UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

 Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2020

UNITED BANCSHARES, INC.

(Exact name of Registrant as specified in its Charter)

N/A

(Former name or former address, if changed since last report)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐                     

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 23, 2020, United Bancshares, Inc. separately issued a quarterly report to shareholders, clients and team members and an earnings press release announcing its results of operations and financial condition for and as of, respectively, the quarter and six month period ended June 30, 2020.  

A copy of the earnings release (Exhibit 99.1) and quarterly report (Exhibit 99.2) are furnished herewith.

The information furnished herewith, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as otherwise stated in such filing.

Item 7.01 Regulation FD Disclosure.

On July 23, 2020, United Bancshares, Inc. separately issued a quarterly report to shareholders, clients and team members and a press release announcing its financial results for the quarter and six month period ended June 30, 2020, unaudited, and the approval by its Board of Directors of a cash dividend of $0.14 per common share payable September 15, 2020 to shareholders of record at the close of business on August 31, 2020. 

A copy of the release (Exhibit 99.1) and quarterly report (Exhibit 99.2) are furnished herewith.

The information furnished herewith, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Exhibit 99.1

On July 23, 2020, United Bancshares, Inc. issued the following release:

United Bancshares, Inc. (Nasdaq: UBOH – news), a financial holding company headquartered in Columbus Grove, Ohio with consolidated assets of $1.0 billion today announced operating results for the quarter and six month period ended June 30, 2020, unaudited.

For the quarter ended June 30, 2020, the Corporation reported net income of $5,668,000, or $1.73 basic earnings per share. This compares to the second quarter of 2019 net income of $2,285,000, or $0.70 basic earnings per share. The increase in operating results for the second quarter of 2020 as compared to the same period in 2019 was primarily attributable to an increase in net interest income of $1,341,000, and an increase in non-interest income of $4,988,000, offset by an increase in the provision for loan losses of $750,000, an increase in non-interest expenses of $1,313,000, and an increase in the provision for income taxes of $883,000. The increase in net interest income resulted from interest and $337,000 in loan fees generated through the Paycheck Protection Program (PPP), as well as a decrease in deposit interest rates. The increase in the provision for loan losses was due to loan growth and allocations of reserves for the uncertainties related to COVID-19.

Net income for the six months ended June 30, 2020 totaled $6,756,000, or $2.07 basic earnings per share, compared to $4,099,000, or $1.25 basic earnings per share for the same period in 2019, an increase of $2,657,000 (64.8%). The increase in operating results for the six month period ended June 30, 2020 as compared to the six month period ended June 30, 2019 was primarily attributable to increases in net interest income of $1,530,000, and non-interest income of $5,314,000, offset by an increase in the provision for loan losses of $1,200,000, an increase in non-interest expenses of $2,301,000, and an increase in the provision for income taxes of $686,000. Similar to the second quarter results, the increase in net interest income for the six month period resulted from interest and fees on PPP loans and lower deposit interest rates, and the increase in the provision for loan losses was attributable to loan growth and additional reserves in response to the COVID-19 uncertainties.

For the quarter ended June 30, 2020, non-interest income was $8,121,000, compared to $3,133,000 for the second quarter of 2019, a $4,988,000 increase, which was attributable to increases in gain on sales of loans of $3,779,000, gain on sales of securities of $287,000, and other non-interest income of $921,000 (97.3%).  For the six months ended June 30, 2020, non-interest income was $10,955,000 compared to $5,641,000 for the same period in 2019, an increase of $5,314,000 (94.2%), which was attributable to increases in gain on sales of loans of $4,924,000, gain on sales of securities of $287,000, and other non-interest income of $103,000. The significant increase in gain on sale of loans was attributable to an increase in loan activity by the residential mortgage and governmental lending operations, along with an increase in the average gain on sale per loan. During the six month period ended June 30, 2020, there were 784 loans sold totaling $201 million, compared to 385 loans sold totaling $90 million during the same period of 2019. The average gain on sale approximated $10,000 during the first six months of 2020, compared to $8,000 for the same period of 2019. The significant increase in other non-interest income was related to fluctuations in the Corporation’s loan hedging program.

For the quarter ended June 30, 2020, non-interest expenses were $8,805,000, compared to $7,492,000 for the second quarter of 2019, a $1,313,000 (17.5%) increase.  The significant quarter-over-quarter increases included salaries and benefits expense of $844,000 (19.5%), loan fees of $217,000, data processing expenses of $118,000, and consultant fees of $172,000.

For the six month period ended June 30, 2020, non-interest expenses were $17,015,000 compared to $14,714,000 for the same period of 2019, a $2,301,000 (15.6%) increase, which was attributable to increases in salaries and benefits expense of $1,495,000, loan fees of $312,000, data processing expenses of $143,000, and an increase in consultant fees of $170,000.

Total assets exceeded $1.0 billion at June 30, 2020, compared to $880.0 million at December 31, 2019, increasing $134.0 million (15.2%). The increase in total assets was primarily the result of increases of $93.3 million (16.3%) in net loans, $42.4 million in cash and cash equivalents, $8.5 million (55.7%) in loans held for sale, offset by a decrease of $9.4 million (5.1%) in securities available-for-sale, and a decrease of $1.0 million (10.1%) in other assets (including accrued interest receivable). Deposits during this same period increased $124.1 million (17.5%). Many of the aforementioned balance sheet changes can be attributed to the impact of the Corporation originating $118.0 million of PPP loans during the second quarter of 2020. These loans contributed to significant increases in customer deposits which in turn contributed to increases in cash and cash equivalents. In response to possible liquidity concerns at the time, the Corporation also sold certain investment securities during the second quarter of 2020 resulting in the aforementioned gains of $287,000.

Shareholders’ equity increased from $94.8 million at December 31, 2019 to $104.8 million at June 30, 2020. This increase was primarily the result of net income during the six month period ended June 30, 2020 of $6,756,000 and an increase in unrealized securities gains, net of tax of $3,756,000, offset by dividends paid of $687,000. The increase in unrealized securities gains during the six month period ended June 30, 2020 was attributable to the Federal Reserve decreasing the Federal Funds Target Rate by 150 basis points (1.50%) during March 2020, in response to the COVID-19 pandemic.  Net unrealized gains and losses on securities are reported as accumulated other comprehensive income in the consolidated balance sheets.

United Bancshares, Inc. is the holding company of The Union Bank Company which serves Allen, Delaware, Franklin, Hancock, Marion, Putnam, Sandusky, Van Wert and Wood Counties in Ohio, with office locations in Bowling Green, Columbus Grove, Delaware, Delphos, Findlay, Gahanna, Gibsonburg, Kalida, Leipsic, Lima, Marion, Ottawa, Pemberville, Plymouth and Westerville Ohio.

This release may contain certain forward-looking statements that are provided to assist in the understanding of anticipated future financial performance.  However, such performance involves risk and uncertainties that may cause actual results to differ materially.  Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, the strength of the local economies in which operations are conducted, the effects of and changes in policies and laws of regulatory agencies, inflation, and interest rates.  For further discussion of certain factors that may cause such forward-looking statements to differ materially from actual results, refer to the 2019 Form 10-K.

Exhibit 99.2

United Bancshares, Inc.

Quarterly Report

June 30, 2020

Shareholders, Clients and Team Members:

Despite the unprecedented operating environment, I am pleased to report that your Company recorded pre-tax income of $8.2 million for the first six months of 2020, which was a 69% increase as compared to the same period in 2019. In addition to those record profits, your Company also reached $1 billion in assets and the Company’s Board of Directors approved a $0.14 per common share second quarter dividend, which amounted to approximately 8% of net income for the second quarter.

I could not be more proud of the Company’s team members. Early in the quarter they recognized the tremendous needs in our communities to help companies fund their employees’ wages, lower interest rates on their home mortgages and remain open to ensure confidence in the country’s financial systems. They worked numerous extra hours, made house calls, relocated their offices, assisted non-clients and other banks, made at least one personal phone call to every client, and countless other sacrifices to live up to our motto of “Success through Service”. Those efforts not only made a positive impact on others, but added significantly to the Company’s bottom line.

Increased revenues for the period were primarily the result of the Company’s ability to close approximately $268 million in residential mortgage loans generating $8.5 million in gains on loan sales, and secure over 1,500 Paycheck Protection Program (“PPP”) loans totaling $118 million, and generating $4.8 million in loan fees. For the period ended June 30, 2020, $1.0 million of fees received from the Small Business Administration was recorded as a reduction to non-interest expenses to cover PPP loan origination costs and $337,000 of deferred fees was amortized into interest income. The remaining $3.4 million of fees received from the SBA have been deferred and will be amortized into interest income over the two year life of the loans. While we have not experienced increases in delinquencies or losses through June 30, 2020, management allocated an additional $1,450,000 to our allowance for loan losses to recognize the added risk of this environment over the first six months of the year.

Although it is still unclear how long our communities or the economy will be negatively impacted, one thing is clear, 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

PERIOD END BALANCES

* 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)

UNITED BANCSHARES, INC.

OFFICERS

Brian D. Young - President/CEO

Heather M. Oatman - Secretary

Stacy A. Cox – Chief Financial Officer

THE UNION BANK COMPANY

DIRECTORS

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