Exhibit 99.2
United Bancshares, Inc.
Quarterly Report
March 31, 2005
Dear Shareholders, Customers, Employees and Friends:
The management of United is pleased with the results of the first quarter 2005. It is our goal to continue to improve the profitability of the institution throughout this year. We will be working to increase our net interest income and improve the efficiency of the organization. In addition, we are working toward the continued growth of our loan portfolio.
Due to the increasing interest rate environment and other economic factors, gains on sale of securities and fixed rate mortgages were down significantly from the same quarter of 2004. Notwithstanding that earnings challenge, United’s net income for the quarter ended March 31, 2005 was $1,083,000 or $0.29 per share, an increase of 28.2% over the first quarter of 2004. United was able to improve profitability primarily through cost containment, with a slight increase of $89,000 in non-interest expenses, and increased net interest income of $791,000. The improvement in net interest income was primarily the result of before tax increases in loan interest income and investment securities interest income of $391,000 and $663,000, respectively, offset by an interest expense increase of $280,000. This improvement was principally through growth in earning assets and management’s monitoring of loan and deposit interest rates.
I wish to take this opportunity to thank our shareholders, customers, and employees for their continued support of our organization. We will continue to work diligently to position ourselves for the future and increase shareholder value for all concerned.
Sincerely,
/s/ Daniel W. Schutt
Daniel W. Schutt
President /CEO
United Bancshares, Inc.
and Subsidiary
Financial Highlights (unaudited)
Three Months
Three Months
Ended
Ended
March 31, 2005
March 31, 2004
(dollars in thousands, except share data and ratios)
FOR THE QUARTER
Interest income
$7,277
$6,205
Interest expense
2,832
2,552
Net interest income
4,445
3,653
Provision for loan losses
150
75
Net interest income after provision for loan losses
4,295
3,578
Non-interest income
663
870
Non-interest expenses
3,521
3,432
Income before income taxes
1,437
1,016
Provision for income taxes
354
172
Net income
$1,083
$844
=====
=====
Average common shares outstanding
3,705,980
3,655,528
PER COMMON SHARE
Net income
$0.29
$0.23
Cash dividends
$0.12
$0.11
Book value
$11.73
$12.03
Closing price
$15.31
$16.25
FINANCIAL RATIOS
Return on average assets
0.78%
0.68%
Return on average equity
9.88%
7.80%
Net interest margin
3.57%
3.50%
Efficiency ratio
66.12%
70.88%
Loans to deposits
84.41%
75.98%
Allowance for loan losses to net loans
0.91%
0.91%
Cash dividends to net income
41.09%
47.69%
PERIOD END BALANCES
As of
As of
March 31, 2005
Dec. 31, 2004
Assets
$552,612
$559,323
Loans
$311,239
$305,790
Deposits
$369,657
$369,767
Shareholders’ equity
$43,479
$44,229
Common shares outstanding
3,707,274
3,688,981
DIRECTORS/OFFICERS
UNITED BANCSHARES, INC.
Robert Benroth
Edward Rigel
Robert Dillhoff
David Roach
Joe Edwards
Robert Schulte, Sr.
Douglas Harter
James Reynolds— Chairman
Daniel Schutt—President/CEO
Bonita Selhorst—Secretary
Brian Young—CFO/Treasurer
DIRECTORS
THE UNION BANK CO.
Robert Benroth
William Perry
Robert Dillhoff
James Reynolds
Joe Edwards, Jr.
Edward Rigel
Douglas Harter
David Roach
Herbert Huffman
Robert Schulte, Sr.
Kevin Lammon
Steve Unverferth
Dr. James O’Neill
Daniel Schutt—President/CEO/Chairman
INVESTOR MATERIALS:
Annual and quarterly Shareholder reports, regulatory filings, press releases, and articles aboutThe Union Bank Company are available in the Shareholder Information section of our website www.theubank.com or by calling 1-800-837-8111.
Office
Locations
Bowling Green
1204 W. Wooster St.
419-353-6088
Columbus Grove
100 S. High St.
419-659-2141
Delphos
114 E. 3rd St.
419-692-2010
Gibsonburg
230 W. Madison St.
419-637-2124
Kalida
110 E. North St.
419-532-3366
Leipsic
318 S. Belmore St.
419-943-2171
Lima—Downtown
215 W. Market St.
419-228-2114
Lima—East
1410 Bellefontaine Ave.
419-229-6500
Lima—West
3211 Elida Rd.
419-331-3211
Ottawa
245 W. Main St.
419-523-2265
Pemberville
132 E. Front St.
419-287-3211
