United Community Financial Corp. – Value Analysis (NASDAQ:UCFC) : September 14, 2017

Capitalcube gives United Community Financial Corp. a score of 71.

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

Fundamental Overview

United Community Financial Corp. has a fundamental score of 71 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.58 is about median in its peer group.
  • The market expects UCFC-US to grow faster than its peers and for the company to improve its current ROE.
  • UCFC-US‘s relative capital efficiency and net profit margins are both around the median level.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • 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.
  • Compared with the peers chosen, UCFC-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • 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 74.91% 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 29.51% 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 25.09% versus peer median of 13.22% — 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 59.03x 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.