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 CDs 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
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191022006093/en/
Media Contact: Kathy Bushway Senior Vice President,
Marketing Home Savings Bank (330) 742-0638
kbushway@homesavings.com
Investor Contact: Gary M. Small President and Chief
Executive Officer United Community Financial Corp. (330)
742-0472
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