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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________to___________
Commission File Number 333-49729
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
UnionBancorp, Inc. 401(k) Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
UnionBancorp, Inc.
321 West Main Street
Ottawa, Illinois 61350
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REQUIRED INFORMATION
The following financial statements and schedules of the UnionBancorp,
Inc. 401(k) Profit Sharing Plan (the "Plan"), prepared in accordance with the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), are filed
herewith. Crowe Chizek and Company LLC, the current independent auditors for the
Plan, audited the financial statements and schedules of the Plan as of and for
the fiscal years ended December 31, 2004 and 2003. The consent of Crowe Chizek
and Company LLC is attached as Exhibit 23.1 to this Form 11-K.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
Ottawa, Illinois
FINANCIAL STATEMENTS
December 31, 2004 and 2003
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
Ottawa, Illinois
FINANCIAL STATEMENTS
December 31, 2004 and 2003
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.................... 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS....................... 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS............. 3
NOTES TO FINANCIAL STATEMENTS......................................... 4
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)....... 9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrator of
UnionBancorp, Inc. 401(k) Profit Sharing Plan
Ottawa, Illinois
We have audited the accompanying statement of net assets available for benefits
of the UnionBancorp, Inc. 401(k) Profit Sharing Plan (the Plan) as of December
31, 2004 and 2003, and the related statement of changes in net assets available
for benefits for the year ended December 31, 2004. These financial statements
are the responsibility of the Plan's Administrator. Our responsibility is to
express an opinion on these 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2004 and 2003, and the changes in net assets available for benefits
for the year ended December 31, 2004, in conformity with U.S. generally accepted
accounting principles
Our audit was conducted for the purpose of forming an opinion on the basic 2004
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic 2004 financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic
2004 financial statements taken as a whole.
Crowe Chizek and Company LLC
Oak Brook, Illinois
June 22, 2005
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2004 and 2003
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2004 2003
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ASSETS
Investments (Note 4) $5,036,415 $4,807,925
Cash 2,174 740
Dividends receivable 10,880 --
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Total assets 5,049,469 4,808,665
LIABILITIES
Accrued expenses 9,441 --
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NET ASSETS AVAILABLE FOR BENEFITS $5,040,028 $4,808,665
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See accompanying notes to financial statements.
2.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2004
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Additions to net assets attributed to
Investment income
Net appreciation in fair value of investments (Note 4) $ 255,323
Interest 4,951
Dividends 64,537
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324,811
Contributions
Participant wage deferrals 652,746
Rollovers 111,225
Employer 341,187
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1,105,158
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Total additions 1,429,969
Deductions from net assets attributed to
Benefits paid to participants 1,151,347
Administrative expenses 47,259
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Total deductions 1,198,606
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Net increase 231,363
Net assets available for plan benefits
Beginning of year 4,808,665
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End of year $5,040,028
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See accompanying notes to financial statements.
3.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
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NOTE 1 - DESCRIPTION OF THE PLAN
The following brief description of the UnionBancorp, Inc. 401(k) Profit Sharing
Plan (the Plan) is provided for general information purposes only. Participants
should refer to the plan agreement for a more complete description of the Plan's
provisions.
General: The Plan is a defined contribution plan covering employees of
UnionBancorp, Inc. (the Company) and certain of its subsidiaries, including
UnionBank; UnionBank/West; UnionBank/Central; UnionBank/Northwest; and
UnionFinancial Services and Trust Company. The Plan was established effective
January 1, 1998 and covers all employees who have completed six months of
service and are age 20 1/2 or older. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
The administrator of the Plan is UnionBancorp, Inc. (the Administrator) and the
trustee of the Plan is UnionBank (the Trustee), which is a subsidiary of the
Administrator. The Trustee is the custodian of the Plan's assets.
Contributions: Each year, participants may contribute up to the maximum allowed
under Internal Revenue Code Sections 402(g) and 415 of their annual
compensation. The Company can make a discretionary contribution, subject to
certain limitations under applicable federal income tax laws and regulations, on
an annual basis. The Company's discretionary contribution is allocated to
participant accounts on the last day of the year based on the ratio of each
participant's eligible compensation for the year to total eligible compensation
for the year. The Company's discretionary matching contribution is allocated to
participant accounts on the last day of the year based on each participant's
voluntary contributions. The employer contributed 3% of eligible wages for the
2004 plan year.
Participant Accounts: Each participant's account is credited with that
employee's contributions and an allocation of plan earnings. Employer
contributions are allocated to participant accounts in proportion to employee
contributions or employee compensation, as provided in the plan document. Plan
earnings are allocated to participant accounts in proportion to the
participant's account balance to total account balances in each investment. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's account.
Upon termination of a participant, the portion of the employer contribution
account not vested will be forfeited and allocated to eligible participants as
of the last day of the plan year for which the terminated participant receives a
distribution.
Retirement, Death, and Disability: A participant is entitled to 100% of his or
her account balance upon attainment of early retirement age (55) and completion
of seven years of service or attainment of normal retirement age (65), death, or
disability.
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(Continued)
4.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
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NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
Vesting: Participants are immediately vested in their voluntary contributions
and any employer safe-harbor contributions plus actual earnings thereon. In the
event that the Company makes matching contributions, a participant would be 100%
vested after seven years of service. Vesting in the remainder of their account
is based on years of continuous service. A participant is 100% vested after
seven years of credited service in accordance with the table below.
Years of Service Percent Vested
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Less than three 0%
Three 20
Four 40
Five 60
Six 80
Seven 100
Payment of Benefits: Upon retirement, death, disability, or other termination of
employment with the Company, participants or designated beneficiaries may
receive distributions of their vested accounts in lump-sum amounts.
Loan Provisions: Participants may borrow up to 50% of their account balance up
to a maximum of $50,000. Loan transactions are treated as a transfer from the
investment fund to the participant notes fund. Loan terms range from one to five
years except for the purchase of a primary residence which may be for a
reasonable period of time. Loans are secured by the balance in the participant's
account and bear interest at a rate commensurate with the local prevailing rates
as determined quarterly by the Plan administrator. Interest rates on loans
outstanding at December 31, 2004 range from 5.0% to 10.5%. Principal and
interest are paid ratably through semi-monthly payroll deductions, and
repayments are reinvested into the participant's account according to the
current investment election.
Investment Options: Upon enrollment in the Plan, a participant may direct
contributions in the investment options made available by the Administrator. The
employee may elect to direct these contributions in multiples of 10%. Employer
contributions are allocated in the same percentages that the employee has
elected. The investment options are derived from a combination of various mutual
funds and a money market fund. Plan participants are allowed to reallocate funds
between investment options on a daily basis.
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(Continued)
5.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
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NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
Accounting Method: The Plan uses the accrual basis of accounting based on
accounting principles generally accepted in the United States of America.
Estimates: The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Investments: Investments in mutual funds are stated at quoted market prices. The
fair value of money market accounts is the amount payable on demand at the
reporting date. Investments in common stock are stated at fair value. The fair
value of common stock is determined by a quoted market price. Purchases and
sales of investments are accounted for on the trade date. Dividend income is
recorded on the ex-dividend date. Income from other investments is recorded as
earned. Participant loans are carried at their remaining balance, which
approximates fair value.
Risks and Uncertainties: The Plan provides for various investment options in
mutual funds and employer stock. The underlying investment securities are
exposed to various risks such as interest rate, market, and credit risks. Due to
the level of risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it is at
least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect the
amounts reported in the statement of net assets available for benefits and the
participants' individual account balances.
NOTE 3 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA and its related regulations. In the
event of the Plan's termination, participants will become 100% vested in their
accounts.
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(Continued)
6.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
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NOTE 4 - INVESTMENTS
The following table presents the fair value of plan investments as of December
31, 2004 and 2003. Investments that represent 5% or more of the Plan's net
assets are separately identified.
2004 2003
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Investments at fair value as determined by
quoted market prices
Money market funds
Federated Automated Cash Management Fund $ 920,736 $ 982,923
Mutual funds
Federated Kaufmann Fund 428,228 465,063
Federated Capital Appreciation Fund 397,295 367,979
Federated Growth Allocation Portfolio 330,078 392,117
Federated Mid Cap Fund 290,966 202,986
American Balanced Fund 444,994 --
Federated Managed Moderate Growth Portfolio -- 400,504
Federated Total Return Bond Fund -- 273,685
Common stock
UnionBancorp, Inc. common stock (21,001 and 23,201
shares at December 31, 2004 and 2003) 446,271 506,710
During the year ended December 31, 2004 the Plan's investments (including
investments bought, sold, and held during the year) appreciated (depreciated) in
fair value as follows:
Mutual funds $ (45,517)
Common stock 300,840
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Net change in fair value $ 255,323
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For the plan year-end December 31, 2004, the Plan's investments earned dividends
and interest of $64,537 and $4,951, respectively.
NOTE 5 - PARTIES-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under DOL regulations as any fiduciary of the
Plan, any party rendering service to the Plan, the employer, and certain others.
Fees in the amount of $34,342 and $12,917 were paid to UnionFinancial Services
and Trust Company and Federated for trustee and plan recordkeeping services,
respectively. Professional fees for the audit of the Plan and other
administrative costs of the Plan were paid by the Company. At December 31, 2004
and 2003, all plan assets were considered to be party-in-interest investments.
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(Continued)
7.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
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NOTE 6 - TERMINATED PARTICIPANTS
Included in net assets available for benefits are amounts allocated to
individuals who have elected to withdraw from the Plan but have not been paid as
of the Plan's year end. Amounts allocated to these participants were $130,062
and $316,242 at December 31, 2004 and 2003, respectively.
NOTE 7 - TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated November 19, 2001 that the Non-Standardized Profit Sharing Plan
(Prototype) upon which the Company's plan is based is designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan's
Administrator believes that the Plan is currently designed and being operated in
compliance with the applicable requirements of the IRC.
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(Continued)
8.
SUPPLEMENTAL SCHEDULE
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
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Name of Plan Sponsor: UnionBancorp, Inc.
Employer Identification Number: 36-3145350
Three Digit Plan Number: 002
(c)
Description of
Investment, Including
Maturity Date,
(b) Rate of Interest, (e)
Identity of Issuer, Borrower, Collateral, Par, (d) Current
(a) Lessor, or Similar Party or Maturity Value Cost** Value
--- ------------------------ ----------------- ---- -----
Money Market Funds
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* Federated Securities
Corporation Automated Cash Management Fund $ 920,736
* Federated Securities
Corporation Stock Liquidity Fund 36,622
Mutual Funds
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* Federated Securities
Corporation Growth Allocation Portfolio 330,078
* Federated Securities
Corporation Total Return Bond Fund 208,990
* Federated Securities
Corporation Managed Conservative Allocation Portfolio 69,835
* Federated Securities
Corporation Mini-Cap Fund 162,003
* Federated Securities
Corporation Mid-Cap Fund 290,966
* Federated Securities
Corporation Max-Cap Fund 181,247
* Federated Securities
Corporation Capital Appreciation Fund 397,295
* Federated Securities
Corporation Mid Cap Growth Strategies Fund 169,669
* Federated Securities
Corporation Kaufmann Fund 428,228
* Federated Securities
Corporation Stock Trust Fund 208,621
* Federated Securities
Corporation Communications Technology Fund 144,025
* Federated Securities
Corporation US Govt 2-5 Instl SS Fund 29,790
* American Funds Growth Fund of America 136,114
* American Funds Washington Mutual Inv 86,951
* American Funds Euro Pacific Growth 238,362
* American Funds American Balanced Fund 444,994
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UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
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Name of Plan Sponsor: UnionBancorp, Inc.
Employer Identification Number: 36-3145350
Three Digit Plan Number: 002
(c)
Description of
Investment, Including
Maturity Date,
(b) Rate of Interest, (e)
Identity of Issuer, Borrower, Collateral, Par, (d) Current
(a) Lessor, or Similar Party or Maturity Value Cost** Value
--- ------------------------ ----------------- ---- -----
Common Stock
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* UnionBancorp, Inc. 21,001 shares $ 446,271
Participant Loans
-----------------
* Participant loans Interest rates 5.0%-10.50% 105,618
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Total investments $ 5,036,415
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* Party-in-interest.
** Not applicable for participant-directed investments.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
UNIONBANCORP, INC.
401(k) PROFIT SHARING PLAN
Date: June 29, 2005 By: /s/ SCOTT A. YEOMAN
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Scott A. Yeoman
President and
Chief Executive Officer
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UNIONBANCORP, INC. 401(k) PROFIT SHARING PLAN
EXHIBIT INDEX
TO
ANNUAL REPORT ON FORM 11-K
Exhibit
No. Description
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23.1 Consent of Crowe Chizek and Company LLC
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