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

Selected first quarter results:
  • Delinquent loans declined $7.3 million to $158.3 million from the prior quarter
  • Net interest margin increased 32 basis points to 3.49% from the prior quarter
  • Home Savings’ Tier 1 leverage ratio increased 60 basis points from the prior quarter to 8.44%
  • Home Savings’ Total Risk Based Capital increased 48 basis points from the prior quarter to 13.02%
  • Book value per share and tangible book value per share increased $0.04 and $0.05, respectively, from the prior quarter to $5.73 and $5.72, respectively

Net Interest Income and Margin

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

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

Asset Quality

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

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

Noninterest Income

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

Noninterest Expense

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

Capital and Book Value

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

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

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

The Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
   
March 31, December 31,
2011 2010
(Dollars in thousands)
Assets:
Cash and deposits with banks $ 18,497 $ 18,627
Federal funds sold and other   20,181     18,480  
Total cash and cash equivalents 38,678 37,107
Securities:
Available for sale, at fair value 289,388 362,042
Loans held for sale 2,531 10,870
Loans, net of allowance for loan losses of $46,415 and $50,883, respectively 1,620,094 1,649,486
Federal Home Loan Bank stock, at cost 26,464 26,464
Premises and equipment, net 21,760 22,076
Accrued interest receivable 7,684 7,720
Real estate owned and other repossessed assets 42,873 40,336
Core deposit intangible 448 485
Cash surrender value of life insurance 27,560 27,303
Other assets   37,600     13,409  
Total assets $ 2,115,080   $ 2,197,298  
 
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Interest bearing $ 1,568,161 $ 1,551,210
Non-interest bearing   144,362     138,571  
Total deposits 1,712,523 1,689,781
Borrowed funds:
Federal Home Loan Bank advances 100,954 202,818
Repurchase agreements and other   100,446     97,797  
Total borrowed funds 201,400 300,615
Advance payments by borrowers for taxes and insurance 13,219 20,668
Accrued interest payable 905 809
Accrued expenses and other liabilities   9,662     9,370  
Total liabilities   1,937,709     2,021,243  
 
Shareholders' Equity:
Preferred stock-no par value; 1,000,000 shares authorized and unissued - -

Common stock-no par value; 499,000,000 shares authorized; 37,804,457 shares issued and 30,951,032 and 30,937,704 shares, respectively, outstanding
142,404 142,318
Retained earnings 113,911 111,049
Accumulated other comprehensive income (loss) (6,551 ) (4,778 )
Treasury stock, at cost, 6,853,425 and 6,866,753 shares, respectively   (72,393 )   (72,534 )
Total shareholders’ equity   177,371     176,055  
Total liabilities and shareholders’ equity $ 2,115,080   $ 2,197,298  
UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
         
For the Three Months Ended
March 31,
2011 2010
(Dollars in thousands, except per share data)
Interest income
Loans $ 22,510 $ 25,843
Loans held for sale 66 70
Securities:
Available for sale 2,847 2,585
Federal Home Loan Bank stock dividends 300 300
Other interest earning assets   9     7  
Total interest income 25,732 28,805
Interest expense
Deposits 6,331 9,318
Federal Home Loan Bank advances 825 848
Repurchase agreements and other   922     923  
Total interest expense   8,078     11,089  
Net interest income 17,654 17,716
Provision for loan losses   2,192     12,450  
Net interest income after provision for loan losses   15,462     5,266  
Non-interest income
Non-deposit investment income 354 428
Service fees and other charges 1,453 1,751
Net gains (losses):
Securities available for sale 1,313 2,843
Other -than-temporary loss on equity securities
Total impairment loss (10 ) -
Loss recognized in other comprehensive income   -     -  
Net impairment loss recognized in earnings (10 ) -
Mortgage banking income 622 386
Real estate owned and other repossessed assets (992 ) (1,484 )
Gain on retail branch sale - 1,387
Other income   1,248     1,249  
Total non-interest income   3,988     6,560  
Non-interest expense
Salaries and employee benefits 7,684 8,174
Occupancy 905 1,004
Equipment and data processing 1,694 1,667
Franchise tax 469 511
Advertising 121 222
Amortization of core deposit intangible 37 48
Deposit insurance premiums 1,405 1,461
Professional fees 962 1,033
Real estate owned and other repossessed asset expenses 873 607
Other expenses   2,338     2,241  
Total non-interest expenses   16,488     16,968  
Income (loss) before income taxes 2,962 (5,142 )
Income taxes expense (benefit)   -     -  
Net income (loss) $ 2,962   $ (5,142 )
 
Earnings (loss) per share
Basic--continuing operations $ 0.10 $ (0.17 )
Basic--discontinued operations - -
Basic 0.10 (0.17 )
Diluted--continuing operations 0.10 (0.17 )
Diluted--discontinued operations - -
Diluted 0.10 (0.17 )
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
         
At or for the quarters ended

March 31,2011

December 31,2010

September 30,2010

June 30,2010

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

March 31,2011

December 31,2010

September 30,2010

June 30,2010

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

March 31,2011

December 31,2010

September 30,2010

June 30,2010

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

March 31,2011

December 31,2010

September 30,2010

June 30,2010

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

March 31,2011

December 31,2010

September 30,2010

June 30,2010

March 31,2010
(Dollars in thousands)
Nonperforming Loans
Real Estate Loans
One-to four family residential $ 29,077 $ 27,417 $ 27,505 $ 30,279 $ 30,054
Multi-family residential 8,239 10,983 12,443 8,816 7,885
Nonresidential 37,353 39,838 44,561 48,653 36,083
Land 6,722 5,188 5,943 5,943 11,627
Construction Loans
One-to four-family residential and land development 47,053 44,021 40,000 49,146 42,963
Multi-family and nonresidential   382     2,414     2,414     2,414     382  
Total real estate loans 128,826 129,861 132,866 145,251 128,994
Consumer Loans 4,224 3,725 3,543 3,482 3,898
Commercial Loans   5,029     5,945     6,304     6,407     5,672  
Total Loans $ 138,079   $ 139,531   $ 142,713   $ 155,140   $ 138,564  
 
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status $ 112,705 $ 117,499 $ 126,062 $ 129,534 $ 131,951
Past due 90 days and still accruing   2,868     6,330     4,253     2,628     536  
Past due 90 days 115,573 123,829 130,315 132,162 132,487
Past due less than 90 days and on nonaccrual   30,283     15,702     12,398     22,978     6,077  
Total Nonperforming Loans 145,856 139,531 142,713 155,140 138,564
Other Real Estate Owned 42,386 39,914 39,963 41,470 34,605
Repossessed Assets   487     422     334     576     813  
Total Nonperforming Assets $ 188,729   $ 179,867   $ 183,010   $ 197,186   $ 173,982  
 
Total Troubled Debt Restructured Loans
Non-accruing $ 24,420 $ 11,240 $ 14,934 $ 10,855 $ 8,764
Accruing   30,129     33,331     13,254     18,214     23,153  
Total $ 54,549   $ 44,571   $ 28,188   $ 29,069   $ 31,917  

Copyright Business Wire 2010

If you liked this article you might like

UCFC Ex-Dividend Reminder - 2/4/15

UCFC Ex-Dividend Reminder - 2/4/15

United Community Financial Corporation Stock Upgraded (UCFC)

United Community Financial Corporation Stock Upgraded (UCFC)

Ratings Moves: SIX, KBR, SATS

Ratings Moves: SIX, KBR, SATS

United Community Financial Corporation Stock Downgraded (UCFC)

United Community Financial Corporation Stock Downgraded (UCFC)

United Community Financial Corporation Stock Upgraded (UCFC)

United Community Financial Corporation Stock Upgraded (UCFC)