UCFC Reports Record Quarterly Net Income

YOUNGSTOWN, Ohio – United Community Financial Corp., holding company of the Home Savings and Loan Co., Tuesday reported second-quarter net income of $5.33 million, or diluted earnings of 11.2 cents a share, both records.

It also announced its directors raised the quarterly dividend to three cents a share, up from 2.5 cents, payable Aug. 12 to shareholders of record Aug. 1.

UCFC reported second-quarter 2015 net income of $4.13 million, or 8.4 cents per diluted share, and first quarter 2016 net income of $3.32 million, or 6.9 cents per diluted share. So second-quarter earnings are 29.2% higher than the year-ago quarter and diluted earnings per share are 33% higher, UCFC said.

In a prepared statement, the president and CEO, Gary M. Small, said, “I am very proud of the team’s accomplishments during a very challenging period. Regardless of the somewhat unfavorable rate environment facing the industry, we have managed to stay on our growth path in each business group. Year over year, loan growth is up 15%, revenue is up over 10% and margin s improving while expenses remain relatively flat. Home Savings developed a more diverse business model over the past 24 months. We are benefiting from those efforts today and we are better positioned to continue to deliver strong performance in the less certain times ahead.”

Key financial ratios for the quarters ended June 30, March 31 and June 30, 2015:

  • Return on average assets, 1.04%, 0.66%, 0.68%.
  • Return on average equity, 8.63%, 5.33%, 7.02%.
  • Net interest margin, 3.24%, 3.21%, 3.16%.
  • Efficiency ratio, 60.81%, 63.90%, 63.74%.

Highlights UCFC cited included the 14.5% increase in total loans year-over-year and the 1.1% increase in total deposits.

Total loans, including those held for sale, stood at $1.442 billion at June 30 compared to $1.352 billion a year earlier.

Total deposits rose to $1.458 billion, up from $1.438 billion at June 30, 2015.

Total assets stood at $2.081 billion at the end of the second quarter compared to $1.988 billion a year earlier.

Noninterest expense (includes salaries and benefits, rents, data processing. Marketing and Federal Deposit Insurance Corp. premiums) was $12.86 million for the quarter ended June 30 compared to $12.46 million the preceding quarter and $12.76 million the year-ago quarter.

Net interest income on a fully taxable equivalent basis $15.33 million compared to $14.87 million the first quarter and $14.49 million the year-ago quarter. Noninterest income (includes fees, servicing rights and from its insurance agency) $5.78 million, up from $4.66 million the preceding quarter and $5.45 million the second quarter of 2015. James & Sons contributed income of $818,000.

Credit quality remains strong as reflected by Home Savings having net chargeoff activity of 0.04% during the quarter, UCFC reported. The allowance for loan losses was increased to $17.17 million, up $395,000 from $16.90 million the first quarter. “The first quarter,” UCFC said, “included the impact of the chargeoff of a long-held commercial real estate loan” it did not identify.

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