United Community Financial Corp. Announces Profitable First Quarter 2014

United Community Financial Corp. (Company) (Nasdaq: UCFC), holding company of The Home Savings and Loan Company of Youngstown, Ohio (Home Savings), today reported consolidated net income of $2.1 million for the three months ended March 31, 2014.

Selected results:
  • Net loans increased $31.7 million from the prior quarter, or 3.0%
  • Net income for first quarter of 2014 was $2.1 million compared to a net income of $2.2 million for the prior quarter and $2.7 million for the same quarter last year
  • Noninterest expense for the first quarter of 2014 was $13.5 million, down 9.6% from the previous quarter and down 2.3% from the first quarter of 2013
  • Credit quality continues to improve as nonperforming loans, nonperforming assets and delinquent loans decreased during the first quarter of 2014
  • Home Savings’ continues to be well capitalized. At quarter end, the Tier 1 leverage ratio was 10.71% and the total risk based capital ratio was 19.68%

Gary M. Small, President and Chief Executive Officer of the Company and Home Savings, commented, “We are very pleased to deliver first quarter loan growth of $31 million, up 3%, with meaningful growth in both the residential mortgage and commercial and industrial loan categories. Credit quality remains strong and our cost of funds has improved 9 basis points as compared to the first quarter of 2013. These achievements are in keeping with 2014 objectives to grow and diversify our loan portfolio and improve operating efficiencies.”

Net Interest Income

Net interest income for the three months ended March 31, 2014 and 2013 was $12.6 million and $12.9 million, respectively. Net interest margin for the three months ended March 31, 2014 and 2013 was 3.07% and 3.01%, respectively.

Total interest income decreased $731,000 in the first quarter of 2014 compared to the first quarter of 2013, primarily as a result of a decrease of $5.4 million in the average balance of outstanding loans as well as a decrease in the yield on net loans of 17 basis points. Further impacting the comparison, the Company also recognized a decrease in the average balance of available for sale securities of $86.2 million in the first quarter of 2014 as compared to the same quarter last year, despite an increase in the yield on those assets of 23 basis points.

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