United Community Financial Corp. (UCFC, Financial) filed Quarterly Report for the period ended 2009-03-31.
United Community Financial Corporation is a very traditional savings and loan company. While the company intends to remain committed to financing home ownership it also believes it must gradually expand the types of loan products it offers in order to meet the needs of its market area and to improve profitability. The company began to commit substantial resources to the commercial lending area which is headed and staffed by individuals with very extensive commercial banking experience. United Community Financial Corp. has a market cap of $56.2 million; its shares were traded at around $1.82 with and P/S ratio of 0.4. United Community Financial Corp. had an annual average earning growth of 13.7% over the past 10 years. GuruFocus rated United Community Financial Corp. the business predictability rank of 3-star.
Cash and cash equivalents increased $3.4 million to $46.8 million at March 31, 2009, compared to $43.4 million at December 31, 2008. This change is primarily the result of an increase in checks awaiting deposit at the Federal Reserve and cash maintained in Home Savings account at the Federal Reserve due to the sale of Butler Wick Trust. These increases were partially offset by a decrease in cash maintained by Home Savings branch locations.
Available for sale securities increased $33.3 million, or 15.4%, from December 31, 2008, to March 31, 2009. Home Savings purchased $42.0 million in securities during the first three months of 2009. These purchases were made primarily to replace the paydowns and maturities that occurred within the portfolio. These purchases were partially offset by paydowns and maturities of $10.0 million at Home Savings and other than temporary impairment charges of $150,000 at United Community. The remaining difference is a result of changes in the market valuation of the portfolio, net of any amortization or accretion.
Net loans decreased $88.6 million from December 31, 2008, to March 31, 2009. Real estate loans decreased $58.1 million, consumer loans decreased $17.0 million, and commercial loans decreased $11.4 million. The overall decrease in loans is attributable primarily to the strategic objective of reducing exposure to commercial real estate and construction lending. Furthermore, due to a much lower interest rate environment, refinance activity has accelerated. The result of this acceleration was a decline in the portfolio of one-to four-family loans as existing loans in the portfolio are refinanced and a majority of the newly originated loans are sold into the secondary market.
The allowance for loan losses increased to $37.9 million, or 1.76% of the net loan portfolio and 36.1% of nonperforming loans as of March 31, 2009, from $36.0 million or 1.61% of the net loan portfolio and 33.71% of nonperforming loans as of December 31, 2008. Provision totaling $8.4 million during the three months ended March 31, 2009 were partially offset by charge-offs totaling $6.7 million. The allowance for loan losses is a valuation allowance for probable credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required based on an analysis using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, general economic conditions in the market area and other factors. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers pools of loans and is based on historical loss experience adjusted for current factors, but the entire allowance is available for any loan that, in managements judgment, should be charged-off.
Nonperforming loans consist of loans past due 90 days or more, loans past due less than 90 days that are on nonaccrual status, and restructured loans. Nonperforming loans were $104.9 million, or 4.96% of net loans, at March 31, 2009, compared to $106.7 million, or 4.84% of net loans, at December 31, 2008. The schedule below summarizes the change in nonperforming loans for the first three months of 2009.
Read the The complete Report
United Community Financial Corporation is a very traditional savings and loan company. While the company intends to remain committed to financing home ownership it also believes it must gradually expand the types of loan products it offers in order to meet the needs of its market area and to improve profitability. The company began to commit substantial resources to the commercial lending area which is headed and staffed by individuals with very extensive commercial banking experience. United Community Financial Corp. has a market cap of $56.2 million; its shares were traded at around $1.82 with and P/S ratio of 0.4. United Community Financial Corp. had an annual average earning growth of 13.7% over the past 10 years. GuruFocus rated United Community Financial Corp. the business predictability rank of 3-star.
Highlight of Business Operations:
Total assets decreased $55.5 million to $2.6 billion at March 31, 2009, compared to December 31, 2008. Contributing to the change were decreases in net loans of $88.6 million, loans held for sale of $1.9 million, and assets of discontinued operations of $5.1 million. These decreases were offset partially by increases in cash and cash equivalents of $3.4 million, securities available for sale of $33.3 million, real estate owned and other repossessed assets of $1.2 million and other assets of $3.3 million.Cash and cash equivalents increased $3.4 million to $46.8 million at March 31, 2009, compared to $43.4 million at December 31, 2008. This change is primarily the result of an increase in checks awaiting deposit at the Federal Reserve and cash maintained in Home Savings account at the Federal Reserve due to the sale of Butler Wick Trust. These increases were partially offset by a decrease in cash maintained by Home Savings branch locations.
Available for sale securities increased $33.3 million, or 15.4%, from December 31, 2008, to March 31, 2009. Home Savings purchased $42.0 million in securities during the first three months of 2009. These purchases were made primarily to replace the paydowns and maturities that occurred within the portfolio. These purchases were partially offset by paydowns and maturities of $10.0 million at Home Savings and other than temporary impairment charges of $150,000 at United Community. The remaining difference is a result of changes in the market valuation of the portfolio, net of any amortization or accretion.
Net loans decreased $88.6 million from December 31, 2008, to March 31, 2009. Real estate loans decreased $58.1 million, consumer loans decreased $17.0 million, and commercial loans decreased $11.4 million. The overall decrease in loans is attributable primarily to the strategic objective of reducing exposure to commercial real estate and construction lending. Furthermore, due to a much lower interest rate environment, refinance activity has accelerated. The result of this acceleration was a decline in the portfolio of one-to four-family loans as existing loans in the portfolio are refinanced and a majority of the newly originated loans are sold into the secondary market.
The allowance for loan losses increased to $37.9 million, or 1.76% of the net loan portfolio and 36.1% of nonperforming loans as of March 31, 2009, from $36.0 million or 1.61% of the net loan portfolio and 33.71% of nonperforming loans as of December 31, 2008. Provision totaling $8.4 million during the three months ended March 31, 2009 were partially offset by charge-offs totaling $6.7 million. The allowance for loan losses is a valuation allowance for probable credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required based on an analysis using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, general economic conditions in the market area and other factors. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers pools of loans and is based on historical loss experience adjusted for current factors, but the entire allowance is available for any loan that, in managements judgment, should be charged-off.
Nonperforming loans consist of loans past due 90 days or more, loans past due less than 90 days that are on nonaccrual status, and restructured loans. Nonperforming loans were $104.9 million, or 4.96% of net loans, at March 31, 2009, compared to $106.7 million, or 4.84% of net loans, at December 31, 2008. The schedule below summarizes the change in nonperforming loans for the first three months of 2009.
Read the The complete Report
