<PAGE>

                                                                      Exhibit 13

                  (UNITED BANCORP INC. LOGO) 2005 ANNUAL REPORT

                                  ANNUAL REPORT

                                      2005

                               UNITED BANCORP INC.

                                Martins Ferry, OH

                           (UNITED BANCORP INC. LOGO)

<PAGE>

DIVIDEND AND STOCK HISTORY

<TABLE>
<CAPTION>
                                               Distribution Date
       Cash Dividends                          of Dividends and
         Declared(1)      Stock Dividends          Exchanges
       --------------   -------------------   ------------------
<S>    <C>              <C>                   <C>
1983        $0.06                        --                   --
1984        $0.07       4 for 1 Exchange(2)      January 2, 1984
1985        $0.08                        --                   --
1986        $0.10                        --                   --
1987        $0.10        50% Stock Dividend      October 2, 1987
1988        $0.11                        --                   --
1989        $0.11                        --                   --
1990        $0.12                        --                   --
1991        $0.13                        --                   --
1992        $0.13       100% Stock Dividend   September 10, 1992
1993        $0.13       100% Stock Dividend    November 30, 1993
1994        $0.15        10% Stock Dividend    September 9, 1994
1995        $0.21                        --                   --
1996        $0.22        10% Stock Dividend        June 20, 1996
1997        $0.25        10% Stock Dividend   September 19, 1997
1998        $0.29         5% Stock Dividend    December 18, 1998
1999        $0.33         5% Stock Dividend    December 20, 1999
2000        $0.34         5% Stock Dividend    December 20, 2000
2001        $0.36         5% Stock Dividend    December 20, 2001
2002        $0.37         5% Stock Dividend    December 20, 2002
2003        $0.39        10% Stock Dividend    December 19, 2003
2004        $0.43        10% Stock Dividend    December 20, 2004
2005        $0.48        10% Stock Dividend    December 20, 2005
</TABLE>

2006 ANTICIPATED DIVIDEND PAYABLE DATES

FIRST QUARTER
March 20, 2006

SECOND QUARTER*
June 20, 2006

THIRD QUARTER*
September 20, 2006

FOURTH QUARTER*
December 20, 2006

*    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
     shareholders received 4 shares of UBCP stock in exchange for 1 share of The
     Citizens Savings Bank.

                        (TOTAL RETURN PERFORMANCE GRAPH)
<PAGE>

                          A LETTER FROM THE PRESIDENT

TO THE PRESENT AND FUTURE SHAREHOLDERS OF UNITED BANCORP, INC....

                          (PHOTO OF JAMES W. EVERSON)

                                JAMES W. EVERSON
                CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

     Contrary to many in the banking industry, we are reporting an increase in
earnings for 2005 at $0.79 per share compared to $0.77 per share in 2004. In
last year's Letter to Shareholders, we stated that based upon our budgeting
process and production to date our management team was projecting a new level of
record year earnings for 2005. Although we failed to meet this projection, 2005
was the second most profitable year in our Company's history, and was driven by
the continued strong performance of our Citizens Bank affiliate.

     Philosophically speaking, the whole is equal to the sum of its parts and
your Company being made up of two affiliate banks is impacted directly by their
performances. Our Citizens Bank affiliate outperformed its peer group, budget
and its prior year performance, producing a 2005 Return on Average Assets (ROA)
of 1.32% and a Return on Average Equity (ROE) of 15.59%. Our Community Bank
affiliate did not meet its budget projection or its prior year earnings
performance, producing a ROA of 0.22% and a ROE of 3.56%, each below their
peer group performance statistics.

     At mid-year, our Community Bank Board and its Management Team positively
reacted to our United Bancorp Board of Director's concerns for their earnings
performance, by holding a planning retreat and updating its three year business
plan for acceptable profitability. Based on this business plan, we are
projecting Community's financial performance to improve each year towards
acceptable peer group statistics, positively impacting the consolidated per
share earnings of your Company. Our Boards of Directors and Management Teams are
committed to making this happen. We recognize that earnings drives shareholder
value.

     Our balance sheet at year-end 2005 again showed solid growth with total
assets at $411.9 million, up 3.6% and gross loans at $232.0 million, an increase
of 7.7%. Credit quality remained strong in 2005 as evidenced by the continuing
positive trend of net charge-offs to average loans at .22% and nonperforming
loans to total loans at .49%. Deposits at year-end 2005 were $306.9 million, up
2.1%.

     On November 15, 2005, your Board of Directors declared a 10% stock split
paid in the form of a share dividend for shareholders of record on December 2,
2005 and a quarterly cash dividend

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                               1

<PAGE>

payment of 13cent(s) per share. It also approved the renewal of the Company's
stock buy back program authorizing management to purchase up to $2,000,000 of
UBCP common shares in the open market over the next two years. On December 20,
2005, shareholders of record received additional stock shares equal to 10% of
their holdings and payment of the fourth quarter cash dividend in the amount of
13cent(s) per share, paid on their total holdings, which included the new share
dividend. This resulted in a 10% increase in the fourth quarter dividend
payment. This combination of cash and stock dividends follows with the Company's
mission of providing consistent returns to its shareholders. When combined, this
level of payout reflects over a 14% current return to our shareholders which
hopefully will translate into a more favorable future pricing of our stock in
the market.

     United Bancorp, Inc. and its lead bank, The Citizens Savings Bank of
Martins Ferry, Ohio has a history of declaring stock splits which has 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 and a 100% share dividend in 1992 and 1993
plus 10% share dividends in 1994, 1996, 1997, 2003, 2004, 2005 and 5% share
dividends in 1998, 1999, 2000, 2001 and 2002. Those holding one hundred shares
of The Citizens Savings Bank stock in 1970 will now hold 21,700 shares of UBCP
stock. In today's dollars, an initial investment of $10,000 in 1970 is now
valued in excess of $260,000 with a current projected annualized cash dividend
of over $11,284.

     During the fourth quarter of 2005, your Board of Directors formed the
United Bancorp of Martins Ferry, Ohio Employee Stock Ownership Plan (ESOP). Our
ESOP will work as a companion to our Stock Buy Back Program, which reduces
Company liquidity with each purchase. At formation, the ESOP borrowed sufficient
funding to purchase the Company's 322,319 treasury shares, thus replenishing
the Company's liquidity and becoming our largest shareholder at 7% of
outstanding shares. To accomplish this share purchase, your Company issued a
$4.0 million Trust Preferred Debenture which is now included in our Tier I
regulatory

                             (CASH DIVIDENDS GRAPH)

ANNUAL REPORT 2005 UNITED BANCORP INC.


2

<PAGE>

capital. As the ESOP repays its loan to the Company, the shares held in the ESOP
will be allocated to our employees. The ESOP is a broad based retirement benefit
plan which provides our Team Members the opportunity to grow an ownership
interest in UBCP per the terms outlined in its Summary Plan Description. Over
time, our ESOP will even provide a greater benefit to our employee-participants
to the extent the UBCP stock price increases. It is the hope of our Board of
Directors that our new ESOP will foster an increasing "ownership mentality" with
our Team Members, working to make UBCP grow in earnings and in shareholder
value.

     As we look into our future, we see challenge and excitement. No doubt a
continuing flat yield curve will challenge us in the short term. The recent
reprieve from Sarbanes Oxley 404 compliance due to market capitalization size
should help us in the intermediate term. And the blessing of our Directors,
Officers and Employees' loyal dedication and cooperation will take us through
the long term.


/s/ James W. Everson
-------------------------------------
James W. Everson
Chairman, President and
Chief Executive Officer

ceo@unitedbancorp.com

January 30, 2006

This letter contains forward-looking statements that involve risk and
uncertainties, including changes in general economic and financial market
conditions and the Company's ability to execute its business plans. Although
management believes the expectations reflected in such statements are
reasonable, actual results may differ materially.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                               3
<PAGE>

                                    DIRECTORS

(PHOTO OF MICHAEL J. ARCIELLO)
MICHAEL J. ARCIELLO(1, 2)

(PHOTO OF DAN BAY)
DAN BAY(3)

(PHOTO OF EILEEN M. COMPETTI)
EILEEN M. COMPETTI(3)

(PHOTO OF HERMAN E. BORKOSKI)
HERMAN E. BORKOSKI(2)

(PHOTO OF JAMES W. EVERSON)
JAMES W. EVERSON(1, 2, 3)

(PHOTO OF SCOTT A. EVERSON)
SCOTT A. EVERSON(2)

(PHOTO OF LEON F. FAVEDE, O.D.)
LEON F. FAVEDE, O.D.(2)

(PHOTO OF JOHN R. HERZIG)
JOHN R. HERZIG(2)

1 = UNITED BANCORP, INC.  2 = THE CITIZENS SAVINGS BANK  3 = THE COMMUNITY BANK

ANNUAL REPORT 2005 UNITED BANCORP INC.


4

<PAGE>

                                    DIRECTORS

(PHOTO OF JOHN M. HOOPINGARNER)
JOHN M. HOOPINGARNER(1, 2)

(PHOTO OF SAMUEL J. JONES)
SAMUEL J. JONES(3)

(PHOTO OF TERRY A. MCGHEE)
TERRY A. MCGHEE(1, 3)

(PHOTO OF ANDREW F. PHILLIPS)
ANDREW F. PHILLIPS(3)

(PHOTO OF L. E. RICHARDSON, JR.)
L. E. RICHARDSON, JR.(1, 3)

(PHOTO OF ROBIN L. RHODES, M. D.)
ROBIN L. RHODES, M. D.(3)

(PHOTO OF RICHARD L. RIESBECK)
RICHARD L. RIESBECK(1, 2)

(PHOTO OF ERROL C. SAMBUCO)
ERROL C. SAMBUCO(2)

(PHOTO OF MATTHEW C. THOMAS)
MATTHEW C. THOMAS(1, 2)

1 = UNITED BANCORP, INC.  2 = THE CITIZENS SAVINGS BANK  3 = THE COMMUNITY BANK

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                               5

<PAGE>

                          DIRECTORS AND OFFICERS

<TABLE>
<S>                                                        <C>
DIRECTORS OF UNITED BANCORP,  INC.
   Michael J. Arciello(2) ..............................   Retired Vice President of Finance, Nickles Bakeries, Inc.,  Navarre,
                                                           Ohio

   James W. Everson(1) .................................   Chairman, President & Chief Executive Officer, United Bancorp, Inc,
                                                           Chairman, The Citizens Savings Bank, Martins Ferry, Ohio, Chairman,
                                                           Interim President & Chief Executive Officer, The Community Bank,
                                                           Lancaster, Ohio

   John M. Hoopingarner(1, 3, 4) .......................   General Manager, Muskingum Watershed Conservancy District, New
                                                           Philadelphia, Ohio

   Terry A. McGhee(1, 2, 4) ............................   President & Chief Executive Officer, Westerman Inc., Bremen, Ohio

   L. E. Richardson, Jr.(3) ............................   Retired President, Southern Ohio Community Bancorporation, Inc.,
                                                           Glouster, Ohio

   Richard L. Riesbeck (1, 2, 4) .......................   President, Riesbeck Food Markets, Inc., St. Clairsville, Ohio

   Matthew C. Thomas(3) ................................   President, M.C. Thomas Insurance Agency, Inc., Bridgeport, Ohio

OFFICERS OF UNITED BANCORP, INC.
   James W. Everson ....................................   Chairman, President & Chief Executive Officer

   Scott A. Everson ....................................   Senior Vice President & Chief Operating Officer

   Randall M. Greenwood ................................   Senior Vice President, Chief Financial Officer & Treasurer

   Norman F. Assenza, Jr. ..............................   Vice President - Compliance

   Michael A. Lloyd ....................................   Vice President - Information Systems

   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, President & Chief Executive Officer, United Bancorp, Inc.,
                                                           Chairman, The Citizens Savings Bank, Martins Ferry, Ohio, Chairman,
                                                           Interim President & Chief Executive Officer, The Community Bank,
                                                           Lancaster, Ohio

   Scott A. Everson(1) .................................   Senior Vice President & Chief Operating Officer, United Bancorp, Inc. &
                                                           President & Chief Executive Officer, The Citizens Savings Bank, Martins
                                                           Ferry, Ohio

   Leon F. Favede, O.D .................................   Optometrist, Bridgeport, Ohio

   John R. Herzig ......................................   President, Toland-Herzig Funeral Homes, Strasburg, Ohio

   John M. Hoopingarner(1) .............................   General Manager, Muskingum Watershed Conservancy District, New
                                                           Philadelphia, Ohio

   Richard L. Riesbeck(1, 2) ...........................   President, Riesbeck Food Markets, Inc., St Clairsville, Ohio

   Errol C. Sambuco(2) .................................   Consultant, Martins Ferry, Ohio

   Matthew C. Thomas(1) ................................   President, M.C. Thomas Insurance Agency, Inc., Bridgeport, Ohio

      Albert W. Lash, Director Emeritus 1975-1996 ......   United Bancorp, Inc. & The Citizens Savings Bank

DIRECTORS OF THE COMMUNITY BANK, LANCASTER, OHIO
   Dan Bay .............................................   President & Cheif Executive Officer, Carnival Foods, Inc., Lancaster,
                                                           Ohio

   Eileen M. Competti ..................................   President, Diamond Power, Lancaster, Ohio

   James W. Everson(1) .................................   Chairman, President & Chief Executive Officer, United Bancorp, Inc.,
                                                           Chairman, The Citizens Savings Bank, Martins Ferry, Ohio, Chairman,
                                                           Interim President & Chief Executive Officer, The Community Bank,
                                                           Lancaster, Ohio

   Samuel J. Jones(1, 2) ...............................   Business Owner, Glouster, Ohio

   Terry A. McGhee(1, 2) ...............................   President & Chief Executive Officer, Westerman Inc., Bremen, Ohio

   Andrew F. Phillips ..................................   President & General Manager, Miller Brands of S.E. Ohio, Glouster, 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

      Paul J. Gerig, Director Emeritus 1974-2004 .......   The Community Bank

      Dean A. Kasler, Director Emeritus 1970-1999 ......   The Community Bank

      Philip D. Kasler, Director Emeritus 1977-2004 ....   The Community Bank

      Joseph D. Kittle, Director Emeritus 1985-2001 ....   The Community Bank
</TABLE>

1 = Executive Committee   2 = Audit Committee   3 = Compensation Committee
                 4 = Nominating and Governance Committee

ANNUAL REPORT 2005 UNITED BANCORP INC.


6
<PAGE>

                             SHAREHOLDER INFORMATION

United Bancorp, Inc.'s (the Company) common stock trades on The Nasdaq SmallCap
Market tier of The Nasdaq Stock Market under the symbol UBCP, CUSIP #909911109.
At year-end 2005, there were 4,615,111 shares issued, held among approximately
2,000 shareholders of record and in street name. The following table sets forth
the quarterly high and low closing prices of the Company's common stock from
January 1, 2005 to December 31, 2005 compared to the same periods in 2004 as
reported by the NASDAQ. The price quotes have been adjusted for comparison
purposes for the 10% stock dividend distributed on December 20, 2005 and
December 20, 2004. The price quotations presented should not necessarily be
relied on in determining the value of the shareholders' investment.

<TABLE>
<CAPTION>
                                    2005                                 2004
                     ----------------------------------   ---------------------------------
                      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 ($)          $14.090   12.640   12.000   12.770   14.700   13.070   12.280   15.060
   Low ($)           $12.740   11.230   11.050   10.110   12.440   11.380   11.090   10.470
Cash Dividends
   Quarter ($)       $ 0.118    0.118    0.118    0.124    0.106    0.106    0.106    0.106
   Cumulative ($)    $ 0.118    0.236    0.354    0.478    0.106    0.212    0.318    0.434
</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
     6201 15th Avenue, 3rd Floor
     Brooklyn, NY 11219
     1-800-278-4353

ANNUAL MEETING:

     The Annual Meeting of Shareholders will be held at 2:00 p.m., April 19,
     2006 at the Corporate Offices in Martins Ferry, Ohio.

INTERNET:

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

INDEPENDENT AUDITORS:

     Grant Thornton LLP
     4000 Smith Road, Suite 500
     Cincinnati, Ohio 45209
     (513) 762-5000

CORPORATE OFFICES:

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

TRANSFER AGENT AND REGISTRAR:

     For transfers and general correspondence, please contact:

     American Stock Transfer and Trust Company
     6201 15th Avenue, 3rd Floor
     Brooklyn, NY 11219
     1-800-937-5449

STOCK TRADING:

     FTN Midwest Research
     2525 West End Avenue
     Suite 330
     Nashville, TN 37203
     Michael O'Boyle
     866-344-4880

     Howe Barnes Investments, Inc.
     222 South Riverside Plaza
     7th Floor
     Chicago, Illinois 60606
     Lou Coines
     800-800-4693

     Ryan Beck & Co.
     Liberty Center, Suite 900
     1001 Liberty Avenue
     Pittsburgh, PA 15222
     Jason Baer
     800-223-8162

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

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                               7

<PAGE>

                       THE CITIZENS SAVINGS BANK PROFILE

                               (PICTURE OF BANK)

               A CENTURY OF SERVICE AT THE CITIZENS SAVINGS BANK

     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 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.

     In May 1999, The Citizens Savings Bank and its affiliate, The
Citizens-State Bank then 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

ANNUAL REPORT 2005 UNITED BANCORP INC.


8
<PAGE>

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. The Bank's first branch office was opened on November
18, 1974. 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.

     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, the
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 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 it's offices in New Philadelphia
and Sherrodsville in April 1992;and the purchase of it's 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 l997 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
Lancaster 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 the purchase and renovation of the adjoining property
formerly 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

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                               9

<PAGE>

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.

     In November 2004, the Citizens Bank Board of Directors completed its senior
management reorganization plans for the beginning of its second century of
service. James W. Everson, will continue as the Bank's Chairman. Furthermore,
the Citizens Bank Board of Directors announced the appointment of Scott A.
Everson as Director, President and Chief Executive Officer, which became
effective on November 1, 2004.

     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; John H.
Clark, Jr., 1976-2001; Dwain R. Hicks, 1999-2002; and Michael A. Ley, 1999-2002.

     Today, The Citizens Savings Bank is Martins Ferry's only 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, President of United Bancorp, Inc.,
Chairman and Chief Executive Officer of The Citizens Savings Bank and Chairman,
The Community Bank of Lancaster; Scott A. Everson, Senior Vice President and
Chief Operating Officer of United Bancorp Inc. and Director, President and Chief
Executive Officer of The Citizens Savings Bank; Dr. Leon F. Favede, Optometrist;
John R. Herzig, President, Toland-Herzig Funeral Homes; John M. Hoopingarner,
General Manager and Secretary-Treasurer of the Muskingum Watershed Conservancy
District; Richard L. Riesbeck, President of Riesbeck Food Markets, Inc.; Errol
C. Sambuco, Consultant; and Matthew C. Thomas, President, M. C.Thomas Insurance
Agency Inc.

ANNUAL REPORT 2005 UNITED BANCORP INC.


10
<PAGE>

                           THE COMMUNITY BANK PROFILE

                               (PICTURE OF BANK)

     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 close 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.

     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.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              11

<PAGE>

     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.

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

ANNUAL REPORT 2005 UNITED BANCORP INC.


12

<PAGE>

                          TABLE OF CONTENTS - FINANCIAL

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
MANAGEMENT'S DISCUSSION AND ANALYSIS ......................................   14
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS .......................   29
CONSOLIDATED STATEMENTS OF FINANCIAL STATEMENTS ...........................   30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................   35
</TABLE>

FOR THE YEAR ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                            2005         2004      CHANGE
                                         ----------   ----------   ------
<S>                                      <C>          <C>          <C>
EARNINGS
   Total interest income                 $   22,181   $   20,507     8.16%
   Total interest expense                     9,146        7,539    21.32%
   Net interest income                       13,035       12,968     0.52%
   Provision for loan losses                    412          618   (33.33)%
   Total noninterest income                   2,342        2,199     6.50%
   Total noninterest expense                 10,763       10,452     2.98%
   Net income                                 3,293        3,233     1.86%
PER SHARE
   Earnings per common share - Basic     $     0.79   $     0.77     2.60%
   Earnings per common share - Diluted         0.79         0.77     2.60%
   Cash dividends paid                         0.48         0.43    11.63%
   Book value (end of period)                  7.77         7.87    (1.35)%
SHARES OUTSTANDING
   Average - Basic                        4,188,008    4,200,186       --
   Average - Diluted                      4,192,473    4,207,031       --
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              13
<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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, 2005 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

     After four straight years, of managing in a historically low interest rate
environment the Federal Reserve Open Market Committee ("FOMC) raised the
short-term borrowing rate from 2.25% at December 31, 2004 to 4.25% December 31,
2005. An improved economic environment in the latter half of 2004, which
continued into 2005 prompted the FOMC to raise short-term rates aggressively in
2005. As short-term interest rates continued to increase, long-term rates were
not impacted resulting in a flattening of the yield curve, eventually leading to
an inverted yield curve in December 2005 and into 2006.

Notwithstanding the challenge of a flat to inverted yield curve, 2005 was the
second most profitable year in the Company's history with core earnings
providing a solid foundation for our performance. Earnings per share for 2005
increased by 2.6%, due to a combination of balance sheet growth, stable credit
quality and substantial improvement in core earnings year over year.

The Company's net interest income in 2005 increased slightly from 2004, as a
result our continued expansion and growth of market share within the markets we
serve. This growth has increased our loans outstanding which, for 2005, more
than offset the pressure on our net interest margin as a result of a flat yield
curve.

                              (TOTAL ASSETS GRAPH)

For the year ended December 31, 2005, the Company's total assets increased $14.4
million, or 3.6% over December 31, 2004 totals.

EARNING ASSETS - LOANS

     Gross loans totaled $232.0 million at year-end 2005, representing a 7.7%
increase from $215.4 million at year-end 2004.

ANNUAL REPORT 2005 UNITED BANCORP INC.


14

<PAGE>

Loan production for both CITIZENS and COMMUNITY was strong during 2005, CITIZENS
yielded a growth of $11.8 million while COMMUNITY loans increased $6.7 million.

Installment loans increased $1.9 million, or 4.6%, real estate loans increased
$2.7 million, or 4.9%, and commercial real estate loans increased $14.6 million,
or 17.6%, from December 31, 2004. Commercial loans decreased $2.6 million, or
7.5%, from December 31, 2004. As discussed previously, with near historical low
interest rates at the start of 2005, management was cautious in originating
longer term fixed-rate loans during this period of uncertainty. Similar to 2002
- 2004 time frames, consumers and businesses during the past year were extremely
price and term sensitive and were looking for longer-term fixed-rate loans.
Management priced our loan products competitively but not overly aggressively
and as we anticipated the economy would rebound and the FOMC would raise
short-term borrowing rates. Based upon the Asset/Liability model utilized by the
Company, management decided not to originate fixed interest rate loans when
short-term interest rates were rapidly rising as they did in 2005.

The Company's installment lending portfolio represented 18.9% of the total
portfolio at year-end 2005,compared to 19.5% at year-end 2004. The targeted
installment lending areas encompass the geographic areas serviced by the Banks,
which are diverse, thereby reducing the risk to changes in economic conditions.
Competition for installment loans principally comes from the captive finance
companies offering low to zero percent financing for extended terms. During
2005, unlike previous years, the captive finance companies were not as
aggressive in their pricing, therefore the Company was able to grow this
portfolio during 2005.

The commercial and commercial real estate portfolio represented approximately
56.2% of the total loan portfolio at December 31, 2005 compared to 55.0% for
December 31, 2004. The Company's commercial loan portfolio decreased by $2.6
million, or 7.5%. The commercial real estate loan portfolio increased $14.6
million, or 17.6%. Management is pleased with the overall increase in the
combined commercial and commercial real estate loan portfolios. To protect the
Company's net interest margin in a rising interest rate environment, the focus
of loan pricing in 2005 was in the one and three year adjustable rate pricing
and to mitigate its exposure to the eventual decline in interest rates certain
interest rate floors and wider repricing indices have been established and
followed for the last few years. This strategy may have caused our price
sensitive customers to seek alternative financing arrangements.

                               (LOANS-NET GRAPH)

Residential real estate loans are comprised of 1, 3 and 5 year adjustable rate
mortgages financed to 1-4 family units. The Company also offers fixed rate real
estate loans through our Secondary Market Real Estate Mortgage Program. The
fixed rate mortgages are serviced and originated by CITIZENS but are sold
immediately in the secondary market. Therefore, our customers enjoy the
convenience of working with a local bank and are able to obtain long-term
fixed-rate financing for their home. As mentioned, once these loans are
originated they are immediately sold in what is referred to as the secondary
market. Since the loans are sold, without recourse, the Company does not assume
any interest rate or credit risk in this portfolio and does not have any loans
held for sale. This arrangement is quite common in banks and without such an
option our customers may look elsewhere for their home financing needs. As the
overall interest rate environment increased in 2005 from their near historical
low levels, consumer preferences are beginning to change from fixed-rate loan
products to adjustable rate products. As a result, the Company's Secondary
Market Program in 2005 experienced a decrease in volume as compared to 2004.

For 2005,the interest rate environment, although still favorable to the
fixed-rate mortgage loan product, did not result in a high volume of customers
refinancing. With interest rates low for several years, most customers may have
already taken advantage of the refinance options available to them. The Company
recognized a gain on the sale of secondary market loans of $21,000 in 2005
compared to a gain of $42,000 in 2004. Given the decreased level of sales and
refinancing in 2005, the Company's residential real estate portfolio increased
$2.7 million.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              15
<PAGE>

                      (TOTAL AVERAGE EARNING ASSETS GRAPH)

COMMUNITY continued their growth from the previous years, with an increase in
loans of $6.7 million, or 9.8%.The increase this past year is due to the
continued expansion of COMMUNITY into the Fairfield County market. COMMUNITY'S
loan growth came in commercial and commercial real estate portfolio of $6.2
million and the real estate portfolio of $1.6 million. This growth was offset by
a decrease of $1.1 million in the installment portfolio.

CITIZENS also experienced an increase in loans for 2005. Total loans increased
$11.8 million, or 8.1%,from December 31, 2004. The increase primarily came in
the installment portfolio of $3.0 million, commercial real estate portfolio of
$8.6 million, and real estate portfolio of $1.0 million. However, this increase
was offset by decreases in the commercial portfolio of $837,000 for 2005.

The allowance for loan losses represents the amount which management and the
Boards of Directors estimates is adequate to provide for probable losses
incurred in the loan portfolio. Accounting for the allowance and the related
provision for loan losses is reviewed by management as a critical accounting
policy. The allowance balance and the annual provision charged to expense are
reviewed by management and the Boards of Directors on a monthly basis. The
allowance calculation is determined by utilizing a risk grading model that
considers borrowers' past due experience, coverage ratio to industry averages,
economic conditions, historical loan portfolio loss performance and various
other circumstances that are subject to change over time. In general, 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, with established 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 generally recognizes interest income on the accrual basis, except
for certain loans which are placed on non-accrual status, when in the opinion of
management, doubt exists as to collection on the loan. The Company's policy is
to generally 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 non-accrual status, interest income may be recognized as cash
payment is received.

Management believes the current balance of the allowance for loan losses is
adequate to cover probable losses incurred. Net charge-offs to average loans for
the year-ended 2005 was 0.22%, unchanged from 0.22% for 2004. Refer to Provision
for Loan Losses section for further discussion on the Company's credit quality.

EARNING ASSETS - SECURITIES AND FEDERAL FUNDS SOLD

     The securities portfolio is comprised of U.S. Government and agency
obligations, tax-exempt obligations of states and political subdivisions,
mortgage-backed securities and certain other investments. The Company does not
hold any collateralized mortgage-backed securities, other than those issued by
U.S. Government agencies. The Company does not hold any derivative securities.
The quality rating of most obligations of states 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 known levels of credit risk.

Securities available for sale at year-end 2005 decreased $15.9 million, or
11.5%, from 2004,while securities held to maturity increased $5.3 million, or
35.5%.

In our planning process, management's projection for 2005 was for a steady to
slightly rising interest rate environment with a positively sloped yield curve.
In the first half of 2005, interest rates actually decreased to a level that
caused a high volume of investment securities to be called. Management
reinvested the funds from the called securities into the Company's loan
portfolio and a portion back into investment securities over the course of 2005.
The increase in the held to maturity portfolio is due to a focus in 2005 to
increase the Company's state and municipal obligations portfolio due to the
favorable tax-advantaged

ANNUAL REPORT 2005 UNITED BANCORP INC.


16

<PAGE>

interest rate spread over other similar duration investment options.

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 2005, core deposits increased $6.8 million, or 2.6%. CITIZENS
AND COMMUNITY experienced varying results in their core deposit balances for
2005. CITIZENS generated an in increase in core deposits of $14.3 million, which
was partially offset by a decrease in core deposits of $7.5 million, for
COMMUNITY, for the year ended December 31, 2005. Over the past several years,
COMMUNITY has developed several large depository customers. As of December 31,
2005, the eight largest depository customers accounted for approximately 32.0%
of COMMUNITY'S certificate of deposits and approximately 86.0% of total
certificates of deposits greater than $100,000. These customers also represent
10.0% of demand deposits at December 31, 2005. The total concentration of retail
funding is approximately 27.0% of COMMUNITY'S total deposits at December 31,
2005.This concentration does pose additional liquidity and earnings risk for
COMMUNITY. The earnings risk would be triggered if COMMUNITY would be placed in
a position to sell assets below book value to meet current liquidity needs. This
risk is mitigated with COMMUNITY'S capability to borrow wholesale funding from
its correspondent banks. CITIZENS management also has an active Asset/Liability
Committee that monitors, among other items monthly liquidity needs on a 90 day
time horizon. CITIZENS, unlike COMMUNITY, has a broad retail depository base.

On a consolidated level, this concentration of funding at COMMUNITY represents
approximately 7.1% of total retail deposits at December 31, 2005.

                               (NET INCOME GRAPH)

                        (RETURN ON AVERAGE ASSETS GRAPH)

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 timeframes.

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 needs. At year-end
2005, certificates of deposit greater than $100,000 decreased $528,000 or 1.3%
from year-end 2004 totals. Certificates of deposits greater than $100,000
increased in 2005 by $1.2 million, or 7.1%, at CITIZENS while COMMUNITY
decreased by approximately $1.7 million, or 7.7%.

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

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, notes payable and Federal Home Loan Bank
advances. Securities sold under agreements to repurchase decreased by $5.5
million. In contract, the average balance in securities sold under agreements to
repurchase increased $1.1 million, or 12.4%, from 2004 to 2005.

Advances from the Federal Home Loan Bank (FHLB)

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              17
<PAGE>

increased $654,000, or 1.4%, from 2004 to 2005 while federal funds purchased
increased $9.4 million for the same period. Management utilized a strategy
whereby excess liquidity and borrowings on its lines of credit at the FHLB were
used to purchase investment securities and fund the growth in the loan
portfolio.

In addition to these funding sources, the Company issued $4.0 million of
subordinated debentures to a special purpose trust. The proceeds were utilized
to fund a $3.4 million note receivable to a newly formed ESOP, with the
remaining $600,000 utilized for general corporate purposes.

OTHER ASSETS

     The Company owns approximately $8.2 million in Bank Owned Life Insurance
(BOLI) with the original investment primarily occurring in 2002. Refer to
Performance Overview, Noninterest Income section for further information.

                        PERFORMANCE OVERVIEW 2005 TO 2004

NET EARNINGS

     The Company reported earnings of $3.3 million in 2005 compared with $3.2
million in 2004, outperforming what was previously the second most profitable
year in the Company's history. This earnings performance equates to a 0.82%
Return on Average Assets ("ROA") and 10.01% Return on Average Equity ("ROE") for
2005 compared to 0.83% and 9.91%, respectively, for 2004. Basic and Diluted
Earnings per share ("EPS") was $0.79 and $0.77, respectively, for 2005 and 2004.
Per share amounts for all periods have been restated to reflect the 10% stock
split in the form of a dividend distributed in December 2005 and 2004.

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 $67,000 in 2005. The net interest margin decreased to
3.58% from 3.97%. Overall, due to the flattening to inverted yield curve in
2005, the Company has experienced deposits costs increasing at a more rapid rate
then it's earning assets. While the Company's earnings assets have on average
increased 19 basis points from 2004 to 2005, the cost of deposits have increased
37 basis points for the same period.

Average interest-earning assets increased $13.2 million,, or 3.7%, in 2005 while
the associated weighted-average yield on these interest-earning assets increased
from 5.80% in 2004, to 6.01% for 2005. Average interest-bearing liabilities
increased $15.9 million, or 4.9%, in 2005 while the associated weighted-average
costs on these interest-bearing liabilities increased from 2.32% to 2.69%.

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 herein for further information.

PROVISION FOR LOAN LOSSES

     The provision for loan losses is a charge to expense recorded to maintain
the related balance sheet allowance for loan losses at an amount considered
adequate to cover probable losses incurred in the portfolio. The total provision
for loan losses was $412,000 in 2005 compared to $618,000 in 2004, a decrease of
$206,000 or 33.3%. The decrease in provision can be attributed to the Company's
stable credit quality, offset by growth in the portfolio. As previously
discussed the loan portfolio increased approximately $16.6 million, or 7.7%,
during 2005.

Net loans charged-off for 2005 were approximately $503,000 compared to $466,000
for 2004. Net charge-offs as a percentage of loans has been on a gradual decline
since a high of 0.49% in 2000. For both 2005 and 2004, net charge-offs as a
percentage of average loans were 0.22% more than a 50% decrease from the high in
2000.

The allowance for loan losses as a percentage of loans decreased to 1.25% at
year-end 2005, from 1.39% at year-end 2004. CITIZENS and COMMUNITY utilize a
consistent

                        (RETURN ON AVERAGE EQUITY GRAPH)

ANNUAL REPORT 2005 UNITED BANCORP INC.


18

<PAGE>

reserve methodology with detail reserve allocations specific to the individual
loan portfolios.

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 box 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. In addition,
both CITIZENS and COMMUNITY have invested in Bank Owned Life Insurance (BOLI).
The earnings from this investment are reflected in the Company's noninterest
income. Total noninterest income, including BOLI, for 2005 was $2.3 million, an
increase of $143,000, or 6.5% from 2004 totals.

Service charges on deposit accounts increased $49,000 or 3.8% from 2003 to 2004.
The majority of the increase came from fees related to overdrafts on depository
accounts. Management introduced several new products and revenue enhancement
strategies over the past several years and the result has been increased service
charge income.

The increase in noninterest income in 2005 is primarily attributable to
increases in service charge income, mortgage servicing revenue and increased
income on BOLI. These increases were off-set by a reduction in gains on the sale
of loans and investment securities during 2005. During 2005, the Company
realized losses from the sale of securities and loans totaling $31,000 compared
to a gain of $119,000 in 2004, reflecting a $99,000 after-tax reduction in
earnings. Management's strategy in 2004, took into consideration the relative
volatility in the bond market. At times during 2004, management realized there
was an opportunity to sell and profitability reposition bonds in the portfolio
when overall interest rates were depressed. Since interest rates were increasing
for most of 2005, there was less opportunity to profitably sell and reposition
bonds in 2005.

             (TOTAL ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS GRAPH)

                       (DILUTED EARNINGS PER SHARE GRAPH)

Other noninterest income increased $244,000 from 2004 to 2005. With the overall
decrease in refinancing activity and prepayment activity, the Company's mortgage
servicing revenue increased as compared to 2004. Also, increasing other
noninterest income is a $24,000 increase in credit card merchant income, as
compared to 2004.

NONINTEREST EXPENSE

     Noninterest expense for 2005 increased $311,000 or 3.0% over 2004.

Salaries and employee benefits increased $209,000, or 4.0%, from 2004 to 2005.
The increase is mainly due to merit increases since 2004.

Occupancy and equipment expense decreased $62,000, or 4.5%. Occupancy expense
decreased due to capital expenditures mainly technology enhancements, becoming
fully depreciated in the first quarter of 2005.

Professional fees increased $80,000 or 16.7% for 2005 as compared to 2004.
Professional fees increased due to additional collection and recovery efforts at
COMMUNITY on delinquent loans and OREO property.

Advertising increased $100,000 or 33.3% mainly due to increased advertising
expenses by COMMUNITY in 2005.

Other expenses decreased 2.2%, or $45,000. Overall there is not a single line
item that contributes significantly to this decrease. Other noninterest expense
including, insurance, franchise and other taxes, stationary and office supplies

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              19
<PAGE>

and amortization did not vary much from 2004 to 2005. As stated previously, the
core earnings growth of the Company's financial performance over 2004, is in
part a reflection of management's strong control of noninterest expense in 2005.

                       PERFORMANCE OVERVIEW 2004 TO 2003

NET EARNINGS

     The Company reported earnings of $3.2 million in 2004 compared with $3.6
million in 2003. This earnings performance equates to a 0.83% Return on Average
Assets ("ROA") and 9.91% Return on Average Equity ("ROE") for 2004 compared to
0.97% and 11.40%, respectively, for 2003. Basic Diluted Earnings per share
("EPS") was $0.77 and $0.85, respectively, for 2004 and 2003. Per share amounts
for all periods have been restated to reflect the 10% stock split in the form of
a dividend distributed in December 2005, 2004 and 2003.

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. Net interest income increased $85,000 in 2004. The
net interest margin decreased to 3.97% from 4.10%. Overall, the Company has seen
both its earning assets and interest paying liabilities repricing downward given
the current low interest rate environment.

Average interest-earning assets increased $12.3 million, or 3.5%, in 2004 while
the associated weighted-average yield on these interest-earning assets decreased
from 6.36% in 2003, to 6.06% for 2004.

                    (NET CHARGE-OFFS TO AVERAGE LOANS GRAPH)

Average interest-bearing liabilities increased $13.8 million in 2004 over 2003.
The average cost of funds decreased to 2.32% from 2.52% from the year ended
December 31, 2003.

Refer to the sections on Assets and Liability Management and Sensitivity to
market Risks and Average Balances, Net Interest Income and Yields Earned and
Rates Paid elsewhere herein for further information.

PROVISION FOR LOAN LOSSES

     The provision for loan losses is charged to operations to maintain the
related balance sheet allowance for loan losses at an amount considered adequate
to cover probable losses incurred in the portfolio. The total provision for loan
losses was $618,000 in 2004, compared to $540,000 in 2003, an increase of $78,
000 or 14.4%. The incremental increase in provision can be attributed to
management's continued efforts to grow the loan portfolio, as well as, the
$850,000 increase in nonperforming loans at December 31, 2004 as compared to
December 31, 2003.

<TABLE>
<CAPTION>
(In thousands)                                  2005      2004      2003
                                              -------   -------   -------
<S>                                           <C>       <C>       <C>
Noninterest income
   Service charges on deposit accounts ....   $ 1,339   $ 1,290   $ 1,122
   Gains on sales of securities ...........       (52)       77       344
   Gains on sales of loans ................        21        42       178
   Other income ...........................     1,034       790       967
                                              -------   -------   -------
      Total noninterest income ............   $ 2,342   $ 2,199   $ 2,611
                                              =======   =======   =======

Noninterest expense
   Salaries and employee benefits .........   $ 5,432   $ 5,223   $ 5,242
   Occupancy and equipment ................     1,320     1,382     1,526
   Professional services ..................       559       479       367
   Insurance ..............................       343       319       306
   Franchise and other taxes ..............       412       419       412
   Advertising ............................       400       300       316
   Stationery and office supplies .........       273       261       285
   Amortization of intangibles ............        18        18        18
   Other expenses .........................     2,006     2,051     1,944
                                              -------   -------   -------
      Total noninterest expense ...........   $10,763   $10,452   $10,416
                                              =======   =======   =======
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


20

<PAGE>

Net loans charged-off for 2004 were approximately $466,000 compared to $668,000
for 2003. During 2004, 86% of the Company's net loans charged-off related to the
installment loan portfolio. In 2003, the installment portfolio accounted for
approximately 47% of net loans charged-off. The installment loan portfolio
decreased $7.4 million, or 15.1%, from December 31, 2003 to 2004.

The allowance for loan losses as percentage of loans decreased to 1.39% at
year-end 2004, from 1.43% at yearend 2003. CITIZENS and COMMUNITY utilize a
consistent reserve methodology with detail reserve allocations specific to the
individual loan portfolios.

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 box 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. In addition,
both CITIZENS and COMMUNITY have invested in Bank Owned Life Insurance (BOLI).
The earnings from this investment are reflected in the Company's noninterest
income. Total noninterest income for 2004 was $2.2 million, a decrease of
$412,000, or 15.8% from 2003 totals.

Service charges on deposit accounts increased $168,000 or 15.0% from 2003 to
2004. The majority of the increase came from fees related to overdrafts on
depository accounts. Management introduced several new products and revenue
enhancement strategies over the past several years and the result has been
increased service charge income.

The decline in noninterest income in 2004 is primarily attributable to a
reduction in gains on the sale of investment securities. During 2004, net
realized gains on the sale of investment securities decreased $267,000 from
2003. Management's strategy in 2004 and 2003, took into consideration the
relative volatility in the bond market. At times during the period, management
realized there was an opportunity to sell and profitably reposition bonds in the
portfolio when overall interest rates were depressed. Since interest rates did
not fluctuate as widely in 2004 as they did in 2003, there was less opportunity
to sell and reposition bonds in 2004.

Other noninterest income decreased $177,000 from 2003 to 2004. In connection
with the 2004 slow down in the Company's secondary market mortgage program,
there was a decrease in related fee and servicing income of $42,000. Also,
impacting other noninterest income is a $41,000 decrease in the amount of
credited interest related to BOLI, as compared to 2003.

NONINTEREST EXPENSE

     Noninterest expense for 2004 increased $36,000 or 0.3% over 2003.

Salaries and employee benefits decreased $19,000 from 2003 to 2004. During 2004
management adjusted the staff levels within the Company to control salary and
benefit costs.

Occupancy and equipment decreased $144,000, or 9.4%. Occupancy decreased due to
capital expenditures mainly technology enhancements, becoming fully depreciated
in the first quarter 2004.

Professional fees increased $112,000 or 30.5% for 2004 as compared to 2003.
Professional fees increased due to additional costs relating to compliance with
the Sarbanes-Oxley Act of 2002 requirements, as well as other increased risk
management costs.

Other expenses increased 5.5%, or $107,000. Overall there is not a single line
item that contributes significantly to this increase. Other noninterest expense
including, insurance, franchise and other taxes, advertising, stationary and
office supplies and amortization did not vary much from 2003 to 2004. As stated
previously, the core earnings growth of the Company's financial performance over
2003 reflect management's strong control of noninterest expense in 2004.

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.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              21
<PAGE>

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, a 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 while conversely, a positive gap
will cause profits to decline in a falling interest rate environment. The
Company's goal is to have acceptable profits under any interest rate
environment. To avoid volatile profits as a result of interest rate
fluctuations, 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 at
least 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

ANNUAL REPORT 2005 UNITED BANCORP INC.


22

<PAGE>

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 following tables present 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, 2005 and
2004 fall within the general guidelines established by the Board of Directors.
The NPV table shows that in a falling interest rate environment of either a 100
or 200 basis point change, the NPV would decrease between 3% and 13%. In the
upward change in interest rates the Company's NPV would increase 11% with a 100
basis point interest rate increase. In a 200 basis point rate increase, the
Company's NPV would increase 11%. This decrease is a result of the Company's
available for sale securities portfolio that is invested in fixed-rate
securities. As interest rates increase, the market value of the securities
decrease. However, since the Company currently has the ability to hold these
securities to their final maturity, it would not have to incur any losses.

                             (Dollars in Thousands)
                    Net Portfolio Value - December 31, 2005

<TABLE>
<CAPTION>
Change in Rates   $ Amount   $ Change   % Change
---------------   --------   --------   --------
<S>               <C>        <C>        <C>
+200               26,567     (3,988)     -13%
+100               29,888       (967)      -3%
Base               30,555
-100               33,901      3,346       11%
-200               33,833      3,277       11%
</TABLE>

                    Net Portfolio Value - December 31, 2004

<TABLE>
<CAPTION>
Change in Rates   $ Amount   $ Change   % Change
---------------   --------   --------   --------
<S>               <C>        <C>        <C>
+200               32,202     (7,446)     -19%
+100               36,537     (3,391)      -9%
Base               39,748
-100               37,782     (1,966)      -5%
-200               34,352     (5,396)     -14%
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              23

<PAGE>

The following table is a summary of selected quarterly results of operations for
the years ended December 31, 2005 and 2004.

<TABLE>
<CAPTION>
                                1ST QUARTER   2ND QUARTER   3RD QUARTER   4TH QUARTER
                                -----------   -----------   -----------   -----------
                                        (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                             <C>           <C>           <C>           <C>
2005

Total interest income              $5,223        $5,445        $5,658        $5,855
Total interest expense              1,974         2,161         2,404         2,607
                                   ------        ------        ------        ------
Net interest income                 3,249         3,284         3,254         3,248
Provision for losses on loans         144           116            68            84
Other income                          566           589           574           613
General, administrative and
   other expense                    2,620         2,640         2,664         2,839
                                   ------        ------        ------        ------
Earnings before income taxes        1,051         1,117         1,096           938
Federal income taxes                  230           237           268           174
                                   ------        ------        ------        ------
Net earnings                       $  821        $  880        $  828        $  764
                                   ======        ======        ======        ======
Earnings per share
   Basic                           $ 0.20        $ 0.21        $ 0.20        $ 0.18
                                   ======        ======        ======        ======
   Diluted                         $ 0.20        $ 0.21        $ 0.20        $ 0.18
                                   ======        ======        ======        ======
2004

Total interest income              $5,027        $5,096        $5,159        $5,225
Total interest expense              1,882         1,862         1,851         1,944
                                   ------        ------        ------        ------
Net interest income                 3,145         3,234         3,308         3,281
Provision for losses on loans         140           200           160           118
Other income                          651           533           525           490
General, administrative and
   other expense                    2,567         2,438         2,560         2,887
                                   ------        ------        ------        ------
Earnings before income taxes        1,089         1,129         1,113           766
Federal income taxes                  233           255           215           161
                                   ------        ------        ------        ------
Net earnings                       $  856        $  874        $  898        $  605
                                   ======        ======        ======        ======
Earnings per share
   Basic                           $ 0.21        $ 0.21        $ 0.20        $ 0.15
                                   ======        ======        ======        ======
   Diluted                         $ 0.21        $ 0.21        $ 0.20        $ 0.15
                                   ======        ======        ======        ======
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


24
<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 taxable equivalent average yield on
interest-earning assets and the average cost of interest-bearing liabilities for
the years ended December 31, 2005, 2004,and 2003. 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 has been
adjusted to tax-equivalent basis.

<TABLE>
<CAPTION>
                                                     2005                        2004                        2003
                                          --------------------------  --------------------------  --------------------------
                                                    INTEREST                    INTEREST                    INTEREST
                                           AVERAGE   INCOME/  YIELD/   AVERAGE  INCOME/   YIELD/   AVERAGE   INCOME/  YIELD/
(DOLLARS IN THOUSANDS)                     BALANCE   EXPENSE   RATE    BALANCE  EXPENSE    RATE    BALANCE   EXPENSE   RATE
                                          --------  --------  ------  --------  --------  ------  --------  --------  ------
<S>                                       <C>       <C>       <C>     <C>       <C>       <C>     <C>       <C>       <C>
ASSETS
Interest-earning assets
   Loans                                  $224,945   $15,513   6.90%  $208,658   $13,844   6.63%  $192,725   $14,025   7.28%
   Taxable securities - AFS                113,491     5,163   4.49    113,502     5,130   4.47    111,282     5,166   4.64
   Tax-exempt securities - AFS              10,059       599   5.80     18,218       872   4.78     18,715     1,001   5.42
   Tax-exempt securities - HTM              20,718     1,078   5.20     15,698       935   5.96     16,680       878   5.26
   Federal funds sold                           --        --     --        150         4   2.67      4,692        58   1.24
   FHLB stock and other                      4,230       249   5.89      4,057       175   4.32      3,915       163   4.18
                                          --------   -------          --------   -------          --------   -------
Total interest-earning assets              373,443    22,602   6.03    360,283    20,960   5.80    348,009    21,291   6.21
Noninterest-earning assets
   Cash and due from banks                  10,829                      11,192                       8,251
   Premises and equipment (net)              7,436                       7,825                       8,367
   Other nonearning assets                  14,509                      13,489                      12,373
   Less: allowance for loan losses          (3,043)                     (2,957)                     (3,094)
                                          --------                    --------                    --------
Total noninterest-earning assets            29,731                      29,549                      25,897
                                          --------                    --------                    --------
Total assets                              $403,174                    $389,832                    $373,906
                                          ========                    ========                    ========

LIABILITIES & SHAREHOLDERS' EQUITY
Interest-bearing liabilities
   Demand deposits                        $ 76,991   $ 1,121   1.46%  $ 68,006   $   625   0.92%  $ 57,456   $   530   0.92%
   Savings deposits                         42,748       145   0.34     46,936       166   0.35     49,962       240   0.48
   Time deposits                           165,109     5,919   3.58    158,325     5,563   3.51    167,615     6,144   3.67
   Fed funds purchased & TT&L                4,753       228   4.80      4,320        82   1.90      3,453        50   1.45
   FHLB advances                            40,100     1,450   3.62     37,813     1,020   2.70     23,369       802   3.43
   Trust preferred debentures                  496        31   6.25         --        --     --         --        --     --
   Repurchase agreements                    10,129       252   2.49      9,013        83   0.92      8,766        71   0.81
                                          --------   -------          --------   -------          --------   -------
Total interest-bearing liabilities         340,326     9,146   2.69    324,413     7,539   2.32    310,621     7,837   2.52
                                                     -------                     -------                     -------
Noninterest-bearing liabilities
   Demand deposits                          28,213                      31,568                      29,543
   Other liabilities                         1,750                       1,229                       1,824
                                          --------                    --------                    --------
Total noninterest-bearing liabilities       29,963                      32,797                      31,367
                                          --------                    --------                    --------
Total liabilities                                                      357,210                     341,988
Total shareholders' equity                  32,885                      32,622                      31,918
                                          --------                    --------                    --------
Total liabilities & shareholders' equity   403,174                    $389,832                    $373,906
                                          ========                    ========                    ========
Net interest income                                   13,456                     $13,421                     $13.454
                                                     =======                     =======                     =======
Net interest spread                                            3.34%                       3.48%                       3.60%
                                                               ====                        ====                        ====
Net yield on interest-earning assets                           3.59%                       3.71%                       3.87%
                                                               ====                        ====                        ====
</TABLE>

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

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

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              25

<PAGE>

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:

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

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

-    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 shareholders'
equity at yearend 2005 was $32.5 million, compared to $32.8 million at year-end
2004, representing a decrease of 1.0%. Equity totals include $2.2 million 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 2005,
compared to a $635,000 loss at year-end 2004. Total shareholders' equity in
relation to total assets was 7.9% at December 31, 2005 and 8.3% at December 31,
2004.

                          (DIVIDENDS PER SHARE GRAPH)

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

<TABLE>
<CAPTION>
                                                2005 COMPARED TO 2004      2004 COMPARED TO 2003
                                                 INCREASE/(DECREASE)        INCREASE/(DECREASE)
                                              ------------------------   -------------------------
                                                       CHANGE   CHANGE            CHANGE    CHANGE
                                               TOTAL   DUE TO   DUE TO    TOTAL   DUE TO    DUE TO
(IN THOUSANDS)                                CHANGE   VOLUME    RATE    CHANGE   VOLUME     RATE
                                              ------   ------   ------   ------   ------   -------
<S>                                           <C>      <C>      <C>      <C>      <C>      <C>
Interest and dividend income
   Loans                                      $1,669   $1,109   $  560    $(181)  $1,110   $(1,291)
   Taxable securities available for sale          33       10       23      (36)     155      (191)
   Tax-exempt securities available for sale     (273)    (433)     160     (129)     (12)     (117)
   Tax-exempt securities held to maturity        143      272     (129)      57      (54)      111
   Federal funds sold                             (4)      (4)    --        (54)     (86)       32
   FHLB stock and other                           74       43       31       12        7         5
                                              ------   ------   ------    -----   ------   -------
Total interest and dividend income             1,642      997      645     (331)   1,120    (1,451)

Interest expense
   Demand deposits                               496       92      404       95       97        (2)
   Savings deposits                              (21)     (14)      (7)     (74)     (14)      (60)
   Time deposits                                 356      241      115     (581)    (333)     (248)
   Fed funds purchased                           146        9      137       32       14        18
   FHLB advances                                 430       65      365      218      417      (199)
   Trust Preferred debentures                     31       31     --
   Repurchase agreements                         169       11      158       12        2        10
                                              ------   ------   ------    -----   ------   -------
Total interest expense                         1,607      435    1,172     (298)     183      (481)
                                              ------   ------   ------    -----   ------   -------
Net interest income                           $   35   $  562   $ (527)   $  33   $  937   $  (970)
                                              ======   ======   ======    =====   ======   =======
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


26

<PAGE>

for participants with automatically reinvested dividends. During 2005, the
Company issued $357,000 of newly-issued common shares to the Plan. 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 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.

As previously stated, in 2005, a Delaware statutory business trust owned by the
Company, United Bancorp Statutory Trust I ("Trust I" or the "Trust"), issued
$4.0 million of mandatorily redeemable debt securities. The sale proceeds were
utilized to purchase $4.0 million of the Company's subordinated debentures. The
Company's subordinated debentures are the sole asset of Trust I. Pursuant to FIN
46(R), the Company's investment in Trust I is not consolidated herein as the
Company is not deemed the primary beneficiary of the Trust. However, the $4.0
million of mandatorily redeemable debt securities issued by the Trust are
includible for regulatory purposes as a component of the Company's Tier 1
Capital. Interest on the Company's subordinated debentures are fixed at 6.25%
and are payable quarterly.

The $4.0 million of net proceeds received by the Company was primarily utilized
to fund a $3.4 million note receivable from a newly formed Employee Stock Option
Plan (ESOP). The ESOP in turn utilized the note proceeds to purchase $3.4
million of the Company's treasury stock. The note receivable from the ESOP will
be funded by Company contributions over a 20 year period.

                             (EQUITY CAPITAL GRAPH)

                          (BOOK VALUE PER SHARE GRAPH)

LIQUIDITY

     Liquidity relates primarily to the Company'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 $135.8 million at December 31,
2005, compared to $145.4 million at December 31, 2004. Management recognizes
securities may need to be sold in the future to help fund loan demand and,
accordingly, as of December 31, 2005, $121.9 million of the securities portfolio
was classified as available for sale. The Company's residential real estate
portfolio, can and has been readily used to collateralize borrowings as an
additional source of liquidity. Management believes its current liquidity level
is sufficient to meet the cash requirement.

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 2005, 2004 and 2003 follows. The Company experienced a net
increase in cash from operating activities in 2005, 2004 and 2003. Net cash
provided by operating activities totaled $4.0 million, $3.9 million and $4.2
million for the years ended December 31, 2005, 2004 and 2003,respectively. The
adjustments to reconcile net earnings to net cash from operating activities
consisted mainly of depreciation and amortization of premises and equipment and
intangibles, gain on sales of

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              27

<PAGE>

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 USED IN INVESTING ACTIVITIES totaled $10.4 million, $14.8 million and
$28.3 million for the years ended December 31, 2005, 2004 and 2003,
respectively. The changes in net cash from investing activities include loan
growth, as well as normal maturities, security calls and reinvestments of
securities and premises and equipment expenditures. In 2005, 2004 and 2003, the
Company received $15.9 million, $33.9 million and $37.7 million, respectively,
from sales of securities available for sale. Proceeds from securities, which
matured or were called totaled $23.5 million, $40.6 million and $77.4 million in
2005, 2004 and 2003, respectively. As mentioned previously, the interest rate
environment in the first half of 2004 dramatically impacted the Company's cash
flows from investing activities.

NET CASH PROVIDED BY FINANCING ACTIVITIES totaled $12.8 million, $10.1 million
and $22.2 million for the years ended December 31, 2005, 2004 and
2003, respectively. The net cash from financing activities in 2005 was primarily
attributable to increases in borrowings of $4.5 million, an increase in deposits
of $6.3 million and the aforementioned issuance of subordinated debentures.

Management feels that it has the capital adequacy, profitability, and
reputation to meet the current and projected financial 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

ANNUAL REPORT 2005 UNITED BANCORP INC.


28
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                                                           (GRANT THORNTON LOGO)

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying consolidated statements of financial condition
of United Bancorp, Inc. and subsidiaries (the "Company") (an Ohio Corporation)
as of December 31, 2005 and 2004, and the related consolidated statements of
earnings, comprehensive income, shareholders' equity and cash flows for each of
the three years in the period ended December 31, 2005. These consolidated
financial statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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.
and subsidiaries as of December 31, 2005 and 2004, and the results of its
operations, comprehensive income and cash flows for each of the three years in
the period ended December 31, 2005, in conformity with accounting principles
generally accepted in the United States of America.


                               GRANT THORNTON LLP

Cincinnati, Ohio
February 28,2006

Suite 500
4000 Smith Road
Cincinnati, OH 45209
T 513.762.5000
F 513.241.6125
W www.grantthornton.com

GRANT THORNTON LLP
US MEMBER OF GRANT THORNTON INTERNATIONAL


                                                                              29

<PAGE>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                        As of December 31, 2005 and 2004
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                         2005       2004
                                                                       --------   --------
<S>                                                                    <C>        <C>
                               ASSETS
Cash and due from financial institutions                               $ 10,009   $  7,581
Interest-bearing deposits in other financial institutions                 3,868         --
                                                                       --------   --------
      Total cash and cash equivalents                                    13,877      7,581
Securities available for sale - at market                               121,946    137,816
Securities held to maturity - estimated fair value of
   $20,483 and $15,475 at December 31, 2005
   and 2004, respectively                                                20,262     14,948
Total loans                                                             232,011    215,447
Allowance for loan losses                                                (2,904)    (2,995)
                                                                       --------   --------
      Loans - net                                                       229,107    212,452
Federal Home Loan Bank stock - at cost                                    4,306      4,115
Premises and equipment                                                    7,605      7,760
Accrued interest receivable                                               2,363      2,253
Other real estate and repossessions                                       1,244      1,014
Core deposit and other intangible assets                                     18         34
Bank-owned life insurance                                                 8,186      7,518
Other assets                                                              3,019      2,031
                                                                       --------   --------
      Total assets                                                     $411,933   $397,522
                                                                       ========   ========

                LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits
   Noninterest-bearing                                                 $ 26,614   $ 31,778
   Interest-bearing                                                      82,295     62,039
Savings deposits                                                         37,634     45,143
Time deposits - under $100,000                                          121,249    122,019
Time deposits - $100,000 and over                                        39,123     39,651
                                                                       --------   --------
      Total deposits                                                    306,915    300,630
Federal funds purchased                                                  12,545      3,180
Advances from the Federal Home Loan Bank                                 47,334     46,680
Securities sold under agreements to repurchase                            7,142     12,612
Subordinated debentures                                                   4,000         --
Accrued expenses and other liabilities                                    1,517      1,596
                                                                       --------   --------
      Total liabilities                                                 379,453    364,698

Commitments                                                                  --         --

Shareholders' equity
   Preferred stock - 2,000,000 shares without par value authorized;
      no shares issued                                                       --         --
   Common stock - $1 par value; 10,000,000 shares authorized;
      4,615,111 and 4,126,970 shares issued at December 31,
      2005 and 2004, respectively                                         4,615      4,127
   Additional paid-in capital                                            26,919     25,831
   Retained earnings                                                      7,776      7,021
   Stock held by deferred compensation plan; 83,024 and 69,275
      shares at December 31, 2005 and 2004, respectively - at cost         (892)      (752)
   Treasury stock - 27,500 and 300,319 shares at December 31,
      2005 and 2004, respectively - at cost                                (329)    (2,768)
   Less required contributions for shares acquired by Employee Stock
      Ownership Plan (ESOP)                                              (3,417)        --
   Accumulated comprehensive loss, unrealized losses on securities
      designated as available for sale, net of related tax benefits      (2,192)      (635)
                                                                       --------   --------
      Total shareholders' equity                                         32,480     32,824
                                                                       --------   --------
      Total liabilities and shareholders' equity                       $411,933   $397,522
                                                                       ========   ========
</TABLE>

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

ANNUAL REPORT 2005 UNITED BANCORP INC.


30
<PAGE>

                      CONSOLIDATED STATEMENTS OF EARNINGS

              For the years ended December 31, 2005, 2004 and 2003
                       (In thousands, except share data)

<TABLE>
<CAPTION>
                                                              2005      2004      2003
                                                            -------   -------   -------
<S>                                                         <C>       <C>       <C>
Interest and dividend income
   Loans, including fees                                    $15,480   $13,808   $13,887
   Taxable securities                                         5,179     5,154     5,167
   Tax-exempt securities                                      1,272     1,366     1,445
   Federal funds sold                                            42         4        58
   Dividends on Federal Home Loan Bank stock and other          208       175       163
                                                            -------   -------   -------
      Total interest and dividend income                     22,181    20,507    20,720
Interest expense Deposits
   Demand                                                     1,121       625       529
   Savings                                                      145       166       240
   Time                                                       5,919     5,563     6,144
   Borrowings                                                 1,961     1,185       924
                                                            -------   -------   -------
      Total interest expense                                  9,146     7,539     7,837
                                                            -------   -------   -------
      Net interest income                                    13,035    12,968    12,883
Provision for loan losses                                       412       618       540
                                                            -------   -------   -------
      Net interest income after provision for loan losses    12,623    12,350    12,343
Noninterest income
   Service charges on deposit accounts                        1,339     1,290     1,122
   Gain (loss) on sales or calls of securities designated
      as available for sale                                     (52)       77       344
   Gain on sale of loans                                         21        42       178
   Other income                                               1,034       790       967
                                                            -------   -------   -------
      Total noninterest income                                2,342     2,199     2,611
Noninterest expense
   Salaries and employee benefits                             5,432     5,223     5,242
   Occupancy and equipment                                    1,320     1,382     1,526
   Professional services                                        559       479       367
   Insurance                                                    343       319       306
   Franchise and other taxes                                    412       419       412
   Advertising                                                  400       300       316
   Stationery and office supplies                               273       261       285
   Amortization of intangible assets                             16        18        18
   Other expenses                                             2,008     2,051     1,944
                                                            -------   -------   -------
      Total noninterest expense                              10,763    10,452    10,416
                                                            -------   -------   -------
Earnings before income taxes                                  4,202     4,097     4,538
Income tax expense                                              909       864       899
                                                            -------   -------   -------
   Net earnings                                             $ 3,293   $ 3,233   $ 3,639
                                                            =======   =======   =======
   EARNINGS PER COMMON SHARE
      Basic                                                 $  0.79   $  0.77   $  0.85
                                                            =======   =======   =======
      Diluted                                               $  0.79   $  0.77   $  0.85
                                                            =======   =======   =======
</TABLE>

        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              31

<PAGE>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

              For the years ended December 31, 2005, 2004 and 2003
                                 (In thousands)

<TABLE>
<CAPTION>
                                                             2005     2004     2003
                                                           -------   ------   ------
<S>                                                        <C>       <C>      <C>
Net earnings                                               $ 3,293   $3,233   $3,639
Other comprehensive income, net of related tax effects:
   Unrealized holding losses on securities during
      the year, net of tax benefits of $(820), $(173)
      and $(508) in 2005, 2004 and 2003, respectively       (1,591)    (336)    (986)
Reclassification adjustment for realized (gains) losses
   included in earnings, net of (taxes) benefits of $17,
   $(26) and $(117) in 2005, 2004 and 2003, respectively        34      (51)    (227)
                                                           -------   ------   ------
Comprehensive income                                       $ 1,736   $2,847   $2,426
                                                           =======   ======   ======
Accumulated comprehensive loss                             $(2,192)  $ (635)  $ (249)
                                                           =======   ======   ======
</TABLE>

        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

ANNUAL REPORT 2005 UNITED BANCORP INC.


32

<PAGE>

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

              For the years ended December 31, 2005, 2004 and 2003
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                      TREASURY      SHARES                ACCUMULATED
                                                       ADDITIONAL     STOCK AND    ACQUIRED                  OTHER
                                              COMMON     PAID-IN      DEFERRED        BY      RETAINED   COMPREHENSIVE
                                               STOCK     CAPITAL    COMPENSATION     ESOP     EARNINGS    INCOME(LOSS)    TOTAL
                                              ------   ----------   ------------   --------   --------   -------------   -------
<S>                                           <C>      <C>          <C>            <C>        <C>        <C>             <C>
Balance at January 1, 2003                    $3,411     $25,652      $(2,345)     $    --    $ 4,473       $   964      $32,155
Net earnings                                      --          --           --           --      3,639            --        3,639
Stock split in the form of a dividend            341          --           --           --       (341)           --           --
Cash paid in lieu of fractional
   shares on stock dividend                       --          --           --           --         (5)           --           (5)
Cash dividends - $0.39 per share                  --          --           --           --     (1,718)           --       (1,718)
Shares purchased for deferred
   compensation plan                              --         115         (115)          --         --            --           --
Shares distributed from deferred
   compensation plan                              --         (54)          54           --         --            --           --
Purchases of treasury stock-
   shares at cost                                 --          --         (344)          --         --            --         (344)
Unrealized losses on securities designated
   as available for sale, net of tax              --          --           --           --         --        (1,213)      (1,213)
                                              ------     -------      -------      -------    -------       -------      -------
Balance at December 31, 2003                   3,752      25,713       (2,750)          --      6,048          (249)      32,514
Net earnings                                      --          --           --           --      3,233            --        3,233
Stock split in the form of a dividend            375          --           --           --       (375)           --           --
Cash paid in lieu of fractional
   shares on stock dividend                       --          --           --           --         (6)           --           (6)
Cash dividends - $0.43 per share                  --          --           --           --     (1,879)           --       (1,879)
Shares purchased for deferred
   compensation plan                              --         118         (118)          --         --            --           --
Purchases of treasury stock -
   shares at cost                                 --          --         (652)          --         --            --         (652)
Unrealized losses on securities designated
   as available for sale, net of tax              --          --           --           --         --          (386)        (386)
                                              ------     -------      -------      -------    -------       -------      -------
Balance at December 31, 2004                   4,127      25,831       (3,520)          --      7,021          (635)      32,824
Net earnings                                      --          --           --           --      3,293            --        3,293
Stock split in the form of a dividend            419          --           --           --       (419)           --           --
Cash paid in lieu of fractional
   shares on stock dividend                       --          --           --           --         (4)           --           (4)
Cash dividends - $0.48 per share                  --          --           --           --     (2,115)           --       (2,115)
Shares purchased for deferred
   compensation plan                              --         147         (147)          --         --            --           --
Shares distributed from deferred
   compensation plan                              --          (7)           7           --         --            --           --
Purchases of treasury stock-
   shares at cost                                 --          --         (614)          --         --            --         (614)
Shares acquired by ESOP                           --         364        3,053       (3,417)        --            --           --
Proceeds from the exercise of stock options       42         254           --           --         --            --          296
Issuance of shares to Dividend Reinvestment
   Plan                                           27         330           --           --         --            --          357
Unrealized losses on securities designated
   as available for sale, net of tax              --          --           --           --         --        (1,557)      (1,557)
                                              ------     -------      -------      -------    -------       -------      -------
Balance at December 31, 2005                  $4,615     $26,919      $(1,221)     $(3,417)   $ 7,776       $(2,192)     $32,480
                                              ======     =======      =======      =======    =======       =======      =======
</TABLE>

        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              33
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOW

              For the years ended December 31, 2005, 2004 and 2003
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                      2005       2004        2003
                                                                    --------   --------   ---------
<S>                                                                 <C>        <C>        <C>
Cash flows from operating activities:
   Net earnings                                                     $  3,293   $  3,233   $   3,639
   Adjustments to reconcile net earnings to net
      cash provided by operating activities:
      Depreciation and amortization                                      621        805         926
      Provision for loan losses                                          412        618         540
      Deferred taxes                                                     (49)        33         151
      Federal Home Loan Bank stock dividend                             (191)      (161)       (157)
      Tax benefit on options exercised                                  (150)        --          --
      Loss (gains) on sales or calls of securities                        52        (77)       (344)
      Amortization of securities, net                                    383        542         803
      Gain on sale of loans                                              (21)       (42)       (178)
      Gain on sale of premises and equipment                             (10)        --          --
      Increase in value of bank-owned life insurance                    (286)      (269)       (325)
      Amortization of mortgage servicing rights                           81         88         120
      Loss (gains) on sale of real estate owned                           (2)       (10)        (12)
      Net change in accrued interest receivable and other assets         (88)       412        (612)
      Net change in accrued expenses and other liabilities               (79)    (1,310)       (352)
                                                                    --------   --------   ---------
         Net cash provided by operating activities                     3,966      3,862       4,199
Cash flows used in investing activities:
   Securities available for sale:
      Sales                                                           15,899     33,936      37,734
      Maturities, prepayments and calls                               22,780     38,624      77,011
      Purchases                                                      (25,643)   (70,636)   (128,819)
   Securities held to maturity:
      Maturities, prepayments and calls                                  710      1,941         427
      Purchases                                                       (5,991)    (1,267)     (3,066)
   Net change in loans                                               (17,644)   (17,262)    (11,605)
   Proceeds from sale of real estate owned                               289        344         166
   Purchase of bank-owned life insurance                                (382)       (63)         --
   Purchases of premises and equipment                                  (484)      (391)       (127)
   Proceeds from disposal of premises and equipment                       44         --          --
                                                                    --------   --------   ---------
         Net cash used in investing activities                       (10,422)   (14,774)    (28,279)
Cash flows provided by (used in) financing activities:
   Net change in deposits                                              6,285     (3,896)      4,324
   Net change in FHLB advances and other borrowings                    4,549     16,539      19,921
   Issuance of subordinated debentures                                 4,000         --          --
   Cash dividends paid                                                (2,115)    (1,879)     (1,718)
   Cash paid in lieu of fractional shares in stock dividend               (4)        (6)         (5)
   Proceeds from issuance of shares to Dividend Reinvestment Plan        357         --          --
   Proceeds from exercise of stock options                               296         --          --
   Treasury stock purchases                                             (614)      (652)       (344)
   Treasury shares acquired by ESOP                                    3,417         --          --
   Funding of note receivable from ESOP                               (3,417)        --          --
                                                                    --------   --------   ---------
         Net cash provided by financing activities                    12,754     10,106      22,178
                                                                    --------   --------   ---------
Net increase (decrease) in cash and cash equivalents                   6,296       (806)     (1,902)
Cash and cash equivalents at beginning of year                         7,581      8,387      10,289
                                                                    --------   --------   ---------
Cash and cash equivalents at end of year                            $ 13,877   $  7,581   $   8,387
                                                                    ========   ========   =========
Supplemental disclosure of cash flow information:
   Interest paid on deposits and borrowings                         $  9,105   $  7,528   $   7,865
                                                                    ========   ========   =========
   Federal income taxes paid                                        $    942   $    735   $     802
                                                                    ========   ========   =========
Supplemental disclosure of noncash investing activities:
   Noncash transfer from loans to other real estate
      and repossessions                                             $    517   $    407   $     395
                                                                    ========   ========   =========
   Unrealized losses on securities designated as
      available for sale, net of related tax benefits               $ (1,557)  $   (386)  $  (1,213)
                                                                    ========   ========   =========
</TABLE>

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

ANNUAL REPORT 2005 UNITED BANCORP INC.


34

<PAGE>

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     1. Principles of Consolidation

     The consolidated financial statements include the accounts of United
     Bancorp, Inc. ("UNITED" or "the Company"), an Ohio corporation, and its
     wholly-owned subsidiaries, The Citizens Savings Bank of Martins Ferry, Ohio
     ("CITIZENS") and The Community Bank, Lancaster, Ohio ("COMMUNITY"),
     (collectively hereinafter "the Banks"). All intercompany transactions and
     balances have been eliminated in consolidation.

     2. Nature of Operations/Segments

     The Company's revenues, operating income, and assets are almost exclusively
     derived from banking. Accordingly, all of the Company's banking operations
     are considered by management to be aggregated in one reportable operating
     segment. Customers are mainly located in Athens, Belmont, Carroll,
     Fairfield, Harrison, Hocking, 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. Net interest income is affected by the relative
     amount of interest-earning assets and interest-bearing liabilities and the
     interest received or paid on these balances. The level of interest rates
     paid or received by the Company can be significantly influenced by a number
     of environmental factors, such as governmental monetary policy, that are
     outside of management's control.

     3. Use of Estimates

     The financial information presented herein has been prepared in accordance
     with accounting principles generally accepted in the United States of
     America ("U.S. GAAP") and general accounting practices within the financial
     services industry. In preparing consolidated financial statements in
     accordance with U.S. GAAP, management is required to make certain estimates
     and assumptions that affect the reported amounts of assets and liabilities
     and the disclosure of contingent assets and liabilities at the date of the
     consolidated financial statements and revenue and expenses during the
     reporting period. Actual results could differ from such estimates.

     4. Cash and Cash Equivalents

     Cash and cash equivalents include cash and due from banks, federal funds
     sold and interest-bearing deposits in other financial institutions with
     original maturities of 90 days or less.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              35

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     5. Securities

     The Company accounts for investment and mortgage-backed securities in
     accordance with Statement of Financial Accounting Standards ("SFAS") No.
     115, "Accounting for Certain Investments in Debt and Equity Securities."
     SFAS No. 115 requires that investments be categorized as held-to-maturity,
     trading or available for sale. Investments and mortgage-backed 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 available for sale are carried at fair value, with unrealized
     holding gains and losses reported in other comprehensive income, net of the
     related tax effects. Securities are classified as held to maturity or
     available for sale upon acquisition. 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 and
     calls are based on the amortized cost of the security sold using the
     specific identification method. Securities are written down to fair value
     when a decline in fair value is deemed other than temporary.

     6. 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 origination fees and
     costs, and the allowance for loan losses. Loans held for sale are reported
     at the lower of cost or market, determined in the aggregate. Interest
     income includes amortization of net deferred loan origination fees and
     costs over the loan term using the interest method. Interest income on
     mortgage and commercial loans is discontinued at the time the loan is 90
     days delinquent unless the credit is well secured and in process of
     collection. Consumer loans are typically charged-off no later than 120 days
     past due. In all cases, loans are placed on nonaccrual status or
     charged-off at an earlier date if collection of principal or interest is
     considered doubtful. All interest accrued but not received for loans placed
     on nonaccrual are reversed against interest income. Interest received on
     such loans is accounted for on a cash-basis or cost-recovery method, until
     qualifying for a return of the loan to accrual status. Loans are returned
     to accrual status when all the principal and interest amounts contractually
     due are brought current and future payments are reasonably assured.

     7. Loan Servicing Rights

     Loan servicing rights are recognized as assets 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. At December 31, 2005
     and 2004, the fair value and carrying value of the Company's mortgage
     servicing rights totaled approximately $367,000 and $274,000, respectively.

ANNUAL REPORT 2005 UNITED BANCORP INC.


36
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     8. Allowance for Loan Losses

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

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

     At December 31, 2005 and 2004, the amount of the Company's impaired loans
     were not material to the consolidated financial statements.

     9. Premises and Equipment:

     Land is carried at cost. Premises and equipment are stated at cost less
     accumulated depreciation and include expenditures which extend the useful
     lives of existing assets. Maintenance, repairs and minor improvements are
     expensed as incurred. Buildings and related components are depreciated
     using the straight-line method with useful lives ranging from 5 to 39
     years. Furniture, fixtures and equipment are depreciated using the
     straight-line method with useful lives ranging from 3 to 5 years. An
     accelerated depreciation method is used for tax purposes. Premises and
     equipment are reviewed for impairment when events indicate the carrying
     amount may not be recoverable. As of December 31, 2005, there were no
     circumstances that indicated impairment of premises and equipment.

     10. Other Real Estate and Repossessions

     Assets acquired through or in lieu of foreclosure are initially recorded at
     the lower of the loan's unpaid principal balance (cost) or fair value when
     acquired. After acquisition, a valuation allowance reduces the reported
     amount to the lower of the initial cost or fair value less costs to sell.
     Expenses, gains and losses on disposition and changes in the valuation
     allowance are reported in other expenses as incurred.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              37

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     11. Bank Owned Life Insurance

     The Company has purchased life insurance policies on certain key
     executives. Bank-owned life insurance is recorded at its cash surrender
     value, or the amount that can be realized.

     12. Intangible Assets

     Intangible assets consist of core deposits arising from branch
     acquisitions. Such assets were recorded at fair value and are being
     amortized over an eight-year estimated life.

     13. Earnings Per Share

     Basic earnings per common share is computed based upon the weighted-average
     number of common shares outstanding during the year, less shares in the
     ESOP which are unallocated and not committed to be released. At December
     31, 2005, the ESOP held 322,319 unallocated shares which were not included
     in weighted-average common shares outstanding. Diluted earnings per common
     share include the dilutive effect of additional potential common shares
     issuable under the Company's stock option plans. The computation is as
     follows:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                  ------------------------------------
                                                     2005         2004         2003
                                                  ----------   ----------   ----------
<S>                                               <C>          <C>          <C>
                                                         (Dollars in thousands)
BASIC
   Net earnings                                   $    3,293   $    3,233   $    3,639
                                                  ==========   ==========   ==========
   Weighted average common shares outstanding      4,188,008    4,200,186    4,245,527
                                                  ==========   ==========   ==========
   Basic earnings per common share                $     0.79   $     0.77   $     0.86
                                                  ==========   ==========   ==========

DILUTED
   Net earnings                                   $    3,293   $    3,233   $    3,639
                                                  ==========   ==========   ==========
   Weighted average common shares outstanding
      for basic earnings per common share          4,188,008    4,200,186    4,245,527
   Add: Dilutive effects of assumed exercise of
      stock options                                    4,465        6,845       18,195
                                                  ----------   ----------   ----------
   Average shares and dilutive potential
      common shares                                4,192,473    4,207,031    4,263,722
                                                  ==========   ==========   ==========
Diluted earnings per common share                 $     0.79   $     0.77   $     0.85
                                                  ==========   ==========   ==========
</TABLE>

     Options to purchase 22,041 shares of common stock with a weighted-average
     price of $13.41 were outstanding at December 31, 2005. Options to purchase
     11,042 shares of common stock with a weighted-average exercise price of
     $14.45 were outstanding at December 31, 2004 and 2003. These options were
     excluded from the computation of common share equivalents for those
     respective years because the exercise prices were greater than the average
     market prices of common shares. Weighted average common shares outstanding
     have been restated to give effect to share distributions made in each of
     the three years ended December 31, 2005, 2004 and 2003.

ANNUAL REPORT 2005 UNITED BANCORP INC.


38

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     14. Stock Options and Benefit Plans

     The Company maintains a nonqualified stock option plan for directors and
     officers. The exercise price for options granted under this plan is 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 Company accounts for its stock option plan in accordance with SFAS No.
     123, "Accounting for Stock-Based Compensation," which contains a fair
     value-based method for valuing stock-based compensation that entities may
     use, which measures compensation cost at the grant date based on the fair
     value of the award. Compensation is then recognized over the service
     period, which is usually the vesting period. Alternatively, SFAS No. 123
     permits companies to continue to account for stock options and similar
     equity investments under Accounting Principles Board ("APB") Opinion No.
     25, "Accounting for Stock Issued to Employees." Entities that continue to
     account for stock options using APB No. 25 are required to make pro forma
     disclosures of net earnings and earnings per share as if the fair
     value-based method of accounting defined is SFAS No. 123 had been applied.

     The Company applies APB Opinion No. 25 and related Interpretations in
     accounting for it stock option plan. Accordingly, no compensation cost has
     been recognized for the plans. Had compensation cost for the Company's
     stock option plan been determined based on the fair value at the grant
     dates for awards under the plan consistent with the accounting method
     utilized in SFAS No. 123, the Company's net earnings and earnings per share
     would have been reported at the pro-forma amounts indicated in the table
     below.

<TABLE>
<CAPTION>
                                                             2005         2004         2003
                                                            ------       ------       ------
<S>                                                         <C>          <C>          <C>
                                                                 (Dollars in thousands)
NET EARNINGS         As reported                            $3,293       $3,233       $3,639
                     Stock-based compensation, net of tax       (6)         (32)         (32)
                                                            ------       ------       ------
                     Pro-forma                              $3,287       $3,201       $3,607
                                                            ======       ======       ======

EARNINGS PER SHARE
   BASIC             As reported                            $  .79       $  .77       $  .86
                     Stock-based compensation, net of tax     (.01)        (.01)        (.01)
                                                            ------       ------       ------
                     Pro-forma                              $  .78       $  .76       $  .85
                                                            ======       ======       ======

   DILUTED           As reported                            $  .79       $  .77       $  .85
                     Stock-based compensation, net of tax     (.01)        (.01)        (.01)
                                                            ------       ------       ------
                     Pro-forma                              $  .78       $  .76       $  .84
                                                            ======       ======       ======
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              39
<PAGE>

                        December 31, 2005, 2004 and 2003
                             (Dollars in thousands)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     14. Stock Options and Benefit Plans (continued)

     All share and per share prices have been restated to reflect stock splits
     or dividends distributed or declared prior to issuance of the financial
     statements. The fair value of each option granted in 2005 has been
     estimated using the Black-Scholes options pricing model with the following
     assumptions; risk-free interest rate of 4.54%, dividend yield of 4.21% and
     expected volatility of 30.53%. No stock options were granted in 2004 or
     2003. Any option not exercised within the designated time frame will be
     forfeited. All options become immediately exercisable upon retirement,
     death, or 9 1/2 years after issuance, or in the event of a change in
     control of the Company.

     A summary of the status of the Company's stock option plan as of December
     31, 2005, 2004 and 2003 and changes for the years then ended is presented
     below:

<TABLE>
<CAPTION>
                                             2005                  2004                  2003
                                     -------------------   -------------------   -------------------
                                               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     112,250     $ 8.47    112,250     $8.47     112,250     $8.47
Granted                               64,172      11.33         --        --          --        --
Exercised                            (77,408)      7.21         --        --          --        --
Forfeited                             (4,405)      7.21         --        --          --        --
                                     -------     ------    -------     -----     -------     -----
Outstanding at end of year            94,609     $11.51    112,250     $8.42     112,250     $8.47
                                     =======     ======    =======     =====     =======     =====
Options exercisable at year-end        6,335     $10.71     88,125     $7.46       7,939     $8.70
                                     =======     ======    =======     =====     =======     =====
Weighted-average fair value of
   options granted during the year               $ 2.82                  N/A                   N/A
                                                 ======                =====                 =====
</TABLE>

The following table summarizes information about stock options outstanding at
December 31, 2005:

<TABLE>
<CAPTION>
             OPTIONS                    OPTIONS      REMAINING
EXERCISE   OUTSTANDING     DATE OF    EXERCISABLE   CONTRACTUAL
  PRICE    AT 12/31/05   EXPIRATION   AT 12/31/05       LIFE
-------    -----------   ----------   -----------   -----------
<S>        <C>           <C>          <C>           <C>
 $ 7.56        2,410      02/14/06       2,410         .2 years
  11.58       16,986      10/26/07       1,188        1.8 years
  10.70       36,122      05/15/15          --        9.3 years
  11.27       17,050      01/16/15          --        9.1 years
  12.82        8,494      12/01/06       2,379         .9 years
  13.50       11,000       8/23/14          --        8.7 years
  15.02        2,547      07/07/07         358        1.6 years
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


40

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     14. Stock Options and Benefit Plans (continued)

     The Company initiated an Employee Stock Ownership Plan ("ESOP") in November
     2005 that provided for the purchase of 322,319 treasury shares from the
     Company. No share allocations were awarded in 2005, and accordingly, no
     expense was recognized in 2005. The Company's loan to the ESOP will be
     repaid from contributions by the Banks over a 15 year period.

     A defined benefit pension plan covers all employees 21 or over, who have
     completed 1,000 hours of service during an anniversary year, measured from
     date of hire. 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 21 and have completed one year of service. Eligible
     employees may contribute up to $14,000 in 2005 and employees who have
     attained the age of 50 years or older may contribute an additional $4,000
     in 2005. 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.

     15. Income Taxes

     The Company accounts for federal income taxes pursuant to SFAS 109,
     "Accounting for Income Taxes." In accordance with SFAS No. 109, a deferred
     tax liability or deferred tax asset is computed by applying the current
     statutory tax rates to net taxable or deductible temporary differences
     between the tax basis of an asset or liability and its reported amount in
     the consolidated financial statements that will result in net taxable or
     deductible amounts in future periods. Deferred tax assets are recorded only
     to the extent that the amount of net deductible temporary differences or
     carryforward attributes may be utilized against current period earnings,
     carried back against prior years' earnings, offset against taxable
     temporary differences reversing in future periods, or utilized to the
     extent of management's estimate of future taxable income. A valuation
     allowance is provided for deferred tax assets to the extent that the value
     of net deductible temporary differences and carryforward attributes exceeds
     management's estimates of taxes payable on future taxable income. Deferred
     tax liabilities are provided on the total amount of net temporary
     differences taxable in the future.

     Deferred income taxes result from different methods of accounting for
     deferred loan origination fees and costs, Federal Home Loan Bank stock
     dividends, mortgage servicing rights, the loan loss allowance, amortization
     of intangibles, deferred compensation and pension expense. Additionally, a
     temporary difference is recognized for depreciation computed using
     accelerated methods for federal income tax purposes.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              41
<PAGE>

                        December 31, 2005, 2004 and 2003
                             (Dollars in thousands)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     16. 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, FHLB stock, accrued interest
     receivable and payable and variable-rate loans that reprice at intervals of
     less than six months. Fair values of securities 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 longer-term borrowings,
     including subordinated debentures, the fair value is estimated by a
     discounted cash flow analysis using current market rates for the estimated
     life and credit risk of the related borrowing. 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>
                                                        2005                  2004
                                                 -------------------   -------------------
                                                 CARRYING     FAIR     CARRYING     FAIR
                                                  AMOUNT      VALUE     AMOUNT      VALUE
                                                 --------   --------   --------   --------
<S>                                              <C>        <C>        <C>        <C>
Financial assets:
   Cash and cash equivalents                     $ 13,877   $ 13,877   $  7,581   $  7,581
   Securities available for sale                  121,946    121,946    137,816    137,816
   Securities held to maturity                     20,262     20,483     14,948     15,475
   FHLB stock                                       4,306      4,306      4,115      4,115
   Loans receivable, net                          229,107    227,480    212,452    208,322
   Accrued interest receivable                      2,363      2,363      2,253      2,253

Financial liabilities:
   Demand and savings deposits                   $146,543   $146,543   $138,960   $138,960
   Time deposits                                  160,372    162,848    161,670    165,427
   Federal funds purchased                         12,545     12,545      3,180      3,180
   Advances from the Federal Home Loan Bank        47,334     47,203     46,680     53,702
   Securities sold under agreements to
      repurchase                                    7,142      7,142     12,612     12,612
   Subordinated debentures                          4,000      4,000         --         --
   Accrued interest payable                           641        641        552        552
</TABLE>

     17. Advertising

     Advertising costs are expensed as incurred.

ANNUAL REPORT 2005 UNITED BANCORP INC.


42

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     18. Shareholders' Equity

     The Company has authorized 10,000,000 shares of $1.00 value common stock
     and 2,000,000 shares of preferred stock. Treasury stock is carried at cost.
     A 10% stock split in the form of a dividend was distributed during 2005,
     2004 and 2003 to all shareholders of record. All per share data has been
     retroactively adjusted for these stock splits.

     19. Dividend Restrictions

     Banking regulations require maintaining certain capital levels and may
     limit the dividends paid by the Banks to the Company or by the Company to
     shareholders. At December 31, 2005, these regulations pose no practical
     limit on the ability of the Banks or Company to pay dividends at recent
     historical levels.

     20. Loss Contingencies

     Loss contingencies, 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 are any loss
     contingencies, the resolution of which will have an adverse effect on the
     financial statements.

     21. Restrictions on Cash

     Cash on hand or on deposit with the Federal Reserve Bank of $3.0 million
     and $1.4 million was required to meet the regulatory reserve and clearing
     requirements at December 31, 2005 and 2004. These balances do not earn
     interest.

     22. Reclassifications

     Certain prior year amounts have been reclassified to conform to the
     December 31, 2005 presentation.

     23. Recent Accounting Pronouncements

     In December 2004, the Financial Accounting Standards Board (the "FASB")
     issued a revision to Statement of Financial Accounting Standards ("SFAS")
     No. 123 which establishes standards for the accounting for transactions in
     which an entity exchanges its equity instruments for goods or services,
     primarily on accounting for transactions in which an entity obtains
     employee services in share-based transactions. This Statement, SFAS No. 123
     (R), requires a public entity to measure the cost of employee services
     received in exchange for an award of equity instruments based on the
     grant-date fair value of the award, with limited exceptions. That cost will
     be recognized over the period during which an employee is required to
     provide services in exchange for the award - the requisite service period.
     No compensation cost is recognized for equity instruments for which
     employees do not render the requisite service. Employee share purchase
     plans will not result in recognition of compensation cost if certain
     conditions are met.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              43
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     23. Recent Accounting Pronouncements (continued)

     Initially, the cost of employee services received in exchange for an award
     of liability instruments will be measured based on current fair value; the
     fair value of that award will be remeasured subsequently at each reporting
     date through the settlement date. Changes in fair value during the
     requisite service period will be recognized as compensation cost over that
     period. The grant-date fair value of employee share options and similar
     instruments will be estimated using option-pricing models adjusted for the
     unique characteristics of those instruments (unless observable market
     prices for the same or similar instruments are available). If an equity
     award is modified after the grant date, incremental compensation cost will
     be recognized in an amount equal to the excess of the fair value of the
     modified award over the fair value of the original award immediately before
     the modification.

     Excess tax benefits, as defined by SFAS 123(R) will be recognized as an
     addition to additional paid in capital. Cash retained as a result of those
     excess tax benefits will be presented in the statement of cash flows as
     financing cash inflows. The write-off of deferred tax assets relating to
     unrealized tax benefits associated with recognized compensation cost will
     be recognized as income tax expense unless there are excess tax benefits
     from previous awards remaining in additional paid in capital to which it
     can be offset.

     Compensation cost is required to be recognized in the beginning of the
     annual period that begins after June 15, 2005, or January 1, 2006 as to the
     Company. Based on the vesting of existing grants, management believes the
     future effect on annual operations will approximate the economic effects
     set forth in the pro-forma stock option disclosure above.

NOTE B - SECURITIES

     The amortized cost, gross unrealized gains, gross unrealized losses and
     estimated fair values of securities available for sale at December 31 are
     summarized as follows:

<TABLE>
<CAPTION>
                                                     GROSS        GROSS     ESTIMATED
                                      AMORTIZED   UNREALIZED   UNREALIZED      FAIR
2005                                     COST        GAINS       LOSSES       VALUE
----                                  ---------   ----------   ----------   ---------
                                                       (In thousands)
<S>                                   <C>         <C>          <C>          <C>
U.S. Government agency obligations     $ 77,436       $--       $(1,953)     $ 75,483
State and municipal obligations           8,928        63          (222)        8,769
Mortgage-backed securities               36,599        --        (1,159)       35,440
Collateralized mortgage obligations       2,301        --           (71)        2,230
                                       --------       ---       -------      --------
Total debt securities                   125,264        63        (3,405)      121,922
Equity securities                             4        20            --            24
                                       --------       ---       -------      --------
                                       $125,268       $83       $(3,405)     $121,946
                                       ========       ===       =======      ========
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


44

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE B - SECURITIES (continued)

<TABLE>
<CAPTION>
                                                     GROSS        GROSS     ESTIMATED
                                      AMORTIZED   UNREALIZED   UNREALIZED      FAIR
2004                                     COST        GAINS       LOSSES       VALUE
----                                  ---------   ----------   ----------   ---------
                                                       (In thousands)
<S>                                   <C>         <C>          <C>          <C>
U.S. Government agency obligations     $ 74,845      $ 87       $  (740)     $ 74,192
State and municipal obligations          16,135       159          (177)       16,117
Mortgage-backed securities               42,978        32          (304)       42,706
Collateralized mortgage obligations       4,817        --           (34)        4,783
                                       --------      ----       -------      --------
Total debt securities                   138,775       278        (1,255)      137,798
Equity securities                             4        14            --            18
                                       --------      ----       -------      --------
                                       $138,779      $292       $(1,255)     $137,816
                                       ========      ====       =======      ========
</TABLE>

     The amortized cost, gross unrealized gains, gross unrealized losses and
     estimated fair value of securities held to maturity at December 31 are
     summarized as follows:

<TABLE>
<CAPTION>
                                                     GROSS        GROSS     ESTIMATED
                                      AMORTIZED   UNREALIZED   UNREALIZED      FAIR
                                         COST        GAINS       LOSSES       VALUE
                                      ---------   ----------   ----------   ---------
                                                       (In thousands)
<S>                                   <C>         <C>          <C>          <C>
2005
State and municipal obligations        $20,262       $343        $(122)      $20,483
                                       =======       ====        =====       =======
2004
State and municipal obligations        $14,948       $559        $ (32)      $15,475
                                       =======       ====        =====       =======
</TABLE>

     The amortized cost and fair value of debt securities by contractual
     maturity were as follows at December 31, 2005. Securities not due at a
     single maturity date, consisting of collateralized mortgage obligations and
     mortgage-backed securities, are shown separately.

<TABLE>
<CAPTION>
                                       AVAILABLE FOR SALE      HELD TO MATURITY
                                      --------------------   -------------------
                                      AMORTIZED     FAIR     AMORTIZED     FAIR
                                         COST       VALUE       COST      VALUE
                                      ---------   --------   ---------   -------
                                                    (In thousands)
<S>                                   <C>         <C>        <C>         <C>
Due in one year or less                $     45   $     45    $ 1,304    $ 1,319
Due from one to five years                7,783      7,657      2,359      2,467
Due from five to ten years               27,864     27,296      5,099      5,193
Due after ten years                      50,672     49,254     11,500     11,504
Mortgage-backed securities               36,599     35,440         --         --
Collateralized mortgage obligations       2,301      2,230         --         --
                                       --------   --------    -------    -------
                                       $125,264   $121,922    $20,262    $20,483
                                       ========   ========    =======    =======
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              45

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE B - SECURITIES (continued)

     Sales of available for sale securities were as follows:

<TABLE>
<CAPTION>
                                        YEAR ENDED DECEMBER 31,
                                      ---------------------------
                                        2005      2004      2003
                                      -------   -------   -------
                                             (In thousands)
<S>                                   <C>       <C>       <C>
Proceeds                              $15,899   $33,936   $37,734
Gross gains                                44       199       375
Gross losses                               96       122        31
</TABLE>

     The table below indicates the length of time individual securities have
     been in a continuous unrealized loss position at December 31, 2005 and
     2004:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 2005
                                        -------------------------------------------------------------------
                                         LESS THAN 12 MONTHS    12 MONTHS OR LONGER            TOTAL
                                        --------------------   --------------------   ---------------------
                                          FAIR    UNREALIZED     FAIR    UNREALIZED     FAIR     UNREALIZED
      DESCRIPTION OF SECURITIES          VALUE      LOSSES      VALUE      LOSSES       VALUE      LOSSES
      -------------------------         -------   ----------   -------   ----------   --------   ----------
                                                                   (In thousands)
<S>                                     <C>       <C>          <C>       <C>          <C>        <C>
U.S. Government agency obligations      $45,581    $  (885)    $25,903    $(1,068)    $ 71,484    $(1,953)
State and municipal obligations           7,996       (151)        734       (193)       8,730       (344)
Mortgage-backed securities               12,672       (338)     22,768       (821)      35,440     (1,159)
Collateralized mortgage obligations         485        (15)      1,745         (5)       2,230        (71)
                                        -------    -------     -------    -------     --------    -------
Total temporarily impaired securities   $66,734    $(1,389)    $51,150    $(2,138)    $117,884    $(3,527)
                                        =======    =======     =======    =======     ========    =======
</TABLE>

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 2004
                                        ------------------------------------------------------------------
                                         LESS THAN 12 MONTHS    12 MONTHS OR LONGER           TOTAL
                                        --------------------   --------------------   --------------------
                                          FAIR    UNREALIZED     FAIR    UNREALIZED     FAIR    UNREALIZED
      DESCRIPTION OF SECURITIES          VALUE      LOSSES      VALUE      LOSSES       VALUE     LOSSES
      -------------------------         -------   ----------   -------   ----------   -------   ----------
                                                                   (In thousands)
<S>                                     <C>       <C>          <C>       <C>          <C>       <C>
U.S. Government agency obligations      $32,324     $(252)     $12,561     $(487)     $44,885    $  (740)
State and municipal obligations           9,317      (138)       1,790       (71)      11,107       (208)
Mortgage-backed securities               31,559      (245)       3,799       (59)      35,358       (304)
Collateralized mortgage obligations       4,291       (26)         491        (8)       4,782        (34)
                                        -------     -----      -------     -----      -------    -------
Total temporarily impaired securities   $77,491     $(661)     $18,641     $(625)     $96,132    $(1,287)
                                        =======     =====      =======     =====      =======    =======
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


46
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE B - SECURITIES (continued)

     Management has the intent and ability to hold these securities for the
     foreseeable future, and the declines in the fair value are largely due to
     an increase in market interest rates. The fair value is expected to recover
     as the securities approach their respective maturity dates.

     Securities with an amortized cost of $97.2 million at December 31, 2005 and
     $66.0 million at December 31, 2004 were pledged to secure public deposits,
     repurchase agreements and other liabilities as required or permitted by
     law.

     At December 31, 2005 and 2004, there were no holdings of securities of any
     one issuer, other than the U. S. Government and its agencies, in an amount
     greater than 10% of shareholders' equity.

NOTE C - LOANS

     The composition of total loans at December 31 is as follows:

<TABLE>
<CAPTION>
                                  2005       2004
                                --------   --------
                                  (In thousands)
<S>                             <C>        <C>
Commercial loans                $ 32,675   $ 35,309
Commercial real estate loans      97,706     83,103
Residential real estate loans     57,746     55,062
Installment loans                 43,884     41,973
                                --------   --------
   Total loans                  $232,011   $215,447
                                ========   ========
</TABLE>

     The Company has sold whole loans and participating interests in loans in
     the secondary market, retaining servicing on the loans sold. Loans sold and
     serviced for others totaled approximately $30.4 million and $25.6 million
     at December 31, 2005 and 2004, respectively.

     In the normal course of business, the Company has made loans to directors
     and officers, their immediate families, affiliated corporations and other
     entities in which they own more than a 10% voting interest. In the opinion
     of management, such loans are consistent with sound banking practices and
     were originated within applicable regulatory lending limitations. Such
     loans are summarized below:

<TABLE>
<CAPTION>
                                        (In thousands)
                                        --------------
<S>                                     <C>
Aggregate balance - December 31, 2004       $ 4,647
New loans                                     2,517
Repayments                                   (1,806)
                                            -------
Aggregate balance - December 31, 2005       $ 5,358
                                            =======
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              47

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE C - LOANS (continued)

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

<TABLE>
<CAPTION>
                                      YEAR ENDED DECEMBER 31,
                                     ------------------------
                                      2005     2004     2003
                                     ------   ------   ------
                                          (In thousands)
<S>                                  <C>      <C>      <C>
Balance January 1,                   $2,995   $2,843   $2,971
Provision for loan losses               412      618      540
Loans charged-off                      (762)    (719)    (816)
Recoveries of previous charge-offs      259      253      148
                                     ------   ------   ------
Balance December 31,                 $2,904   $2,995   $2,843
                                     ======   ======   ======
</TABLE>

Nonperforming loans were as follows at December 31:

<TABLE>
<CAPTION>
                                                2005     2004
                                               ------   ------
                                                (In thousands)
<S>                                            <C>      <C>
Loans past due over 90 days still on accrual   $  417   $  500
Nonaccrual loans                               $1,144   $1,106
</TABLE>

     As of December 31, 2005 and 2004 and for each of the three years in the
     period ended December 31, 2005, individually impaired loans were not
     material to the consolidated financial statements.

NOTE D - PREMISES AND EQUIPMENT

     Premises and equipment is comprised of the following at December 31:

<TABLE>
<CAPTION>
                                                   2005       2004
                                                 --------   --------
                                                   (In thousands)
<S>                                              <C>        <C>
Buildings and land                               $ 10,174   $ 10,131
Furniture and equipment                             6,826      6,537
Leasehold improvements                                264        264
Computer software                                   1,231      1,206
                                                 --------   --------
                                                   18,495     18,138
Less accumulated depreciation and amortization    (10,890)   (10,378)
                                                 --------   --------
Premises and equipment, net                      $  7,605   $  7,760
                                                 ========   ========
</TABLE>

     Depreciation expense totaled $605,000, $770,000 and $896,000 for the years
     ended December 31, 2005, 2004 and 2003, respectively. CITIZENS leases an
     in-store retail branch from a corporation in which a director of the
     Company holds an interest. The current five year lease provides for renewal
     options through 2012. Rental expense was $26,000 for each of the years
     ended December 31, 2005, 2004 and 2003.

ANNUAL REPORT 2005 UNITED BANCORP INC.


48

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE E - TIME DEPOSITS

     The scheduled maturities of time deposits as of December 31, 2005 were as
     follows:

<TABLE>
<CAPTION>
               UNDER      OVER
             $100,000   $100,000    TOTALS
             --------   --------   --------
                     (In thousands)
<S>          <C>        <C>        <C>
2006         $ 54,777    $24,532   $ 79,309
2007           28,038      7,748     35,786
2008           28,975      4,996     33,971
2009            6,905      1,644      8,549
2010            1,727        203      1,930
Thereafter        827         --        827
             --------    -------   --------
             $121,249    $39,123   $160,372
             ========    =======   ========
</TABLE>

NOTE F - INTANGIBLE ASSETS

     Intangible assets at December 31, 2005 were as follows:

<TABLE>
<CAPTION>
                                                                GROSS
                                                              CARRYING    ACCUMULATED
                                                               AMOUNT    AMORTIZATION
                                                              --------   ------------
                                                                   (In thousands)
<S>                                                           <C>        <C>
Amortized intangible assets:
   Core deposit intangibles arising from branch acquisition     $116          $98
                                                                ====          ===
</TABLE>

     Amortization expense related to intangible assets totaled $18,000 for each
     of the years ended December 31, 2005, 2004 and 2003.

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              49
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE G - BORROWINGS

     At December 31, 2005 and 2004, the Company had daily repricing federal
     funds borrowings totaling $12.5 million and $3.2 million. The
     weighted-average interest rate for such borrowings was 4.50% and 1.75% at
     December 31, 2005 and 2004, respectively.

     At December 31 advances from the Federal Home Loan Bank were as follows:

<TABLE>
<CAPTION>
                                                        2005      2004
                                                      -------   -------
                                                        (In thousands)
<S>                                                   <C>       <C>
Maturities November 2007 through August 2025,
   primarily fixed at rates from 2.68% to 7.20%,
   averaging 5.54%                                    $12,334   $    --
Cash Management Lines of Credit, floating rate from
   2.52% to 4.42%, averaging 3.44%                     35,000        --
Maturities November 2005 through August 2023,
   primarily fixed at rates from 2.22% to 7.20%,
   averaging 4.41%                                         --    14,180
Cash Management Lines of Credit, floating rate from
   0.875% to 2.5%, averaging 1.90%                         --    32,500
                                                      -------   -------
                                                      $47,334   $46,680
                                                      =======   =======
</TABLE>

     At December 31, 2005, required annual principal payments on Federal Home
     Loan Bank advances and lines of credit were as follows:

<TABLE>
<S>          <C>
2006         $36,483
2007           6,515
2008             666
2009             602
2010             668
Thereafter     2,400
             -------
             $47,334
             =======
</TABLE>

     Additionally, as members of the Federal Home Loan Bank system at year-end
     2005, the Banks had the ability to obtain up to $6.7 million in additional
     borrowings based on securities pledged to the FHLB at December 31, 2005. At
     December 31, 2005, the Company and its Banks have approximately $51.5
     million one- to four-family residential real estate loans pledged as
     collateral for borrowings. Also at December 31, 2005, the Company and its
     Banks have cash management lines of credit with various correspondent banks
     (excluding FHLB cash management lines of credit) enabling further
     borrowings of up to $24.4 million.

ANNUAL REPORT 2005 UNITED BANCORP INC.


50

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE G - BORROWINGS (continued)

     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>
                                               2005      2004
                                             -------   -------
                                               (In thousands)
<S>                                          <C>       <C>
Average daily balance during the year        $10,129   $ 9,013
Average interest rate during the year           2.58%     0.96%
Maximum month-end balance during the year    $14,555   $12,632
Weighted average interest rate at year end      2.49%     0.92%
</TABLE>

     Securities with an approximate carrying value of $10.6 million and $13.9
     million at December 31, 2005 and 2004, respectively, were pledged as
     collateral for repurchase borrowings.

NOTE H - BENEFIT PLANS

     Information about the Company's defined benefit pension plan is as follows:

<TABLE>
<CAPTION>
                                                 2005     2004
                                                ------   ------
                                                 (In thousands)
<S>                                             <C>      <C>
Change in Projected Benefit Obligation (PBO):
   Beginning PBO                                $2,119   $ 2,925
   Service cost                                    249       222
   Interest cost                                   154       197
   Actuarial loss                                   38       212
   Benefits paid                                  (133)   (1,437)
                                                ------   -------
   Ending PBO                                    2,427     2,119
Changes in plan assets, at fair value
   Beginning plan assets                         2,156     3,191
   Actual return, net of expense                   109       170
   Employer contributions                          236       232
   Benefits paid                                  (133)   (1,437)
                                                ------   -------
   Ending plan assets                            2,368     2,156
   Funded status                                   (59)       37
   Unrecognized net actuarial loss                 543       504
   Unrecognized prior service cost                 121       136
                                                ------   -------
   Prepaid benefit cost                         $  605   $   677
                                                ======   =======
   Accumulated Benefit Obligation               $1,583   $ 1,276
                                                ======   =======
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              51

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE H - BENEFIT PLANS (continued)

     Pension expense is comprised of the following:

<TABLE>
<CAPTION>
                                                  2005    2004    2003
                                                 -----   -----   -----
                                                     (In thousands)
<S>                                              <C>     <C>     <C>
Service cost                                     $ 249   $ 222   $ 196
Interest cost                                      154     197     167
Expected return on assets                         (151)   (270)   (212)
Settlement loss                                     --     172      --
Amortization of prior service cost, transition
   liability, net loss, and plan amendments         57      42      15
                                                 -----   -----   -----
Pension expense                                  $ 309   $ 363   $ 166
                                                 =====   =====   =====
</TABLE>

     Weighted-average assumptions used to determine obligations at December 31
     are as follows:

<TABLE>
<CAPTION>
                                         2005   2004   2003
                                         ----   ----   ----
<S>                                      <C>    <C>    <C>
Discount rate on benefit obligation      7.00%  6.50%  6.50%
Rate of compensation increase            4.50%  3.50%  3.50%
</TABLE>

     Weighted-average assumptions used to determine net periodic benefit cost
     for the years ended December 31 are as follows:

<TABLE>
<CAPTION>
                                              2005   2004   2003
                                              ----   ----   ----
<S>                                           <C>    <C>    <C>
Discount rate                                 6.50%  6.50%  7.00%
Expected long-term rate of return on assets   7.00%  8.00%  8.00%
Rate of compensation increases                4.50%  3.50%  3.50%
</TABLE>

     The Company's defined benefit plan's weighted-average asset allocation at
     December 31, 2005 and 2004, by asset category are as follows:

<TABLE>
<CAPTION>
ASSET CATEGORIES     2005     2004
----------------    ------   ------
<S>                 <C>      <C>
Equity securities    60.25%   60.65%
Debt securities      37.52    37.39
Other                 2.23     1.96
                    ------   ------
                    100.00%  100.00%
                    ======   ======
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


52
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE H - BENEFIT PLANS (continued)

     The Plan's assets are invested in prototype investment strategy classified
     as a "balanced investment approach." This investment strategy permits the
     asset allocation to range between 40% to 60% for equities and fixed income
     investments. This model is further defined to permit the use of multiple
     equity mutual funds as deemed appropriate by the funds investment advisor.
     The types of mutual funds include, but are not limited to, large, mid or
     small capitalization funds to international mutual funds. The fixed income
     investment model is categorized as a core model using a single mutual fund
     with both long and shorter term focus. Depending on the needs of the plan
     benefits, certain levels of liquidity in the Plan will vary depending on
     scheduled benefit or lump sum distribution requirements. The remaining fund
     assets are subject to the previously mentioned investment guidelines. The
     actual rate of return on plan assets for 2005 was 2.52% for fixed income
     investments, 7.93% on equity investments and 5.49% on total plan assets.
     The actual rate of return and the expected long term rate of return using a
     balanced investment approach were used as the basis for the actuarial
     assumptions of 7% for the expected long term rate of return on assets in
     2005.

     The Company anticipates a cash contribution of approximately $225,000 in
     2006. During 2004, an unusually large amount of pension benefits were paid
     to retirees. Such payments gave rise to a settlement loss of approximately
     $172,000.

     The following benefit payments, which reflect expected future service, as
     appropriate, are expected to be paid:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING IN   RETIREMENT BENEFITS
---------------------   -------------------
<S>                     <C>
         2006                 $   29
         2007                     36
         2008                     48
         2009                     52
         2010                     68
     2011 - 2015               1,180
                              ------
                              $1,413
                              ======
</TABLE>

     In addition to the defined benefit plan, the Company has a 401(k) plan. The
     Company's 401(k) matching percentage was 50% of the employees' first 6% of
     contributions for 2005, 2004 and 2003. The cash contribution and related
     expense included in salaries and employee benefits totaled $80,000 $67,000
     and $81,000 for the years ended December 31, 2005, 2004 and 2003,
     respectively.

NOTE I - INCOME TAXES

     Income tax expense for the years ended December 31 was as follows:

<TABLE>
<CAPTION>
           2005   2004   2003
           ----   ----   ----
             (In thousands)
<S>        <C>    <C>    <C>
Current    $958   $831   $748
Deferred    (49)    33    151
           ----   ----   ----
           $909   $864   $899
           ====   ====   ====
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              53

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE I - INCOME TAXES (continued)

     The effective tax rate differs from the statutory federal income tax rate
     as follows:

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                                          ------------------------
                                                           2005     2004     2003
                                                          ------   ------   ------
                                                               (In thousands)
<S>                                                       <C>      <C>      <C>
Statutory rate                                              34.0%    34.0%    34.0%
Income taxes computed at the statutory federal tax rate   $1,429   $1,393   $1,543
Effect of:
   Tax exempt interest income                               (420)    (454)    (471)
   Bank-owned life insurance                                 (98)     (94)    (113)
   Other                                                      (2)      19      (60)
                                                          ------   ------   ------
                                                          $  909   $  864   $  899
                                                          ------   ------   ------
Effective tax rate                                          21.6%    21.1%    19.8%
                                                          ======   ======   ======
</TABLE>

     Deferred tax assets and deferred tax liabilities at December 31, are
     comprised of the following:

<TABLE>
<CAPTION>
                                                        2005      2004
                                                      -------   -------
                                                       (In thousands)
<S>                                                   <C>       <C>
Items giving rise to deferred tax assets:
   Allowance for loan losses                          $   818   $   849
   Core deposit intangible                                  6        12
   Deferred compensation                                  304       256
   Unrealized loss on securities available for sale     1,130       327
                                                      -------   -------
      Total deferred tax assets                         2,258     1,444

Items giving rise to deferred tax liabilities:
   Depreciation                                          (202)     (237)
   Deferred loan costs, net                              (119)     (106)
   Accretion                                              (28)      (20)
   FHLB stock dividends                                  (433)     (365)
   Mortgage servicing rights                             (124)      (93)
   Pension expense                                       (206)     (231)
                                                      -------   -------
      Total deferred tax liabilities                   (1,112)   (1,052)
                                                      -------   -------
      Net deferred tax asset                          $ 1,146   $   392
                                                      =======   =======
</TABLE>

     Management has not provided an allowance for any portion of the deferred
     tax assets based on the amount of taxes paid in the current year and
     available carryback periods.

ANNUAL REPORT 2005 UNITED BANCORP INC.


54

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE J - OFF-BALANCE SHEET ACTIVITIES

     The Company is party to financial instruments with off-balance sheet risk
     in the normal course of business to meet the financing needs of its
     customers. These financial instruments include loan commitments and standby
     letters of credit. The instruments involve, to varying degrees, elements of
     credit and interest rate risk in excess of the amount recognized in the
     financial statements.

     The Company's exposure to credit loss in the event of nonperformance by the
     other party to the financial instrument for loan commitments and standby
     letters of credit is represented by the contractual amount of those
     instruments. The Corporation uses the same credit policies in making
     commitments and conditional obligations as it does for on-balance sheet
     instruments. Since many of the loan commitments may expire without being
     drawn upon, the total commitment amount does not necessarily represent
     future cash requirements. The credit risk involved in issuing letters of
     credit is essentially the same as that involved in extending loan
     commitments to customers.

     The Company grants retail, commercial and commercial real estate loans to
     customers primarily located in northeastern, eastern and southeastern Ohio.
     The Company evaluates each customer's credit worthiness on a case-by-case
     basis. The amount of collateral obtained, if deemed necessary by the
     Company upon extension of credit, is based on management's credit
     evaluation of the customer. Collateral held varies but may include accounts
     receivable, inventory, property, plant and equipment, and income-producing
     commercial properties.

     Although the Company has a diversified loan portfolio, a substantial
     portion of the borrowers' ability to honor their contracts is dependent
     upon the economic conditions in each borrower's geographic location.

     A summary of the notional or contractual amounts of financial instruments
     with off-balance sheet risk at December 31 is as follows:

<TABLE>
<CAPTION>
                                        2005      2004
                                      -------   -------
                                       (In thousands)
<S>                                   <C>       <C>
Commitments to extend credit          $29,617   $26,879
Credit card and ready reserve lines     2,028     1,582
Standby letters of credit                 855       475
</TABLE>

NOTE K - CONCENTRATIONS

     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 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, 2005
     and 2004, total commercial and commercial real estate loans made up 56.2%
     and 55.0%, respectively of the loan portfolio with 4.9% and 6.1% of these
     loans secured by commercial real

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              55
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE K - CONCENTRATIONS (continued)

     assets including automobiles, which account for 71.0% and 68.5%,
     respectively, of the installment loan portfolio. Real estate loans comprise
     24.9% and 25.6% of the loan portfolio as of December 31, 2005 and 2004,
     respectively, and primarily include first mortgage loans on residential
     properties and home equity lines of credit. Included in cash and due from
     banks as of December 31, 2005 and 2004 is $4.8 million and $3.4 million
     respectively, on deposit with J.P. Morgan Chase Bank, NA, Detroit,
     Michigan. Also included in cash and cash equivalents as of December 31,
     2005 is $3.9 million of interest-bearing deposits with First Tennessee
     Bank.

     A significant percentage of COMMUNITY'S deposit growth over the past
     several years has emanated from its dealings with eight large depository
     customers. As of December 31, 2005, these depositors accounted for
     approximately 27.0% of COMMUNITY'S deposits and 7.1% of the Company's
     deposit totals. This concentration of deposits poses possible liquidity and
     earnings risk to the Company. However, in the opinion of management, the
     potential risks associated with such deposit concentration is more than
     offset at December 31, 2005 by the Company's available borrowing capacity.

NOTE L - SUBORDINATED DEBENTURES

     In 2005, a Delaware statutory business trust owned by the Company, United
     Bancorp Statutory Trust I ("Trust I" or the "Trust"), issued $4.0 million
     of mandatorily redeemable debt securities. The sale proceeds were utilized
     to purchase $4.0 million of the Company's subordinated debentures which
     mature in 2035. The Company's subordinated debentures are the sole asset of
     Trust I. Pursuant to FIN 46(R), the Company's investment in Trust I is not
     consolidated herein as the Company is not deemed the primary beneficiary of
     the Trust. However, the $4.0 million of mandatorily redeemable debt
     securities issued by the Trust are includible for regulatory purposes as a
     component of the Company's Tier 1 Capital. Interest on the Company's
     subordinated debentures are fixed at 6.25% and are payable quarterly.

NOTE M - REGULATORY CAPITAL

     The Company and Banks are subject to regulatory capital requirements
     administered by federal banking agencies. Capital adequacy guidelines and,
     additionally for banks, prompt correct action regulations involve
     quantitative measures of assets, 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 were categorized as well capitalized at December 31,
     2005. Management is not aware of any conditions subsequent to that date
     which would change the Company's or the Banks' capital category.

ANNUAL REPORT 2005 UNITED BANCORP INC.


56

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE M - REGULATORY CAPITAL (continued)

<TABLE>
<CAPTION>
                                                           AS OF DECEMBER 31, 2005
                                           -------------------------------------------------------
                                                                                      REQUIRED
                                                                                    TO BE "WELL-
                                                                                    CAPITALIZED"
                                                                  REQUIRED          UNDER PROMPT
                                                                FOR CAPITAL          CORRECTIVE
                                                ACTUAL       ADEQUACY PURPOSES   ACTION PROVISIONS
                                           ---------------   -----------------   -----------------
                                            AMOUNT   RATIO    AMOUNT    RATIO     AMOUNT    RATIO
                                           -------   -----   -------   -------   -------   -------
<S>                                        <C>       <C>     <C>       <C>       <C>       <C>
Total capital (to risk-weighted assets)
   Consolidated                            $41,534   16.3%   $20,338     8.0%        N/A     N/A
   Citizens                                 27,494   15.1     14,545     8.0     $18,182    10.0%
   Community                                 8,758   11.5      6,098     8.0       7,623    10.0

Tier 1 capital (to risk-weighted assets)
   Consolidated                            $38,620   15.2%   $10,169     4.0%        N/A     N/A
   Citizens                                 25,340   13.9      7,273     4.0     $10,909     6.0%
   Community                                 7,998   10.5      3,049     4.0       4,574     6.0

Tier 1 capital (to average assets)
   Consolidated                            $38,620    9.6%   $16,125     4.0%        N/A     N/A
   Citizens                                 25,340    9.0     11,314     4.0     $14,142     5.0%
   Community                                 7,998    6.7      4,812     4.0       6,016     5.0
</TABLE>

<TABLE>
<CAPTION>
                                                          AS OF DECEMBER 31, 2004
                                          -------------------------------------------------------
                                                                                     REQUIRED
                                                                                   TO BE "WELL-
                                                                                   CAPITALIZED"
                                                                 REQUIRED          UNDER PROMPT
                                                               FOR CAPITAL          CORRECTIVE
                                               ACTUAL       ADEQUACY PURPOSES   ACTION PROVISIONS
                                          ---------------   -----------------   -----------------
                                           AMOUNT   RATIO    AMOUNT    RATIO     AMOUNT    RATIO
                                          -------   -----   -------   -------   -------   -------
<S>                                       <C>       <C>     <C>       <C>       <C>       <C>
                                                           (Dollars in thousands)
Total capital (to risk weighted assets)
   Consolidated                           $36,197   15.0%   $19,275     8.0%        N/A     N/A
   Citizens                                25,561   15.4     13,250     8.0     $16,562    10.0%
   Community                                8,602   11.6      5,929     8.0       7,411    10.0

Tier 1 capital (to risk weighed assets)
   Consolidated                           $33,414   13.9%   $ 9,638     4.0%        N/A     N/A
   Citizens                                23,482   14.2      6,625     4.0     $ 9,937     6.0%
   Community                                7,898   10.7      2,964     4.0       4,446     6.0

Tier 1 capital (to average assets)
   Consolidated                           $33,414    8.6%   $15,591     4.0%        N/A     N/A
   Citizens                                23,482    8.8     10,663     4.0     $13,329     5.0%
   Community                                7,898    6.5      4,878     4.0       6,098     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. Generally, capital distributions are limited

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              57
<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE N - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS

     The following condensed financial statements summarize the financial
     position of the Company as of December 31, 2005 and 2004, and the results
     of its operations and its cash flows for each of the years ended December
     31, 2005, 2004 and 2003.

                              UNITED BANCORP, INC.
                        STATEMENTS OF FINANCIAL CONDITION
                                  December 31,
                                 (In thousands)

<TABLE>
<CAPTION>
                                                  2005      2004
                                                -------   -------
<S>                                             <C>       <C>
                  ASSETS
Cash and cash equivalents                       $ 4,245   $   741
Securities available for sale, at fair value          1         1
Investment in Banks                              31,198    30,790
Office premises                                     173       173
Other assets                                        965     1,214
                                                -------   -------
   Total assets                                 $36,582   $32,919
                                                =======   =======

     LIABILITIES AND SHAREHOLDERS' EQUITY
Subordinated debentures                         $ 4,000   $    --
Other liabilities                                   102        95
Shareholders' equity                             32,480    32,824
                                                -------   -------
   Total liabilities and shareholders' equity   $36,582   $32,919
                                                =======   =======
</TABLE>

                              UNITED BANCORP, INC.
                             STATEMENTS OF EARNINGS
                             Year ended December 31,
                                 (In thousands)

<TABLE>
<CAPTION>
                                                    2005     2004     2003
                                                   ------   ------   ------
<S>                                                <C>      <C>      <C>
Operating income
   Dividends from subsidiaries                     $1,952   $1,717   $2,866
   Interest and dividend income from securities
      and federal funds                                27       --       --
   Other income                                        30        7        7
                                                   ------   ------   ------
      Total operating income                        2,009    1,724    2,873

General, administrative and other expenses          1,030      873      529
                                                   ------   ------   ------
Income before income taxes and equity in
   undistributed net earnings                         979      851    2,344
Income tax benefits                                  (336)    (268)    (213)
                                                   ------   ------   ------
Income before equity in undistributed earnings
   of subsidiaries                                  1,315    1,119    2,557
Equity in undistributed earnings of subsidiaries    1,978    2,114    1,082
                                                   ------   ------   ------
Net earnings                                       $3,293   $3,233   $3,639
                                                   ======   ======   ======
</TABLE>

ANNUAL REPORT 2005 UNITED BANCORP INC.


58

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE N - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS (CONTINUED)

                              UNITED BANCORP, INC.
                            STATEMENTS OF CASH FLOWS
                             Year ended December 31,
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                 2005      2004      2003
                                                               -------   -------   -------
<S>                                                            <C>       <C>       <C>
Cash flows provided by operating activities:
   Net earnings                                                $ 3,293   $ 3,233   $ 3,639
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation and amortization                                  1         1         1
      Equity in undistributed earnings of subsidiaries          (1,978)   (2,114)   (1,083)
      Net change in other assets and other liabilities             259        60      (335)
      Amortization of intangibles                                    3        12        12
                                                               -------   -------   -------
         Net cash provided by operating activities               1,584     1,192     2,234
Cash flows provided by (used in) investing activities               --        --        --
Cash flows provided by (used in) financing activities:
   Dividends paid to shareholders                               (2,115)   (1,879)   (1,718)
   Cash paid in lieu of fractional shares                           (4)       (6)       (6)
   Proceeds from issuance to Dividend Reinvestment Plan            357        --        --
   Proceeds from exercise of stock options                         296        --        --
   Proceeds from issuance of subordinated debentures             4,000        --        --
   Acquisition of treasury shares by ESOP                        3,417        --        --
   Funding of note receivable to ESOP                           (3,417)       --        --
   Purchases of treasury stock                                    (614)     (652)     (344)
                                                               -------   -------   -------
         Net cash provided by (used in) financing activities     1,919    (2,537)   (2,068)
                                                               -------   -------   -------
Net increase (decrease) in cash and cash equivalents             3,504    (1,345)      166
Cash and cash equivalents at beginning of year                     741     2,086     1,920
                                                               -------   -------   -------
Cash and cash equivalents at end of year                       $ 4,245   $   741   $ 2,086
                                                               =======   =======   =======
</TABLE>

                                          ANNUAL REPORT 2005 UNITED BANCORP INC.


                                                                              59

<PAGE>

                        December 31, 2005, 2004 and 2003

NOTE O - QUARTERLY FINANCIAL DATA (UNAUDITED)

     The following table summarizes the Company's quarterly results of
     operations for the years ended December 31, 2005 and 2004.

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                            ---------------------------------------------------
                                            MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                            ---------   --------   -------------   ------------
                                                               (In thousands)
<S>                                         <C>         <C>        <C>             <C>
2005:

Total interest income                         $5,223     $5,445        $5,658         $5,855
Total interest expense                         1,974      2,161         2,404          2,607
                                              ------     ------        ------         ------
Net interest income                            3,249      3,284         3,254          3,248
Provision for losses on loans                    144        116            68             84
Other income                                     566        589           574            613
General, administrative and other expense      2,620      2,640         2,664          2,839
                                              ------     ------        ------         ------
Earnings before income taxes                   1,051      1,117         1,096            938
Federal income taxes                             230        237           268            174
                                              ------     ------        ------         ------
Net earnings                                  $  821     $  880        $  828         $  764
                                              ======     ======        ======         ======
Earnings per share
   Basic                                      $ 0.20     $ 0.21        $ 0.20         $ 0.18
                                              ======     ======        ======         ======
   Diluted                                    $ 0.20     $ 0.21        $ 0.20         $ 0.18
                                              ======     ======        ======         ======
</TABLE>

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                            ---------------------------------------------------
                                            MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                            ---------   --------   -------------   ------------
                                                               (In thousands)
<S>                                         <C>         <C>        <C>             <C>
2004:

Total interest income                         $5,027     $5,096        $5,159         $5,225
Total interest expense                         1,882      1,862         1,851          1,944
                                              ------     ------        ------         ------
Net interest income                            3,145      3,234         3,308          3,281
Provision for losses on loans                    140        200           160            118
Other income                                     651        533           525            490
General, administrative and other expense      2,567      2,438         2,560          2,887
                                              ------     ------        ------         ------
Earnings before income taxes                   1,089      1,129         1,113            766
Federal income taxes                             233        255           215            161
                                              ------     ------        ------         ------
Net earnings                                  $  856     $  874        $  898         $  605
                                              ======     ======        ======         ======
Earnings per share
   Basic                                      $ 0.21     $ 0.21        $ 0.20         $ 0.15
                                              ======     ======        ======         ======
   Diluted                                    $ 0.21     $ 0.21        $ 0.20         $ 0.15
                                              ======     ======        ======         ======
</TABLE>

     The earnings per share data has been adjusted to account for the 10% stock
     split in the form of a dividend paid in 2005 and 2004.

ANNUAL REPORT 2005 UNITED BANCORP INC.


60

<PAGE>

                               DECADE OF PROGRESS
                                    Unaudited

<TABLE>
<CAPTION>
(as originally reported) (1)                   1995          1996          1997          1998          1999          2000
                                           ------------  ------------  ------------  ------------  ------------  ------------
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
Interest and dividend income               $ 14,351,522  $ 15,006,091  $ 16,205,162  $ 21,126,421  $ 21,638,690  $ 23,734,085
Interest expense                              6,575,486     6,747,357     7,346,629     9,657,844     9,844,827    12,336,669
                                           ------------  ------------  ------------  ------------  ------------  ------------
Net interest income                           7,776,036     8,258,734     8,858,533    11,468,577    11,793,863    11,397,416
Provision for loan losses                       465,000       455,400       444,000       797,957       726,806       587,000
                                           ------------  ------------  ------------  ------------  ------------  ------------
NET INTEREST INCOME AFTER PROVISION FOR
   LOAN LOSSES                                7,311,036     7,803,334     8,414,533    10,670,620    11,067,057    10,810,416
Noninterest income, including security
   gains/(losses)                               876,285       920,951     1,027,166     1,581,139     1,285,519     1,368,986
Noninterest expense                           5,174,452     5,289,273     5,654,659     8,007,689     8,189,260     8,711,655
                                           ------------  ------------  ------------  ------------  ------------  ------------
INCOME BEFORE INCOME TAXES                    3,012,869     3,435,012     3,787,040     4,244,070     4,163,316     3,467,747
Income tax expense                              768,577       851,023       940,472     1,089,091     1,003,062       880,772
                                           ------------  ------------  ------------  ------------  ------------  ------------
NET INCOME                                 $  2,244,292  $  2,583,989  $  2,846,568  $  3,154,979  $  3,160,254  $  2,586,975
                                           ============  ============  ============  ============  ============  ============

Total assets                               $191,199,526  $202,364,858  $211,742,313  $285,492,897  $298,764,079  $323,885,801
Deposits                                    166,604,359   171,512,241   175,791,296   229,110,372   235,539,865   267,552,875
Shareholders' equity                         18,451,873    20,016,011    21,924,638    27,320,749    25,297,973    28,679,087
Loans receivable, net                       120,907,269   130,637,621   137,308,856   161,187,833   177,406,092   193,707,099
Allowance for loan losses                     1,775,383     2,022,987     2,238,522     3,033,105     3,109,821     2,790,133
Net charge-offs                                 127,351       207,796       228,465       803,374       650,090       906,688
Full time employees (average equivalents)            83            84            86           112           135           136
Banking locations                                 Eight         Eight          Nine      Thirteen     Seventeen     Seventeen

Earnings per common share - Basic (2)      $       0.58  $       0.67  $       0.74  $       0.69  $       0.69  $       0.57
Earnings per common share - Diluted (2)            0.58          0.67          0.73          0.67          0.69          0.57
Dividends per share (2)                            0.21          0.22          0.25          0.29          0.33          0.34
Book value per share (2)                           4.81          5.21          5.72          5.96          5.53          6.35
Market value range per share (2)             6.15-10.33    7.06-11.53    9.00-15.96   10.93-17.34    8.19-15.92     5.14-9.64

Cash dividends paid                        $    776,136  $    876,153  $    988,820  $  1,254,340  $  1,477,686  $  1,549,657
Return on average assets (ROA)                     1.18%         1.32%         1.38%         1.17%         1.09%         0.83%
Return on average equity (ROE)                    12.85%        13.49%        13.56%        11.80%        11.94%         9.88%

<CAPTION>
(as originally reported) (1)                   2001          2002          2003          2004          2005
                                           ------------  ------------  ------------  ------------  ------------
<S>                                        <C>           <C>           <C>           <C>           <C>
Interest and dividend income               $ 24,595,769  $ 22,095,682  $ 20,720,464  $ 20,506,914  $ 22,181,071
Interest expense                             12,348,548     9,328,867     7,837,463     7,538,572     9,146,249
                                           ------------  ------------  ------------  ------------  ------------
Net interest income                          12,247,221    12,766,815    12,883,001    12,968,342    13,034,822
Provision for loan losses                       780,000       630,000       540,000       618,000       412,000
                                           ------------  ------------  ------------  ------------  ------------
NET INTEREST INCOME AFTER PROVISION FOR
   LOAN LOSSES                               11,467,221    12,136,815    12,343,001    12,350,342    12,622,822
Noninterest income, including security
   gains/(losses)                             1,606,046     2,059,173     2,611,566     2,199,020     2,341,826
Noninterest expense                           9,382,984     9,989,172    10,415,947    10,452,666    10,763,473
                                           ------------  ------------  ------------  ------------  ------------
INCOME BEFORE INCOME TAXES                    3,690,283     4,206,816     4,538,620     4,096,696     4,201,175
Income tax expense                              934,696       986,653       899,229       863,799       908,647
                                           ------------  ------------  ------------  ------------  ------------
NET INCOME                                 $  2,755,587  $  3,220,163  $  3,639,391  $  3,232,897  $  3,292,528
                                           ============  ============  ============  ============  ============

Total assets                               $341,317,195  $361,711,069  $385,522,969  $397,521,584  $411,932,779
Deposits                                    283,375,923   300,201,533   304,525,997   300,629,543   306,914,758
Shareholders' equity                         30,474,195    32,154,862    32,514,459    32,824,111    32,479,697
Loans receivable, net                       180,460,538   184,916,798   195,765,090   212,451,448   229,106,682
Allowance for loan losses                     2,879,065     2,971,116     2,843,484     2,995,422     2,904,447
Net charge-offs                                 691,068       537,949       667,632       466,062       502,833
Full time employees (average equivalents)           130           130           133           135           132
Banking locations                             Seventeen     Seventeen     Seventeen     Seventeen     Seventeen

Earnings per common share - Basic (2)      $       0.62  $       0.75  $       0.85  $       0.77  $       0.79
Earnings per common share - Diluted (2)            0.62          0.75          0.85          0.77          0.79
Dividends per share (2)                            0.36          0.37          0.39          0.43          0.48
Book value per share (2)                           6.92          7.46          8.52          7.87          7.77
Market value range per share (2)              6.61-9.92    8.68-10.60    9.95-15.11   10.47-15.06   10.11-14.09

Cash dividends paid                        $  1,590,220  $  1,647,670  $  1,717,838  $  1,878,788  $  2,114,723
Return on average assets (ROA)                     0.82%         0.94%         0.97%         0.83%         0.82%
Return on average equity (ROE)                     9.13%        10.34%        11.40%         9.91%        10.01%
</TABLE>

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

(2)  All years restated for common share dividends and distributions.

ANNUAL REPORT 2005 UNITED BANCORP INC.
<PAGE>

                          (UNITED BANCORP, INC. LOGO)

                              UNITED BANCORP, INC.
                               Martins Ferry, OH

                             www.unitedbancorp.com