EX-99 2 d806709dex99.htm EX-99 EX-99

EXHIBIT 99

 

LOGO

275 West Federal Street

Youngstown, Ohio 44503-1203

FOR IMMEDIATE RELEASE

 

Media Contact:    Investor Contact:
Kathy Bushway    Gary M. Small
Senior Vice President, Marketing    President and Chief Executive Officer
Home Savings Bank    United Community Financial Corp.
(330) 742-0638    (330) 742-0472
kbushway@homesavings.com   

UCFC ANNOUNCES RECORD EARNINGS FOR THE THIRD QUARTER AND

DECLARES A DIVIDEND

YOUNGSTOWN, Ohio (October 22, 2019) – United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), announced today third quarter net income of $10.5 million, an increase of 10.2% compared to the same quarter in 2018. Diluted earnings per share (“EPS”) totaled $0.218, a 14.7% improvement over the $0.190 per share reported for the quarter ended September 30, 2018.

Third quarter 2019 highlights:

 

  •  

ROA of 1.46%, ROE of 13.1%, ROTE of 14.2% for the quarter

 

  •  

Total loan growth of 6.1% annualized for the quarter

 

  •  

Average customer deposit growth of 7.2% compared to third quarter 2018

 

  •  

Fee income (noninterest income) increase of 14.1% compared to third quarter 2018

 

  •  

Noninterest expense decrease of 4.8% compared to third quarter of 2018

 

  •  

Pretax preprovision income of $13.6 million, a 13.3% increase compared to third quarter 2018

 

  •  

Efficiency ratio of 52.2%

 

  •  

Declared a dividend of $0.08 per common share

Gary M. Small, President and Chief Executive Officer of the Company commented, “We are very pleased to report a 10.2% earnings increase for the quarter in light of the very challenging rate environment the industry is experiencing.”

Small continued, “Strong loan growth, excellent residential mortgage origination efforts, and diligent expense management were the keys to success. Expect a continuation of this theme over the remainder of the year. We are very well positioned to deliver a strong financial contribution to the Home Savings/First Defiance combination slated for the first quarter of 2020.”

Strong Loan and Deposit Growth

Total loans grew $117.9 million (including loans held for sale), or 5.3%, during the last twelve months and $35.3 million, or 6.1% annualized, compared to the previous quarter. At September 30, 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 $62.3 million, or 6.7%, over the last twelve months. The growth in commercial loans in comparison to the prior quarter was $19.7 million, or 8.1% annualized. Mortgage loans (including loans held for sale) increased $52.9 million, or 5.1%, over the previous twelve months and increased $10.8 million, or 4.0% annualized, during the past three months. While consumer loan growth is flat over the last twelve months, the Company realized $4.1 million in growth for the quarter, a 6.0% annualized increase. The Company continues to see increases in its indirect auto business even as conditions remain challenging with regard to home equity balances.

Average quarterly customer deposits (which exclude brokered certificates of deposit) increased $140.4 million, or 7.2%, from September 30, 2018 and is flat compared to June 30, 2019. The growth in average customer deposits over the last twelve months was primarily driven by increases in interest bearing checking and money market accounts of $134.6 million or 21.2% and increases in non-interest bearing accounts of $29.1 million, or 7.6%. This was offset by declines in savings accounts and certificates of deposit. Much of this deposit growth is in business deposits which have increased 27.8% compared to the third quarter of 2018 and 5.0% over the past three months.

Net Interest Income and Margin

Net interest income totaled $21.6 million on a fully taxable equivalent (FTE) basis for the quarter ended September 30, 2019 compared to $21.7 million for the quarter ended September 30, 2018. Average earning assets grew $79.8 million during this time but it was offset by a 12 basis point decline in the net interest margin.

The net interest margin on an FTE basis was 3.21% for the third quarter of 2019 compared to 3.33% in the third quarter of 2018. Excluding the effects of purchase accounting adjustments, the net interest margin was 3.18% in the third quarter of 2019 compared to 3.27% in the third quarter of 2018. The 9 basis point decline in the net interest margin, excluding purchase accounting, was due to declining interest rates and an inverted yield curve.

The net interest margin on a linked quarter basis declined 12 basis points from 3.33% in the second quarter of 2019 to 3.21% in the third quarter of 2019. Excluding the effects of purchase accounting adjustments, the net interest margin was 3.18% in the third quarter of 2019 compared to 3.29% in the second quarter of 2019. The dramatic fall in interest rates in the third quarter along with continued treasury curve inversion continues to place pressure on margins. In addition, the funding pressures in the repo market in September increased funding costs associated with short term FHLB advance and short term brokered CDs decreasing margin by one basis point. The Company expects stabilization in its net interest margin at these levels in the fourth quarter as higher rate money market specials and CD’s begin to reprice which should help to offset the continued decline in asset yields.

Asset Quality Remains Strong

Asset quality remained strong during the third quarter. At September 30, 2019, nonperforming loans aggregated $10.3 million compared to $12.9 million at the end of the previous quarter. The Company’s level of nonperforming loans did move up at the end of the previous quarter, primarily as a result of a single credit.

A substantial portion of this credit was paid off in the current quarter, which reduced nonperforming loans. The allowance for loan losses at the end of the period, as a percent of nonperforming loans was 193.7%. The allowance for loan losses as a percent of loans totaled 0.88% at September 30, 2019 compared to .91% the previous quarter.

The Company recognized a provision for loan losses of $701,000 for the third quarter of 2019, compared to a negative provision of $51,000 in the third quarter of 2018. For nine months of the year the provision totaled $712,000 compared to $520,000 the previous year. Net charge offs to average loans were seven basis points for the nine months ended September 30, 2019 and delinquencies continue to trend downward.

Non-Interest Income

Non-interest income increased 14.1%, or $869,000, to $7.0 million for the third quarter of 2019 compared to $6.1 million for the same quarter last year. The primary reason for this is an increase in mortgage banking income (gain on sale) of $1.1 million along with solid increases in brokerage income, mortgage servicing fees and trading and security gains. This was offset by a decrease in the value of mortgage servicing rights of $330,000. 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. At the end of the third quarter, the Company had a $1.9 million valuation allowance associated with its mortgage servicing rights. Steady or rising interest rates should allow the Company to recoup most of this allowance over the next 18 months.

The increase in mortgage banking income was primarily driven by increased margins when comparing the third quarter of 2019 to the third 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.

Non-Interest Expense

Non-interest expense was $15.0 million for the third quarter of 2019 compared to $15.8 million during the third quarter of 2018, a decrease of $761,000, or 4.8%. This decrease was driven by a decline in salaries and benefits along with a reduction in FDIC expense related to a credit adjustment on premiums. The Company continues to focus on disciplined expense management as an offset to the challenging rate environment that exists today. The Company’s efficiency ratio improved to 52.2% for the current quarter versus 57.3% for the same quarter a year ago.

Dividend

On October 22, 2019, the Board of Directors declared a quarterly cash dividend of $0.08 per common share payable November 8, 2019 to shareholders of record November 1, 2019.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, October 23, 2019, at 10:00 a.m. ET, to provide an overview of the Company’s third 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 3rd 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, 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)

 

     September 30,     September 30,        
     2019     2018     F/(U)  
     (Dollars in thousands)  

Assets:

       

Cash and deposits with banks

    $ 39,072     $ 31,042       25.9 % 

Federal funds sold

      25,797       23,223       11.1 % 
  

 

 

    

 

 

    

Total cash and cash equivalents

      64,869       54,265       19.5 % 

Securities:

       

Trading, at fair value

      734       —         0.0 % 

Available for sale, at fair value

      315,021       242,106       30.1 % 

Held to maturity (fair value of $0 and $74,812, respectively)

      —         78,700       -100.0 % 

Loans held for sale, at fair value

      113,593       95,235       19.3 % 

Gross loans

      2,268,494       2,170,274       4.5 % 

Allowance for loan losses

      (19,987 )      (21,332 )      -6.3 % 
  

 

 

    

 

 

    

Net loans

      2,248,507       2,148,942       4.6 % 

Federal Home Loan Bank stock, at cost

      13,639       19,144       -28.8 % 

Premises and equipment, net

      21,187       21,449       -1.2 % 

Accrued interest receivable

      8,713       8,551       1.9 % 

Real estate owned and other repossessed assets

      948       907       4.5 % 

Goodwill

      20,221       20,221       0.0 % 

Core deposit intangible

      1,357       1,686       -19.5 % 

Customer list intangible

      2,078       2,259       -8.0 % 

Cash surrender value of life insurance

      65,401       63,789       2.5 % 

Other assets

      30,305       31,929       -5.1 % 
  

 

 

    

 

 

    

Total assets

    $ 2,906,573     $ 2,789,183       4.2 % 
  

 

 

    

 

 

    

Liabilities and Shareholders’ Equity

       

Liabilities:

       

Deposits:

       

Interest bearing

    $ 1,666,355     $ 1,553,204       7.3 % 

Noninterest bearing

      421,631       383,535       9.9 % 
  

 

 

    

 

 

    

Customer deposits

      2,087,986       1,936,739       7.8 % 

Brokered deposits

      17,772       415,737       -95.7 % 
  

 

 

    

 

 

    

Total deposits

      2,105,758       2,352,476       -10.5 % 

Borrowed funds:

       

Federal Home Loan Bank advances

       

Long-term advances

      —         49,025       -100.0 % 

Short-term advances

      422,000       46,000       817.4 % 
  

 

 

    

 

 

    

Total Federal Home Loan Bank advances

      422,000       95,025       344.1 % 

Repurchase agreements and other

      —         238       -100.0 % 
  

 

 

    

 

 

    

Total borrowed funds

      422,000       95,263       343.0 % 

Advance payments by borrowers for taxes and insurance

      23,447       16,494       42.2 % 

Accrued interest payable

      747       1,177       -36.5 % 

Accrued expenses and other liabilities

      27,765       17,730       56.6 % 
  

 

 

    

 

 

    

Total liabilities

      2,579,717       2,483,140       3.9 % 
  

 

 

    

 

 

    

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 48,087,430 and 49,922,514 shares, respectively, outstanding

      177,314       177,412       -0.1 % 

Retained earnings

      211,012       186,000       13.4 % 

Accumulated other comprehensive loss

      (12,673 )      (25,783 )      -50.8 % 

Treasury stock, at cost, 6,051,480 and 4,216,396 shares, respectively

      (48,797 )      (31,586 )      54.5 % 
  

 

 

    

 

 

    

Total shareholders’ equity

      326,856       306,043       6.8 % 
  

 

 

    

 

 

    

Total liabilities and shareholders’ equity

    $ 2,906,573     $ 2,789,183       4.2 % 
  

 

 

    

 

 

    

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
     September 30,     June 30,                 September 30,                 September 30,     September 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

    $ 26,037     $ 26,373     $ (336)       -1.3 %    $ 24,031     $ 2,006       8.3 %    $ 78,267     $ 70,065     $ 8,202       11.7 % 

Loans held for sale

      1,067       991       76       7.7 %      1,264       (197 )      -15.6 %      3,065       3,134       (69 )      -2.2 % 

Securities:

                       

Available for sale, nontaxable

      235       236       (1 )      -0.4 %      333       (98 )      -29.4 %      777       1,077       (300 )      -27.9 % 

Available for sale, taxable

      1,828       1,611       217       13.5 %      1,176       652       55.4 %      4,702       3,584       1,118       31.2 % 

Held to maturity, nontaxable

      —         25       (25 )      -100.0 %      69       (69 )      -100.0 %      100       181       (81 )      -44.8 % 

Held to maturity, taxable

      —         118       (118 )      -100.0 %      374       (374 )      -100.0 %      497       1,194       (697 )      -58.4 % 

Federal Home Loan Bank stock dividends

      173       245       (72 )      -29.4 %      289       (116 )      -40.1 %      707       843       (136 )      -16.1 % 

Other interest earning assets

      203       200       3       1.5 %      154       49       31.8 %      628       323       305       94.4 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total interest income

      29,543       29,799       (256 )      -0.9 %      27,690       1,853       6.7 %      88,743       80,401       8,342       10.4 % 

Interest expense

                       

Deposits

      6,856       7,197       (341 )      4.7 %      5,044       1,812       -35.9 %      20,627       11,931       8,696       -72.9 % 

Federal Home Loan Bank advances

      1,103       559       544       -97.3 %      1,023       80       -7.8 %      2,303       4,019       (1,716 )      42.7 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total interest expense

      7,959       7,756       (203 )      2.6 %      6,067       (1,892 )      31.2 %      22,930       15,950       (6,980 )      43.8 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net interest income

      21,584       22,043       (459 )      -2.1 %      21,623       (39 )      -0.2 %      65,813       64,451       1,362       2.1 % 

Taxable equivalent adjustment

      46       62       (16 )      -25.8 %      84       (38 )      -45.2 %      192       271       (79 )      -29.2 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net interest income (FTE) (1)

      21,630       22,105       (475 )      -2.1 %      21,707       (77 )      -0.4 %      66,005       64,722       1,283       2.0 % 

Provision for loan losses

      701       (51 )      (752 )      1474.5 %      251       (450 )      -179.3 %      712       520       (192 )      -36.9 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net interest income after provision for loan losses (FTE)

      20,929       22,156       (1,227 )      -5.5 %      21,456       (527 )      -2.5 %      65,293       64,202       1,091       1.7 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Non-interest income

                       

Insurance agency income

      575       545       30       5.5 %      545       30       5.5 %      1,821       1,635       186       11.4 % 

Brokerage income

      480       409       71       17.4 %      339       141       41.6 %      1,259       911       348       38.2 % 

Service fees and other charges:

                       

Deposit related fees

      1,490       1,417       73       5.2 %      1,494       (4 )      -0.3 %      4,247       4,186       61       1.5 % 

Mortgage servicing fees

      908       881       27       3.1 %      821       87       10.6 %      2,662       2,446       216       8.8 % 

Mortgage servicing rights valuation

      (336 )      (996 )      660       -66.3 %      (6 )      (330 )      5500.0 %      (1,831 )      (17 )      (1,814 )      -10670.6 % 

Mortgage servicing rights amortization

      (702 )      (553 )      (149 )      26.9 %      (477 )      (225 )      47.2 %      (1,701 )      (1,519 )      (182 )      -12.0 % 

Other service fees

      21       21       —         0.0 %      26       (5 )      -19.2 %      80       125       (45 )      -36.0 % 

Net gains (losses):

                       

Trading securities

      29       39       (10 )      -25.6 %      —         29       0.0 %      131       —         131       0.0 % 

Securities available for sale

      128       148       (20 )      -13.5 %      —         128       0.0 %      420       233       187       80.3 % 

Mortgage banking income

      2,508       2,631       (123 )      -4.7 %      1,409       1,099       78.0 %      6,815       3,972       2,843       71.6 % 

Real estate owned and other repossessed assets charges, net

      (55 )      (33 )      (22 )      66.7 %      (45 )      (10 )      22.2 %      (119 )      (236 )      117       49.6 % 

Debit/credit card fees

      1,057       1,221       (164 )      -13.4 %      1,000       57       5.7 %      3,213       3,126       87       2.8 % 

Trust fee income

      434       461       (27 )      -5.9 %      483       (49 )      -10.1 %      1,360       1,425       (65 )      -4.6 % 

Bank owned life insurance

      398       397       1       0.3 %      435       (37 )      -8.5 %      1,180       1,301       (121 )      -9.3 % 

Other income

      80       83       (3 )      -3.6 %      122       (42 )      -34.4 %      222       229       (7 )      -3.1 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total non-interest income

      7,015       6,671       344       5.2 %      6,146       869       14.1 %      19,759       17,817       1,942       10.9 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Non-interest expense

                       

Salaries and employee benefits

      8,831       9,106       (275 )      3.0 %      9,107       (276 )      3.0 %      28,512       28,042       470       -1.7 % 

Occupancy

      1,024       1,028       (4 )      0.4 %      1,094       (70 )      6.4 %      3,098       3,144       (46 )      1.5 % 

Equipment and data processing

      2,307       2,208       99       -4.5 %      2,032       275       -13.5 %      6,806       6,558       248       -3.8 % 

Financial institutions tax

      509       509       —         0.0 %      495       14       -2.8 %      1,527       1,486       41       -2.8 % 

Advertising

      407       465       (58 )      12.5 %      340       67       -19.7 %      1,261       865       396       -45.8 % 

Amortization of intangible assets

      127       127       —         0.0 %      128       (1 )      0.8 %      382       373       9       -2.4 % 

FDIC insurance premiums

      (288 )      297       (585 )      197.0 %      294       (582 )      198.0 %      340       872       (532 )      61.0 % 

Other insurance premiums

      74       76       (2 )      2.6 %      85       (11 )      12.9 %      227       303       (76 )      25.1 % 

Professional fees:

                       

Legal fees

      181       214       (33 )      15.4 %      356       (175 )      49.2 %      454       802       (348 )      43.4 % 

Other professional fees

      545       562       (17 )      3.0 %      651       (106 )      16.3 %      1,695       1,541       154       -10.0 % 

Supervisory fees

      48       34       14       -41.2 %      34       14       -41.2 %      115       118       (3 )      2.5 % 

Real estate owned and other repossessed asset expenses

      39       17       22       -129.4 %      25       14       -56.0 %      95       95       —         0.0 % 

Other expenses

      1,207       1,333       (126 )      9.5 %      1,131       76       -6.7 %      4,149       3,703       446       -12.0 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total non-interest expenses

      15,011       15,976       965       6.0 %      15,772       761       -4.8 %      48,661       47,902       (759 )      1.6 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Income before income taxes

      12,933       12,851       82       0.6 %      11,830       1,103       9.3 %      36,391       34,117       2,274       6.7 % 

Taxable equivalent adjustment

      46       62       (16 )      25.8 %      84       (38 )      45.2 %      192       271       (79 )      29.2 % 

Income tax expense

      2,383       2,303       80       -3.5 %      2,217       166       -7.5 %      6,553       6,220       333       -5.4 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net income

    $ 10,504     $ 10,486     $ 18       0.2 %    $ 9,529     $ 975       10.2 %    $ 29,646     $ 27,626     $ 2,020       7.3 % 
  

 

 

    

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Earnings per common share:

                       

Basic

    $ 0.218     $ 0.216     $ 0.002       0.9 %    $ 0.191     $ 0.027       14.1 %    $ 0.610     $ 0.554     $ 0.056       10.1 % 

Diluted

      0.218       0.215       0.003       1.4 %      0.190       0.028       14.7 %      0.608       0.551       0.057       10.3 % 

 

(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  
     September 30, 2019     June 30, 2019     September 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)

    $ 2,224,310      $ 26,045        4.66 %    $ 2,207,554      $ 26,382        4.79 %    $ 2,115,227      $ 24,031        4.54 % 

Loans held for sale

      99,581        1,067        4.29 %      84,210        991        4.71 %      111,295        1,264        4.51 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total loans, net

      2,323,891        27,112        4.66 %      2,291,764        27,373        4.79 %      2,226,522        25,295        4.54 % 

Securities:

                         

Available for sale-taxable

      279,618        1,828        2.61 %      243,895        1,611        2.64 %      204,924        1,176        2.30 % 

Available for sale-nontaxable (2)

      35,054        273        3.12 %      33,068        283        3.42 %      48,370        400        3.31 % 

Held to maturity-taxable

      —          —          0.00 %      31,498        118        1.50 %      67,979        374        2.20 % 

Held to maturity-nontaxable (2)

      —          —          0.00 %      6,406        31        1.94 %      12,215        86        2.82 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total securities

      314,672        2,101        2.67 %      314,867        2,043        2.60 %      333,488        2,036        2.44 % 

Federal Home Loan Bank stock

      13,872        173        4.99 %      15,408        245        6.36 %      19,160        289        6.03 % 

Other interest earning assets

      36,706        203        2.19 %      37,240        200        2.15 %      30,140        154        2.03 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total interest earning assets

      2,689,141        29,589        4.38 %      2,659,279        29,861        4.50 %      2,609,310        27,774        4.26 % 

Non-interest earning assets

      181,208             181,268             177,553        
  

 

 

          

 

 

          

 

 

        

Total assets

    $ 2,870,349           $ 2,840,547           $ 2,786,863        
  

 

 

          

 

 

          

 

 

        

Interest bearing liabilities:

                         

Deposits:

                         

Checking accounts

    $ 770,268        2,391        1.24 %    $ 734,458        2,138        1.16 %    $ 635,705        1,026        0.64 % 

Savings accounts

      286,794        27        0.04 %      293,784        26        0.04 %      303,247        27        0.04 % 

Certificates of deposit

                         

Customer certificates of deposit

      611,736        3,148        2.06 %      645,115        3,231        2.00 %      618,545        2,457        1.58 % 

Brokered certificates of deposit

      226,951        1,290        2.27 %      299,747        1,802        2.40 %      327,120        1,534        1.86 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total certificates of deposit

      838,687        4,438        2.12 %      944,862        5,033        2.14 %      945,665        3,991        1.67 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total interest bearing deposits

      1,895,749        6,856        1.45 %      1,973,104        7,197        1.46 %      1,884,617        5,044        1.06 % 

Federal Home Loan Bank advances

                         

Long-term advances

      —          —          0.00 %      —          —          0.00 %      48,976        413        3.35 % 

Short-term advances

      189,370        1,103        2.33 %      89,879        559        2.49 %      120,880        610        2.00 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total Federal Home Loan Bank advances

      189,370        1,103        2.33 %      89,879        559        2.49 %      169,856        1,023        2.39 % 

Repurchase agreements and other

      125        —          0.00 %      142        —          0.00 %      213        —          0.00 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total borrowed funds

      189,495        1,103        2.33 %      90,021        559        2.49 %      170,069        1,023        2.39 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total interest bearing liabilities

    $ 2,085,244        7,959        1.53 %    $ 2,063,125        7,756        1.50 %    $ 2,054,686        6,067        1.17 % 
     

 

 

          

 

 

          

 

 

     

Non-interest bearing liabilities

                         

Total noninterest bearing deposits

      411,106             405,535             382,044        

Other noninterest bearing liabilities

      54,197             54,622             39,075        
  

 

 

          

 

 

          

 

 

        

Total noninterest bearing liabilities

      465,303             460,157             421,119        
  

 

 

          

 

 

          

 

 

        

Total liabilities

    $ 2,550,547           $ 2,523,282           $ 2,475,805        

Shareholders’ equity

      319,802             317,265             311,058        
  

 

 

          

 

 

          

 

 

        

Total liabilities and equity

    $ 2,870,349           $ 2,840,547           $ 2,786,863        
  

 

 

          

 

 

          

 

 

        

Net interest income and interest rate spread

       $ 21,630        2.85 %       $ 22,105        3.00 %       $ 21,707        3.09 % 
     

 

 

          

 

 

          

 

 

     

Net interest margin

            3.21 %            3.33 %            3.33 % 

Average interest earning assets to average interest bearing liabilities

            128.96 %            128.90 %            126.99 % 

Interest bearing deposits

                         

Checking accounts

    $ 770,268      $ 2,391        1.24 %    $ 734,458      $ 2,138        1.16 %    $ 635,705      $ 1,026        0.64 % 

Savings accounts

      286,794        27        0.04 %      293,784        26        0.04 %      303,247        27        0.04 % 

Customer certificates of deposit

      611,736        3,148        2.06 %      645,115        3,231        2.00 %      618,545        2,457        1.58 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total customer deposits

      1,668,798        5,566        1.33 %      1,673,357        5,395        1.29 %      1,557,497        3,510        0.90 % 

Brokered certificates of deposit

      226,951        1,290        2.27 %      299,747        1,802        2.40 %      327,120        1,534        1.86 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total interest bearing deposits

      1,895,749        6,856        1.45 %      1,973,104        7,197        1.46 %      1,884,617        5,044        1.06 % 

Noninterest bearing deposits

      411,106        —          0.00 %      405,535        —          0.00 %      382,044        —          0.00 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total average deposits and cost of deposits

    $ 2,306,855      $ 6,856        1.19 %    $ 2,378,639      $ 7,197        1.21 %    $ 2,266,661      $ 5,044        0.89 % 

Other interest bearing liabilities

                         

Federal Home Loan Bank advances

                         

Long term advances

    $ —        $ —          0.00 %    $ —        $ —          0.00 %    $ 48,976      $ 413        3.35 % 

Short term advances

      189,370        1,103        2.33 %      89,879        559        2.49 %      120,880        610        2.00 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total Federal Home Loan Bank advances

      189,370        1,103        2.33 %      89,879        559        2.49 %      169,856        1,023        2.39 % 

Repurchase agreements and other

      125        —          0.00 %      142        —          0.00 %      213        —          0.00 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total borrowed funds

      189,495        1,103        2.33 %      90,021        559        2.49 %      170,069        1,023        2.39 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Total average deposits and other interest bearing liabilities and total cost of funds

    $ 2,496,350      $ 7,959        1.26 %    $ 2,468,660      $ 7,756        1.26 %    $ 2,436,730      $ 6,067        1.00 % 
  

 

 

     

 

 

       

 

 

     

 

 

       

 

 

     

 

 

     

Customer deposits interest bearing and noninterest bearing

    $ 2,079,904      $ 5,566        1.07 %    $ 2,078,892      $ 5,395        1.04 %    $ 1,939,541      $ 3,510        0.72 % 

Brokered deposits

      226,951        1,290        2.27 %      299,747        1,802        2.40 %      327,120        1,534        1.86 % 

Total borrowings

      189,495        1,103        2.33 %      90,021        559        2.49 %      170,069        1,023        2.39 % 

Cost of funds

      2,496,350        7,959        1.26 %      2,468,660        7,756        1.26 %      2,436,730        6,067        1.00 % 

 

(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,
2019		     June 30, 2019     March 31,
2019		     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands, except per share data)  

Financial Data

           

Total assets

    $ 2,906,573     $ 2,869,116     $ 2,852,041     $ 2,811,357     $ 2,789,183  

Total loans, net

      2,248,507       2,229,326       2,215,549       2,176,842       2,148,942  

Total securities

      315,755       319,714       313,847       319,498       320,806  

Total deposits

      2,105,758       2,259,179       2,289,803       2,213,220       2,352,476  

Average interest-bearing deposits

      1,895,749       1,973,104       1,963,567       1,936,539       1,884,617  

Average noninterest-bearing deposits

      411,106       405,535       400,874       395,649       382,044  

Total shareholders’ equity

      326,856       317,554       314,709       309,334       306,043  

Net interest income

      21,584       22,043       22,186       23,494       21,623  

Net interest income (FTE) (1)

      21,630       22,105       22,270       23,605       21,707  

Provision for loan losses

      701       (51 )      61       178       251  

Noninterest income

      7,015       6,671       6,073       5,585       6,146  

Noninterest expense

      15,011       15,976       17,674       17,178       15,772  

Income tax expense

      2,383       2,303       1,868       2,172       2,217  

Net income

      10,504       10,486       8,656       9,551       9,529  

Share Data

           

Basic earnings per common share

    $ 0.218     $ 0.216     $ 0.177     $ 0.192     $ 0.191  

Diluted earnings per common share

      0.218       0.215       0.176       0.191       0.190  

Book value per common share

      6.80       6.61       6.44       6.30       6.13  

Tangible book value per common share

      6.31       6.11       5.95       5.81       5.65  

Market value per common share

      10.78       9.57       9.35       8.85       9.67  

Common shares outstanding at end of period

      48,087       48,069       48,853       49,129       49,923  

Weighted average shares outstanding—basic

      47,961       48,463       48,854       49,445       49,683  

Weighted average shares outstanding—diluted

      48,164       48,644       49,113       49,695       49,947  

Key Ratios

           

Return on average assets (2)

      1.46 %      1.48 %      1.22 %      1.36 %      1.37 % 

Return on average equity (3)

      13.14 %      13.22 %      10.99 %      12.15 %      12.25 % 

Return on tangible equity (4)

      14.19 %      14.30 %      11.90 %      13.16 %      13.28 % 

Net interest margin

      3.21 %      3.33 %      3.38 %      3.58 %      3.33 % 

Efficiency ratio

     52.15 %      55.37 %      62.29 %      54.79 %      57.30 % 

Nonperforming loans to net loans, end of period

      0.46 %      0.58 %      0.32 %      0.30 %      0.42 % 

Nonperforming assets to total assets, end of period

      0.39 %      0.48 %      0.34 %      0.27 %      0.36 % 

Allowance for loan loss as a percent of loans, end of period

      0.88 %      0.91 %      0.91 %      0.93 %      0.98 % 

Delinquent loans to total net loans, end of period

      0.63 %      0.58 %      0.41 %      0.50 %      0.69 % 

 

 

(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,
2019		     June 30, 2019     March 31, 2019     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands)  

Loan Portfolio Composition

           

Commercial loans

           

Multi-family

    $ 166,027     $ 154,630     $ 163,243     $ 134,143     $ 139,938  

Owner/nonowner occupied commercial real estate

      409,687       414,780       412,550       409,979       408,938  

Land

      19,653       16,955       17,090       16,830       16,129  

Construction

      127,388       138,043       135,048       141,686       132,961  

Commercial and industrial

      271,292       249,898       246,740       240,293       233,801  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      994,047       974,306       974,671       942,931       931,767  

Residential mortgage loans

           

Real estate

      938,899       942,698       934,586       927,255       909,626  

Construction

      44,636       46,196       45,102       43,435       39,396  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      983,535       988,894       979,688       970,690       949,022  

Consumer loans

           

Consumer

      283,641       279,531       274,998       277,041       283,108  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      283,641       279,531       274,998       277,041       283,108  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

      2,261,223       2,242,731       2,229,357       2,190,662       2,163,897  

Less:

           

Allowance for loan losses

      19,987       20,482       20,446       20,443       21,332  

Deferred loan costs, net

      (7,271 )      (7,077 )      (6,638 )      (6,623 )      (6,377 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      12,716       13,405       13,808       13,820       14,955  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans, net

      2,248,507       2,229,326       2,215,549       2,176,842       2,148,942  

Loans held for sale, net

      113,593       97,477       77,676       91,472       95,235  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

    $  2,362,100     $  2,326,803     $  2,293,225     $  2,268,314     $  2,244,177  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     At or for the quarters ended  
     September 30,
2019		     June 30, 2019     March 31, 2019     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands)  

Deposit Portfolio Composition

           

Checking accounts

           

Interest bearing checking accounts

    $ 134,662     $ 131,725     $ 146,244     $ 146,977     $ 140,722  

Non-interest bearing checking accounts

      421,631       398,340       404,644       394,208       383,535  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total checking accounts

      556,293       530,065       550,888       541,185       524,257  

Savings accounts

      286,251       290,354       297,186       298,087       300,007  

Money market accounts

      653,926       606,661       550,049       466,167       489,668  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total non-time deposits

      1,496,470       1,427,080       1,398,123       1,305,439       1,313,932  

Certificates of deposit

      591,516       644,024       630,174       616,826       622,807  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total customer deposits

      2,087,986       2,071,104       2,028,297       1,922,265       1,936,739  

Brokered deposits

      17,772       188,075       261,506       290,955       415,737  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total certificates of deposit

      609,288       832,099       891,680       907,781       1,038,544  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total deposits

    $ 2,105,758     $ 2,259,179     $ 2,289,803     $ 2,213,220     $ 2,352,476  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

     At or for the quarters ended  
     September 30,
2019		     June 30,
2019		     March 31,
2019		     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands)  

Allowance For Loan Losses

           

Beginning balance

    $  20,482     $  20,446     $  20,443     $  21,332     $  21,405  

Provision

      701       (51 )      61       178       251  

Net (chargeoffs) recoveries

      (1,196 )      87       (58 )      (1,067 )      (324 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

    $ 19,987     $ 20,482     $ 20,446     $ 20,443     $ 21,332  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     At or for the quarters ended  
     September 30,
2019		     June 30,
2019		     March 31,
2019		     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands)  

Net (Charge-offs) Recoveries

           

Commercial loans

           

Multi-family

    $ 4     $ 4     $ 113     $ (99)     $ 4  

Owner/nonowner occupied commercial real estate

      12       165       28       38       12  

Land

      —         —         —         —         150  

Construction

      —         —         1       —         11  

Commercial and industrial

      (897 )      1       (84 )      (765 )      (275 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      (881 )      170       58       (826 )      (98 ) 

Residential mortgage loans

           

Real estate

      (186 )      (53 )      78       (131 )      (141 ) 

Construction

      —         —         —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      (186 )      (53 )      78       (131 )      (141 ) 

Consumer loans

           

Consumer

      (130 )      (30 )      (194 )      (110 )      (85 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      (130 )      (30 )      (194 )      (110 )      (85 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total net chargeoffs

    $ (1,197 )    $ 87     $ (58 )    $ (1,067 )    $ (324 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     At or for the quarters ended  
     September 30,
2019		     June 30,
2019		     March 31,
2019		     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands)  

Nonperforming Loans

           

Commercial loans

           

Multi-family

    $ —       $ —       $ —       $ 171     $ 275  

Owner/nonowner occupied commercial real estate

      3,610       2,688       1,565       13       1,101  

Land

      —         —         —         —         —    

Construction

      —         —         —         —         —    

Commercial and industrial

      785       4,678       456       531       1,489  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      4,395       7,366       2,021       715       2,865  

Residential mortgage loans

           

Real estate

      4,233       4,365       3,883       4,170       4,426  

Construction

      —         —         —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      4,233       4,365       3,883       4,170       4,426  

Consumer loans

           

Consumer

      1,689       1,141       1,203       1,654       1,770  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      1,689       1,141       1,203       1,654       1,770  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming loans

    $ 10,317     $ 12,872     $ 7,107     $ 6,539     $ 9,061  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Nonperforming Loans and Nonperforming Assets

           

Past due 90 days and on nonaccrual status

    $ 7,107     $ 5,392     $ 4,351     $ 5,750     $ 8,200  

Past due 90 days and still accruing

      —         —         —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Past due 90 days

      7,107       5,392       4,351       5,750       8,200  

Past due less than 90 days and on nonaccrual

      3,210       7,480       2,756       789       861  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming loans

      10,317       12,872       7,107       6,539       9,061  

Other real estate owned

      880       871       1,143       1,049       907  

Other classified assets

      —         —         1,479       —         —    

Repossessed assets

      82       84       37       39       —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming assets

    $ 11,279     $ 13,827     $ 9,766     $ 7,627     $ 9,968  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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,
2019		     June 30, 2019     March 31, 2019     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands, except per share data)  

Average shareholders equity

    $ 319,802     $ 317,265     $ 315,006     $ 314,464     $ 311,058  

Average intangible assets

      23,740       23,867       23,994       24,123       24,144  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average tangible equity

    $ 296,062     $ 293,398     $ 291,012     $ 290,341     $ 286,914  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 10,504     $ 10,486     $ 8,656     $ 9,551     $ 9,529  

Return on tangible equity

      14.19 %      14.30 %      11.90 %      13.16 %      13.28 % 

Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income:

 

  
     For the quarters ended  
     September 30,
2019		     June 30, 2019     March 31, 2019     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands)  

Interest income

    $ 29,543     $ 29,799     $ 29,401     $ 30,170     $ 27,690  

Fully taxable equivalent adjustment

      46       62       84       111       84  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fully taxable equivalent interest income

      29,589       29,861       29,485       30,281       27,774  

Interest expense

      7,959       7,756       7,215       6,676       6,067  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fully taxable net interest income

    $ 21,630     $ 22,105     $ 22,270     $ 23,605     $ 21,707  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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,
2019		     June 30, 2019     March 31, 2019     December 31,
2018		     September 30,
2018		  
     (Dollars in thousands, except per share data)  

Total shareholders’ equity

    $ 326,856     $ 317,554     $ 314,709     $ 309,334     $ 306,043  

Goodwill

      20,221       20,221       20,221       20,221       20,221  

Customer list intangible

      2,078       2,123       2,169       2,214       2,259  

Core deposit intangible

      1,357       1,439       1,521       1,603       1,686  

Total common shares outstanding

      48,087,430       48,068,790       48,852,688       49,128,875       49,922,514  

Tangible book value, as reported

    $ 6.31     $ 6.11     $ 5.95     $ 5.81     $ 5.65  

Reconciliation of Net Interest Margin, Non-Interest Income and Non-Interest Expense:

 

     At the quarters ended     At the quarters ended  
     September 30,
2019		     September 30,
2018		     June 30,
2019		     June 30,
2018		  

Net interest income (FTE)

    $ 21,630     $ 21,707     $ 22,105     $ 21,385  

less: purchase accounting

      (213 )      (383 )      (271 )      (463 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted net interest income

      21,417       21,324       21,834       20,922  

Average earning assets

      2,689,141       2,609,310       2,659,279       2,550,587  

Net interest margin excluding purchase accounting

      3.18 %      3.27 %      3.29 %      3.28 % 

Non-interest income

    $ 7,015     $ 6,146     $ 6,671     $ 5,852  

less: mortgage servicing valuation adjustment

      336       6       996       20  
  

 

 

    

 

 

    

 

 

    

 

 

  

Non-interest income, adjusted

      7,351       6,152       7,667       5,872  

Non-interest income % increase

      19.5 %        30.6 %   

Non-interest expense

    $ 15,011     $ 15,772     $ 15,976     $ 15,530  

Non-interest expense % increase

      -4.8 %        2.9 %