Exhibit 99.2
United Bancshares, Inc.
Quarterly Report
June 30, 2022
Shareholders, Clients and Team Members:
I am proud to report that, as a direct result of the ongoing efforts of the Company’s dedicated team members in implementing our Strategic Plan, your Company reported positive results for the first half of 2022. Those positive results include income before taxes of $5.2 million, return on average assets of 0.87%, and return on average equity of 12.7%. I am also pleased to report that after a review of your Company’s earnings, capital position, risk profile and strategic plan, your Board of Directors declared a $0.21 per share cash dividend, payable to shareholders on September 15, 2022. The dividend is approximately 32% of the reported net income for the second quarter of 2022.
As the result of record inflation, rapidly rising interest rates, and recession fears, the banking industry and our overall economy continues to face significant headwinds. These headwinds had a significant negative impact on your Company’s financial performance, including significant reductions in residential mortgage activity, funding costs pressure, and tepid loan demand. While these factors were formidable obstacles, the team was able to grow deposits and relationship loans at a steady pace and maintain a reasonable net interest margin at 3.52%.
The continued accomplishments of your Company are 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) | Six months ended June 30, 2022 | Six months ended June 30, 2021 | ||||||
(dollars in thousands, except per share data) | ||||||||
CONDENSED STATEMENTS OF INCOME | ||||||||
Interest income | $ | 18,018 | $ | 18,738 | ||||
Interest expense | 1,134 | 1,648 | ||||||
Net interest income | 16,884 | 17,090 | ||||||
Provision for loan losses | - | 300 | ||||||
Net interest income after provision for loan losses | 16,884 | 16,790 | ||||||
Non-interest income | 5,307 | 9,518 | ||||||
Non-interest expense | 16,963 | 18,179 | ||||||
Income before income taxes | 5,228 | 8,129 | ||||||
Provision for income taxes | 538 | 1,357 | ||||||
Net income | $ | 4,690 | $ | 6,772 | ||||
Average common shares outstanding (basic) | 3,278,731 | 3,278,347 | ||||||
PER COMMON SHARE | ||||||||
Net income | $ | 1.43 | $ | 2.07 | ||||
Book value | $ | 26.57 | $ | 35.29 | ||||
Tangible book value (non-GAAP)* | $ | 17.71 | $ | 26.39 | ||||
Closing price | $ | 28.46 | $ | 35.80 | ||||
FINANCIAL RATIOS | ||||||||
Return on average assets | 0.87 | % | 1.32 | % | ||||
Return on average tangible equity (non-GAAP)* | 12.66 | % | 16.21 | % | ||||
Net interest margin, tax equivalent (non-GAAP)* | 3.52 | % | 3.69 | % | ||||
Efficiency ratio (non-GAAP)* | 74.83 | % | 67.42 | % | ||||
Loans to deposits | 62.67 | % | 67.27 | % |
PERIOD END BALANCES
As of June 30, 2022 | As of December 31, 2021 | |||||||
Assets | $ | 1,110,640 | $ | 1,076,556 | ||||
Loans, gross | $ | 625,562 | $ | 609,559 | ||||
Deposits | $ | 998,191 | $ | 930,413 | ||||
Shareholders' equity | $ | 87,122 | $ | 119,095 | ||||
Common shares outstanding | 3,279,513 | 3,272,585 |
* 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 | June 30, 2022 | June 30, 2021 | ||||||
Shareholders' equity | $ | 87,122 | $ | 115,716 | ||||
Less goodwill and other intangibles | 29,045 | 29,187 | ||||||
Tangible common equity | $ | 58,077 | $ | 86,529 | ||||
Average Shareholders' equity | $ | 103,158 | $ | 112,750 | ||||
Less average goodwill and other intangibles | 29,074 | 29,217 | ||||||
Average tangible common equity | $ | 74,084 | $ | 83,533 | ||||
Tangible Book Value Per Common Share | ||||||||
Tangible common equity (a) | $ | 58,077 | $ | 86,529 | ||||
Total common shares issued and outstanding (b) | 3,279,513 | 3,279,076 | ||||||
Tangible book value per common share (a)/(b) | $ | 17.71 | $ | 26.39 | ||||
Return on Average Tangible Equity | ||||||||
Net income, annualized (c) | $ | 9,380 | $ | 13,544 | ||||
Average tangible common equity (d) | $ | 74,084 | $ | 83,533 | ||||
Return on average tangible common equity (c/d) | 12.66 | % | 16.21 | % | ||||
Net Interest Margin, Tax-Equivalent | ||||||||
Net interest income, annualized | $ | 33,768 | $ | 34,180 | ||||
Tax-equivalent adjustment, annualized | 956 | 710 | ||||||
Tax-equivalent net interest income, annualized (e) | $ | 34,724 | $ | 34,890 | ||||
Average earning assets (f) | $ | 985,369 | $ | 946,361 | ||||
Net interest margin, tax-equivalent (e)/(f) | 3.52 | % | 3.69 | % | ||||
Efficiency Ratio, Tax-Equivalent | ||||||||
Non-interest expense, annualized (g) | $ | 33,926 | $ | 36,358 | ||||
Tax-equivalent net interest income, annualized | 34,724 | 34,890 | ||||||
Non-interest income, annualized | 10,614 | 19,036 | ||||||
Total revenue, annualized (h) | $ | 45,338 | $ | 53,926 | ||||
Efficiency ratio (g)/(h) | 74.83 | % | 67.42 | % |
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
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 Dr. Jane M. Wood 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
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Columbus Grove, OH 45830
419-659-4250
30 Coal Bend
Delaware, OH 43015
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Delphos, OH 45833
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Findlay, OH 45840
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Gahanna, OH 43230
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Gibsonburg, OH 43431
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Kalida, OH 45853
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Leipsic, OH 45856
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Lima, OH 45804
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3211 Elida Rd.
Lima, OH 45805
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