UNITED BANCSHARES, INC.

DESCRIPTION OF THE CORPORATION

United Bancshares, Inc., an Ohio corporation, was formed as a bank holding company in 1985.
The Union Bank Company and The Bank of Leipsic Company, its wholly-owned subsidiaries,
are both Ohio state-chartered banks.  The Union Bank Company has been in continuous
operation since 1904.  The Bank of Leipsic Company was chartered in 1924 and has been in
continuous operation since that time.  The Union Bank Company is engaged in the general
commercial banking business through its main office in Columbus Grove, Putnam County, Ohio
and five branch offices located in Putnam and Allen Counties, Ohio.  The Bank of Leipsic
Company is engaged in the general commercial banking business through its main office in
Leipsic, Putnam County, Ohio and one branch office also located in Leipsic, Putnam County,
Ohio.

MARKET PRICE AND DIVIDENDS ON COMMON STOCK

United Bancshares, Inc. currently trades its common stock on the Nasdaq Markets Exchange
under the symbol "UBOH."  Prior to January 2000, there was no established public trading
market for United Bancshares, Inc. common stock.  During 1999, trade prices for shares of stock
in United Bancshares, Inc. reported through registered securities dealers are set forth below.
Because the holding company was not public at that time, the stock of United Bancshares, Inc.
often traded without the company having knowledge of the trade.  The company knows that there
were trades in its stock during 1999 of which it was aware.  The trades that it is aware of from
the market makers in United Bancshares, Inc. common stock for 1999 and the trades reported in
2000 on the Nasdaq Over-The-Counter Bulletin Board are outlined below.  The prices given are
interdealer prices without retail markups, markdown or commissions.

| |  |  | Year 1999      |  |        | High |        | Low
| |  |  | -------------- |  | ------ | ---- | ------ | ---
| |  |  | First Quarter  |  | $16.50 |      | $16.25 |    
| |  |  | Second Quarter |  | 19.00  |      | 17.38 
| |  |  | Third Quarter  |  | 19.00  |      | 17.25 
| |  |  | Fourth Quarter |  | 17.25  |      | 16.25 
|
| |  |  | Year 2000      | 
| |  |  | First Quarter  |  | $17.00 |      | $11.25
| |  |  | Second Quarter |  | 12.75  |      | 10.38 
| |  |  | Third Quarter  |  | 11.38  |      | 8.00  
| |  |  | Fourth Quarter |  | 11.25  |      | 9.00  

Dividends declared by United Bancshares, Inc. on its common stock during the past two years
were as follows:

| |  |                |  |              |  | 2000         |  | 1999 |  | 
| |  | -------------- |  | ------------ |  | ------------ |  | ---- |  | 
| |  | First Quarter  |  | $  .11       |  | $  .02       | 
| |  | Second Quarter |  | .11          |  | .11          | 
| |  | Third Quarter  |  | .11          |  | .11          | 
| |  | Fourth Quarter |  | .11          |  | .11          | 
| |  | Totals         |  | $  .44

==== |  | $  .35

==== | 

AVAILABILITY OF MORE INFORMATION

To obtain a copy of the United Bancshares, Inc.'s annual report (Form 10-K) filed with the
Securities and Exchange Commission, please write to:

Bonita Selhorst, Secretary

United Bancshares, Inc.

100 S. High Street

Columbus Grove, Ohio 45830

419-659-2141

UNITED BANCSHARES, INC.

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA

|                                  |                                              |                                    |                           |           |           |         |          |          | Years
ended December 31,                     
|--------------------------------- | -------------------------------------------- | ---------------------------------- | ------------------------- | --------- | --------- | ------- | -------- | -------- | ---------------------------------------------
|                                  |                                              |                                    |                           |           |           |         |          |          | 2000                                         
|                                  |                                              |                                    |                           |           |           |         |          |          | (Dollars in thousands, except
per share data)
|Statements of income:             |                                              |                                    |                           |           |           |         |          |          |                                              
|                                  | Total interest income                        |                                    |                           |           | $18,940   | $16,658 | $15,247  | $14,069  | $12,393                                      
|                                  | Total interest expense                       | 10,687                             | 8,599                     | 8,026     | 7,351     | 6,414  
|                                  |                                              | Net interest income                |                           |           | 8,253     | 8,059   | 7,221    | 6,718    | 5,979                                        
|                                  | Provision for loan losses                    |                                    |                           | 502       | 309       | 222     | 179      | 970     
|                                  |                                              |                                    |                           |           |           |         |          |          |                                              
|                                  |                                              | Net interest income after          |                           |           |           |         |          |          |                                              
|                                  |                                              |                                    | Provision for loan losses | 7,751     | 7,750     | 6,999   | 6,539    | 5,009   
|                                  | Total non-interest income                    |                                    |                           | 1,028     | 980       | 1,170   | 690      | 518     
|                                  | Total non-interest expense                   |                                    |                           | 7,059     | 6,044     | 5,565   | 4,469    | 4,026   
|                                  |                                              | Income before federal income taxes | 1,720                     | 2,686     | 2,604     | 2,760   | 1,501   
|                                  | Federal income taxes                         |                                    |                           |           | 235       | 544     | 485      | 553      | 280                                          
|                                  |                                              | Net income                         |                           |           |           |         | $1,485   | $2,142   | $2,119                                       
|                                 
|Per share of common stock:        |                                              |                                    |                           |           |           |         |          |          |                                              
|                                  | Net income                                   |                                    |                           |           |           |         | $0.66    | $0.94    | $0.95                                        
|                                  | Dividends                                    |                                    |                           |           |           |         | 0.44     | 0.35     | 0.13                                         
|                                  | Book value                                   |                                    |                           |           |           |         | 8.48     | 7.92     | 8.38                                         
|                                 
|Average common shares outstanding | 2,254,420                                    | 2,274,067                          | 2,238,306                 | 2,145,751 | 2,103,964
|                                 
|Year end balances:                |                                              |                                    |                           |           |           |         |          |          |                                              
|                                  | Loan, net                                    |                                    |                           |           |           |         | $178,951 | $167,229 | $141,491                                     
|                                  | Securities                                   |                                    |                           |           |           |         | 54,976   | 52,264   | 62,721                                       
|                                  | Total assets                                 |                                    |                           | 256,815   | 237,032   | 221,218 | 185,309  | 166,433 
|                                  | Deposits                                     |                                    |                           |           | 205,506   | 198,130 | 185,542  | 160,800  | 144,918                                      
|                                  | Stockholders equity                          |                                    |                           |           | 19,049    | 18,075  | 19,005   | 16,494   | 14,029                                       
|                                 
|Average balances:                 |                                              |                                    |                           |           |           |         |          |          |                                              
|                                  | Loan, net                                    |                                    |                           |           |           |         | $175,743 | $156,143 | $126,724                                     
|                                  | Securities                                   |                                    |                           |           |           |         | 54,925   | 54,063   | 56,197                                       
|                                  | Total assets                                 |                                    |                           |           | 244,855   | 225,139 | 198,514  | 176,346  | 154,694                                      
|                                  | Deposits                                     |                                    |                           |           | 198,526   | 193,863 | 171,689  | 151,351  | 134,286                                      
|                                  | Stockholders equity                          |                                    |                           |           | 17,506    | 18,327  | 17,352   | 15,349   | 13,695                                       
|                                 
|Selected ratios:                  |                                              |                                    |                           |           |           |         |          |          |                                              
|                                  | Net yield on average interest-earning assets | 3.80%                              | 4.10%                     | 4.26%     | 4.31%     | 4.45%  
|                                  | Return on average assets                     |                                    |                           | 0.61%     | 0.95%     | 1.07%   | 1.25%    | 0.79%   
|                                  | Return on average stockholders' equity       | 8.48%                              | 11.69%                    | 12.21%    | 14.38%    | 8.92%  
|                                  | Net loan charge-offs as a percentage         |                                    |                           |           |           |         |          |          |                                              
|                                  |                                              | of average outstanding net loans   | 0.14%                     | 0.19%     | 0.07%     | 0.04%   | 0.76%   
|                                  | Allowance for loan losses                    |                                    |                           |           |           |         |          |          |                                              
|                                  |                                              | as a percentage of year end loans  | 1.08%                     | 1.00%     | 1.18%     | 1.30%   | 1.35%   
|                                  | Stockholders' equity as a percentage of      |                                    |                           |           |           |         |          |          |                                              
|                                  |                                              | Total year end assets              |                           |           | 7.42%     | 7.63%   | 8.59%    | 8.90%    | 8.43%                                        
|                                 



UNITED BANCSHARES, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Of Financial Condition and Results of Operations

EARNINGS SUMMARY

Consolidated net income for United Bancshares, Inc. (the "Corporation") for 2000 was $1.49
million, compared with $2.14 million in 1999 and $2.12 million in 1998.  As explained in the
Notes to Consolidated Financial Statements, all amounts for 1999 and 1998 have been restated to
give effect to the pooling of interests resulting from the merger with Bank of Leipsic.  Basic
earnings per share were $0.66 in 2000, a decrease of 29.8% from $0.94 in 1999.  The 1999 basic
earnings per share represented a 1.1% decrease from $0.95 in 1998.  Per share data has been
adjusted to reflect the stock dividends issued in 1999 and 1998 as well as the four-for-one stock
split declared in May 1998.

RESULTS OF OPERATIONS

2000 Compared With 1999

Net interest income for 2000 was $8.25 million, an increase of $0.19 million (2.4%) over 1999.
The increase was primarily due to a 12.6% increase in the average balance of total loans.  The
average yield on loans increased to 8.80% compared to 8.52% for 1999.  The average rate on
interest-bearing liabilities increased to 5.06% from 4.49% in 1999.  The net of these factors
resulted in the net interest margin, on a tax-equivalent basis, as a percentage of earning assets
declining from 4.10% in 1999 to 3.81% in 2000.

At December 31, 2000, total loans were $179.0 million, an increase of 7.1% over the December
31, 1999 balance of $167.2 million.  This increase was due to the Corporation's loan origination
efforts and the continued penetration into the newer Lima markets.

The Corporation elects to sell in the secondary market a portion of the residential mortgage loans
that it originates.  These are primarily fixed rate loans and, typically, the servicing rights are
retained.  During 2000, gains of $156,000 were recognized on such sales.  As described in the
Notes to Consolidated Financial Statements, this amount includes $313,000 resulting from the
adoption of Financial Accounting Standards Board Opinion 122.  Offsetting these gains
recognized was a charge in the amount of $182,000 to establish a valuation allowance for the
excess of cost over estimated fair value of the portion of loans held for sale at December 31,
2000.

Securities available for sale totaled $53.3 million at December 31, 2000 which represented an
increase of $2.1 million (4.1%) from total securities available for sale of $51.2 million at
December 31, 1999.  At both year-ends, all securities of the Corporation were designated as
available for sale.  As such, these securities may be sold if needed for liquidity, asset/liability
management or other reasons.  Such securities are reported at fair value with net unrealized
appreciation/(depreciation) included as a separate component of stockholders' equity, net of tax.
At December 31, 2000, this resulted in $303,000 as a net decrease in stockholders' equity.

Total deposits at December 31, 2000 were $205.5 million, an increase of $7.4 million (3.7%)
over total deposits of $198.1 million at December 31, 1999.  This increase was a result of cross-selling efforts with existing customers, aggressive pricing and the increased expansion into the
Lima market.

Federal Home Loan Bank borrowings at December 31, 2000 were $30.4 million compared to
$19.2 million at December 31, 1999.  The Corporation utilizes this alternative source of funding
to support its asset growth.

The allowance for loan losses at December 31, 2000 was $1.9 million (1.08% of total loans)
compared to $1.7 million (1.00% of total loans) at December 31, 1999.

The provision for loan losses charged to operations was based on the amount of net losses
incurred and managements' estimation of future losses based on an evaluation of loan portfolio
risk and current economic factors.  The provision for loan losses was $502,000 in 2000 compared
to $309,000 in 1999.

Total non-interest income increased $48,000 to $1.03 million in 2000 from $980,000 in 1999.
Net gains on sales of loans increased $98,000 to $156,000 in 2000 from $58,000 in 1999.
Service charges on deposit accounts increased $61,000 to $623,000 in 2000 as compared to
$562,000 in 1999.

Total non-interest expenses increased $1.02 million (16.8%) to $7.06 million in 2000 from $6.04
million in 1999.  Salaries and related costs increased $111,000 (3.5%) to $3.3 million in 2000
from $3.2 million in 1999.  Net occupancy costs, including buildings, furnishings, and
equipment, increased $174,000 (33.2%) to $700,000 in 2000 from $526,000 in 1999.  Data
processing costs increased $222,000 (56.5%) to $616,000 in 2000 from $394,000 in 1999.  This
increase resulted from more accounts processed and the full-year utilization of an out-sourced
proof and transit service.  Professional fees increased $245,000 (94.5%) to $504,000 from
$259,000 in 1999.  The majority of this increase resulted from fees associated with the merger
with The Bank of Leipsic Company, as well as fees associated with the proposed merger with
Delphos Citizens Bancorp, Inc.

Income tax expense for 2000 was $235,000, a decrease of $309,000 (56.8%) from 1999.  This
decrease resulted from lower income before income taxes.  The effective income tax rate is
13.7% in 2000 compared to 20.3% in 1999.  The decrease in the effective rate resulted from tax
exempt income from securities and loans comprising a larger portion of income before income
taxes.

RESULTS OF OPERATIONS

1999 Compared With 1998

Net interest income for 1999 was $8.06 million, an increase of $0.84 million (11.6%) over 1999.
The increase was primarily due to a 23.2% increase in the average balance of total loans.  The
average yield on loans decreased to 8.52% in 1999 compared to 9.16% for 1998.  The average
rate on interest-bearing liabilities decreased to 4.49% in 1999 from 4.81% in 1998.  The net of
these factors resulted in the net interest margin, on a tax-equivalent basis, as a percentage of
earning assets declining to 4.10% in 1999 from 4.26% in 1998.

At December 31, 1999, total loans were $167.2 million, an increase of 18.2% over the December
31, 1998 balance of $141.5 million.  This increase was due to the Corporation's loan origination
efforts and the continued penetration into the newer Lima markets.

The Corporation elects to sell in the secondary market a portion of the residential mortgage loans
that it originates.  These are primarily fixed rate loans and, typically, the servicing rights are
retained.  During 1999, gains of $58,000 were recognized on such sales as compared to $171,000
in 1998.

Securities available for sale totaled $51.2 million at December 31, 1999 which represented a
decrease of $10.4 million (16.7%) from total securities available for sale of $62.7 million at
December 31, 1998.  At both year-ends, all securities of the Corporation were designated as
available for sale.  As such, these securities may be sold if needed for liquidity, asset/liability
management or other reasons.  Such securities are reported at fair value with net unrealized
appreciation/(depreciation) included as a separate component of stockholders' equity, net of tax.
At December 31, 1999, this resulted in $1.62 million as a net decrease in stockholders' equity.

Total deposits at December 31, 1999 were $198.1 million, an increase of $12.6 million (6.8%)
over total deposits of $185.5 million at December 31, 1998.  This increase was a result of cross-selling efforts with existing customers, aggressive pricing and the increased expansion into the
Lima market.

Federal Home Loan Bank borrowings at December 31, 1999 were $19.2 million compared to
$15.2 million at December 31, 1998.  These borrowings were comprised primarily of Federal
Home Loan Bank advances.  The Corporation utilizes these alternative sources of funding to
support its asset growth.

The allowance for loan losses at December 31, 1999 was $1.7 million (1.00% of total loans)
compared to $1.7 million (1.18% of total loans) at December 31, 1998

.

The provision for loan losses charged to operations was based on the amount of net losses
incurred and managements' estimation of future losses based on an evaluation of loan portfolio
risk and current economic factors.  The provision for loan losses was $309,000 in 1999 compared
to $222,000 in 1998.

Total non-interest income decreased $190,000 to $980,000 in 1999 from $1.17 million in 1998.
Net gains on sales of securities decreased $351,000 to $8,000 in 1999 from $359,000 in 1998.
Net gains on sales of loans decreased $113,000 to $58,000 in 1999 from $171,000 in 1998.
Service charges on deposit accounts increased $109,000 to $562,000 in 1999 from $453,000 in
1998.

Total non-interest expense increased $479,000 (8.6%) to $6.04 million in 1999 from $5.56
million in 1998.  Salaries and related costs increased $263,000 (9.0%) to $3.2 million in 1999
from $2.9 million in 1998.  In addition to normal annual merit increases, several positions were
added to strengthen administrative areas.  Data processing costs increased $161,000 (69.1%) to
$394,000 in 1999 from $233,000 in 1998.  This increase is due both to additional accounts
processed as well as the out-sourcing of the proof and transit function.

Income tax expense for 1999 was $544,000, an increase of $59,000 (12.1%) from 1998.  This
increase resulted from an increase in income before income taxes.

LIQUIDITY

Liquidity relates primarily to the Corporation's ability to fund loan demand, meet deposit
customers' withdrawal requirements and provide for operating expenses.  Assets used to satisfy
these needs consist of cash and due from banks, federal funds sold, securities available for sale,
and loans held for sale.  A large portion of liquidity is provided by the ability to sell securities.
Accordingly, the Corporation has designated the entire securities portfolio of $53.3 million at
December 31, 2000 as available for sale.

Another source of liquidity is represented by loans held for sale which can be sold at any time.
Other loans could readily be used to collateralize borrowings.

The cash flow statements for the years presented provide an indication of the Corporation's
sources and uses of cash as well as an indication of the ability of the Corporation to maintain an
adequate level of liquidity.  A discussion of the cash flow statements for 2000, 1999, and 1998
follows.

The Corporation generated cash from operating activities of $3.5 million in 2000, $2.8 million in
1999, and $1.7 million in 1998.  Additional sales of loans provided additional cash inflows in
2000 to offset the decline in net income.

Net cash flow used in investing activities was $15.2 million in 2000, $19.4 million in 1999, and
$31.7 million in 1998.  The primary reason for these net cash outflows was the net increase in
loans which was $13.5 million in 2000, $26.0 million in 1999, and $24.1 million in 1998.

Net cash flow from financing activities was $16.8 million in 2000, $16.1 million in 1999, and
$33.2 million in 1998.  The primary source for these cash flows was the net increase in deposits
of $7.4 million in 2000, $12.6 million in 1999, and $24.7 million in 1998; as well as net Federal
Home Loan Bank borrowings of $11.2 million in 2000, $4.3 million in 1999, and $8.5 million in
1998.

ASSET LIABILITY MANAGEMENT

Closely related to liquidity management is the management of interest-earning assets and
interest-bearing liabilities.  The Corporation manages its rate sensitivity position to avoid wide
swings in net interest margins and to minimize risk due to changes in interest rates.

The difference between a financial institution's interest rate sensitive assets (assets that will
mature or reprice within a specific time period) and interest rate sensitive liabilities (liabilities
that will mature or reprice within the same time period) is commonly referred to as its "interest
rate sensitivity gap" or, simply, its "gap".  An institution having more interest rate sensitive assets
than interest rate sensitive liabilities within a given time interval is said to have a "positive gap".
This generally means that when interest rates increase, an institution's net interest income will
increase and when interest rates decrease, the institution's net interest income will decrease.  An
institution having more interest rate sensitive liabilities than interest rate sensitive assets within a
given time interval is said to have a "negative gap".  This generally means that when interest rates
increase, the institution's net interest income will decrease and when interest rates decrease, the
institution's net interest income will increase.

As seen by the decline in the net interest margin, the dramatic increases in short-term interest
rates during 2000 had a negative impact on the Corporation's net interest income.  Since the
Corporation is liability-sensitive, more liabilities (primarily deposits) repriced quicker at higher
increments in interest rates than did assets (primarily loans).  Given the nature of the
Corporation's business, this exposure exists in periods of rising interest rates.  The proposed
merger with Delphos Citizens Bancorp, Inc. will increase this risk even further.  The Company
recognizes this exposure and has taken steps to reduce the potential risk.

EFFECTS OF INFLATION

The assets and liabilities of the Corporation are primarily monetary in nature and are more
directly affected by the fluctuation in interest rates than inflation.  Movement in interest rates is a
result of the perceived changes in inflation as well as monetary and fiscal policies.  Interest rates
and inflation do not necessarily move with the same velocity or within the same period;
therefore, a direct relationship to the inflation rate cannot be shown.  The financial information
presented in the Corporation's financial statements has been presented in accordance with
generally accepted accounting principles, which require that the Corporation measure financial
position and operating results primarily in terms of historical dollars.

FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements by the Corporation relating to such matters as
anticipated operating results, prospects for new lines of business, technological developments,
economic trends (including interest rates), and similar matters.  The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements, and the purpose of
this paragraph is to secure the use of the safe harbor provisions.  While the Corporation believes
that the assumptions underlying the forward looking statements contained herein and in other
public documents are reasonable, any of the assumptions could prove to be inaccurate, and
accordingly, actual results and experience could differ materially from the anticipated results or
other expectations expressed by the Corporation in it forward-looking statements.  Factors that
could cause actual results or experience to differ from results discussed in the forward-looking
statements include, but are not limited to: economic conditions; volatility and direction of market
interest rates; governmental legislation and regulation; material unforeseen changes in the
financial condition or results of operations of the Corporation's customers; customer reaction to
and unforeseen complications with respect of the integration of acquisition; product design
initiative; and other risks identified, from time-to-time in the Corporation's other public
documents on file with the Securities and Exchange Commission.

ACQUISITION OF DELPHOS CITIZENS BANCORP, INC.

During February 2001, shareholders of both the Corporation and Delphos Citizens Bancorp, Inc.
voted to approve a merger whereby Delphos Citizens Bancorp, Inc. would become a wholly-owned subsidiary of the Corporation.  After receiving requisite regulatory approval, the merger
was consummated February 28, 2001.  Under terms of the merger agreement, shareholders of
Delphos Citizens Bancorp, Inc. received .8749 shares of the Corporation, cash in lieu of
fractional shares, and $5.41 in cash for each share of Delphos Citizens Bancorp, Inc. stock held.

UNITED

BANCSHARES, INC.

Columbus Grove, Ohio

CONSOLIDATED

FINANCIAL STATEMENTS

December 31, 2000 and 1999

TABLE OF CONTENTS

|                             |                                                 |  |    |   |   |   |   |  |  |  | PAGE
|---------------------------- | ----------------------------------------------- |  | -- | - | - | - | - |  |  |  | ----
|INDEPENDENT AUDITOR'S REPORT |                                                 |  |    |   |   | 1
|                            
|FINANCIAL STATEMENTS        
|                            
|                             | Consolidated Balance Sheets                     |  |    |   |   |   | 2
|                             | Consolidated Statements of Income               |  |    | 3
|                             | Consolidated Statements of Stockholders' Equity |  |    |   | 4
|                             | Consolidated Statements of Cash Flows           |  |    |   |   | 5
|                            
|                             | Summary of Significant Accounting Policies      |  |    |   | 6
|                            
|                             | Notes to Consolidated Financial Statements      |  | 10
|                            

Independent Auditor's Report

Stockholders and Board of Directors

United Bancshares, Inc.

Columbus Grove, Ohio

We have audited the accompanying consolidated balance sheet of United Bancshares, Inc. and
subsidiaries as of December 31, 2000, and the related consolidated statements of income,
stockholders' equity, and cash flows for the year then ended.  These consolidated financial
statements are the responsibility of the Corporation's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.  Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.  We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of United Bancshares, Inc. and subsidiaries as of
December 31, 2000, and the results of their operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.

The consolidated balance sheet of United Bancshares, Inc. and subsidiary as of December 31,
1999, and the related consolidated statements of income, stockholders' equity and cash flows for
the years ended December 31, 1999 and 1998 were audited and reported on by other auditors,
prior to their restatement for the 2000 pooling-of-interests.  The report of other auditors dated
February 25, 2000, expressed an unqualified opinion on those financial statements.  The
contribution of United Bancshares, Inc. and subsidiary to total assets, total interest and dividend
income, and net income, represented 70%, 71%, and 62% of the respective restated totals for
1999 and 69%, 68%, and 62% of the respective totals for 1998.  We audited the separate
financial statements of The Bank of Leipsic Company which are included in the restated
consolidated financial statements as of December 31, 1999 and for the years ended December 31,
1999 and 1998.  We also audited the combination of the accompanying consolidated financial
statements as of December 31, 1999 and for the years ended December 31, 1999 and 1998, after
restatement for the 2000 pooling-of-interests; in our opinion, such consolidated financial
statements have been properly combined on the basis described in Note 1 of the notes to the
consolidated financial statements.



/s/ Clifton Gunderson LLP

Toledo, Ohio

January 26, 2001

UNITED BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2000 and 1999

|                                      |                                          | ASSETS                                 |                            |                          |              |                          | 2000         |                          | 1999       
|------------------------------------- | ---------------------------------------- | -------------------------------------- | -------------------------- | ------------------------ | ------------ | ------------------------ | ------------ | ------------------------ | -----------
|CASH AND CASH EQUIVALENTS            
|                                      | Cash and due from banks                  |                                        |                            |                          | $  6,051,496 |                          | $  6,360,196
|                                      | Interest-bearing deposits in other banks |                                        | 133,774                    |                          | 114,239     
|                                      | Federal funds sold                       |                                        |                            |                          |              | 7,684,000                |              | 2,298,000               
|                                      |                                          | Total cash and cash equivalents        |                            | 13,869,270               |              | 8,772,435               
|SECURITIES, available-for-sale        |                                          |                                        |                            | 53,283,442               |              | 51,192,226              
|FEDERAL HOME LOAN BANK STOCK, at cost | 1,692,500                                |                                        | 1,071,300                 
|LOANS HELD FOR SALE                   |                                          |                                        | 11,178,988                 |                          | 12,562,568  
|LOANS                                 |                                          |                                        |                            |                          |              |                          | 167,771,628  |                          | 154,666,163
|                                      | Less allowance for loan losses           |                                        |                            | 1,935,648                |              | 1,672,535               
|                                      |                                          |                                        | Net loans                  |                          |              |                          | 165,835,980  |                          | 152,993,628
|PREMISES AND EQUIPMENT, net           |                                          |                                        | 4,898,103                  |                          | 4,180,590   
|ACCRUED INTEREST RECEIVABLE           |                                          |                                        | 1,905,328                  |                          | 1,707,429   
|OTHER ASSETS                          |                                          |                                        |                            |                          |              | 4,151,596                |              | 4,552,002               
|TOTAL ASSETS                          |                                          |                                        |                            |                          |              | $256,815,207

========== |              | $237,032,178

==========
|                                      | LIABILITIES AND STOCKHOLDERS' EQUITY     |                                       
|LIABILITIES                           |                                          |                                       
|                                      | Deposits:                                |                                        |                            |                          |              |                          |              |                          |            
|                                      |                                          | Non-interest bearing                   |                            | $ 17,698,485             |              | $ 15,590,110            
|                                      |                                          | Interest-bearing                       |                            |                          |              | 187,807,683              |              | 182,540,075             
|                                      |                                          |                                        | Total deposits             |                          | 205,506,168  |                          | 198,130,185 
|                                      | Federal Home Loan Bank borrowings        |                                        | 30,432,706                 |                          | 19,195,071  
|                                      | Other liabilities                        |                                        |                            |                          |              | 1,827,464                |              | 1,631,805               
|                                      |                                          |                                        | Total liabilities          |                          |              | 237,766,338              |              | 218,957,061             
|STOCKHOLDERS' EQUITY                  |                                         
|                                      | Common stock, stated value $1.           |                                       
|                                      |                                          | Authorized 3,750,000	shares; issued    |                           
|                                      |                                          | 2,300,646 shares in 2000 and 2,283,635 |                           
|                                      |                                          | shares in 1999                         |                            |                          | 2,300,646    |                          | 2,283,635   
|                                      |                                          | Surplus                                |                            |                          |              |                          | 1,955,378    |                          | 1,889,936  
|                                      |                                          | Retained earnings                      |                            |                          |              | 16,009,977               |              | 15,517,485              
|                                      |                                          | Accumulated other comprehensive loss   | (303,261)                  |                          | (1,615,939) 
|                                      |                                          | Treasury stock, 53,318 shares at cost  | (913,871)                  |                          | -           
|                                      |                                          |                                        | Total stockholders' equity |                          | 19,048,869   |                          | 18,075,117  
|TOTAL LIABILITIES AND                 |                                          |                                        |                           
|                                      | STOCKHOLDERS' EQUITY                     |                                        |                            | $256,815,207

========== |              | $237,032,178

========= 

These consolidated financial statements should be read only in connection with the accompanying summary of
significant accounting policies and notes to consolidated financial policies and notes to consolidated financial
statements.

UNITED BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31, 2000, 1999 and 1998

|                             |                                        |            |                                    |                                     |                       |             |             |           |           | 2000      | 1999 | 1998
|---------------------------- | -------------------------------------- | ---------- | ---------------------------------- | ----------------------------------- | --------------------- | ----------- | ----------- | --------- | --------- | --------- | ---- | ----
|INTEREST AND DIVIDEND INCOME |                                       
|                             | Loans, including fees                  |            |                                    |                                     | $15,416,133           | $13,306,994 | $11,607,005
|                             | Securities:                            |           
|                             |                                        | Taxable    |                                    |                                     |                       |             |             | 1,976,162 | 1,904,828 | 2,084,448
|                             |                                        | Tax-exempt |                                    |                                     |                       |             | 1,298,915   | 1,292,298 | 1,362,191
|                             | Other                                  |            |                                    |                                     |                       | 249,332     | 153,705     | 194,230  
|                             |                                        |            | Total interest and dividend income | 18,940,542                          | 16,657,825            | 15,247,874 
|INTEREST EXPENSE             |                                       
|                             | Deposits                               |            |                                    |                                     |                       |             |             | 8,881,567 | 7,913,334 | 7,530,218
|                             | Borrowings                             |            |                                    |                                     |                       |             | 1,805,781   | 685,054   | 495,921  
|                             |                                        |            | Total interest expense             |                                     |                       | 10,687,348  | 8,598,388   | 8,026,139
|                             |                                        |            | Net interest income                |                                     | 8,253,194             | 8,059,437   | 7,221,735  
|PROVISION FOR LOAN LOSSES    |                                        |            | 502,490                            | 309,350                             | 222,150              
|                             |                                        |            |                                    | Net interest income after provision |                       |             |             |           |           |          
|                             |                                        |            |                                    | for loan losses                     |                       |             | 7,750,704   | 7,750,087 | 6,999,585
|NON-INTEREST INCOME          |                                       
|                             | Service charges on deposit accounts    |            | 623,185                            | 561,711                             | 452,860              
|                             | Gain on sale of securities             |            |                                    |                                     | 7,968                 | 8,335       | 359,642    
|                             | Gain on sale of loans                  |            |                                    |                                     | 155,739               | 58,277      | 171,484    
|                             | Other operating income                 |            |                                    |                                     | 241,341               | 351,624     | 186,114    
|                             |                                        |            | Total non-interest income          |                                     | 1,028,233             | 979,947     | 1,170,100  
|NON-INTEREST EXPENSES        |                                        |           
|                             | Salaries, wages and employee benefits  |            | 3,302,987                          | 3,191,971                           | 2,929,118            
|                             | Net occupancy expense of bank premises |            | 700,071                            | 525,721                             | 607,085              
|                             | Data processing costs                  |            |                                    |                                     | 616,395               | 393,867     | 232,986    
|                             | Professional fees                      |            |                                    |                                     |                       | 504,305     | 259,269     | 239,258  
|                             | Stationery and supplies costs          |            |                                    | 170,363                             | 170,859               | 178,854    
|                             | Advertising costs                      |            |                                    |                                     |                       | 176,739     | 133,871     | 172,571  
|                             | Franchise tax costs                    |            |                                    | 216,467                             | 238,610               | 228,489    
|                             | Other operating expenses               |            |                                    |                                     | 1,371,184             | 1,130,004   | 976,754    
|                             |                                        |            | Total non-interest expenses        | 7,058,511                           | 6,044,172             | 5,565,115  
|                             |                                        |            | Income before income taxes         |                                     | 1,720,426             | 2,685,862   | 2,604,570  
|PROVISION FOR INCOME TAXES   |                                        |            | 235,000                            | 544,070                             | 485,161              
|                            
|NET INCOME                   |                                        |            | $ 1,485,426

========              | $ 2,141,792

=======                | $ 2,119,409

========
|                            
|NET INCOME PER SHARE         |                                        |            |                                   
|                             | Basic                                  |            |                                    | $.66

====                          | $.94

===             | $.95

==== 
|                             | Diluted                                |            | $.63

====                         | $.89

====                          | $.89

====           

These consolidated financial statements should be read only in connection with the accompanying summary of
significant accounting policies and notes to consolidated financial policies and notes to consolidated financial
statements.

UNITED BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Years Ended December 31, 2000, 1999 and 1998

|                                |                          |                     |                     |                        |                        |                       |                      | Common
stock          | Surplus   | Retained
earnings | Accumulated other
compre-hensive
income

(loss) | Treasury
stock | Total
|------------------------------- | ------------------------ | ------------------- | ------------------- | ---------------------- | ---------------------- | --------------------- | -------------------- | --------------------- | --------- | ----------------- | ----------------------------------------------- | -------------- | -----
|BALANCE AT                      |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|DECEMBER 31, 1997               |                          |                     | $  532,044          | $ 2,714,968            | $   13,099,590         | $   359,231           | $(212,284)           | $16,493,549          
|Comprehensive income:           |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | Net income               |                     |                     | -                      | -                      | 2,119,409             | -                    | -                     | 2,119,409
|                                | Change in net unrealized |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | gain (loss), net of |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | reclassification    |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | adjustments and     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | income taxes        |                     |                        | -                      | -                     | -                    | 371,735               | -         | 371,735          
|                                |                          |                     | Total comprehen-    |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          |                     |                     | sive income            |                        |                       |                      |                       |           |                   |                                                 |                |      
|Transfer for four-for-one       |                         
|                                | stock split              |                     |                     |                        |                        | 1,674,554             | (1,674,554)          | -                     | -         | -                 | -                                              
|Sale of treasury stock          | -                        |                     |                     | -                      |                        |                       | -                    |                       |           | -                 | 212,284                                         | 212,284       
|Exercise of stock options       | 10,626                   | 95,577              |                     | -                      | -                      | -                     | 106,203             
|Stock dividends                 | 44,534                   | 598,218             | (642,754)           | -                      | -                      | (2)                  
|Redemption of fractional shares | -                        | (7,707)             | -                   | -                      | -                      | (7,707)              
|Cash dividends paid,            |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | $.13 per share           |                     |                     |                        | -                      | -                     | (290,000)            | -                     | -         | (290,000)        
|BALANCE AT                      |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | DECEMBER 31, 1998        |                     | 2,261,758           | 1,726,502              | 14,286,245             | 730,966               | -                    | 19,005,471           
|Comprehensive income:           |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | Net income               |                     |                     | -                      | -                      | 2,141,792             | -                    | -                     | 2,141,792
|                                | Change in net unrealized |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | gain (loss), net of |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | reclassification    |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | adjustments and     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | income taxes        |                     |                        | -                      | -                     | -                    | (2,346,905)           | -         | (2,345,905)      
|                                |                          |                     | Total comprehen-    |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          |                     |                     | sive income (loss)     |                        |                       |                      |                       |           |                   |                                                 |                |      
|Stock dividends                 |                          | 7,213               | 109,998             | (117,211)              | -                      | -                     | -                   
|Exercise of stock options       | 14,664                   | 56,790              | -                   | -                      | -                      | 71,454               
|Redemption of fractional shares | -                        | (3,354)             | -                   | -                      |                        | -                     | (3,354)             
|Cash dividends declared,        |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | $.35 per share           |                     |                     |                        | -                      | -                     | (793,341)            | -                     | -         | (793,341)        
|BALANCE AT                      |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | DECEMBER 31, 1999        |                     | 2,283,635           | 1,889,936              | 15,517,485             | (1,615,939)           | -                    | 18,075,117           
|Comprehensive income:           |                         
|                                | Net income               |                     |                     | -                      | -                      | 1,485,426             | -                    | -                     | 1,485,426
|                                | Change in net unrealized |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | gain (loss), net of |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | reclassification    |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          | adjustments and     |                     |                        |                        |                       |                      |                       |           |                   |                                                
|                                |                          | income taxes        |                     |                        | -                      | -                     | -                    | 1,312,678             | -         | 1,312,678        
|                                |                          |                     | Total comprehen-    |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                |                          |                     |                     | sive income            |                        |                       |                      |                       |           |                   |                                                 |                |      
|Purchase of treasury stock      | -                        | -                   | -                   | -                      | (913,871)              | (913,871)            
|Exercise of stock options       |                          | 17,011              | 65,442              | -                      | -                      | -                     | 82,453              
|Cash dividends declared,        |                          |                     |                     |                        |                        |                       |                      |                       |           |                   |                                                 |                |      
|                                | $.44 per share           |                     |                     |                        | -                      | -                     | (992,934)            | -                     | -         | (992,934)        
|BALANCE AT                     
|                                | DECEMBER 31, 2000        |                     | $2,300,646

======= | $ 1,955,378

========= | $16,009,977

========= | $ (303,261)

======== | $(913,871)

======== | $19,048,869

========

These consolidated financial statements should be read only in connection with the accompanying summary of
significant accounting policies and notes to consolidated financial policies and notes to consolidated financial
statements.

UNITED BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2000, 1999 and 1998

|                                     |                                                 |                                   |                                              |                                           |           |             |              |                         |                        |                       |              |            |            |           | 2000      | 1999 | 1998
|------------------------------------ | ----------------------------------------------- | --------------------------------- | -------------------------------------------- | ----------------------------------------- | --------- | ----------- | ------------ | ----------------------- | ---------------------- | --------------------- | ------------ | ---------- | ---------- | --------- | --------- | ---- | ----
|CASH FLOWS FROM OPERATING
ACTIVITIES |                                                 |                                   |                                              |                                           |           |             |              |                         |                        |                       |              |           
|                                     | Net income                                      |                                   |                                              |                                           |           |             |              |                         | $  1,485,426           | $  2,141,792          | $  2,119,409
|                                     | Adjustments to reconcile net income to net cash |                                   |                                              |                                           |           |             |              |                         |                        |                       |             
|                                     |                                                 | provided by operating activities: |                                              |                                           |           |             |              |                         |                        |                       |              |            |            |          
|                                     |                                                 |                                   | Depreciation and amortization                |                                           |           |             | 515,791      | 388,047                 | 334,694               
|                                     |                                                 |                                   | Provision for loan losses                    |                                           |           |             | 502,490      | 309,350                 | 222,150               
|                                     |                                                 |                                   | Deferred federal income taxes                |                                           | (30,228)  | (9,314)     | (100,545)   
|                                     |                                                 |                                   | FHLB stock dividends                         |                                           |           |             |              |                         |                        | (93,300)              | (65,700)     | (60,600)  
|                                     |                                                 |                                   | Net amortization (accretion) of security     |                                           |           |             |              |                         |                        |                       |              |            |           
|                                     |                                                 |                                   |                                              | premiums and discounts                    |           |             | (55,811)     | 10,352                  | 68,838                
|                                     |                                                 |                                   | Provision (credit) for deferred compensation |                                           |           |             |              |                         |                        |                       |             
|                                     |                                                 |                                   |                                              | and stock appreciated rights              |           |             |              |                         | (40,136)               | 156,118               | 194,818     
|                                     |                                                 |                                   | Gain on sale of securities                   |                                           |           | (7,968)     | (8,335)      | (359,642)              
|                                     |                                                 |                                   | Gain on sale of loans                        |                                           |           | (155,739)   | (58,277)     | (171,484)              
|                                     |                                                 |                                   | Proceeds from sale of loans held-for-sale    |                                           |           | 7,805,196   | 13,138,572   | 19,020,711             
|                                     |                                                 |                                   | Originations of loans held-for-sale          |                                           |           | (6,396,113) | (13,080,295) | (18,849,227)           
|                                     |                                                 |                                   | Decrease (increase) in accrued               |                                           |           |             |              |                         |                        |                       |              |            |            |           |          
|                                     |                                                 |                                   |                                              | interest receivable                       |           |             |              |                         |                        |                       | (197,899)    | (39,384)   | 18,057    
|                                     |                                                 |                                   | Decrease (increase) in other assets          |                                           |           | (75,424)    | 52,671       | (653,154)              
|                                     |                                                 |                                   | Increase (decrease) in other
liabilities     |                                           |           |             | 235,795      | (183,442)               | (95,743)              
|                                     |                                                 |                                   |                                              | Net cash provided by operating activities |           | 3,492,080   | 2,752,155    | 1,688,282              
|CASH FLOWS FROM INVESTING ACTIVITIES
|                                     | Proceeds from sales and maturities
of           |                                   |                                              |                                           |           |             |              |                         |                        |                       |              |            |            |          
|                                     |                                                 | available-for-sale securities     |                                              |                                           |           |             |              |                         | 11,542,518             | 21,538,300            | 30,874,019  
|                                     | Purchases of available-for-sale securities and  |                                   |                                              |                                           |           |             |              |                         |                        |                       |              |           
|                                     |                                                 | FHLB stock                        |                                              |                                           |           |             |              |                         | (12,108,949)           | (14,572,918)          | (37,017,668)
|                                     | Net increase in loans                           |                                   |                                              |                                           |           |             |              | (13,527,305)            | (26,038,439)           | (24,124,909)         
|                                     | Purchases of premises and
equipment             |                                   |                                              |                                           |           |             | (1,090,775)  | (336,598)               | (1,465,270)           
|                                     |                                                 |                                   |                                              | Net cash used in investing activities     |           |             | (15,184,511) | (19,409,655)            | (31,733,828)          
|CASH FLOWS FROM FINANCING ACTIVITIES |                                                
|                                     | Net increase in deposits                        |                                   |                                              |                                           |           |             |              |                         |                        | 7,375,983             | 12,587,846   | 24,659,815
|                                     | Borrowed funds:                                 |                                   |                                              |                                           |           |             |              |                         |                        |                       |             
|                                     |                                                 | Proceeds                          |                                              |                                           |           |             |              |                         |                        |                       |              |            | 13,500,000 | 5,052,970 | 9,385,930
|                                     |                                                 | Repayments                        |                                              |                                           |           |             |              |                         | (2,262,365)            | (769,724)             | (893,293)   
|                                     | Proceeds from sale of treasury stock            |                                   |                                              |                                           |           |             | -            | -                       | 212,284               
|                                     | Proceeds from issuance of common stock          |                                   |                                              |                                           |           | 82,453      | 68,100       | 98,494                 
|                                     | Purchase of treasury stock                      |                                   |                                              |                                           | (913,871) | -           | -           
|                                     | Cash dividends paid                             |                                   |                                              |                                           |           |             |              | (992,934)               | (793,341)              | (290,000)            
|                                     |                                                 |                                   |                                              | Net cash provided by financing activities |           | 16,789,266  | 16,145,851   | 33,173,230             
|NET INCREASE (DECREASE) IN CASH AND  |                                                 |                                   |                                              |                                           |           |             |              |                         |                        |                       |              |           
|                                     | CASH EQUIVALENTS                                |                                   |                                              |                                           | 5,096,835 | (511,649)   | 3,127,684   
|CASH AND CASH EQUIVALENTS           
|                                     | At beginning of year                            |                                   |                                              |                                           | 8,772,435 | 9,284,084   | 6,156,400   
|                                     | At end of year                                  |                                   |                                              |                                           |           |             |              | $ 13,869,270

========= | $  8,772,435

======== | $  9,284,084

=======

These consolidated financial statements should be read only in connection with the accompanying summary of
significant accounting policies and notes to consolidated financial policies and notes to consolidated financial
statements.

UNITED BANCSHARES, INC.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

United Bancshares, Inc. (the "Corporation") was incorporated in 1985 in the state of Ohio.  The
Corporation is a bank holding company and has two wholly-owned subsidiaries, The Union Bank
Company("Union") and The Bank of Leipsic Company ("Leipsic"), who operate in the
commercial banking industry.  Union, an Ohio chartered bank organized in 1904, has its main
office in Columbus Grove, Ohio, and has branch offices in Kalida, Lima, and Ottawa, Ohio.
Leipsic was formed in 1884 and chartered as an Ohio bank in 1924.  Its main office and only
branch are both located in Leipsic, Ohio.  Union and Leipsic are hereafter collectively referred to
as "the Banks".

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

Significant accounting policies followed by the Corporation are presented below.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during each
reporting period.  The most significant areas involving the use of management's estimates and
assumptions are the allowance for loan losses and the valuation of servicing assets.  Actual
results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

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

CASH AND CASH EQUIVALENTS

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

SECURITIES

Securities are generally classified as "available-for-sale" and recorded at fair value, with
unrealized gains and losses excluded from income and reported as accumulated other
comprehensive income.

Purchase premiums and discounts are recognized in interest income using the interest method
over the terms of the securities.  Declines in fair value of securities below their cost that are
deemed to be other than temporary are reflected in income as realized losses.  Gains and losses
on the sale of securities are recorded on the trade date, using the specific identification method.

LOANS HELD FOR SALE

Effective December 31, 2000, loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated fair value in the aggregate, as described in Note 3.  Net
unrealized losses are recognized through a valuation allowance by charges to income.  Prior to
December 31, 2000, such loans were carried at cost.

UNITED BANCSHARES, INC.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

LOANS

Loans that management has the intent and ability to hold for the foreseeable future or until
maturity or pay-off generally are stated at their outstanding principal amount, adjusted for loan
fees and costs and net of an allowance for loan losses.  Interest is accrued as earned based upon
the daily outstanding principal balance.

The accrual of interest on loans is discontinued when, in management's opinion, the borrower
may be unable to meet payments as they come due.  Loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

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

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is established as losses are estimated to have occurred through a
provision for loan losses charged to income.  Loan losses are charged against the allowance when
management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries,
if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon
management's periodic review of the collectibility of the loans in light of historical experience,
the nature and volume of the loan portfolio, adverse situations that may affect the borrower's
ability to repay, estimated value of any underlying collateral and prevailing economic conditions.
This evaluation is inherently subjective as it requires estimates that are susceptible to significant
revision as more information becomes available.

A loan is considered impaired when, based on current information and events, it is probable that
the Banks will be unable to collect the scheduled payments of principal or interest when due
according to the contractual terms of the loan agreement.  Factors considered by management in
determining impairment include payment status, collateral value, and the probability of collecting
scheduled principal and interest payments when due.  Loans that experience insignificant
payment delays and payment shortfalls generally are not classified as impaired.  Management
determines the significance of payment delays and payment shortfalls on a case-by-case basis,
taking into consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower's prior payment record,
and the amount of the shortfall in relation to the principal and interest owed.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.
Accordingly, the Corporation does not separately identify individual consumer and residential
loans for impairment disclosures.

OTHER REAL ESTATE OWNED

Other real estate owned represents property acquired through foreclosure or deeded to the Banks
in lieu of foreclosure on real estate mortgage loans on which the borrowers have defaulted as to
payment of principal and interest.  Other real estate owned is recorded at the lower of cost or fair
value, less estimated costs to sell, and any loan balance in excess of fair value is charged to the
allowance for loan losses.  Subsequent write-downs are included in other operating expense, as
are gains or losses upon sale and expenses related to maintenance of the properties.  Other real
estate owned is included in other assets in the accompanying consolidated balance sheets.

UNITED BANCSHARES, INC.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SERVICING

Commencing in the fourth quarter of 2000, as described in Note 7, servicing assets are
recognized as separate assets when rights are acquired through sale of mortgage loans.
Capitalized servicing rights are reported in other assets and are amortized into noninterest
income in proportion to, and over the period of, the estimated future net servicing income of the
underlying mortgage loans.  Servicing assets are evaluated for impairment based upon the fair
value of the rights as compared to amortized cost.  Impairment is determined by stratifying rights
by predominant characteristics, such as interest rates and terms.  Fair value is determined using
prices for similar assets with similar characteristics, when available, or based upon discounted
cash flows using market-based assumptions.  Impairment is recognized through a valuation
allowance for an individual stratum, to the extent that fair value is less than the capitalized
amount for the stratum.

PREMISES AND EQUIPMENT

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

FEDERAL INCOME TAXES

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

The Corporation and Banks are not currently subject to state and local income taxes.

STOCK COMPENSATION PLANS AND STOCK APPRECIATION RIGHTS

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation", encourages all entities to adopt a fair value based method of accounting for
employee stock compensation plans, whereby compensation cost is measured at the grant date
based on the value of the award and is recognized over the service period, which is usually the
vesting period.  However, Statement 123 also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25), whereby compensation cost is the excess, if any, of the quoted market
price of the stock at the grant date (or other measurement date) over the amount an employee
must pay to acquire the stock.  The Corporation has elected to follow the provisions of APB 25.
Stock options issued under the Corporation's stock option plan have no intrinsic value at the
grant date, and no compensation cost is recognized for them under APB 25.

Stock appreciation rights are determined based on the estimated value of the Company's common
stock.  The provision (credit) for any liability is included in salaries, wages and employee
benefits.

UNITED BANCSHARES, INC.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ADVERTISING COSTS

All advertising costs are expensed as incurred.

COMPREHENSIVE INCOME

Accounting principles generally require that recognized revenue, expenses, gains and losses be
included in net income.  Although certain changes in assets and liabilities, such as unrealized
gains and losses on available-for-sale securities, are reported as a separate component of the
equity section of the balance sheet, such items, along with net income, are components of
comprehensive income.

PER SHARE DATA

Basic net income per share is computed based on the weighted average number of shares of
common stock outstanding during each year, after restatement for stock dividends.  Diluted net
income per share reflects additional common shares that would have been outstanding if dilutive
potential common shares had been issued, as well as any adjustment to income that would result
from the assumed issuance.  Potential common shares that may be issued by the Corporation
relate solely to outstanding stock options, and are determined using the treasury stock method.

Dividends per share are based on the number of shares outstanding at the declaration date, after
restatement for stock dividends.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities (Statement 133), effective for fiscal years beginning after June 15, 2000, with
earlier adoption permitted.  Statement 133 establishes accounting and reporting standards for
derivative instruments and hedging activities, including certain derivative instruments embedded
in other contracts, and requires that an entity recognize all derivatives as assets or liabilities in the
balance sheet and measure them at fair value.  There was no impact on the consolidated financial
statements of the Corporation as a result of adopting Statement 133 during the third quarter of
2000 as the Corporation and Banks do not hold any derivative instruments or conduct hedging
activities.

RECLASSIFICATIONS

Certain reclassifications of 1999 and 1998 amounts have been made to conform with the 2000
presentation.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - MERGER WITH BANK OF LEIPSIC COMPANY

In December 1999, the shareholders of both the Corporation and Leipsic voted to approve the
merger of Leipsic into the Corporation and the merger became effective February 1, 2000.  Under
the terms of the Merger Agreement, former shareholders of Leipsic received 54.25 shares of the
Corporation's common stock in exchange for each Leipsic share.  Consequently, the Corporation
issued 1,084,958 shares of its common stock for all the outstanding shares of Leipsic.

As part of the merger process, two shareholders of the Corporation exercised their rights as
dissenting shareholders and requested that their shares be redeemed at fair value.  Consequently,
the dissenting shareholders' 53,318 shares were redeemed during the first quarter of 2000 for
$913,871.  The shares were held as treasury stock at December 31, 2000.

The merger qualified as a tax-free reorganization and was accounted for as a pooling-of-interests.
Accordingly, the Corporation's consolidated financial statements have been restated to include
the results of Leipsic for all periods presented.

Combined and separate results of the Corporation, including Union, and Leipsic were as follows:

|                             |                                    |  |                          |  |                          |  |                          |  |                          |  |                        | Corporation |                          | Leipsic |  |  | Combined
|---------------------------- | ---------------------------------- |  | ------------------------ |  | ------------------------ |  | ------------------------ |  | ------------------------ |  | ---------------------- | ----------- | ------------------------ | ------- |  |  | --------
|December 31, 1999            |                                    |  |                          |  |                          |  |                          |  |                          |  |                        |             |                         
|                             | Total assets                       |  |                          |  |                          |  |                          |  | $166,963,463

=========  |  | $70,068,715

========  |             | $237,032,178

==========
|                             | Total stockholders' equity         |  |                          |  | $    9,849,101

======== |  | $  8,226,016

========   |  | $  18,075,117

======== 
|Year ended December 31, 1999 |                                   
|                             | Total interest and dividend income |  | $  11,858,529

========  |  | $  4,799,296

========   |  | $  16,657,825

======== 
|                             | Net income                         |  |                          |  |                          |  |                          |  | $    1,336,235

======== |  | $     805,557

======= |             | $    2,141,792

========
|Year ended December 31, 1998 |                                   
|                             | Total interest and dividend income |  | $  10,405,248

========= |  | $  4,842,626

========   |  | $  15,247,874

=========
|                             | Net income                         |  |                          |  |                          |  |                          |  | $   1,319,567

========  |  | $     799,842

======= |             | $    2,119,409

========

There were no adjustments made to the combined financial results presented above in order to
conform accounting policies of the two companies.  Intercompany transactions between the two
companies for the periods presented were not material.

In connection with the merger, the Corporation and Leipsic recorded one-time charges
aggregating $166,897, including $29,737 expensed during the fourth quarter of 1999 and
$137,160 expensed during the first quarter of 2000.  Such costs primarily relate to professional
fees.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SECURITIES

The amortized cost and fair value of securities as of December 31, 2000 and 1999 are as follows:

|                    |                           |                        |                       |                       | 2000                  | 1999                 
|------------------- | ------------------------- | ---------------------- | --------------------- | --------------------- | --------------------- | ---------------------
|                    |                           |                        |                       |                       | Amortized
cost        | Fair value           
|Available-for-sale: |                           |                        |                       |                       |                       |                      
|                    | U.S. Treasury and agency  | $ 6,435,495            | $ 6,344,644           | $ 6,826,560           | $ 6,592,833          
|                    | Obligations of states and |                        |                       |                       |                       |                      
|                    |                           | political subdivisions | 23,441,112            | 23,117,242            | 27,521,351            | 25,787,742           
|                    | Mortgage-backed           |                        | 23,264,433            | 23,357,274            | 18,690,446            | 18,301,718           
|                    | Other                     |                        | 601,889               | 464,282               | 602,261               | 509,933              
|Total               |                           |                        | $53,742,929

======== | $53,283,442

======== | $53,640,618

======== | $51,192,226

========

A summary of unrealized gains and losses on investment securities at December 31, 2000 and
1999 follows:

|                    |                           |                         |                        |                         |                  | 2000                | 1999
|------------------- | ------------------------- | ----------------------- | ---------------------- | ----------------------- | ---------------- | ------------------- | ----
|                    | Gross
unrealized
gains    | Gross
unrealized
losses | Gross
unrealized
gains | Gross
unrealized
losses
|Available-for-sale: |                          
|                    | U.S. Treasury and agency  | $   3,499               | $ 94,350               | $ 26,262                | $   259,989     
|                    | Obligations of states and |                        
|                    |                           | political  subdivisions | 255,177                | 579,047                 | 97,998           | 1,831,607          
|                    | Mortgage-backed           |                         | 174,451                | 81,610                  | 45,754           | 434,482            
|                    | Other                     |                         |                        |                         | -                | 137,607             | -   
|Total               |                           |                         | $433,127

======       | $892,614

=======       | $170,014

====== | $2,618,406

=======

The amortized cost and fair value of securities at December 31, 2000, by contractual maturity,
are shown below.  Actual maturities may differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or prepayment penalties.

|                                         | Amortized cost | Fair value
|---------------------------------------- | -------------- | ----------
|                                        
|Due in one year or less                  |                |           
|Due after one year through five years    |                |           
|Due after five years through ten years   |                |           
|Due after ten years                      |                |           
|Other securities having no maturity date |                |           
|Total                                    |                |           

Securities with an amortized cost of approximately $9,386,000 at December 31, 2000 and
$9,332,000 at December 31, 1999 were pledged to secure public deposits and for other purposes
as required or permitted by law.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SECURITIES (CONTINUED)

Under generally accepted accounting principles, securities classified as held-to-maturity are
recorded at amortized cost as compared to securities classified as available-for-sale which are
recorded at fair value.  During 1998, Union transferred certain securities with an amortized cost
of $10,401,137 and fair value of $10,711,000 from held-to-maturity to available-for-sale, as
permitted by FASB, resulting in an unrealized gain, net of tax, of $204,510.

NOTE 3 - LOANS HELD-FOR-SALE

Prior to December 31, 2000, loans held-for-sale were carried at cost, as opposed to the lower of
cost or estimated fair value as stipulated by generally accepted accounting principles.  In order to
reflect such loans at estimated fair value, a valuation allowance of $182,463, representing the
excess of cost over estimated fair value of loans held-for-sale, was established on December 31,
2000 by charging gain on sale of loans.  The prior periods presented herein were not restated to
reflect this change since the impact would not have a material impact on the consolidated
financial statements for the respective periods taken as a whole.

NOTE 4 - LOANS

Loans at December 31, 2000 and 1999 consist of the following:

|                        |  |  |              |  |                         |  | 2000                    |  | 1999
|----------------------- |  |  | ------------ |  | ----------------------- |  | ----------------------- |  | ----
|Residential real estate |  |  | $ 58,973,279 |  | $ 59,582,944           
|Commercial              |  |  |              |  | 60,668,106              |  | 47,879,827             
|Agriculture             |  |  |              |  | 29,593,826              |  | 24,963,499             
|Consumer                |  |  |              |  | 17,272,114              |  | 21,131,640             
|Credit cards            |  |  |              |  | 1,264,303               |  | 1,108,253              
|Loans, net              |  |  |              |  | $167,771,628

========= |  | $154,666,163

=========

Fixed rate loans amounted to $55,876,000 at December 31, 2000 and $69,345,000 at
December 31, 1999, including loans classified as held-for-sale.

Impaired loans approximated $99,000 at December 31, 1999 (none at December 31, 2000).
None of the impaired loans at December 31, 1999 were to directors or executive officers.  No
specific allocation of the allowance for loan losses has been made for such loans.  The amount of
interest accrued and received on a cash basis relating to impaired loans for 2000, 1999 and 1998
was not significant.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LOANS (CONTINUED)

Certain directors and executive officers, including their immediate families and companies in
which they are principal owners, are loan customers of the Banks.  Such loans are made in the
ordinary course of business in accordance with the normal lending policies of the Banks,
including the interest rate charged and collateralization, and do not represent more than a normal
collection risk.  Such loans amounted to $1,371,856 and $1,824,797 at December 31, 2000 and
1999, respectively.  The following is a summary of activity during 2000 and 1999 for such loans:

|     |  |  |                      | Balance at       |                   |                      |        |  | Balance
|---- |  |  | -------------------- | ---------------- | ----------------- | -------------------- | ------ |  | -------
|     |  |  |                      | beginning        | Additions         | Repayments           | at end
|2000 |  |  | $1,824,797

======== | $78,904

=====   | $531,845

======= | $1,371,856

========
|1999 |  |  | $2,236,228

=======  | $226,322

====== | $637,753

======  | $1,824,797

======= 

Additions and repayments include loan renewals, as well as sold loans.

Most of the Banks' lending activities are with customers primarily located in Northwestern and
West Central Ohio.  As of December 31, 2000 and 1999, the Banks' loans from borrowers in the
agriculture industry represent the single largest industry and amounted to $29,593,826 and
$24,963,499, respectively.  Agricultural loans are generally secured by property, equipment, and
crop income.  Repayment is expected from cash flow from the harvest and sale of crops.  The
agricultural customers are subject to the risks of weather and market prices of crops which could
have an impact on their ability to repay their loans.  Credit losses arising from the Banks' lending
experience in the agriculture industry compare favorably with the Banks' loss experience on their
loan portfolio as a whole.  Credit evaluation of agricultural lending is based on an evaluation of
cash flow coverage of principal and interest payments and the adequacy of collateral received.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES

The following represents a summary of the activity in the allowance for loan losses for the years
ended December 31, 2000, 1999 and 1998:

|                                |                     |                     |                     |  |  | 2000 | 1999 | 1998
|------------------------------- | ------------------- | ------------------- | ------------------- |  |  | ---- | ---- | ----
|Balance at beginning of year    | $1,672,535          | $1,664,134          | $1,534,551         
|Provision charged to operations | 502,490             | 309,350             | 222,150            
|Loans charged-off               | (372,055)           | (400,548)           | (205,924)          
|Recoveries of loans charged-off | 132,678             | 99,599              | 113,357            
|Balance at end of year          | $1,935,648

======= | $1,672,535

======= | $1,664,134

=======

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - PREMISES AND EQUIPMENT

The following is a summary of premises and equipment at December 31, 2000 and 1999:

|                            |  |                      |                      |            |            |           |           | 2000      | 1999     
|--------------------------- |  | -------------------- | -------------------- | ---------- | ---------- | --------- | --------- | --------- | ---------
|Land and improvements       |  |                      |                      | $1,168,080 | $1,068,580
|Buildings                   |  |                      |                      |            |            | 4,438,573 | 3,818,836
|Equipment                   |  |                      |                      |            |            | 2,767,207 | 2,395,669
|                            |  |                      |                      |            |            |           |           | 8,373,860 | 7,283,085
|Accumulated depreciation    |  |                      |                      | 3,475,757  | 3,102,495 
|Premises and equipment, net |  | $4,898,103

======== | $4,180,590

========

Depreciation expense amounted to $373,262 in 2000, $310,647 in 1999 and $257,294 in 1998.

NOTE 7 - SERVICING

Mortgage loans serviced for others are not included in the accompanying consolidated balance
sheets.  The unpaid principal balance of mortgage loans serviced for others approximated
$46,143,000 and $41,209,000 at December 31, 2000 and 1999, respectively.

During the fourth quarter of 2000, the Corporation commenced recognizing service assets
acquired through sale of mortgage loans.  The total cost of the loans sold with servicing rights
retained is allocated between the mortgage servicing rights and the loans, based on their relative
fair values.  As a result of commencing recognizing service assets, the Corporation recognized a
gain on sale of loans of $312,699 relating to capitalized servicing rights, including $256,073
relating to servicing rights acquired prior to January 1, 2000.  The prior periods presented herein
were not restated to reflect the recognition of service assets since the impact of the change would
not have a material impact on the consolidated financial statements for those respective periods
taken as a whole.

The balance of capitalized servicing rights included in other assets at December 31, 2000
amounted to $247,570.  The fair value of these rights approximated $355,000 at December 31,
2000.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - DEPOSITS

Time deposits at December 31, 2000 and 1999 include individual deposits of $100,000 and over
amounting to $17,700,000 and $15,200,000, respectively.  Interest expense on time deposits of
$100,000 or more amounted to $823,000 for 2000, $712,000 for 1999 and $690,000 for 1998.

At December 31, 2000, the scheduled maturities of time deposits were approximately as follows:

2001            $95,899,000

2002              34,764,000

2003                9,774,000

2004                   823,000

2005                   969,000

Thereafter          134,000

Total          $142,363,000

=========

NOTE 9 - FEDERAL HOME LOAN BANK BORROWINGS

Borrowings from the Federal Home Loan Bank consist of the following at December 31, 2000
and 1999:

|                                           |                                   |                      |           |                       |                        |           |  | 2000 | 1999
|------------------------------------------ | --------------------------------- | -------------------- | --------- | --------------------- | ---------------------- | --------- |  | ---- | ----
|Secured note, with interest at 6.78%,      |                                   |                      |           |                      
|                                           |                                   | due January 26, 2001 |           | $ 2,000,000           | $                 -   
|Secured note, with interest at 6.85%,      |                                   |                      |           |                      
|                                           | due March 26, 2001                |                      |           |                       | 1,000,000              | -        
|Secured note, with interest at 7.04%,      |                                   |                      |           |                      
|                                           | due April 27, 2001                |                      |           |                       | 2,000,000              | -        
|Secured note, with interest at 7.03%,      |                                   |                      |           |                       |                       
|                                           | due August 30, 2002               |                      |           |                       | 8,000,000              | -        
|Secured note, with interest at 6.6175%,    |                                  
|                                           | due September 8, 2009             |                      |           |                       | 6,000,000              | -        
|Secured note, with interest at 6.55%,      |                                   |                      |           |                      
|                                           | due June 16, 2010                 |                      |           |                       | 6,500,000              | -        
|Secured note, with interest at 6.11%,      |                                   |                      |           |                      
|                                           | due August 31, 2000               |                      |           |                       | -                      | 8,000,000
|Secured note, with interest at 5.52%,      |                                   |                      |           |                      
|                                           | due September 2, 2009             |                      |           |                       | -                      | 6,000,000
|Advances secured by individual residential |                                  
|                                           | mortgages under blanket agreement |                      | 4,932,706 | 5,195,071            
|Total                                      |                                   |                      |           | $30,432,706

======== | $19,195,071

=========

At December 31, 2000, Union had available a $26,000,000 line-of-credit from the Federal Home
Loan Bank with outstanding borrowings under the line-of-credit aggregating $25,108,418.  Such
borrowings are included in the above summary.  Outstanding borrowings are secured by Federal
Home Loan Bank stock and all eligible mortgage loans.  Interest on advances outstanding at
December 31, 2000 secured by individual mortgages under blanket agreement ranged from 5.1%
to 8.8%, with maturities ranging from October 2002 through July 2019.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - COMMON STOCK

On May 20, 1998, the Board of Directors declared a four-for-one stock split (stock split effected
in the form of a 300% stock dividend).  Since the par value of the shares was not adjusted, the
stock dividend was recorded at the par value of the additional 1,674,554 shares issued
(amounting to $1,674,554) through a transfer to common stock from the Corporation's surplus.

During 1999 and 1998, the Corporation issued stock dividends of 7,213 and 44,534 shares,
respectively.

All per share amounts included in the consolidated financial statements and the notes thereto are
based on the increased number of shares after giving retroactive effect to the 1998 stock split, as
well as the shares issued incident to the merger with Leipsic.

NOTE 11 - OTHER COMPREHENSIVE INCOME

The components of other comprehensive income and related tax effects are as follows for the
years ended  December 31, 2000, 1999 and 1998:

|                                       |                               |                               |           |             |                      |                         | 2000              | 1999      | 1998
|-------------------------------------- | ----------------------------- | ----------------------------- | --------- | ----------- | -------------------- | ----------------------- | ----------------- | --------- | ----
|Unrealized holding gains (losses) on   |                               |                               |           |             |                     
|                                       | available-for-sale securities |                               |           | $1,996,874  | $(3,547,582)         | $922,877               
|Reclassification adjustments for gains |                              
|                                       | realized to income            |                               |           |             | (7,968)              | (8,335)                 | (359,642)        
|                                       |                               | Net unrealized gains (losses) | 1,988,906 | (3,555,917) | 563,235             
|Tax effect                             |                               |                               |           |             |                      | (676,228)               | 1,209,012         | (191,500)
|Net-of-tax amount                      |                               |                               |           |             | $1,312,678

======== | $(2,346,905)

========= | $371,735

=======

NOTE 12 - FEDERAL INCOME TAXES

The provision for federal income taxes consists of the following for 2000, 1999 and 1998:

|         |  |  |  |  |          | 2000     | 1999      | 1998
|-------- |  |  |  |  | -------- | -------- | --------- | ----
|Current  |  |  |  |  | $265,228 | $553,384 | $585,706 
|Deferred |  |  |  |  | (30,228) | (9,314)  | (100,545)
|Total    |  |  |  |  | $235,000 | $544,070 | $485,161 

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - FEDERAL INCOME TAXES (CONTINUED)

The income tax provision attributable to income from operations differed from the amounts
computed by applying the U.S. federal income tax rate of 34% to income before federal income
taxes as a result of the following:

|                                             |                                           |                                            |           |                   |                   |                   |          |  | 2000 | 1999 | 1998
|-------------------------------------------- | ----------------------------------------- | ------------------------------------------ | --------- | ----------------- | ----------------- | ----------------- | -------- |  | ---- | ---- | ----
|Expected tax using statutory tax rate of 34% | $ 584,900                                 | $ 913,200                                  | $ 885,600
|Increase (decrease) in tax resulting from:   |                                           |                                            |           |                   |                   |                  
|                                             | Tax-exempt income on state and municipal  |                                            |           |                   |                   |                   |         
|                                             |                                           | securities and political subdivision loans | (457,800) | (439,700)         | (451,200)        
|                                             | Interest expense associated with carrying |                                            |           |                   |                   |                   |         
|                                             |                                           | certain state and municipal securities     |           |                   |                   |                   |         
|                                             |                                           | and political subdivision loans            |           | 73,900            | 63,300            | 66,800           
|                                             | Acquisition-related costs capitalized for |                                            |           |                   |                   |                  
|                                             |                                           | income tax purposes                        | 20,300    | 10,100            | -                
|                                             | Other, net                                |                                            |           |                   | 13,700            | (2,830)           | (16,039)
|Total                                        |                                           |                                            |           | $ 235,000

====== | $ 544,070

====== | $ 485,161

======

The deferred federal income tax credit of $30,228 for 2000, $9,314 for 1999 and $100,545 for
1998 resulted from the tax effects of temporary differences.  There was no impact for changes in
tax laws and rates or changes in the valuation allowance for deferred tax assets.

The tax effects of temporary differences that give rise to significant portions of the deferred tax
assets and deferred tax liabilities at December 31, 2000 and 1999 are presented below:

|                          |                                                  |  |                                |            |         |                    |                     |         |  |  | 2000 | 1999
|------------------------- | ------------------------------------------------ |  | ------------------------------ | ---------- | ------- | ------------------ | ------------------- | ------- |  |  | ---- | ----
|Deferred tax assets:      |                                                 
|                          | Unrealized loss on securities available-for-sale |  | $  156,226                     | $  832,454
|                          | Allowance for loan losses                        |  |                                |            |         | 492,100            | 401,600            
|                          | Deferred compensation                            |  |                                |            |         |                    | 230,000             | 201,000
|                          | Valuation allowance on loans held-for-sale       |  |                                | 62,000     | -      
|                          | Accrued expenses and other                       |  |                                |            |         | 65,874             | 78,546             
|                          |                                                  |  | Total deferred tax assets      |            |         | 1,006,200          | 1,513,600          
|Deferred tax liabilities: |                                                  | 
|                          | Federal Home Loan Bank stock dividends           |  |                                | 145,500    | 113,800
|                          | Capitalized mortgage servicing rights            |  |                                |            | 84,200  | -                 
|                          | Depreciation of premises and equipment           |  | 58,700                         | 44,700    
|                          | Accrued to cash basis - Leipsic                  |  |                                | 81,400     | 94,300 
|                          | Securities accretion                             |  |                                |            |         |                    | 64,700              | 59,100 
|                          | Cash surrender value of life insurance           |  |                                |            | 47,700  | 31,700            
|                          |                                                  |  | Total deferred tax liabilities |            |         |                    | 482,200             | 343,600
|Net deferred tax assets   |                                                  |  |                                |            |         | $  524,000

====== | $1,170,000

=======

Net deferred tax assets at December 31, 2000 and 1999 are included in other assets in the
consolidated balance sheets.

As a result of the merger described in Note 1, Leipsic was required to conform its income tax
reporting to the same method used by the Corporation.  Consequently, the accrued to cash basis
cumulative temporary difference at the time of the merger will be recognized as taxable income
on a ratable basis over the four years subsequent to the merger.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - FEDERAL INCOME TAXES (CONTINUED)

The Corporation believes it is more likely than not that the benefit of deferred tax assets will be
realized.  Consequently, no valuation allowance for deferred tax assets is deemed necessary as of
December 31, 2000 and 1999.

NOTE 13 - EMPLOYEE AND DIRECTOR BENEFITS

The Corporation sponsors a 401(k) profit sharing plan.  Under the terms of the plan, each active
participant may make a voluntary contribution of up to 12% of their pay, subject to Internal
Revenue Service Code limitations.  The Banks provide a discretionary matching contribution
which was 50% of an employee's contribution in 2000, 1999 and 1998.  This matching
contribution is limited to a maximum of a 6% employee contribution.  For 2000, the Banks'
matching contribution was $54,317.  Union's matching contribution for 1999 and 1998 was
$45,109, and $38,394, respectively.

The Banks also make discretionary contributions to a profit sharing plan.  For 2000, 6% of
eligible compensation was contributed, amounting to $155,340.  Union made discretionary
contributions to the plan of 6% of eligible compensation in 1999 and 1998 amounting to $99,515
and $94,625, respectively.

Prior to the merger, Leipsic sponsored a noncontributory profit sharing plan for all employees
who completed 1,000 hours of service during the year and attained age 24.  Annual contributions
to the plan were made at the discretion of Leipsic's Board of Directors and profit sharing
contribution expense amounted to $52,111 in 1999 and $50,430 in 1998.

Union has a nonqualified deferred compensation plan covering certain key employees.  Such plan
is indirectly funded by purchasing Bank owned life insurance policies.  The cash value of these
policies aggregated $1,559,871 and $1,426,495 at December 31, 2000 and 1999, respectively.
Such amounts are included in other assets in the accompanying consolidated balance sheets.

Leipsic has entered into an agreement with its former president and the Corporation's current
Chairman of the Board of Directors to provide for retirement compensation benefits.  Such
benefits are to be paid over a period of twenty years commencing upon retirement or other
termination events as specified in the agreement.  Provision for deferred compensation amounted
to $31,534 for each of the years ended December 31, 2000, 1999, and 1998, respectively.  At
December 31, 2000 and 1999, the net present value (based on a discount rate of 12%) of future
deferred compensation payments amounted to $344,256 and $283,806, respectively.  Such
amounts are included in other liabilities in the December 31, 2000 and 1999 consolidated balance
sheets.  Leipsic has purchased a split dollar life insurance policy to fund the future deferred
compensation payments.  The cash value of such policy aggregated $393,138 and $378,881 at
December 31, 2000 and 1999, respectively.  Such amounts are included in other assets in the
accompanying consolidated balance sheets.

The Corporation has granted stock appreciation rights to the President of Union which provide
additional compensation based upon increases in the value of the Corporation's stock.  The
provision (credit) for stock appreciation rights amounted to ($142,400) in 2000, $41,600 in 1999,
and $100,800 in 1998.  Such amounts are included in salaries, wages and employee benefits in
the consolidated statements of income.

During 2000, the Corporation agreed to lump sum payments aggregating $285,000 to two
executive officers of Leipsic as part of their early retirement arrangement.  The payments are to
be made during the first quarter of 2001 and are included in other liabilities, and salaries, wages
and benefits, in the accompanying 2000 balance sheet and statement of income, respectively.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - STOCK OPTIONS

The Corporation maintains both qualified and nonqualified stock option plans, under which
directors and certain Union officers are entitled to purchase common shares.  The plans generally
provide that the exercise price of any stock option may not be less than the fair market value of
the common stock on the date of the grant.  As permitted by Statement 123, the Corporation has
elected to follow APB 25.  Under APB 25, because the exercise price of the Company' stock
options equals the market price of the underlying stock on the date of grant, no compensation
expense is recognized for financial statement purposes.  Any subsequent tax benefit from the
exercise is recorded by the Corporation as an addition to capital surplus.

All options granted since plan inception have been adjusted for the effects of common stock
dividends, as well as the 1998 stock split.  Because the effects of applying the fair value method
of accounting for stock options under Statement 123 are not materially different from amounts
reported in the consolidated financial statements, fair value and proforma information has not
been provided.

The following summarizes the Corporation's stock options as of December 31, 2000, 1999, and
1998:

|                    |                 |                 |              |                 | 2000         | 1999            | 1998          
|------------------- | --------------- | --------------- | ------------ | --------------- | ------------ | --------------- | --------------
|                    |                 |                 |              |                 |              |                 |               
|                    |                 |                 |              |                 |              |                 |               
|                    |                 |                 |              |                 |              |                 |               
|                    |                 |                 |              |                 | Shares       | price           | Shares        
|Outstanding at      |                 |                 |              |                 |              |                 |               
|                    | beginning       |                 |              |                 |              |                 |               
|                    | of year         |                 | 125,813      | $5.63           | 139,636      | $5.58           | 35,395        
|Granted             |                 |                 | -            | -               | -            | -               | 15,989        
|Adjustments for     |                 |                 |              |                 |              |                 |               
|                    | stock splits/   |                 |              |                 |              |                 |               
|                    | dividends       | -               | -            | 841             | (.01)        | 110,918         | (15.17)       
|Exercised           | (17,011)        | 4.85            | (14,664)     | 4.76            | (10,626)     | 9.99           
|Forfeited           | -               | -               | -            | -               | (12,040)     | 4.89           
|Outstanding at     
|                    | end of year     | 108,802

====== | $5.75

===== | 125,813

====== | $5.63

===== | 139,636

====== | $ 5.58

===== 
|Options exercisable
|                    | at year end     | 108,802

====== | $5.75

===== | 125,813

====== | $5.63

===== | 139,636

====== | $ 5.58

======
|Weighted-average    |                 |                
|                    | fair value of   |                 |             
|                    | options granted |                 |             
|                    | during the year |                 | $    -

===  |                 |              |                 | $     -

==== 

NOTE 15 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

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

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
(CONTINUED)

The Banks' exposure to credit loss in the event of the nonperformance by the other party to the
financial instruments for loan commitments to extend credit and letters of credit is represented by
the contractual amounts of these instruments.  The Banks use the same credit policies in making
loan commitments as they do for on-balance sheet loans.

The following financial instruments whose contract amount represents credit risk were
outstanding at December 31, 2000 and 1999:

|                             |  |  |  |  |  |  |  |  |                       |                        |  |  |                         |                          |  |  | Contract amount
|---------------------------- |  |  |  |  |  |  |  |  | --------------------- | ---------------------- |  |  | ----------------------- | ------------------------ |  |  | ---------------
|                             |  |  |  |  |  |  |  |  |                       |                        |  |  |                         |                          |  |  | 2000           
|Commitments to extend credit |  |  |  |  |  |  |  |  | $30,193,000

======== | $22,406,000

=========
|Letters of credit            |  |  |  |  |  |  |  |  |                       |                        |  |  | $     753,000

======== | $     386,000

=========

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

Letters of credit are written conditional commitments issued by the Banks to guarantee the
performance of a customer to a third party and are reviewed for renewal at expiration.  At
December 31, 2000, letters of credit totalling $703,000 expire in 2001 and $50,000 expire in
2003.  The credit risk involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers.  The Banks require collateral supporting these commitments
when deemed necessary.

NOTE 16 - REGULATORY MATTERS

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

Quantitative measures established by regulation to ensure capital adequacy require the
Corporation and Banks to maintain minimum amounts and ratios (set forth in the table below) of
total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of
Tier I capital to average assets (as defined).  Management believes, as of December 31, 2000 and
1999, that the Corporation and Banks meet all capital adequacy requirements to which they are
subject.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 - REGULATORY MATTERS (CONTINUED)

As of December 31, 2000, the most recent notification from federal and state banking agencies
categorized the Banks as "well capitalized" under the regulatory framework for prompt corrective
action.  To be categorized as "well capitalized", an institution must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the following tables.  There are
no conditions or events since that notification that management believes have changed the Banks'
category.

The actual capital amounts and ratios of the Corporation and Banks as of December 31, 2000 and
1999 are also presented in the following table:

|                         | Minimum to be
well capitalized
under prompt
corrective action
provisions
|------------------------ | ------------------------------------------------------------------------
|                         | Minimum capital
requirement                                             
|                        
|                         | Actual                                                                  
|                         | Amount                                                                  
|                         |                                                                         
|As of December 31, 2000: |                                                                         
|                         | Total Capital (to Risk-                                                 
|                         |                                                                         
|                         |                                                                         
|                         |                                                                         
|                        
|                         | Tier I Capital (to Risk-                                                
|                         |                                                                         
|                         |                                                                         
|                         |                                                                         
|                        
|                         | Tier I Capital (to                                                      
|                         |                                                                         
|                         |                                                                         
|                         |                                                                         
|                        
|As of December 31, 1999: |                                                                         
|                         | Total Capital (to Risk-                                                 
|                         |                                                                         
|                         |                                                                         
|                         |                                                                         
|                        
|                         | Tier I Capital (to Risk-                                                
|                         |                                                                         
|                         |                                                                         
|                         |                                                                         
|                        
|                         | Tier I Capital (to                                                      
|                         |                                                                         
|                         |                                                                         
|                         |                                                                         
|                        

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 - REGULATORY MATTERS (CONTINUED)

On a parent company only basis, the Corporation's primary source of funds is dividends paid by
the Banks.  The ability of the Banks to pay dividends is subject to limitations under various laws
and regulations, and to prudent and sound banking principles.  Generally, subject to certain
minimum capital requirements, the Bank may declare a dividend without the approval of the
State of Ohio Division of Financial Institutions, unless the total dividends in a calendar year
exceed the total of its net profits for the year combined with its retained profits of the two
preceding years.  Under these provisions, approximately $2,342,000 was available for dividends
on January 1, 2001, without the need to obtain the approval of the State of Ohio Division of
Financial Institutions.

The Board of Governors of the Federal Reserve System generally considers it to be an unsafe and
unsound banking practice for a bank holding company to pay dividends except out of current
operating income, although other factors such as overall capital adequacy and projected income
may also be relevant in determining whether dividends should be paid.

NOTE 17 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION

A summary of condensed financial information of the parent company as of December 31, 2000
and 1999 and for each of the three years in the period ended December 31, 2000 are as follows:

|                                           |                                      |                            |                       | CONDENSED BALANCE SHEETS |            |                | 2000          | 1999     
|------------------------------------------ | ------------------------------------ | -------------------------- | --------------------- | ------------------------ | ---------- | -------------- | ------------- | ---------
|                                           |                                      |                            |                      
|Assets:                                    |                                      |                            |                       |                          |            |                |               |          
|                                           | Cash                                 |                            |                       |                          |            |                |               |          
|                                           | Investment in bank subsidiaries      |                            |                       |                          | 18,731,433 | 17,802,198    
|                                           | Other assets                         |                            |                       |                          |            |                |               |          
|Total assets                               |                                      |                            |                       |                          |            |                |               |          
|Liability - accrued expenses               |                                      |                            |                       |                          |            | $       37,400 | $     142,400
|Stockholders' equity:                     
|                                           | Common stock                         |                            |                       |                          |            |                | 2,300,646     | 2,283,635
|                                           | Surplus                              |                            |                       |                          |            |                |               |          
|                                           | Retained earnings                    |                            |                       |                          |            |                |               |          
|                                           | Accumulated other comprehensive loss |                            |                       |                          | (303,261)  | (1,615,939)   
|                                           | Treasury stock, at cost              |                            |                       |                          |            |                |               |          
|                                           |                                      | Total stockholders' equity |                       |                          |            |                |               |          
|Total liabilities and stockholders' equity |                                      | $19,086,269

========      | $18,217,517

========

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - CONDENSED PARENT COMPANY FINANCIAL

INFORMATION (CONTINUED)

|                                                 |                                            | CONDENSED STATEMENTS                  
|------------------------------------------------ | ------------------------------------------ | --------------------------------------
|                                                 |                                            |                                       
|                                                
|Income - dividends from bank subsidiaries        |                                            | $3,981,000                            
|Expenses - Professional fees and other expenses, |                                            |                                       
|                                                 | net of federal income tax benefit          |                                       
|                                                 |                                            | Income before equity in undistributed 
|                                                 |                                            |                                       
|Equity in net income of bank subsidiaries,       |                                            |                                       
|                                                 | less dividends                             |                                       
|                                                
|Net income                                       |                                            |                                       
|                                                
|                                                 |                                            | CONDENSED STATEMENTS                  
|                                                 |                                            |                                       
|Cash flows from operating activities:            |                                            |                                       
|                                                 | Net income                                 |                                       
|                                                 | Adjustments to reconcile net income to net |                                       
|                                                 |                                            | cash provided by operating activities:
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|Cash flows from investing activities:            |                                            |                                       
|                                                 | Capital contribution to bank subsidiary    |                                       
|                                                 | Purchase of available-for-sale security    |                                       
|                                                 |                                            |                                       
|Cash flows from financing activities:           
|                                                 | Proceeds from sale of treasury shares      |                                       
|                                                 | Proceeds from issuance of common stock     |                                       
|                                                 | Purchase of treasury shares                |                                       
|                                                 | Cash dividends paid                        |                                       
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|                                                 |                                            |                                       
|Cash at beginning of the year                    |                                            |                                       
|Cash at end of the year                          |                                            |                                       

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Financial Accounting Standards Board's Statement of Financial Accounting Standards
No. 107, "Disclosures About Fair Value of Financial Instruments", requires that the estimated fair
value of financial instruments, as defined by the Statement, be disclosed.  Statement 107 also
requires disclosure of the methods and significant assumptions used to estimate the fair value of
financial instruments.

The estimated fair values of recognized financial instruments at December 31, 2000 and 1999 are
as follows:

|                      | 2000                   | 1999           
|--------------------- | ---------------------- | ---------------
|Carrying
amount       | Estimated
value        | Carrying
amount
|FINANCIAL ASSETS      |                        |                
|                      | Cash and cash          |                
|                      |                        | equivalents    
|                      | Securities             |                
|                      | Federal Home Loan      |                
|                      |                        | Bank stock     
|                      | Loans, including loans
|                      |                        | held-for-sale  
|Total                 |                        |                
|FINANCIAL LIABILITIES
|                      | Deposits               |                
|                      | Federal Home Loan     
|                      |                        | Bank borrowings
|Total                 |                        |                
|                     

The above summary does not include accrued interest receivable and other liabilities which are also
considered financial instruments.  The estimated fair value of such items is considered to be their
carrying amount.

The Banks also have unrecognized financial instruments at December 31, 2000 and 1999.  These
financial instruments relate to commitments to extend credit and letters of credit.  The contract
amount of such financial instruments amounts to $30,946,000 at December 31, 2000 and
$22,792,000 at December 31, 1999.  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.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Securities:

The fair value of securities is determined based on quoted market prices of the individual securities
or, if not available, estimated fair value was 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 secondary market quotes from various dealers, considering weighted
average rates and terms of the portfolio, adjusted for credit and interest rate risk inherent in the loans.
Fair value for nonperforming loans is based on recent appraisals or estimated discounted cash flows.
The estimated value of credit card loans is based on existing loans and does not include the value
that relates to estimated cash flows from new loans generated from existing cardholders over the
remaining life of the portfolio.

Deposit liabilities:

The fair value of core deposits, including demand deposits, savings accounts, and certain money
market deposits, is the amount payable on demand.  The fair value of fixed-maturity certificates of
deposit is estimated using the rates offered at year end for deposits of similar remaining maturities.
The estimated fair value does not include the benefit that results from the low-cost funding provided
by the deposit liabilities compared to the cost of borrowing funds in the marketplace.

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 borrowed funds is determined to be the carrying amount since the interest rates on such
borrowings closely approximate current year end rates.

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.

UNITED BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19 - SUPPLEMENTAL CASH FLOW DISCLOSURES

Supplemental cash flow disclosures consists of the following at December 31:

|                               |                                         |                               |  |                       |                          |                         |                       |                      |  |  |                        |                       | 2000                 | 1999 | 1998
|------------------------------ | --------------------------------------- | ----------------------------- |  | --------------------- | ------------------------ | ----------------------- | --------------------- | -------------------- |  |  | ---------------------- | --------------------- | -------------------- | ---- | ----
|Cash paid during the year for: |                                         |                               |  |                       |                          |                         |                       |                      |  |  |                       
|                               | Interest                                |                               |  |                       |                          |                         |                       |                      |  |  | $10,603,551

========= | $ 8,599,310

======== | $8,006,498

========
|                               | Federal income taxes                    |                               |  |                       | $     254,000

========= | $   571,952

========   | $   853,209

======= 
|Non-cash operating activity:   |                                         |                               |  |                       |                          |                         |                      
|                               | Change in deferred income taxes on      |                               |  |                       |                          |                         |                       |                      |  |  |                       
|                               |                                         | net unrealized gain (loss) on |  |                       |                          |                         |                       |                      |  |  |                        |                      
|                               |                                         | available-for-sale securities |  |                       |                          | $  (676,228)

========= | $ 1,209,012

======== | $(191,500)

========
|Non-cash investing activity:   |                                         |                               |  |                       |                          |                         |                       |                      | 
|                               | Change in net unrealized gain (loss) on |                               |  |                       |                          |                         |                       |                      | 
|                               |                                         | available-for-sale securities |  | $ 1,988,906

======== | $(3,555,917)

=========  | $  563,235

=======    

NOTE 20 - CONTINGENT LIABILITIES

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

NOTE 21 - BUSINESS ACQUISITION

The Board of Directors of the Corporation and Delphos Citizens Bancorp, Inc. (Delphos) have
agreed on a reorganization that will result in Delphos being acquired by the Corporation.  The
acquisition is contemplated to take place during the first quarter of 2001 and is subject to approval of
the stockholders of both the Corporation and Delphos, as well as certain regulatory authorities.

Under the terms of the Merger Agreement, shareholders of Delphos will receive .8749 shares of the
Corporation, cash in lieu of fractional shares, and $5.41 in cash for each share of Delphos stock held.
The total purchase price (based on the fair value of the Corporation's stock, as well as the number of
outstanding shares of Delphos, at September 30, 2000), is approximately $22.8 million.  The Merger
Agreement also provides shareholders of the Corporation the right to dissent from the merger and
receive from the Corporation the fair value of their shares.

The audited September 30, 2000 financial statements of Delphos reported total assets of
$136,627,000 and stockholders' equity of $25,985,000.