Fourth quarter 2019 highlights compared with
the fourth quarter of 2018:
- Net quarterly income of $9.8 million (or $11.2 million,
excluding merger related costs, up 17.0%)
- Diluted EPS of $0.20 (or $0.23, excluding merger related costs,
up 20.9%)
- Noninterest income $6.8 million, up 22.6%
- Noninterest expense $16.8 million (or $15.4 million, excluding
merger costs, down 10.2%)
- ROA of 1.36% (or 1.55%, excluding merger related costs, versus
1.36%)
- ROE of 12.03% (or 13.68%, excluding merger related costs,
versus 12.15%)
- Efficiency ratio improved to 53.6% compared to 54.8%
Full year 2019 highlights compared with 2018:
- Net income of $39.5 million (or $40.8 million, excluding merger
related costs, up 9.8%)
- Diluted EPS of $0.81 (or $0.84, excluding merger related costs,
up 13.1%)
- Noninterest income $26.6 million, up 13.7%
- Noninterest expense $65.4 million (or $64.1 million, excluding
merger costs, down 1.5%)
- ROA of 1.38% (or 1.43%, excluding merger related costs, versus
1.35%)
- ROE of 12.34% (or 12.77%, excluding merger related costs,
versus 12.10%)
- Efficiency ratio improved to 55.8% compared to 57.7%
- Average total loan growth 5.4%
- Average total customer deposit growth 7.5%
United Community Financial Corp. (Company) (NASDAQ: UCFC),
parent company of Home Savings Bank (Home Savings), announced today
that net income for the quarter ended December 31, 2019, was $9.8
million, up 2.8% from the $9.6 million reported for the quarter
ended December 31, 2018. Fourth quarter diluted earnings per share
increased 6.3% to $0.20 from $0.19 per share reported at the same
time last year. These results included $1.4 million of merger costs
related to the previously announced merger with First Defiance
Financial Corp. Excluding these acquisition costs, the Company’s
adjusted net income (non-GAAP) was $11.2 million, up 17.0% and
diluted earnings per share were $0.23 per share, up 20.9% for the
quarter ending December 31, 2019 when compared to the same quarter
last year.
Net income for the twelve months ended December 31, 2019 totaled
$39.5 million, up 6.2% from the $37.2 million reported for the
twelve months ended December 31, 2018. For the same time period,
diluted earnings per share increased to $0.81, up 9.3% from the
$0.74 per share previously reported in the prior year. Excluding
the $1.4 million in merger costs (after-tax), adjusted net income
(non-GAAP) for the twelve months ended December 31, 2019 was $40.8
million up 9.8%, or $0.84 per diluted share or 13.1% when compared
to the prior year.
Gary M. Small, President and Chief Executive Officer of the
Company, commented, “The year 2019 proved to be a challenging yet
gratifying period for Home Savings. Our team took the steps
necessary to overcome the difficulties presented by a tumultuous
year for net interest margin management and a very active loan
prepayment environment.”
Small continued, “The organization set record levels of
commercial and residential new business production, delivered
exceptional fee income growth across all business lines, and drove
strong deposit growth. As a result we posted excellent financial
results … our best earnings on record.”
Concluding, “I am very proud of the efforts of all of our
associates. Thanks to their hard work, we remain right on track
regarding our pending merger with First Defiance and we look
forward to an exciting and successful 2020 with our new
partners.”
Strong Loan and Deposit Growth
Total average loans grew $119.2 million (including loans held
for sale), or 5.4%, during the last twelve months and $90.6
million, or 4.0% when compared to the same quarter last year. At
December 31, 2019, total net loans (including loans held for sale)
aggregated $2.4 billion.
The increase in total loans for the period was driven by an
increase in commercial loans, which grew $51.4 million, or 5.5%,
over the last twelve months. Mortgage loans (including loans held
for sale) increased $14.7 million, or 1.4%, over the previous
twelve months. Consumer loan growth amounted to $9.2 million, or
3.4%, for the same time period.
Average customer deposits (which exclude brokered certificates
of deposit) increased $142.7 million, or 7.5%, from December 31,
2018. During that same time period total business deposits
increased $69.1 million, or 26.6%. Average non-interest bearing
accounts increased $43.9 million or 10.4% while average
non-interest bearing business deposits increased $27.1 million or
13.4% during the same time period.
Net Interest Income and Margin
Net interest income totaled $21.8 million on a fully taxable
equivalent (FTE) basis for the quarter ended December 31, 2019
compared to $23.6 million for the quarter ended December 31, 2018.
The fourth quarter of 2018 included the impact of the favorable
resolution of an impaired loan that added approximately $1.1
million to loan income during that quarter.
The net interest margin on an FTE basis was 3.22% for the fourth
quarter of 2019 compared to 3.58% in the fourth quarter of 2018.
Excluding the 16 basis point impact of the aforementioned
resolution of an impaired loan, the net interest margin declined 20
basis points. Of this, 5 basis points were from reduced purchase
accounting accretion, while the remainder of the decline reflects
the near term impact of multiple rate reductions by the Federal
Reserve in 2019.
For the full year 2019, the net interest margin was 3.28%
compared to 3.43% for the full year 2018. Excluding the income
impact of the loan resolution, calendar year 2018 net interest
margin would have been 3.39%. Of the 11 basis point reduction 3
basis points were from reduced purchase accounting accretion, and
the remaining 8 basis points of the decline can be attributed to
the fall in interest rates in 2019.
Asset Quality Remains Strong
Asset quality remained strong during the fourth quarter despite
movement in nonperforming loans. At December 31, 2019,
nonperforming loans aggregated $12.9 million compared to $6.5
million at the end of the same quarter in the previous year. The
Company’s level of nonperforming loans increased primarily as a
result of a single credit. The allowance for loan losses at the end
of the quarter, as a percent of nonperforming loans was 149.6%. The
allowance for loan losses as a percent of loans totaled 0.86% at
December 31, 2019 compared to 0.93% the same quarter last year.
The Company recognized a negative provision for loan losses of
$422,000 for the fourth quarter of 2019, compared to a provision of
$178,000 in the fourth quarter of 2018. The decline in provision is
a result of decreased loan balances in the fourth quarter of 2019,
quarterly realignment of factors and the resolution of one credit
with a specific reserve. For the year, the provision totaled
$290,000 compared to $699,000 the previous year. Net charge offs to
average loans were 6.6 basis points for the year ended December 31,
2019.
Non-Interest Income
Non-interest income increased 22.6%, or $1.3 million to $6.9
million for the fourth quarter of 2019 compared to $5.6 million for
the same quarter last year. The primary drivers for the increase
are mortgage banking income (gain on sale) of $686,000 and an
increase of $356,000 in the value of mortgage servicing rights
along with a $260,000 improvement in security sales. These gains
were offset by an increase in the amortization of mortgage
servicing rights of $427,000.
The increase in mortgage banking income was primarily driven by
increased saleable volumes when comparing the fourth quarter of
2019 to the fourth quarter of 2018. The drop in interest rates
resulting in increased refinance activity is the primary driver for
the increased volume.
For the full year 2019, non-interest income increased 13.7%, or
$3.2 million to $26.6 million compared to $23.4 million for
calendar year 2018. The primary reason for this is an increase in
mortgage banking income (gain on sale) of $3.5 million along with
increased mortgage servicing fees of $289,000. Also adding to the
increase was $578,000 from improvement in security gains, along
with an 11.6% increase in insurance income and 9.9% increase in
investment management fees. This was offset by an increase in
mortgage serving rights amortization of $608,000 and a negative
mortgage servicing rights valuation adjustment of $1,457,000. The
increase in mortgage banking income was primarily driven by an
increase in saleable loan volumes of 24.1% and in increase in the
gain on sale margin of 43 basis points.
Non-Interest Expense
Non-interest expense was $15.4 million (excluding merger costs)
for the fourth quarter of 2019 compared to $17.2 million for the
similar quarter last year, a decrease of $1.8 million, or 10.2%.
The fourth quarter of 2018 includes a prepayment penalty of
$937,000 for the early extinguishment of Federal Home Loan Bank
debt. Excluding this expense non-interest expense was down 4.8%.
Non-interest expense for the year was $64.1 million (excluding
merger costs). When compared to the prior year of $65.1 million,
expenses were down 1.5%. When excluding the Federal Home Loan Bank
prepayment penalty expenses year over year remained flat. The
Company’s efficiency ratio improved to 55.8% for the year versus
57.7% for the same time period a year ago.
Equity
During 2019, the Company repurchased 1,145,434 of its common
shares in the open market at an average price of $9.36. Tangible
book value per common share at December 31, 2019 was $6.41 compared
to $5.18 at December 31, 2018.
Dividend to be paid
Subject to the closing of the merger of United Community with
and into First Defiance Financial Corp., which was announced on
September 9, 2019, and is expected to close on January 31, 2020, it
is anticipated that a dividend will be paid to all First Defiance
shareholders, including UCFC’s shareholders whose shares will be
converted to First Defiance common shares upon the closing of the
merger. First Defiance declared a dividend of $0.22 per share
payable on February 21, to shareholders of record as of February
14. This action would be the equivalent of UCFC paying a dividend
of $0.08173 on UCFC shares.
Other
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, competition, and the
ability to close the merger of the Company with and into First
Defiance Financial Corp. 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,
2019
2018
F/(U)
(Dollars in thousands)
Assets:
Cash and deposits with banks
$
30,218
$
34,380
-12.1
%
Federal funds sold
21,635
26,605
-18.7
%
Total cash and cash equivalents
51,853
60,985
-15.0
%
Securities: Trading, at fair value
516
364
41.8
%
Available for sale, at fair value
306,786
241,643
27.0
%
Held to maturity (fair value of $0 and $75,075, respectively)
—
77,491
-100.0
%
Loans held for sale, at fair value
127,839
91,472
39.8
%
Gross loans
2,237,224
2,197,285
1.8
%
Allowance for loan losses
(19,281
)
(20,443
)
-5.7
%
Net loans
2,217,943
2,176,842
1.9
%
Federal Home Loan Bank stock, at cost
13,639
19,144
-28.8
%
Premises and equipment, net
22,337
21,930
1.9
%
Accrued interest receivable
8,660
9,080
-4.6
%
Real estate owned and other repossessed assets
816
1,088
-25.0
%
Goodwill
20,221
20,221
0.0
%
Core deposit intangible
1,275
1,603
-20.5
%
Customer list intangible
2,032
2,214
-8.2
%
Cash surrender value of life insurance
65,798
64,220
2.5
%
Other assets
28,598
23,060
24.0
%
Total assets
$
2,868,313
$
2,811,357
2.0
%
Liabilities and Shareholders'
Equity Liabilities:
Deposits: Interest bearing
$
1,665,042
$
1,528,057
9.0
%
Noninterest bearing
430,040
394,208
9.1
%
Customer deposits
2,095,082
1,922,265
9.0
%
Brokered deposits
192,027
290,955
-34.0
%
Total deposits
2,287,109
2,213,220
3.3
%
Borrowed funds: Federal Home Loan Bank
advances Short-term advances
191,000
243,000
-21.4
%
Total Federal Home Loan Bank advances
191,000
243,000
-21.4
%
Repurchase agreements and other
—
224
-100.0
%
Total borrowed funds
191,000
243,224
-21.5
%
Advance payments by borrowers for taxes and insurance
31,650
27,192
16.4
%
Accrued interest payable
656
1,279
-48.7
%
Accrued expenses and other liabilities
25,789
17,108
50.7
%
Total liabilities
2,536,204
2,502,023
1.4
%
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 48,104,055 and 49,128,875 shares,
respectively, outstanding
177,392
177,492
-0.1
%
Retained earnings
216,868
192,062
12.9
%
Accumulated other comprehensive loss
(13,461
)
(21,436
)
-37.2
%
Treasury stock, at cost, 6,034,855 and 5,010,035 shares,
respectively
(48,690
)
(38,784
)
25.5
%
Total shareholders’ equity
332,109
309,334
7.4
%
Total liabilities and shareholders’ equity
$
2,868,313
$
2,811,357
2.0
%
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended
For the Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2019
2019
Variance
F/(U)
2018
Variance
F/(U)
2019
2018
Variance
F/(U)
(Dollars in thousands, except per share data)
Interest
income Loans
$
25,501
$
26,037
$
(536
)
-2.1
%
$
26,587
$
(1,086
)
-4.1
%
$
103,768
$
96,653
$
7,115
7.4
%
Loans held for sale
1,219
1,067
152
14.2
%
1,184
35
3.0
%
4,284
4,318
(34
)
-0.8
%
Securities: Available for sale, nontaxable
234
235
(1
)
-0.4
%
334
(100
)
-29.9
%
1,012
1,412
(400
)
-28.3
%
Available for sale, taxable
1,781
1,828
(47
)
-2.6
%
1,148
633
55.1
%
6,483
4,732
1,751
37.0
%
Held to maturity, nontaxable
—
—
—
0.0
%
69
(69
)
-100.0
%
99
250
(151
)
-60.4
%
Held to maturity, taxable
—
—
—
0.0
%
380
(380
)
-100.0
%
497
1,574
(1,077
)
-68.4
%
Federal Home Loan Bank stock dividends
140
173
(33
)
-19.1
%
290
(150
)
-51.7
%
847
1,133
(286
)
-25.2
%
Other interest earning assets
125
203
(78
)
-38.4
%
178
(53
)
-29.8
%
752
500
252
50.4
%
Total interest income
29,000
29,543
(543
)
-1.8
%
30,170
(1,170
)
-3.9
%
117,742
110,572
7,170
6.5
%
Interest expense Deposits
6,095
6,856
(761
)
11.1
%
5,866
229
-3.9
%
26,722
17,796
8,926
-50.2
%
Federal Home Loan Bank advances
1,157
1,103
54
-4.9
%
810
347
-42.8
%
3,460
4,830
(1,370
)
28.4
%
Repurchase agreements and other
—
—
—
0.0
%
—
—
0.0
%
—
1
1
100.0
%
Total interest expense
7,252
7,959
707
-8.9
%
6,676
(576
)
8.6
%
30,182
22,627
(7,555
)
33.4
%
Net interest income
21,748
21,584
164
0.8
%
23,494
(1,746
)
-7.4
%
87,560
87,945
(385
)
-0.4
%
Taxable equivalent adjustment
51
46
5
10.9
%
111
(60
)
-54.1
%
244
382
(138
)
-36.1
%
Net interest income (FTE) (1)
21,799
21,630
169
0.8
%
23,605
(1,806
)
-7.7
%
87,804
88,327
(523
)
-0.6
%
Provision for loan losses
(422
)
701
1,123
160.2
%
178
600
337.1
%
290
699
409
58.5
%
Net interest income after provision for loan losses (FTE)
22,221
20,929
1,292
6.2
%
23,427
(1,206
)
-5.1
%
87,514
87,628
(114
)
-0.1
%
Non-interest income Insurance agency income
631
575
56
9.7
%
562
69
12.3
%
2,452
2,197
255
11.6
%
Brokerage income
383
480
(97
)
-20.2
%
305
78
25.6
%
1,642
1,216
426
35.0
%
Service fees and other charges: Deposit related fees
1,515
1,490
25
1.7
%
1,521
(6
)
-0.4
%
5,762
5,706
56
1.0
%
Mortgage servicing fees
931
908
23
2.5
%
858
73
8.5
%
3,593
3,304
289
8.7
%
Mortgage servicing rights valuation
312
(336
)
648
-192.9
%
(44
)
356
-809.1
%
(1,518
)
(61
)
(1,457
)
-2388.5
%
Mortgage servicing rights amortization
(857
)
(702
)
(155
)
22.1
%
(430
)
(427
)
99.3
%
(2,557
)
(1,949
)
(608
)
-31.2
%
Other service fees
21
21
—
0.0
%
36
(15
)
-41.7
%
101
161
(60
)
-37.3
%
Net gains (losses): Trading securities
68
29
39
134.5
%
669
(601
)
-89.8
%
200
669
(469
)
-70.1
%
Securities available for sale
—
128
(128
)
-100.0
%
(861
)
861
-100.0
%
420
(627
)
1,047
-167.0
%
Mortgage banking income
1,804
2,508
(704
)
-28.1
%
1,118
686
61.4
%
8,619
5,090
3,529
69.3
%
Real estate owned and other repossessed assets charges, net
4
(55
)
59
-107.3
%
(24
)
28
-116.7
%
(115
)
(260
)
145
55.8
%
Debit/credit card fees
1,039
1,057
(18
)
-1.7
%
1,033
6
0.6
%
4,251
4,158
93
2.2
%
Trust fee income
428
434
(6
)
-1.4
%
480
(52
)
-10.8
%
1,788
1,905
(117
)
-6.1
%
Bank owned life insurance
397
398
(1
)
-0.3
%
431
(34
)
-7.9
%
1,578
1,732
(154
)
-8.9
%
Other income
171
80
91
113.8
%
(69
)
240
-347.8
%
391
161
230
142.9
%
Total non-interest income
6,847
7,015
(168
)
-2.4
%
5,585
1,262
22.6
%
26,607
23,402
3,205
13.7
%
Non-interest expense Salaries and employee benefits
9,278
8,831
447
-5.1
%
9,029
249
-2.8
%
37,790
37,071
719
-1.9
%
Occupancy
1,051
1,024
27
-2.6
%
1,023
28
-2.7
%
4,146
4,167
(21
)
0.5
%
Equipment and data processing
2,251
2,307
(56
)
2.4
%
2,122
129
-6.1
%
9,055
8,679
376
-4.3
%
Financial institutions tax
468
509
(41
)
8.1
%
464
4
-0.9
%
1,995
1,950
45
-2.3
%
Advertising
278
407
(129
)
31.7
%
414
(136
)
32.9
%
1,539
1,278
261
-20.4
%
Amortization of intangible assets
127
127
—
0.0
%
128
(1
)
0.8
%
510
501
9
-1.8
%
FDIC insurance premiums
211
(288
)
499
173.3
%
398
(187
)
47.0
%
551
1,270
(719
)
56.6
%
Other insurance premiums
74
74
—
0.0
%
70
4
-5.7
%
300
373
(73
)
19.6
%
Professional fees: Legal fees
100
181
(81
)
44.8
%
292
(192
)
65.8
%
554
1,094
(540
)
49.4
%
Other professional fees
250
545
(295
)
54.1
%
721
(471
)
65.3
%
1,945
2,262
(317
)
14.0
%
Supervisory fees
48
48
—
0.0
%
34
14
-41.2
%
163
152
11
-7.2
%
Real estate owned and other repossessed asset expenses
27
39
(12
)
30.8
%
34
(7
)
20.6
%
123
129
(6
)
4.7
%
Acquisition related expenses
1,351
—
1,351
100.0
%
—
1,351
100.0
%
1,351
—
1,351
100.0
%
Other expenses
1,265
1,207
58
-4.8
%
2,449
(1,184
)
48.3
%
5,419
6,153
(734
)
11.9
%
Total non-interest expenses
16,779
15,011
(1,768
)
-11.8
%
17,178
399
-2.3
%
65,441
65,079
(362
)
0.6
%
Income before income taxes
12,289
12,933
(644
)
-5.0
%
11,834
455
3.8
%
48,680
45,951
2,729
5.9
%
Taxable equivalent adjustment
51
46
5
-10.9
%
111
(60
)
54.1
%
244
382
(138
)
36.1
%
Income tax expense
2,415
2,383
32
-1.3
%
2,172
243
-11.2
%
8,967
8,391
576
-6.9
%
Net income
$
9,823
$
10,504
$
(681
)
-6.5
%
$
9,551
$
272
2.8
%
$
39,469
$
37,178
$
2,291
6.2
%
Earnings per common share: Basic
$
0.204
$
0.218
$
0.014
)
-6.4
%
$
0.192
$
0.012
6.2
%
$
0.815
$
0.746
$
0.069
9.2
%
Diluted
0.203
0.218
(0.015
)
-6.9
%
0.191
0.012
6.3
%
0.811
0.742
0.069
9.3
%
Diluted earnings per share excluding merger cost
0.231
0.218
0.013
6.0
%
0.191
0.040
20.9
%
0.839
0.742
0.097
13.1
%
(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, 2019
September 30, 2019
December 31, 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)
$
2,233,356
$
25,508
4.55
%
$
2,224,310
$
26,045
4.66
%
$
2,161,414
$
26,616
4.93
%
Loans held for sale
119,043
1,219
4.10
%
99,581
1,067
4.29
%
100,348
1,184
4.68
%
Total loans, net
2,352,399
26,727
4.55
%
2,323,891
27,112
4.66
%
2,261,762
27,800
4.91
%
Securities: Trading — —
0.00
%
— —
0.00
%
4
—
0.00
%
Available for sale-taxable
271,592
1,781
2.62
%
279,618
1,828
2.61
%
196,910
1,148
2.33
%
Available for sale-nontaxable (2)
34,968
278
3.18
%
35,054
273
3.12
%
48,370
399
3.30
%
Held to maturity-taxable — —
0.00
%
— —
0.00
%
65,605
380
2.32
%
Held to maturity-nontaxable (2) — —
0.00
%
— —
0.00
%
12,215
86
2.82
%
Total securities
306,560
2,059
2.69
%
314,672
2,101
2.67
%
323,104
2,013
2.49
%
Federal Home Loan Bank stock
13,639
140
4.11
%
13,872
173
4.99
%
19,144
290
6.06
%
Other interest earning assets
26,414
125
1.88
%
36,706
203
2.19
%
34,779
178
2.03
%
Total interest earning assets
2,699,012
29,051
4.29
%
2,689,141
29,589
4.38
%
2,638,789
30,281
4.59
%
Non-interest earning assets
180,691
181,208
176,579
Total assets
$
2,879,703
$
2,870,349
$
2,815,368
Interest bearing liabilities: Deposits: Checking accounts
$
807,682
2,440
1.21
%
$
770,268
2,391
1.24
%
$
620,306
1,114
0.71
%
Savings accounts
285,478
26
0.04
%
286,794
27
0.04
%
303,247
28
0.04
%
Certificates of deposit Customer certificates of deposit
580,701
2,965
2.04
%
611,736
3,148
2.06
%
619,208
2,652
1.70
%
Brokered certificates of deposit
144,337
664
1.84
%
226,951
1,290
2.27
%
393,778
2,072
2.09
%
Total certificates of deposit
725,038
3,629
2.00
%
838,687
4,438
2.12
%
1,012,986
4,724
1.85
%
Total interest bearing deposits
1,818,198
6,095
1.34
%
1,895,749
6,856
1.45
%
1,936,539
5,866
1.20
%
Federal Home Loan Bank advances Long-term advances — —
0.00
%
— —
0.00
%
46,879
357
3.02
%
Short-term advances
245,250
1,157
1.89
%
189,370
1,103
2.33
%
75,033
453
2.40
%
Total Federal Home Loan Bank advances
245,250
1,157
1.89
%
189,370
1,103
2.33
%
121,912
810
2.64
%
Repurchase agreements and other — —
0.00
%
125
—
0.00
%
245
—
0.00
%
Total borrowed funds
245,250
1,157
1.89
%
189,495
1,103
2.33
%
122,157
810
2.63
%
Total interest bearing liabilities
$
2,063,448
7,252
1.41
%
$
2,085,244
7,959
1.53
%
$
2,058,696
6,676
1.29
%
Non-interest bearing liabilities Total noninterest bearing deposits
433,275
411,106
395,649
Other noninterest bearing liabilities
56,267
54,197
46,559
Total noninterest bearing liabilities
489,542
465,303
442,208
Total liabilities
$
2,552,990
$
2,550,547
$
2,500,904
Shareholders’ equity
326,713
319,802
314,464
Total liabilities and equity
$
2,879,703
$
2,870,349
$
2,815,368
Net interest income and interest rate spread
$
21,799
3.00
%
$
21,630
2.85
%
$
23,605
3.30
%
Net interest margin
3.22
%
3.21
%
3.58
%
Average interest earning assets to average interest bearing
liabilities
130.80
%
128.96
%
128.18
%
Interest bearing deposits Checking accounts
$
807,682
$
2,440
1.21
%
$
770,268
$
2,391
1.24
%
$
620,306
$
1,114
0.71
%
Savings accounts
285,478
26
0.04
%
286,794
27
0.04
%
303,247
28
0.04
%
Customer certificates of deposit
580,701
2,965
2.04
%
611,736
3,148
2.06
%
619,208
2,652
1.70
%
Total customer deposits
1,673,861
5,431
1.30
%
1,668,798
5,566
1.33
%
1,542,761
3,794
0.98
%
Brokered certificates of deposit
144,337
664
1.84
%
226,951
1,290
2.27
%
393,778
2,072
2.09
%
Total interest bearing deposits
1,818,198
6,095
1.34
%
1,895,749
6,856
1.45
%
1,936,539
5,866
1.20
%
Noninterest bearing deposits
433,275
—
0.00
%
411,106
—
0.00
%
395,649
—
0.00
%
Total average deposits and cost of deposits
$
2,251,473
$
6,095
1.08
%
$
2,306,855
$
6,856
1.19
%
$
2,332,188
$
5,866
1.01
%
Other interest bearing liabilities Federal Home Loan Bank advances
Long term advances $
—
$
—
0.00
%
$
—
$
—
0.00
%
$
46,879
$
357
3.02
%
Short term advances
245,250
1,157
1.89
%
189,370
1,103
2.33
%
75,033
453
2.40
%
Total Federal Home Loan Bank advances
245,250
1,157
1.89
%
189,370
1,103
2.33
%
121,912
810
2.64
%
Repurchase agreements and other
-
—
0.00
%
125
—
0.00
%
245
—
0.00
%
Total borrowed funds
245,250
1,157
1.89
%
189,495
1,103
2.33
%
122,157
810
2.63
%
Total average deposits and other interest bearing liabilities and
total cost of funds
$
2,496,723
$
7,252
1.26
%
$
2,496,350
$
7,959
1.26
%
$
2,454,345
$
6,676
1.09
%
Customer deposits interest bearing and noninterest
bearing
$
2,107,136
$
5,431
1.03
%
$
2,079,904
$
5,566
1.07
%
$
1,938,410
$
3,794
0.78
%
Brokered deposits
144,337
664
1.84
%
226,951
1,290
2.27
%
393,778
2,072
2.09
%
Total borrowings
245,250
1,157
1.89
%
189,495
1,103
2.33
%
122,157
810
2.63
%
Cost of funds
2,496,723
7,252
1.26
%
2,496,350
7,959
1.26
%
2,454,345
6,676
1.09
%
(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, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands, except per
share data)
Financial Data Total assets
$
2,868,313
$
2,906,573
$
2,869,116
$
2,852,041
$
2,811,357
Total loans, net
2,217,943
2,248,507
2,229,326
2,215,549
2,176,842
Total securities
307,302
315,755
319,714
313,847
319,498
Total deposits
2,287,109
2,105,758
2,259,179
2,289,803
2,213,220
Average interest-bearing deposits
1,818,198
1,895,749
1,973,104
1,963,567
1,936,539
Average noninterest-bearing deposits
433,275
411,106
405,535
400,874
395,649
Total shareholders' equity
332,109
326,856
317,554
314,709
309,334
Net interest income
21,748
21,584
22,043
22,186
23,494
Net interest income (FTE) (1)
21,799
21,630
22,105
22,270
23,605
Provision for loan losses
(422
)
701
(51
)
61
178
Noninterest income
6,847
7,015
6,671
6,073
5,585
Noninterest expense
16,779
15,011
15,976
17,674
17,178
Income tax expense
2,415
2,383
2,303
1,868
2,172
Net income
9,823
10,504
10,486
8,656
9,551
Share Data Basic earnings per common share
$
0.204
$
0.218
$
0.216
$
0.177
$
0.192
Diluted earnings per common share
0.203
0.218
0.215
0.176
0.191
Book value per common share
6.90
6.80
6.61
6.44
6.30
Tangible book value per common share
6.41
6.31
6.11
5.95
5.81
Market value per common share
11.66
10.78
9.57
9.35
8.85
Common shares outstanding at end of period
48,104
48,087
48,069
48,853
49,129
Weighted average shares outstanding—basic
47,996
47,961
48,463
48,854
49,445
Weighted average shares outstanding—diluted
48,221
48,164
48,644
49,113
49,695
Key Ratios Return on average assets (2)
1.36
%
1.46
%
1.48
%
1.22
%
1.36
%
Return on average assets excluding merger cost
1.55
%
1.46
%
1.48
%
1.22
%
1.36
%
Return on average equity (3)
12.03
%
13.14
%
13.22
%
10.99
%
12.15
%
Return on average equity excluding merger cost
13.68
%
13.14
%
13.22
%
10.99
%
12.15
%
Return on tangible equity (4)
12.96
%
14.19
%
14.30
%
11.90
%
13.16
%
Return on tangible equity excluding merger cost
14.75
%
14.19
%
14.30
%
11.90
%
13.16
%
Net interest margin
3.22
%
3.21
%
3.33
%
3.38
%
3.58
%
Efficiency ratio
53.55
%
52.15
%
55.37
%
62.29
%
54.79
%
Nonperforming loans to net loans, end of period
0.58
%
0.46
%
0.58
%
0.32
%
0.30
%
Nonperforming assets to total assets, end of period
0.48
%
0.39
%
0.48
%
0.34
%
0.27
%
Allowance for loan loss as a percent of loans, end of period
0.86
%
0.88
%
0.91
%
0.91
%
0.93
%
Delinquent loans to total net loans, end of period
0.74
%
0.63
%
0.58
%
0.41
%
0.50
%
(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, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands)
Loan Portfolio Composition
Commercial loans Multi-family
$
177,363
$
166,027
$
154,630
$
163,243
$
134,143
Owner/nonowner occupied commercial real estate
401,600
409,687
414,780
412,550
409,979
Land
18,131
19,653
16,955
17,090
16,830
Construction
122,102
127,388
138,043
135,048
141,686
Commercial and industrial
275,179
271,292
249,898
246,740
240,293
Total
994,375
994,047
974,306
974,671
942,931
Residential mortgage loans Real estate
914,073
938,899
942,698
934,586
927,255
Construction
34,931
44,636
46,196
45,102
43,435
Total
949,004
983,535
988,894
979,688
970,690
Consumer loans Consumer
286,329
283,641
279,531
274,998
277,041
Total
286,329
283,641
279,531
274,998
277,041
Total loans
2,229,708
2,261,223
2,242,731
2,229,357
2,190,662
Less: Allowance for loan losses
19,281
19,987
20,482
20,446
20,443
Deferred loan costs, net
(7,517
)
(7,271
)
(7,077
)
(6,638
)
(6,623
)
Total
11,764
12,716
13,405
13,808
13,820
Total loans, net
2,217,944
2,248,507
2,229,326
2,215,549
2,176,842
Loans held for sale, net
127,839
113,593
97,477
77,676
91,472
Total loans
$
2,345,783
$
2,362,100
$
2,326,803
$
2,293,225
$
2,268,314
At or for the quarters ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts Interest bearing checking accounts
$
137,783
$
134,662
$
131,725
$
146,244
$
146,977
Non-interest bearing checking accounts
430,040
421,631
398,340
404,644
394,208
Total checking accounts
567,823
556,293
530,065
550,888
541,185
Savings accounts
284,745
286,251
290,354
297,186
298,087
Money market accounts
681,518
653,926
606,661
550,049
466,167
Total non-time deposits
1,534,086
1,496,470
1,427,080
1,398,123
1,305,439
Certificates of deposit
560,996
591,516
644,024
630,174
616,826
Total customer deposits
2,095,082
2,087,986
2,071,104
2,028,297
1,922,265
Brokered deposits
192,027
17,772
188,075
261,506
290,955
Total certificates of deposit
753,023
609,288
832,099
891,680
907,781
Total deposits
$
2,287,109
$
2,105,758
$
2,259,179
$
2,289,803
$
2,213,220
UNITED COMMUNITY FINANCIAL CORP. SELECTED
FINANCIAL HIGHLIGHTS (Unaudited)
At or for the quarters ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands)
Allowance For Loan Losses
Beginning balance
$
19,987
$
20,482
$
20,446
$
20,443
$
21,332
Provision
(422
)
701
(51
)
61
178
Net (chargeoffs) recoveries
(284
)
(1,196
)
87
(58
)
(1,067
)
Ending balance
$
19,281
$
19,987
$
20,482
$
20,446
$
20,443
At or for the quarters ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands)
Net (Charge-offs) Recoveries
Commercial loans Multi-family
$
13
$
4
$
4
$
113
$
(99
)
Owner/nonowner occupied commercial real estate
14
12
165
28
38
Land
—
—
—
—
—
Construction
1
—
—
1
—
Commercial and industrial
(155
)
(897
)
1
(84
)
(765
)
Total
(127
)
(881
)
170
58
(826
)
Residential mortgage loans Real estate
(55
)
(186
)
(53
)
78
(131
)
Construction
—
—
—
—
—
Total
(55
)
(186
)
(53
)
78
(131
)
Consumer loans Consumer
(102
)
(130
)
(30
)
(194
)
(110
)
Total
(102
)
(130
)
(30
)
(194
)
(110
)
Total net (charge-offs) Recoveries
$
(284
)
$
(1,197
)
$
87
$
(58
)
$
(1,067
)
At or for the quarters ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands)
Nonperforming Loans Commercial
loans Multi-family $
—
$
—
$
—
$
—
$
171
Owner/nonowner occupied commercial real estate
6,222
3,610
2,688
1,565
13
Land
—
—
—
—
—
Construction
—
—
—
—
—
Commercial and industrial
525
785
4,678
456
531
Total
6,747
4,395
7,366
2,021
715
Residential mortgage loans Real estate
4,275
4,233
4,365
3,883
4,170
Construction
—
—
—
—
—
Total
4,275
4,233
4,365
3,883
4,170
Consumer loans Consumer
1,868
1,689
1,141
1,203
1,654
Total
1,868
1,689
1,141
1,203
1,654
Total nonperforming loans
$
12,890
$
10,317
$
12,872
$
7,107
$
6,539
Total Nonperforming Loans and Nonperforming
Assets Past due 90 days and on nonaccrual status
$
7,279
$
7,107
$
5,392
$
4,351
$
5,750
Past due 90 days and still accruing
—
—
—
—
—
Past due 90 days
7,279
7,107
5,392
4,351
5,750
Past due less than 90 days and on nonaccrual
5,611
3,210
7,480
2,756
789
Total nonperforming loans
12,890
10,317
12,872
7,107
6,539
Other real estate owned
754
880
871
1,143
1,049
Other classified assets
—
—
—
1,479
—
Repossessed assets
62
82
84
37
39
Total nonperforming assets
$
13,706
$
11,279
$
13,827
$
9,766
$
7,627
UNITED COMMUNITY FINANCIAL CORP. NON-GAAP DISCLOSURE
RECONCILIATION (Unaudited)
As Reported
Non-GAAP Proforma
As Reported
Non-GAAP Proforma
Three months ended
Merger related
Three months ended
Twelve months ended
Merger related
Twelve months ended
December 31, 2019
costs
December 31, 2019
December 31, 2019
costs
December 31, 2019
(In thousands, except per share data)
Net income:
$
9,823
$
1,351
$
11,174
$
39,469
$
1,351
$
40,820
Diluted EPS: Net income
$
9,823
$
1,351
$
11,174
39,469
40,820
Net income allocated to participating securities
(23
)
(23
)
(8
)
(8
)
Net income available to common shareholders
$
9,800
$
11,151
39,461
40,812
Weighted average shares outstanding: diluted
48,220,742
48,220,742
48,501,575
48,501,575
Diluted EPS:
$
0.203
$
0.231
$
0.814
$
0.841
Net income
$
9,823
$
1,351
$
11,174
$
39,469
$
1,351
$
40,820
Average assets
2,879,703
2,879,703
2,854,554
2,854,554
Average equity
326,713
326,713
319,729
319,729
ROA:
1.36
%
1.55
%
1.38
%
1.43
%
ROE:
12.03
%
13.68
%
12.34
%
12.77
%
Efficiency Ratio: Noninterest Expense
$
16,779
$
1,351
$
15,428
$
65,441
$
1,351
$
64,090
Intangible asset amortization
(127
)
(127
)
(510
)
(510
)
Net interest income
21,799
21,799
87,804
87,804
Noninterest income
6,847
6,847
26,606
26,606
Loss on securities
(68
)
(68
)
(620
)
(620
)
Loss on real estated owned
(4
)
(4
)
115
115
Efficiency Ratio:
58.28
%
53.55
%
57.00
%
55.82
%
Reconciliation of Average Shareholders' Equity to
Average Tangible Equity:
At or for the quarters ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands, except per share data) Average shareholders
equity
$
326,713
$
319,802
$
317,265
$
315,006
$
314,464
Average intangible assets
23,612
23,740
23,867
23,994
24,123
Average tangible equity
$
303,101
$
296,062
$
293,398
$
291,012
$
290,341
Net income
$
9,823
$
10,504
$
10,486
$
8,656
$
9,551
Merger cost
1,351
-
-
-
-
Net income without merger cost
$
11,174
$
10,504
$
10,486
$
8,656
$
9,551
Return on tangible equity
12.96
%
14.19
%
14.30
%
11.90
%
13.16
%
Return on tangible equity without merger cost
14.75
%
14.19
%
14.30
%
11.90
%
13.16
%
Reconciliation of Fully Taxable Equivalent Net Interest
Income to Net Interest Income:
For the quarters ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands) Interest income
$
29,000
$
29,543
$
29,799
$
29,401
$
30,170
Fully taxable equivalent adjustment
51
46
62
84
111
Fully taxable equivalent interest income
29,051
29,589
29,861
29,485
30,281
Interest expense
7,252
7,959
7,756
7,215
6,676
Fully taxable net interest income
$
21,799
$
21,630
$
22,105
$
22,270
$
23,605
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, 2019
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
(Dollars in thousands, except per share data) Total
shareholders' equity
$
332,109
$
326,856
$
317,554
$
314,709
$
309,334
Goodwill
20,221
20,221
20,221
20,221
20,221
Customer list intangible
2,032
2,078
2,123
2,169
2,214
Core deposit intangible
1,275
1,357
1,439
1,521
1,603
Total common shares outstanding
48,104,055
48,087,430
48,068,790
48,852,688
49,128,875
Tangible book value, as reported
$
6.41
$
6.31
$
6.11
$
5.95
$
5.81
Reconciliation of Net Interest Margin, Non-Interest Income and
Non-Interest Expense:
At the quarters ended
At the quarters ended
December 31, 2019
December 31, 2018
September 30, 2019
September 30, 2018
Net interest income (FTE)
$
21,799
$
23,605
$
21,630
$
21,707
less: purchase accounting
(422
)
(178
)
(213
)
(383
)
Adjusted net interest income
21,377
23,427
21,417
21,324
Average earning assets
2,699,012
2,638,789
2,689,141
2,609,310
Net interest margin excluding purchase accounting
3.16
%
3.55
%
3.18
%
3.27
%
Non-interest income
$
6,847
$
5,585
$
7,015
$
6,146
less: mortgage servicing valuation adjustment
(312
)
44
336
6
Non-interest income, adjusted
6,535
5,629
7,351
6,152
Non-interest income % increase
16.1
%
19.5
%
Non-interest expense
$
16,779
$
17,178
$
15,011
$
15,772
Non-interest expense % decrease
-2.3
%
-4.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200121006062/en/
Media Contact: Kathy Bushway Senior Vice President,
Marketing Home Savings (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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