-----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, R0DW6QhBDekR9p6bMn5XnUjXLwzcy0OA2PI6+Ab0Fiy5sVMH68CcuWEy+oZPpDi/ rE0vwUIxMaIbErTljeA+kw== 0000950152-03-006864.txt : 20030716 0000950152-03-006864.hdr.sgml : 20030716 20030716165740 ACCESSION NUMBER: 0000950152-03-006864 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030716 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030716 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: 03789808 BUSINESS ADDRESS: STREET 1: 275 FEDERAL PLAZA WEST CITY: YOUNGSTOWN STATE: OH ZIP: 44503-1203 BUSINESS PHONE: 3307420500 8-K 1 l02130ae8vk.txt UNITED COMMUNITY FINANCIAL CORPORATION 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 16, 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 7. Financial Statements and Exhibits (a.) and (b.) Not applicable. (c.) Exhibits. See Index to Exhibits. Item 9: Regulation FD Disclosure, providing information under Items 9 and 12. On July 16, 2003, United Community Financial Corp. issued a press release discussing its earnings for the second quarter of 2003. The press release is attached as Exhibit 99. 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: July 16, 2003 INDEX TO EXHIBITS Exhibit 99 Press release dated July 16, 2003 EX-99 3 l02130aexv99.txt EX-99 PRESS RELEASE EXHIBIT 99 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. 2592 UNITED COMMUNITY FINANCIAL CORP. ANNOUNCES EARNINGS FOR SECOND QUARTER 2003 YOUNGSTOWN, Ohio (July 16, 2003) - United Community Financial Corp. (Nasdaq: UCFC), holding company of The Home Savings and Loan Co. and Butler Wick Corp., today reported net income of $7.0 million, or $0.22 per diluted share, for the quarter ended June 30, 2003 compared to $6.0 million, or $0.19 per diluted share, for the second quarter of 2002. For the six months ended June 30, 2003, net income was $12.0 million, or $0.38 per diluted share, compared with $10.3 million, or $0.32 per diluted share, for the six months ended June 30, 2002. "United Community has had a strong first half of 2003, increasing earnings per share 19% over last year," said Douglas M. McKay, Chairman and Chief Executive Officer of United Community. "We are particularly pleased with the fact that we have been able to maintain a strong net interest margin and an improved efficiency ratio throughout this same time period." Second Quarter Results Net income increased $1.0 million for the three months ended June 30, 2003, compared to the same period in 2002. Net interest income decreased by $605,000, while the provision for loan losses increased by $1.8 million. Noninterest income increased $4.7 million, which can mainly be attributed to an increase of $3.8 million in gains recognized from the sale of loans. The increase in noninterest income was partially offset by increased noninterest expense. The decrease in net interest income is a result of decreases in interest rates on loans and securities, which was primarily offset by a lowering of interest rates on deposits. Additionally, effecting the decrease in net interest income was the level of refinancing activity during the quarter, which has caused a decline in average outstanding loans. As a result of this activity, the net interest margin declined 8 basis points to 3.84% for the three months ended June 30, 2003. During the second quarter of 2003, United Community sold newly originated loans and fixed rate loans from the portfolio to help manage interest rate risk. These sales resulted in gains of approximately $2.2 million and $4.2 million, respectively. In comparison, during the three months ended June 30, 2002, United Community sold newly originated loans that resulted in $673,000 in gains and loans out of the portfolio that resulted in $2.2 million in gains. Increases in gains on securities of $750,000, which are largely related to the market valuation of the trading securities portfolio, and $237,000 in commission income also contributed to the increase in noninterest income. These increases were partially offset by a $379,000 decline in service fees and other charges, which is principally a result of an impairment charge on mortgage servicing rights. Noninterest expense increased $1.4 million in the second quarter of 2003 compared to the same period in 2002 primarily as a result of a $2.0 million increase in salaries and employee benefits and a $309,000 increase in equipment and data processing. The increase in salaries and employee benefits is primarily due to a $977,000 charge for post retirement benefits as a result of increased heath care costs and an $806,000 increase in the market valuation of the Butler Wick retention plan. These increases were partially offset by decreases of $712,000 in other noninterest expense and $261,000 in the amortization of the core deposit intangible related to the acquisitions of Potters Financial Corporation (Potters) and Industrial Bancorp. The decline in other expense is primarily due to decreases in advertising costs, franchise taxes and telephone expense. YEAR TO DATE RESULTS Net interest income for the six months ended June 30, 2003 increased $1.7 million and noninterest income increased $4.7 million over the same period in the previous year. These increases were partially offset by a $2.8 million increase in noninterest expense and a $1.2 million increase in the provision for loan loss reserves. The increase in net interest income for the six months of fiscal 2003 compared to 2002 is primarily due to a decrease of $6.9 million in interest expense on deposits, which is mostly related to a decrease in interest rates and a decrease in certificates of deposit. This decrease was partially offset by a $4.7 million decline in interest earned on loans, as a result of a decrease in the average balance of loans and a decrease in interest rates, and decreases in interest earned on securities and other interest-earning assets. Noninterest income increased for the six months ended June 30, 2003 compared to the same period in 2002 as a result of increases of $5.0 million in gains on the sale of loans and $493,000 in net gains on securities. These increases were partially offset by decreases of $481,000 in service fees and other charges, which is primarily a result of an impairment charge on mortgage servicing rights, and $552,000 in other income. The decrease in other income was predominately due to the acquisition of stock through the demutualization of Anthem in 2002, which Home Savings received as a result of Anthem being the health care provider for its employees. Noninterest expense increased $2.8 million primarily as a result of a $3.2 million increase in salaries and employee benefits and $834,000 in equipment and data processing. The increase in salaries and employee benefits is primarily related to a $1.8 million charge for post retirement benefits as a result of increased health care costs, increased salaries from the acquisition of Potters that occurred in the second quarter of 2002 and an increase in the valuation of the Butler Wick retention plan. These increases were partially offset by decreases of $510,000 in the amortization of core deposit intangibles, related to the acquisitions of Industrial Bancorp and Potters, and $919,000 in other expense. The decline in other expense is predominately due to charges recognized in the first quarter of 2002 as a result of the early extinguishments of debt that did not reoccur in 2003. During 2002, United Community determined that it was advantageous to extinguish debt early and incur associated fees due to economic conditions and cash inflows from sales of loans. FINANCIAL CONDITION United Community's return on average assets and return on average equity were 1.20% and 8.74%, respectively, for the six months ended June 30, 2003. The returns on average assets and average equity were 1.00% and 7.71%, respectively, for the six months ended June 30, 2002. Total assets decreased by $10.6 million, or 0.54%, to $2.0 billion at June 30, 2003 compared with December 31, 2002. Securities increased $45.6 million, bank owned life insurance increased $20.0 million, other assets increased $1.3 million and deposits declined $55.2 million. These changes were funded by decreases of $48.3 million in cash and cash equivalents, $17.3 million in loans and $11.2 million in loans held for sale and an increase of $35.2 million in other borrowed funds. Net loans decreased $17.3 million, or 1.2%, from December 31, 2002 to June 30, 2003. Home Savings had a decrease of $160.1 million in real estate loans mainly as a result of the sale of approximately $90.4 million of fixed rate loans from the portfolio to help manage interest rate risk and continued refinancing activity in the portfolio as a result of the current interest rate environment. This decrease was partially offset by increases of $78.1 million in construction loans, $20.8 million in consumer loans and $2.4 million in commercial loans. With this change in the composition of the loan portfolio from real estate loans to other portfolios, an increase of $968,000 in nonperforming loans and current economic conditions, the allowance for loan losses increased $1.2 million, or 7.81%, to $16.3 million at June 30, 2003 compared to $15.1 million at December 31, 2002. The allowance for loan losses is monitored closely and may be increased or decreased depending on current data. The allowance for loan losses as a percentage of total loans increased to 1.10% at June 30, 2003 compared to 1.01% at December 31, 2002. During the second quarter of 2003, Home Savings invested $20.0 million in bank owned life insurance, which represents insurance on the lives of certain employees where Home Savings is the beneficiary. The purpose of this investment is to partially cover the cost of Home Savings' existing benefit plans. Bank owned life insurance provides a long-term asset to offset long-term benefit liabilities, while generating competitive investment yields. Increases in the Home Savings' policy cash value are tax deferred and death benefit proceeds received by Home Savings are tax-free. Deposits decreased $55.2 million, or 3.72%, from December 31, 2002 to June 30, 2003. Decreases in Home Savings' deposits are mainly due to a $78.3 million decrease in certificates of deposit, which was partially offset by a $16.0 million increase in savings accounts and $7.1 million increase in checking accounts. Other borrowed funds increased $35.2 million, or 16.76%, from December 31, 2002 to June 30, 2003. The increase consisted of an increase in long term advances from the Federal Home Loan Bank (FHLB) of $22.4 million, short term FHLB advances of $9.4 million and other short term borrowing as a result of bond positions entered into by Butler Wick. Total shareholders' equity increased $1.5 million from December 31, 2002 to June 30, 2003. The increase was largely due to income for the year partially offset by treasury stock purchases and quarterly dividend payments. Tangible book value and book value as of June 30, 2003 were $6.92 and $8.02 per share, respectively. Home Savings and Butler Wick are wholly owned subsidiaries of United Community Financial Corp. Home Savings operates 34 full service banking offices and 5 loan production 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 United Community's press release 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 results 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. UNITED COMMUNITY FINANCIAL CORP.
As of As of June 30, 2003 December 31, 2002 ------------- ----------------- (In thousands, except per share data) SELECTED FINANCIAL CONDITION DATA (UNAUDITED): ASSETS Cash and cash equivalents $ 62,679 $ 110,936 Securities 287,879 242,328 Federal Home Loan Bank stock 21,488 21,069 Loans held for sale 34,640 45,825 Loans 1,477,188 1,493,312 Allowance for loan losses (16,278) (15,099) Real estate owned 519 994 Goodwill 33,593 33,593 Core deposit intangible 4,372 5,101 Bank Owned Life Insurance 20,011 - Other assets 53,393 52,072 ------------- ------------- Total assets $ 1,979,484 $ 1,990,131 ============= ============= LIABILITIES Deposits $ 1,426,744 $ 1,481,901 Other borrowed funds 245,228 210,024 Other liabilities 31,441 23,637 ------------- ------------- Total liabilities 1,703,413 1,715,562 SHAREHOLDERS' EQUITY Preferred stock-no par value; 1,000,000 shares authorized and unissued at June 30, 2003 - - Common stock-no par value; 499,000,000 shares authorized; 37,802,081 and 37,803,269 issued, respectively 138,607 138,207 Retained earnings 179,296 172,080 Other comprehensive income 1,898 2,363 Unearned compensation (17,949) (19,724) Treasury stock, at cost; 3,373,697 and 2,558,214 shares, respectively (25,781) (18,357) ------------- ------------- Total shareholders' equity 276,071 274,569 ------------- ------------- Total liabilities and shareholders' equity $ 1,979,484 $ 1,990,131 ============= ============= Book value per share $ 8.02 $ 7.79 Tangible book value per share $ 6.92 $ 6.69
Three Months Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 ------------- ------------ ------------- ------------- (In thousands, except per share data) SELECTED EARNINGS DATA (UNAUDITED): Interest income $ 28,304 $ 32,458 $ 58,047 $ 63,584 Interest expense 10,177 13,726 21,408 28,619 ----------- ----------- ----------- ----------- Net interest income 18,127 18,732 36,639 34,965 Provision for loan losses 1,702 532 2,398 1,228 Noninterest income: Commissions 3,914 3,677 7,089 7,059 Service fees and other charges 1,632 2,011 3,432 3,913 Underwriting and investment banking 188 138 305 171 Net gains (losses) Loans sold 6,430 2,673 8,440 3,449 Securities 456 (294) 804 311 Other 15 (165) (44) (165) Other income 534 471 1,116 1,668 ----------- ----------- ----------- ----------- Total noninterest income 13,169 8,511 21,142 16,406 Noninterest expense: Salaries and employee benefits 11,938 9,947 22,840 19,670 Occupancy 916 878 1,745 1,550 Equipment and data processing 2,474 2,165 4,818 3,984 Amortization of core deposit intangible 340 601 729 1,239 Other noninterest expense 3,061 3,773 6,754 7,673 ----------- ----------- ----------- ----------- Total noninterest expense 18,729 17,364 36,886 34,116 Income before taxes 10,865 9,347 18,497 16,027 Income taxes 3,837 3,350 6,490 5,775 ----------- ----------- ----------- ----------- Net income $ 7,028 $ 5,997 $ 12,007 $ 10,252 =========== =========== =========== =========== Basic earnings per share $ 0.22 $ 0.19 $ 0.38 $ 0.32 Diluted earnings per share $ 0.22 $ 0.19 $ 0.38 $ 0.32 Dividends paid per share $ 0.075 $ 0.075 $ 0.150 $ 0.150
Three Months Ended Three Months Ended Three Months Ended June 30, March 31, December 31, 2003 2003 2002 ------------------- --------------------- -------------------- (In thousands) AVERAGE DAILY BALANCE OF SELECTED FINANCIAL CONDITION DATA (UNAUDITED): Net loans (including allowance for loan losses $ 1,494,086 $ 1,459,191 $ 1,500,940 of $16,278, $15,584 and $15,099, respectively) Loans held for sale 40,496 41,142 36,218 Securities 306,260 294,982 246,754 Margin accounts 14,255 14,382 15,683 Other interest-earning assets 31,562 79,498 94,420 Total interest-earning assets 1,886,659 1,889,195 1,894,015 Total assets 1,991,983 1,997,894 2,002,717 Certificates of deposit 756,609 805,590 824,516 Interest-bearing checking, demand and savings accounts 659,000 644,270 599,144 Other-interest bearing liabilities 235,362 210,250 215,389 Total interest-bearing liabilities 1,650,971 1,660,110 1,639,049 Noninterest-bearing deposits 59,130 59,105 55,562 Total noninterest-bearing liabilities 66,165 63,073 89,736 Total liabilities 1,717,136 1,723,183 1,728,785 Shareholders' equity 274,847 274,711 273,932 Common shares outstanding for basic EPS calculation 31,253 31,669 31,892 Common shares outstanding for diluted EPS calculation 31,839 32,011 32,376 SUPPLEMENTAL LOAN DATA: Loans originated $ 455,674 $ 267,489 $ 260,383 Loans purchased 68,818 37,726 1,000 Loans sold 213,633 113,649 108,034 Loan chargeoffs 1,172 246 1,394 Recoveries on loans 15 35 28
As of As of As of June 30, March 31, December 31, 2003 2003 2002 ------------------- --------------------- -------------------- (In thousands, except employee data) SUPPLEMENTAL DATA: Nonaccrual loans $ 15,625 $ 14,732 $ 14,196 Restructured loans 1,952 1,877 1,271 Other real estate owned 519 1,236 994 Total nonperforming assets 18,096 17,845 16,461 Loans serviced for others 577,716 436,782 386,218 Number of full time equivalent employees 776 769 774 Securities trading 13,170 19,939 5,060 Securities available for sale 274,709 290,101 237,268 Federal Home Loan Bank stock 21,488 21,276 21,069 REGULATORY CAPITAL DATA: Regulatory tangible capital $ 165,509 $ 157,192 $ 150,821 Tangible capital ratio 8.78 8.23 8.05 Regulatory core capital 165,509 157,192 150,821 Core capital ratio 8.78 8.23 8.05 Regulatory total capital 180,353 170,513 163,419 Total risk adjusted assets 1,483,047 1,351,232 1,295,667 Total risk adjusted ratio 12.16 12.62 12.61
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