YOUNGSTOWN, Ohio--(BUSINESS WIRE)--

United Community Financial Corp. (Company) (NASDAQ: UCFC), parent company of Home Savings Bank (Home Savings), today announced net income of $8.2 million, or $0.163 per diluted common share, a 45.5% improvement over the $0.112 per diluted common share reported for the quarter ended June 30, 2016.

Second quarter 2017 highlights:

• Organic loan growth, including loans held for sale, strong at 9.4% annualized
• Revenue growth of 31%, compared to the second quarter of 2016
• Net interest margin increased to 3.46%
• Return on average assets of 1.27%
• Return on average equity of 11.60%, return on average tangible equity of 12.66%
• Efficiency ratio improved to 54.71%
• Dividend of $0.04 declared per common share, up 33%

Gary M. Small, President and Chief Executive Officer of the Company commented, “The results for the quarter reflect the successful efforts of the entire Home Savings team. Outstanding earnings were driven by strong revenue growth combined with a disciplined approach to managing the business. We continue to see very good opportunities across all our markets and business lines and believe the quarterly performance to be reflective of the organization’s capabilities going forward.”

Strong Organic Loan Growth

Loan growth for the second quarter, including loans held for sale, totaled $45.2 million, or 9.4%. Total loans, including loans held for sale, were $1.97 billion at June 30, 2017 compared to $1.93 billion at March 31, 2017.

Commercial loan growth was $33.9 million for the quarter ended June 30, 2017, a 19.1% annualized organic growth rate. The Company continues to focus on attracting and building commercial relationships. Residential mortgage loans increased modestly during the quarter. The Company sold $27.9 million of residential mortgage loans that were reclassified from the portfolio to held for sale at the end of the second quarter, consistent with our strategic objectives.

Net Interest Margin Expands

Net interest income increased 10.9% to $20.5 million for the quarter ended June 30, 2017, compared to $18.5 million for the quarter ended March 31, 2017 and increased 33.7% from $15.3 million for the three months ended June 30, 2016. The increase in net interest income was primarily due to yield earned on loans was 4.30%, or 19 basis points higher than the prior quarter and 16 basis points higher than the same quarter last year while cost of deposits only increased 5 basis points to 0.42% from the quarter ended March 31, 2017 and 1 basis point from the quarter ended June 30, 2016.

The net interest margin was 3.46% for the three months ended June 30, 2017, an 18 basis point increase from the 3.28% reported in the quarter ended March 31, 2017. For the quarter ended June 30, 2016, the net interest margin was 3.25%. The increased margin for both time periods was primarily due to continued growth in yield on earning assets along with the recognition of purchase accounting adjustments. Yield on interest earning assets was 3.97%, an increase of 23 basis points from the prior quarter and 29 basis points from the same quarter last year. Cost of funds for the quarter ended June 30, 2017 was 0.64%, an increase of 6 basis points from the quarter ended March 31, 2017 and 7 basis points from the quarter ended June 30, 2016. Net interest margin was 3.38% for the six months ended June 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 $1.2 million, the net interest margin would have been 11 basis points lower, or 3.27%, for the six months ended June 30, 2017.

Nonperforming Loans to Total Loans Ratio Decreases

The ratio of nonperforming loans to total loans continues to improve. The ratio was 0.58% at June 30, 2017, which is down from 1.45% reported at June 30, 2016. Net charge-offs as a percentage of average loans were only 3 basis points, or $152,000 for the three months ended June 30, 2017.

The Company’s provision for loan losses totaled $842,000 for the second quarter of 2017, which was down in comparison to the prior quarter, and up $447,000 from the second quarter of 2016. As of June 30, 2017, the Company’s allowance for loan losses to total loans was 1.04%, versus 1.25% at December 31, 2016 and 1.21% at June 30, 2016.

Loans acquired were recorded at fair value at the time of acquisition; therefore, there was no allowance associated with these loans at June 30, 2017. When combining the remaining fair value adjustment of $4.9 million and the Company’s allowance, the Company’s allowance as a percentage of total loans increases to 1.30%.

Non-Interest Income

Non-interest income increased 22.7% to $7.1 million in the second quarter of 2017, compared to the $5.8 million recognized in the second quarter last year. Mortgage banking income was 13.3% higher compared to the same quarter last year. Debit/credit card fee income was up 18.4% compared to the second quarter of 2016. Deposit related fee income rose 3.6% in the second quarter of 2017, compared to the second quarter of 2016. Also affecting the comparison was the Company’s recognition of higher gains on the sale of securities and a full quarter of trust fee income.

Non-Interest Expense

Non-interest expense decreased 25.2% to $15.2 million during the second quarter of 2017 compared to $20.3 million during the first quarter of 2017 and increased 18.0% compared to $12.9 million recognized in the second quarter of 2016. Excluding the $5.0 million of acquisition related expense, non-interest expense was down $152,000 compared to the first quarter of 2017. As a result of the cost savings realized during the quarter along with the expansion of revenues from the acquisition, the Company’s efficiency ratio improved to 54.7% for the quarter ended June 30, 2017.

Tangible Book Value

Tangible book value per common share at June 30, 2017 was $5.27 compared to $5.32 at December 31, 2016. The decline was primarily due to the acquisition of Premier.

Dividend to be Paid

On July 18, 2017, the Board of Directors declared a quarterly cash dividend of $0.04 per common share payable August 11, 2017 to shareholders of record at the close of business July 28, 2017.

Conference Call

United Community Financial Corp. will host an earnings conference call on Wednesday, July 19, 2017, at 10:00 a.m. ET., to provide an overview of the Company's second 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 2nd 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 and loan production centers in 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)
			June 30,				March 31,							December 31,
			2017				2017				F/(U)			2016				F/(U)
			(Dollars in thousands)
Assets:
Cash and deposits with banks			$	42,654			$	32,904			29.6	%		$	27,690			54.0	%
Federal funds sold				9,360				16,868			-44.5	%			18,197			-48.6	%
Total cash and cash equivalents				52,014				49,772			4.5	%			45,887			13.4	%
Securities:
Available for sale, at fair value				287,179				335,834			-14.5	%			343,284			-16.3	%
Held to maturity (fair value of $87,775, $93,297 and $96,150, respectively)				88,559				94,523			-6.3	%			97,519			-9.2	%
Loans held for sale, at lower of cost or market				199				197			1.0	%			165			20.6	%
Loans held for sale, at fair value				85,954				75,501			13.8	%			62,593			37.3	%
Loans, net of allowance for loan losses of $19,660, $18,970 and $19,087				1,869,095				1,835,000			1.9	%			1,503,577			24.3	%
Federal Home Loan Bank stock, at cost				19,324				19,324			0.0	%			18,068			7.0	%
Premises and equipment, net				22,424				23,919			-6.3	%			20,963			7.0	%
Accrued interest receivable				7,420				7,032			5.5	%			6,900			7.5	%
Real estate owned and other repossessed assets				1,197				1,137			5.3	%			1,777			-32.6	%
Goodwill				19,467				19,460			0.0	%			208			9259.1	%
Core deposit intangible				2,099				2,182			-3.8	%			5			41880.0	%
Customer list intangible				2,060				2,090			-1.4	%			1,356			51.9	%
Cash surrender value of life insurance				56,628				56,238			0.7	%			55,861			1.4	%
Other assets				39,946				34,801			14.8	%			33,182			20.4	%
Total assets			$	2,553,565			$	2,557,010			-0.1	%		$	2,191,345			16.5	%
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Non-interest bearing			$	339,067			$	333,940			1.5	%		$	256,918			32.0	%
Interest bearing
Customer deposits				1,423,327				1,439,266			-1.1	%			1,181,557			20.5	%
Brokered deposits				131,599				131,999			-0.3	%			76,516			72.0	%
Total interest bearing deposits				1,554,926				1,571,265			-1.0	%			1,258,073			23.6	%
Total deposits				1,893,993				1,905,205			-0.6	%			1,514,991			25.0	%
Borrowed funds:
Federal Home Loan Bank advances
Long-term advances				48,146				47,951			0.4	%			47,756			0.8	%
Short-term advances				280,000				291,000			-3.8	%			343,000			-18.4	%
Total Federal Home Loan Bank advances				328,146				338,951			-3.2	%			390,756			-16.0	%
Repurchase agreements and other				8,045				6,839			17.6	%			512			1471.3	%
Total borrowed funds				336,191				345,790			-2.8	%			391,268			-14.1	%
Advance payments by borrowers for taxes and insurance				21,989				17,084			28.7	%			23,812			-7.7	%
Accrued interest payable				392				304			28.9	%			145			170.3	%
Accrued expenses and other liabilities				15,520				11,525			34.7	%			11,323			37.1	%
Total liabilities				2,268,085				2,279,908			-0.5	%			1,941,539			16.8	%
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 49,715,021, 49,695,487 and 46,581,370 shares, respectively, outstanding				174,184				177,523			-1.9	%			174,360			-0.1	%
Retained earnings				162,716				152,721			6.5	%			152,675			6.6	%
Accumulated other comprehensive loss				(18,448	)			(20,042	)		-8.0	%			(21,040	)		-12.3	%
Treasury stock, at cost, 4,444,307, 4,443,423 and 7,557,540 shares, respectively				(32,972	)			(33,100	)		-0.4	%			(56,189	)		-41.3	%
Total shareholders’ equity				285,480				277,102			3.0	%			249,806			14.3	%
Total liabilities and shareholders’ equity			$	2,553,565			$	2,557,010			-0.1	%		$	2,191,345			16.5	%

UNITED COMMUNITY FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
					For the Three Months Ended																		For the Six Months Ended
					June 30,				March 31,							June 30,							June 30,				June 30,
					2017				2017				F/(U)			2016				F/(U)			2017				2016				F/(U)
					(Dollars in thousands, except per share data)
Interest income
	Loans				$	20,011			$	17,558			14.0	%		$	14,184			41.1	%		$	37,569			$	27,985			34.2	%
	Loans held for sale					872				661			31.9	%			363			140.2	%			1,533				695			120.6	%
	Securities:
		Available for sale, nontaxable				418				418			0.0	%			290			44.1	%			836				413			102.4	%
		Available for sale, taxable				1,479				1,602			-7.7	%			1,781			-17.0	%			3,081				3,716			-17.1	%
		Held to maturity, nontaxable				52				62			-16.1	%			62			-16.1	%			114				117			-2.6	%
		Held to maturity, taxable				454				465			-2.4	%			524			-13.4	%			919				1,101			-16.5	%
	Federal Home Loan Bank stock dividends					227				214			6.1	%			180			26.1	%			441				362			21.8	%
	Other interest earning assets					40				80			-50.0	%			15			166.7	%			120				30			300.0	%
			Total interest income			23,553				21,060			11.8	%			17,399			35.4	%			44,613				34,419			29.6	%
Interest expense
	Deposits					1,987				1,621			-22.6	%			1,496			-32.8	%			3,608				3,108			-16.1	%
	Federal Home Loan Bank advances					1,064				955			-11.4	%			563			-89.0	%			2,019				1,093			-84.7	%
	Repurchase agreements and other					8				8			0.0	%			6			-33.3	%			16				11			-45.5	%
			Total interest expense			3,059				2,584			-18.4	%			2,065			-48.1	%			5,643				4,212			-34.0	%
Net interest income						20,494				18,476			10.9	%			15,334			33.7	%			38,970				30,207			29.0	%
Taxable equivalent adjustment						229				237			-3.4	%			187			22.5	%			466				282			65.2	%
Net interest income (FTE) (1)						20,723				18,713			10.7	%			15,521			33.5	%			39,436				30,489			29.3	%
Provision for loan losses						842				1,475			42.9	%			395			-113.2	%			2,317				2,550			9.1	%
Net interest income after provision for loan losses (FTE)						19,881				17,238			15.3	%			15,126			31.4	%			37,119				27,939			32.9	%
Non-interest income
	Insurance agency income					472				473			-0.2	%			516			-8.5	%			945				818			15.5	%
	Brokerage income					301				322			-6.5	%			396			-24.0	%			623				696			-10.5	%
	Service fees and other charges:
		Deposit related fees				1,411				1,290			9.4	%			1,362			3.6	%			2,701				2,688			0.5	%
		Mortgage servicing fees				729				735			-0.8	%			701			4.0	%			1,464				1,399			4.6	%
		Mortgage servicing rights valuation				(2	)			(3	)		-33.3	%			(292	)		-99.3	%			(5	)			(727	)		99.3	%
		Mortgage servicing rights amortization				(486	)			(448	)		8.5	%			(567	)		-14.3	%			(934	)			(1,035	)		9.8	%
		Other service fees				33				29			13.8	%			47			-29.8	%			62				65			-4.6	%
	Net gains (losses):
		Securities available for sale				301				29			937.9	%			233			29.2	%			330				386			-14.5	%
		Mortgage banking income				2,117				1,323			60.0	%			1,869			13.3	%			3,440				3,251			5.8	%
		Real estate owned and other repossessed assets charges, net				(18	)			(52	)		-65.4	%			(63	)		-71.4	%			(70	)			(76	)		7.9	%
	Debit/credit card fees					1,326				923			43.7	%			1,120			18.4	%			2,249				2,001			12.4	%
	Trust fee income					420				282			48.9	%			—			100.0	%			702				—			100.0	%
	Other income					486				481			1.0	%			458			6.1	%			967				972			-0.5	%
			Total non-interest income			7,090				5,384			31.7	%			5,780			22.7	%			12,474				10,438			19.5	%
Non-interest expense
	Salaries and employee benefits					8,749				8,975			2.5	%			7,186			-21.8	%			17,724				14,274			-24.2	%
	Occupancy					943				964			2.2	%			855			-10.3	%			1,907				1,717			-11.1	%
	Equipment and data processing					2,306				2,079			-10.9	%			1,887			-22.2	%			4,385				3,722			-17.8	%
	Financial institutions tax					510				490			-4.1	%			431			-18.3	%			1,000				873			-14.5	%
	Advertising					265				124			-113.7	%			221			-19.9	%			389				348			-11.8	%
	Amortization of intangible assets					113				83			-36.1	%			10			-1030.0	%			196				23			-752.2	%
	FDIC insurance premiums					340				188			-80.9	%			287			-18.5	%			528				613			13.9	%
	Other insurance premiums					109				112			2.7	%			73			-49.3	%			221				162			-36.4	%
	Professional fees:
		Legal and consulting fees				184				229			19.7	%			193			4.7	%			413				273			-51.3	%
		Other professional fees				420				520			19.2	%			372			-12.9	%			940				559			-68.2	%
	Real estate owned and other repossessed asset expenses					23				62			62.9	%			77			70.1	%			85				149			43.0	%
	Acquisition related expenses					—				4,962			100.0	%			—			0.0	%			4,962				—			-100.0	%
	Other expenses					1,214				1,502			19.2	%			1,268			4.3	%			2,716				2,611			-4.0	%
			Total non-interest expenses			15,176				20,290			25.2	%			12,860			-18.0	%			35,466				25,324			-40.0	%
Income before income taxes						11,795				2,332			405.8	%			8,046			46.6	%			14,127				13,053			8.2	%
Taxable equivalent adjustment						229				237			3.4	%			187			-22.5	%			466				282			-65.2	%
Income tax expense						3,377				557			-506.3	%			2,529			-33.5	%			3,934				4,121			4.5	%
Net income					$	8,189			$	1,538			432.4	%		$	5,330			53.6	%		$	9,727			$	8,650			12.5	%
Earnings per common share:
	Basic				$	0.165			$	0.032			415.6	%		$	0.113			46.0	%		$	0.198			$	0.182			8.8	%
	Diluted					0.163				0.032			409.4	%			0.112			45.5	%			0.196				0.182			7.7	%

(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
		June 30, 2017									March 31, 2017									June 30, 2016
		Average			Interest						Average			Interest						Average			Interest
		outstanding			earned/			Yield/			outstanding			earned/			Yield/			outstanding			earned/			Yield/
		balance			paid			rate			balance			paid			rate			balance			paid			rate
		(Dollars in thousands)
Interest earning assets:
Net loans (1)		$	1,863,525		$	20,012		4.30	%		$	1,706,009		$	17,560		4.12	%		$	1,369,683		$	14,186		4.14	%
Loans held for sale			80,205			872		4.35	%			67,860			661		3.90	%			37,521			363		3.87	%
Total loans, net			1,943,730			20,884		4.30	%			1,773,869			18,221		4.11	%			1,407,204			14,549		4.14	%
Securities:
Available for sale-taxable			258,217			1,479		2.29	%			287,775			1,602		2.23	%			315,583			1,781		2.26	%
Available for sale-nontaxable (2)			59,209			619		4.18	%			59,361			621		4.18	%			42,394			440		4.15	%
Held to maturity-taxable			80,817			454		2.25	%			83,655			465		2.22	%			95,933			524		2.18	%
Held to maturity-nontaxable (2)			9,843			79		3.21	%			12,451			94		3.02	%			12,971			96		2.96	%
Total securities			408,086			2,631		2.58	%			443,242			2,782		2.51	%			466,881			2,841		2.43	%
Federal Home Loan Bank stock			19,324			227		4.70	%			18,905			214		4.53	%			18,068			180		3.98	%
Other interest earning assets			22,129			40		0.72	%			43,059			80		0.74	%			18,978			15		0.33	%
Total interest earning assets			2,393,269			23,782		3.97	%			2,279,075			21,297		3.74	%			1,911,131			17,585		3.68	%
Non-interest earning assets			180,524									166,070									132,780
Total assets		$	2,573,793								$	2,445,145								$	2,043,911
Interest bearing liabilities:
Deposits:
Checking accounts		$	633,276			480		0.30	%		$	564,903			337		0.24	%		$	505,284			261		0.21	%
Savings accounts			308,683			27		0.03	%			301,675			30		0.04	%			291,820			34		0.05	%
Certificates of deposit
Customer certificates of deposit			504,397			1,166		0.92	%			468,686			1,073		0.92	%			434,053			1,201		1.11	%
Brokered certificates of deposit			133,082			314		0.94	%			99,380			181		0.73	%			—			—		—	%
Total certificates of deposit			637,479			1,480		0.93	%			568,066			1,254		0.88	%			434,053			1,201		1.11	%
Total interest bearing deposits			1,579,438			1,987		0.50	%			1,434,644			1,621		0.45	%			1,231,157			1,496		0.49	%
Federal Home Loan Bank advances
Long-term advances			48,019			370		3.08	%			47,823			349		2.92	%			47,237			307		2.60	%
Short-term advances			286,604			694		0.97	%			347,050			606		0.70	%			246,967			256		0.41	%
Total Federal Home Loan Bank advances			334,623			1,064		1.27	%			394,873			955		0.97	%			294,204			563		0.77	%
Repurchase agreements and other			4,844			8		0.66	%			1,051			8		3.04	%			527			6		4.55	%
Total borrowed funds			339,467			1,072		1.26	%			395,924			963		0.97	%			294,731			569		0.77	%
Total interest bearing liabilities		$	1,918,905			3,059		0.64	%		$	1,830,568			2,584		0.56	%		$	1,525,888			2,065		0.54	%
Non-interest bearing liabilities
Total noninterest bearing deposits			333,784									306,402									241,098
Other noninterest bearing liabilities			38,769									33,898									29,751
Total noninterest bearing liabilities			372,553									340,300									270,849
Total liabilities		$	2,291,458								$	2,170,868								$	1,796,737
Shareholders’ equity			282,335									274,277									247,174
Total liabilities and equity		$	2,573,793								$	2,445,145								$	2,043,911
Net interest income and interest rate spread					$	20,723		3.33	%					$	18,713		3.18	%					$	15,520		3.14	%
Net interest margin								3.46	%								3.28	%								3.25	%
Average interest earning assets to average interest bearing liabilities								124.72	%								124.50	%								125.24	%
Interest bearing deposits
Checking accounts		$	633,276		$	480		0.30	%		$	564,903		$	337		0.24	%		$	505,284		$	261		0.21	%
Savings accounts			308,683			27		0.03	%			301,675			30		0.04	%			291,820			34		0.05	%
Customer certificates of deposit			504,397			1,166		0.92	%			468,686			1,073		0.92	%			434,053			1,201		1.11	%
Total customer deposits			1,446,356			1,673		0.46	%			1,335,264			1,440		0.43	%			1,231,157			1,496		0.49	%
Brokered certificates of deposit			133,082			314		0.94	%			99,380			181		0.73	%			—			—		—	%
Total interest bearing deposits			1,579,438			1,987		0.50	%			1,434,644			1,621		0.45	%			1,231,157			1,496		0.49	%
Noninterest bearing deposits			333,784			—		0.00	%			306,402			—		0.00	%			241,098			—		0.00	%
Total average deposits and cost of deposits		$	1,913,222		$	1,987		0.42	%		$	1,741,046		$	1,621		0.37	%		$	1,472,255		$	1,496		0.41	%
Other interest bearing liabilities
Federal Home Loan Bank advances
Long term advances		$	48,019		$	370		3.08	%		$	47,823		$	349		2.92	%		$	47,237		$	307		2.60	%
Short term advances			286,604			694		0.97	%			347,050			606		0.70	%			246,967			256		0.41	%
Total Federal Home Loan Bank advances			334,623			1,064		1.27	%			394,873			955		0.97	%			294,204			563		0.77	%
Repurchase agreements and other			4,844			8		0.66	%			1,051			8		3.04	%			527			6		4.55	%
Total borrowed funds			339,467			1,072		1.26	%			395,924			963		0.97	%			294,731			569		0.77	%
Total average deposits and other interest bearing liabilities and total cost of funds		$	2,252,689		$	3,059		0.54	%		$	2,136,970		$	2,584		0.48	%		$	1,766,986		$	2,065		0.47	%

(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
			June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
			(Dollars in thousands, except per share data)
Financial Data
Total assets			$	2,553,565			$	2,557,010			$	2,191,345			$	2,160,234			$	2,080,542
Total loans, net				1,869,095				1,835,000				1,503,577				1,473,949				1,398,106
Total securities				375,738				430,357				440,803				457,671				474,707
Total deposits				1,893,993				1,905,205				1,514,991				1,473,043				1,455,746
Average interest-bearing deposits				1,579,438				1,434,644				1,236,496				1,207,858				1,231,157
Average noninterest-bearing deposits				333,784				306,402				257,412				242,310				241,098
Total shareholders' equity				285,480				277,102				249,806				256,403				254,075
Net interest income				20,494				18,476				16,334				15,760				15,334
Net interest income (FTE) (1)				20,723				18,713				16,553				15,945				15,520
Provision for loan losses				842				1,475				1,493				1,344				395
Noninterest income				7,090				5,384				5,635				6,003				5,780
Noninterest expense				15,176				20,290				13,717				12,978				12,860
Income tax expense				3,377				557				1,734				2,288				2,529
Net income				8,189				1,538				5,025				5,153				5,330
Share Data
Basic earnings per common share			$	0.165			$	0.032			$	0.108			$	0.111			$	0.113
Diluted earnings per common share				0.163				0.032				0.107				0.110				0.112
Book value per common share				5.74				5.58				5.36				5.51				5.46
Tangible book value per common share				5.27				5.10				5.33				5.48				5.43
Market value per common share				8.31				8.34				8.94				7.11				6.08
Common shares outstanding at end of period				49,715				49,695				46,581				46,542				46,493
Weighted average shares outstanding--basic				49,392				48,289				46,216				46,167				46,869
Weighted average shares outstanding--diluted				49,795				48,646				46,415				46,392				47,117
Key Ratios
Return on average assets (2)				1.27	%			0.25	%			0.93	%			0.98	%			1.04	%
Return on average equity (3)				11.60	%			2.24	%			8.00	%			8.38	%			8.63	%
Return on tangible equity (4)				12.66	%			2.39	%			8.05	%			8.43	%			8.68	%
Net interest margin				3.46	%			3.28	%			3.26	%			3.25	%			3.25	%
Efficiency ratio				54.71	%			83.78	%			61.89	%			59.40	%			60.81	%
Nonperforming loans to net loans, end of period				0.58	%			0.58	%			0.83	%			1.32	%			1.45	%
Nonperforming assets to total assets, end of period				0.72	%			0.74	%			0.94	%			0.98	%			1.06	%
Allowance for loan loss as a percent of loans, end of period				1.04	%			1.02	%			1.25	%			1.22	%			1.21	%
Delinquent loans to total net loans, end of period				0.77	%			0.81	%			1.26	%			1.48	%			1.49	%

__________
(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
			June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
			(Dollars in thousands)
Loan Portfolio Composition
Commercial loans
Multi-family			$	121,565			$	108,330			$	93,597			$	107,066			$	81,022
Owner/nonowner occupied commercial real estate				342,300				325,633				231,401				225,699				196,110
Land				10,867				9,276				8,373				9,401				9,748
Construction				96,765				94,727				68,158				45,137				61,744
Commercial and industrial				170,758				170,398				102,729				106,880				88,804
Total				742,255				708,364				504,258				494,183				437,428
Residential mortgage loans
Real estate				834,349				839,413				762,926				755,893				747,530
Construction				56,946				51,372				35,695				35,875				35,275
Total				891,295				890,785				798,621				791,768				782,805
Consumer loans
Consumer				251,151				251,215				216,598				203,851				193,272
Total				251,151				251,215				216,598				203,851				193,272
Total loans				1,884,701				1,850,364				1,519,477				1,489,802				1,413,505
Less:
Allowance for loan losses				19,660				18,970				19,087				18,234				17,172
Deferred loan costs, net				(4,054	)			(3,606	)			(3,187	)			(2,381	)			(1,773	)
Total				15,606				15,364				15,900				15,853				15,399
Total loans, net				1,869,095				1,835,000				1,503,577				1,473,949				1,398,106
Loans held for sale, net				86,153				75,698				62,758				60,345				43,847
Total loans			$	1,955,248			$	1,910,698			$	1,566,335			$	1,534,294			$	1,441,953
			At or for the quarters ended
			June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
			(Dollars in thousands)
Deposit Portfolio Composition
Checking accounts
Interest bearing checking accounts			$	175,800			$	211,875			$	158,271			$	170,348			$	182,713
Non-interest bearing checking accounts				339,067				333,940				256,918				252,923				236,173
Total checking accounts				514,867				545,815				415,189				423,271				418,886
Savings accounts				310,012				308,533				294,563				290,325				292,232
Money market accounts				427,348				418,449				316,813				312,124				314,081
Total non-time deposits				1,252,227				1,272,797				1,026,565				1,025,720				1,025,199
Certificates of deposit less than $250,000				557,300				547,823				425,893				381,605				366,410
Certificates of deposit greater than $250,000				84,466				84,585				62,533				65,718				64,137
Total certificates of deposit				641,766				632,408				488,426				447,323				430,547
Total deposits			$	1,893,993			$	1,905,205			$	1,514,991			$	1,473,043			$	1,455,746

UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
		At or for the quarters ended
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
		(Dollars in thousands)
Allowance For Loan Losses
Beginning balance		$	18,970			$	19,087			$	18,234			$	17,172			$	16,903
Provision			842				1,475				1,493				1,344				395
Net chargeoffs			(152	)			(1,592	)			(640	)			(282	)			(126	)
Ending balance		$	19,660			$	18,970			$	19,087			$	18,234			$	17,172
		At or for the quarters ended
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
		(Dollars in thousands)
Net (Charge-offs) Recoveries
Commercial loans
Multi-family		$	4			$	1			$	5			$	35			$	3
Owner/nonowner occupied commercial real estate			24				(1,141	)			(570	)			17				(117	)
Land			—				(25	)			(100	)			(250	)			—
Construction			—				—				—				—				—
Commercial and industrial			108				1				139				192				62
Total			136				(1,164	)			(526	)			(6	)			(52	)
Residential mortgage loans
Real estate			(239	)			(196	)			(123	)			(146	)			(59	)
Construction			—				—				—				—				—
Total			(239	)			(196	)			(123	)			(146	)			(59	)
Consumer loans
Consumer			(49	)			(232	)			9				(130	)			(15	)
Total			(49	)			(232	)			9				(130	)			(15	)
Total net chargeoffs		$	(152	)		$	(1,592	)		$	(640	)		$	(282	)		$	(126	)
		At or for the quarters ended
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
		(Dollars in thousands)
Nonperforming Loans
Commercial loans
Multi-family		$	413			$	419			$	—			$	—			$	—
Owner/nonowner occupied commercial real estate			1,331				1,398				3,546				6,879				7,362
Land			9				9				34				134				384
Construction			—				—				—				—				—
Commercial and industrial			190				354				361				4,242				4,633
Total			1,943				2,180				3,941				11,255				12,379
Residential mortgage loans
Real estate			6,701				5,868				6,084				5,835				5,713
Construction			—				—				—				—				—
Total			6,701				5,868				6,084				5,835				5,713
Consumer loans
Consumer			2,139				2,513				2,414				2,358				2,249
Total			2,139				2,513				2,414				2,358				2,249
Total nonperforming loans		$	10,783			$	10,561			$	12,439			$	19,448			$	20,341
Total Nonperforming Loans and Nonperforming Assets
Past due 90 days and on nonaccrual status		$	7,708			$	7,581			$	7,859			$	15,350			$	15,819
Past due 90 days and still accruing			2				—				—				—				—
Past due 90 days			7,710				7,581				7,859				15,350				15,819
Past due less than 90 days and on nonaccrual			3,073				2,980				4,580				4,098				4,522
Total nonperforming loans			10,783				10,561				12,439				19,448				20,341
Other real estate owned			1,197				1,137				1,726				1,790				1,613
Other classified assets			6,384				6,384				6,384				—				—
Repossessed assets			—				—				51				3				3
Total nonperforming assets		$	18,364			$	18,082			$	20,600			$	21,241			$	21,957

UNITED COMMUNITY FINANCIAL CORP.
NON-GAAP DISCLOSURE RECONCILIATION
(Unaudited)
Reconciliation of Average Shareholders' Equity to Average Tangible Equity:
		At or for the quarters ended
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
		(Dollars in thousands, except per share data)
Average shareholders equity		$	282,335			$	274,277			$	251,230			$	245,919			$	247,174
Average intangible assets			23,699				26,935				1,543				1,556				1,611
Average tangible equity		$	258,636			$	247,342			$	249,687			$	244,363			$	245,563
Net income		$	8,189			$	1,538			$	5,025			$	5,153			$	5,330
Return on tangible equity			12.66	%			2.49	%			8.05	%			8.43	%			8.68	%
Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income:
		For the quarters ended
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
		(Dollars in thousands)
Interest income		$	23,553			$	21,060			$	18,495			$	17,815			$	17,399
Fully taxable equivalent adjustment			229				237				219				185				187
Fully taxable equivalent interest income			23,782				21,297				18,714				18,000				17,586
Interest expense			3,059				2,584				2,161				2,055				2,065
Fully taxable net interest income		$	20,723			$	18,713			$	16,553			$	15,945			$	15,521
		For the six months ended
		June 30, 2017				June 30, 2016
		(Dollars in thousands)
Interest income		$	44,613			$	34,419
Fully taxable equivalent adjustment			466				282
Fully taxable equivalent interest income			45,079				34,701
Interest expense			5,643				4,212
Fully taxable net interest income		$	39,436			$	30,489
Reconciliation of Net Interest Margin without Accretion/Amortization of Purchase Accounting Adjustments:
		Six months ended
		June 30, 2017
		(Dollars in thousands)
Fully taxable net interest income		$	39,436
Accretion/amortization of purchase accounting adjustments			1,185
Fully taxable net interest income, without purchase accounting adjustments		$	38,251
Average interest earning assets		$	2,336,489
Net interest margin excluding accretion amortization of purchase accounting adjustments			3.27	%
Reconciliation of Coverage Ratio to Coverage Ratio with Fair Value Adjustments Included with Allowance for Loan Losses:
		June 30, 2017
		(Dollars in thousands)
Allowance for loan losses		$	19,660
Fair value adjustments			4,917
			24,577
Loans, net		$	1,869,095
Coverage ratio with the Fair Value adjustments included in Allowance for loan losses			1.30	%
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
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
		(Dollars in thousands, except per share data)
Total shareholders' equity		$	285,480			$	277,102			$	249,806			$	256,403			$	254,075
Goodwill			19,467				19,460				208				-				-
Customer list intangible			2,060				2,090				1,356				1,538				1,554
Core deposit intangible			2,099				2,182				5				6				7
Total common shares outstanding			49,715,021				49,695,487				46,581,370				46,542,388				46,492,527
Tangible book value, as reported		$	5.27			$	5.10			$	5.33			$	5.48			$	5.43

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