Exhibit 99.2
United Bancshares, Inc.
Quarterly Report
March 31, 2021
Shareholders, Clients and Team Members:
I am pleased to inform you that your Company is off to a solid start in 2021. Despite the current unparalleled operating environment, your Company recorded pre-tax income of $5.0 million for the first three months of 2021, compared to $1.2 million for the same period of 2020. In addition, the Company’s Board of Directors approved a $0.17 per common share dividend, which was a 6.25% increase from last quarter and amounted to approximately 13.5% of net income for the first quarter.
During the first quarter, team members were once again focused on delivering funds to those in our communities through the third round of Paycheck Protection Program funding. Those efforts provided $48.4 million in funding to more than 1,200 organizations generating $3.8 million in loan fees to the Company. The Company realized $870,000 in loan fees during the first quarter, which increased interest income. As of March 31, 2021, the Company had $3.4 million in unrealized loan fees remaining from this program.
The Company’s first quarter earnings were also positively impacted by continued strength in our residential mortgage originations. The Company sold $117.6 million in residential mortgage loans, which generated $4.6 million in gain on sale of loans, an increase of $2.0 million (77.2%) from the same period in 2020. Additionally, other non-interest income was increased by a $583,000 increase in the fair value of mortgage servicing rights as the result of a decrease in prepayment speeds at the end of the quarter.
The aforementioned results and the Company’s continued successes are only possible because of the ongoing dedication of the Company’s committed 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.
As always, we greatly appreciate your continued support and the trust you have placed in us.
Respectfully,
Brian D. Young
President and CEO
United Bancshares, Inc.
and Subsidiaries
Financial Information (unaudited) | | Three months ended March 31, 2021 | | | Three months ended March 31, 2020 | |
| | | (dollars in thousands, except per share data) | |
CONDENSED STATEMENT OF INCOME | | | | | | | | |
Interest income | | $ | 9,490 | | | $ | 9,232 | |
Interest expense | | | 835 | | | | 2,108 | |
Net interest income | | | 8,655 | | | | 7,124 | |
Provision for loan losses | | | 300 | | | | 550 | |
Net interest income after provision for loan losses | | | 8,355 | | | | 6,574 | |
Non-interest income | | | 5,741 | | | | 2,834 | |
Non-interest expenses | | | 9,106 | | | | 8,210 | |
Income before income taxes | | | 4,990 | | | | 1,198 | |
Provision for income taxes | | | 873 | | | | 110 | |
Net income | | $ | 4,117 | | | $ | 1,088 | |
| | | | | | | | | |
Average common shares outstanding (basic) | | | 3,277,744 | | | | 3,270,066 | |
| | | | | | | | | |
PER COMMON SHARE | | | | | | | | |
Net income | | $ | 1.26 | | | $ | 0.33 | |
Book value | | $ | 34.18 | | | $ | 30.11 | |
Tangible book value (non-GAAP)* | | $ | 25.27 | | | $ | 21.12 | |
Closing price | | $ | 25.25 | | | $ | 16.25 | |
| | | | | | | | | |
FINANCIAL RATIOS | | | | | | | | |
Return on average assets | | | 1.66 | % | | | 0.49 | % |
Return on average tangible equity (non-GAAP)* | | | 19.94 | % | | | 6.40 | % |
Net interest margin, tax equivalent (non-GAAP)* | | | 3.85 | % | | | 3.60 | % |
Efficiency ratio (non-GAAP)* | | | 62.51 | % | | | 81.30 | % |
Loans (including held for sale) to deposits | | | 71.62 | % | | | 81.86 | % |
PERIOD END BALANCES
| | | As of March 31, 2021 | | | As of December 31, 2020 | |
Assets | | $ | 1,026,974 | | | $ | 978,532 | |
Loans, gross | | $ | 636,374 | | | $ | 634,103 | |
Deposits | | $ | 888,561 | | | $ | 838,378 | |
Shareholders' equity | | $ | 112,071 | | | $ | 111,599 | |
| | | | | | | | | |
Common shares outstanding | | | 3,278,789 | | | | 3,271,984 | |
* 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 | | March 31, 2021 | | | March 31, 2020 | |
Shareholders' equity | | $ | 112,071 | | | $ | 98,482 | |
Less goodwill and other intangibles | | | 29,224 | | | | 29,372 | |
Tangible common equity | | $ | 82,847 | | | $ | 69,110 | |
Average Shareholders' equity | | $ | 111,839 | | | $ | 97,336 | |
Less average goodwill and other intangibles | | | 29,236 | | | | 29,386 | |
Average tangible common equity | | $ | 82,603 | | | $ | 67,950 | |
| | | | | | | | | |
Tangible Book Value Per Common Share | | | | | | | | |
Tangible common equity (a) | | $ | 82,847 | | | $ | 69,110 | |
Total common shares issued and outstanding (b) | | | 3,278,789 | | | | 3,271,984 | |
Tangible book value per common share (a)/(b) | | $ | 25.27 | | | $ | 21.12 | |
| | | | | | | | | |
Return on Average Tangible Equity | | | | | | | | |
Net income, annualized (c) | | $ | 16,468 | | | $ | 4,352 | |
Average tangible common equity (d) | | $ | 82,603 | | | $ | 67,950 | |
Return on average tangible common equity (c/d) | | | 19.94 | % | | | 6.40 | % |
| | | | | | | | | |
Net Interest Margin, Tax-Equivalent | | | | | | | | |
Net interest income, annualized | | $ | 34,620 | | | $ | 28,496 | |
Tax-equivalent adjustment, annualized | | | 684 | | | | 560 | |
Tax-equivalent net interest income, annualized (e) | | $ | 35,304 | | | $ | 29,056 | |
Average earning assets (f) | | $ | 916,214 | | | $ | 806,106 | |
Net interest margin, tax-equivalent (e)/(f) | | | 3.85 | % | | | 3.60 | % |
| | | | | | | | | |
Efficiency Ratio, Tax-Equivalent | | | | | | | | |
Non-interest expense, annualized (g) | | $ | 36,424 | | | $ | 32,840 | |
Tax-equivalent net interest income, annualized | | | 35,304 | | | | 29,056 | |
Non-interest income, annualized | | | 22,964 | | | | 11,336 | |
Total revenue, annualized (h) | | $ | 58,268 | | | $ | 40,392 | |
Efficiency ratio (g)/(h) | | | 62.51 | % | | | 81.30 | % |
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
