Company News »

UCFC Announces Net Income of $3.7 Million

Business Wire
Share on StockTwits
Published on

United Community Financial Corp. (Company) (Nasdaq: UCFC), parent company of The Home Savings and Loan Company of Youngstown, Ohio (Home Savings), announced today that net income for the quarter ended March 31, 2015 totaled $3.7 million, or $.074 per diluted common share, compared to $2.1 million or $0.041 per common share for the quarter ended March 31, 2014.

Gary M. Small, President and Chief Executive Officer of United Community and Home Savings, commented that, “Performance for the first quarter was in line with our expectations and we were very pleased with the continued improvement in pre-tax earnings, topping $5.5 million for the quarter. The results were driven by a powerful combination of strong loan and deposit growth, meaningful improvement in fee income, and a continuous focus on expense management. I expect these themes to be sustained going forward as the entire Home Savings team is very focused on delivering a very strong 2015.”

Total Loans

Total loans, including loans held for sale, increased $30.9 million to $1.2 billion at March 31, 2015 compared to December 31, 2014. The increase was driven by a 7.8% increase, or $19.6 million, in commercial loans during the first quarter of 2015. Unfunded commercial loan commitments remain strong at approximately $60.0 million at the end of the first quarter of 2015. Residential loans, including residential loans held for sale, increased 1.4%, or $10.9 million.

Total Deposits

Total deposits increased $58.9 million to $1.4 billion at March 31, 2015 compared to $1.3 billion at December 31, 2014. Total non-time deposits increased 7.1% which can be substantially attributed to Home Savings’ planned expansion efforts in attracting public funds.

First Quarter Results

Net Interest Income and Margin

Net interest income was $13.9 million in the first quarter of 2015 up from the $12.6 million recorded in the first quarter of 2014 and $13.4 million recorded in the previous quarter. Net interest margin was 3.24% for the first quarter of 2015 compared to 3.07% in the first quarter of 2014, and increased from the 3.16% net interest margin recorded in the previous quarter. The net interest margin is being positively impacted by the 2014 modification of a FHLB advance and the prepayment of two repurchase agreements.

Provision for Loan Losses

The Company recognized a negative provision for loan losses of $184,000 in the first quarter of 2015 compared to $33,000 of provision expense in first quarter of 2014, and $194,000 of provision expense in the previous quarter. Home Savings continues to experience positive trends in the loan portfolio’s asset quality metrics. This, combined with positive economic conditions has led to the negative loan loss provision in the first quarter of 2015. The volume of net chargeoffs declined during the quarter as compared to the same quarter last year and the previous quarter. At the end of the first quarter, net chargeoffs to average outstanding loans was 10 basis points on an annualized basis. This compares favorably to an average of 20 basis points over the previous four quarters.

Non-Interest Income

Non-interest income was $4.1 million in the first quarter of 2015 compared to $3.2 million in the first quarter of 2014 and up from $2.9 million in the previous quarter. This change was primarily attributable to an increase in the volume of loans sold into the secondary market. Additionally, Home Savings was able to realize benefit from increased pricing related to 2015 production.

Non-Interest Expense

Total non-interest expense was $12.7 million in the first quarter of 2015, an increase of $755,000 over the fourth quarter of 2014 when adjusted for a $2.0 million prepayment penalty that occurred at that time. The $755,000 increase is primarily reflective of the cost of funding revenue-producing initiatives. Total non-interest expense also decreased $862,000 from the $13.5 million reported in the first quarter of 2014. All major expense categories declined as a result of the successful efforts in monitoring and managing expenses.

Asset Quality

For the first quarter of 2015, the allowance for loan loss as a percentage of total loans was 1.45% at March 31, 2015 compared with 1.52% at December 31, 2014 and 1.90% at March 31, 2014. Measures of asset quality continued to improve during the first quarter of 2015. Delinquencies continue to decline along with nonperforming assets and nonperforming loans.

Dividend to be Paid

The Board of Directors declared a quarterly cash dividend of $0.01 per common share payable May 15, 2015 to shareholders of record at the close of business May 1, 2015.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, April 22, 2015, at 10:00 a.m. ET., to provide an overview of the Company’s first quarter 2015 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 www.ucfconline.com. Click on 1st Quarter 2015 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 32 full-service banking offices and nine loan production offices located throughout Ohio and western Pennsylvania. Additional information on the Company and Home Savings may be found on the Company’s web site: www.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)
March 31, December 31,
2015 2014
(Dollars in thousands)
Assets:
Cash and deposits with banks $ 22,197 $ 21,152
Federal funds sold 19,468 11,828
Total cash and cash equivalents 41,665 32,980
Securities:
Available for sale, at fair value 492,412 499,790
Loans held for sale 31,243 20,730
Loans, net of allowance for loan losses of $17,221 and $17,687 1,168,434 1,148,093
Federal Home Loan Bank stock, at cost 18,068 18,068
Premises and equipment, net 20,790 21,002
Accrued interest receivable 5,208 5,763
Real estate owned and other repossessed assets 3,119 3,467
Core deposit intangible 70 84
Cash surrender value of life insurance 46,733 46,401
Other assets 32,878 37,172
Total assets $ 1,860,620 $ 1,833,550
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Interest bearing $ 1,207,232 $ 1,159,871
Non-interest bearing 199,512 187,965
Total deposits 1,406,744 1,347,836
Borrowed funds:
Federal Home Loan Bank advances 152,389 186,194
Repurchase agreements and other 30,552 30,558
Total borrowed funds 182,941 216,752
Advance payments by borrowers for taxes and insurance 14,529 19,904
Accrued interest payable 219 185
Accrued expenses and other liabilities 9,083 8,738
Total liabilities 1,613,516 1,593,415
Shareholders’ Equity:
Preferred stock-no par value; 1,000,000 shares authorized and no shares outstanding

Common stock-no par value; 499,000,000 shares authorized; 54,138,910 shares

issued and 49,309,412 and 49,239,004 shares, respectively, outstanding 173,923 174,385
Retained earnings 131,238 128,512
Accumulated other comprehensive loss (16,108 ) (19,998 )
Treasury stock, at cost, 4,829,498 and 4,899,906 shares, respectively (41,949 ) (42,764 )
Total shareholders’ equity 247,104 240,135
Total liabilities and shareholders’ equity $ 1,860,620 $ 1,833,550
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31, December 31, March 31,
2015 2014 2014
(Dollars in thousands, except per share data)
Interest income
Loans $ 12,691 $ 12,640 $ 12,122
Loans held for sale 294 217 49
Securities:
Available for sale 2,861 2,946 3,241
Federal Home Loan Bank stock dividends 182 182 267
Other interest earning assets 6 7 26
Total interest income 16,034 15,992 15,705
Interest expense
Deposits 1,533 1,583 1,677
Federal Home Loan Bank advances 305 443 518
Repurchase agreements and other 316 615 908
Total interest expense 2,154 2,641 3,103
Net interest income 13,880 13,351 12,602
Provision for loan losses (184 ) 194 33
Net interest income after provision for loan losses 14,064 13,157 12,569
Non-interest income
Non-deposit investment income 292 259 341
Service fees and other charges
Mortgage servicing fees 674 684 689
Deposit related fees 1,065 1,051 1,198
Mortgage servicing rights valuation (161 ) (54 ) (1 )
Mortgage servicing rights amortization (443 ) (428 ) (392 )
Other service fees 17 17
Net gains (losses):
Securities available for sale 11 82 3
Mortgage banking income 1,553 (30 ) 612
Real estate owned and other repossessed assets charges, net (90 ) (172 ) (383 )
Card fees 816 893 772
Other income 384 603 385
Total non-interest income 4,118 2,905 3,224
Non-interest expense
Salaries and employee benefits 7,176 6,683 7,580
Occupancy 918 847 933
Equipment and data processing 1,672 1,918 1,798
Financial institutions tax 326 201 198
Advertising 142 221 189
Amortization of core deposit intangible 14 16 19
Prepayment penalty 2,013
FDIC assessment 326 341 253
Other insurance premiums 84 85 137
Professional fees
Legal and consulting fees 217 85 161
Other professional fees 376 381 392
Real estate owned and other repossessed asset expenses 141 92 213
Other expenses 1,289 1,056 1,670
Total non-interest expenses 12,681 13,939 13,543
Income before income taxes 5,501 2,123 2,250
Income tax expense (benefit) 1,815 (685 ) 156
Net income $ 3,686 $ 2,808 $ 2,094
Earnings per common share
Basic $ 0.075 $ 0.057 $ 0.042
Diluted 0.074 0.056 0.041
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the quarters ended
March 31, December 31,

September 30,

June 30, March 31,
2015 2014

2014

2014 2014
(Dollars in thousands, except per share data)
Financial Data
Total assets $ 1,860,620 $ 1,833,550 $ 1,801,540 $ 1,789,939 $ 1,749,144
Total loans, net 1,168,434 1,148,093 1,119,955 1,086,771 1,060,901
Total securities 492,412 499,790 507,125 516,637 517,388
Total deposits 1,406,744 1,347,836 1,346,377 1,375,474 1,398,067
Total shareholders’ equity 247,104 240,135 233,706 235,049 189,829
Net interest income 13,880 13,351 12,725 12,741 12,602
(Recovery) provision for loan losses (184 ) 194 116 (1,614 ) 33
Noninterest income 4,118 2,905 4,174 3,438 3,224
Noninterest expense 12,681 13,939 14,252 14,226 13,543
Income tax expense (benefit) 1,815 (685 ) (369 ) (38,837 ) 156
Net income 3,686 2,808 2,900 42,404 2,094
Share Data
Basic earnings per common share $ 0.075 $ 0.057 $ 0.058 $ 0.839 $ 0.042
Diluted earnings per common share 0.074 0.056 0.058 0.835 0.041
Book value per common share 5.01 4.88 4.70 4.66 3.76
Tangible book value per common share 5.01 4.88 4.70 4.66 3.76
Market value per common share 5.46 5.37 4.68 4.13 3.92
Common shares outstanding at end of period 49,309 49,239 49,682 50,452 50,422
Weighted average shares outstanding–basic 49,022 49,244 49,698 50,274 50,196
Weighted average shares outstanding–diluted 49,295 49,531 49,958 50,495 50,451
Key Ratios
Return on average assets (1) 0.80 % 0.62 % 0.66 % 9.67 % 0.48 %
Return on average equity (2) 5.99 % 4.70 % 4.99 % 84.84 % 4.52 %
Net interest margin 3.24 % 3.16 % 3.06 % 3.09 % 3.07 %
Efficiency ratio 70.07 % 72.85 %

(3)

76.55 %

(3)

87.77 % 83.45 %
Nonperforming loans to total loans, end of period 1.72 % 1.78 % 1.85 % 1.87 % 2.17 %
Nonperforming assets to total assets, end of period 1.25 % 1.30 % 1.40 % 1.39 % 1.58 %
Allowance for loan loss as a percent of loans, end of period 1.45 % 1.52 % 1.59 % 1.65 % 1.90 %
Delinquent loans to total loans, end of period 1.66 % 1.82 % 2.10 % 1.86 % 2.07 %
(1) Net income divided by average total assets
(2) Net income divided by average total equity
(3) Excludes penalty on the prepayment of repurchase agreements
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the quarters ended
March 31, December 31, September 30, June 30, March 31,
2015 2014 2014 2014 2014
(Dollars in thousands)
Loan Portfolio Composition
Commercial loans
Multi-family $ 63,597 $ 60,546 $ 56,445 $ 52,938 $ 54,233
Owner/nonowner occupied commercial real estate 132,305 121,595 123,260 122,066 125,796
Land 9,437 9,484 9,487 9,635 9,829
Construction 11,030 16,064 4,667 1,010 207
Commercial and industrial 54,036 45,222 39,853 39,127 40,013
Total 270,405 252,911 233,712 224,776 230,078
Residential mortgage loans
Real estate 696,387 694,105 669,270 645,211 610,879
Construction 37,293 37,113 52,735 51,974 55,082
Total 733,680 731,218 722,005 697,185 665,961
Consumer loans
Consumer 180,735 180,754 181,474 182,027 184,409
Total 180,735 180,754 181,474 182,027 184,409
Total loans 1,184,820 1,164,883 1,137,191 1,103,988 1,080,448
Less:
Allowance for loan losses 17,221 17,687 18,132 18,264 20,554
Deferred loan costs, net (835 ) (897 ) (896 ) (1,047 ) (1,007 )
Total 16,386 16,790 17,236 17,217 19,547
Total loans, net 1,168,434 1,148,093 1,119,955 1,086,771 1,060,901
Loans held for sale, net 31,243 20,730 10,567 9,290 4,230
Total loans $ 1,199,677 $ 1,168,823 $ 1,130,522 $ 1,096,061 $ 1,065,131
At or for the quarters ended
March 31, December 31, September 30, June 30, March 31,
2015 2014 2014 2014 2014
(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts $ 184,029 $ 137,511 $ 131,266 $ 133,999 $ 136,031
Non-interest bearing checking accounts 199,512 187,965 181,631 185,411 185,620
Total checking accounts 383,541 325,476 312,897 319,410 321,651
Savings accounts 282,643 274,149 273,192 277,404 278,906
Money market accounts 310,983 312,911 313,513 326,738 329,163
Total non-time deposits 977,167 912,536 899,602 923,552 929,720
Retail certificates of deposit 429,576 435,300 446,774 451,922 468,347
Total certificates of deposit 429,576 435,300 446,774 451,922 468,347
Total deposits $ 1,406,743 $ 1,347,836 $ 1,346,376 $ 1,375,474 $ 1,398,067
Certificates of deposit as a percent of total deposits 30.54 % 32.30 % 33.18 % 32.86 % 33.50 %
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the quarters ended
March 31, December 31, September 30, June 30, March 31,
2015 2014 2014 2014 2014
(Dollars in thousands)
Allowance For Loan Losses
Beginning balance $ 17,687 $ 18,132 $ 18,264 $ 20,554 $ 21,116
(Recovery) provision (184 ) 194 116 (1,614 ) 33
Net (chargeoffs) recoveries (282 ) (639 ) (248 ) (676 ) (595 )
Ending balance $ 17,221 $ 17,687 $ 18,132 $ 18,264 $ 20,554
At or for the quarters ended
March 31, December 31, September 30, June 30, March 31,
2015 2014 2014 2014 2014
(Dollars in thousands)
Net (Charge-offs) Recoveries
Commercial loans
Multi-family $ 13 $ $ $ (135 ) $ (5 )
Owner/nonowner occupied commercial real estate 9 (25 ) (9 ) 56 (252 )
Land
Construction
Commercial and industrial 75 199 158 218 137
Total 97 174 149 139 (120 )
Residential mortgage loans
Real estate 20 (141 ) (278 ) (181 ) (163 )
Construction (488 ) (90 ) (330 ) (79 )
Total 20 (629 ) (368 ) (511 ) (242 )
Consumer loans
Consumer (399 ) (184 ) (29 ) (304 ) (233 )
Total (399 ) (184 ) (29 ) (304 ) (233 )
Total net (chargeoffs) recoveries $ (282 ) $ (639 ) $ (248 ) $ (676 ) $ (595 )
At or for the quarters ended
March 31, December 31, September 30, June 30, March 31,
2015 2014 2014 2014 2014
(Dollars in thousands)
Nonperforming Loans
Commercial loans
Multi-family $ 85 $ 93 $ 114 $ 133 $ 1,158
Owner/nonowner occupied commercial real estate 5,701 5,781 6,804 4,902 5,033
Land 531 531 531 532 532
Construction 1,050 1,051 2,453 2,553 2,884
Commercial and industrial 4,016 4,016 4,144 4,151 4,155
Total 11,383 11,472 14,046 12,271 13,762
Residential mortgage loans
Real estate 6,652 6,816 4,700 5,380 6,133
Construction
Total 6,652 6,816 4,700 5,380 6,133
Consumer loans
Consumer 2,061 2,163 1,960 2,663 3,089
Total 2,061 2,163 1,960 2,663 3,089
Total nonperforming loans $ 20,096 $ 20,451 $ 20,706 $ 20,314 $ 22,984
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status $ 15,357 $ 16,017 $ 18,114 $ 16,636 $ 18,708
Past due 90 days and still accruing
Past due 90 days 15,357 16,017 18,114 16,636 18,708
Past due less than 90 days and on nonaccrual 4,739 4,434 2,592 3,678 4,276
Total nonperforming loans 20,096 20,451 20,706 20,314 22,984
Other real estate owned 2,908 3,345 4,445 4,546 4,700
Repossessed assets 211 122 42 2
Total nonperforming assets $ 23,215 $ 23,918 $ 25,193 $ 24,862 $ 27,684

Share on StockTwits