United Community Financial Corp. (Company) (NASDAQ: UCFC),
parent company of Home Savings Bank (Home Savings), today announced
net income of $9.6 million, or $0.191 per diluted common share
(“EPS”) for the three months ended December 31, 2018, compared to
$0.090 EPS or $4.5 million for the three months ended December 31,
2017. For the year ended December 31, 2018, net income was $37.2
million, or $0.742 per diluted common share compared to $0.437 EPS
or $21.8 million in the previous year.
Fourth quarter 2018 highlights:
- Linked quarter net loan growth of 5.2%
annualized
- Net interest margin of 3.58%, or 3.42%
normalized
- ROA of 1.36%, ROE of 12.15% and ROTE of
13.16%
- Efficiency ratio was 54.79%
- Repurchase of 801,000 shares
Full year 2018 highlights:
- Year over year net loan growth of
8.9%
- Year over year average customer deposit
growth of 8.3%
- Net interest income up 9.4%
- Net interest margin of 3.43%, or 3.39%
normalized
- ROA of 1.35%, ROE of 12.10% and ROTE of
13.13%
- Efficiency ratio was 56.85%
Gary M. Small, President and Chief Executive Officer of the
Company commented, “Full year 2018 performance reflects
strengths on many fronts. Loan growth up 8.9%, average customer
deposit growth up 8.3%, net interest income up 9.4%, and net
interest margin was managed well throughout a very challenging
year. Generally, our fee businesses performed well. While the
residential mortgage business continues to be very
competitive, our origination activity improved 10% year over
year. Loan portfolios are strong with very favorable non-performing
loan and delinquency metrics.”
Small further commented, “Strong fourth quarter core
performance, combined with a significant impaired asset recovery
and VISA stock related income recognition, provided the opportunity
to undertake balance sheet restructuring during the quarter. The
charges incurred to execute the restructuring of $26 million in
available for sale securities and to terminate a FHLB advance were
substantially offset by the income generated from the impaired
asset recovery and VISA gain. The restructuring positions the
Company for improved earnings in 2019. The cumulative net effect of
these actions had no material impact on net income for the quarter.
We enter 2019 well capitalized, with a strong balance
sheet and well positioned to address new opportunities.”
Solid Loan Growth
At year-end, total net loans aggregated $2.2 billion, an
increase of 8.9% over the prior year. Total net loan growth for the
fourth quarter was $27.9 million, or 5.2% annualized on a linked
quarter basis. As anticipated, growth slowed in the fourth quarter
of 2018 as the Company experienced a lower level of commercial loan
originations than it had experienced earlier in the year.
Commercial loan growth was $11.2 million for the quarter ended
December 31, 2018, or 4.8% annualized on a linked quarter basis.
Commercial loan growth was $120.3 million, or 14.6% for the full
year of 2018. Residential mortgage loans, including loans held for
sale, increased $17.9 million on a linked quarter basis, or 6.9%
annualized. On a full year basis residential loans, including loans
held for sale, increased $58.4 million or 5.8%. Consumer loans
increased $3.5 million year over year, but declining $6.1 million
on a linked quarter basis.
Strong Business Deposit and Noninterest Bearing Deposit
Growth
Average customer deposit growth totaled 8.3%, or $148.4 million
for the full year ended 2018, remaining flat in the fourth quarter
of 2018 compared to the prior quarter. Total average business
deposits increased 31.7% when compared to the linked quarter on an
annualized basis. Average business deposits increased 19.5% when
comparing the fourth quarter of 2018 to the four quarter last year.
The Company also saw a 14.2% annualized increase in average
noninterest bearing deposits on a linked quarter basis. Average
noninterest bearing deposits increased 11.4% or $40.4 million when
comparing the full year of 2018 to the full year of 2017. The
Company continues to make progress in the generation of these key
funding sources.
Net Interest Margin Sees Boost
Net interest income on a fully-taxable equivalent basis
increased to $23.6 million for the quarter ended December 31, 2018,
compared to $21.7 million for the quarter ended September 30, 2018
and $21.1 million for the quarter ended December 31, 2017. The
increase in net interest income included the impact of the
favorable resolution of an acquired impaired loan that added
approximately $1.1 million to loan income during the quarter.
The net interest margin was 3.58% for the three months ended
December 31, 2018 due primarily to the favorable resolution of the
acquired loan mentioned above. This resolution added approximately
16 basis points to the margin for the quarter. The normalized net
interest margin was 3.42% compared to the 3.33% reported in the
prior quarter and 3.43 for the quarter ending December 31,
2017.
Non-Interest Income
Non-interest income decreased to $5.6 million in the fourth
quarter of 2018, compared to $6.5 million in the fourth quarter of
2017. During the fourth quarter of 2018, the Company restructured
approximately $26 million of available for sale investment
securities, incurred a loss on the sale of $861,000, and
subsequently invested the sale proceeds into securities with
increased yields. Offsetting this loss, was the sale of 50% of the
Company’s VISA Class B shares and the movement of the remaining
shares to a trading account which resulted in a gain of $669,000.
The net of these two transactions was a loss of $192,000.
Additionally, the fourth quarter of 2017 is reflective of a
one-time gain of $595,000 from the sale of a bank-owned building.
Adjusting for these one-time items occurring in the fourth quarter
of both years, noninterest income would be flat.
Mortgage banking income declined $257,000 in the fourth quarter
of 2018 compared to the fourth quarter of 2017 as competition in
the marketplace pressured margins. The Company continues to
actively manage pricing and the saleable mix of originations to
limit the margin compression. In addition, the Company has seen
increases to mortgage servicing fees in 2018 which helps to offset
the decline in the gain on mortgage sales.
Non-Interest Expense
Non-interest expense was $17.2 million for the quarter ended
December 31, 2018 compared to $17.3 million for the quarter ended
December 31, 2017. Adjusting the fourth quarter of 2018 for the
termination cost of $937,000 of a previously restructured FHLB
advance, non-interest expense would be $16.2 million compared to
$15.0 million for the quarter ended December 31, 2017, which
excludes a $2.3 million one-time asset write down in the fourth
quarter of 2017. The termination of the FHLB advance will permit
the Company to recognize a lower level of interest expense going
forward. At December 31, 2018, total non-interest expense
aggregated $65.1 million compared to $68.2 million the prior year.
Adjusting total non-interest expense for the aforementioned items
in addition to acquisition related expenses in 2017, total 2018
non-interest expense would aggregate $64.1 million in 2018 compared
to $61.0 million the prior year, or an increase of 5.2%
The Company’s efficiency ratio remained on target at a level of
54.79% for the quarter ended December 31, 2018 adjusted for the
FHLB termination cost of $937,000. Inclusive of the termination
cost, the ratio would be 57.98% for the quarter. Year-to-date the
efficiency ratio was 56.85% and 57.69% with and without the
consideration of the termination cost.
Credit Quality
Credit quality metrics have shown improvement throughout the
year, and the fourth quarter of 2018 continued the trend. The ratio
of nonperforming loans to net loans was 0.30% at December 31, 2018,
which is down from 0.59% reported at December 31, 2017. Total
nonperforming commercial loans have now declined to only $715,000
as of December 31, 2018, or 0.08% of total commercial loans. Total
nonperforming assets to assets was 0.27% at December 31, 2018 while
total delinquent loans to net loans was 0.50% for the same period.
These ratios were 0.64% and 0.86%, respectively, at December 31,
2017.
During the quarter ended December 31, 2018, the Company
recognized total net charge offs of $1.1 million, or 20 basis
points as a percentage of average loans. Included in the $1.1
million was a charge off of $676,000 for an acquired impaired loan
relationship. Full-year net charge offs were $1.5 million, or 7
basis points as a percentage of average loans.
The Company’s provision for loan losses totaled $178,000 for the
fourth quarter of 2018, which was down from the $1.2 million
reported in the fourth quarter of 2017. As of December 31, 2018,
the Company’s allowance for loan losses to total loans was 0.93%,
versus 1.05% at December 31, 2017. Also at December 31, 2018 the
allowance for loan loss as a percent of nonperforming loans totaled
311.8%.
Capital Management and Tangible Book Value per Share
During the fourth quarter of 2018, the Company repurchased
801,000. Tangible book value per common share at December 31, 2018
was $5.81 compared to $5.41 at December 31, 2017.
Dividend Declaration and Increase to Share Repurchase
Program
On January 22, 2019, the Board of Directors declared a quarterly
cash dividend of $0.07 per common share. The dividend is payable
February 15, 2019 to shareholders of record at the close of
business February 4, 2019. Furthermore, the Board has authorized an
increase to the Company’s existing share repurchase program for an
additional one million shares. The Company had remaining 873,000
shares authorized for repurchase as of December 31, 2018.
Conference Call
United Community Financial Corp. will host an earnings
conference call on Wednesday, January 23, 2019, at 10:00 a.m. ET.,
to provide an overview of the Company's fourth quarter 2019 results
and highlights. The conference call may be accessed by calling
1-877-272-7661 ten minutes prior to the start time. Please ask to
be joined into the United Community Financial Corp. (UCFC) call.
Additionally, a live webcast may be accessed from the Company’s
website ir.ucfconline.com. Click on 4th Quarter 2018 Conference
Call on the corporate profile page to join the webcast.
United Community Financial Corp.
Home Savings is a wholly owned subsidiary of the Company,
offering a full line of commercial, wealth management and consumer
banking products and services with 35 retail banking offices (34 in
Ohio and one in Pennsylvania). Home Savings also has residential
mortgage loan centers servicing Ohio, West Virginia, western
Pennsylvania, northern Kentucky, and eastern Indiana. Additional
information on the Company, Home Savings and James & Sons
Insurance is available at ir.ucfconline.com.
When used in this press release, the words or phrases
“believes,” “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “estimate,” “project”, “will have”,
“can expect” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are
subject to certain risks and uncertainties, including changes in
economic conditions in the Company’s market area, changes in
policies by regulatory agencies, fluctuations in interest rates,
demand for loans in the Company’s market area and competition that
could cause actual results to differ materially from historical
earnings and those presently anticipated or projected. The Company
cautions readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.
The Company advises readers that the factors listed above could
affect the Company’s financial performance and could cause the
Company’s actual results for future periods to differ materially
from any opinions or statements expressed with respect to future
periods in any current statements.
The Company does not undertake, and specifically disclaims any
obligation, to release publicly the result of any revisions that
may be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION (Unaudited)
December 31, December 31, 2018 2017 F/(U)
(Dollars in thousands)
Assets: Cash and deposits with banks $ 34,380 $ 34,365 0.0 %
Federal funds sold 26,605 12,515 112.6
% Total cash and cash equivalents 60,985 46,880 30.1 % Securities:
Trading, at fair value 364 — 0.0 % Available for sale, at fair
value 241,643 270,561 -10.7 % Held to maturity (fair value of
$75,075 and $82,126, respectively) 77,491 82,911 -6.5 % Loans held
for sale, at lower of cost or market — 211 -100.0 % Loans held for
sale, at fair value 91,472 83,541 9.5 % Loans, net of allowance for
loan losses of $20,443 and $21,202 2,176,842 1,999,877 8.8 %
Federal Home Loan Bank stock, at cost 19,144 19,324 -0.9 % Premises
and equipment, net 21,930 22,094 -0.7 % Accrued interest receivable
9,080 8,190 10.9 % Real estate owned and other repossessed assets
1,088 1,253 -13.2 % Goodwill 20,221 20,221 0.0 % Core deposit
intangible 1,603 1,934 -17.1 % Customer list intangible 2,214 2,060
7.5 % Cash surrender value of life insurance 64,220 62,488 2.8 %
Other assets 23,060 28,360 -18.7 %
Total assets $ 2,811,357 $ 2,649,905 6.1 %
Liabilities and Shareholders' Equity
Liabilities: Deposits: Interest bearing $ 1,528,057 $
1,445,293 5.7 % Noninterest bearing 394,208
354,970 11.1 % Customer deposits 1,922,265 1,800,263 6.8 %
Brokered deposits 290,955 156,476 85.9
% Total deposits 2,213,220 1,956,739 13.1 % Borrowed funds: Federal
Home Loan Bank advances Long-term advances — 48,536 -100.0 %
Short-term advances 243,000 308,000
-21.1 % Total Federal Home Loan Bank advances 243,000 356,536 -31.8
% Repurchase agreements and other 224 197
13.7 % Total borrowed funds 243,224 356,733 -31.8 % Advance
payments by borrowers for taxes and insurance 27,192 25,038 8.6 %
Accrued interest payable 1,279 1,097 16.6 % Accrued expenses and
other liabilities 17,108 16,033 6.7 %
Total liabilities 2,502,023 2,355,640
6.2 %
Shareholders' Equity: Preferred stock-no
par value; 1,000,000 shares authorized and no shares outstanding —
— 0.0 %
Common stock-no par value; 499,000,000
shares authorized; 54,138,910 shares issued and 49,128,875 and
49,800,126 shares, respectively, outstanding
177,492 177,458 0.0 % Retained earnings 192,062 167,852 14.4 %
Accumulated other comprehensive loss (21,436 ) (18,685 ) 14.7 %
Treasury stock, at cost, 5,010,035 and 4,338,784 shares,
respectively (38,784 ) (32,360 ) 19.9 %
Total
shareholders’ equity 309,334 294,265
5.1 %
Total liabilities and shareholders’ equity $
2,811,357 $ 2,649,905 6.1 %
UNITED
COMMUNITY FINANCIAL CORP. CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)
For the Three Months Ended
For the Twelve Months Ended December 31, December 31, December 31,
December 31, 2018 2017 Variance F/(U) 2018 2017 Variance F/(U)
(Dollars in thousands, except per share data)
Interest
income Loans $ 26,587 $ 21,529 $ 5,058 23.5 % $ 96,653 $ 79,795
$ 16,858 21.1 % Loans held for sale 1,184 886 298 33.6 % 4,318
3,301 1,017 30.8 % Securities: Available for sale, nontaxable 334
416 (82 ) -19.7 % 1,412 1,668 (256 ) -15.3 % Available for sale,
taxable 1,148 1,222 (74 ) -6.1 % 4,732 5,579 (847 ) -15.2 % Held to
maturity, nontaxable 69 51 18 35.3 % 250 214 36 16.8 % Held to
maturity, taxable 380 421 (41 ) -9.7 % 1,574 1,764 (190 ) -10.8 %
Federal Home Loan Bank stock dividends 290 267 23 8.6 % 1,133 961
172 17.9 % Other interest earning assets 178
57 121 212.3 % 500 228
272 119.3 % Total interest income 30,170
24,849 5,321 21.4 % 110,572 93,510 17,062 18.2 %
Interest
expense Deposits 5,866 2,603 (3,263 ) -125.4 % 17,796 8,437
(9,359 ) -110.9 % Federal Home Loan Bank advances 810 1,365 555
40.7 % 4,830 4,699 (131 ) -2.8 % Repurchase agreements and other
— 1 1 100.0 % 1
21 20 95.2 % Total interest
expense 6,676 3,969 (2,707 )
-68.2 % 22,627 13,157 (9,470 )
-72.0 %
Net interest income 23,494 20,880 2,614 12.5 %
87,945 80,353 7,592 9.4 %
Taxable equivalent adjustment
111 221 (110 ) -49.8 %
382 911 (529 ) -58.1 %
Net interest
income (FTE) (1) 23,605 21,101 2,504 11.9 % 88,327
81,264 7,063 8.7 %
Provision for loan losses 178
1,215 1,037 85.3 % 699
4,253 3,554 83.6 %
Net
interest income after provision for loan losses (FTE)
23,427 19,886 3,541 17.8 %
87,628 77,011 10,617 13.8
%
Non-interest income Insurance agency income 562 552 10 1.8
% 2,197 2,006 191 9.5 % Brokerage income 305 264 41 15.5 % 1,216
1,158 58 5.0 % Service fees and other charges: Deposit related fees
1,521 1,436 85 5.9 % 5,706 5,636 70 1.2 % Mortgage servicing fees
858 780 78 10.0 % 3,304 3,005 299 10.0 % Mortgage servicing rights
valuation (44 ) 6 (50 ) -833.3 % (61 ) (9 ) 52 -577.8 % Mortgage
servicing rights amortization (430 ) (518 ) 88 -17.0 % (1,949 )
(1,944 ) 5 -0.3 % Other service fees 36 42 (6 ) -14.3 % 161 125 36
28.8 % Net gains (losses): Trading Securities 669 — 669 100.0 % 669
— 669 100.0 % Securities available for sale (861 ) — (861 ) 100.0 %
(627 ) 566 (1,193 ) -210.8 % Mortgage banking income 1,118 1,375
(257 ) -18.7 % 5,090 6,503 (1,413 ) -21.7 % Real estate owned and
other repossessed assets charges, net (24 ) (46 ) 22 -47.8 % (260 )
(189 ) 71 -37.6 % Debit/credit card fees 1,033 995 38 3.8 % 4,158
4,215 (57 ) -1.4 % Trust fee income 480 467 13 2.8 % 1,905 1,618
287 17.7 % Bank owned life insurance 431 438 (7 ) -1.6 % 1,732
1,627 105 6.5 % Other income (69 ) 669
(738 ) -110.3 % 161 922 (761 )
-82.5 % Total non-interest income 5,585 6,460
(875 ) -13.5 % 23,402 25,239
(1,837 ) -7.3 %
Non-interest expense Salaries
and employee benefits 9,029 8,347 (682 ) -8.2 % 37,071 34,807
(2,264 ) -6.5 % Occupancy 1,023 1,023 — 0.0 % 4,167 3,943 (224 )
-5.7 % Equipment and data processing 2,122 2,256 134 5.9 % 8,679
8,944 265 3.0 % Financial institutions tax 464 300 (164 ) -54.7 %
1,950 1,648 (302 ) -18.3 % Advertising 414 317 (97 ) -30.6 % 1,278
991 (287 ) -29.0 % Amortization of intangible assets 128 114 (14 )
-12.3 % 501 422 (79 ) -18.7 % FDIC insurance premiums 398 249 (149
) -59.8 % 1,270 1,078 (192 ) -17.8 % Other insurance premiums 70
114 44 38.6 % 373 450 77 17.1 % Professional fees: Legal fees 292
155 (137 ) -88.4 % 1,094 724 (370 ) -51.1 % Other professional fees
721 461 (260 ) -56.4 % 2,262 2,067 (195 ) -9.4 % Supervisory fees
34 84 50 0.0 % 152 84 (68 ) -100.0 % Real estate owned and other
repossessed asset expenses 34 17 (17 ) -100.0 % 129 135 6 4.4 %
Acquisition related expenses — 39 39 0.0 % — 5,001 5,001 100.0 %
Other expenses 2,449 3,853 1,404
36.4 % 6,153 7,965 1,812
22.7 % Total non-interest expenses 17,178
17,329 151 0.9 % 65,079
68,259 3,180 4.7 %
Income before
income taxes 11,834 9,017 2,817 31.2 % 45,951 33,991 11,960
35.2 %
Taxable equivalent adjustment 111 221 110 49.8 % 382
911 529 58.1 %
Income tax expense 2,172
4,294 2,122 49.4 % 8,391
11,295 2,904 25.7 %
Net income $ 9,551
$ 4,502 $ 5,049 112.2 % $ 37,178 $
21,785 $ 15,393 70.7 %
Earnings per common
share: Basic $ 0.192 $ 0.090 $ 0.102 113.3 % $ 0.746 $ 0.440 $
0.306 69.5 % Diluted 0.191 0.090 0.101 112.2 % 0.742 0.437 0.305
69.8 % (1)
Net interest income is also presented on a
fully taxable equivalent (FTE) basis, the Company believes this
non-GAAP measure is the preferred industry measurement for this
item.
UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended December 31, September 30,
2018 2018 Variance F/(U) (Dollars in thousands, except per share
data)
Interest income Loans $ 26,587 $ 24,031 $ 2,556 10.6 %
Loans held for sale 1,184 1,264 (80 ) -6.3 % Securities: Available
for sale, nontaxable 334 333 1 0.3 % Available for sale, taxable
1,148 1,176 (28 ) -2.4 % Held to maturity, nontaxable 69 69 — 0.0 %
Held to maturity, taxable 380 374 6 1.6 % Federal Home Loan Bank
stock dividends 290 289 1 0.3 % Other interest earning assets
178 154 24 15.6 % Total
interest income 30,170 27,690 2,480 9.0 %
Interest expense
Deposits 5,866 5,044 (822 ) -16.3 % Federal Home Loan Bank advances
810 1,023 213 20.8 %
Total interest expense 6,676 6,067
(609 ) -10.0 %
Net interest income 23,494 21,623
1,871 8.7 %
Taxable equivalent adjustment 111
84 27 32.1 %
Net interest income
(FTE) (1) 23,605 21,707 1,898 8.7 %
Provision for
loan losses 178 251 73
29.1 %
Net interest income after provision for loan
losses (FTE) 23,427 21,456
1,971 9.2 %
Non-interest income Insurance agency
income 562 545 17 3.1 % Brokerage income 305 339 (34 ) -10.0 %
Service fees and other charges: Deposit related fees 1,521 1,494 27
1.8 % Mortgage servicing fees 858 821 37 4.5 % Mortgage servicing
rights valuation (44 ) (6 ) (38 ) 633.3 % Mortgage servicing rights
amortization (430 ) (477 ) 47 -9.9 % Other service fees 36 26 10
38.5 % Net gains (losses): Trading 669 — 669 100.0 % Securities
available for sale (861 ) — (861 ) 100.0 % Mortgage banking income
1,118 1,409 (291 ) -20.7 % Real estate owned and other repossessed
assets charges, net (24 ) (45 ) 21 -46.7 % Debit/credit card fees
1,033 1,000 33 3.3 % Trust fee income 480 483 (3 ) -0.6 % Bank
owned life insurance 431 367 64 17.4 % Other income (69 )
190 (259 ) -136.3 % Total non-interest income
5,585 6,146 (561 ) -9.1 %
Non-interest expense Salaries and employee benefits 9,029
9,107 78 0.9 % Occupancy 1,023 1,094 71 6.5 % Equipment and data
processing 2,122 2,032 (90 ) -4.4 % Financial institutions tax 464
495 31 6.3 % Advertising 414 340 (74 ) -21.8 % Amortization of
intangible assets 128 128 — 0.0 % FDIC insurance premiums 398 294
(104 ) -35.4 % Other insurance premiums 70 85 15 17.6 %
Professional fees: — Legal fees 292 356 64 18.0 % Other
professional fees 721 651 (70 ) -10.8 % Supervisory fees 34 34 —
0.0 % Real estate owned and other repossessed asset expenses 34 25
(9 ) -36.0 % Acquisition related expenses — — — 0.0 % Other
expenses 2,449 1,131 (1,318 )
-116.5 % Total non-interest expenses 17,178
15,772 (1,406 ) -8.9 %
Income before income
taxes 11,834 11,830 4 0.0 %
Taxable equivalent
adjustment 111 84 (27 ) -32.1 %
Income tax expense
2,172 2,217 45 2.0 %
Net income $ 9,551 $ 9,529 $ 22 0.2 %
Earnings per common share: Basic $ 0.192 $ 0.191 $
0.001 0.5 % Diluted 0.191 0.190 0.001 0.5 % (1)
Net interest income is also presented on a
fully taxable equivalent (FTE) basis, the Company believes this
non-GAAP measure is the preferred industry measurement for this
item.
UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED
AVERAGE BALANCES (Unaudited)
For the three months ended
December 31, 2018 September 30, 2018 December 31, 2017 Average
Interest Average Interest Average Interest outstanding earned/
Yield/ outstanding earned/ Yield/ outstanding earned/ Yield/
balance paid rate balance paid rate balance paid rate
(Dollars in thousands)
Interest earning assets: Net loans (1) $ 2,161,414 $ 26,616 4.93 %
$ 2,115,227 $ 24,031 4.54 % $ 1,975,847 $ 21,531 4.36 % Loans held
for sale 100,348 1,184 4.68 % 111,295
1,264 4.51 % 88,247 886 4.02 % Total loans, net
2,261,762 27,800 4.91 % 2,226,522 25,295 4.54 % 2,064,094 22,417
4.34 % Securities: Trading 4 — 0.00 % — — 0.00 % — — 0.00 %
Available for sale-taxable 196,910 1,148 2.33 % 204,924 1,176 2.30
% 214,631 1,222 2.28 % Available for sale-nontaxable (2) 48,370 399
3.30 % 48,370 400 3.31 % 58,903 609 4.14 % Held to maturity-taxable
65,605 380 2.32 % 67,979 374 2.20 % 75,136 421 2.24 % Held to
maturity-nontaxable (2) 12,215 86 2.82 %
12,215 86 2.82 % 9,233 77 3.34 % Total
securities 323,104 2,013 2.49 % 333,488 2,036 2.44 % 357,903 2,329
2.60 % Federal Home Loan Bank stock 19,144 290 6.06 % 19,160 289
6.03 % 19,324 267 5.53 % Other interest earning assets
34,779 178 2.03 % 30,140 154 2.03 %
22,656 57 1.01 % Total interest earning assets 2,638,789
30,281 4.59 % 2,609,310 27,774 4.26 % 2,463,977 25,070 4.07 %
Non-interest earning assets 176,579 177,553
179,023 Total assets $ 2,815,368 $ 2,786,863 $ 2,643,000 Interest
bearing liabilities: Deposits: Checking accounts $ 620,306 1,114
0.71 % $ 635,705 1,026 0.64 % $ 600,249 589 0.39 % Savings accounts
303,247 28 0.04 % 303,247 27 0.04 % 304,229 27 0.04 % Certificates
of deposit Customer certificates of deposit 619,208 2,652 1.70 %
618,545 2,457 1.58 % 530,297 1,458 1.10 % Brokered certificates of
deposit 393,778 2,072 2.09 % 327,120
1,534 1.86 % 164,147 529 1.29 % Total certificates of
deposit 1,012,986 4,724 1.85 % 945,665
3,991 1.67 % 694,444 1,987 1.14 % Total interest
bearing deposits 1,936,539 5,866 1.20 % 1,884,617 5,044 1.06 %
1,598,922 2,603 0.65 %
Federal Home Loan Bank advances
Long-term advances 46,879 357 3.02 % 48,976 413 3.35 % 48,409 404
3.34 % Short-term advances 75,033 453 2.40 %
120,880 610 2.00 % 301,424 961 1.28 % Total
Federal Home Loan Bank advances 121,912 810 2.64 % 169,856 1,023
2.39 % 349,833 1,365 1.56 % Repurchase agreements and other
245 — 0.00 % 213 — 0.00 % 2,114
1 0.19 % Total borrowed funds 122,157 810 2.63 %
170,069 1,023 2.39 % 351,947 1,366 1.55
% Total interest bearing liabilities $ 2,058,696 6,676 1.29
% $ 2,054,686 6,067 1.17 % $ 1,950,869 3,969 0.81 %
Non-interest bearing liabilities Total noninterest bearing deposits
395,649 382,044 355,225 Other noninterest bearing liabilities
46,559 39,075 41,400 Total noninterest bearing
liabilities 442,208 421,119 396,625 Total
liabilities $ 2,500,904 $ 2,475,805 $ 2,347,494 Shareholders’
equity 314,464 311,058 295,506 Total
liabilities and equity $ 2,815,368 $ 2,786,863 $ 2,643,000 Net
interest income and interest rate spread $ 23,605 3.30 % $ 21,707
3.09 % $ 21,101 3.26 % Net interest margin 3.58 % 3.33 % 3.43 %
Average interest earning assets to average interest bearing
liabilities 128.18 % 126.99 % 126.30 % Interest
bearing deposits Checking accounts $ 620,306 $ 1,114 0.71 % $
635,705 $ 1,026 0.64 % $ 600,249 $ 589 0.39 % Savings accounts
303,247 28 0.04 % 303,247 27 0.04 % 304,229 27 0.04 % Customer
certificates of deposit 619,208 2,652 1.70 %
618,545 2,457 1.58 % 530,297 1,458 1.10 %
Total interest bearing customer deposits 1,542,761 3,794 0.98 %
1,557,497 3,510 0.90 % 1,434,775 2,074 0.58 % Brokered certificates
of deposit 393,778 2,072 2.09 % 327,120
1,534 1.86 % 164,147 529 1.29 % Total interest
bearing deposits 1,936,539 5,866 1.20 % 1,884,617 5,044 1.06 %
1,598,922 2,603 0.65 % Noninterest bearing deposits 395,649
— 0.00 % 382,044 — 0.00 % 355,225
— 0.00 % Total average deposits and cost of deposits $
2,332,188 $ 5,866 1.01 % $ 2,266,661 $ 5,044 0.89 % $ 1,954,147 $
2,603 0.53 % Other interest bearing liabilities Federal Home Loan
Bank advances Long term advances $ 46,879 $ 357 3.02 % $ 48,976 $
413 3.35 % $ 48,409 $ 404 3.34 % Short term advances 75,033
453 2.40 % 120,880 610 2.00 % 301,424
961 1.28 % Total Federal Home Loan Bank advances 121,912 810
2.64 % 169,856 1,023 2.39 % 349,833 1,365 1.56 % Repurchase
agreements and other 245 — 0.00 % 213 —
0.00 % 2,114 1 0.19 % Total borrowed funds
122,157 810 2.63 % 170,069 1,023 2.39 %
351,947 1,366 1.55 % Total average deposits and other
interest bearing liabilities and total cost of funds $ 2,454,345 $
6,676 1.09 % $ 2,436,730 $ 6,067 1.00 % $ 2,306,094 $ 3,969 0.69 %
Customer deposits interest bearing and noninterest
bearing $ 1,938,410 $ 3,794 0.78 % $ 1,939,541 $ 3,510 0.72 % $
1,790,000 $ 2,074 0.46 % Brokered deposits 393,778 2,072 2.09 %
327,120 1,534 1.86 % 164,147 529 1.29 % Total borrowings 122,157
810 2.63 % 170,069 1,023 2.39 % 351,947 1,366 1.55 % Cost of funds
2,454,345 6,676 1.09 % 2,436,730 6,067 1.00 % 2,306,094 3,969 0.69
%
(1)
Nonaccrual loans are included in the
average balance at a yield of 0%.
(2)
Yields are on a fully taxable equivalent
basis.
UNITED COMMUNITY FINANCIAL CORP. SELECTED
FINANCIAL HIGHLIGHTS (Unaudited)
At or for the quarters ended December 31, September
30, June 30, March 31, December 31, 2018 2018 2018 2018 2017
(Dollars in thousands, except per share data)
Financial Data
Total assets $ 2,811,357 $ 2,789,183 $ 2,770,558 $ 2,690,707 $
2,649,905 Total loans, net 2,176,842 2,148,942 2,099,781 2,061,443
1,999,877 Total securities 319,498 320,806 328,924 338,593 353,472
Total deposits 2,213,220 2,352,476 2,135,345 2,066,978 1,956,739
Average interest-bearing deposits 1,936,539 1,884,617 1,718,639
1,644,165 1,598,922 Average noninterest-bearing deposits 395,649
382,044 376,905 375,142 355,225 Total shareholders' equity 309,334
306,043 301,484 296,195 294,265 Net interest income 23,494 21,623
21,295 21,533 20,880 Net interest income (FTE) (1) 23,605 21,707
21,385 21,630 21,101 Provision (recovery) for loan losses 178 251
(138 ) 407 1,215 Noninterest income 5,585 6,146 5,852 5,819 6,460
Noninterest expense 17,178 15,772 15,530 16,600 17,329 Income tax
expense 2,172 2,217 2,214 1,789 4,294 Net income 9,551 9,529 9,541
8,556 4,502
Share Data Basic earnings per common
share $ 0.192 $ 0.191 $ 0.191 $ 0.172 $ 0.090 Diluted earnings per
common share 0.191 0.190 0.190 0.171 0.090 Book value per common
share 6.30 6.13 6.04 5.94 5.90 Tangible book value per common share
5.81 5.65 5.56 5.45 5.41 Market value per common share 8.85 9.67
10.99 9.86 9.13 Common shares outstanding at end of period
49,129 49,923 49,904 49,882 49,800 Weighted average shares
outstanding--basic 49,445 49,683 49,694 49,611 49,497 Weighted
average shares outstanding--diluted 49,695 49,947 49,944 49,885
49,827
Key Ratios Return on average assets (ROA) (2)
1.36 % 1.37 % 1.40 % 1.28 % 0.68 % Return on average equity
(ROE)(3) 12.15 % 12.25 % 12.56 % 11.44 % 6.09 % Return on tangible
equity (ROTE)(4) 13.16 % 13.28 % 13.65 % 12.44 % 6.62 % Net
interest margin 3.58 % 3.33 % 3.36 % 3.47 % 3.43 % Efficiency ratio
54.79 % 57.30 % 57.75 % 60.20 % 63.73 % Nonperforming loans to net
loans, end of period 0.30 % 0.42 % 0.51 % 0.59 % 0.59 %
Nonperforming assets to total assets, end of period 0.27 % 0.36 %
0.57 % 0.65 % 0.64 % Allowance for loan loss as a percent of loans,
end of period 0.93 % 0.98 % 1.01 % 1.04 % 1.05 % Delinquent loans
to total net loans, end of period 0.50 % 0.69 % 0.67 % 0.81 % 0.86
%
(1)
Net interest income is presented on a
fully taxable equivalent (FTE) basis, the Company believes this
non-GAAP measure is the preferred industry measurement for this
item
(2)
Net income divided by average total
assets
(3)
Net income divided by average total
equity
(4)
Net income divided by average total
equity, minus average intangible assets
UNITED COMMUNITY FINANCIAL CORP. SELECTED
FINANCIAL HIGHLIGHTS (Unaudited)
At or for the quarters ended December 31, September
30, June 30, March 31, December 31, 2018 2018 2018 2018 2017
(Dollars in thousands)
Loan Portfolio Composition
Commercial loans Multi-family $ 134,143 $ 139,938 $ 141,004
$ 137,836 $ 120,480 Owner/nonowner occupied commercial real estate
409,979 408,938 396,624 384,533 381,611 Land 16,831 16,129 16,887
15,452 15,162 Construction 141,685 132,961 127,691 134,181 116,863
Commercial and industrial 240,293 233,801
218,611 201,132 188,500
Total 942,931 931,767 900,817 873,134 822,616
Residential mortgage loans Real estate 927,255 909,626
888,583 882,873 870,939 Construction 43,435
39,396 40,623 42,453
49,092
Total
970,690 949,022 929,206 925,326 920,031
Consumer loans
Consumer 277,041 283,108 284,909
279,110 273,494
Total
277,041 283,108 284,909
279,110 273,494
Total loans
2,190,662 2,163,897 2,114,932 2,077,570 2,016,141 Less: Allowance
for loan losses 20,443 21,332 21,405 21,610 21,202 Deferred loan
costs, net (6,623 ) (6,377 ) (6,254 )
(5,483 ) (4,938 )
Total 13,820
14,955 15,151 16,127
16,264
Total loans, net 2,176,842 2,148,942 2,099,781
2,061,443 1,999,877
Loans held for sale, net 91,472
95,235 107,701 79,292
83,752
Total loans $ 2,268,314 $
2,244,177 $ 2,207,482 $ 2,140,735 $ 2,083,629
At or for the quarters ended December 31,
September 30, June 30, March 31, December 31, 2018 2018 2018 2018
2017 (Dollars in thousands)
Deposit Portfolio Composition
Checking accounts Interest bearing checking accounts $
146,977 $ 140,722 $ 138,812 $ 140,740 $ 170,478 Non-interest
bearing checking accounts 394,208 383,535
383,082 376,904 354,970
Total checking accounts 541,185 524,257 521,894
517,644 525,448 Savings accounts 298,087 300,007 306,283 308,025
301,716 Money market accounts 466,167 489,668
502,560 483,840 424,234
Total non-time deposits 1,305,439 1,313,932 1,330,737
1,309,509 1,251,398 Certificates of deposit 616,826
622,807 615,388 595,657
548,865
Total customer deposits 1,922,265
1,936,739 1,946,125 1,905,166 1,800,263 Brokered deposits
290,955 415,737 189,220
161,812 156,476
Total certificates of
deposit 907,781 1,038,544
804,608 757,469 705,341
Total deposits
$ 2,213,220 $ 2,352,476 $ 2,135,345 $
2,066,978 $ 1,956,739
UNITED COMMUNITY FINANCIAL
CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the quarters ended December 31, September 30,
June 30, March 31, December 31, 2018 2018 2018 2018 2017
(Dollars in thousands)
Allowance For Loan Losses
Beginning balance $ 21,332 $ 21,405 $ 21,610 $ 21,202 $ 20,555
Provision 178 251 (138 ) 407 1,215 Net (chargeoffs) recoveries
(1,067 ) (324 ) (67 ) 1
(568 ) Ending balance $ 20,443 $ 21,332 $ 21,405
$ 21,610 $ 21,202 At or for the
quarters ended December 31, September 30, June 30, March 31,
December 31, 2018 2018 2018 2018 2017 (Dollars in thousands)
Net
(Charge-offs) Recoveries Commercial loans Multi-family $
(99 ) $ 4 $ 9 $ 6 $ (126 ) Owner/nonowner occupied commercial real
estate 38 12 29 40 23 Land — 150 — — — Construction — 11 10 7 —
Commercial and industrial (765 ) (275 ) (72 )
104 (90 )
Total (826 ) (98 ) (24 ) 157
(193 )
Residential mortgage loans Real estate (131 ) (141 )
(14 ) (66 ) (257 ) Construction — —
— — —
Total (131 )
(141 ) (14 ) (66 ) (257 )
Consumer loans Consumer
(110 ) (85 ) (29 ) (90 ) (118 )
Total (110 ) (85 ) (29 ) (90 )
(118 )
Total net chargeoffs $ (1,067 ) $ (324 ) $ (67
) $ 1 $ (568 ) At or for the quarters ended
December 31, September 30, June 30, March 31, December 31, 2018
2018 2018 2018 2017 (Dollars in thousands)
Nonperforming
Loans Commercial loans Multi-family $ 171 $ 275 $ 275 $
275 $ 275 Owner/nonowner occupied commercial real estate 13 1,101
1,111 1,206 1,218 Land — — — 9 9 Construction — — — — — Commercial
and industrial 531 1,489 1,475
1,459 1,505
Total 715
2,865 2,861 2,949 3,007
Residential mortgage loans Real
estate 4,170 4,426 6,146 7,045 6,076 Construction —
— — — —
Total 4,170 4,426 6,146 7,045 6,076
Consumer loans
Consumer 1,654 1,770 1,783
2,180 2,620
Total
1,654 1,770 1,783 2,180
2,620
Total nonperforming loans $ 6,539
$ 9,061 $ 10,790 $ 12,174 $ 11,703
Total Nonperforming Loans and Nonperforming
Assets Past due 90 days and on nonaccrual status $ 5,732 $
8,200 $ 8,395 $ 8,326 $ 8,620 Past due 90 days and still accruing
18 — — —
— Past due 90 days 5,750 8,200 8,395 8,326 8,620 Past
due less than 90 days and on nonaccrual 789
861 2,395 3,848 3,083
Total nonperforming loans 6,539 9,061 10,790 12,174
11,703 Other real estate owned 1,049 907 802 1,030 1,047 Other
classified assets — — 4,050 4,050 4,050 Repossessed assets
39 — 75 263
206
Total nonperforming assets $ 7,627 $ 9,968
$ 15,717 $ 17,517 $ 17,006
UNITED COMMUNITY FINANCIAL CORP. NON-GAAP
DISCLOSURE RECONCILIATION (Unaudited)
Reconciliation of Average Shareholders'
Equity to Average Tangible Equity: At or for the
quarters ended December 31, September 30, June 30, March 31,
December 31, 2018 2018 2018 2018 2017 (Dollars in thousands, except
per share data) Average shareholders equity $ 314,464 $ 311,058 $
303,733 $ 299,284 $ 295,506 Average intangible assets 24,123
24,144 24,063 24,175
23,563 Average tangible equity $ 290,341
$ 286,914 $ 279,670 $ 275,109 $ 271,943
Net income $ 9,551 $ 9,529 $ 9,541 $ 8,556 $ 4,502
Return on tangible equity 13.16 % 13.28 % 13.65 % 12.44 %
6.62 %
Reconciliation of Fully Taxable Equivalent Net
Interest Income to Net Interest Income: For the quarters
ended December 31, September 30, June 30, March 31, December 31,
2018 2018 2018 2018 2017 (Dollars in thousands) Interest
income $ 30,170 $ 27,690 $ 26,661 $ 26,050 $ 24,849 Fully taxable
equivalent adjustment 111 84 90
97 221 Fully taxable equivalent
interest income 30,281 27,774 26,751 26,147 25,070 Interest expense
6,676 6,067 5,366
4,517 3,969 Fully taxable net interest income
$ 23,605 $ 21,707 $ 21,385 $ 21,630 $
21,101
Reconciliation of Net Interest Margin
without Resolution of Acquired Loan: For the
three For the twelve months ended months ended December 31,
December 31, 2018 2018 (Dollars in thousands) Fully taxable net
interest income $ 23,605 $ 88,327 Resolution of acquired loan
1,050 1,050 Fully taxable net interest
income, without purchase accounting adjustments $ 22,555 $
87,277 Average interest earning assets $ 2,638,789 $
2,574,321
Net interest margin excluding accretion
amortization of purchase accounting adjustments
3.42 % 3.39 %
Reconciliation of Efficiency Ratio to
Efficiency Ratio Inclusive of Termination Costs: For the
three For the twelve months ended months ended December 31,
December 31, 2018 2018 (Dollars in thousands) Noninterest Expense $
17,178 $ 65,079 Intangible asset amortization (128 )
(501 ) 17,050 64,578 Net
interest income $ 23,605 $ 88,327 Noninterest income 5,585 23,402
G/L Securities 192 (42 ) Loss on REO 24 260
29,406 111,947 Efficiency
ratio including termination cost 57.98 % 57.69 %
Tangible
Book Value Per Share:
Tangible book value, per share is defined at shareholders equity
minus intangible assets divided by the number of shares
outstanding. At the quarters ended December 31, September
30, June 30, March 31, December 31, 2018 2018 2018 2018 2017
(Dollars in thousands, except per share data) Total shareholders'
equity $ 309,334 $ 306,043 $ 301,484 $ 296,195 $ 294,265 Goodwill
20,221 20,221 20,221 20,221 20,221 Customer list intangible 2,214
2,259 1,980 2,030 2,060 Core deposit intangible 1,603 1,686 1,769
1,851 1,934 Total common shares outstanding 49,128,875 49,922,514
49,904,074 49,882,491 49,800,126 Tangible book value, as reported $
5.81 $ 5.65 $ 5.56 $ 5.45 $ 5.41
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version on businesswire.com: https://www.businesswire.com/news/home/20190122005974/en/
Media Contact:Kathy BushwaySenior Vice President,
MarketingHome Savings(330) 742-0638kbushway@homesavings.com
Investor Contact:Gary M. SmallPresident and Chief
Executive OfficerUnited Community Financial Corp.(330) 742-0472
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