United Community Financial (UCFC) 8-K Ucfc Announces Strong Earnings and Dividend Increase

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 EARNINGS AND DIVIDEND INCREASE

YOUNGSTOWN, Ohio (January 23, 2018) – United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), today announced net income of $4.5 million, or $0.090 per diluted common share for the three months ended December 31, 2017. For the year ended December 31, 2017, net income was $21.8 million, or $0.437 per diluted common share.

During the year, threenon-recurring charges were recognized. In the fourth quarter, a revaluation of net deferred tax assets increased tax expense $1.9 million and an asset write down of $1.5 million, after tax, was prompted by an unfavorable ruling from an Appellate Court. For the year,non-recurring acquisition related expenses totaling $3.3 million, after tax, were also recognized. By adjusting reported earnings adjusted for thesenon-recurring items, the Company’s normalized quarterly net income(non-GAAP) was $7.9 million for the quarter, or $0.158 per diluted share and normalized full-year net income was $28.5 million, or $0.571 per diluted common share.

Fourth quarter 2017 highlights:

• Continued strong organic loan growth at 10.1% annualized

• Average deposit growth at 5.8% annualized

• Net interest margin of 3.43%

• Return on average assets of 0.68%, or 1.20% normalized

• Return on average equity of 6.09%, or 10.72% normalized

• Efficiency ratio was 63.73%, or 53.76% normalized

• Increased dividend 50% to $0.06 per common share

Full year 2017 highlights:

• Continued strong organic loan growth, including loans held for sale, at 16.5%

• Net interest margin of 3.41%

• Return on average assets of 0.85%, or 1.11% normalized

• Return on average equity of 7.63%, or 9.97% normalized

• Efficiency ratio was 64.28%, or 57.01% normalized

Gary M. Small, President and Chief Executive Officer of the Company commented, “I am very pleased with the organization’s fourth quarter core performance. Commercial and consumer growth exceeded expectations, deposit growth initiatives took hold, and our core expenses for the quarter were well contained. These results, combined with the anticipated positive impacts for our customers from the recent tax legislation, certainly provide excellent momentum as we head into 2018.”                

Strong Organic Loan Growth

Total loan growth for the fourth quarter was $51.4 million, or 10.1% on an annualized basis. Atyear-end, total loans aggregated $2.08 billion.

Commercial loan growth was $31.5 million for the quarter ended December 31, 2017, or 15.9% on an annualized basis. Residential mortgage loans, including loans held for sale, increased $10.3 million, or 4.1% annualized during the quarter. Consumer loans increased $9.8 million, or 14.9%, annualized during the same time period.

Meaningful Organic Customer Deposit Growth

Average customer deposit growth for the fourth quarter of 2017 totaled $25.4 million, or 5.8% annualized. Average annualized consumer and business deposit growth was 11.5% for the period. The Company also saw annualized growth of 21.6% in average noninterest bearing deposits for the quarter. Our success in these areas is a reflection of our focus on treasury management, product enhancement and pricing and promotional changes.

Net Interest Margin Remains Stable

Net interest income on a fully-taxable equivalent basis increased to $21.1 million for the quarter ended December 31, 2017, compared to $20.7 million for the quarter ended September 30, 2017, or 1.8%, and increased 27.5% from $16.6 million for the quarter ended December 31, 2016. The increase in net interest income was primarily due to a higher level of earning assets compared to the prior quarter. The increase in net interest income compared to the fourth quarter of 2016 was driven by an increase in earning assets along with an expansion in net interest margin, primarily related to purchase accounting adjustments.    

The net interest margin was 3.43% for the three months ended December 31, 2017, a two basis point decrease from 3.45% reported in the prior quarter. For the quarter ended December 31, 2016, the net interest margin was 3.26%. The increased margin from the same quarter last year was primarily due to the increased yield on earning assets along with the recognition of purchase accounting adjustments.    

Excluding purchase accounting yield adjustments, the net interest margin would have been 12 basis points lower, or 3.31%, for the three months ended December 31, 2017. The net interest margin would have been 11 basis points lower, or 3.30%, for the year.

Nonperforming Loans to Net Loans Ratio Decreases

The ratio of nonperforming loans to net loans continues to improve. The ratio was 0.59% at December 31, 2017, which is down from 0.83% reported at December 31, 2016. During the quarter ended December 31, 2017, the Company recognized total net chargeoffs of $568,000, or 11.5 basis points as a percentage of average loans. Full-year net chargeoffs were $2.1 million, or 11.5 basis points as a percentage of average loans.

The Company’s provision for loan losses totaled $1.2 million for the fourth quarter of 2017, which was up in comparison to the prior quarter and down from the fourth quarter of 2016. As of December 31, 2017, the Company’s allowance for loan losses to total loans was 1.05%, versus 1.25% at December 31, 2016.

Loans acquired through the acquisition during the first quarter of 2017 were recorded at fair value. When combining the remaining fair value adjustment of $3.8 million and the Company’s allowance, the Company’s allowance as a percentage of total loans increases to 1.23%.

Non-Interest Income

Non-interest income increased to $6.5 million in the fourth quarter of 2017, compared to $6.3 million in the prior quarter. Aone-time gain of $595,000 from the sale of a bank-owned building was partially offset by lower gains on mortgage loan sales due to seasonality and no recognized security gains in the fourth quarter.

Non-Interest Expense

Non-interest expense was $17.3 million for the quarter and normalized was $15.0 million, excluding a $2.3 millionone-time asset write down, compared to $15.5 million recognized during last quarter.

In 2003, Home Savings entered into two development loans on which the borrower subsequently filed bankruptcy, and a Court appointed receiver liquidated the collateral. The proceeds from the sale of the collateral have remained in escrow with the Court since 2007 as a number of competing claims were made against the proceeds. In 2011, a lower court affirmed Home Savings’ priority position in the proceeds, and its lien validity was affirmed by the same Court in 2016. However, in December 2017, an Appellate Court ruled that a portion of the proceeds should be awarded to another claimant. The $2.3 million charge reflects the Appellate court ruling. It is the Company’s intent to continue to pursue a full recovery.

The Company’s efficiency ratio remained on target at a normalized level of 53.77%, for the quarter ended December 31, 2017.

Tangible Book Value

Tangible book value per common share at December 31, 2017 was $5.41 compared to $5.32 at December 31, 2016. Tangible book value per share was lowered $0.037 per share because of the recent change in tax law.

Increased Dividend to be Paid

On January 23, 2018, the Board of Directors declared a quarterly cash dividend of $0.06 per common share, a 50% increase from the quarterly dividend paid last quarter. The dividend is payable February 16, 2018 to shareholders of record at the close of business February 2, 2018. This increase reflects both the sentiments of the Company to move to a higher dividend payout ratio and anticipated increased earnings due to recent changes in tax law.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, January 24, 2018, at 10:00 a.m. ET., to provide an overview of the Company’s fourth quarter 2017 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 websiteir.ucfconline.com. Click on4th Quarter 2017 Conference Call on the corporate profile page to join the webcast.

United Community Financial Corp.

Home Savings is a wholly owned subsidiary of the Company, offering a full line of commercial, wealth management and consumer banking products and services with 35 retail banking offices (34 in Ohio and one in Pennsylvania). Home Savings also has residential mortgage loan centers servicing Ohio, West Virginia, western Pennsylvania, northern Kentucky, and eastern Indiana. Additional information on the Company, Home Savings and James & Sons Insurance is available at ir.ucfconline.com.

###

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

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

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	December 31, 2017			September 30, 2017			F/(U)			December 31, 2016			F/(U)
	(Dollars in thousands)
Assets:
Cash and deposits with banks	$	34,365		$	29,600			16.1	%	$	27,690			24.1	%
Federal funds sold		12,515			8,410			48.8	%		18,197			-31.2	%
Total cash and cash equivalents		46,880			38,010			23.3	%		45,887			2.2	%
Securities:
Available for sale, at fair value		270,561			274,822			-1.6	%		343,284			-21.2	%
Held to maturity (fair value of $82,126, $85,024 and $96,150, respectively)		82,911			85,549			-3.1	%		97,519			-15.0	%
Loans held for sale, at lower of cost or market		211			196			7.7	%		165			27.9	%
Loans held for sale, at fair value		83,541			84,349			-1.0	%		62,593			33.5	%
Loans, net of allowance for loan losses of $21,202, $20,555 and $19,087		1,999,877			1,947,695			2.7	%		1,503,577			33.0	%
Federal Home Loan Bank stock, at cost		19,324			19,324			0.0	%		18,068			7.0	%
Premises and equipment, net		22,094			22,132			-0.2	%		20,963			5.4	%
Accrued interest receivable		8,190			7,253			12.9	%		6,900			18.7	%
Real estate owned and other repossessed assets		1,253			1,143			9.6	%		1,777			-29.5	%
Goodwill		20,221			19,488			3.8	%		208			9621.6	%
Core deposit intangible		1,934			2,017			-4.1	%		5			38580.0	%
Customer list intangible		2,060			2,090			-1.4	%		1,356			51.9	%
Cash surrender value of life insurance		62,488			62,050			0.7	%		55,861			11.9	%
Other assets		27,789			36,247			-23.3	%		33,182			-16.3	%
Total assets	$	2,649,334		$	2,602,365			1.8	%	$	2,191,345			20.9	%
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	354,970		$	343,146			3.4	%	$	256,918			38.2	%
Interest bearing		1,601,769			1,595,553			0.4	%		1,258,073			27.3	%
Total deposits		1,956,739			1,938,699			0.9	%		1,514,991			29.2	%
Borrowed funds:
Federal Home Loan Bank advances
Long-term advances		48,536			48,341			0.4	%		47,756			1.6	%
Short-term advances		308,000			280,000			10.0	%		343,000			-10.2	%
Total Federal Home Loan Bank advances		356,536			328,341			8.6	%		390,756			-8.8	%
Repurchase agreements and other		197			10,191			-98.1	%		512			-61.5	%
Total borrowed funds		356,733			338,532			5.4	%		391,268			-8.8	%
Advance payments by borrowers for taxes and insurance		25,038			16,048			56.0	%		23,812			5.1	%
Accrued interest payable		1,097			722			51.9	%		145			656.6	%
Accrued expenses and other liabilities		16,033			16,513			-2.9	%		11,323			41.6	%
Total liabilities		2,355,640			2,310,514			2.0	%		1,941,539			21.3	%
Shareholders’ Equity:
Preferredstock-no par value; 1,000,000 shares authorized and no shares outstanding		—			—			0.0	%		—			0.0	%
Commonstock-no par value; 499,000,000 shares authorized; 54,138,910 shares issued and 49,800,126, 49,758,487 and 46,581,370 shares, respectively, outstanding		177,458			177,460			0.0	%		174,360			1.8	%
Retained earnings		167,500			164,988			1.5	%		152,675			9.7	%
Accumulated other comprehensive loss		(18,904	)		(17,929	)		5.4	%		(21,040	)		-10.2	%
Treasury stock, at cost, 4,338,784, 4,380,423 and 7,557,540 shares, respectively		(32,360	)		(32,668	)		-0.9	%		(56,189	)		-42.4	%
Total shareholders’ equity		293,694			291,851			0.6	%		249,806			17.6	%
Total liabilities andshareholders’ equity	$	2,649,334		$	2,602,365			1.8	%	$	2,191,345			20.9	%

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,
	2017			2017			F/(U)			2016			F/(U)			2017			2016			F/(U)
	(Dollars in thousands, except per share data)
Interest income
Loans	$	21,529		$	20,697			4.0	%	$	15,285			40.9	%	$	79,795		$	57,903			37.8	%
Loans held for sale		886			882			0.5	%		578			53.3	%		3,301			1,755			88.1	%
Securities:
Available for sale, nontaxable		416			416			0.0	%		377			10.3	%		1,668			1,129			47.7	%
Available for sale, taxable		1,222			1,276			-4.2	%		1,569			-22.1	%		5,579			6,915			-19.3	%
Held to maturity, nontaxable		51			49			4.1	%		65			-21.5	%		214			248			-13.7	%
Held to maturity, taxable		421			424			-0.7	%		422			-0.2	%		1,764			1,989			-11.3	%
Federal Home Loan Bank stock dividends		267			253			5.5	%		181			47.5	%		961			723			32.9	%
Other interest earning assets		57			51			11.8	%		18			216.7	%		228			67			240.3	%
Total interest income		24,849			24,048			3.3	%		18,495			34.4	%		93,510			70,729			32.2	%
Interest expense
Deposits		2,603			2,226			-16.9	%		1,425			-82.7	%		8,437			5,922			-42.5	%
Federal Home Loan Bank advances		1,365			1,315			-3.8	%		732			-86.5	%		4,699			2,486			-89.0	%
Repurchase agreements and other		1			4			75.0	%		4			75.0	%		21			20			-5.0	%
Total interest expense		3,969			3,545			-12.0	%		2,161			-83.7	%		13,157			8,428			-56.1	%
Net interest income		20,880			20,503			1.8	%		16,334			27.8	%		80,353			62,301			29.0	%
Taxable equivalent adjustment		221			224			-1.3	%		219			0.9	%		911			686			32.8	%
Net interest income (FTE) (1)		21,101			20,727			1.8	%		16,553			27.5	%		81,264			62,987			29.0	%
Provision for loan losses		1,215			721			-68.5	%		1,493			18.6	%		4,253			5,387			21.1	%
Net interest income after provision for loan losses (FTE)		19,886			20,006			-0.6	%		15,060			32.0	%		77,011			57,600			33.7	%
Non-interest income
Insurance agency income		552			509			8.4	%		417			32.4	%		2,006			1,686			19.0	%
Brokerage income		264			271			-2.6	%		248			6.5	%		1,158			1,281			-9.6	%
Service fees and other charges:
Deposit related fees		1,436			1,499			-4.2	%		1,380			4.1	%		5,636			5,486			2.7	%
Mortgage servicing fees		780			760			2.6	%		719			8.5	%		3,005			2,833			6.1	%
Mortgage servicing rights valuation		6			(10	)		-160.0	%		741			-99.2	%		(9	)		39			123.1	%
Mortgage servicing rights amortization		(518	)		(491	)		5.5	%		(534	)		-3.0	%		(1,944	)		(2,094	)		7.2	%
Other service fees		42			21			100.0	%		27			55.6	%		125			135			-7.4	%
Net gains (losses):
Securities available for sale		—			236			-100.0	%		—			0.0	%		566			604			-6.3	%
Mortgage banking income		1,375			1,688			-18.5	%		1,236			11.2	%		6,503			6,444			0.9	%
Real estate owned and other repossessed assets charges, net		(46	)		(73	)		-37.0	%		(17	)		-100.0	%		(189	)		(93	)		-103.2	%
Debit/credit card fees		995			971			2.5	%		930			7.0	%		4,215			3,846			9.6	%
Trust fee income		467			449			4.0	%		—			100.0	%		1,618			—			100.0	%
Other income		1,107			475			133.1	%		488			126.8	%		2,549			1,909			33.5	%
Totalnon-interest income		6,460			6,305			2.5	%		5,635			14.6	%		25,239			22,076			14.3	%
Non-interest expense
Salaries and employee benefits		8,347			8,736			4.5	%		7,376			-13.2	%		34,807			28,600			-21.7	%
Occupancy		1,023			1,013			-1.0	%		809			-26.5	%		3,943			3,373			-16.9	%
Equipment and data processing		2,256			2,303			2.0	%		1,916			-17.7	%		8,944			7,564			-18.2	%
Financial institutions tax		300			348			13.8	%		410			26.8	%		1,648			1,694			2.7	%
Advertising		317			285			-11.2	%		207			-53.1	%		991			845			-17.3	%
Amortization of intangible assets		114			113			-0.9	%		(26	)		538.5	%		422			69			-511.6	%
FDIC insurance premiums		249			301			17.3	%		172			-44.8	%		1,078			940			-14.7	%
Other insurance premiums		114			115			0.9	%		77			-48.1	%		450			328			-37.2	%
Professional fees:
Legal fees		155			156			0.6	%		124			-25.0	%		724			583			-24.2	%
Other professional fees		545			666			18.2	%		491			-11.0	%		2,151			1,416			-51.9	%
Real estate owned and other repossessed asset expenses		17			33			48.5	%		1			-1600.0	%		135			191			29.3	%
Acquisition related expenses		39			—			0.0	%		787			0.0	%		5,001			787			-100.0	%
Other expenses		3,853			1,395			-176.2	%		1,373			-180.6	%		7,965			5,629			-41.5	%
Totalnon-interest expenses		17,329			15,464			-12.1	%		13,717			-26.3	%		68,259			52,019			-31.2	%
Income before income taxes		9,017			10,847			-16.9	%		6,978			29.2	%		33,991			27,657			22.9	%
Taxable equivalent adjustment		221			224			1.3	%		219			-0.9	%		911			686			-32.8	%
Income tax expense		4,294			3,067			-40.0	%		1,734			-147.6	%		11,295			8,143			-38.7	%
Net income	$	4,502		$	7,556			-40.4	%	$	5,025			-10.4	%	$	21,785		$	18,828			15.7	%
Earnings per common share:
Basic	$	0.090		$	0.152			-40.8	%	$	0.108			-16.7	%	$	0.440		$	0.401			9.7	%
Diluted		0.090			0.151			-40.4	%		0.107			-15.9	%		0.437			0.399			9.5	%

⁽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.

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED AVERAGE BALANCES

(Unaudited)

	For the three months ended
	December 31, 2017							September 30, 2017							December 31, 2016
	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)	$	1,975,847	$	21,531		4.36	%	$	1,906,786	$	20,699		4.34	%	$	1,485,617	$	15,286		4.12	%
Loans held for sale		88,247		886		4.02	%		88,854		882		3.97	%		61,289		578		3.77	%
Total loans, net		2,064,094		22,417		4.34	%		1,995,640		21,581		4.33	%		1,546,906		15,864		4.10	%
Securities:
Available for sale-taxable		214,631		1,222		2.28	%		224,927		1,276		2.27	%		292,115		1,569		2.15	%
Available for sale-nontaxable(2)		58,903		609		4.14	%		59,057		611		4.14	%		54,018		561		4.15	%
Held to maturity-taxable		75,136		421		2.24	%		77,947		424		2.18	%		87,480		422		1.93	%
Held to maturity-nontaxable (2)		9,233		77		3.34	%		9,239		76		3.29	%		13,438		99		2.95	%
Total securities		357,903		2,329		2.60	%		371,170		2,387		2.57	%		447,051		2,651		2.37	%
Federal Home Loan Bank stock		19,324		267		5.53	%		19,324		253		5.24	%		18,068		181		4.01	%
Other interest earning assets		22,656		57		1.01	%		18,881		51		1.08	%		22,071		18		0.33	%
Total interest earning assets		2,463,977		25,070		4.07	%		2,405,015		24,272		4.04	%		2,034,096		18,714		3.68	%
Non-interest earning assets		179,023							185,773							134,902
Total assets	$	2,643,000						$	2,590,788						$	2,168,998
Interest bearing liabilities:
Deposits:
Checking accounts	$	600,249		589		0.39	%	$	591,982		468		0.32	%	$	481,225		248		0.21	%
Savings accounts		304,229		27		0.04	%		308,829		28		0.04	%		291,212		25		0.03	%
Certificates of deposit
Customer certificates of deposit		530,297		1,458		1.10	%		526,697		1,333		1.01	%		416,299		1,077		1.03	%
Brokered certificates of deposit		164,147		529		1.29	%		135,956		397		1.17	%		47,760		75		0.63	%
Total certificates of deposit		694,444		1,987		1.14	%		662,653		1,730		1.04	%		464,059		1,152		0.99	%
Total interest bearing deposits		1,598,922		2,603		0.65	%		1,563,464		2,226		0.57	%		1,236,496		1,425		0.46	%
Federal Home Loan Bank advances
Long-term advances		48,409		404		3.34	%		48,212		388		3.22	%		47,628		337		2.83	%
Short-term advances		301,424		961		1.28	%		310,152		927		1.20	%		342,174		395		0.46	%
Total Federal Home Loan Bank advances		349,833		1,365		1.56	%		358,364		1,315		1.47	%		389,802		732		0.75	%
Repurchase agreements and other		2,114		1		0.19	%		6,483		4		0.25	%		514		4		3.11	%
Total borrowed funds		351,947		1,366		1.55	%		364,847		1,319		1.45	%		390,316		736		0.75	%
Total interest bearing liabilities	$	1,950,869		3,969		0.81	%	$	1,928,311		3,545		0.74	%	$	1,626,812		2,161		0.53	%
Non-interest bearing liabilities
Total noninterest bearing deposits		355,225							337,067							257,412
Other noninterest bearing liabilities		41,400							35,576							33,544
Total noninterest bearing liabilities		396,625							372,643							290,956
Total liabilities	$	2,347,494						$	2,300,954						$	1,917,768
Shareholders’ equity		295,506							289,834							251,230
Total liabilities and equity	$	2,643,000						$	2,590,788						$	2,168,998
Net interest income and interest rate spread			$	21,101		3.26	%			$	20,727		3.30	%			$	16,553		3.15	%
Net interest margin						3.43	%						3.45	%						3.26	%
Average interest earning assets to average interest bearing liabilities						126.30	%						124.72	%						125.04	%
Interest bearing deposits
Checking accounts	$	600,249	$	589		0.39	%	$	591,982	$	468		0.32	%	$	481,225	$	248		0.21	%
Savings accounts		304,229		27		0.04	%		308,829		28		0.04	%		291,212		25		0.03	%
Customer certificates of deposit		530,297		1,458		1.10	%		526,697		1,333		1.01	%		416,299		1,077		1.03	%
Total customer deposits		1,434,775		2,074		0.58	%		1,427,508		1,829		0.51	%		1,188,736		1,350		0.45	%
Brokered certificates of deposit		164,147		529		1.29	%		135,956		397		1.17	%		47,760		75		0.63	%
Total interest bearing deposits		1,598,922		2,603		0.65	%		1,563,464		2,226		0.57	%		1,236,496		1,425		0.46	%
Noninterest bearing deposits		355,225		—		0.00	%		337,067		—		0.00	%		257,412		—		0.00	%
Total average deposits and cost of deposits	$	1,954,147	$	2,603		0.53	%	$	1,900,531	$	2,226		0.47	%	$	1,493,908	$	1,425		0.38	%
Other interest bearing liabilities
Federal Home Loan Bank advances
Long term advances	$	48,409	$	404		3.34	%	$	48,212	$	388		3.22	%	$	47,628	$	337		2.83	%
Short term advances		301,424		961		1.28	%		310,152		927		1.20	%		342,174		395		0.46	%
Total Federal Home Loan Bank advances		349,833		1,365		1.56	%		358,364		1,315		1.47	%		389,802		732		0.75	%
Repurchase agreements and other		2,114		1		0.19	%		6,483		4		0.25	%		514		4		3.11	%
Total borrowed funds		351,947		1,366		1.55	%		364,847		1,319		1.45	%		390,316		736		0.75	%
Total average deposits and other interest bearing liabilities and total cost of funds	$	2,306,094	$	3,969		0.69	%	$	2,265,378	$	3,545		0.63	%	$	1,884,224	$	2,161		0.46	%
Customer deposits interest bearing and noninterest bearing	$	1,790,000	$	2,074		0.46	%	$	1,764,575	$	1,829		0.41	%	$	1,446,148	$	1,350		0.37	%
Brokered deposits		164,147		529		1.29	%		135,956		397		1.17	%		47,760		75		0.63	%
Total borrowings		351,947		1,366		1.55	%		364,847		1,319		1.45	%		390,316		736		0.75	%
Cost of funds		2,306,094		3,969		0.69	%		2,265,378		3,545		0.63	%		1,884,224		2,161		0.46	%

⁽¹⁾ Nonaccrual loans are included in the average balance at a yield of 0%.

⁽²⁾ Yields are on a fully taxable equivalent basis.

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands, except per share data)
Financial Data
Total assets	$	2,649,334		$	2,602,365		$	2,553,565		$	2,557,010		$	2,191,345
Total loans, net		1,999,877			1,947,695			1,869,095			1,835,000			1,503,577
Total securities		353,472			360,371			375,738			430,357			440,803
Total deposits		1,956,739			1,938,699			1,893,993			1,905,205			1,514,991
Average interest-bearing deposits		1,598,922			1,563,464			1,579,438			1,434,644			1,236,496
Average noninterest-bearing deposits		355,225			337,067			333,784			306,402			257,412
Total shareholders’ equity		293,694			291,851			285,480			277,102			249,806
Net interest income		20,880			20,503			20,494			18,476			16,334
Net interest income (FTE) (1)		21,101			20,727			20,723			18,713			16,553
Provision for loan losses		1,215			721			842			1,475			1,493
Noninterest income		6,460			6,305			7,090			5,384			5,635
Noninterest expense		17,329			15,464			15,176			20,290			13,717
Income tax expense		4,294			3,067			3,377			557			1,734
Net income		4,502			7,556			8,189			1,538			5,025
Share Data
Basic earnings per common share	$	0.090		$	0.152		$	0.165		$	0.032		$	0.108
Diluted earnings per common share		0.090			0.151			0.163			0.032			0.107
Book value per common share		5.90			5.87			5.74			5.58			5.36
Tangible book value per common share		5.41			5.38			5.27			5.10			5.32
Market value per common share		9.13			9.60			8.31			8.34			8.94
Common shares outstanding at end of period		49,800			49,758			49,715			49,695			46,581
Weighted average shares outstanding—basic		49,497			49,460			49,392			48,289			46,216
Weighted average shares outstanding—diluted		49,827			49,851			49,795			48,646			46,415
Key Ratios
Return on average assets(2)		0.68	%		1.17	%		1.27	%		0.25	%		0.93	%
Return on average equity(3)		6.09	%		10.43	%		11.60	%		2.24	%		8.00	%
Return on tangible equity(4)		6.62	%		11.35	%		12.66	%		2.39	%		8.05	%
Net interest margin		3.43	%		3.45	%		3.46	%		3.28	%		3.26	%
Efficiency ratio		63.73	%		57.13	%		54.71	%		83.78	%		61.89	%
Nonperforming loans to net loans, end of period		0.59	%		0.62	%		0.58	%		0.58	%		0.83	%
Nonperforming assets to total assets, end of period		0.64	%		0.75	%		0.72	%		0.74	%		0.94	%
Allowance for loan loss as a percent of loans, end of period		1.05	%		1.04	%		1.04	%		1.02	%		1.25	%
Delinquent loans to total net loans, end of period		0.86	%		0.89	%		0.77	%		0.81	%		1.26	%

⁽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    

⁽⁴⁾  Net income divided by average total equity, minus average intangible assets    

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands)
Loan Portfolio Composition
Commercial loans
Multi-family	$	120,479		$	126,977		$	121,565		$	108,330		$	93,597
Owner/nonowner occupied commercial real estate		381,611			366,747			342,300			325,633			231,401
Land		15,162			13,666			10,867			9,276			8,373
Construction		116,863			108,106			96,765			94,727			68,158
Commercial and industrial		188,500			175,580			170,758			170,398			102,729
Total		822,615			791,076			742,255			708,364			504,258
Residential mortgage loans
Real estate		870,939			851,863			834,349			839,413			762,926
Construction		49,092			57,081			56,946			51,372			35,695
Total		920,031			908,944			891,295			890,785			798,621
Consumer loans
Consumer		273,494			263,692			251,151			251,215			216,598
Total		273,494			263,692			251,151			251,215			216,598
Total loans		2,016,140			1,963,712			1,884,701			1,850,364			1,519,477
Less:
Allowance for loan losses		21,202			20,555			19,660			18,970			19,087
Deferred loan costs, net		(4,939	)		(4,538	)		(4,054	)		(3,606	)		(3,187	)
Total		16,263			16,017			15,606			15,364			15,900
Total loans, net		1,999,877			1,947,695			1,869,095			1,835,000			1,503,577
Loans held for sale, net		83,752			84,545			86,153			75,698			62,758
Totalloans	$	2,083,629		$	2,032,240		$	1,955,248		$	1,910,698		$	1,566,335
	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts	$	170,478		$	173,170		$	175,800		$	211,875		$	158,271
Non-interest bearing checking accounts		354,970			343,146			339,067			333,940			256,918
Total checking accounts		525,448			516,316			514,867			545,815			415,189
Savings accounts		301,716			307,169			310,012			308,533			294,563
Money market accounts		424,234			418,294			427,348			418,449			316,813
Totalnon-time deposits		1,251,398			1,241,779			1,252,227			1,272,797			1,026,565
Certificates of deposit less than or equal to $250,000		651,255			617,839			557,300			547,823			425,893
Certificates of deposit greater than $250,000		54,086			79,080			84,466			84,585			62,533
Total certificates of deposit		705,341			696,919			641,766			632,408			488,426
Total deposits	$	1,956,739		$	1,938,698		$	1,893,993		$	1,905,205		$	1,514,991

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands)
Allowance For Loan Losses
Beginning balance	$	20,555		$	19,660		$	18,970		$	19,087		$	18,234
Provision		1,215			721			842			1,475			1,493
Net recoveries (chargeoffs)		(568	)		174			(152	)		(1,592	)		(640	)
Ending balance	$	21,202		$	20,555		$	19,660		$	18,970		$	19,087
	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands)
Net (Charge-offs) Recoveries
Commercial loans
Multi-family	$	(126	)	$	(4	)	$	4		$	1		$	5
Owner/nonowner occupied commercial real estate		23			39			24			(1,141	)		(570	)
Land		—			—			—			(25	)		(100	)
Construction		—			—			—			—			—
Commercial and industrial		(90	)		314			108			1			139
Total		(193	)		349			136			(1,164	)		(526	)
Residential mortgage loans
Real estate		(257	)		(291	)		(239	)		(196	)		(123	)
Construction		—			—			—			—			—
Total		(257	)		(291	)		(239	)		(196	)		(123	)
Consumer loans
Consumer		(118	)		116			(49	)		(232	)		9
Total		(118	)		116			(49	)		(232	)		9
Total net chargeoffs	$	(568	)	$	174		$	(152	)	$	(1,592	)	$	(640	)
	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands)
Nonperforming Loans
Commercial loans
Multi-family	$	275		$	402		$	413		$	419		$	—
Owner/nonowner occupied commercial real estate		1,218			1,234			1,331			1,398			3,546
Land		9			9			9			9			34
Construction		—			—			—			—			—
Commercial and industrial		1,505			234			190			354			361
Total		3,007			1,879			1,943			2,180			3,941
Residential mortgage loans
Real estate		6,076			6,627			6,701			5,868			6,084
Construction		—			—			—			—			—
Total		6,076			6,627			6,701			5,868			6,084
Consumer loans
Consumer		2,620			2,332			2,137			2,513			2,414
Total		2,620			2,332			2,137			2,513			2,414
Total nonperforming loans	$	11,703		$	10,838		$	10,781		$	10,561		$	12,439
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status	$	8,620		$	7,634		$	7,706		$	7,581		$	7,859
Past due 90 days and still accruing		—			8			2			—			—
Past due 90 days		8,620			7,642			7,708			7,581			7,859
Past due less than 90 days and on nonaccrual		3,083			3,196			3,073			2,980			4,580
Total nonperforming loans		11,703			10,838			10,781			10,561			12,439
Other real estate owned		1,047			1,133			1,197			1,137			1,726
Other classified assets		4,050			6,384			6,384			6,384			6,384
Repossessed assets		206			10			—			—			51
Total nonperforming assets	$	17,006		$	18,365		$	18,362		$	18,082		$	20,600

UNITED COMMUNITY FINANCIAL CORP.

NON-GAAP DISCLOSURE RECONCILIATION

(Unaudited)

Reconciliation of Average Shareholders’ Equity to Average Tangible Equity:

	At or for the quarters ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(Dollars in thousands, except per share data)
Average shareholders equity	$	295,506		$	295,506		$	282,335		$	274,277		$	251,230
Average intangible assets		23,563			23,642			23,699			26,935			1,543
Average tangible equity	$	271,943		$	271,864		$	258,636		$	247,342		$	249,687
Net income	$	4,502		$	7,556		$	8,189		$	1,538		$	5,025
Return on tangible equity		6.62	%		11.12	%		12.66	%		2.49	%		8.05	%

Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income:

	For the quarters ended
	December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016
	(Dollars in thousands)
Interest income	$	24,849	$	24,048	$	23,553	$	21,060	$	18,495
Fully taxable equivalent adjustment		221		224		229		237		219
Fully taxable equivalent interest income		25,070		24,272		23,782		21,297		18,714
Interest expense		3,969		3,545		3,059		2,584		2,161
Fully taxable net interest income	$	21,101	$	20,727	$	20,723	$	18,713	$	16,553

	For the twelve months ended
	December 31, 2017		December 31, 2016
	(Dollars in thousands)
Interest income	$	93,510	$	70,729
Fully taxable equivalent adjustment		911		686
Fully taxable equivalent interest income		94,421		71,415
Interest expense		13,157		8,428
Fully taxable net interest income	$	81,264	$	62,987

Reconciliation of Net Interest Margin without Accretion/Amortization of Purchase Accounting Adjustments:

	For the three months ended			For the twelve months ended
	December 31, 2017			December 31, 2017
	(Dollars in thousands)
Fully taxable net interest income	$	21,101		$	81,264
Accretion/amortization of purchase accounting adjustments		711			2,566
Fully taxable net interest income, without purchase accounting adjustments	$	20,390		$	78,698
Average interest earning assets	$	2,463,977		$	2,385,893
Net interest margin excluding accretion amortization of purchase accounting adjustments		3.31	%		3.30	%

Reconciliation of Coverage Ratio to Coverage Ratio with Fair Value Adjustments Included with Allowance for Loan Losses:

	December 31, 2017
	(Dollars in thousands)
Allowance for loan losses	$	21,202
Fair value adjustments		3,785
		24,987
Loans, net	$	1,999,877
Add: Allowance for loan losses and fair value adjustment		24,987
Gross loans	$	2,024,864
Coverage ratio with the Fair Value adjustments included in Allowance for loan losses		1.23	%

Tangible Book Value Per Share:

Tangible book value, per share is defined at shareholders equity minus intangible assets divided by the number of shares outstanding.

	At the quarters ended
	December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016
			(Dollars in thousands, except per share data)
Total shareholders’ equity	$	293,694	$	291,851	$	285,480	$	277,102	$	249,806
Goodwill		20,221		19,488		19,467		19,460		208
Customer list intangible		2,060		2,090		2,060		2,090		1,356
Core deposit intangible		1,934		2,017		2,099		2,182		5
Total common shares outstanding		49,800,126		49,758,487		49,715,021		49,695,487		46,581,370
Tangible book value, as reported	$	5.41	$	5.39	$	5.27	$	5.10	$	5.32

UNITED COMMUNITY FINANCIAL CORP.

NON-GAAP DISCLOSURE RECONCILIATION

(Unaudited)

Reconciliation of Normalized Net Income and Earnings Per Diluted Share:

	For the three months ended				For the twelve months ended
	December 31, 2017				December 31, 2017
	Dollars in thousands		Diluted Earnings Per Share		Dollars in thousands		Diluted Earnings Per Share
Net Income and diluted earnings per share	$	4,502	$	0.090	$	21,785	$	0.437
Add: Acquisition related expenses, net of tax		39		—		3,293		0.066
Add: Deferred tax asset revaluation		1,861		0.037		1,861		0.038
Add: Litigation receivable adjustment, net of tax		1,517		0.030		1,517		0.031
Normalized net income and diluted earnings per share	$	7,919	$	0.158	$	28,456	$	0.571
Weighted average shares outstanding—diluted		49,827				49,492

Calculation of Normalized Return on Average Assets and Normalized Return on Average Equity:

	For the three months ended			For the twelve months ended
	December 31, 2017			December 31, 2017
	(Dollars in thousands)
Normalized net income	$	7,919		$	28,456
Average assets		2,643,000			2,564,160
Average equity		295,506			285,511
Normalized return on average assets		1.20	%		1.11	%
Normalized return on average equity		10.72	%		9.97	%

Calculation of Normalized Efficiency Ratio:

	For the three months ended			For the twelve months ended
	December 31, 2017			December 31, 2017
	(Dollars in thousands)
Noninterest expense	$	17,329		$	68,259
Subtract: intangible asset amortization		(114	)		(422	)
Subtract: merger related expenses		(39	)		(5,001	)
Subtract: litigation receivable adjustment		(2,334	)		(2,334	)
	$	14,842		$	60,502
Net interest income (FTE)	$	21,101		$	81,264
Noninterest income		6,460			25,239
Subtract: Securities gains		—			(566	)
Add: Loss on disposal of REO		46			189
	$	27,607		$	106,126
Normalized efficiency ratio		53.76	%		57.01	%