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 16.6% improvement over the $0.163 per common share reported for the quarter ended June 30, 2017.

Second quarter 2018 highlights:

  • Total loan growth of 12.9% over the last twelve months, and 3.1% on a linked quarter basis
  • Monthly average customer deposit growth of 10.1% over the last twelve months, and 2.2% over the last three months
  • ROA of 1.40%, ROE of 12.56%, ROTE of 13.65% for the quarter
  • Dividend increase of 17% to $0.07 per common share declared

Gary M. Small President and Chief Executive Officer of the Company commented, “We are pleased with the quarterly performance results and the ongoing progress on our strategic initiatives focused on loan, deposit and revenue growth. Each market and business unit is showing improvement and our client base is expanding. Loan growth, outstanding credit performance, and a well-managed expense base continue to be strong points for the organization. Deposit growth over the past year has been outstanding and remains a central focus for the team.”

Strong Loan and Deposit Growth

Total loans grew $252.2 million, or 12.9%, during the previous twelve months ended June 30, 2018, and $66.7 million, or 3.1% compared to the previous quarter. At June 30, 2018, total net loans and loans held for sale aggregated $2.21 billion.

Home Savings has produced excellent results over all lending categories. The increase in total loans for the period was driven by an increase in commercial loans, which grew $158.6 million, or 21.4%, over the last twelve months and $27.7 million, or 3.2%, versus March 31, 2018. Mortgage loans (including loans held for sale) increased $59.5 million, or 6.1%, over the previous twelve months and increased $32.3 million, or 3.2%, during the past three months. Consumer loans increased $33.8 million, or 13.4%, since June 30, 2017 and $5.8 million, or 2.1%, since the previous quarter.

Monthly average customer deposits (which exclude brokered certificates of deposit) increased 10.1% from June 30, 2017 and 2.2% from March 31, 2018. The growth in average customer deposits was driven by increases in average non-interest bearing accounts of 12.7% over the past twelve months and an increase of 0.60% over the past three months. Average business deposits continue to rise, increasing 16.6% over the past twelve months and 2.8% over the past three months. The Company continues to experience deposit gains from all lines of business including treasury management, private banking, consumer and public funds.

Net Interest Margin

The net interest margin was 3.36% for the three months ended June 30, 2018 compared to 3.47% for the previous quarter. This eleven basis point decrease is the result of three separate items. First, a one time prepayment penalty on a commercial loan in the first quarter 2018 increased the margin five basis points in that quarter. Secondly, purchase accounting adjustments were two basis points less favorable to the margin than the first quarter of 2018. Lastly, the remaining four basis point difference is the result of a 38 basis point increase in cost of Federal Home Loan Bank advances.

Excluding the impact of purchase accounting yield adjustments, the net interest margin would have been 3.29%, or seven basis points lower than the 3.36% reported, for the quarter ended June 30, 2018.

Small continued, “The flattening yield curve presents challenges for all in the banking industry and adds more volatility to Home Savings’ net interest margin management. We are operating within our expected margin range and are funded well for additional growth.”

Nonperforming Loans to Total Loans Ratio Decreases during the Second Quarter

Asset quality remained very strong during the second quarter. The Company’s level of nonperforming loans, delinquencies and classified assets all improved during the quarter. Net chargeoffs for the quarter were 1.3 basis points of average loans. Additionally, over the past three months, the ratio of the allowance for loan losses as a percent of loans has increased from 177.5% to 198.4% at June 30, 2018. Nonperforming loans to total loans at June 30, 2018 declined to 0.51%. Delinquent loans to total loans are down to 0.67% at June 30, 2018.

The Company recognized a negative provision for loan losses of $138,000 for the second quarter of 2018, which was down $545,000 in comparison to the previous quarter. Continued asset quality improvements, and an improved credit environment, combined with a favorable change in loan portfolio mix resulted in the need for a lower required provision. As of June 30, 2018, the Company’s allowance for loan losses to total loans was 1.01%, versus 1.04% at March 31, 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 $3.0 million and the Company’s allowance, the Company’s allowance as a percentage of total loans increases to 1.15%.

Non-Interest Income

Non-interest income decreased $1.2 million to $5.9 million for the second quarter of 2018 compared to $7.1 million for the same quarter last year. Significantly affecting this comparison is mortgage banking income being lower by $912,000, or 43.1%. The volume of mortgage loan production increased 17% and is very favorable to the prior year, however, as experienced industry-wide, market competitiveness continues to impact the margin on saleable loans.

On a year to date basis, mortgage banking income was down 25.5% compared to the same period last year.

Also affecting non-interest income, security gains were down $207,000 when compared to the second quarter of 2017. Lastly, debit/credit card fee income was down $149,000, when compared to the second quarter of 2017 due primarily to a one-time VISA credit as a result of the implementation of a more secure chip debit card, which did not reoccur in 2018.

Small added, “Home Savings’ residential mortgage team has delivered double-digit production growth over the past year, well in excess of the industry benchmark. The landscape is more competitive than ever and pricing has gotten very aggressive. While narrowed pricing is having an adverse impact on gain on sale income, we also see our portfolio yields increasing and our related operating costs decreasing. On balance, the business unit performance remains strong, and we remain very committed to our residential mortgage clients.”

Non-Interest Expense

Non-interest expense was $15.5 million for the second quarter of 2018 compared to $15.2 million during the second quarter of 2017, an increase of $354,000, or 2.3%. This increase is reflective of higher salary and employee benefits costs associated with the hiring of additional revenue generating staff in the latter half of 2017. The Company’s efficiency ratio remains consistent at 57.8%.

Effective Tax Rate

The Company’s effective tax rate on an FTE basis at June 30, 2018 was 19.5% compared to 30.6% at June 30, 2017. The decline was due to the enactment of tax legislation at the end of the year.

Dividend to be Paid

On July 17, 2018, the Board of Directors declared a 17% increase to the quarterly cash dividend to $0.07 per common share payable August 10, 2018 to shareholders of record July 27, 2018.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, July 18, 2018, at 10:00 a.m. ET, to provide an overview of the Company's second 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 2nd 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)
       
June 30, December 31,
2018 2017 F/(U)
(Dollars in thousands)
Assets:
Cash and deposits with banks $ 32,584 $ 34,365 -5.2 %
Federal funds sold   34,393     12,515   174.8 %
Total cash and cash equivalents 66,977 46,880 42.9 %
Securities:
Available for sale, at fair value 247,630 270,561 -8.5 %
Held to maturity (fair value of $78,194 and $82,126, respectively) 81,294 82,911 -2.0 %
Loans held for sale, at lower of cost or market — 211 -100.0 %
Loans held for sale, at fair value 107,701 83,541 28.9 %
Loans, net of allowance for loan losses of $21,405 and $21,202 2,099,781 1,999,877 5.0 %
Federal Home Loan Bank stock, at cost 19,324 19,324 0.0 %
Premises and equipment, net 21,645 22,094 -2.0 %
Accrued interest receivable 8,454 8,190 3.2 %
Real estate owned and other repossessed assets 877 1,253 -30.0 %
Goodwill 20,221 20,221 0.0 %
Core deposit intangible 1,769 1,934 -8.5 %
Customer list intangible 1,980 2,060 -3.9 %
Cash surrender value of life insurance 63,354 62,488 1.4 %
Other assets   29,551     28,360   4.2 %
Total assets $ 2,770,558   $ 2,649,905   4.6 %
 
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Interest bearing $ 1,563,043 $ 1,445,293 8.1 %
Noninterest bearing   383,082     354,970   7.9 %
Customer deposits 1,946,125 1,800,263 8.1 %
Brokered deposits   189,220     156,476   20.9 %
Total deposits 2,135,345 1,956,739 9.1 %
Borrowed funds:
Federal Home Loan Bank advances
Long-term advances 48,927 48,536 0.8 %
Short-term advances   248,000     308,000   -19.5 %
Total Federal Home Loan Bank advances 296,927 356,536 -16.7 %
Repurchase agreements and other   191     197   -3.0 %
Total borrowed funds 297,118 356,733 -16.7 %
Advance payments by borrowers for taxes and insurance 19,253 25,038 -23.1 %
Accrued interest payable 964 1,097 -12.1 %
Accrued expenses and other liabilities   16,394     16,033   2.3 %
Total liabilities   2,469,074     2,355,640   4.8 %
 
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 49,904,074 and 49,800,126 shares, respectively, outstanding

177,311 177,458 -0.1 %
Retained earnings 179,965 167,852 7.2 %
Accumulated other comprehensive loss (24,077 ) (18,685 ) 28.9 %
Treasury stock, at cost, 4,234,836 and 4,338,784 shares, respectively   (31,715 )   (32,360 ) -2.0 %
Total shareholders’ equity   301,484     294,265   2.5 %
Total liabilities and shareholders’ equity $ 2,770,558   $ 2,649,905   4.6 %
 
 
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                   
For the Three Months Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2018 2018 F/(U) 2017 F/(U) 2018 2017 F/(U)
(Dollars in thousands, except per share data)
Interest income
Loans $ 23,275 $ 22,759 2.3 % $ 20,011 16.3 % $ 46,034 $ 37,569 22.5 %
Loans held for sale 1,012 858 17.9 % 872 16.1 % 1,870 1,533 22.0 %
Securities:
Available for sale, nontaxable 356 388 -8.2 % 418 -14.8 % 744 836 -11.0 %
Available for sale, taxable 1,193 1,215 -1.8 % 1,479 -19.3 % 2,408 3,081 -21.8 %
Held to maturity, nontaxable 61 51 19.6 % 52 17.3 % 112 114 -1.8 %
Held to maturity, taxable 398 422 -5.7 % 454 -12.3 % 820 919 -10.8 %
Federal Home Loan Bank stock dividends 274 280 -2.1 % 227 20.7 % 554 441 25.6 %
Other interest earning assets   92     77   19.5 %   40   130.0 %   169     120   40.8 %
Total interest income 26,661 26,050 2.3 % 23,553 13.2 % 52,711 44,613 18.2 %
Interest expense
Deposits 3,790 3,097 -22.4 % 1,987 -90.7 % 6,887 3,608 -90.9 %
Federal Home Loan Bank advances 1,576 1,420 -11.0 % 1,064 -48.1 % 2,996 2,019 -48.4 %
Repurchase agreements and other   —     —   0.0 %   8   100.0 %   —     16   100.0 %
Total interest expense   5,366     4,517   -18.8 %   3,059   -75.4 %   9,883     5,643   -75.1 %
Net interest income 21,295 21,533 -1.1 % 20,494 3.9 % 42,828 38,970 9.9 %
Taxable equivalent adjustment   90     97   -7.2 %   229   -60.7 %   187     466   -59.9 %
Net interest income (FTE) (1) 21,385 21,630 -1.1 % 20,723 3.2 % 43,015 39,436 9.1 %
Provision for loan losses   (138 )   407   133.9 %   842   116.4 %   269     2,317   88.4 %
Net interest income after provision for loan losses (FTE)   21,523     21,223   1.4 %   19,881   8.3 %   42,746     37,119   15.2 %
Non-interest income
Insurance agency income 513 577 -11.1 % 472 8.7 % 1,090 945 15.3 %
Brokerage income 300 272 10.3 % 301 -0.3 % 572 623 -8.2 %
Service fees and other charges:
Deposit related fees 1,392 1,300 7.1 % 1,411 -1.3 % 2,692 2,701 -0.3 %
Mortgage servicing fees 813 812 0.1 % 729 11.5 % 1,625 1,465 10.9 %
Mortgage servicing rights valuation (20 ) 9 -322.2 % (2 ) 900.0 % (11 ) (5 ) -120.0 %
Mortgage servicing rights amortization (542 ) (500 ) 8.4 % (486 ) 11.5 % (1,042 ) (935 ) -11.4 %
Other service fees 61 38 60.5 % 33 84.8 % 99 62 59.7 %
Net gains (losses):
Securities available for sale 94 139 -32.4 % 301 -68.8 % 233 330 -29.4 %
Mortgage banking income 1,205 1,358 -11.3 % 2,117 -43.1 % 2,563 3,440 -25.5 %
Real estate owned and other repossessed assets charges, net (113 ) (78 ) 44.9 % (18 ) 527.8 % (191 ) (70 ) -172.9 %
Debit/credit card fees 1,177 949 24.0 % 1,326 -11.2 % 2,126 2,249 -5.5 %
Trust fee income 473 469 0.9 % 420 12.6 % 942 702 34.2 %
Other income   499     474   5.3 %   486   2.7 %   973     967   0.6 %
Total non-interest income   5,852     5,819   0.6 %   7,090   -17.5 %   11,671     12,474   -6.4 %
Non-interest expense
Salaries and employee benefits 8,937 9,998 10.6 % 8,749 -2.1 % 18,935 17,724 -6.8 %
Occupancy 950 1,100 13.6 % 943 -0.7 % 2,050 1,907 -7.5 %
Equipment and data processing 2,372 2,154 -10.1 % 2,306 -2.9 % 4,526 4,385 -3.2 %
Financial institutions tax 495 496 0.2 % 510 2.9 % 991 1,000 0.9 %
Advertising 290 235 -23.4 % 265 -9.4 % 525 389 -35.0 %
Amortization of intangible assets 132 113 -16.8 % 113 -16.8 % 245 196 -25.0 %
FDIC insurance premiums 288 290 0.7 % 340 15.3 % 578 528 -9.5 %
Other insurance premiums 109 109 0.0 % 109 0.0 % 218 221 1.4 %
Professional fees:
Legal fees 147 299 50.8 % 184 20.1 % 446 413 -8.0 %
Other professional fees 499 391 -27.6 % 420 -18.8 % 890 940 5.3 %
Supervisory fees 42 42 0.0 % — 0.0 % 84 — -100.0 %
Real estate owned and other repossessed asset expenses 34 36 5.6 % 23 -47.8 % 70 85 17.6 %
Acquisition related expenses — — 0.0 % — 0.0 % — 4,962 100.0 %
Other expenses   1,235     1,337   7.6 %   1,214   -1.7 %   2,572     2,716   5.3 %
Total non-interest expenses   15,530     16,600   6.4 %   15,176   -2.3 %   32,130     35,466   9.4 %
Income before income taxes 11,845 10,442 13.4 % 11,795 0.4 % 22,287 14,127 57.8 %
Taxable equivalent adjustment 90 97 7.2 % 229 60.7 % 187 466 59.9 %
Income tax expense   2,214     1,789   -23.8 %   3,377   34.4 %   4,003     3,934   -1.8 %
Net income $ 9,541   $ 8,556   11.5 % $ 8,189   16.5 % $ 18,097   $ 9,727   86.0 %
 
Earnings per common share:
Basic $ 0.191 $ 0.172 11.0 % $ 0.165 15.8 % $ 0.363 $ 0.198 83.3 %
Diluted 0.190 0.171 11.1 % 0.163 16.6 % 0.361 0.196 84.2 %
 
(1)  

Net interest income is also presented on a fully taxable equivalent (FTE) basis, the Company believes this non-GAAP measure is the preferred industry measurement for this item.

 

 
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED AVERAGE BALANCES
(Unaudited)
                 
 
For the three months ended
June 30, 2018 March 31, 2018 June 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) $ 2,075,307 $ 23,275 4.49 % $ 2,026,266 $ 22,760 4.49 % $ 1,863,525 $ 20,012 4.30 %
Loans held for sale   91,836   1,012 4.42 %   80,681   858 4.31 %   80,205   872 4.35 %
Total loans, net 2,167,143 24,287 4.48 % 2,106,947 23,618 4.49 % 1,943,730 20,884 4.30 %
Securities:
Available for sale-taxable 207,908 1,193 2.30 % 211,332 1,215 2.30 % 258,217 1,479 2.29 %
Available for sale-nontaxable (2) 50,710 429 3.38 % 54,737 472 3.45 % 59,209 619 4.18 %
Held to maturity-taxable 70,406 398 2.26 % 72,627 422 2.32 % 80,817 454 2.25 %
Held to maturity-nontaxable (2)   11,265   78 2.77 %   9,227   63 2.73 %   9,843   79 3.21 %
Total securities 340,289 2,098 2.47 % 347,923 2,172 2.50 % 408,086 2,631 2.58 %
Federal Home Loan Bank stock 19,324 274 5.67 % 19,324 280 5.80 % 19,324 227 4.70 %
Other interest earning assets   23,831   92 1.55 %   22,479   77 1.39 %   22,129   40 0.72 %
Total interest earning assets 2,550,587 26,751 4.20 % 2,496,673 26,147 4.19 % 2,393,269 23,782 3.97 %
Non-interest earning assets   174,270   176,785   180,524
Total assets $ 2,724,857 $ 2,673,458 $ 2,573,793
Interest bearing liabilities:
Deposits:
Checking accounts $ 638,910 948 0.60 % $ 593,499 687 0.47 % $ 633,276 480 0.30 %
Savings accounts 307,250 26 0.03 % 303,639 27 0.04 % 308,683 27 0.03 %
Certificates of deposit
Customer certificates of deposit 608,079 2,143 1.41 % 581,858 1,817 1.27 % 504,397 1,166 0.92 %
Brokered certificates of deposit   164,400   673 1.64 %   165,169   566 1.39 %   133,082   314 0.94 %
Total certificates of deposit   772,479   2,816 1.46 %   747,027   2,383 1.29 %   637,479   1,480 0.93 %
Total interest bearing deposits 1,718,639 3,790 0.88 % 1,644,165 3,097 0.76 % 1,579,438 1,987 0.50 %
Federal Home Loan Bank advances
Long-term advances 48,799 493 4.05 % 48,603 431 3.60 % 48,019 370 3.08 %
Short-term advances   236,747   1,083 1.83 %   265,322   989 1.51 %   286,604   694 0.97 %
Total Federal Home Loan Bank advances 285,546 1,576 2.21 % 313,925 1,420 1.83 % 334,623 1,064 1.27 %
Repurchase agreements and other   195   — 0.00 %   213   — 0.00 %   4,844   8 0.66 %
Total borrowed funds   285,741   1,576 2.21 %   314,138   1,420 1.83 %   339,467   1,072 1.26 %
Total interest bearing liabilities $ 2,004,380   5,366 1.07 % $ 1,958,303   4,517 0.94 % $ 1,918,905   3,059 0.64 %
Non-interest bearing liabilities
Total noninterest bearing deposits 376,905 375,142 333,784
Other noninterest bearing liabilities   39,839   40,729   38,771
Total noninterest bearing liabilities   416,744   415,871   372,555
Total liabilities $ 2,421,124 $ 2,374,174 $ 2,291,460
Shareholders’ equity   303,733   299,284   282,333
Total liabilities and equity $ 2,724,857 $ 2,673,458 $ 2,573,793
Net interest income and interest rate spread $ 21,385 3.13 % $ 21,630 3.25 % $ 20,723 3.33 %
Net interest margin 3.36 % 3.47 % 3.46 %
Average interest earning assets to average interest bearing liabilities 127.25 % 127.49 % 124.72 %
 
 
Interest bearing deposits
Checking accounts $ 638,910 $ 948 0.60 % $ 593,499 $ 687 0.47 % $ 633,276 $ 480 0.30 %
Savings accounts 307,250 26 0.03 % 303,639 27 0.04 % 308,683 27 0.03 %
Customer certificates of deposit   608,079   2,143 1.41 %   581,858   1,817 1.27 %   504,397   1,166 0.92 %
Total customer deposits 1,554,239 3,117 0.80 % 1,478,996 2,531 0.68 % 1,446,356 1,673 0.46 %
Brokered certificates of deposit   164,400   673 1.64 %   165,169   566 1.39 %   133,082   314 0.94 %
Total interest bearing deposits 1,718,639 3,790 0.88 % 1,644,165 3,097 0.76 % 1,579,438 1,987 0.50 %
Noninterest bearing deposits   376,905   — 0.00 %   375,142   — 0.00 %   333,784   — 0.00 %
Total average deposits and cost of deposits $ 2,095,544 $ 3,790 0.72 % $ 2,019,307 $ 3,097 0.62 % $ 1,913,222 $ 1,987 0.42 %
Other interest bearing liabilities
Federal Home Loan Bank advances
Long term advances $ 48,799 $ 493 4.05 % $ 48,603 $ 431 3.60 % $ 48,019 $ 370 3.08 %
Short term advances   236,747   1,083 1.83 %   265,322   989 1.51 %   286,604   694 0.97 %
Total Federal Home Loan Bank advances 285,546 1,576 2.21 % 313,925 1,420 1.83 % 334,623 1,064 1.27 %
Repurchase agreements and other   195   — 0.00 %   213   — 0.00 %   4,844   8 0.66 %
Total borrowed funds   285,741   1,576 2.21 %   314,138   1,420 1.83 %   339,467   1,072 1.26 %
Total average deposits and other interest bearing liabilities and total cost of funds $ 2,381,285 $ 5,366 0.90 % $ 2,333,445 $ 4,517 0.79 % $ 2,252,689 $ 3,059 0.54 %
 
 
Customer deposits interest bearing and noninterest bearing $ 1,931,144 $ 3,117 0.65 % $ 1,854,138 $ 2,531 0.55 % $ 1,780,140 $ 1,673 0.38 %
Brokered deposits 164,400 673 1.64 % 165,169 566 1.39 % 133,082 314 0.94 %
Total borrowings 285,741 1,576 2.21 % 314,138 1,420 1.83 % 339,467 1,072 1.26 %
Cost of funds 2,381,285 5,366 0.90 % 2,333,445 4,517 0.79 % 2,252,689 3,059 0.54 %
 

(1)

  

Nonaccrual loans are included in the average balance at a yield of 0%.

(2)

Yields are on a fully taxable equivalent basis.

 
       
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
   
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands, except per share data)
Financial Data
Total assets $ 2,770,558 $ 2,690,707 $ 2,649,905 $ 2,602,365 $ 2,553,565
Total loans, net 2,099,781 2,061,443 1,999,877 1,947,695 1,869,095
Total securities 328,924 338,593 353,472 360,371 375,738
Total deposits 2,135,345 2,066,978 1,956,739 1,938,699 1,893,993
Average interest-bearing deposits 1,718,639 1,644,165 1,598,922 1,563,464 1,579,438
Average noninterest-bearing deposits 376,905 375,142 355,225 337,067 333,784
Total shareholders' equity 301,484 296,195 294,265 291,851 285,480
Net interest income 21,295 21,533 20,880 20,503 20,494
Net interest income (FTE) (1) 21,385 21,630 21,101 20,727 20,723
(Recovery) provision for loan losses (138 ) 407 1,215 721 842
Noninterest income 5,852 5,819 6,460 6,305 7,090
Noninterest expense 15,530 16,600 17,329 15,464 15,176
Income tax expense 2,214 1,789 4,294 3,067 3,377
Net income 9,541 8,556 4,502 7,556 8,189
 
Share Data
Basic earnings per common share $ 0.191 $ 0.172 $ 0.090 $ 0.152 $ 0.165
Diluted earnings per common share 0.190 0.171 0.090 0.151 0.163
Book value per common share 6.04 5.94 5.90 5.87 5.74
Tangible book value per common share 5.56 5.45 5.41 5.38 5.27
Market value per common share 10.99 9.86 9.13 9.60 8.31
 
Common shares outstanding at end of period 49,904 49,882 49,800 49,758 49,715
Weighted average shares outstanding--basic 49,694 49,611 49,497 49,460 49,392
Weighted average shares outstanding--diluted 50,006 49,885 49,827 49,851 49,795
 
Key Ratios
Return on average assets (ROA) (2) 1.40 % 1.28 % 0.68 % 1.17 % 1.27 %
Return on average equity (ROE)(3) 12.56 % 11.44 % 6.09 % 10.43 % 11.60 %
Return on tangible equity (ROTE)(4) 13.65 % 12.44 % 6.62 % 11.35 % 12.66 %
Net interest margin 3.36 % 3.47 % 3.43 % 3.45 % 3.46 %
Efficiency ratio 57.75 % 60.20 % 63.73 % 57.13 % 54.71 %
Nonperforming loans to net loans, end of period 0.51 % 0.59 % 0.59 % 0.62 % 0.58 %
Nonperforming assets to total assets, end of period 0.57 % 0.65 % 0.64 % 0.75 % 0.72 %
Allowance for loan loss as a percent of loans, end of period 1.01 % 1.04 % 1.05 % 1.04 % 1.04 %
Delinquent loans to total net loans, end of period 0.67 % 0.81 % 0.86 % 0.89 % 0.77 %

______________________________

(1)

  

Net interest income is presented on a fully taxable equivalent (FTE) basis, the Company believes this non-GAAP measure is the preferred industry measurement for this item

(2)

Net income divided by average total assets

(3)

Net income divided by average total equity

(4)

Net income divided by average total equity, minus average intangible assets

 
 
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
         
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands)
Loan Portfolio Composition
Commercial loans
Multi-family $ 141,004 $ 137,836 $ 120,480 $ 126,977 $ 121,565
Owner/nonowner occupied commercial real estate 396,624 384,533 381,611 366,747 342,300
Land 16,887 15,452 15,162 13,666 10,867
Construction 127,691 134,181 116,863 108,105 96,765
Commercial and industrial   218,611     201,132     188,500     175,581     170,758  
Total 900,817 873,134 822,616 791,076 742,255
Residential mortgage loans
Real estate 888,583 882,873 870,939 851,863 834,349
Construction   40,623     42,453     49,092     57,081     56,946  
Total 929,206 925,326 920,031 908,944 891,295
Consumer loans
Consumer   284,909     279,110     273,494     263,692     251,151  
Total   284,909     279,110     273,494     263,692     251,151  
Total loans 2,114,932 2,077,570 2,016,141 1,963,712 1,884,701
Less:
Allowance for loan losses 21,405 21,610 21,202 20,555 19,660
Deferred loan costs, net   (6,254 )   (5,483 )   (4,938 )   (4,538 )   (4,054 )
Total   15,151     16,127     16,264     16,017     15,606  
Total loans, net 2,099,781 2,061,443 1,999,877 1,947,695 1,869,095
Loans held for sale, net   107,701     79,292     83,752     84,545     86,153  
Total loans $ 2,207,482   $ 2,140,735   $ 2,083,629   $ 2,032,240   $ 1,955,248  
 
 
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts $ 138,812 $ 140,740 $ 170,478 $ 173,171 $ 175,800
Non-interest bearing checking accounts   383,082     376,904     354,970     343,146     339,067  
Total checking accounts 521,894 517,644 525,448 516,317 514,867
Savings accounts 306,283 308,025 301,716 307,169 310,012
Money market accounts   502,560     483,840     424,234     418,294     427,348  
Total non-time deposits 1,330,737 1,309,509 1,251,398 1,241,780 1,252,227
Certificates of deposit less than or equal to $250,000 744,770 704,147 651,255 617,839 557,300
Certificates of deposit greater than $250,000   59,838     53,322     54,086     79,080     84,466  
Total certificates of deposit   804,608     757,469     705,341     696,919     641,766  
Total deposits $ 2,135,345   $ 2,066,978   $ 1,956,739   $ 1,938,699   $ 1,893,993  
 
 
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
         
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands)
 
Allowance For Loan Losses
Beginning balance $ 21,610 $ 21,202 $ 20,555 $ 19,660 $ 18,970
Provision (138 ) 407 1,215 721 842
Net (chargeoffs) recoveries   (67 )   1     (568 )   174     (152 )
Ending balance $ 21,405   $ 21,610   $ 21,202   $ 20,555   $ 19,660  
 
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands)
Net Recoveries (Charge-offs)
Commercial loans
Multi-family $ 9 $ 6 $ (126 ) $ (4 ) $ 4
Owner/nonowner occupied commercial real estate 29 40 23 39 24
Land — — — — —
Construction 10 7 — — —
Commercial and industrial   (72 )   104     (90 )   314     108  
Total (24 ) 157 (193 ) 349 136
Residential mortgage loans
Real estate (14 ) (66 ) (257 ) (291 ) (239 )
Construction   —     —     —     —     —  
Total (14 ) (66 ) (257 ) (291 ) (239 )
Consumer loans
Consumer   (29 )   (90 )   (118 )   116     (49 )
Total   (29 )   (90 )   (118 )   116     (49 )
Total net chargeoffs $ (67 ) $ 1   $ (568 ) $ 174   $ (152 )
 
 
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands)
Nonperforming Loans
Commercial loans
Multi-family $ 275 $ 275 $ 275 $ 402 $ 413
Owner/nonowner occupied commercial real estate 1,111 1,206 1,218 1,234 1,331
Land — 9 9 9 9
Construction — — — — —
Commercial and industrial   1,475     1,459     1,505     234     190  
Total 2,861 2,949 3,007 1,879 1,943
Residential mortgage loans
Real estate 6,146 7,045 6,076 6,627 6,701
Construction   —     —     —     —     —  
Total 6,146 7,045 6,076 6,627 6,701
Consumer loans
Consumer   1,783     2,180     2,620     2,332     2,137  
Total   1,783     2,180     2,620     2,332     2,137  
Total nonperforming loans $ 10,790   $ 12,174   $ 11,703   $ 10,838   $ 10,781  
 
 
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status $ 8,395 $ 8,326 $ 8,620 $ 7,634 $ 7,706
Past due 90 days and still accruing   —     —     —     8     2  
Past due 90 days 8,395 8,326 8,620 7,642 7,708
Past due less than 90 days and on nonaccrual   2,395     3,848     3,083     3,196     3,073  
Total nonperforming loans 10,790 12,174 11,703 10,838 10,781
Other real estate owned 802 1,030 1,047 1,133 1,197
Other classified assets 4,050 4,050 4,050 6,384 6,384
Repossessed assets   75     263     206     10     —  
Total nonperforming assets $ 15,717   $ 17,517   $ 17,006   $ 18,365   $ 18,362  
 
UNITED COMMUNITY FINANCIAL CORP.
NON-GAAP DISCLOSURE RECONCILIATION
(Unaudited)
         
 
Reconciliation of Average Shareholders' Equity to Average Tangible Equity:
 
At or for the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands, except per share data)
Average shareholders equity $ 303,733 $ 299,284 $ 295,506 $ 295,506 $ 282,335
Average intangible assets   24,063     24,175     23,563     23,642     23,699  
Average tangible equity $ 279,670   $ 275,109   $ 271,943   $ 271,864   $ 258,636  
 
Net income $ 9,541 $ 8,556 $ 4,502 $ 7,556 $ 8,189
 
Return on tangible equity 13.65 % 12.44 % 6.62 % 11.12 % 12.66 %
 
Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income:
 
For the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands)
 
Interest income $ 26,661 $ 26,050 $ 24,849 $ 24,048 $ 23,553
Fully taxable equivalent adjustment   90     97     221     224     229  
Fully taxable equivalent interest income 26,751 26,147 25,070 24,272 23,782
Interest expense   5,366     4,517     3,969     3,545     3,059  
Fully taxable net interest income $ 21,385   $ 21,630   $ 21,101   $ 20,727   $ 20,723  
 
Reconciliation of Coverage Ratio to Coverage Ratio with Fair Value Adjustments Included with Allowance for Loan Losses:
 

June 30,
2018

(Dollars in thousands)
Allowance for loan losses $ 21,405
Fair value adjustments   2,961  
  24,366  
 
Loans, net $ 2,099,781
Add: Allowance for loan losses and fair value adjustment   24,366  
Gross loans $ 2,124,147  
 

Coverage ratio with the Fair Value adjustments included in Allowance for loan losses

1.15 %
 
 
Tangible Book Value Per Share:
 
Tangible book value, per share is defined at shareholders equity minus intangible assets divided by the number of shares outstanding.
 
At the quarters ended

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30,
2017

(Dollars in thousands, except per share data)
Total shareholders' equity $ 301,484 $ 296,195 $ 294,265 $ 291,851 $ 285,480
Goodwill 20,221 20,221 20,221 19,488 19,467
Customer list intangible 1,980 2,030 2,060 2,090 2,060
Core deposit intangible 1,769 1,851 1,934 2,017 2,099
Total common shares outstanding 49,904,074 49,882,491 49,800,126 49,758,487 49,715,021
Tangible book value, as reported $ 5.56 $ 5.45 $ 5.41 $ 5.38 $ 5.27