United Bancshares, Inc. Annual Report 2023

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FY2023 Annual Report · United Bancshares, Inc.

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2023
ANNUAL
REPORT

OTCQX: UBOH

800-837-8111

www.theubank.com

105 Progressive Drive
Columbus Grove, OH 45830

SHAREHOLDERS, CLIENTS,
AND TEAM MEMBERS:

“In 2024, we believe that effectively implementing
technology will promote growth and provide the
opportunity to increase the effectiveness of our team
members in serving our clients.”

Despite the significant challenges to the banking industry throughout 2023, I am pleased to report that
your Company had a successful year. In addition to reporting income before taxes of approximately $9.3
million and the return on average tangible equity of 15.82%, your Company continued to focus on serving
our communities. As a result of these successes, the Board of Directors declared a $0.22 per share
quarterly dividend payable on March 15th for shareholders of record on February 29th.

While earnings were negatively impacted by cost inflation, shrinking margins, severely limited residential
mortgage activity, tightening of the labor force and economic uncertainties, the Company minimized the
impact by reducing non-interest expenses by over $2.5 million, reduced outstanding shares by 242,756
over the last 18 months through repurchasing efforts, and restrained from making loans until rates
reached profitable levels. Selectively growing the loan portfolio in the first half of 2023 has positioned the
bank to have capital for share repurchases and to obtain more profitable loans at the end of 2023,
thereby saving quality loan growth capacity for 2024, while many peers start the year with less liquidity.

As previously reported the rapid increase in interest rates has created significant fluctuations in our
investment unrealized loss position, reaching a high of $65.6 million on October 31, 2023. It moderated by
year end to finish at a $38.8 million unrealized loss position. While this fluctuation has no impact on
regulatory capital, it has likely been a noticeable factor in the industry’s, and our Company’s, share price.
Based on the Company’s current liquidity position and strong quality metrics in our investment portfolio,
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. [YB1]

In 2024, we plan to make investments in technology to create internal efficiencies, reduce the risk of
fraud, and enhance customer tools and resources. Such investments are expected to yield positive results
in our cost structure and in customers’ ease in the use of our technology-based products. We believe that
effectively implementing technology will promote growth and provide the opportunity to increase the
effectiveness of our team members in serving our clients.

While we expect the headwinds to continue to have a negative impact on our industry’s earnings
throughout 2024, we believe that continued focus on cost controls, new loan originations and upward
repricing of existing loans through this cycle will offset some of that earnings pressure. The efforts of the
team 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.

Table of Contents

Description of the Corporation

Selected Financial Data

Independent Auditor’s Report

Consolidated Financial Statements

UNITED BANCSHARES, INC.
DESCRIPTION OF THE CORPORATION

United Bancshares, Inc., an Ohio corporation (the “Corporation”), is a financial holding company
registered under the Bank Holding Company Act of 1956, as amended, and is subject to regulation by the
Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Corporation was
incorporated and organized in 1985. The executive offices of the Corporation are located at 105
Progressive Drive, Columbus Grove, Ohio 45830. Effective February 1, 2007, the Bank formed a wholly-
owned subsidiary, UBC Investments, Inc. (“UBC”) to hold and manage its securities portfolio. The
operations of UBC are located in Wilmington, Delaware. Effective, December 4, 2009, the Bank formed a
wholly-owned subsidiary UBC Property, Inc. to hold and manage certain property that was acquired in
lieu of foreclosure. At this time all other real estate owned property is being held at the Bank. Through its
subsidiary, the Bank, the Corporation is engaged in the business of full-service community banking
offering a full range of commercial and consumer banking services. Effective May 5, 2022, the Corporation
formed a wholly-owned subsidiary, UBC Risk Management, Inc. (UBC Risk) which insures various liability
and property damage policies for the Corporation and its related subsidiaries.

The Union Bank Company is an Ohio state-charted bank, which provides full-service banking to the
people and businesses throughout the communities we serve through 18 offices across Northwest and
Central Ohio, including Bowling Green, Columbus Grove, Delphos, Findlay, Gahanna, Gibsonburg, Kalida,
Leipsic, Lewis Center, Lima, Marion, Ottawa, Paulding, Pemberville and Westerville. The Union Bank
Company is headquartered in Columbus Grove, Ohio, and remains committed to providing the very best
banking service and products to all the communities we serve.

United Bancshares, Inc. trades its common stock on the OTCQX Exchange under the symbol “UBOH”.

AVAILABILITY OF MORE INFORMATION

Annual and quarterly shareholder reports, regulatory filings, press releases, and articles about United
Bancshares, Inc. are available in the Investor Relations section of our website theubank.com, by calling
800-837-8111, or by writing to:

Denise Giesige, Secretary
United Bancshares, Inc.
105 Progressive Drive
Columbus Grove, Ohio 45830

UNITED BANCSHARES, INC.
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA

UNITED BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS

UNITED BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME

UNITED BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

UNITED BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

UNITED BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

UNITED BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

UNITED BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

United Bancshares, Inc. (the “Corporation”) was incorporated in 1985 in the state of Ohio as a single-bank
holding company for The Union Bank Company (the “Bank”) and UBC Risk Management. The Bank has
formed a wholly-owned subsidiary, UBC Investments, Inc. (“UBC”) to hold and manage its securities
portfolio. The operations of UBC are located in Wilmington, Delaware. The Bank has also formed a wholly-
owned subsidiary, UBC Property, Inc. to hold and manage certain property that is acquired in lieu of
foreclosure.

The Corporation, through its wholly-owned subsidiary, the Bank, is a full service community bank offering
a full range of commercial and consumer banking services. The Bank, organized in 1904 as an Ohio-
chartered bank, is headquartered in Columbus Grove, Ohio, with branch offices in Bowling Green,
Delaware, Delphos, Findlay, Gahanna, Gibsonburg, Kalida, Leipsic, Lima, Marion, Ottawa, Paulding,
Pemberville, Plymouth and Westerville, Ohio.

The primary source of revenue of the Corporation is providing loans to customers primarily located in
Northwestern and West Central Ohio. Such customers are predominately small and middle-market
businesses and individuals.

UBC Risk Management, Inc. is located in Las Vegas, Nevada. It is a captive insurance subsidiary which
insures various liability and property damage policies for the Corporation and its subsidiaries.

Significant accounting policies followed by the Corporation are presented below.

Use of Estimates in Preparing Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and expenses during each
reporting period. Actual results could differ from those estimates. The estimates most susceptible to
significant change in the near term include the determination of the allowance for credit losses, valuation
of securities, deferred tax assets, and goodwill.

Principles of Consolidation

The consolidated financial statements include the accounts of the Corporation and its wholly-owned
subsidiaries, the Bank, and its wholly-owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash on
hand, amounts due from banks, and federal funds sold which mature overnight or within four days.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Securities and Federal Home Loan Bank Stock

The Corporation has designated all securities as available-for-sale. Such securities are recorded at fair
value, with unrealized gains and losses, net of applicable income taxes, excluded from income and
reported as accumulated other comprehensive (loss) income. The cost of debt securities is adjusted for
amortization of premiums and accretion of discounts to maturity. Purchase premiums and discounts are
recognized in interest income using the interest method over the terms of the securities. For debt
securities purchased at a premium, the amortization period is shortened to the earliest call date.

On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments. Under ASC 326, for available for sale debt
securities, the Company first assesses whether it intends to sell, or is more likely than not that it will be
required to sell the security before recovery of its amortized cost basis. If either of these criteria are met,
the security’s amortized costs basis is written down to fair value through income. If these criteria are not
met, the Company evaluates whether the decline in fair value has resulted from credit losses or other
factors. In making this assessment, management considers the extent to which fair value is less than
amortized costs, any changes in the underlying credit rating of the security, and adverse conditions
specifically related to the security, among other factors. If it is determined that a credit loss exists, the
present value of cash flows expected to be collected from the security are compared to the amortized
cost basis of the security. If the present value of the cash flows expected to be collected is less than the
amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, which is limited by
the amount that the fair value is less than the amortized costs basis. Any impairment that has not been
recorded through an allowance for credit losses is recognized as a component of other comprehensive
income. Changes in the allowance for credit losses are recorded as a provision for credit loss.

Prior to the adoption of ASC 326, the Corporation used an other than temporary impairment model.

Investment in Federal Home Loan Bank of Cincinnati stock is classified as a restricted security, carried at
cost, and evaluated for impairment.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the estimated fair value in
the aggregate. Estimated fair value is determined based on quoted market prices in the secondary
market. Any net unrealized losses are recognized through a valuation allowance by charges to income.
The Corporation had no unrealized losses at December 31, 2023 and 2022.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or
pay-off are generally stated at their outstanding principal amount adjusted for charge-offs and the
allowance for credit losses. Interest is accrued as earned based upon the daily outstanding principal
balance. Loan origination fees and certain direct obligation costs are capitalized and recognized as an
adjustment of the yield of the related loan.

The accrual of interest on mortgage and commercial loans is generally discontinued at the time the loan
is 90 days past due unless the credit is well-secured and in process of collection. Personal loans are
typically charged-off no later than when they become 150 days past due. Past due status is based on
contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier
date if collection of principal or interest is considered doubtful.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed
against interest income. Interest on these loans is accounted for on the cash-basis or cost-recovery
method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal
and interest amounts contractually due are brought current and future payments are reasonably
assured.

Allowance for Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments, as amended, which replaced the incurred loss
methodology with an expected loss methodology that is referred to as the current expected credit loss
(“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is
applicable to financial assets measured at amortized cost, including loan receivables and held-to-
maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as
insurance (loan commitments, standby letters of credit, financial guarantees, and other similar
instruments) and net investments in leases recognized by a lessor in accordance to Topic 842 on leases.
In addition, ASC 326 made changes to the accounting for available-for-sale debt securities.

The Company adopted ASC 326 using the prospective transition approach for financial assets purchased
with credit deterioration that were previously classified as purchased credit impaired (“PCI”) and
accounted for under ASC 310-30. In accordance with the standard, management did not reassess
whether PCI assets met the criteria of PCD assets as of the date of adoption.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity of
payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of
purchase premiums and discounts, adjustments, and deferred loan fees and costs. Accrued interest
receivable was reported in other assets and is excluded from the estimate of credit losses.

Management estimates the allowance balance using relevant available information, from internal and
external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
Historical credit loss experience provides the basis for the estimation of expected credit losses.
Adjustments to historical loss information are made for differences in current loan-specific risk
characteristics such as differences in underwriting standards, portfolio mix, delinquency level, nature or
volume of the Company’s financial assets, changes in experience in staff, as well as changes in
environmental conditions, such as changes in unemployment rates, property values and other external
factors, such as regulatory, legal and technological environments.

The allowance for credit losses is measured on a collective pool basis when similar risk characteristics
exist. Loans that do not share risk characteristics are evaluated on an individual basis and are excluded
from the collective evaluation. A loan is individually analyzed when, based on current information and
events, it is probable that the Company will be unable to collect all amounts due according to the
contractual terms of the loan agreement. When a loan is considered individually analyzed, an analysis of
the net present value of estimated cash flows is performed and an allowance may be established based
on the outcome of that analysis, or if the loan is deemed to be collateral dependent an allowance is
established based on the fair value of collateral.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company is utilizing the discounted cash flow (“DCF”) methodology to analyze all loan pools. DCF
models are forward-focused cash flow models compatible with the Company’s limited loss history. The
Company estimates losses over an approximate one-year forecast period using the Federal Reserve
baseline economic forecasts, and then reverts to longer term historical loss experience over a three-year
period.

The DCF model has two key components, the loss driver analysis combined with a cash flow analysis. The
contractual cash flow is adjusted for loss driver and prepayment speed to establish a reserve level. The
loss driver analysis are updated annually by a third party for each applicable pool. The prepayment
studies are updated quarterly by a third-party for each applicable pool. The loss driver and prepayment
rates are computed using benchmark data due to the Company having insufficient loss history and lack
of specific data or observable prepayment experience.

Prior to the adoption of ASC 326, the Company used an incurred loss model to measure an allowance for
loan losses.

Acquired Loans

Purchased loans acquired in a business combination are reviewed to determine whether there is
evidence of more than insignificant deterioration of credit quality since origination. The Company
determines whether each such loan is to be accounted for individually or whether such loans will be
assembled into pools of loans based on common risk characteristics (loan type and date of origination).

PCD loans acquired in a transaction are marked to fair value and a mark on yield is recorded. In addition,
an adjustment is made to the ACL for the expected loss on the acquisition date. These loans are assessed
on a regular basis and subsequent adjustments to the ACL are recorded on the income statement.

Loan Sales and Servicing

Mortgage loans are sold with mortgage servicing rights either retained by the Corporation or released to
the purchaser of the loan. The value of mortgage loans sold with servicing rights retained is reduced by
the cost allocated to the associated mortgage servicing rights. Gains or losses on sales of mortgage loans
are recognized based on the difference between the selling price and the carrying value of the related
mortgage loans sold. The Corporation estimates fair value for servicing rights based on the present value
of future expected cash flows, using management’s best estimates of the key assumptions – credit losses,
prepayment speeds, servicing costs, earnings rate, and discount rates commensurate with the risks
involved. Capitalized servicing rights are reported at fair value and changes in fair value are reported in
net income for the period the change occurs. Servicing fee income is recorded for servicing loans, based
on a contractual percentage of the outstanding principal, and is reported as other operating income.
Amortization of mortgage servicing rights is charged against loan servicing fee income.

Premises and Equipment

Premises and equipment is stated at cost, less accumulated depreciation. Upon the sale or disposition of
the assets, the difference between the depreciated cost and proceeds is charged or credited to income.
Depreciation is determined based on the estimated useful lives of the individual assets (typically 20 to 40
years for buildings and 3 to 10 years for equipment) and is computed primarily using the straight-line
method.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Premises and equipment is reviewed for impairment when events indicate the carrying amount may not
be recoverable from future undiscounted cash flows. If impaired, premises and equipment is recorded at
fair value and any corresponding write-downs are charged against current year earnings.

Off-Balance Sheet Credit Related Financial Instruments

In the ordinary course of business, the Corporation has entered into commitments to extend credit,
including commitments under commercial letters of credit, and standby letters of credit. Such financial
instruments are recorded when they are funded. The Corporation maintains a separate allowance for off-
balance sheet commitments. Management estimates anticipated losses using historical data and
utilization assumptions. The allowance for off-balance sheet commitments is included in other liabilities.
Changes in the allowance for off-balance sheet commitments is included in the provision for credit
losses on the consolidated statements of income.

Goodwill and Core Deposit Intangible Assets

Goodwill arising from acquisitions is not amortized but is subject to an annual impairment test to
determine if an impairment loss has occurred. Significant judgment is applied when goodwill is assessed
for impairment. This judgment includes developing cash flow projections, selecting appropriate discount
rates, identifying relevant market comparables, incorporating general economic and market conditions,
and selecting an appropriate control premium. As of December 31, 2023, the Corporation believes the
Bank does not have any indicators of potential impairment based on the estimated fair value of its
reporting unit.

The core deposit intangible asset resulting from the November 2014 Ohio State Bank (“OSB”) acquisition
was determined to have a definite life and is being amortized on a straight-line basis over ten years
through October 2024. The core deposit intangible asset resulting from the September 2017 Benchmark
acquisition was also determined to have a definite life and is being amortized on an accelerated basis
over ten years through 2027. Amortization of core deposit intangible assets amounted to $139,000,
$140,000, and $143,000 for the years ended December 31, 2023, 2022 and 2021. Future amortization of
core deposit intangible assets for the years 2024 thru 2027 are $121,000, $38,000, $37,000, and $24,000
respectively.

Supplemental Retirement Benefits

Annual provisions are made for the estimated liability for accumulated supplemental retirement benefits
under agreements with certain officers and directors. These provisions are determined based on the
terms of the agreements, as well as certain assumptions, including estimated service periods and
discount rates.

Advertising Costs

All advertising costs are expensed as incurred.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

Deferred income taxes are provided on temporary differences between financial statement and income
tax reporting. Temporary differences are differences between the amounts of assets and liabilities
reported for financial statement purposes and its tax bases. Deferred tax assets are recognized for
temporary differences that will be deductible in future years’ tax returns and for operating loss and tax
credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is deemed more likely
than not that some or all of the deferred tax assets will not be realized. Deferred tax liabilities are
recognized for temporary differences that will be taxable in future years’ tax returns.

Benefits from tax positions taken or expected to be taken in a tax return are not recognized if the
likelihood that the tax position would be sustained upon examination by a taxing authority is considered
to be 50% or less. The Corporation has adopted the policy of classifying any interest and penalties
resulting from the filing of its income tax returns in the provision for income taxes.

The Corporation is not currently subject to state or local income taxes.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been
surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been
isolated from the Corporation, (2) the transferee obtains the right (free of conditions that constrain it from
taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation
does not maintain effective control over the transferred assets through an agreement to repurchase
them before their maturity.

The transfer of a participating interest in an entire financial asset must also meet the definition of a
participating interest. A participating interest in a financial asset has all of the following characteristics: (1)
from the date of transfer, it must represent a proportionate (pro rata) ownership interest in the financial
asset, (2) from the date of transfer, all cash flows received, except any cash flows allocated as any
compensation for servicing or other services performed, must be divided proportionately among
participating interest holders in the amount equal to their share ownership, (3) the rights of each
participating interest holder must have the same priority, (4) no party has the right to pledge or
exchange the entire financial asset unless all participating interest holders agree to do so.

Comprehensive (Loss) Income

Recognized revenue, expenses, gains, and losses are included in net income. Although certain changes in
assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a
separate component of the equity section of the consolidated balance sheet, such items, along with net
income, are components of comprehensive (loss) income.

Per Share Data

Basic net income per share is computed based on the weighted average number of shares of common
stock outstanding during each year. Diluted net income per share reflects additional common shares
that would have been outstanding if dilutive potential common shares had been issued.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The weighted average number of shares used for the years ended December 31, 2023, 2022 and 2021 are
as follows:

Dividends per share are based on the number of shares outstanding at the declaration date.

Derivative Financial Instruments

The price risk related to changes in the fair value of interest rate lock commitments (IRLCs) and
mortgage loans held for sale not committed to investors are subject to change primarily due to changes
in market interest rates. The Corporation is exposed to this interest rate risk for IRLCs and mortgage loans
held for sale originated until those loans are sold in the secondary market. The Corporation manages the
interest rate and price risk associated with its outstanding IRLCs and mortgage loans held for sale not
committed to investors by entering into derivative instruments such as forward loan sales commitments
and mandatory delivery commitments. Management expects these derivative
instruments will
experience changes in fair value opposite to changes in the fair value of the IRLCs and mortgage loans
held for sale not committed to investors, thereby reducing earnings volatility. Best effort sale
commitments are also executed for certain loans at the time the IRLC is locked with the borrower. The
fair value of the best effort IRLC and mortgage loans held for sale are valued using the commitment price
to the investor.

The Corporation started hedging in May of 2018 and takes into account various factors and strategies in
determining the portion of the IRLCs and mortgage loans held for sale to be economically hedged. FASB
ASC 815-25, Derivatives and Hedging, requires that all derivative instruments be recognized as assets or
liabilities on the balance sheets at their estimated fair value. Changes in the fair value of the derivative
instruments are recognized in gain on sale of loans in the statements of operations in the period in which
they occur. The Corporation accounts for all derivative instruments as free-standing derivative
instruments and does not designate any for hedge accounting. The Corporation recognized a net gain
from hedging activity of $120,000 for the year ended December 31, 2023, and $1,814,000 for the year
ended December 31, 2022, and a net loss from hedging activity of $1,325,000 for the year ended
December 31, 2021, which are included in gain on sale of loans in the consolidated statements of income.
A net hedging asset of $139,000 as of December 31, 2023, and $305,000 as of December 31, 2022, was
included in other assets in the consolidated balance sheets.

Fair Values of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other
assumptions, as more fully discussed in Note 17. Fair value estimates involve uncertainties and matters of
significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in
the absence of broad markets for particular items. Changes in assumptions or in market conditions could
significantly affect the estimates.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Subsequent Events

Management evaluated subsequent events through the date the consolidated financial statements were
issued. Events or transactions occurring after December 31, 2023, but prior to when the consolidated
financial statements were issued, that provided additional evidence about conditions that existed at
December 31, 2023, have been recognized in the financial statements for the year ended December 31,
2023. Events or transactions that provided evidence about conditions that did not exist at December 31,
2023 but arose before the financial statements were issued, have not been recognized in the
consolidated financial statements for the year ended December 31, 2023.

On January 18, 2024, United Bancshares, Inc. issued a release announcing that its Board of Directors
approved a cash dividend of $0.22 per common share payable March 15, 2024, to shareholders of record
at the close of business on February 29, 2024.

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS

In March 2022, the Financial Accounting Standards Board (FASB) issued ASU 2022-02, Financial
Instruments Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The
amendments in Update 2016-13 require that an entity measure and record the lifetime expected credit
losses on an asset that is within the scope of the Update upon origination or acquisition, and, as a result,
credit losses from loans modified as troubled debt restructurings (TDRs) have been incorporated into the
allowance for credit losses. Investors and preparers observed that the additional designation of a loan
modification as a TDR and the related accounting are unnecessarily complex and no longer provide
decision-useful information. The amendment in this Update also requires that an entity disclose current-
period gross write-offs by year of origination for financing receivables and net investments in leases
within the scope of Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost.
The Corporation implemented this update in January 2023.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides
optional guidance for a limited period of time to ease the potential burden in accounting for reference
rate reform on financial reporting. The amendments in this Update provide optional expedients and
exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging
relationships, and other transactions that reference LIBOR or another reference rate expected to be
discontinued because of reference rate reform. The amendments are effective for all entities as of March
12, 2020 through December 31, 2024. The Corporation does not expect this guidance to have a material
impact on its consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which is in
response to stakeholder concerns related to reference rate reform. The amendments in this Update are
elective and apply to all entities that have derivative instruments that use an interest rate for managing,
discounting, or contract price alignment that is modified as a result of reference rate reform. The
amendments in this Update are effective immediately for all entities. The Corporation is currently
reviewing the amendments in this Update but does not expect this guidance to have a material impact
on its consolidated financial statements.

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement
of Credit Losses on Financial Instruments. The ASU requires an organization to measure all expected
credit losses for financial assets held at the reporting date based on historical experience, current
conditions, and reasonable and supportable forecasts. Financial institutions and other organizations is
now using forward-looking information to better inform their credit loss estimates. Many of the loss
estimation techniques applied under the previous standard are still permitted, although the inputs to
those techniques have changed to reflect the full amount of expected credit losses. Organizations are still
able to use judgment to determine which loss estimation method is appropriate for their circumstances.
Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and
purchased financial assets with credit deterioration. For public companies, this update was to be effective
for interim and annual periods beginning after December 15, 2019. On July 17, 2019, the FASB voted to
issue a proposal for public comment that would potentially result in a postponement of the required
implementation date for ASU 2016-13. On October 16, 2019, the FASB extended the implementation
deadline until the fiscal year and interim periods beginning after December 15, 2022.

The Company adopted the guidance on January 1, 2023. The Company has disaggregated its loan
portfolio into segments of like kind loans with additional disaggregation based on risk level of the loans.
Models have been chosen to be applied to loan segments based on factors such as life of the loan
segment and loan payment types. The Company engaged an independent third party to validate the
model, methodologies, and compliance with the regulation, which was completed during the third
quarter of 2023. Qualitative factors have also been included to capture inherent risks that are not
included within the quantitative model. At adoption, the Company did not have any securities classified
as HTM debt securities. No allowance for credit loss was recorded related to AFS debt securities at the
date of adoption, January 1, 2023.

NOTE 3 - SECURITIES

The amortized cost, unrealized gains and losses on securities, and fair value of securities as of December
31, 2023 and 2022 are as follows:

The amortized cost and fair value of securities at December 31, 2023, by contractual maturity, are shown
below. Actual maturities may differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

Securities with a carrying value of $24.2 million at December 31, 2023 and $42.9 million at December 31,
2022 were pledged to secure public deposits and for other purposes as required or permitted by law.

NOTE 3 - SECURITIES (CONTINUED)

The following table presents gross unrealized losses and fair value of debt securities, aggregated by
investment category and length of time that individual securities have been in a continuous unrealized
loss position at December 31, 2023 and 2022:

There were 327 securities in an unrealized loss position at December 31, 2023, 323 of which were in a
continuous unrealized loss position for 12 months or more. There were 386 securities in an unrealized loss
position at December 31, 2022, 113 of which were in a continuous unrealized loss position for 12 months or
more. Management has considered industry analyst reports, whether downgrades by bond rating
agencies have occurred, sector credit reports, issuer’s financial condition and prospects, the Corporation’s
ability and intent to hold securities to maturity, and volatility in the bond market. This analysis concluded
that the unrealized losses as of December 31, 2023 were primarily the result of fluctuations in the bond
market related primarily to changes in market interest rates, therefore, in accordance with ACS 326,
management has determined that there is no allowance for credit loss needed as of December 31, 2023
related to its available for sale securities portfolio.

Gross realized losses from sale of securities, including securities calls, amounted to $224,000 in 2023 with
a related income tax effect of $47,000, $114,000 in 2022 with related income tax effect of $24,000, and
$16,000 in 2021, with a related income tax effect of $3,000. There was $156,000 of gross realized gains from
the sale of securities in 2023, with a related income tax effect of $33,000. There were no gross realized
gains from sale of securities in 2022 or 2021.

NOTE 4 - LOANS

Loans receivable at December 31, 2023 and 2022 consist of the following:

Loan segments have been identified by evaluating the portfolio based on collateral and credit risk
characteristics.

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans. As of
December 31, 2023, and 2022, accrued interest receivable for loans totaled $2,722,000 and $2,026,000,
respectively, and is included in accrued interest receivable on the consolidated balance sheets.

Fixed rate loans approximated $185.2 million at December 31, 2023 and $192.2 million at December 31,
2022.

Most of the Corporation’s lending activities are with customers located in Northwestern and Central Ohio.
The Corporation has
industry
concentration. Total loans for income-generating rental property totaled $353.1 million at December 31,
2023 representing 50.0% of total loans.

income-generating rental properties as an

lending for

identified

The Corporation originates 1-4 family real estate and consumer loans utilizing credit reports to
supplement the underwriting process. The Corporation’s underwriting standards for 1-4 family loans are
generally
in accordance with the Federal Home Loan Mortgage Corporation (FHLMC) manual
underwriting guidelines. Properties securing 1-4 family real estate loans are appraised by fee appraisers,
which are independent of the loan origination function and have been approved by the Board of
Directors and the Loan Policy Committee. The loan-to-value ratios normally do not exceed 80% without
credit enhancements such as mortgage insurance. The Corporation will lend up to 100% of the lesser of
the appraised value or purchase price for conventional 1-4 family real estate loans, provided private
mortgage insurance is obtained. The underwriting standards for consumer loans include a determination
of the applicant’s payment history on other debts and an assessment of their ability to meet existing
obligations and payments on the proposed loan. To monitor and manage loan risk, policies and
procedures are developed and modified, as needed by management. This activity, coupled with smaller
loan amounts that are spread across many individual borrowers, minimizes risk. Additionally, market
conditions are reviewed by management on a regular basis. The Corporation’s 1-4 family real estate loans
are secured primarily by properties located in its primary market area.

NOTE 4 - LOANS (CONTINUED)

Commercial and agricultural real estate loans are subject to underwriting standards and processes
similar to commercial and agricultural operating loans, in addition to those unique to real estate loans.
These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.
Commercial and agricultural real estate lending typically involves higher loan principal amounts, and the
repayment of these loans is generally dependent on the successful operation of the property securing
the loan or the business conducted on the property securing the loan. Loan to value is generally 75% of
the cost or appraised value of the assets or less. Appraisals on properties securing these loans are
generally performed by fee appraisers approved by the Board of Directors. Because payments on
commercial and agricultural real estate loans are often dependent on the successful operation or
management of the properties, repayment of such loans may be subject to adverse conditions in the real
estate market or the economy. Management monitors and evaluates commercial and agricultural real
estate loans based on cash flows, collateral and risk rating criteria. The Corporation may require
guarantees on these loans. The Corporation’s commercial and agricultural real estate loans are secured
primarily by properties located in its primary market area.

Commercial and agricultural operating loans are underwritten based on the Corporation’s examination
of current and projected cash flows to determine the ability of the borrower to repay their obligations as
agreed. This underwriting includes the evaluation of cash flows of the borrower, underlying collateral, if
applicable and the borrower’s ability to manage its business activities. The cash flows of borrowers and
the collateral securing these loans may fluctuate in value after the initial evaluation. A first priority lien on
the general assets of the business normally secures these types of loans. Loan to value limits vary and are
dependent upon the nature and type of the underlying collateral and the financial strength of the
borrower. Crop and/or hail insurance may be required for agricultural borrowers. Loans are generally
guaranteed by the principal(s). The Corporation’s commercial and agricultural operating lending is
primarily in its primary market area.

The Corporation maintains an internal audit department that reviews and validates the credit risk
program on a periodic basis. Results of these reviews are presented to management and the audit
committee. The
identification and
internal audit process complements and reinforces the risk
assessment decisions made by lenders and credit personnel, as well as the Corporation’s policies and
procedures.

A loan is considered to be collateral dependent when, based upon management's assessment, the
borrower is experiencing financial difficulty and repayment is expected to be provided substantially
through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are
based on the estimated fair value of the collateral at the balance sheet date, with consideration for
estimated selling costs if satisfaction of the loan depends on the sale of the collateral.

The allowance for credit losses for loans considered to be collateral dependent as of December 31, 2023, is
as follows:

NOTE 4 - LOANS (CONTINUED)

The following table presents loans individually evaluated for impairment by class of loans as of December
31, 2022:

The following table presents the recorded investment in nonaccrual loans, loans past due over 90 days
still on accrual and troubled debt restructurings by class of loans as of December 31, 2023 and 2022:

The nonaccrual balances in the table above include troubled debt restructurings that have been
classified as nonaccrual.

Interest income foregone on nonaccrual loans was approximately $15,000 and $45,000 for the years
ended December 31, 2023 and 2022, respectively.

The amortized costs basis for loans on nonaccrual status for which there is no related allowance for credit
losses was $38,000 and $873,000 for the years ended December 31, 2023 and 2022, respectively.

NOTE 4 - LOANS (CONTINUED)

The following table presents the aging of the recorded investment in past due loans as of December 31,
2023 and 2022 by class of loans:

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of
borrowers to service their debt such as: current financial information, historical payment experience,
credit documentation, public information, and current economic trends, among other factors. The
Corporation analyzes loans individually by classifying the loans as to the credit risk. This analysis generally
includes non-homogenous loans, such as commercial and commercial real estate loans. The Corporation
uses the following definitions for risk ratings for adverse classified loans:

Pass: Loans not meeting the previous criteria that are analyzed individually as part of the above-
described process are considered to be pass rated loans.

Special Mention: Loans which possess some credit deficiency or potential weakness which deserves
loans pose
close attention, but which do not yet warrant substandard classification. Such
unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future.
The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted
level of risk, and (2) weaknesses are considered "potential", versus "defined", impairments to the
primary source of loan repayment.

Substandard: These loans are inadequately protected by the current sound net worth and paying
ability of the borrower. Loans of this type will generally display negative financial trends such as poor
or negative net worth, earnings or cash flow. These loans may also have historic and/or severe
delinquency problems, and Corporation management may depend on secondary repayment sources
to liquidate these loans. The Corporation could sustain some degree of loss in these loans if the
weaknesses remain uncorrected.

NOTE 4 - LOANS (CONTINUED)

Doubtful: Loans in this category display a high degree of loss, although the amount of actual loss at
the time of classification is undeterminable. This should be a temporary category until such time that
actual loss can be identified, or improvements made to reduce the seriousness of the classification.

The following table provides a summary of the loan portfolio risk grades, as applicable, based on the most
recent analysis performed, as of December 31, 2023 and 2022.

The Corporation considers the performance of the loan portfolio and its impact on the allowance for loan
and lease losses. For all loan classes that are not rated, the Corporation also evaluates credit quality based
on the aging status of the loan, which was previously presented, and by payment activity. Generally, all
loans not rated that are 90 days past due or are classified as nonaccrual and collectively evaluated for
impairment, are considered nonperforming. The following table presents the recorded investment in all
loans that are not risk rated, based on payment activity as of December 31, 2023 and 2022:

NOTE 4 - LOANS (CONTINUED)

Modifications:

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal
or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic
loss and to avoid foreclosure or repossession of collateral.

When the Corporation modifies a loan, management evaluates any possible concession based on the
present value of expected future cash flows, discounted at the contractual interest rate of the original
loan agreement, except when the sole (remaining) source of repayment for the loan is the operation or
liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less
selling costs, instead of discounted cash flows. If management determines that the value of the modified
loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or
costs and unamortized premium or discount), an impairment is recognized through a specific reserve in
the allowance or a direct write down of the loan balance if collection is not expected.

There were no loan modifications made to borrowers experiencing financial difficulty during the year
ended December 31, 2023.

There were no modifications for TDR loans or subsequent defaults relating to TDR loans during the year
ended December 31, 2022.

NOTE 4 - LOANS (CONTINUED)

The table below presents the amortized cost basis of loans by vintage, credit quality indicator and class of
loans as of December 31, 2023 (in thousands):

Allowance for Credit Losses (“ACL”)

The Company has adopted ASU 2016-13 (Topic 326 – Credit Losses) to calculate the ACL, which requires a
projection of credit loss over the contract lifetime of the credit adjusted for prepayment tendencies. This
valuation account is deducted from the loans amortized cost basis to present the net amount expected
to be collected on the loan. The ACL is adjusted through the provision for credit losses and reduced by
net charge offs to loans.

NOTE 4 - LOANS (CONTINUED)

The credit loss estimation process involves procedures that consider the unique characteristics of the
Company’s portfolio segments. These segments are further disaggregated into the loan pools for
monitoring. When computing allowance levels, a model of risk characteristics, such as loss history and
delinquency status, along with current conditions and a supportable forecast is used to determine credit
loss assumptions.

According to the accounting standard an entity may make an accounting policy election not to measure
an allowance for credit losses for accrued interest receivable if the entity writes off the applicable accrued
interest receivable balance in a timely manner. The Company has made the accounting policy election
not to measure an allowance for credit losses for accrued interest receivables for all loan segments.
Current policy dictates that a loan will be placed on nonaccrual status, with the current accrued interest
receivable balance being written off, upon the loan being 90 days delinquent or when the loan is deemed
to be collateral dependent.

NOTE 4 - LOANS (CONTINUED)

In addition, ASC Topic 326 requires the Company to establish a liability for anticipated credit losses for
unfunded commitments. To accomplish this, the company must first establish a loss expectation for
extended (funded) commitments. This loss expectation, expressed as a ratio to the amortized cost basis,
is then applied to the portion of unfunded commitments not considered unilaterally cancelable, and
considered by the company’s management as likely to fund over the life of the instrument. At December
31, 2023, the Company had $192.6 million in unfunded commitments and set aside $766,000 in
anticipated credit losses. This reserve is recorded in other liabilities as opposed to the ACL.

The determination of ACL is complex, and the Company makes decisions on the effects of factors that are
inherently uncertain. Evaluations of the loan portfolio and individual credits require certain estimates,
assumptions and judgments as to the facts and circumstances related to particular situations or credits.
There may be significant changes in the ACL in future periods determined by prevailing factors at that
point in time along with future forecasts.

The following tables disclose the annual activity in the allowance for credit losses for the periods
indicated by portfolio segment (in thousands). The Company adopted CECL as of January 1, 2023. The
prior years’ amounts presented are calculated under the prior accounting standard.

NOTE 4 - LOANS (CONTINUED)

The following tables present the balance in the allowance for credit losses and the recorded investment
in loans by portfolio segment and based on impairment method as of December 31, 2022:

The provision for credit losses is determined by the Company as the amount to be added to the
allowance for credit losses for various types of financial instruments including loans, investment
securities, and unfunded commitments after net charge-offs have been deducted to bring the allowance
for credit losses to a level that, in management's judgment, is necessary to absorb expected credit losses
over the lives of the respective financial instruments. The components of the provision for credit losses
included in the consolidated statements of income for the years ended December 31 are as follows:

NOTE 4 - LOANS (CONTINUED)

The following is additional information with respect to loans acquired in the Benchmark and OSB
transactions as of December 31, 2023 and 2022:

NOTE 4 - LOANS (CONTINUED)

As a result of the acquisitions, the Corporation has loans, for which there was at acquisition, evidence of
deterioration of credit quality since origination and for which it was probable at acquisition, that all
contractually required payments would not be collected. The carrying amount of those loans was
$49,000 as of December 31, 2023 and $52,000 as of December 31, 2022 related to the Benchmark
acquisition and $67,000 at December 31, 2023 and $72,000 at December 31, 2022 for the OSB acquisition.

Certain directors and executive officers, including their immediate families and companies in which they
are principal owners, are loan customers of the Corporation. Such loans are made in the ordinary course
of business in accordance with the normal lending policies of the Corporation, including the interest rate
charged and collateralization. Such loans amounted to $986,000 and $1,330,000 at December 31, 2023
and 2022 respectively. The following is a summary of activity during 2023, 2022 and 2021 for such loans:

Additions and repayments include loan and lease renewals, as well as net borrowings and repayments
under revolving lines-of-credit.

NOTE 5 - PREMISES AND EQUIPMENT

The following is a summary of premises and equipment at December 31, 2023 and 2022:

Depreciation expense amounted to $1,453,000 in 2023, $1,250,000 in 2022 and $1,204,000 in 2021.

NOTE 6 - SERVICING

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets.
The unpaid principal balance of mortgage loans serviced for others amounted to $262,757,000 and
$263,593,000 at December 31, 2022 and 2021, respectively.

Mortgage servicing rights are included in other assets in the accompanying consolidated balance sheets.
The Corporation has elected to record its mortgage servicing rights using the fair value measurement
method. Significant assumptions used in determining the fair value of servicing rights as of December 31,
2023 and 2022 include:

Following is a summary of mortgage servicing rights activity for the years ended December 31, 2023, 2022
and 2021:

The changes in fair value of servicing rights for the years ended December 31, 2023, 2022 and 2021
resulted from changes in external market conditions, including prepayment assumptions, which is a key
valuation input used in determining the fair value of servicing. The prepayment assumption factor used
in determining the fair value of servicing at December 31, 2023 was 112 compared to 114 at December 31,
2022 and 180 at December 31, 2021. The earnings rate used in determining the fair value of servicing was
0.25% in 2023, 2022 and 2021.

NOTE 7 - DEPOSITS

Time deposits at December 31, 2023 and 2022 include individual deposits greater than $250,000 of
$45,223,000 and $18,258,000, respectively. Interest expense on time deposits greater than $250,000
amounted to $1,376,000 for 2023, $60,000 for 2022, and $134,000 for 2021.

Scheduled maturities of certificates of deposit at December 31, 2023, are as follows (in thousands):

Certain directors and executive officers, including their immediate families and companies in which they
are principal owners, are depositors of the Corporation. Such deposits amounted to $4,165,000 and
$4,298,000at December 31, 2023 and 2022, respectively.

NOTE 8 - FEDERAL FUNDS PURCHASED AND OTHER BORROWINGS

Other borrowings consists of the following at December 31, 2023 and December 31, 2022:

At December 31, 2023, the Corporation had $310.1 million of borrowing availability under various line-of-
credit agreements with the Federal Home Loan Bank and other financial institutions.

Future maturities of other borrowings are as follows: 2024, $1,000,000; 2025, $1,000,000; 2026, $1,000,000;
2027, $1,000,000; 2028, $1,000,000.

NOTE 9 - JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES

The Corporation has formed and invested $300,000 in a business trust, United (OH) Statutory Trust
(United Trust) which is not consolidated by the Corporation. United Trust issued $10,000,000 of trust
preferred securities, which are guaranteed by the Corporation, and are subject to mandatory redemption
upon payment of the debentures. United Trust used the proceeds from the issuance of the trust
preferred securities, as well as the Corporation’s capital investment, to purchase $10,300,000 of junior
subordinated deferrable interest debentures issued by the Corporation. The debentures have a stated
maturity date of March 26, 2033. As of March 26, 2008, and quarterly thereafter, the debentures may be
shortened at the Corporation’s option. Interest is at a floating rate adjustable quarterly and equal to 315
basis points over the 3-month CME Term SOFR plus spread adjustment amounting to 8.77% at
December 31, 2023, with interest payable quarterly. Interest at a floating rate adjustable quarterly and
equal to 315 basis points over the 3-month LIBOR amounting to 7.87% at December 31, 2022, and 3.37% at
December 31, 2021. The Corporation has the right, subject to events in default, to defer payments of
interest on the debentures by extending the interest payment period for a period not exceeding 20
consecutive quarterly periods.

The Corporation assumed $3,093,000 of trust preferred securities from the OSB acquisition with
$3,000,000 of the liability guaranteed by the Corporation, and the remaining $93,000 secured by an
investment in the trust preferred securities. The trust preferred securities have a carrying value of
$2,743,000 at December 31, 2023 and $2,709,000 at December 31, 2022. The difference between the
principal owed and the carrying value is due to the below-market interest rate on the debentures. The
debentures have a stated maturity date of April 23, 2034. Interest is at a floating rate adjustable quarterly
and equal to 285 basis points over the 3-month CME Term SOFR plus spread adjustment amounting to
8.52% at December 31, 2023, with interest payable quarterly. Interest at a floating rate adjustable quarterly
and equal to 285 basis points over the 3-month LIBOR amounting to 7.17% at December 31, 2022, and
2.97% at December 31, 2021.

Interest expense on the debentures amounted to $1,102,000in 2023, $649,000 in 2022, and $429,000 in
2021, and is included in interest expense-borrowings in the accompanying consolidated statements of
income.

Each issue of the trust preferred securities carries an interest rate identical to that of the related
debenture. The securities have been structured to qualify as Tier I capital for regulatory purposes and the
dividends paid on such are tax deductible. However, the securities cannot be used to constitute more
than 25% of the Corporation’s Tier I capital inclusive of these securities under Federal Reserve Board
guidelines.

NOTE 10 - OTHER OPERATING EXPENSES

Other operating expenses consisted of the following for the years ended December 31, 2023, 2022 & 2021:

NOTE 11 - INCOME TAXES

The provision for income taxes for the years ended December 31, 2023, 2022 and 2021 consist of the
following:

The income tax provision attributable to income from operations differed from the amounts computed
by applying the U.S. federal income tax rate of 21% in 2023, 2022, and 2021:

The deferred income tax provision (credit) of ($144,000) in 2023, $1,341,000 in 2022, and $1,380,000 in 2021
resulted from the tax effects of temporary differences.

NOTE 11 - INCOME TAXES (CONTINUED)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets
and deferred tax liabilities at December 31, 2023 and 2022 are presented below:

Net deferred tax assets liabilities at December 31, 2023 and 2022 are included in other assets and other
liabilities in the consolidated balance sheets, respectively.

The Corporation acquired $15.0 million in federal loss carryforwards with the 2014 acquisition of OSB,
which losses expire in years ranging from 2029 to 2033. Since the use of these losses is limited to $126,000
per year under Section 382 of the Internal Revenue Code, the Corporation recorded in deferred tax assets
at the time of acquisition the tax benefit of only $2.5 million of the losses that were deemed more likely
than not to be utilized before expiration. The Corporation also acquired $8.9 million in federal loss
carryforwards with the 2017 acquisition of Benchmark, which losses expire in years ranging from 2029 to
2036. Under Section 382 of the Internal Revenue Code, the annual limitation on the use of these losses is
$652,000 subject to other adjustments. At December 31, 2023, $1.1 million of loss carryforwards remained
from these acquisitions, resulting in a benefit of $252,000, which was reflected in deferred tax assets.

The Corporation had no unrecognized tax benefits at December 31, 2023 and 2022. The Corporation does
not expect the total amount of unrecognized tax benefits to significantly change in the next twelve
months. There was no accrued interest related to uncertain tax positions at December 31, 2023 and
December 31, 2022.

The Corporation and its subsidiaries are subject to U.S. federal income tax. The Corporation and its
subsidiaries are no longer subject to examination by taxing authorities for years before 2018. There are no
current federal examinations of the Corporation’s open tax years.

NOTE 12 - EMPLOYEE AND DIRECTOR BENEFITS

The Corporation sponsors a salary deferral, defined contribution plan which provides for both profit
sharing and employer matching contributions. The plan permits investing in the Corporation’s stock
subject to certain limitations. Participants who meet certain eligibility conditions are eligible to
participate and defer a specified percentage of their eligible compensation subject to certain income tax
law limitations. The Corporation makes discretionary matching and profit-sharing contributions, which
are approved annually by the Board of Directors and are subject to certain income tax law limitations.
Contribution expense for the plan amounted to $1,070,000, $1,261,000, and $1,399,000 in 2023, 2022, and
2021, respectively. At December 31, 2023, the plan owned 312,903 shares of the Corporation’s common
stock.

The Corporation also sponsors nonqualified deferred compensation plans, covering certain directors and
employees, which have been indirectly funded through the purchase of split-dollar life insurance policies.
In connection with the policies, the Corporation has provided an estimated liability for accumulated
supplemental retirement benefits amounting to $1,376,000 and $1,577,000 at December 31, 2023 and
2022, respectively, which is included in other liabilities in the accompanying consolidated balance sheets.
The Corporation has also purchased split-dollar life insurance policies for investment purposes and to
fund other employee benefit plans. The combined cash values of these policies aggregated $19,559,000
and $19,207,000 at December 31, 2023 and 2022, respectively.

Under an employee stock purchase plan, eligible employees may defer a portion of their compensation
and use the proceeds to purchase stock of the Corporation at a discount determined semi-annually by
the Board of Directors as stipulated in the plan. The Corporation sold from treasury 7,845 shares in 2023,
7,804 shares in 2022, and 11,115 shares in 2021 under the plan.

The Chief Executive Officer has an employment agreement which provides for certain compensation and
benefits should any triggering events occur, as specified in the agreement, including change of control or
termination without cause.

NOTE 13 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Corporation is party to financial instruments with off-balance sheet risk in the normal course of
business to meet the financing needs of its customers. These financial instruments are primarily loan
commitments to extend credit and letters of credit. These instruments involve, to varying degrees,
elements of credit risk in excess of the amounts recognized in the consolidated balance sheets. The
contract amount of these instruments reflects the extent of involvement the Corporation has in these
financial instruments.

The Corporation’s exposure to credit loss in the event of the nonperformance by the other party to the
financial instruments for loan commitments to extend credit and letters of credit is represented by the
contractual amounts of these instruments. The Corporation uses the same credit policies in making loan
commitments as it does for on-balance sheet loans.

NOTE 13 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONTINUED)

The following financial instruments whose contract amount represents credit risk were outstanding at
December 31, 2023 and 2022:

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of
any condition established in the contract. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amount does not necessarily represent future
cash requirements. The Corporation evaluates each customer’s credit worthiness on a case-by-case basis.
The amount of collateral obtained if deemed necessary by the Corporation upon extension of credit is
based on management’s credit evaluation of the customer. Collateral held varies but may include
accounts receivable, inventory, property, plant, and equipment, and income-producing commercial
properties.

Letters of credit are written conditional commitments issued by the Corporation to guarantee the
performance of a customer to a third party and are reviewed for renewal at expiration. The credit risk
involved in issuing letters of credit is essentially the same as that involved in extending loans to
customers. The Corporation requires collateral supporting these commitments when deemed necessary.

NOTE 14 - REGULATORY MATTERS

The Corporation (on a consolidated basis) and Bank are subject to various regulatory capital
requirements administered by the federal and state banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional discretionary actions by regulators
that, if undertaken, could have a direct material effect on the Corporation’s and Bank’s financial
statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Corporation and Bank must meet specific capital guidelines that involve quantitative
measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The capital amounts and classification are also subject to qualitative judgments by
the regulators about components, risk weightings, and other factors. Prompt corrective action provisions
are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Corporation and
Bank to maintain minimum amounts and ratios (set forth in the following table) of Common Equity Tier 1
Capital (CET1) to risk-weighted assets (as defined), total and Tier I capital (as defined) to risk-weighted
assets (as defined), and of Tier I capital to average assets (as defined). Management believes, as of
December 31, 2023 and 2022, that the Corporation and Bank meet all capital adequacy requirements to
which they are subject. Furthermore, the Board of Directors of the Bank has adopted a resolution to
maintain Tier I capital at or above 8% of total assets.

As of December 31, 2023, the most recent notification from federal and state banking agencies
categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action.
To be categorize

NOTE 14 - REGULATORY MATTERS (CONTINUED)

To be categorized as “well capitalized”, an institution must maintain minimum CET1, total risk-based, Tier
I risk-based and Tier I leverage ratios as set forth in the following table. There are no conditions or events
since that notification that management believes have changed the Bank’s category.

In July 2013 the U.S federal banking authorities approved the final rules (the “Basel III Capital Rules”)
which established a new comprehensive capital framework for U.S. banking organizations. The Basel III
Capital Rules have maintained the general structure of the current prompt corrective action framework,
while incorporating provisions which will increase both the quality and quantity of the Bank’s capital.
Generally, the Bank became subject to the new rules on January 1, 2015 with phase-in periods for many of
the new provisions. Management believes the Bank is complying with the fully phased-in capital
requirements.

The actual capital amounts and ratios of the Corporation and Bank as of December 31, 2023 and 2022 are
presented in the following table:

(1) Includes capital conservation buffer of 2.5%

On a parent company only basis, the Corporation’s primary source of funds is dividends paid by the Bank.
The ability of the Bank to pay dividends is subject to limitations under various laws and regulations, and
to prudent and sound banking principles. Generally, subject to certain minimum capital requirements,
the Bank may declare dividends without the approval of the State of Ohio, Division of Financial
Institutions (the “ODFI”), unless the total dividends in a calendar year exceed the total of the Bank’s net
profits for the year combined with its retained profits of the two preceding years.

NOTE 15 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION

A summary of condensed financial information of the parent company as of December 31, 2023 and 2022
and for each of the years in the three-year period ended December 31, 2023, is as follows:

NOTE 15 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

During 2005, the Board of Directors approved a program whereby the Corporation purchases shares of
its common stock in the open market. The decision to purchase shares, the number of shares to be
purchased, and the price to be paid depends upon the availability of shares, prevailing market prices, and
other possible considerations which may impact the advisability of purchasing shares. The Corporation
purchased 94,215 shares in 2023, 130,553 shares in 2022, and 11,651 shares in 2021 under the program. As of
December 31, 2023, there were 216,980 shares available for repurchase under this plan.

NOTE 16 - FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. A fair value measurement assumes that the transaction
to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the
absence of a principal market, the most advantageous market for the asset or liability. The price in the
principal (or most advantageous) market used to measure the fair value of the asset or liability shall not
be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the
market for a period prior to the measurement date to allow for marketing activities that are usual and
customary for transactions involving such assets and liabilities; it is not a forced transaction. Market
participants are buyers and sellers in the principal market that are independent, knowledgeable, and
both able and willing to transact.

FASB ASC 820-10, Fair Value Measurements (ASC 820-10) requires the use of valuation techniques that
are consistent with the market approach, the income approach, and/or the cost approach. The market
approach uses prices and other relevant information generated by market transactions involving
identical or comparable assets and liabilities. The income approach uses valuation techniques to convert
future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The
cost approach is based on the amount that currently would be required to replace the service capacity of
an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation
techniques refer to the assumptions that market participants would use in pricing the asset or liability.
Inputs may be observable or unobservable. Observable inputs reflect the assumptions market
participants would use in pricing the asset or liability developed based on market data obtained from
independent sources. Unobservable inputs reflect the reporting entity’s own assumptions about the
assumptions market participants would use in pricing the asset or liability developed based on the best
information available in the circumstances. In that regard, ASC 820-10 establishes a fair value hierarchy
for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets
or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation
has the ability to access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in
active markets; quoted prices for identical or similar assets or liabilities in markets that are not active;
inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived
principally from or corroborated by observable market data by correlation or other means.

Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the
measurement date. Unobservable inputs reflect the Corporation’s own assumptions about what market
participants would use to price the asset or liability. The inputs are developed based on the best
information available in the circumstances, which might include the Corporation’s own financial data
such as internally developed pricing models, discounted cash flow methodologies, as well as instruments
for which the fair value determination requires significant management judgment.

NOTE 16 - FAIR VALUE MEASUREMENTS (CONTINUED)

The following table summarizes financial assets (there were no financial liabilities) measured at fair value
as of December 31, 2023 and 2022, segregated by the level of the valuation inputs within the fair value
hierarchy utilized to measure fair value:

The table below presents a reconciliation and income statement classification of gains and losses for
mortgage servicing rights, which is measured at fair value on a recurring basis using significant
unobservable inputs (Level 3) for the years ended December 31, 2023, 2022 and 2021:

NOTE 16 - FAIR VALUE MEASUREMENTS (CONTINUED)

A description of the valuation methodologies used for instruments measured at fair value, as well as the
general classification of such instruments pursuant to the valuation hierarchy, and disclosure of
unobservable inputs follows.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices
are not available, fair value is based upon internally developed models that primarily use, as inputs,
observable market-based parameters. Valuation adjustments may be made to ensure that financial
instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty
credit quality, the Corporation’s creditworthiness, among other things, as well as unobservable
parameters. Any such valuation adjustments are applied consistently over time. The Corporation’s
valuation methodologies may produce a fair value calculation that may not be indicative of net realizable
value or reflective of future fair values. While management believes the Corporation’s valuation
methodologies are appropriate and consistent with other market participants, the use of different
methodologies or assumptions to determine the fair value of certain financial instruments could result in
a different estimate of fair value at the reporting date.

Securities Available-for-Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the
valuation hierarchy. Level 1 securities would typically include government bonds and exchange traded
equities. If quoted market prices are not available, then fair values are estimated using pricing models,
quoted prices of securities with similar characteristics, or discounted cash flows. Examples of such
instruments, which would generally be classified within Level 2 of the valuation hierarchy, include U.S.
Government and agencies, municipal bonds, mortgage-backed securities, and asset-backed securities. In
certain cases where there is limited activity or less transparency around inputs to the valuation, securities
may be classified within Level 3 of the valuation hierarchy.

Mortgage Servicing Rights

The Corporation records mortgage servicing rights at estimated fair value based on a discounted cash
flow model which includes discount rates between 9% and 11%, in addition to assumptions disclosed in
Note 6 that are considered to be unobservable inputs. Due to the significance of the level 3 inputs,
mortgage servicing rights have been classified as level 3.

Impaired Loans

The Corporation does not record impaired loans at fair value on a recurring basis. However, periodically, a
loan is considered impaired and is reported at the fair value of the underlying collateral less estimated
cost to sell, if repayment is expected solely from collateral. Collateral values are estimated using level 2
inputs, including market valuations and recent appraisals and level 3 inputs based on customized
discounting criteria such as additional appraisal adjustments to consider deterioration of value
subsequent to appraisal date and estimated cost to sell. Additional appraisal adjustments range between
10% and 30% of market value, and estimated selling cost ranges between 10% and 20% of the adjusted
appraised value. Due to the significance of the level 3 inputs, impaired loans fair values have been
classified as level 3.

NOTE 17 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of recognized financial instruments at December 31, 2023
and 2022 are as follows:

The above summary does not include accrued interest receivable and cash surrender value of life
insurance which are also considered financial instruments. The estimated fair value of such items is
considered to be their carrying amounts and would be considered Level 1 inputs.

There are also unrecognized financial instruments at December 31, 2023 and 2022 which relate to
commitments to extend credit and letters of credit. The contract amount of such financial instruments
amounts to $192.8 million at December 31, 2023 and $205.2 million at December 31, 2022. Such amounts
are also considered to be the estimated fair values.

The following methods and assumptions were used to estimate the fair value of each class of financial
instruments shown above:

Cash and cash equivalents:

Fair value is determined to be the carrying amount for these items (which include cash on hand, due
from banks, and federal funds sold) because they represent cash or mature in 90 days or less and do not
represent unanticipated credit concerns.

NOTE 17 - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Securities:
Where quoted prices are available in an active market, securities are classified within Level 1 of the
valuation hierarchy. Level 1 securities would typically include government bonds and exchange traded
equities. If quoted market prices are not available, then fair values are estimated using pricing models,
quoted prices of securities with similar characteristics, or discounted cash flows. Examples of such
instruments, which would generally be classified within Level 2 of the valuation hierarchy, include
municipal bonds, mortgage-backed securities, and asset-backed securities. In certain cases where there
is limited activity or less transparency around inputs to the valuation, securities may be classified within
Level 3 of the valuation hierarchy. The Corporation did not have any securities classified as Level 3 at
December 31, 2022 or 2021.

Loans:
Loans originated and intended for sale in the secondary market are carried at the estimated fair value in
the aggregate. Estimated fair value is determined based on quoted market prices in the secondary
market.

Fair value for loans was estimated for portfolios of loans with similar financial characteristics. For
adjustable-rate loans, which re-price at least annually and generally possess low risk characteristics, the
carrying amount is believed to be a reasonable estimate of fair value. For fixed rate loans the fair value is
estimated based on a discounted cash flow analysis, considering weighted average rates and terms of
the portfolio, adjusted for credit and interest rate risk inherent in the loans. Fair value for nonperforming
loans is based on recent appraisals or estimated discounted cash flows. The fair value disclosures for both
fixed and adjustable-rate loans were adjusted to reflect the exit price amount anticipated to be received
from the sale of the loans in an open market transaction.

Mortgage servicing rights:
The fair value for mortgage servicing rights is determined based on an analysis of the portfolio by an
independent third party.

Derivative assets and liabilities:
The fair value of derivative assets and liabilities are evaluated monthly based on derivative valuation
models using quoted prices for similar assets adjusted for specific attributes of the commitments and
other observable market data at the valuation date.

Deposit liabilities:
The fair value of core deposits, including demand deposits, savings accounts, and certain money market
deposits, is the amount payable on demand. The fair value of fixed-maturity certificates of deposit is
estimated using the rates offered at year end for deposits of similar remaining maturities. The estimated
fair value does not include the benefit that results from the low-cost funding provided by the deposit
liabilities compared to the cost of borrowing funds in the marketplace. The fair value disclosures for all of
the deposits were adjusted to reflect the exit price amount anticipated to be received from sale of the
deposits in an open market transaction.

NOTE 17 - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Other financial instruments:
The fair value of commitments to extend credit and letters of credit is determined to be the contract
amount, since these financial instruments generally represent commitments at existing rates. The fair
value of other borrowings is determined based on a discounted cash flow analysis using current interest
rates. The fair value of fed funds purchased and other borrowings is determined to be the carrying value
due to the short-term to maturity of these borrowings. The fair value of the junior subordinated
deferrable interest debentures is determined based on quoted market prices of similar instruments.

The fair value estimates of financial instruments are made at a specific point in time based on relevant
market information. These estimates do not reflect any premium or discount that could result from
offering for sale at one time the entire holdings of a particular financial instrument over the value of
anticipated future business and the value of assets and liabilities that are not considered financial
instruments. Since no ready market exists for a significant portion of the financial instruments, fair value
estimates are largely based on judgments after considering such factors as future expected credit losses,
current economic conditions, risk characteristics of various financial instruments, and other factors. These
estimates are subjective in nature and involve uncertainties and matters of significant judgment and
therefore cannot be determined with precision. Changes in assumptions could significantly affect these
estimates.

NOTE 18 - REVENUE RECOGNITION

The Corporation’s revenue from contracts with customers within the scope of ASC 606 is recognized in
noninterest income. The material groups of noninterest income are defined as follows:

Service charges on deposit accounts:
Service charges on deposit accounts primarily consist of account analysis fees, monthly maintenance
fees, overdraft fees, and other deposit account related fees. Overdraft fees and certain service charges are
fixed, and the performance obligation is typically satisfied at the time of the related transaction. The
consideration for analysis fees and monthly maintenance fees are variable as the fee can be reduced if
the customer meets certain qualifying metrics. The Company’s performance obligations are satisfied at
the time of the transaction or over the course of a month.

Interchange fee income:
The Company earns interchange fees from debit and credit cardholder transactions conducted through
the MasterCard payment network. Interchange fees from cardholder transactions represent a
percentage of the underlying transaction value and are recognized concurrently with the transaction
processing services provided to the cardholder.

Wealth management income:
The Company earns wealth management and investment brokerage fees from its services with
customers to manage assets for investment, to provide advisory services, and for account transactions.
Fees are based on the market value of the assets under management and are recognized monthly as the
Company’s performance obligations are met. Commissions on transactions are recognized on a trade-
date basis as the performance obligation is satisfied at the point in time in which the trade is processed.
Other related services are based on a fixed fee schedule and the revenue is recognized when the services
are rendered, which is when the Company has satisfied its performance obligation.

NOTE 18 - REVENUE RECOGNITION (CONTINUED)

The following table presents the Company’s non-interest income for the years ended December 31, 2023,
2022 and 2021. Items outside the scope of ASC 606 are noted as such.

(1) Not within the scope of ASC 606

NOTE 19 - LEASING ARRANGEMENTS

The Corporation leases various branch facilities under operating leases. Rent expense was $272,000,
$396,000, and $406,000 for the years ended December 31, 2023, 2022 and 2021, respectively. A right-of-
use lease asset, included in other assets, was $1,022,000 and $1,364,000 at December 31, 2023 and
December 31, 2022, respectively. A right-of-use lease liability, included in other liabilities, was $1,061,000
and $1,364,000 at December 31, 2023 and December 31, 2022, respectively.

The following is a schedule of future minimum rental payments required under the facility leases as of
December 31, 2023:

NOTE 20 - STOCK-BASED COMPENSATION

The United Bancshares, Inc. 2016 Stock Option Plan (the “Plan”) permits the Corporation to award non-
qualified stock options to eligible participants. There are no remaining shares available for issuance
pursuant to the Plan.

The Corporation issued 35,966 options during 2022 at an exercise price of $23.10, 21,958 options during
2021 at an exercise price of $34.60, and 63,858 options during 2020 at an exercise price of $16.77 under the
Plan. Following is a summary of activity for stock options for the years ended December 31, 2023, 2022
and 2021 (number of shares):

The options vest over a three-year period on the anniversary of the date of grant. At December 31, 2023,
86,921 options were vested and outstanding options had a weighted average remaining contractual term
of 6.7 years.

The fair value of options granted is estimated at the date of grant using the Black Scholes option pricing
model. Following are assumptions used in calculating the fair value of the options granted in 2022 and
2021. There were no options issued in 2023.

Total compensation expense related to the stock options granted in 2022, net of forfeitures, is expected
to be $250,000 and is being recognized ratably over the 36-month period beginning July 1, 2022. Total
compensation expense related to the stock options granted in 2021, net of forfeitures, is expected to be
$242,000 and is being recognized ratably over the 36-month period beginning July 1, 2021. Stock option
expense for outstanding awards amounted to $197,000, $222,000, and $183,000 for the years ended
December 31, 2023, 2022 and 2021, respectively.

NOTE 21 - CONTINGENT LIABILITIES

In the normal course of business, the Corporation and its subsidiary may be involved in various legal
actions, but in the opinion of management and legal counsel, the ultimate disposition of such matters is
not expected to have a material adverse effect on the consolidated financial statements.

NOTE 22 - QUARTERLY FINANCIAL DATA (UNAUDITED)

The following represents a summary of selected unaudited quarterly financial data for 2023 and 2022:

OUR
DIRECTORS

DIRECTORS - UNITED BANCSHARES, INC

Robert L. Benroth
Putnam County Auditor
Director Since 2003

Herbert H. Huffman
Retired - Educator
Director Since 2018

H. Edward Rigel
Farmer, Rigel Farms, Inc.
Director Since 2000

David P. Roach
Vice President/GM, First Family
Broadcasting of Ohio
Director Since 2001

Daniel W. Schutt
Chairman, Retired Banker
Director Since 2005

R. Steven Unverferth
Chairman, Unverferth Manufacturing
Corporation, Inc.
Director Since 2005

Brian D. Young
President/CEO, The Union Bank Co.
Director Since 2012

DIRECTORS - THE UNION BANK COMPANY

Robert L. Benroth
Putnam County Auditor
Director Since 2001

Anthony M.V. Eramo
Managing Director, MountainView
Financial Solutions
Director Since 2016

David P. Roach
Vice President/GM, First Family
Broadcasting of Ohio
Director Since 1997

Carol R Russell
President/CEO, Schulte Group
Director Since 2019

Herbert H. Huffman
Retired - Educator
Director Since 1993

Daniel W. Schutt
Retired Banker
Director Since 2005

Kevin L. Lammon
Village Administrator, Village of
Leipsic
Director Since 1996

R. Steven Unverferth
Chairman, Unverferth Manufacturing
Corporation, Inc.
Director Since 1993

William R. Perry
Farmer
Director Since 1990

H. Edward Rigel
Farmer, Rigel Farms, Inc.
Director Since 1979

Dr. Jane M. Wood
President, Bluffton University
Director Since 2021

Brian D. Young
President/CEO, The Union Bank Co.
Director Since 2008

BRANCH
LOCATIONS

Bowling Green
1300 N Main Street
Bowling Green, OH 43402
419-353-6088

Kalida
110 E North Street
Kalida, OH 45853
419-532-3366

Columbus Grove
101 Progressive Drive
Columbus Grove, OH 45830
419-659-4250

Leipsic
318 S Belmore Street
Leipsic, OH 45856
419-943-2171

Marion Richland
220 Richland Road
Marion, OH 43302
740-386-2171

Marysville LPO
240 W Fifth Street
Marysville, OH 43040
419-659-2141

Delphos
114 E Third Street
Delphos, OH 45833
419-692-2010

Findlay
1500 Bright Road
Findlay, OH 45840
419-424-1400

Findlay LPO
222 S Main Street
Findlay, OH 45840
419-659-2141

Gahanna
461 Beecher Road
Gahanna, OH 43230
614-269-4400

Gibsonburg
230 W Madison Street
Gibsonburg, OH 43431
419-637-2124

Lewis Center
30 Coal Bend
Delaware, OH 43015
740-549-3400

New Haven LPO
2660 W State Route 224
Plymouth, OH 44865
419-659-2141

Lima East
1410 Bellefontaine Avenue
Lima, OH 45804
419-229-6500

Ottawa
245 W Main Street
Ottawa, OH 45875
419-523-2265

Lima Shawnee
701 Shawnee Road
Lima, OH 45805
419-228-2114

Lima West
3211 Elida Road
Lima, OH 45805
419-331-3211

Marion Downtown
111 S Main Street
Marion, OH 43302
740-387-2265

Paulding
103 S Main Street
Paulding, OH 45879
419-567-1075

Pemberville
132 E Front Street
Pemberville, OH 43450
419-287-3211

Westerville
468 Polaris Pkwy
Westerville, OH 43082
614-296-4402

INVESTOR MATERIALS

The enclosed Summary Annual Report presents only an
overview of the more complete report that is available to you on
the Investor Relations link on our website, www.theubank.com.
Annual and quarterly shareholder reports, regulatory filings,
press releases, and articles about United Bancshares, Inc. are
also available through that website or by calling 800-837-8111.
We encourage you to access and review the full Annual Report
and proxy materials contained online before voting.

001CSN57EC