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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 18, 2000
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
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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
Patrick A. Kelly
Chief Financial Officer
(330) 742-0500, Ext. 592
UNITED COMMUNITY FINANCIAL CORP. ANNOUNCES
EARNINGS FOR THIRD QUARTER 2000
YOUNGSTOWN, Ohio (October 18, 2000) - United Community Financial Corp. (Nasdaq:
UCFC) today announced its financial results for the third quarter of fiscal
2000. United Community is the holding company of The Home Savings and Loan Co.
and Butler Wick Corp.
For the three month period ended September 30, 2000, United Community reported
net income of $3.1 million, or $0.09 per diluted share, compared with a net loss
of $1.9 million, or $(0.06) per diluted share, for the same three month period
in the prior year. United Community's net interest income declined $3.1 million
in the third quarter of 2000 compared to the same period last year, primarily
due to interest expense on other borrowed funds in conjunction with a special $6
per share distribution declared in September 1999. Noninterest expense declined
by $9.8 million, due largely to a decrease in salaries and employee benefits and
a gain on the curtailment of postretirement benefits, which were partially
offset by a loss on the termination of Home Savings' pension plan.
Net income for the nine months ended September 30, 2000 was $9.2 million, or
$0.27 per diluted share, compared to $8.5 million, or $0.25 per diluted share,
for the nine months ended September 30, 1999. Net interest income decreased $8.2
million, or 18.7%, resulting primarily from an increase in interest expense on
other borrowed funds of $5.5 million, primarily in conjunction with the special
distribution. Also contributing to the decrease in net interest income was an
increase in interest expense on deposits of $3.1 million, due to an increase in
deposits and an increase in rates paid on deposits over this time period.
Noninterest expense through the first nine months of 2000 decreased $6.3
million, primarily attributable to a decrease in salaries and employee benefits
due largely to expense recognized in 1999 for the special capital distribution
related to the United Community Recognition and Retention Plan. The gain on
postretirement benefits curtailment also contributed to the decrease in
noninterest expense. These decreases were partially offset by the loss on
pension termination and an increase in franchise tax expense.
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Noninterest income increased $2.4 million, primarily due to a $1.6 million
increase in commissions earned at Butler Wick and a $622,000 increase in service
fees and other charges.
United Community's annualized return on average assets and return on average
equity were 0.98% and 4.71%, respectively, for the first nine months of the
year. The annualized return on average assets and return on average equity were
0.87% and 2.37%, respectively, for the nine months ended September 30, 1999.
Total shareholders' equity increased $5.7 million, or 2.2%, to $262.6 million at
September 30, 2000 from $256.9 million at December 31, 1999. The increase was
primarily due to earnings for the nine months, and was partially offset by
quarterly dividend payments. Book value as of September 30, 2000 was $7.69 per
share.
Total assets decreased $27.3 million, or 2.1%, from December 31, 1999 to
September 30, 2000, primarily as a result of a decline in cash and cash
equivalents of $71.4 million, or 64.1%, and a reduction in securities of $85.6
million, or 20.3%. United Community used these assets to reduce its other
borrowed funds by $50.9 million and to fund increases in net loans of $112.8
million and margin accounts of $13.8 million.
Net loans increased $112.8 million, or 15.6%, from December 31, 1999 to
September 30, 2000 due to an increase of $51.9 million in mortgage loans, an
increase of $48.1 million in commercial loans and a $12.8 million increase in
consumer loans. These increases were due to a continual effort to increase
loans in both United Community's current market and new markets such as Canton,
Stow and Cleveland.
Deposits increased $20.3 million, or 2.4%, from December 31, 1999 to September
30, 2000, primarily due to a $31.6 million increase in certificates of deposit
and a $4.6 million increase in checking accounts, which were offset by a $16.2
million decrease in savings accounts. The increases in certificates of deposits
and checking accounts were primarily due to competitive interest rates.
"We are satisfied with the results from the quarter, as well as with United
Community's progress in implementing its strategic plan," said Douglas M. McKay,
chairman and chief executive officer of United Community. "We have made banking
more convenient for our customers by introducing online banking and opening a
new bank branch in Howland, Ohio this quarter and telebanking services earlier
in the year. These new innovations will help us meet the needs of consumers."
McKay also pointed out several other developments in implementing its strategic
plan to increase its loan portfolio. Loan production offices were opened in
Canton and Stow during the third quarter and a third loan production office is
scheduled to open in Cleveland in the fourth quarter. The new loan production
offices, along with increased loan production in the Youngstown market, have
allowed United Community to increase its loan portfolio by $113.0 million in the
current year.
Home Savings will also be expanding by opening new branches at Youngstown State
University and the Lincoln Knolls Plaza in Youngstown, Ohio in the near future.
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Home Savings and Butler Wick are wholly owned subsidiaries of United Community
Financial Corp. Home Savings has 15 full service offices located throughout
Mahoning, Columbiana and Trumbull counties in Northeastern Ohio. Butler Wick has
10 full service offices located throughout Northeastern Ohio and Western
Pennsylvania. Additional information on United Community, Home Savings and
Butler Wick may be found on United Community's web site: www.ucfcorp.com.
###
This press release includes statements that may constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The statements regarding continued implementation
of United Community's strategic plan are forward-looking in nature. These
statements are subject to risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements. Such risks
include, among other factors, the acceptance of new products in the marketplace
and the success of finding additional opportunities for product and geographic
expansion. For a more complete list of risk factors, read United Community's
Form 10K filed with the Securities and Exchange Commission.
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UNITED COMMUNITY FINANCIAL CORP.
<TABLE>
<CAPTION>
As of As of
September 30, 2000 December 31,1999
------------------ ----------------
(In thousands, except per share data)
<S> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
ASSETS
Cash and cash equivalents $ 40,005 $ 111,445
Mortgage-backed securities 216,944 251,638
Investment securities 119,698 170,652
Federal Home Loan Bank stock 13,538 12,825
Net loans receivable:
Loans held for investment 837,965 725,632
Loans held for sale 4,363 3,860
Allowance for loan losses (6,461) (6,405)
Real estate owned 307 158
Other assets 73,887 57,768
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Total assets $ 1,300,246 $ 1,327,573
=========== ===========
LIABILITIES
Deposits $ 854,390 $ 834,087
Other borrowed funds 162,639 213,578
Other liabilities 20,652 23,040
----------- -----------
Total liabilities 1,037,681 1,070,705
SHAREHOLDERS' EQUITY
Preferred stock-no par value; 1,000,000 shares authorized and unissued
at September 30, 2000 -- --
Common stock-no par value; 499,000,000 shares authorized;
37,802,873 shares issued and outstanding at September 30, 2000 136,903 136,509
Retained earnings 155,091 153,553
Other comprehensive loss (1,698) (3,003)
Unearned compensation (27,731) (30,191)
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Total shareholders' equity 262,565 256,868
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Total liabilities and shareholders' equity $ 1,300,246 $ 1,327,573
=========== ===========
Book value per share $ 7.69 $ 7.46
Dividends paid per share $ 0.075 $ 0.075
</TABLE>
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<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Three Months Ended
September 30, June 30, September 30,
2000 2000 1999
------------------ ------------------ ------------------
(In thousands, except per share data)
<S> <C> <C> <C>
SELECTED EARNINGS DATA (UNAUDITED):
Interest income $ 23,236 $ 22,420 $ 22,699
Interest expense 11,443 10,371 7,850
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Net interest income 11,793 12,049 14,849
Provision for loan losses 150 -- --
Noninterest income:
Commissions 3,910 4,238 3,563
Service fees and other charges 1,404 1,385 1,085
Underwriting and investment banking 113 192 40
Net gains (losses)
Securities 1 (158) 21
Other 8 (4) (2)
Other income 278 204 155
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Total noninterest income 5,714 5,857 4,862
Noninterest expense
Salaries and employee benefits 9,483 8,470 18,110
Gain from curtailment of postretirement benefits (2,928) -- --
Loss from settlement of pension 1,008 -- --
Occupancy 552 532 500
Equipment and data processing 1,477 1,446 1,234
Acquisition expense -- -- 431
Other noninterest expense 3,148 2,779 2,294
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Total noninterest expense 12,740 13,227 22,569
Income before taxes 4,617 4,679 (2,858)
Income taxes 1,528 1,709 (916)
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Net income $ 3,089 $ 2,970 $ (1,942)
======== ======== ========
Basic earnings per share $ 0.09 $ 0.09 $ (0.06)
Diluted earnings per share $ 0.09 $ 0.09 $ (0.06)
</TABLE>
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<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
September 30, September 30,
2000 1999
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(In thousands, except per share data)
<S> <C> <C>
SELECTED EARNINGS DATA:
Interest income $ 67,535 $ 67,136
Interest expense 31,897 23,316
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Net interest income 35,638 43,820
Provision for loan losses 150 100
Noninterest income:
Commissions 13,532 11,891
Service fees and other charges 4,017 3,395
Underwriting and investment banking 327 396
Net gains (losses)
Securities 224 181
Other 5 (11)
Other income 694 520
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Total noninterest income 18,799 16,372
Noninterest expense
Salaries and employee benefits 27,554 33,803
Gain on postretirement curtailment (2,928) --
Loss on pension termination 1,008 --
Occupancy 1,540 1,473
Equipment and data processing 4,222 3,792
Acquisition expense -- 431
Other noninterest expense 8,985 7,206
-------- --------
Total noninterest expense 40,381 46,705
Income before taxes 13,906 13,387
Income taxes 4,745 4,902
-------- --------
Net income $ 9,161 $ 8,485
======== ========
Basic earnings per share $ 0.27 $ 0.25
Diluted earnings per share $ 0.27 $ 0.25
</TABLE>
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<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Three Months Ended
September 30, June 30, March 31,
2000 2000 2000
------------------ ------------------ ------------------
(Dollars in thousands)
<S> <C> <C> <C>
AVERAGE DAILY BALANCE OF SELECTED FINANCIAL CONDITION DATA (UNAUDITED):
Net loans held for investment (including allowance for loan losses $ 800,785 $ 746,430 $ 724,776
of $6,461, $6,324 and $6,390, respectively)
Net loans held for sale 3,908 4,142 3,979
Mortgage-backed securities 222,108 234,727 246,713
Investment securities 141,482 151,870 162,364
Margin accounts 43,702 42,881 36,295
Other interest-earning assets 20,630 19,107 23,203
Total interest-earning assets 1,232,615 1,199,157 1,197,330
Total assets 1,275,354 1,240,837 1,236,916
Certificates of deposit 471,751 443,474 448,488
Checking, demand and savings accounts 358,298 366,121 365,412
Other interest bearing liabilities 139,447 131,566 127,320
Total interest-bearing deposits 969,496 941,161 941,220
Total noninterest-bearing liabilities 45,401 40,595 37,925
Total liabilities 1,014,897 981,756 979,145
Shareholders' equity 260,457 259,081 257,771
Common shares outstanding for basic EPS calculation 33,252,174 32,903,672 32,923,217
Common shares outstanding for diluted EPS calculation 34,093,040 33,442,391 33,437,697
SUPPLEMENTAL LOAN DATA:
Loans originated $ 92,587 $ 93,366 $ 45,642
Loans purchased 3,262 4,281 322
Loan chargeoffs 16 70 28
Recoveries on loans 4 5 12
As of As of As of
September 30, 2000 June 30, 2000 March 31, 2000
------------------ ------------- --------------
(Dollars in thousands)
SUPPLEMENTAL DATA:
Nonaccrual loans $ 3,409 $ 3,757 $ 3,952
Restructured loans 212 214 216
Other real estate owned 307 302 204
Total nonperforming assets 3,928 4,273 4,372
Loans serviced for others 5,015 5,134 5,207
Number of full time equivalent employees 566 547 578
Mortgage-backed securities available for sale 99,097 102,863 108,670
Mortgage-backed securities held to maturity 117,847 125,115 131,657
Investment securities trading 5,813 5,161 6,590
Investment securities available for sale 113,010 144,102 150,865
Investment securities held to maturity 875 875 1,175
Federal home loan bank stock 13,538 13,287 13,048
Fair value of held to maturity securities 116,930 122,843 129,465
REGULATORY CAPITAL DATA:
Regulatory tangible capital $ 159,552 $ 155,816 $ 153,021
Tangible capital ratio 13.50 13.53 13.66
Regulatory core capital 159,552 155,816 153,021
Core capital ratio 13.50 13.53 13.66
Regulatory total capital 165,954 162,078 159,311
Total risk adjusted assets 710,548 679,300 645,164
Total risk adjusted ratio 23.36 23.86 24.69
</TABLE>
