10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

Commission file number 000-29283

UNITED BANCSHARES, INC.

(Exact name of Registrant as specified in its charter)

Ohio

(State or other jurisdiction of incorporation or organization)

100 S. High Street, Columbus Grove, Ohio

(Address of principal executive offices)

34-1516518

(I.R.S. Employer Identification Number)

45830

(Zip Code)

(419) 659-2141

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.    See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ____   Accelerated filer ____   Non-accelerated filer____   Smaller Reporting Company  X  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes____   No    X  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of July 26, 2012: 3,446,305

This document contains 42 pages.  The Exhibit Index is on page 36 immediately preceding the filed exhibits.

1

UNITED BANCSHARES, INC.

Table of Contents

	Page
Part I – Financial Information
Item 1 – Financial Statements	3
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	31
Item 4 – Controls and Procedures	32
Part II – Other Information
Item 1 – Legal Proceedings	33
Item 1A – Risk Factors	33
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3 – Defaults upon Senior Securities	33
Item 4 – Mine Safety Disclosures	34
Item 5 – Other Information	34
Item 6 – Exhibits	34

2

PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

United Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited)

	June 30, 2012			December 31, 2011
ASSETS
CASH AND CASH EQUIVALENTS
Cash and due from banks	$	6,790,918		$	8,865,206
Interest-bearing deposits in other banks		32,926,930			48,389,046
Federal funds sold		2,569			32,722
Total cash and cash equivalents		39,720,417			57,286,974
SECURITIES, available-for-sale		163,544,581			151,955,957
FEDERAL HOME LOAN BANK STOCK, at cost		4,893,800			4,893,800
CERTIFICATES OF DEPOSIT		2,241,000			1,743,000
LOANS HELD FOR SALE		1,968,857			2,753,505
LOANS		321,828,184			337,946,708
Less allowance for loan losses		(7,050,422	)		(8,543,367	)
Net loans		314,777,762			329,403,341
PREMISES AND EQUIPMENT, net		9,396,387			9,581,311
GOODWILL		8,554,979			8,554,979
CASH SURRENDER VALUE OF LIFE INSURANCE		13,549,503			13,335,587
OTHER REAL ESTATE OWNED		2,013,150			2,833,500
OTHER ASSETS, including accrued interest and intangible assets		4,352,305			4,702,710
TOTAL ASSETS	$	565,012,741		$	587,044,664
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Non-interest bearing	$	61,748,457		$	66,399,124
Interest bearing		397,097,796			414,086,441
Total deposits		458,846,253			480,485,565
Other borrowings		30,048,200			32,780,963
Junior subordinated deferrable interest debentures		10,300,000			10,300,000
Accrued expenses and other liabilities		3,899,675			3,730,422
Total liabilities		503,094,128			527,296,950
SHAREHOLDERS' EQUITY
Common stock, $1.00 stated value. Authorized 10,000,000 shares; issued 3,760,557 shares		3,760,557			3,760,557
Surplus		14,661,025			14,660,579
Retained earnings		44,749,055			42,543,363
Accumulated other comprehensive income		3,557,991			3,598,031
Treasury stock 314,564 shares at June 30, 2012 and 314,878 shares at December 31, 2011, at cost		(4,810,015	)		(4,814,816	)
Total shareholders' equity		61,918,613			59,747,714
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	565,012,741		$	587,044,664

See notes to consolidated financial statements

3

United Bancshares, Inc. and Subsidiary

Condensed Consolidated Statements of Income (Unaudited)

	Three months ended June 30,					Six months ended June 30,
	2012			2011		2012		2011
INTEREST INCOME
Loans, including fees	$	4,472,614		$	5,444,360	$	9,146,166	$	11,042,272
Securities:
Taxable		675,779			829,210		1,330,828		1,649,445
Tax-exempt		447,797			493,060		904,909		980,739
Other		85,800			87,227		176,847		164,736
Total interest income		5,681,990			6,853,857		11,558,750		13,837,192
INTEREST EXPENSE
Deposits		892,771			1,470,291		1,989,032		2,826,426
Other borrowings		367,396			528,928		731,263		1,063,139
Total interest expense		1,260,167			1,999,219		2,720,295		3,889,565
NET INTEREST INCOME		4,421,823			4,854,638		8,838,455		9,947,627
PROVISION FOR LOAN LOSSES		-			1,300,000		-		2,575,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		4,421,823			3,554,638		8,838,455		7,372,627
NON-INTEREST INCOME
Gain on sales of loans		284,984			75,869		540,512		133,523
Gain on sales of securities		239,190			618,990		240,396		639,991
Change in fair value of mortgage servicing rights		(100,337	)		39,661		11,797		54,286
Other		679,179			725,121		1,364,755		1,372,311
Total non-interest income		1,103,016			1,459,641		2,157,460		2,200,111
NON-INTEREST EXPENSES		3,972,961			3,823,899		8,208,223		7,600,290
Income before income taxes		1,551,878			1,190,380		2,787,692		1,972,448
PROVISION FOR INCOME TAXES		349,000			203,000		582,000		219,000
NET INCOME	$	1,202,878		$	987,380	$	2,205,692	$	1,753,448
NET INCOME PER SHARE
Basic	$	0.35		$	0.29	$	0.64	$	0.51
Weighted average common shares outstanding		3,445,993			3,445,278		3,445,977		3,445,265
Diluted	$	0.35		$	0.29	$	0.64	$	0.51
Weighted average common shares outstanding		3,445,993			3,445,278		3,445,977		3,445,265

See notes to consolidated financial statements

4

United Bancshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

	Threemonths ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
NET INCOME	$	1,202,878		$	987,380		$	2,205,692		$	1,753,448
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on securities:
Unrealized holding gains during period		187,213			1,177,625			179,729			1,866,991
Reclassification adjustments for gains included in net income		(239,190	)		(618,989	)		(240,396	)		(639,991	)
Other comprehensive income (loss), before income taxes		(51,977	)		558,636			(60,667	)		1,227,000
Income tax expense (credit) related to items of other comprehensive income		17,672			(189,936	)		20,627			(417,180	)
Other comprehensive income (loss)		(34,305	)		368,700			(40,040	)		809,820
COMPREHENSIVE INCOME	$	1,168,573		$	1,356,080		$	2,165,652		$	2,563,268

See notes to consolidated financial statements

5

United Bancshares, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity (Unaudited)

Six months ended June 30, 2012 and 2011

	Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income			Treasury Stock			Total
BALANCE AT DECEMBER 31, 2011	$	3,760,557	$	14,660,579	$	42,543,363	$	3,598,031		$	(4,814,816	)	$	59,747,714
Net income						2,205,692								2,205,692
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes								(40,040	)					(40,040	)
Total comprehensive income														2,165,652
314 shares issued from treasury in connection with the Corporation’s Employee Stock Purchase Plan				446							4,801			5,247
BALANCE AT JUNE 30, 2012	$	3,760,557	$	14,661,025	$	44,749,055	$	3,557,991		$	(4,810,015	)	$	61,918,613
BALANCE AT DECEMBER 31, 2010	$	3,760,557	$	14,660,000	$	39,600,718	$	1,810,684		$	(4,826,896	)	$	55,005,063
Net income						1,753,448								1,753,448
Change in unrealized gain on available-for-sale securities, net of income taxes								809,820						809,820
Total comprehensive income														2,563,268
389 shares issued from treasury in connection with the Corporation’s Employee Stock Purchase Plan				307							5,948			6,255
BALANCE AT JUNE 30, 2011	$	3,760,557	$	14,660,307	$	41,354,166	$	2,620,504		$	(4,820,948	)	$	57,574,586

See notes to consolidated financial statements

6

United Bancshares, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited)

	Six months ended June 30,
	2012			2011
Cash flows provided by operating activities	$	4,068,507		$	160,460
Cash flows provided by investing activities:
Proceeds from calls or maturities of securities		23,230,429			13,905,032
Proceeds from sales of available-for-sale securities		7,711,574			12,245,534
Purchases of available-for-sale securities		(42,811,761	)		(35,588,722	)
Net decrease in loans		14,254,929			28,737,553
Purchases of certificates of deposit		(498,000	)		-
Proceeds from sale of other real estate owned		906,425			1,532,208
Expenditures for premises and equipment		(61,832	)		(37,453	)
Net cash provided by investing activities		2,731,764			20,794,152
Cash flows used in financing activities:
Net change in deposits		(21,639,312	)		(10,750,641	)
Long-term borrowings, net of repayments		(2,732,763	)		(22,585,067	)
Proceeds from issuance of common stock		5,247			6,255
Net cash used by financing activities		(24,366,828	)		(33,329,453	)
Net change in cash and cash equivalents		(17,566,557	)		(12,374,841	)
Cash and cash equivalents:
At beginning of period		57,286,974			48,603,636
At end of period	$	39,720,417			36,228,795
Cash paid for:
Interest	$	2,742,923		$	3,880,362
Income taxes	$	780,000		$	-
Non-cash investing activities:
Change in net unrealized gain on available-for-sale securities	$	179,730		$	1,866,991
Transfer of loans to other real estate owned	$	370,650		$	96,000

See notes to consolidated financial statements

7

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of United Bancshares, Inc. and subsidiaries (the “Corporation”) have been prepared without audit and in the opinion of management reflect all adjustments (which include normal recurring adjustments) necessary to present fairly such information for the periods and dates indicated.  Since the unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q, they do not contain all information and footnotes typically included in financial statements prepared in conformity with generally accepted accounting principles.  Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.  Complete audited consolidated financial statements with footnotes thereto are included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011.

The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiary, The Union Bank Company (“the Bank”).  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.  All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and reporting policies of the Corporation conform to generally accepted practices within the banking industry.  The Corporation considers all of its principal activities to be banking related.

Certain reclassifications of prior period amounts have been made to conform to the current presentation.

NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement; amending ASC Topic 820 which eliminates terminology differences between U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS) on the measurement of fair value and the related fair value disclosures.  While largely consistent with existing fair value measurement principles and disclosures, the changes were made as part of the continuing efforts to converge GAAP and IFRS.  The adoption of this guidance was effective for interim and annual periods beginning after December 15, 2011, and its adoption did not have a significant impact on the Corporation’s financial statements.

In June 2011, the FASB issued ASU 2011-05 Comprehensive Income; amending ASC Topic 220 to require that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements.  Additionally, the guidance requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented.  The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated.  In December 2011, the FASB issued ASU 2011-12 to defer changes in ASU 2011-05 that relate to the presentation of reclassification adjustments until FASB has time to reconsider the presentation of such adjustments.  The remaining portion of ASU 2011-05 was effective for annual periods beginning after December 15, 2011, and its adoption did not have a significant impact on the Corporation’s financial statements.

In December 2011, The FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, amending ASC Topic 210 requiring an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The amendment is effective for annual and interim periods beginning on or after January 1, 2013, and the Corporation has not yet determined the financial statement impact.

8

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

NOTE 3 - SECURITIES

The amortized cost and fair value of available-for-sale securities as of June 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

	June 30, 2012				December 31, 2011
	Amortized cost		Fair value		Amortized cost		Fair value
U.S. Government and agencies	$	9,502	$	9,530	$	7,506	$	7,521
Obligations of states and political subdivisions		45,069		47,711		46,459		49,311
Mortgage-backed		103,080		105,772		92,037		94,599
Other		502		531		502		525
Total	$	158,153	$	163,544	$	146,504	$	151,956

A summary of gross unrealized gains and losses on available-for-sale securities as of June 30, 2012 and December 31, 2011 follows (dollars in thousands):

	June 30, 2012				December 31, 2011
	Gross unrealized gains		Gross unrealized losses		Gross unrealized gains		Gross unrealized losses
U.S. Government and agencies	$	28	$	-	$	16	$	1
Obligations of states and political subdivisions		2,646		4		2,856		4
Mortgage-backed		2,693		1		2,570		8
Other		29		-		23		-
Total	$	5,396	$	5	$	5,465	$	13

9

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

NOTE 4 – LOANS

The following table presents the activity in the allowance for loan losses by portfolio segment for the periods ending June 30, 2012 and 2011:

	Commercial			Commercial and multi-family real estate			Residential real estate			Consumer			Total
Balance at December 31, 2011	$	2,596,629		$	4,847,234		$	998,941		$	100,563		$	8,543,367
Provision charged to expenses		(1,082,299	)		1,362,788			(223,312	)		(57,177	)		-
Losses charged off		(19,797	)		(1,525,343	)		(109,749	)		(7,881	)		(1,662,770	)
Recoveries		32,423			105,995			10,437			20,970			169,825
Balance at June 30, 2012	$	1,526,956		$	4,790,674		$	676,317		$	56,475		$	7,050,422

	Commercial			Commercial and multi-family real estate			Residential real estate			Consumer			Total
Balance at December 31, 2010	$	2,886,467		$	3,915,323		$	886,879		$	328,117		$	8,016,786
Provision charged to expenses		1,012,863			1,203,989			556,317			(198,169	)		2,575,000
Losses charged off		(464,729	)		(980,006	)		(321,072	)		(56,794	)		(1,822,601	)
Recoveries		10,640			396			47,434			51,505			109,975
Balance at June 30, 2011	$	3,445,241		$	4,139,702		$	1,169,558		$	124,659		$	8,879,160

10

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method for the periods ending June 30, 2012 and December 31 2011:

June 30, 2012	Commercial		Commercial and multi-family real estate		Residential real estate		Consumer		Total
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	$	518,070	$	1,760,228	$	-	$	-	$	2,278,298
Collectively evaluated forimpairment		1,008,886		3,030,446		676,317		56,475		4,772,124
Total allowance for loan losses	$	1,526,956	$	4,790,674	$	676,317	$	56,475	$	7,050,422
Loans:
Individually evaluated  for impairment	$	3,585,236	$	14,819,685	$	171,429	$	-	$	18,576,350
Collectively evaluated for impairment		53,575,727		186,092,080		58,996,664		4,587,363		303,251,834
Total ending loans balance	$	57,160,963	$	200,911,765	$	59,168,093	$	4,587,363	$	321,828,184

December 31, 2011	Commercial		Commercial and multi-family real estate		Residential real estate		Consumer		Total
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	$	754,874	$	1,235,351	$	-	$	-	$	1,990,225
Collectively evaluated for impairment		1,841,755		3,611,883		998,941		100,563		6,553,142
Total allowance for loan losses	$	2,596,629	$	4,847,234	$	998,941	$	100,563	$	8,543,367
Loans:
Individually evaluated  for impairment	$	3,972,618	$	16,842,092	$	172,494	$	-	$	20,987,204
Collectively evaluated for impairment		58,349,383		191,290,270		61,962,130		5,357,721		316,959,504
Total ending loans balance	$	62,322,001	$	208,132,362	$	62,134,624	$	5,357,721	$	337,946,708

11

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

Impaired loans were as follows as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Loans with no allowance for loan losses allocated	$	8,139,973	$	7,660,276
Loans with allowance for loan losses allocated		10,436,377		13,326,928
Total impaired loans	$	18,576,350	$	20,987,204
Amount of the allowance allocated to impaired loans	$	2,278,298	$	1,990,225

The average recorded investment in impaired loans for the six month period ended June 30, 2012 and 2011 was $18.6 million and $17.1 million, respectively.  There was approximately $109,000 and $80,000 in interest income recognized by the Bank on impaired loans on an accrual or cash basis during the six month period ended June 30 2012 and 2011, respectively.

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
	Recorded investment		Allowance for loan losses allocated		Recorded investment		Allowance for loan losses allocated
With no related allowance recorded:
Commercial	$	246,099	$	-	$	-	$	-
Agriculture		2,821,067		-		2,303,732		-
Commercial and multi-family real estate		3,801,853		-		5,184,050		-
Agricultural real estate		1,099,525		-		-		-
Residential real estate		171,429		-		172,494		-
With an allowance recorded:
Commercial		518,070		518,070		619,618		619,618
Agriculture		-		-		1,836,985		135,256
Commercial and multi-family real estate		9,918,307		1,760,228		10,870,325		1,235,351
Total	$	18,576,350	$	2,278,298	$	20,987,204	$	1,990,225

12

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

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 June 30, 2012 and December 31, 2011:

June 30, 2012	Nonaccrual		Loans past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	573,904	$	-	$	761,980
Commercial real estate		12,195,508		101,817		8,968,765
Agriculture		731,171		-		2,115,695
Agricultural real estate		1,067,675		-		160,367
Consumer		4,004		-		-
Residential real estate		2,563,045		21,309		56,116
Total	$	17,135,307	$	123,126	$	12,062,923

December 31, 2011	Nonaccrual		Loans past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	684,763	$	-	$	619,618
Commercial real estate		15,887,322		-		10,209,573
Agriculture		1,064,282		-		2,303,732
Agricultural real estate		1,074,694		-		-
Consumer		97		9,437		-
Residential real estate		2,988,983		46,005		57,192
Total	$	21,700,141	$	55,442	$	13,190,115

The following table presents the aging of the recorded investment in past due loans as of June 30, 2012 by class of loans:

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans not past due		Total
Commercial	$	-	$	-	$	-	$	-	$	43,675,519	$	43,675,519
Commercial real estate		4,504,594		439,007		2,399,199		7,342,800		180,379,481		187,722,281
Agriculture		-		-		705,372		705,372		12,780,072		13,485,444
Agricultural real estate		-		-		933,945		933,945		12,255,539		13,189,484
Consumer		41,305		8,460		4,004		53,769		4,533,594		4,587,363
Residential real estate		460,713		359,784		139,947		960,444		58,207,649		59,168,093
Total	$	5,006,612	$	807,251	$	4,182,467	$	9,996,330	$	311,831,854	$	321,828,184

13

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

The following table presents the aging of the recorded investment in past due loans as of December 31, 2011 by class of loans:

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans not past due		Total
Commercial	$	264,350	$	503,099	$	19,356	$	786,805	$	43,816,740	$	44,603,545
Commercial real estate		2,072,253		1,929,564		4,831,138		8,832,955		170,298,358		179,131,313
Agriculture		-		-		1,029,883		1,029,883		16,688,573		17,718,456
Agricultural real estate		-		-		933,945		933,945		28,067,104		29,001,049
Consumer		150,626		29,222		9,534		189,382		5,168,339		5,357,721
Residential  real estate		2,244,462		877,860		544,990		3,667,312		58,467,312		62,134,624
Total	$	4,731,691	$	3,339,745	$	7,368,846	$	15,440,282	$	322,506,426	$	337,946,708

Credit Quality Indicators:

The Company 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 Company analyzes loans individually by classifying the loans as to the credit risk.  This analysis generally includes loans with an outstanding balance greater than $100,000 and non-homogenous loans, such as commercial and commercial real estate loans.  This analysis is performed on a quarterly basis.  The Company uses the following definitions for risk ratings:

● Special Mention:  Loans which possess some credit deficiency or potential weakness which deserve close attention, but which do not yet warrant substandard classification.  Such loans pose 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 bank management may depend on secondary repayment sources to liquidate these loans.  The bank could sustain some degree of loss in these loans if the weaknesses remain uncorrected.

● 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.

14

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

Loans not meeting the previous criteria that are analyzed individually as part of the above described process are considered to be pass rated loans.  Loans listed as not rated are generally either less than $100,000 or are included in groups of homogenous loans.  As of June 30, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Doubtful		Not rated
June 30, 2012
Commercial	$	51,767,884	$	829,182	$	3,858,525	$	705,372	$	-
Commercial and multi-family real estate		167,285,667		8,223,699		24,628,326		774,073		-
Residential real estate		-		257,057		159,968		11,462		58,739,606
Consumer		-		-		15,952		-		4,571,411
Total	$	219,053,551	$	9,309,938	$	28,662,771	$	1,490,907	$	63,311,017

December 31, 2011	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	54,683,831	$	2,966,782	$	3,768,348	$	903,040	$	-
Commercial and multi-family real estate		170,750,804		9,245,517		27,202,096		933,945		-
Residential real estate		-		257,860		245,204		12,976		61,618,584
Consumer		-		2,538		18,716		-		5,336,467
Total	$	225,434,635	$	12,472,697	$	31,234,364	$	1,849,961	$	66,955,051

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses.  For residential 1 – 4 family and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment in non-impaired residential 1 – 4 family and consumer loans based on payment activity as of June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
	Consumer		Residential real estate		Consumer		Residential real estate
Performing	$	4,553,472	$	56,193,286	$	5,326,933	$	60,070,730
Nonperforming		17,939		2,546,320		9,534		1,547,854
Total	$	4,571,411	$	58,739,606	$	5,336,467	$	61,618,584

Purchased Loans:

From time to time, the Company enters into loan participation agreements to purchase loans.  At June 30, 2012 and December 31, 2011, the Bank held no loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

15

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

Modifications:

The Bank’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties.  These concessions typically result from the Bank’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions.  All TDRs are also classified as impaired loans.

When the Bank 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 with the sole (remaining) source of repayment for the loan in 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.

The Bank did not have any loan modifications considered to be Troubled Debt Restructurings during the six months ended June 30, 2012.

NOTE 5 – 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 payable quarterly at a floating rate adjustable quarterly and equal to 315 basis points over the 3-month LIBOR amounting to 3.61% at June 30, 2012 and 3.40% at June 30, 2011.  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. Interest expense on the debentures approximated $187,000 and $175,000 for the six month periods ended June 30, 2012 and 2011, respectively, and is included in interest expense-other 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, under Federal Reserve Board guidelines, the securities cannot be used to constitute more than 25% of the Corporation’s core Tier I capital inclusive of these securities.

16

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

NOTE 6 - FAIR VALUE MEASUREMENTS

ASC 820-10 defines fair value 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.

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.

Financial assets (there were no financial liabilities) measured at fair value on a recurring basis at June 30, 2012 and December 31, 2011 include available-for-sale securities, which are all valued using Level 2 inputs, and mortgage servicing rights, amounting to $815,864 at June 30, 2012 and $727,240 at December 31, 2011, which are valued using Level 3 inputs.  Financial assets (there were no financial liabilities) measured at fair value on a non-recurring basis at June 30, 2012 and December 31, 2011 include other real estate owned, as well as impaired loans approximating $16,298,000 at June 30, 2012 and $18,997,000 at December 31, 2011 all of which are valued using Level 3 inputs.

17

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

There were no financial instruments measured at fair value that moved to a lower level in the fair value hierarchy during the periods presented due to the lack of observable quotes in inactive markets for those instruments at June 30, 2012 and December 31, 2011.

The table below presents a reconciliation and income statement classification of gains and losses for mortgage servicing rights, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the six month period ended June 30, 2012 and year ended December 31, 2011:

	June 30, 2012			December 31, 2011
Balance at beginning of period	$	727,240		$	1,114,126
Gains or losses, including realized and unrealized:
Disposals – amortization based on loan payments and payoffs		(118,355	)		(240,662	)
Purchases, issuances, and settlements		195,182			168,342
Other changes in fair value		11,797			(314,566	)
Balance at end of period	$	815,864		$	727,240

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, 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 corporate and 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 are classified within Level 3 of the valuation hierarchy.  The Corporation did not have any securities classified as Level 1 or Level 3 at June 30, 2012 or December 31, 2011.  There were no gains or losses relating to securities available-for-sale included in earnings before income taxes that were attributable to changes in fair values of securities held at June 30, 2012 or December 31, 2011.

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 costs to sell, if repayment is expected solely from the collateral.  Collateral values are estimated using level 2 inputs, including recent appraisals and Level 3 inputs based on customized discounting criteria.  Due to the significance of the level 3 inputs, impaired loans fair values have been classified as level 3.

18

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

Other Real Estate Owned

The Corporation values other real estate owned at the estimated fair value of the underlying collateral less expected selling costs.  Such values are estimated primarily using appraisals and reflect a market value approach.  Due to the significance of the Level 3 inputs, other real estate owned has been classified as Level 3.  In accordance with the provisions of ASC 360-10, other real estate owned was written down to its estimated fair value of $2,013,150, resulting in impairment charges of $250,000 which are included in earnings for the six month period ended June 30, 2012.

Certain other financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.  Financial assets and financial liabilities, excluding impaired loans and other real estate owned, measured at fair value on a nonrecurring basis were not significant at June 30, 2012 and December 31, 2011.

NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of recognized financial instruments at June 30, 2012 and December 31, 2011 were as follows (dollars in thousands):

	June 30, 2012				December 31, 2011
	Carrying amount		Estimated value		Carrying amount		Estimated value
FINANCIAL ASSETS
Cash and cash equivalents	$	39,720	$	39,720	$	57,287	$	57,287
Securities, including Federal Home Loan Bank stock		158,153		163,544		156,850		156,850
Net loans		314,778		314,823		329,403		330,286
Mortgage servicing rights		816		816		727		727
	$	513,467	$	518,903	$	544,267	$	545,150
FINANCIAL LIABILITIES
Deposits	$	458,846	$	460,725	$	480,486	$	483,014
Other borrowings		30,048		32,601		32,781		35,484
Junior subordinated deferrable interest debentures		10,300		9,873		10,300		9,220
Other liabilities		3,900		3,966		3,730		3,801
	$	503,094	$	507,165	$	527,297	$	531,519

The above summary does not include accrued interest receivable or 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.

There are also unrecognized financial instruments at June 30, 2012 and December 31, 2011 which relate to commitments to extend credit and letters of credit.  The contract amount of such financial instruments amounts to $67,455,000 at June 30, 2012 and $69,398,000 at December 31, 2011.  Such amounts are also considered to be the estimated fair values.

19

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

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.

Securities:

The fair value of securities is determined based on quoted market prices of the individual securities; if not available, estimated fair value is obtained by comparison to other known securities with similar risk and maturity characteristics.  Such value does not consider possible tax ramifications or estimated transaction costs.

Loans:

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.

Mortgage servicing rights:

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

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 quarter 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.

Other borrowings and junior subordinated deferrable interest debentures:

The fair value of other borrowings (consisting of Federal Home Loan Bank borrowings, securities sold under agreements to repurchase, and customer repurchase agreements), and junior subordinated deferrable interest debentures are determined using the net present value of discounted cash flows based on current borrowing rates for similar types of borrowing arrangements, and are obtained from an independent third party.

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 other liabilities is generally considered to be carrying value except for the deferred compensation agreement.  The fair value of the contract is determined based on a discounted cash flow analysis using a current interest rate for a similar instrument.

20

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2012

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 8 – SUBSEQUENT EVENTS

Management evaluated subsequent events through the date the consolidated financial statements were issued. Events or transactions occurring after June 30, 2012 but prior to when the consolidated financial statements were issued, that provided additional evidence about conditions that existed at June 30, 2012 have been recognized in the consolidated financial statements for the period ended June 30, 2012.  Events or transactions that provided evidence about conditions that did not exist at June 30, 2012 but arose before the financial statements were issued have not been recognized in the consolidated financial statements for the period ended June 30, 2012.

21

ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

The following data should be read in conjunction with the unaudited consolidated financial statements and management’s discussion and analysis that follows:

	As of or for the Three Months Ended June 30,						As of or for the Six Months Ended June 30,
	2012			2011			2012			2011
SIGNIFICANT RATIOS (Unaudited)
Net income to:
Average assets (a)		0.83	%		0.69	%		0.76	%		0.58	%
Average shareholders’ equity (a)		7.84	%		6.94	%		7.26	%		6.23	%
Net interest margin (a)		3.47	%		3.63	%		3.45	%		3.73	%
Efficiency ratio (b)		69.03	%		58.22	%		71.61	%		60.07	%
Average shareholders’ equity to average assets		10.57	%		9.94	%		10.54	%		9.35	%
Loans to deposits (end of period)		70.57	%		75.04	%		70.57	%		75.04	%
Allowance for loan losses to loans (end of period)		2.19	%		2.48	%		2.19	%		2.48	%
Book value per share	$	17.97		$	16.71		$	17.97		$	16.71

(a) Net income to average assets, net income to average shareholders’ equity and net interest margin are presented on an annualized basis.  Net interest margin is calculated using fully-tax equivalent net interest income as a percentage of average interest earning assets.

(b) Efficiency ratio is a ratio of non-interest expense as a percentage of fully tax equivalent net interest income plus non-interest income.

22

Introduction

United Bancshares, Inc. (the “Corporation”), an Ohio corporation, is a bank 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 100 S. High Street, Columbus Grove, Ohio 45830.  The Corporation is a one-bank holding company, as that term is defined by the Federal Reserve Board.

The Union Bank Company (“the Bank”), a wholly-owned subsidiary of the Corporation, is engaged in the business of commercial banking.  The Bank is an Ohio state-chartered bank, which serves Allen, Hancock, Putnam, Sandusky, Van Wert and Wood counties in Ohio, with office locations in Bowling Green, Columbus Grove, Delphos, Findlay, Gibsonburg, Kalida, Leipsic, Lima, Ottawa, and Pemberville, Ohio.

The Bank offers a full range of commercial banking services, including checking accounts, savings and money market accounts, time certificates of deposit, automatic teller machines, commercial, consumer, agricultural, residential mortgage and home equity loans, credit card services, safe deposit box rentals, and other personalized banking services.  The Bank has formed 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 UBC Property, Inc. to hold and manage certain other real estate owned.

When or if used in the Corporation’s Securities and Exchange Commission filings or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases:  “anticipate,” “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “is estimated,” “is projected,” or similar expressions are intended to identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Any such statements are subject to the risks and uncertainties that include but are not limited to: changes in economic conditions in the Corporation’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Corporation’s market area, and competition.  All or some of these factors could cause actual results to differ materially from historical earnings and those presently anticipated or projected.

The Corporation cautions readers not to place undue reliance on any such forward looking statements, which speak only as of the date made, and advises readers that various factors, including regional and national economic conditions, substantial changes in the levels of market interest rates, credit and other risks associated with lending and investing activities, and competitive and regulatory factors could affect the Corporation’s financial performance and could cause the Corporation’s actual results for future periods to differ materially from those anticipated or projected.  The Corporation does not undertake, and specifically disclaims any obligation, to update any forward looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

The Corporation is registered as a Securities Exchange Act of 1934 reporting company.

The following discussion and analysis of the consolidated financial statements of the Corporation is presented to provide insight into management’s assessment of the financial results.

23

RESULTS OF OPERATIONS

Overview of the Income Statement

For the quarter ended June 30, 2012, the Corporation reported net income of $1,203,000, or $0.35 basic earnings per share compared to second quarter 2011 net income of $988,000 or $0.29 per share.  Compared with the same period in 2011, second quarter net income increased $215,000 (21.8%) primarily due to a decrease in the provision for loan losses of $1,300,000 offset by a $433,000 decrease in net interest income, a $357,000 decrease in non-interest income, a $149,000 increase in non-interest expenses and a $146,000 increase in the provision for income taxes.

Net income for the six months ended June 30, 2012 totaled $2,205,000, or $0.64 basic earnings per share compared to $1,753,000 or $0.51 basic earnings per share for the same period in 2011. Compared with the same period in 2011, net income increased $452,000, or 25.8%. The increase for the six month period ended June 30, 2012, as compared to the six month period ended June 30, 2011, was primarily the result of a decrease in the provision for loan losses of $2,575,000 offset by a decrease in net interest income of $1,109,000, a decrease in non-interest income of $43,000, an increase in non-interest expenses of $608,000, and an increase in the provision for income taxes of $363,000.

Net Interest Income

Net interest income is the amount by which interest income from interest-earning assets exceeds interest incurred on interest-bearing liabilities. Interest-earning assets consist principally of loans and investment securities while interest-bearing liabilities include interest-bearing deposit accounts and borrowed funds.  Net interest income remains the primary source of revenue for the Corporation.  Changes in market interest rates, as well as changes in the mix and volume of interest-bearing assets and interest-bearing liabilities impact net interest income.  Net interest income was $4,422,000 for the second quarter of 2012, compared to $4,855,000 for the same period of 2011, a decrease of $433,000 (8.9%).  For the six months ended June 30, 2012, net interest income was $8,838,000 compared to $9,948,000 for the same period of 2011, a decrease of $1,109,000 (11.2%).

Net interest margin is calculated by dividing net interest income (adjusted to reflect tax-exempt interest income on a taxable equivalent basis) by average interest-earning assets.  The resulting percentage serves as a measurement for the Corporation in comparing its results with those of past periods as well as those of peer institutions.  For the quarterly and six month periods ended June 30, 2012, the net interest margin (on a taxable equivalent basis) was 3.47% and 3.45%, respectively, compared with 3.63% and 3.73% for the same periods in 2011.

Deposits comprised 90.7% of average interest-bearing liabilities for the six month period ended June 30, 2012, compared to 88% for the same period in 2011.  A lower overall interest rate environment resulted in the Corporation’s cost of funds being 1.19% for the first six months of 2012 compared to 1.59% for the same period in 2011.  This decrease in cost of funds was offset by a decrease in the yield of interest-earning assets (4.46% for the first six months of 2012 compared to 5.11% for the same period of 2011) which negatively impacted the net interest margin.

Provision for Loan Losses

The Corporation’s provision for loan losses is determined based upon management’s calculation of the allowance for loan losses and is reflective of management’s assessment of the quality of the portfolio and overall management of the inherent credit risk of the loan portfolio.  Changes in the provision for loan losses are dependent, among other things, on loan delinquencies, collateral position, portfolio risks and general economic conditions in the Corporation’s lending markets.  No provision for loan losses was made for the second quarter of 2012 compared to a $1,300,000 provision for the same period in 2011. The decrease in the provision for loan losses resulted primarily from declining historic loss rates, which are used to calculate the reserve for the homogenous pool of loans, a decrease in risk rated loans and an overall decrease in the loan portfolio.  See “Allowance for Loan Losses” under Financial Condition for further discussion relating to the provision for loan losses.

24

Non-Interest Income

The Corporation’s non-interest income is largely generated from activities related to the origination, servicing and gain on sales of fixed rate mortgage loans, customer deposit account fees, earnings on life insurance policies, income arising from sales of investment products to customers, and occasional security sale transactions.  Income related to customer deposit accounts and Bank Owned Life Insurance provides a relatively steady flow of income while the other sources are more volume or transaction related and consequently can vary from quarter to quarter.  For the quarter ended June 30, 2012, non-interest income was $1,103,000, compared to $1,460,000 for the second quarter of 2011, a $357,000 (24.4%) decrease.

Gain on sales of loans amounted to $285,000 for the quarter ended June 30, 2012, compared to $76,000 for the second quarter of 2011, an increase of $209,000 (275%).  Quarterly gain on sale of loans was impacted by an increase in capitalized servicing rights of $94,000 in 2012 and a decrease of $44,000 in 2011.  Gain on sales of loans amounted to $541,000 for the six months ended June 30, 2012 compared to $134,000 for the comparable period in 2011, an increase of $407,000 (303.7%).  Gain on sales of loans for the six month period included capitalized servicing rights of $195,000 in 2012 and $50,000 in 2011.  The increase in gain on sale of loans corresponds with the increase in loan sales activity.  Loan sales for the first six months of 2012 were $30 million, compared to $5.4 million for the first six months of 2011.

The fair value of mortgage servicing rights decreased $100,000 for the quarter ended June 30, 2012, compared to a $40,000 increase for the quarter ended June 30, 2011. For the six month period ended June 30, 2012, there was an increase in fair value of mortgage servicing rights of $12,000, compared to an increase in fair value of mortgage servicing rights of $54,000 for the six months ended June 30, 2011.

Gain on sales of securities amounted to $239,000 for the quarter ended June 30, 2012, compared to $619,000 for the second quarter of 2011, a decrease of $380,000 (61.4%).  Gain on sales of securities amounted to $240,000 for the six months ended June 30, 2012 compared to $640,000 for the comparable period in 2011, a decrease of $400,000 (62.4%).

Non-Interest Expenses

For the quarter ended June 30, 2012, non-interest expenses were $3,973,000, compared to $3,824,000 for the second quarter of 2011, a $149,000 (3.9%) increase.  For the six month period ended June 30, 2012, non-interest expenses totaled $8,208,000, compared to $7,600,000 for the comparable period of 2011, an increase of $608,000 (8%).  The increase in non-interest expenses for the six month period ended June 30, 2012 was primarily attributable to a $386,000 increase in salaries and benefits, a $195,000 increase in other real estate owned expenses, a $69,000 increase in miscellaneous expenses, a $56,000 increase in ATM/debit card processing expenses, and a $50,000 increase in loan closing fees, offset by a $145,000 decrease in FDIC premium expenses.  The increase in salaries and benefits resulted primarily from filling vacant and new positions, coupled with a slight increase due to annual salary and benefit increases.

Maintaining acceptable levels of non-interest expenses and operating efficiency are key performance indicators for the Corporation in its strategic initiatives.  The financial services industry uses the efficiency ratio (total non-interest expense as a percentage of the aggregate of fully-tax equivalent net interest income and non-interest income) as a key indicator of performance.  For the quarter ended June 30, 2012, the Corporation’s efficiency ratio was 69.03%, compared to 58.22% for the same period of 2011.  For the six month period ended June 30, 2012, the Corporation’s efficiency ratio was 71.61% compared to 58.22% for the same period of 2011.  The efficiency ratio was negatively impacted by the decrease in net interest income, decrease in non-interest income and increase in non-interest expenses for the quarter and six month period ended June 30, 2012 compared to the same period of 2011.

25

Provision for Income Taxes

The provision for income taxes for the quarter ended June 30, 2012 was $349,000, compared to $203,000 for the comparable 2011 period.  The provision for income taxes for the six month period ended June 30, 2012 was $582,000, or 20.9% of income before income taxes, compared to $219,000 or 11% for the comparable 2011 period. The effective tax rate for the six months ended June 30, 2011 was low due to tax exempt income from securities and loans, as well as bank-owned life insurance comprising approximately 46% of the Corporation’s income before income taxes.  For the six months ended June 30, 2011, the provision for income taxes was also reduced by $50,000 related to a FIN 48 reserve that was established under the Tax Equity and Fiscal Responsibility Act (TEFRA) being reversed back into income.  This reversal resulted from a 2009 IRS exam that was closed with no adjustments.

Return on Assets

Return on average assets was 0.83% for the second quarter of 2012, compared to 0.69% for the second quarter of 2011.  For the six month period ended June 30, 2012, return on average assets was 0.76%, compared to 0.58% for the same period of 2011.

Return on Equity

Return on average shareholders’ equity for the second quarter of 2012 was 7.84%, compared to 6.94% for the same period of 2011.  Return on average equity for the six months ended June 30, 2012 was 7.26%, compared to 6.23% for the same period in 2011.

The Corporation and Bank met all regulatory capital requirements as June 30, 2012, and the Bank is considered “well capitalized” under regulatory and industry standards of risk-based capital.

26

FINANCIAL CONDITION

Overview of Balance Sheet

Total assets amounted to $565 million at June 30, 2012, compared to $587 million at December 31, 2011, a decrease of $22 million, or 3.8%.  The decrease in total assets was primarily the result of decreases in total cash and cash equivalents of $17.6 million (30.7%), gross loans of $16.1 million (4.8%), and other real estate owned of $820,000 (29%) offset by an increase in available-for-sale securities of $11.6 million (7.6%) and a decrease in the allowance for loan losses of $1.5 million (17.5%).  Deposits during this same period decreased $21.6 million, or 4.5%.

Shareholders’ equity increased from $59.7 million at December 31, 2011 to $61.9 million at June 30, 2012, an increase of $2.2 million, or 3.6%.  This increase was the result of net income ($2.2 million) and the issuance of 314 treasury shares under the Corporation’s Employee Stock Purchase Plan ($5,000) offset by a $40,000 decrease in unrealized securities gains, net of tax.  The decrease in unrealized securities gains during the six month period ended June 30, 2012, was the result of customary and expected changes in the bond market. Net unrealized gains on securities are reported as accumulated other comprehensive income in the consolidated balance sheets.

Cash and Cash Equivalents

Cash and cash equivalents totaled $39.7 million at June 30, 2012, compared to $57.3 million at December 31, 2011. Cash and cash equivalents at June 30, 2012 includes interest-bearing deposits in other banks of $32.9 million compared to $48.4 million at December 31, 2011.  Management believes the current level of cash and cash equivalents is sufficient to meet the Corporation’s present liquidity and performance needs.  Total cash and cash equivalents fluctuate on a daily basis due to transactions in process and corresponding liquidity sources and uses. Management believes the Corporation’s liquidity needs in the near term will be satisfied by the current level of cash and cash equivalents, readily available access to traditional and non-traditional funding sources, and the portions of the investment and loan portfolios that will mature within one year.  These sources of funds should enable the Corporation to meet cash obligations and off-balance sheet commitments as they come due.  In addition, the Corporation has access to various sources of additional borrowings by virtue of long-term assets that can be used as collateral for such borrowings.

Securities

Management monitors the earnings performance and liquidity of the securities portfolio on a regular basis through Asset/Liability Committee (ALCO) meetings.  As a result, all securities, except FHLB stock, have been designated as available-for-sale and may be sold if needed for liquidity, asset-liability management or other reasons.  Such securities are reported at fair value, with any net unrealized gains or losses reported as a separate component of shareholders’ equity, net of related incomes taxes.

At June 30, 2012, available-for-sale securities totaled $163.5 million, an increase of $11.6 million from December 31, 2011.  At June 30, 2012, the amortized cost of the Corporation’s securities totaled $158.1 million, resulting in net unrealized gains of $5.4 million and a corresponding after tax increase in shareholders’ equity of $3.6 million.

Loans

The Corporation’s lending is primarily centered in Northwestern and West Central Ohio.  Gross loans totaled $321.8 million at June 30, 2012, compared to $337.9 million at December 31, 2011, a decrease of $16.1 million (4.8%).  The Bank has continued to experience soft loan demand in its lending markets.  The decrease in loan balances during the first six months of 2012 resulted primarily from a decline in loan origination activity, normal pay downs and runoff on current loans, and a continued focus by the Bank’s credit administration department to identify and dispose of or reduce problem credits.

27

Allowance for Loan Losses

The following table presents a summary of activity in the allowance for loan losses for the six months ended June 30, 2012 and 2011, respectively:

	(dollars in thousands)
	2012			2011
Balance, beginning of period	$	8,543		$	8,017
Provision for loan losses		-			2,575
Charge offs		(1,663	)		(1,823	)
Recoveries		170			110
Net charge offs		(1,493	)		(1,713	)
Balance, end of period	$	7,050		$	8,879

The allowance for loan losses as a percentage of gross loans was 2.19% at June 30, 2012 and 2.53% at December 31, 2011.  The increased allowance for loan losses as a percentage of gross loans over the past few years is attributable to the higher level of charge-offs experienced by the Bank, continued distress in the overall quality of the loan portfolio as evidenced by the level of classified credits, and continued concerns with the prolonged economic downturn.

Regular provisions are made in amounts sufficient to maintain the balance in the allowance for loan losses at a level considered by management to be adequate for losses within the portfolio.  Even though management uses all available information to assess possible loan losses, future additions or reductions to the allowance may be required as changes occur in economic conditions and specific borrower circumstances.  The regulatory agencies that periodically review the Bank’s allowance for loan losses may also require additions to the allowance or the charge-off of specific loans based upon the information available to them at the time of their examinations.

Loans on non-accrual status amounted to $17.1 million and $21.7 million at June 30, 2012 and December 31, 2011, respectively.  Non-accrual loans as a percentage of outstanding loans amounted to 5.3% at June 30, 2012, compared to 5.1% at December 31, 2011.

The Bank considers a loan to be impaired when it becomes probable that the Bank will be unable to collect under the contractual terms of the loan, based on current information and events.  Impaired loans, principally consisting of commercial and commercial real estate credits, amounted to $18.6 million at June 30, 2012 and $21 million at December 31, 2011.  Impaired loans at June 30, 2012 and December 31, 2011, included $8.1 million and $7.7 million, respectively, of loans with no specific reserves included in the allowance for loan losses and $10.5 million and $13.3 million, respectively, of loans with specific reserves of $2.3 million and $1.9 million included in the Bank’s June 30, 2012 and December 31, 2011 allowance for loan losses.

In addition to impaired loans, the Bank had other potential problem credits of $20.9 million at June 30, 2012 and $24.6 million at December 31, 2011.  The Bank’s credit administration department continues to closely monitor these credits.

The Bank provides pooled reserves for potential problem loans using loss rates calculated considering historic net loan-charge off experience.  The Bank has experienced $1.5 million of net loan charge-offs during the first six months of 2012 compared to annual net loan charge-offs of $3.8 million in 2011, $3.3 million in 2010, and $5.9 million in 2009, with most of the charge-offs coming from the commercial and commercial real estate loan portfolios.  The Bank also provides general reserves for the remaining portion of its loan portfolio not considered to be problem or potential problem loans. These general reserves are also calculated considering, among other things, the historic net charge-off experience for the relative loan type.  The negative provision of $1.1 million to the commercial loan portfolio segment during the first six months of 2012 resulted from a decrease in commercial loan balances, a decrease in specific reserves allocated to the commercial segment , and a decrease in historic loss rates applied to calculate reserves.  During the first six months of 2012, historic loss rates applied to commercial loans has decreased significantly as the 2009 charge-offs become less of a factor in the calculation.

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Funding Sources

The Corporation considers a number of alternatives, including but not limited to, deposits, as well as short-term and long-term borrowings when evaluating funding sources.  Deposits, including customer deposits, brokered certificates of deposit, and public funds deposits, continue to be the most significant source of funds for the Corporation, totaling $458.8 million, or 91.9% of the Corporation’s funding sources at June 30, 2012.  Total deposits decreased $21.6 million during the six months ending June 30, 2012.

Non-interest bearing deposits remain a smaller portion of the funding source for the Corporation than for most of its peers.  Non-interest bearing deposits comprised 13.5% of total deposits at June 30, 2012, compared to 10.7% at June 30, 2011.

In addition to traditional deposits, the Corporation maintains both short-term and long-term borrowing arrangements. Other borrowings consisted of FHLB borrowings totaling $27.5 million at June 30, 2012 and $27.6 million at December 31, 2011, and customer repurchase agreements totaling $2.5 million and $5.2 million at June 30, 2012 and December 31, 2011, respectively.  The Corporation also has outstanding junior subordinated deferrable interest debentures of $10.3 million at June 30, 2012 and December 31, 2011.  Management plans to maintain access to various borrowing alternatives as an appropriate funding source.

Shareholders’ Equity

For the six month period ended June 30, 2012, the Corporation had net income of $2,205,000.  The increase (decrease) in net unrealized gains on available-for-sale securities, net of income taxes, was ($40,000) and $810,000 for the six months ended June 30, 2012 and 2011, respectively.  Since all of the securities in the Corporation’s portfolio are classified as available-for-sale, both securities and the equity section of the consolidated balance sheets are sensitive to the changing market values of securities.

The Corporation has also complied with the standards of capital adequacy mandated by the banking industry.  Bank regulators have established “risk-based” capital requirements designed to measure capital adequacy.  Risk-based capital ratios reflect the relative risks of various assets banks hold in their portfolios.  A weight category of 0% (lowest risk assets), 20%, 50%, or 100% (highest risk assets) is assigned to each asset on the balance sheet and to certain off-balance sheet commitments.

29

Liquidity and Interest Rate Sensitivity

The objective of the Corporation’s asset/liability management function is to maintain consistent growth in net interest income through management of the Corporation’s balance sheet liquidity and interest rate exposure based on changes in economic conditions, interest rate levels, and customer preferences.

The Corporation manages interest rate risk to minimize the impact of fluctuating interest rates on earnings.  The Corporation uses simulation techniques that attempt to measure the volatility of changes in the level of interest rates, basic banking interest rate spreads, the shape of the yield curve, and the impact of changing product growth patterns.  The primary method of measuring the sensitivity of earnings of changing market interest rates is to simulate expected cash flows using varying assumed interest rates while also adjusting the timing and magnitude of non-contractual deposit re-pricing to more accurately reflect anticipated pricing behavior.  These simulations include adjustments for the lag in prime loan re-pricing and the spread and volume elasticity of interest-bearing deposit accounts, regular savings and money market deposit accounts.

The principal function of interest rate risk management is to maintain an appropriate relationship between those assets and liabilities that are sensitive to changing market interest rates.  The Corporation closely monitors the sensitivity of its assets and liabilities on an ongoing basis and projects the effect of various interest rate changes on its net interest margin.  Interest sensitive assets and liabilities are defined as those assets or liabilities that mature or re-price within a designated time frame.

Management believes the Corporation’s current mix of assets and liabilities provides a reasonable level of risk related to significant fluctuations in net interest income and the resulting volatility of the Corporation’s earning base.  The Corporation’s management reviews interest rate risk in relation to its effect on net interest income, net interest margin, and the volatility of the earnings base of the Corporation.

Effects of Inflation on Financial Statements

All of the Corporation’s assets relate to commercial banking operations and are generally monetary in nature. Therefore, they are not impacted by inflation to the same degree as companies in capital-intensive industries in a replacement cost environment.  During a period of rising prices, a net monetary asset position results in loss of purchasing power and conversely a net monetary liability position results in an increase in purchasing power.  In the commercial banking industry, monetary assets typically exceed monetary liabilities.  The Bank has not experienced a significant level of inflation or deflation during the six month period ended June 30, 2012.  However, because of the depressed national real estate market and sluggish local economy, the Bank has experienced declines in the value of collateral securing commercial and non-commercial real estate loans.  Management continues to closely monitor these trends in calculating the Bank’s allowance for loan losses.

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ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The only significant market risk to which the Corporation is exposed is interest rate risk.  The business of the Corporation and the composition of its balance sheet consist of investments in interest-earning assets (primarily loans and securities), which are funded by interest bearing liabilities (deposits and borrowings).  These financial instruments have varying levels of sensitivity to changes in the market rates of interest, resulting in market risk. None of the Corporation’s financial instruments are held for trading purposes.

The Corporation manages interest rate risk regularly through its Asset Liability Committee.  The Committee meets on a regular basis and reviews various asset and liability management information, including but not limited to, the bank’s liquidity positions, projected sources and uses of funds, interest rate risk positions and economic conditions.

The Corporation monitors its interest rate risk through a sensitivity analysis, whereby it measures potential changes in its future earnings and the fair values of its financial instruments that may result from one or more hypothetical changes in interest rates.  This analysis is performed by estimating the expected cash flows of the Corporation’s financial instruments using interest rates in effect at year-end.  For the fair value estimates, the cash flows are then discounted to year-end to arrive at an estimated present value of the Corporation’s financial instruments. Hypothetical changes in interest rates are then applied to the financial instruments, and the cash flows and fair values are again estimated using these hypothetical rates.  For the net interest income estimates, the hypothetical rates are applied to the financial instruments based on the assumed cash flows.  The Corporation typically applies interest rate “shocks” to its financial instruments up and down under various scenarios up to as much as 400 basis points depending on the overall level of interest rates at any point in time.

There have been no material changes in the quantitative and qualitative information about market risk from the information provided in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

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ITEM 4

CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures.

With the participation of our management, including our chief executive officer and chief financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")); as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that:

(a) information required to be disclosed by the Corporation in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Corporation’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure;

(b) information required to be disclosed by the Corporation in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and

(c) the Corporation’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Corporation and its consolidated subsidiaries is made known to them, particularly during the period for which our periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.

Changes in Internal Control over Financial Reporting.

There were no significant changes during the period covered by this Quarterly Report on Form 10-Q in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II – Other Information

Item 1:  Legal Proceedings.

There are no pending legal proceedings to which the Corporation or its subsidiaries are a party or to which any of their property is subject except routine legal proceedings to which the Corporation or its subsidiaries are a party incident to the banking business.  None of such proceedings are considered by the Corporation to be material.

Item 1A:  Risk Factors

There have been no material changes in the discussion pertaining to risk factors that was provided in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds.

The Corporation has not sold any of its securities which were not registered under the Securities Act during the period covered by this report.  The table below includes certain information regarding the Corporation’s purchase of United Bancshares, Inc. common stock during the quarterly period ended June 30, 2012:

Period			Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of a publicly announced plan or program		Maximum number of shares that may yet be purchased under the plan or program (a)
04/01/12	-	04/30/12	None	None		302,058		97,942
05/01/12	-	05/31/12	None	None		302,058		97,942
06/01/12	-	06/30/12	None	None		302,058		97,942

(a) A stock repurchase program (“Plan”) was announced on July 29, 2005 (100,000 shares authorized) and expanded by 100,000 shares on December 23, 2005 and 200,000 shares on March 20, 2007.  The Plan authorizes the Corporation to repurchase up to 400,000 of the Corporation’s common shares from time to time in a program of market purchases or in privately negotiated transactions as the securities laws and market conditions permit.

Item 3:  Defaults upon Senior Securities.

None

33

Item 4:  Mine Safety Disclosures

Not applicable

Item 5:  Other Information.

None

Item 6:  Exhibits

(a) Exhibits

Exhibit 3(i) Amended and Restated Articles of Incorporation

Exhibit 3(ii) Amended and Restated Code of Regulations

Exhibit 10.1 Employment Agreement – Daniel W. Schutt

Exhibit 10.2 Salary Continuation Agreement – Daniel W. Schutt

Exhibit 10.3 Agreement - Brian D. Young

Exhibit 10.4 Salary Continuation Agreement - Brian D. Young

Exhibit 10.5 Salary Continuation Agreement – Heather M. Oatman

Exhibit 10.6 Salary Continuation Agreement, First Amendment – Daniel W. Schutt

Exhibit 10.7 Preferred Trust Securities, Placement and Debenture agreements

Exhibit 10.8 Salary Continuation Agreement, Second Amendment – Daniel W. Schutt

Exhibit 10.9 Salary Continuation Agreement, First Amendment – Brian D. Young

Exhibit 10.10 Change in Control Agreement - Daniel W. Schutt

Exhibit 10.11 Change in Control Agreement - Diana L. Engelhardt

Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification of CEO

Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification of CFO

Exhibit 32.1 Section 1350 CEO’s Certification

Exhibit 32.2 Section 1350 CFO’s Certification

Exhibit 99 Safe Harbor under The Private Securities Litigation Reform Act of 1995

Exhibit 101.INS  XBRL Instance Document

Exhibit 101.SCH  XBRL Taxonomy Extension Schema

Exhibit 101.CAL  XBRL Taxonomy Extension Calculation

Exhibit 101.DEF  XBRL Taxonomy Extension Definition

Exhibit 101.LAB  XBRL Taxonomy Extension Label

Exhibit 101.PRE  XBRL Taxonomy Extension Presentation

34

SIGNATURES

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

		UNITED BANCSHARES, INC.
Date:	August 1, 2012	By: /s/ Diana L. Engelhardt
		Diana L. Engelhardt
		Chief Executive Officer

35

EXHIBIT INDEX

UNITED BANCSHARES, INC. QUARTERLY REPORT ON FORM 10-Q

FOR PERIOD ENDED JUNE 30, 2012

Exhibit Number	Description	Exhibit Location
3(i)	Amended and Restated Articles of Incorporation	Incorporated herein by reference to the Corporation's Definitive Proxy Statement pursuant to Section 14(a) filed March 8, 2002.
3(ii)	Amended and Restated Code of Regulations	Incorporated herein by reference to the Corporation’s Form 10Q for the quarter ended June 30, 2007.
10.1	Employment Agreement – Daniel W. Schutt	Incorporated herein by reference to the Corporation's 2004 Form 10K/A filed August 5, 2005.
10.2	Salary Continuation Agreement – Daniel W. Schutt	Incorporated by reference to Corporation's Form 10K filed March 23, 2007.
10.3	Agreement - Brian D. Young	Incorporated by reference to Corporation's Form 8-K filed July 20, 2006.
10.4	Salary Continuation Agreement - Brian D. Young	Incorporated herein by reference to the Corporation's 2004 Form 10K/A filed August 5, 2005.
10.5	Salary Continuation Agreement – Heather M. Oatman	Incorporated herein by reference to the Corporation's 2008 Form 10K filed March 20, 2009.
10.6	Salary Continuation Agreement First Amendment – Daniel W. Schutt	Incorporated herein by reference to the Corporation’s 2007 Form 10Q filed April 27, 2007.
10.7	Preferred Trust Securities, Placement and Debenture agreements	Incorporated herein by reference to the Corporation’s 2004 Form 10K/A filed August 5, 2005.
10.8	Salary Continuation Agreement, Second Amendment – Daniel W. Schutt	Incorporated herein by reference to the Corporation’s 2007 Form 10Q filed April 27, 2007.
10.9	Salary Continuation Agreement, First Amendment – Brian D. Young	Incorporated herein by reference to the Corporation’s 2007 Form 10Q filed April 27, 2007.
10.10	Change in Control Agreement - Daniel W. Schutt	Incorporated herein by reference to the Corporation’s Form 8-K filed January 14, 2010.
10.11	Change in Control Agreement - Diana L. Engelhardt	Incorporated herein by reference to the Corporation's Form 8-K filed July 23, 2012.
31.1	Rule 13a-14(a)/15d-14(a) Certification of CEO	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certification of CFO	Filed herewith
32.1	Section 1350 CEO’s Certification	Filed herewith
32.2	Section 1350 CFO’s Certification	Filed herewith
99	Safe Harbor under the Private Securities Litigation Reform Act of 1995	Filed herewith
101.INS	XBRL Instance Document (a)	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition	Filed herewith
101.LAB	XBRL Taxonomy Extension Label	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation	Filed herewith

(a) Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are furnished and not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

EX-31.1

Exhibit 31.1

Rule 13a–14(a)/15d–14(a) CERTIFICATION

I, Brian D. Young, President and Chief Executive Officer of United Bancshares, Inc., certify, that:

(1) I have reviewed this Quarterly Report on Form 10-Q of United Bancshares, Inc.;

(2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Brian D. Young

Brian D. Young

President and Chief Executive Officer

August 1, 2012

EX-31.2

Exhibit 31.2

Rule 13a–14(a)/15d–14(a) CERTIFICATION

I, Diana L. Engelhardt, Chief Financial Officer of United Bancshares, Inc., certify, that:

(1) I have reviewed this Quarterly Report on Form 10-Q of United Bancshares, Inc.;

(2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Diana L. Engelhardt

Diana L. Engelhardt

Chief Financial Officer

August 1, 2012

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of United Bancshares, Inc. (the "Company") on Form 10-Q for the quarterly period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel W. Schutt, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brian D. Young

Brian D. Young

President and Chief Executive Officer

Date: August 1, 2012

*This certification is being furnished as required by Rule 13a –14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of United Bancshares, Inc. (the "Company") on Form 10-Q for the quarterly period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brian D. Young, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Diana L. Engelhardt

Diana L. Engelhardt

Chief Financial Officer

August 1, 2012

Date: August 1, 2012

*This certification is being furnished as required by Rule 13a –14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

EX-99

Exhibit 99

SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about their companies, so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statement. United Bancshares, Inc. ("Corporation") desires to take advantage of the "safe harbor" provisions of the Act. Certain information, particularly information regarding future economic performance and finances and plans and objectives of management, contained or incorporated by reference in the Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, is forward-looking. In some cases, information regarding certain important factors that could cause actual results of operations or outcomes of other events to differ materially from any such forward-looking statement appears together with such statement. In addition, forward-looking statements are subject to other risks and uncertainties affecting the financial institutions industry, including, but not limited to, the following:

Interest Rate Risk

The Corporation’s operating results are dependent to a significant degree on its net interest income, which is the difference between interest income from loans, investments and other interest-earning assets and interest expense on deposits, borrowings and other interest-bearing liabilities. The interest income and interest expense of the Corporation changes as the interest rates on interest-earning assets and interest-bearing liabilities change. Interest rates may change because of general economic conditions, the policies of various regulatory authorities and other factors beyond the Corporation's control. In a rising interest rate environment, loans tend to prepay slowly and new loans at higher rates increase slowly, while interest paid on deposits increases rapidly because the terms to maturity of deposits tend to be shorter than the terms to maturity or prepayment of loans. Such differences in the adjustment of interest rates on assets and liabilities may negatively affect the Corporation's income.

Possible Inadequacy of the Allowance for Loan Losses

The Corporation maintains an allowance for loan losses based upon a number of relevant factors, including, but not limited to, trends in the level of non-performing assets and classified loans, current economic conditions in the primary lending area, past loss experience, possible losses arising from specific problem loans and changes in the composition of the loan portfolio. While the Board of Directors of the Corporation believe that it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could result in material adjustments, and net earnings could be significantly adversely affected if circumstances differ substantially from the assumptions used in making the final determination.

Loans not secured by one to four family residential real estate are generally considered to involve greater risk of loss than loans secured by one to four-family residential real estate due, in part, to the effects of general economic conditions. The repayment of multifamily residential, nonresidential real estate and commercial loans generally depends upon the cash flow from the operation of the property or business, which may be negatively affected by national and local economic conditions. Construction loans may also be negatively affected by such economic conditions, particularly loans made to developers who do not have a buyer for a property before the loan is made. The risk of default on consumer loans increases during periods of recession, high unemployment and other adverse economic conditions. When consumers have trouble paying their bills, they are more likely to pay mortgage loans than consumer loans. In addition, the collateral securing such loans, if any, may decrease in value more rapidly than the outstanding balance of the loan.

Competition

The Corporation competes for deposits with other savings associations, commercial banks and credit unions and issuers of commercial paper and other securities, such as shares in money market mutual funds. The primary factors in competing for deposits are interest rates and convenience of office location. In making loans, the Corporation competes with other commercial banks, savings associations, consumer finance companies, credit unions, leasing companies, mortgage companies and other lenders. Competition is affected by, among other things, the general availability of lendable funds, general and local economic conditions, current interest rate levels and other factors that are not readily predictable. The size of financial institutions competing with the Corporation is likely to increase as a result of changes in statutes and regulations eliminating various restrictions on interstate and inter-industry branching and acquisitions. Such increased competition may have an adverse effect upon the Corporation.

Legislation and Regulation that may Adversely Affect the Corporation's Earnings

The Corporation is subject to extensive regulation by the State of Ohio, Division of Financial Institutions (the “ODFI”), the Federal Reserve Bank (the “FED”), and the Federal Deposit Insurance Corporation (the "FDIC") and is periodically examined by such regulatory agencies to test compliance with various regulatory requirements.  Such supervision and regulation of the Corporation and the bank are intended primarily for the protection of depositors and not for the maximization of shareholder value and may affect the ability of the Corporation to engage in various business activities. The assessments, filing fees and other costs associated with reports, examinations and other regulatory matters are significant and may have an adverse effect on the Corporation's net earnings.

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Note 6 - Fair Value Measurements (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Other Real Estate, Foreclosed Assets, and Repossessed Assets	$ 2,013,150	$ 2,833,500
Asset Impairment Charges	250,000
Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure, Recurring	815,864	727,240
Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure, Recurring	$ 16,298,000	$ 18,997,000

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Note 4 - Loans (Detail) - Activity in the Allowance for Loan Losses by Portfolio Segment (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Beginning Balance	$ 8,543,367	$ 8,016,786
Provision charged to expenses		2,575,000
Losses charged off	(1,662,770)	(1,822,601)
Recoveries	169,825	109,975
Ending Balance	7,050,422	8,879,160
Loans:
Individually evaluated for impairment	18,576,350		20,987,204
Collectively evaluated for impairment	303,251,834		316,959,504
Total ending loans balance	321,828,184		337,946,708
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	2,278,298		1,990,225
Collectively evaluated for impairment	4,772,124		6,553,142
Commercial Loans [Member]
Beginning Balance	2,596,629	2,886,467
Provision charged to expenses	(1,082,299)	1,012,863
Losses charged off	(19,797)	(464,729)
Recoveries	32,423	10,640
Ending Balance	1,526,956	3,445,241
Loans:
Individually evaluated for impairment	3,585,236		3,972,618
Collectively evaluated for impairment	53,575,727		58,349,383
Total ending loans balance	57,160,963		62,322,001
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	518,070		754,874
Collectively evaluated for impairment	1,008,886		1,841,755
Commercial and Multi-Family Real Estate [Member]
Beginning Balance	4,847,234	3,915,323
Provision charged to expenses	1,362,788	1,203,989
Losses charged off	(1,525,343)	(980,006)
Recoveries	105,995	396
Ending Balance	4,790,674	4,139,702
Loans:
Individually evaluated for impairment	14,819,685		16,842,092
Collectively evaluated for impairment	186,092,080		191,290,270
Total ending loans balance	200,911,765		208,132,362
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	1,760,228		1,235,351
Collectively evaluated for impairment	3,030,446		3,611,883
Residential 1-4 Family Real Estate [Member]
Beginning Balance	998,941	886,879
Provision charged to expenses	(223,312)	556,317
Losses charged off	(109,749)	(321,072)
Recoveries	10,437	47,434
Ending Balance	676,317	1,169,558
Loans:
Individually evaluated for impairment	171,429		172,494
Collectively evaluated for impairment	58,996,664		61,962,130
Total ending loans balance	59,168,093		62,134,624
Allowance for loan losses:
Collectively evaluated for impairment	676,317		998,941
Consumer Portfolio Segment [Member]
Beginning Balance	100,563	328,117
Provision charged to expenses	(57,177)	(198,169)
Losses charged off	(7,881)	(56,794)
Recoveries	20,970	51,505
Ending Balance	56,475	124,659
Loans:
Collectively evaluated for impairment	4,587,363		5,357,721
Total ending loans balance	4,587,363		5,357,721
Allowance for loan losses:
Collectively evaluated for impairment	$ 56,475		$ 100,563

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Note 1 - Consolidated Financial Statements

6 Months Ended

Jun. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of United Bancshares, Inc. and subsidiaries (the “Corporation”) have been prepared without audit and in the opinion of management reflect all adjustments (which include normal recurring adjustments) necessary to present fairly such information for the periods and dates indicated.  Since the unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q, they do not contain all information and footnotes typically included in financial statements prepared in conformity with generally accepted accounting principles.  Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.  Complete audited consolidated financial statements with footnotes thereto are included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011.

The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiary, The Union Bank Company (“the Bank”).  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.  All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and reporting policies of the Corporation conform to generally accepted practices within the banking industry.  The Corporation considers all of its principal activities to be banking related.

Certain reclassifications of prior period amounts have been made to conform to the current presentation.

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Note 4 - Loans (Detail) - Aging of the Recorded Investment in Past Due Loans (USD $)	Jun. 30, 2012	Dec. 31, 2011
30-49 days past due	$ 5,006,612	$ 4,731,691
60-89 days past due	807,251	3,339,745
Greater than 90 days past due	4,182,467	7,368,846
Total past due	9,996,330	15,440,282
Loans not past due	311,831,854	322,506,426
Total	321,828,184	337,946,708
Commercial Portfolio Segment [Member]
30-49 days past due		264,350
60-89 days past due		503,099
Greater than 90 days past due		19,356
Total past due		786,805
Loans not past due	43,675,519	43,816,740
Total	43,675,519	44,603,545
Commercial Real Estate Portfolio Segment [Member]
30-49 days past due	4,504,594	2,072,253
60-89 days past due	439,007	1,929,564
Greater than 90 days past due	2,399,199	4,831,138
Total past due	7,342,800	8,832,955
Loans not past due	180,379,481	170,298,358
Total	187,722,281	179,131,313
Agriculture Portfolio [Member]
Greater than 90 days past due	705,372	1,029,883
Total past due	705,372	1,029,883
Loans not past due	12,780,072	16,688,573
Total	13,485,444	17,718,456
Agricultural Real Estate [Member]
Greater than 90 days past due	933,945	933,945
Total past due	933,945	933,945
Loans not past due	12,255,539	28,067,104
Total	13,189,484	29,001,049
Consumer Portfolio Segment [Member]
30-49 days past due	41,305	150,626
60-89 days past due	8,460	29,222
Greater than 90 days past due	4,004	9,534
Total past due	53,769	189,382
Loans not past due	4,533,594	5,168,339
Total	4,587,363	5,357,721
Residential Real Estate Portfolio [Member]
30-49 days past due	460,713	2,244,462
60-89 days past due	359,784	877,860
Greater than 90 days past due	139,947	544,990
Total past due	960,444	3,667,312
Loans not past due	58,207,649	58,467,312
Total	$ 59,168,093	$ 62,134,624

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Note 4 - Loans (Detail) - Nonaccrual Loans (USD $)	Jun. 30, 2012	Dec. 31, 2011
Nonaccrual	$ 17,135,307	$ 21,700,141
Loans past due over 90 days and still accruing	123,126	55,442
Troubled debt restructurings	12,062,923	13,190,115
Commercial Portfolio Segment [Member]
Nonaccrual	573,904	684,763
Troubled debt restructurings	761,980	619,618
Commercial Real Estate Portfolio Segment [Member]
Nonaccrual	12,195,508	15,887,322
Loans past due over 90 days and still accruing	101,817
Troubled debt restructurings	8,968,765	10,209,573
Agriculture Portfolio [Member]
Nonaccrual	731,171	1,064,282
Troubled debt restructurings	2,115,695	2,303,732
Agricultural Real Estate [Member]
Nonaccrual	1,067,675	1,074,694
Troubled debt restructurings	160,367
Consumer Portfolio Segment [Member]
Nonaccrual	4,004	97
Loans past due over 90 days and still accruing		9,437
Residential Real Estate Portfolio [Member]
Nonaccrual	2,563,045	2,988,983
Loans past due over 90 days and still accruing	21,309	46,005
Troubled debt restructurings	$ 56,116	$ 57,192

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Note 4 - Loans (Detail) - Loans By Credit Quality Indicators (USD $)	Jun. 30, 2012	Dec. 31, 2011
Loans Receivable	$ 321,828,184	$ 337,946,708
Pass [Member] | Commercial Portfolio Segment [Member]
Loans Receivable	51,767,884	54,683,831
Pass [Member] | Commercial and Multi-Family Real Estate [Member]
Loans Receivable	167,285,667	170,750,804
Pass [Member]
Loans Receivable	219,053,551	225,434,635
Special Mention [Member] | Commercial Portfolio Segment [Member]
Loans Receivable	829,182	2,966,782
Special Mention [Member] | Commercial and Multi-Family Real Estate [Member]
Loans Receivable	8,223,699	9,245,517
Special Mention [Member] | Residential 1-4 Family Real Estate [Member]
Loans Receivable	257,057	257,860
Special Mention [Member] | Consumer Portfolio Segment [Member]
Loans Receivable		2,538
Special Mention [Member]
Loans Receivable	9,309,938	12,472,697
Substandard [Member] | Commercial Portfolio Segment [Member]
Loans Receivable	3,858,525	3,768,348
Substandard [Member] | Commercial and Multi-Family Real Estate [Member]
Loans Receivable	24,628,326	27,202,096
Substandard [Member] | Residential 1-4 Family Real Estate [Member]
Loans Receivable	159,968	245,204
Substandard [Member] | Consumer Portfolio Segment [Member]
Loans Receivable	15,952	18,716
Substandard [Member]
Loans Receivable	28,662,771	31,234,364
Doubtful [Member] | Commercial Portfolio Segment [Member]
Loans Receivable	705,372	903,040
Doubtful [Member] | Commercial and Multi-Family Real Estate [Member]
Loans Receivable	774,073	933,945
Doubtful [Member] | Residential 1-4 Family Real Estate [Member]
Loans Receivable	11,462	12,976
Doubtful [Member]
Loans Receivable	1,490,907	1,849,961
Not Rated [Member] | Residential 1-4 Family Real Estate [Member]
Loans Receivable	58,739,606	61,618,584
Not Rated [Member] | Consumer Portfolio Segment [Member]
Loans Receivable	4,571,411	5,336,467
Not Rated [Member]
Loans Receivable	63,311,017	66,955,051
Commercial Portfolio Segment [Member]
Loans Receivable	43,675,519	44,603,545
Commercial and Multi-Family Real Estate [Member]
Loans Receivable	200,911,765	208,132,362
Residential 1-4 Family Real Estate [Member]
Loans Receivable	59,168,093	62,134,624
Consumer Portfolio Segment [Member]
Loans Receivable	$ 4,587,363	$ 5,357,721

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Note 4 - Loans (Detail) - Performance of the Loan Portfolio (USD $)	Jun. 30, 2012	Dec. 31, 2011
Consumer Loans [Member] | Performing Loans [Member]
Nonimpaired loans	$ 4,553,472	$ 5,326,933
Consumer Loans [Member] | Nonperforming Loans [Member]
Nonimpaired loans	17,939	9,534
Consumer Loans [Member] | Nonimpaired Loans [Member]
Nonimpaired loans	4,571,411	5,336,467
Residential 1-4 Family Real Estate [Member] | Performing Loans [Member]
Nonimpaired loans	56,193,286	60,070,730
Residential 1-4 Family Real Estate [Member] | Nonperforming Loans [Member]
Nonimpaired loans	2,546,320	1,547,854
Residential 1-4 Family Real Estate [Member] | Nonimpaired Loans [Member]
Nonimpaired loans	$ 58,739,606	$ 61,618,584

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Condensed Consolidated Statement of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows provided by operating activities	$ 4,068,507	$ 160,460
Cash flows provided by investing activities:
Proceeds from calls or maturities of securities	23,230,429	13,905,032
Proceeds from sales of available-for-sale securities	7,711,574	12,245,534
Purchases of available-for-sale securities	(42,811,761)	(35,588,722)
Net decrease in loans	14,254,929	28,737,553
Purchases of certificates of deposit	(498,000)
Proceeds from sale of other real estate owned	906,425	1,532,208
Expenditures for premises and equipment	(61,832)	(37,453)
Net cash provided by investing activities	2,731,764	20,794,152
Cash flows used in financing activities:
Net change in deposits	(21,639,312)	(10,750,641)
Long-term borrowings, net of repayments	(2,732,763)	(22,585,067)
Proceeds from issuance of common stock	5,247	6,255
Net cash used by financing activities	(24,366,828)	(33,329,453)
Net change in cash and cash equivalents	(17,566,557)	(12,374,841)
Cash and cash equivalents:
At beginning of period	57,286,974	48,603,636
At end of period	39,720,417	36,228,795
Cash paid for:
Interest	2,742,923	3,880,362
Income taxes	780,000
Non-cash investing activities:
Change in net unrealized gain on available-for-sale securities	179,730	1,866,991
Transfer of loans to other real estate owned	$ 370,650	$ 96,000

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Note 5 - Junior Subordinated Deferrable Interest Debentures (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Investments in and Advances to Affiliates, Balance, Principal Amount	$ 300,000
Guarantor Obligations, Maximum Exposure, Undiscounted	10,000,000
Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust	10,300,000		10,300,000
Debt Instrument, Basis Spread on Variable Rate	315.00%
Debt Instrument, Interest Rate at Period End	3.61%	3.40%
Interest Expense, Debt	$ 187,000	$ 175,000
Maximum Amount of Core Capital	25.00%

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Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2012	Dec. 31, 2011
CASH AND CASH EQUIVALENTS
Cash and due from banks	$ 6,790,918	$ 8,865,206
Interest-bearing deposits in other banks	32,926,930	48,389,046
Federal funds sold	2,569	32,722
Total cash and cash equivalents	39,720,417	57,286,974
SECURITIES, available-for-sale	163,544,581	151,955,957
FEDERAL HOME LOAN BANK STOCK, at cost	4,893,800	4,893,800
CERTIFICATES OF DEPOSIT	2,241,000	1,743,000
LOANS HELD FOR SALE	1,968,857	2,753,505
LOANS	321,828,184	337,946,708
Less allowance for loan losses	(7,050,422)	(8,543,367)
Net loans	314,777,762	329,403,341
PREMISES AND EQUIPMENT, net	9,396,387	9,581,311
GOODWILL	8,554,979	8,554,979
CASH SURRENDER VALUE OF LIFE INSURANCE	13,549,503	13,335,587
OTHER REAL ESTATE OWNED	2,013,150	2,833,500
OTHER ASSETS, including accrued interest and intangible assets	4,352,305	4,702,710
TOTAL ASSETS	565,012,741	587,044,664
Deposits
Non-interest bearing	61,748,457	66,399,124
Interest bearing	397,097,796	414,086,441
Total deposits	458,846,253	480,485,565
Other borrowings	30,048,200	32,780,963
Junior subordinated deferrable interest debentures	10,300,000	10,300,000
Accrued expenses and other liabilities	3,899,675	3,730,422
Total liabilities	503,094,128	527,296,950
SHAREHOLDERS' EQUITY
Common stock, $1.00 stated value. Authorized 10,000,000 shares; issued 3,760,557 shares	3,760,557	3,760,557
Surplus	14,661,025	14,660,579
Retained earnings	44,749,055	42,543,363
Accumulated other comprehensive income	3,557,991	3,598,031
Treasury stock 314,564 shares at June 30, 2012 and 314,878 shares at December 31, 2011, at cost	(4,810,015)	(4,814,816)
Total shareholders' equity	61,918,613	59,747,714
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 565,012,741	$ 587,044,664

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Consolidated Statements of Shareholders' Equity (Unaudited) (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2010	$ 3,760,557	$ 14,660,000	$ 39,600,718	$ 1,810,684	$ (4,826,896)	$ 55,005,063
Net income			1,753,448			1,753,448
Change in unrealized gain on available-for-sale securities, net of income taxes				809,820		809,820
Total comprehensive income						2,563,268
Value of shares issued, Employee Stock Purchase Plan		307			5,948	6,255
Balance at Jun. 30, 2011	3,760,557	14,660,307	41,354,166	2,620,504	(4,820,948)	57,574,586
Balance at Dec. 31, 2011	3,760,557	14,660,579	42,543,363	3,598,031	(4,814,816)	59,747,714
Net income			2,205,692			2,205,692
Change in unrealized gain on available-for-sale securities, net of income taxes				(40,040)		(40,040)
Total comprehensive income						2,165,652
Value of shares issued, Employee Stock Purchase Plan		446			4,801	5,247
Balance at Jun. 30, 2012	$ 3,760,557	$ 14,661,025	$ 44,749,055	$ 3,557,991	$ (4,810,015)	$ 61,918,613

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Note 7 - Fair Value Of Financial Instruments (Detail) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Letters of Credit Outstanding, Amount	$ 67,455,000	$ 69,398,000

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Note 3 - Securities (Detail) - The Amortized Cost and Fair Value of Available-For-Sale Securities (USD $)	Jun. 30, 2012	Dec. 31, 2011
Fair value	$ 163,544,581	$ 151,955,957
Rounded Value [Member]
Amortized cost	158,153,000	146,504,000
Fair value	163,544,000	151,956,000
US Government Agencies Debt Securities [Member]
Amortized cost	9,502,000	7,506,000
Fair value	9,530,000	7,521,000
US States and Political Subdivisions Debt Securities [Member]
Amortized cost	45,069,000	46,459,000
Fair value	47,711,000	49,311,000
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Amortized cost	103,080,000	92,037,000
Fair value	105,772,000	94,599,000
Other Available-for-Sale Securities [Member]
Amortized cost	502,000	502,000
Fair value	$ 531,000	$ 525,000

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Note 7 - Fair Value Of Financial Instruments (Detail) - Carrying Amounts and Estimated Fair Values of Recognized Financial Instruments (USD $)	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
FINANCIAL ASSETS
Cash and cash equivalents	$ 39,720,417	$ 57,286,974	$ 36,228,795	$ 48,603,636
Cash and cash equivalents	39,720,000	57,287,000
Securities, including Federal Home Loan Bank stock	158,153,000	156,850,000
Securities, including Federal Home Loan Bank stock	163,544,000	156,850,000
Net loans	314,777,762	329,403,341
Net loans	314,823,000	330,286,000
Mortgage servicing rights	816,000	727,000
Mortgage servicing rights	815,864	727,240		1,114,126
	565,012,741	587,044,664
FINANCIAL LIABILITIES
Deposits	458,846,253	480,485,565
Deposits	460,725,000	483,014,000
Other borrowings	30,048,200	32,780,963
Other borrowings	32,601,000	35,484,000
Junior subordinated deferrable interest debentures	10,300,000	10,300,000
Junior subordinated deferrable interest debentures	9,873,000	9,220,000
Other liabilities	3,899,675	3,730,422
Other liabilities	3,966,000	3,801,000
	503,094,128	527,296,950
Financial Liabilities [Member]
FINANCIAL LIABILITIES
	503,094,000	527,297,000
	507,165,000	531,519,000
Financial Assets [Member]
FINANCIAL ASSETS
	513,467,000	544,267,000
	$ 518,903,000	$ 545,150,000

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Note 4 - Loans (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Impaired Financing Receivable, Average Recorded Investment	$ 18,600,000	$ 17,100,000
Impaired Financing Receivable, Interest Income, Accrual Method	109,000	80,000
Minimum Loan Balance for Categorization Into Risk Categories	$ 100,000

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Consolidated Statements of Shareholders' Equity (Unaudited) (Parentheticals) (Treasury Stock [Member])	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Treasury Stock [Member]
Employee Stock Purchase Plan, shares issued	314	389

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Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Common stock par value (in Dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,760,557	3,760,557
Treasury stock, shares	314,564	314,878

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Accounting Policies, by Policy (Policies)	6 Months Ended
	Jun. 30, 2012
Consolidation, Policy [Policy Text Block]	All significant intercompany balances and transactions have been eliminated in consolidation.
Policy Loans Receivable, Policy [Policy Text Block]	Credit Quality Indicators: The Company 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 Company analyzes loans individually by classifying the loans as to the credit risk.This analysis generally includes loans with an outstanding balance greater than $100,000 and non-homogenous loans, such as commercial and commercial real estate loans.This analysis is performed on a quarterly basis.The Company uses the following definitions for risk ratings: Special Mention: Loans which possess some credit deficiency or potential weakness which deserve close attention, but which do not yet warrant substandard classification.Such loans pose 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 bank management may depend on secondary repayment sources to liquidate these loans.The bank could sustain some degree of loss in these loans if the weaknesses remain uncorrected. 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. Loans not meeting the previous criteria that are analyzed individually as part of the above described process are considered to be pass rated loans.
Loans and Leases Receivable, Troubled Debt Restructuring Policy [Policy Text Block]	Modifications: The Bank's loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties.These concessions typically result from the Bank's loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions.All TDRs are also classified as impaired loans. When the Bank 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 with the sole (remaining) source of repayment for the loan in 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.
Fair Value Measurement, Policy [Policy Text Block]	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, 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 Level1 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 Level2 of the valuation hierarchy, include corporate and 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 are classified within Level3 of the valuation hierarchy.The Corporation did not have any securities classified as Level1 or Level3 at June 30, 2012 or December 31, 2011.There were no gains or losses relating to securities available-for-sale included in earnings before income taxes that were attributable to changes in fair values of securities held at June 30, 2012 or December 31, 2011. 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 costs to sell, if repayment is expected solely from the collateral.Collateral values are estimated using level 2 inputs, including recent appraisals and Level 3 inputs based on customized discounting criteria. Due to the significance of the level 3 inputs, impaired loans fair values have been classified as level 3. Other Real Estate Owned The Corporation values other real estate owned at the estimated fair value of the underlying collateral less expected selling costs.Such values are estimated primarily using appraisals and reflect a market value approach.Due to the significance of the Level3 inputs, other real estate owned has been classified as Level 3.In accordance with the provisions of ASC 360-10, other real estate owned was written down to its estimated fair value of $2,013,150, resulting in impairment charges of $250,000 which are included in earnings for the six month period ended June 30, 2012. Certain other financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.
Fair Value of Financial Instruments, Policy [Policy Text Block]	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. Securities: The fair value of securities is determined based on quoted market prices of the individual securities; if not available, estimated fair value is obtained by comparison to other known securities with similar risk and maturity characteristics.Such value does not consider possible tax ramifications or estimated transaction costs. Loans: 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. Mortgage servicing rights: The fair value for mortgage servicing rights is determined based on an analysis of the portfolio by an independent third party. 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 quarter 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. Other borrowings and junior subordinated deferrable interest debentures: The fair value of other borrowings (consisting of Federal Home Loan Bank borrowings, securities sold under agreements to repurchase, and customer repurchase agreements), and junior subordinated deferrable interest debentures are determined using the net present value of discounted cash flows based on current borrowing rates for similar types of borrowing arrangements, and are obtained from an independent third party. 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 other liabilities is generally considered to be carrying value except for the deferred compensation agreement.The fair value of the contract is determined based on a discounted cash flow analysis using a current interest rate for a similar instrument. 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.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 26, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	UNITED BANCSHARES INC/OH
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		3,446,305
Amendment Flag	false
Entity Central Index Key	0001087456
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Note 3 - Securities (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	June 30, 2012				December 31, 2011
	Amortized cost		Fair value		Amortized cost		Fair value
U.S. Government and agencies	$	9,502	$	9,530	$	7,506	$	7,521
Obligations of states and political subdivisions		45,069		47,711		46,459		49,311
Mortgage-backed		103,080		105,772		92,037		94,599
Other		502		531		502		525
Total	$	158,153	$	163,544	$	146,504	$	151,956

Unrealized Gain (Loss) on Investments [Table Text Block]

	June 30, 2012				December 31, 2011
	Gross unrealized gains		Gross unrealized losses		Gross unrealized gains		Gross unrealized losses
U.S. Government and agencies	$	28	$	-	$	16	$	1
Obligations of states and political subdivisions		2,646		4		2,856		4
Mortgage-backed		2,693		1		2,570		8
Other		29		-		23		-
Total	$	5,396	$	5	$	5,465	$	13

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Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
INTEREST INCOME
Loans, including fees	$ 4,472,614	$ 5,444,360	$ 9,146,166	$ 11,042,272
Securities:
Taxable	675,779	829,210	1,330,828	1,649,445
Tax-exempt	447,797	493,060	904,909	980,739
Other	85,800	87,227	176,847	164,736
Total interest income	5,681,990	6,853,857	11,558,750	13,837,192
INTEREST EXPENSE
Deposits	892,771	1,470,291	1,989,032	2,826,426
Other borrowings	367,396	528,928	731,263	1,063,139
Total interest expense	1,260,167	1,999,219	2,720,295	3,889,565
NET INTEREST INCOME	4,421,823	4,854,638	8,838,455	9,947,627
PROVISION FOR LOAN LOSSES		1,300,000		2,575,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES	4,421,823	3,554,638	8,838,455	7,372,627
NON-INTEREST INCOME
Gain on sales of loans	284,984	75,869	540,512	133,523
Gain on sales of securities	239,190	618,990	240,396	639,991
Change in fair value of mortgage servicing rights	(100,337)	39,661	11,797	54,286
Other	679,179	725,121	1,364,755	1,372,311
Total non-interest income	1,103,016	1,459,641	2,157,460	2,200,111
NON-INTEREST EXPENSES	3,972,961	3,823,899	8,208,223	7,600,290
Income before income taxes	1,551,878	1,190,380	2,787,692	1,972,448
PROVISION FOR INCOME TAXES	349,000	203,000	582,000	219,000
NET INCOME	$ 1,202,878	$ 987,380	$ 2,205,692	$ 1,753,448
NET INCOME PER SHARE
Basic (in Dollars per share)	$ 0.35	$ 0.29	$ 0.64	$ 0.51
Weighted average common shares outstanding (in Shares)	3,445,993	3,445,278	3,445,977	3,445,265
Diluted (in Dollars per share)	$ 0.35	$ 0.29	$ 0.64	$ 0.51
Weighted average common shares outstanding (in Shares)	3,445,993	3,445,278	3,445,977	3,445,265

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Note 4 - Loans

6 Months Ended

Jun. 30, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 4 – LOANS

The following table presents the activity in the allowance for loan losses by portfolio segment for the periods ending June 30, 2012 and 2011:

	Commercial			Commercial and multi-family real estate			Residential real estate			Consumer			Total
Balance at December 31, 2011	$	2,596,629		$	4,847,234		$	998,941		$	100,563		$	8,543,367
Provision charged to expenses		(1,082,299	)		1,362,788			(223,312	)		(57,177	)		-
Losses charged off		(19,797	)		(1,525,343	)		(109,749	)		(7,881	)		(1,662,770	)
Recoveries		32,423			105,995			10,437			20,970			169,825
Balance at June 30, 2012	$	1,526,956		$	4,790,674		$	676,317		$	56,475		$	7,050,422

	Commercial			Commercial and multi-family real estate			Residential real estate			Consumer			Total
Balance at December 31, 2010	$	2,886,467		$	3,915,323		$	886,879		$	328,117		$	8,016,786
Provision charged to expenses		1,012,863			1,203,989			556,317			(198,169	)		2,575,000
Losses charged off		(464,729	)		(980,006	)		(321,072	)		(56,794	)		(1,822,601	)
Recoveries		10,640			396			47,434			51,505			109,975
Balance at June 30, 2011	$	3,445,241		$	4,139,702		$	1,169,558		$	124,659		$	8,879,160

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method for the periods ending June 30, 2012 and December 31 2011:

June 30, 2012	Commercial		Commercial and multi-family real estate		Residential real estate		Consumer		Total
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	$	518,070	$	1,760,228	$	-	$	-	$	2,278,298
Collectively evaluated forimpairment		1,008,886		3,030,446		676,317		56,475		4,772,124
Total allowance for loan losses	$	1,526,956	$	4,790,674	$	676,317	$	56,475	$	7,050,422
Loans:
Individually evaluated  for impairment	$	3,585,236	$	14,819,685	$	171,429	$	-	$	18,576,350
Collectively evaluated for impairment		53,575,727		186,092,080		58,996,664		4,587,363		303,251,834
Total ending loans balance	$	57,160,963	$	200,911,765	$	59,168,093	$	4,587,363	$	321,828,184

December 31, 2011	Commercial		Commercial and multi-family real estate		Residential real estate		Consumer		Total
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	$	754,874	$	1,235,351	$	-	$	-	$	1,990,225
Collectively evaluated for impairment		1,841,755		3,611,883		998,941		100,563		6,553,142
Total allowance for loan losses	$	2,596,629	$	4,847,234	$	998,941	$	100,563	$	8,543,367
Loans:
Individually evaluated  for impairment	$	3,972,618	$	16,842,092	$	172,494	$	-	$	20,987,204
Collectively evaluated for impairment		58,349,383		191,290,270		61,962,130		5,357,721		316,959,504
Total ending loans balance	$	62,322,001	$	208,132,362	$	62,134,624	$	5,357,721	$	337,946,708

Impaired loans were as follows as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Loans with no allowance for loan losses allocated	$	8,139,973	$	7,660,276
Loans with allowance for loan losses allocated		10,436,377		13,326,928
Total impaired loans	$	18,576,350	$	20,987,204
Amount of the allowance allocated to impaired loans	$	2,278,298	$	1,990,225

The average recorded investment in impaired loans for the six month period ended June 30, 2012 and 2011 was $18.6 million and $17.1 million, respectively.  There was approximately $109,000 and $80,000 in interest income recognized by the Bank on impaired loans on an accrual or cash basis during the six month period ended June 30 2012 and 2011, respectively.

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
	Recorded investment		Allowance for loan losses allocated		Recorded investment		Allowance for loan losses allocated
With no related allowance recorded:
Commercial	$	246,099	$	-	$	-	$	-
Agriculture		2,821,067		-		2,303,732		-
Commercial and multi-family real estate		3,801,853		-		5,184,050		-
Agricultural real estate		1,099,525		-		-		-
Residential real estate		171,429		-		172,494		-
With an allowance recorded:
Commercial		518,070		518,070		619,618		619,618
Agriculture		-		-		1,836,985		135,256
Commercial and multi-family real estate		9,918,307		1,760,228		10,870,325		1,235,351
Total	$	18,576,350	$	2,278,298	$	20,987,204	$	1,990,225

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 June 30, 2012 and December 31, 2011:

June 30, 2012	Nonaccrual		Loans past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	573,904	$	-	$	761,980
Commercial real estate		12,195,508		101,817		8,968,765
Agriculture		731,171		-		2,115,695
Agricultural real estate		1,067,675		-		160,367
Consumer		4,004		-		-
Residential real estate		2,563,045		21,309		56,116
Total	$	17,135,307	$	123,126	$	12,062,923

December 31, 2011	Nonaccrual		Loans past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	684,763	$	-	$	619,618
Commercial real estate		15,887,322		-		10,209,573
Agriculture		1,064,282		-		2,303,732
Agricultural real estate		1,074,694		-		-
Consumer		97		9,437		-
Residential real estate		2,988,983		46,005		57,192
Total	$	21,700,141	$	55,442	$	13,190,115

The following table presents the aging of the recorded investment in past due loans as of June 30, 2012 by class of loans:

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans not past due		Total
Commercial	$	-	$	-	$	-	$	-	$	43,675,519	$	43,675,519
Commercial real estate		4,504,594		439,007		2,399,199		7,342,800		180,379,481		187,722,281
Agriculture		-		-		705,372		705,372		12,780,072		13,485,444
Agricultural real estate		-		-		933,945		933,945		12,255,539		13,189,484
Consumer		41,305		8,460		4,004		53,769		4,533,594		4,587,363
Residential real estate		460,713		359,784		139,947		960,444		58,207,649		59,168,093
Total	$	5,006,612	$	807,251	$	4,182,467	$	9,996,330	$	311,831,854	$	321,828,184

The following table presents the aging of the recorded investment in past due loans as of December 31, 2011 by class of loans:

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans not past due		Total
Commercial	$	264,350	$	503,099	$	19,356	$	786,805	$	43,816,740	$	44,603,545
Commercial real estate		2,072,253		1,929,564		4,831,138		8,832,955		170,298,358		179,131,313
Agriculture		-		-		1,029,883		1,029,883		16,688,573		17,718,456
Agricultural real estate		-		-		933,945		933,945		28,067,104		29,001,049
Consumer		150,626		29,222		9,534		189,382		5,168,339		5,357,721
Residential  real estate		2,244,462		877,860		544,990		3,667,312		58,467,312		62,134,624
Total	$	4,731,691	$	3,339,745	$	7,368,846	$	15,440,282	$	322,506,426	$	337,946,708

Credit Quality Indicators:

The Company 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 Company analyzes loans individually by classifying the loans as to the credit risk.  This analysis generally includes loans with an outstanding balance greater than $100,000 and non-homogenous loans, such as commercial and commercial real estate loans.  This analysis is performed on a quarterly basis.  The Company uses the following definitions for risk ratings:

● Special Mention:  Loans which possess some credit deficiency or potential weakness which deserve close attention, but which do not yet warrant substandard classification.  Such loans pose 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 bank management may depend on secondary repayment sources to liquidate these loans.  The bank could sustain some degree of loss in these loans if the weaknesses remain uncorrected.

● 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.

Loans not meeting the previous criteria that are analyzed individually as part of the above described process are considered to be pass rated loans.  Loans listed as not rated are generally either less than $100,000 or are included in groups of homogenous loans.  As of June 30, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Doubtful		Not rated
June 30, 2012
Commercial	$	51,767,884	$	829,182	$	3,858,525	$	705,372	$	-
Commercial and multi-family real estate		167,285,667		8,223,699		24,628,326		774,073		-
Residential real estate		-		257,057		159,968		11,462		58,739,606
Consumer		-		-		15,952		-		4,571,411
Total	$	219,053,551	$	9,309,938	$	28,662,771	$	1,490,907	$	63,311,017

December 31, 2011	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	54,683,831	$	2,966,782	$	3,768,348	$	903,040	$	-
Commercial and multi-family real estate		170,750,804		9,245,517		27,202,096		933,945		-
Residential real estate		-		257,860		245,204		12,976		61,618,584
Consumer		-		2,538		18,716		-		5,336,467
Total	$	225,434,635	$	12,472,697	$	31,234,364	$	1,849,961	$	66,955,051

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses.  For residential 1 – 4 family and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment in non-impaired residential 1 – 4 family and consumer loans based on payment activity as of June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
	Consumer		Residential real estate		Consumer		Residential real estate
Performing	$	4,553,472	$	56,193,286	$	5,326,933	$	60,070,730
Nonperforming		17,939		2,546,320		9,534		1,547,854
Total	$	4,571,411	$	58,739,606	$	5,336,467	$	61,618,584

Purchased Loans:

From time to time, the Company enters into loan participation agreements to purchase loans.  At June 30, 2012 and December 31, 2011, the Bank held no loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Modifications:

The Bank’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties.  These concessions typically result from the Bank’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions.  All TDRs are also classified as impaired loans.

When the Bank 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 with the sole (remaining) source of repayment for the loan in 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.

The Bank did not have any loan modifications considered to be Troubled Debt Restructurings during the six months ended June 30, 2012.

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Note 3 - Securities

6 Months Ended

Jun. 30, 2012

Available-for-sale Securities [Table Text Block]

NOTE 3 - SECURITIES

The amortized cost and fair value of available-for-sale securities as of June 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

	June 30, 2012				December 31, 2011
	Amortized cost		Fair value		Amortized cost		Fair value
U.S. Government and agencies	$	9,502	$	9,530	$	7,506	$	7,521
Obligations of states and political subdivisions		45,069		47,711		46,459		49,311
Mortgage-backed		103,080		105,772		92,037		94,599
Other		502		531		502		525
Total	$	158,153	$	163,544	$	146,504	$	151,956

A summary of gross unrealized gains and losses on available-for-sale securities as of June 30, 2012 and December 31, 2011 follows (dollars in thousands):

	June 30, 2012				December 31, 2011
	Gross unrealized gains		Gross unrealized losses		Gross unrealized gains		Gross unrealized losses
U.S. Government and agencies	$	28	$	-	$	16	$	1
Obligations of states and political subdivisions		2,646		4		2,856		4
Mortgage-backed		2,693		1		2,570		8
Other		29		-		23		-
Total	$	5,396	$	5	$	5,465	$	13

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Note 3 - Securities (Detail) - Gross Unrealized Gains and Losses on Available-For-Sale Securities (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Available-for-sale securities gross unrealized gains	$ 5,396	$ 5,465
Available-for-sale securities gross unrealized losses	5	13
US Government Agencies Debt Securities [Member]
Available-for-sale securities gross unrealized gains	28	16
Available-for-sale securities gross unrealized losses		1
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities gross unrealized gains	2,646	2,856
Available-for-sale securities gross unrealized losses	4	4
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Available-for-sale securities gross unrealized gains	2,693	2,570
Available-for-sale securities gross unrealized losses	1	8
Other Available-for-Sale Securities [Member]
Available-for-sale securities gross unrealized gains	$ 29	$ 23

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Note 4 - Loans (Tables)

6 Months Ended

Jun. 30, 2012

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	Commercial			Commercial and multi-family real estate			Residential real estate			Consumer			Total
Balance at December 31, 2011	$	2,596,629		$	4,847,234		$	998,941		$	100,563		$	8,543,367
Provision charged to expenses		(1,082,299	)		1,362,788			(223,312	)		(57,177	)		-
Losses charged off		(19,797	)		(1,525,343	)		(109,749	)		(7,881	)		(1,662,770	)
Recoveries		32,423			105,995			10,437			20,970			169,825
Balance at June 30, 2012	$	1,526,956		$	4,790,674		$	676,317		$	56,475		$	7,050,422

	Commercial			Commercial and multi-family real estate			Residential real estate			Consumer			Total
Balance at December 31, 2010	$	2,886,467		$	3,915,323		$	886,879		$	328,117		$	8,016,786
Provision charged to expenses		1,012,863			1,203,989			556,317			(198,169	)		2,575,000
Losses charged off		(464,729	)		(980,006	)		(321,072	)		(56,794	)		(1,822,601	)
Recoveries		10,640			396			47,434			51,505			109,975
Balance at June 30, 2011	$	3,445,241		$	4,139,702		$	1,169,558		$	124,659		$	8,879,160

June 30, 2012	Commercial		Commercial and multi-family real estate		Residential real estate		Consumer		Total
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	$	518,070	$	1,760,228	$	-	$	-	$	2,278,298
Collectively evaluated forimpairment		1,008,886		3,030,446		676,317		56,475		4,772,124
Total allowance for loan losses	$	1,526,956	$	4,790,674	$	676,317	$	56,475	$	7,050,422
Loans:
Individually evaluated  for impairment	$	3,585,236	$	14,819,685	$	171,429	$	-	$	18,576,350
Collectively evaluated for impairment		53,575,727		186,092,080		58,996,664		4,587,363		303,251,834
Total ending loans balance	$	57,160,963	$	200,911,765	$	59,168,093	$	4,587,363	$	321,828,184

December 31, 2011	Commercial		Commercial and multi-family real estate		Residential real estate		Consumer		Total
Allowance for loan losses:
Attributable to loans individually evaluated for impairment	$	754,874	$	1,235,351	$	-	$	-	$	1,990,225
Collectively evaluated for impairment		1,841,755		3,611,883		998,941		100,563		6,553,142
Total allowance for loan losses	$	2,596,629	$	4,847,234	$	998,941	$	100,563	$	8,543,367
Loans:
Individually evaluated  for impairment	$	3,972,618	$	16,842,092	$	172,494	$	-	$	20,987,204
Collectively evaluated for impairment		58,349,383		191,290,270		61,962,130		5,357,721		316,959,504
Total ending loans balance	$	62,322,001	$	208,132,362	$	62,134,624	$	5,357,721	$	337,946,708

Impaired Financing Receivables [Table Text Block]

	June 30, 2012		December 31, 2011
Loans with no allowance for loan losses allocated	$	8,139,973	$	7,660,276
Loans with allowance for loan losses allocated		10,436,377		13,326,928
Total impaired loans	$	18,576,350	$	20,987,204
Amount of the allowance allocated to impaired loans	$	2,278,298	$	1,990,225

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

	June 30, 2012				December 31, 2011
	Recorded investment		Allowance for loan losses allocated		Recorded investment		Allowance for loan losses allocated
With no related allowance recorded:
Commercial	$	246,099	$	-	$	-	$	-
Agriculture		2,821,067		-		2,303,732		-
Commercial and multi-family real estate		3,801,853		-		5,184,050		-
Agricultural real estate		1,099,525		-		-		-
Residential real estate		171,429		-		172,494		-
With an allowance recorded:
Commercial		518,070		518,070		619,618		619,618
Agriculture		-		-		1,836,985		135,256
Commercial and multi-family real estate		9,918,307		1,760,228		10,870,325		1,235,351
Total	$	18,576,350	$	2,278,298	$	20,987,204	$	1,990,225

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

June 30, 2012	Nonaccrual		Loans past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	573,904	$	-	$	761,980
Commercial real estate		12,195,508		101,817		8,968,765
Agriculture		731,171		-		2,115,695
Agricultural real estate		1,067,675		-		160,367
Consumer		4,004		-		-
Residential real estate		2,563,045		21,309		56,116
Total	$	17,135,307	$	123,126	$	12,062,923

December 31, 2011	Nonaccrual		Loans past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	684,763	$	-	$	619,618
Commercial real estate		15,887,322		-		10,209,573
Agriculture		1,064,282		-		2,303,732
Agricultural real estate		1,074,694		-		-
Consumer		97		9,437		-
Residential real estate		2,988,983		46,005		57,192
Total	$	21,700,141	$	55,442	$	13,190,115

Past Due Financing Receivables [Table Text Block]

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans not past due		Total
Commercial	$	-	$	-	$	-	$	-	$	43,675,519	$	43,675,519
Commercial real estate		4,504,594		439,007		2,399,199		7,342,800		180,379,481		187,722,281
Agriculture		-		-		705,372		705,372		12,780,072		13,485,444
Agricultural real estate		-		-		933,945		933,945		12,255,539		13,189,484
Consumer		41,305		8,460		4,004		53,769		4,533,594		4,587,363
Residential real estate		460,713		359,784		139,947		960,444		58,207,649		59,168,093
Total	$	5,006,612	$	807,251	$	4,182,467	$	9,996,330	$	311,831,854	$	321,828,184

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans not past due		Total
Commercial	$	264,350	$	503,099	$	19,356	$	786,805	$	43,816,740	$	44,603,545
Commercial real estate		2,072,253		1,929,564		4,831,138		8,832,955		170,298,358		179,131,313
Agriculture		-		-		1,029,883		1,029,883		16,688,573		17,718,456
Agricultural real estate		-		-		933,945		933,945		28,067,104		29,001,049
Consumer		150,626		29,222		9,534		189,382		5,168,339		5,357,721
Residential  real estate		2,244,462		877,860		544,990		3,667,312		58,467,312		62,134,624
Total	$	4,731,691	$	3,339,745	$	7,368,846	$	15,440,282	$	322,506,426	$	337,946,708

Financing Receivable Credit Quality Indicators [Table Text Block]

	Pass		Special Mention		Substandard		Doubtful		Not rated
June 30, 2012
Commercial	$	51,767,884	$	829,182	$	3,858,525	$	705,372	$	-
Commercial and multi-family real estate		167,285,667		8,223,699		24,628,326		774,073		-
Residential real estate		-		257,057		159,968		11,462		58,739,606
Consumer		-		-		15,952		-		4,571,411
Total	$	219,053,551	$	9,309,938	$	28,662,771	$	1,490,907	$	63,311,017

December 31, 2011	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	54,683,831	$	2,966,782	$	3,768,348	$	903,040	$	-
Commercial and multi-family real estate		170,750,804		9,245,517		27,202,096		933,945		-
Residential real estate		-		257,860		245,204		12,976		61,618,584
Consumer		-		2,538		18,716		-		5,336,467
Total	$	225,434,635	$	12,472,697	$	31,234,364	$	1,849,961	$	66,955,051

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	June 30, 2012				December 31, 2011
	Consumer		Residential real estate		Consumer		Residential real estate
Performing	$	4,553,472	$	56,193,286	$	5,326,933	$	60,070,730
Nonperforming		17,939		2,546,320		9,534		1,547,854
Total	$	4,571,411	$	58,739,606	$	5,336,467	$	61,618,584

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Note 7 - Fair Value Of Financial Instruments

6 Months Ended

Jun. 30, 2012

Financial Instruments Disclosure [Text Block]

NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of recognized financial instruments at June 30, 2012 and December 31, 2011 were as follows (dollars in thousands):

	June 30, 2012				December 31, 2011
	Carrying amount		Estimated value		Carrying amount		Estimated value
FINANCIAL ASSETS
Cash and cash equivalents	$	39,720	$	39,720	$	57,287	$	57,287
Securities, including Federal Home Loan Bank stock		158,153		163,544		156,850		156,850
Net loans		314,778		314,823		329,403		330,286
Mortgage servicing rights		816		816		727		727
	$	513,467	$	518,903	$	544,267	$	545,150
FINANCIAL LIABILITIES
Deposits	$	458,846	$	460,725	$	480,486	$	483,014
Other borrowings		30,048		32,601		32,781		35,484
Junior subordinated deferrable interest debentures		10,300		9,873		10,300		9,220
Other liabilities		3,900		3,966		3,730		3,801
	$	503,094	$	507,165	$	527,297	$	531,519

The above summary does not include accrued interest receivable or 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.

There are also unrecognized financial instruments at June 30, 2012 and December 31, 2011 which relate to commitments to extend credit and letters of credit.  The contract amount of such financial instruments amounts to $67,455,000 at June 30, 2012 and $69,398,000 at December 31, 2011.  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.

Securities:

The fair value of securities is determined based on quoted market prices of the individual securities; if not available, estimated fair value is obtained by comparison to other known securities with similar risk and maturity characteristics.  Such value does not consider possible tax ramifications or estimated transaction costs.

Loans:

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.

Mortgage servicing rights:

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

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 quarter 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.

Other borrowings and junior subordinated deferrable interest debentures:

The fair value of other borrowings (consisting of Federal Home Loan Bank borrowings, securities sold under agreements to repurchase, and customer repurchase agreements), and junior subordinated deferrable interest debentures are determined using the net present value of discounted cash flows based on current borrowing rates for similar types of borrowing arrangements, and are obtained from an independent third party.

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 other liabilities is generally considered to be carrying value except for the deferred compensation agreement.  The fair value of the contract is determined based on a discounted cash flow analysis using a current interest rate for a similar instrument.

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.

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Note 5 - Junior Subordinated Deferrable Interest Debentures

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Text Block]

NOTE 5 – 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 payable quarterly at a floating rate adjustable quarterly and equal to 315 basis points over the 3-month LIBOR amounting to 3.61% at June 30, 2012 and 3.40% at June 30, 2011.  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. Interest expense on the debentures approximated $187,000 and $175,000 for the six month periods ended June 30, 2012 and 2011, respectively, and is included in interest expense-other 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, under Federal Reserve Board guidelines, the securities cannot be used to constitute more than 25% of the Corporation’s core Tier I capital inclusive of these securities.

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Note 6 - Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Text Block]

NOTE 6 - FAIR VALUE MEASUREMENTS

ASC 820-10 defines fair value 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.

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.

Financial assets (there were no financial liabilities) measured at fair value on a recurring basis at June 30, 2012 and December 31, 2011 include available-for-sale securities, which are all valued using Level 2 inputs, and mortgage servicing rights, amounting to $815,864 at June 30, 2012 and $727,240 at December 31, 2011, which are valued using Level 3 inputs.  Financial assets (there were no financial liabilities) measured at fair value on a non-recurring basis at June 30, 2012 and December 31, 2011 include other real estate owned, as well as impaired loans approximating $16,298,000 at June 30, 2012 and $18,997,000 at December 31, 2011 all of which are valued using Level 3 inputs.

There were no financial instruments measured at fair value that moved to a lower level in the fair value hierarchy during the periods presented due to the lack of observable quotes in inactive markets for those instruments at June 30, 2012 and December 31, 2011.

The table below presents a reconciliation and income statement classification of gains and losses for mortgage servicing rights, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the six month period ended June 30, 2012 and year ended December 31, 2011:

	June 30, 2012			December 31, 2011
Balance at beginning of period	$	727,240		$	1,114,126
Gains or losses, including realized and unrealized:
Disposals – amortization based on loan payments and payoffs		(118,355	)		(240,662	)
Purchases, issuances, and settlements		195,182			168,342
Other changes in fair value		11,797			(314,566	)
Balance at end of period	$	815,864		$	727,240

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, 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 corporate and 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 are classified within Level 3 of the valuation hierarchy.  The Corporation did not have any securities classified as Level 1 or Level 3 at June 30, 2012 or December 31, 2011.  There were no gains or losses relating to securities available-for-sale included in earnings before income taxes that were attributable to changes in fair values of securities held at June 30, 2012 or December 31, 2011.

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 costs to sell, if repayment is expected solely from the collateral.  Collateral values are estimated using level 2 inputs, including recent appraisals and Level 3 inputs based on customized discounting criteria.  Due to the significance of the level 3 inputs, impaired loans fair values have been classified as level 3.

Other Real Estate Owned

The Corporation values other real estate owned at the estimated fair value of the underlying collateral less expected selling costs.  Such values are estimated primarily using appraisals and reflect a market value approach.  Due to the significance of the Level 3 inputs, other real estate owned has been classified as Level 3.  In accordance with the provisions of ASC 360-10, other real estate owned was written down to its estimated fair value of $2,013,150, resulting in impairment charges of $250,000 which are included in earnings for the six month period ended June 30, 2012.

Certain other financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.  Financial assets and financial liabilities, excluding impaired loans and other real estate owned, measured at fair value on a nonrecurring basis were not significant at June 30, 2012 and December 31, 2011.

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Note 8 - Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events [Text Block]

NOTE 8 – SUBSEQUENT EVENTS

Management evaluated subsequent events through the date the consolidated financial statements were issued. Events or transactions occurring after June 30, 2012 but prior to when the consolidated financial statements were issued, that provided additional evidence about conditions that existed at June 30, 2012 have been recognized in the consolidated financial statements for the period ended June 30, 2012.  Events or transactions that provided evidence about conditions that did not exist at June 30, 2012 but arose before the financial statements were issued have not been recognized in the consolidated financial statements for the period ended June 30, 2012.

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Note 6 - Fair Value Measurements (Detail) - Reconciliation and Income Statement Classification of Gains and Losses (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Balance at beginning of period	$ 727,240	$ 1,114,126
Gains or losses, including realized and unrealized:
Disposals – amortization based on loan payments and payoffs	(118,355)	(240,662)
Purchases, issuances, and settlements	195,182	168,342
Other changes in fair value	11,797	(314,566)
Balance at end of period	$ 815,864	$ 727,240

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Note 7 - Fair Value Of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value, by Balance Sheet Grouping [Table Text Block]

	June 30, 2012				December 31, 2011
	Carrying amount		Estimated value		Carrying amount		Estimated value
FINANCIAL ASSETS
Cash and cash equivalents	$	39,720	$	39,720	$	57,287	$	57,287
Securities, including Federal Home Loan Bank stock		158,153		163,544		156,850		156,850
Net loans		314,778		314,823		329,403		330,286
Mortgage servicing rights		816		816		727		727
	$	513,467	$	518,903	$	544,267	$	545,150
FINANCIAL LIABILITIES
Deposits	$	458,846	$	460,725	$	480,486	$	483,014
Other borrowings		30,048		32,601		32,781		35,484
Junior subordinated deferrable interest debentures		10,300		9,873		10,300		9,220
Other liabilities		3,900		3,966		3,730		3,801
	$	503,094	$	507,165	$	527,297	$	531,519

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Note 4 - Loans (Detail) - Impaired Loans (USD $)	Jun. 30, 2012	Dec. 31, 2011
Loans with no allowance for loan losses allocated	$ 8,139,973	$ 7,660,276
Loans with allowance for loan losses allocated	10,436,377	13,326,928
Total impaired loans	18,576,350	20,987,204
Amount of the allowance allocated to impaired loans	$ 2,278,298	$ 1,990,225

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
NET INCOME	$ 1,202,878	$ 987,380	$ 2,205,692	$ 1,753,448
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains during period	187,213	1,177,625	179,729	1,866,991
Reclassification adjustments for gains included in net income	(239,190)	(618,989)	(240,396)	(639,991)
Other comprehensive income (loss), before income taxes	(51,977)	558,636	(60,667)	1,227,000
Income tax expense (credit) related to items of other comprehensive income	17,672	(189,936)	20,627	(417,180)
Other comprehensive income (loss)	(34,305)	368,700	(40,040)	809,820
COMPREHENSIVE INCOME	$ 1,168,573	$ 1,356,080	$ 2,165,652	$ 2,563,268

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Note 2 - New Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement; amending ASC Topic 820 which eliminates terminology differences between U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS) on the measurement of fair value and the related fair value disclosures.  While largely consistent with existing fair value measurement principles and disclosures, the changes were made as part of the continuing efforts to converge GAAP and IFRS.  The adoption of this guidance was effective for interim and annual periods beginning after December 15, 2011, and its adoption did not have a significant impact on the Corporation’s financial statements.

In June 2011, the FASB issued ASU 2011-05 Comprehensive Income; amending ASC Topic 220 to require that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements.  Additionally, the guidance requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented.  The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated.  In December 2011, the FASB issued ASU 2011-12 to defer changes in ASU 2011-05 that relate to the presentation of reclassification adjustments until FASB has time to reconsider the presentation of such adjustments.  The remaining portion of ASU 2011-05 was effective for annual periods beginning after December 15, 2011, and its adoption did not have a significant impact on the Corporation’s financial statements.

In December 2011, The FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, amending ASC Topic 210 requiring an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The amendment is effective for annual and interim periods beginning on or after January 1, 2013, and the Corporation has not yet determined the financial statement impact.

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Note 4 - Loans (Detail) - Loans Individually Evaluated for Impairment (USD $)	Jun. 30, 2012	Dec. 31, 2011
Recorded investment	$ 8,139,973	$ 7,660,276
Recorded investment	10,436,377	13,326,928
Allowance for Loan Losses Allocated	2,278,298	1,990,225
Total	18,576,350	20,987,204
Total	2,278,298	1,990,225
With No Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member]
Recorded investment	246,099
With No Related Allowance Recorded [Member] | Agriculture Portfolio [Member]
Recorded investment	2,821,067	2,303,732
With No Related Allowance Recorded [Member] | Commercial and Multi-Family Real Estate [Member]
Recorded investment	3,801,853	5,184,050
With No Related Allowance Recorded [Member] | Agricultural Real Estate [Member]
Recorded investment	1,099,525
With No Related Allowance Recorded [Member] | Residential Portfolio Segment [Member]
Recorded investment	171,429	172,494
With A Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member]
Recorded investment	518,070	619,618
Allowance for Loan Losses Allocated	518,070	619,618
Total	518,070	619,618
With A Related Allowance Recorded [Member] | Agriculture Portfolio [Member]
Recorded investment		1,836,985
Allowance for Loan Losses Allocated		135,256
Total		135,256
With A Related Allowance Recorded [Member] | Commercial and Multi-Family Real Estate [Member]
Recorded investment	9,918,307	10,870,325
Allowance for Loan Losses Allocated	1,760,228	1,235,351
Total	$ 1,760,228	$ 1,235,351

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Note 6 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	June 30, 2012			December 31, 2011
Balance at beginning of period	$	727,240		$	1,114,126
Gains or losses, including realized and unrealized:
Disposals – amortization based on loan payments and payoffs		(118,355	)		(240,662	)
Purchases, issuances, and settlements		195,182			168,342
Other changes in fair value		11,797			(314,566	)
Balance at end of period	$	815,864		$	727,240