UCFC Earns $7.9M in 4th Quarter, Profit in 2011

Friday, March 16, 2012

YOUNGSTOWN, Ohio – United Community Financial Corp., holding company of the Home Savings and Loan Co., Thursday reported fourth-quarter net income of $7.93 million, or 25 cents a share, and 2011 net income of $230,000, or a penny a share.

This compares to UCFC’s fourth-quarter net loss a year ago of $17.33 million, or 56 cents a share, and a net loss of $37.27 million, or $1.22, for all of 2010.

The company attributed much of its improved performances to the successful sale of four branches in northwestern Ohio and gains recognized on the sale of securities.

“Fourth-quarter earnings also benefited from the need for only $2.4 million in loan loss provision expense, down from $22.6 million in the fourth quarter of 2010,” the company said in its earnings release.

In a prepared statement, the president and CEO of UCFC, Patrick W. Bevack, said, “2011 was a year of progress. Not only did UCFC return to profitability, but more significantly, Home Savings has positioned itself with very positive improvements in asset quality measures. Delinquent loans, nonperforming loans and nonperforming assets are all headed in the right direction.” 

Other highlights of the three months ended Dec. 31:

• Delinquent loans (those 30 to 89 days past due) fell to $126.9 million, a decline of $4 million from Sept. 30.
• Nonperforming loans (those 90 days or more past due) stood at $123.1 million, nearly $11 million less than at Sept. 30.
• Nonperforming assets (repossessed properties) fell to $156.58 million, from $172.4 million at the end of the third quarter.
• Home Savings Tier 1 leverage ratio stood at 8.61% and the total risk-based capital ratio of 14.57%. Both figures were up substantially from 8.13% and 13.25% at Sept. 30 and 7.84% and 13.02% respectively at Dec. 31, 2010.

Key ratios for the quarters ended Dec. 31, Sept. 30 and Dec. 31, 2010:

• Return on average assets, 1.53%, (1.69%), (3.06%).
• Return on average equity, 16.97%, (18.98%), (33.91%).
• Net interest margin, 3.04%, 3.18%, 3.17%.
• Efficiency ratio: 87.96%, 79.67%, 78.08%.

Net interest income for the fourth quarter was $14.84 million compared to $16.89 the same quarter a year earlier. Full-year net interest income was $65.18 million compared to $71.36 million in 2010.

Total interest expense fell just under $1 million fourth quarter over fourth quarter, $7.63 million compared to $8.63 million at Dec. 31, 2010. Full-year interest expense came to $31.21 million compared to $39.39 million for 2010.

Noninterest expense (which includes salaries, benefits, rents, Federal Deposit Insurance Corp. premiums and maintenance of repossessed properties) was $16.55 million for the quarter ended Dec. 31 compared to $18.37 million the quarter ended Dec. 31, 2010. Full-year noninterest expense was $63.51 million to $68.33 million for 2010.

The company attributed the lower 2011 figure to “the recognition of lower expenses associated with [repossessed properties]. Lower salaries and benefits paid employees along with lower deposit insurance premiums also contributed.”

Total assets continue to shrink. That figure stood at $2.031 billion at year-end compared to $2.197 billion Dec. 31, 2010. Shareholders’ equity rose to stand at $188.75 million Dec. 31 compared to $176.1 million a year earlier.

Published by The Business Journal, Youngstown, Ohio.