-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R0iYOlB6/DugCnJIVpO9v2fuL6zmp6TbPNQRyqPYG+Laip7cnOCXA+716wZjytHB MN+/N+pyqFpB5P1Lyt9uOQ== 0000950152-03-000792.txt : 20030129 0000950152-03-000792.hdr.sgml : 20030129 20030129164829 ACCESSION NUMBER: 0000950152-03-000792 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030129 ITEM INFORMATION: Other events FILED AS OF DATE: 20030129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED COMMUNITY FINANCIAL CORP CENTRAL INDEX KEY: 0000707886 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 341856319 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24399 FILM NUMBER: 03530266 BUSINESS ADDRESS: STREET 1: 275 FEDERAL PLAZA WEST CITY: YOUNGSTOWN STATE: OH ZIP: 44503-1203 BUSINESS PHONE: 3307420500 8-K 1 l98462ae8vk.txt UNITED COMMUNITY FINANCIAL CORP. 8-K 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: January 29, 2003 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.) Item 5: Other Events 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 FOURTH QUARTER AND YEAR END 2002 YOUNGSTOWN, Ohio (January 29, 2003) - United Community Financial Corp. (Nasdaq: UCFC), holding company of The Home Savings and Loan Co. and Butler Wick Corp., announced today financial results for the fourth quarter and year end fiscal 2002. For the fourth quarter ended December 31, 2002, net income was reported as $5.4 million, or $0.17 per diluted share, compared to $5.6 million, or $0.17 per diluted share, for the fourth quarter of 2001. For the year ended December 31, 2002, net income was $20.8 million, or $0.65 per diluted share, compared with $15.7 million, or $0.48 per diluted share, for the year ended December 31, 2001. "2002 proved to be an excellent year for United Community," said Douglas M. McKay, chairman and chief executive officer of United Community. "We experienced a 33% increase in net income over 2001 while reducing our debt. We also continued to expand our customer base through the acquisition of Potters Financial Corp. and by opening a Home Savings branch in Mentor, Ohio and a Butler Wick office in Columbus, Ohio. During 2002, United Community also showed continuing improvement in our efficiency ratio, return on average assets and return on average equity compared with 2001." Fourth Quarter Results United Community's net interest income for the three months ended December 31, 2002 increased $2.5 million over the same period in 2001, while noninterest income decreased $2.6 million over the same quarter in the previous year. The increase in net interest income was also offset by a $1.4 million increase in noninterest expense and a $150,000 increase in the provision for loan losses. The increase in net interest income can be attributed to a reduction in interest expense on deposits and other borrowed funds due to the current interest rate environment, which, in turn, were partially offset by a decrease in interest earned on securities and margin accounts. The decrease in noninterest income was directly a result of a decline in gains on loans sold, underwriting and investment banking income and an increase in other recognized losses due to the disposal of fixed assets. These changes were partially offset by increases in gains recognized on securities, service fees and other charges. In 2001, United Community became active in the secondary market and during the fourth quarter of that year, in order to improve the company's interest rate risk profile, sold fixed rate loans out of the portfolio, resulting in large gains. Due to the current interest rate environment, United Community has been selling new loan originations to help reduce interest rate risk. The smaller net gains reported in the fourth quarter of 2002 relate to the sale of new originations, which it anticipates continuing to do in the future. The increase in noninterest expense was primarily the result of an increase in compensation due to the additional staff acquired from Potters, as well as increases in occupancy, equipment, data processing and other expenses related to the acquisition. These increases were partially offset by a decrease in the amortization of the core deposit intangible. Year to Date Results Net interest income for the year ended December 31, 2002 increased $15.5 million and noninterest income increased $2.6 million over the previous year, both of which were partially offset by a $10.7 million increase in noninterest expense and a $1.1 million increase in the provision for loan losses. The growth in net interest income for 2002 as compared to 2001 is primarily due to an increase of $17.8 million in loan income from new loan originations and the acquisitions of Industrial Bancorp and Potters Financial Corp., as well as a $3.1 million decline in interest expense on deposits. This increase was partially offset by decreases in interest earned on securities of $3.9 million and margin accounts of $944,000. The increase in noninterest income was a result of a $2.0 million increase in gains recognized on securities, $1.0 million in other income, $469,000 in gains on loans sold and $467,000 in service fees and other charges. The growth in other income was related to the sale of stock received by Home Savings in the demutualization of Anthem. These changes were partially offset by a decline in underwriting and investment banking fees and other recognized losses as a result of the disposal of fixed assets. Noninterest expense grew in part because of an increase in the amortization of core deposit intangible and compensation costs related to the two acquisitions. Contributing factors also included occupancy, equipment, data processing and other expenses, which were largely due to costs associated with the early extinguishment of debt reclassified from extraordinary items in accordance with SFAS No. 145 adopted on April 1, 2002. United Community's return on average assets and return on average equity were 1.04% and 7.74%, respectively, for the year ended December 31, 2002, while the returns on average assets and average equity were 0.97% and 6.03%, respectively, for the previous year. Financial Condition Total shareholders' equity increased $12.7 million from December 31, 2001 to December 31, 2002. This was principally due to income for the period, offset by quarterly dividend payments and treasury stock purchases. Book value as of December 31, 2002 was $7.79 per share. Total assets increased by $45.4 million, or 2.3%, to $2.0 billion at December 31, 2002 compared with December 31, 2001, again as a result of the Potters acquisition. Loans increased $71.7 million, securities by $35.3 million, goodwill by $13.9 million, while other borrowed funds decreased $61.6 million. These changes were funded by a $94.9 million decline in cash and cash equivalents and a $98.5 million increase in deposits. Net loans remained strong, increasing $71.7 million, or 5.1%, from December 31, 2001 to December 31, 2002. Specifically, Home Savings showed growth of $44.8 million in consumer loans, $19.4 million in commercial loans, $15.1 million in construction loans and $2.5 million in real estate loans. The allowance for loan losses increased $3.6 million, or 31.5% over last year to $15.1 million at December 31, 2002, of which, approximately $1.9 million was acquired from Potters. The remainder was due to an increase in the provision for loan losses less net chargeoffs, which can be attributed to growth in the loan portfolio, as well as current market conditions. The allowance for loan losses as a percentage of total loans increased to 1.01% at December 31, 2002 compared to 0.81% at December 31, 2001. Deposits increased $98.5 million, or 7.1%, from December 31, 2001 to December 31, 2002, mainly comprised of deposits acquired from Potters. While current rate conditions led Home Savings to realize a $13.6 million decrease in certificates of deposit, this was overcompensated by increases of $44.9 million in savings accounts and $67.2 million in checking accounts. Other borrowed funds decreased $61.6 million from December 31, 2001 to December 31, 2002, due mostly to the maturity and early extinguishment of Federal Home Loan Bank debt. "We remained focused on our three initiatives of growth, profitability and capital management throughout 2002," said McKay. "The acquisition of Potters helped to strengthen our position in our current market, while the opening of our new offices have provided growth opportunities in new market areas. We are well positioned to continue to build on our record of success and are therefore anticipating another strong year in 2003." Home Savings and Butler Wick are wholly owned subsidiaries of United Community Financial Corp. Home Savings operates 34 full service banking offices and 4 loan production offices, including the former Potters offices, located throughout Northern Ohio and Western Pennsylvania. Butler Wick has 12 office locations providing full service retail brokerage, capital markets and trust services throughout Northern Ohio and Western Pennsylvania. Additional information on United Community, Home Savings and Butler Wick may be found on United Community's web site: www.ucfconline.com. When used in this Form 8-K or in future filings by United Community with the SEC, in United Community's press releases or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue, "is anticipated." "estimate," "project" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in United Community's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in Home Savings' market area, demand for investments in Butler Wick's market area and competition, that could cause actual result to differ materially from historical earnings and those presently anticipated or projected. United Community cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. United Community advises readers that the factors listed above could affect United Community's financial performance and could cause United Community's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. United Community does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UNITED COMMUNITY FINANCIAL CORP. By: /s/ Patrick A. Kelly ----------------------------------- Patrick A. Kelly Chief Financial Officer Dated: January 28, 2003 UNITED COMMUNITY FINANCIAL CORP.
As of As of December 31, 2002 December 31, 2001 ----------------- ----------------- (In thousands, except per share data) SELECTED FINANCIAL CONDITION DATA: ASSETS Cash and cash equivalents $ 110,936 $ 205,883 Investment securities 242,328 206,998 Federal Home Loan Bank stock 21,069 18,760 Loans held for sale 45,825 20,192 Loans 1,493,312 1,417,959 Allowance for loan losses (15,099) (11,480) Real estate owned 994 477 Goodwill 33,593 19,664 Core deposit intangible 5,101 6,312 Other assets 52,072 60,015 ----------- ----------- Total assets $ 1,990,131 $ 1,944,780 =========== =========== LIABILITIES Deposits $ 1,481,901 $ 1,383,418 Other borrowed funds 210,024 271,631 Other liabilities 23,637 27,851 ----------- ----------- Total liabilities 1,715,562 1,682,900 SHAREHOLDERS' EQUITY Preferred stock-no par value; 1,000,000 shares authorized and unissued at December 31, 2002 -- -- Common stock-no par value; 499,000,000 shares authorized; 37,803,269 and 37,754,086 issued, respectively 138,207 136,903 Retained earnings 172,080 160,915 Other comprehensive income 2,363 1,402 Unearned compensation (19,724) (22,988) Treasury stock, at cost; 2,558,214 and 2,086,500 shares, respectively (18,357) (14,352) ----------- ----------- Total shareholders' equity 274,569 261,880 ----------- ----------- Total liabilities and shareholders' equity $ 1,990,131 $ 1,944,780 =========== =========== Book value per share $ 7.79 $ 7.34
Three Months Ended Twelve Months Ended December 31, December 31, ------------ ------------ 2002 2001 2002 2001 ---- ---- ---- ---- (In thousands, except per share data) SELECTED EARNINGS DATA (UNAUDITED): Interest income $ 31,062 $ 32,434 $ 126,693 $ 113,989 Interest expense 12,465 16,303 54,236 57,047 --------- --------- --------- --------- Net interest income 18,597 16,131 72,457 56,942 Provision for loan losses 1,600 1,450 3,578 2,495 Noninterest income: Commissions 3,429 3,380 13,677 13,411 Service fees and other charges 2,101 1,834 8,224 7,757 Underwriting and investment banking 119 806 312 1,316 Net gains (losses) Loans sold 1,161 5,111 5,919 5,450 Securities 1,655 (13) 1,476 (477) Other (260) (14) (515) 37 Other income 464 203 1,980 955 --------- --------- --------- --------- Total noninterest income 8,669 11,307 31,073 28,449 Noninterest expense: Salaries and employee benefits 10,679 10,033 39,917 34,528 Occupancy 817 679 3,186 2,575 Equipment and data processing 2,277 2,054 8,309 7,378 Amortization of core deposit intangible 434 756 2,180 1,671 Other noninterest expense 4,062 3,337 14,767 11,556 --------- --------- --------- --------- Total noninterest expense 18,269 16,859 68,359 57,708 Income before taxes 7,397 9,129 31,593 25,188 Income taxes 2,037 3,555 10,776 9,509 --------- --------- --------- --------- Net income $ 5,360 $ 5,574 $ 20,817 $ 15,679 ========= ========= ========= ========= Basic earnings per share $ 0.17 $ 0.18 $ 0.65 $ 0.49 Diluted earnings per share $ 0.17 $ 0.17 $ 0.65 $ 0.48 Dividends paid per share $ 0.075 $ 0.075 $ 0.300 $ 0.300
Three Months Ended Three Months Ended Three Months Ended December 31, September 30, June 30, 2002 2002 2002 ---- ---- ---- (Dollars in thousands) AVERAGE DAILY BALANCE OF SELECTED FINANCIAL CONDITION DATA (UNAUDITED): Net loans (including allowance for loan losses of $15,099, $14,865 and $14,365, respectively) $ 1,500,940 $ 1,518,533 $ 1,582,747 Loans held for sale 36,218 14,922 6,486 Investment securities 246,754 257,725 223,488 Margin accounts 15,683 16,980 18,430 Other interest-earning assets 94,420 85,323 80,641 Total interest-earning assets 1,894,015 1,893,483 1,911,792 Total assets 2,002,717 2,003,574 2,023,237 Certificates of deposit 824,516 855,939 880,608 Interest-bearing checking, demand and savings accounts 599,144 595,866 597,144 Other-interest bearing liabilities 215,389 198,047 197,727 Total interest-bearing liabilities 1,639,049 1,649,852 1,675,479 Noninterest-bearing deposits 55,562 47,255 43,345 Total noninterest-bearing liabilities 89,736 83,463 81,175 Total liabilities 1,728,785 1,733,315 1,756,654 Shareholders' equity 273,932 270,259 266,583 Common shares outstanding for basic EPS calculation 31,891,690 31,773,058 31,821,940 Common shares outstanding for diluted EPS calculation 32,375,598 32,318,094 32,254,684 SUPPLEMENTAL LOAN DATA: Loans originated $ 260,383 $ 220,129 $ 215,637 Loans purchased 1,000 7,317 13,568 Loans sold 108,034 42,434 135,440 Loan chargeoffs 1,394 261 80 Recoveries on loans 28 35 22
As of As of As of December 31, September 30, June 30, 2002 2002 2002 ---- ---- ---- SUPPLEMENTAL DATA: Nonaccrual loans $ 14,196 $ 13,466 $ 12,189 Restructured loans 1,271 1,255 1,281 Other real estate owned 994 1,622 1,167 Total nonperforming assets 16,461 16,343 14,637 Loans serviced for others 386,218 341,027 332,448 Number of full time equivalent employees 774 789 777 Investment securities trading 5,060 44,401 5,033 Investment securities available for sale 237,268 196,809 160,690 Investment securities held to maturity 0 59,917 65,079 Federal Home Loan Bank stock 21,069 20,832 20,586 Fair value of held to maturity securities 0 62,914 67,372 REGULATORY CAPITAL DATA: Regulatory tangible capital $ 150,821 $ 173,854 $ 166,533 Tangible capital ratio 8.05 9.11 8.67 Regulatory core capital 150,821 173,854 166,533 Core capital ratio 8.05 9.11 8.67 Regulatory total capital 163,419 184,929 177,766 Total risk adjusted assets 1,295,667 1,318,398 1,355,444 Total risk adjusted ratio 12.61 14.03 13.11
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