United Community Financial Corp. (Company) (NASDAQ: UCFC),
parent company of Home Savings Bank (Home Savings), announced today
second quarter net income of $10.5 million, an increase of 9.9%
compared to the second quarter of 2018. Diluted earnings per share
(“EPS”) totaled $0.215, a 13.2% improvement over the $0.190 per
share reported for the quarter ended June 30, 2018.
Second quarter 2019 highlights:
- ROA of 1.48%, ROE of 13.2%, ROTE of 14.3% for the quarter
- Total loan growth of 6.1% over the last twelve months
- Average customer deposit growth of 7.7% compared to second
quarter 2018
- Revenue growth of 5.8% compared to second quarter 2018
- Pretax preprovision income of $12.7 million, a 9.6% increase
compared to second quarter 2018
- Efficiency ratio of 55.4%
- Declared a dividend of $0.08 per common share, an increase of
14% over the prior quarter
- Authorized an additional one million shares for repurchase
Gary M. Small, President and Chief Executive Officer of the
Company commented, “The team delivered an outstanding quarter and
each business line continues to contribute to our success. Balanced
improvements in commercial banking, residential mortgage and our
consumer business produced a very strong 9.9% net income
improvement for the quarter versus the same period last year.”
Small continued, “Excellent earnings growth and an accelerated
stock repurchase program combined to deliver EPS growth of 13%.
Based on the strength and momentum of our performance, the board
approved a 14% dividend increase. Capital management will remain a
strategic priority as we are focused on delivering top tier returns
for our shareholders.”
Strong Loan and Deposit Growth
Total loans grew $129.5 million (excluding loans held for sale),
or 6.1%, during the previous twelve months ended June 30, 2018 and
$13.8 million compared to the previous quarter. At June 30, 2019,
total net loans (excluding loans held for sale) aggregated $2.23
billion.
Home Savings continues to produce excellent results over all
lending categories. The increase in total loans for the period was
driven by an increase in commercial loans, which grew $73.5
million, or 8.2%, over the last twelve months, remaining flat
compared to the prior quarter. This was as expected due to paydowns
in the commercial real estate portfolio. Mortgage loans (excluding
loans held for sale and permanent construction loans) increased
$54.1 million, or 6.1%, over the previous twelve months and
increased $8.1 million, during the past three months.
Average quarterly customer deposits (which exclude brokered
certificates of deposit) increased 7.7% from June 30, 2018 and 5.7%
from March 31, 2019. The growth in average customer deposits was
driven by increases in average non-interest bearing accounts of
7.6% compared to the second quarter of 2018 and 1.2% over the past
three months. Secondly, increases occurred in money market accounts
of 19.8% compared to the second quarter of 2018 and 17.4% over the
last three months. Finally, average business deposits continue to
rise, increasing 29.6% compared to the second quarter of 2018 and
8.4% over the past three months.
Net Interest Income and Margin
Net interest income totaled $22.1 million on a fully taxable
equivalent (FTE) basis for the quarter ended June 30, 2019 compared
to $21.4 million for the quarter ended June 30, 2018, or an
increase of 3.4%. This increase is the result of growth in average
earning assets of 4.3% offset by a decline in purchase accounting
adjustments.
The net interest margin on an FTE basis was 3.33% for the second
quarter of 2019 compared to 3.36% in the second quarter of 2018.
The decline was primarily due to lower purchase accounting
adjustments. Excluding the effects of purchase accounting
adjustments, the net interest margin was 3.29% in the second
quarter of 2019 compared to 3.28% in the second quarter of
2018.
The net interest margin on a linked quarter basis declined 5
basis points from 3.38% in the first quarter of 2019 to 3.33% in
the second quarter of 2019. Two basis points of this decline was
the result of lower purchase accounting adjustments. One basis
point is due to increased funding costs related to treasury share
repurchases. The remaining difference can be attributed to a
challenging interest rate environment with an inverted treasury
curve along with falling treasury rates and LIBOR.
Asset Quality Remains Strong
Asset quality remained strong during the second quarter. At June
30, 2019, nonperforming loans aggregated $12.9 million compared to
$10.8 million at June 30, 2018 and $7.1 million at the end of the
previous quarter. The Company’s level of nonperforming loans moved
up at the end of the quarter, primarily as a result of a single
credit. A substantial portion of this credit was paid off in July,
which should reduce nonperforming loans to levels seen in recent
quarters. The allowance for loan losses at the end of the period,
as a percent of nonperforming loans was 159.1%. Net recoveries for
the quarter were $87,000, or two basis points. For the six months
ended June 30, 2019, net recoveries totaled $29,000. The allowance
for loan losses as a percent of loans totaled 0.91% at June 30,
2019 compared to 1.01% at June 30, 2018.
The Company recognized a negative provision for loan losses of
$51,000 for the second quarter of 2019, compared to a negative
provision of $138,000 in the second quarter of 2018. As of June 30,
2019 the allowance for loan losses to total loans amounted to 0.91%
with no change from the prior quarter. Continued asset quality
combined with net recoveries for the period resulted in the
negative provision for the quarter.
Non-Interest Income
Non-interest income increased 14.0%, or $819,000, to $6.7
million for the second quarter of 2019 compared to $5.9 million for
the same quarter last year. The primary reason for this is an
increase in mortgage banking income of $1.4 million along with
solid increases in brokerage income, mortgage servicing fees and
trading and security gains. This was offset by a decrease in value
of mortgage servicing rights of $975,000.
The increase in mortgage banking income was primarily driven by
increased margins when comparing the second quarter of 2019 to the
second quarter of 2018. Pricing in the market has been much more
disciplined in 2019 compared to 2018 while hedging costs for the
construction loans being sold have been much lower in 2019. At this
time, the Company anticipates mortgage banking margins tracking
higher than in 2018 for the remainder of the year. The decrease in
the mortgage servicing rights valuation was due to the dramatic
drop in long term interest rates and the commensurate rise in
mortgage prepayment speeds.
Non-Interest Expense
Non-interest expense was $16.0 million for the second quarter of
2019 compared to $15.5 million during the second quarter of 2018,
an increase of $446,000, or 2.9%. The Company’s efficiency ratio
improved to 55.4% for the current quarter versus 57.8% for the same
quarter a year ago.
Small added, “We are pleased with the positive operating
leverage created during the quarter given the volatile rate
environment. Revenue increased 5.8% with expenses up 2.9%. We
anticipate continued expansion of operational leverage over the
remainder of the year.”
Effective Tax Rate
The Company’s effective tax rate on an FTE basis for the quarter
ended June 30, 2019 was 18.4% compared to 19.5% for the quarter
ended June 30, 2018.
Dividend to be Paid and Equity
On July 23, 2019, the Board of Directors declared a 14.3%
increase to the quarterly cash dividend to $0.08 per common share
payable August 13, 2019 to shareholders of record August 5, 2019.
On July 23, 2019 the Board also authorized an additional one
million shares to the Company’s existing share repurchase program.
The Company had 727,711 shares authorized as of June 30, 2019.
During the second quarter of 2019, the Company repurchased 817,000
shares for a total of 1.1 million for 2019. The average cost was
$9.33 per share for the quarter and $9.36 per share for the
year.
Conference Call
United Community Financial Corp. will host an earnings
conference call on Wednesday, July 24, 2019, at 10:00 a.m. ET, to
provide an overview of the Company's second 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 2nd Quarter 2019 Conference
Call on our corporate profile page to join the webcast.
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 33 retail banking offices (32 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 may be found on the Company’s web site:
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)
June 30,
June 30,
2019
2018
F/(U)
(Dollars in thousands)
Assets: Cash and deposits with banks
$
27,507
$
32,584
-15.6
%
Federal funds sold
27,055
34,393
-21.3
%
Total cash and cash equivalents
54,562
66,977
-18.5
%
Securities: Trading, at fair value
705
—
0.0
%
Available for sale, at fair value
319,009
247,630
28.8
%
Held to maturity (fair value of $0 and $78,194, respectively)
—
81,294
-100.0
%
Loans held for sale, at fair value
97,477
107,701
-9.5
%
Gross loans
2,249,808
2,121,186
6.1
%
Allowance for loan losses
(20,482
)
(21,405
)
-4.3
%
Net loans
2,229,326
2,099,781
6.2
%
Federal Home Loan Bank stock, at cost
14,059
19,324
-27.2
%
Premises and equipment, net
22,130
21,645
2.2
%
Accrued interest receivable
9,184
8,454
8.6
%
Real estate owned and other repossessed assets
955
877
8.9
%
Goodwill
20,221
20,221
0.0
%
Core deposit intangible
1,439
1,769
-18.7
%
Customer list intangible
2,123
1,980
7.2
%
Cash surrender value of life insurance
65,002
63,354
2.6
%
Other assets
32,924
29,551
11.4
%
Total assets
$
2,869,116
$
2,770,558
3.6
%
Liabilities and Shareholders' Equity
Liabilities: Deposits: Interest bearing
$
1,672,764
$
1,563,043
7.0
%
Noninterest bearing
398,340
383,082
4.0
%
Customer deposits
2,071,104
1,946,125
6.4
%
Brokered deposits
188,075
189,220
-0.6
%
Total deposits
2,259,179
2,135,345
5.8
%
Borrowed funds: Federal Home Loan Bank advances Long-term advances
—
48,927
-100.0
%
Short-term advances
233,000
248,000
-6.0
%
Total Federal Home Loan Bank advances
233,000
296,927
-21.5
%
Repurchase agreements and other
146
191
-23.6
%
Total borrowed funds
233,146
297,118
-21.5
%
Advance payments by borrowers for taxes and insurance
25,335
19,253
31.6
%
Accrued interest payable
1,378
964
42.9
%
Accrued expenses and other liabilities
32,524
16,394
98.4
%
Total liabilities
2,551,562
2,469,074
3.3
%
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 48,068,790 and 49,904,074 shares,
respectively, outstanding
177,319
177,311
0.0
%
Retained earnings
204,355
179,965
13.6
%
Accumulated other comprehensive loss
(15,180
)
(24,077
)
-37.0
%
Treasury stock, at cost, 6,070,120 and 4,234,836 shares,
respectively
(48,940
)
(31,715
)
54.3
%
Total shareholders’ equity
317,554
301,484
5.3
%
Total liabilities and shareholders’ equity
$
2,869,116
$
2,770,558
3.6
%
UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited)
For the Three Months Ended
For the Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2019
2019
Variance
F/(U)
2018
Variance
F/(U)
2019
2018
Variance
F/(U)
(Dollars in thousands, except per
share data)
Interest income Loans
$
26,373
$
25,856
$
517
2.0
%
$
23,275
$
3,098
13.3
%
$
52,229
$
46,034
$
6,195
13.5
%
Loans held for sale
991
1,007
(16
)
-1.6
%
1,012
(21
)
-2.1
%
1,998
1,870
128
6.8
%
Securities: Available for sale, nontaxable
236
307
(71
)
-23.1
%
356
(120
)
-33.7
%
544
744
(200
)
-26.9
%
Available for sale, taxable
1,611
1,263
348
27.6
%
1,193
418
35.0
%
2,874
2,408
466
19.4
%
Held to maturity, nontaxable
25
75
(50
)
-66.7
%
61
(36
)
-59.0
%
100
112
(12
)
-10.7
%
Held to maturity, taxable
118
379
(261
)
-68.9
%
398
(280
)
-70.4
%
497
820
(323
)
-39.4
%
Federal Home Loan Bank stock dividends
245
290
(45
)
-15.5
%
274
(29
)
-10.6
%
534
554
(20
)
-3.6
%
Other interest earning assets
200
224
(24
)
-10.7
%
92
108
117.4
%
424
169
255
150.9
%
Total interest income
29,799
29,401
398
1.4
%
26,661
3,138
11.8
%
59,200
52,711
6,489
12.3
%
Interest expense Deposits
7,197
6,574
(623
)
-9.5
%
3,790
(3,407
)
-89.9
%
13,771
6,887
(6,884
)
-100.0
%
Federal Home Loan Bank advances
559
641
82
12.8
%
1,576
1,017
64.5
%
1,200
2,996
1,796
59.9
%
Total interest expense
7,756
7,215
(541
)
-7.5
%
5,366
(2,390
)
-44.5
%
14,971
9,883
(5,088
)
-51.5
%
Net interest income
22,043
22,186
(143
)
-0.6
%
21,295
748
3.5
%
44,229
42,828
1,401
3.3
%
Taxable equivalent adjustment
62
84
(22
)
-26.2
%
90
(28
)
-31.1
%
146
187
(41
)
-21.9
%
Net interest income (FTE) (1)
22,105
22,270
(165
)
-0.7
%
21,385
720
3.4
%
44,375
43,015
1,360
3.2
%
Provision for loan losses
(51
)
61
112
183.6
%
(138
)
(87
)
63.0
%
10
269
259
96.3
%
Net interest income after provision for loan losses (FTE)
22,156
22,209
(53
)
-0.2
%
21,523
633
2.9
%
44,365
42,746
1,619
3.8
%
Non-interest income Insurance agency income
545
701
(156
)
-22.3
%
513
32
6.2
%
1,246
1,090
156
14.3
%
Brokerage income
409
370
39
10.5
%
300
109
36.3
%
779
572
207
36.2
%
Service fees and other charges: Deposit related fees
1,417
1,341
76
5.7
%
1,392
25
1.8
%
2,758
2,692
66
2.5
%
Mortgage servicing fees
881
873
8
0.9
%
813
68
8.4
%
1,754
1,625
129
7.9
%
Mortgage servicing rights valuation
(995
)
(499
)
(496
)
99.4
%
(20
)
(975
)
4875.0
%
(1,494
)
(11
)
1,483
-13481.8
%
Mortgage servicing rights amortization
(553
)
(446
)
(107
)
24.0
%
(542
)
(11
)
2.0
%
(999
)
(1,042
)
(43
)
4.1
%
Other service fees
21
38
(17
)
-44.7
%
61
(40
)
-65.6
%
59
99
(40
)
-40.4
%
Net gains (losses): Trading securities
39
64
(25
)
-39.1
%
—
39
0.0
%
103
Securities available for sale
148
144
4
2.8
%
94
54
57.4
%
292
233
59
25.3
%
Mortgage banking income
2,631
1,676
955
57.0
%
1,205
1,426
118.3
%
4,307
2,563
1,744
68.0
%
Real estate owned and other repossessed assets charges, net
(33
)
(31
)
(2
)
6.5
%
(113
)
80
-70.8
%
(64
)
(191
)
(127
)
66.5
%
Debit/credit card fees
1,221
934
287
30.7
%
1,177
44
3.7
%
2,156
2,126
30
1.4
%
Trust fee income
461
465
(4
)
-0.9
%
473
(12
)
-2.5
%
926
942
(16
)
-1.7
%
Bank owned life insurance
397
385
12
3.1
%
433
(36
)
-8.3
%
782
866
(84
)
-9.7
%
Other income
82
58
24
41.4
%
66
16
24.2
%
139
107
32
29.9
%
Total non-interest income
6,671
6,073
598
9.8
%
5,852
819
14.0
%
12,744
11,671
1,073
9.2
%
Non-interest expense Salaries and employee benefits
9,106
10,575
1,469
13.9
%
8,937
(169
)
-1.9
%
19,681
18,935
(746
)
-3.9
%
Occupancy
1,028
1,046
18
1.7
%
950
(78
)
-8.2
%
2,074
2,050
(24
)
-1.2
%
Equipment and data processing
2,208
2,292
84
3.7
%
2,372
164
6.9
%
4,501
4,526
25
0.6
%
Financial institutions tax
509
509
—
0.0
%
495
(14
)
-2.8
%
1,018
991
(27
)
-2.7
%
Advertising
465
390
(75
)
-19.2
%
290
(175
)
-60.3
%
854
525
(329
)
-62.7
%
Amortization of intangible assets
127
127
—
0.0
%
132
5
3.8
%
255
245
(10
)
-4.1
%
FDIC insurance premiums
297
331
34
10.3
%
288
(9
)
-3.1
%
628
578
(50
)
-8.7
%
Other insurance premiums
76
76
—
0.0
%
109
33
30.3
%
151
218
67
30.7
%
Professional fees: Legal fees
214
60
(154
)
-256.7
%
147
(67
)
-45.6
%
274
446
172
38.6
%
Other professional fees
562
587
25
4.3
%
499
(63
)
-12.6
%
1,150
890
(260
)
-29.2
%
Supervisory fees
34
34
—
0.0
%
42
8
19.0
%
68
84
Real estate owned and other repossessed asset expenses
17
39
22
56.4
%
34
17
50.0
%
56
70
14
20.0
%
Other expenses
1,333
1,608
275
17.1
%
1,235
(98
)
-7.9
%
2,940
2,572
(368
)
-14.3
%
Total non-interest expenses
15,976
17,674
1,698
9.6
%
15,530
(446
)
-2.9
%
33,650
32,130
(1,520
)
-4.7
%
Income before income taxes
12,851
10,608
2,243
21.1
%
11,845
1,006
8.5
%
23,459
22,287
1,172
5.3
%
Taxable equivalent adjustment
62
84
22
26.2
%
90
28
31.1
%
146
187
41
21.9
%
Income tax expense
2,303
1,868
(435
)
-23.3
%
2,214
(89
)
-4.0
%
4,171
4,003
(168
)
-4.2
%
Net income
$
10,486
$
8,656
$
1,830
21.1
%
$
9,541
$
945
9.9
%
$
19,142
$
18,097
$
1,045
5.8
%
Earnings per common share: Basic
$
0.216
$
0.177
$
0.039
22.0
%
$
0.191
$
0.025
13.1
%
$
0.393
$
0.363
$
0.030
8.3
%
Diluted
0.215
0.176
0.039
22.2
%
0.190
0.025
13.2
%
0.391
0.361
0.030
8.3
%
(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
June 30, 2019
March 31, 2019
June 30, 2018
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)
$
2,207,554
$
26,382
4.79
%
$
2,191,746
$
25,864
4.75
%
$
2,075,307
$
23,275
4.49
%
Loans held for sale
84,210
991
4.71
%
84,932
1,007
4.74
%
91,836
1,012
4.42
%
Total loans, net
2,291,764
27,373
4.79
%
2,276,678
26,871
4.75
%
2,167,143
24,287
4.48
%
Securities: Available for sale-taxable
243,895
1,611
2.64
%
200,088
1,263
2.52
%
207,908
1,193
2.30
%
Available for sale-nontaxable (2)
33,068
283
3.42
%
43,468
365
3.36
%
50,710
429
3.38
%
Held to maturity-taxable
31,498
118
1.50
%
63,674
379
2.38
%
70,406
398
2.26
%
Held to maturity-nontaxable (2)
6,406
31
1.94
%
13,047
93
2.85
%
11,265
78
2.77
%
Total securities
314,867
2,043
2.60
%
320,277
2,100
2.62
%
340,289
2,098
2.47
%
Federal Home Loan Bank stock
15,408
245
6.36
%
18,010
290
6.43
%
19,324
274
5.67
%
Other interest earning assets
37,240
200
2.15
%
34,986
224
2.59
%
23,831
92
1.55
%
Total interest earning assets
2,659,279
29,861
4.50
%
2,649,951
29,485
4.48
%
2,550,587
26,751
4.20
%
Non-interest earning assets
181,268
176,913
174,270
Total assets
$
2,840,547
$
2,826,864
$
2,724,857
Interest bearing liabilities: Deposits: Checking accounts
$
734,458
2,138
1.16
%
$
650,268
1,440
0.89
%
$
638,910
948
0.60
%
Savings accounts
293,784
26
0.04
%
297,410
29
0.04
%
307,250
26
0.03
%
Certificates of deposit Customer certificates of deposit
645,115
3,231
2.00
%
618,752
2,824
1.83
%
608,079
2,143
1.41
%
Brokered certificates of deposit
299,747
1,802
2.40
%
397,137
2,281
2.30
%
164,400
673
1.64
%
Total certificates of deposit
944,862
5,033
2.13
%
1,015,889
5,105
2.01
%
772,479
2,816
1.46
%
Total interest bearing deposits
1,973,104
7,197
1.46
%
1,963,567
6,574
1.34
%
1,718,639
3,790
0.88
%
Federal Home Loan Bank advances Long-term advances
—
—
0.00
%
—
—
0.00
%
48,799
493
4.05
%
Short-term advances
89,879
559
2.49
%
103,333
641
2.48
%
236,747
1,083
1.83
%
Total Federal Home Loan Bank advances
89,879
559
2.49
%
103,333
641
2.48
%
285,546
1,576
2.21
%
Repurchase agreements and other
142
—
0.00
%
233
—
0.00
%
195
—
0.00
%
Total borrowed funds
90,021
559
2.49
%
103,566
641
2.48
%
285,741
1,576
2.21
%
Total interest bearing liabilities
$
2,063,125
7,756
1.50
%
$
2,067,133
7,215
1.40
%
$
2,004,380
5,366
1.07
%
Non-interest bearing liabilities Total noninterest bearing deposits
405,535
400,874
376,905
Other noninterest bearing liabilities
54,622
43,851
39,839
Total noninterest bearing liabilities
460,157
444,725
416,744
Total liabilities
$
2,523,282
$
2,511,858
$
2,421,124
Shareholders’ equity
317,265
315,006
303,733
Total liabilities and equity
$
2,840,547
$
2,826,864
$
2,724,857
Net interest income and interest rate spread
$
22,105
3.00
%
$
22,270
3.08
%
$
21,385
3.12
%
Net interest margin
3.33
%
3.38
%
3.36
%
Average interest earning assets to average interest bearing
liabilities
128.90
%
128.19
%
127.25
%
Interest bearing deposits Checking accounts
$
734,458
$
2,138
1.16
%
$
650,268
$
1,440
0.89
%
$
638,910
$
948
0.60
%
Savings accounts
293,784
26
0.04
%
297,410
29
0.04
%
307,250
26
0.03
%
Customer certificates of deposit
645,115
3,231
2.00
%
618,752
2,824
1.83
%
608,079
2,143
1.41
%
Total customer deposits
1,673,357
5,395
1.29
%
1,566,430
4,293
1.10
%
1,554,239
3,117
0.80
%
Brokered certificates of deposit
299,747
1,802
2.40
%
397,137
2,281
2.30
%
164,400
673
1.64
%
Total interest bearing deposits
1,973,104
7,197
1.46
%
1,963,567
6,574
1.34
%
1,718,639
3,790
0.88
%
Noninterest bearing deposits
405,535
—
0.00
%
400,874
—
0.00
%
376,905
—
0.00
%
Total average deposits and cost of deposits
$
2,378,639
$
7,197
1.21
%
$
2,364,441
$
6,574
1.11
%
$
2,095,544
$
3,790
0.72
%
Other interest bearing liabilities Federal Home Loan Bank advances
Long term advances
$
—
$
—
0.00
%
$
—
$
—
0.00
%
$
48,799
$
493
4.05
%
Short term advances
89,879
559
2.49
%
103,333
641
2.48
%
236,747
1,083
1.83
%
Total Federal Home Loan Bank advances
89,879
559
2.49
%
103,333
641
2.48
%
285,546
1,576
2.21
%
Repurchase agreements and other
142
—
0.00
%
233
—
0.00
%
195
—
0.00
%
Total borrowed funds
90,021
559
2.49
%
103,566
641
2.48
%
285,741
1,576
2.21
%
Total average deposits and other interest bearing liabilities and
total cost of funds
$
2,468,660
$
7,756
1.26
%
$
2,468,007
$
7,215
1.17
%
$
2,381,285
$
5,366
0.90
%
Customer deposits interest bearing and noninterest
bearing
$
2,078,892
$
5,395
1.04
%
$
1,967,304
$
4,293
0.87
%
$
1,931,144
$
3,117
0.65
%
Brokered deposits
299,747
1,802
2.40
%
397,137
2,281
2.30
%
164,400
673
1.64
%
Total borrowings
90,021
559
2.49
%
103,566
641
2.48
%
285,741
1,576
2.21
%
Cost of funds
2,468,660
7,756
1.26
%
2,468,007
7,215
1.17
%
2,381,285
5,366
0.90
%
(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
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands, except per
share data)
Financial Data Total assets
$
2,869,116
$
2,852,041
$
2,811,357
$
2,789,183
$
2,770,558
Total loans, net
2,229,326
2,215,549
2,176,842
2,148,942
2,099,781
Total securities
319,714
313,847
319,498
320,806
328,924
Total deposits
2,259,179
2,289,803
2,213,220
2,352,476
2,135,345
Average interest-bearing deposits
1,973,104
1,963,567
1,936,539
1,884,617
1,718,639
Average noninterest-bearing deposits
405,535
400,874
395,649
382,044
376,905
Total shareholders' equity
317,554
314,709
309,334
306,043
301,484
Net interest income
22,043
22,186
23,494
21,623
21,295
Net interest income (FTE) (1)
22,105
22,270
23,605
21,707
21,385
Provision for loan losses
(51
)
61
178
251
(138
)
Noninterest income
6,671
6,073
5,585
6,146
5,852
Noninterest expense
15,976
17,674
17,178
15,772
15,530
Income tax expense
2,303
1,868
2,172
2,217
2,214
Net income
10,486
8,656
9,551
9,529
9,541
Share Data Basic earnings per common share
$
0.216
$
0.177
$
0.192
$
0.191
$
0.191
Diluted earnings per common share
0.215
0.176
0.191
0.190
0.190
Book value per common share
6.61
6.44
6.30
6.13
6.04
Tangible book value per common share
6.11
5.95
5.81
5.65
5.56
Market value per common share
9.57
9.35
8.85
9.67
10.99
Common shares outstanding at end of period
48,069
48,853
49,129
49,923
49,904
Weighted average shares outstanding--basic
48,463
48,854
49,445
49,683
49,694
Weighted average shares outstanding--diluted
48,644
49,113
49,695
49,947
49,944
Key Ratios Return on average assets (2)
1.48
%
1.22
%
1.36
%
1.37
%
1.40
%
Return on average equity (3)
13.22
%
10.99
%
12.15
%
12.25
%
12.56
%
Return on tangible equity (4)
14.30
%
11.90
%
13.16
%
13.28
%
13.65
%
Net interest margin
3.33
%
3.38
%
3.58
%
3.33
%
3.36
%
Efficiency ratio
55.37
%
62.29
%
54.79
%
57.30
%
57.75
%
Nonperforming loans to net loans, end of period
0.58
%
0.32
%
0.30
%
0.42
%
0.51
%
Nonperforming assets to total assets, end of period
0.48
%
0.34
%
0.27
%
0.36
%
0.57
%
Allowance for loan loss as a percent of loans, end of period
0.91
%
0.91
%
0.93
%
0.98
%
1.01
%
Delinquent loans to total net loans, end of period
0.58
%
0.41
%
0.50
%
0.69
%
0.67
%
______________________________
(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
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands)
Loan Portfolio Composition Commercial loans
Multi-family
$
154,630
$
163,243
$
134,143
$
139,938
$
141,004
Owner/nonowner occupied commercial real estate
414,780
412,550
409,979
408,938
396,624
Land
16,955
17,090
16,830
16,129
16,887
Construction
138,043
135,048
141,686
132,961
127,691
Commercial and industrial
249,898
246,740
240,293
233,801
218,611
Total
974,306
974,671
942,931
931,767
900,817
Residential mortgage loans Real estate
942,698
934,586
927,255
909,626
888,583
Construction
46,196
45,102
43,435
39,396
40,623
Total
988,894
979,688
970,690
949,022
929,206
Consumer loans Consumer
279,531
274,998
277,041
283,108
284,909
Total
279,531
274,998
277,041
283,108
284,909
Total loans
2,242,731
2,229,357
2,190,662
2,163,897
2,114,932
Less: Allowance for loan losses
20,482
20,446
20,443
21,332
21,405
Deferred loan costs, net
(7,077
)
(6,638
)
(6,623
)
(6,377
)
(6,254
)
Total
13,405
13,808
13,820
14,955
15,151
Total loans, net
2,229,326
2,215,549
2,176,842
2,148,942
2,099,781
Loans held for sale, net
97,477
77,676
91,472
95,235
107,701
Total loans
$
2,326,803
$
2,293,225
$
2,268,314
$
2,244,177
$
2,207,482
At or for the quarters ended
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands)
Deposit Portfolio Composition Checking accounts
Interest bearing checking accounts
$
131,725
$
146,244
$
146,977
$
140,722
$
138,812
Non-interest bearing checking accounts
398,340
404,644
394,208
383,535
383,082
Total checking accounts
530,065
550,888
541,185
524,257
521,894
Savings accounts
290,354
297,186
298,087
300,007
306,283
Money market accounts
606,661
550,049
466,167
489,668
502,560
Total non-time deposits
1,427,080
1,398,123
1,305,439
1,313,932
1,330,737
Certificates of deposit
644,024
630,174
616,826
622,807
615,388
Total customer deposits
2,071,104
2,028,297
1,922,265
1,936,739
1,946,125
Brokered deposits
188,075
261,506
290,955
415,737
189,220
Total certificates of deposit
832,099
891,680
907,781
1,038,544
804,608
Total deposits
$
2,259,179
$
2,289,803
$
2,213,220
$
2,352,476
$
2,135,345
UNITED COMMUNITY FINANCIAL CORP. SELECTED
FINANCIAL HIGHLIGHTS (Unaudited)
At or for the quarters ended
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands)
Allowance For Loan Losses Beginning balance
$
20,446
$
20,443
$
21,332
$
21,405
$
21,610
Provision
(51
)
61
178
251
(138
)
Net recoveries (chargeoffs)
87
(58
)
(1,067
)
(324
)
(67
)
Ending balance
$
20,482
$
20,446
$
20,443
$
21,332
$
21,405
At or for the quarters ended
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands)
Net Recoveries (Charge-offs) Commercial loans
Multi-family
$
4
$
113
$
(99
)
$
4
$
9
Owner/nonowner occupied commercial real estate
165
28
38
12
29
Land
—
—
—
150
—
Construction
—
1
—
11
10
Commercial and industrial
1
(84
)
(765
)
(275
)
(72
)
Total
170
58
(826
)
(98
)
(24
)
Residential mortgage loans Real estate
(53
)
78
(131
)
(141
)
(14
)
Construction
—
—
—
—
—
Total
(53
)
78
(131
)
(141
)
(14
)
Consumer loans Consumer
(30
)
(194
)
(110
)
(85
)
(29
)
Total
(30
)
(194
)
(110
)
(85
)
(29
)
Total net chargeoffs
$
87
$
(58
)
$
(1,067
)
$
(324
)
$
(67
)
At or for the quarters ended
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands)
Nonperforming Loans Commercial loans Multi-family
$
—
$
—
$
171
$
275
$
275
Owner/nonowner occupied commercial real estate
2,688
1,565
13
1,101
1,111
Land
—
—
—
—
—
Construction
—
—
—
—
—
Commercial and industrial
4,678
456
531
1,489
1,475
Total
7,366
2,021
715
2,865
2,861
Residential mortgage loans Real estate
4,365
3,883
4,170
4,426
6,146
Construction
—
—
—
—
—
Total
4,365
3,883
4,170
4,426
6,146
Consumer loans Consumer
1,141
1,203
1,654
1,770
1,783
Total
1,141
1,203
1,654
1,770
1,783
Total nonperforming loans
$
12,872
$
7,107
$
6,539
$
9,061
$
10,790
Total Nonperforming Loans and Nonperforming
Assets Past due 90 days and on nonaccrual status
$
5,392
$
4,351
$
5,732
$
8,200
$
8,395
Past due 90 days and still accruing
—
—
18
—
—
Past due 90 days
5,392
4,351
5,750
8,200
8,395
Past due less than 90 days and on nonaccrual
7,480
2,756
789
861
2,395
Total nonperforming loans
12,872
7,107
6,539
9,061
10,790
Other real estate owned
871
1,143
1,049
907
802
Other classified assets
—
1,479
—
—
4,050
Repossessed assets
84
37
39
—
75
Total nonperforming assets
$
13,827
$
9,766
$
7,627
$
9,968
$
15,717
UNITED COMMUNITY FINANCIAL CORP. NON-GAAP
DISCLOSURE RECONCILIATION (Unaudited)
Reconciliation of Average Shareholders' Equity to Average
Tangible Equity:
At or for the quarters ended
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands, except per
share data)
Average shareholders equity
$
317,265
$
315,006
$
314,464
$
311,058
$
303,733
Average intangible assets
23,867
23,994
24,123
24,144
24,063
Average tangible equity
$
293,398
$
291,012
$
290,341
$
286,914
$
279,670
Net income
$
10,486
$
8,656
$
9,551
$
9,529
$
9,541
Return on tangible equity
14.30
%
11.90
%
13.16
%
13.28
%
13.65
%
Reconciliation of Fully Taxable Equivalent Net Interest
Income to Net Interest Income:
For the quarters ended
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands)
Interest income
$
29,799
$
29,401
$
30,170
$
27,690
$
26,661
Fully taxable equivalent adjustment
62
84
111
84
90
Fully taxable equivalent interest income
29,861
29,485
30,281
27,774
26,751
Interest expense
7,756
7,215
6,676
6,067
5,366
Fully taxable net interest income
$
22,105
$
22,270
$
23,605
$
21,707
$
21,385
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
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
(Dollars in thousands, except per
share data)
Total shareholders' equity
$
317,554
$
314,709
$
309,334
$
306,043
$
301,484
Goodwill
20,221
20,221
20,221
20,221
20,221
Customer list intangible
2,123
2,169
2,214
2,259
1,980
Core deposit intangible
1,439
1,521
1,603
1,686
1,769
Total common shares outstanding
48,068,790
48,852,688
49,128,875
49,922,514
49,904,074
Tangible book value, as reported
$
6.11
$
5.95
$
5.81
$
5.65
$
5.56
Reconciliation of Net Interest Margin,
Non-Interest Income and Non-Interest Expense:
At the quarters ended
At the quarters ended
June 30,
2019
June 30,
2018
March 31,
2019
March 31,
2018
Net interest income (FTE)
$
22,105
$
21,385
$
22,270
$
21,630
less: impact of loan payoff
-
(588
)
less: purchase accounting
(271
)
(463
)
(360
)
(545
)
Adjusted net interest income
21,834
20,922
21,910
20,497
Average earning assets
2,659,279
2,550,587
2,649,951
2,496,673
Net interest margin excluding purchase accounting
3.29
%
3.28
%
3.32
%
3.30
%
Non-interest income
$
6,671
$
5,852
$
6,073
$
5,819
less: mortgage servicing valuation adjustment
995
20
499
(9
)
Non-interest income, adjusted
7,666
5,872
6,572
5,810
Non-interest income % increase
30.6
%
13.1
%
Non-interest expense
$
15,976
$
15,530
$
17,674
$
16,600
Non-interest expense % increase
2.9
%
2.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190723005893/en/
Media Contact: Kathy Bushway Senior Vice President,
Marketing Home Savings Bank (330) 742-0638
kbushway@homesavings.com
Investor Contact: Gary M. Small President and Chief
Executive Officer United Community Financial Corp. (330)
742-0472
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