United Community Financial (UCFC) 8-K Results of Operations and Financial Condition

Exhibit 99

275 West Federal Street

Youngstown, Ohio 44503-1203

FOR IMMEDIATE RELEASE

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

United Community Financial Corp. Announces

First Quarter Net Income of $2.7 million

YOUNGSTOWN, Ohio (May 10, 2013) – 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 $2.7 million for the three months ended March 31, 2013.

Selected first quarter results:

• Delinquent loans were $46.7 million at March 31, 2013, down 3.2% for the year to date

• Nonperforming assets were $60.5 million at March 31, 2013, down 8.7% for the year to date

• Classified loans were $57.6 million at March 31, 2013, down 3.8% for the year to date

• Home Savings’ Tier 1 leverage ratio was 9.84% and the total risk based capital ratio was 18.28%

Patrick W. Bevack, President and Chief Executive Officer of United Community and Home Savings, commented that, “Net income for the quarter, along with improvement in asset quality and the successful completion of the private equity offering continues to move our Company forward. These positive steps provide United Community and Home Savings with the capital to grow our Company, raise our capital levels to levels that are commensurate with our risk profile and continue to execute our business plan.”

1

Asset Quality

Delinquent loans continued to decline through the first quarter of 2013. As of March 31, 2013, delinquent loans were $46.7 million, down $1.5 million, or 3.2%, from December 31, 2012. Nonperforming loans also continued to decline. Nonperforming loans as of March 31, 2013 were down $3.1 million, or 6.4%, from $47.8 million at December 31, 2012. Nonperforming assets were $60.5 million as of March 31, 2013, down $5.7 million, or 8.7%, from $66.2 million at December 31, 2012.

The provision for loan losses increased to $2.1 million in the first quarter of 2013, compared to $680,000 in the first quarter of 2012. This $1.4 million increase in the provision for loan losses is primarily a result of chargeoffs of $560,000 associated with one commercial lending relationship and a $382,000 specific reserve established on another commercial relationship due to events surrounding these credits that occurred in the first quarter of 2013.

Net Interest Income and Margin

Net interest income for the three months ended March 31, 2013 and December 31, 2012, was $12.9 million and $14.0 million, respectively. Total interest income decreased $1.4 million in the first quarter of 2013 compared to the prior quarter, primarily because of a decrease of $36.7 million in the average balance of outstanding loans. United Community also experienced a decrease in the yield on net loans of 29 basis points.

Total interest expense decreased $267,000 for the quarter ended March 31, 2013, as compared to the prior quarter. The change was due primarily to reductions of $235,000 in interest paid on deposits. The overall decrease in interest expense was attributable to a shift in deposit balances from certificates of deposit to relatively less expensive non-time deposits. Between December 31, 2012, and March 31, 2013, the average outstanding balance of certificates of deposit declined by $30.2 million, while non-time deposits increased by $9.4 million. Also contributing to the decrease was a reduction of six basis points in the cost of certificates of deposit, as well as a decrease of three basis points in the cost of non-time deposits.

Noninterest Income

Noninterest income decreased in the first quarter of 2013 to $5.7 million, as compared to noninterest income for the prior quarter of $6.9 million. Decreased noninterest income was a result of lower service fees and other charges, lower gains recognized on the sale of securities available for sale and decreased mortgage banking income recognized in the first quarter of 2013 as compared to the previous quarter.

The overall change in service fees and other charges was a result of a higher valuation adjustment recognized on deferred mortgage servicing rights in the last quarter of 2012 as compared to the first quarter of 2013. A lower gain recognized on the sale of available for sale securities was the result of fewer sales during the current quarter as compared to the prior quarter. The decline in mortgage banking income is attributable to a lower volume of sales in the first quarter of 2013 as compared to the prior quarter, as Home Savings retained a more significant portion of 15-year mortgage originations in its loan portfolio rather than selling such loans in the secondary market.

Noninterest Expense

Noninterest expense was $13.9 million in the first quarter of 2013, compared to $14.3 million in the prior quarter. In the first quarter of 2013, deposit insurance premiums were lower due to the bank being able to avail itself of more favorable insurance rates and a lower average asset base used in the calculation of insurance premiums. Professional fees were $796,000 lower during the quarter ended March 31, 2013 as compared to the quarter ended December 31, 2012. The improvement in asset quality has reduced the need to engage legal and other consultants to assist in the resolution of problem assets. Other expenses were $635,000 higher in the first quarter of 2013 as compared to the last quarter in 2012. This variance is the result of higher expenses accrued in the first quarter for loans expected to be repurchased from Fannie Mae and Freddie Mac.

2

Capital and Book Value per Common Share

Home Savings’ Tier 1 leverage ratio was 9.84% as of March 31, 2013, as compared to 8.70% as of December 31, 2012. Home Savings’ total risk-based capital ratio was 18.28% at March 31, 2013, as compared to 16.21% at December 31, 2012. Tangible book value per common share at March 31, 2013 was $4.81, as compared to $5.16 at December 31, 2012.

The Consent Order issued by the FDIC and the Ohio Division of Financial Institutions in 2012 required Home Savings to maintain a Tier 1 Leverage Capital Ratio at a minimum of 9.0% and a total risk-based capital ratio of no less than 12.0%. The FDIC and the Ohio Division terminated the Consent Order on January 31, 2013. Home Savings is now considered well capitalized and is no longer considered a troubled institution. The Memorandum of Understanding (MOU) entered into on January 31, 2013, now requires Home Savings to maintain these ratios at 8.5% and 12.0%, respectively. As of March 31, 2013, Home Savings was in compliance with the MOU.

On January 11, 2013, United Community entered into securities purchase agreements with 28 accredited investors, pursuant to which the Investors agreed to invest an aggregate of approximately $39.9 million in United Community for 6,574,272 newly issued common shares of United Community at a purchase price of $2.75 per share, and 7,942 newly created and issued perpetual mandatorily convertible non-cumulative preferred shares of United Community at a purchase price of $2,750 per share. On March 22, 2013, UCFC received $39.9 million from the completion of this portion of the capital raise. On March 26, 2013, United Community invested $16.0 million from those proceeds into Home Savings.

Home Savings is a wholly-owned subsidiary of the Company and operates 33 full-service banking offices and nine 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.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except by means of a prospectus satisfying the requirements of Section 10 of the Securities Act of 1933, as amended (the “Act”). The securities offered in the private offerings have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

###

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” 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.

3

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

4

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	March 31, 2013			December 31, 2012
	(Dollars in thousands)
Assets:
Cash and deposits with banks	$	20,739		$	26,041
Federal funds sold		57,345			16,572
Total cash and cash equivalents		78,084			42,613
Securities:
Available for sale, at fair value		602,107			574,562
Loans held for sale		9,268			13,031
Loans, net of allowance for loan losses of $21,827 and $21,130		1,034,415			1,066,240
Federal Home Loan Bank stock, at cost		26,464			26,464
Premises and equipment, net		21,400			21,549
Accrued interest receivable		5,587			6,238
Real estate owned and other repossessed assets		15,782			18,440
Core deposit intangible		215			238
Cash surrender value of life insurance		29,106			28,881
Other assets		9,348			10,109
Total assets	$	1,831,776		$	1,808,365
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Interest bearing	$	1,291,170		$	1,302,307
Non-interest bearing		169,790			159,767
Total deposits		1,460,960			1,462,074
Borrowed funds:
Federal Home Loan Bank advances		50,000			50,000
Repurchase agreements and other		90,593			90,598
Total borrowed funds		140,593			140,598
Advance payments by borrowers for taxes and insurance		14,258			23,590
Accrued interest payable		597			563
Accrued expenses and other liabilities		8,857			10,780
Total liabilities		1,625,265			1,637,605
Shareholders’ Equity:
Preferred stock-no par value; 1,000,000 shares authorized and 7,942 and 0 shares, respectively issued and outstanding, $21,841 and $0 liquidation value, respectively		15,911			—
Common stock-no par value; 499,000,000 shares authorized; 44,378,729 and 37,804,457 shares, respectively, issued and 39,606,586 and 33,027,886 shares, respectively, outstanding		148,937			128,026
Retained earnings		88,191			86,345
Accumulated other comprehensive income		3,719			6,682
Treasury stock, at cost, 4,772,143 and 4,776,571 shares, respectively		(50,247	)		(50,293	)
Total shareholders’ equity		206,511			170,760
Total liabilities and shareholders’ equity	$	1,831,776		$	1,808,365

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)

	For the Three Months Ended
	March 31, 2013			December 31, 2012			March 31, 2012
	(Dollars in thousands, except per share data)
Interest income
Loans	$	12,627		$	13,862	��	$	17,656
Loans held for sale		89			119			100
Securities:
Available for sale		3,428			3,488			3,494
Federal Home Loan Bank stock dividends		283			316			300
Other interest earning assets		9			12			12
Total interest income		16,436			17,797			21,562
Interest expense
Deposits		2,087			2,322			4,032
Federal Home Loan Bank advances		523			535			732
Repurchase agreements and other		909			929			919
Total interest expense		3,519			3,786			5,683
Net interest income		12,917			14,011			15,879
Provision for loan losses		2,064			2,102			680
Net interest income after provision for loan losses		10,853			11,909			15,199
Non-interest income
Non-deposit investment income		541			373			541
Service fees and other charges		1,782			2,794			2,317
Net gains (losses):
Securities available for sale (includes $721, $1,164 and $414, respectively, accumulated other comprehensive income reclassifications for unrealized net gains on available for sale securities)		721			1,164			414
Other -than-temporary loss on equity securities
Total impairment loss		—			(13	)		—
Loss recognized in other comprehensive income		—			—			—
Net impairment loss recognized in earnings		—			(13	)		—
Mortgage banking income		1,643			2,083			1,471
Real estate owned and other repossessed assets		(431	)		(744	)		(729	)
Other income		1,437			1,282			1,077
Total non-interest income		5,693			6,939			5,091
Non-interest expense
Salaries and employee benefits		7,451			7,253			8,333
Occupancy		822			849			799
Equipment and data processing		1,760			1,821			1,689
Franchise tax		431			445			438
Advertising		139			292			141
Amortization of core deposit intangible		23			25			29
Deposit insurance premiums		554			1,026			1,109
Professional fees		408			1,204			880
Real estate owned and other repossessed asset expenses		493			239			702
Other expenses		1,783			1,148			2,374
Total non-interest expenses		13,864			14,302			16,494
Income before income taxes		2,682			4,546			3,796
Income tax expense (includes $0 income tax expense from reclassification items, respectively)		—			1,950			—
Net income		2,682			2,596			3,796
Amortization of discount on preferred stock		821			—			—
Earnings available to common shareholders	$	1,861		$	2,596		$	3,796
Earnings per common share
Basic	$	0.06		$	0.08		$	0.12
Diluted		0.05			0.08			0.12

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

	At or for the quarters ended
	March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
	(In thousands, except per share data)
Financial Data
Total assets	$	1,831,776		$	1,808,365		$	1,830,944		$	1,906,995		$	2,041,964
Total loans, net		1,034,415			1,066,240			1,100,328			1,249,595			1,325,101
Total securities		602,107			574,562			551,795			431,040			530,283
Total deposits		1,460,960			1,462,074			1,490,642			1,541,699			1,571,859
Total shareholders’ equity		206,511			170,760			171,580			195,631			190,014
Net interest income		12,917			14,011			14,128			16,420			15,879
Provision for loan losses		2,064			2,102			30,279			6,264			680
Noninterest income, excluding other-than-temporary impairment losses		5,693			6,952			3,752			6,949			5,091
Net impairment losses recognized in earnings		—			13			—			—			—
Noninterest expense		13,864			14,302			17,330			17,043			16,494
Income tax expense (benefit)		—			1,950			(2,838	)		—			—
Net income (loss)		2,682			2,596			(26,891	)		62			3,796
Share Data
Basic earnings (loss) per common share	$	0.06		$	0.08		$	(0.82	)	$	—		$	0.12
Diluted earnings (loss) per common share		0.05			0.08			(0.82	)		—			0.12
Book value per common share		4.81			5.17			5.22			5.95			5.78
Tangible book value per common share		4.81			5.16			5.21			5.94			5.77
Market value per common share		3.88			2.89			3.49			2.98			2.44
Common shares outstanding at end of period		39,607			33,028			32,891			32,885			32,876
Weighted average shares outstanding—basic		33,565			32,880			32,751			32,802			32,693
Weighted average shares outstanding—diluted		33,829			33,153			32,751			32,843			23,697
Key Ratios
Return on average assets		0.59	%		0.57	%		-5.67	%		0.01	%		0.74	%
Return on average equity		6.14	%		6.06	%		-53.53	%		0.12	%		7.89	%
Net interest margin		3.01	%		3.23	%		3.17	%		3.55	%		3.30	%
Efficiency ratio		75.55	%		69.50	%		93.62	%		78.50	%		77.35	%
Capital Ratios
Tier 1 leverage ratio		9.84	%		8.70	%		8.27	%		9.32	%		8.96	%
Tier 1 risk-based capital ratio		17.02	%		14.95	%		14.59	%		15.16	%		13.94	%
Total risk-based capital ratio		18.28	%		16.21	%		15.85	%		16.43	%		15.21	%
Equity to assets		11.27	%		9.44	%		9.37	%		10.26	%		9.31	%
Tangible common equity to tangible assets		10.07	%		9.43	%		9.36	%		10.24	%		9.29	%

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

	At or for the quarters ended
	March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
	(Dollars in thousands)
Loan Portfolio Composition
Real Estate Loans
One-to four-family residential	$	570,377		$	577,249		$	587,220		$	635,756		$	649,000
Multi-family residential*		69,857			80,923			82,518			98,545			114,493
Nonresidential*		132,662			138,188			150,693			229,303			263,891
Land*		15,216			15,808			16,363			19,113			19,735
Construction Loans
One-to four-family residential and land development		32,866			28,318			32,483			42,077			49,311
Multi-family and nonresidential*		4,584			4,534			4,480			4,528			4,527
Total real estate loans		825,562			845,020			873,757			1,029,322			1,100,957
Consumer Loans		206,496			214,593			222,995			225,067			231,008
Commercial Loans		23,077			26,543			22,183			24,799			26,434
Total Loans		1,055,135			1,086,156			1,118,935			1,279,188			1,358,399
Less:
Allowance for loan losses		21,827			21,130			20,048			30,933			34,523
Deferred loan costs, net		(1,107	)		(1,214	)		(1,441	)		(1,340	)		(1,225	)
Total		20,720			19,916			18,607			29,593			33,298
Loans, net	$	1,034,415		$	1,066,240		$	1,100,328		$	1,249,595		$	1,325,101

* Categories are considered commercial real estate

	At or for the quarters ended
	March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
	(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts	$	136,952		$	132,947		$	128,794		$	126,502		$	129,795
Non-interest bearing checking accounts		169,790			159,767			159,361			162,152			164,155
Total checking accounts		306,742			292,714			288,155			288,654			293,950
Savings accounts		274,419			264,411			259,578			259,593			256,628
Money market accounts		341,804			345,651			345,428			344,750			339,824
Total non-time deposits		922,965			902,776			893,161			892,997			890,402
Retail certificates of deposit		537,995			559,298			597,481			648,632			681,457
Total certificates of deposit		537,995			559,298			597,481			648,632			681,457
Total deposits	$	1,460,960		$	1,462,074		$	1,490,642		$	1,541,629		$	1,571,859
Certificates of deposit as a percent of total deposits		36.82	%		38.25	%		40.08	%		42.07	%		43.35	%

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

	At or for the quarters ended
	March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
	(Dollars in thousands)
Allowance For Loan Losses
Beginning balance	$	21,130		$	20,048		$	30,933		$	34,523		$	42,271
Provision		2,064			2,102			30,279			6,264			680
Net chargeoffs		(1,367	)		(1,020	)		(41,164	)		(9,854	)		(8,428	)
Ending balance	$	21,827		$	21,130		$	20,048		$	30,933		$	34,523
Net Charge-offs
Real Estate Loans
One-to four-family	$	637		$	317		$	15,010		$	962		$	762
Multi-family		41			(1	)		5,632			588			68
Nonresidential		459			224			15,340			7,057			2,579
Land		(196	)		(155	)		1,561			44			1,776
Construction Loans
One-to four-family residential and land development		(75	)		259			2,658			516			2,098
Multi-family and nonresidential		18			(16	)		(120	)		4			—
Total real estate loans		884			628			40,081			9,171			7,283
Consumer Loans		443			397			1,536			160			745
Commercial Loans		40			(5	)		(453	)		523			400
Total	$	1,367		$	1,020		$	41,164		$	9,854		$	8,428
	At or for the quarters ended
	March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
	(Dollars in thousands)
Nonperforming Loans
Real Estate Loans
One-to four family residential	$	5,978		$	5,437		$	5,817		$	26,705		$	23,721
Multi-family residential		1,727			2,027			1,512			9,582			5,411
Nonresidential		21,021			20,743			17,484			43,103			41,871
Land		5,957			6,047			6,228			8,316			8,472
Construction Loans
One-to four-family residential and land development		4,931			7,466			9,527			18,335			22,455
Multi-family and nonresidential		—			—			—			—			—
Total real estate loans		39,614			41,720			40,568			106,041			101,930
Consumer Loans		3,608			4,842			4,921			6,702			6,165
Commercial Loans		1,492			1,225			1,068			1,786			1,813
Total Loans	$	44,714		$	47,787		$	46,557		$	114,529		$	109,908
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status	$	36,515		$	38,378		$	41,335		$	97,357		$	91,153
Past due 90 days and still accruing		3,594			3,678			47			47			303
Past due 90 days		40,109			42,056			41,382			97,404			91,456
Past due less than 90 days and on nonaccrual		4,605			5,731			5,175			17,125			18,452
Total Nonperforming Loans		44,714			47,787			46,557			114,529			109,908
Other Real Estate Owned		15,349			18,075			19,732			24,325			28,517
Repossessed Assets		433			365			474			453			540
Total Nonperforming Assets	$	60,496		$	66,227		$	66,763		$	139,307		$	138,965
Total Troubled Debt Restructured Loans
Accruing	$	23,812		$	21,006		$	17,002		$	18,530		$	35,657
Non-accruing		3,616			4,430			4,531			14,250			15,161
Total	$	27,428		$	25,436		$	21,533		$	32,780		$	50,818