EX-99

EX-99 2 d476986dex99.htm EX-99 EX-99

EXHIBIT 99

LOGO

275 West Federal Street

Youngstown, Ohio 44503-1203

FOR IMMEDIATE RELEASE


Media Contact:		Investor Contact:
Kathy Bushway		Gary M. Small
Senior Vice President, Marketing		President and Chief Executive Officer
Home Savings		United Community Financial Corp.
(330) 742-0638		(330) 742-0472
kbushway@homesavings.com

UCFC ANNOUNCES THIRD QUARTER EARNINGS AND

DIVIDEND

YOUNGSTOWN, Ohio (October 17, 2017) – United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), today announced net income of $7.6 million, or $0.151 per diluted common share, a 37.3% improvement over the $0.110 per diluted common share reported for the quarter ended September 30, 2016.

Third quarter 2017 highlights:

•

Strong organic loan growth, including loans held for sale, at 15.8% annualized

•

Net interest margin increased to 3.45%

•

Return on average assets of 1.17%

•

Return on average tangible equity of 11.35%

•

Efficiency ratio improved to 57.13%

•

Dividend of $0.04 declared per common share

Gary M. Small, President and Chief Executive Officer of the Company commented, “We are very pleased to report strong performance for the quarter. The team delivered excellent loan growth, stable margins, and each business division and market is experiencing growth. Within our markets, the economic conditions remain supportive of steady growth and improvement in both the business and consumer sectors. We continue to see great opportunities in the market.”

Strong Organic Loan Growth

Loan growth for the third quarter, including loans held for sale, totaled $77.0 million, or 15.8% on an annualized basis. Total loans, including loans held for sale, were $2.03 billion at September 30, 2017 compared to $1.96 billion at June 30, 2017.

Commercial loan growth was $48.8 million for the quarter ended September 30, 2017, or 26.3% on an annualized basis. Consistent with strategic objectives, the Company continues to focus on attracting and building commercial relationships. Residential mortgage loans, including loans held for sale, increased $16.0 million, or 6.6% annualized during the quarter. Consumer loans increased $12.5 million, or 20.0%, annualized.

Net Interest Margin Expands

Net interest income was $20.5 million for the three months ended September 30, 2017. Net interest income on a fully-taxable equivalent basis increased slightly to $20.7 million for the quarter ended September 30, 2017, compared to the quarter ended June 30, 2017, and increased 30.0% from $15.9 million for the three months ended September 30, 2016. The increase in net interest income was primarily due to a higher yield of 4.33% earned on loans, or 3 basis points higher than the prior quarter and 22 basis points higher than the same quarter last year. Cost of deposits increased 5 basis points to 0.47% from the quarter ended June 30, 2017 and 9 basis points from the quarter ended September 30, 2016.

The net interest margin was 3.45% for the three months ended September 30, 2017, a 1 basis point decrease from the 3.46% reported in the quarter ended June 30, 2017. For the quarter ended September 30, 2016, the net interest margin was 3.25%. The increased margin from the same quarter last year was primarily due to continued growth in the yield on earning assets along with the recognition of purchase accounting adjustments. Yield on interest earning assets was 4.04%, an increase of 7 basis points from the prior quarter and 38 basis points from the same quarter last year. Cost of funds for the quarter ended September 30, 2017 was 0.63%, an increase of 9 basis points from the quarter ended June 30, 2017 and 18 basis points from the quarter ended September 30, 2016. Net interest margin was 3.40% for the nine months ended September 30, 2017, compared to 3.23% for the same period last year.

Excluding the impact of the amortization of premiums on time deposits and the accretion of the loan portfolio discount of $670,000, the net interest margin would have been 11 basis points lower, or 3.34%, for the three months ended September 30, 2017. Excluding the impact of the amortization of premiums on time deposits and the accretion of the loan portfolio discount of $1.9 million, the net interest margin would have been 11 basis points lower, or 3.29%, for the nine months ended September 30, 2017.

Nonperforming Loans to Net Loans Ratio Decreases

The ratio of nonperforming loans to net loans continues to improve. The ratio was 0.62% at September 30, 2017, which is down from 1.32% reported at September 30, 2016. During the quarter ended September 30, 2017, the Company recognized a net recovery of $174,000, or 3.7 basis points as a percentage of average loans for the three months ended September 30, 2017.

The Company’s provision for loan losses totaled $721,000 for the third quarter of 2017, which was down in comparison to the prior quarter and from the third quarter of 2016. As of September 30, 2017, the Company’s allowance for loan losses to total loans was 1.04%, versus 1.25% at December 31, 2016 and 1.22% at September 30, 2016.

Loans acquired during the first quarter were recorded at fair value. When combining the remaining fair value adjustment of $4.4 million and the Company’s allowance, the Company’s allowance as a percentage of total loans increases to 1.26%.

Non-Interest Income

Non-interest income was $6.3 million in the third quarter of 2017, compared to $7.1 million in the second quarter of 2017 and increased $6.0 million from the third quarter last year. Insurance agency income was 7.8% higher than the previous quarter and 12.9% higher compared to the same quarter last year. Debit/credit card fee income was up 6.1% compared to the third quarter of 2016, but down $355,000 from the prior quarter primarily due to a one-time fee received in the second quarter. Deposit related fee income rose 6.2% in the third quarter of 2017, compared to the second quarter of 2017 and 5.7% compared to the third quarter of 2016.

Non-Interest Expense

Non-interest expense increased 1.9% to $15.5 million during the third quarter of 2017 compared to $15.2 million during the second quarter of 2017 and increased 19.2% compared to $13.0 million recognized in the third quarter of 2016. The Company’s efficiency ratio remained on target at 57.13% for the quarter ended September 30, 2017. Small continued, “Home Savings is focused on providing the best possible service and solutions for our clients and we continue to attract experienced and respected financial professionals to the Home Savings team. Solid performance in 2017 has enabled the organization to accelerate the expansion efforts of our Wealth and Commercial teams across markets.”

Tangible Book Value

Tangible book value per common share at September 30, 2017 was $5.39 compared to $5.32 at December 31, 2016. The increase was primarily due to net income for the year, offset partially by the acquisition in the first quarter.

Dividend to be Paid

On October 17, 2017, the Board of Directors declared a quarterly cash dividend of $0.04 per common share payable November 17, 2017 to shareholders of record at the close of business November 3, 2017.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, October 18, 2017, at 10:00 a.m. ET., to provide an overview of the Company’s third quarter 2017 results and highlights. The conference call may be accessed by calling 1-877-272-7661 ten minutes prior to the start time. Please ask to be joined into the United Community Financial Corp. (UCFC) call. Additionally, a live webcast may be accessed from the Company’s website ir.ucfconline.com. Click on 3rd Quarter 2017 Conference Call on our corporate profile page to join the webcast.

United Community Financial Corp.

Home Savings is a wholly owned subsidiary of the Company and operates retail banking offices, loan production centers and wealth management offices throughout Ohio, western Pennsylvania and West Virginia. Additional information on the Company, Home Savings and James & Sons Insurance may be found on the Company’s web site: ir.ucfconline.com.

###

When used in this press release, the words or phrases “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project”, “will have”, “can expect” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including changes in economic conditions in the Company’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company’s market area, and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company advises readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


	September 30,			June 30,						December 31,
	2017			2017			F/(U)			2016			F/(U)
	(Dollars in thousands)
Assets:
Cash and deposits with banks	$	29,600		$	42,654			-30.6	%	$	27,690			6.9	%
Federal funds sold		8,410			9,360			-10.1	%		18,197			-53.8	%

Total cash and cash equivalents		38,010			52,014			-26.9	%		45,887			-17.2	%
Securities:
Available for sale, at fair value		274,822			287,179			-4.3	%		343,284			-19.9	%
Held to maturity (fair value of $85,024, $87,775 and $96,150, respectively)		85,549			88,559			-3.4	%		97,519			-12.3	%
Loans held for sale, at lower of cost or market		194			199			-2.5	%		165			17.6	%
Loans held for sale, at fair value		84,351			85,954			-1.9	%		62,593			34.8	%
Loans, net of allowance for loan losses of $20,555, $19,660 and $19,087		1,947,695			1,869,095			4.2	%		1,503,577			29.5	%
Federal Home Loan Bank stock, at cost		19,324			19,324			0.0	%		18,068			7.0	%
Premises and equipment, net		22,132			22,424			-1.3	%		20,963			5.6	%
Accrued interest receivable		7,253			7,420			-2.3	%		6,900			5.1	%
Real estate owned and other repossessed assets		1,143			1,197			-4.5	%		1,777			-35.7	%
Goodwill		19,488			19,467			0.1	%		208			9269.2	%
Core deposit intangible		2,017			2,099			-3.9	%		5			40240.0	%
Customer list intangible		2,090			2,060			1.5	%		1,356			54.1	%
Cash surrender value of life insurance		62,050			56,628			9.6	%		55,861			11.1	%
Other assets		36,247			39,946			-9.3	%		33,182			9.2	%

Total assets	$	2,602,365		$	2,553,565			1.9	%	$	2,191,345			18.8	%

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	343,146		$	339,067			1.2	%	$	256,918			33.6	%
Interest bearing		1,595,553			1,554,926			2.6	%		1,258,073			26.8	%

Total deposits		1,938,699			1,893,993			2.4	%		1,514,991			28.0	%
Borrowed funds:
Federal Home Loan Bank advances
Long-term advances		48,341			48,146			0.4	%		47,756			1.2	%
Short-term advances		280,000			280,000			0.0	%		343,000			-18.4	%

Total Federal Home Loan Bank advances		328,341			328,146			0.1	%		390,756			-16.0	%
Repurchase agreements and other		10,191			8,045			26.7	%		512			1890.4	%

Total borrowed funds		338,532			336,191			0.7	%		391,268			-13.5	%
Advance payments by borrowers for taxes and insurance		16,048			21,989			-27.0	%		23,812			-32.6	%
Accrued interest payable		722			392			84.2	%		145			397.9	%
Accrued expenses and other liabilities		16,513			15,520			6.4	%		11,323			45.8	%

Total liabilities		2,310,514			2,268,085			1.9	%		1,941,539			19.0	%

Shareholders’ Equity:
Preferred stock-no par value; 1,000,000 shares authorized and no shares outstanding		—			—			0.0	%		—			0.0	%
Common stock-no par value; 499,000,000 shares authorized; 54,138,910 shares issued and 49,758,487, 49,715,021 and 46,581,370 shares, respectively, outstanding		177,507			177,478			0.0	%		174,360			1.8	%
Retained earnings		164,941			159,422			3.5	%		152,675			8.0	%
Accumulated other comprehensive loss		(17,929	)		(18,448	)		-2.8	%		(21,040	)		-14.8	%
Treasury stock, at cost, 4,380,423, 4,423,889 and 7,557,540 shares, respectively		(32,668	)		(32,972	)		-0.9	%		(56,189	)		-41.9	%

Total shareholders’ equity		291,851			285,480			2.2	%		249,806			16.8	%

Total liabilities and shareholders’ equity	$	2,602,365		$	2,553,565			1.9	%	$	2,191,345			18.8	%

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended															For the Nine Months Ended
	September 30,			June 30,						September 30,						September 30,			September 30,
	2017			2017			F/(U)			2016			F/(U)			2017			2016			F/(U)
	(Dollars in thousands, except per share data)
Interest income
Loans	$	20,697		$	20,011			3.4	%	$	14,633			41.4	%	$	58,266		$	42,618			36.7	%
Loans held for sale		882			872			1.1	%		482			83.0	%		2,415			1,177			105.2	%
Securities:
Available for sale, nontaxable		416			418			-0.5	%		339			22.7	%		1,252			752			66.5	%
Available for sale, taxable		1,276			1,479			-13.7	%		1,630			-21.7	%		4,357			5,346			-18.5	%
Held to maturity, nontaxable		49			52			-5.8	%		66			-25.8	%		163			183			-10.9	%
Held to maturity, taxable		424			454			-6.6	%		466			-9.0	%		1,343			1,567			-14.3	%
Federal Home Loan Bank stock dividends		253			227			11.5	%		180			40.6	%		694			542			28.0	%
Other interest earning assets		51			40			27.5	%		19			168.4	%		171			49			249.0	%

Total interest income		24,048			23,553			2.1	%		17,815			35.0	%		68,661			52,234			31.4	%
Interest expense
Deposits		2,226			1,987			-12.0	%		1,389			-60.3	%		5,834			4,497			-29.7	%
Federal Home Loan Bank advances		1,315			1,064			-23.6	%		661			-98.9	%		3,334			1,754			-90.1	%
Repurchase agreements and other		4			8			50.0	%		5			20.0	%		20			16			-25.0	%

Total interest expense		3,545			3,059			-15.9	%		2,055			-72.5	%		9,188			6,267			-46.6	%

Net interest income		20,503			20,494			0.0	%		15,760			30.1	%		59,473			45,967			29.4	%
Taxable equivalent adjustment		224			229			-2.2	%		185			21.1	%		690			466			48.1	%

Net interest income (FTE)⁽¹⁾		20,727			20,723			0.0	%		15,945			30.0	%		60,163			46,433			29.6	%
Provision for loan losses		721			842			14.4	%		1,344			46.4	%		3,038			3,894			22.0	%

Net interest income after provision for loan losses (FTE)		20,006			19,881			0.6	%		14,601			37.0	%		57,125			42,539			34.3	%

Non-interest income
Insurance agency income		509			472			7.8	%		451			12.9	%		1,454			1,269			14.6	%
Brokerage income		271			301			-10.0	%		337			-19.6	%		894			1,033			-13.5	%
Service fees and other charges:
Deposit related fees		1,499			1,411			6.2	%		1,418			5.7	%		4,200			4,106			2.3	%
Mortgage servicing fees		761			729			4.4	%		715			6.4	%		2,225			2,114			5.3	%
Mortgage servicing rights valuation		(10	)		(2	)		400.0	%		25			-140.0	%		(15	)		(702	)		97.9	%
Mortgage servicing rights amortization		(492	)		(486	)		1.2	%		(525	)		-6.3	%		(1,426	)		(1,560	)		8.6	%
Other service fees		21			33			-36.4	%		43			-51.2	%		83			108			-23.1	%
Net gains (losses):
Securities available for sale		236			301			-21.6	%		218			8.3	%		566			604			-6.3	%
Mortgage banking income		1,688			2,117			-20.3	%		1,957			-13.7	%		5,128			5,208			-1.5	%
Real estate owned and other repossessed assets charges, net		(73	)		(18	)		305.6	%		—			-100.0	%		(143	)		(76	)		-88.2	%
Debit/credit card fees		971			1,326			-26.8	%		915			6.1	%		3,220			2,916			10.4	%
Trust fee income		449			420			6.9	%		—			100.0	%		1,151			—			100.0	%
Other income		475			486			-2.3	%		449			5.8	%		1,442			1,421			1.5	%

Total non-interest income		6,305			7,090			-11.1	%		6,003			5.0	%		18,779			16,441			14.2	%

Non-interest expense
Salaries and employee benefits		8,736			8,749			0.1	%		6,950			-25.7	%		26,460			21,224			-24.7	%
Occupancy		1,013			943			-7.4	%		847			-19.6	%		2,920			2,564			-13.9	%
Equipment and data processing		2,303			2,306			0.1	%		1,926			-19.6	%		6,688			5,648			-18.4	%
Financial institutions tax		348			510			31.8	%		411			15.3	%		1,348			1,284			-5.0	%
Advertising		285			265			-7.5	%		290			1.7	%		674			638			-5.6	%
Amortization of intangible assets		113			113			0.0	%		72			-56.9	%		309			95			-225.3	%
FDIC insurance premiums		301			340			11.5	%		155			-94.2	%		829			768			-7.9	%
Other insurance premiums		115			109			-5.5	%		89			-29.2	%		336			251			-33.9	%
Professional fees:
Legal and consulting fees		156			184			15.2	%		266			41.4	%		569			459			-24.0	%
Other professional fees		666			420			-58.6	%		286			-132.9	%		1,606			925			-73.6	%
Real estate owned and other repossessed asset expenses		33			23			-43.5	%		41			19.5	%		118			190			37.9	%
Acquisition related expenses		—			—			0.0	%		—			0.0	%		4,962			—			-100.0	%
Other expenses		1,395			1,214			-14.9	%		1,645			15.2	%		4,111			4,256			3.4	%

Total non-interest expenses		15,464			15,176			-1.9	%		12,978			-19.2	%		50,930			38,302			-33.0	%

Income before income taxes		10,847			11,795			-8.0	%		7,626			42.2	%		24,974			20,678			20.8	%
Taxable equivalent adjustment		224			229			2.2	%		185			-21.1	%		690			466			-48.1	%
Income tax expense		3,067			3,377			9.2	%		2,288			-34.0	%		7,001			6,409			-9.2	%

Net income	$	7,556		$	8,189			-7.7	%	$	5,153			46.6	%	$	17,283		$	13,803			25.2	%

Earnings per common share:
Basic	$	0.152		$	0.165			-7.9	%	$	0.111			37.2	%	$	0.350		$	0.293			19.5	%
Diluted		0.151			0.163			-7.4	%		0.110			37.3	%		0.347			0.292			18.8	%

⁽¹⁾

Net interest income is also presented on a fully taxable equivalent (FTE) basis, the Company believes this non-GAAP measure is the preferred industry measurement for this item.

UNITED COMMUNITY FINANCIAL CORP.

CONSOLIDATED AVERAGE BALANCES

(Unaudited)


	For the three months ended
	September 30, 2017							June 30, 2017							September 30, 2016
	Average outstanding balance		Interest earned/ paid		Yield/ rate			Average outstanding balance		Interest earned/ paid		Yield/ rate			Average outstanding balance		Interest earned/ paid		Yield/ rate
	(Dollars in thousands)
Interest earning assets:
Net loans ⁽¹⁾	$	1,906,786	$	20,699		4.34	%	$	1,863,525	$	20,012		4.30	%	$	1,422,294	$	14,634		4.12	%
Loans held for sale		88,854		882		3.97	%		80,205		872		4.35	%		49,095		482		3.93	%

Total loans, net		1,995,640		21,581		4.33	%		1,943,730		20,884		4.30	%		1,471,389		15,116		4.11	%
Securities:
Available for sale-taxable		224,927		1,276		2.27	%		258,217		1,479		2.29	%		300,522		1,630		2.17	%
Available for sale-nontaxable ⁽²⁾		59,057		611		4.14	%		59,209		619		4.18	%		49,489		489		3.95	%
Held to maturity-taxable		77,947		424		2.18	%		80,817		454		2.25	%		92,077		466		2.02	%
Held to maturity-nontaxable ⁽²⁾		9,239		76		3.29	%		9,843		79		3.21	%		13,563		100		2.95	%

Total securities		371,170		2,387		2.57	%		408,086		2,631		2.58	%		455,651		2,685		2.36	%
Federal Home Loan Bank stock		19,324		253		5.24	%		19,324		227		4.70	%		18,068		180		3.98	%
Other interest earning assets		18,881		51		1.08	%		22,129		40		0.72	%		20,028		19		0.38	%

Total interest earning assets		2,405,015		24,272		4.04	%		2,393,269		23,782		3.97	%		1,965,136		18,000		3.66	%
Non-interest earning assets		185,773							180,524							132,922

Total assets	$	2,590,788						$	2,573,793						$	2,098,058

Interest bearing liabilities:
Deposits:
Checking accounts	$	591,982		468		0.32	%	$	633,276		480		0.30	%	$	491,553		238		0.19	%
Savings accounts		308,829		28		0.04	%		308,683		27		0.03	%		290,998		24		0.03	%
Certificates of deposit
Customer certificates of deposit		526,697		1,333		1.01	%		504,397		1,166		0.92	%		425,307		1,127		1.06	%
Brokered certificates of deposit		135,956		397		1.17	%		133,082		314		0.94	%		—		—		—	%

Total certificates of deposit		662,653		1,730		1.04	%		637,479		1,480		0.93	%		425,307		1,127		1.06	%

Total interest bearing deposits		1,563,464		2,226		0.57	%		1,579,438		1,987		0.50	%		1,207,858		1,389		0.46	%
Federal Home Loan Bank advances
Long-term advances		48,212		388		3.22	%		48,019		370		3.08	%		47,432		319		2.69	%
Short-term advances		310,152		927		1.20	%		286,604		694		0.97	%		326,250		342		0.42	%

Total Federal Home Loan Bank advances		358,364		1,315		1.47	%		334,623		1,064		1.27	%		373,682		661		0.71	%
Repurchase agreements and other		6,483		4		0.25	%		4,844		8		0.66	%		520		5		3.85	%

Total borrowed funds		364,847		1,319		1.45	%		339,467		1,072		1.26	%		374,202		666		0.71	%

Total interest bearing liabilities	$	1,928,311		3,545		0.74	%	$	1,918,905		3,059		0.64	%	$	1,582,060		2,055		0.52	%

Non-interest bearing liabilities
Total noninterest bearing deposits		337,067							333,784							242,310
Other noninterest bearing liabilities		35,576							38,771							27,769

Total noninterest bearing liabilities		372,643							372,555							270,079

Total liabilities	$	2,300,954						$	2,291,460						$	1,852,139
Shareholders’ equity		289,834							282,333							245,919

Total liabilities and equity	$	2,590,788						$	2,573,793						$	2,098,058

Net interest income and interest rate spread			$	20,727		3.30	%			$	20,723		3.33	%			$	15,945		3.14	%

Net interest margin						3.45	%						3.46	%						3.25	%
Average interest earning assets to average interest bearing liabilities						124.72	%						124.72	%						124.21	%
Interest bearing deposits
Checking accounts	$	591,982	$	468		0.32	%	$	633,276	$	480		0.30	%	$	491,553	$	238		0.19	%
Savings accounts		308,829		28		0.04	%		308,683		27		0.03	%		290,998		24		0.03	%
Customer certificates of deposit		526,697		1,333		1.01	%		504,397		1,166		0.92	%		425,307		1,127		1.06	%

Total customer deposits		1,427,508		1,829		0.51	%		1,446,356		1,673		0.46	%		1,207,858		1,389		0.46	%
Brokered certificates of deposit		135,956		397		1.17	%		133,082		314		0.94	%		—		—		—	%

Total interest bearing deposits		1,563,464		2,226		0.57	%		1,579,438		1,987		0.50	%		1,207,858		1,389		0.46	%
Noninterest bearing deposits		337,067		—		0.00	%		333,784		—		0.00	%		242,310		—		0.00	%

Total average deposits and cost of deposits	$	1,900,531	$	2,226		0.47	%	$	1,913,222	$	1,987		0.42	%	$	1,450,168	$	1,389		0.38	%
Other interest bearing liabilities
Federal Home Loan Bank advances
Long term advances	$	48,212	$	388		3.22	%	$	48,019	$	370		3.08	%	$	47,432	$	319		2.69	%
Short term advances		310,152		927		1.20	%		286,604		694		0.97	%		326,250		342		0.42	%

Total Federal Home Loan Bank advances		358,364		1,315		1.47	%		334,623		1,064		1.27	%		373,682		661		0.71	%
Repurchase agreements and other		6,483		4		0.25	%		4,844		8		0.66	%		520		5		3.85	%

Total borrowed funds		364,847		1,319		1.45	%		339,467		1,072		1.26	%		374,202		666		0.71	%

Total average deposits and other interest bearing liabilities and total cost of funds	$	2,265,378	$	3,545		0.63	%	$	2,252,689	$	3,059		0.54	%	$	1,824,370	$	2,055		0.45	%

⁽¹⁾	Nonaccrual loans are included in the average balance at a yield of 0%.

⁽²⁾	Yields are on a fully taxable equivalent basis.

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands, except per share data)
Financial Data
Total assets	$	2,602,365		$	2,553,565		$	2,557,010		$	2,191,345		$	2,160,234
Total loans, net		1,947,695			1,869,095			1,835,000			1,503,577			1,473,949
Total securities		360,371			375,738			430,357			440,803			457,671
Total deposits		1,938,699			1,893,993			1,905,205			1,514,991			1,473,043
Average interest-bearing deposits		1,563,464			1,579,438			1,434,644			1,236,496			1,207,858
Average noninterest-bearing deposits		337,067			333,784			306,402			257,412			242,310
Total shareholders’ equity		291,851			285,480			277,102			249,806			256,403
Net interest income		20,503			20,494			18,476			16,334			15,760
Net interest income (FTE)⁽¹⁾		20,727			20,723			18,713			16,553			15,945
Provision for loan losses		721			842			1,475			1,493			1,344
Noninterest income		6,305			7,090			5,384			5,635			6,003
Noninterest expense		15,464			15,176			20,290			13,717			12,978
Income tax expense		3,067			3,377			557			1,734			2,288
Net income		7,556			8,189			1,538			5,025			5,153

Share Data
Basic earnings per common share	$	0.152		$	0.165		$	0.032		$	0.108		$	0.111
Diluted earnings per common share		0.151			0.163			0.032			0.107			0.110
Book value per common share		5.87			5.74			5.58			5.36			5.51
Tangible book value per common share		5.39			5.27			5.10			5.32			5.48
Market value per common share		9.60			8.31			8.34			8.94			7.11

Common shares outstanding at end of period		49,758			49,715			49,695			46,581			46,542
Weighted average shares outstanding—basic		49,460			49,392			48,289			46,216			46,167
Weighted average shares outstanding—diluted		49,851			49,795			48,646			46,415			46,392

Key Ratios
Return on average assets ⁽²⁾		1.17	%		1.27	%		0.25	%		0.93	%		0.98	%
Return on average equity ⁽³⁾		10.43	%		11.60	%		2.24	%		8.00	%		8.38	%
Return on tangible equity ⁽⁴⁾		11.35	%		12.66	%		2.39	%		8.05	%		8.43	%
Net interest margin		3.45	%		3.46	%		3.28	%		3.26	%		3.25	%
Efficiency ratio		57.13	%		54.71	%		83.78	%		61.89	%		59.40	%
Nonperforming loans to net loans, end of period		0.62	%		0.58	%		0.58	%		0.83	%		1.32	%
Nonperforming assets to total assets, end of period		0.75	%		0.72	%		0.74	%		0.94	%		0.98	%
Allowance for loan loss as a percent of loans, end of period		1.04	%		1.04	%		1.02	%		1.25	%		1.22	%
Delinquent loans to total net loans, end of period		0.89	%		0.77	%		0.81	%		1.26	%		1.48	%

⁽¹⁾	Net interest income is presented on a fully taxable equivalent (FTE) basis, the Company believes this non-GAAP measure is the preferred industry measurement for this item

⁽²⁾	Net income divided by average total assets

⁽³⁾	Net income divided by average total equity

⁽⁴⁾	Net income divided by average total equity, minus average intangible assets

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands)
Loan Portfolio Composition
Commercial loans
Multi-family	$	126,977		$	121,565		$	108,330		$	93,597		$	107,066
Owner/nonowner occupied commercial real estate		366,747			342,300			325,633			231,401			225,699
Land		13,666			10,867			9,276			8,373			9,401
Construction		108,106			96,765			94,727			68,158			45,137
Commercial and industrial		175,580			170,758			170,398			102,729			106,880

Total		791,076			742,255			708,364			504,258			494,183
Residential mortgage loans
Real estate		851,863			834,349			839,413			762,926			755,893
Construction		57,081			56,946			51,372			35,695			35,875

Total		908,944			891,295			890,785			798,621			791,768
Consumer loans
Consumer		263,692			251,151			251,215			216,598			203,851

Total		263,692			251,151			251,215			216,598			203,851

Total loans		1,963,712			1,884,701			1,850,364			1,519,477			1,489,802
Less:
Allowance for loan losses		20,555			19,660			18,970			19,087			18,234
Deferred loan costs, net		(4,538	)		(4,054	)		(3,606	)		(3,187	)		(2,381	)

Total		16,017			15,606			15,364			15,900			15,853

Total loans, net		1,947,695			1,869,095			1,835,000			1,503,577			1,473,949
Loans held for sale, net		84,545			86,153			75,698			62,758			60,345

Total loans	$	2,032,240		$	1,955,248		$	1,910,698		$	1,566,335		$	1,534,294


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts	$	173,170		$	175,800		$	211,875		$	158,271		$	170,348
Non-interest bearing checking accounts		343,146			339,067			333,940			256,918			252,923

Total checking accounts		516,316			514,867			545,815			415,189			423,271
Savings accounts		307,169			310,012			308,533			294,563			290,325
Money market accounts		418,294			427,348			418,449			316,813			312,124

Total non-time deposits		1,241,779			1,252,227			1,272,797			1,026,565			1,025,720
Certificates of deposit less than $250,000		617,839			557,300			547,823			425,893			381,605
Certificates of deposit greater than $250,000		79,080			84,466			84,585			62,533			65,718

Total certificates of deposit		696,919			641,766			632,408			488,426			447,323

Total deposits	$	1,938,698		$	1,893,993		$	1,905,205		$	1,514,991		$	1,473,043

UNITED COMMUNITY FINANCIAL CORP.

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands)
Allowance For Loan Losses
Beginning balance	$	19,660		$	18,970		$	19,087		$	18,234		$	17,172
Provision		721			842			1,475			1,493			1,344
Net recoveries (chargeoffs)		174			(152	)		(1,592	)		(640	)		(282	)

Ending balance	$	20,555		$	19,660		$	18,970		$	19,087		$	18,234


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands)
Net (Charge-offs) Recoveries
Commercial loans
Multi-family	$	(4	)	$	4		$	1		$	5		$	35
Owner/nonowner occupied commercial real estate		39			24			(1,141	)		(570	)		17
Land		—			—			(25	)		(100	)		(250	)
Construction		—			—			—			—			—
Commercial and industrial		314			108			1			139			192

Total		349			136			(1,164	)		(526	)		(6	)
Residential mortgage loans
Real estate		(291	)		(239	)		(196	)		(123	)		(146	)
Construction		—			—			—			—			—

Total		(291	)		(239	)		(196	)		(123	)		(146	)
Consumer loans
Consumer		116			(49	)		(232	)		9			(130	)

Total		116			(49	)		(232	)		9			(130	)

Total net chargeoffs	$	174		$	(152	)	$	(1,592	)	$	(640	)	$	(282	)


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands)
Nonperforming Loans
Commercial loans
Multi-family	$	402		$	413		$	419		$	—		$	—
Owner/nonowner occupied commercial real estate		1,234			1,331			1,398			3,546			6,879
Land		9			9			9			34			134
Construction		—			—			—			—			—
Commercial and industrial		234			190			354			361			4,242

Total		1,879			1,943			2,180			3,941			11,255
Residential mortgage loans
Real estate		6,627			6,701			5,868			6,084			5,835
Construction		—			—			—			—			—

Total		6,627			6,701			5,868			6,084			5,835
Consumer loans
Consumer		2,340			2,139			2,513			2,414			2,358

Total		2,340			2,139			2,513			2,414			2,358

Total nonperforming loans	$	10,846		$	10,783		$	10,561		$	12,439		$	19,448

Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status	$	7,642		$	7,708		$	7,581		$	7,859		$	15,350
Past due 90 days and still accruing		8			2			—			—			—

Past due 90 days		7,650			7,710			7,581			7,859			15,350
Past due less than 90 days and on nonaccrual		3,196			3,073			2,980			4,580			4,098

Total nonperforming loans		10,846			10,783			10,561			12,439			19,448
Other real estate owned		1,133			1,197			1,137			1,726			1,790
Other classified assets		6,384			6,384			6,384			6,384			—
Repossessed assets		10			—			—			51			3

Total nonperforming assets	$	18,373		$	18,364		$	18,082		$	20,600		$	21,241

UNITED COMMUNITY FINANCIAL CORP.

NON-GAAP DISCLOSURE RECONCILIATION

(Unaudited)

Reconciliation of Average Shareholders’ Equity to Average Tangible Equity:


	At or for the quarters ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	(Dollars in thousands, except per share data)
Average shareholders equity	$	289,834		$	282,335		$	274,277		$	251,230		$	245,919
Average intangible assets		23,642			23,699			26,935			1,543			1,556

Average tangible equity	$	266,192		$	258,636		$	247,342		$	249,687		$	244,363

Net income	$	7,556		$	8,189		$	1,538		$	5,025		$	5,153

Return on tangible equity		11.35	%		12.66	%		2.49	%		8.05	%		8.43	%

Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income:


	For the quarters ended
	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
	(Dollars in thousands)
Interest income	$	24,048	$	23,553	$	21,060	$	18,495	$	17,815
Fully taxable equivalent adjustment		224		229		237		219		185

Fully taxable equivalent interest income		24,272		23,782		21,297		18,714		18,000
Interest expense		3,545		3,059		2,584		2,161		2,055

Fully taxable net interest income	$	20,727	$	20,723	$	18,713	$	16,553	$	15,945


	For the nine months ended
	September 30, 2017		September 30, 2016
	(Dollars in thousands)
Interest income	$	68,661	$	52,234
Fully taxable equivalent adjustment		690		466

Fully taxable equivalent interest income		69,351		52,700
Interest expense		9,188		6,267

Fully taxable net interest income	$	60,163	$	46,433

Reconciliation of Net Interest Margin without Accretion/Amortization of Purchase Accounting Adjustments:


	For the three months ended September 30, 2017			For the nine months ended September 30, 2017
	(Dollars in thousands)			(Dollars in thousands)
Fully taxable net interest income	$	20,727		$	60,163
Accretion/amortization of purchase accounting adjustments		670			1,855

Fully taxable net interest income, without purchase accounting adjustments	$	20,057		$	58,308

Average interest earning assets	$	2,405,015		$	2,359,579
Net interest margin excluding accretion amortization of purchase accounting adjustments		3.34	%		3.29	%

Reconciliation of Coverage Ratio to Coverage Ratio with Fair Value Adjustments Included with Allowance for Loan Losses:


	September 30, 2017
	(Dollars in thousands)
Allowance for loan losses	$	20,555
Fair value adjustments		4,383

		24,938

Loans, net	$	1,947,695
Coverage ratio with the Fair Value adjustments included in Allowance for loan losses		1.26	%

Tangible Book Value Per Share:

Tangible book value, per share is defined at shareholders equity minus intangible assets divided by the number of shares outstanding.


	At the quarters ended
	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
			(Dollars in thousands, except per share data)
Total shareholders’ equity	$	291,851	$	285,480	$	277,102	$	249,806	$	256,403
Goodwill		19,488		19,467		19,460		208		—
Customer list intangible		2,090		2,060		2,090		1,356		1,538
Core deposit intangible		2,017		2,099		2,182		5		6
Total common shares outstanding		49,758,487		49,715,021		49,695,487		46,581,370		46,542,388
Tangible book value, as reported	$	5.39	$	5.27	$	5.10	$	5.32	$	5.48