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UBOH United Bancshares Inc.

Filed: 21 Jan 21, 5:20pm

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

419-229-6500

 

3211 Elida Rd.

Lima, OH 45805

419-331-3211

 

701 Shawnee Rd.

Lima, OH 45805

419-228-2114

 

111 S. Main St.

Marion, OH 43302

740-387-2265

 

220 Richland Rd.

Marion, OH 43302

740-386-2171 

 

 

 

245 W. Main St.

Ottawa, OH 45875

419-523-2265

 

103 E. Perry St.

Paulding, OH 45879

419-567-1075

 

132 E. Front St.

Pemberville, OH 43450

419-287-3211

 

2660 US Hwy 224, Ste. 3

Plymouth, OH 44865

419-659-2141

 

468 Polaris Parkway

Westerville, OH 43082

614-269-4402