Core Insights - United Bancshares, Inc. reported strong financial results for the first half of 2025, with a net income of $5.9 million, translating to $1.99 per share and a return on average tangible shareholder equity of 16.56% [2][3] - The company experienced significant loan growth of $22.3 million (5.82% annualized) and core deposit growth of $14.5 million (2.96% annualized) during the same period [2][3] - The net interest margin improved to 3.71%, up from 3.12% in the same period of 2024, indicating enhanced profitability from interest-earning assets [2][3] Financial Performance - For the second quarter of 2025, net income was $3.1 million or $1.05 per share, an increase from $1.8 million or $0.61 per share in the second quarter of 2024 [3][8] - Year-to-date net income for 2025 reached $5.9 million, a $0.77 per share increase from $3.7 million in the same period of 2024 [3][8] - The return on average assets for the second quarter was 1.04%, up from 0.68% in the comparable period of 2024 [3][8] Dividend and Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.23 per share, representing 21.9% of the reported net income for the second quarter of 2025 [5][3] - The dividend yield based on the average closing price for the second quarter was 3.44% [3][8] Asset Quality and Growth - The company reported stable credit quality metrics, with non-performing and classified loans remaining stable and charge-offs at historically low levels [3][8] - Total assets increased to $1.198 billion as of June 30, 2025, compared to $1.189 billion at the end of 2024 [7][8] Share Repurchase Program - The company repurchased 20,145 shares during the second quarter, totaling 369,321 shares repurchased at an average price of $21.41 since June 2022 [4][3] Digital Initiatives - The implementation of a new digital platform for clients is expected to roll out in the first quarter of 2026, enhancing customer service capabilities [6]

Part I [Business](index=5&type=section&id=Item%201.%20Business) United Bancshares, Inc is an Ohio-based financial holding company with its principal subsidiary, The Union Bank Company, offering a full range of banking and wealth management services - United Bancshares, Inc (UBOH) is a financial holding company with consolidated total assets of **$1.1 billion** at December 31, 2022[17](index=17&type=chunk) - The Union Bank Company offers a full range of commercial and consumer banking services, including deposit services, various loan products (commercial, residential, agricultural), and wealth management services through an arrangement with LPL Financial LLC[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The company operates through **twenty-two offices** serving eleven counties in Ohio[25](index=25&type=chunk) - The company faces **substantial competition** from commercial banks, savings associations, credit unions, and other financial service providers[34](index=34&type=chunk)[35](index=35&type-chunk) [Supervision and Regulation](index=7&type=section&id=Supervision%20and%20Regulation) The company operates under a comprehensive regulatory framework from the Federal Reserve, ODFI, and FDIC, and its subsidiary bank exceeds all minimum capital requirements - UBOH is a financial holding company subject to supervision by the **Federal Reserve Board**, while its subsidiary, Union Bank, is supervised by the State of Ohio, Division of Financial Institutions (ODFI) and the Federal Deposit Insurance Corporation (FDIC)[40](index=40&type=chunk)[45](index=45&type=chunk) - The **Dodd-Frank Act** has introduced significant regulatory changes, including the creation of the Consumer Financial Protection Bureau, new corporate governance requirements, and an expanded deposit insurance assessment base[63](index=63&type=chunk)[67](index=67&type=chunk) - Dividends from Union Bank to UBOH are subject to **regulatory approval and limitations**, potentially affecting UBOH's ability to pay dividends on its common shares[58](index=58&type=chunk) Union Bank Capital Ratios as of December 31, 2022 | Capital Ratio | Bank's Ratio | Well-Capitalized Minimum | Required Minimum | | :--- | :--- | :--- | :--- | | Total risk-based capital | 16.7% | 10.0% | 8.0% | | Tier 1 risk-based capital | 15.5% | 8.0% | 6.0% | | Common equity tier 1 (CET1) | 15.5% | 6.5% | 4.5% | | Tier 1 leverage capital | 10.1% | 5.0% | 4.0% | [Statistical Financial Information](index=15&type=section&id=Statistical%20Financial%20Information) The company's financial data shows stable net interest income, a slight increase in interest-earning assets, and improved credit quality leading to a negative loan loss provision in 2022 - The company recognized a **negative provision for loan losses of ($1,000,000)** in 2022, compared to provisions of $300,000 in 2021 and $6,200,000 in 2020, attributed to the waning impact of COVID-related concerns[90](index=90&type=chunk) Average Balance Sheet Summary (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total interest-earning assets | $979,562 | $969,413 | $891,850 | | Total assets | $1,072,002 | $1,046,350 | $967,828 | | Total interest-bearing liabilities | $764,395 | $731,430 | $688,218 | | Shareholders' equity | $92,471 | $114,981 | $101,631 | Net Interest Income and Margin (Tax Equivalent Basis, in thousands) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Interest Income | $39,942 | $39,588 | $40,598 | | Total Interest Expense | $3,258 | $3,069 | $6,988 | | Net Interest Income | $36,684 | $36,519 | $33,610 | | Net Interest Margin | 3.74% | 3.77% | 3.77% | Loan Loss Experience Ratios | Ratio | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net charge-offs to average loans | -0.01% | -0.01% | 0.05% | | Allowance for credit losses to total loans | 1.38% | 1.70% | 1.58% | | Nonaccrual loans to total loans | 0.14% | 0.05% | 0.15% | [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company faces primary risks from interest rate volatility, credit quality tied to Ohio's economy, liquidity management, and intense industry competition - The Corporation's earnings are largely dependent on net interest income and are **highly sensitive to interest rate changes**, which are beyond its control[99](index=99&type=chunk) - The company is subject to **credit risk** from its lending activities, with potential for increased non-performing loans if economic conditions in its Ohio markets deteriorate[103](index=103&type=chunk)[104](index=104&type=chunk) - **Liquidity risk** is significant, as an inability to raise funds through deposits or borrowings could materially affect operations[106](index=106&type=chunk) - The **allowance for loan losses** is based on management estimates and may be insufficient if economic conditions worsen, potentially requiring increased provisions that would decrease net income[109](index=109&type=chunk) - The company faces **substantial competition** from a variety of financial institutions, including larger banks and non-banks, which could affect growth and profitability[117](index=117&type=chunk) - UBOH, the holding company, is a separate legal entity that relies on **dividends from its subsidiary**, Union Bank, for revenue, which are subject to regulatory limitations[123](index=123&type=chunk) [Other Part I Information](index=30&type=section&id=Item%201B%2C%202%2C%203%2C%20and%204) This section confirms the company has no unresolved staff comments, no material legal proceedings, and lists its operational properties in Ohio - Item 1B Unresolved Staff Comments: **Not applicable**[138](index=138&type=chunk) - Item 2 Properties: The Corporation operates from its headquarters in Columbus Grove, Ohio, with **eighteen full-service banking centers** and three loan production offices in northwest and central Ohio[138](index=138&type=chunk)[139](index=139&type=chunk) - Item 3 Legal Proceedings: There are **no material pending legal proceedings** against the Corporation or its subsidiary outside of routine business matters[140](index=140&type=chunk) - Item 4 Mine Safety Disclosures: **Not applicable**[141](index=141&type=chunk) Part II [Market for Common Equity and Share Repurchases](index=31&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company actively repurchased its common stock in the fourth quarter of 2022 under a plan authorizing up to 800,000 shares for repurchase - The stock repurchase plan authorizes the Corporation to repurchase up to **800,000** of its common shares[142](index=142&type=chunk) Share Repurchases in Q4 2022 | Period | Total Shares Purchased | Weighted Avg. Price Paid | Shares Remaining in Plan | | :--- | :--- | :--- | :--- | | Oct 2022 | 0 | $- | 338,693 | | Nov 2022 | 10,000 | $18.59 | 328,693 | | Dec 2022 | 76,953 | $23.64 | 251,740 | [Selected Financial Data, MD&A, and Financial Statements](index=31&type=section&id=Item%206%2C%207%2C%20and%208) Key financial data and management's discussion are incorporated by reference from the company's 2022 Annual Report to Shareholders - The information required for Items 6, 7, and 8 is **incorporated by reference** from the United Bancshares' Annual Report to Shareholders for 2022 (Exhibit 13)[143](index=143&type=chunk)[144](index=144&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2022 - Management concluded that the Corporation's disclosure controls and procedures were **effective** as of December 31, 2022[146](index=146&type=chunk) - Based on an assessment using the COSO framework, management believes the Corporation's internal control over financial reporting was **effective** as of December 31, 2022[149](index=149&type=chunk) - There were **no changes** in the Corporation's internal control over financial reporting during the fiscal year that materially affected, or are reasonably likely to materially affect, its internal controls[150](index=150&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=33&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company maintains a governance structure with a seven-member board, separate CEO and Chairman roles, independent committees, and a designated audit committee financial expert - The Board of Directors is set at **seven members**, and the offices of Chairman of the Board and Chief Executive Officer are separated[158](index=158&type=chunk)[178](index=178&type=chunk) - The company has standing **Audit, Compensation, and Nominating Committees**, each with a written charter and composed of independent directors[183](index=183&type=chunk)[188](index=188&type=chunk)[190](index=190&type=chunk) - The Board has determined that director Robert L Benroth is an '**audit committee financial expert**' as defined by SEC regulations[160](index=160&type=chunk)[190](index=190&type=chunk) - The company has adopted a **Code of Ethics** applicable to its senior officers, which is available on the company's website[195](index=195&type=chunk) [Executive Compensation](index=39&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation includes salary, bonuses, and stock awards, with the CEO participating in a supplemental retirement plan and stock options featuring a double-trigger clause - CEO Brian D Young participates in a non-qualified supplemental retirement plan (Salary Continuation Agreement) with an accrued benefit of **$343,371** as of December 31, 2022[200](index=200&type=chunk)[209](index=209&type=chunk) - Stock options granted under the 2016 Stock Option Plan have a **double-trigger change of control clause**, allowing for accelerated vesting if an employee is terminated without cause or resigns for good reason following a change of control[212](index=212&type=chunk) - Non-employee directors receive annual compensation of up to **$15,000** for service on the United Bancshares board and up to **$15,000** for service on The Union Bank Company board, with additional fees for committee chairs[220](index=220&type=chunk) 2022 Summary Compensation Table | Name and Principal Position | Year | Salary($) | Bonus($) | Option Awards ($) | All Other Compensation($) | Total($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Brian D. Young, President and CEO | 2022 | $395,000 | $90,000 | $95,000 | $72,254 | $652,254 | | Klint D. Manz, CFO | 2022 | $171,250 | $45,150 | $24,375 | $19,720 | $260,495 | [Security Ownership](index=43&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Significant stock ownership is held by the company's ESOP and two other entities, while directors and executive officers as a group own 4.84% of common stock - As of February 28, 2023, all directors, nominees, and officers as a group (9 persons) beneficially owned 151,753 shares, representing **4.84%** of the outstanding common stock[225](index=225&type=chunk) Beneficial Owners of More Than 5% (as of Dec 31, 2022) | Name of Beneficial Owner | Percent of Class | | :--- | :--- | | United Bancshares, Inc. Restated Employee Stock Ownership Plan | 10.98% | | Tontine Financial Partners, L.P. | 9.33% | | Joe S. Edwards, Jr. | 5.87% | [Certain Relationships, Related Transactions, and Director Independence](index=45&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) All directors except the CEO are independent, and all related party transactions are conducted on standard market terms and pre-approved by the Audit Committee - The Board of Directors has determined that all directors, with the exception of CEO Brian D Young, are **independent** under applicable NASDAQ Rules[228](index=228&type=chunk) - All banking transactions with directors and officers were made in the **ordinary course of business** on substantially the same terms as those for comparable transactions with other persons and did not involve more than a normal risk of collectability[227](index=227&type=chunk)[229](index=229&type=chunk) - The Corporation's Audit Committee is required to **pre-approve all related party transactions**, though routine banking transactions are exempt if they comply with all banking regulations[230](index=230&type=chunk) [Principal Accountant Fees and Services](index=46&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) CliftonLarsonAllen LLP's fees for 2022 totaled $282,472 for audit and audit-related services, all of which were pre-approved by the Audit Committee - The Audit Committee is responsible for the approval of all audit and permitted non-audit services and **approved 100%** of the services performed by CliftonLarsonAllen LLP[238](index=238&type=chunk) Accountant Fees Billed | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit Fees | $254,779 | $185,393 | | Audit-Related Fees | $27,693 | $21,600 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | Part IV [Exhibits and Financial Statement Schedules](index=46&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K, with key financial reports incorporated by reference from the 2022 Annual Report - The consolidated financial statements for the years ended December 31, 2022, 2021, and 2020 are **incorporated by reference** from the Corporation's 2022 Annual Report to Shareholders (Exhibit 13)[240](index=240&type=chunk) - A list of exhibits filed with the report includes Articles of Incorporation, executive agreements, the 2016 Stock Option Plan, the 2022 Annual Report, and various certifications required by the SEC[243](index=243&type=chunk)[246](index=246&type=chunk)