UCFC's New CEO Commends Shareholders' Patience

BOARDMAN, Ohio -- In his first appearance before shareholders, the new president and CEO of United Community Financial Corp., holding company of The Home Savings and Loan Co., lauded their patience and loyalty as the company steered itself through troubled times.

And, sooner rather than later, that patience should pay off, Gary M. Small told shareholders Tuesday during the company's annual meeting at Mr. Anthony's.

"With the capital where it's at, and our growth aspirations easily covered with that, we have the liquidity and we've put dividend payouts at the forefront of our discussion," Small told The Business Journal after the meeting. "I think sooner versus later, we'll be coming forth with some more things for our investors, that they'll be pleased with the return."

Small, who succeeded Patrick W. Bevack as president and CEO April 1, relates the growth strategy for UCFC lies in its community banking services, emphasizing the talent, experience and face-to-face relationships with its customers.

"Coming through the rough times over the last few years, what we've come out with is a balance sheet that is rock solid," Small said, noting that the company is looking at adjusting various financial products intended to make the institution more competitive. "We're growing our commercial team,” he said, “and you'll see more of that, particularly in the small-business sector."

UCFC and Home Savings have successfully worked their way through a difficult period that began Aug. 8, 2008, when federal and state regulators imposed cease-and-desist orders on the company. Those orders were lifted July 10, 2013, replaced with less onerous memoranda of understanding. The Federal Deposit Insurance Corp. and the Ohio Department of Financial Institutions lifted those memoranda last December.

Small said the institution remains in constant contact with its regulators, including the Federal Reserve Bank of Cleveland, and last week shared with regulators its current plan to move forward. "They were all very supportive and positive of where we're at,” he said, “and they're supportive of what we'd like to be doing going forward."

In 2013, UCFC reported net income of just more than $10 million, and $2.1 million during the first quarter of 2014, Small noted.

Also last year, UCFC originated $550 million in loans, served 28,000 online banking customers, and over the last eight months, 12,000 have become mobile-bank users. Mobile and online services, as well as improving other technological assets, are integral in expanding the reach of the financial institution, Small said.

Since the end of 2012, the company has witnessed a sizeable decrease in nonperforming assets, which include loans 90 days or more past due and repossessed real estate, Small reported. Since then, UCFC has seen its nonperforming assets decline 16%.

Small emphasized the institution's mission to increase its commercial, consumer and mortgage loan business. "Lending is the focus," he told shareholders.

On the commercial side, Small said, at the end of April, loans stood at twice the level of volume compared to the same period last year. As for consumer lending, the CEO reported, May should reflect the best month in three years for home equity and direct lending for the consumer division.

"There's nothing special about the market this month," he clarified. "What's special is what's happening within our team. We've gotten aggressive in getting out with our clients to make sure they understand the value of the offer."

The company has also expanded its mortgage lending presence, Small said. "We're at two more markets today than we were last year," he noted, which includes an office in the Pittsburgh market and one in Toledo.

UCFC also has a presence in Columbus and north to Cleveland, but two-thirds of its business stretches north from the Ohio/West Virginia/Pennsylvania border to Trumbull County.

"What we do well in this market is we do a great job with our customers. We're the depositor of choice. And we lend money as we see the right opportunities," Small said. "It also gives us the ability to have more robust mortgage operations in other markets."

Any expansion of UCFC's geographical footprint would depend on how that expansion -- be it an acquisition or new build -- fits the bank's current operation.

"We always have an eye for things that are complementary to what we do now, whether that's an end-market deal where the customers win and the associates win, or that next market down the road that makes sense to the operation that we have," Small said. "All those are on the table."

He continued: "The common thread will be you get good people with the deal, you get markets that make sense to you, and buy the best competitor you can in that marketplace."

WATCH:
'3 Minutes With' Gary Small, CEO of UCFC and Home Savings & Loan

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Copyright 2014 The Business Journal, Youngstown, Ohio.
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