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Posted on Thu, Feb 4, 2010 : 6 a.m.

United Bank & Trust consolidating under single charter as it narrows losses

By Paula Gardner

The parent company of United Bank & Trust Washtenaw narrowed its losses in the fourth quarter to $482,000 as it moves toward a spring consolidation of its two subsidiaries under a single charter.

United Bankcorp Inc. says the consolidation will retain all existing branches, including the five locations in Washtenaw County and the 11 operating under the United Bank & Trust name in both Lenawee and Monroe counties.

“The customer is really not going to see any difference,” said Bob Chapman, president and CEO.

However, the consolidation under the UBT charter will allow the Tecumseh-based bank to gain operating efficiencies, Chapman said.

It’s also a move increasingly seen among other U.S. banks as related entities combine under single charters to trim costs and consolidate balance sheets.

Locally, Ann Arbor Commerce Bank was one of 9 related banks that moved into the single Michigan Commerce Bank charter in 2009.

Pending changes at UBT include aligning software systems and eliminating parallel functions for public filings and other regulatory requirements, Chapman said. No layoffs will stem from the move, estimated to take effect by April 30.

The banks will retain community boards of directors, but corporate governance will come from the United Bancorp board, which will have representatives from both community banks.

The move will preserve capital, Chapman said, in a banking climate that faces ongoing challenges.

Among the most acute for UBT is eroding real estate values, leading to much of the $32.7 million in non-performing loans.

“The loan portfolios of the Banks continue to be affected by loans to a number of residential real estate developers struggling to meet their financial obligations,” according to a UBT news release. “Real estate construction and development loans have been particularly impacted by declines in housing activity and the resultant impact on real estate values, and have had a disproportionate impact on the credit quality of the Company.”

UBT’s consolidated net loss for 2009 was $8.83 million, including $482,000 for the fourth quarter.

Total revenues for the year rose 11.9 percent, including a 23.5 percent rise in the fourth quarter.

Meanwhile, the company’s provision for loan losses totaled $25.8 million in 2009, compared to $14.6 million in 2008.

Other points from the bank's annual report:

• Consolidated assets were $909.3 million, up 9.2 percent.

• Liquid funds reached $115.5 million, compared to $6.3 million at the end of 2008.

• Loans dropped to $658 million from $702 million.

• Deposits climbed 10.3 percent to $782.8 million.

UBT branches in Washtenaw County are located in Ann Arbor, Scio Township, Dexter, Manchester and Saline.

Paula Gardner is Business Director of She can be reached at 734-623-2586 or by email.

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