-----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, WlQr9qc0aNsKPGPbsqaQA+1sR4RNMv/d7eUWz27QYJ5cz4vuB64dCmQkNv7LDl0Z tXHJ4STYqy2byZGWuZpyKQ== 0000950152-04-000380.txt : 20040121 0000950152-04-000380.hdr.sgml : 20040121 20040121162917 ACCESSION NUMBER: 0000950152-04-000380 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040121 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040121 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: 04535418 BUSINESS ADDRESS: STREET 1: 275 FEDERAL PLAZA WEST CITY: YOUNGSTOWN STATE: OH ZIP: 44503-1203 BUSINESS PHONE: 3307420500 8-K 1 l05184ae8vk.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 21, 2004 ---------------- 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 12: Results of Operations and Financial Condition. On January 21, 2004, United Community Financial Corp. issued a press release discussing its earnings for the fourth 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: January 21, 2004 INDEX TO EXHIBITS Exhibit 99 Press release dated January 21, 2004 EX-99 3 l05184aexv99.txt EXHIBIT 99 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 FOURTH QUARTER 2003 YOUNGSTOWN, Ohio (January 21, 2004) - United Community Financial Corp. (United Community) (Nasdaq: UCFC), holding company of The Home Savings and Loan Co. (Home Savings) and Butler Wick Corp. (Butler Wick), today reported net income of $5.2 million, or $0.17 per diluted share, for the quarter ended December 31, 2003 compared to $5.4 million, or $0.17 per diluted share, for the fourth quarter of 2002. For the year ended December 31, 2003, net income was $22.9 million, or $0.72 per diluted share, compared with $20.8 million, or $0.65 per diluted share, for the year ended December 31, 2002. "United Community is pleased to report record earnings for the sixth consecutive year since becoming a publicly traded company, " said Douglas M. McKay, Chairman and Chief Executive Officer of United Community. "Additionally, we are happy to see the realization of our strategic initiatives unfold as demonstrated by our performance for 2003. Furthermore, we look forward to the new year with a continued focus on profit, balance sheet management and capital levels." Fourth Quarter Results - ---------------------- Net income decreased $210,000 for the three months ended December 31, 2003 compared to the same period in 2002. Net interest income decreased by $1.1 million and the provision for loan losses decreased by $1.4 million during the same period. Additionally, noninterest income increased $496,000, which was partially offset by a $50,000 increase in noninterest expense. The decrease in net interest income is a result of declining interest rates on loans and securities, which was partially offset by a lowering of interest rates on deposits. As a result of this activity, the net interest margin declined 18 basis points to 3.70% for the three months ended December 31, 2003 compared to the same period in 2002. The provision for loan losses declined $1.4 million for the three months ended December 31, 2003 compared to the same period in 2002. This decrease was based on the needed level of the allowance for loan losses, as a result of a decline in delinquent and nonperforming loans. The increase in noninterest income was primarily a result of increases in service fees, commissions earned and underwriting and investment banking income. These increases were partially offset by decreases in gains recognized on the sale of securities and loans. Noninterest expense increased primarily as a result of an increase in salaries and employee benefits, which was offset by a decrease in other expenses related to regulatory fees and disaster recovery preparation. The increase in salaries and benefits is principally related to the change in the market value of retention plan assets and a charge for post retirement medical benefits as a result of rising health care costs. In addition, provisions for bonuses and commissions earned rose as a result of increased underwriting and investment banking activity in the fourth quarter of 2003. "During the fourth quarter of 2003 we expanded our market again through the opening of a full service banking branch in Aurora, Ohio", said Douglas M. McKay. "This expansion, along with a loan production office opened in the Columbus area earlier this year and the strong growth we have seen in our loan portfolio, has helped us continue to position ourselves for the future." Year to Date Results - -------------------- Net income increased $2.1 million, or 10.2%, for the year ended December 31, 2003. During the same time period, net interest income decreased $313,000, the provision for loan losses was reduced by $399,000, while noninterest income increased $9.0 million. This increase was partially offset by a $5.2 million increase in total noninterest expense. The decrease in net interest income for the year ended December 31, 2003 compared to 2002 is primarily due to a decrease in interest earned on loans and securities. This decrease was substantially offset by decreases in interest rates on deposits. Further offsetting this decrease was a change in the average balance of interest-bearing liabilities. Noninterest income increased $9.0 million for the year ended December 31, 2003 compared to 2002 as a result of increases in gains recognized on the sale of loans, commissions earned and underwriting and investment banking income. The increase in commissions and underwriting are predominately related to an increase in the dollar volume of bond issues underwritten by Butler Wick throughout the year. Net gain on loan sales increased in 2003 due to the historically low interest rate environment and the volume of loans sold. Home Savings has been selling new loan originations to help manage interest rate risk. Noninterest expense increased $5.2 million primarily as a result of increases in salaries and employee benefits and equipment and data processing costs. The increase in salaries and employee benefits is primarily related to a charge for post retirement benefits as a result of increased health care costs, personnel additions from the acquisition of Potters Financial Corporation that occurred in the second quarter of 2002, an increase in the valuation of the Butler Wick retention plan and increases in commissions paid and bonus accruals. These increases were partially offset by a decrease in other noninterest expense 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 1.15% and 8.27%, respectively, for the year ended December 31, 2003. The returns on average assets and average equity were 1.04% and 7.74%, respectively, for the year ended December 31, 2002. Total assets increased by $83.7 million, or 4.21%, to $2.1 billion at December 31, 2003 compared with December 31, 2002. The net change in assets was a result of increases of $109.6 million in loans, $20.5 million in bank owned life insurance and $2.2 million in other assets partially offset by decreases of $29.8 million in cash and cash equivalents and $19.5 million in loans held for sale. Total liabilities changed $78.4 million as a result of a $128.4 million increase in other borrowed funds offset by a decrease of $58.2 million in deposits. Net loans increased $109.6 million, or 7.42%, from December 31, 2002 to December 31, 2003. Home Savings had increases of $161.9 million in commercial real estate loans, $148.6 million in construction loans, $63.2 million in consumer loans and $8.2 million in commercial loans. These increases were partially offset by a decrease of $275.4 million in one to four family real estate loans. This decrease was mainly the 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 of loans in the portfolio as a result of the interest rate environment. The allowance for loan losses increased $12,000, or 0.08%, to $15.1 million at December 31, 2003. 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 was 0.94% at December 31, 2003 and 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. Bank owned life insurance provides a long-term asset to offset long-term benefit liabilities, while generating competitive investment yields. Home Savings has recognized a $496,000 increase in the cash value of the policies, which is tax deferred. Any death benefit proceeds received by Home Savings are tax-free. Deposits decreased $58.2 million, or 3.93%, from December 31, 2002 to December 31, 2003. Decreases in Home Savings' deposits are mainly due to a $76.1 million decrease in certificates of deposit, which was partially offset by increases of $10.4 million in savings accounts and $7.5 million in NOW accounts. Other borrowed funds increased $128.4 million, or 61.15%, from December 31, 2002 to December 31, 2003. The increase consisted of increases in short term advances from the Federal Home Loan Bank (FHLB) of $101.2 million, long term FHLB advances of $14.4 million, $4.8 million in repurchase agreements and $8.0 million in other short term borrowings as a result of bond positions entered into by Butler Wick. Total shareholders' equity increased $5.3 million from December 31, 2002 to December 31, 2003, 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 December 31, 2003 were $7.11 and $8.21 per share, respectively. Home Savings and Butler Wick are wholly owned subsidiaries of United Community Financial Corp. Home Savings operates 35 full service banking offices and 5 loan production offices located throughout Northern Ohio and Western Pennsylvania. Butler Wick has 13 office locations providing full service retail brokerage, capital markets or 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 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 December 31, 2003 December 31, 2002 ----------------- ----------------- (In thousands, except per share data) SELECTED FINANCIAL CONDITION DATA (UNAUDITED): ASSETS Cash and cash equivalents $ 81,155 $ 110,936 Securities 243,125 242,328 Federal Home Loan Bank stock 21,924 21,069 Loans held for sale 26,374 45,825 Loans 1,602,946 1,493,312 Allowance for loan losses (15,111) (15,099) Real estate owned 1,299 994 Goodwill 33,593 33,593 Core deposit intangible 3,787 5,101 Bank Owned Life Insurance 20,496 -- Other assets 54,245 52,072 ----------- ----------- Total assets $ 2,073,833 $ 1,990,131 =========== =========== LIABILITIES Deposits $ 1,423,698 $ 1,481,901 Other borrowed funds 338,463 210,024 Other liabilities 31,836 23,637 ----------- ----------- Total liabilities 1,793,997 1,715,562 SHAREHOLDERS' EQUITY Preferred stock-no par value; 1,000,000 shares authorized and unissued at December 31, 2003 -- -- Common stock-no par value; 499,000,000 shares authorized; 37,804,457 and 37,803,269 issued, respectively 139,526 138,207 Retained earnings 185,495 172,080 Other comprehensive income 1,124 2,363 Unearned compensation (16,752) (19,724) Treasury stock, at cost; 3,718,542 and 2,558,214 shares, respectively (29,557) (18,357) ----------- ----------- Total shareholders' equity 279,836 274,569 ----------- ----------- Total liabilities and shareholders' equity $ 2,073,833 $ 1,990,131 =========== =========== Book value per share $ 8.21 $ 7.79 Tangible book value per share $ 7.11 $ 6.69
Three Months Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 --------- --------- --------- --------- (In thousands, except per share data) SELECTED EARNINGS DATA (UNAUDITED): Interest income $ 26,573 $ 30,828 $ 111,663 $ 125,960 Interest expense 9,328 12,465 40,252 54,236 --------- --------- --------- --------- Net interest income 17,245 18,363 71,411 71,724 Provision for loan losses 210 1,600 3,179 3,578 Noninterest income: Commissions 3,913 3,429 14,925 13,677 Service fees and other charges 2,716 1,987 8,382 7,976 Underwriting and investment banking 502 119 1,528 312 Net gains (losses) Loans sold 818 1,161 11,707 5,919 Securities 757 1,655 1,689 1,476 Other (61) (260) (105) (515) Other income 753 811 2,719 2,961 --------- --------- --------- --------- Total noninterest income 9,398 8,902 40,845 31,806 Noninterest expense: Salaries and employee benefits 11,993 10,679 46,511 39,917 Occupancy 945 817 3,658 3,186 Equipment and data processing 2,240 2,277 9,459 8,309 Amortization of core deposit intangible 477 516 1,314 2,167 Other noninterest expense 2,664 3,980 12,630 14,780 --------- --------- --------- --------- Total noninterest expense 18,319 18,269 73,572 68,359 Income before taxes 8,114 7,396 35,505 31,593 Income taxes 2,965 2,037 12,565 10,776 --------- --------- --------- --------- Net income $ 5,149 $ 5,359 $ 22,940 $ 20,817 ========= ========= ========= ========= Basic earnings per share $ 0.17 $ 0.17 $ 0.73 $ 0.65 Diluted earnings per share $ 0.17 $ 0.17 $ 0.72 $ 0.65 Dividends paid per share $ 0.075 $ 0.075 $ 0.30 $ 0.30
Three Months Ended Three Months Ended Three Months Ended December 31, September 30, June 30, 2003 2003 2003 ------------ ------------- ---------- (In thousands) AVERAGE DAILY BALANCE OF SELECTED FINANCIAL CONDITION DATA (UNAUDITED): Net loans (including allowance for loan losses $1,549,363 $1,483,019 $1,494,086 of $15,111, $15,973 and $16,278, respectively) Loans held for sale 32,230 51,796 40,496 Securities 236,584 269,890 306,260 Margin accounts 14,654 14,106 14,255 Other interest-earning assets 29,773 30,728 31,562 Total interest-earning assets 1,862,604 1,849,539 1,886,659 Total assets 1,989,801 1,974,949 1,991,983 Certificates of deposit 751,531 741,432 756,609 Interest-bearing checking, demand and savings accounts 630,277 645,213 659,000 Other-interest bearing liabilities 239,798 235,520 235,362 Total interest-bearing liabilities 1,621,606 1,622,165 1,650,971 Noninterest-bearing deposits 65,436 61,379 59,130 Total noninterest-bearing liabilities 87,508 73,255 66,165 Total liabilities 1,709,114 1,695,420 1,717,136 Shareholders' equity 280,687 279,529 274,847 Common shares outstanding for basic EPS calculation 31,052 31,440 31,253 Common shares outstanding for diluted EPS calculation 31,664 31,884 31,839 SUPPLEMENTAL LOAN DATA: Loans originated $ 232,725 $ 435,636 $ 455,674 Loans purchased 52,398 52,428 68,818 Loans sold 55,646 163,290 213,633 Loan chargeoffs 1,181 889 1,023 Recoveries on loans 109 13 15
As of As of As of December 31, September 30, June 30, 2003 2003 2003 ------------ ------------- ---------- (In thousands, except employee data) SUPPLEMENTAL DATA: Nonaccrual loans $ 12,981 $ 14,423 $ 15,625 Restructured loans 2,025 1,923 1,952 Other real estate owned 1,299 546 519 Total nonperforming assets 16,305 16,892 18,096 Loans serviced for others 633,189 615,352 577,716 Number of full time equivalent employees 779 773 776 Securities trading 15,600 12,735 13,170 Securities available for sale 227,525 234,649 274,709 Federal Home Loan Bank stock 21,924 21,705 21,488 REGULATORY CAPITAL DATA: Tier 1 leverage ratio 8.22 9.08 8.78 Tier 1 risk-based capital ratio 9.61 10.97 11.13 Total risk-based capital ratio 10.56 11.98 12.13
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