8-K 1 e8-k.txt UNITED COMMUNITY FINANCIAL CORPORATION 8-K 1 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 ------------- 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.) 2 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 3 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 4 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. 5 UNITED COMMUNITY FINANCIAL CORP.
As of As of June 30, 2000 December 31,1999 ------------- ---------------- (In thousands, except per share data) SELECTED FINANCIAL CONDITION DATA: 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 ---------------------- ----------------------- Total assets $ 1,269,569 $ 1,327,573 ====================== ======================= LIABILITIES Deposits $ 830,019 $ 834,087 Other borrowed funds 151,410 213,578 Other liabilities 28,582 23,040 ---------------------- ----------------------- 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) ---------------------- ----------------------- Total shareholders' equity 259,558 256,868 ---------------------- ----------------------- Total liabilities and shareholders' equity $ 1,269,569 $ 1,327,573 ====================== ======================= Book value per share $ 7.63 $ 7.46 Dividends paid per share $ 0.075 $ 0.075
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Three Months Ended Three Months Ended Three Months Ended June 30, March 31, June 30, 2000 2000 1999 --------------------- ---------------------- ---------------------- (In thousands, except per share data) SELECTED EARNINGS DATA (UNAUDITED): Interest income $ 22,420 $ 21,879 $ 22,390 Interest expense 10,371 10,083 7,764 --------------------- ---------------------- ---------------------- 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 --------------------- ---------------------- ---------------------- 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 --------------------- ---------------------- ---------------------- 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 --------------------- ---------------------- ---------------------- Net income $ 2,970 $ 3,102 $ 5,302 ===================== ====================== ====================== Basic earnings per share $ 0.09 $ 0.09 $ 0.16 Diluted earnings per share $ 0.09 $ 0.09 $ 0.16
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Six Months Ended Six Months Ended June 30, June 30, 2000 1999 ----------------------- ---------------------- (In thousands, except per share data) SELECTED EARNINGS DATA: Interest income $ 44,299 $ 44,434 Interest expense 20,454 15,464 ----------------------- ---------------------- 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 ----------------------- ---------------------- 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 ----------------------- ---------------------- Total noninterest expense 27,668 24,135 Income before taxes 9,289 16,245 Income taxes 3,217 5,818 ----------------------- ---------------------- Net income $ 6,072 $ 10,427 ======================= ====================== Basic earnings per share $ 0.18 $ 0.31 Diluted earnings per share $ 0.18 $ 0.31
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Three Months Ended Three Months Ended Three Months Ended June 30, March 31, December 31, 2000 2000 1999 ------------------ -------------------- ------------------ (Dollars in thousands) 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 ------------------ -------------------- ------------------ (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