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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: JULY 14, 1999
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 44503-1203
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (330) 742-0500
Not Applicable
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(Former name or former address, if changes since last report.)
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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
EARNINGS FOR SECOND QUARTER 1999 AND HOLDS
SPECIAL SHAREHOLDER'S MEETING
Youngstown, Ohio - July 14, 1999 - United Community Financial Corp. (Nasdaq:
UCFC), holding company for The Home Savings and Loan Company of Youngstown,
Ohio, announced net income for the three months ended June 30, 1999 of $4.9
million, or $.15 per share. Net income for the comparable period in 1998 was
$3.5 million and net income for the three months ended March 31, 1999 was
$4.7 million. United Community's annualized return on average assets and
return on average equity were 1.54% and 4.17%, respectively, for the three
months ended June 30, 1999. The annualized return on average assets and
return on average equity for the comparable period in 1998 were 1.20% and
9.55%, respectively, and 1.49% and 4.04%, respectively, for the three months
ended March 31, 1999.
For the six-month period ended June 30, 1999, United Community realized net
income of $9.6 million, or $0.30 per share. For the comparable period in
1998, United Community realized net income of $6.2 million. Interest income
increased $2.7 million to $43.4 million for the six months ended June 30,
1999, compared to $40.7 million for the same period in 1998. Interest expense
was $15.0 million for the six months ended June 30, 1999, a $4.5 million
decline from $19.5 million for the same period in 1998. United Community's
annualized return on average assets and return on average equity were 1.52%
and 4.11%, respectively, for the six months ended June 30, 1999. The
annualized return on average assets and return on average equity for the
comparable period in 1998 were 1.12% and 8.57%, respectively.
Douglas M. McKay, President of United Community, stated, "Earnings for the
first six months of 1999 have increased substantially when compared to last
year, primarily due to an increase in interest-earning assets in conjunction
with a decrease in interest-bearing liabilities."
Total shareholders' equity increased $4.0 million to $468.6 million at June
30, 1999 from $464.6 million at December 31, 1998. This increase was
primarily due to earnings for the six months, which
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were partially offset by the first and second quarter dividends of $0.075 per
share paid in March and June of 1999. Book value per share was $14.54 as of
June 30, 1999. Total assets increased $16.1 million from December 31, 1998 to
June 30, 1999. The primary reason for the increase in total assets was a
result of a $30.0 million increase in net loans and an $89.6 million increase
in investment securities. The increases were offset by a $108.0 million
decline in cash and cash equivalents. Funds from cash and cash equivalents
were invested in short-term securities that were designated as available for
sale. This enabled United Community to take advantage of the current interest
rate environment by investing in higher yielding securities while providing a
great deal of liquidity and flexibility. Deposits increased $4.3 million to
$781.9 million as of June 30, 1999 from $777.6 million as of December 31,
1998.
On June 30, 1999, the stock of United Community was added to the Russell 2000
index, which is an index of 2000 companies that generally have market
capitalizations up to $1.5 billion.
At a special meeting of United Community shareholders held on July 12, 1999, the
shareholders approved the United Community Financial Corp. 1999 Long-Term
Incentive Plan and the United Community Financial Corp. Recognition and
Retention Plan. The purpose of the plans is to promote and advance the interests
of United Community and its shareholders by enabling United Community to
attract, retain and reward directors, directors emeritus and managerial and
other key employees of United Community and any other subsidiary, by
facilitating their purchase of an ownership interest in United Community. At
this time, no awards have been made under either plan.
As previously announced, United Community has entered into a merger agreement
with Butler Wick Corp., also headquartered in Youngstown, Ohio, whereby Butler
Wick will become a wholly-owned subsidiary of United Community. The shareholders
of Butler Wick are expected to approve the merger at a special meeting of
shareholders held on July 14, 1999, and the parties anticipate that the merger
will be completed on or about July 30, 1999. In connection with the merger,
United Community will issue up to 1.7 million common shares in exchange for all
of the outstanding Butler Wick shares. Butler Wick Corp., an Ohio corporation,
is the parent company for three wholly-owned subsidiaries: Butler Wick & Co.,
Inc., Butler Wick Asset Management Company and Butler Wick Trust Company.
Through these subsidiaries, Butler Wick's business includes investment
brokerage, which it has conducted for over 70 years, and a network of integrated
financial services including asset management, trust and estate services, public
finance and insurance. Butler Wick and its subsidiaries have ten offices
throughout northeastern Ohio and western Pennsylvania.
Home Savings, the wholly-owned subsidiary of United Community, has 14 offices
located throughout Mahoning, Columbiana and Trumbull Counties in Northeastern
Ohio. Additional information on United Community, Home Savings and Butler Wick
may be found on Home Savings' web site: www.homesavingsandloan.com.
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UNITED COMMUNITY FINANCIAL CORP.
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<CAPTION>
As of As of
June 30, 1999 December 31,1998
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(In thousands, except per share data)
<S> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
ASSETS
Cash and cash equivalents $ 62,494 $ 170,508
Mortgage-backed securities 281,613 281,889
Investment securities 205,469 115,881
Federal Home Loan Bank stock 12,376 11,958
Net loans receivable:
Loans held for investment 690,201 659,903
Loans held for sale 3,719 3,993
Allowance for loan losses (6,446) (6,398)
Real estate owned 152 78
Other assets 23,816 19,493
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Total assets $ 1,273,394 $ 1,257,305
LIABILITIES
Deposits $ 781,927 $ 777,583
Other liabilities 22,914 15,077
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Total liabilities $ 804,841 $ 792,660
SHAREHOLDERS' EQUITY
Preferred stock-no par value; 1,000,000 shares authorized and unissued
at June 30, 1999 - -
Common stock-no par value; 499,000,000 shares authorized; 34,715,625
shares issued-and 32,220,552 outstanding at June 30, 1999 $ 342,998 $ 342,840
Retained earnings 151,717 146,934
Other comprehensive income (1,211) 733
Unearned compensation (24,951) (25,862)
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Total shareholders' equity $ 468,553 $ 464,645
Book value per share $ 14.54 $ 14.46
Dividends paid per share per quarter $ 0.075 $ 0.075
</TABLE>
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<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Three Months Ended
June 30, March 31, June 30,
1999 1999 1998
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(In thousands, except per share data)
<S> <C> <C> <C>
SELECTED EARNINGS DATA:
Interest income $ 21,816 $ 21,598 $ 21,017
Interest expense 7,491 7,507 9,960
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Net interest income 14,325 14,091 11,057
Provision for loan losses 25 75 150
Noninterest income:
Service fees and other charges 337 273 300
Net gains (losses)
Securities 40 - 240
Other (10) 1 (6)
Other income 137 116 150
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Total noninterest income 504 390 684
Noninterest expense
Salaries and employee benefits 4,255 4,183 3,564
Occupancy 337 301 328
Equipment and data processing 662 646 689
Other noninterest expense 1,859 1,983 1,682
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Total noninterest expense 7,113 7,113 6,263
Income before taxes 7,691 7,293 5,328
Income taxes 2,800 2,582 1,866
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Net income $ 4,891 $ 4,711 $ 3,462
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Basic and diluted earnings per share $ 0.15 $ 0.15 N/A
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<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, June 30,
1999 1998
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(In thousands, except per share data)
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SELECTED EARNINGS DATA:
Interest income $ 43,415 $ 40,695
Interest expense 14,998 19,516
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Net interest income 28,417 21,179
Provision for loan losses 100 400
Noninterest income:
Service fees and other charges 610 580
Net gains (losses)
Securities 40 253
Other (9) (58)
Other income 253 287
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Total noninterest income 894 1,062
Noninterest expense
Salaries and employee benefits 8,440 7,145
Occupancy 639 641
Equipment and data processing 1,308 1,292
Other noninterest expense 3,840 3,280
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Total noninterest expense 14,227 12,358
Income before taxes 14,984 9,483
Income taxes 5,382 3,320
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Net income $ 9,602 $ 6,163
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Basic and diluted earnings per share $ 0.30 N/A
</TABLE>
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<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Three Months Ended
June 30, March 31, December 31,
1999 1999 1998
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(Dollars in thousands)
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AVERAGE DAILY BALANCE OF SELECTED FINANCIAL CONDITION
DATA:
Net loans held for investment (including
allowance for loan losses of $ 6,462,
$6,413 and $6,315, respectively) $ 672,986 $ 660,225 $ 646,962
Net loans held for sale 4,051 4,035 3,679
Mortgage-backed securities 272,823 270,668 284,989
Investment securities 159,358 123,140 104,940
Other interest-earning assets 127,127 171,948 182,192
Total interest-earning assets 1,263,345 1,230,016 1,222,762
Total assets 1,269,016 1,261,453 1,253,463
Certificates of deposit 423,562 429,325 432,713
Checking, demand and savings accounts 350,471 340,454 331,182
Total interest-bearing deposits 774,308 769,779 763,895
Total noninterest-bearing deposits 7,874 6,712 6,752
Total liabilities 800,399 795,367 789,276
Shareholders' equity 468,617 466,086 464,187
Common shares outstanding 32,198,030 32,152,489 32,105,871
SUPPLEMENTAL LOAN DATA:
Loans originated $ 63,743 $ 56,542 $ 67,718
Loans purchased - - -
Loan chargeoffs 29 22 29
Recoveries on loans 4 9 16
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As of As of As of
June 30, 1999 March 31, 1999 December 31, 1998
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(Dollars in thousands)
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SUPPLEMENTAL DATA:
Nonaccrual loans $ 3,805 $ 4,856 $ 5,729
Restructured loans 1,712 1,822 1,832
Other real estate owned 152 196 78
Total nonperforming assets 5,669 6,874 7,639
Loans serviced for others 5,535 5,696 6,002
Number of full time equivalent employees 420 417 418
Mortgage-backed securities available for sale 126,501 97,127 98,890
Mortgage-backed securities held to maturity 155,112 166,996 182,999
Investment securities available for sale 205,469 129,221 110,888
Investment securities held to maturity - - 4,993
Federal home loan bank stock 12,376 12,164 11,958
Fair value of held to maturity securities 155,838 170,127 192,026
REGULATORY CAPITAL DATA:
Regulatory tangible capital $ 307,885 $ 303,666 $ 299,617
Tangible capital ratio 27.00 26.97 26.80
Regulatory core capital 307,885 303,666 299,617
Core capital ratio 27.00 26.97 26.80
Regulatory total capital 314,235 310,031 305,919
Total risk adjusted assets 623,181 605,685 593,913
Total risk adjusted ratio 50.42 51.19 51.51
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