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Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 22, 2019

 

 

UNITED COMMUNITY FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

 

 

 

OHIO   000-024399   34-1856319

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(IRS Employer

I.D. No.)

275 West Federal Street, Youngstown, Ohio 44503-1203

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (330) 742-0500

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Section 2 – Financial Information

 

Item 2.02

Results of Operation and Financial Condition

 

  (a)

On January 22, 2019, United Community Financial Corp. issued a press release announcing its results of operations for the fourth quarter of 2018. A copy of the press release is attached as Exhibit 99.

Section 9 – Financial Statements and Exhibits

 

Item 9.01

Financial Statements and Exhibits.

 

  (d)

Exhibits.

 

Exhibit
Number

  

Description

    
99    Press Release of United Community dated January 22, 2019.    Included herewith.

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

UNITED COMMUNITY FINANCIAL CORP.
  By:  

/s/ Jude J. Nohra

   

Jude J. Nohra

General Counsel & Secretary

Date: January 23, 2019

 

3

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Section 2: EX-99 (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    United Community Financial Corp.
(330) 742-0638    (330) 742-0472
kbushway@homesavings.com   

UCFC ANNOUNCES STRONG EARNINGS FOR THE FOURTH QUARTER AND A DIVIDEND OF $0.07 PER COMMON SHARE

YOUNGSTOWN, Ohio (January 22, 2019) – United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), today announced net income of $9.6 million, or $0.191 per diluted common share (“EPS”) for the three months ended December 31, 2018, compared to $0.090 EPS or $4.5 million for the three months ended December 31, 2017. For the year ended December 31, 2018, net income was $37.2 million, or $0.742 per diluted common share compared to $0.437 EPS or $21.8 million in the previous year.    

Fourth quarter 2018 highlights:

 

   

Linked quarter net loan growth of 5.2% annualized

 

   

Net interest margin of 3.58%, or 3.42% normalized

 

   

ROA of 1.36%, ROE of 12.15% and ROTE of 13.16%

 

   

Efficiency ratio was 54.79%

 

   

Repurchase of 801,000 shares

Full year 2018 highlights:

 

   

Year over year net loan growth of 8.9%

 

   

Year over year average customer deposit growth of 8.3%

 

   

Net interest income up 9.4%

 

   

Net interest margin of 3.43%, or 3.39% normalized

 

   

ROA of 1.35%, ROE of 12.10% and ROTE of 13.13%

 

   

Efficiency ratio was 56.85%


Gary M. Small, President and Chief Executive Officer of the Company commented, “Full year 2018 performance reflects strengths on many fronts. Loan growth up 8.9%, average customer deposit growth up 8.3%, net interest income up 9.4%, and net interest margin was managed well throughout a very challenging year. Generally, our fee businesses performed well. While the residential mortgage business continues to be very competitive, our origination activity improved 10% year over year. Loan portfolios are strong with very favorable non-performing loan and delinquency metrics.”

Small further commented, “Strong fourth quarter core performance, combined with a significant impaired asset recovery and VISA stock related income recognition, provided the opportunity to undertake balance sheet restructuring during the quarter. The charges incurred to execute the restructuring of $26 million in available for sale securities and to terminate a FHLB advance were substantially offset by the income generated from the impaired asset recovery and VISA gain. The restructuring positions the Company for improved earnings in 2019. The cumulative net effect of these actions had no material impact on net income for the quarter. We enter 2019 well capitalized, with a strong balance sheet and well positioned to address new opportunities.”

Solid Loan Growth

At year-end, total net loans aggregated $2.2 billion, an increase of 8.9% over the prior year.

Total net loan growth for the fourth quarter was $27.9 million, or 5.2% annualized on a linked quarter basis. As anticipated, growth slowed in the fourth quarter of 2018 as the Company experienced a lower level of commercial loan originations than it had experienced earlier in the year.

Commercial loan growth was $11.2 million for the quarter ended December 31, 2018, or 4.8% annualized on a linked quarter basis. Commercial loan growth was $120.3 million, or 14.6% for the full year of 2018. Residential mortgage loans, including loans held for sale, increased $17.9 million on a linked quarter basis, or 6.9% annualized. On a full year basis residential loans, including loans held for sale, increased $58.4 million or 5.8%. Consumer loans increased $3.5 million year over year, but declining $6.1 million on a linked quarter basis.

Strong Business Deposit and Noninterest Bearing Deposit Growth

Average customer deposit growth totaled 8.3%, or $148.4 million for the full year ended 2018, remaining flat in the fourth quarter of 2018 compared to the prior quarter. Total average business deposits increased 31.7% when compared to the linked quarter on an annualized basis. Average business deposits increased 19.5% when comparing the fourth quarter of 2018 to the four quarter last year. The Company also saw a 14.2% annualized increase in average noninterest bearing deposits on a linked quarter basis. Average noninterest bearing deposits increased 11.4% or $40.4 million when comparing the full year of 2018 to the full year of 2017. The Company continues to make progress in the generation of these key funding sources.

Net Interest Margin Sees Boost

Net interest income on a fully-taxable equivalent basis increased to $23.6 million for the quarter ended December 31, 2018, compared to $21.7 million for the quarter ended September 30, 2018 and $21.1 million for the quarter ended December 31, 2017. The increase in net interest income included the impact of the favorable resolution of an acquired impaired loan that added approximately $1.1 million to loan income during the quarter.

The net interest margin was 3.58% for the three months ended December 31, 2018 due primarily to the favorable resolution of the acquired loan mentioned above. This resolution added approximately 16 basis points to the margin for the quarter. The normalized net interest margin was 3.42% compared to the 3.33% reported in the prior quarter and 3.43% for the quarter ending December 31, 2017.


Non-Interest Income

Non-interest income decreased to $5.6 million in the fourth quarter of 2018, compared to $6.5 million in the fourth quarter of 2017. During the fourth quarter of 2018, the Company restructured approximately $26 million of available for sale investment securities, incurred a loss on the sale of $861,000, and subsequently invested the sale proceeds into securities with increased yields. Offsetting this loss, was the sale of 50% of the Company’s VISA Class B shares and the movement of the remaining shares to a trading account which resulted in a gain of $669,000. The net of these two transactions was a loss of $192,000. Additionally, the fourth quarter of 2017 is reflective of a one-time gain of $595,000 from the sale of a bank-owned building. Adjusting for these one-time items occurring in the fourth quarter of both years, noninterest income would be flat.

Mortgage banking income declined $257,000 in the fourth quarter of 2018 compared to the fourth quarter of 2017 as competition in the marketplace pressured margins. The Company continues to actively manage pricing and the saleable mix of originations to limit the margin compression. In addition, the Company has seen increases to mortgage servicing fees in 2018 which helps to offset the decline in the gain on mortgage sales.

Non-Interest Expense

Non-interest expense was $17.2 million for the quarter ended December 31, 2018 compared to $17.3 million for the quarter ended December 31, 2017. Adjusting the fourth quarter of 2018 for the termination cost of $937,000 of a previously restructured FHLB advance, non-interest expense would be $16.2 million compared to $15.0 million for the quarter ended December 31, 2017, which excludes a $2.3 million one-time asset write down in the fourth quarter of 2017. The termination of the FHLB advance will permit the Company to recognize a lower level of interest expense going forward. At December 31, 2018, total non-interest expense aggregated $65.1 million compared to $68.2 million the prior year. Adjusting total non-interest expense for the aforementioned items in addition to acquisition related expenses in 2017, total 2018 non-interest expense would aggregate $64.1 million in 2018 compared to $61.0 million the prior year, or an increase of 5.2%

The Company’s efficiency ratio remained on target at a level of 54.79% for the quarter ended December 31, 2018 adjusted for the FHLB termination cost of $937,000. Inclusive of the termination cost, the ratio would be 57.98% for the quarter. Year-to-date the efficiency ratio was 56.85% and 57.69% with and without the consideration of the termination cost.

Credit Quality

Credit quality metrics have shown improvement throughout the year, and the fourth quarter of 2018 continued the trend. The ratio of nonperforming loans to net loans was 0.30% at December 31, 2018, which is down from 0.59% reported at December 31, 2017. Total nonperforming commercial loans have now declined to only $715,000 as of December 31, 2018, or 0.08% of total commercial loans. Total nonperforming assets to assets was 0.27% at December 31, 2018 while total delinquent loans to net loans was 0.50% for the same period. These ratios were 0.64% and 0.86%, respectively, at December 31, 2017.

During the quarter ended December 31, 2018, the Company recognized total net charge offs of $1.1 million, or 20 basis points as a percentage of average loans. Included in the $1.1 million was a charge off of $676,000 for an acquired impaired loan relationship. Full-year net charge offs were $1.5 million, or 7 basis points as a percentage of average loans.

The Company’s provision for loan losses totaled $178,000 for the fourth quarter of 2018, which was down from the $1.2 million reported in the fourth quarter of 2017. As of December 31, 2018, the Company’s allowance for loan losses to total loans was 0.93%, versus 1.05% at December 31, 2017. Also at December 31, 2018 the allowance for loan loss as a percent of nonperforming loans totaled 311.8%.


Capital Management and Tangible Book Value per Share

During the fourth quarter of 2018, the Company repurchased 801,000. Tangible book value per common share at December 31, 2018 was $5.81 compared to $5.41 at December 31, 2017.

Dividend Declaration and Increase to Share Repurchase Program

On January 22, 2019, the Board of Directors declared a quarterly cash dividend of $0.07 per common share. The dividend is payable February 15, 2019 to shareholders of record at the close of business February 4, 2019. Furthermore, the Board has authorized an increase to the Company’s existing share repurchase program for an additional one million shares. The Company had remaining 873,000 shares authorized for repurchase as of December 31, 2018.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, January 23, 2019, at 10:00 a.m. ET., to provide an overview of the Company’s fourth 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 4th Quarter 2018 Conference Call on the corporate profile page to join the webcast.

United Community Financial Corp.

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 35 retail banking offices (34 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 is available at 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)

 

     December 31,     December 31,        
     2018     2017     F/(U)  
     (Dollars in thousands)  

Assets:

      

Cash and deposits with banks

   $ 34,380     $ 34,365       0.0

Federal funds sold

     26,605       12,515       112.6
  

 

 

   

 

 

   

 

 

 

Total cash and cash equivalents

     60,985       46,880       30.1

Securities:

      

Trading, at fair value

     364       —         0.0

Available for sale, at fair value

     241,643       270,561       -10.7

Held to maturity (fair value of $75,075 and $82,126, respectively)

     77,491       82,911       -6.5

Loans held for sale, at lower of cost or market

     —         211       -100.0

Loans held for sale, at fair value

     91,472       83,541       9.5

Loans, net of allowance for loan losses of $20,443 and $21,202

     2,176,842       1,999,877       8.8

Federal Home Loan Bank stock, at cost

     19,144       19,324       -0.9

Premises and equipment, net

     21,930       22,094       -0.7

Accrued interest receivable

     9,080       8,190       10.9

Real estate owned and other repossessed assets

     1,088       1,253       -13.2

Goodwill

     20,221       20,221       0.0

Core deposit intangible

     1,603       1,934       -17.1

Customer list intangible

     2,214       2,060       7.5

Cash surrender value of life insurance

     64,220       62,488       2.8

Other assets

     23,060       28,360       -18.7
  

 

 

   

 

 

   

 

 

 

Total assets

   $  2,811,357     $  2,649,905       6.1
  

 

 

   

 

 

   

 

 

 

Liabilities and Shareholders’ Equity

      

Liabilities:

      

Deposits:

      

Interest bearing

   $ 1,528,057     $ 1,445,293       5.7

Noninterest bearing

     394,208       354,970       11.1
  

 

 

   

 

 

   

 

 

 

Customer deposits

     1,922,265       1,800,263       6.8

Brokered deposits

     290,955       156,476       85.9
  

 

 

   

 

 

   

 

 

 

Total deposits

     2,213,220       1,956,739       13.1

Borrowed funds:

      

Federal Home Loan Bank advances

      

Long-term advances

     —         48,536       -100.0

Short-term advances

     243,000       308,000       -21.1
  

 

 

   

 

 

   

 

 

 

Total Federal Home Loan Bank advances

     243,000       356,536       -31.8

Repurchase agreements and other

     224       197       13.7
  

 

 

   

 

 

   

 

 

 

Total borrowed funds

     243,224       356,733       -31.8

Advance payments by borrowers for taxes and insurance

     27,192       25,038       8.6

Accrued interest payable

     1,279       1,097       16.6

Accrued expenses and other liabilities

     17,108       16,033       6.7
  

 

 

   

 

 

   

 

 

 

Total liabilities

     2,502,023       2,355,640       6.2
  

 

 

   

 

 

   

 

 

 

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 49,128,875 and 49,800,126 shares, respectively, outstanding

     177,492       177,458       0.0

Retained earnings

     192,062       167,852       14.4

Accumulated other comprehensive loss

     (21,436     (18,685     14.7

Treasury stock, at cost, 5,010,035 and 4,338,784 shares, respectively

     (38,784     (32,360     19.9
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     309,334       294,265       5.1
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 2,811,357     $ 2,649,905       6.1
  

 

 

   

 

 

   

 

 

 


UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     For the Three Months Ended     For the Twelve Months Ended  
     December 31,     December 31,                 December 31,     December 31,              
     2018     2017     Variance     F/(U)     2018     2017     Variance     F/(U)  
     (Dollars in thousands, except per share data)  

Interest income

                

Loans

   $  26,587     $  21,529     $ 5,058       23.5   $ 96,653     $  79,795     $  16,858       21.1

Loans held for sale

     1,184       886       298       33.6     4,318       3,301       1,017       30.8

Securities:

                

Available for sale, nontaxable

     334       416       (82     -19.7     1,412       1,668       (256     -15.3

Available for sale, taxable

     1,148       1,222       (74     -6.1     4,732       5,579       (847     -15.2

Held to maturity, nontaxable

     69       51       18       35.3     250       214       36       16.8

Held to maturity, taxable

     380       421       (41     -9.7     1,574       1,764       (190     -10.8

Federal Home Loan Bank stock dividends

     290       267       23       8.6     1,133       961       172       17.9

Other interest earning assets

     178       57       121       212.3     500       228       272       119.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     30,170       24,849       5,321       21.4     110,572       93,510       17,062       18.2

Interest expense

                

Deposits

     5,866       2,603       (3,263     -125.4     17,796       8,437       (9,359     -110.9

Federal Home Loan Bank advances

     810       1,365       555       40.7     4,830       4,699       (131     -2.8

Repurchase agreements and other

     —         1       1       100.0     1       21       20       95.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     6,676       3,969       (2,707     -68.2     22,627       13,157       (9,470     -72.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     23,494       20,880       2,614       12.5     87,945       80,353       7,592       9.4

Taxable equivalent adjustment

     111       221       (110     -49.8     382       911       (529     -58.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income (FTE) (1)

     23,605       21,101       2,504       11.9     88,327       81,264       7,063       8.7

Provision for loan losses

     178       1,215       1,037       85.3     699       4,253       3,554       83.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses (FTE)

     23,427       19,886       3,541       17.8     87,628       77,011       10,617       13.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income

                

Insurance agency income

     562       552       10       1.8     2,197       2,006       191       9.5

Brokerage income

     305       264       41       15.5     1,216       1,158       58       5.0

Service fees and other charges:

                

Deposit related fees

     1,521       1,436       85       5.9     5,706       5,636       70       1.2

Mortgage servicing fees

     858       780       78       10.0     3,304       3,005       299       10.0

Mortgage servicing rights valuation

     (44     6       (50     -833.3     (61     (9     52       -577.8

Mortgage servicing rights amortization

     (430     (518     88       -17.0     (1,949     (1,944     5       -0.3

Other service fees

     36       42       (6     -14.3     161       125       36       28.8

Net gains (losses):

                

Trading Securities

     669       —         669       100.0     669       —         669       100.0

Securities available for sale

     (861     —         (861     100.0     (627     566       (1,193     -210.8

Mortgage banking income

     1,118       1,375       (257     -18.7     5,090       6,503       (1,413     -21.7

Real estate owned and other repossessed assets charges, net

     (24     (46     22       -47.8     (260     (189     71       -37.6

Debit/credit card fees

     1,033       995       38       3.8     4,158       4,215       (57     -1.4

Trust fee income

     480       467       13       2.8     1,905       1,618       287       17.7

Bank owned life insurance

     431       438       (7     -1.6     1,732       1,627       105       6.5

Other income

     (69     669       (738     -110.3     161       922       (761     -82.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

     5,585       6,460       (875     -13.5     23,402       25,239       (1,837     -7.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expense

                

Salaries and employee benefits

     9,029       8,347       (682     -8.2     37,071       34,807       (2,264     -6.5

Occupancy

     1,023       1,023       —         0.0     4,167       3,943       (224     -5.7

Equipment and data processing

     2,122       2,256       134       5.9     8,679       8,944       265       3.0

Financial institutions tax

     464       300       (164     -54.7     1,950       1,648       (302     -18.3

Advertising

     414       317       (97     -30.6     1,278       991       (287     -29.0

Amortization of intangible assets

     128       114       (14     -12.3     501       422       (79     -18.7

FDIC insurance premiums

     398       249       (149     -59.8     1,270       1,078       (192     -17.8

Other insurance premiums

     70       114       44       38.6     373       450       77       17.1

Professional fees:

                

Legal fees

     292       155       (137     -88.4     1,094       724       (370     -51.1

Other professional fees

     721       461       (260     -56.4     2,262       2,067       (195     -9.4

Supervisory fees

     34       84       50       0.0     152       84       (68     -100.0

Real estate owned and other repossessed asset expenses

     34       17       (17     -100.0     129       135       6       4.4

Acquisition related expenses

     —         39       39       0.0     —         5,001       5,001       100.0

Other expenses

     2,449       3,853       1,404       36.4     6,153       7,965       1,812       22.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest expenses

     17,178       17,329       151       0.9     65,079       68,259       3,180       4.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     11,834       9,017       2,817       31.2     45,951       33,991       11,960       35.2

Taxable equivalent adjustment

     111       221       110       49.8     382       911       529       58.1

Income tax expense

     2,172       4,294       2,122       49.4     8,391       11,295       2,904       25.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 9,551     $ 4,502     $ 5,049       112.2   $ 37,178     $ 21,785     $ 15,393       70.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

                

Basic

   $ 0.192     $ 0.090     $ 0.102       113.3   $ 0.746     $ 0.440     $ 0.306       69.5

Diluted

     0.191       0.090       0.101       112.2     0.742       0.437       0.305       69.8

 

(1)

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


UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     For the Three Months Ended  
     December 31,     September 30,              
     2018     2018     Variance     F/(U)  
     (Dollars in thousands, except per share data)  

Interest income

        

Loans

   $  26,587     $  24,031     $ 2,556       10.6

Loans held for sale

     1,184       1,264       (80     -6.3

Securities:

        

Available for sale, nontaxable

     334       333       1       0.3

Available for sale, taxable

     1,148       1,176       (28     -2.4

Held to maturity, nontaxable

     69       69       —         0.0

Held to maturity, taxable

     380       374       6       1.6

Federal Home Loan Bank stock dividends

     290       289       1       0.3

Other interest earning assets

     178       154       24       15.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     30,170       27,690       2,480       9.0

Interest expense

        

Deposits

     5,866       5,044       (822     -16.3

Federal Home Loan Bank advances

     810       1,023       213       20.8
  

 

 

   

 

 

   

 

 

   

Total interest expense

     6,676       6,067       (609     -10.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     23,494       21,623       1,871       8.7

Taxable equivalent adjustment

     111       84       27       32.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income (FTE) (1)

     23,605       21,707       1,898       8.7

Provision for loan losses

     178       251       73       29.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses (FTE)

     23,427       21,456       1,971       9.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income

        

Insurance agency income

     562       545       17       3.1

Brokerage income

     305       339       (34     -10.0

Service fees and other charges:

        

Deposit related fees

     1,521       1,494       27       1.8

Mortgage servicing fees

     858       821       37       4.5

Mortgage servicing rights valuation

     (44     (6     (38     633.3

Mortgage servicing rights amortization

     (430     (477     47       -9.9

Other service fees

     36       26       10       38.5

Net gains (losses):

        

Trading

     669       —         669       100.0

Securities available for sale

     (861     —         (861     100.0

Mortgage banking income

     1,118       1,409       (291     -20.7

Real estate owned and other repossessed assets charges, net

     (24     (45     21       -46.7

Debit/credit card fees

     1,033       1,000       33       3.3

Trust fee income

     480       483       (3     -0.6

Bank owned life insurance

     431       367       64       17.4

Other income

     (69     190       (259     -136.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

     5,585       6,146       (561     -9.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expense

        

Salaries and employee benefits

     9,029       9,107       78       0.9

Occupancy

     1,023       1,094       71       6.5

Equipment and data processing

     2,122       2,032       (90     -4.4

Financial institutions tax

     464       495       31       6.3

Advertising

     414       340       (74     -21.8

Amortization of intangible assets

     128       128       —         0.0

FDIC insurance premiums

     398       294       (104     -35.4

Other insurance premiums

     70       85       15       17.6

Professional fees:

     —          

Legal fees

     292       356       64       18.0

Other professional fees

     721       651       (70     -10.8

Supervisory fees

     34       34       —         0.0

Real estate owned and other repossessed asset expenses

     34       25       (9     -36.0

Acquisition related expenses

     —         —         —         0.0

Other expenses

     2,449       1,131       (1,318     -116.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest expenses

     17,178       15,772       (1,406     -8.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     11,834       11,830       4       0.0

Taxable equivalent adjustment

     111       84       (27     -32.1

Income tax expense

     2,172       2,217       45       2.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 9,551     $ 9,529     $ 22       0.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

        

Basic

   $ 0.192     $ 0.191     $ 0.001       0.5

Diluted

     0.191       0.190       0.001       0.5

 

(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  
     December 31, 2018     September 30, 2018     December 31, 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)

   $  2,161,414      $  26,616        4.93   $  2,115,227      $  24,031        4.54   $  1,975,847    $  21,531        4.36

Loans held for sale

     100,348        1,184        4.68     111,295        1,264        4.51     88,247        886        4.02
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total loans, net

     2,261,762        27,800        4.91     2,226,522        25,295        4.54     2,064,094        22,417        4.34

Securities:

                        

Trading

     4        —          0.00     —          —          0.00     —          —          0.00

Available for sale-taxable

     196,910        1,148        2.33     204,924        1,176        2.30     214,631        1,222        2.28

Available for sale-nontaxable (2)

     48,370        399        3.30     48,370        400        3.31     58,903        609        4.14

Held to maturity-taxable

     65,605        380        2.32     67,979        374        2.20     75,136        421        2.24

Held to maturity-nontaxable (2)

     12,215        86        2.82     12,215        86        2.82     9,233        77        3.34
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total securities

     323,104        2,013        2.49     333,488        2,036        2.44     357,903        2,329        2.60

Federal Home Loan Bank stock

     19,144        290        6.06     19,160        289        6.03     19,324        267        5.53

Other interest earning assets

     34,779        178        2.03     30,140        154        2.03     22,656        57        1.01
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total interest earning assets

     2,638,789        30,281        4.59     2,609,310        27,774        4.26     2,463,977        25,070        4.07

Non-interest earning assets

     176,579             177,553             179,023        
  

 

 

         

 

 

         

 

 

       

Total assets

   $ 2,815,368           $ 2,786,863           $ 2,643,000        
  

 

 

         

 

 

         

 

 

       

Interest bearing liabilities:

                        

Deposits:

                        

Checking accounts

   $ 620,306        1,114        0.71   $ 635,705        1,026        0.64   $ 600,249        589        0.39

Savings accounts

     303,247        28        0.04     303,247        27        0.04     304,229        27        0.04

Certificates of deposit

                        

Customer certificates of deposit

     619,208        2,652        1.70     618,545        2,457        1.58     530,297        1,458        1.10

Brokered certificates of deposit

     393,778        2,072        2.09     327,120        1,534        1.86     164,147        529        1.29
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total certificates of deposit

     1,012,986        4,724        1.85     945,665        3,991        1.67     694,444        1,987        1.14
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total interest bearing deposits

     1,936,539        5,866        1.20     1,884,617        5,044        1.06     1,598,922        2,603        0.65

Federal Home Loan Bank advances

                        

Long-term advances

     46,879        357        3.02     48,976        413        3.35     48,409        404        3.34

Short-term advances

     75,033        453        2.40     120,880        610        2.00     301,424        961        1.28
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total Federal Home Loan Bank advances

     121,912        810        2.64     169,856        1,023        2.39     349,833        1,365        1.56

Repurchase agreements and other

     245        —          0.00     213        —          0.00     2,114        1        0.19
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total borrowed funds

     122,157        810        2.63     170,069        1,023        2.39     351,947        1,366        1.55
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total interest bearing liabilities

   $ 2,058,696        6,676        1.29   $ 2,054,686        6,067        1.17   $ 1,950,869        3,969        0.81
     

 

 

         

 

 

         

 

 

    

Non-interest bearing liabilities

                        

Total noninterest bearing deposits

     395,649             382,044             355,225        

Other noninterest bearing liabilities

     46,559             39,075             41,400        
  

 

 

         

 

 

         

 

 

       

Total noninterest bearing liabilities

     442,208             421,119             396,625        
  

 

 

         

 

 

         

 

 

       

Total liabilities

   $ 2,500,904           $ 2,475,805           $ 2,347,494        

Shareholders’ equity

     314,464             311,058             295,506        
  

 

 

         

 

 

         

 

 

       

Total liabilities and equity

   $ 2,815,368           $ 2,786,863           $ 2,643,000        
  

 

 

         

 

 

         

 

 

       

Net interest income and interest rate spread

      $ 23,605        3.30      $ 21,707        3.09      $ 21,101        3.26
     

 

 

         

 

 

         

 

 

    

Net interest margin

           3.58           3.33           3.43

Average interest earning assets to average interest bearing liabilities

           128.18           126.99           126.30

Interest bearing deposits

                        

Checking accounts

   $ 620,306      $ 1,114        0.71   $ 635,705      $ 1,026        0.64   $ 600,249      $ 589        0.39

Savings accounts

     303,247        28        0.04     303,247        27        0.04     304,229        27        0.04

Customer certificates of deposit

     619,208        2,652        1.70     618,545        2,457        1.58     530,297        1,458        1.10
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total interest bearing customer deposits

     1,542,761        3,794        0.98     1,557,497        3,510        0.90     1,434,775        2,074        0.58

Brokered certificates of deposit

     393,778        2,072        2.09     327,120        1,534        1.86     164,147        529        1.29
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total interest bearing deposits

     1,936,539        5,866        1.20     1,884,617        5,044        1.06     1,598,922        2,603        0.65

Noninterest bearing deposits

     395,649        —          0.00     382,044        —          0.00     355,225        —          0.00
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total average deposits and cost of deposits

   $ 2,332,188      $ 5,866        1.01   $ 2,266,661      $ 5,044        0.89   $ 1,954,147      $ 2,603        0.53

Other interest bearing liabilities

                        

Federal Home Loan Bank advances

                        

Long term advances

   $ 46,879      $ 357        3.02   $ 48,976      $ 413        3.35   $ 48,409      $ 404        3.34

Short term advances

     75,033        453        2.40     120,880        610        2.00     301,424        961        1.28
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total Federal Home Loan Bank advances

     121,912        810        2.64     169,856        1,023        2.39     349,833        1,365        1.56

Repurchase agreements and other

     245        —          0.00     213        —          0.00     2,114        1        0.19
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Total borrowed funds

     122,157        810        2.63     170,069        1,023        2.39     351,947        1,366        1.55
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

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

   $ 2,454,345      $ 6,676        1.09   $ 2,436,730      $ 6,067        1.00   $ 2,306,094      $ 3,969        0.69
  

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

Customer deposits interest bearing and noninterest bearing

   $ 1,938,410      $ 3,794        0.78   $ 1,939,541      $ 3,510        0.72   $ 1,790,000      $ 2,074        0.46

Brokered deposits

     393,778        2,072        2.09     327,120        1,534        1.86     164,147        529        1.29

Total borrowings

     122,157        810        2.63     170,069        1,023        2.39     351,947        1,366        1.55

Cost of funds

     2,454,345        6,676        1.09     2,436,730        6,067        1.00     2,306,094        3,969        0.69

 

(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  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands, except per share data)  

Financial Data

          

Total assets

   $  2,811,357     $  2,789,183     $  2,770,558     $  2,690,707     $  2,649,905  

Total loans, net

     2,176,842       2,148,942       2,099,781       2,061,443       1,999,877  

Total securities

     319,498       320,806       328,924       338,593       353,472  

Total deposits

     2,213,220       2,352,476       2,135,345       2,066,978       1,956,739  

Average interest-bearing deposits

     1,936,539       1,884,617       1,718,639       1,644,165       1,598,922  

Average noninterest-bearing deposits

     395,649       382,044       376,905       375,142       355,225  

Total shareholders’ equity

     309,334       306,043       301,484       296,195       294,265  

Net interest income

     23,494       21,623       21,295       21,533       20,880  

Net interest income (FTE) (1)

     23,605       21,707       21,385       21,630       21,101  

Provision (recovery) for loan losses

     178       251       (138     407       1,215  

Noninterest income

     5,585       6,146       5,852       5,819       6,460  

Noninterest expense

     17,178       15,772       15,530       16,600       17,329  

Income tax expense

     2,172       2,217       2,214       1,789       4,294  

Net income

     9,551       9,529       9,541       8,556       4,502  

Share Data

          

Basic earnings per common share

   $ 0.192     $ 0.191     $ 0.191     $ 0.172     $ 0.090  

Diluted earnings per common share

     0.191       0.190       0.190       0.171       0.090  

Book value per common share

     6.30       6.13       6.04       5.94       5.90  

Tangible book value per common share

     5.81       5.65       5.56       5.45       5.41  

Market value per common share

     8.85       9.67       10.99       9.86       9.13  

Common shares outstanding at end of period

     49,129       49,923       49,904       49,882       49,800  

Weighted average shares outstanding—basic

     49,445       49,683       49,694       49,611       49,497  

Weighted average shares outstanding—diluted

     49,695       49,947       49,944       49,885       49,827  

Key Ratios

          

Return on average assets (ROA) (2)

     1.36     1.37     1.40     1.28     0.68

Return on average equity (ROE)(3)

     12.15     12.25     12.56     11.44     6.09

Return on tangible equity (ROTE)(4)

     13.16     13.28     13.65     12.44     6.62

Net interest margin

     3.58     3.33     3.36     3.47     3.43

Efficiency ratio

     54.79     57.30     57.75     60.20     63.73

Nonperforming loans to net loans, end of period

     0.30     0.42     0.51     0.59     0.59

Nonperforming assets to total assets, end of period

     0.27     0.36     0.57     0.65     0.64

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

     0.93     0.98     1.01     1.04     1.05

Delinquent loans to total net loans, end of period

     0.50     0.69     0.67     0.81     0.86

 

(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  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands)  

Loan Portfolio Composition

          

Commercial loans

          

Multi-family

   $ 134,143     $ 139,938     $ 141,004     $ 137,836     $ 120,480  

Owner/nonowner occupied commercial real estate

     409,979       408,938       396,624       384,533       381,611  

Land

     16,831       16,129       16,887       15,452       15,162  

Construction

     141,685       132,961       127,691       134,181       116,863  

Commercial and industrial

     240,293       233,801       218,611       201,132       188,500  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     942,931       931,767       900,817       873,134       822,616  

Residential mortgage loans

          

Real estate

     927,255       909,626       888,583       882,873       870,939  

Construction

     43,435       39,396       40,623       42,453       49,092  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     970,690       949,022       929,206       925,326       920,031  

Consumer loans

          

Consumer

     277,041       283,108       284,909       279,110       273,494  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     277,041       283,108       284,909       279,110       273,494  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     2,190,662       2,163,897       2,114,932       2,077,570       2,016,141  

Less:

          

Allowance for loan losses

     20,443       21,332       21,405       21,610       21,202  

Deferred loan costs, net

     (6,623     (6,377     (6,254     (5,483     (4,938
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     13,820       14,955       15,151       16,127       16,264  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans, net

     2,176,842       2,148,942       2,099,781       2,061,443       1,999,877  

Loans held for sale, net

     91,472       95,235       107,701       79,292       83,752  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

   $  2,268,314     $  2,244,177     $  2,207,482     $  2,140,735     $  2,083,629  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     At or for the quarters ended  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands)  

Deposit Portfolio Composition

          

Checking accounts

          

Interest bearing checking accounts

   $ 146,977     $ 140,722     $ 138,812     $ 140,740     $ 170,478  

Non-interest bearing checking accounts

     394,208       383,535       383,082       376,904       354,970  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total checking accounts

     541,185       524,257       521,894       517,644       525,448  

Savings accounts

     298,087       300,007       306,283       308,025       301,716  

Money market accounts

     466,167       489,668       502,560       483,840       424,234  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-time deposits

     1,305,439       1,313,932       1,330,737       1,309,509       1,251,398  

Certificates of deposit

     616,826       622,807       615,388       595,657       548,865  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total customer deposits

     1,922,265       1,936,739       1,946,125       1,905,166       1,800,263  

Brokered deposits

     290,955       415,737       189,220       161,812       156,476  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total certificates of deposit

     907,781       1,038,544       804,608       757,469       705,341  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

   $ 2,213,220     $ 2,352,476     $ 2,135,345     $ 2,066,978     $ 1,956,739  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

     At or for the quarters ended  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands)  

Allowance For Loan Losses

          

Beginning balance

   $  21,332     $  21,405     $  21,610     $  21,202     $  20,555  

Provision

     178       251       (138     407       1,215  

Net (chargeoffs) recoveries

     (1,067     (324     (67     1       (568
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

   $ 20,443     $ 21,332     $ 21,405     $ 21,610     $ 21,202  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     At or for the quarters ended  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands)  

Net (Charge-offs) Recoveries

          

Commercial loans

          

Multi-family

   $ (99   $ 4     $ 9     $ 6     $ (126

Owner/nonowner occupied commercial real estate

     38       12       29       40       23  

Land

     —         150       —         —         —    

Construction

     —         11       10       7       —    

Commercial and industrial

     (765     (275     (72     104       (90
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (826     (98     (24     157       (193

Residential mortgage loans

          

Real estate

     (131     (141     (14     (66     (257

Construction

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (131     (141     (14     (66     (257

Consumer loans

          

Consumer

     (110     (85     (29     (90     (118
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (110     (85     (29     (90     (118
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net chargeoffs

   $  (1,067   $ (324   $ (67   $ 1     $ (568
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     At or for the quarters ended  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands)  

Nonperforming Loans

          

Commercial loans

          

Multi-family

   $ 171     $ 275     $ 275     $ 275     $ 275  

Owner/nonowner occupied commercial real estate

     13       1,101       1,111       1,206       1,218  

Land

     —         —         —         9       9  

Construction

     —         —         —         —         —    

Commercial and industrial

     531       1,489       1,475       1,459       1,505  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     715       2,865       2,861       2,949       3,007  

Residential mortgage loans

          

Real estate

     4,170       4,426       6,146       7,045       6,076  

Construction

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     4,170       4,426       6,146       7,045       6,076  

Consumer loans

          

Consumer

     1,654       1,770       1,783       2,180       2,620  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     1,654       1,770       1,783       2,180       2,620  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

   $ 6,539     $ 9,061     $ 10,790     $ 12,174     $ 11,703  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Nonperforming Loans and Nonperforming Assets

          

Past due 90 days and on nonaccrual status

   $ 5,732     $ 8,200     $ 8,395     $ 8,326     $ 8,620  

Past due 90 days and still accruing

     18       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Past due 90 days

     5,750       8,200       8,395       8,326       8,620  

Past due less than 90 days and on nonaccrual

     789       861       2,395       3,848       3,083  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     6,539       9,061       10,790       12,174       11,703  

Other real estate owned

     1,049       907       802       1,030       1,047  

Other classified assets

     —         —         4,050       4,050       4,050  

Repossessed assets

     39       —         75       263       206  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 7,627     $ 9,968     $ 15,717     $ 17,517     $ 17,006  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


UNITED COMMUNITY FINANCIAL CORP.

NON-GAAP DISCLOSURE RECONCILIATION

(Unaudited)

 

Reconciliation of Average Shareholders’ Equity to Average Tangible Equity:

 

     
     At or for the quarters ended  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands, except per share data)  

Average shareholders equity

   $  314,464     $  311,058     $  303,733     $  299,284     $  295,506  

Average intangible assets

     24,123       24,144       24,063       24,175       23,563  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible equity

   $ 290,341     $ 286,914     $ 279,670     $ 275,109     $ 271,943  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 9,551     $ 9,529     $ 9,541     $ 8,556     $ 4,502  

Return on tangible equity

     13.16     13.28     13.65     12.44     6.62

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

 

   
     For the quarters ended  
     December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
     (Dollars in thousands)  

Interest income

   $ 30,170     $ 27,690     $ 26,661     $ 26,050     $ 24,849  

Fully taxable equivalent adjustment

     111       84       90       97       221  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fully taxable equivalent interest income

     30,281       27,774       26,751       26,147       25,070  

Interest expense

     6,676       6,067       5,366       4,517       3,969  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fully taxable net interest income

   $ 23,605     $ 21,707     $ 21,385     $ 21,630     $ 21,101  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Net Interest Margin without Resolution of Acquired Loan:

 

     For the three
months ended
    For the twelve
months ended
 
     December 31,
2018
    December 31,
2018
 
     (Dollars in thousands)  

Fully taxable net interest income

   $ 23,605     $ 88,327  

Resolution of acquired loan

     1,050       1,050  
  

 

 

   

 

 

 

Fully taxable net interest income, without purchase accounting adjustments

   $ 22,555     $ 87,277  
  

 

 

   

 

 

 

Average interest earning assets

   $  2,638,789     $  2,574,321  

Net interest margin excluding accretion amortization of purchase accounting adjustments

     3.42     3.39

Reconciliation of Efficiency Ratio to Efficiency Ratio Inclusive of Termination Costs:

 

     For the three
months ended
    For the twelve
months ended
 
     December 31,
2018
    December 31,
2018
 
     (Dollars in thousands)  

Noninterest Expense

   $  17,178     $ 65,079  

Intangible asset amortization

     (128     (501
  

 

 

   

 

 

 
     17,050       64,578  
  

 

 

   

 

 

 

Net interest income

   $ 23,605     $ 88,327  

Noninterest income

     5,585       23,402  

G/L Securities

     192       (42

Loss on REO

     24       260  
  

 

 

   

 

 

 
     29,406       111,947  
  

 

 

   

 

 

 

Efficiency ratio including termination cost

     57.98     57.69

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  
     December 31,
2018
     September 30,
2018
     June 30,
2018
     March 31,
2018
     December 31,
2017
 
     (Dollars in thousands, except per share data)  

Total shareholders’ equity

   $ 309,334      $ 306,043      $ 301,484      $ 296,195      $ 294,265  

Goodwill

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

Customer list intangible

     2,214        2,259        1,980        2,030        2,060  

Core deposit intangible

     1,603        1,686        1,769        1,851        1,934  

Total common shares outstanding

     49,128,875        49,922,514        49,904,074        49,882,491        49,800,126  

Tangible book value, as reported

   $ 5.81      $ 5.65      $ 5.56      $ 5.45      $ 5.41  
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