Perhaps the bank was trying to improve profitability for the first quarter. UFB Direct's parent company, Union Federal Bank of Indianapolis, is currently rated only 1 of 5 stars (weak) at Bankrate.com. For 2005 the bank recorded a net loss of almost $14 million. So it could be making an effort to improve profitability. Also, the bank is being acquired by Sky Financial Group (see article). This may be another factor.
With erratic interest rates, no ACH transfer system and a poor financial situation, there's currently not much to like about UFB Direct. They're going need to bring back the sign-up bonus and keep the interest rates steady and high if they want to keep and attract customers.
Note, UFB Direct does currently have some high yield short term CDs. The APY of the 3-month CD is 4.85% ($8K minimum). The APY of the 6-month CD is 4.90% for $8K minimum deposit and 5.00% for $50K minimum deposit.