UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM8-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 24, 2017
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 Form8-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 Rule14a-12 under the Exchange Act (17 CFR240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
Section 2 – Financial Information
| Item 2.02 | Results of Operation and Financial Condition |
| (a) | On January 24, 2017, United Community Financial Corp. issued a press release announcing its results of operations for the fourth quarter of 2016. A copy of the press release is attached as Exhibit 99. |
Section 9 – Financial Statements and Exhibits
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
Exhibit Number | Description | |||
| 99 | Press Release of United Community dated January 24, 2017. | Included herewith. | ||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| UNITED COMMUNITY FINANCIAL CORP. | ||
| By: | /s/ Jude J. Nohra | |
| Jude J. Nohra | ||
| General Counsel & Secretary | ||
Date: January 24, 2017
3
EXHIBIT 99
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 PERFORMANCE RESULTS
AND DECLARES DIVIDEND
Fourth quarter 2016 highlights compared with the fourth quarter of 2015:
| • | Net quarterly income of $5.0 million, up 16.1% ($5.6 million, excluding acquisition related costs1) |
| • | Diluted EPS of $0.107, up 18.9% ($0.121, excluding acquisition related costs1) |
| • | ROA of 0.93%, up 5.7% (1.04%, excluding acquisition related costs1) |
| • | ROE of 8.00%, up 14.0% (8.97%, excluding acquisition related costs1) |
| • | Efficiency ratio improved to 61.89% (58.35% excluding acquisition related costs1) |
| • | Dividend of $0.03 per common share declared |
Full year 2016 highlights compared with 2015:
| • | Diluted EPS of $0.399, up 19.1% ($0.412, excluding acquisition related costs1) |
| • | Total loan growth of 15.9% |
| • | Strong operating leverage - 11.5% revenue growth vs. 4.2% expense growth (2.6%, excluding acquisition related costs1) |
| • | ROA of 0.91%, up 7.1% (0.94%, excluding acquisition related costs1) |
| • | ROE of 7.58%, up 14.0% (7.83%, excluding acquisition related costs1) |
YOUNGSTOWN, Ohio (January 24, 2017) – 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 December 31, 2016, was $5.0 million, up 16.1% from the $4.3 million reported for the quarter ended December 31, 2015. Fourth quarter diluted earnings per share increased 18.9% to $0.107 from $0.090 per share reported at the same time last year. These results
1
included $611,000 of acquisition costs(after-tax)related to the previously announced acquisition of Ohio Legacy Corp. Excluding these acquisition costs, the Company’s adjusted net income(non-GAAP) was $5.6 million and diluted earnings per share was $0.121 per share for the quarter ending December 31, 2016.
Net income for the twelve months ended December 31, 2016 totaled $18.8 million, up 15.6% from the $16.3 million reported for the twelve months ended December 31, 2015. For the same time period, diluted earnings per share increased to $0.399, up 19.1% from the $0.335 per share previously reported. Excluding the $611,000 acquisition costs(after-tax), adjusted net income(non-GAAP) for the twelve months ended December 31, 2016 was $19.4 million, or $0.412 per diluted share.
Gary M. Small, President and Chief Executive Officer of the Company, commented, “Excellent fourth quarter performance capped off an outstanding year for Home Savings. For the year we originated over $900 million in loans, delivered strong loan growth in our commercial and consumer business segments, successfully expanded our residential lending business into new markets, added insurance agency and mezzanine finance capabilities, and are well on our way to completing the integration process with Premier Bank and Trust.” Small continued, “All indications lead us to believe 2017 should prove to be an equally exciting year as business pipelines are full and we anticipate expansion of Premier’s asset management, trust and private banking business across the organization.”
Balance Sheet Highlights
Total Loans
Total net loans, including loans held for sale, increased $214.3 million, or 15.9% to $1.6 billion at December 31, 2016, compared to December 31, 2015. Loan growth is being driven primarily by the commercial loan portfolio. Commercial loan production totaled $308.7 million for 2016 and was approximately 35.8% higher than 2015. Commercial loan balances grew over 36.4%, or $134.5 million when compared to the same time period last year. Unfunded commercial loan commitments increased $45.3 million, or 43.8%, to $148.7 million, during 2016.
Residential loans, including residential loans held for sale, grew $51.0 million, or 6.3%, at December 31, 2016 compared to December 31, 2015. Total residential loan production increased 28.5% over the prior year. Over half of this increase is a result of growth within the Company’s residential construction loan program. Pipeline levels are 5.7% higher at December 31, 2016, compared to December 31, 2015.
Consumer loan balances increased $28.3 million, or 15.1% to $216.6 million at December 31, 2016. Consumer loan production increased 21.9%, driven primarily by auto loan production of $35.6 million during 2016.
Total Deposits
The Company lowered its overall cost of deposits to 38 basis points from 47 basis points for the three months ended December 31, 2016 compared to the same time period last year. This 19.2% reduction in cost was the result of a shift in deposit mix driven by a 17.3% growth in the average outstanding balance of noninterest bearing deposit accounts. Noninterest bearing deposit accounts grew primarily because of a 29% increase in commercial deposits. The Company also continued to grow public funds, which increased $15.7 million, or 17.1%, to $107.6 million at December 31, 2016, compared to $91.9 million at December 31, 2015. Lastly, the Company was able to diversify its deposit mix utilizing brokered deposits. As a result of this activity, total deposits increased $79.2 million, or 5.5% to $1.5 billion at December 31, 2016, compared to December 31, 2015.
2
Asset Quality
Nonperforming loans decreased 25.7% to $12.4 million as of December 31, 2016, compared to December 31, 2015. The reduction was driven by a single relationship aggregating $6.4 million that was classified as an Other Asset to more closely reflect the nature of the receivable. As a result, nonperforming loans to net loans at December 31, 2016 was 0.83%, compared to 1.27% at December 31, 2015. The Company’s allowance to total loan ratio was 1.25% at December 31, 2016.
During the first quarter of 2016, Home Savings recognized additional provision expense for a specific seasoned commercial loan, due to a loss of the property’s tenant. This loan was exited in January 2017. The following table depicts results had the resolution been achieved in the fourth quarter of 2016.
| As reported | Non-GAAP Proforma | |||||||||||
| December 31, 2016 | Adjustment | December 31, 2016 | ||||||||||
| (Dollars in thousands) | ||||||||||||
Nonperforming loans | $ | 12,438 | $ | (3,389 | ) | $ | 9,049 | |||||
Nonperforming assets | 20,599 | (3,389 | ) | 17,210 | ||||||||
Loans, net | 1,503,577 | (2,250 | ) | 1,501,327 | ||||||||
Allowance for loan losses | 19,087 | (1,139 | ) | 17,948 | ||||||||
Nonperforming loans to net loans | 0.83 | % | 0.60 | % | ||||||||
Nonperforming assets to total assets | 0.94 | % | 0.79 | % | ||||||||
Allowance for loan loss as a percent of loans | 1.25 | % | 1.18 | % | ||||||||
Fourth Quarter andYear-to-date Results
Net Interest Income and Margin
Net interest income on a fully taxable equivalent basis was $16.6 million in the fourth quarter of 2016, up 13.9% from the $14.5 million recorded in the fourth 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. Net interest income on a fully taxable equivalent basis was $63.0 million for the twelve months ended December 31, 2016, up 11.3% from the $56.6 million recorded for the twelve months ended December 31, 2015.
Net interest margin was 3.26% for the fourth quarter of 2016, an increase from 3.16% reported in the fourth quarter of 2015. The increase in net interest margin was due primarily to the overall reduction in funding costs.
Net interest margin was 3.24% for the twelve months ended December 31, 2016, an increase from 3.18% reported for the twelve months ended December 31, 2015.
3
Provision for Loan Losses
The Company recognized a provision for loan loss expense of $1.5 million in the fourth quarter of 2016 compared to a provision of $893,000 in the fourth quarter of 2015. Net charge offs for the quarter totaled 17 basis points on an annualized basis. 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 $5.4 million for the twelve months ended December 31, 2016 compared to an expense of $2.1 million in the comparable period of 2015. Small continued, “The provision for 2016 was in line with our expectations based on anticipated loan growth, netcharge-off activity and improvement in asset quality.”
Non-Interest Income
Non-interest income increased 3.4% to $5.6 million in the fourth quarter of 2016 compared to $5.5 million in the fourth quarter of 2015. Favorably affecting the change was the benefit of insurance agency income of $417,000. The Company also recognized a positive change in the valuation of mortgage servicing rights totaling $630,000 in the quarter. Partially offsetting these favorable changes was a decrease in mortgage banking income and a decline in deposit related fees.
Non-interest income increased 12.0% to $22.1 million for the twelve months ended December 31, 2016 compared to $19.7 million in the comparable period last year. Positively affecting the comparison was the benefit of insurance agency income totaling $1.7 million. Also contributing to the change was an increase in brokerage income, deposit related fees, mortgage servicing fees and debit/credit card fees, for a total of $533,000. The twelve months ended December 31, 2016 also saw security gains totaling $604,000. These increases were partially offset by a $397,000 decrease in mortgage banking income.
Non-Interest Expense
Non-interest expense was $13.7 million, up 7.5% for the fourth quarter of 2016, compared to the fourth quarter of 2015. After giving consideration to $787,000 in acquisition related costs associated with the Ohio Legacy Corp. acquisition announced in the third quarter of 2016, noninterest expense was essentially flat. The efficiency ratio continues to show improvement at 61.89% for the fourth quarter of 2016 as compared to 63.74% for the same time period last year.
Non-interest expense was $52.0 million, up 4.2% for the twelve months ended December 31, 2016, compared to the twelve months ended December 31, 2015.Non-interest expense was flat for the twelve months ended December 31, 2016, in comparison to the same period last year after taking into consideration the addition of James & Sons Insurance Company and the acquisition of Ohio Legacy Corp. The efficiency ratio was 61.01% for the twelve months ended December 31, 2016 compared to 65.10% for the twelve months ended December 31, 2015.
Pre-tax,Pre-provision Income
Pre-tax,pre-provision income was $8.3 million for the three months ended December 31, 2016, up $1.1 million, or 14.8%, from the $7.2 million recorded for the three months ended December 31, 2015.Pre-tax,pre-provision income was $32.4 million for the twelve months ended December 31, 2016, up $6.0 million, or 23.0%, from the $26.3 million recorded for the twelve months ended December 31, 2015.Pre-tax,pre-provision income is derived by adding provision for loan losses and income tax expense to net income.
4
Equity
Tangible book value per common share at December 31, 2016 improved to $5.32, as compared to $5.14 at December 31, 2015. This change was primarily due to net income for the twelve months ended December 31, 2016 offset partially by dividends paid and an increase in losses on available for sale securities.
During 2016, the Company continued its common share repurchase program, and purchased 1,562,959 shares at an average price of $6.01 per share. At December 31, 2016, United Community has 1,683,830 shares remaining to be repurchased under its current repurchase program.
Dividend to be Paid
On January 24, 2017, the Board of Directors declared a quarterly cash dividend of $0.03 per common share payable February 22, 2017 to shareholders of record at the close of business February 10, 2017.
Conference Call
United Community Financial Corp. will host an earnings conference call on Wednesday, January 25, 2017, at 10:00 a.m. ET., to provide an overview of the Company’s fourth quarter 2016 results and highlights. The conference call may be accessed by calling1-877-272-7661 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 on4th 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.
1See supplementary information,Non-GAAP Disclosure Reconciliation
###
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.
5
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 filed a registration statement on FormS-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. A proxy statement/prospectus was mailed to shareholders of Ohio Legacy on December 28, 2016, for the Special Shareholder Meeting to be held on January 27, 2017, at 1:00 p.m., at Acute Care Solutions Education Center, 4565 Dressler Road, NW, Canton, Ohio 44718. 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 through the website maintained by the SEC atwww.sec.gov, on the NASDAQ website athttp://www.nasdaq.com and from either the United Community or Ohio Legacy websites atir.ucfconline.com or athttp://www.ohiolegacycorp.com.
6
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| December 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| (Dollars in thousands) | ||||||||
Assets: | ||||||||
Cash and deposits with banks | $ | 27,690 | $ | 20,528 | ||||
Federal funds sold | 18,197 | 15,382 | ||||||
|
|
|
| |||||
Total cash and cash equivalents | 45,887 | 35,910 | ||||||
Securities: | ||||||||
Available for sale, at fair value | 343,284 | 357,670 | ||||||
Held to maturity (fair value of $96,151 and $109,644, respectively) | 97,519 | 110,699 | ||||||
Loans held for sale, at lower of cost or market | 165 | 9,085 | ||||||
Loans held for sale, at fair value | 62,593 | 26,716 | ||||||
Loans, net of allowance for loan losses of $19,087 and $17,712 | 1,503,577 | 1,316,192 | ||||||
Federal Home Loan Bank stock, at cost | 18,068 | 18,068 | ||||||
Premises and equipment, net | 20,963 | 20,678 | ||||||
Accrued interest receivable | 6,900 | 5,978 | ||||||
Real estate owned and other repossessed assets | 1,777 | 2,727 | ||||||
Goodwill and customer list intangible | 1,564 | — | ||||||
Core deposit intangible | 5 | 30 | ||||||
Cash surrender value of life insurance | 55,861 | 54,366 | ||||||
Other assets | 32,904 | 29,870 | ||||||
|
|
|
| |||||
Total assets | $ | 2,191,067 | $ | 1,987,989 | ||||
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|
|
| |||||
Liabilities and Shareholders’ Equity | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Non-interest bearing | $ | 256,918 | $ | 227,505 | ||||
Interest bearing | ||||||||
Customer deposits | 1,181,557 | 1,208,238 | ||||||
Brokered deposits | 76,516 | — | ||||||
|
|
|
| |||||
Total interest bearing deposits | 1,258,073 | 1,208,238 | ||||||
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|
| |||||
Total deposits | 1,514,991 | 1,435,743 | ||||||
Borrowed funds: | ||||||||
Federal Home Loan Bank advances | ||||||||
Long-term advances | 47,756 | 46,975 | ||||||
Short-term advances | 343,000 | 232,000 | ||||||
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|
| |||||
Total Federal Home Loan Bank advances | 390,756 | 278,975 | ||||||
Repurchase agreements and other | 512 | 535 | ||||||
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|
| |||||
Total borrowed funds | 391,268 | 279,510 | ||||||
Advance payments by borrowers for taxes and insurance | 23,812 | 21,174 | ||||||
Accrued interest payable | 145 | 53 | ||||||
Accrued expenses and other liabilities | 11,323 | 7,264 | ||||||
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|
| |||||
Total liabilities | 1,941,539 | 1,743,744 | ||||||
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| |||||
Shareholders’ Equity: | ||||||||
Preferredstock-no par value; 1,000,000 shares authorized and no shares outstanding | — | — | ||||||
Commonstock-no par value; 499,000,000 shares authorized; 54,138,910 shares issued and 46,581,370 and 47,517,644 shares, respectively, outstanding | 173,581 | 174,304 | ||||||
Retained earnings | 153,176 | 140,819 | ||||||
Accumulated other comprehensive loss | (21,040 | ) | (19,220 | ) | ||||
Treasury stock, at cost, 7,557,540 and 6,621,266 shares, respectively | (56,189 | ) | (51,658 | ) | ||||
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|
| |||||
Total shareholders’ equity | 249,528 | 244,245 | ||||||
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| |||||
Total liabilities and shareholders’ equity | $ | 2,191,067 | $ | 1,987,989 | ||||
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7
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, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
Interest income | ||||||||||||||||||||
Loans | $ | 15,285 | $ | 14,633 | $ | 13,612 | $ | 57,903 | $ | 52,619 | ||||||||||
Loans held for sale | 578 | 482 | 371 | 1,755 | 1,396 | |||||||||||||||
Securities: | ||||||||||||||||||||
Available for sale, nontaxable | 377 | 339 | 35 | 1,129 | 35 | |||||||||||||||
Available for sale, taxable | 1,569 | 1,630 | 2,002 | 6,915 | 10,141 | |||||||||||||||
Held to maturity, nontaxable | 65 | 66 | 51 | 248 | 96 | |||||||||||||||
Held to maturity, taxable | 422 | 466 | 573 | 1,989 | 590 | |||||||||||||||
Federal Home Loan Bank stock dividends | 181 | 180 | 182 | 723 | 723 | |||||||||||||||
Other interest earning assets | 18 | 19 | 10 | 67 | 35 | |||||||||||||||
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| |||||||||||
Total interest income | 18,495 | 17,815 | 16,836 | 70,729 | 65,635 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 1,425 | 1,389 | 1,664 | 5,922 | 6,526 | |||||||||||||||
Federal Home Loan Bank advances | 732 | 661 | 387 | 2,486 | 1,334 | |||||||||||||||
Repurchase agreements and other | 4 | 5 | 295 | 20 | 1,253 | |||||||||||||||
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| |||||||||||
Total interest expense | 2,161 | 2,055 | 2,346 | 8,428 | 9,113 | |||||||||||||||
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|
|
|
|
| |||||||||||
Net interest income | 16,334 | 15,760 | 14,490 | 62,301 | 56,522 | |||||||||||||||
Taxable equivalent adjustment | 219 | 185 | 45 | 686 | 70 | |||||||||||||||
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| |||||||||||
Net interest income (FTE) (1) | 16,553 | 15,945 | 14,535 | 62,987 | 56,592 | |||||||||||||||
Provision for loan losses | 1,493 | 1,344 | 893 | 5,387 | 2,135 | |||||||||||||||
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| |||||||||||
Net interest income after provision for loan losses (FTE) | 15,060 | 14,601 | 13,642 | 57,600 | 54,457 | |||||||||||||||
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| |||||||||||
Non-interest income | ||||||||||||||||||||
Insurance agency income | 417 | 451 | — | 1,686 | — | |||||||||||||||
Brokerage income | 248 | 337 | 316 | 1,281 | 1,115 | |||||||||||||||
Service fees and other charges: | ||||||||||||||||||||
Deposit related fees | 1,380 | 1,418 | 1,573 | 5,486 | 5,384 | |||||||||||||||
Mortgage servicing fees | 719 | 715 | 692 | 2,833 | 2,730 | |||||||||||||||
Mortgage servicing rights valuation | 741 | 25 | 111 | 39 | 19 | |||||||||||||||
Mortgage servicing rights amortization | (534 | ) | (525 | ) | (445 | ) | (2,094 | ) | (1,800 | ) | ||||||||||
Other service fees | 27 | 43 | 19 | 135 | 75 | |||||||||||||||
Net gains (losses): | ||||||||||||||||||||
Securities available for sale | — | 218 | 131 | 604 | 142 | |||||||||||||||
Mortgage banking income | 1,236 | 1,957 | 1,538 | 6,444 | 6,841 | |||||||||||||||
Real estate owned and other repossessed assets charges, net | (17 | ) | — | (134 | ) | (93 | ) | (445 | ) | |||||||||||
Debit/credit card fees | 930 | 915 | 907 | 3,846 | 3,684 | |||||||||||||||
Other income | 488 | 449 | 743 | 1,909 | 1,972 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Totalnon-interest income | 5,635 | 6,003 | 5,451 | 22,076 | 19,717 | |||||||||||||||
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|
|
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|
|
| |||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | 7,376 | 6,950 | 5,756 | 28,600 | 26,724 | |||||||||||||||
Occupancy | 809 | 847 | 744 | 3,373 | 3,249 | |||||||||||||||
Equipment and data processing | 1,916 | 1,926 | 1,760 | 7,564 | 6,865 | |||||||||||||||
Financial institutions tax | 410 | 411 | 317 | 1,694 | 1,241 | |||||||||||||||
Advertising | 207 | 290 | 191 | 845 | 737 | |||||||||||||||
Amortization of intangible assets | (26 | ) | 72 | 13 | 69 | 54 | ||||||||||||||
Prepayment penalty | — | — | 1,280 | — | 1,280 | |||||||||||||||
FDIC insurance premiums | 172 | 155 | 295 | 940 | 1,241 | |||||||||||||||
Other insurance premiums | 77 | 89 | 102 | 328 | 355 | |||||||||||||||
Professional fees: | ||||||||||||||||||||
Legal and consulting fees | 331 | 211 | 338 | 953 | 1,227 | |||||||||||||||
Other professional fees | 284 | 341 | 502 | 1,046 | 1,733 | |||||||||||||||
Real estate owned and other repossessed asset expenses | 1 | 41 | 45 | 191 | 338 | |||||||||||||||
Merger related expenses | 787 | — | — | 787 | — | |||||||||||||||
Other expenses | 1,373 | 1,645 | 1,412 | 5,629 | 4,885 | |||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Totalnon-interest expenses | 13,717 | 12,978 | 12,755 | 52,019 | 49,929 | |||||||||||||||
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|
|
|
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|
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| |||||||||||
Income before income taxes | 6,978 | 7,626 | 6,338 | 27,657 | 24,245 | |||||||||||||||
Taxable equivalent adjustment | 219 | 185 | 45 | 686 | 70 | |||||||||||||||
Income tax expense | 1,734 | 2,288 | 1,965 | 8,143 | 7,893 | |||||||||||||||
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| |||||||||||
Net income | $ | 5,025 | $ | 5,153 | $ | 4,328 | $ | 18,828 | $ | 16,282 | ||||||||||
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Earnings per common share: | ||||||||||||||||||||
Basic | $ | 0.108 | $ | 0.111 | $ | 0.091 | $ | 0.401 | $ | 0.337 | ||||||||||
Diluted | 0.107 | 0.110 | 0.090 | 0.399 | 0.335 | |||||||||||||||
| (1) | Net interest income is also presented on a fully taxable equivalent (FTE) basis, the Company believes thisnon-GAAP measure is the preferred industry measurement for this item. |
8
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED AVERAGE BALANCES
(Unaudited)
| For the three months ended | ||||||||||||||||||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||||||
| 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) | $ | 1,485,617 | $ | 15,286 | 4.12 | % | $ | 1,422,294 | $ | 14,634 | 4.12 | % | $ | 1,290,238 | $ | 13,612 | 4.22 | % | ||||||||||||||||||
Loans held for sale | 61,289 | 578 | 3.77 | % | 49,095 | 482 | 3.93 | % | 39,589 | 371 | 3.75 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total loans, net | 1,546,906 | 15,864 | 4.10 | % | 1,471,389 | 15,116 | 4.11 | % | 1,329,827 | 13,983 | 4.21 | % | ||||||||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||||||||||
Available for sale-taxable | 292,115 | 1,569 | 2.15 | % | 300,522 | 1,630 | 2.17 | % | 355,438 | 2,002 | 2.25 | % | ||||||||||||||||||||||||
Available for sale-nontaxable(2) | 54,018 | 561 | 4.15 | % | 49,489 | 489 | 3.95 | % | 5,199 | 53 | 4.08 | % | ||||||||||||||||||||||||
Held to maturity-taxable | 87,480 | 422 | 1.93 | % | 92,077 | 466 | 2.02 | % | 102,172 | 573 | 2.24 | % | ||||||||||||||||||||||||
Held to maturity-nontaxable(2) | 13,438 | 99 | 2.95 | % | 13,563 | 100 | 2.95 | % | 9,401 | 77 | 3.28 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total securities | 447,051 | 2,651 | 2.37 | % | 455,651 | 2,685 | 2.36 | % | 472,210 | 2,705 | 2.29 | % | ||||||||||||||||||||||||
Federal Home Loan Bank stock | 18,068 | 181 | 4.01 | % | 18,068 | 180 | 3.98 | % | 18,068 | 182 | 4.03 | % | ||||||||||||||||||||||||
Other interest earning assets | 22,071 | 18 | 0.33 | % | 20,028 | 19 | 0.38 | % | 18,185 | 10 | 0.22 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total interest earning assets | 2,034,096 | 18,714 | 3.68 | % | 1,965,136 | 18,000 | 3.66 | % | 1,838,290 | 16,880 | 3.67 | % | ||||||||||||||||||||||||
Non-interest earning assets | 134,902 | 132,922 | 134,366 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total assets | $ | 2,168,998 | $ | 2,098,058 | $ | 1,972,656 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||
Checking accounts | $ | 481,225 | 248 | 0.21 | % | $ | 491,553 | 238 | 0.19 | % | $ | 474,213 | 262 | 0.22 | % | |||||||||||||||||||||
Savings accounts | 291,212 | 25 | 0.03 | % | 290,998 | 24 | 0.03 | % | 278,748 | 41 | 0.06 | % | ||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||||||||||||
Customer certificates of deposit | 416,299 | 1,077 | 1.03 | % | 424,493 | 1,126 | 1.06 | % | 456,102 | 1,361 | 1.19 | % | ||||||||||||||||||||||||
Brokered certificates of deposit | 47,760 | 75 | 0.63 | % | 814 | 1 | 0.49 | % | — | — | — | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total certificates of deposit | 464,059 | 1,152 | 0.99 | % | 425,307 | 1,127 | 1.06 | % | 456,102 | 1,361 | 1.19 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total interest bearing deposits | 1,236,496 | 1,425 | 0.46 | % | 1,207,858 | 1,389 | 0.46 | % | 1,209,063 | 1,664 | 0.55 | % | ||||||||||||||||||||||||
Federal Home Loan Bank advances | ||||||||||||||||||||||||||||||||||||
Long-term advances | 47,628 | 337 | 2.83 | % | 47,432 | 319 | 2.69 | % | 46,847 | 272 | 2.32 | % | ||||||||||||||||||||||||
Short-term advances | 342,174 | 395 | 0.46 | % | 326,250 | 342 | 0.42 | % | 192,674 | 114 | 0.24 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Federal Home Loan Bank advances | 389,802 | 732 | 0.75 | % | 373,682 | 661 | 0.71 | % | 239,521 | 386 | 0.64 | % | ||||||||||||||||||||||||
Repurchase agreements and other | 514 | 4 | 3.11 | % | 520 | 5 | 3.85 | % | 27,929 | 295 | 4.22 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total borrowed funds | 390,316 | 736 | 0.75 | % | 374,202 | 666 | 0.71 | % | 267,450 | 681 | 1.02 | % | ||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total interest bearing liabilities | $ | 1,626,812 | 2,161 | 0.53 | % | $ | 1,582,060 | 2,055 | 0.52 | % | $ | 1,476,513 | 2,345 | 0.64 | % | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Non-interest bearing liabilities | ||||||||||||||||||||||||||||||||||||
Total noninterest bearing deposits | 257,412 | 242,310 | 219,379 | |||||||||||||||||||||||||||||||||
Other noninterest bearing liabilities | 33,544 | 27,769 | 30,256 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total noninterest bearing liabilities | 290,956 | 270,079 | 249,635 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total liabilities | $ | 1,917,768 | $ | 1,852,139 | $ | 1,726,148 | ||||||||||||||||||||||||||||||
Shareholders’ equity | 251,230 | 245,919 | 246,508 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 2,168,998 | $ | 2,098,058 | $ | 1,972,656 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net interest income and interest rate spread | $ | 16,553 | 3.15 | % | $ | 15,945 | 3.14 | % | $ | 14,535 | 3.03 | % | ||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net interest margin | 3.26 | % | 3.25 | % | 3.16 | % | ||||||||||||||||||||||||||||||
Average interest earning assets to average interest bearing liabilities | 125.04 | % | 124.21 | % | 124.50 | % | ||||||||||||||||||||||||||||||
Interest bearing deposits | ||||||||||||||||||||||||||||||||||||
Checking accounts | $ | 481,225 | $ | 248 | 0.21 | % | $ | 491,553 | $ | 238 | 0.19 | % | $ | 474,213 | $ | 262 | 0.22 | % | ||||||||||||||||||
Savings accounts | 291,212 | 25 | 0.03 | % | 290,998 | 24 | 0.03 | % | 278,748 | 41 | 0.06 | % | ||||||||||||||||||||||||
Customer certificates of deposit | 416,299 | 1,077 | 1.03 | % | 424,493 | 1,126 | 1.06 | % | 456,102 | 1,361 | 1.19 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total customer deposits | 1,188,736 | 1,350 | 0.45 | % | 1,207,044 | 1,388 | 0.46 | % | 1,209,063 | 1,664 | 0.55 | % | ||||||||||||||||||||||||
Brokered certificates of deposit | 47,760 | 75 | 0.63 | % | 814 | 1 | 0.49 | % | — | — | — | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total interest bearing deposits | 1,236,496 | 1,425 | 0.46 | % | 1,207,858 | 1,389 | 0.46 | % | 1,209,063 | 1,664 | 0.55 | % | ||||||||||||||||||||||||
Noninterest bearing deposits | 257,412 | — | 0.00 | % | 242,310 | — | 0.00 | % | 219,379 | — | 0.00 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total average deposits and cost of deposits | $ | 1,493,908 | $ | 1,425 | 0.38 | % | $ | 1,450,168 | $ | 1,389 | 0.38 | % | $ | 1,428,442 | $ | 1,664 | 0.47 | % | ||||||||||||||||||
Other interest bearing liabilities | ||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | ||||||||||||||||||||||||||||||||||||
Long term advances | $ | 47,628 | $ | 337 | 2.83 | % | $ | 47,432 | $ | 319 | 2.69 | % | $ | 46,847 | $ | 272 | 2.32 | % | ||||||||||||||||||
Short term advances | 342,174 | 395 | 0.46 | % | 326,250 | 342 | 0.42 | % | 192,674 | 114 | 0.24 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Federal Home Loan Bank advances | 389,802 | 732 | 0.75 | % | 373,682 | 661 | 0.71 | % | 239,521 | 386 | 0.64 | % | ||||||||||||||||||||||||
Repurchase agreements and other | 514 | 4 | 3.11 | % | 520 | 5 | 3.85 | % | 27,929 | 295 | 4.22 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total borrowed funds | 390,316 | 736 | 0.75 | % | 374,202 | 666 | 0.71 | % | 267,450 | 681 | 1.02 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
| �� |
|
|
|
| |||||||||||||||||||||||||
Total average deposits and other interest bearing liabilities and total cost of funds | $ | 1,884,224 | $ | 2,161 | 0.46 | % | $ | 1,824,370 | $ | 2,055 | 0.45 | % | $ | 1,695,892 | $ | 2,345 | 0.55 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| (1) | Nonaccrual loans are included in the average balance at a yield of 0%. |
| (2) | Yields are on a fully taxable equivalent basis. |
9
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
Financial Data | ||||||||||||||||||||
Total assets | $ | 2,191,067 | $ | 2,160,234 | $ | 2,080,542 | $ | 2,036,430 | $ | 1,987,989 | ||||||||||
Total loans, net | 1,503,577 | 1,473,949 | 1,398,106 | 1,359,146 | 1,316,192 | |||||||||||||||
Total securities | 440,803 | 457,671 | 474,707 | 473,207 | 468,369 | |||||||||||||||
Total deposits | 1,514,991 | 1,473,043 | 1,455,746 | 1,466,614 | 1,435,743 | |||||||||||||||
Average interest-bearing deposits | 1,236,496 | 1,207,858 | 1,231,157 | 1,212,701 | 1,209,063 | |||||||||||||||
Average noninterest-bearing deposits | 257,412 | 242,310 | 241,098 | 228,308 | 219,379 | |||||||||||||||
Total shareholders’ equity | 249,528 | 256,403 | 254,075 | 251,804 | 244,245 | |||||||||||||||
Net interest income | 16,334 | 15,760 | 15,334 | 14,873 | 14,490 | |||||||||||||||
Net interest income (FTE) (1) | 16,553 | 15,945 | 15,520 | 14,967 | 14,535 | |||||||||||||||
Provision for loan losses | 1,493 | 1,344 | 395 | 2,155 | 893 | |||||||||||||||
Noninterest income | 5,635 | 6,003 | 5,780 | 4,658 | 5,451 | |||||||||||||||
Noninterest expense | 13,717 | 12,978 | 12,860 | 12,464 | 12,755 | |||||||||||||||
Income tax expense | 1,734 | 2,288 | 2,529 | 1,592 | 1,965 | |||||||||||||||
Net income | 5,025 | 5,153 | 5,330 | 3,320 | 4,328 | |||||||||||||||
Share Data | ||||||||||||||||||||
Basic earnings per common share | $ | 0.108 | $ | 0.111 | $ | 0.113 | $ | 0.070 | $ | 0.091 | ||||||||||
Diluted earnings per common share | 0.107 | 0.110 | 0.112 | 0.069 | 0.090 | |||||||||||||||
Book value per common share | 5.36 | 5.51 | 5.46 | 5.30 | 5.14 | |||||||||||||||
Tangible book value per common share | 5.32 | 5.48 | 5.43 | 5.27 | 5.14 | |||||||||||||||
Market value per common share | 8.94 | 7.11 | 6.08 | 5.87 | 5.90 | |||||||||||||||
Common shares outstanding at end of period | 46,581 | 46,542 | 46,493 | 47,507 | 47,518 | |||||||||||||||
Weighted average shares outstanding—basic | 46,216 | 46,167 | 46,869 | 47,272 | 47,356 | |||||||||||||||
Weighted average shares outstanding—diluted | 46,415 | 46,392 | 47,117 | 47,551 | 47,636 | |||||||||||||||
Key Ratios | ||||||||||||||||||||
Return on average assets(2) | 0.93 | % | 0.98 | % | 1.04 | % | 0.66 | % | 0.88 | % | ||||||||||
Return on average equity(3) | 8.00 | % | 8.38 | % | 8.63 | % | 5.33 | % | 7.02 | % | ||||||||||
Net interest margin | 3.26 | % | 3.25 | % | 3.25 | % | 3.21 | % | 3.16 | % | ||||||||||
Efficiency ratio | 61.89 | % | 59.40 | % | 60.81 | % | 63.90 | % | 63.74 | % | ||||||||||
Nonperforming loans to net loans, end of period | 0.83 | % | 1.32 | % | 1.45 | % | 1.48 | % | 1.27 | % | ||||||||||
Nonperforming assets to total assets, end of period | 0.94 | % | 0.98 | % | 1.06 | % | 1.08 | % | 0.98 | % | ||||||||||
Allowance for loan loss as a percent of loans, end of period | 1.25 | % | 1.22 | % | 1.21 | % | 1.23 | % | 1.33 | % | ||||||||||
Delinquent loans to total net loans, end of period | 1.26 | % | 1.48 | % | 1.49 | % | 1.50 | % | 1.70 | % | ||||||||||
| (1) | Net interest income is presented on a fully taxable equivalent (FTE) basis, the Company believes thisnon-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 |
10
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
Loan Portfolio Composition | ||||||||||||||||||||
Commercial loans | ||||||||||||||||||||
Multi-family | $ | 93,597 | $ | 107,066 | $ | 81,022 | $ | 80,581 | $ | 80,170 | ||||||||||
Owner/nonowner occupied commercial real estate | 231,400 | 225,699 | 196,110 | 184,279 | 175,456 | |||||||||||||||
Land | 8,373 | 9,401 | 9,748 | 8,938 | 9,301 | |||||||||||||||
Construction | 68,158 | 45,137 | 61,744 | 49,858 | 38,812 | |||||||||||||||
Commercial and industrial | 102,729 | 106,880 | 88,804 | 83,256 | 66,013 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 504,257 | 494,183 | 437,428 | 406,912 | 369,752 | |||||||||||||||
Residential mortgage loans | ||||||||||||||||||||
Real estate | 762,926 | 755,893 | 747,530 | 741,401 | 733,685 | |||||||||||||||
Construction | 35,695 | 35,875 | 35,275 | 38,994 | 40,898 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 798,621 | 791,768 | 782,805 | 780,395 | 774,583 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Consumer | 216,598 | 203,851 | 193,272 | 187,323 | 188,258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 216,598 | 203,851 | 193,272 | 187,323 | 188,258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total loans | 1,519,476 | 1,489,802 | 1,413,505 | 1,374,630 | 1,332,593 | |||||||||||||||
Less: | ||||||||||||||||||||
Allowance for loan losses | 19,087 | 18,234 | 17,172 | 16,903 | 17,712 | |||||||||||||||
Deferred loan costs, net | (3,188 | ) | (2,381 | ) | (1,773 | ) | (1,419 | ) | (1,311 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 15,899 | 15,853 | 15,399 | 15,484 | 16,401 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total loans, net | 1,503,577 | 1,473,949 | 1,398,106 | 1,359,146 | 1,316,192 | |||||||||||||||
Loans held for sale, net | 62,758 | 60,345 | 43,847 | 35,998 | 35,801 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total loans | $ | 1,566,335 | $ | 1,534,294 | $ | 1,441,953 | $ | 1,395,144 | $ | 1,351,993 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
| At or for the quarters ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
Deposit Portfolio Composition | ||||||||||||||||||||
Checking accounts | ||||||||||||||||||||
Interest bearing checking accounts | $ | 158,271 | $ | 170,348 | $ | 182,713 | $ | 194,586 | $ | 160,264 | ||||||||||
Non-interest bearing checking accounts | 256,918 | 252,923 | 236,173 | 230,831 | 227,505 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total checking accounts | 415,189 | 423,271 | 418,886 | 425,417 | 387,769 | |||||||||||||||
Savings accounts | 294,563 | 290,325 | 292,232 | 288,324 | 280,889 | |||||||||||||||
Money market accounts | 316,813 | 312,124 | 314,081 | 312,577 | 312,125 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Totalnon-time deposits | 1,026,565 | 1,025,720 | 1,025,199 | 1,026,318 | 980,783 | |||||||||||||||
Customer certificates of deposit | 411,910 | 422,370 | 430,547 | 440,296 | 454,960 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total customer deposits | 1,438,475 | 1,448,090 | 1,455,746 | 1,466,614 | 1,435,743 | |||||||||||||||
Brokered certificates of deposit | 76,516 | 24,953 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total deposits | $ | 1,514,991 | $ | 1,473,043 | $ | 1,455,746 | $ | 1,466,614 | $ | 1,435,743 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Customer certificates of deposit as a percent of total deposits | 27.19 | % | 28.67 | % | 29.58 | % | 30.02 | % | 31.69 | % | ||||||||||
Brokered certificates of deposit as a percent of total deposits | 5.05 | % | 1.69 | % | — | % | — | % | — | % | ||||||||||
11
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
Allowance For Loan Losses | ||||||||||||||||||||
Beginning balance | $ | 18,234 | $ | 17,172 | $ | 16,903 | $ | 17,712 | $ | 17,482 | ||||||||||
Provision | 1,493 | 1,344 | 395 | 2,155 | 893 | |||||||||||||||
Net chargeoffs | (640 | ) | (282 | ) | (126 | ) | (2,964 | ) | (663 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ending balance | $ | 19,087 | $ | 18,234 | $ | 17,172 | $ | 16,903 | $ | 17,712 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
| At or for the quarters ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
Net (Charge-offs) Recoveries | ||||||||||||||||||||
Commercial loans | ||||||||||||||||||||
Multi-family | $ | 5 | $ | 35 | $ | 3 | $ | 7 | $ | 7 | ||||||||||
Owner/nonowner occupied commercial real estate | (570 | ) | 17 | (117 | ) | (2,213 | ) | (67 | ) | |||||||||||
Land | (100 | ) | (250 | ) | — | — | (100 | ) | ||||||||||||
Construction | — | — | — | — | 21 | |||||||||||||||
Commercial and industrial | 139 | 192 | 62 | (74 | ) | 141 | ||||||||||||||
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|
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| |||||||||||
Total | (526 | ) | (6 | ) | (52 | ) | (2,280 | ) | 2 | |||||||||||
Residential mortgage loans | ||||||||||||||||||||
Real estate | (123 | ) | (146 | ) | (59 | ) | (300 | ) | (611 | ) | ||||||||||
Construction | — | — | — | — | — | |||||||||||||||
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|
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| |||||||||||
Total | (123 | ) | (146 | ) | (59 | ) | (300 | ) | (611 | ) | ||||||||||
Consumer loans | ||||||||||||||||||||
Consumer | 9 | (130 | ) | (15 | ) | (384 | ) | (54 | ) | |||||||||||
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Total | 9 | (130 | ) | (15 | ) | (384 | ) | (54 | ) | |||||||||||
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Total net chargeoffs | $ | (640 | ) | $ | (282 | ) | $ | (126 | ) | $ | (2,964 | ) | $ | (663 | ) | |||||
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| At or for the quarters ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
Nonperforming Loans | ||||||||||||||||||||
Commercial loans | ||||||||||||||||||||
Multi-family | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Owner/nonowner occupied commercial real estate | 3,546 | 6,879 | 7,362 | 7,557 | 3,599 | |||||||||||||||
Land | 34 | 134 | 384 | 384 | 384 | |||||||||||||||
Construction | — | — | — | — | — | |||||||||||||||
Commercial and industrial | 361 | 4,242 | 4,633 | 4,652 | 4,016 | |||||||||||||||
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| |||||||||||
Total | 3,941 | 11,255 | 12,379 | 12,593 | 7,999 | |||||||||||||||
Residential mortgage loans | ||||||||||||||||||||
Real estate | 6,084 | 5,835 | 5,713 | 5,312 | 6,181 | |||||||||||||||
Construction | — | — | — | — | — | |||||||||||||||
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| |||||||||||
Total | 6,084 | 5,835 | 5,713 | 5,312 | 6,181 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Consumer | 2,413 | 2,358 | 2,249 | 2,200 | 2,567 | |||||||||||||||
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Total | 2,413 | 2,358 | 2,249 | 2,200 | 2,567 | |||||||||||||||
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Total nonperforming loans | $ | 12,438 | $ | 19,448 | $ | 20,341 | $ | 20,105 | $ | 16,747 | ||||||||||
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Total Nonperforming Loans and Nonperforming Assets | ||||||||||||||||||||
Past due 90 days and on nonaccrual status | $ | 7,858 | $ | 15,350 | $ | 15,819 | $ | 15,663 | $ | 16,279 | ||||||||||
Past due 90 days and still accruing | — | — | — | — | — | |||||||||||||||
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Past due 90 days | 7,858 | 15,350 | 15,819 | 15,663 | 16,279 | |||||||||||||||
Past due less than 90 days and on nonaccrual | 4,580 | 4,098 | 4,522 | 4,442 | 468 | |||||||||||||||
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Total nonperforming loans | 12,438 | 19,448 | 20,341 | 20,105 | 16,747 | |||||||||||||||
Other real estate owned | 1,726 | 1,790 | 1,613 | 1,832 | 2,651 | |||||||||||||||
Other classified assets | 6,384 | — | — | — | — | |||||||||||||||
Repossessed assets | 51 | 3 | 3 | 14 | 76 | |||||||||||||||
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Total nonperforming assets | $ | 20,599 | $ | 21,241 | $ | 21,957 | $ | 21,951 | $ | 19,474 | ||||||||||
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12
UNITED COMMUNITY FINANCIAL CORP.
NON-GAAP DISCLOSURE RECONCILIATION
(Unaudited)
In reporting the results of the quarter ended December 31, 2016, the Company has provided supplemental performance measures on atax-equivalent basis or excluding merger related costs. These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’snon-GAAP measures may not be comparable tonon-GAAP measures of other companies.
| For the three and twelve months ended December 31, 2016 | ||||||||||||||||||||||||
| Merger related costs | $ | 787 | ||||||||||||||||||||||
| Tax expense | (176 | ) | ||||||||||||||||||||||
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| Merger related costs, net of tax | $ | 611 | ||||||||||||||||||||||
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| As Reported | Non-GAAP Proforma | As Reported | Non-GAAP Proforma | |||||||||||||||||||||
| Three months ended | Merger related | Three months ended | Twelve months ended | Merger related | Twelve months ended | |||||||||||||||||||
| December 31, 2016 | costs, net of tax | December 31, 2016 | December 31, 2016 | costs, net of tax | December 31, 2016 | |||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||||
| Net income: | $ | 5,025 | $ | 611 | $ | 5,636 | $ | 18,828 | 611 | $ | 19,439 | |||||||||||||
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| Diluted EPS: | ||||||||||||||||||||||||
| Net income | $ | 5,025 | $ | 611 | $ | 5,636 | 18,828 | 19,439 | ||||||||||||||||
Net income allocated to participating securities | (37 | ) | (37 | ) | (121 | ) | (121 | ) | ||||||||||||||||
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Net income available to common shareholders | $ | 4,988 | $ | 5,599 | 18,707 | 19,318 | ||||||||||||||||||
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Weighted average shares outstanding: diluted | 46,415,038 | 46,415,038 | 46,860,065 | 46,860,065 | ||||||||||||||||||||
| Diluted EPS: | $ | 0.107 | $ | 0.121 | $ | 0.399 | $ | 0.412 | ||||||||||||||||
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| Net income | $ | 5,025 | $ | 611 | $ | 5,636 | $ | 18,828 | $ | 611 | $ | 19,439 | ||||||||||||
| Average assets | 2,168,998 | 2,168,998 | 2,078,650 | 2,078,650 | ||||||||||||||||||||
| Average equity | 251,230 | 251,230 | 248,362 | 248,362 | ||||||||||||||||||||
| ROA: | 0.93 | % | 1.04 | % | 0.91 | % | 0.94 | % | ||||||||||||||||
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| ROE: | 8.00 | % | 8.97 | % | 7.58 | % | 7.83 | % | ||||||||||||||||
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Efficiency Ratio: | ||||||||||||||||||||||||
Noninterest Expense | $ | 13,719 | $ | (787 | ) | $ | 12,932 | $ | 52,019 | $ | (787 | ) | $ | 51,232 | ||||||||||
Intangible asset amortization | (26 | ) | (26 | ) | 69 | 69 | ||||||||||||||||||
Net interest income | 16,556 | 16,556 | 62,987 | 62,987 | ||||||||||||||||||||
Noninterest income | 5,635 | 5,635 | 22,076 | 22,076 | ||||||||||||||||||||
Loss on real estate owned | (17 | ) | (17 | ) | (93 | ) | (93 | ) | ||||||||||||||||
Efficiency Ratio: | 61.89 | % | 58.35 | % | 61.01 | % | 60.08 | % | ||||||||||||||||
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| Expense growth: | ||||||||||||||||||||||||
Noninterest expense, current period | 52,019 | (787 | ) | 51,232 | ||||||||||||||||||||
Noninterest expense, prior period | 49,929 | 49,929 | ||||||||||||||||||||||
| Noninterest expense growth | 4.2 | % | 2.6 | % | ||||||||||||||||||||
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13