Exhibit 99.2
United Bancshares, Inc.
Quarterly Report
December 31, 2022
Shareholders, Clients and Team Members:
I am pleased to report that, once again, your Company had a successful year. In addition to reporting income before taxes of approximately $12.5 million, return on average tangible equity of 17.70% and return on average assets of 1.06%, your Company continues to focus on serving our clients and communities. As a result of these successes, the Board of Directors declared a $0.22 per share dividend, a 4.8% increase as compared to the fourth quarter of 2022. This declaration was the 13th increase in dividends since 2012.
During 2022 the banking industry faced record inflation, a dramatic decrease in residential mortgage activity, rapidly rising interest rates, and recession fears. The Company adjusted to those factors by reducing staff, aggressively managing its balance sheet and controlling interest costs. As a result, excluding PPP fees, net interest income increased $4.4 million with 43 basis points increase in net margin, non-interest expenses decreased $2.6 million, and gross loan and deposit balances increased $74 million and $23 million, respectively during 2022.
The cumulative effect of those adjustments throughout the first three quarters of 2022 were evident by the Company’s reporting of $1.10 earnings per share in the fourth quarter ($.91 per share excluding the tax effected positive impact of $606,000 from the negative loan loss provision and offsetting increase in the unfunded commitment liability).
Additionally, the rapid increase in interest rates has created a decline in the market value of our available for sale securities portfolio of $53.6 million, which has decreased your Company’s tangible book value by $13.43 per share since December 31, 2021. While this decrease has no impact on regulatory capital, it has likely been a noticeable factor in the Company’s recent decrease in share price. Based on the Company’s current alternative sources of liquidity, I believe it is very unlikely that those losses will be realized. As such, we remain focused on continuing to add value to our shareholders through core revenue growth, strong asset quality, and consistent dividends.
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, 2022 | Year ended December 31, 2021 | ||||||
(dollars in thousands, except per share data) | ||||||||
CONDENSED STATEMENTS OF INCOME | ||||||||
Interest income | $ | 38,942 | $ | 38,804 | ||||
Interest expense | 3,258 | 3,069 | ||||||
Net interest income | 35,684 | 35,735 | ||||||
Provision for loan losses | (1,000 | ) | 300 | |||||
Net interest income after provision for loan losses | 36,684 | 35,735 | ||||||
Non-interest income | 9,954 | 17,346 | ||||||
Non-interest expense | 34,114 | 36,706 | ||||||
Income before income taxes | 12,524 | 16,075 | ||||||
Provision for income taxes | 1,214 | 2,494 | ||||||
Net income | $ | 11,310 | $ | 13,581 | ||||
Average common shares outstanding (basic) | 3,259,924 | 3,277,062 | ||||||
PER COMMON SHARE | ||||||||
Net income | $ | 3.47 | $ | 4.14 | ||||
Book value | $ | 26.23 | $ | 36.39 | ||||
Tangible book value (non-GAAP)* | $ | 17.04 | $ | 27.50 | ||||
Closing price | $ | 18.72 | $ | 30.55 | ||||
FINANCIAL RATIOS | ||||||||
Return on average assets | 1.06 | % | 1.29 | % | ||||
Return on average tangible equity (non-GAAP)* | 17.70 | % | 15.83 | % | ||||
Net interest margin, tax equivalent (non-GAAP)* | 3.75 | % | 3.77 | % | ||||
Efficiency ratio (non-GAAP)* | 73.15 | % | 68.14 | % | ||||
Loans to deposits | 71.66 | % | 66.50 | % |
PERIOD END BALANCES (in thousands, except share data)
As of December 31, 2022 | As of December 31, 2021 | |||||||
Assets | $ | 1,087,293 | $ | 1,076,556 | ||||
Loans, gross | $ | 683,575 | $ | 609,559 | ||||
Deposits | $ | 953,883 | $ | 930,413 | ||||
Shareholders' equity | $ | 82,691 | $ | 119,095 | ||||
Common shares outstanding | 3,153,031 | 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 | December 31, 2022 | December 31, 2021 | ||||||
Shareholders' equity | $ | 82,691 | $ | 119,095 | ||||
Less goodwill and other intangibles | 28,975 | 29,115 | ||||||
Tangible common equity | $ | 53,716 | $ | 89,980 | ||||
Average Shareholders' equity | $ | 92,938 | $ | 114,981 | ||||
Less average goodwill and other intangibles | 29,039 | 29,199 | ||||||
Average tangible common equity | $ | 63,899 | $ | 85,782 | ||||
Tangible Book Value Per Common Share | ||||||||
Tangible common equity (a) | $ | 53,716 | $ | 89,980 | ||||
Total common shares issued and outstanding (b) | 3,153,031 | 3,272,585 | ||||||
Tangible book value per common share (a)/(b) | $ | 17.04 | $ | 27.50 | ||||
Return on Average Tangible Equity | ||||||||
Net income, annualized (c) | $ | 11,310 | $ | 13,581 | ||||
Average tangible common equity (d) | $ | 63,899 | $ | 85,782 | ||||
Return on average tangible common equity (c/d) | 17.70 | % | 15.83 | % | ||||
Net Interest Margin, Tax-Equivalent | ||||||||
Net interest income, annualized | $ | 35,684 | $ | 35,735 | ||||
Tax-equivalent adjustment, annualized | 1,000 | 784 | ||||||
Tax-equivalent net interest income, annualized (e) | $ | 36,684 | $ | 36,519 | ||||
Average earning assets (f) | $ | 979,053 | $ | 969,418 | ||||
Net interest margin, tax-equivalent (e)/(f) | 3.75 | % | 3.77 | % | ||||
Efficiency Ratio, Tax-Equivalent | ||||||||
Non-interest expense, annualized (g) | $ | 34,114 | $ | 36,706 | ||||
Tax-equivalent net interest income, annualized | 36,684 | 36,519 | ||||||
Non-interest income, annualized | 9,954 | 17,346 | ||||||
Total revenue, annualized (h) | $ | 46,638 | $ | 53,865 | ||||
Efficiency ratio (g)/(h) | 73.15 | % | 68.14 | % |
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
Klint D. Manz- CFO
Denise E. Giesige - 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 OTCQX Market under the symbol “UBOH” since August 2022. 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
222 S. Main St., Unit 1
Findlay, OH 45840
419-659-2141
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
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240 W. Fifth St.
Marysville, OH 43040
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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
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468 Polaris Parkway
Westerville, OH 43082
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