United Community Financial Corp. (Company) (NASDAQ: UCFC),
parent company of Home Savings Bank (Home Savings), announced today
net income of $9.5 million and diluted earnings per share (“EPS”)
of $0.190, a 25.8% improvement over the $0.151 per common share
reported for the quarter ended September 30, 2017.
Third quarter 2018 highlights:
- Total loans, net growth of 10.3% over
the last twelve months, and 2.3% on a linked quarter basis
- Monthly average customer deposit growth
of 9.6% over the last twelve months
- Total revenue up by 2.3% on a linked
quarter basis
- Efficiency Ratio of 57.3%
- ROA of 1.37%, ROE of 12.25% and ROTE of
13.28%
- Dividend of $0.07 per common share
declared
Gary M. Small, President and Chief Executive Officer of the
Company commented, “Home Savings’ strong quarterly performance
reflected the continued favorable economic and business environment
experienced in each of the markets we serve. We delivered excellent
loan and solid revenue growth creating positive operating leverage
for the organization…a winning formula. While the interest rate
environment and trade/tariff issues create uncertainty, I believe
our balanced business approach and the strength of our client base
will serve us very well in the future.”
Strong Loan and Deposit Growth
Total loans, net grew $201.2 million, or 10.3%, during the
previous twelve months ended September 30, 2018, and $49.2 million,
or 2.3% compared to the previous quarter. At September 30, 2018,
total net loans aggregated $2.15 billion.
Home Savings has produced excellent results within all lending
categories. The increase in total loans for the period was driven
by an increase in commercial loans, which grew $140.7 million, or
17.8%, over the last twelve months and $31.0 million, or 3.4%,
versus June 30, 2018. Mortgage loans increased $40.1 million, or
4.4%, over the previous twelve months and increased $19.8 million,
or 2.1%, during the past three months. Consumer loans increased
$19.4 million, or 7.4%, since September 30, 2017 and remained
consistent with the prior quarter.
Monthly average customer deposits (which exclude brokered
certificates of deposit) increased 9.6% from September 30, 2017 and
remained consistent on a linked quarter basis. Average customer
deposit growth in the third quarter was muted by seasonality
associated with one large, public fund deposit. This relationship
historically experiences a high point in the deposit level during
the second quarter with decreasing balances through the end of the
calendar year. The growth in average customer deposits was driven
by increases in non-interest bearing accounts of 13.6% over the
past twelve months and an increase of 2.4% over the past three
months. Average business deposits continue to rise, increasing
21.9% over the past twelve months and 6.2% over the past three
months.
Net Interest Margin
The net interest margin was 3.33% for the three months ended
September 30, 2018 compared to 3.36% for the previous quarter. This
change is the result of several factors. First, the slowing of the
recognition of loan and deposit marks from the 2017 acquisition
accounted for one basis point of the decline. Also, the continued
flattening of the yield curve during the third quarter put pressure
on spreads. Finally, short-term LIBOR rates did not move in advance
of the Federal Reserve Bank increasing rates at the end of
September, as has occurred previously, resulting in lower loan
yields than expected. The Company expects the delayed increase seen
in LIBOR to favorably impact net interest margin during the fourth
quarter. Adjustments made during the quarter resulted in a positive
margin trend within the period.
Excluding the impact of purchase accounting yield adjustments,
the net interest margin would have been 3.27%, or six basis points
lower than the 3.33% reported, for the quarter ended September 30,
2018.
Nonperforming Loans to Total Loans Ratio
Continued to Decrease during the Third Quarter
Asset quality remained very strong during the third quarter. The
Company’s level of nonperforming loans and classified assets all
improved during the quarter. Net chargeoffs for the quarter were
6.1 basis points of average loans. Additionally, over the past
three months, the ratio of the allowance for loan losses as a
percent of nonperforming loans has increased from 198.4% to 235.43%
at September 30, 2018. Nonperforming loans to total loans, net at
September 30, 2018 declined to 0.42%. Nonperforming assets declined
$5.7 million to 0.36% of total assets.
The Company recognized a provision for loan losses of $251,000
for the third quarter of 2018, which was up $389,000 in comparison
to the previous quarter. Loan growth offset by continued asset
quality improvements and an improved credit environment has
impacted the provision level. As of September 30, 2018, the
Company’s allowance for loan losses to total loans was 0.98%,
versus 1.01% at June 30, 2018.
Loans acquired through the acquisition during the first quarter
of 2017 were recorded at fair value. When combining the remaining
fair value adjustment of $2.6 million and the Company’s allowance,
the combined coverage as a percentage of total loans is 1.10%.
Non-Interest Income
Non-interest income increased 5.0% or $294,000 to $6.1 million
on a linked quarter basis. During this same time period, the
Company did see an increase of 16.9% in mortgage banking income.
Additionally a 6.2% increase in agency income, a 13.0% increase in
brokerage income, a 7.3% increase in deposit related fees and
finally, a 2.1% increase in trust fees offset a 15% seasonal
decrease in card fees. As experienced industry-wide, market
conditions continue to impact the margin on salable loans. Also
impacting the comparison negatively was the fact no security gains
were recognized in the third quarter 2018.
At the end of the third quarter, trust assets under management
and advisory totaled $775 million.
Non-Interest Expense
Non-interest expense was $15.8 million for the third quarter of
2018 compared to $15.5 million for the same quarter last year, an
increase of $308,000, or 2.0%. This increase is reflective of
digital banking expansion and additional incentive compensation
resulting from increased loan production. The Company’s efficiency
ratio remains consistent at 57.3%, compared to the prior
quarter.
Effective Tax Rate
The Company’s effective tax rate on an FTE basis for the three
months ended September 30, 2018 was 19.5% compared to 30.3% for the
three months ended September 30, 2017. The decline was due to the
enactment of tax legislation at the end of the year.
Dividend to be Paid
On October 16, 2018, the Board of Directors declared a quarterly
cash dividend of $0.07 per common share payable November 9, 2018 to
shareholders of record October 26, 2018.
Conference Call
United Community Financial Corp. will host an earnings
conference call on Wednesday, October 17, 2018, at 10:00 a.m. ET,
to provide an overview of the Company's third quarter 2018 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 3rd Quarter 2018 Conference
Call on our corporate profile page to join the webcast.
United Community Financial Corp.
Home Savings is a wholly owned subsidiary of the Company and
operates retail banking offices and loan production centers in
Ohio, western Pennsylvania and West Virginia. 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) September 30, December 31, 2018 2017
F/(U)
(Dollars in thousands)
Assets: Cash and deposits with banks $ 31,042 $ 34,365 -9.7
% Federal funds sold 23,223 12,515 85.6
% Total cash and cash equivalents 54,265 46,880 15.8 % Securities:
Available for sale, at fair value 242,106 270,561 -10.5 % Held to
maturity (fair value of $74,812 and $82,126, respectively) 78,700
82,911 -5.1 % Loans held for sale, at lower of cost or market — 211
-100.0 % Loans held for sale, at fair value 95,235 83,541 14.0 %
Loans, net of allowance for loan losses of $21,332 and $21,202
2,148,942 1,999,877 7.5 % Federal Home Loan Bank stock, at cost
19,144 19,324 -0.9 % Premises and equipment, net 21,449 22,094 -2.9
% Accrued interest receivable 8,551 8,190 4.4 % Real estate owned
and other repossessed assets 907 1,253 -27.6 % Goodwill 20,221
20,221 0.0 % Core deposit intangible 1,686 1,934 -12.8 % Customer
list intangible 2,259 2,060 9.7 % Cash surrender value of life
insurance 63,789 62,488 2.1 % Other assets 31,929
28,360 12.6 %
Total assets $ 2,789,183
$ 2,649,905 5.3 %
Liabilities and Shareholders'
Equity Liabilities: Deposits: Interest bearing $
1,553,204 $ 1,445,293 7.5 % Noninterest bearing 383,535
354,970 8.0 % Customer deposits 1,936,739
1,800,263 7.6 % Brokered deposits 415,737
156,476 165.7 % Total deposits 2,352,476 1,956,739 20.2 %
Borrowed funds: Federal Home Loan Bank advances Long-term advances
49,025 48,536 1.0 % Short-term advances 46,000
308,000 -85.1 % Total Federal Home Loan Bank advances 95,025
356,536 -73.3 % Repurchase agreements and other 238
197 20.8 % Total borrowed funds 95,263 356,733 -73.3
% Advance payments by borrowers for taxes and insurance 16,494
25,038 -34.1 % Accrued interest payable 1,177 1,097 7.3 % Accrued
expenses and other liabilities 17,730 16,033
10.6 %
Total liabilities 2,483,140
2,355,640 5.4 %
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 49,922,514 and
49,800,126 shares, respectively, outstanding 177,412 177,458 0.0 %
Retained earnings 186,000 167,852 10.8 % Accumulated other
comprehensive loss (25,783 ) (18,685 ) 38.0 % Treasury stock, at
cost, 4,216,396 and 4,338,784 shares, respectively (31,586 )
(32,360 ) -2.4 %
Total shareholders’ equity
306,043 294,265 4.0 %
Total liabilities and
shareholders’ equity $ 2,789,183 $ 2,649,905 5.3
%
UNITED COMMUNITY FINANCIAL
CORP.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited) For the Three Months Ended
For the Nine Months Ended September 30, September 30, September 30,
September 30, 2018 2017 Variance F/(U) 2018 2017 Variance F/(U)
(Dollars in thousands, except per share data)
Interest
income Loans $ 24,031 $ 20,697 $ 3,334 16.1 % $ 70,065 $ 58,266
$ 11,799 20.3 % Loans held for sale 1,264 882 382 43.3 % 3,134
2,415 719 29.8 % Securities: Available for sale, nontaxable 333 416
(83 ) -20.0 % 1,077 1,252 (175 ) -14.0 % Available for sale,
taxable 1,176 1,276 (100 ) -7.8 % 3,584 4,357 (773 ) -17.7 % Held
to maturity, nontaxable 69 49 20 40.8 % 181 163 18 11.0 % Held to
maturity, taxable 374 424 (50 ) -11.8 % 1,194 1,343 (149 ) -11.1 %
Federal Home Loan Bank stock dividends 289 253 36 14.2 % 843 694
149 21.5 % Other interest earning assets 154
51 103 202.0 % 323 171
152 88.9 % Total interest income 27,690 24,048
3,642 15.1 % 80,401 68,661 11,740 17.1 %
Interest expense
Deposits 5,044 2,226 (2,818 ) -126.6 % 11,931 5,834 (6,097 ) -104.5
% Federal Home Loan Bank advances 1,023 1,315 292 22.2 % 4,019
3,334 (685 ) -20.5 % Repurchase agreements and other —
4 4 100.0 % —
20 20 100.0 % Total interest expense
6,067 3,545 (2,522 ) -71.1 %
15,950 9,188 (6,762 ) -73.6 %
Net interest income 21,623 20,503 1,120 5.5 % 64,451 59,473
4,978 8.4 %
Taxable equivalent adjustment 84
224 (140 ) -62.5 % 271
690 (419 ) -60.7 %
Net interest income (FTE)
(1) 21,707 20,727 980 4.7 % 64,722 60,163 4,559 7.6 %
Provision for loan losses 251 721
470 65.2 % 520 3,038
2,518 82.9 %
Net interest income after
provision for loan losses (FTE) 21,456
20,006 1,450 7.2 % 64,202
57,125 7,077 12.4 %
Non-interest income
Insurance agency income 545 509 36 7.1 % 1,635 1,454 181 12.4 %
Brokerage income 339 271 68 25.1 % 911 894 17 1.9 % Service fees
and other charges: Deposit related fees 1,494 1,499 (5 ) -0.3 %
4,186 4,200 (14 ) -0.3 % Mortgage servicing fees 821 760 61 8.0 %
2,446 2,225 221 9.9 % Mortgage servicing rights valuation (6 ) (10
) 4 -40.0 % (17 ) (15 ) 2 -13.3 % Mortgage servicing rights
amortization (477 ) (491 ) 14 -2.9 % (1,519 ) (1,426 ) 93 -6.5 %
Other service fees 26 21 5 23.8 % 125 83 42 50.6 % Net gains
(losses): Securities available for sale — 236 (236 ) -100.0 % 233
566 (333 ) -58.8 % Mortgage banking income 1,409 1,688 (279 ) -16.5
% 3,972 5,128 (1,156 ) -22.5 % Real estate owned and other
repossessed assets charges, net (45 ) (73 ) 28 -38.4 % (236 ) (143
) 93 -65.0 % Debit/credit card fees 1,000 971 29 3.0 % 3,126 3,220
(94 ) -2.9 % Trust fee income 483 449 34 7.6 % 1,425 1,151 274 23.8
% Other income 557 475 82
17.3 % 1,530 1,442 88 6.1
% Total non-interest income 6,146 6,305
(159 ) -2.5 % 17,817 18,779
(962 ) -5.1 %
Non-interest expense Salaries and
employee benefits 9,107 8,736 (371 ) -4.2 % 28,042 26,460 (1,582 )
-6.0 % Occupancy 1,094 1,013 (81 ) -8.0 % 3,144 2,920 (224 ) -7.7 %
Equipment and data processing 2,032 2,303 271 11.8 % 6,558 6,688
130 1.9 % Financial institutions tax 495 348 (147 ) -42.2 % 1,486
1,348 (138 ) -10.2 % Advertising 340 285 (55 ) -19.3 % 865 674 (191
) -28.3 % Amortization of intangible assets 128 113 (15 ) -13.3 %
373 308 (65 ) -21.1 % FDIC insurance premiums 294 301 7 2.3 % 872
829 (43 ) -5.2 % Other insurance premiums 85 115 30 26.1 % 303 336
33 9.8 % Professional fees: Legal fees 356 156 (200 ) -128.2 % 802
569 (233 ) -40.9 % Other professional fees 651 666 15 2.3 % 1,541
1,606 65 4.0 % Supervisory fees 34 — (34 ) 0.0 % 118 — (118 )
-100.0 % Real estate owned and other repossessed asset expenses 25
33 8 24.2 % 95 118 23 19.5 % Acquisition related expenses — — — 0.0
% — 4,962 4,962 100.0 % Other expenses 1,131
1,395 264 18.9 % 3,703
4,112 409 9.9 % Total non-interest expenses
15,772 15,464 (308 ) -2.0 %
47,902 50,930 3,028 5.9 %
Income before income taxes 11,830 10,847 983 9.1 % 34,117
24,974 9,143 36.6 %
Taxable equivalent adjustment 84 224 140
62.5 % 271 690 419 60.7 %
Income tax expense 2,217
3,067 850 27.7 % 6,220
7,001 781 11.2 %
Net
income $ 9,529 $ 7,556 $ 1,973 26.1 % $
27,626 $ 17,283 $ 10,343 59.8 %
Earnings per common share: Basic $ 0.191 $ 0.152 $ 0.039
25.7 % $ 0.554 $ 0.350 $ 0.204 58.3 % Diluted 0.190 0.151 0.039
25.8 % 0.551 0.347 0.204 58.8 % (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 September
30, June 30, 2018 2018 Variance F/(U) (Dollars in thousands, except
per share data)
Interest income Loans $ 24,031 $ 23,275 $
756 3.2 % Loans held for sale 1,264 1,012 252 24.9 % Securities:
Available for sale, nontaxable 333 356 (23 ) -6.5 % Available for
sale, taxable 1,176 1,193 (17 ) -1.4 % Held to maturity, nontaxable
69 61 8 13.1 % Held to maturity, taxable 374 398 (24 ) -6.0 %
Federal Home Loan Bank stock dividends 289 274 15 5.5 % Other
interest earning assets 154 92
62 67.4 % Total interest income 27,690 26,661 1,029 3.9 %
Interest expense Deposits 5,044 3,790 (1,254 ) -33.1 %
Federal Home Loan Bank advances 1,023 1,576 553 35.1 % Repurchase
agreements and other — — —
0.0 % Total interest expense 6,067
5,366 (701 ) -13.1 %
Net interest income
21,623 21,295 328 1.5 %
Taxable equivalent adjustment
84 90 (6 ) -6.7 %
Net interest
income (FTE) (1) 21,707 21,385 322 1.5 %
Provision
for loan losses 251 (138 ) (389 )
281.9 %
Net interest income after provision for loan losses
(FTE) 21,456 21,523 (67 )
-0.3 %
Non-interest income Insurance agency income 545 513
32 6.2 % Brokerage income 339 300 39 13.0 % Service fees and other
charges: Deposit related fees 1,494 1,392 102 7.3 % Mortgage
servicing fees 821 813 8 1.0 % Mortgage servicing rights valuation
(6 ) (20 ) 14 -70.0 % Mortgage servicing rights amortization (477 )
(542 ) 65 -12.0 % Other service fees 26 61 (35 ) -57.4 % Net gains
(losses): Securities available for sale — 94 (94 ) -100.0 %
Mortgage banking income 1,409 1,205 204 16.9 %
Real estate owned and other repossessed
assets charges, net
(45 ) (113 ) 68 -60.2 % Debit/credit card fees 1,000 1,177 (177 )
-15.0 % Trust fee income 483 473 10 2.1 % Other income 557
499 58 11.6 % Total non-interest
income 6,146 5,852 294
5.0 %
Non-interest expense Salaries and employee benefits
9,107 8,937 (170 ) -1.9 % Occupancy 1,094 950 (144 ) -15.2 %
Equipment and data processing 2,032 2,372 340 14.3 % Financial
institutions tax 495 495 — 0.0 % Advertising 340 290 (50 ) -17.2 %
Amortization of intangible assets 128 132 4 3.0 % FDIC insurance
premiums 294 288 (6 ) -2.1 % Other insurance premiums 85 109 24
22.0 % Professional fees: Legal fees 356 147 (209 ) -142.2 % Other
professional fees 651 499 (152 ) -30.5 % Supervisory fees 34 42 8
0.0 % Real estate owned and other repossessed asset expenses 25 34
9 26.5 % Acquisition related expenses — — — 0.0 % Other expenses
1,131 1,235 104 8.4 %
Total non-interest expenses 15,772 15,530
(242 ) -1.6 %
Income before income taxes
11,830 11,845 (15 ) -0.1 %
Taxable equivalent adjustment 84
90 6 6.7 %
Income tax expense 2,217
2,214 (3 ) -0.1 %
Net income $ 9,529 $
9,541 $ (12 ) -0.1 %
Earnings per common
share: Basic $ 0.191 $ 0.191 $ - 0.0 % Diluted 0.190 0.190 -
0.0 % (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 September 30, 2018 June
30, 2018 September 30, 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) $ 2,115,227 $ 24,031 4.54 % $ 2,075,307 $
23,275 4.49 % $ 1,906,786 $ 20,699 4.34 % Loans held for sale
111,295 1,264 4.51 % 91,836 1,012 4.42
% 88,854 882 3.97 % Total loans, net 2,226,522 25,295
4.54 % 2,167,143 24,287 4.48 % 1,995,640 21,581 4.33 % Securities:
Available for sale-taxable 204,924 1,176 2.30 % 207,908 1,193 2.30
% 224,927 1,276 2.27 % Available for sale-nontaxable (2) 48,370 400
3.31 % 50,710 429 3.38 % 59,057 611 4.14 % Held to maturity-taxable
67,979 374 2.20 % 70,406 398 2.26 % 77,947 424 2.18 % Held to
maturity-nontaxable (2) 12,215 86 2.82 %
11,265 78 2.77 % 9,239 76 3.29 % Total
securities 333,488 2,036 2.44 % 340,289 2,098 2.47 % 371,170 2,387
2.57 % Federal Home Loan Bank stock 19,160 289 6.03 % 19,324 274
5.67 % 19,324 253 5.24 % Other interest earning assets
30,140 154 2.03 % 23,831 92 1.55 %
18,881 51 1.08 % Total interest earning assets 2,609,310
27,774 4.26 % 2,550,587 26,751 4.20 % 2,405,015 24,272 4.04 %
Non-interest earning assets 177,553 174,270
185,773 Total assets $ 2,786,863 $ 2,724,857 $ 2,590,788 Interest
bearing liabilities: Deposits: Checking accounts $ 635,705 1,026
0.64 % $ 638,910 948 0.60 % $ 591,982 468 0.32 % Savings accounts
303,247 27 0.04 % 307,250 26 0.03 % 308,829 28 0.04 % Certificates
of deposit Customer certificates of deposit 618,545 2,457 1.58 %
608,079 2,143 1.41 % 526,697 1,333 1.01 % Brokered certificates of
deposit 327,120 1,534 1.86 % 164,400
673 1.64 % 135,956 397 1.17 % Total certificates of
deposit 945,665 3,991 1.67 % 772,479
2,816 1.46 % 662,653 1,730 1.04 % Total interest
bearing deposits 1,884,617 5,044 1.06 % 1,718,639 3,790 0.88 %
1,563,464 2,226 0.57 % Federal Home Loan Bank advances Long-term
advances 48,976 413 3.35 % 48,799 493 4.05 % 48,212 388 3.22 %
Short-term advances 120,880 610 2.00 % 236,747
1,083 1.83 % 310,152 927 1.20 % Total Federal
Home Loan Bank advances 169,856 1,023 2.39 % 285,546 1,576 2.21 %
358,364 1,315 1.47 % Repurchase agreements and other 213
— 0.00 % 195 — 0.00 % 6,483 4
0.25 % Total borrowed funds 170,069 1,023 2.39 %
285,741 1,576 2.21 % 364,847 1,319 1.45
% Total interest bearing liabilities $ 2,054,686 6,067 1.17
% $ 2,004,380 5,366 1.07 % $ 1,928,311 3,545 0.74 %
Non-interest bearing liabilities Total noninterest bearing deposits
382,044 376,905 337,067 Other noninterest bearing liabilities
39,075 39,839 35,576 Total noninterest bearing
liabilities 421,119 416,744 372,643 Total
liabilities $ 2,475,805 $ 2,421,124 $ 2,300,954 Shareholders’
equity 311,058 303,733 289,834 Total
liabilities and equity $ 2,786,863 $ 2,724,857 $ 2,590,788 Net
interest income and interest rate spread $ 21,707 3.09 % $ 21,385
3.12 % $ 20,727 3.30 % Net interest margin 3.33 % 3.36 % 3.45 %
Average interest earning assets to average interest bearing
liabilities 126.99 % 127.25 % 124.72 % Interest
bearing deposits Checking accounts $ 635,705 $ 1,026 0.64 % $
638,910 $ 948 0.60 % $ 591,982 $ 468 0.32 % Savings accounts
303,247 27 0.04 % 307,250 26 0.03 % 308,829 28 0.04 % Customer
certificates of deposit 618,545 2,457 1.58 %
608,079 2,143 1.41 % 526,697 1,333 1.01 %
Total interest bearing customer deposits 1,557,497 3,510 0.90 %
1,554,239 3,117 0.80 % 1,427,508 1,829 0.51 % Brokered certificates
of deposit 327,120 1,534 1.86 % 164,400
673 1.64 % 135,956 397 1.17 % Total interest bearing
deposits 1,884,617 5,044 1.06 % 1,718,639 3,790 0.88 % 1,563,464
2,226 0.57 % Noninterest bearing deposits 382,044 —
0.00 % 376,905 — 0.00 % 337,067 — 0.00
% Total average deposits and cost of deposits $ 2,266,661 $ 5,044
0.89 % $ 2,095,544 $ 3,790 0.72 % $ 1,900,531 $ 2,226 0.47 % Other
interest bearing liabilities Federal Home Loan Bank advances Long
term advances $ 48,976 $ 413 3.35 % $ 48,799 $ 493 4.05 % $ 48,212
$ 388 3.22 % Short term advances 120,880 610 2.00 %
236,747 1,083 1.83 % 310,152 927 1.20 %
Total Federal Home Loan Bank advances 169,856 1,023 2.39 % 285,546
1,576 2.21 % 358,364 1,315 1.47 % Repurchase agreements and other
213 — 0.00 % 195 — 0.00 % 6,483
4 0.25 % Total borrowed funds 170,069 1,023
2.39 % 285,741 1,576 2.21 % 364,847
1,319 1.45 % Total average deposits and other interest bearing
liabilities and total cost of funds $ 2,436,730 $ 6,067 1.00 % $
2,381,285 $ 5,366 0.90 % $ 2,265,378 $ 3,545 0.63 %
Customer deposits interest bearing and noninterest bearing $
1,939,541 $ 3,510 0.72 % $ 1,931,144 $ 3,117 0.65 % $ 1,764,575 $
1,829 0.41 % Brokered deposits 327,120 1,534 1.86 % 164,400 673
1.64 % 135,956 397 1.17 % Total borrowings 170,069 1,023 2.39 %
285,741 1,576 2.21 % 364,847 1,319 1.45 % Cost of funds 2,436,730
6,067 1.00 % 2,381,285 5,366 0.90 % 2,265,378 3,545 0.63 %
(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 September 30, June 30,
March 31, December 31,
September 30,
2018 2018 2018 2017
2017
(Dollars in thousands, except per share data)
Financial Data
Total assets $ 2,789,183 $ 2,770,558 $ 2,690,707 $ 2,649,905 $
2,602,365 Total loans, net 2,148,942 2,099,781 2,061,443 1,999,877
1,947,695 Total securities 320,806 328,924 338,593 353,472 360,371
Total deposits 2,352,476 2,135,345 2,066,978 1,956,739 1,938,699
Average interest-bearing deposits 1,884,617 1,718,639 1,644,165
1,598,922 1,563,464 Average noninterest-bearing deposits 382,044
376,905 375,142 355,225 337,067 Total shareholders' equity 306,043
301,484 296,195 294,265 291,851 Net interest income 21,623 21,295
21,533 20,880 20,503 Net interest income (FTE) (1) 21,707 21,385
21,630 21,101 20,727 Provision (recovery) for loan losses 251 (138
) 407 1,215 721 Noninterest income 6,146 5,852 5,819 6,460 6,305
Noninterest expense 15,772 15,530 16,600 17,329 15,464 Income tax
expense 2,217 2,214 1,789 4,294 3,067 Net income 9,529 9,541 8,556
4,502 7,556
Share Data Basic earnings per common
share $ 0.191 $ 0.191 $ 0.172 $ 0.090 $ 0.152 Diluted earnings per
common share 0.190 0.190 0.171 0.090 0.151 Book value per common
share 6.13 6.04 5.94 5.90 5.87 Tangible book value per common share
5.65 5.56 5.45 5.41 5.38 Market value per common share 9.67 10.99
9.86 9.13 9.60 Common shares outstanding at end of period
49,923 49,904 49,882 49,800 49,758 Weighted average shares
outstanding--basic 49,683 49,694 49,611 49,497 49,460 Weighted
average shares outstanding--diluted 49,947 49,944 49,885 49,827
49,851
Key Ratios Return on average assets (ROA) (2)
1.37 % 1.40 % 1.28 % 0.68 % 1.17 % Return on average equity
(ROE)(3) 12.25 % 12.56 % 11.44 % 6.09 % 10.43 % Return on tangible
equity (ROTE)(4) 13.28 % 13.65 % 12.44 % 6.62 % 11.35 % Net
interest margin 3.33 % 3.36 % 3.47 % 3.43 % 3.45 % Efficiency ratio
57.30 % 57.75 % 60.20 % 63.73 % 57.13 % Nonperforming loans to net
loans, end of period 0.42 % 0.51 % 0.59 % 0.59 % 0.62 %
Nonperforming assets to total assets, end of period 0.36 % 0.57 %
0.65 % 0.64 % 0.75 % Allowance for loan loss as a percent of loans,
end of period 0.98 % 1.01 % 1.04 % 1.05 % 1.04 % Delinquent loans
to total net loans, end of period 0.69 % 0.67 % 0.81 % 0.86 % 0.89
%
(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 September 30, June 30,
March 31, December 31, September 30, 2018 2018 2018 2017 2017
(Dollars in thousands)
Loan Portfolio Composition
Commercial loans Multi-family $ 139,938 $ 141,004 $ 137,836
$ 120,480 $ 126,977 Owner/nonowner occupied commercial real estate
408,938 396,624 384,533 381,611 366,747 Land 16,129 16,887 15,452
15,162 13,666 Construction 132,961 127,691 134,181 116,863 108,105
Commercial and industrial 233,801 218,611
201,132 188,500 175,581
Total 931,767 900,817 873,134 822,616 791,076
Residential mortgage loans Real estate 909,626 888,583
882,873 870,939 851,863 Construction 39,396
40,623 42,453 49,092
57,081
Total 949,022 929,206 925,326 920,031 908,944
Consumer loans Consumer 283,108 284,909
279,110 273,494 263,692
Total 283,108 284,909
279,110 273,494 263,692
Total loans 2,163,897 2,114,932 2,077,570 2,016,141
1,963,712 Less: Allowance for loan losses 21,332 21,405 21,610
21,202 20,555 Deferred loan costs, net (6,377 )
(6,254 ) (5,483 ) (4,938 ) (4,538 )
Total 14,955 15,151
16,127 16,264 16,017
Total
loans, net 2,148,942 2,099,781 2,061,443 1,999,877 1,947,695
Loans held for sale, net 95,235 107,701
79,292 83,752 84,545
Total loans $ 2,244,177 $ 2,207,482 $
2,140,735 $ 2,083,629 $ 2,032,240
At or for the quarters ended
September 30,
June 30,
March 31, December 31, September 30, 2018
2018
2018 2017 2017 (Dollars in thousands)
Deposit Portfolio
Composition Checking accounts Interest bearing checking
accounts $ 140,722 $ 138,812 $ 140,740 $ 170,478 $ 173,171
Non-interest bearing checking accounts 383,535
383,082 376,904 354,970
343,146
Total checking accounts 524,257 521,894
517,644 525,448 516,317 Savings accounts 300,007 306,283 308,025
301,716 307,169 Money market accounts 489,668
502,560 483,840 424,234
418,294
Total non-time deposits 1,313,932 1,330,737
1,309,509 1,251,398 1,241,780 Certificates of deposit less than or
equal to $250,000 977,588 744,770 704,147 651,255 617,839
Certificates of deposit greater than $250,000 60,956
59,838 53,322 54,086
79,080
Total certificates of deposit
1,038,544 804,608 757,469
705,341 696,919
Total deposits $
2,352,476 $ 2,135,345 $ 2,066,978 $ 1,956,739
$ 1,938,699
UNITED COMMUNITY FINANCIAL CORP. SELECTED FINANCIAL
HIGHLIGHTS (Unaudited) At or for the quarters
ended September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017 2017 (Dollars in thousands)
Allowance
For Loan Losses Beginning balance $ 21,405 $ 21,610 $ 21,202 $
20,555 $ 19,660 Provision 251 (138 ) 407 1,215 721 Net (chargeoffs)
recoveries (324 ) (67 ) 1 (568 )
174 Ending balance $ 21,332 $ 21,405 $
21,610 $ 21,202 $ 20,555 At or for the
quarters ended September 30, June 30, March 31, December 31,
September 30, 2018 2018 2018 2017 2017 (Dollars in thousands)
Net Recoveries (Charge-offs) Commercial loans
Multi-family $ 4 $ 9 $ 6 $ (126 ) $ (4 ) Owner/nonowner occupied
commercial real estate 12 29 40 23 39 Land 150 — — — — Construction
11 10 7 — — Commercial and industrial (275 ) (72 )
104 (90 ) 314
Total (98 )
(24 ) 157 (193 ) 349
Residential mortgage loans Real estate
(141 ) (14 ) (66 ) (257 ) (291 ) Construction —
— — — —
Total (141 ) (14 ) (66 ) (257 ) (291 )
Consumer loans
Consumer (85 ) (29 ) (90 ) (118 )
116
Total (85 ) (29 ) (90
) (118 ) 116
Total net chargeoffs $
(324 ) $ (67 ) $ 1 $ (568 ) $ 174 At or
for the quarters ended September 30, June 30, March 31, December
31, September 30, 2018 2018 2018 2017 2017 (Dollars in thousands)
Nonperforming Loans Commercial loans Multi-family $
275 $ 275 $ 275 $ 275 $ 402 Owner/nonowner occupied commercial real
estate 1,101 1,111 1,206 1,218 1,234 Land — — 9 9 9 Construction —
— — — — Commercial and industrial 1,489 1,475
1,459 1,505 234
Total 2,865 2,861 2,949 3,007 1,879
Residential mortgage
loans Real estate 4,426 6,146 7,045 6,076 6,627 Construction
— — — —
—
Total 4,426 6,146 7,045 6,076 6,627
Consumer loans Consumer 1,770 1,783
2,180 2,620 2,332
Total 1,770 1,783 2,180
2,620 2,332
Total
nonperforming loans $ 9,061 $ 10,790 $ 12,174
$ 11,703 $ 10,838
Total
Nonperforming Loans and Nonperforming Assets Past due 90 days
and on nonaccrual status $ 8,200 $ 8,395 $ 8,326 $ 8,620 $ 7,634
Past due 90 days and still accruing — —
— — 8 Past due 90 days
8,200 8,395 8,326 8,620 7,642 Past due less than 90 days and on
nonaccrual 861 2,395 3,848
3,083 3,196
Total
nonperforming loans 9,061 10,790 12,174 11,703 10,838 Other
real estate owned 907 802 1,030 1,047 1,133 Other classified assets
— 4,050 4,050 4,050 6,384 Repossessed assets —
75 263 206 10
Total nonperforming assets $ 9,968 $ 15,717 $
17,517 $ 17,006 $ 18,365
UNITED COMMUNITY FINANCIAL CORP. NON-GAAP DISCLOSURE
RECONCILIATION (Unaudited)
Reconciliation of Average Shareholders' Equity to
Average Tangible Equity: At or for the quarters ended
September 30, June 30, March 31, December 31, September 30, 2018
2018 2018 2017 2017 (Dollars in thousands, except per share data)
Average shareholders equity $ 311,058 $ 303,733 $ 299,284 $ 295,506
$ 295,506 Average intangible assets 24,144
24,063 24,175 23,563
23,642 Average tangible equity $ 286,914 $ 279,670
$ 275,109 $ 271,943 $ 271,864
Net income $ 9,529 $ 9,541 $ 8,556 $ 4,502 $ 7,556 Return on
tangible equity 13.28 % 13.65 % 12.44 % 6.62 % 11.12 %
Reconciliation of Fully Taxable Equivalent Net Interest Income
to Net Interest Income: For the quarters ended September
30,
June 30,
March 31, December 31, September 30, 2018
2018
2018 2017 2017 (Dollars in thousands) Interest income $
27,690 $ 26,661 $ 26,050 $ 24,849 $ 24,048 Fully taxable equivalent
adjustment 84 90 97
221 224 Fully taxable equivalent
interest income 27,774 26,751 26,147 25,070 24,272 Interest expense
6,067 5,366 4,517
3,969 3,545 Fully taxable net interest income
$ 21,707 $ 21,385 $ 21,630 $ 21,101 $
20,727
Reconciliation of Coverage Ratio to
Coverage Ratio with Fair Value Adjustments Included with Allowance
for Loan Losses: September 30, 2018
(Dollars in
thousands)
Allowance for loan losses $ 21,332 Fair value adjustments
2,644 23,976 Loans, net $ 2,148,942
Add: Allowance for loan losses and fair value adjustment
23,976 Gross loans $ 2,172,918
Coverage ratio with the Fair Value
adjustments included in Allowance for loan losses
1.10 %
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 September 30, June 30,
March 31, December 31, September 30, 2018 2018 2018 2017 2017
(Dollars in thousands, except per share data) Total shareholders'
equity $ 306,043 $ 301,484 $ 296,195 $ 294,265 $ 291,851 Goodwill
20,221 20,221 20,221 20,221 19,488 Customer list intangible 2,259
1,980 2,030 2,060 2,090 Core deposit intangible 1,686 1,769 1,851
1,934 2,017 Total common shares outstanding 49,922,514 49,904,074
49,882,491 49,800,126 49,758,487 Tangible book value, as reported $
5.65 $ 5.56 $ 5.45 $ 5.41 $ 5.38
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version on businesswire.com: https://www.businesswire.com/news/home/20181016006025/en/
Media Contact:Home Savings BankKathy Bushway,
330-742-0638Senior Vice President,
Marketingkbushway@homesavings.comorInvestor Contact:United
Community Financial Corp.Gary M. Small, 330-742-0472President and
Chief Executive Officer
United Community Financial (NASDAQ:UCFC)
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