UCFC Reports $3.32 Million in First-Quarter Income

YOUNGSTOWN, Ohio – United Community Financial Corp., parent of the Home Savings and Loan Co., Tuesday reported first-quarter net income of $3.32 million, or 6.9 cents per diluted share.

This compares to fourth-quarter 2015 net income of $4.33 million, or 9.0 cents per diluted share, and year-ago first-quarter income of $3.69 million, or 7.4 cents per diluted share.

UCFC also announced that its board declared a cash dividend of 2.5 cents per common share payable May 13 to shareholders of record May 3.

Other items in UCFC’s earnings release:

  • Assets climbed above $2 billion to $2.036 billion from $1.988 billion at Dec. 31.
  • Commercial and industrial loans jumped to $83.26 million at the end of the quarter from $66.01 million at year-end and $54.04 million a year ago.
  • Deposits rose to $1.467 billion from $1.438 billion at Dec. 31.
  • Tangible book value per common share was $5.27, an increase from $5.14 at year-end. UCFC attributed the increase to “changes in accumulated other comprehensive income as the drop in long-term interest rates resulted in a higher valuation of the company’s securities portfolio.” Shares of UCFC remained unchanged at the closing bell Tuesday, $5.90.

Key performance ratios at March 31, and Dec. 31 and March 31, 2015:

  • Return on average assets, 0.66%, 0.88%, 0.80%.
  • Return on average equity, 5.33%, 7.02%, 5.99%.
  • Net interest margin, 4.21%, 3.16%, 3.24%.
  • Efficiency ratio, 63.90%, 63.74%, 70.07%.

In a prepared statement, the president and CEO of UCFC and Home Savings, Gary M. Small, said, ”The quarter reflects continued execution against our long-term strategy. We are seeing excellent opportunities, particularly in our commercial and residential mortgage business. We delivered strong loan growth, excellent revenue growth and focused expense management. For the quarter, we saw positive operating leverage and revenue up over 9% while expenses were down 1.7% compared to the first quarter of 2015.”

Net interest income was $14.87 million compared to $14.49 million the previous quarter and $13.88 million the year-ago quarter.

Noninterest income was $4.66 million, $5.45 million and $4.12 million for the same periods.

Noninterest expense (includes salaries and benefits, rents, data processing, marketing and Federal Deposit Insurance Corp. premiums) was $12.46 million, less than the $12.76 million reported for the last quarter of last year and the $12.68 million reported a year ago.

The commercial real estate portfolio stood at $184.28 million at March 31, up from $175.46 million the previous quarter and $132.31 million at March 31, 2015.

The residential loan portfolio, both real estate and construction lending, was $780.40 million at March 31, $774.58 million at Dec. 31, and $733.68 million a year ago.

Credit quality remains healthy as reflected by total nonperforming loans (those 90-plus days past due) of $20.11 million, roughly the same as a year ago but up from $16.48 million the preceding quarter.

The ratio of nonperforming assets ($21.95 million, which includes $1.83 million in repossessed real estate) to total assets was 1.08% at March 31, compared to 0.98% at Dec. 31, and 1.25% a year ago.

Total nonperforming assets at March 31, 2015, stood at $23.22 million.

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