United Community Financial Corp. – Value Analysis (NASDAQ:UCFC) : December 13, 2017

Capitalcube gives United Community Financial Corp. a score of 57.

Our analysis is based on comparing United Community Financial Corp. with the following peers – Wayne Savings Bancshares, Inc., First Defiance Financial Corp., New York Community Bancorp, Inc., FFD Financial Corporation, Central Federal Corporation, TFS Financial Corporation and ASB Financial Corp (WAYN-US, FDEF-US, NYCB-US, FFDF-US, CFBK-US, TFSL-US and ASBN-US).

Fundamental Overview

United Community Financial Corp. has a fundamental score of 57 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.62 is about median in its peer group.
  • The market expects UCFC-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • UCFC-US‘s relative capital efficiency and net profit margins are both around the median level.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • UCFC-US‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • UCFC-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s level of equity capital investment seems appropriate to support the company’s growth.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 75.78% is around peer median suggesting that UCFC-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, UCFC-US‘s pre-tax margin of 31.16% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s comparatively healthy proportion of fee based income (i.e. non interest income/total revenues) of 24.22% versus peer median of 15.48% — suggests that UCFC-US‘s operating margins are likely to be less volatile. In addition, UCFC-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 58.59x is around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

United Community Financial Corp. operates as a financial holding company, which provides retail and business banking products and services. The company’s lending activity include conventional residential real estate loans secured by real estate located in home savings primary market area. It provides commercial real estate, commercial and industrial loans, and various types of consumer loans, including home equity loans, loans secured by savings accounts, motor vehicles, boats and recreational vehicles and unsecured loans. The company offers various deposit products, including regular passbook savings accounts, demand deposits, individual retirement accounts, checking accounts, money market accounts and certificates of deposit. United Community Financial was founded in February 1998 and is headquartered in Youngstown, OH.