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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 19, 2000
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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 44503-1203
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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 SECOND QUARTER 2000
YOUNGSTOWN, Ohio (July 19, 2000) - United Community Financial Corp., (Nasdaq:
UCFC) today announced its financial results for the second quarter of fiscal
2000. United Community, the holding company of The Home Savings and Loan Co. and
Butler Wick Corp., also said it made progress during the quarter on several
initiatives to achieve product and geographic expansion.
For the three month period ended June 30, 2000, United Community reported net
income of $3.0 million, or $0.09 per diluted share, compared with $5.3 million,
or $0.16 per diluted share, for the same three month period in the prior year.
United Community's net interest income declined $2.6 million in the second
quarter of 2000 when 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 increased by
$1.2 million, due largely to an increase in salaries and employee benefits.
Net income for the six months ended June 30, 2000 was $6.1 million, or $0.18 per
diluted share, compared to $10.4 million, or $0.31 per diluted share, for the
six months ended June 30, 1999. Net interest income decreased $5.1 million, or
17.7%, resulting from an increase in interest expense on other borrowed funds of
$3.6 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 $1.4 million, due to an increase in deposits over this
time period. Noninterest expense through the first six months of 2000 increased
$3.5 million, of which $2.4 million was attributable to an increase in
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salaries and employee benefits, primarily due to the United Community
Recognition and Retention Plan and the Butler Wick Retention Plan.
The decrease in net interest income and the increase in noninterest expense were
partially offset by a $1.6 million increase in noninterest income, primarily due
to a $1.3 million increase in commissions earned at Butler Wick.
United Community's annualized return on average assets and return on average
equity were 0.98% and 4.70%, respectively, for the first half of the year. The
annualized return on average assets and return on average equity were 1.60% and
4.37%, respectively, for the six months ended June 30, 1999.
Total shareholders' equity increased $2.7 million, or 1.1%, to $259.6 million at
June 30, 2000 from $256.9 million at December 31, 1999. The increase was
primarily due to earnings for the six months, and was partially offset by
quarterly dividend payments. Book value as of June 30, 2000 was $7.63 per share.
Total assets decreased $58.0 million, or 4.4%, from December 31, 1999 to June
30, 2000, primarily as a result of a decline in cash and cash equivalents of
$87.2 million, or 78.2%, and a reduction in securities of $44.2 million, or
10.5%. United Community used these assets to reduce its other borrowed funds by
$62.2 million and to fund increases in net loans of $58.3 million and margin
accounts of $9.7 million.
Deposits declined $4.1 million, or 0.5%, from December 31, 1999 to June 30,
2000 primarily due to a $7.2 million decrease in savings accounts which was
partially offset by a $3.6 million increase in checking accounts.
"We are satisfied with the results from the quarter, as well as with United
Community's progress in implementing its strategic plan to increase its loan
portfolio, said Douglas M. McKay, chairman and chief executive officer of United
Community. We have seen positive response to the recent changes in our
telebanking services and expect to begin offering online banking within the next
several months. Product offerings, such as these, will help us meet the
ever-changing needs of consumers."
McKay also pointed to several other significant developments in the quarter
beginning with the appointment of David G. Lodge as President and Chief
Operating Officer of Home Savings. Lodge brings 28 years of experience in the
banking industry and has begun to implement organizational improvements to
promote growth at Home Savings.
In accordance with its strategic plan, United Community has grown its loan
portfolio by $58.3 million over the last six months. To help continue growth,
Patrick Bevack has been appointed as the Senior Vice President of Home Savings
Mortgage
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Department. Bevack, who brings over 23 years of experience in the financial
services area, will be responsible for managing Home Savings' expanding mortgage
banking operation. To expand its lending opportunities, Home Savings is in the
process of establishing loan origination offices to service the Cleveland,
Akron, Canton and Stow areas. Staff has been hired and offices leased for the
new loan offices in Canton and Stow, with plans to open there in the near
future. Home Savings is still looking for additional space in the Cleveland
area, which will likely open in mid-September. Anthony Corrao, who brings over
25 years of banking experience, has been appointed Vice President and Manager of
this market area.
Home Savings has also expanded its Consumer Lending and Retail Sales and Service
Support departments to help achieve strategic goals. Steve Schulz has been named
Vice President of Consumer Lending. With over 19 years of experience, Schulz
will be responsible for managing, developing and delivering the consumer loan
products and services. Karen DeAmicis, who has over 21 years of experience, has
been named the Assistant Vice President of Retail Sales and Service Support. She
will be responsible for enhancing Home Savings' retail operations.
Butler Wick has expanded its trust operations in Trumbull County by opening a
new trust office in Howland, Ohio.
Home Savings and Butler Wick are wholly owned subsidiaries of United Community
Financial Corp. Home Savings has 14 offices located throughout Mahoning,
Columbiana and Trumbull counties in Northeastern Ohio. Butler Wick has 10
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 the company's Form 10K
filed with the Securities and Exchange Commission.
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UNITED COMMUNITY FINANCIAL CORP.
<TABLE>
<CAPTION>
As of As of
June 30, 2000 December 31,1999
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(In thousands, except per share data)
SELECTED FINANCIAL CONDITION DATA:
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 24,276 $ 111,445
Mortgage-backed securities 227,978 251,638
Investment securities 150,138 170,652
Federal Home Loan Bank stock 13,287 12,825
Net loans receivable:
Loans held for investment 783,810 725,632
Loans held for sale 3,946 3,860
Allowance for loan losses (6,324) (6,405)
Real estate owned 302 158
Other assets 72,156 57,768
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Total assets $ 1,269,569 $ 1,327,573
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LIABILITIES
Deposits $ 830,019 $ 834,087
Other borrowed funds 151,410 213,578
Other liabilities 28,582 23,040
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Total liabilities 1,010,011 1,070,705
SHAREHOLDERS' EQUITY
Preferred stock-no par value; 1,000,000 shares authorized and unissued
at June 30, 2000 - -
Common stock-no par value; 499,000,000 shares authorized;
37,756,582 shares issued and outstanding at June 30, 2000 136,616 136,509
Retained earnings 154,546 153,553
Other comprehensive loss (3,163) (3,003)
Unearned compensation (28,441) (30,191)
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Total shareholders' equity 259,558 256,868
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Total liabilities and shareholders' equity $ 1,269,569 $ 1,327,573
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Book value per share $ 7.63 $ 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
June 30, March 31, June 30,
2000 2000 1999
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(In thousands, except per share data)
SELECTED EARNINGS DATA (UNAUDITED):
<S> <C> <C> <C>
Interest income $ 22,420 $ 21,879 $ 22,390
Interest expense 10,371 10,083 7,764
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Net interest income 12,049 11,796 14,626
Provision for loan losses - - 25
Noninterest income:
Commissions 4,238 5,384 4,224
Service fees and other charges 1,385 1,255 1,234
Underwriting and investment banking 192 21 92
Net gains (losses)
Securities (158) 381 33
Other (4) 2 (10)
Other income 204 212 188
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Total noninterest income 5,857 7,255 5,761
Noninterest expense
Salaries and employee benefits 8,470 9,628 7,864
Occupancy 532 456 515
Equipment and data processing 1,446 1,300 1,308
Other noninterest expense 2,779 3,057 2,356
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Total noninterest expense 13,227 14,441 12,043
Income before taxes 4,679 4,610 8,319
Income taxes 1,709 1,508 3,017
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Net income $ 2,970 $ 3,102 $ 5,302
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Basic earnings per share $ 0.09 $ 0.09 $ 0.16
Diluted earnings per share $ 0.09 $ 0.09 $ 0.16
</TABLE>
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<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, June 30,
2000 1999
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(In thousands, except per share data)
SELECTED EARNINGS DATA:
<S> <C> <C>
Interest income $ 44,299 $ 44,434
Interest expense 20,454 15,464
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Net interest income 23,845 28,970
Provision for loan losses - 100
Noninterest income:
Commissions 9,622 8,328
Service fees and other charges 2,640 2,310
Underwriting and investment banking 214 494
Net gains (losses)
Securities 223 22
Other (3) (9)
Other income 416 365
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Total noninterest income 13,112 11,510
Noninterest expense
Salaries and employee benefits 18,098 15,693
Occupancy 988 973
Equipment and data processing 2,746 2,557
Other noninterest expense 5,836 4,912
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Total noninterest expense 27,668 24,135
Income before taxes 9,289 16,245
Income taxes 3,217 5,818
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Net income $ 6,072 $ 10,427
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Basic earnings per share $ 0.18 $ 0.31
Diluted earnings per share $ 0.18 $ 0.31
</TABLE>
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<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Three Months Ended
June 30, March 31, December 31,
2000 2000 1999
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(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 $ 746,430 $ 724,776 $ 712,985
of $6,324, $6,390 and $6,405, respectively)
Net loans held for sale 4,142 3,979 3,526
Mortgage-backed securities 234,727 246,713 259,128
Investment securities 151,870 162,364 191,246
Margin accounts 42,881 36,295 31,771
Other interest-earning assets 19,107 23,203 78,452
Total interest-earning assets 1,199,157 1,197,330 1,277,108
Total assets 1,240,837 1,236,916 1,324,143
Certificates of deposit 443,474 448,488 440,658
Checking, demand and savings accounts 366,121 365,412 362,148
Other interest bearing liabilities 131,566 127,320 160,962
Total interest-bearing deposits 941,161 941,220 963,768
Total noninterest-bearing liabilities 40,595 37,925 101,980
Total liabilities 981,756 979,145 1,065,748
Shareholders' equity 259,081 257,771 258,395
Common shares outstanding for basic EPS calculation 32,903,672 32,923,217 33,827,224
Common shares outstanding for diluted EPS calculation 33,442,391 33,437,697 34,367,314
SUPPLEMENTAL LOAN DATA:
Loans originated $ 93,366 $ 45,642 $ 54,871
Loans purchased 4,281 322 -
Loan chargeoffs 70 28 29
Recoveries on loans 5 12 13
As of As of As of
June 30, 2000 March 31, 2000 December 31, 1999
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(Dollars in thousands)
SUPPLEMENTAL DATA:
Nonaccrual loans $ 3,757 $ 3,952 $ 3,568
Restructured loans 214 216 317
Other real estate owned 302 204 158
Total nonperforming assets 4,273 4,372 4,043
Loans serviced for others 5,134 5,207 5,292
Number of full time equivalent employees 547 578 583
Mortgage-backed securities available for sale 102,863 108,670 113,559
Mortgage-backed securities held to maturity 125,115 131,657 138,079
Investment securities trading 5,161 6,590 7,657
Investment securities available for sale 144,102 150,865 161,904
Investment securities held to maturity 875 1,175 1,091
Federal home loan bank stock 13,287 13,048 12,825
Fair value of held to maturity securities 122,843 129,465 137,091
REGULATORY CAPITAL DATA:
Regulatory tangible capital $ 155,816 $ 153,021 $ 320,119
Tangible capital ratio 13.53 13.66 26.75
Regulatory core capital 155,816 153,021 320,119
Core capital ratio 13.53 13.66 26.75
Regulatory total capital 162,078 159,311 326,376
Total risk adjusted assets 679,300 645,164 647,426
Total risk adjusted ratio 23.86 24.69 50.41
</TABLE>
