Exhibit 99.2
United Bancshares, Inc.
Quarterly Report
December 31, 2019
Shareholders, Clients and Team Members:
I am pleased to report that as a result of the effort and commitment of our team members that once again your Company had a successful year. In addition to reporting income before taxes of approximately $12.3 million, return on average tangible equity of 18.49% and return on average assets of 1.24%, all noticeable increases from previous years, your company continues to focus on sustainable growth. We continue to believe that growth in full relationships with our clients is key to the continued increase in income generation for our shareholders. As such, we continue to focus our activities around driving those relationships across services and product lines.
These focused activities led to year over year growth of 2.6% in loans and 6.1% in deposits. During this same period, the Company recognized a 94.0% increase in gain on loan sales. While net interest income will continue to be our largest source of income, the enduring challenges of industry-wide margin compression make it increasingly important to generate non-interest income. Both our residential mortgage activities and governmental lending units are providing those opportunities, while at the same time capturing customer relationships during those transactions. Relationship banking is, has been, and will continue to be the fundamental driver of our long-term profitability and success.
It is also important to note that during the fourth quarter of 2019, the company realized an increase in other non-interest income due to the settlement of claims related to prior year tax adjustments which resulted in recording a one-time net income recovery of $1,980,000.
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, 2019 | | | Year ended December 31, 2018 | |
| | | (dollars in thousands, except per share data) | |
Condensed Statement of Income | | | | | | | | |
Interest income | | $ | 37,819 | | | $ | 34,365 | |
Interest expense | | | 8,924 | | | | 6,158 | |
Net interest income | | | 28,895 | | | | 28,207 | |
Provision for loan losses | | | 550 | | | | 450 | |
Net interest income after provision for loan losses | | | 28,345 | | | | 27,757 | |
Non-interest income | | | 15,048 | | | | 9,428 | |
Non-interest expenses | | | 31,117 | | | | 27,436 | |
Income before income taxes | | | 12,276 | | | | 9,749 | |
Provision for income taxes | | | 1,615 | | | | 1,529 | |
Net income | | $ | 10,661 | | | $ | 8,220 | |
| | | | | | | | | |
Average common shares outstanding (basic) | | | 3,270,878 | | | | 3,268,667 | |
| | | | | | | | | |
PER COMMON SHARE | | | | | | | | |
Net income | | $ | 3.26 | | | $ | 2.51 | |
Book value | | $ | 29.00 | | | $ | 24.76 | |
Tangible book value (non-GAAP)* | | $ | 19.99 | | | $ | 15.71 | |
Closing price | | $ | 22.71 | | | $ | 20.02 | |
| | | | | | | | | |
FINANCIAL RATIOS | | | | | | | | |
Return on average assets | | | 1.24 | % | | | 1.02 | % |
Return on average tangible equity (non-GAAP) | | | 18.49 | % | | | 16.79 | % |
Net interest margin | | | 3.76 | % | | | 3.97 | % |
Efficiency ratio | | | 70.03 | % | | | 72.03 | % |
Loans (including held for sale) to deposits | | | 83.68 | % | | | 85.45 | % |
PERIOD END BALANCES
| | | As of December 31, 2019 | | | As of December 31, 2018 | |
Assets | | $ | 880,014 | | | $ | 830,300 | |
Loans, gross | | $ | 576,424 | | | $ | 561,614 | |
Deposits | | $ | 707,134 | | | $ | 666,236 | |
Shareholders' equity | | $ | 94,781 | | | $ | 80,944 | |
| | | | | | | | | |
Common shares outstanding | | | 3,268,095 | | | | 3,269,358 | |
* Tangible book value per share is calculated by dividing tangible equity by average shares outstanding.
Reconciliation of shareholders' equity to tangible equity | | | | | |
| | | December 31, 2019 | | | December 31, 2018 | |
Shareholders' equity | | $ | 94,781 | | | $ | 80,944 | |
Less goodwill and other intangibles | | | 29,410 | | | | 29,569 | |
Tangible common equity | | $ | 65,371 | | | $ | 51,375 | |
Average Shareholders' equity | | $ | 87,132 | | | $ | 76,058 | |
Less average goodwill and other intangibles (a) | | | 29,484 | | | | 27,103 | |
Average tangible common equity | | $ | 57,648 | | | $ | 48,955 | |
(a) Goodwill and other intangibles for the December 31, 2019 period, as compared to the December 31, 2018 period, includes the impact of the $3.2 million goodwill adjustment made in August 2018 as a result of a review of the accounting and tax implications of the September 2017 Benchmark Bancorp, Inc. transaction.
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
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
