United Bancshares Inc. is a bank holding company. Through its subsidiaries, The Union Bank Company, Columbus Grove, Ohio, The Bank of Leipsic Company, Leipsic, Ohio, and Citizens Bank of Delphos, Delphos, Ohio, the Corporation is engaged in the business of commercial banking. United Bancshares Inc. has a market cap of $32.6 million; its shares were traded at around $9.5 with a P/E ratio of 6.5 and P/S ratio of 0.9. The dividend yield of United Bancshares Inc. stocks is 6.3%. United Bancshares Inc. had an annual average earning growth of 12% over the past 5 years.
Highlight of Business Operations:For the quarter ended September 30, 2009, the Corporation reported a net loss of $777,000, or $(0.23) basic earnings per share. This compares to third quarter 2008 net income of $1,127,000, or $0.33 basic earnings per share. Compared with the same period in 2008, third quarter 2009 net income decreased $1,904,000. The decrease for the quarter, as compared to the quarter ended September 30, 2008, resulted from an increase in the provision for loan losses of $3,350,000 offset by increases in net interest income of $207,000, non-interest income of $91,000, a decrease in non-interest expenses of $171,000, and a $977,000 change in the provision (credit) for income taxes.
Net income for the nine months ended September 30, 2009, totaled $1,990,000, or $0.58 basic earnings per share compared to $3,821,000, or $1.11 basic earnings per share for the same period in 2008. Compared with the same period in 2008, net income decreased $1,831,000 or 47.9%. The decrease for the nine month period ended September 30, 2009, as compared to the nine month period ended September 30, 2008, was the result of an increase in the provision for loan losses of $4,480,000, and an increase in non-interest expenses of $94,000, offset by increases in net interest income of $942,000, non-interest income of $797,000, and a $1,004,000 decrease in the provision for income taxes.
For the quarter ended September 30, 2009, non-interest income was $847,000, compared to $756,000 for the third quarter of 2008, a $91,000 (12.0%) increase. For the nine month period ended September 30, 2009, non-interest income was $3,417,000, compared to $2,620,000 for the nine month period ended September 30, 2008, a $797,000 (30.4%) increase. Gain on sales of loans amounted to $241,000 for the quarter ended September 30, 2009, compared to $62,000 for the third quarter of 2008, an increase of $179,000. Quarterly gains on sale of loans included capitalized servicing rights of $107,000 in 2009 and $26,000 in 2008. Gain on sales of loans amounted to $1,213,000 for the nine months ended September 30, 2009 compared to $308,000 for the comparable period in 2008, an increase of $905,000. Gain on sale of loans for the nine month period included capitalized servicing rights of $550,000 in 2009 (on loan sales of $58.3 million) and $134,000 in 2008 (on loan sales of $11.2 million). The significant increase in loan sales activity in 2009 as compared to 2008 is attributable to the significant decline in mortgage interest rates during the fourth quarter of 2008 and first part of 2009 which resulted in significant refinancing activity. Despite the significant loan sales activity experienced during the first three quarters of 2009, Union's serviced portfolio remained relatively unchanged increasing only $2.4 million to $190.0 million at September 30, 2009.
For the quarter ended September 30, 2009, non-interest expenses were $3,638,000, compared to $3,809,000 for the comparable period in 2008, a $171,000 (4.5%) decrease. For the nine month period ended September 30, 2009, non-interest expenses totaled $11,086,000, compared to $10,992,000 for the comparable period of 2008, an increase of $94,000 (0.9%).
Current economic conditions have increased bank failures and expectations for further failures, in which case the Federal Deposit Insurance Corporation (FDIC) insures payment of deposits up to insured limits from the Deposit Insurance Fund. Non-interest expenses for the quarter ended September 30, 2009 included a $288,000 increase in the Corporation's FDIC insurance expense. This increase was due to an industry-wide increase in deposit premium rates. Conversely, the Corporation experienced a decrease in several non-interest expense categories during the third quarter of 2009 as compared to 2008, including salaries and benefits ($88,000), ATM processing fees ($109,000), and miscellaneous expenses ($264,000). The decrease in miscellaneous expenses resulted primarily from a $235,000 impairment in 2008 to the Lima Downtown building. Non-interest expenses for the nine months ended September 30, 2009 included an $863,000 increase in FDIC insurance expense and an $89,000 increase in foreclosure legal expense offset by decreases in advertising ($57,000), seminars and training ($64,000), dealer reserves ($98,000), ATM processing fees ($179,000), miscellaneous expense ($356,000) and write-downs in OREO expense of $79,000 ($25,000 in 2009 compared to $104,000 in 2008).
Total assets amounted to $602.0 million at September 30, 2009, compared to $616.1 million at December 31, 2008, a decrease of $14.0 million, or 2.3%. The decrease in total assets was the result of decreases in total cash and cash equivalents of $3.6 million (14.2%), available-for-sale securities of $4.3 million (3.1%), and a decrease of $3.4 million in gross loans. Deposits during this same period decreased $13.2 million (2.8%) and other borrowings (consisting of Federal Home Loan Bank borrowings, securities sold under agreements to repurchase, customer repurchase agreements, and junior subordinated deferrable debentures) decreased $5.2 million (6.0%).
Read the The complete Report