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
Fourth Consecutive Quarter of Positive Earnings
YOUNGSTOWN, Ohio (November 8, 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 $1.7 million for the three months ended September 30, 2013. The Company also reported net income of $7.8 million (before amortization of the discount on preferred stock1) for the nine months ended September 30, 2013.
Selected third quarter and year-to-date results:
| | • | | Net income for the first nine months of 2013 was $7.8 million |
| | • | | Noninterest expense for the first nine months of 2013 was $41.8 million, down 17.8% from the first nine months of 2012 |
| | • | | Delinquent loans and nonperforming assets at September 30, 2013, were down 41.2% and 44.4% respectively from December 31, 2012 |
| | • | | The balance of real estate owned and other repossessed assets was $9.3 million at September 30, 2013, down 49.5% from December 31, 2012 |
| | • | | Home Savings’ Tier 1 leverage ratio was 10.26% and the total risk based capital ratio was 19.78%, well in excess of regulatory minimums |
Patrick W. Bevack, President and Chief Executive Officer of the Company and Home Savings, commented, “Performance throughout the third quarter continued the positive trend for our Company. With the exception of the third quarter of 2012 in which we conducted a bulk asset sale, the Company has been profitable for seven out of the last eight quarters.” Bevack continued, “We will continue to focus our efforts on maintaining the strength and profitability of our Company while maximizing shareholder value.”
1
Asset Quality
Delinquent loans continued to decline in the third quarter of 2013. As of September 30, 2013, delinquent loans were $27.9 million, down $20.3 million, or 42.1%, from $48.2 million at December 31, 2012. Nonperforming loans also continued to decline; as of September 30, 2013, nonperforming loans were $27.5 million, down $20.3 million, or 42.5%, from $47.8 million at December 31, 2012. Nonperforming assets were $36.8 million as of September 30, 2013, down $29.4 million, or 44.4%, from $66.2 million at December 31, 2012.
The provision for loan losses decreased to $657,000 in the third quarter of 2013, compared to $30.3 million in the third quarter of 2012. The provision for loan losses also decreased to $3.8 million in the first nine months of 2013, compared to $37.2 million in the first nine months of 2012. The decrease in the provision for loan losses in both time periods was primarily a result of the bulk asset sale that was completed in September 2012. As a result of the sale, an additional provision of $30.2 million was required in September 2012. This was the result of loans charged off in excess of specific reserves on loans included in the bulk sale. In addition, the Company recognized a recovery of $1.9 million in the third quarter of 2013 as a result of the sale of one nonperforming loan, offset by the downgrade of one commercial loan relationship resulting in a provision of $1.4 million.
In addition, the Company continued to make significant progress in the resolution of foreclosed properties in the third quarter and for the year to date. At December 31, 2012, other real estate owned and other repossessed assets (OREO) consisted of 166 properties with a book value of $18.4 million. The Company sold 37 properties totaling $1.5 million in the third quarter of 2013 and 117 properties totaling $7.9 million in the first nine months of 2013, bringing total OREO, net of inflows, to 73 properties with a net book value of $9.3 million as of September 30, 2013.
Net Interest Income and Margin
Net interest income for the three months ended September 30, 2013 and September 30, 2012 was $12.7 million and $14.1 million, respectively.
Total interest income decreased $2.2 million in the third quarter of 2013 compared to the third quarter of 2012, primarily as a result of a decrease of $205.2 million in the average balance of outstanding loans despite experiencing an increase in the yield on net loans of 5 basis points. Exclusive of the bulk sale, average loans declined by $90.4 million between the two quarterly periods.
Total interest expense decreased $758,000 for the quarter ended September 30, 2013, as compared to the same quarter last year. The change was due primarily to reductions of $753,000 in interest paid on deposits. The overall decrease in interest expense was attributable to a planned decision to decrease certificate of deposit balances. The average outstanding balance of certificates of deposit in the third quarter of 2013 declined by $111.1 million as compared to the third quarter of 2012. Also contributing to the decrease between the two quarterly periods was a reduction of 18 basis points in the cost of certificates of deposit, as well as a decrease in the cost of non-time deposits of 7 basis points.
2
Net interest income for the nine months ended September 30, 2013 and September 30, 2012 was $38.3 million and $46.4 million, respectively.
Total interest income decreased $12.2 million in the first nine months of 2013 compared to the first nine months of 2012, primarily as a result of a decrease of $265.7 million in the average balance of outstanding loans. Exclusive of the bulk sale, average loans for the first nine months of 2013 declined by $151.0 million as compared to the same period a year ago. The Company also experienced a decrease in the yield on net loans between the two nine month periods of 26 basis points.
Total interest expense decreased $4.0 million for the nine months ended September 30, 2013, as compared to the same period last year. The change was due primarily to reductions of $3.7 million in interest paid on deposits. The overall decrease in deposit interest expense was attributable to a shift in deposit balances from certificates of deposit to relatively less expensive non-time deposits. The average
outstanding balance of certificates of deposit for the nine months ended September 30, 2013 declined by $138.1 million as compared to the same period a year ago, while non-time deposits increased by $23.7 million. Also contributing to the decrease in interest expense was a reduction of 39 basis points in the cost of certificates of deposit, offset by an increase in the cost of non-time deposits of 10 basis points.
Noninterest Income
Noninterest income in the third quarter of 2013 was $3.5 million, as compared to noninterest income for the third quarter of 2012 of $3.8 million. Decreased noninterest income was a result of lower gains recognized on the sale of securities available for sale. There was no sales activity during the third quarter of 2013, as compared to gains recognized on the sale of securities available for sale of $1.2 million in the third quarter of 2012. Also affecting the comparison, Home Savings recognized $1.2 million less in mortgage banking income in the third quarter of 2013 as compared to the same quarter in 2012. Lower mortgage banking income was the result of a lower volume of loans originated for sale during the quarter ended September 30, 2013, as compared to the same quarter in 2012. These reductions in noninterest income for the third quarter of 2013 as compared to the third quarter of 2012 were partially offset by lower losses recognized on the valuation and disposal of OREO, as well as higher service fees and other charges earned, due primarily to a recovery on the valuation of deferred mortgage servicing rights of $30,000 in the third quarter of 2013 as compared to a $672,000 expense recognized in the third quarter of 2012.
Noninterest income decreased $167,000 in the first nine months of 2013 to $15.6 million, as compared to noninterest income for the first nine months of 2012 of $15.8 million. The decrease in noninterest income was primarily attributable to a decline of $1.5 million in gains on the sale of securities in the first nine months of 2013, as compared to the same period last year. However, this was partially offset by an increase in service fees and other charges as a result of a positive valuation adjustment on deferred mortgage servicing rights of $676,000. Additionally, other income increased $1.4 million due primarily to Home Savings’ recognition of a positive valuation adjustment of $547,000 on interest rate caps during 2013 as compared to a negative valuation adjustment of $1.1 million during the first nine months of 2012. Increased debit card fee income of $342,000 earned during the first nine months of 2013 also contributed to the increase in noninterest income.
Noninterest Expense
Noninterest expense declined to $13.5 million in the third quarter of 2013, compared to $17.3 million in the third quarter of 2012. In the third quarter of 2013, salaries and employee benefits decreased because of lower expenses associated with incentive payments and a lower level of salaries as a result of fewer full-time equivalent employees at September 30, 2013, as compared to September 30, 2012. Deposit insurance premiums were lower in the third quarter of 2013 due to Home Savings 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 $1.5 million lower during the quarter ended September 30, 2013, as compared to the same quarter last year. The improvement in asset quality has reduced the need to engage legal counsel and other consultants to assist in the resolution of problem assets, and the third quarter of 2012 included professional fees associated with the bulk asset sale. Other expenses were lower in the third quarter of 2013, as compared to the same quarter in 2012. This positive variance is the result of lower expenses incurred for real estate taxes and other expenses paid prior to loans going into foreclosure.
3
Noninterest expense declined to $41.8 million in the first nine months of 2013, compared to $50.9 million in the first nine months of 2012. In the first nine months of 2013, salaries and employee benefits decreased because of the recognition of expenses associated with a restricted stock grant that occurred in the first quarter of 2012. A similar award was not granted in 2013. As was the case with the quarterly comparison described above, deposit insurance premiums were lower in the first nine months of 2013 due to Home Savings 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 $2.1 million lower during the nine months ended September 30, 2013 as compared to the same period last year. The improvement in asset quality reduced the need to engage legal counsel and other consultants to assist in the resolution of problem assets, and the third quarter of 2012 included professional fees associated with the bulk asset sale. Other expenses were lower in the first nine months of 2013, as compared to the same period in 2012. This positive variance is the result of lower expenses incurred for real estate taxes and other expenses paid prior to loans going into foreclosure. Lastly, prepayment penalties incurred on the early payoff of Federal Home Loan Bank advances in the second quarter of 2012 were not a recurring expenditure in 2013.
Capital and Book Value per Common Share
Home Savings’ Tier 1 leverage ratio was 10.26% as of September 30, 2013, as compared to 8.70% as of December 31, 2012 and well in excess of the minimum 8.50% Tier 1 capital ratio required under the MOU (as described below). Home Savings’ total risk-based capital ratio was 19.78% at September 30, 2013, as compared to 16.21% at December 31, 2012 well in excess of the minimum 12.00% total risk-based capital ratio required under the MOU. Tangible book value per common share at September 30, 2013 was $3.65, as compared to $5.16 at December 31, 2012. Book value per share at September 30, 2013 was affected by two items that took place in the first nine months of 2013: the $38.0 million unrealized loss on available for sale securities and the dilutive effect of the capital raise that took place in the first half of 2013, in which the Company issued 17.1 million shares in exchange for net proceeds of $42.4 million, after expenses.
Home Savings is considered well capitalized and is no longer considered a troubled institution. The Memorandum of Understanding (MOU) entered into on January 31, 2013, requires Home Savings to maintain a Tier 1 leverage ratio of 8.5% and a total risk-based capital ratio of 12.0%. As of September 30, 2013, Home Savings was in compliance with the MOU.
As of September 30, 2013, the net deferred tax asset (DTA), before valuation allowance, was $39.7 million, and at December 31, 2012, the net DTA was $28.8 million. The net DTA at September 30, 2013, includes the tax effect of the unrealized loss on available for sale securities. The Company has established a full valuation allowance against the entire net DTA.
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.
4
###
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.
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.
| (1) | As part of the capital raise, we issued preferred stock that was later converted to common stock. No dividend was declared or paid on the preferred stock. However, because the preferred stock was issued at a price below the then market price of our common stock, the difference is deemed a non-cash dividend under U.S. Generally Accepted Accounting Principles and is deducted in the calculation of net income available to common shareholders. Please refer to Note 12 of the Consolidated Financial Statements found in the Company’s Form 10-Q for the period ended September 30, 2013 for further detail. |
5
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| | | | | | | | |
| | | September 30, | | | December 31, | |
| | | 2013 | | | 2012 | |
| | | (Dollars in thousands) | |
Assets: | | | | | | | | |
Cash and deposits with banks | | $ | 22,918 | | | $ | 26,041 | |
Federal funds sold | | | 63,212 | | | | 16,572 | |
| | | | | | | | |
Total cash and cash equivalents | | | 86,130 | | | | 42,613 | |
Securities: | | | | | | | | |
Available for sale, at fair value | | | 542,811 | | | | 574,562 | |
Loans held for sale | | | 2,894 | | | | 13,031 | |
Loans, net of allowance for loan losses of $21,032 and $21,130 | | | 1,009,029 | | | | 1,066,240 | |
Federal Home Loan Bank stock, at cost | | | 26,464 | | | | 26,464 | |
Premises and equipment, net | | | 20,938 | | | | 21,549 | |
Accrued interest receivable | | | 5,200 | | | | 6,238 | |
Real estate owned and other repossessed assets | | | 9,315 | | | | 18,440 | |
Core deposit intangible | | | 172 | | | | 238 | |
Cash surrender value of life insurance | | | 44,603 | | | | 28,881 | |
Other assets | | | 8,646 | | | | 10,109 | |
| | | | | | | | |
Total assets | | $ | 1,756,202 | | | $ | 1,808,365 | |
| | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | |
Liabilities: | | | | | | | | |
Deposits: | | | | | | | | |
Interest bearing | | $ | 1,243,443 | | | $ | 1,302,307 | |
Non-interest bearing | | | 167,167 | | | | 159,767 | |
| | | | | | | | |
Total deposits | | | 1,410,610 | | | | 1,462,074 | |
Borrowed funds: | | | | | | | | |
Federal Home Loan Bank advances | | | 50,000 | | | | 50,000 | |
Repurchase agreements and other | | | 90,583 | | | | 90,598 | |
| | | | | | | | |
Total borrowed funds | | | 140,583 | | | | 140,598 | |
Advance payments by borrowers for taxes and insurance | | | 12,126 | | | | 23,590 | |
Accrued interest payable | | | 592 | | | | 563 | |
Accrued expenses and other liabilities | | | 8,969 | | | | 10,780 | |
| | | | | | | | |
Total liabilities | | | 1,572,880 | | | | 1,637,605 | |
| | | | | | | | |
Shareholders’ Equity: | | | | | | | | |
Preferred stock-no par value; 1,000,000 shares authorized and no shares outstanding | | | — | | | | — | |
Common stock-no par value; 499,000,000 shares authorized; 54,138,910 and 37,804,457 shares, respectively, issued and 50,225,367 and 33,027,886 shares, respectively, outstanding | | | 175,282 | | | | 128,026 | |
Retained earnings | | | 80,460 | | | | 86,345 | |
Accumulated other comprehensive income (loss) | | | (31,324 | ) | | | 6,682 | |
Treasury stock, at cost, 3,913,543 and 4,776,571 shares, respectively | | | (41,096 | ) | | | (50,293 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 183,322 | | | | 170,760 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 1,756,202 | | | $ | 1,808,365 | |
| | | | | | | | |
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30, | | | June 30 | | | September 30, | | | September 30, | | | September 30, | |
| | | 2013 | | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | (Dollars in thousands, except per share data) | |
Interest income | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 12,233 | | | $ | 12,207 | | | $ | 14,567 | | | $ | 37,067 | | | $ | 49,182 | |
Loans held for sale | | | 80 | | | | 78 | | | | 101 | | | | 247 | | | | 305 | |
Securities: | | | | | | | | | | | | | | | | | | | | |
Available for sale | | | 3,364 | | | | 3,384 | | | | 3,219 | | | | 10,176 | | | | 10,253 | |
Federal Home Loan Bank stock dividends | | | 280 | | | | 277 | | | | 279 | | | | 840 | | | | 859 | |
Other interest earning assets | | | 52 | | | | 41 | | | | 25 | | | | 102 | | | | 48 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest income | | | 16,009 | | | | 15,987 | | | | 18,191 | | | | 48,432 | | | | 60,647 | |
Interest expense | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 1,847 | | | | 1,909 | | | | 2,600 | | | | 5,843 | | | | 9,574 | |
Federal Home Loan Bank advances | | | 529 | | | | 524 | | | | 535 | | | | 1,576 | | | | 1,880 | |
Repurchase agreements and other | | | 929 | | | | 918 | | | | 928 | | | | 2,756 | | | | 2,766 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest expense | | | 3,305 | | | | 3,351 | | | | 4,063 | | | | 10,175 | | | | 14,220 | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | 12,704 | | | | 12,636 | | | | 14,128 | | | | 38,257 | | | | 46,427 | |
Provision for loan losses | | | 657 | | | | 1,113 | | | | 30,279 | | | | 3,834 | | | | 37,223 | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 12,047 | | | | 11,523 | | | | (16,151 | ) | | | 34,423 | | | | 9,204 | |
| | | | | | | | | | | | | | | | | | | | |
Non-interest income | | | | | | | | | | | | | | | | | | | | |
Non-deposit investment income | | | 275 | | | | 373 | | | | 478 | | | | 1,189 | | | | 1,525 | |
Service fees and other charges | | | | | | | | | | | | | | | | | | | | |
Mortgage servicing fees | | | 702 | | | | 698 | | | | 934 | | | | 2,104 | | | | 2,338 | |
Deposit related fees | | | 1,471 | | | | 1,334 | | | | 1,378 | | | | 4,065 | | | | 4,022 | |
Mortgage servicing rights valuation | | | 30 | | | | 211 | | | | (672 | ) | | | 676 | | | | (230 | ) |
Mortgage servicing rights amortization | | | (482 | ) | | | (570 | ) | | | (859 | ) | | | (1,712 | ) | | | (2,141 | ) |
Other service fees | | | 13 | | | | 18 | | | | 12 | | | | 74 | | | | 22 | |
Net gains (losses): | | | | | | | | | | | | | | | | | | | | |
Securities available for sale | | | — | | | | 1,857 | | | | 1,192 | | | | 2,578 | | | | 5,161 | |
Mortgage banking income | | | 895 | | | | 1,389 | | | | 2,110 | | | | 3,927 | | | | 5,308 | |
Real estate owned and other repossessed assets | | | (395 | ) | | | (1,140 | ) | | | (1,795 | ) | | | (1,966 | ) | | | (3,447 | ) |
Card fees | | | 821 | | | | 1,179 | | | | 1,025 | | | | 2,734 | | | | 2,614 | |
Other income | | | 218 | | | | 1,035 | | | | (51 | ) | | | 1,956 | | | | 620 | |
| | | | | | | | | | | | | | | | | | | | |
Total non-interest income | | | 3,548 | | | | 6,384 | | | | 3,752 | | | | 15,625 | | | | 15,792 | |
| | | | | | | | | | | | | | | | | | | | |
Non-interest expense | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 7,379 | | | | 7,709 | | | | 8,634 | | | | 22,539 | | | | 25,651 | |
Occupancy | | | 811 | | | | 851 | | | | 845 | | | | 2,484 | | | | 2,495 | |
Equipment and data processing | | | 1,698 | | | | 1,782 | | | | 1,665 | | | | 5,240 | | | | 5,074 | |
Franchise tax | | | 385 | | | | 400 | | | | 521 | | | | 1,216 | | | | 1,396 | |
Advertising | | | 226 | | | | 281 | | | | 134 | | | | 646 | | | | 486 | |
Amortization of core deposit intangible | | | 20 | | | | 23 | | | | 26 | | | | 66 | | | | 83 | |
Prepayment penalty | | | — | | | | — | | | | 65 | | | | — | | | | 803 | |
Deposit insurance premiums | | | 598 | | | | 603 | | | | 1,012 | | | | 1,755 | | | | 3,176 | |
Other insurance premiums | | | 174 | | | | 175 | | | | 173 | | | | 525 | | | | 520 | |
Professional fees | | | | | | | | | | | | | | | | | | | | |
Legal and consulting fees | | | 368 | | | | 7 | | | | 779 | | | | 567 | | | | 1,795 | |
Other professional fees | | | 393 | | | | 867 | | | | 1,440 | | | | 1,476 | | | | 2,343 | |
Real estate owned and other repossessed asset expenses | | | 354 | | | | 293 | | | | 383 | | | | 1,140 | | | | 1,504 | |
Other expenses | | | 1,122 | | | | 1,377 | | | | 1,653 | | | | 4,106 | | | | 5,541 | |
| | | | | | | | | | | | | | | | | | | | |
Total non-interest expenses | | | 13,528 | | | | 14,368 | | | | 17,330 | | | | 41,760 | | | | 50,867 | |
| | | | | | | | | | | | | | | | | | | | |
Income before income taxes | | | 2,067 | | | | 3,539 | | | | (29,729 | ) | | | 8,288 | | | | (25,871 | ) |
Income tax expense (includes $0 income tax expense from reclassification items) | | | 350 | | | | 150 | | | | (2,838 | ) | | | 500 | | | | (2,838 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income | | | 1,717 | | | | 3,389 | | | | (26,891 | ) | | | 7,788 | | | | (23,033 | ) |
Amortization of discount on preferred stock | | | — | | | | 5,930 | | | | — | | | | 6,751 | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Earnings (loss) available to common shareholders | | $ | 1,717 | | | $ | (2,541 | ) | | $ | (26,891 | ) | | $ | 1,037 | | | $ | (23,033 | ) |
| | | | | | | | | | | | | | | | | | | | |
Earnings (loss) per common share | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.03 | | | $ | (0.06 | ) | | $ | (0.82 | ) | | $ | 0.02 | | | $ | (0.70 | ) |
Diluted | | | 0.03 | | | | (0.06 | ) | | | (0.82 | ) | | | 0.02 | | | | (0.70 | ) |
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (In thousands, except per share data) | | | | |
Financial Data | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 1,756,202 | | | $ | 1,787,071 | | | $ | 1,831,776 | | | $ | 1,808,365 | | | $ | 1,830,944 | |
Total loans, net | | | 1,009,029 | | | | 1,008,843 | | | | 1,034,415 | | | | 1,066,240 | | | | 1,100,328 | |
Total securities | | | 542,811 | | | | 555,188 | | | | 602,107 | | | | 574,562 | | | | 551,795 | |
Total deposits | | | 1,410,610 | | | | 1,433,815 | | | | 1,460,960 | | | | 1,462,074 | | | | 1,490,642 | |
Total shareholders’ equity | | | 183,322 | | | | 183,759 | | | | 206,511 | | | | 170,760 | | | | 171,580 | |
Net interest income | | | 12,704 | | | | 12,636 | | | | 12,917 | | | | 14,011 | | | | 14,128 | |
Provision for loan losses | | | 657 | | | | 1,113 | | | | 2,064 | | | | 2,102 | | | | 30,279 | |
Noninterest income, excluding other-than-temporary impairment losses | | | 3,548 | | | | 6,384 | | | | 5,693 | | | | 6,952 | | | | 3,752 | |
Net impairment losses recognized in earnings | | | — | | | | — | | | | — | | | | 13 | | | | — | |
Noninterest expense | | | 13,528 | | | | 14,368 | | | | 13,864 | | | | 14,302 | | | | 17,330 | |
Income tax expense (benefit) | | | 350 | | | | 150 | | | | — | | | | 1,950 | | | | (2,838 | ) |
Net income (loss) | | | 1,717 | | | | 3,389 | | | | 2,682 | | | | 2,596 | | | | (26,891 | ) |
Share Data | | | | | | | | | | | | | | | | | | | | |
Basic earnings (loss) per common share | | $ | 0.03 | | | $ | (0.06 | ) | | $ | 0.06 | | | $ | 0.08 | | | $ | (0.82 | ) |
Diluted earnings (loss) per common share | | | 0.03 | | | | (0.06 | ) | | | 0.05 | | | | 0.08 | | | | (0.82 | ) |
Book value per common share | | | 3.65 | | | | 3.66 | | | | 4.81 | | | | 5.17 | | | | 5.22 | |
Tangible book value per common share | | | 3.65 | | | | 3.66 | | | | 4.81 | | | | 5.16 | | | | 5.21 | |
Market value per common share | | | 3.89 | | | | 4.65 | | | | 3.88 | | | | 2.89 | | | | 3.49 | |
Common shares outstanding at end of period | | | 50,225 | | | | 50,189 | | | | 39,607 | | | | 33,028 | | | | 32,891 | |
Weighted average shares outstanding—basic | | | 50,110 | | | | 43,160 | | | | 33,565 | | | | 32,880 | | | | 32,751 | |
Weighted average shares outstanding—diluted | | | 50,382 | | | | 43,160 | | | | 33,829 | | | | 33,153 | | | | 32,751 | |
Key Ratios | | | | | | | | | | | | | | | | | | | | |
Return on average assets(1) | | | 0.39 | % | | | 0.74 | % | | | 0.59 | % | | | 0.57 | % | | | -5.67 | % |
Return on average equity(2) | | | 3.75 | % | | | 6.46 | % | | | 6.14 | % | | | 6.06 | % | | | -53.53 | % |
Net interest margin | | | 3.04 | % | | | 2.93 | % | | | 3.01 | % | | | 3.23 | % | | | 3.17 | % |
Efficiency ratio | | | 81.14 | % | | | 78.38 | % | | | 75.55 | % | | | 69.50 | % | | | 93.62 | % |
Capital Ratios | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio | | | 10.26 | % | | | 10.03 | % | | | 9.84 | % | | | 8.70 | % | | | 8.27 | % |
Tier 1 risk-based capital ratio | | | 18.52 | % | | | 18.17 | % | | | 17.02 | % | | | 14.95 | % | | | 14.59 | % |
Total risk-based capital ratio | | | 19.78 | % | | | 19.42 | % | | | 18.28 | % | | | 16.21 | % | | | 15.85 | % |
Equity to assets | | | 10.44 | % | | | 10.28 | % | | | 11.27 | % | | | 9.44 | % | | | 9.37 | % |
Tangible common equity to tangible assets(3) | | | 10.43 | % | | | 10.27 | % | | | 11.26 | % | | | 9.43 | % | | | 9.36 | % |
| (1) | Net income divided by average total assets |
| (2) | Net income divided by average total equity |
| (3) | We use certain non-GAAP financial measures, such as the tangible common equity to tangible common assets ratio (TCE), to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. We believe TCE is useful because it is a measure utilized by regulators, market analysts and investors in evaluating a Company’s financial condition and capital strength. TCE, as defined by us, represents common equity less core deposit intangible assets. A reconciliation form our GAAP total equity to total assets ratio to the non-GAAP tangible common equity to tangible assets ratio is presented below: |
| | | | | | | | | | | | | | | | | | | | |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (Dollars in thousands) | | | | |
Total assets | | $ | 1,756,202 | | | $ | 1,787,071 | | | $ | 1,831,776 | | | $ | 1,808,365 | | | $ | 1,830,944 | |
Less: Core deposit intangible | | | 172 | | | | 192 | | | | 215 | | | | 238 | | | | 263 | |
| | | | | | | | | | | | | | | | | | | | |
Tangible assets (Non-GAAP) | | $ | 1,756,030 | | | $ | 1,786,879 | | | $ | 1,831,561 | | | $ | 1,808,127 | | | $ | 1,830,681 | |
Total common equity | | | 183,322 | | | | 183,759 | | | | 206,511 | | | | 170,760 | | | | 171,580 | |
Less: Core deposit intangible | | | 172 | | | | 192 | | | | 215 | | | | 238 | | | | 263 | |
| | | | | | | | | | | | | | | | | | | | |
Tangible common equity (Non-GAAP) | | $ | 183,150 | | | $ | 183,567 | | | $ | 206,296 | | | $ | 170,522 | | | $ | 171,317 | |
Total equity/Total assets | | | 10.44 | % | | | 10.28 | % | | | 11.27 | % | | | 9.44 | % | | | 9.37 | % |
Tangible common equity/Tangible assets (non-GAAP) | | | 10.43 | % | | | 10.27 | % | | | 11.26 | % | | | 9.43 | % | | | 9.36 | % |
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (Dollars in thousands) | | | | |
Loan Portfolio Composition | | | | | | | | | | | | | | | | | | | | |
Real Estate Loans | | | | | | | | | | | | | | | | | | | | |
One-to four-family residential | | $ | 575,791 | | | $ | 572,575 | | | $ | 570,377 | | | $ | 577,249 | | | $ | 587,220 | |
Multi-family residential* | | | 55,696 | | | | 62,559 | | | | 69,857 | | | | 80,923 | | | | 82,518 | |
Nonresidential* | | | 127,699 | | | | 120,586 | | | | 132,662 | | | | 138,188 | | | | 150,693 | |
Land* | | | 9,546 | | | | 9,821 | | | | 15,216 | | | | 15,808 | | | | 16,363 | |
Construction Loans | | | | | | | | | | | | | | | | | | | | |
One-to four-family residential and land development | | | 38,932 | | | | 32,512 | | | | 32,866 | | | | 28,318 | | | | 32,483 | |
Multi-family and nonresidential* | | | — | | | | 4,584 | | | | 4,584 | | | | 4,534 | | | | 4,480 | |
| | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 807,664 | | | | 802,637 | | | | 825,562 | | | | 845,020 | | | | 873,757 | |
Consumer Loans | | | 194,383 | | | | 199,634 | | | | 206,496 | | | | 214,593 | | | | 222,995 | |
Commercial Loans | | | 26,888 | | | | 24,526 | | | | 23,077 | | | | 26,543 | | | | 22,183 | |
| | | | | | | | | | | | | | | | | | | | |
Total Loans | | | 1,028,935 | | | | 1,026,797 | | | | 1,055,135 | | | | 1,086,156 | | | | 1,118,935 | |
Less: | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | 21,032 | | | | 19,037 | | | | 21,827 | | | | 21,130 | | | | 20,048 | |
Deferred loan costs, net | | | (1,126 | ) | | | (1,083 | ) | | | (1,107 | ) | | | (1,214 | ) | | | (1,441 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total | | | 19,906 | | | | 17,954 | | | | 20,720 | | | | 19,916 | | | | 18,607 | |
| | | | | | | | | | | | | | | | | | | | |
Loans, net | | $ | 1,009,029 | | | $ | 1,008,843 | | | $ | 1,034,415 | | | $ | 1,066,240 | | | $ | 1,100,328 | |
| | | | | | | | | | | | | | | | | | | | |
* Categories are considered commercial real estate | |
| |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (Dollars in thousands) | | | | |
Real Estate Owned and Other Repossessed Assets | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 11,359 | | | $ | 15,782 | | | $ | 18,440 | | | $ | 20,206 | | | $ | 24,778 | |
Acquisitions | | | 772 | | | | 389 | | | | 664 | | | | 2,237 | | | | 1,486 | |
Sales, net of gains | | | (2,352 | ) | | | (3,780 | ) | | | (3,017 | ) | | | (3,560 | ) | | | (4,834 | ) |
Changes in valuation allowance | | | (464 | ) | | | (1,032 | ) | | | (305 | ) | | | (443 | ) | | | (1,224 | ) |
| | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 9,315 | | | $ | 11,359 | | | $ | 15,782 | | | $ | 18,440 | | | $ | 20,206 | |
| | | | | | | | | | | | | | | | | | | | |
Real Estate Owned and Other Repossessed Assets Expenses | | | | | | | | | | | | | | | | | | | | |
Net (gain)/loss on sales | | $ | (69 | ) | | $ | 126 | | | $ | 108 | | | $ | 301 | | | $ | 210 | |
Net loss on sales from bulk asset transaction | | | — | | | | — | | | | — | | | | — | | | | 413 | |
Provision for unrealized losses, net | | | 464 | | | | 1,014 | | | | 323 | | | | 443 | | | | 1,172 | |
Operating expenses, net of rental income | | | 354 | | | | 293 | | | | 493 | | | | 239 | | | | 383 | |
| | | | | | | | | | | | | | | | | | | | |
Total | | $ | 749 | | | $ | 1,433 | | | $ | 924 | | | $ | 983 | | | $ | 2,178 | |
| | | | | | | | | | | | | | | | | | | | |
| |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (Dollars in thousands) | | | | |
Deposit Portfolio Composition | | | | | | | | | | | | | | | | | | | | |
Checking accounts | | | | | | | | | | | | | | | | | | | | |
Interest bearing checking accounts | | $ | 134,766 | | | $ | 135,228 | | | $ | 136,952 | | | $ | 132,947 | | | $ | 128,794 | |
Non-interest bearing checking accounts | | | 167,167 | | | | 165,224 | | | | 169,790 | | | | 159,767 | | | | 159,361 | |
| | | | | | | | | | | | | | | | | | | | |
Total checking accounts | | | 301,933 | | | | 300,452 | | | | 306,742 | | | | 292,714 | | | | 288,155 | |
Savings accounts | | | 267,062 | | | | 272,991 | | | | 274,419 | | | | 264,411 | | | | 259,578 | |
Money market accounts | | | 331,449 | | | | 334,242 | | | | 341,804 | | | | 345,651 | | | | 345,428 | |
| | | | | | | | | | | | | | | | | | | | |
Total non-time deposits | | | 900,444 | | | | 907,685 | | | | 922,965 | | | | 902,776 | | | | 893,161 | |
Retail certificates of deposit | | | 510,166 | | | | 526,130 | | | | 537,995 | | | | 559,298 | | | | 597,481 | |
| | | | | | | | | | | | | | | | | | | | |
Total certificates of deposit | | | 510,166 | | | | 526,130 | | | | 537,995 | | | | 559,298 | | | | 597,481 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | $ | 1,410,610 | | | $ | 1,433,815 | | | $ | 1,460,960 | | | $ | 1,462,074 | | | $ | 1,490,642 | |
| | | | | | | | | | | | | | | | | | | | |
Certificates of deposit as a percent of total deposits | | | 36.17 | % | | | 36.69 | % | | | 36.82 | % | | | 38.25 | % | | | 40.08 | % |
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (Dollars in thousands) | | | | |
Allowance For Loan Losses | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 19,037 | | | $ | 21,827 | | | $ | 21,130 | | | $ | 20,048 | | | $ | 30,933 | |
Provision | | | 657 | | | | 1,113 | | | | 2,064 | | | | 2,102 | | | | 30,279 | |
Net recoveries (chargeoffs) | | | 1,338 | | | | (3,903 | ) | | | (1,367 | ) | | | (1,020 | ) | | | (41,164 | ) |
| | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 21,032 | | | $ | 19,037 | | | $ | 21,827 | | | $ | 21,130 | | | $ | 20,048 | |
| | | | | | | | | | | | | | | | | | | | |
Net Charge-offs (Recoveries) | | | | | | | | | | | | | | | | | | | | |
Real Estate Loans | | | | | | | | | | | | | | | | | | | | |
One-to four-family | | $ | 201 | | | $ | 487 | | | $ | 637 | | | $ | 317 | | | $ | 15,010 | |
Multi-family | | | (13 | ) | | | 113 | | | | 41 | | | | (1 | ) | | | 5,632 | |
Nonresidential | | | 381 | | | | 1,288 | | | | 459 | | | | 224 | | | | 15,340 | |
Land | | | (10 | ) | | | 1,639 | | | | (196 | ) | | | (155 | ) | | | 1,561 | |
Construction Loans | | | | | | | | | | | | | | | | | | | | |
One-to four-family residential and land development | | | (1,876 | ) | | | 108 | | | | (75 | ) | | | 259 | | | | 2,658 | |
Multi-family and nonresidential | | | — | | | | (4 | ) | | | 18 | | | | (16 | ) | | | (120 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | (1,317 | ) | | | 3,631 | | | | 884 | | | | 628 | | | | 40,081 | |
Consumer Loans | | | 143 | | | | 387 | | | | 443 | | | | 397 | | | | 1,536 | |
Commercial Loans | | | (164 | ) | | | (115 | ) | | | 40 | | | | (5 | ) | | | (453 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total | | $ | (1,338 | ) | | $ | 3,903 | | | $ | 1,367 | | | $ | 1,020 | | | $ | 41,164 | |
| | | | | | | | | | | | | | | | | | | | |
| |
| | | At or for the quarters ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
| | | | | | | | | (Dollars in thousands) | | | | |
Nonperforming Loans | | | | | | | | | | | | | | | | | | | | |
Real Estate Loans | | | | | | | | | | | | | | | | | | | | |
One-to four-family residential | | $ | 6,127 | | | $ | 4,993 | | | $ | 5,978 | | | $ | 5,437 | | | $ | 5,817 | |
Multi-family residential | | | 705 | | | | 727 | | | | 1,727 | | | | 2,027 | | | | 1,512 | |
Nonresidential | | | 8,963 | | | | 10,429 | | | | 21,021 | | | | 20,743 | | | | 17,484 | |
Land | | | 628 | | | | 656 | | | | 5,957 | | | | 6,047 | | | | 6,228 | |
Construction Loans | | | | | | | | | | | | | | | | | | | | |
One-to four-family residential and land development | | | 3,320 | | | | 4,385 | | | | 4,931 | | | | 7,465 | | | | 9,527 | |
Multi-family and nonresidential | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 19,743 | | | | 21,190 | | | | 39,614 | | | | 41,719 | | | | 40,568 | |
Consumer Loans | | | 3,564 | | | | 3,459 | | | | 3,608 | | | | 4,843 | | | | 4,921 | |
Commercial Loans | | | 4,177 | | | | 4,453 | | | | 1,492 | | | | 1,225 | | | | 1,068 | |
| | | | | | | | | | | | | | | | | | | | |
Total Loans | | $ | 27,484 | | | $ | 29,102 | | | $ | 44,714 | | | $ | 47,787 | | | $ | 46,557 | |
| | | | | | | | | | | | | | | | | | | | |
Total Nonperforming Loans and Nonperforming Assets | | | | | | | | | | | | | | | | | | | | |
Past due 90 days and on nonaccrual status | | $ | 20,946 | | | $ | 22,487 | | | $ | 36,515 | | | $ | 38,378 | | | $ | 41,335 | |
Past due 90 days and still accruing | | | 3,413 | | | | 3,501 | | | | 3,594 | | | | 3,678 | | | | 47 | |
| | | | | | | | | | | | | | | | | | | | |
Past due 90 days | | | 24,359 | | | | 25,988 | | | | 40,109 | | | | 42,056 | | | | 41,382 | |
Past due less than 90 days and on nonaccrual | | | 3,125 | | | | 3,114 | | | | 4,605 | | | | 5,731 | | | | 5,175 | |
| | | | | | | | | | | | | | | | | | | | |
Total Nonperforming Loans | | | 27,484 | | | | 29,102 | | | | 44,714 | | | | 47,787 | | | | 46,557 | |
Other Real Estate Owned | | | 9,276 | | | | 11,203 | | | | 15,349 | | | | 18,075 | | | | 19,732 | |
Repossessed Assets | | | 39 | | | | 156 | | | | 433 | | | | 365 | | | | 474 | |
| | | | | | | | | | | | | | | | | | | | |
Total Nonperforming Assets | | $ | 36,799 | | | $ | 40,461 | | | $ | 60,496 | | | $ | 66,227 | | | $ | 66,763 | |
| | | | | | | | | | | | | | | | | | | | |
Total Troubled Debt Restructured Loans | | | | | | | | | | | | | | | | | | | | |
Accruing | | $ | 26,629 | | | $ | 25,165 | | | $ | 23,812 | | | $ | 21,006 | | | $ | 17,002 | |
Nonaccruing | | | 5,474 | | | | 5,455 | | | | 3,616 | | | | 4,430 | | | | 4,531 | |
| | | | | | | | | | | | | | | | | | | | |
Total | | $ | 32,103 | | | $ | 30,620 | | | $ | 27,428 | | | $ | 25,436 | | | $ | 21,533 | |
| | | | | | | | | | | | | | | | | | | | |
