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Section 1: 8-K (8-K)

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 21, 2020

 

 

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))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common shares, no par value   UCFC   Nasdaq Global Market

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 December 31, 2019, United Community Financial Corp. issued a press release announcing its results of operations for the fourth quarter of 2019. 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 December 31, 2019. Included herewith.

 

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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 21, 2020

 

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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

Senior Vice President, Marketing

Home Savings

(330) 742-0638

[email protected]

     

Gary M. Small

President and Chief Executive Officer

United Community Financial Corp.

(330) 742-0472

UCFC ANNOUNCES RECORD RESULTS FOR THE YEAR

NET INCOME $39.5 MILLION — $0.81 PER SHARE

OR $40.8 MILLION — $0.84 PER SHARE ADJUSTED FOR MERGER COSTS

Fourth quarter 2019 highlights compared with the fourth quarter of 2018:

 

   

Net quarterly income of $9.8 million (or $11.2 million, excluding merger related costs, up 17.0%)

 

   

Diluted EPS of $0.20 (or $0.23, excluding merger related costs, up 20.9%)

 

   

Noninterest income $6.8 million, up 22.6%

 

   

Noninterest expense $16.8 million (or $15.4 million, excluding merger costs, down 10.2%)

 

   

ROA of 1.36% (or 1.55%, excluding merger related costs, versus 1.36%)

 

   

ROE of 12.03% (or 13.68%, excluding merger related costs, versus 12.15%)

 

   

Efficiency ratio improved to 53.6% compared to 54.8%

Full year 2019 highlights compared with 2018:

 

   

Net income of $39.5 million (or $40.8 million, excluding merger related costs, up 9.8%)

 

   

Diluted EPS of $0.81 (or $0.84, excluding merger related costs, up 13.1%)

 

   

Noninterest income $26.6 million, up 13.7%

 

   

Noninterest expense $65.4 million (or $64.1 million, excluding merger costs, down 1.5%)

 

   

ROA of 1.38% (or 1.43%, excluding merger related costs, versus 1.35%)

 

   

ROE of 12.34% (or 12.77%, excluding merger related costs, versus 12.10%)

 

   

Efficiency ratio improved to 55.8% compared to 57.7%

 

   

Average total loan growth 5.4%

 

   

Average total customer deposit growth 7.5%

 

1


YOUNGSTOWN, Ohio (January 21, 2020) – United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), announced today that net income for the quarter ended December 31, 2019, was $9.8 million, up 2.8% from the $9.6 million reported for the quarter ended December 31, 2018. Fourth quarter diluted earnings per share increased 6.3% to $0.20 from $0.19 per share reported at the same time last year. These results included $1.4 million of merger costs related to the previously announced merger with First Defiance Financial Corp. Excluding these acquisition costs, the Company’s adjusted net income (non-GAAP) was $11.2 million, up 17.0% and diluted earnings per share were $0.23 per share, up 20.9% for the quarter ending December 31, 2019 when compared to the same quarter last year.

Net income for the twelve months ended December 31, 2019 totaled $39.5 million, up 6.2% from the $37.2 million reported for the twelve months ended December 31, 2018. For the same time period, diluted earnings per share increased to $0.81, up 9.3% from the $0.74 per share previously reported in the prior year. Excluding the $1.4 million in merger costs (after-tax), adjusted net income (non-GAAP) for the twelve months ended December 31, 2019 was $40.8 million up 9.8%, or $0.84 per diluted share or 13.1% when compared to the prior year.

Gary M. Small, President and Chief Executive Officer of the Company, commented, “The year 2019 proved to be a challenging yet gratifying period for Home Savings. Our team took the steps necessary to overcome the difficulties presented by a tumultuous year for net interest margin management and a very active loan prepayment environment.”

Small continued, “The organization set record levels of commercial and residential new business production, delivered exceptional fee income growth across all business lines, and drove strong deposit growth. As a result we posted excellent financial results … our best earnings on record.”

Concluding, “I am very proud of the efforts of all of our associates. Thanks to their hard work, we remain right on track regarding our pending merger with First Defiance and we look forward to an exciting and successful 2020 with our new partners.”

Strong Loan and Deposit Growth

Total average loans grew $119.2 million (including loans held for sale), or 5.4%, during the last twelve months and $90.6 million, or 4.0% when compared to the same quarter last year. At December 31, 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 $51.4 million, or 5.5%, over the last twelve months. Mortgage loans (including loans held for sale) increased $14.7 million, or 1.4%, over the previous twelve months. Consumer loan growth amounted to $9.2 million, or 3.4%, for the same time period.

Average customer deposits (which exclude brokered certificates of deposit) increased $142.7 million, or 7.5%, from December 31, 2018. During that same time period total business deposits increased $69.1 million, or 26.6%. Average non-interest bearing accounts increased $43.9 million or 10.4% while average non-interest bearing business deposits increased $27.1 million or 13.4% during the same time period.

Net Interest Income and Margin

Net interest income totaled $21.8 million on a fully taxable equivalent (FTE) basis for the quarter ended December 31, 2019 compared to $23.6 million for the quarter ended December 31, 2018. The fourth quarter of 2018 included the impact of the favorable resolution of an impaired loan that added approximately $1.1 million to loan income during that quarter.

 

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The net interest margin on an FTE basis was 3.22% for the fourth quarter of 2019 compared to 3.58% in the fourth quarter of 2018. Excluding the 16 basis point impact of the aforementioned resolution of an impaired loan, the net interest margin declined 20 basis points. Of this, 5 basis points were from reduced purchase accounting accretion, while the remainder of the decline reflects the near term impact of multiple rate reductions by the Federal Reserve in 2019.

For the full year 2019, the net interest margin was 3.28% compared to 3.43% for the full year 2018. Excluding the income impact of the loan resolution, calendar year 2018 net interest margin would have been 3.39%. Of the 11 basis point reduction 3 basis points were from reduced purchase accounting accretion, and the remaining 8 basis points of the decline can be attributed to the fall in interest rates in 2019.

Asset Quality Remains Strong

Asset quality remained strong during the fourth quarter despite movement in nonperforming loans. At December 31, 2019, nonperforming loans aggregated $12.9 million compared to $6.5 million at the end of the same quarter in the previous year. The Company’s level of nonperforming loans increased primarily as a result of a single credit. The allowance for loan losses at the end of the quarter, as a percent of nonperforming loans was 149.6%. The allowance for loan losses as a percent of loans totaled 0.86% at December 31, 2019 compared to 0.93% the same quarter last year.

The Company recognized a negative provision for loan losses of $422,000 for the fourth quarter of 2019, compared to a provision of $178,000 in the fourth quarter of 2018. The decline in provision is a result of decreased loan balances in the fourth quarter of 2019, quarterly realignment of factors and the resolution of one credit with a specific reserve. For the year, the provision totaled $290,000 compared to $699,000 the previous year. Net charge offs to average loans were 6.6 basis points for the year ended December 31, 2019.

Non-Interest Income

Non-interest income increased 22.6%, or $1.3 million to $6.9 million for the fourth quarter of 2019 compared to $5.6 million for the same quarter last year. The primary drivers for the increase are mortgage banking income (gain on sale) of $686,000 and an increase of $356,000 in the value of mortgage servicing rights along with a $260,000 improvement in security sales. These gains were offset by an increase in the amortization of mortgage servicing rights of $427,000.

The increase in mortgage banking income was primarily driven by increased saleable volumes when comparing the fourth quarter of 2019 to the fourth quarter of 2018. The drop in interest rates resulting in increased refinance activity is the primary driver for the increased volume.

For the full year 2019, non-interest income increased 13.7%, or $3.2 million to $26.6 million compared to $23.4 million for calendar year 2018. The primary reason for this is an increase in mortgage banking income (gain on sale) of $3.5 million along with increased mortgage servicing fees of $289,000. Also adding to the increase was $578,000 from improvement in security gains, along with an 11.6% increase in insurance income and 9.9% increase in investment management fees. This was offset by an increase in mortgage serving rights amortization of $608,000 and a negative mortgage servicing rights valuation adjustment of $1,457,000. The increase in mortgage banking income was primarily driven by an increase in saleable loan volumes of 24.1% and in increase in the gain on sale margin of 43 basis points.

 

3


Non-Interest Expense

Non-interest expense was $15.4 million (excluding merger costs) for the fourth quarter of 2019 compared to $17.2 million for the similar quarter last year, a decrease of $1.8 million, or 10.2%. The fourth quarter of 2018 includes a prepayment penalty of $937,000 for the early extinguishment of Federal Home Loan Bank debt. Excluding this expense non-interest expense was down 4.8%. Non-interest expense for the year was $64.1 million (excluding merger costs). When compared to the prior year of $65.1 million, expenses were down 1.5%. When excluding the Federal Home Loan Bank prepayment penalty expenses year over year remained flat. The Company’s efficiency ratio improved to 55.8% for the year versus 57.7% for the same time period a year ago.

Equity

During 2019, the Company repurchased 1,145,434 of its common shares in the open market at an average price of $9.36. Tangible book value per common share at December 31, 2019 was $6.41compared to $5.18 at December 31, 2018.

Dividend to be paid

Subject to the closing of the merger of United Community with and into First Defiance Financial Corp., which was announced on September 9, 2019, and is expected to close on January 31, 2020, it is anticipated that a dividend will be paid to all First Defiance shareholders, including UCFC’s shareholders whose shares will be converted to First Defiance common shares upon the closing of the merger. First Defiance declared a dividend of $0.22 per share payable on February 21, to shareholders of record as of February 14. This action would be the equivalent of UCFC paying a dividend of $0.08173 on UCFC shares.

Other

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

 

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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.

 

5


UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

 

     December 31,     December 31,        
     2019     2018     F/(U)  
     (Dollars in thousands)  

Assets:

      

Cash and deposits with banks

   $ 30,218     $ 34,380       -12.1

Federal funds sold

     21,635       26,605       -18.7
  

 

 

   

 

 

   

Total cash and cash equivalents

     51,853       60,985       -15.0

Securities:

      

Trading, at fair value

     516       364       41.8

Available for sale, at fair value

     306,786       241,643       27.0

Held to maturity (fair value of $0 and $75,075, respectively)

     —         77,491       -100.0

Loans held for sale, at fair value

     127,839       91,472       39.8

Gross loans

     2,237,224       2,197,285       1.8

Allowance for loan losses

     (19,281     (20,443     -5.7
  

 

 

   

 

 

   

Net loans

     2,217,943       2,176,842       1.9

Federal Home Loan Bank stock, at cost

     13,639       19,144       -28.8

Premises and equipment, net

     22,337       21,930       1.9

Accrued interest receivable

     8,660       9,080       -4.6

Real estate owned and other repossessed assets

     816       1,088       -25.0

Goodwill

     20,221       20,221       0.0

Core deposit intangible

     1,275       1,603       -20.5

Customer list intangible

     2,032       2,214       -8.2

Cash surrender value of life insurance

     65,798       64,220       2.5

Other assets

     28,598       23,060       24.0
  

 

 

   

 

 

   

Total assets

   $ 2,868,313     $ 2,811,357       2.0
  

 

 

   

 

 

   

Liabilities and Shareholders’ Equity

      

Liabilities:

      

Deposits:

      

Interest bearing

   $ 1,665,042     $ 1,528,057       9.0

Noninterest bearing

     430,040       394,208       9.1
  

 

 

   

 

 

   

Customer deposits

     2,095,082       1,922,265       9.0

Brokered deposits

     192,027       290,955       -34.0
  

 

 

   

 

 

   

Total deposits

     2,287,109       2,213,220       3.3

Borrowed funds:

      

Federal Home Loan Bank advances

      

Short-term advances

     191,000       243,000       -21.4
  

 

 

   

 

 

   

Total Federal Home Loan Bank advances

     191,000       243,000       -21.4

Repurchase agreements and other

     —         224       -100.0
  

 

 

   

 

 

   

Total borrowed funds

     191,000       243,224       -21.5

Advance payments by borrowers for taxes and insurance

     31,650       27,192       16.4

Accrued interest payable

     656       1,279       -48.7

Accrued expenses and other liabilities

     25,789       17,108       50.7
  

 

 

   

 

 

   

Total liabilities

     2,536,204       2,502,023       1.4
  

 

 

   

 

 

   

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 48,104,055 and 49,128,875 shares, respectively, outstanding

     177,392       177,492       -0.1

Retained earnings

     216,868       192,062       12.9

Accumulated other comprehensive loss

     (13,461     (21,436     -37.2

Treasury stock, at cost, 6,034,855 and 5,010,035 shares, respectively

     (48,690     (38,784     25.5
  

 

 

   

 

 

   

Total shareholders’ equity

     332,109       309,334       7.4
  

 

 

   

 

 

   

Total liabilities and shareholders’ equity

   $ 2,868,313     $ 2,811,357       2.0
  

 

 

   

 

 

   

 

6


UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

    For the Three Months Ended     For the Twelve Months Ended  
    December 31,     September 30,                 December 31,                 December 31,     December 31,              
    2019     2019     Variance     F/(U)     2018     Variance     F/(U)     2019     2018     Variance     F/(U)  
    (Dollars in thousands, except per share data)  

Interest income

                     

Loans

  $ 25,501     $ 26,037     $ (536     -2.1   $ 26,587     $ (1,086     -4.1   $ 103,768     $ 96,653     $ 7,115       7.4

Loans held for sale

    1,219       1,067       152       14.2     1,184       35       3.0     4,284       4,318       (34     -0.8

Securities:

                     

Available for sale, nontaxable

    234       235       (1     -0.4     334       (100     -29.9     1,012       1,412       (400     -28.3

Available for sale, taxable

    1,781       1,828       (47     -2.6     1,148       633       55.1     6,483       4,732       1,751       37.0

Held to maturity, nontaxable

    —         —         —         0.0     69       (69     -100.0     99       250       (151     -60.4

Held to maturity, taxable

    —         —         —         0.0     380       (380     -100.0     497       1,574       (1,077     -68.4

Federal Home Loan Bank stock dividends

    140       173       (33     -19.1     290       (150     -51.7     847       1,133       (286     -25.2

Other interest earning assets

    125       203       (78     -38.4     178       (53     -29.8     752       500       252       50.4
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total interest income

    29,000       29,543       (543     -1.8     30,170       (1,170     -3.9     117,742       110,572       7,170       6.5

Interest expense

                     

Deposits

    6,095       6,856       (761     11.1     5,866       229       -3.9     26,722       17,796       8,926       -50.2

Federal Home Loan Bank advances

    1,157       1,103       54       -4.9     810       347       -42.8     3,460       4,830       (1,370     28.4

Repurchase agreements and other

    —         —         —         0.0     —         —         0.0     —         1       1       100.0
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total interest expense

    7,252       7,959       707       -8.9     6,676       (576     8.6     30,182       22,627       (7,555     33.4
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Net interest income

    21,748       21,584       164       0.8     23,494       (1,746     -7.4     87,560       87,945       (385     -0.4

Taxable equivalent adjustment

    51       46       5       10.9     111       (60     -54.1     244       382       (138     -36.1
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Net interest income (FTE) (1)

    21,799       21,630       169       0.8     23,605       (1,806     -7.7     87,804       88,327       (523     -0.6

Provision for loan losses

    (422     701       1,123       160.2     178       600       337.1     290       699       409       58.5
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Net interest income after provision for loan losses (FTE)

    22,221       20,929       1,292       6.2     23,427       (1,206     -5.1     87,514       87,628       (114     -0.1
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Non-interest income

                     

Insurance agency income

    631       575       56       9.7     562       69       12.3     2,452       2,197       255       11.6

Brokerage income

    383       480       (97     -20.2     305       78       25.6     1,642       1,216       426       35.0

Service fees and other charges:

                     

Deposit related fees

    1,515       1,490       25       1.7     1,521       (6     -0.4     5,762       5,706       56       1.0

Mortgage servicing fees

    931       908       23       2.5     858       73       8.5     3,593       3,304       289       8.7

Mortgage servicing rights valuation

    312       (336     648       -192.9     (44     356       -809.1     (1,518     (61     (1,457     -2388.5

Mortgage servicing rights amortization

    (857     (702     (155     22.1     (430     (427     99.3     (2,557     (1,949     (608     -31.2

Other service fees

    21       21       —         0.0     36       (15     -41.7     101       161       (60     -37.3

Net gains (losses):

                     

Trading securities

    68       29       39       134.5     669       (601     -89.8     200       669       (469     -70.1

Securities available for sale

    —         128       (128     -100.0     (861     861       -100.0     420       (627     1,047       -167.0

Mortgage banking income

    1,804       2,508       (704     -28.1     1,118       686       61.4     8,619       5,090       3,529       69.3

Real estate owned and other repossessed assets charges, net

    4       (55     59       -107.3     (24     28       -116.7     (115     (260     145       55.8

Debit/credit card fees

    1,039       1,057       (18     -1.7     1,033       6       0.6     4,251       4,158       93       2.2

Trust fee income

    428       434       (6     -1.4     480       (52     -10.8     1,788       1,905       (117     -6.1

Bank owned life insurance

    397       398       (1     -0.3     431       (34     -7.9     1,578       1,732       (154     -8.9

Other income

    171       80       91       113.8     (69     240       -347.8     391       161       230       142.9
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total non-interest income

    6,847       7,015       (168     -2.4     5,585       1,262       22.6     26,607       23,402       3,205       13.7
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Non-interest expense

                     

Salaries and employee benefits

    9,278       8,831       447       -5.1     9,029       249       -2.8     37,790       37,071       719       -1.9

Occupancy

    1,051       1,024       27       -2.6     1,023       28       -2.7     4,146       4,167       (21     0.5

Equipment and data processing

    2,251       2,307       (56     2.4     2,122       129       -6.1     9,055       8,679       376       -4.3

Financial institutions tax

    468       509       (41     8.1     464       4       -0.9     1,995       1,950       45       -2.3

Advertising

    278       407       (129     31.7     414       (136     32.9     1,539       1,278       261       -20.4

Amortization of intangible assets

    127       127       —         0.0     128       (1     0.8     510       501       9       -1.8

FDIC insurance premiums

    211       (288     499       173.3     398       (187     47.0     551       1,270       (719     56.6

Other insurance premiums

    74       74       —         0.0     70       4       -5.7     300       373       (73     19.6

Professional fees:

                     

Legal fees

    100       181       (81     44.8     292       (192     65.8     554       1,094       (540     49.4

Other professional fees

    250       545       (295     54.1     721       (471     65.3     1,945       2,262       (317     14.0

Supervisory fees

    48       48       —         0.0     34       14       -41.2     163       152       11       -7.2

Real estate owned and other repossessed asset expenses

    27       39       (12     30.8     34       (7     20.6     123       129       (6     4.7

Acquisition related expenses

    1,351       —         1,351       100.0     —         1,351       100.0     1,351       —         1,351       100.0

Other expenses

    1,265       1,207       58       -4.8     2,449       (1,184     48.3     5,419       6,153       (734     11.9
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total non-interest expenses

    16,779       15,011       (1,768     -11.8     17,178       399       -2.3     65,441       65,079       (362     0.6
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Income before income taxes

    12,289       12,933       (644     -5.0     11,834       455       3.8     48,680       45,951       2,729       5.9

Taxable equivalent adjustment

    51       46       5       -10.9     111       (60     54.1     244       382       (138     36.1

Income tax expense

    2,415       2,383       32       -1.3     2,172       243       -11.2     8,967       8,391       576       -6.9
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Net income

  $ 9,823     $ 10,504     $ (681     -6.5   $ 9,551     $ 272       2.8   $ 39,469     $ 37,178     $ 2,291       6.2
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Earnings per common share:

                     

Basic

  $ 0.204     $ 0.218     $ (0.014     -6.4   $ 0.192     $ 0.012       6.2   $ 0.815     $ 0.746     $ 0.069       9.2

Diluted

    0.203       0.218       (0.015     -6.9     0.191       0.012       6.3     0.811       0.742       0.069       9.3

Diluted earnings per share excluding merger cost

    0.231     0.218     0.013     6.0     0.191     0.040     20.9     0.839     0.742     0.097     13.1

 

(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.

 

7


UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED AVERAGE BALANCES

(Unaudited)

 

    For the three months ended  
    December 31, 2019     September 30, 2019     December 31, 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)

  $ 2,233,356     $ 25,508       4.55   $ 2,224,310     $ 26,045       4.66   $ 2,161,414     $ 26,616       4.93

Loans held for sale

    119,043       1,219       4.10     99,581       1,067       4.29     100,348       1,184       4.68
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total loans, net

    2,352,399       26,727       4.55     2,323,891       27,112       4.66     2,261,762       27,800       4.91

Securities:

                 

Trading

    —         —         0.00     —         —         0.00     4       —         0.00

Available for sale-taxable

    271,592       1,781       2.62     279,618       1,828       2.61     196,910       1,148       2.33

Available for sale-nontaxable (2)

    34,968       278       3.18     35,054       273       3.12     48,370       399       3.30

Held to maturity-taxable

    —         —         0.00     —         —         0.00     65,605       380       2.32

Held to maturity-nontaxable (2)

    —         —         0.00     —         —         0.00     12,215       86       2.82
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total securities

    306,560       2,059       2.69     314,672       2,101       2.67     323,104       2,013       2.49

Federal Home Loan Bank stock

    13,639       140       4.11     13,872       173       4.99     19,144       290       6.06

Other interest earning assets

    26,414       125       1.88     36,706       203       2.19     34,779       178       2.03
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total interest earning assets

    2,699,012       29,051       4.29     2,689,141       29,589       4.38     2,638,789       30,281       4.59

Non-interest earning assets

    180,691           181,208           176,579      
 

 

 

       

 

 

       

 

 

     

Total assets

  $ 2,879,703         $ 2,870,349         $ 2,815,368      
 

 

 

       

 

 

       

 

 

     

Interest bearing liabilities:

                 

Deposits:

                 

Checking accounts

  $ 807,682       2,440       1.21   $ 770,268       2,391       1.24   $ 620,306       1,114       0.71

Savings accounts

    285,478       26       0.04     286,794       27       0.04     303,247       28       0.04

Certificates of deposit

                 

Customer certificates of deposit

    580,701       2,965       2.04     611,736       3,148       2.06     619,208       2,652       1.70

Brokered certificates of deposit

    144,337       664       1.84     226,951       1,290       2.27     393,778       2,072       2.09
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total certificates of deposit

    725,038       3,629       2.00     838,687       4,438       2.12     1,012,986       4,724       1.85
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total interest bearing deposits

    1,818,198       6,095       1.34     1,895,749       6,856       1.45     1,936,539       5,866       1.20

Federal Home Loan Bank advances

                 

Long-term advances

    —         —         0.00     —         —         0.00     46,879       357       3.02

Short-term advances

    245,250       1,157       1.89     189,370       1,103       2.33     75,033       453       2.40
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total Federal Home Loan Bank advances

    245,250       1,157       1.89     189,370       1,103       2.33     121,912       810       2.64

Repurchase agreements and other

    —         —         0.00     125       —         0.00     245       —         0.00
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total borrowed funds

    245,250       1,157       1.89     189,495       1,103       2.33     122,157       810       2.63
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total interest bearing liabilities

  $ 2,063,448       7,252       1.41   $ 2,085,244       7,959       1.53   $ 2,058,696       6,676       1.29
   

 

 

       

 

 

       

 

 

   

Non-interest bearing liabilities

                 

Total noninterest bearing deposits

    433,275           411,106           395,649      

Other noninterest bearing liabilities

    56,267           54,197           46,559      
 

 

 

       

 

 

       

 

 

     

Total noninterest bearing liabilities

    489,542           465,303           442,208      
 

 

 

       

 

 

       

 

 

     

Total liabilities

  $ 2,552,990         $ 2,550,547         $ 2,500,904      

Shareholders’ equity

    326,713           319,802           314,464      
 

 

 

       

 

 

       

 

 

     

Total liabilities and equity

  $ 2,879,703         $ 2,870,349         $ 2,815,368      
 

 

 

       

 

 

       

 

 

     

Net interest income and interest rate spread

    $ 21,799       3.00     $ 21,630       2.85     $ 23,605       3.30
   

 

 

       

 

 

       

 

 

   

Net interest margin

        3.22         3.21         3.58

Average interest earning assets to average interest bearing liabilities

        130.80         128.96         128.18

Interest bearing deposits

                 

Checking accounts

  $ 807,682     $ 2,440       1.21   $ 770,268     $ 2,391       1.24   $ 620,306     $ 1,114       0.71

Savings accounts

    285,478       26       0.04     286,794       27       0.04     303,247       28       0.04

Customer certificates of deposit

    580,701       2,965       2.04     611,736       3,148       2.06     619,208       2,652       1.70
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total customer deposits

    1,673,861       5,431       1.30     1,668,798       5,566       1.33     1,542,761       3,794       0.98

Brokered certificates of deposit

    144,337       664       1.84     226,951       1,290       2.27     393,778       2,072       2.09
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total interest bearing deposits

    1,818,198       6,095       1.34     1,895,749       6,856       1.45     1,936,539       5,866       1.20

Noninterest bearing deposits

    433,275       —         0.00     411,106       —         0.00     395,649       —         0.00
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total average deposits and cost of deposits

  $ 2,251,473     $ 6,095       1.08   $ 2,306,855     $ 6,856       1.19   $ 2,332,188     $ 5,866       1.01

Other interest bearing liabilities

                 

Federal Home Loan Bank advances

                 

Long term advances

  $ —       $ —         0.00   $ —       $ —         0.00   $ 46,879     $ 357       3.02

Short term advances

    245,250       1,157       1.89     189,370       1,103       2.33     75,033       453       2.40
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total Federal Home Loan Bank advances

    245,250       1,157       1.89     189,370       1,103       2.33     121,912       810       2.64

Repurchase agreements and other

    —         —         0.00     125       —         0.00     245       —         0.00
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total borrowed funds

    245,250       1,157       1.89     189,495       1,103       2.33     122,157       810       2.63
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

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

  $ 2,496,723     $ 7,252       1.26   $ 2,496,350     $ 7,959       1.26   $ 2,454,345     $ 6,676       1.09
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Customer deposits interest bearing and noninterest bearing

  $ 2,107,136     $ 5,431       1.03   $ 2,079,904     $ 5,566       1.07   $ 1,938,410     $ 3,794       0.78

Brokered deposits

    144,337       664       1.84     226,951       1,290       2.27     393,778       2,072       2.09

Total borrowings

    245,250       1,157       1.89     189,495       1,103       2.33     122,157       810       2.63

Cost of funds

    2,496,723       7,252       1.26     2,496,350       7,959       1.26     2,454,345       6,676       1.09

 

(1) 

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

(2) 

Yields are on a fully taxable equivalent basis.

 

8


UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

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

Financial Data

          

Total assets

   $ 2,868,313     $ 2,906,573     $ 2,869,116     $ 2,852,041     $ 2,811,357  

Total loans, net

     2,217,943       2,248,507       2,229,326       2,215,549       2,176,842  

Total securities

     307,302       315,755       319,714       313,847       319,498  

Total deposits

     2,287,109       2,105,758       2,259,179       2,289,803       2,213,220  

Average interest-bearing deposits

     1,818,198       1,895,749       1,973,104       1,963,567       1,936,539  

Average noninterest-bearing deposits

     433,275       411,106       405,535       400,874       395,649  

Total shareholders’ equity

     332,109       326,856       317,554       314,709       309,334  

Net interest income

     21,748       21,584       22,043       22,186       23,494  

Net interest income (FTE) (1)

     21,799       21,630       22,105       22,270       23,605  

Provision for loan losses

     (422     701       (51     61       178  

Noninterest income

     6,847       7,015       6,671       6,073       5,585  

Noninterest expense

     16,779       15,011       15,976       17,674       17,178  

Income tax expense

     2,415       2,383       2,303       1,868       2,172  

Net income

     9,823       10,504       10,486       8,656       9,551  

Share Data

          

Basic earnings per common share

   $ 0.204     $ 0.218     $ 0.216     $ 0.177     $ 0.192  

Diluted earnings per common share

     0.203       0.218       0.215       0.176       0.191  

Book value per common share

     6.90       6.80       6.61       6.44       6.30  

Tangible book value per common share

     6.41       6.31       6.11       5.95       5.81  

Market value per common share

     11.66       10.78       9.57       9.35       8.85  

Common shares outstanding at end of period

     48,104       48,087       48,069       48,853       49,129  

Weighted average shares outstanding—basic

     47,996       47,961       48,463       48,854       49,445  

Weighted average shares outstanding—diluted

     48,221       48,164       48,644       49,113       49,695  

Key Ratios

          

Return on average assets (2)

     1.36     1.46     1.48     1.22     1.36

Return on average assets excluding merger cost

     1.55     1.46     1.48     1.22     1.36

Return on average equity (3)

     12.03     13.14     13.22     10.99     12.15

Return on average equity excluding merger cost

     13.68     13.14     13.22     10.99     12.15

Return on tangible equity (4)

     12.96     14.19     14.30     11.90     13.16

Return on tangible equity excluding merger cost

     14.75     14.19     14.30     11.90     13.16

Net interest margin

     3.22     3.21     3.33     3.38     3.58

Efficiency ratio

     53.55     52.15     55.37     62.29     54.79

Nonperforming loans to net loans, end of period

     0.58     0.46     0.58     0.32     0.30

Nonperforming assets to total assets, end of period

     0.48     0.39     0.48     0.34     0.27

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

     0.86     0.88     0.91     0.91     0.93

Delinquent loans to total net loans, end of period

     0.74     0.63     0.58     0.41     0.50

 

(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

 

9


UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

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

Loan Portfolio Composition

          

Commercial loans

          

Multi-family

   $ 177,363     $ 166,027     $ 154,630     $ 163,243     $ 134,143  

Owner/nonowner occupied commercial real estate

     401,600       409,687       414,780       412,550       409,979  

Land

     18,131       19,653       16,955       17,090       16,830  

Construction

     122,102       127,388       138,043       135,048       141,686  

Commercial and industrial

     275,179       271,292       249,898       246,740       240,293  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     994,375       994,047       974,306       974,671       942,931  

Residential mortgage loans

          

Real estate

     914,073       938,899       942,698       934,586       927,255  

Construction

     34,931       44,636       46,196       45,102       43,435  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     949,004       983,535       988,894       979,688       970,690  

Consumer loans

          

Consumer

     286,329       283,641       279,531       274,998       277,041  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     286,329       283,641       279,531       274,998       277,041  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     2,229,708       2,261,223       2,242,731       2,229,357       2,190,662  

Less:

          

Allowance for loan losses

     19,281       19,987       20,482       20,446       20,443  

Deferred loan costs, net

     (7,517     (7,271     (7,077     (6,638     (6,623
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     11,764       12,716       13,405       13,808       13,820  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans, net

     2,217,944       2,248,507       2,229,326       2,215,549       2,176,842  

Loans held for sale, net

     127,839       113,593       97,477       77,676       91,472  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

   $ 2,345,783     $ 2,362,100     $ 2,326,803     $ 2,293,225     $ 2,268,314  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Deposit Portfolio Composition

          

Checking accounts

          

Interest bearing checking accounts

   $ 137,783     $ 134,662     $ 131,725     $ 146,244     $ 146,977  

Non-interest bearing checking accounts

     430,040       421,631       398,340       404,644       394,208  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total checking accounts

     567,823       556,293       530,065       550,888       541,185  

Savings accounts

     284,745       286,251       290,354       297,186       298,087  

Money market accounts

     681,518       653,926       606,661       550,049       466,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-time deposits

     1,534,086       1,496,470       1,427,080       1,398,123       1,305,439  

Certificates of deposit

     560,996       591,516       644,024       630,174       616,826  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total customer deposits

     2,095,082       2,087,986       2,071,104       2,028,297       1,922,265  

Brokered deposits

     192,027       17,772       188,075       261,506       290,955  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total certificates of deposit

     753,023       609,288       832,099       891,680       907,781  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

   $ 2,287,109     $ 2,105,758     $ 2,259,179     $ 2,289,803     $ 2,213,220  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

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

Allowance For Loan Losses

          

Beginning balance

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

Provision

     (422     701       (51     61       178  

Net (chargeoffs) recoveries

     (284     (1,196     87       (58     (1,067
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

   $ 19,281     $ 19,987     $ 20,482     $ 20,446     $ 20,443  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Net (Charge-offs) Recoveries

          

Commercial loans

          

Multi-family

   $ 13     $ 4     $ 4     $ 113     $ (99

Owner/nonowner occupied commercial real estate

     14       12       165       28       38  

Land

     —         —         —         —         —    

Construction

     1       —         —         1       —    

Commercial and industrial

     (155     (897     1       (84     (765
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (127     (881     170       58       (826

Residential mortgage loans

          

Real estate

     (55     (186     (53     78       (131

Construction

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (55     (186     (53     78       (131

Consumer loans

          

Consumer

     (102     (130     (30     (194     (110
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (102     (130     (30     (194     (110
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net (charge-offs) Recoveries

   $ (284   $ (1,197   $ 87     $ (58   $ (1,067
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Nonperforming Loans

          

Commercial loans

          

Multi-family

   $ —       $ —       $ —       $ —       $ 171  

Owner/nonowner occupied commercial real estate

     6,222       3,610       2,688       1,565       13  

Land

     —         —         —         —         —    

Construction

     —         —         —         —         —    

Commercial and industrial

     525       785       4,678       456       531  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     6,747       4,395       7,366       2,021       715  

Residential mortgage loans

          

Real estate

     4,275       4,233       4,365       3,883       4,170  

Construction

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     4,275       4,233       4,365       3,883       4,170  

Consumer loans

          

Consumer

     1,868       1,689       1,141       1,203       1,654  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     1,868       1,689       1,141       1,203       1,654  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

   $ 12,890     $ 10,317     $ 12,872     $ 7,107     $ 6,539  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Nonperforming Loans and Nonperforming Assets

          

Past due 90 days and on nonaccrual status

   $ 7,279     $ 7,107     $ 5,392     $ 4,351     $ 5,750  

Past due 90 days and still accruing

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Past due 90 days

     7,279       7,107       5,392       4,351       5,750  

Past due less than 90 days and on nonaccrual

     5,611       3,210       7,480       2,756       789  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     12,890       10,317       12,872       7,107       6,539  

Other real estate owned

     754       880       871       1,143       1,049  

Other classified assets

     —         —         —         1,479       —    

Repossessed assets

     62       82       84       37       39  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 13,706     $ 11,279     $ 13,827     $ 9,766     $ 7,627  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

11


UNITED COMMUNITY FINANCIAL CORP.

NON-GAAP DISCLOSURE RECONCILIATION

(Unaudited)

 

    As Reported
Three months ended
December 31, 2019
    Merger related
costs
    Non-GAAP Proforma
Three months ended
December 31, 2019
    As Reported
Twelve months ended
December 31, 2019
    Merger related
costs
    Non-GAAP Proforma
Twelve months ended
December 31, 2019
 
    (In thousands, except per  share data)   

Net income:

  $  9,823   $  1,351   $  11,174   $  39,469     1,351   $  40,820
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted EPS:

           

Net income

  $  9,823   $  1,351   $  11,174     39,469       40,820

Net income allocated to participating securities

    (23       (23     (8       (8
 

 

 

     

 

 

   

 

 

     

 

 

 

Net income available to common shareholders

  $  9,800     $  11,151     39,461       40,812
 

 

 

     

 

 

   

 

 

     

 

 

 

Weighted average shares outstanding: diluted

    48,220,742       48,220,742     48,501,575       48,501,575

Diluted EPS:

  $  0.203     $  0.231   $  0.814     $  0.841
 

 

 

     

 

 

   

 

 

     

 

 

 

Net income

  $  9,823   $  1,351   $  11,174   $  39,469   $  1,351   $  40,820

Average assets

    2,879,703       2,879,703     2,854,554       2,854,554

Average equity

    326,713       326,713     319,729       319,729

ROA:

    1.36       1.55     1.38       1.43
 

 

 

     

 

 

   

 

 

     

 

 

 

ROE:

    12.03       13.68     12.34       12.77
 

 

 

     

 

 

   

 

 

     

 

 

 

Efficiency Ratio:

           

Noninterest Expense

  $ 16,779     $ 1,351     $ 15,428     $ 65,441     $ 1,351     $ 64,090  

Intangible asset amortization

    (127       (127     (510       (510

Net interest income

    21,799         21,799       87,804         87,804  

Noninterest income

    6,847         6,847       26,606         26,606  

Loss on securities

    (68       (68     (620       (620

Loss on real estated owned

    (4       (4     115         115  

Efficiency Ratio:

    58.28       53.55     57.00       55.82
 

 

 

     

 

 

   

 

 

     

 

 

 

Reconciliation of Average Shareholders’ Equity to Average Tangible Equity:

 

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

Average shareholders equity

   $  326,713   $  319,802   $  317,265   $  315,006   $  314,464

Average intangible assets

     23,612     23,740     23,867     23,994     24,123
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible equity

   $  303,101   $  296,062   $  293,398   $  291,012   $  290,341
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $  9,823   $  10,504   $  10,486   $  8,656   $  9,551

Merger cost

     1,351     —       —       —       —  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income without merger cost

   $ 11,174     $ 10,504     $ 10,486     $ 8,656     $ 9,551  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on tangible equity

     12.96     14.19     14.30     11.90     13.16

Return on tangible equity without merger cost

     14.75     14.19     14.30     11.90     13.16

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

 

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

Interest income

   $ 29,000      $ 29,543      $ 29,799      $ 29,401      $ 30,170  

Fully taxable equivalent adjustment

     51        46        62        84        111  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fully taxable equivalent interest income

     29,051        29,589        29,861        29,485        30,281  

Interest expense

     7,252        7,959        7,756        7,215        6,676  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fully taxable net interest income

   $ 21,799      $ 21,630      $ 22,105      $ 22,270      $ 23,605  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

Total shareholders’ equity

   $ 332,109      $ 326,856      $ 317,554      $ 314,709      $ 309,334  

Goodwill

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

Customer list intangible

     2,032        2,078        2,123        2,169        2,214  

Core deposit intangible

     1,275        1,357        1,439        1,521        1,603  

Total common shares outstanding

     48,104,055        48,087,430        48,068,790        48,852,688        49,128,875  

Tangible book value, as reported

   $  6.41    $  6.31    $  6.11    $  5.95    $  5.81

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

 

     At the quarters ended     At the quarters ended  
     December 31,
2019
    December 31,
2018
    September 30,
2019
    September 30, 2018  

Net interest income (FTE)

   $ 21,799     $ 23,605     $ 21,630     $ 21,707  

less: purchase accounting

     (422     (178     (213     (383
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net interest income

     21,377       23,427       21,417       21,324  

Average earning assets

     2,699,012       2,638,789       2,689,141       2,609,310  

Net interest margin excluding purchase accounting

     3.16     3.55     3.18     3.27

Non-interest income

   $ 6,847     $ 5,585     $ 7,015     $ 6,146  

less: mortgage servicing valuation adjustment

     (312     44       336       6  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income, adjusted

     6,535       5,629       7,351       6,152  

Non-interest income % increase

     16.1       19.5  

Non-interest expense

   $ 16,779     $ 17,178     $ 15,011     $ 15,772  

Non-interest expense % decrease

     -2.3       -4.8  

 

12

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