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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 21, 1998
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United Community Financial Corp.
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(Exact name of registrant as specified in its charter)
Ohio 0-24399 34-1856319
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(State or other jurisdiction (Commission (IRS Employer of
incorporation) File Number) Identification Number)
275 Federal Plaza West
Youngstown, Ohio 44503-0500
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (330) 742-0500
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Not Applicable
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(Former name or former address, if changes since last report.)
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TABLE OF CONTENTS
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Item 5 Other Events
Exhibit 1 Third Quarter Financial Information News Release......1-3
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UNITED COMMUNITY FINANCIAL CORP.
275 Federal Plaza West
Youngstown, Ohio 44503-1203
FOR IMMEDIATE RELEASE
Douglas M. McKay
President
(330) 742-0500, Ext. 801
UNITED COMMUNITY FINANCIAL CORP. ANNOUNCES THIRD QUARTER
EARNINGS AND INCREASE IN CORE EARNINGS
Youngstown, Ohio - October 21, 1998 - United Community Financial Corp.
(NASDAQ: UCFC), Holding Company for The Home Savings and Loan Company of
Youngstown, Ohio, (the "Company"), announced a loss for the three months
ended September 30, 1998 of $2.0 million or $.06 per common share which was
primarily due to an $11.8 million contribution to The Home Savings and Loan
Company Charitable Foundation. Earnings per common share for the same
quarter would have been $.18 if there was no contribution to the Foundation.
Net income for the comparable period in the prior year was $2.9 million.
Book value per share was $14.42 as of September 30, 1998. United Community
Financial Corp. believes that the contribution of common shares to the
Foundation will benefit the long-term value of the Company's community
banking franchise by enabling the communities it serves to share in the
potential growth and success of the Company and the Holding Company.
A more direct comparison of operating results is to compare pre-tax core
earnings for the two periods. Core earnings are defined as pre-tax earnings
adjusted for securities sales transactions and unusual or nonrecurring
expense or income items. Core earnings for the three months ended September
30, 1998 were $8.6 million compared to $4.2 million in the prior year period.
The increase of $4.4 million in core earnings was due to an increase in net
interest income.
Net income for the nine months ended September 30, 1998 was $4.1 million,
compared to $11.7 million for the nine month period in 1997. The change in
the current period is primarily due to the contribution to the Charitable
Foundation. Also contributing to the change in the current period, when
compared to the previous period, was a recovery in June 1997 of two loans
that had previously been charged off, resulting in a recovery of $3.1 million
of interest and a loan loss recovery of $2.8 million. Core earnings, as
defined above, for the nine months ended September 30, 1998 were $17.9
million compared to $12.0 million in the prior year period. The increase of
$5.9 million in core earnings was due to an increase in net interest income.
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Douglas M. McKay, President of United Community Financial Corp., said "The
third quarter loss, due to the contribution to the Charitable Foundation, was
fully anticipated and in conjunction with the business plan. This
contribution will eliminate the need to make any future contributions to the
Charitable Foundation which will enhance future earnings. There was a
significant increase in earnings when viewed on the basis of pre-tax core
earnings. This increase was mainly attributed to a substantial increase in
net interest income, primarily due to a reduction in our overall cost of
interest bearing liabilities combined with an increase of interest earning
assets."
Total equity increased $322.4 million to $462.5 million at September 30, 1998
from $140.1 million at September 30, 1997. Total assets increased $205.1
million from September 30, 1997 to September 30, 1998. The increase in equity
and assets was primarily attributable to funds received from the sale of United
Community Financial Corp.'s stock in connection with the mutual to stock
conversion of Home Savings and Loan which was completed on July 8, 1998.
The Company has 14 offices located throughout Mahoning, Columbiana and Trumbull
Counties in Northeastern Ohio. Additional information may be found on the
Company's web site: www.homesavingsandloan.com.
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UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL DATA
(IN THOUSANDS)
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September 30,
1998 1997
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SELECTED FINANCIAL CONDITION DATA:
Total assets $1,249,226 $1,044,093
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Allowance for loan losses 6,261 5,296
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Total deposits 769,628 888,929
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Total equity 462,465 140,081
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Three months ended
September 30,
1998 1997
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SUMMARY OF EARNINGS:
Net interest income $14,750 $9,951
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Provision for loan losses 100 0
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Total noninterest income 745 386
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Total noninterest expense 18,613 6,097
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Net income (2,022) 2,902
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Three months ended
September 30,
1998 1997
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SUMMARY OF CORE EARNINGS:
Net interest income $14,750 $9,751
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Provision for loan losses 100 0
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Total noninterest income,
excluding gains and losses 745 400
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Total noninterest expense 6,779 5,947
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Pre-tax Core Earnings 8,616 4,204
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Nine months ended
September 30,
1998 1997
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SUMMARY OF EARNINGS:
Net interest income $35,929 $32,658
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Provision for loan losses 500 (2,246)
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Total noninterest income 1,807 1,060
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Total noninterest expense 30,971 18,330
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Net income 4,143 11,749
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Nine months ended
September 30,
1998 1997
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SUMMARY OF CORE EARNINGS:
Net interest income $35,929 $29,350
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Provision for loan losses 500 600
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Total noninterest income,
excluding gains and losses 1,612 1,081
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Total noninterest expense 19,137 17,880
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Pre-tax Core Earnings 17,904 11,951
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