UCFC United Community Financial Corporation

United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), today announced net income of $8.7 million, or $0.176 per diluted common share (“EPS”) for the three months ended March 31, 2019, compared to $0.171 EPS, or $8.6 million for the three months ended March 31, 2018.

First quarter 2019 highlights:

• ROA of 1.22%, ROE of 10.99% and ROTE of 11.90%
• Net loan growth of 7.1%, annualized on a linked quarter basis
• Average customer deposit growth of 6.1% comparing first quarter 2019 to first quarter 2018
• Net interest margin of 3.38%
• Noninterest income growth of 4.4% comparing first quarter 2019 to first quarter 2018, 13.1% when adjusted for a change in mortgage servicing rights valuation
• Repurchase of 328,000 shares, or approximately 0.7% of outstanding shares

Gary M. Small, President and Chief Executive Officer of the Company commented, “We are pleased with Q1 performance as our loan and deposit growth came in right on target, margin met expectations during an unpredictable interest rate environment, and our residential mortgage, wealth and insurance business units experienced strong revenue growth.”

Small further commented, “The year began a bit softer than normal as clients seemed to strike a cautious stance while evaluating the impact of Q4 market uncertainty. Activity levels picked up over the course of the quarter, the residential mortgage business began to benefit from the lower rate environment, and we enter Q2 in a good position.”

Solid Loan Growth

Total net loans grew $38.7 million on a linked quarter basis, or 7.1% annualized, in the first quarter of 2019. Commercial loan growth was $31.7 million for the quarter ended March 31, 2019, an annualized growth rate of 13.5% on a linked quarter basis. Residential mortgage loans increased $9.0 million when comparing the linked quarters, or 3.7% annualized.

Strong Business Deposit and Noninterest Bearing Deposit Growth

Average customer deposit growth was 6.1% when comparing the first quarter of 2019 to the first quarter of 2018. Average noninterest bearing deposits grew $31.3 million, or 8.4%, from March of 2018 to March of 2019 while average business deposits grew $58.8 million, or 24.0%, and average public funds grew $29.2 million, or 27.5%, over this same time frame.

Net Interest Income and Margin

Net interest income totaled $22.3 million on a fully taxable equivalent (FTE) basis for the quarter ended March 31, 2019, compared to $21.6 million for the quarter ended March 31, 2018, an increase of 3.0%. First quarter 2018 net interest income includes a onetime fee recognition from the early payoff of a single loan and a higher level of purchase accounting accretion income versus 2019. Adjusting for these two items, the increase in first quarter net interest income would be 7.0%.

The net interest margin on an FTE basis was 3.38% for the first quarter of 2019 compared to 3.47% for the similar period last year. The net interest margin during the first quarter of 2018 was positively impacted by the payoff of a single loan that added approximately 8 basis points to the reported margin. Also included in the margin for both years are purchase accounting yield adjustments aggregating 6 and 9 basis points respectively for 2019 and 2018. Absent of both the early payoff and the purchase accounting adjustments the net interest margin for the first quarter of 2019 would be 3.32% compared to 3.30% for the same time period last year.

Non-Interest Income

Non-interest income increased to $6.1 million in the first quarter of 2019, compared to $5.8 million in the first quarter of 2018, an increase of 4.4%. Excluding the unfavorable mortgage servicing rights valuation adjustment in the first quarter of 2019, non-interest income would have increased by 13.1%. Mortgage banking income was up 23.4%. Insurance agency income was up 21.5% along with wealth fees being up 12.6%. These increases helped offset the impact of the negative mortgage servicing rights valuation adjustment.

Non-Interest Expense

Non-interest expense was $17.7 million for the quarter ended March 31, 2019 compared to $16.6 million for the quarter ended March 31, 2018, or a 6.5% increase. Non-interest expense for the first quarter of 2019 also included charges of $650,000 for organizational restructuring of the retail and wealth business units. Absent of the organizational restructure charges the increase in non-interest expense is 2.6% for the same period. The Company’s efficiency ratio was 62.29%.

Credit Quality

Credit quality metrics continue to show very favorably during the first quarter of 2019. The ratio of nonperforming loans to net loans was 0.32% at March 31, 2019, which is down from 0.59% reported at March 31, 2018. Total nonperforming commercial loans remain low at $2.0 million as of March 31, 2019 or 0.20% of total commercial loans. Total nonperforming assets to assets was 0.34% at March 31, 2019, while total delinquent loans to net loans was 0.41% for the same period. These ratios were 0.65% and 0.81%, respectively, at March 31, 2018.

During the quarter ended March 31, 2019, the Company recognized total net charge offs of $58,000 or one basis point as a percentage of average loans.

The Company’s provision for loan losses totaled $61,000 for the first quarter of 2019, which was down from the $407,000 reported in the first quarter of 2018. As of March 31, 2019, the Company’s allowance for loan losses to total loans was 0.91%, versus 1.04% at March 31, 2018. Also at March 31, 2019 the allowance for loan loss as a percent of nonperforming loans totaled 287.7%.

Loans acquired through acquisition during the first quarter of 2017 were recorded at fair value. When combining the remaining fair value adjustment of $1.7 million and the Company’s allowance, the Company’s allowance as a percentage total loans increases to .99%.

Capital Management and Tangible Book Value per Share

During the first quarter of 2019, the Company repurchased 328,000 shares. The Company had remaining 1,545,000 shares authorized for repurchase as of March 31, 2019. Tangible book value per common share at March 31, 2019 was $5.95 compared to $5.45 at March 31, 2018.

Dividend Declaration

On April 16, 2019, the Board of Directors declared a quarterly cash dividend of $0.07 per common share. The dividend is payable May 10, 2019 to shareholders of record at the close of business April 29, 2019.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, April 17, 2019, at 10:00 a.m. ET., to provide an overview of the Company's first quarter 2019 results and highlights. The conference call may be accessed by calling 1-877-272-7661 ten minutes prior to the start time. Please ask to be joined into the United Community Financial Corp. (UCFC) call. Additionally, a live webcast may be accessed from the Company’s website ir.ucfconline.com. Click on 1st Quarter 2019 Conference Call on the corporate profile page to join the webcast.

United Community Financial Corp.

Home Savings is a wholly owned subsidiary of the Company, offering a full line of commercial, wealth management and consumer banking products and services with 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 is available at ir.ucfconline.com.

When used in this press release, the words or phrases “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project”, “will have”, “can expect” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including changes in economic conditions in the Company’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company’s market area and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company advises readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

      UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)   March 31, March 31, 2019 2018 F/(U) (Dollars in thousands) Assets: Cash and deposits with banks $ 41,920 $ 27,683 51.4 % Federal funds sold   35,277     19,058   85.1 % Total cash and cash equivalents 77,197 46,741 65.2 % Securities: Trading, at fair value 666 — 0.0 % Available for sale, at fair value 237,421 257,908 -7.9 % Held to maturity (fair value of $74,748 and $78,033, respectively) 75,760 80,685 -6.1 % Loans held for sale, at fair value 77,676 79,292 -2.0 % Gross loans 2,235,995 2,083,053 7.3 % Allowance for loan losses   (20,446 )   (21,610 ) -5.4 % Net loans 2,215,549 2,061,443 7.5 % Federal Home Loan Bank stock, at cost 16,702 19,324 -13.6 % Premises and equipment, net 22,012 21,795 1.0 % Accrued interest receivable 8,873 7,615 16.5 % Real estate owned and other repossessed assets 1,180 1,293 -8.7 % Goodwill 20,221 20,221 0.0 % Core deposit intangible 1,521 1,851 -17.8 % Customer list intangible 2,169 2,030 6.8 % Cash surrender value of life insurance 64,606 62,922 2.7 % Other assets   30,488     27,587   10.5 % Total assets $ 2,852,041   $ 2,690,707   6.0 %   Liabilities and Shareholders' Equity Liabilities: Deposits: Interest bearing $ 1,623,653 $ 1,528,262 6.2 % Noninterest bearing   404,644     376,904   7.4 % Customer deposits 2,028,297 1,905,166 6.5 % Brokered deposits   261,506     161,812   61.6 % Total deposits 2,289,803 2,066,978 10.8 % Borrowed funds: Federal Home Loan Bank advances Long-term advances — 48,731 -100.0 % Short-term advances   204,000     245,000   -16.7 % Total Federal Home Loan Bank advances 204,000 293,731 -30.5 % Repurchase agreements and other   254     233   9.0 % Total borrowed funds 204,254 293,964 -30.5 % Advance payments by borrowers for taxes and insurance 19,542 18,444 6.0 % Accrued interest payable 1,492 1,363 9.5 % Accrued expenses and other liabilities   22,241     13,763   61.6 % Total liabilities   2,537,332     2,394,512   6.0 %   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 48,852,688 and 49,882,491 shares, respectively, outstanding

177,410 177,297 0.1 % Retained earnings 197,286 173,419 13.8 % Accumulated other comprehensive loss (18,416 ) (22,675 ) -18.8 % Treasury stock, at cost, 5,286,222 and 4,256,419 shares, respectively   (41,571 )   (31,846 ) 30.5 % Total shareholders’ equity   314,709     296,195   6.3 % Total liabilities and shareholders’ equity $ 2,852,041   $ 2,690,707   6.0 %     UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)                     For the Three Months Ended

March 31,

December 31, March 31, 2019 2018 Variance F/(U) 2018 Variance F/(U) (Dollars in thousands, except per share data) Interest income Loans $ 25,856 $ 26,587 $ (731 ) -2.7 % $ 22,759 $ 3,097 13.6 % Loans held for sale 1,007 1,184 (177 ) -14.9 % 858 149 17.4 % Securities: Available for sale, nontaxable 307 334 (27 ) -8.1 % 388 (81 ) -20.9 % Available for sale, taxable 1,263 1,148 115 10.0 % 1,215 48 4.0 % Held to maturity, nontaxable 75 69 6 8.7 % 51 24 47.1 % Held to maturity, taxable 379 380 (1 ) -0.3 % 422 (43 ) -10.2 % Federal Home Loan Bank stock dividends 290 290 — 0.0 % 280 10 3.6 % Other interest earning assets   224     178     46   25.8 %   77     147   190.9 % Total interest income 29,401 30,170 (769 ) -2.5 % 26,050 3,351 12.9 % Interest expense Deposits 6,574 5,866 (708 ) -12.1 % 3,097 (3,477 ) -112.3 % Federal Home Loan Bank advances   641     810     169   20.9 %   1,420     779   54.9 % Total interest expense   7,215     6,676     (539 ) -8.1 %   4,517     (2,698 ) -59.7 % Net interest income 22,186 23,494 (1,308 ) -5.6 % 21,533 653 3.0 % Taxable equivalent adjustment   84     111     (27 ) -24.3 %   97     (13 ) -13.4 % Net interest income (FTE) (1) 22,270 23,605 (1,335 ) -5.7 % 21,630 640 3.0 % Provision for loan losses   61     178     117   65.7 %   407     346   85.0 % Net interest income after provision for loan losses (FTE)   22,209     23,427     (1,218 ) -5.2 %   21,223     986   4.6 % Non-interest income Insurance agency income 701 562 139 24.7 % 577 124 21.5 % Brokerage income 370 305 65 21.3 % 272 98 36.0 % Service fees and other charges: Deposit related fees 1,341 1,521 (180 ) -11.8 % 1,300 41 3.2 % Mortgage servicing fees 873 858 15 1.7 % 812 61 7.5 % Mortgage servicing rights valuation (499 ) (44 ) (455 ) 1034.1 % 9 (508 ) -5644.4 % Mortgage servicing rights amortization (446 ) (430 ) (16 ) 3.7 % (500 ) 54 -10.8 % Other service fees 38 36 2 5.6 % 38 — 0.0 % Net gains (losses): Trading securities 64 669 (605 ) -90.4 % — 64 0.0 % Securities available for sale 144 (861 ) 1,005 -116.7 % 139 5 3.6 % Mortgage banking income 1,676 1,118 558 49.9 % 1,358 318 23.4 % Real estate owned and other repossessed assets charges, net (31 ) (24 ) (7 ) 29.2 % (78 ) 47 -60.3 % Debit/credit card fees 934 1,033 (99 ) -9.6 % 949 (15 ) -1.6 % Trust fee income 465 480 (15 ) -3.1 % 469 (4 ) -0.9 % Bank owned life insurance 385 431 (46 ) -10.7 % 433 (48 ) -11.1 % Other income   58     (69 )   127   -184.1 %   41     17   41.5 % Total non-interest income   6,073     5,585     488   8.7 %   5,819     254   4.4 % Non-interest expense Salaries and employee benefits 10,575 9,029 (1,546 ) -17.1 % 9,998 (577 ) -5.8 % Occupancy 1,046 1,023 (23 ) -2.2 % 1,100 54 4.9 % Equipment and data processing 2,292 2,122 (170 ) -8.0 % 2,154 (138 ) -6.4 % Financial institutions tax 509 464 (45 ) -9.7 % 496 (13 ) -2.6 % Advertising 390 414 24 5.8 % 235 (155 ) -66.0 % Amortization of intangible assets 127 128 1 0.8 % 113 (14 ) -12.4 % FDIC insurance premiums 331 398 67 16.8 % 290 (41 ) -14.1 % Other insurance premiums 76 70 (6 ) -8.6 % 109 33 30.3 % Professional fees: Legal fees 60 292 232 79.5 % 299 239 79.9 % Other professional fees 587 721 134 18.6 % 391 (196 ) -50.1 % Supervisory fees 34 34 — 0.0 % 42 8 19.0 % Real estate owned and other repossessed asset expenses 39 34 (5 ) -14.7 % 36 (3 ) -8.3 % Other expenses   1,608     2,449     841   34.3 %   1,337     (271 ) -20.3 % Total non-interest expenses   17,674     17,178     (496 ) -2.9 %   16,600     (1,074 ) -6.5 % Income before income taxes 10,608 11,834 (1,226 ) -10.4 % 10,442 166 1.6 % Taxable equivalent adjustment 84 111 27 24.3 % 97 13 13.4 % Income tax expense   1,868     2,172     304   14.0 %   1,789     (79 ) -4.4 % Net income $ 8,656   $ 9,551   $ (895 ) -9.4 % $ 8,556   $ 100   1.2 %   Earnings per common share: Basic $ 0.177 $ 0.192 $ (0.015 ) -7.8 % $ 0.172 $ 0.005 2.9 % Diluted 0.176 0.191 (0.015 ) -7.9 % 0.171 0.005 2.9 % (1)  

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

 

                  UNITED COMMUNITY FINANCIAL CORP. CONSOLIDATED AVERAGE BALANCES (Unaudited)     For the three months ended March 31, 2019 December 31, 2018 March 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) $ 2,191,746 $ 25,864 4.75 % $ 2,161,414 $ 26,616 4.93 % $ 2,026,266 $ 22,760 4.49 % Loans held for sale   84,932   1,007 4.74 %   100,348   1,184 4.68 %   80,681   858 4.31 % Total loans, net 2,276,678 26,871 4.75 % 2,261,762 27,800 4.91 % 2,106,947 23,618 4.49 % Securities: Available for sale-taxable 200,088 1,263 2.52 % 196,910 1,148 2.33 % 211,332 1,215 2.30 % Available for sale-nontaxable (2) 43,468 365 3.36 % 48,370 399 3.30 % 54,737 472 3.45 % Held to maturity-taxable 63,674 379 2.38 % 65,605 380 2.32 % 72,627 422 2.32 % Held to maturity-nontaxable (2)   13,047   93 2.85 %   12,215   86 2.82 %   9,227   63 2.73 % Total securities 320,277 2,100 2.62 % 323,100 2,013 2.49 % 347,923 2,172 2.50 % Federal Home Loan Bank stock 18,010 290 6.43 % 19,144 290 6.06 % 19,324 280 5.80 % Other interest earning assets   34,986   224 2.59 %   34,779   178 2.03 %   22,479   77 1.39 % Total interest earning assets 2,649,951 29,485 4.48 % 2,638,785 30,281 4.59 % 2,496,673 26,147 4.19 % Non-interest earning assets   176,913   176,579   176,785 Total assets $ 2,826,864 $ 2,815,364 $ 2,673,458 Interest bearing liabilities: Deposits: Checking accounts $ 650,268 1,440 0.89 % $ 620,306 1,114 0.71 % $ 593,499 687 0.47 % Savings accounts 297,410 29 0.04 % 303,247 28 0.04 % 303,639 27 0.04 % Certificates of deposit Customer certificates of deposit 618,752 2,824 1.83 % 619,208 2,652 1.70 % 581,858 1,817 1.27 % Brokered certificates of deposit   397,137   2,281 2.30 %   393,778   2,072 2.09 %   165,169   566 1.39 % Total certificates of deposit   1,015,889   5,105 2.01 %   1,012,986   4,724 1.85 %   747,027   2,383 1.28 % Total interest bearing deposits 1,963,567 6,574 1.34 % 1,936,539 5,866 1.20 % 1,644,165 3,097 0.76 % Federal Home Loan Bank advances Long-term advances — — 0.00 % 46,879 357 3.02 % 48,603 431 3.60 % Short-term advances   103,333   641 2.48 %   75,033   453 2.40 %   265,322   989 1.51 % Total Federal Home Loan Bank advances 103,333 641 2.48 % 121,912 810 2.64 % 313,925 1,420 1.83 % Repurchase agreements and other   233   — 0.00 %   245   — 0.00 %   213   — 0.00 % Total borrowed funds   103,566   641 2.48 %   122,157   810 2.63 %   314,138   1,420 1.83 % Total interest bearing liabilities $ 2,067,133   7,215 1.40 % $ 2,058,696   6,676 1.29 % $ 1,958,303   4,517 0.94 % Non-interest bearing liabilities Total noninterest bearing deposits 400,874 395,649 375,142 Other noninterest bearing liabilities   43,851   46,559   40,729 Total noninterest bearing liabilities   444,725   442,208   415,871 Total liabilities $ 2,511,858 $ 2,500,904 $ 2,374,174 Shareholders’ equity   315,006   314,464   299,284 Total liabilities and equity $ 2,826,864 $ 2,815,368 $ 2,673,458 Net interest income and interest rate spread $ 22,270 3.08 % $ 23,605 3.30 % $ 21,630 3.25 % Net interest margin 3.38 % 3.58 % 3.47 % Average interest earning assets to average interest bearing liabilities 128.19 % 128.18 % 127.49 %     Interest bearing deposits Checking accounts $ 650,268 $ 1,440 0.89 % $ 620,306 $ 1,114 0.71 % $ 593,499 $ 687 0.47 % Savings accounts 297,410 29 0.04 % 303,247 28 0.04 % 303,639 27 0.04 % Customer certificates of deposit   618,752   2,824 1.83 %   619,208   2,652 1.70 %   581,858   1,817 1.27 % Total customer deposits 1,566,430 4,293 1.10 % 1,542,761 3,794 0.98 % 1,478,996 2,531 0.68 % Brokered certificates of deposit   397,137   2,281 2.30 %   393,778   2,072 2.09 %   165,169   566 1.39 % Total interest bearing deposits 1,963,567 6,574 1.34 % 1,936,539 5,866 1.20 % 1,644,165 3,097 0.76 % Noninterest bearing deposits   400,874   — 0.00 %   395,649   — 0.00 %   375,142   — 0.00 % Total average deposits and cost of deposits $ 2,364,441 $ 6,574 1.11 % $ 2,332,188 $ 5,866 1.01 % $ 2,019,307 $ 3,097 0.61 % Other interest bearing liabilities Federal Home Loan Bank advances Long term advances $ — $ — 0.00 % $ 46,879 $ 357 3.02 % $ 48,603 $ 431 3.60 % Short term advances   103,333   641 2.48 %   75,033   453 2.40 %   265,322   989 1.51 % Total Federal Home Loan Bank advances 103,333 641 2.48 % 121,912 810 2.64 % 313,925 1,420 1.83 % Repurchase agreements and other   233   — 0.00 %   245   — 0.00 %   213   — 0.00 % Total borrowed funds   103,566   641 2.48 %   122,157   810 2.63 %   314,138   1,420 1.83 % Total average deposits and other interest bearing liabilities and total cost of funds $ 2,468,007 $ 7,215 1.17 % $ 2,454,345 $ 6,676 1.09 % $ 2,333,445 $ 4,517 0.79 %     Customer deposits interest bearing and noninterest bearing $ 1,967,304 $ 4,293 0.87 % $ 1,938,410 $ 3,794 0.78 % $ 1,854,138 $ 2,531 0.55 % Brokered deposits 397,137 2,281 2.30 % 393,778 2,072 2.09 % 165,169 566 1.39 % Total borrowings 103,566 641 2.48 % 122,157 810 2.63 % 314,138 1,420 1.83 % Cost of funds 2,468,007 7,215 1.17 % 2,454,345 6,676 1.09 % 2,333,445 4,517 0.79 %  

(1)

 

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

(2)

Yields are on a fully taxable equivalent basis.

            UNITED COMMUNITY FINANCIAL CORP. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)   At or for the quarters ended March 31, December 31,

September 30,

June 30, March 31, 2019 2018

2018

2018 2018 (Dollars in thousands, except per share data) Financial Data Total assets $ 2,852,041 $ 2,811,357 $ 2,789,183 $ 2,770,558 $ 2,690,707 Total loans, net 2,215,549 2,176,842 2,148,942 2,099,781 2,061,443 Total securities 313,847 319,498 320,806 328,924 338,593 Total deposits 2,289,803 2,213,220 2,352,476 2,135,345 2,066,978 Average interest-bearing deposits 1,963,567 1,936,539 1,884,617 1,718,639 1,644,165 Average noninterest-bearing deposits 400,874 395,649 382,044 376,905 375,142 Total shareholders' equity 314,709 309,334 306,043 301,484 296,195 Net interest income 22,186 23,494 21,623 21,295 21,533 Net interest income (FTE) (1) 22,270 23,605 21,707 21,385 21,630 Provision for loan losses 61 178 251 (138 ) 407 Noninterest income 6,073 5,585 6,146 5,852 5,819 Noninterest expense 17,674 17,178 15,772 15,530 16,600 Income tax expense 1,868 2,172 2,217 2,214 1,789 Net income 8,656 9,551 9,529 9,541 8,556   Share Data Basic earnings per common share $ 0.177 $ 0.192 $ 0.191 $ 0.191 $ 0.172 Diluted earnings per common share 0.176 0.191 0.190 0.190 0.171 Book value per common share 6.44 6.30 6.13 6.04 5.94 Tangible book value per common share 5.95 5.81 5.65 5.56 5.45 Market value per common share 9.35 8.85 9.67 10.99 9.86   Common shares outstanding at end of period 48,853 49,129 49,923 49,904 49,882 Weighted average shares outstanding--basic 48,854 49,445 49,683 49,694 49,611 Weighted average shares outstanding--diluted 49,113 49,695 49,947 49,944 49,885   Key Ratios Return on average assets (2) 1.22 % 1.36 % 1.37 % 1.40 % 1.28 % Return on average equity (3) 10.99 % 12.15 % 12.25 % 12.56 % 11.44 % Return on tangible equity (4) 11.90 % 13.16 % 13.28 % 13.65 % 12.44 % Net interest margin 3.38 % 3.58 % 3.33 % 3.36 % 3.47 % Efficiency ratio 62.29 % 54.79 % 57.30 % 57.75 % 60.20 % Nonperforming loans to net loans, end of period 0.32 % 0.30 % 0.42 % 0.51 % 0.59 % Nonperforming assets to total assets, end of period 0.34 % 0.27 % 0.36 % 0.57 % 0.65 % Allowance for loan loss as a percent of loans, end of period 0.91 % 0.93 % 0.98 % 1.01 % 1.04 % Delinquent loans to total net loans, end of period 0.41 % 0.50 % 0.69 % 0.67 % 0.81 %

(1)

 

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

(2)

Net income divided by average total assets

(3)

Net income divided by average total equity

(4)

Net income divided by average total equity, minus average intangible assets

    UNITED COMMUNITY FINANCIAL CORP. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)           At or for the quarters ended March 31, December 31,

September 30,

June 30, March 31, 2019 2018

2018

2018 2018 (Dollars in thousands) Loan Portfolio Composition Commercial loans Multi-family $ 163,243 $ 134,143 $ 139,938 $ 141,004 $ 137,836 Owner/nonowner occupied commercial real estate 412,550 409,979 408,938 396,624 384,533 Land 17,090 16,831 16,129 16,887 15,452 Construction 135,048 141,685 132,961 127,691 134,181 Commercial and industrial   246,740     240,293     233,801     218,611     201,132   Total 974,671 942,931 931,767 900,817 873,134 Residential mortgage loans Real estate 934,586 927,255 909,626 888,583 882,873 Construction   45,102     43,435     39,396     40,623     42,453   Total 979,688 970,690 949,022 929,206 925,326 Consumer loans Consumer   274,998     277,041     283,108     284,909     279,110   Total   274,998     277,041     283,108     284,909     279,110   Total loans 2,229,357 2,190,662 2,163,897 2,114,932 2,077,570 Less: Allowance for loan losses 20,446 20,443 21,332 21,405 21,610 Deferred loan costs, net   (6,638 )   (6,623 )   (6,377 )   (6,254 )   (5,483 ) Total   13,808     13,820     14,955     15,151     16,127   Total loans, net 2,215,549 2,176,842 2,148,942 2,099,781 2,061,443 Loans held for sale, net   77,676     91,472     95,235     107,701     79,292   Total loans $ 2,293,225   $ 2,268,314   $ 2,244,177   $ 2,207,482   $ 2,140,735       At or for the quarters ended March 31, December 31, September 30, June 30, March 31, 2019 2018 2018 2018 2018 (Dollars in thousands) Deposit Portfolio Composition Checking accounts Interest bearing checking accounts $ 146,244 $ 146,977 $ 140,722 $ 138,812 $ 140,740 Non-interest bearing checking accounts   404,644     394,208     383,535     383,082     376,904   Total checking accounts 550,888 541,185 524,257 521,894 517,644 Savings accounts 297,186 298,087 300,007 306,283 308,025 Money market accounts   550,049     466,167     489,668     502,560     483,840   Total non-time deposits 1,398,123 1,305,439 1,313,932 1,330,737 1,309,509 Certificates of deposit   630,174     616,826     622,807     615,388     595,657   Total customer deposits 2,028,297 1,922,265 1,936,739 1,946,125 1,905,166 Brokered deposits   261,506     290,955     415,737     189,220     161,812   Total certificates of deposit   891,680     907,781     1,038,544     804,608     757,469   Total deposits $ 2,289,803   $ 2,213,220   $ 2,352,476   $ 2,135,345   $ 2,066,978       UNITED COMMUNITY FINANCIAL CORP. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)           At or for the quarters ended March 31,

December 31,

September 30,

June 30, March 31, 2019

2018

2018

2018 2018 (Dollars in thousands)   Allowance For Loan Losses Beginning balance $ 20,443 $ 21,332 $ 21,405 $ 21,610 $ 21,202 Provision 61 178 251 (138 ) 407 Net recoveries (chargeoffs)   (58 )   (1,067 )   (324 )   (67 )   1   Ending balance $ 20,446   $ 20,443   $ 21,332   $ 21,405   $ 21,610     At or for the quarters ended March 31,

December 31,

September 30,

June 30, March 31, 2019

2018

2018

2018 2018 (Dollars in thousands) Net Recoveries (Charge-offs) Commercial loans Multi-family $ 113 $ (99 ) $ 4 $ 9 $ 6 Owner/nonowner occupied commercial real estate 28 38 12 29 40 Land — — 150 — — Construction 1 — 11 10 7 Commercial and industrial   (84 )   (765 )   (275 )   (72 )   104   Total 58 (826 ) (98 ) (24 ) 157 Residential mortgage loans Real estate 78 (131 ) (141 ) (14 ) (66 ) Construction   —     —     —     —     —   Total 78 (131 ) (141 ) (14 ) (66 ) Consumer loans Consumer   (194 )   (110 )   (85 )   (29 )   (90 ) Total   (194 )   (110 )   (85 )   (29 )   (90 ) Total net chargeoffs $ (58 ) $ (1,067 ) $ (324 ) $ (67 ) $ 1       At or for the quarters ended

March 31,

December 31,

September 30,

June 30, March 31, 2019

2018

2018

2018 2018 (Dollars in thousands) Nonperforming Loans Commercial loans Multi-family $ — $ 171 $ 275 $ 275 $ 275 Owner/nonowner occupied commercial real estate 1,565 13 1,101 1,111 1,206 Land — — — — 9 Construction — — — — — Commercial and industrial   456     531     1,489     1,475     1,459   Total 2,021 715 2,865 2,861 2,949 Residential mortgage loans Real estate 3,883 4,170 4,426 6,146 7,045 Construction   —     —     —     —     —   Total 3,883 4,170 4,426 6,146 7,045 Consumer loans Consumer   1,203     1,654     1,770     1,783     2,180   Total   1,203     1,654     1,770     1,783     2,180   Total nonperforming loans $ 7,107   $ 6,539   $ 9,061   $ 10,790   $ 12,174       Total Nonperforming Loans and Nonperforming Assets Past due 90 days and on nonaccrual status $ 4,351 $ 5,732 $ 8,200 $ 8,395 $ 8,326 Past due 90 days and still accruing   —     18     —     —     —   Past due 90 days 4,351 5,750 8,200 8,395 8,326 Past due less than 90 days and on nonaccrual   2,756     789     861     2,395     3,848   Total nonperforming loans 7,107 6,539 9,061 10,790 12,174 Other real estate owned 1,143 1,049 907 802 1,030 Other classified assets 1,479 — — 4,050 4,050 Repossessed assets   37     39     —     75     263   Total nonperforming assets $ 9,766   $ 7,627   $ 9,968   $ 15,717   $ 17,517     UNITED COMMUNITY FINANCIAL CORP. NON-GAAP DISCLOSURE RECONCILIATION (Unaudited)         Reconciliation of Average Shareholders' Equity to Average Tangible Equity:   At or for the quarters ended March 31, December 31,

September 30,

June 30, March 31, 2019 2018

2018

2018 2018 (Dollars in thousands, except per share data) Average shareholders equity $ 315,006 $ 314,464 $ 311,058 $ 303,733 $ 299,284 Average intangible assets   23,994     24,123     24,144     24,063     24,175   Average tangible equity $ 291,012   $ 290,341   $ 286,914   $ 279,670   $ 275,109     Net income $ 8,656 $ 9,551 $ 9,529 $ 9,541 $ 8,556   Return on tangible equity 11.90 % 13.16 % 13.28 % 13.65 % 12.44 %   Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income:   For the quarters ended March 31, December 31, September 30, June 30, March 31, 2019 2018 2018 2018 2018 (Dollars in thousands)   Interest income $ 29,401 $ 30,170 $ 27,690 $ 26,661 $ 26,050 Fully taxable equivalent adjustment   84     111     84     90     97   Fully taxable equivalent interest income 29,485 30,281 27,774 26,751 26,147 Interest expense   7,215     6,676     6,067     5,366     4,517   Fully taxable net interest income $ 22,270   $ 23,605   $ 21,707   $ 21,385   $ 21,630     Reconciliation of Coverage Ratio to Coverage Ratio with Fair Value Adjustments Included with Allowance for Loan Losses:   March 31, 2019 (Dollars in thousands) Allowance for loan losses $ 20,446 Fair value adjustments   1,738     22,184     Loans, net $ 2,215,548 Add: Allowance for loan losses and fair value adjustment   22,184   Gross loans $ 2,237,732    

Coverage ratio with the Fair Value adjustments included in Allowance for loan losses

0.99 %   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 March 31, December 31, September 30, June 30, March 31, 2019 2018 2018 2018 2018 (Dollars in thousands, except per share data) Total shareholders' equity $ 314,709 $ 309,334 $ 306,043 $ 301,484 $ 296,195 Goodwill 20,221 20,221 20,221 20,221 20,221 Customer list intangible 2,169 2,214 2,259 1,980 2,030 Core deposit intangible 1,521 1,603 1,686 1,769 1,851 Total common shares outstanding 48,852,688 49,128,875 49,922,514 49,904,074 49,882,491 Tangible book value, as reported $ 5.95 $ 5.81 $ 5.65 $ 5.56 $ 5.45     Reconciliation of Net Interest Margin, Non-Interest Income and Non-Interest Expense:   At the quarters ended March 31, March 31, 2019 2018 Net interest income (FTE) $ 22,270 $ 21,630 less: impact of loan payoff - (588 ) less: purchase accounting   (360 )   (545 )

Adjusted net interest income

21,910 20,497 Average earning assets 2,649,951 2,496,673 Net interest margin exc. loan payoff and purch. accounting 3.32 % 3.30 %   Non-interest income $ 6,073 $ 5,819 less: mortgage servicing valuation adjustment   499     (9 ) Non-interest income, adjusted 6,572 5,810 Non-interest income % increase 13.1 %   Non-interest expense $ 17,674 $ 16,600 less: organizational restructure charge   (650 )   -   Non-interest expense, adjusted 17,024 16,600 Non-interest expense % increase 2.6 %

View source version on businesswire.com: https://www.businesswire.com/news/home/20190416005958/en/

Media Contact:Kathy BushwaySenior Vice President, MarketingHome Savings(330) 742-0638kbushway@homesavings.com

Investor Contact:Gary M. SmallPresident and Chief Executive OfficerUnited Community Financial Corp.(330) 742-0472