EX-99 4 l89863aex99.txt EXHIBIT 99 1 EXHIBIT 99 Contact: INVESTORS Patrick A. Kelly United Community Financial Corp. (330) 742-0592 MEDIA MEDIA Susan E. Stricklin James King United Community Financial Corp. Edward Howard & Co. (330) 742-0638 (216) 781-2400 FOR IMMEDIATE RELEASE UNITED COMMUNITY COMPLETES ACQUISITION OF INDUSTRIAL BANCORP, INC. BRANCHES TO BECOME NORTHWEST DIVISION OF HOME SAVINGS AND LOAN YOUNGSTOWN, Ohio (July 2, 2001) - United Community Financial Corp. (Nasdaq: UCFC), holding company of The Home Savings and Loan Company and Butler Wick Corp., announced today it completed its acquisition of Bellevue-based Industrial Bancorp, Inc. on July 1, 2001. "This acquisition is a significant step in implementing our strategic plan to grow our company through product and geographic expansion," said Douglas M. McKay, chairman and president of United Community. "It further strengthens United Community's ability to maximize growth opportunities in new markets." Industrial Savings and Loan, the sole subsidiary of Industrial Bancorp, Inc., has 12 branches located in Ashland, Bellevue, Clyde, Fremont, Findlay, Lexington, Norwalk, Sandusky, Tiffin and Willard. These branches will now operate as the northwest division under the Home Savings name. David Windau, the former president and chief executive officer of Industrial, will lead the northwest division and report to David G. Lodge, president and chief operating officer of Home Savings. Home Savings is a community bank with a long-standing tradition of meeting and exceeding the expectations and financial needs of customers within each local community served. "Customers of Industrial can still count on the same friendly faces, branch locations and quality service they have come to know," said Lodge. "One of the most attractive aspects of this acquisition was the ability to retain 100 percent of the employee base." Customers in the northwest division can expect to see an expanded array of financial products and services from Home Savings, including new deposit, lending and business 2 programs. Later this year, when the computer systems of the two organizations are integrated, 24-hour online and telephone banking will also be made available in these areas. At the same time, branch signage will reflect the name change. United Community Financial Corp. is an Ohio-based unitary thrift holding company. Its subsidiaries include The Home Savings and Loan Company and Butler Wick Corp. Home Savings has 29 full-service branches and four loan production offices located throughout Northeastern Ohio, while Butler Wick has 11 offices located throughout Northeastern Ohio and Western Pennsylvania. Additional information on United Community may be found on its web site: www.ucfconline.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. Statements related to the name change to Home Savings and the integration of computer systems 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. 3 UNITED COMMUNITY FINANCIAL CORP. PRO-FORMA STATEMENT OF FINANCIAL CONDITION MARCH 31, 2001 (dollars in thousands)
Historical ----------------------------- United Industrial Pro-forma Community Bancorp Adjustments Notes Consolidated -------------------------------------------------------------------------- Assets: Cash and deposits with banks $ 26,656 $ 1,245 $ (5,540) (4) $ 22,361 Federal funds sold and other 45,321 24,830 70,151 ------------------------------------------ ----------- Total cash and cash equivalents 71,977 26,075 (5,540) 92,512 ------------------------------------------ ----------- Investment securities: Trading 5,968 5,968 Available for sale 79,415 12,019 91,434 Held to maturity 881 881 Mortgage-related securities: Available for sale 97,741 97,741 Held to maturity 100,651 110 7 (2) 100,761 (7) (3) Loans, net 927,399 379,236 6,367 (2) 1,310,909 (2,093) (3) Margin accounts 29,350 29,350 Federal Home Loan Bank stock 14,039 3,820 17,859 Premises and equipment 11,964 5,216 180 (2) 17,352 (8) (3) Accrued interest receivable 8,222 2,520 10,742 Real estate owned 349 349 Other assets 8,802 595 7,077 (2) 32,321 18,121 (1) 215 (2) (37) (3) (2,452) (3) ------------------------------------------ ----------- Total assets $ 1,356,758 $ 429,591 $ 21,830 $ 1,808,179 ========================================== =========== Liabilities: Deposits $ 939,693 $ 315,703 $ 3,619 (2) $ 1,256,400 (2,615) (3) Other borrowed funds 138,516 50,000 664 (2) 275,966 87,302 (1) (516) (3) Advance payments by borrowers for taxes and insurance 2,564 929 3,493 Accrued interest payable 3,612 1,481 5,093 Accrued expenses and other liabilities 14,822 1,860 348 (3) 15,091 (1,939) (4) ------------------------------------------ ----------- Total liabilities 1,099,207 369,973 86,863 1,556,043 ------------------------------------------ ----------- Shareholders' Equity: Preferred stock -- -- -- -- Common stock 136,989 38,091 (38,091) (1) 136,989 Retained earnings 155,706 43,151 (43,151) (1) 150,291 (3,601) (4) (1,814) (3) Accumulated other comprehensive income 1,009 1,995 (1,995) (1) 1,009 Unearned stock compensation (25,795) (2,243) 2,243 (1) (25,795) Treasury stock (10,358) (21,376) 21,376 (1) (10,358) ------------------------------------------ ----------- Total shareholders' equity 257,551 59,618 (65,033) 252,136 ------------------------------------------ ----------- Total liabilities and shareholders;' equity $ 1,356,758 $ 429,591 $ 21,830 $ 1,808,179 ========================================== ===========
B-1 4 UNITED COMMUNITY FINANCIAL CORP. PRO-FORMA STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDING MARCH 31, 2001 (dollars in thousands, except per share data)
Historical ----------------------------------- United Industrial Pro-forma Community Bancorp Adjustments Notes Consolidated ------------------------------------------------------------------------------ Interest income Loans $ 18,074 $ 8,081 $ (268) (3) $ 25,887 Mortgage-related securities: Available for sale 1,464 1,464 Held to maturity 1,782 3 1,785 Investment securities: Trading 31 31 Available for sale 1,332 174 1,506 Held to maturity 13 13 Margin accounts 668 668 FHLB stock dividend 246 67 313 Other interest-earning assets 428 190 618 ----------------------------------------------- ---------------- Total interest income 24,038 8,515 (268) 32,285 Interest expense Interest on deposits 10,284 3,953 (230) (3) 14,007 Interest on Federal Home Loan Bank advances 1,397 775 1,096 (4) 3,218 (50) (3) ----------------------------------------------- ---------------- Total interest expense 11,681 4,728 816 17,225 ----------------------------------------------- ---------------- Net interest income 12,357 3,787 (1,084) 15,060 Provision for loan loss allowances 330 120 450 ----------------------------------------------- ---------------- Net interest income after provision for loan loss allowances 12,027 3,667 (1,084) 14,610 ----------------------------------------------- ---------------- Noninterest income Commissions 3,591 3,591 Service fees and other charges 1,919 204 2,123 Underwriting and investment banking fees 63 63 Net gains (losses): Mortgage-related securities 92 92 Investment securities 245 245 Trading securities (411) (411) Loans 25 67 92 Other (9) 21 12 Other income 273 7 (7) (3) 273 ----------------------------------------------- ---------------- Total noninterest income 5,788 299 (7) 6,080 ----------------------------------------------- ---------------- Noninterest expenses Salaries and employee benefits 7,864 950 8,814 Occupancy 573 121 2 (3) 696 Equipment and data processing 1,619 203 1,822 Deposit insurance premiums 42 15 57 Franchise tax 510 20 530 Advertising 551 26 577 Other expenses 1,620 377 320 (3) 2,317 ----------------------------------------------- ---------------- Total noninterest expense 12,779 1,712 322 14,813 ----------------------------------------------- ---------------- Income before income taxes 5,036 2,254 (1,413) 5,877 Income taxes 1,834 815 (384) (4) 2,267 2 (3) ----------------------------------------------- ---------------- Net income $ 3,202 $ 1,439 $ (1,031) $ 3,610 =============================================== ================ EPS shares: Basic 32,671 4,135 (4,135) 32,671 Diluted 32,815 4,245 (4,245) 32,815 Basic earnings per share $ 0.10 $ 0.35 $ 0.11 Diluted earnings per share $ 0.10 $ 0.34 $ 0.11
B-2 5 UNITED COMMUNITY FINANCIAL CORP. PRO-FORMA STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDING DECEMBER 31, 2000 (dollars in thousands, except per share data)
Historical ------------------------------ United Industrial Pro-forma Community Bancorp Adjustments Notes Consolidated -------------------------------------------------------------------------------- Interest income Loans $ 62,836 $ 30,111 $ (1,825) (3) $ 91,122 Mortgage-related securities: Available for sale 6,737 6,737 Held to maturity 8,651 16 (7) (3) 8,660 Investment securities: Trading 145 145 Available for sale 7,896 800 8,696 Held to maturity 62 62 Margin accounts 3,565 3,565 FHLB stock dividend 968 263 1,231 Other interest-earning assets 762 874 1,636 ----------------------------------------------- ----------------- Total interest income 91,622 32,064 (1,832) 121,854 Interest expense Interest on deposits 35,394 14,694 (2,385) (3) 47,703 Interest on Federal Home Loan Bank advances 8,710 2,833 4,444 (4) 15,521 (466) (3) ----------------------------------------------- ----------------- Total interest expense 44,104 17,527 1,593 63,224 ----------------------------------------------- ----------------- Net interest income 47,518 14,537 (3,425) 58,630 Provision for loan loss allowances 300 113 413 ----------------------------------------------- ----------------- Net interest income after provision for loan loss allowances 47,218 14,424 (3,425) 58,217 ----------------------------------------------- ----------------- Noninterest income Commissions 17,176 17,176 Service fees and other charges 5,607 830 6,437 Underwriting and investment banking fees 646 646 Net gains (losses): Mortgage-related securities 115 115 Investment securities 36 182 218 Trading securities 241 241 Loans 116 116 Other (2) 13 11 Other income 935 34 (30) (3) 939 ----------------------------------------------- ----------------- Total noninterest income 24,754 1,175 (30) 25,899 ----------------------------------------------- ----------------- Noninterest expenses Salaries and employee benefits 36,193 3,477 39,670 Gain on porstretirement curtailment (2,928) (2,928) Loss on pension termination 1,008 1,008 Occupancy 2,093 478 6 (3) 2,577 Equipment and data processing 5,807 880 6,687 Deposit insurance premiums 168 61 229 Franchise tax 3,710 399 4,109 Advertising 1,924 221 2,145 Other expenses 6,332 1,303 2,132 (3) 9,767 ----------------------------------------------- ----------------- Total noninterest expense 54,307 6,819 2,138 63,264 ----------------------------------------------- ----------------- Income before income taxes 17,665 8,780 (5,593) 20,852 Income taxes 6,051 3,081 (1,555) (4) 7,923 346 (3) ----------------------------------------------- ----------------- Net income $ 11,614 $ 5,699 $ (4,384) $ 12,929 =============================================== ================= EPS shares: Basic 33,186 4,116 (4,116) 33,186 Diluted 33,316 4,152 (4,152) 33,316 Basic earnings per share $ 0.35 $ 1.38 $ 0.39 Diluted earnings per share $ 0.35 $ 1.37 $ 0.39
B-3 6 UNITED COMMUNITY FINANCIAL CORP. NOTES TO UNAUDITED PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Basis of Presentation: The following pro-forma adjustments are based on available information and certain estimates and assumptions. Therefore, it is likely that the actual adjustments will differ from the pro-forma adjustments. United Community believes that such assumptions provide a reasonable basis for presenting all of the significant effects of the following transactions and that the pro-forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro-forma consolidated financial statements. Adjustments to Pro-forma Consolidated Financial Statements (1) Represents the acquisition for a total purchase price of $$87,302. The acquisition, which was paid in cash, is summarized as follows: Total cash paid to INBI shareholders $ 87,302 Industrial Bancorp shareholders' equity 59,618 ----------------- Acquisition cost in excess of book value 27,684 Adjustments to reflect fair value (see (2) below) (9,563) ----------------- Total goodwill $ 18,121 ================= (2) Represents adjustments to reflect fair values of assets and liabilities as follows: Mortgage-related securities held to maturity 7 Loans, net 6,367 Premises and equipment 180 Mortgage servicing rights 215 Core deposit intangible 7,077 Deposits (3,619) FHLB advances (664) ----------------- Total fair value adjustments 9,563 ================= (3) Represents the amortization of the purchase accounting adjustments over the following periods: Weighted Average Amortization Life Method ------------------------------ Mortgage-related securities held to maturity 6 months straight line Loans, net 7 years level yield Premises and equipment 15 years straight line Mortgage servicing rights 7.5 years level yield Core deposit intangible 5 years level yield Deposits 3 years level yield FHLB advances 1 year level yield (4) Represents interest expense on FHLB advances used to fund the acquisition and the related income tax effect. B-4