EX-99 2 l30768aexv99.htm EX-99 EX-99
 

EXHIBIT 99
UNITED COMMUNITY FINANCIAL CORP.
275 West Federal Street
Youngstown, Ohio 44503-1203
FOR IMMEDIATE RELEASE
Contact:
Patrick A. Kelly
Chief Financial Officer
(330) 742-2592
United Community Financial Corp. Announces Financial Results for 2007.
YOUNGSTOWN, Ohio (March 26, 2008) — United Community Financial Corp. (Company) (Nasdaq: UCFC), holding company of The Home Savings and Loan Company (Home Savings) and Butler Wick Corp. (Butler Wick), today reported revised unaudited financial results for 2007 to reflect additional loan loss reserves and a subsequent increase in the provision for loan losses.
Following a report to management by the Federal Deposit Insurance Corporation and the Ohio Division of Financial Institutions on the asset quality portion of the current regulatory examination, the Company has elected to establish an additional loan loss reserve of approximately $3.3 million, after tax, as of December 31, 2007. The examination process has not been completed, and a final report on asset quality and other aspects of the examination has not been presented.
UCFC previously reported a consolidated net loss for the quarter ended December 31, 2007, of $3.8 million, or $(0.13) per diluted share. After the additional reserves, consolidated net loss for the quarter ended December 31, 2007, was $7.1 million, or $(0.25) per diluted share. Previously reported net income for the year ended December 31, 2007, was $7.4 million, or $0.25 per diluted share. After the additional reserves, consolidated net income for the year ended December 31, 2007, was $4.1 million, or $0.14 per diluted share.
The Company expects to file its Annual Report on Form 10-K for the year ended December 31, 2007, including its audited financial statements, which will incorporate this revision on or about April 1, 2008.
Selected financial condition and earnings information revised to reflect these changes, is attached.
Home Savings and Butler Wick are wholly owned subsidiaries of the Company. Home Savings operates 39 full service banking offices and 6 loan production offices located throughout Northern and Central Ohio and Western Pennsylvania. Butler Wick has 23 offices providing full

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service retail brokerage, capital markets and trust services throughout Ohio and Western Pennsylvania. Additional information on the Company, Home Savings and Butler Wick may be found on the Company’s web site: www.ucfconline.com.
###
When used in this press release the words or phrases “believes,” “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 the Company’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. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company advises readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.
The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that 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.

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UNITED COMMUNITY FINANCIAL CORP.
                 
    As of     As of  
    December 31, 2007     December 31, 2006  
    (Dollars in thousands, except per share data)  
SELECTED FINANCIAL CONDITION DATA (UNAUDITED):
                
 
                
ASSETS
                
Cash and cash equivalents
   $ 37,363     $ 35,637  
Securities
     249,817       248,317  
Federal Home Loan Bank stock, at cost
     25,432       25,432  
Loans held for sale
     87,236       26,960  
Loans:
                
Real estate
     1,433,995       1,393,814  
Construction
     382,344       414,141  
Consumer
     349,447       345,607  
Commercial
     103,208       116,952  
Allowance for loan losses
     (32,006 )     (16,955 )
 
            
Net loans
     2,236,988       2,253,559  
Real estate owned and other repossessed assets
     10,510       3,242  
Goodwill
     33,713       33,593  
Core deposit intangible
     1,169       1,534  
Cash surrender value of life insurance
     24,053       23,137  
Other assets
     53,758       52,134  
 
            
Total assets
   $ 2,760,039     $ 2,703,545  
 
            
 
                
LIABILITIES
                
Deposits:
                
Interest-bearing
   $ 1,768,757     $ 1,720,426  
Noninterest-bearing
     106,449       102,509  
 
            
Deposits
     1,875,206       1,822,935  
Federal Home Loan Bank advances
     437,253       465,253  
Repurchase agreements and other
     149,533       98,511  
Other liabilities
     28,333       35,513  
 
            
Total liabilities
     2,490,325       2,422,212  
 
                
SHAREHOLDERS’ EQUITY
                
Preferred stock-no par value; 1,000,000 shares authorized and unissued
Common stock-no par value; 499,000,000 shares authorized; 37,804,457 issued
     146,683       145,834  
Retained earnings
     213,727       220,527  
Accumulated other comprehensive income (loss)
     661       (1,296 )
Unearned employee stock ownership plan shares
     (9,465 )     (11,287 )
Treasury stock, at cost; 7,752,684 and 6,827,143 shares, respectively
     (81,892 )     (72,445 )
 
            
Total shareholders’ equity
     269,714       281,333  
 
            
Total liabilities and shareholders’ equity
   $ 2,760,039     $ 2,703,545  
 
            
Book value per share
   $ 8.97     $ 9.08  
Tangible book value per share
   $ 7.81     $ 7.95  

 

 

UNITED COMMUNITY FINANCIAL CORP.
                                         
      Three Months Ended     Twelve Months Ended  
    December 31,     September 30,     December 31,     December 31,  
    2007     2007     2006     2007     2006  
            (Dollars in thousands, except per share data)          
SELECTED EARNINGS DATA (UNAUDITED):
                                        
 
Interest income
   $ 42,731     $ 42,390     $ 42,692     $ 169,950     $ 165,430  
Interest expense
     24,660       24,512       23,389       96,448       84,428  
 
                              
Net interest income
     18,071       17,878       19,303       73,502       81,002  
 
                                        
Provision for loan losses
     18,318       5,363       1,322       28,750       4,347  
Noninterest income:
                                        
Brokerage commissions
     6,628       6,475       5,193       26,392       19,882  
Service fees and other charges
     3,009       3,705       2,979       14,057       12,546  
Underwriting and investment banking
     406       113       594       764       814  
Net gains (losses):
                                        
Securities
     (29 )     3       (14 )     22       56  
Loans sold
     545       892       1,044       2,624       2,943  
Other
     (515 )     (143 )     (45 )     (1,061 )     (63 )
Other income:
     1,113       1,064       982       4,102       4,096  
 
                              
Total noninterest income
     11,157       12,109       10,733       46,900       40,274  
 
                                        
Noninterest expense:
                                        
Salaries and employee benefits
     13,595       13,733       13,140       55,969       52,272  
Occupancy
     1,258       1,232       1,120       4,846       4,450  
Equipment and data processing
     2,240       2,156       2,298       9,017       8,998  
Amortization of core deposit intangible
     84       88       205       365       584  
Other noninterest expense
     4,677       3,523       3,208       15,131       13,514  
 
                              
Total noninterest expense
     21,854       20,732       19,971       85,328       79,818  
 
                              
 
                                        
Income (loss) before taxes
     (10,944 )     3,892       8,743       6,324       37,111  
Income tax expense (benefit)
     (3,894 )     1,309       3,074       2,191       13,000  
 
                                  
Net income (loss)
   $ (7,050 )   $ 2,583     $ 5,669     $ 4,133     $ 24,111  
 
                              
 
                                        
Basic earnings (loss) per share
   $ (0.25 )   $ 0.09     $ 0.19     $ 0.14     $ 0.83  
Diluted earnings (loss) per share
   $ (0.25 )   $ 0.09     $ 0.19     $ 0.14     $ 0.82  
Dividends paid per share
   $ 0.095     $ 0.095     $ 0.09     $ 0.38     $ 0.36  

 

 

UNITED COMMUNITY FINANCIAL CORP.
                         
    Three Months Ended     Three Months Ended     Three Months Ended  
    December 31,     September 30,     December 31,  
    2007     2007     2006  
    (Dollars and share data in thousands)  
AVERAGE DAILY BALANCE OF SELECTED FINANCIAL
CONDITION DATA (UNAUDITED):
                        
 
Net loans (including allowance for loan losses
   $ 2,308,157     $ 2,263,546     $ 2,247,958  
of $32,006, $23,807 and $16,955, respectively)
                        
Loans held for sale
     16,327       18,605       28,649  
Securities
     245,250       251,585       227,943  
Other interest-earning assets
     35,809       34,601       32,224  
Total interest-earning assets
     2,605,543       2,568,337       2,536,790  
Total assets
     2,759,181       2,719,571       2,677,818  
Certificates of deposit
     1,142,379       1,096,056       1,140,926  
Interest-bearing checking, demand and savings accounts
     586,075       584,178       559,322  
Other interest-bearing liabilities
     598,339       615,891       557,785  
Total interest-bearing liabilities
     2,326,793       2,296,126       2,258,033  
Noninterest-bearing deposits
     105,548       103,757       97,116  
Total noninterest-bearing liabilities
     143,705       138,833       136,214  
Total liabilities
     2,470,498       2,434,959       2,394,247  
Shareholders’ equity
     288,683       284,612       283,571  
Common shares outstanding for basic EPS calculation
     28,339       28,489       29,096  
Common shares outstanding for diluted EPS calculation
     28,339       28,532       29,493  
 
                        
SUPPLEMENTAL LOAN DATA:
                        
 
                        
Loans originated
   $ 247,607     $ 247,890     $ 270,843  
Loans purchased
     59,777       61,476       54,384  
Loans sold
     49,002       52,737       57,469  
Loan charge-offs
     10,243       1,102       1,046  
Recoveries on loans
     124       151       98  
                         
    As of     As of     As of  
    December 31,     September 30,     December 31,  
    2007     2007     2006  
      (Dollars in thousands)  
SUPPLEMENTAL DATA:
                        
 
                        
Nonaccrual loans
   $ 97,499     $ 97,253     $ 52,646  
Restructured loans
     2,342       2,132       1,385  
Real estate owned and other repossessed assets
     10,510       11,671       3,242  
Total nonperforming assets
     111,565       112,491       58,069  
Mortgage loans serviced for others
     876,147       875,039       861,543  
Securities trading, at fair value
     5,064       4,964       10,786  
Securities available for sale, at fair value
     244,753       242,271       237,531  
Federal Home Loan Bank stock, at cost
     25,432       25,432       25,432  
Number of full time equivalent employees
     807       799       807  
 
                        
REGULATORY CAPITAL DATA:
                        
 
                        
Tier 1 leverage ratio
     7.47 %     8.03 %     7.68 %
Tier 1 risk-based capital ratio
     9.26 %     9.94 %     9.49 %
Total risk-based capital ratio
     11.88 %     12.44 %     11.70 %