Filed by United Community Financial Corp. pursuant to
Rule 425 under the Securities Act of 1933.
Subject Company: United Community Financial Corp.
Commission File No.: 000-24399
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 THIRD QUARTER EARNINGS
AND DECLARES DIVIDEND
Third quarter 2016 highlights compared with the third quarter of 2015:
| • | Net quarterly income of $5.2 million, up 24.4% |
| • | Diluted earnings per share of $0.11, up 27.9% |
| • | ROA of 0.98% — ROE of 8.38% compared to ROA of 0.85% — ROE of 6.87% |
| • | Net interest margin improved to 3.25% compared to 3.18% |
| • | Net loans increased 15.4% |
| • | Efficiency ratio improved to 59.4% compared to 63.5% |
| • | Dividend of $0.03 per common share declared |
YOUNGSTOWN, Ohio (October 18, 2016) – United Community Financial Corp. (Company) (Nasdaq: UCFC), parent company of The Home Savings and Loan Company (Home Savings), announced today that net income for the quarter ended September 30, 2016, was $5.2 million, up 24.4% from the $4.1 million reported for the quarter ended September 30, 2015. Third quarter diluted earnings per share increased 27.9% to $0.110 from $0.086 per share reported at the same time last year. Net income for the nine months ended September 30, 2016 totaled $13.8 million, up 15.5% from the $12.0 million reported for the nine months ended September 30, 2015. For the same time period, diluted earnings per share increased to $0.292, up 19.2% from the $0.245 per share previously reported.
Gary M. Small, President and Chief Executive Officer of the Company, commented, “We are very pleased to post another strong quarter with revenue up 14% and loan growth in excess 12% vs. the same period in 2015. Earnings momentum is excellent as reflected in our pre provision, pretax comparisons, up 6.3% on a linked quarter basis and 30% vs 2015. The entire Home Savings team remains focused on growth and has put the organization in a very good position as we prepare for the successful integration of Premier Bank & Trust in the first quarter of 2017.”
1
Balance Sheet Highlights
Total Loans
Total net loans, including loans held for sale, increased $218.7 million, or 16.6% to $1.5 billion at September 30, 2016, compared to September 30, 2015, and 18.0% on an annualized basis through the third quarter compared to December 31, 2015. This positive growth is being driven primarily by the commercial loan portfolio. Commercial loan balances grew over 44.2%, or $151.5 million when compared to the same time period last year. Commercial loan production totaled $232.8 million for the first nine months of the year and was approximately 43.1% higher than the first nine months of 2015. Unfunded commercial loan commitments increased $37.7 million, or 36.5%, to $141.2 million, during the first nine months of 2016.
Residential loans, including residential loans held for sale, grew as planned at a measured pace, increasing $49.5 million, or 6.2%, at September 30, 2016 compared to September 30, 2015. During the same time period, residential loan production grew by 18.5%, when comparing the third quarter of 2016 to the same time period in the previous year. Pipeline levels remain strong at the end of the third quarter.
Total Deposits
Total deposits increased $62.6 million, or 4.4% to $1.5 billion at September 30, 2016, compared to September 30, 2015, and 3.5% on an annualized basis during the first nine months of 2016 compared to December 31, 2015. The Company continues to see improvement in growing public funds, which grew $37.9 million, or 49.0%, to $115.3 million at September 30, 2016, compared to $77.4 million at September 30, 2015. Noninterest bearing deposit balances grew $44.3 million, or 21.2% at September 30, 2016, compared to September 30, 2015. Furthermore, the Company has seen an increase in the average balance of business deposits of $23.2 million, or 19.5%, during the first nine months of 2016. As the deposit mix changes, the Company has realized the benefit of lowering its overall cost of deposits to 38 basis points for the three months ended September 30, 2016.
Third Quarter and Year-to-date Results
Net Interest Income and Margin
Net interest income on a fully taxable equivalent basis was $15.9 million in the third quarter of 2016, up 11.3% from the $14.3 million recorded in the third quarter of 2015. The improvement in net interest income was primarily due to the growth in average net loan balances and a decline in funding costs, quarter versus quarter. Net interest income on a fully taxable equivalent basis was $46.4 million in the first nine months of 2016, up 10.4% from the $42.1 million recorded in the first nine months of 2015.
Net interest margin was 3.25% for the third quarter of 2016, an increase from 3.18% reported in the third quarter of 2015. This increase was due to the prepayment of high cost debt at the end of 2015 and the repricing of higher cost certificates of deposit during the year.
2
Net interest margin was 3.23% for the first nine months of 2016, an increase from 3.19% reported in the first nine months of 2015. The increase was also due to the prepayment of the high-cost debt and the reduction of the cost of deposits.
Provision for Loan Losses
The Company recognized a provision for loan loss expense of $1.3 million in the third quarter of 2016 compared to a provision of $395,000 in the second quarter of 2016. Net chargeoffs for the quarter totaled eight basis points. The majority of the provision expense was related to the growth of the loan portfolio.
The Company recognized a provision for loan loss expense of $3.9 million in the first nine months of 2016 compared to an expense of $1.2 million in the comparable period of 2015.
Non-Interest Income
Non-interest income increased 23.2% to $6.0 million in the third quarter of 2016 compared to $4.9 million in the third quarter of 2015. Favorably impacting the change was the benefit of insurance agency income of $451,000 coupled with a 14.5% increase in mortgage banking income. The Company also recognized security gains of $218,000 in the quarter as the investment portfolio is realigned to include higher-yielding municipal securities.
Non-interest income increased 15.2% to $16.4 million in the first nine months of 2016 compared to $14.3 million in the comparable period last year. Positively affecting the comparison was the benefit of insurance agency income totaling $1.3 million. Also contributing to the change was an increase of 7.7% of deposit related fees along with an increase of 29.3% in brokerage income and a 5.0% increase in debit/credit card fees, for a total of $668,000. The first nine months of 2016 also saw security gains totaling $604,000. These increases were partially offset by a $610,000 increase in the valuation adjustment of mortgage servicing rights.
Non-Interest Expense
Non-interest expense was $13.0 million for the third quarter of 2016, which represented an increase of $693,000, or 5.6%, from the third quarter of 2015. Included in this increase were expenses of $432,000 related to the operation of the insurance agency acquired in 2016. The efficiency ratio continues to show improvement at 59.4% for the third quarter of 2016 as compared to 63.5% in the same time period last year.
Non-interest expense was essentially flat, in comparison to the same period last year after giving consideration to the insurance company acquisition. Non-interest expense was $38.3 million for the nine months ended September 30, 2016, which represented an increase of $1.1 million, or 3.0%, from the nine months ended September 30, 2015. As in the quarter-to-quarter comparison, the acquisition of the insurance company and its operating expenses to date of $948,000 was the primary reason for the increase. The efficiency ratio was 61.3% for the first nine months of 2016 compared to 65.6% for the same period last year.
Pre-tax, Pre-provision Income
Pre-tax, pre-provision income was $8.8 million for the three months ended September 30, 2016, up $1.9 million, or 27.5%, from the $6.9 million recorded for the three months ended September 30, 2015. Pre-tax, pre-provision income was $24.1 million for the nine months ended September 30, 2016, up $5.0 million, or 26.1%, from the $19.1 million recorded for the nine months ended September 30, 2015. Pre-tax, pre-provision income is derived by adding provision for loan losses and income tax expense to net income. The Company believes this non-GAAP measure presentation removes volatility that can occur quarter to quarter due to changes in factors used in calculating the provision for loan losses.
3
Equity
Tangible book value per common share at September 30, 2016 improved to $5.48, as compared to $5.14 at December 31, 2015. This change was due to changes in accumulated other comprehensive income paralleling the drop in long-term interest rates which resulted in a higher valuation of the Company’s securities portfolio. Net income for the nine months ended September 30, 2016, along with purchases of treasury stock also contributed to the change.
Dividend to be Paid
On October 18, 2016, the Board of Directors declared a quarterly cash dividend of $0.03 per common share payable November 14, 2016 to shareholders of record at the close of business October 31, 2016.
Conference Call
United Community Financial Corp. will host an earnings conference call on Wednesday, October 19, 2016, at 10:00 a.m. ET., to provide an overview of the Company’s third quarter 2016 results and highlights. The conference call may be accessed by calling 1-877-272-7661 ten minutes prior to the start time. Please ask to be joined into the United Community Financial Corp. (UCFC) call. Additionally, a live webcast may be accessed from the Company’s website ir.ucfconline.com. Click on 3rd Quarter 2016 Conference Call on our corporate profile page to join the webcast.
United Community Financial Corp.
Home Savings is a wholly owned subsidiary of the Company and operates retail banking offices and loan production centers in Ohio, western Pennsylvania and West Virginia. Additional information on the Company, Home Savings and James & Sons Insurance may be found on the Company’s web site: ir.ucfconline.com.
###
When used in this press release, the words or phrases “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project”, “will have”, “can expect” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including changes in economic conditions in the Company’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company’s market area, and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company advises readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.
4
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.
Important Information for Investors and Shareholders
This earnings release does not constitute an offer to sell or the solicitation of an offer to buy securities of United Community. United Community will file a registration statement on Form S-4 and other documents regarding the proposed merger with Ohio Legacy with the Securities and Exchange Commission (“SEC”) to register the shares of the Company’s common shares to be issued to the shareholders of Ohio Legacy. The registration statement will include a proxy statement/prospectus, which will be sent to the shareholders of Ohio Legacy in advance of its special meeting of shareholders to be held to consider the proposed merger. Investors and security holders are urged to read the proxy statement/prospectus and any other relevant documents to be filed with the SEC in connection with the proposed transaction because they contain important information about United Community, Ohio Legacy and the proposed transaction. Investors and security holders may obtain a free copy of these documents (when available) through the website maintained by the SEC at www.sec.gov, on the NASDAQ website at http://www.nasdaq.com and from either the United Community or Ohio Legacy websites at http://www.ucfconline.com or at http://www.ohiolegacycorp.com.
5
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| September 30, 2016 |
December 31, 2015 |
|||||||
| (Dollars in thousands) | ||||||||
| Assets: |
||||||||
| Cash and deposits with banks |
$ | 23,861 | $ | 20,528 | ||||
| Federal funds sold |
20,087 | 15,382 | ||||||
|
|
|
|
|
|||||
| Total cash and cash equivalents |
43,948 | 35,910 | ||||||
| Securities: |
||||||||
| Available for sale, at fair value |
354,469 | 357,670 | ||||||
| Held to maturity (fair value of $105,209 and $109,664, respectively) |
103,202 | 110,699 | ||||||
| Loans held for sale, at lower of cost or market |
378 | 9,085 | ||||||
| Loans held for sale, at fair value |
59,967 | 26,716 | ||||||
| Loans, net of allowance for loan losses of $18,234 and $17,712 |
1,473,949 | 1,316,192 | ||||||
| Federal Home Loan Bank stock, at cost |
18,068 | 18,068 | ||||||
| Premises and equipment, net |
20,565 | 20,678 | ||||||
| Accrued interest receivable |
6,066 | 5,978 | ||||||
| Real estate owned and other repossessed assets |
1,793 | 2,727 | ||||||
| Customer list intangible |
1,538 | — | ||||||
| Core deposit intangible |
6 | 30 | ||||||
| Cash surrender value of life insurance |
55,474 | 54,366 | ||||||
| Other assets |
20,811 | 29,870 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 2,160,234 | $ | 1,987,989 | ||||
|
|
|
|
|
|||||
| Liabilities and Shareholders’ Equity |
||||||||
| Liabilities: |
||||||||
| Deposits: |
||||||||
| Interest bearing |
$ | 1,220,120 | $ | 1,208,238 | ||||
| Non-interest bearing |
252,923 | 227,505 | ||||||
|
|
|
|
|
|||||
| Total deposits |
1,473,043 | 1,435,743 | ||||||
| Borrowed funds: |
||||||||
| Federal Home Loan Bank advances |
||||||||
| Long-term advances |
47,561 | 46,975 | ||||||
| Short-term advances |
358,000 | 232,000 | ||||||
|
|
|
|
|
|||||
| Total Federal Home Loan Bank advances |
405,561 | 278,975 | ||||||
| Repurchase agreements and other |
517 | 535 | ||||||
|
|
|
|
|
|||||
| Total borrowed funds |
406,078 | 279,510 | ||||||
| Advance payments by borrowers for taxes and insurance |
14,758 | 21,174 | ||||||
| Accrued interest payable |
117 | 53 | ||||||
| Accrued expenses and other liabilities |
9,835 | 7,264 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
1,903,831 | 1,743,744 | ||||||
|
|
|
|
|
|||||
| Shareholders’ Equity: |
||||||||
| Preferred stock-no par value; 1,000,000 shares authorized and no shares outstanding |
— | — | ||||||
| Common stock-no par value; 499,000,000 shares authorized; 54,138,910 shares |
||||||||
| issued and 46,542,388 and 47,517,644 shares, respectively, outstanding |
173,383 | 174,304 | ||||||
| Retained earnings |
149,750 | 140,819 | ||||||
| Accumulated other comprehensive loss |
(10,251 | ) | (19,220 | ) | ||||
| Treasury stock, at cost, 7,596,522 and 6,621,266 shares, respectively |
(56,479 | ) | (51,658 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
256,403 | 244,245 | ||||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ equity |
$ | 2,160,234 | $ | 1,987,989 | ||||
|
|
|
|
|
|||||
6
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30 | September 30, | September 30, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| (Dollars in thousands, except per share data) |
||||||||||||||||||||
| Interest income |
||||||||||||||||||||
| Loans |
$ | 14,633 | $ | 14,184 | $ | 13,426 | $ | 42,618 | $ | 39,007 | ||||||||||
| Loans held for sale |
482 | 363 | 390 | 1,177 | 1,025 | |||||||||||||||
| Securities: |
||||||||||||||||||||
| Available for sale, nontaxable |
339 | 290 | — | 752 | — | |||||||||||||||
| Available for sale, taxable |
1,630 | 1,781 | 2,599 | 5,346 | 8,139 | |||||||||||||||
| Held to maturity, nontaxable |
66 | 62 | 33 | 183 | 45 | |||||||||||||||
| Held to maturity, taxable |
466 | 524 | 17 | 1,567 | 17 | |||||||||||||||
| Federal Home Loan Bank stock dividends |
180 | 180 | 181 | 542 | 541 | |||||||||||||||
| Other interest earning assets |
19 | 15 | 8 | 49 | 25 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest income |
17,815 | 17,399 | 16,654 | 52,234 | 48,799 | |||||||||||||||
| Interest expense |
|
|||||||||||||||||||
| Deposits |
1,389 | 1,496 | 1,690 | 4,497 | 4,862 | |||||||||||||||
| Federal Home Loan Bank advances |
661 | 563 | 340 | 1,754 | 947 | |||||||||||||||
| Repurchase agreements and other |
5 | 6 | 323 | 16 | 958 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
2,055 | 2,065 | 2,353 | 6,267 | 6,767 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
15,760 | 15,334 | 14,301 | 45,967 | 42,032 | |||||||||||||||
| Taxable equivalent adjustment |
185 | 186 | 19 | 466 | 25 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income (FTE) (1) |
15,945 | 15,520 | 14,320 | 46,433 | 42,057 | |||||||||||||||
| Provision for loan losses |
1,344 | 395 | 673 | 3,894 | 1,242 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for loan losses (FTE) |
14,601 | 15,125 | 13,647 | 42,539 | 40,815 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-interest income |
||||||||||||||||||||
| Insurance agency income |
451 | 516 | — | 1,269 | — | |||||||||||||||
| Brokerage income |
337 | 396 | 259 | 1,033 | 799 | |||||||||||||||
| Service fees and other charges: |
||||||||||||||||||||
| Deposit related fees |
1,418 | 1,362 | 1,405 | 4,106 | 3,811 | |||||||||||||||
| Mortgage servicing fees |
715 | 701 | 683 | 2,114 | 2,038 | |||||||||||||||
| Mortgage servicing rights valuation |
25 | (292 | ) | (138 | ) | (702 | ) | (92 | ) | |||||||||||
| Mortgage servicing rights amortization |
(525 | ) | (567 | ) | (449 | ) | (1,560 | ) | (1,355 | ) | ||||||||||
| Other service fees |
43 | 47 | 19 | 108 | 56 | |||||||||||||||
| Net gains (losses): |
||||||||||||||||||||
| Securities available for sale |
218 | 233 | — | 604 | 11 | |||||||||||||||
| Mortgage banking income |
1,957 | 1,869 | 1,709 | 5,208 | 5,303 | |||||||||||||||
| Real estate owned and other repossessed assets charges, net |
— | (63 | ) | (119 | ) | (76 | ) | (311 | ) | |||||||||||
| Debit/credit card fees |
915 | 1,120 | 1,036 | 2,916 | 2,777 | |||||||||||||||
| Other income |
449 | 458 | 468 | 1,421 | 1,229 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest income |
6,003 | 5,780 | 4,873 | 16,441 | 14,266 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-interest expense |
||||||||||||||||||||
| Salaries and employee benefits |
6,950 | 7,186 | 6,894 | 21,224 | 20,968 | |||||||||||||||
| Occupancy |
847 | 855 | 819 | 2,564 | 2,505 | |||||||||||||||
| Equipment and data processing |
1,926 | 1,887 | 1,714 | 5,648 | 5,105 | |||||||||||||||
| Financial institutions tax |
411 | 431 | 272 | 1,284 | 924 | |||||||||||||||
| Advertising |
290 | 221 | 183 | 638 | 546 | |||||||||||||||
| Amortization of intangible assets |
72 | 10 | 14 | 95 | 41 | |||||||||||||||
| FDIC insurance premiums |
155 | 287 | 313 | 768 | 946 | |||||||||||||||
| Other insurance premiums |
89 | 73 | 84 | 251 | 253 | |||||||||||||||
| Professional fees: |
||||||||||||||||||||
| Legal and consulting fees |
211 | 214 | 361 | 622 | 889 | |||||||||||||||
| Other professional fees |
341 | 351 | 469 | 762 | 1,231 | |||||||||||||||
| Real estate owned and other repossessed asset expenses |
41 | 77 | 134 | 190 | 293 | |||||||||||||||
| Other expenses |
1,645 | 1,268 | 1,028 | 4,256 | 3,473 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest expenses |
12,978 | 12,860 | 12,285 | 38,302 | 37,174 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income before income taxes |
7,626 | 8,045 | 6,235 | 20,678 | 17,907 | |||||||||||||||
| Taxable equivalent adjustment |
185 | 186 | 19 | 466 | 25 | |||||||||||||||
| Income tax expense |
2,288 | 2,529 | 2,073 | 6,409 | 5,928 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 5,153 | $ | 5,330 | $ | 4,143 | $ | 13,803 | $ | 11,954 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Earnings per common share: |
||||||||||||||||||||
| Basic |
$ | 0.111 | $ | 0.113 | $ | 0.087 | $ | 0.293 | $ | 0.246 | ||||||||||
| Diluted |
0.110 | 0.112 | 0.086 | 0.292 | 0.245 | |||||||||||||||
| (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 | ||||||||||||||||||||||||||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||||||||||||||||||
| Average outstanding balance |
Interest earned/ paid |
Yield/ rate |
Average outstanding balance |
Interest earned/ paid |
Yield/ rate |
Average outstanding balance |
Interest earned/ paid |
Yield/ rate |
||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| Interest earning assets: |
||||||||||||||||||||||||||||||||||||
| Net loans (1) |
$ | 1,422,294 | $ | 14,634 | 4.12 | % | $ | 1,369,683 | $ | 14,186 | 4.14 | % | $ | 1,249,316 | $ | 13,426 | 4.30 | % | ||||||||||||||||||
| Loans held for sale |
49,095 | 482 | 3.93 | % | 37,521 | 363 | 3.87 | % | 39,078 | 390 | 3.99 | % | ||||||||||||||||||||||||
| Securities: |
||||||||||||||||||||||||||||||||||||
| Available for sale-taxable |
300,522 | 1,630 | 2.17 | % | 315,583 | 1,781 | 2.26 | % | 469,049 | 2,599 | 2.22 | % | ||||||||||||||||||||||||
| Available for sale-nontaxable (2) |
49,489 | 489 | 3.95 | % | 42,394 | 440 | 4.15 | % | — | — | — | % | ||||||||||||||||||||||||
| Held to maturity-taxable |
92,077 | 466 | 2.02 | % | 95,933 | 524 | 2.18 | % | 2,256 | 17 | 3.01 | % | ||||||||||||||||||||||||
| Held to maturity-nontaxable (2) |
13,563 | 100 | 2.95 | % | 12,971 | 96 | 2.96 | % | 6,211 | 52 | 3.35 | % | ||||||||||||||||||||||||
| Federal Home Loan Bank stock |
18,068 | 180 | 3.98 | % | 18,068 | 180 | 3.98 | % | 18,068 | 181 | 4.01 | % | ||||||||||||||||||||||||
| Other interest earning assets |
20,028 | 19 | 0.38 | % | 18,978 | 15 | 0.32 | % | 17,779 | 8 | 0.18 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest earning assets |
1,965,136 | 18,000 | 3.66 | % | 1,911,131 | 17,585 | 3.68 | % | 1,801,757 | 16,673 | 3.70 | % | ||||||||||||||||||||||||
| Non-interest earning assets |
132,922 | 132,780 | 137,495 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total assets |
$ | 2,098,058 | $ | 2,043,911 | $ | 1,939,252 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Interest bearing liabilities: |
||||||||||||||||||||||||||||||||||||
| Deposits: |
||||||||||||||||||||||||||||||||||||
| Checking accounts |
$ | 491,553 | 238 | 0.19 | % | $ | 505,284 | 261 | 0.21 | % | $ | 488,924 | 262 | 0.21 | % | |||||||||||||||||||||
| Savings accounts |
290,998 | 24 | 0.03 | % | 291,820 | 34 | 0.05 | % | 279,894 | 41 | 0.06 | % | ||||||||||||||||||||||||
| Certificates of deposit |
425,307 | 1,127 | 1.06 | % | 434,053 | 1,201 | 1.11 | % | 450,917 | 1,387 | 1.23 | % | ||||||||||||||||||||||||
| Federal Home Loan Bank advances |
||||||||||||||||||||||||||||||||||||
| Long-term advances |
47,432 | 319 | 2.69 | % | 47,237 | 307 | 2.60 | % | 46,651 | 266 | 2.28 | % | ||||||||||||||||||||||||
| Short-term advances |
326,250 | 342 | 0.42 | % | 246,967 | 256 | 0.41 | % | 164,489 | 74 | 0.18 | % | ||||||||||||||||||||||||
| Repurchase agreements and other |
520 | 5 | 3.85 | % | 527 | 6 | 4.55 | % | 30,544 | 323 | 4.23 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest bearing liabilities |
$ | 1,582,060 | 2,055 | 0.52 | % | $ | 1,525,888 | 2,065 | 0.54 | % | $ | 1,461,419 | 2,353 | 0.64 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Non-interest bearing liabilities |
||||||||||||||||||||||||||||||||||||
| Total noninterest bearing deposits |
242,310 | 241,098 | 211,923 | |||||||||||||||||||||||||||||||||
| Other noninterest bearing liabilities |
27,769 | 29,751 | 24,524 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total noninterest bearing liabilities |
270,079 | 270,849 | 236,447 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities |
$ | 1,852,139 | $ | 1,796,737 | $ | 1,697,866 | ||||||||||||||||||||||||||||||
| Shareholders’ equity |
245,919 | 247,174 | 241,386 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities and equity |
$ | 2,098,058 | $ | 2,043,911 | $ | 1,939,252 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest income and interest rate spread |
$ | 15,945 | 3.14 | % | $ | 15,520 | 3.14 | % | $ | 14,320 | 3.06 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest margin |
3.25 | % | 3.25 | % | 3.18 | % | ||||||||||||||||||||||||||||||
| Average interest earning assets to average interest bearing liabilities |
124.21 | % | 125.25 | % | 123.29 | % | ||||||||||||||||||||||||||||||
| Total interest bearing deposits |
$ | 1,207,858 | $ | 1,389 | $ | 1,231,157 | $ | 1,496 | $ | 1,219,735 | $ | 1,690 | ||||||||||||||||||||||||
| Non-interest bearing deposits |
242,310 | — | 241,098 | — | 211,923 | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total average deposits and cost of deposits |
1,450,168 | 1,389 | 0.38 | % | 1,472,255 | 1,496 | 0.41 | % | 1,431,658 | 1,690 | 0.47 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Other interest bearing liabilities |
374,202 | 666 | 294,731 | 569 | 241,684 | 663 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total average deposits and other interest bearing liabilities and total cost of funds |
$ | 1,824,370 | $ | 2,055 | 0.45 | % | $ | 1,766,986 | $ | 2,065 | 0.47 | % | $ | 1,673,342 | $ | 2,353 | 0.56 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (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 | ||||||||||||||||||||
| September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Financial Data |
||||||||||||||||||||
| Total assets |
$ | 2,160,234 | $ | 2,080,542 | $ | 2,036,430 | $ | 1,987,989 | $ | 1,970,887 | ||||||||||
| Total loans, net |
1,473,949 | 1,398,106 | 1,359,146 | 1,316,192 | 1,277,330 | |||||||||||||||
| Total securities |
457,671 | 474,707 | 473,207 | 468,369 | 479,817 | |||||||||||||||
| Total deposits |
1,473,043 | 1,455,746 | 1,466,614 | 1,435,743 | 1,410,484 | |||||||||||||||
| Average interest-bearing deposits |
1,207,858 | 1,231,157 | 1,212,701 | 1,209,063 | 1,219,735 | |||||||||||||||
| Average noninterest-bearing deposits |
242,310 | 241,098 | 228,308 | 219,379 | 211,923 | |||||||||||||||
| Total shareholders’ equity |
256,403 | 254,075 | 251,804 | 244,245 | 243,929 | |||||||||||||||
| Net interest income |
15,760 | 15,334 | 14,873 | 14,490 | 14,301 | |||||||||||||||
| Net interest income (FTE) (1) |
15,945 | 15,520 | 14,967 | 14,535 | 14,320 | |||||||||||||||
| Provision for loan losses |
1,344 | 395 | 2,155 | 893 | 673 | |||||||||||||||
| Noninterest income |
6,003 | 5,780 | 4,658 | 5,451 | 4,873 | |||||||||||||||
| Noninterest expense |
12,978 | 12,860 | 12,464 | 12,755 | 12,285 | |||||||||||||||
| Income tax expense |
2,288 | 2,529 | 1,592 | 1,965 | 2,073 | |||||||||||||||
| Net income |
5,153 | 5,330 | 3,320 | 4,328 | 4,143 | |||||||||||||||
| Share Data |
||||||||||||||||||||
| Basic earnings per common share |
$ | 0.111 | $ | 0.113 | $ | 0.070 | $ | 0.091 | $ | 0.087 | ||||||||||
| Diluted earnings per common share |
0.110 | 0.112 | 0.069 | 0.090 | 0.086 | |||||||||||||||
| Book value per common share |
5.51 | 5.46 | 5.30 | 5.14 | 5.12 | |||||||||||||||
| Tangible book value per common share |
5.48 | 5.43 | 5.27 | 5.14 | 5.12 | |||||||||||||||
| Market value per common share |
7.11 | 6.08 | 5.87 | 5.90 | 5.00 | |||||||||||||||
| Common shares outstanding at end of period |
46,542 | 46,493 | 47,507 | 47,518 | 47,614 | |||||||||||||||
| Weighted average shares outstanding—basic |
46,167 | 46,869 | 47,272 | 47,356 | 47,480 | |||||||||||||||
| Weighted average shares outstanding—diluted |
46,392 | 47,117 | 47,551 | 47,636 | 47,744 | |||||||||||||||
| Key Ratios |
||||||||||||||||||||
| Return on average assets (2) |
0.98 | % | 1.04 | % | 0.66 | % | 0.88 | % | 0.85 | % | ||||||||||
| Return on average equity (3) |
8.38 | % | 8.63 | % | 5.33 | % | 7.02 | % | 6.87 | % | ||||||||||
| Net interest margin |
3.25 | % | 3.25 | % | 3.21 | % | 3.16 | % | 3.18 | % | ||||||||||
| Efficiency ratio (4) |
59.40 | % | 60.81 | % | 63.90 | % | 63.74 | % | 63.54 | % | ||||||||||
| Nonperforming loans to net loans, end of period |
1.32 | % | 1.45 | % | 1.48 | % | 1.27 | % | 1.20 | % | ||||||||||
| Nonperforming assets to total assets, end of period |
0.98 | % | 1.06 | % | 1.08 | % | 0.98 | % | 0.95 | % | ||||||||||
| Allowance for loan loss as a percent of loans, end of period |
1.22 | % | 1.21 | % | 1.23 | % | 1.33 | % | 1.35 | % | ||||||||||
| Delinquent loans to total net loans, end of period |
1.48 | % | 1.49 | % | 1.50 | % | 1.70 | % | 1.62 | % | ||||||||||
| (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) | Excludes penalty on the prepayment of repurchase agreements |
9
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Loan Portfolio Composition |
||||||||||||||||||||
| Commercial loans |
||||||||||||||||||||
| Multi-family |
$ | 107,066 | $ | 81,022 | $ | 80,581 | $ | 80,170 | $ | 74,042 | ||||||||||
| Owner/nonowner occupied commercial real estate |
225,699 | 196,110 | 184,279 | 175,456 | 167,366 | |||||||||||||||
| Land |
9,401 | 9,748 | 8,938 | 9,301 | 9,709 | |||||||||||||||
| Construction |
45,137 | 61,744 | 49,858 | 38,812 | 26,545 | |||||||||||||||
| Commercial and industrial |
106,880 | 88,804 | 83,256 | 66,013 | 65,004 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
494,183 | 437,428 | 406,912 | 369,752 | 342,666 | |||||||||||||||
| Residential mortgage loans |
||||||||||||||||||||
| Real estate |
755,893 | 747,530 | 741,401 | 733,685 | 723,619 | |||||||||||||||
| Construction |
35,875 | 35,275 | 38,994 | 40,898 | 40,723 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
791,768 | 782,805 | 780,395 | 774,583 | 764,342 | |||||||||||||||
| Consumer loans |
||||||||||||||||||||
| Consumer |
203,851 | 193,272 | 187,323 | 188,258 | 186,661 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
203,851 | 193,272 | 187,323 | 188,258 | 186,661 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans |
1,489,802 | 1,413,505 | 1,374,630 | 1,332,593 | 1,293,669 | |||||||||||||||
| Less: |
||||||||||||||||||||
| Allowance for loan losses |
18,234 | 17,172 | 16,903 | 17,712 | 17,482 | |||||||||||||||
| Deferred loan costs, net |
(2,381 | ) | (1,773 | ) | (1,419 | ) | (1,311 | ) | (1,143 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
15,853 | 15,399 | 15,484 | 16,401 | 16,339 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans, net |
1,473,949 | 1,398,106 | 1,359,146 | 1,316,192 | 1,277,330 | |||||||||||||||
| Loans held for sale, net |
60,345 | 43,847 | 35,998 | 35,801 | 38,274 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans |
$ | 1,534,294 | $ | 1,441,953 | $ | 1,395,144 | $ | 1,351,993 | $ | 1,315,604 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| At or for the quarters ended | ||||||||||||||||||||
| September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Deposit Portfolio Composition |
||||||||||||||||||||
| Checking accounts |
||||||||||||||||||||
| Interest bearing checking accounts |
$ | 170,348 | $ | 182,713 | $ | 194,586 | $ | 160,264 | $ | 168,025 | ||||||||||
| Non-interest bearing checking accounts |
252,923 | 236,173 | 230,831 | 227,505 | 208,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total checking accounts |
423,271 | 418,886 | 425,417 | 387,769 | 376,623 | |||||||||||||||
| Savings accounts |
290,325 | 292,232 | 288,324 | 280,889 | 277,313 | |||||||||||||||
| Money market accounts |
312,124 | 314,081 | 312,577 | 312,125 | 309,004 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-time deposits |
1,025,720 | 1,025,199 | 1,026,318 | 980,783 | 962,940 | |||||||||||||||
| Retail certificates of deposit |
422,370 | 430,547 | 440,296 | 454,960 | 447,544 | |||||||||||||||
| Brokered certificates of deposit |
24,953 | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total certificates of deposit |
447,323 | 430,547 | 440,296 | 454,960 | 447,544 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
$ | 1,473,043 | $ | 1,455,746 | $ | 1,466,614 | $ | 1,435,743 | $ | 1,410,484 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Certificates of deposit as a percent of total deposits |
30.37 | % | 29.58 | % | 30.02 | % | 31.69 | % | 31.73 | % | ||||||||||
10
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Allowance For Loan Losses |
||||||||||||||||||||
| Beginning balance |
$ | 17,172 | $ | 16,903 | $ | 17,712 | $ | 17,482 | $ | 16,881 | ||||||||||
| Provision |
1,344 | 395 | 2,155 | 893 | 673 | |||||||||||||||
| Net chargeoffs |
(282 | ) | (126 | ) | (2,964 | ) | (663 | ) | (72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ending balance |
$ | 18,234 | $ | 17,172 | $ | 16,903 | $ | 17,712 | $ | 17,482 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| At or for the quarters ended | ||||||||||||||||||||
| September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Net (Charge-offs) Recoveries |
||||||||||||||||||||
| Commercial loans |
||||||||||||||||||||
| Multi-family |
$ | 35 | $ | 3 | $ | 7 | $ | 7 | $ | 9 | ||||||||||
| Owner/nonowner occupied commercial real estate |
17 | (117 | ) | (2,213 | ) | (67 | ) | (109 | ) | |||||||||||
| Land |
(250 | ) | — | — | (100 | ) | (12 | ) | ||||||||||||
| Construction |
— | — | — | 21 | (88 | ) | ||||||||||||||
| Commercial and industrial |
192 | 62 | (74 | ) | 141 | 137 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
(6 | ) | (52 | ) | (2,280 | ) | 2 | (63 | ) | |||||||||||
| Residential mortgage loans |
||||||||||||||||||||
| Real estate |
(146 | ) | (59 | ) | (300 | ) | (611 | ) | (17 | ) | ||||||||||
| Construction |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
(146 | ) | (59 | ) | (300 | ) | (611 | ) | (17 | ) | ||||||||||
| Consumer loans |
||||||||||||||||||||
| Consumer |
(130 | ) | (15 | ) | (384 | ) | (54 | ) | 8 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
(130 | ) | (15 | ) | (384 | ) | (54 | ) | 8 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total net chargeoffs |
$ | (282 | ) | $ | (126 | ) | $ | (2,964 | ) | $ | (663 | ) | $ | (72 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| At or for the quarters ended | ||||||||||||||||||||
| September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Nonperforming Loans |
||||||||||||||||||||
| Commercial loans |
||||||||||||||||||||
| Multi-family |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Owner/nonowner occupied commercial real estate |
6,879 | 7,362 | 7,557 | 3,599 | 3,694 | |||||||||||||||
| Land |
134 | 384 | 384 | 384 | 484 | |||||||||||||||
| Construction |
— | — | — | — | 415 | |||||||||||||||
| Commercial and industrial |
4,242 | 4,633 | 4,652 | 4,016 | 4,016 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
11,255 | 12,379 | 12,593 | 7,999 | 8,609 | |||||||||||||||
| Residential mortgage loans |
||||||||||||||||||||
| Real estate |
5,835 | 5,713 | 5,312 | 6,181 | 4,845 | |||||||||||||||
| Construction |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
5,835 | 5,713 | 5,312 | 6,181 | 4,845 | |||||||||||||||
| Consumer loans |
||||||||||||||||||||
| Consumer |
2,358 | 2,249 | 2,200 | 2,567 | 1,887 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
2,358 | 2,249 | 2,200 | 2,567 | 1,887 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total nonperforming loans |
$ | 19,448 | $ | 20,341 | $ | 20,105 | $ | 16,747 | $ | 15,341 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Nonperforming Loans and Nonperforming Assets |
||||||||||||||||||||
| Past due 90 days and on nonaccrual status |
$ | 15,350 | $ | 15,819 | $ | 15,663 | $ | 16,279 | $ | 14,890 | ||||||||||
| Past due 90 days and still accruing |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Past due 90 days |
15,350 | 15,819 | 15,663 | 16,279 | 14,890 | |||||||||||||||
| Past due less than 90 days and on nonaccrual |
4,098 | 4,522 | 4,442 | 468 | 451 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total nonperforming loans |
19,448 | 20,341 | 20,105 | 16,747 | 15,341 | |||||||||||||||
| Other real estate owned |
1,790 | 1,613 | 1,832 | 2,651 | 3,262 | |||||||||||||||
| Repossessed assets |
3 | 3 | 14 | 76 | 54 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total nonperforming assets |
$ | 21,241 | $ | 21,957 | $ | 21,951 | $ | 19,474 | $ | 18,657 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
11