11.80%
                                        1997                    11.48%
</Table>


32   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>


<Table>
<Caption>


                                              [DILUTED EARNINGS PER SHARE CHART]


                                      YEAR            DILUTED EARNINGS PER SHARE
                                      ----            --------------------------
<S>                                                   <C>
                                      2001                       $0.88
                                      2000                       $0.81
                                      1999                       $0.97
                                      1998                       $0.96
                                      1997                       $1.03
</Table>

tributed in December 2001, 2000 and 1999.

NET INTEREST INCOME

    Net interest income, by definition, is the difference between interest
income generated on interest-earning assets and the interest expense incurred on
interest-bearing liabilities. Various factors contribute to changes in net
interest income, including volumes, interest rates and the composition or mix of
interest-earning assets in relation to interest-bearing liabilities. Net
interest income increased $850,000, or 7.5% in 2001. The net margin did not
change in 2001 from 2000 and remains at 3.86%. Overall, the Company has seen
both its earning assets and interest paying liabilities repricing downward given
the interest rate environment in 2001 as previously discussed.

    Average interest-earning assets increased $27,046,000, or 9.3% in 2001 while
the associated weighted-average yield on these interest-earning assets has
decreased from 8.03% in 2000, to 7.76% for 2001.

    Average interest-bearing liabilities increased $18,977,000, or 7.2% in 2001
over 2000. The average cost of funds decreased to 4.38% from 4.69% at December
31, 2000.

    Refer to the sections on Asset and Liability Management and Sensitivity to
Market Risks and Average Balances, Net Interest Income and Yields Earned and
Rates Paid elsewhere for further discussion.

PROVISION FOR LOAN LOSSES

    The provision for loan losses is an operating expense recorded to maintain
the related balance sheet allowance for loan losses at an amount considered
adequate to cover probable losses incurred in the normal course of lending. The
total provision for loan losses was $780,000 in 2001 compared to $587,000 in
2000, an increase of $193,000 or 32.9%. The increase from 2000 of 32.9% in the
provision for loan losses can be attributed to Management's continued efforts to
monitor credit quality in the loan portfolio. Although total loans decreased
from 2000 to 2001, Management did not reduce the provision in 2001 due to the
continued economic slowdown experienced during the year.

    The Company's total allowance for loan losses compared to nonperforming
loans is 436% at December 31, 2001, compared to 352% at December 31, 2000.
Despite a decrease in outstanding loans, the Company's nonperforming loans to
total loans decreased from 0.40% at year-end 2000 to 0.36% at year-end 2001.
Both ratios measure in common size the relative risk and coverage in the
allowance for loan losses.

    The allowance for loan losses as a percentage of loans increased to




             [TOTAL ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS CHART]
                                    (Percent)

<Table>
<Caption>

YEAR            TOTAL ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS
----            ----------------------------------------------
<S>             <C>
2001                              1.57%
2000                              1.42%
1999                              1.72%
1998                              1.85%
1997                              1.77%
</Table>


                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     33

<PAGE>

                    [NET CHARGEOFFS TO AVERAGE LOANS CHART]
                                   (Percent)
<Table>
<Caption>

YEAR        NET CHARGEOFFS TO AVERAGE LOANS
----        -------------------------------
<S>         <C>
2001             0.21%
2000             0.49%
1999             0.38%
1998             0.48%
1997             0.38%
</Table>

1.57% at year-end 2001, from 1.42% at year-end 2000, which occurred because of
the increase in the 2001 provision coupled with a decrease in total outstanding
loans. CITIZENS and COMMUNITY utilize a consistent reserve methodology with the
detail reserve allocations specific to their individual loan portfolios.

    The unallocated loans loss reserve at December 31, 2001 is approximately
$597,000 compared to $450,000 for 2000. The allowance is maintained by
Management at a level considered adequate to cover losses currently anticipated
based upon past loss experience, economic conditions, information about specific
borrower situations including their financial position and collateral values,
and other factors and estimates which are subject to change over time.

NONINTEREST INCOME

    Noninterest income is made up of Bank related fees and service charges, as
well as other income-producing services. These include secondary market loan
servicing fees, ATM/interchange income, internet bank fees, early redemption
penalties for certificates of deposit, safe deposit rental income, net gain or
loss on sales of securities available for sale and loans, leased rental
property, cash management services and other miscellaneous items. Total
noninterest income for 2001 was $1,606,000, or 17.3% over 2000 totals, an
increase of $237,060.

    The increase in 2001 can be attributed to several factors. The Fairfield
County expansion generated additional fee based accounts, as well as additional
ATM and credit card merchant income. During the year, Management focused on
service charges assessed on non-sufficient funds checks and updated our policies
to clearly define when a customer service representative may waive fees on an
account. Also contributing to the increase in noninterest income is the
Company's secondary market mortgage program which generated total income of
approximately $71,000 compared with a $28,000 loss for 2000, an increase of
$99,000. Service charges on deposit accounts increased $40,000 or 4.7%. A gain
on other real estate property sold was approximately $45,000 for 2001. The
Company did not have any similar gains reported in 2000.

NONINTEREST EXPENSE

    Noninterest expense for 2001 increased $671,000, or 7.7% over 2000.

    Salaries and employee benefits increased $396,000 or 9.4% from 2000 to 2001.
Contributing to the increase was additional staffing associated with expansion
activities and the rapidly escalating health care cost which for 2001 increased
over 45% for the majority of the employees covered by the Company.

    Occupancy and equipment and other expense contributed $31,000 to

<Table>
<Caption>

                                                   2001           2000             1999
                                               -----------     -----------      -----------
<S>                                            <C>             <C>              <C>
Noninterest income
  Service charges on deposit accounts          $   904,571     $   864,343      $   745,797
  Net realized gain on sales of securities          39,358          26,674           38,833
  Net realized gain on sales of loans               71,421         (27,544)          41,289
  Other income                                     590,696         505,513          459,600
                                               -----------     -----------      -----------
    Total noninterest income                   $ 1,606,046     $ 1,368,986      $ 1,285,519
                                               ===========     ===========      ===========

Noninterest expense
  Salaries and employee benefits               $ 4,593,016     $ 4,196,960      $ 4,052,095
  Occupancy and equipment                        1,465,804       1,435,207        1,287,170
  Professional services                            309,797         256,577          152,653
  Insurance                                        149,449         209,751          193,615
  Franchise and other taxes                        320,622         250,151          284,125
  Advertising                                      278,731         396,858          302,655
  Stationery and office supplies                   208,999         233,668          276,995
  Other expenses                                 2,056,566       1,732,483        1,639,952
                                               -----------     -----------      -----------
    Total noninterest expense                  $ 9,382,984     $ 8,711,655      $ 8,189,260
                                               ===========     ===========      ===========
</Table>



34   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>
the increase or 2.2% for the year.

    Since franchise taxes are based on the net equity of CITIZENS and COMMUNITY,
the resulting impact of lower interest rates was an increase in the fair market
value of the fixed interest rate securities in the available for sale portfolio.
This resulted in increased net equity producing a higher tax base and tax pay-
ment. The decrease in stationery and office supplies was a direct result of
Management's focus on cost containment.

    Other expenses increased 18.7% or approximately $324,000. Contributing to
this was increased data communication lines of $24,300, merchant processing
expenses of $46,200, bank service fees of $22,000, brokerage office expenses of
$17,300, travel and entertainment of $10,400, director and committee fees of
$16,700 and other losses of $82,200.

    Professional fees increased approximately $53,000 due mainly to increased
loan collection expenses.

    Decreased advertising was budgeted for 2001 since increased advertising in
2000 was deemed necessary to successfully enter into the Lancaster market and to
offset the cost of hiring a full time Marketing Director at CITIZENS.

                              PERFORMANCE OVERVIEW
                                  2000 TO 1999

NET INCOME

    The Company reported earnings of $2,587,000 in 2000 compared with $3,160,000
in 1999. Basic and Diluted Earnings per share ("EPS") was $0.81 for 2000
compared to $0.97 for 1999.

NET INTEREST INCOME

    Net interest income decreased $396,000, or 3.4% from 1999 to 2000. The net
margin decreased from 4.30% for 1999 to 3.86% in 2000. Overall, the Company
experienced higher depository costs in 2000 when compared to 1999. Loan growth
was strong in 2000 and as a result, this was funded with typically higher rate
certificates of deposit.

    Average interest-earning assets increased $17,790,000, or 6.5% in 2000 while
the associated weighted-average yield on these interest-earning assets was also
increased from 7.9% in 1999, to 8.0% for 2000.

    Average interest-bearing liabilities increased $20,826,000, or 8.6% in 2000
over 1999. The average cost of funds increased to 4.69% from 4.06% at December
31, 1999.

PROVISION FOR LOAN LOSSES

    The total provision for loan losses was $587,000 in 2000 compared to
$727,000 in 1999, a decrease of $140,000 or 19.3%.

    With the acquisition of COMMUNITY in mid 1998, Management believed it was
necessary to carry a higher allowance for loan losses due to the perceived
credit quality problems the Company acquired with this acquisition. Prior to the
acquisition, COMMUNITY was under a Memorandum of Understanding with The Ohio
Division of Financial Institutions mainly due to past management credit quality
concerns. As a result, COMMUNITY'S loan loss reserve increased prior to the
merger. These increases were attributed to the loan loss reserve methodology of
prior management and upon the merger reviewed and tested by current management.

    Over the past three years, Management has come to realize that the potential
credit losses supported by prior management in their reserving methodology have
not yet materialized and therefore the loan loss reserve allocated to such loans
was not entirely warranted.

    With the additional history on COMMUNITY'S loan loss history, Management
reduced the provision in 2000.

NONINTEREST INCOME

    Total noninterest income for 2000 was $1,369,000, a modest growth of $83,000
or 6.5% over 1999 totals.

    The secondary market mortgage program incurred a net loss of $28,000 for
2000 compared to a net gain of $41,000 for 1999 amounting to a decrease of
$69,000 from 1999 to 2000. This decrease in losses on secondary market loans
sold offset a growth in service charge income of $118,546 or 15.9% from 1999 to
2000.

NONINTEREST EXPENSE

    Noninterest expense increased $522,000, or 6.4% from 1999 to 2000.

    Management had expected the increase in noninterest expense from 1999 to
2000. Since the end of 1999, the Company has been preparing for the expansion
into Fairfield County. Towards the end of 1998 and continually into 1999,
Management and

                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    35
<PAGE>

staff were added at COMMUNITY to prepare for their eventual grand opening of
three banking locations in Lancaster, Ohio. The gradual building of staffing
over the past two years contributed to the 3.6% increase in salaries and
employee benefits from 1999 to 2000.

    Occupancy and equipment and other expense contributed to the most
significant increases from 1999 to 2000. During the construction mode in 1999,
the Company did not incur any depreciation expense nor did they have maintenance
contracts on all the new facilities. These expenses did not begin until 2000
when the facilities were opened.

    Stationery and office supplies and franchise taxes accounted for the largest
decreases in 2000 compared to 1999. Since franchise taxes are based on the net
equity of CITIZENS and COMMUNITY, the resulting impact of rising rates reduced
the fair market value of the securities in the available for sale portfolio
which in turn is an off-set to net equity producing a lower tax base.

    Professional fees increased approximately $104,000 mainly due to the
services provided in connection with the Lancaster expansion. Also, as the loan
portfolio continues to grow certain legal and collection expenses will grow
also.

    Increased advertising was deemed necessary to successfully enter into the
Lancaster market. As expected by management, a majority of these expenses were
incurred in the first quarter of 2000 for the grand opening events of this
expansion strategy.

ASSET/LIABILITY MANAGEMENT AND SENSITIVITY TO MARKET RISKS

    In the environment of changing business cycles, interest rate fluctuations
and growing competition, it has become increasingly more difficult for banks to
produce adequate earnings on a consistent basis. Although Management can
anticipate changes in interest rates, it is not possible to reliably predict the
magnitude of interest rates changes. As a result the Company must establish a
sound asset/liability management policy, which will minimize exposure to
interest rate risk while maintaining an acceptable interest rate spread and
insuring adequate liquidity.

    The principal goal of asset/liability management - profit management - can
be accomplished by establishing decision processes and control procedures for
all bank assets and liabilities. Thus, the full scope of asset/liability
management encompasses the entire balance sheet of the Company. The broader
principal components of asset/liability management include, but are not limited
to liquidity planning, capital planning, gap management and spread management.

    By definition, liquidity is measured by the Company's ability to raise cash
at a reasonable cost or with a minimum amount of loss. Liquidity planning is
necessary so the Company will be capable of funding all obligations to its
customers at all times, from meeting their immediate cash withdrawal
requirements to fulfilling their short-term credit needs.

    Capital planning is an essential portion of asset/liability management, as
capital is a limited bank resource, which, due to minimum capital requirements,
can place possible restraints on bank growth. Capital planning refers to
maintaining capital standards through effective growth management, dividend
policies and asset/liability strategies.

    Gap is defined as the dollar difference between rate sensitive assets and
rate sensitive liabilities with respect to a specified time frame. A gap has
three components - the asset component, the liability component, and the time
component. Gap management involves the management of all three components.

    Gap management is defined as those actions taken to measure and match rate
sensitive assets to rate sensitive liabilities. A rate sensitive asset is any
interest-earning asset, which can be repriced to a market rate in a given time
frame. Similarly, a rate sensitive liability is any interest-bearing liability,
which can have its interest rate changed to a market rate during the specified
time period. Caps and collars may prevent certain loans and securities from
adjusting to the market rate.

    A negative gap is created when rate sensitive liabilities exceed rate
sensitive assets and, conversely, positive gap occurs when rate sensitive assets
exceed rate sensitive liabilities. A negative gap position will cause profits to
decline in a rising interest rate environment and a positive gap will cause
profits to decline in a falling interest rate environment. Under either
scenario, profits suffer. The Company's goal is to have acceptable profits under
any interest rate environment. To avoid volatile profits as a result of interest
rate fluc-



36   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                             (Dollars in Thousands)
                    NET PORTFOLIO VALUE - DECEMBER 31, 2001

<Table>
<Caption>

CHANGE IN RATES               $ AMOUNT            $ CHANGE           % CHANGE
                              --------            --------           --------
<S>                           <C>                 <C>                <C>
+200 bp                        38,205              (3,349)              -8%
+100 bp                        42,965              (1,411)              -3%
Base                           41,554
-100 bp                        37,711              (3,843)              -9%
-200 bp                        35,921              (5,633)             -14%
</Table>


                    NET PORTFOLIO VALUE - DECEMBER 31, 2000

<Table>
<Caption>

CHANGE IN RATES               $ AMOUNT             $ CHANGE     % CHANGE
                              --------             --------     --------
<S>                           <C>                  <C>          <C>
+200 bp                       26,501                (3,765)        -12%
+100 bp                       28,811                (1,455)         -5%
Base                          30,266
-100 bp                       33,171                 2,905          10%
-200 bp                       33,507                 3,241          11%
</Table>

tuations, the Company attempts to match interest rate sensitivities, while
pricing both the asset and liability components to yield a sufficient interest
rate spread so that profits will remain relatively consistent across interest
rate cycles.

    Management of the income statement is called spread management and is
defined as managing investments, loans, and liabilities to achieve an acceptable
spread between the Company's return on its earning assets and its cost of funds.
Gap management without consideration of interest spread can cause unacceptable
low profit margins while assuring that the level of profits is steady. Spread
management without consideration of gap positions can cause acceptable profits
in some interest rate environments and unacceptable profits in others. A sound
asset/liability management program combines gap and spread management into a
single cohesive system.

    Management measures the Company's interest rate risk by computing estimated
changes in net interest income and the net portfolio value ("NPV") of its cash
flows from assets, liabilities and off-balance sheet items in the event of a
range of assumed changes in market interest rates. The Banks' senior management
and the Executive Committee of the Board of Directors, comprising the
Asset/Liability Committee ("ALCO") review the exposure to interest rates
quarterly. Exposure to interest rate risk is measured with the use of an
interest rate sensitivity analysis to determine the change in NPV in the event
of hypothetical changes in interest rates, while interest rate sensitivity gap
analysis is used to determine the repricing characteristics of the assets and
liabilities.

    NPV represents the market value 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.

    Computations of prospective effects of hypothetical interest rate changes
are based on numerous 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 Company may undertake in response to changes in interest rates.
The NPV calculation is based on the net present value of discounted cash flows
utilizing market prepayment assumptions and market rates of interest provided by
surveys performed during each quarterly period, with adjustments made to reflect
the shift in the Treasury yield curve between the survey date and quarter-end
date. Certain shortcomings are inherent in this method of analysis presented in
the computation of estimated NPV. Certain assets such as adjustable-rate loans
have features that restrict changes in interest rates on a short-term basis and
over the life of the asset. In addition, the portion of adjustable-rate loans in
the Company's portfolio could decrease in future periods if market interest
rates remain at or decrease below current levels due to refinancing activity.
Further, in the event of a change in interest rates, prepayment and early
withdrawal levels would likely deviate from those assumed in the table. Finally,
the ability of many borrowers to repay their adjustable-rate debt may decrease
in the case of an increase in interest rates.

    The table above presents an analysis of the potential sensitivity of the
Company's net present value of its financial instruments to sudden and sustained
changes in the prevailing interest rates.

    The projected volatility of the net present value at both December 31, 2001
and 2000 fall within the general guidelines established by the Board of
Directors.



                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     37
<PAGE>

The following table is a summary of selected quarterly results of operations for
the years ended December 31, 2001 and 2000.

<Table>
<Caption>

                                          1ST        2ND        3RD        4TH
                                        QUARTER    QUARTER    QUARTER    QUARTER
                                        -------    -------    -------    -------
                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>        <C>        <C>        <C>
2001

Interest and dividend income             $6,204     $6,321     $6,203     $5,868
Interest expense                          3,325      3,197      3,084      2,743
                                         ------     ------     ------     ------
Net interest income                       2,879      3,124      3,119      3,125
Provision for loan losses                   195        195        195        195
                                         ------     ------     ------     ------
Net interest income after
  provision for loan losses               2,684      2,929      2,924      2,930
Noninterest income                          368        385        395        459
Noninterest expense                       2,260      2,418      2,357      2,348
                                         ------     ------     ------     ------
Income before income tax                    792        896        962      1,041
Income tax expense                          187        159        284        305
                                         ------     ------     ------     ------
Net income                               $  605     $  737     $  678     $  736
                                         ======     ======     ======     ======

Earnings per common share - Basic        $ 0.19     $ 0.24     $ 0.22     $ 0.24
                                         ======     ======     ======     ======

Earnings per common share - Diluted      $ 0.19     $ 0.24     $ 0.22     $ 0.24
                                         ======     ======     ======     ======

Dividends declared per share             $0.124     $0.124     $0.124     $0.130
                                         ======     ======     ======     ======

2000

Interest and dividend income             $5,593     $5,800     $6,125     $6,216
Interest expense                          2,752      2,952      3,270      3,363
                                         ------     ------     ------     ------
Net interest income                       2,841      2,848      2,855      2,853
Provision for loan losses                   116        115        116        240
                                         ------     ------     ------     ------
Net interest income after
  provision for loan losses               2,725      2,733      2,739      2,613
Noninterest income                          325        334        331        379
Noninterest expense                       2,290      2,131      2,128      2,163
                                         ------     ------     ------     ------
Income before income tax                    760        936        942        829
Income tax expense                          184        230        274        192
                                         ------     ------     ------     ------
Net income                               $  576     $  706     $  668     $  637
                                         ======     ======     ======     ======

Earnings per common share - Basic        $ 0.18     $ 0.22     $ 0.21     $ 0.20
                                         ======     ======     ======     ======

Earnings per common share - Diluted      $ 0.18     $ 0.22     $ 0.21     $ 0.20
                                         ======     ======     ======     ======

Dividends declared per share             $0.118     $0.118     $0.118     $0.124
                                         ======     ======     ======     ======
</Table>


38   UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS EARNED AND RATES PAID

    The following table provides information relating to average balance sheet
information and reflects the average yield on interest-earning assets and the
average cost of interest-bearing liabilities for the years ended December 31,
2001, 2000 and 1999. The yields and costs are calculated by dividing income or
expense by the average balance of interest-earning assets or interest-bearing
liabilities.

    The average balance of available for sale securities is computed using the
carrying value of securities while the yield for available for sale securities
has been computed using the average amortized cost. Average balances are derived
from average month-end balances, which include nonaccruing loans in the loan
portfolio, net of the allowance for loan losses. Interest income is on a his-

<Table>
<Caption>

                                                             2001                                         2000
                                            ---------------------------------------      -------------------------------------
(DOLLARS IN THOUSANDS)                                     INTEREST                                     INTEREST
                                            AVERAGE        INCOME/           YIELD/      AVERAGE        INCOME/           YIELD/
                                            BALANCE        EXPENSE            RATE       BALANCE        EXPENSE           RATE
                                            -------        -------            -----      -------        -------           ----
<S>                                         <C>            <C>               <C>        <C>            <C>               <C>
ASSETS
Interest-earning assets
  Loans                                     $ 188,114      $  16,570          8.81%     $ 190,386      $  17,145          9.01%
  Taxable securities - AFS                     98,706          6,544          6.60         71,670          5,066          6.55
  Taxable securities - HTM                        629             49          7.79          2,495            179          7.17
  Tax-exempt securities - AFS                  13,446            656          5.02         13,914            701          5.02
  Tax-exempt securities - HTM                   8,926            433          4.85          7,876            383          4.86
  Federal funds sold                            3,462             88          2.54            130              7          5.38
  FHLB stock and other                          3,529            256          7.23          3,295            253          7.68
                                            ---------      ---------                    ---------      ---------
Total interest-earning assets                 316,812         24,596          7.76        289,766         23,734          8.03

Noninterest-earning assets
  Cash and due from banks                       8,971                                       9,687
  Premises and equipment (net)                  9,241                                       9,191
  Other nonearning assets                       4,835                                       6,003
  Less: allowance for loan losses              (2,887)                                     (3,039)
                                            ---------                                   ---------
Total noninterest-earning assets               20,160                                      21,842
                                            ---------                                   ---------
Total assets                                $ 336,972                                   $ 311,608
                                            ==========                                  =========
LIABILITIES & SHAREHOLDERS' EQUITY
Interest-bearing liabilities
  Demand deposits                           $  43,846            843          1.92      $  41,488          1,121          2.70
  Savings deposits                             48,850            713          1.46         53,131          1,097          2.06
  Time deposits                               158,778          9,411          5.93        139,363          8,282          5.94
  Fed funds purchased & TT&L                      818             41          5.01          4,244            292          6.88
  FHLB advances                                19,160            958          5.00         19,767          1,263          6.39
  Repurchase agreements                        10,695            383          3.58          5,177            282          5.45
                                            ---------      ---------                    ---------      ---------
Total interest-bearing liabilities            282,147         12,349          4.38        263,170         12,337          4.69
                                                           ---------                                   ---------

Noninterest-bearing liabilities
  Demand deposits                              23,186                                      21,167
  Other liabilities                             1,471                                       1,093
                                            ---------                                   ---------
Total noninterest-bearing liabilities          24,657                                      22,260
                                            ---------                                   ---------
Total liabilities                             306,804                                     285,430
Total shareholders' equity                     30,168                                      26,178
                                            ---------                                   ---------
Total liabilities & shareholders' equity    $ 336,972                                   $ 311,608
                                            ==========                                  =========
Net interest income                                        $  12,247                                   $  11,397
                                                           =========                                   =========

Net interest spread                                                           3.38%                                       3.34%
                                                                              ====                                        ====

Net yield on interest-earning assets                                          3.86%                                       3.86%
                                                                              ====                                        ====

<Caption>

                                                              1999
                                              -------------------------------------
(DOLLARS IN THOUSANDS)                                      INTEREST
                                              AVERAGE        INCOME/           YIELD/
                                              BALANCE        EXPENSE           RATE
                                              -------        -------           ----
<S>                                          <C>             <C>              <C>
ASSETS
Interest-earning assets
  Loans                                      $ 168,868      $  15,130          8.96%
  Taxable securities - AFS                      72,668          4,886          6.49
  Taxable securities - HTM                       1,382             90          6.51
  Tax-exempt securities - AFS                   10,127            598          5.99
  Tax-exempt securities - HTM                   14,480            676          4.67
  Federal funds sold                             2,307            100          4.33
  FHLB stock and other                           2,144            158          7.37
                                             ---------      ---------
Total interest-earning assets                  271,976         21,638          7.88


Noninterest-earning assets
  Cash and due from banks                        9,341
  Premises and equipment (net)                   7,543
  Other nonearning assets                        3,866
  Less: allowance for loan losses               (3,071)
                                             ---------
Total noninterest-earning assets                17,679
                                            ----------
Total assets                                 $ 289,655
                                             =========
LIABILITIES & SHAREHOLDERS' EQUITY
Interest-bearing liabilities
  Demand deposits                            $  41,258            898          2.18
  Savings deposits                              59,559          1,248          2.10
  Time deposits                                113,133          6,198          5.48
  Fed funds purchased & TT&L                     4,156            214          5.15
  FHLB advances                                 16,932            972          5.74
  Repurchase agreements                          7,306            314          4.30
                                             ---------      ---------
Total interest-bearing liabilities             242,344          9,844          4.06
                                                            ---------

Noninterest-bearing liabilities
  Demand deposits                               19,851
  Other liabilities                                991
                                             ---------
Total noninterest-bearing liabilities           20,842
                                             ---------
Total liabilities                              263,186
Total shareholders' equity                      26,469
                                             ---------
Total liabilities & shareholders' equity     $ 289,655
                                             =========
Net interest income                                         $  11,794
                                                            =========

Net interest spread                                                            3.82%
                                                                               ====

Net yield on interest-earning assets                                           4.30%
                                                                               ====
</Table>

o   For purposes of this schedule,,nonaccrual loans are included in loans.

o   Net interest income is reported on an historical basis without
    tax equivalent adjustment.

o   Fees collected on loans are included in interest on loans.


                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    39

<PAGE>
                          [DIVIDENDS PER SHARE CHART]

<Table>
<Caption>

YEAR          DIVIDENDS PER SHARE
----          -------------------
<S>                 <C>
2001                $0.50
2000                $0.48
1999                $0.46
1998                $0.41
1997                $0.36
</Table>

torical basis without tax-equivalent adjustment.

RATE/VOLUME ANALYSIS

    The table below describes the extent to which changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities
have affected interest income and expense during the periods indicated. For
purposes of this table, changes in interest due to volume and rate were
determined using the following methods:

o   Volume variance results when the change in volume is multiplied by the
    previous year's rate.

o   Rate variance results when the change in rate is multiplied by the previous
    year's volume.

o   Rate/volume variance results when the change in volume is multiplied by the
    change in rate.

Note: The rate/volume variance was allocated to volume variance and rate
variance in proportion to the relationship of the absolute dollar amount of the
change in each. Nonaccrual loans are ignored for purposes of the calculations
due to the nominal amount of the loans.

CAPITAL RESOURCES

    Internal capital growth, through the retention of earnings, is the primary
means of maintaining capital adequacy for the Banks. The Company's shareholder
equity at year-end 2001 was $30,474,195 compared to $28,679,087 at year-

<Table>
<Caption>

                                                      2001 COMPARED TO 2000                2000 COMPARED TO 1999
                                                       INCREASE/(DECREASE)                  INCREASE/(DECREASE)
                                               ------------------------------------  ----------------------------------
(IN THOUSANDS)                                              CHANGE        CHANGE                   CHANGE       CHANGE
                                                TOTAL       DUE TO        DUE TO      TOTAL        DUE TO       DUE TO
                                                CHANGE      VOLUME         RATE       CHANGE       VOLUME        RATE
                                               --------     --------     --------     -------      ------       ------
<S>                                            <C>          <C>          <C>          <C>          <C>          <C>
Interest and dividend income
  Loans                                        $  (575)     $  (203)     $  (372)     $ 2,015      $ 1,937      $    78
  Taxable securities available for sale          1,478        1,809         (331)         180          129           51
  Taxable securities held to maturity             (130)        (144)          14           89           79           10
  Tax-exempt securities available for sale         (45)         (23)         (22)         103          210         (107)
  Tax-exempt securities held to maturity            50          (24)         (74)        (293)        (320)          27
  Federal funds sold                                81           87           (6)         (93)        (113)          20
  FHLB stock and other                               3           17          (14)          95           88            7
                                               -------      -------      -------      -------      -------      -------
Total interest and dividend income                 862        1,519         (657)       2,096        2,010           86

Interest expense
  Demand deposits                                 (278)          61         (339)         223            5          218
  Savings deposits                                (384)         (83)        (301)        (151)        (133)         (18)
  Time deposits                                  1,129        1,151          (22)       2,084        1,526          558
  Fed funds purchased & T, T & L                  (251)        (188)         (63)          78            4           74
  FHLB advances                                   (305)         (38)        (267)         291          174          117
  Repurchase agreements                            101          223         (122)         (32)        (104)          72
                                               -------      -------      -------      -------      -------      -------
Total interest expense                              12        1,126       (1,114)       2,493        1,472        1,021
                                               -------      -------      -------      -------      -------      -------

Net interest earnings                          $   850      $   393      $   457      $  (397)     $   538      $  (935)
                                               =======      =======      =======      =======      =======      =======
</Table>

40   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

                          [BOOK VALUE PER SHARE CHART]
<Table>
<Caption>


YEAR            BOOK VALUE PER SHARE
----            --------------------
<S>             <C>
2001                  $9.75
2000                  $8.98
1999                  $7.80
1998                  $8.43
1997                  $8.07
</Table>

end 2000, representing an increase of 6.3%. Equity totals include $56,569 in
accumulated other comprehensive loss which is comprised solely of a net
unrealized loss on securities available for sale, net of tax, at year end 2001,
compared to a $1,272,709 loss at year-end 2000. Total shareholder's equity in
relation to total assets was 8.9% at December 31, 2001 and 2000.

    The Company has established a Dividend Reinvestment Plan ("The Plan") for
shareholders under which the Company's common stock will be purchased by The
Plan for participants with automatically reinvested dividends. The Plan does not
represent a change in the dividend policy or a guarantee of future dividends.
Shareholders who do not wish to participate in The Plan will continue to receive
cash dividends, as declared in the usual and customary manner.

    In May 2001 the Company's shareholders approved an amendment to the
Company's Articles of Incorporation to create a class of preferred shares with
2,000,000 authorized shares. This will enable the Company, at the option of the
Board of Directors, to issue series of preferred shares in a manner calculated
to take advantage of financing techniques which may provide a lower effective
cost of capital to the Company. The amendment also provides greater flexibility
to the Board of Directors in structuring the terms of equity securities that may
be issued by the Company.

LIQUIDITY

    Liquidity relates primarily to the Corporation's ability to fund loan
demand, meet deposit customers' withdrawal requirements and provide for
operating expenses. Assets used to satisfy these needs consist of cash and due
from banks, federal funds sold and securities available for sale. These assets
are commonly referred to as liquid assets. Liquid assets were $137 million at
December 31, 2001 compared to $105 million at December 31, 2000. Management
recognizes securities may need to be sold in the future to help fund loan demand
and, accordingly, as of December 31, 2001, $114.0 million of the securities
portfolio was classified as available for sale. The Company's residential real
estate portfolio which can and has been readily used to collateralize
borrowings, is an additional source of liquidity. Management believes its
current liquidity level is sufficient to meet anticipated future growth.

    The Cash Flow Statements for the periods presented provide an indication of
the Company's sources and uses of cash as well as an indication of the ability
of the Company to maintain an adequate level of liquidity. A discussion of the
cash flow statements for 2001, 2000 and 1999 follows. The Company experienced a
net increase in cash from operating activities in 2001, 2000 and 1999.

                             [EQUITY CAPITAL CHART]
                                 (In Thousands)

<Table>
<Caption>

YEAR                EQUITY CAPITAL
----                --------------
<S>                 <C>
2001                   $30,474
2000                   $28,679
1999                   $25,298
1998                   $27,321
1997                   $25,713
</Table>

                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     41
<PAGE>

Net cash from operating activities was $3.4 million, $3.5 million and $4.1
million for the years ended December 31, 2001, 2000 and 1999, respectively. For
the year-ended 2001, the adjustments to reconcile net income to net cash from
operating activities consisted mainly of depreciation and amortization of
premises and equipment and intangibles, gain on sales of loans, securities and
other assets, the provision for loan losses, Federal Home Loan Bank stock
dividends, net amortization of securities and net changes in other assets and
liabilities.

    NET CASH FLOW FROM INVESTING ACTIVITIES was $(4.4 million), $(24.6 million)
and $(22.5 million) for the years ended December 31, 2001, 2000 and 1999,
respectively. The changes in net cash from investing activities include lending,
as well as normal maturities, security calls and reinvestments of securities and
premises and equipment expenditures. In 2001, 2000 and 1999, the Company
received $5.5 million, $3.0 million and $7.3 million, respectively, from sales
of securities available for sale, while proceeds from securities called were
$72.4 million, $0.9 million and $13.2 million in 2001, 2000 and 1999,
respectively. As mentioned previously, the decrease in interest rates
dramatically impacted the Company's cash flow from investing activities.

    NET CASH FLOW FROM FINANCING ACTIVITIES was $13.8 million, $20.0 million and
$13.8 million for the years ended December 31, 2001, 2000 and 1999,
respectively. The net cash increase was primarily attributable to growth in
total deposits of $15.8 million and $32.0 million in 2001 and 2000 respectively,
and growth in short term borrowings of $8.1 million in 1999.

    Management feels that it has the capital adequacy, profitability, and
reputation to meet the current and projected needs of its customers.

INFLATION

    The majority of assets and liabilities of the Company are monetary in nature
and therefore the Company differs greatly from most commercial and industrial
companies that have significant investments in fixed assets or inventories.
However, inflation does have an important impact on the growth of total assets
in the banking industry and the resulting need to increase equity capital at
higher than normal rates in order to maintain an appropriate equity to assets
ratio. Inflation significantly affects noninterest expense, which tends to rise
during periods of general inflation. Management believes the most significant
impact on financial results is the Company's ability to react to changes in
interest rates. Management seeks to maintain an essentially balanced position
between interest sensitive assets and liabilities and actively manages the
amount of securities available for sale in order to protect against the effects
of wide interest rate fluctuations on net income and shareholder's equity.

NEW ACCOUNTING PRONOUNCEMENTS

    A new accounting standard requires all business combinations to be recorded
using the purchase method of accounting for any transaction initiated after June
30, 2001. Under the purchase method, all identifiable tangible and intangible
assets and liabilities of the acquired company must be recorded at fair value at
date of acquisition, and the excess of cost over fair value of net assets
acquired is recorded as goodwill. Identifiable intangible assets must be
separated from goodwill. Identifiable intangible assets with finite useful lives
will be amortized under the new standard, whereas goodwill, both amounts
previously recorded and future amounts purchased, will cease being amortized
starting in 2002. Annual impairment testing will be required for goodwill with
impairment being recorded if the carrying amount of goodwill exceeds its implied
fair value. Adoption of this standard on January 1, 2002 will not have a
material effect on the Company's financial statements.



42   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

[UNITED BANCORP LOGO] REPORT OF INDEPENDENT AUDITORS                        2001


                               [CROWE CHIZEK LOGO]


Board of Directors and Shareholders
United Bancorp, Inc.
Martins Ferry, Ohio

    We have audited the accompanying consolidated balance sheets of United
Bancorp, Inc. as of December 31, 2001 and 2000, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each of
the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of United
Bancorp, Inc. as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally in the
United States of America.


                                   /s/ CROWE, CHIZEK AND COMPANY LLP
                                   CROWE, CHIZEK AND COMPANY LLP


Columbus, Ohio
January 10, 2002



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    43
<PAGE>

[UNITED BANCORP LOGO] CONSOLIDATED BALANCE SHEETS                           2001



<Table>
<Caption>
                                                                                                 2001             2000
                                                                                            --------------   --------------
<S>                                                                                         <C>              <C>
ASSETS
Cash and due from financial institutions                                                       $   9,427,756      $  10,694,118
Federal funds sold                                                                                13,962,000                 --
                                                                                               -------------      -------------
     Total cash and cash equivalents                                                              23,389,756         10,694,118

Securities available for sale                                                                    114,044,617         94,438,970
Securities held to maturity (Estimated fair value
  of $10,617,845 in 2001 and $10,946,251 in 2000)                                                 10,378,811         10,802,213
Total loans                                                                                      183,339,603        196,497,232
Allowance for loan losses                                                                         (2,879,065)        (2,790,133)
                                                                                               -------------      -------------
     Loans, net                                                                                  180,460,538        193,707,099
Premises and equipment, net                                                                        9,083,891          9,521,046
Accrued interest receivable                                                                        2,796,442          2,758,634
Other real estate and repossessions                                                                  119,888            333,682
Other assets                                                                                       1,043,252          1,630,039
                                                                                               -------------      -------------
     Total assets                                                                              $ 341,317,195      $ 323,885,801
                                                                                               =============      =============

LIABILITIES
Demand deposits
     Noninterest-bearing                                                                       $  26,297,805      $  22,708,636
     Interest-bearing                                                                             42,423,962         45,470,957
Savings deposits                                                                                  49,396,199         49,158,941
Time deposits - under $100,000                                                                   126,820,233        120,797,039
Time deposits - $100,000 and over                                                                 38,437,724         29,417,302
                                                                                               -------------      -------------
     Total deposits                                                                              283,375,923        267,552,875

Federal funds purchased                                                                              116,000            371,000
FHLB line of credit                                                                               10,100,000         14,824,000
Securities sold under agreements to repurchase                                                     7,811,230          4,861,430
Other borrowed funds                                                                               8,199,230          6,052,616
Accrued expenses and other liabilities                                                             1,240,617          1,544,793
                                                                                               -------------      -------------
     Total liabilities                                                                           310,843,000        295,206,714

SHAREHOLDERS' EQUITY
Preferred stock, without par value: 2,000,000 shares authorized and unissued
Common stock - $1 par value: 10,000,000 shares authorized;
  2001 - 3,249,227 and 2000 - 3,094,882 shares issued                                              3,249,227          3,094,882
Additional paid-in capital                                                                        23,619,610         21,699,632
Retained earnings                                                                                  5,044,540          5,852,284
Stock held by deferred compensation plan, 36,550 shares at cost in 2001 and 27,462 in 2000          (517,838)          (411,438)
Treasury stock, 85,791 shares at cost in 2001 and 29,924 in 2000                                    (864,775)          (283,564)
Accumulated other comprehensive income(loss), net of tax                                             (56,569)        (1,272,709)
                                                                                               -------------      -------------
     Total shareholders' equity                                                                   30,474,195         28,679,087
                                                                                               -------------      -------------

     Total liabilities and shareholders' equity                                                $ 341,317,195      $ 323,885,801
                                                                                               =============      =============
</Table>



         See Accompanying Notes to the Consolidated Financial Statements



44   UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>

[UNITED BANCORP LOGO] CONSOLIDATED STATEMENTS OF INCOME                     2001



<Table>
<Caption>
                                                            2001           2000            1999
                                                        ------------   ------------    ------------
<S>                                                     <C>            <C>             <C>
Interest and dividend income
  Loans, including fees                                 $ 16,569,452   $ 17,112,362    $ 15,129,533
  Taxable securities                                       6,593,114      5,244,590       4,976,318
  Non-taxable securities                                   1,088,942      1,083,310       1,274,083
  Federal funds sold                                          87,776         26,321         100,341
  Dividends on Federal Home Loan Bank stock and other        256,485        267,502         158,415
                                                        ------------   ------------    ------------
      Total interest and dividend income                  24,595,769     23,734,085      21,638,690

Interest expense
  Deposits
    Demand                                                   842,893      1,121,150         898,450
    Savings                                                  712,754      1,096,782       1,248,199
    Time                                                   9,411,154      8,282,081       6,198,199
  Other borrowings                                         1,381,747      1,836,656       1,499,979
                                                        ------------   ------------    ------------
      Total interest expense                              12,348,548     12,336,669       9,844,827
                                                        ------------   ------------    ------------

Net interest income                                       12,247,221     11,397,416      11,793,863

Provision for loan losses                                    780,000        587,000         726,806
                                                        ------------   ------------    ------------

Net interest income after provision for loan losses       11,467,221     10,810,416      11,067,057

Noninterest income
  Service charges on deposit accounts                        904,571        864,343         745,797
  Net realized gain on sales/calls of securities              39,358         26,674          38,833
  Net realized gain/(loss) on sales of loans                  71,421        (27,544)         41,289
  Other income                                               590,696        505,513         459,600
                                                        ------------   ------------    ------------
      Total noninterest income                             1,606,046      1,368,986       1,285,519

Noninterest expense
  Salaries and employee benefits                           4,593,016      4,196,960       4,052,095
  Occupancy and equipment                                  1,465,804      1,435,207       1,287,170
  Professional services                                      309,797        256,577         152,653
  Insurance                                                  149,449        209,751         193,615
  Franchise and other taxes                                  320,622        250,151         284,125
  Advertising                                                278,731        396,858         302,655
  Stationery and office supplies                             208,999        233,668         276,995
  Other expenses                                           2,056,566      1,732,483       1,639,952
                                                        ------------   ------------    ------------
      Total noninterest expense                            9,382,984      8,711,655       8,189,260
                                                        ------------   ------------    ------------

Income before income taxes                                 3,690,283      3,467,747       4,163,316
  Income tax expense                                         934,696        880,772       1,003,062
                                                        ------------   ------------    ------------

Net Income                                              $  2,755,587   $  2,586,975    $  3,160,254
                                                        ============   ============    ============

Earnings per common share - Basic                       $       0.88   $       0.81    $       0.97
                                                        ============   ============    ============

Earnings per common share - Diluted                     $       0.88   $       0.81    $       0.97
                                                        ============   ============    ============
</Table>



         See Accompanying Notes to the Consolidated Financial Statements



                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    45
<PAGE>


[UNITED BANCORP LOGO] CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY       2001

<Table>
<Caption>
                                ---------------------------------------------------------------------------------------------------
                                                            TREASURY                                   ACCUMULATED
                                             ADDITIONAL     STOCK AND                                     OTHER          TOTAL
                                  COMMON      PAID-IN       DEFERRED      RETAINED    COMPREHENSIVE   COMPREHENSIVE   SHAREHOLDERS'
                                  STOCK       CAPITAL         PLAN        EARNINGS       INCOME           INCOME         EQUITY
                                ----------   -----------  ------------  ------------  -------------   -------------   -------------
<S>                             <C>          <C>          <C>           <C>           <C>              <C>             <C>
BALANCE AT JANUARY 1, 1999      $2,800,298   $17,801,437  $        --   $ 6,839,877                    $   (120,863)    $27,320,749
Net income                                                                3,160,254    $ 3,160,254                        3,160,254
5% Stock dividend                  139,720     1,833,769                 (1,973,489)
Cash paid in lieu of fractional
  shares on 5% stock dividend                                                (6,245)                                         (6,245)
Proceeds and tax benefit from
  exercise of stock options,
  net of shares redeemed             2,867        24,999                                                                     27,866
Cash dividends -- $0.46 per
  share                                                                  (1,477,686)                                     (1,477,686)
Change in unrealized gain (loss)
  on securities available for
  sale, net of reclassifications
  and tax effects                                                                       (3,726,965)      (3,726,965)     (3,726,965)
                                                                                       -----------
Comprehensive income/(loss)                                                            $  (566,711)
                                                                                       ===========

                                ----------   -----------  -----------   -----------                    ------------     -----------
BALANCE AT DECEMBER 31, 1999     2,942,885    19,660,205           --     6,542,711                      (3,847,828)     25,297,973
Net income                                                                2,586,975    $ 2,586,975                        2,586,975
Shares issued in Dividend
  Reinvestment Plan                  4,954        47,288                                                                     52,242
5% Stock dividend                  147,043     1,580,701                 (1,727,744)
Cash paid in lieu of fractional
  shares on 5% stock dividend                                                (4,111)                                         (4,111)
Cash dividends -- $0.48
  per share                                                              (1,545,547)                                     (1,545,547)
Recognition of shares held by
  deferred compensation plan --
   16,064 at cost                                288,628     (288,628)
11,398 shares purchased for
  deferred compensation plan                     122,810     (122,810)
Purchases of Treasury Stock --
  29,924 shares at cost                                      (283,564)                                                     (283,564)
Change in unrealized gain (loss)
  on securities available for
  sale, net of reclassifications
  and tax effects                                                                        2,575,119        2,575,119       2,575,119
                                                                                       -----------
Comprehensive income/(loss)                                                            $ 5,162,094
                                                                                       ===========

                                ----------   -----------  -----------   -----------                    ------------     -----------
BALANCE AT DECEMBER 31, 2000     3,094,882    21,699,632     (695,002)    5,852,284                      (1,272,709)     28,679,087
Net income                                                                2,755,587    $ 2,755,587                        2,755,587
5% Stock dividend                  154,345     1,813,578                 (1,967,923)
Cash paid in lieu of fractional
  shares on 5% stock dividend           --                                   (5,188)                                         (5,188)
Cash dividends -- $0.50 per
  share                                                                  (1,590,220)                                     (1,590,220)
9,088 shares purchased for
  deferred compensation plan                     106,400     (106,400)
Purchases of Treasury Stock --
  55,867 shares at cost                               --     (581,211)                                                     (581,211)
Change in unrealized gain (loss)
  on securities available for
  sale, net of reclassifications
  and tax effects                                                                        1,216,140        1,216,140       1,216,140
                                                                                       -----------
Comprehensive income/(loss)                                                            $ 3,971,727
                                                                                       ===========

                                ----------   -----------  -----------   -----------                    ------------     -----------
BALANCE AT DECEMBER 31, 2001    $3,249,227   $23,619,610  $(1,382,613)  $ 5,044,540                    $    (56,569)    $30,474,195
                                ==========   ===========  ===========   ===========                    ============     ===========
</Table>

        See Accompanying Notes to the Consolidated Financial Statements


46 UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>
[UNITED BANCORP LOGO] CONSOLIDATED STATEMENTS OF CASH FLOW                  2001

<Table>
<Caption>
                                                                              2001               2000              1999
                                                                          ------------       ------------      ------------
<S>                                                                       <C>                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                             $  2,755,587       $  2,586,975      $  3,160,254
   Adjustments to reconcile net income to net cash
    from operating activities
      Depreciation and amortization                                            901,145            894,956           766,229
      Provision for loan losses                                                780,000            587,000           726,806
      Deferred taxes                                                           (84,270)           151,192          (117,985)
      Federal Home Loan Bank stock dividend                                   (247,400)          (198,200)         (144,400)
      Net realized gains on sales or calls of securities                       (39,358)           (26,674)          (38,833)
      (Accretion)/amortization of securities, net                              (57,020)             8,316            45,767
      Net realized (gains)/losses on sales of loans                            (71,421)            27,544           (41,289)
      Amortization of mortgage servicing rights                                 63,704             46,045            47,490
      Net realized (gains)/losses on sale of real estate owned                 (44,794)
      Net realized (gains)/losses on sale of assets                                                34,328           (10,032)
      Net change in accrued interest receivable and other assets              (297,535)          (462,836)         (133,552)
      Net change in accrued expenses and other liabilities                    (304,175)          (192,015)         (124,838)
                                                                          ------------       ------------      ------------
      Net cash from operating activities                                     3,354,463          3,456,631         4,135,617

CASH FLOWS FROM INVESTING ACTIVITIES
   Securities available for sale
      Sales                                                                  5,480,956          3,026,674         7,271,884
      Maturities, prepayments and calls                                     72,402,575            980,070        13,178,601
      Purchases                                                            (95,326,510)        (8,978,438)      (19,468,023)
   Securities held to maturity
      Maturities, prepayments and calls                                      2,600,000            178,500                --
      Purchases                                                             (2,152,763)        (1,175,555)       (3,960,549)
   Net change in loans                                                      12,611,249        (17,213,721)      (17,034,756)
   Proceeds from sale of assets                                                                                     305,554
   Proceeds from sale of real estate owned                                     403,282
   Purchases of premises and equipment                                        (441,456)        (1,411,084)       (2,823,215)
                                                                          ------------       ------------      ------------
      Net cash from investing activities                                    (4,422,667)       (24,593,554)      (22,530,504)

CASH FLOWS FROM FINANCING ACTIVITIES
   Net change in deposits                                                   15,823,048         32,013,010        (3,881,264)
   Cash and cash equivalents received from deposit assumption,
    net of assets acquired                                                                                       10,163,299
   Net change in short-term borrowings                                      (1,945,836)        (9,504,707)        8,079,507
   Proceeds from long-term debt                                              2,852,590                            3,693,000
   Principal payments on long-term debt                                       (789,341)          (773,237)       (2,818,386)
   Cash dividends paid                                                      (1,590,220)        (1,545,547)       (1,477,686)
   Cash paid in lieu of fractional shares in stock dividend                     (5,188)            (4,111)           (6,245)
   Proceeds from stock issuance                                                                    52,242
   Treasury stock purchases                                                   (581,211)          (283,564)
   Proceeds and tax benefit from exercise of stock options,
    net of shares redeemed                                                                                           27,866
                                                                          ------------       ------------      ------------
         Net change from financing activities                               13,763,842         19,954,086        13,780,091
                                                                          ------------       ------------      ------------

Net change in cash and cash equivalents                                     12,695,638         (1,182,837)       (4,614,796)

Cash and cash equivalents at beginning of year                              10,694,118         11,876,955        16,491,751
                                                                          ------------       ------------      ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                  $ 23,389,756       $ 10,694,118      $ 11,876,955
                                                                          ============       ============      ============

Interest paid                                                             $ 12,545,238       $ 12,238,551      $  9,883,868
Income taxes paid                                                              930,469            854,470         1,078,302
Non-cash transfer from loans to other real estate and repossessions       $    144,688       $    298,170      $    279,758
Non-cash transfer of securities from held to maturity to available for
 sale upon adoption of SFAS No. 133                                                                              16,004,920
</Table>


        See Accompanying Notes to the Consolidated Financial Statements

                                 UNITED BANCORP, INC. 2001 ANNUAL REPORT      47

<PAGE>
[UNITED BANCORP LOGO] NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS        2001

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION:

         The consolidated financial statements include the accounts of United
Bancorp, Inc. ("UNITED") and its wholly-owned subsidiaries, ("Banks"), The
Citizens Savings Bank of Martins Ferry, Ohio ("CITIZENS") and The Community
Bank, Glouster, Ohio ("COMMUNITY"), together referred to as the "COMPANY".
Intercompany transactions and balances have been eliminated in consolidation.

NATURE OF OPERATIONS/SEGMENTS:

         The Company's revenues, operating income, and assets are primarily from
the banking industry. Accordingly, all of the Company's banking operations are
considered by Management to be aggregated in one reportable operating segment.
Customers are mainly located in Athens, Belmont, Carroll, Fairfield, Harrison,
Hocking, and Tuscarawas Counties and the surrounding localities in northeastern,
eastern and southeastern Ohio, and include a wide range of individuals, business
and other organizations. CITIZENS conducts its business through its main office
in Martins Ferry, Ohio and nine branches in Bridgeport, Colerain, Dellroy,
Dover, Jewett, New Philadelphia, St. Clairsville, Sherrodsville, and Strasburg
Ohio. COMMUNITY conducts its business through its seven offices in Amesville,
Glouster, Lancaster, and Nelsonville, Ohio. The Company's primary deposit
products are checking, savings, and term certificate accounts, and its primary
lending products are residential mortgage, commercial, and installment loans.
Substantially all loans are secured by specific items of collateral including
business assets, consumer assets and real estate. Commercial loans are expected
to be repaid from cash flow from operations of businesses. Real estate loans are
secured by both residential and commercial real estate. Other financial
instruments which potentially represent concentrations of credit risk include
deposit accounts in other financial institutions.

USE OF ESTIMATES:

         To prepare financial statements in conformity with accounting
principles generally accepted in the United States of America, management makes
estimates and assumptions based on available information. These estimates and
assumptions affect the amounts reported in the financial statements and the
disclosures provided, and future results could differ. The allowance for loan
losses, fair values of financial instruments and status of contingencies are
particularly subject to change.

CASH FLOW REPORTING:

         Cash and cash equivalents includes cash and due from banks and federal
funds sold. Net cash flows are reported for customer loan and deposit
transactions, securities sold under agreements to repurchase and short-term
borrowings with original maturities of 90 days or less.

SECURITIES:

         Securities are classified as held to maturity and carried at amortized
cost when management has the positive intent and ability to hold them to
maturity. Securities are classified as available for sale when they might be
sold before maturity. Securities available for sale are carried at fair value,
with unrealized holding gains and losses reported in other comprehensive income,
net of tax. Other securities such as Federal Home Loan Bank stock are carried at
cost. Interest income includes amortization of purchase premiums and discounts.
Realized gains and losses on sales are based on the amortized cost of the
security sold. Securities are written down to fair value when a decline in fair
value is not temporary.

LOANS:

         Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff, are reported at the principal
balance outstanding, net of deferred loan fees and costs, and the allowance for
loan losses. Loans held for sale are reported at the lower of cost or market, on
an aggregate basis. Interest income is reported on the interest method and
includes amortization of net deferred loan fees and costs over the loan term.
Interest income is not reported when full loan repayment is doubtful, typically
when the loan is impaired or payments are past due over 90 days. Payments
received on such loans are reported as principal reductions.

ALLOWANCE FOR LOAN LOSSES:

         The allowance for loan losses is a valuation allowance for probable
incurred credit loss, increased by the provision for loan losses and decreased
by charge-offs less recoveries. Management estimates the allowance balance
required based on past loan loss experience, the nature and volume of the
portfolio, information about specific borrower situations and estimated
collateral values,


48  UNITED BANCORP, INC. 2001 ANNUAL REPORT


<PAGE>




NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


ALLOWANCE FOR LOAN LOSSES (CONTINUED):

economic conditions and other factors. Allocations of the allowance may be made
for specific loans, but the entire allowance is available for any loan that, in
management's judgment, should be charged-off. Loan losses are charged against
the allowance when management believes the uncollectibility of a loan balance is
confirmed. A loan is impaired when full payment under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of similar
nature such as residential mortgage, consumer, and credit card loans, and on an
individual loan basis for other loans. If a loan is impaired, a portion of the
allowance is allocated so that the loan is reported, net, at the present value
of estimated future cash flows using the loan's existing rate or at the fair
value of collateral if repayment is expected solely from the collateral.

PREMISES AND EQUIPMENT:

         Premises and equipment are stated at cost less accumulated
depreciation. Depreciation is computed over the assets useful lives on the
straight-line method. These assets are reviewed for impairment when events
indicate the carrying amount may not be recoverable.

FORECLOSED ASSETS:

         Assets acquired through or instead of loan foreclosure are initially
recorded at fair value when acquired, establishing a new cost basis. After
acquisition, a valuation allowance reduces the reported amount to the lower of
the initial amount or fair value less costs to sell. Expenses, gains and losses
on disposition and changes in the valuation allowance are reported in other
expenses.

LOAN SERVICING RIGHTS:

            Loan servicing rights are recognized as assets for purchased rights
and for the allocated value of retained servicing rights on loans sold.
Servicing rights are expensed in proportion to, and over the period of,
estimated net servicing revenues. Impairment is evaluated based on the fair
value of the rights, using groupings of underlying loans with similar
characteristics. Any impairment of a grouping is reported as a valuation
allowance.

INTANGIBLE ASSETS:

         Identified intangibles include the value of depositor relationships
purchased which are being amortized on an accelerated method over eight years.
Unidentified intangibles include goodwill, which is being amortized on a
straight-line method over eleven years. Intangible assets are assessed for
impairment based on estimated undiscounted cash flows and written down if
necessary. At year-end 2001 and 2000, intangibles, net of accumulated
amortization, totaled $99,940 and $122,474 and are included in other assets in
the accompanying consolidated balance sheets.

REPURCHASE AGREEMENTS:

         Substantially all repurchase agreement liabilities represent amounts
advanced by various customers. Securities are pledged to cover these
liabilities, which are not covered by federal deposit insurance.

EMPLOYEE BENEFITS:

         A defined benefit pension plan covers all employees who have completed
1,000 hours of service during an anniversary year, measured from their date of
hire, who have attained age 21. The plan calls for benefits to be paid to
eligible employees at retirement, based primarily upon years of service and
compensation rates near retirement. Contributions to the plan reflect benefits
attributed to employees' services to date, as well as services expected to be
earned in the future. Plan assets consist of primarily common stock and debt
instruments. Pension expense is the net of service and interest cost, return on
plan assets, and amortization of gains and losses not immediately recognized.

         The Company offers a 401(k) plan, which covers all employees who have
attained the age of 2l and have completed one year of service. Eligible
employees may contribute up to 15% of their compensation subject to maximum
statutory limitation. The Company may make a discretionary matching contribution
equal to a percentage of each participant's elective deferral not to exceed 6%
of the participant's annual compensation. Employee contributions are always
vested. Employer contributions become 100% vested after 3 years of service.

STOCK COMPENSATION:

         Employee compensation expense under stock option plans is reported only
if options are granted below market price at grant date. Pro forma disclosures
of net income and earnings per share are provided using the fair value method of
Statement of



                                     UNITED BANCORP, INC. 2001 ANNUAL REPORT  49



<PAGE>

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


STOCK COMPENSATION (CONTINUED):

Financial Accounting Standards ("SFAS") No. 123 to measure expense for options
granted after 1994, using an option pricing model to estimate fair value.

INCOME TAXES:

         Income tax expense is the total of the current year income tax due or
refundable and the change in deferred tax assets and liabilities. Deferred tax
assets and liabilities are the expected future tax amounts for temporary
differences between the carrying amounts and tax bases of assets and
liabilities, computed using enacted tax rates. A valuation allowance, if needed,
reduces deferred tax assets to the amount expected to be realized.

FINANCIAL INSTRUMENTS

         Financial instruments include off-balance sheet credit instruments,
such as commitments to make loans and standby letters of credit, issued to meet
customer financing needs. The face amount for these items represents the
exposure to loss, before considering customer collateral or ability to repay.
Such financial instruments are recorded when they are funded.

EQUITY:

         Common stock has $1.00 par and 10,000,000 shares are authorized.
Preferred stock has no par value and 2,000,000 shares are authorized. Treasury
stock is carried at cost. Transfers from retained earnings are made for stock
dividends using the fair value of shares issued. On November 20, 2001, a 5%
stock dividend was approved for all shareholders of record on December 1, 2001
and distributed on December 20, 2001. On November 21, 2000, a 5% stock dividend
was approved for all shareholders of record on December 1, 2000 and distributed
on December 20, 2000. On November 16, 1999, a 5% stock dividend was approved for
all shareholders of record on December 1, 1999 and distributed on December 20,
1999. All per share data has been retroactively adjusted for the 5% stock
dividends in 2001,2000 and 1999.

DIVIDEND RESTRICTION:

         Banking regulations require maintaining certain capital levels and may
limit the dividends paid by the Banks to the holding company or by the holding
company to shareholders.

FAIR VALUES OF FINANCIAL INSTRUMENTS:

         Fair values of financial instruments are estimated using relevant
market information and other assumptions, as more fully disclosed separately.
Fair value estimates involve uncertainties and matters of significant judgment
regarding interest rates, credit risk, prepayments and other factors, especially
in the absence of broad markets for particular items. Changes in assumptions or
in market conditions could significantly affect the estimates.

EARNINGS PER COMMON SHARE:

         Basic earnings per common share (EPS) is net income divided by the
weighted-average number of common shares outstanding during the period. Diluted
EPS includes the dilutive effect of additional potential common shares issuable
under stock options. Earnings and dividends per share are restated for all stock
dividends through the date of issuance of the financial statements.

COMPREHENSIVE INCOME:

            Comprehensive income consists of net income and other comprehensive
income. Other comprehensive income includes unrealized gains and losses on
securities available for sale which is also recognized as a separate component
of equity.

LOSS CONTINGENCIES:

         Loss contengencies, including claims and legal actions arising in the
ordinary course of business, are recorded as liabilities when the likelihood of
loss is probable and an amount or range of loss can be reasonably estimated.
Management does not believe there now are such matters that will have a material
effect on the financial statements.

RESTRICTIONS ON CASH:

            Cash on hand or on deposit with the Federal Reserve Bank of
$1,598,000 and $1,254,000 was required to meet regulatory reserve and clearing
requirements at year end 2001 and 2000. These balances do not earn interest.

RECLASSIFICATIONS:

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


50   UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS:

         A new accounting standard requires all business combinations to be
recorded using the purchase method of accounting for any transaction initiated
after June 30, 2001. Under the purchase method, all identifiable tangible and
intangible assets and liabilities of the acquired company must be recorded at
fair value at date of acquisition, and the excess of cost over fair value of net
assets acquired is recorded as goodwill. Identifiable intangible assets must be
separated from goodwill. Identifiable intangible assets with finite useful lives
will be amortized under another new standard, whereas goodwill, both amounts
previously recorded and future amounts purchased, will cease being amortized
starting in 2002. Annual impairment testing will be required for goodwill with
impairment being recorded if the carrying amount of goodwill exceeds its implied
fair value. Adoption of these standards on January 1, 2002 will not have a
material effect on the Company's financial statements.

NOTE 2 - SECURITIES

         Securities at year end were as follows:


<Table>
<Caption>
                                    -----------------------------------------------------------------------------
                                      AMORTIZED              GROSS               GROSS               ESTIMATED
                                        COST           UNREALIZED GAINS    UNREALIZED LOSSES        FAIR VALUE
                                    -------------      ----------------    -----------------       -------------
<S>                                 <C>                 <C>                <C>                  <C>
AVAILABLE FOR SALE 2001
  US Agency obligations             $    99,893,474     $       508,193      $      (911,894)     $    99,489,773
  State and municipal obligations        10,463,516             293,400               (8,563)          10,748,353
  Mortgage-backed obligations               148,938               3,794                                   152,732
  Other securities                        3,624,400              29,359                                 3,653,759
                                    ---------------     ---------------      ---------------      ---------------
                                    $   114,130,328     $       834,746      $      (920,457)     $   114,044,617
                                    ===============     ===============      ===============      ===============

AVAILABLE FOR SALE 2000
  US Agency obligations             $    77,808,200     $        62,193      $    (2,185,777)     $    75,684,616
  State and municipal obligations        13,247,607             207,123              (20,430)          13,434,300
  Mortgage-backed obligations             1,934,599                                   (4,470)           1,930,129
  Other securities                        3,377,000              12,925                                 3,389,925
                                    ---------------     ---------------      ---------------      ---------------
                                    $    96,367,406     $       282,241      $    (2,210,677)     $    94,438,970
                                    ===============     ===============      ===============      ===============

HELD TO MATURITY 2000
  State and municipal obligations   $    10,378,811     $       293,163      $       (54,129)     $    10,617,845
                                    ---------------     ---------------      ---------------      ---------------
                                    $    10,378,811     $       293,163      $       (54,129)     $    10,617,845
                                    ===============     ===============      ===============      ===============

HELD TO MATURITY 2000
  US Agency obligations             $     2,495,865     $         2,432      $       (13,077)     $     2,485,220
  State and municipal obligations   $     8,306,348     $       194,352      $       (39,669)     $     8,461,031
                                    ---------------     ---------------      ---------------      ---------------
                                    $    10,802,213     $       196,784      $       (52,746)     $    10,946,251
                                    ===============     ===============      ===============      ===============
</Table>

Sales of securities available for sale were as follows:

<Table>
<Caption>

                        2001           2000           1999
                     ----------     ----------     ----------
<S>                  <C>            <C>            <C>
Proceeds             $5,480,956     $3,026,674     $7,271,884
Gross gains              34,358         26,674         56,068
Gross losses                                           17,235
</Table>



                                    UNITED BANCORP, INC.  2001 ANNUAL REPORT  51
<PAGE>

NOTE 2 - SECURITIES (CONTINUED)

        Contractual maturities of securities at year-end 2001 were as follows:


<Table>
<Caption>
                                                                                                   AVERAGE
                                                AMORTIZED                 ESTIMATED             TAX EQUIVALENT
       AVAILABLE FOR SALE                         COST                   FAIR VALUE                 YIELD
                                             ---------------          ---------------          ---------------

<S>                                          <C>                      <C>                      <C>
US AGENCY OBLIGATIONS
  1-5 Years                                  $     3,500,000          $     3,487,930                     4.41%
  5-10 Years                                      25,256,983               25,361,149                     6.29%
  Over 10 Years                                   71,136,491               70,640,694                     6.51%
                                             ---------------          ---------------          ---------------
    Total                                         99,893,474               99,489,773                     6.38%
                                             ---------------          ---------------          ---------------

MORTGAGE-BACKED SECURITIES
  5-10 Years                                         148,938                  152,732                     6.01%

STATE AND MUNICIPAL OBLIGATIONS
  Under 1 Year                                     4,241,960                4,343,107                     7.52%
  1-5 Years                                        3,716,486                3,860,697                     7.50%
  5-10 Years                                       1,902,467                1,939,430                     7.09%
  Over 10 Years                                      602,603                  605,119                     7.07%
                                             ---------------          ---------------          ---------------
    Total                                         10,463,516               10,748,353                     7.41%
                                             ---------------          ---------------          ---------------

OTHER SECURITIES
  Equity securities                                3,624,400                3,653,759                     7.00%
                                             ---------------          ---------------          ---------------

TOTAL SECURITIES AVAILABLE FOR SALE          $   114,130,328          $   114,044,617                     6.49%
                                             ===============          ===============          ===============

      HELD TO MATURITY

STATE AND MUNICIPAL OBLIGATIONS
  1-5 Years                                        4,002,230                4,179,318                     7.44%
  5-10 Years                                       3,333,540                3,416,804                     7.20%
  Over 10 Years                                    3,043,041                3,021,723                     7.21%
                                             ---------------          ---------------          ---------------

TOTAL SECURITIES HELD TO MATURITY            $    10,378,811          $    10,617,845                     7.30%
                                             ===============          ===============          ===============
</Table>

         Securities with a carrying value of $58,817,931 at December 31, 2001
and $49,414,697 at December 31, 2000 were pledged to secure public deposits,
repurchase agreements and other liabilities as required or permitted by law.

52 UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>
NOTE 3 -- LOANS

         Year-end loans were as follows:

<Table>
<Caption>
                                                    2001                     2000
                                               -------------            -------------

<S>                                            <C>                      <C>
        Commercial loans                       $  21,502,208            $  20,414,810
        Commercial real estate loans              61,962,953               64,811,940
        Real estate loans                         54,153,041               55,931,621
        Installment loans                         45,721,401               55,338,861
                                               -------------            -------------
                Total loans                    $ 183,339,603            $ 196,497,232
                                               =============            =============
</Table>

         Loans to directors and officers, their immediate families, affiliated
corporations, and other entities in which they own more than a 10% voting
interest are summarized below:

<Table>
<S>                                                     <C>
        Aggregate balance - December 31, 2000           $  3,770,020
        New loans                                          2,181,411
        Repayments                                        (1,082,064)
                                                        ------------
        Aggregate balance - December 31, 2001           $  4,869,367
                                                        ============
</Table>

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

<Table>
<Caption>
                                                        2001               2000            1999
                                                    -----------        -----------     -----------

<S>                                                 <C>                <C>             <C>
        Balance January 1,                          $ 2,790,133        $ 3,109,821     $ 3,033,105
        Provision for loan losses                       780,000            587,000         726,806
        Loans charged-off                            (1,063,444)        (1,194,840)       (943,124)
        Recoveries of previous charge-offs              372,376            288,152         293,034
                                                    -----------        -----------     -----------
        Balance December 31,                        $ 2,879,065        $ 2,790,133     $ 3,109,821
                                                    ===========        ===========     ===========
</Table>

         Non-performing loans were as follows at year end:

<Table>
<Caption>
                                                                         2001               2000
                                                                      ---------          ---------

<S>                                                                   <C>                <C>
        Loans past due over 90 days still on accrual                  $ 157,000          $ 124,000
        Nonaccrual loans                                              $ 661,000          $ 793,000

</Table>

         Loans required to be evaluated individually for impairment under the
provisions of SFAS No. 114 were not material during any of the periods
presented.

NOTE 4 -- PREMISES AND EQUIPMENT

         Year-end premises and equipment were as follows:

<Table>
<Caption>
                                                            2001                 2000
                                                        ------------         ------------

<S>                                                     <C>                 <C>
        Buildings and land                              $ 10,030,383         $  9,856,383
        Furniture and equipment                            5,790,192            5,524,629
        Leasehold improvements                               263,977              263,977
        Computer software                                    948,462              946,569
                                                        ------------         ------------
                Total                                     17,033,014           16,591,558

        Accumulated depreciation and amortization          7,949,123            7,070,512
                                                        ------------         ------------
        Premises and equipment, net                     $  9,083,891         $  9,521,046
                                                        ============         ============
</Table>



                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     53
<PAGE>

NOTE 4 -- PREMISES AND EQUIPMENT (CONTINUED)

         Depreciation expense was $865,951, $879,176, and $721,485 for the years
2001, 2000, and 1999 respectively. On April 1, 1997, CITIZENS entered in to a
five-year noncancelable operating lease for an in-store retail branch. The
lessor is a business in which a director of the Company and CITIZENS holds an
interest. The lease may be renewed for up to two additional five-year terms
after March 31, 2002. Annual rent expense during the initial term of the lease
is $22,500. Annual rent during the second and third five-year terms would be
$26,000 and $30,000, respectively. Rental expense was $22,500 for the years
ended December 31, 2001, 2000 and 1999. Future minimum lease payments are $5,625
for 2002. This lease is expected to be renewed for the second five year term at
a rate of $26,000 annually beginning April 1, 2002.

NOTE 5 -- TIME DEPOSITS

         The scheduled maturities of time deposits as of December 31, 2001 were
as follows:

<Table>
<Caption>
                 Under $100,000      Over $100,000           Totals
                 --------------      -------------        ------------
<C>               <C>                 <C>                 <C>
2002              $ 82,444,939        $ 25,416,084        $107,861,023
2003                28,339,786           9,834,186          38,173,972
2004                10,264,420           1,953,241          12,217,661
2005                 1,951,082             590,888           2,541,970
2006                 2,893,931             643,325           3,537,256
                       926,075                                 926,075
                  ------------        ------------        ------------
Thereafter        $126,820,233        $ 38,437,724        $165,257,957
                  ============        ============        ============

</Table>

NOTE 6 -- BORROWED FUNDS

         Securities sold under agreements to repurchase are financing
arrangements whereby the Company sells securities and agrees to repurchase the
identical securities at the maturities of the agreements at specified prices.
Physical control is maintained for all securities sold under repurchase
agreements. Information concerning securities sold under agreements to
repurchase is summarized as follows:


<Table>
<Caption>
                                                         2001                 2000
                                                         ----                 ----
<S>                                                <C>                    <C>
Average daily balance during the year              $   10,695,000         $  5,177,000
Average interest rate during the year                        3.59%                5.45%
Maximum month-end balance during the year          $   20,653,000         $  6,117,396
</Table>

         Securities underlying these agreements at year-end were as follows:

<Table>
<Caption>
                                            2001                   2000
                                            ----                   ----
<S>                                     <C>                   <C>
Carrying value of securities            $ 28,695,446          $  8,176,616
Fair value of securities                  28,667,567             7,897,487
</Table>

         At year end, advances from the Federal Home Loan Bank were as follows.

<Table>
<Caption>
                                                                     2001                   2000
                                                                     ----                   ----
<S>                                                             <C>                      <C>
Maturities March 2008 through January 2022,
primarily fixed rate at rates from 3.60% to 7.20%,
averaging 5.56%                                                  $  7,959,229

Maturities March 2008 through September 2019,
primarily fixed rate at rates from 5.85% to 7.20%,
averaging 6.25%                                                                          $  5,895,979

Cash management line of credit, 2.05% at December 31,
2001 and 6.75% at December 31, 2000                              $ 10,100,000            S 14,824,000
                                                                 ------------            ------------
Total                                                            $ 18,059,229            $ 20,719,979
                                                                 ============            ============
</Table>


54    UNITED BANCORP, INC. 2001 ANNUAL REPORT
<PAGE>




NOTE 6 - BORROWED FUNDS (CONTINUED)

         At year end, lines of credit from correspondent banks were as follows.


<Table>
<Caption>
                                           2001             2000
                                       ------------     ------------
<S>                                    <C>              <C>
Correspondent banks line of credit     $    116,000     $    371,000
Treasury, tax and loan note            $    240,001     $    156,637
</Table>






At year-end 2001, required annual principal payments were as follows:

<Table>
<S>                                                             <C>
                    2002                                        $   10,905,088
                    2003                                               481,656
                    2004                                               509,082
                    2005                                               538,122
                    2006                                               568,872
              Thereafter                                             5,412,410
                                                                --------------
                                                                $   18,415,230
                                                                ==============
</Table>

Additionally, as members of the Federal Home Loan Bank system at year-end 2001,
the Banks had the ability to obtain up to $40,232,000 based on current FHLB
stock ownership, or up to 50% of their total assets in advances from the FHLB
subject to increased share ownership of FHLB stock and 1-4 family residential
real estate loan collateral availability. At December 31, 2001, the Company and
its Banks have $62,199,000 in Federal Home Loan Bank Stock and 1-4 family
residential real estate loans pledged as collateral for borrowings. Also at
December 31, 2001, the Company and its Banks have cash management lines of
credit (excluding FHLB cash management lines of credit) enabling borrowings up
to $18.4 million with various correspondent banks.

NOTE 7-- BENEFIT PLANS

Information about the pension plan was as follows:


<Table>
<Caption>
                                               2001              2000
                                           ------------      ------------
<S>                                        <C>               <C>
Change in benefit obligation:
   Beginning benefit obligation            $  1,954,428      $  1,741,598
   Service cost                                 157,915           131,781
   Interest cost                                144,507           133,233
   Actuarial (gain)/loss                        132,443            33,272
   Plan amendments                                   --                --
   Benefits paid                               (308,109)          (85,456)
                                           ------------      ------------
Ending benefits obligation                    2,081,184         1,954,428

Changes in plan assets, at fair value
   Beginning plan assets                      2,076,833         2,153,900
   Actual return                                (17,355)         (133,245)
   Employer contributions                       201,326           141,634
   Benefits paid                               (308,109)          (85,456)
                                           ------------      ------------
   Ending plan assets                         1,952,695         2,076,833

Funded status                                  (128,489)          122,405
Unrecognized net actuarial loss/(gain)          220,189          (120,624)
Unrecognized prior service cost                  67,321            76,473
                                           ------------      ------------
Prepaid benefit cost                       $    159,021      $     78,254
                                           ============      ============
</Table>


                                       UNITED BANCORP, INC 2001 ANNUAL REPORT 55

<PAGE>
NOTE 7 - BENEFIT PLANS (CONTINUED)



<Table>
<Caption>
        Pension expense includes the following:
                                                  2001           2000         1999
                                                ---------     ---------     ---------
        <S>                                     <C>           <C>           <C>
        Service cost                            $ 157,915     $ 131,781     $ 131,950
        Interest cost                             144,507       133,233       122,963
        Expected return on assets                (182,294)     (172,171)     (155,634)
        Amortization of prior service cost,
          transition liability, net gain,
          and plan amendment                          431        (7,024)        3,503
                                                ---------     ---------     ---------
            Pension expense                     $ 120,559     $  85,819     $ 102,782
                                                =========     =========     =========
<Caption>

        Significant assumption used:


                                                  2001           2000         1999
                                                ---------     ---------     ---------
        <S>                                     <C>           <C>           <C>
        Discount rate on benefit obligation         7.50%         7.50%         7.00%
        Rate of compensation increase               4.50%         4.00%         4.00%
        Expected long-term rate of return on
          assets                                    8.00%         8.00%         7.50%
</Table>

         The Company's 401(k) matching percentage was 50% of the employees'
contribution for 2001, 2000 and 1999. The cash contribution and related expense
included in salaries and employee benefits totaled $73,350 in 2001, $71,200 in
2000 and $66,425 in 1999.

         The Company entered into severance agreements with certain holding
company officers. The original agreements were for a one-year period and extend
automatically each year unless notice is given prior to June 30. No benefits are
payable unless there has been a change in control and change in duties of the
officers occurs.

NOTE 8 - INCOME TAXES

        Income tax expense was as follows:

<Table>
<Caption>
                                   2001               2000              1999
                                ----------          --------         ----------
        <S>                     <C>                 <C>              <C>
        Current                 $1,018,966          $729,580         $1,121,047
        Deferred                   (84,270)          151,192           (117,985)
                                ----------          --------         ----------
          Total                 $  934,696          $880,772         $1,003,062
                                ==========          ========         ==========
</Table>

         The effective tax rate differs from the federal statutory rate applied
to financial statement income due to the following:

<Table>
<Caption>
                                                        2001              2000             1999
                                                     ----------        ----------       ----------
        <S>                                          <C>               <C>              <C>
        Statutory rate                                   34.00%            34.00%           34.00%
                                                    ----------        ----------       ----------
        Income taxes computed at the statutory
          federal tax rate                          $1,254,696        $1,179,034       $1,415,527
         Effect of:
           Tax exempt interest income                 (340,286)         (336,629)        (407,506)
           Other                                        20,286            38,367           (4,959)
                                                    ----------        ----------       ----------
             Total                                  $  934,696        $  880,772       $1,003,062
                                                    ==========        ==========       ==========
        Effective tax rate                                25.3%             25.4%           24.1%
                                                    ==========        ==========       ==========
</Table>


56 UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

NOTE 8 -- INCOME TAXES (CONTINUED)

     Year-end gross deferred tax assets and gross deferred tax liabilities were
due to the following:

<Table>
<Caption>
                                                                        2001                   2000
                                                                     ----------             ----------
<S>                                                                  <C>                    <C>
ITEMS GIVING RISE TO DEFERRED TAX ASSETS
     Allowance for loan losses in excess of tax reserve              $  731,014             $  669,971
     Amortization of intangibles                                         65,426                 69,787
     Deferred compensation                                              176,065                139,889
     Unrealized loss on securities available for sale                    29,083                655,668
                                                                     ----------             ----------
          Total deferred tax assets                                   1,001,588              1,535,315

ITEMS GIVING RISE TO DEFERRED TAX LIABILITIES
     Depreciation                                                      (428,982)              (469,031)
     Deferred loan costs, net                                           (56,622)               (90,462)
     Accretion                                                          (14,372)               (17,136)
     FHLB stock dividends                                              (224,366)              (163,404)
     Mortgage servicing rights                                          (51,586)               (38,643)
     Difference in accrued income, net of accrued expenses                   --                (16,126)
     Pension expense                                                    (59,587)               (32,125)
                                                                     ----------             ----------
          Total deferred tax liabilities                               (835,515)              (826,927)
                                                                     ----------             ----------
          Net deferred tax asset                                     $  166,073             $  708,388
                                                                     ==========             ==========
</Table>

NOTE 9 -- STOCK OPTIONS

     The Company maintains a nonqualified stock option plan for directors and
bank holding company officers. The exercise price for options granted under
this plan will be no less than 100% of the fair market value of the shares on
the date of grant adjusted for stock dividends and stock splits.

     The options are first exercisable after February 21, 2005, except in the
event certain financial performance criteria are met. Based on meeting portions
of the established criteria, 14,516 became exercisable at December 31, 1998.
All options become immediately exercisable upon retirement, death or in the
event of a change in control of the Company. During 1999, 12,650 options vested
due to the death of an executive officer.

     A summary of the status of the Company's stock option plan as of year-end
2001, 2000, and 1999 and changes during those years is presented in the table
following. All share and per share prices have been restated to reflect stock
dividends distributed or declared prior to issuance of the financial statements.

<Table>
<Caption>
                                                   2001                        2000                          1999
                                        ------------------------     ------------------------      ------------------------
                                                       WEIGHTED-                    WEIGHTED-                     WEIGHTED-
                                                       AVERAGE                      AVERAGE                       AVERAGE
                                                       EXERCISE                     EXERCISE                      EXERCISE
                                        SHARES          PRICE        SHARES          PRICE          SHARES         PRICE
                                        ------         --------      -------        ---------      --------       ---------
<S>                                     <C>            <C>            <C>            <C>            <C>            <C>
Outstanding at beginning of year        82,200         $  11.92       96,908         $  11.65       103,689        $  11.56
Granted                                     --               --           --               --            --              --
Exercised                                   --               --           --               --        (6,781)          10.19
Forfeited                                   --               --      (14,708)           10.16            --              --
                                        ------                       -------                        -------
Outstanding at end of year              82,200            11.92       82,200            11.92        96,908           11.65
                                        ======                       =======                        =======
Remaining shares available for
     grant at year-end                  44,708                        44,708                         30,000
Options exercisable at year-end          5,679                         5,679                         20,387
</Table>

                                  UNITED BANCORP, INC. 2001 ANNUAL REPORT     57
<PAGE>
NOTE 9 -- STOCK OPTIONS (CONTINUED)

     The following table summarized information about stock options outstanding
at December 31, 2001:

<Table>
<Caption>
                                 NUMBER                          NUMBER
               EXERCISE       OUTSTANDING        DATE OF       EXERCISABLE
                 PRICE        AT 12/31/01      EXPIRATION      AT 12/31/01
               ---------      -----------      ----------      -----------
<S>                           <C>              <C>             <C>
               $  10.16          60,420         11/21/05           2,870
                  10.67           1,724         11/21/05              --
                  16.35          12,155         11/21/05           1,702
                  18.10           6,078         11/21/05             851
                  21.19           1,823         11/21/05             256
</Table>

     SFAS No. 123 requires pro forma disclosures for options granted during
1995 and in subsequent years by corporations that do not adopt its fair value
accounting method for stock-based employee compensation. Accordingly, the
following pro forma information presents net income and earnings per share had
the Statement's fair value method been used to measure compensation cost for
stock option plans. No compensation expense was actually recognized for any of
the periods presented. Pro forma net income exceeded reported net income for
2000 due to the forfeiture of options previously expensed for purposes of
reporting pro forma disclosures in accordance with SFAS No. 123.

<Table>
<Caption>
                                                          2001             2000            1999
                                                        --------         --------        --------

<S>                                                    <C>              <C>             <C>
          Net income as reported                       $2,755,587       $2,586,975      $3,160,254
          Pro forma net income                          2,706,198        2,598,085       3,070,715

          Earnings per share as reported - Basic       $     0.88       $     0.81      $     0.97
          Earnings per share as reported - Diluted           0.88             0.81            0.97
          Pro forma earnings per share - Basic               0.86             0.81            0.95
          Pro forma earnings per share - Diluted             0.86             0.81            0.94
</Table>

NOTE 10 -- OFF-BALANCE SHEET ACTIVITIES

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

     A summary of the notional or contractual amounts of financial instruments
with off-balance sheet risk at year-end was as follows:

<Table>
<Caption>
                                                             2001            2000
                                                         -----------     -----------

<S>                                                     <C>              <C>
     Commitments to extend credit                        $18,779,162     $16,656,030
     Credit card and Ready Reserve Lines                   1,275,919       1,256,090
     Standby letters of credit                               471,000         596,000
</Table>

     At year-end 2001, and included above, commitments to make fixed-rate loans
at current market rates totaled $2,416,731 with the interest rates on those
fixed-rate commitments ranging from 6.50% to 10.00%. The fixed-rate commitments
at year-end 2000 were $2,740,105 with the interest rates ranging from 7.50% to
10.00%.



58      UNITED BANCORP, INC. 2001 ANNUAL REPORT


<PAGE>
NOTE 11 -- CONCENTRATIONS OF CREDIT RISK

     The Banks grant commercial, commercial real estate, real estate and
installment loans to customers mainly in Athens, Belmont, Carroll, Fairfield,
Harrison, Hocking and Tuscarawas Counties and the surrounding localities. The
Banks also grant commercial and commercial real estate loans in the Columbus,
Ohio area. Substantially all loans are secured by specific items of collateral
including business assets, consumer assets, commercial real estate and
residential real estate. At December 31, 2001, and 2000, total commercial and
commercial real estate loans made up 46.1% and 43.4% respectively of the loan
portfolio, with 13.9% and 16.0% of these loans secured by commercial real
estate and business assets mainly in the Columbus, Ohio area. Installment loans
account for 24.7% and 28.1% of the loan portfolio and are secured by consumer
assets including automobiles, which account for 90.4% and 92.8%, respectively,
of the installment loan portfolio. Real estate loans comprise 29.2% and 28.5%
of the loan portfolio as of December 31, 2001 and 2000, respectively, and
primarily include first mortgage loans on residential properties and home
equity lines of credit. Included in cash and due from banks and federal funds
sold as of December 31, 2001 and 2000, is $1,673,841 and $5,662,566,
respectively on deposit with Mellon Bank, NA, Pittsburgh, Pennsylvania. Also
included in cash and due from banks and federal funds sold as of December 31,
2001 is $2,848,186 on deposit with Bank One, NA, Detroit, Michigan.

NOTE 12 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used to estimate fair values
for financial instruments. The carrying amount is considered to approximate
fair value for cash and cash equivalents, deposit liabilities subject to
immediate withdrawal, short-term borrowings, loan servicing rights, accrued
interest receivable and payable and variable-rate loans that reprice at
intervals of less than six months. Securities fair values are based on quoted
market prices or, if no quotes are available, on the rate and term of the
security and on information about the issuer. For fixed-rate loans that reprice
less frequently than each six months, time deposits and long-term debt, the
fair value is estimated by a discounted cash flow analysis using current market
rates for the estimated life and credit risk. Fair values for impaired loans
are estimated using discounted cash flow analysis or underlying collateral
values, where applicable. Fair value of loans held for sale is based on market
estimates. The fair value of off-balance sheet items is based on the current
fees or cost that would be charged to enter into or terminate such arrangements.

     The estimated year-end fair values of financial instruments were:


<Table>
<Caption>
                                                          2001                     2000
                                                 ----------------------   ----------------------
                                                 CARRYING                 CARRYING
                                                  AMOUNT     FAIR VALUE    AMOUNT     FAIR VALUE
(Dollars in thousands)                           ---------   ----------   ---------   ----------
<S>                                              <C>         <C>          <C>         <C>
Financial assets:
  Cash and cash equivalents                      $  23,390   $  23,390    $  10,694   $  10,694
  Securities available for sale                    114,045     114,045       94,439      94,439
  Securities held to maturity                       10,379      10,618       10,802      10,946
  Loans receivable, net                            180,461     186,249      193,707     192,486
  Loan servicing rights                                152         152          113         113
  Accrued interest receivable                        2,796       2,796        2,759       2,759
Financial liabilities:
  Demand and savings deposits                    $(118,118)  $(118,118)   $(117,339)  $(117,339)
  Time deposits                                   (165,258)   (174,119)    (150,214)   (150,209)
  Short-term borrowings                            (10,456)    (10,456)     (15,352)    (15,352)
  Repurchase agreements                             (7,811)     (7,811)      (4,861)     (4,861)
  Long-term debt                                    (7,959)     (8,695)      (5,896)     (5,832)
  Accrued interest payable                            (669)       (669)        (866)       (866)
</Table>

NOTE 13 -- REGULATORY MATTERS

     The Company and Banks are subject to regulatory capital requirements
administered by federal banking agencies. Capital adequacy guidelines and,
additionally for banks, prompt corrective action regulations involve
quantitative measures of assets,

                                      UNITED BANCORP, INC. 2001 ANNUAL REPORT 59
<PAGE>
NOTE 13 - REGULATORY MATTERS (CONTINUED)

liabilities and certain off-balance-sheet items calculated under regulatory
accounting practices. Capital amounts and classifications are also subject to
qualitative judgments by regulators. Failure to  meet various capital
requirements can initiate regulatory action. Prompt corrective action
regulations provide five classifications, including well capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized and critically
undercapitalized, although these terms are not used to represent overall
financial condition. If adequately capitalized, regulatory approval is required
to accept brokered deposits. If undercapitalized, capital distributions are
limited, as is asset growth and expansion, and plans for capital restoration are
required. The Company and Banks at year-end 2001 and 2000 were categorized as
well capitalized. Management is not aware of any conditions subsequent to their
last regulatory notification that would change the Company's or the Banks'
capital category.

         At year-end, consolidated and Bank only actual capital levels and
minimum levels (in thousands) were:



<Table>
<Caption>
                                                                                                    MINIMUM REQUIRED
                                                                         MINIMUM REQUIRED         TO BE WELL CAPITALIZED
                                                                           FOR CAPITAL           UNDER PROMPT CORRECTIVE
                                                    ACTUAL              ADEQUACY PURPOSES           ACTION REGULATIONS
                                           -----------------------    -----------------------    -----------------------
                                              AMOUNT      RATIO         AMOUNT       RATIO         AMOUNT       RATIO
                                           ----------   ----------    ----------   ----------    ----------   ----------
<S>                                        <C>          <C>           <C>          <C>           <C>          <C>
2001
Total capital (to risk weighted assets)
   Consolidated                            $   32,985         16.4%   $   16,057          8.0%   $   20,071         10.0%
   Citizens                                    22,171         14.8        11,992          8.0        14,990         10.0
   Community                                    6,581         11.9         4,409          8.0         5,512         10.0
Tier 1 capital (to risk weighted assets)
   Consolidated                            $   30,421         15.1%   $    8,028          4.0%   $   12,042          6.0%
   Citizens                                    20,280         13.5         5,996          4.0         8,994          6.0
   Community                                    5,908         10.7         2,205          4.0         3,307          6.0
Tier 1 capital (to average assets)
   Consolidated                            $   30,421          9.0%   $   13,470          4.0%   $   16,838          5.0%
   Citizens                                    20,280          8.3         9,770          4.0        12,213          5.0
   Community                                    5,908          6.4         3,696          4.0         4,620          5.0


2000
Total capital (to risk weighted assets)
   Consolidated                            $   32,476         15.3%   $   16,995          8.0%   $   21,244         10.0%
   Citizens                                    22,377         13.9        12,848          8.0        16,060         10.0
   Community                                    6,707         13.0         4,121          8.0         5,151         10.0
Tier 1 capital (to risk weighted assets)
   Consolidated                            $   29,819         14.0%   $    8,498          4.0%   $   12,746          6.0%
   Citizens                                    20,368         12.7         6,424          4.0         9,636          6.0
   Community                                    6,063         11.8         2,060          4.0         3,091          6.0
Tier 1 capital (to average assets)
   Consolidated                            $   29,819          9.4%   $   12,711          4.0%   $   15,889          5.0%
   Citizens                                    20,368          8.5         9,603          4.0        12,003          5.0
   Community                                    6,063          7.8         3,105          4.0         3,881          5.0
</Table>


         The Company's primary source of funds to pay dividends to shareholders
is the dividends it receives from the Banks. The Banks are subject to certain
restrictions on the amount of dividends that they may declare without prior
regulatory approval. At year-end 2001, $1,439,459 of retained earnings was
available for dividend declaration without prior regulatory approval.


60 UNITED BANCORP, INC. 2001 ANNUAL REPORT


<PAGE>

NOTE 14 - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS

     Following are condensed parent company financial statements:

                            Condensed Balance Sheets
                           December 31, 2001 and 2000

<Table>
<Caption>
                                                                   2001           2000
                                                                   ----           ----
<S>                                                             <C>            <C>
Assets:
  Cash and cash equivalents                                     $ 3,288,585    $ 1,289,604
  Securities available for sale, at fair value                      311,995      1,796,638
  Investment in subsidiaries                                     26,235,841     25,481,528
  Building/Land                                                     175,212          1,910
  Other assets                                                      654,486        361,307
                                                                -----------    -----------
                                                                $30,666,119    $28,930,987
                                                                ===========    ===========
Liabilities and shareholders' equity:
  Other liabilities                                             $   191,924    $   251,900
  Shareholders' equity                                           30,474,195    $28,679,087
                                                                -----------    -----------
     Total liabilities and shareholders' equity                 $30,666,119    $28,930,987
                                                                ===========    ===========
</Table>

                         Condensed Statements of Income
                  Year ended December 31, 2001, 2000 and 1999

<Table>
<Caption>
                                                                   2001           2000           1999
                                                                   ----           ----           ----
<S>                                                             <C>            <C>            <C>
Operating income
  Dividends from subsidiaries                                   $ 3,448,355    $ 2,511,286    $ 1,612,561
  Interest and dividend income from securities and fed funds         67,136        138,119        211,179
  Other income                                                        8,568         14,305          5,424
                                                                -----------    -----------    -----------
    Total operating income                                        3,524,059      2,663,710      1,829,164
Operating expenses                                                  703,328        219,232        267,947
                                                                -----------    -----------    -----------
Income before income taxes and Equity in undistributed
  net income.                                                     2,820,731      2,444,478      1,561,217
Income tax expense (benefit)                                       (199,802)       (20,000)       (17,129)
                                                                -----------    -----------    -----------
Income before Equity in undistributed earnings
  of subsidiaries                                                 3,020,533      2,464,478      1,578,346
Equity in undistributed earnings of subsidiaries                   (264,946)       122,497      1,581,908
                                                                -----------    -----------    -----------
Net income                                                      $ 2,755,587    $ 2,586,975    $ 3,160,254
                                                                ===========    ===========    ===========
</Table>

                                   UNITED BANCORP, INC. 2001 ANNUAL REPORT    61
<PAGE>
NOTE 14-PARENT COMPANY CONDENSED FINANCIAL STATEMENTS (CONTINUED)

                       Condensed Statements of Cash Flows
                  Years ended December 31, 2001, 2000 and 1999

<Table>
<Caption>
                                                           2001           2000           1999
                                                        -----------    -----------    -----------
<S>                                                     <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                           $ 2,755,587    $ 2,586,975    $ 3,160,254
   Adjustments to reconcile net income to net cash
     from operating activities:
   Depreciation and Amortization                                698         26,480
     Equity in undistributed earnings
       of subsidiaries                                      264,946       (122,497)    (1,581,908)
     Net change in other assets and other liabilities      (183,333)       136,551        (17,789)
     (Accretion)/amortization of securities, net               (298)           440            412
     Amortization of intangibles                             12,000         12,000         12,307
                                                        -----------    -----------    -----------
     Net cash from operating activities                   2,849,600      2,639,949      1,573,276

CASH FLOWS FROM INVESTING ACTIVITIES
   Net change in certificates of deposit
   Securities available for sale
     Proceeds from maturities and calls                   1,500,000                     1,000,000
   Purchases of premises and equipment                     (174,000)      (565,586)    (1,838,010)
                                                        -----------    -----------    -----------
     Net cash from investing activities                   1,326,000       (565,586)      (838,010)

CASH FLOWS FROM FINANCING ACTIVITIES
   Dividends paid to shareholders                        (1,590,220)    (1,545,547)    (1,477,686)
   Proceeds and tax benefit from exercise of
   stock options, net of shares redeemed                                                   27,866
   Cash paid in lieu of fractional shares                    (5,188)        (4,111)        (6,245)
   Purchases of treasury stock                             (581,211)      (283,564)
   Proceeds from stock issuance                                             52,242
                                                        -----------    -----------    -----------
     Net cash from financing activities                  (2,176,619)    (1,780,980)    (1,456,065)
                                                        -----------    -----------    -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS                   1,998,981        293,383       (720,799)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR            1,289,604        996,221      1,717,020
                                                        -----------    -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF YEAR                $ 3,288,585    $ 1,289,604    $   996,221
                                                        ===========    ===========    ===========

Noncash transfer of Land and Building to
subsidiary bank                                                        $ 2,375,206
</Table>


62    UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>
NOTE 15 - EARNINGS PER SHARE

         The factors used in the earnings per share computation follow:

<Table>
<Caption>
                                                            2001         2000         1999
                                                         ----------   ----------   ----------
<S>                                                      <C>          <C>          <C>
BASIC
  Net income                                             $2,755,587   $2,586,975   $3,160,254
                                                         ==========   ==========   ==========

  Weighted average common shares outstanding              3,142,949    3,205,822    3,243,648
                                                         ==========   ==========   ==========

  Basic earnings per common share                        $     0.88   $     0.81   $     0.97
                                                         ==========   ==========   ==========

DILUTED

   Net income                                            $2,755,587   $2,586,975   $3,160,254
                                                         ==========   ==========   ==========

   Weighted average common shares outstanding for
     basic earnings per common share                      3,142,949    3,205,822    3,243,648
   Add: Dilutive effects of assumed exercise of stock
     options                                                  4,346        1,202       18,382
                                                         ----------   ----------   ----------

   Average shares and dilutive potential common shares    3,147,295    3,207,024    3,262,030
                                                         ==========   ==========   ==========

   Average shares and dilutive potential common shares   $     0.88   $     0.81   $     0.97
                                                         ==========   ==========   ==========
</Table>

Stock options for 20,056, 60,419 and 20,057 shares of common stock were not
considered in computing diluted earnings per common share for 2001, 2000 and
1999 because they were antidilutive.

NOTE 16 - OTHER COMPREHENSIVE INCOME (LOSS)

<Table>
<Caption>
                                                          YEAR ENDED     YEAR ENDED      YEAR ENDED
                                                          DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                             2001           2000            1999
                                                          -----------    -----------    -----------
<S>                                                       <C>            <C>            <C>
Unrealized holding gains and (losses)
 on securities available for sale                         $ 1,882,083    $ 3,925,291    $(6,279,955)
Reclassification adjustment for
 (gains) and losses later recognized in income                (39,358)       (26,674)       (38,833)
Cumulative effect adjustment for the transfer of
 securities from held to maturity to available for sale
 upon adoption of SFAS No. 133                                                              674,194
                                                          -----------    -----------    -----------
Net unrealized gains and (losses)                           1,842,725      3,898,617     (5,644,594)
Tax effect                                                    626,585      1,323,498      1,917,629
                                                          -----------    -----------    -----------

Other comprehensive income (loss)                         $ 1,216,140    $ 2,575,119    $(3,726,965)
                                                          ===========    ===========    ===========
</Table>


                                    UNITED BANCORP, INC. 2001 ANNUAL REPORT   63
<PAGE>
NOTE 17 - QUARTERLY FINANCIAL DATA (UNAUDITED)


<Table>
<Caption>
                                                                                                         FULLY DILUTED
                            INTEREST           NET INTEREST                         BASIC EARNINGS       EARNINGS PER
                             INCOME               INCOME           NET INCOME          PER SHARE             SHARE
                            --------           ------------        ----------       --------------       -------------
                                                        (In thousands except per share data)

<S>                         <C>                 <C>                 <C>             <C>                  <C>
2001
----
First Quarter               $ 6,204             $ 2,879              $ 605             $ 0.19              $ 0.19
Second Quarter                6,321               3,124                737             $ 0.24              $ 0.24
Third Quarter                 6,203               3,119                678             $ 0.22              $ 0.22
Fourth Quarter                5,868               3,125                736             $ 0.24              $ 0.24

2000
----
First Quarter               $ 5,593             $ 2,841              $ 576             $ 0.18              $ 0.18
Second Quarter                5,800               2,848                706             $ 0.22              $ 0.22
Third Quarter                 6,125               2,855                668             $ 0.21              $ 0.21
Fourth Quarter                6,216               2,853                637             $ 0.20              $ 0.20
</Table>

   The per share data has been adjusted to account for the 5% share dividends
paid in 2000 and 2001.



64     UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>


                 FIVE YEAR PERFORMANCE SUMMARY(1) (UNAUDITED)               2001

<Table>
<Caption>


$(THOUSANDS,EXCEPT RATIOS AND PER SHARE DATA)   2001             2000              1999             1998            1997
----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>              <C>              <C>
INCOME AND EXPENSE:
  Interest and dividend income               $    24,596      $    23,734      $    21,639      $    21,126      $    20,802
  Interest expense                                12,349           12,337            9,845            9,657            9,410
  Provision for loan losses                          780              587              727              798              932
  Noninterest income                               1,606            1,369            1,285            1,581            1,307
  Noninterest expense                              9,383            8,712            8,189            8,008            7,946
  Income tax expense                                 935              880            1,003            1,089              973
  Net income                                       2,756            2,587            3,160            3,155            2,848

PER COMMON SHARE DATA:
  Net income, basic                          $      0.88      $      0.81      $      0.97      $      0.97      $      0.88
  Net income, diluted                               0.88             0.81             0.97             0.94             0.87
  Cash dividends paid                               0.50             0.48             0.46             0.41             0.36
  Book value                                        9.75             8.98             7.80             8.42             7.93

BALANCE SHEET:
  Loans receivable, net                      $   180,461      $   193,707      $   177,406      $   161,188      $   168,439
  Deposits                                       283,376          267,553          235,540          229,110          223,489
  Total assets                                   341,317          323,886          298,764          285,493          263,607

OPERATING RATIOS:
  Return on average assets                          0.82%            0.83%            1.09%            1.17%            1.10%
  Net interest margin(2)                            3.86%            3.86%            4.30%            4.48%            4.62%
  Efficiency ratio(3)                              64.95%           65.17%           57.50%           56.37%           57.50%

EQUITY RATIO:
  Return on average shareholder's equity            9.13%            9.88%           11.94%           11.80%           11.48%

CREDIT QUALITY:
  Net charge-offs to average loans                  0.21%            0.49%            0.38%            0.48%            0.38%
  Ending allowance for loan losses                  1.57%            1.42%            1.72%            1.85%            1.77%
</Table>

(1) All share and per share amounts have been restated to reflect common stock
    dividends

(2) As a percent of average earning assets

(3) Noninterest expense divided by net interest income plus noninterest income



                                         UNITED BANCORP, INC. 2001 ANNUAL REPORT

<PAGE>

                           [UNITED BANCORP, INC. LOGO]
                              UNITED BANCORP, INC.
                                Martins Ferry, OH

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