United Community Financial (UCFC) 8-K United Community Financial Corp. Announces First Quarter Profit

EXHIBIT 99

275 West Federal Street
Youngstown, Ohio 44503-1203

FOR IMMEDIATE RELEASE

Media Contact:	Investor Contact:
Colleen Scott Vice President of Marketing Home Savings (330) 742-0638 cscott@homesavings.com	James R. Reske Chief Financial Officer United Community Financial Corp. (330) 742-0592 jreske@ucfconline.com

United Community Financial Corp. Announces First Quarter Profit

YOUNGSTOWN, Ohio (April 26, 2011) — United Community Financial Corp. (Company) (Nasdaq: UCFC), holding company of The Home Savings and Loan Company of Youngstown, Ohio (Home Savings), today reported consolidated net income of $3.0 million, or $0.10 per diluted share, for the three months ended March 31, 2011. This compares to a net loss of $5.1 million, or $(0.17) per diluted share, for the three months ended March 31, 2010.

Selected first quarter results:

• Delinquent loans declined $7.3 million to $158.3 million from the prior quarter

• Net interest margin increased 32 basis points to 3.49% from the prior quarter

• Home Savings’ Tier 1 leverage ratio increased 60 basis points from the prior quarter to 8.44%

• Home Savings’ Total Risk Based Capital increased 48 basis points from the prior quarter to 13.02%

• Book value per share and tangible book value per share increased $0.04 and $0.05, respectively, from the prior quarter to $5.73 and $5.72, respectively

Net Interest Income and Margin

Net interest income for the three months ended March 31, 2011, was $17.7 million, which was unchanged from a year earlier. Total interest income decreased $3.1 million in the first quarter of 2011 compared to the first quarter of 2010, primarily as a result of a decrease of $215.3 million in the average balance of outstanding loans. Total interest expense, however, also decreased by a comparable amount of $3.0 million for the first quarter of 2011, as compared to the same quarter last year. The decline was due to a reduction in interest paid on deposits due to changes in the deposit portfolio composition and lower rates paid on certificates of deposit.

Net interest margin was 3.49% for the first quarter of 2011 compared with 3.28% for the first quarter of 2010 and 3.17% from December 31, 2010.

Asset Quality

Nonperforming loans at March 31, 2011 increased to $145.9 million, compared to $139.5 million at December 31, 2010, an increase of $6.3 million during the period. Real estate owned and other repossessed assets were $42.9 million at March 31, 2011 and $40.3 million at December 31, 2010.

Patrick W. Bevack, President and Chief Executive Officer of UCFC and Home Savings, commented that, “While we are pleased with the progress made in the first quarter with a return to profitability, we will continue to focus on our key initiative of improving asset quality. We are encouraged that delinquent loans decreased for the second consecutive quarter; however, seeking resolution to problem assets remains the number one priority and vital to our long term success.”

Noninterest Income

In the first quarter of 2011, the Company recognized noninterest income of $4.0 million, compared to $6.6 million in the first quarter of 2010. During the first quarter of 2011, the Company realized $1.3 million in securities gains compared to $2.8 million in the same quarter of 2010. Further affecting the comparison was the $1.4 million gain recognized on the sale of Home Savings’ Findlay, Ohio branch in the first quarter of 2010.

Noninterest Expense

Noninterest expense was $16.5 million in the first quarter of 2011, compared to $17.0 million in the first quarter of 2010. The decreased expense in the first quarter of 2011 as compared to the same quarter last year is primarily a result of lower salaries and employee benefit expenses. The decline in salaries and employee benefits are due to lower expenses recognized for incentives, and the suspension of matching contributions to the Company’s 401(k) plan.

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Capital and Book Value

Home Savings’ Tier 1 leverage ratio was 8.44% as of March 31, 2011, compared to 7.84% at December 31, 2010. The Company’s total risk-based capital ratio was 13.02% at March 31, 2011, as compared to 12.54% at December 31, 2010. Book value per share and tangible book value per share at March 31, 2011 were $5.73 and $5.72, respectively.

Home Savings is a wholly-owned subsidiary of the Company and operates 38 full-service banking offices and seven loan production offices located throughout Ohio and western Pennsylvania. Additional information on the Company and Home Savings may be found on the Company’s web site: www.ucfconline.com.

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When used in this press release, the words or phrases “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” 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.

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UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

	March 31,			December 31,
	2011			2010
	(Dollars in thousands)
Assets:
Cash and deposits with banks	$	18,497		$	18,627
Federal funds sold and other		20,181			18,480
Total cash and cash equivalents		38,678			37,107
Securities:
Available for sale, at fair value		289,388			362,042
Loans held for sale		2,531			10,870
Loans, net of allowance for loan losses of $46,415 and $50,883, respectively		1,620,094			1,649,486
Federal Home Loan Bank stock, at cost		26,464			26,464
Premises and equipment, net		21,760			22,076
Accrued interest receivable		7,684			7,720
Real estate owned and other repossessed assets		42,873			40,336
Core deposit intangible		448			485
Cash surrender value of life insurance		27,560			27,303
Other assets		37,600			13,409
Total assets	$	2,115,080		$	2,197,298
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Interest bearing	$	1,568,161		$	1,551,210
Non-interest bearing		144,362			138,571
Total deposits		1,712,523			1,689,781
Borrowed funds:
Federal Home Loan Bank advances		100,954			202,818
Repurchase agreements and other		100,446			97,797
Total borrowed funds		201,400			300,615
Advance payments by borrowers for taxes and insurance		13,219			20,668
Accrued interest payable		905			809
Accrued expenses and other liabilities		9,662			9,370
Total liabilities		1,937,709			2,021,243
Shareholders’ Equity:
Preferred stock-no par value; 1,000,000 shares authorized and unissued		—			—
Common stock-no par value; 499,000,000 shares authorized; 37,804,457 shares issued and 30,951,032 and 30,937,704 shares, respectively, outstanding		142,404			142,318
Retained earnings		113,911			111,049
Accumulated other comprehensive income (loss)		(6,551	)		(4,778	)
Treasury stock, at cost, 6,853,425 and 6,866,753 shares, respectively		(72,393	)		(72,534	)
Total shareholders’ equity		177,371			176,055
Total liabilities and shareholders’ equity	$	2,115,080		$	2,197,298

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UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	For the Three Months Ended
	March 31,
	2011			2010
	(Dollars in thousands, except per share data)
Interest income
Loans	$	22,510		$	25,843
Loans held for sale		66			70
Securities:
Available for sale		2,847			2,585
Federal Home Loan Bank stock dividends		300			300
Other interest earning assets		9			7
Total interest income		25,732			28,805
Interest expense
Deposits		6,331			9,318
Federal Home Loan Bank advances		825			848
Repurchase agreements and other		922			923
Total interest expense		8,078			11,089
Net interest income		17,654			17,716
Provision for loan losses		2,192			12,450
Net interest income after provision for loan losses		15,462			5,266
Non-interest income
Non-deposit investment income		354			428
Service fees and other charges		1,453			1,751
Net gains (losses):
Securities available for sale		1,313			2,843
Other -than-temporary loss on equity securities
Total impairment loss		(10	)		—
Loss recognized in other comprehensive income		—			—
Net impairment loss recognized in earnings		(10	)		—
Mortgage banking income		622			386
Real estate owned and other repossessed assets		(992	)		(1,484	)
Gain on retail branch sale		—			1,387
Other income		1,248			1,249
Total non-interest income		3,988			6,560
Non-interest expense
Salaries and employee benefits		7,684			8,174
Occupancy		905			1,004
Equipment and data processing		1,694			1,667
Franchise tax		469			511
Advertising		121			222
Amortization of core deposit intangible		37			48
Deposit insurance premiums		1,405			1,461
Professional fees		962			1,033
Real estate owned and other repossessed asset expenses		873			607
Other expenses		2,338			2,241
Total non-interest expenses		16,488			16,968
Income (loss) before income taxes		2,962			(5,142	)
Income taxes expense (benefit)		—			—
Net income (loss)	$	2,962		$	(5,142	)
Earnings (loss) per share
Basic—continuing operations	$	0.10		$	(0.17	)
Basic—discontinued operations		—			—
Basic		0.10			(0.17	)
Diluted—continuing operations		0.10			(0.17	)
Diluted—discontinued operations		—			—
Diluted		0.10			(0.17	)

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UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)

	At or for the quarters ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2011			2010			2010			2010			2010
	(In thousands, except per share data)
Financial Data
Total assets	$	2,115,080		$	2,197,298		$	2,317,948		$	2,314,109		$	2,279,719
Total loans, net		1,620,094			1,649,486			1,726,381			1,786,038			1,823,899
Total securities		289,388			362,042			390,636			307,154			272,239
Total deposits		1,712,523			1,689,781			1,685,033			1,696,531			1,728,592
Total shareholders’ equity		177,371			176,055			201,333			212,691			214,482
Net interest income		17,654			16,888			18,786			17,971			17,716
Provision for loan losses		2,192			22,551			17,116			10,310			12,450
Noninterest income, excluding other-than-temporary impairment losses		3,998			6,487			4,159			4,745			6,560
Net impairment losses recognized in earnings		10			14			44			—			—
Noninterest expense		16,488			18,372			15,700			17,291			16,968
Income tax expense (benefit)		—			(231	)		—			—			—
Net income (loss)		2,962			(17,331	)		(9,915	)		(4,885	)		(5,142	)
Share Data
Basic earnings (loss) per share	$	0.10		$	(0.56	)	$	(0.32	)	$	(0.16	)	$	(0.17	)
Diluted earnings (loss) per share		0.10			(0.56	)		(0.32	)		(0.16	)		(0.17	)
Book value per share		5.73			5.69			6.51			6.88			6.94
Tangible book value per share		5.72			5.67			6.49			6.87			6.92
Market value per share		1.33			1.34			1.33			1.68			1.50
Shares outstanding at end of period		30,951			30,938			30,925			30,898			30,898
Weighted average shares outstanding—basic		30,917			30,906			30,899			30,039			29,955
Weighted average shares outstanding—diluted		30,919			30,906			30,899			30,039			29,955
Key Ratios
Return on average assets		0.55	%		-3.06	%		-1.70	%		-0.85	%		-0.90	%
Return on average equity		6.56	%		-33.91	%		-18.41	%		-8.91	%		-9.18	%
Net interest margin		3.49	%		3.17	%		3.42	%		3.30	%		3.28	%
Efficiency ratio		77.12	%		78.08	%		66.80	%		82.92	%		78.59	%
Capital Ratios
Tier 1 leverage ratio		8.44	%		7.84	%		8.23	%		8.71	%		8.47	%
Tier 1 risk-based capital ratio		11.74	%		11.26	%		11.85	%		11.90	%		11.47	%
Total risk-based capital ratio		13.02	%		12.54	%		13.12	%		13.16	%		12.73	%
Equity to assets		8.39	%		8.01	%		8.69	%		9.19	%		9.41	%
Tangible common equity to tangible assets		8.37	%		7.99	%		8.67	%		9.17	%		9.38	%

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UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)

	At or for the quarters ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2011			2010			2010			2010			2010
	(Dollars in thousands)
Loan Portfolio Composition
Real Estate Loans
One-to four-family residential	$	762,065		$	757,426		$	778,005		$	779,565		$	777,380
Multi-family residential*		131,246			135,771			136,681			138,875			143,992
Nonresidential*		328,772			331,390			355,914			383,882			389,407
Land*		25,624			25,138			25,413			26,217			25,122
Construction Loans
One-to four-family residential and land development		88,075			108,583			117,297			133,534			161,625
Multi-family and nonresidential*		11,201			15,077			14,537			14,870			14,682
Total real estate loans		1,346,983			1,373,385			1,427,847			1,476,943			1,512,208
Consumer Loans		272,478			279,453			289,296			295,007			301,457
Commercial Loans		45,772			46,304			48,902			53,566			56,726
Total Loans		1,665,233			1,699,142			1,766,045			1,825,516			1,870,391
Less:
Allowance for loan losses		46,415			50,883			40,884			40,728			47,768
Deferred loan costs, net		(1,276	)		(1,227	)		(1,220	)		(1,250	)		(1,276	)
Total		45,139			49,656			39,664			39,478			46,492
Loans, net	$	1,620,094		$	1,649,486		$	1,726,381		$	1,786,038		$	1,823,899

* Such categories are considered commercial real estate

	At or for the quarters ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2011			2010			2010			2010			2010
	(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts	$	110,711		$	110,092		$	103,204		$	104,905		$	101,068
Non-interest bearing checking accounts		144,362			138,571			128,702			126,437			125,741
Total checking accounts		255,073			248,663			231,906			231,342			226,809
Savings accounts		234,295			218,946			214,197			212,778			210,091
Money market accounts		318,395			311,692			310,884			310,506			300,610
Total non-time deposits		807,763			779,301			756,987			754,626			737,510
Retail certificates of deposit		904,760			910,480			928,046			939,568			988,747
Brokered certificates of deposit		—			—			—			2,337			2,335
Total certificates of deposit		904,760			910,480			928,046			941,905			991,082
Total deposits	$	1,712,523		$	1,689,781		$	1,685,033		$	1,696,531		$	1,728,592
Certificates of deposit as a percent of total deposits		52.83	%		53.88	%		55.08	%		55.52	%		57.33	%

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UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)

	At or for the quarters ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2011			2010			2010			2010			2010
	(Dollars in thousands)
Allowance For Loan Losses
Beginning balance	$	50,883		$	40,884		$	40,728		$	47,768		$	42,287
Provision		2,192			22,551			17,116			10,310			12,450
Net chargeoffs		(6,660	)		(12,552	)		(16,960	)		(17,350	)		(6,969	)
Ending balance	$	46,415		$	50,883		$	40,884		$	40,728		$	47,768
Net Charge-offs
Real Estate Loans
One-to four-family	$	924		$	1,483		$	1,834		$	2,318		$	998
Multi-family		163			1,819			160			1,067			1,585
Nonresidential		1,038			6,923			7,041			25			1,951
Land		504			284			11			—			318
Construction Loans
One-to four-family residential and land development		2,295			669			6,595			11,924			1,018
Multi-family and nonresidential		—			(1	)		—			310			—
Total real estate loans		4,924			11,177			15,641			15,644			5,870
Consumer Loans		856			639			905			1,330			904
Commercial Loans		880			736			414			376			195
Total	$	6,660		$	12,552		$	16,960		$	17,350		$	6,969

	At or for the quarters ended
	March 31,		December 31,		September 30,		June 30,		March 31,
	2011		2010		2010		2010		2010
	(Dollars in thousands)
Nonperforming Loans
Real Estate Loans
One-to four family residential	$	29,062	$	27,417	$	27,505	$	30,279	$	30,054
Multi-family residential		8,239		10,983		12,443		8,816		7,885
Nonresidential		37,353		39,838		44,561		48,653		36,083
Land		6,722		5,188		5,943		5,943		11,627
Construction Loans
One-to four-family residential and land development		46,139		44,021		40,000		49,146		42,963
Multi-family and nonresidential		382		2,414		2,414		2,414		382
Total real estate loans		127,897		129,861		132,866		145,251		128,994
Consumer Loans		4,224		3,725		3,543		3,482		3,898
Commercial Loans		13,735		5,945		6,304		6,407		5,672
Total Loans	$	145,856	$	139,531	$	142,713	$	155,140	$	138,564
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status	$	112,705	$	117,499	$	126,062	$	129,534	$	131,951
Past due 90 days and still accruing		2,868		6,330		4,253		2,628		536
Past due 90 days		115,573		123,829		130,315		132,162		132,487
Past due less than 90 days and on nonaccrual		30,283		15,702		12,398		22,978		6,077
Total Nonperforming Loans		145,856		139,531		142,713		155,140		138,564
Other Real Estate Owned		42,386		39,914		39,963		41,470		34,605
Repossessed Assets		487		422		334		576		813
Total Nonperforming Assets	$	188,729	$	179,867	$	183,010	$	197,186	$	173,982
Total Troubled Debt Restructured Loans
Non-accruing	$	24,420	$	11,240	$	14,934	$	10,855	$	8,764
Accruing		30,129		33,331		13,254		18,214		23,153
Total	$	54,549	$	44,571	$	28,188	$	29,069	$	31,917

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