Exhibit 99.2
United Bancshares, Inc.
Quarterly Report
December 31, 2020
Shareholders, Clients and Team Members:
Despite the unprecedented operating environment, I am pleased to report that as a result of the efforts of our team members your Company had another successful year. In addition to reporting income before taxes of approximately $16.7 million, return on average tangible equity of 18.53% and return on average assets of 1.42%, all noticeable increases from previous years, your Company also repaid $50 million in FHLB advances, allocated a $6.2 million provision to its reserve for loan losses, and provided more than $125 million in funding to over 1,600 organizations through the Paycheck Protection Program.
Your Company posted record profits for the second consecutive year. Improved year over year results in gain on loan sales ($15.1 million), Paycheck Protection Program loan origination fees ($2.4 million) and decreased deposit interest expense ($2.4 million), were more than sufficient to offset the increased costs of FHLB prepayment penalties ($1 million), non-interest expenses ($6.0 million), and provision for loan losses ($5.7 million). Additionally, the Company maintained better than peer credit quality metrics.
We are also very pleased with the results of the Company’s expansion into Paulding County during the third quarter of 2020. The Company experienced better than expected growth in deposits and loans and we expect to have our permanent location renovated by the end of 2021. We also implemented a new technology in that market by establishing the Company’s first Interactive Teller Machine (ITM). The ITM allows clients to connect virtually with tellers from their local retail location to conduct most transactions. Our future strategic plans will include further deployment of this technology.
The continued accomplishments of your Company is the undeniable result of the ongoing efforts of the Company’s dedicated team members and Board of Directors in implementing our Strategic Plan. Their efforts and our strong corporate values of respect for and accountability to our shareholders, clients, colleagues, and communities are the foundation for the continued success of your Company. Thank you for your ongoing support and the trust you have placed in us.
Respectfully,
Brian D. Young
President and CEO
United Bancshares, Inc.
and Subsidiaries
Financial Information (unaudited) | Year ended December 31, 2020 | Year ended December 31, 2019 | ||||||
(dollars in thousands, except per share data) | ||||||||
Condensed Statement of Income | ||||||||
Interest income | $ | 40,030 | $ | 37,819 | ||||
Interest expense | 6,988 | 8,924 | ||||||
Net interest income | 33,042 | 28,895 | ||||||
Provision for loan losses | 6,200 | 550 | ||||||
Net interest income after provision for loan losses | 26,842 | 28,345 | ||||||
Non-interest income | 27,000 | 15,048 | ||||||
Non-interest expenses | 37,165 | 31,117 | ||||||
Income before income taxes | 16,677 | 12,276 | ||||||
Provision for income taxes | 2,922 | 1,615 | ||||||
Net income | $ | 13,755 | $ | 10,661 | ||||
Average common shares outstanding (basic) | 3,270,996 | 3,270,878 | ||||||
PER COMMON SHARE | ||||||||
Net income | $ | 4.21 | $ | 3.26 | ||||
Book value | $ | 34.11 | $ | 29.00 | ||||
Tangible book value (non-GAAP)* | $ | 25.17 | $ | 20.00 | ||||
Closing price | $ | 25.44 | $ | 22.71 | ||||
FINANCIAL RATIOS | ||||||||
Return on average assets | 1.42 | % | 1.24 | % | ||||
Return on average tangible equity (non-GAAP)* | 18.53 | % | 18.49 | % | ||||
Net interest margin, tax equivalent (non-GAAP)* | 3.92 | % | 3.76 | % | ||||
Efficiency ratio (non-GAAP)* | 61.29 | % | 70.03 | % | ||||
Loans (including held for sale) to deposits | 77.83 | % | 83.68 | % |
PERIOD END BALANCES
As of December 31, 2020 | As of December 31, 2019 | |||||||
Assets | $ | 978,532 | $ | 880,014 | ||||
Loans, gross | $ | 634,103 | $ | 576,424 | ||||
Deposits | $ | 838,378 | $ | 707,134 | ||||
Shareholders' equity | $ | 111,599 | $ | 94,781 | ||||
Common shares outstanding | 3,271,984 | 3,268,095 |
* Some of the financial measures included in this press release are not measures of financial performance recognized by U.S. Generally Accepted Accounting Principles, or GAAP. These non-GAAP financial measures include tangible book value, return on average tangible equity, net interest margin (tax-equivalent), and the efficiency ratio. Management uses these non-GAAP financial measures in its analysis of its performance, and believes financial analysts and investors frequently use these measures, and other similar measures, to evaluate capital adequacy. Reconciliations of non-GAAP disclosures used in this press release to the comparable GAAP measures are provided in the accompanying table. Management, as well as regulators, financial analysts and other investors may use these measures in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions.
These non-GAAP financial measures should not be considered in isolation or as a substitute for total shareholders’ equity, total assets, book value per share, return on average assets, return on average equity, or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP financial measures may differ from that of other companies reporting measures with similar names.
United Bancshares, Inc.
and Subsidiaries
Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited)
(dollars and shares in thousands, except per share data)
Shareholders' Equity to Tangible Equity |
December 31, 2020 |
December 31, 2019 | ||||||
Shareholders' equity | $ | 111,599 | $ | 94,781 | ||||
Less goodwill and other intangibles | 29,259 | 29,410 | ||||||
Tangible common equity | $ | 82,340 | $ | 65,371 | ||||
Average Shareholders' equity | $ | 103,547 | $ | 87,132 | ||||
Less average goodwill and other intangibles | 29,329 | 29,484 | ||||||
Average tangible common equity | $ | 74,218 | $ | 57,648 | ||||
Tangible Book Value Per Common Share | ||||||||
Tangible common equity (a) | $ | 82,340 | $ | 65,371 | ||||
Total common shares issued and outstanding (b) | 3,271,984 | 3,268,095 | ||||||
Tangible book value per common share (a)/(b) | $ | 25.17 | $ | 20.00 | ||||
Return on Average Tangible Equity | ||||||||
Net income (c) | $ | 13,755 | $ | 10,661 | ||||
Average tangible common equity (d) | $ | 74,218 | $ | 57,648 | ||||
Return on average tangible common equity (c/d) | 18.53 | % | 18.49 | % | ||||
Net Interest Margin, Tax-Equivalent | ||||||||
Net interest income | $ | 33,042 | $ | 28,895 | ||||
Tax-equivalent adjustment | 598 | 489 | ||||||
Tax-equivalent net interest income (e) | $ | 33,640 | $ | 29,384 | ||||
Average earning assets (f) | $ | 857,179 | $ | 781,645 | ||||
Net interest margin, tax-equivalent (e)/(f) | 3.92 | % | 3.76 | % | ||||
Efficiency Ratio, Tax-Equivalent | ||||||||
Non-interest expense (g) | $ | 37,165 | $ | 31,117 | ||||
Tax-equivalent net interest income | 33,640 | 29,384 | ||||||
Non-interest income | 27,000 | 15,048 | ||||||
Total revenue (h) | $ | 60,640 | $ | 44,432 | ||||
Efficiency ratio (g)/(h) | 61.29 | % | 70.03 | % |
UNITED BANCSHARES, INC.
DIRECTORS Robert L. Benroth Herbert H. Huffman H. Edward Rigel David P. Roach |
Daniel W. Schutt – Chairman R. Steven Unverferth Brian D. Young |
OFFICERS
Brian D. Young - President/CEO
Heather M. Oatman - Secretary
Stacy A. Cox – Chief Financial Officer
THE UNION BANK COMPANY
DIRECTORS
Robert L. Benroth Anthony M.V. Eramo Herbert H. Huffman Kevin L. Lammon William R. Perry | H. Edward Rigel David P. Roach Carol R. Russell Daniel W. Schutt R. Steven Unverferth |
Brian D. Young - Chairman/President/CEO |
INVESTOR MATERIALS:
United Bancshares, Inc. has traded its common stock on the NASDAQ Markets Exchange under the symbol “UBOH” since March 2001. Annual and quarterly shareholder reports, regulatory filings, press releases, and articles about United Bancshares, Inc. are available in the Shareholder Information section of our website www.theubank.com or by calling 1-800-837-8111.
Locations
1300 N. Main St.
Bowling Green, OH 43402
419-353-6088
100 S. High St.
Columbus Grove, OH 45830
419-659-2141
101 Progressive Dr.
Columbus Grove, OH 45830
419-659-4250
30 Coal Bend
Delaware, OH 43015
740-549-3400
114 E. 3rd St.
Delphos, OH 45833
419-692-2010
1500 Bright Rd.
Findlay, OH 45840
419-424-1400
461 Beecher Road
Gahanna, OH 43230
614-269-4400
230 W. Madison St.
Gibsonburg, OH 43431
419-637-2124
110 E. North St.
Kalida, OH 45853
419-532-3366
318 S. Belmore St.
Leipsic, OH 45856
419-943-2171
1410 Bellefontaine Ave.
Lima, OH 45804
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3211 Elida Rd.
Lima, OH 45805
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701 Shawnee Rd.
Lima, OH 45805
419-228-2114
111 S. Main St.
Marion, OH 43302
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220 Richland Rd.
Marion, OH 43302
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245 W. Main St.
Ottawa, OH 45875
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103 E. Perry St.
Paulding, OH 45879
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Pemberville, OH 43450
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2660 US Hwy 224, Ste. 3
Plymouth, OH 44865
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468 Polaris Parkway
Westerville, OH 43082
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