Banking & Finance

UCFC Reports Net Income of $3.69M for First Quarter

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YOUNGSTOWN, Ohio – United Community Financial Corp., holding company of the Home Savings and Loan Co., Tuesday reported first-quarter net income of $3.69 million, or 7.4 cents per diluted share.

This compares to fourth-quarter net income of $2.81 million, or 5.6 cents per diluted share, and $2.09 million the same quarter in 2014, or 4.1 cents per diluted share.

The board of director declared a cash dividend of a penny per share payable May 15 to shareholders of record May 1.

Said the president and CEO, Gary M. Small, in a prepared statement, “Performance for the first quarter was in line with our expectations and we are pleased with the pre-tax earnings, topping $5.5 million for the quarter. The results were driven by a powerful combination of strong loan and deposit growth, meaningful improvement in fee income and a continuous focus on expense management. I expect these themes to be sustained going forward as the entire Home Savings team is very focused on delivering a strong 2015.”

In all measures, UCFC results showed slight to considerable improvement from a year ago.

During the quarter, total loans (which include loans held for sale), rose $30.85 million to $1.2 billion. They stood at $1.065 billion a year ago.

Over the same period, total deposits increased to $1.407 billion from $1.348 billion. At March 31, 2014, total deposits were $1.398 billion.

“Total noontime deposits increased 7.1%,” UCFC said, “which can be substantially attributed to Home Savings’ planned expansion efforts in attracting public [sector] funds.”

Net interest income was $13.88 million compared to $13.35 million at Dec. 31 and $12.60 million March 31, 2014.

Noninterest income (basically fees and commissions) was $4.11 million, compared to $2.91 million the previous quarter and $3.22 million the same quarter a year ago.

Noninterest expense (wages and benefits, rents, marketing, rents, data processing, Federal Deposit Insurance Corp. premiums) fell to $12.61 million from $13.94 million the fourth quarter. The fourth-quarter figure reflects a $2.01 million prepayment penalty incurred for early retirement of a loan.

Excluding the prepayment penalty, UCFC attributed the $755,000 increase to “the cost of funding revenue-producing initiatives.”

While wages and benefits rose to $7.18 million from $6.68 million the fourth quarter, they were still below the $7.58 million recorded the first quarter of 2014.

Total noninterest expense was $13.54 million the first quarter of 2014.

Key ratios for the quarters ended March 31, and Dec. 31 and March 31, 2014:

  • Return on average assets, 0.80%, 0.62%, 0.48%.
  • Return on average equity, 5.99%, 4.70%, 4.52%.
  • Net interest margin, 3.24%, 3.16%, 3.07%.
  • Efficiency ratio, 70.07%, 72.85%, 83.45%.

Asset quality continued to show improvement with total nonperforming loans (those 90 days past due) falling to $20.10 million from $20.45 million at Dec. 31 and $22.98 million March 31, 2014.

Total nonperforming assets (which include repossessed real estate) fell to $23.22 million from $23.92 million the previous quarter and $27.68 million a year ago.

The ratios of nonperforming loans to total loans and nonperforming assets to total assets also showed improvement from last quarter and the year-ago quarter as did the allowance for loan losses to total loans.

Total assets rose slightly to $1.86 billion as did shareholders’ equity to $247.1 million. At March 31, 2014, total assets stood at $1.749 billion and shareholders’ equity was $189.8 million.

Published by The Business Journal, Youngstown, Ohio.