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United Community Financial Corp. Announces Fourth Quarter Results; Profitability Returns

As of December 31, 2012, the FDIC categorized Home Savings as adequately capitalized pursuant to the Consent Order. However, because the FDIC and the Ohio Division terminated the Consent Order on January 31, 2013, Home Savings is now considered well capitalized. Home Savings is also no longer considered to be in troubled condition.

On January 11, 2013, United Community entered into securities purchase agreements with 28 accredited investors (the Investors) pursuant to which the Investors will, in a private offering, invest an aggregate of approximately $39.9 million in United Community. United Community has confirmed that no bank regulatory approvals are required. United Community presently expects the private offering to close on March 22, 2013.

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

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, December 31,
2012 2011
(Dollars in thousands)
Assets:
Cash and deposits with banks $ 26,041 $ 26,573
Federal funds sold and other   16,572     27,563  
Total cash and cash equivalents 42,613 54,136
Securities:
Available for sale, at fair value 574,562 459,598
Loans held for sale 13,031 12,727
Loans, net of allowance for loan losses of $21,130 and $42,271, respectively 1,066,240 1,379,276
Federal Home Loan Bank stock, at cost 26,464 26,464
Premises and equipment, net 21,549 19,175
Accrued interest receivable 6,238 6,741
Real estate owned and other repossessed assets 18,440 33,486
Core deposit intangible 238 346
Cash surrender value of life insurance 28,881 28,354
Other assets   10,109     10,384  
Total assets $ 1,808,365   $ 2,030,687  
 
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Interest bearing $ 1,302,307 $ 1,440,448
Noninterest bearing   159,767     148,049  
Total deposits 1,462,074 1,588,497
Borrowed funds:
Federal Home Loan Bank advances 50,000 128,155
Repurchase agreements and other   90,598     90,618  
Total borrowed funds 140,598 218,773
Advance payments by borrowers for taxes and insurance 23,590 23,282
Accrued interest payable 563 610
Accrued expenses and other liabilities   10,780     10,780  
Total liabilities   1,637,605     1,841,942  
 
Shareholders' Equity:
Preferred stock-no par value; 1,000,000 shares authorized and unissued - -
Common stock-no par value; 499,000,000 shares authorized; 37,804,457
shares issued and 33,027,886 and 32,597,762 shares, respectively, outstanding 128,026 128,031
Retained earnings 86,345 110,681
Accumulated other comprehensive income 6,682 5,032
Treasury stock, at cost, 4,776,571 and 5,206,695 shares, respectively   (50,293 )   (54,999 )
Total shareholders’ equity   170,760     188,745  
Total liabilities and shareholders’ equity $ 1,808,365   $ 2,030,687  
 
                 
 
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
 
For the Three Months Ended For the Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2012 2012 2011 2012 2011
(Dollars in thousands, except per share data)
Interest income
Loans $ 13,862 $ 14,567 $ 18,801 $ 63,044 $ 82,290
Loans held for sale 119 101 272 424 542
Securities:
Available for sale 3,488 3,219 3,102 13,741 12,366
Federal Home Loan Bank stock dividends 316 279 267 1,175 1,125
Other interest earning assets   12     25     29     60     64  
Total interest income 17,797 18,191 22,471 78,444 96,387
Interest expense
Deposits 2,322 2,600 5,957 11,896 24,341
Federal Home Loan Bank advances 535 535 748 2,415 3,162
Repurchase agreements and other   929     928     928     3,695     3,709  
Total interest expense   3,786     4,063     7,633     18,006     31,212  
Net interest income 14,011 14,128 14,838 60,438 65,175
Provision for loan losses   2,102     30,279     2,386     39,325     24,658  
Net interest income after provision for loan losses   11,909     (16,151 )   12,452     21,113     40,517  
Non-interest income
Non-deposit investment income 373 478 348 1,898 1,398
Service fees and other charges 2,794 793 1,172 6,805 4,416
Net gains (losses):
Securities available for sale 1,164 1,192 5,133 6,325 8,633
Other -than-temporary loss on equity securities
Total impairment loss (13 ) - (16 ) (13 ) (89 )
Loss recognized in other comprehensive income   -     -     -     -     -  
Net impairment loss recognized in earnings (13 ) - (16 ) (13 ) (89 )
Mortgage banking income 2,083 2,110 1,243 7,391 5,675
Real estate owned and other repossessed assets (744 ) (1,795 ) (1,184 ) (4,191 ) (6,165 )
Gain on retail branch sale - - 4,154 - 4,154
Other income   1,282     974     1,171     4,516     5,203  
Total non-interest income   6,939     3,752     12,021     22,731     23,225  
Non-interest expense
Salaries and employee benefits 7,253 8,634 7,863 32,934 31,160
Occupancy 849 845 794 3,344 3,409
Equipment and data processing 1,821 1,665 1,680 6,895 6,590
Franchise tax 445 521 254 1,841 1,495
Advertising 292 134 354 778 820
Amortization of core deposit intangible 25 26 33 108 139
Prepayment penalty - 65 - 803 -
Deposit insurance premiums 1,026 1,012 1,282 4,202 4,855
Professional fees 1,204 2,219 1,132 5,342 3,677
Real estate owned and other repossessed asset expenses 239 383 766 1,743 2,891
Other expenses   1,148     1,826     2,387     7,179     8,476  
Total non-interest expenses   14,302     17,330     16,545     65,169     63,512  
Income (loss) before income taxes 4,546 (29,729 ) 7,928 (21,325 ) 230
Income tax expense (benefit)   1,950     (2,838 )   -     (888 )   -  
Net income (loss) $ 2,596   $ (26,891 ) $ 7,928   $ (20,437 ) $ 230  
 
Earnings (loss) per share
Basic $ 0.08 $ (0.82 ) $ 0.25 $ (0.62 ) $ 0.01
Diluted 0.08 (0.82 ) 0.25 (0.62 ) 0.01
 
               
 
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
 
At or for the quarters ended

December 31,2012

September 30,2012

June 30,2012

March 31,2012

December 31,2011

(In thousands, except per share data)
Financial Data
Total assets $ 1,808,365 $ 1,830,944 $ 1,906,995 $ 2,041,964 $ 2,030,687
Total loans, net 1,066,240 1,100,328 1,249,595 1,325,101 1,379,276
Total securities 574,562 551,795 431,040 530,283 459,598
Total deposits 1,462,074 1,490,642 1,541,699 1,571,859 1,588,497
Total shareholders' equity 170,760 171,580 195,631 190,014 188,745
Net interest income 14,011 14,128 16,420 15,879 14,838
Provision for loan losses 2,102 30,279 6,264 680 2,386
Noninterest income, excluding other-than-temporary impairment losses 6,952 3,752 6,949 5,091 12,037
Net impairment losses recognized in earnings 13 - - - 16
Noninterest expense 14,302 17,330 17,043 16,494 16,545
Income tax expense (benefit) 1,950 (2,838 ) - - -
Net income (loss) 2,596 (26,891 ) 62 3,796 7,928
 
Share Data
Basic earnings (loss) per share $ 0.08 $ (0.82 ) $ - $ 0.12 $ 0.25
Diluted earnings (loss) per share 0.08 (0.82 ) - 0.12 0.25
Book value per share 5.17 5.22 5.95 5.78 5.79
Tangible book value per share 5.16 5.21 5.94 5.77 5.78
Market value per share 2.89 3.49 2.98 2.44 1.27
 
Shares outstanding at end of period 33,028 32,891 32,885 32,876 32,598
Weighted average shares outstanding--basic 32,880 32,751 32,802 32,693 31,295
Weighted average shares outstanding--diluted 33,153 32,751 32,843 23,697 31,295
 
Key Ratios
Return on average assets 0.57 % -5.67 % 0.01 % 0.74 % 1.53 %
Return on average equity 6.06 % -53.53 % 0.12 % 7.89 % 16.97 %
Net interest margin 3.23 % 3.17 % 3.55 % 3.30 % 3.04 %
Efficiency ratio 69.50 % 93.62 % 78.50 % 77.35 % 87.96 %
 
Capital Ratios
Tier 1 leverage ratio 8.70 % 8.27 % 9.32 % 8.96 % 8.61 %
Tier 1 risk-based capital ratio 14.95 % 14.59 % 15.16 % 13.94 % 13.30 %
Total risk-based capital ratio 16.21 % 15.85 % 16.43 % 15.21 % 14.57 %
Equity to assets 9.44 % 9.37 % 10.26 % 9.31 % 9.29 %
Tangible common equity to tangible assets 9.43 % 9.36 % 10.24 % 9.29 % 9.28 %
 
       
 
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
           
At or for the quarters ended

December 31,2012

September 30,2012

June 30,2012

March 31,2012

December 31,2011

 

(Dollars in thousands)

Loan Portfolio Composition
Real Estate Loans
One-to four-family residential $ 577,249 $ 587,220 $ 635,756 $ 649,000 $ 667,375
Multi-family residential* 80,923 82,518 98,545 114,493 120,991
Nonresidential* 138,188 150,693 229,303 263,891 276,198
Land* 15,808 16,363 19,113 19,735 23,222
Construction Loans
One-to four-family residential and land development 28,318 32,483 42,077 49,311 59,339
Multi-family and nonresidential*   4,534     4,480     4,528     4,527     4,528  
Total real estate loans 845,020 873,757 1,029,322 1,100,957 1,151,653
Consumer Loans 214,593 222,995 225,067 231,008 238,397
Commercial Loans   26,543     22,183     24,799     26,434     30,146  
Total Loans 1,086,156 1,118,935 1,279,188 1,358,399 1,420,196
Less:
Allowance for loan losses 21,130 20,048 30,933 34,523 42,271
Deferred loan costs, net   (1,214 )   (1,441 )   (1,340 )   (1,225 )   (1,351 )
Total   19,916     18,607     29,593     33,298     40,920  
Loans, net $ 1,066,240   $ 1,100,328   $ 1,249,595   $ 1,325,101   $ 1,379,276  
* Categories are considered commercial real estate
 
 
At or for the quarters ended

December 31,2012

September 30,2012

June 30,2012

March 31,2012

December 31,2011

 

(Dollars in thousands)

Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts $ 132,947 $ 128,794 $ 126,502 $ 129,795 $ 119,298
Non-interest bearing checking accounts   159,767     159,361     162,152     164,155     148,049  
Total checking accounts 292,714 288,155 288,654 293,950 267,347
Savings accounts 264,411 259,578 259,593 256,628 234,828
Money market accounts   345,651     345,428     344,750     339,824     314,907  
Total non-time deposits 902,776 893,161 892,997 890,402 817,082
Retail certificates of deposit   559,298     597,481     648,632     681,457     771,415  
Total certificates of deposit   559,298     597,481     648,632     681,457     771,415  
Total deposits $ 1,462,074   $ 1,490,642   $ 1,541,629   $ 1,571,859   $ 1,588,497  
Certificates of deposit as a percent of total deposits 38.25 % 40.08 % 42.07 % 43.35 % 48.56 %
 
               
 
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
 
At or for the quarters ended

December 31,2012

September 30,2012

June 30,2012

March 31,2012

December 31,2011

(Dollars in thousands)
Allowance For Loan Losses
Beginning balance $ 20,048 $ 30,933 $ 34,523 $ 42,271 $ 44,162
Provision 2,102 30,279 6,264 680 2,386
Net chargeoffs   (1,020 )   (41,164 )   (9,854 )   (8,428 )   (4,277 )
Ending balance $ 21,130   $ 20,048   $ 30,933   $ 34,523   $ 42,271  
 
Net Charge-offs
Real Estate Loans
One-to four-family $ 317 $ 15,010 $ 962 $ 762 $ 366
Multi-family (1 ) 5,632 588 68 203
Nonresidential 224 15,340 7,057 2,579 975
Land (155 ) 1,561 44 1,776 217
Construction Loans
One-to four-family residential and land development 259 2,658 516 2,098 1,874
Multi-family and nonresidential   (16 )   (120 )   4     -     -  
Total real estate loans 628 40,081 9,171 7,283 3,635
Consumer Loans 397 1,536 160 745 493
Commercial Loans   (5 )   (453 )   523     400     149  
Total $ 1,020   $ 41,164   $ 9,854   $ 8,428   $ 4,277  
 
 
At or for the quarters ended

December 31,2012

September 30,2012

June 30,2012

March 31,2012

December 31,2011

(Dollars in thousands)
Nonperforming Loans
Real Estate Loans
One-to four family residential $ 5,437 $ 5,817 $ 26,705 $ 23,721 $ 26,637
Multi-family residential 2,027 1,512 9,582 5,411 5,860
Nonresidential 20,743 17,484 43,103 41,871 42,902
Land 6,047 6,228 8,316 8,472 11,142
Construction Loans
One-to four-family residential and land development 7,466 9,527 18,335 22,455 27,104
Multi-family and nonresidential   -     -     -     -     -  
Total real estate loans 41,720 40,568 106,041 101,930 113,645
Consumer Loans 4,842 4,921 6,702 6,165 6,620
Commercial Loans   1,225     1,068     1,786     1,813     2,830  
Total Loans $ 47,787   $ 46,557   $ 114,529   $ 109,908   $ 123,095  
 
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status $ 38,378 $ 41,335 $ 97,357 $ 91,153 $ 104,812
Past due 90 days and still accruing   3,678     47     47     303     39  
Past due 90 days 42,056 41,382 97,404 91,456 104,851
Past due less than 90 days and on nonaccrual   5,731     5,175     17,125     18,452     18,244  
Total Nonperforming Loans 47,787 46,557 114,529 109,908 123,095
Other Real Estate Owned 18,075 19,732 24,325 28,517 32,946
Repossessed Assets   365     474     453     540     540  
Total Nonperforming Assets $ 66,227   $ 66,763   $ 139,307   $ 138,965   $ 156,581  
 
Total Troubled Debt Restructured Loans
Accruing $ 21,006 $ 17,002 $ 18,530 $ 35,657 $ 33,146
Non-accruing   4,430     4,531     14,250     15,161     17,752  
Total $ 25,436   $ 21,533   $ 32,780   $ 50,818   $ 50,898  
 




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