United Community Financial Corp. (NASDAQ:UCFC) Q1 2019 Earnings Conference Call - Final Transcript

Apr 17, 2019 • 10:00 am ET


United Community Financial Corp. (NASDAQ:UCFC) Q1 2019 Earnings Conference Call - Final Transcript


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Hello, and welcome to the United Community First Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to your host today, Tim Esson. Please go ahead, sir.

Timothy W. Esson

Good morning, and thank you for participating in today's conference call. As always, before we begin, I would like to refer you to the Company's forward-looking statements and risk factors that appear on the screen in front of you. Additionally, the risk factors can be found at our Investor Relations website, ir.ucfconline.com. This statement provides the standard cautionary language required by the Securities and Exchange Commission for forward-looking statements that may be included in today's call. In addition, a copy of the first quarter earnings release can be obtained at the same website.

With that said, I would now like to introduce Gary Small, President and CEO of both UCFC and Home Savings.

Gary M. Small

Thanks Tim, and good morning to all. Thank you for joining us. We're pleased to report first quarter earnings of $8.7 million or $0.176 per share. From a distance, the results may appear relatively flat versus the prior year's first quarter results, however as we peel back the figures, you'll see why we are enthusiastic about the outcome. We delivered solid loan growth on a linked quarter basis over 7% annualized and first quarter always includes the share pay downs particularly around the CRE book and this year was no exception. New business generation gathered momentum over the course of the quarter and we feel we're well positioned as we head into Q2.

Deposit growth for the quarter versus prior year first quarter was up over 6%. Our seasonal municipal deposits make the year-over-year comparison a little bit more appropriate than linked quarter. We continue to experience excellent growth in our business, non-interest bearing and municipal deposit base. Business came in -- up 24%, non-interest bearing up over 8%, and our public funds up over 27% over the same period of last year.

Margin for the quarter fell right in line with expectations at 338 basis points and our deposit betas are holding steady. While Wall Street may look a little confused from time to time, Main Street is looking really good. We closed the quarter with the lowest percentage of loan delinquency in our history across each of our major lending portfolios, that would be commercial, consumer and our residential mortgage portfolio, which is large for an organization of our size.

For the quarter, we experienced a single basis point of net charge-offs. Falling interest rates created a bit of noise in the non-interest income category for the quarter. We adjusted our mortgage servicing rights asset downward by about $500,000 for the quarter. However, we did take advantage of the rate environment and exceeded our residential loan gain on sale expectations. The additional gain on sale