<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: March 26, 1999
----------------------------
United Community Financial Corp.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 0-24399 34-1856319
- -------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer of
incorporation ) File Number) Identification Number)
275 Federal Plaza West
Youngstown, Ohio 44503-1203
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (330) 742-0500
-----------------------------
Not Applicable
- --------------------------------------------------------------------
(Former name or former address, if changes since last report.)
<PAGE>
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 FOURTH QUARTER,
YEAR END AND AN INCREASE IN CORE EARNINGS
Youngstown, Ohio - January 26, 1999 - United Community Financial Corp. (NASDAQ:
UCFC), holding company for The Home Savings and Loan Company of Youngstown,
Ohio, (the "Company"), announced net income for the three months ended December
31, 1998 of $4.6 million or $.14 per share. Net income for the comparable period
in the prior year was $1.3 million. Effective July 8, 1998, the Company
converted from a mutual association to a stock company and formed United
Community Financial Corp.
Due to the contribution of $11.8 million to The Home Savings and Loan Company
Charitable Foundation (Foundation) in 1998 and a large loan loss recovery in
1997, a more direct comparison of operating results is to compare pretax 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 December 31, 1998 were
$7.3 million compared to $3.1 million in the prior year period. The increase of
$4.2 million in core earnings was due primarily to an increase in net interest
income as a result of the investment of proceeds from the stock offering of
United Community Financial Corp. and a decrease in overall costs of interest
bearing liabilities.
Net income for the year ended December 31, 1998 was $8.7 million, compared to
$13.0 million for the year ended December 31, 1997. The decline in net income
is primarily due to an $11.8 million contribution to the Foundation. 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. Also
contributing to the decline in the current year, when compared to the
previous year, was a recovery in 1997 of three loans that had previously been
charged off, resulting in a recovery of $3.3 million of interest and a loan
loss recovery of $2.8 million. Earnings per share, since the conversion, for
the six-month period ended December 31, 1998 was $ 0.08. Earnings per share
for the same period would have been $ 0.32 if there was no
<PAGE>
contribution to the Foundation. There are no comparable per share earnings in
the prior year as the Company was a mutual association.
Core earnings, as defined above, for the year ended December 31, 1998 were $25.2
million compared to $15.1 million in the prior year ended December 31, 1997. The
increase of $10.1 million in core earnings was due to an increase in net
interest income.
Douglas M. McKay, President of United Community Financial Corp., said "Fourth
quarter and calendar year earnings, particularly when viewed on the basis of
pre-tax core earnings, reflects a substantial increase in net interest income.
This increase in net interest income is primarily due to a reduction in our
overall cost of interest bearing liabilities combined with an increase of
interest earning assets. The reduction in earnings for 1998, due to the
contribution to the Charitable Foundation, was fully anticipated and addressed
at the time of our stock conversion. This contribution positions Home Savings to
support worthwhile causes well into the future without affecting future
earnings, and we expect to realize tax benefits from the contribution for
several more years."
Total equity increased $323.2 million to $464.6 million at December 31, 1998
from $141.4 million at December 31, 1997. Book value per share was $14.46 as of
December 31, 1998. Total assets increased $212.3 million from December 31, 1997
to December 31, 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. The Holding Company paid its first quarterly
dividend of $0.075 per share in December 1998. Additional information may be
found on the Company's web site: www.homesavingsandloan.com.
<PAGE>
UNITED COMMUNITY FINANCIAL CORP.
SELECTED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
December 31,
1998 1997
-----------------------------------
<S> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
Total assets $1,257,305 $1,044,993
- ---------------------------------------------------------------------------------------------------
Allowance for loan losses 6,398 5,982
- ---------------------------------------------------------------------------------------------------
Total deposits 777,583 886,808
- ---------------------------------------------------------------------------------------------------
Total equity 464,645 141,353
- ---------------------------------------------------------------------------------------------------
Three months ended
December 31,
1998 1997
-----------------------------------
SUMMARY OF EARNINGS:
Net interest income $14,197 $9,565
- ---------------------------------------------------------------------------------------------------
Provision for loan losses 150 700
- ---------------------------------------------------------------------------------------------------
Total noninterest income 482 503
- ---------------------------------------------------------------------------------------------------
Total noninterest expense 7,246 6,972
- ---------------------------------------------------------------------------------------------------
Income taxes 2,726 1,097
- ---------------------------------------------------------------------------------------------------
Net income 4,557 1,299
- ---------------------------------------------------------------------------------------------------
Three months ended
December 31,
1998 1997
-----------------------------------
SUMMARY OF CORE EARNINGS:
Net interest income $14,197 $9,565
- ---------------------------------------------------------------------------------------------------
Provision for loan losses 150 100
- ---------------------------------------------------------------------------------------------------
Total noninterest income 492 437
- ---------------------------------------------------------------------------------------------------
Total noninterest expense 7,246 6,822
- ---------------------------------------------------------------------------------------------------
Pre-tax core earnings 7,293 3,080
- ---------------------------------------------------------------------------------------------------
Year ended
December 31,
1998 1997
-----------------------------------
SUMMARY OF EARNINGS:
Net interest income $50,126 $42,222
- ---------------------------------------------------------------------------------------------------
Provision for loan losses 650 (1,546)
- ---------------------------------------------------------------------------------------------------
Total noninterest income 2,289 1,564
- ---------------------------------------------------------------------------------------------------
Total noninterest expense 38,217 25,303
- ---------------------------------------------------------------------------------------------------
Income taxes 4,849 6,982
- ---------------------------------------------------------------------------------------------------
Net income 8,699 13,047
- ---------------------------------------------------------------------------------------------------
Year ended
December 31,
1998 1997
-----------------------------------
SUMMARY OF CORE EARNINGS:
Net interest income $50,126 $38,914
- ---------------------------------------------------------------------------------------------------
Provision for loan losses 650 700
- ---------------------------------------------------------------------------------------------------
Total noninterest income 2,104 1,518
- ---------------------------------------------------------------------------------------------------
Total noninterest expense 26,383 24,703
- ---------------------------------------------------------------------------------------------------
Pre-tax core earnings 25,197 15,029
- ---------------------------------------------------------------------------------------------------
</TABLE>
