One provision in the Consent Order states that should Home Savings be unable to meet the required capital ratios, Home Savings, upon notice of its Regulators, could be asked to submit a contingency plan to merge, sell or invest capital into Home Savings. “We believe that this particular provision is now required in all (or nearly all) consent orders in which specific capital levels must be maintained,” said Bevack. He also added, “Over the last three years, we have established a very good working relationship with our Regulators. As a result, we will work closely with our Regulators to ensure that Home Savings meets the regulatory requirements of the Consent Order and maintains a sufficient level of capital so that no such contingency plan is required.”United Community has developed and maintained a capital plan that is consistent with and incorporated into the strategic planning process that Home Savings undertook under the terms of the terminated Cease and Desist Order. United Community’s capital plan considers several possible ways in which to raise capital both internally and externally. In keeping with this capital plan, United Community engaged an investment banking advisory firm, in June 2011, to advise the board and management on the Company’s strategic alternatives, including raising outside capital. Bevack stated, “United Community has been moving forward with a capital raising plan that we believe will achieve compliance with the Consent Order. In order to give us adequate time to pursue our capital plan, we will be postponing our annual shareholder meeting until summer. In the coming months, we anticipate further announcements regarding our capital raising efforts. As previously stated, we contemplate that if we raise capital from new investors, we also anticipate providing existing shareholders the right to purchase United Community shares at the same price as those investors. The Board and management are very excited about these opportunities and the future of Home Savings.”
The majority of any capital raised by United Community will be contributed to Home Savings, with the remainder to be used for general corporate purposes. Home Savings will then utilize the capital to accelerate the disposition of its nonperforming loans and real estate owned and meet the capital requirements of the Consent Order.On March 15 th, United Community reported consolidated net income of $7.9 million, or $0.25 per diluted share, for the three months ended December 31, 2011. United Community also reported net income of $230,000, or $0.01 per diluted share, for the year ended December 31, 2011. Delinquent loans, nonperforming loans and nonperforming assets for the fourth quarter of 2011 all decreased when compared to the prior quarter ended September 30, 2011. As of December 31, 2011, Home Savings’ Tier 1 leverage ratio was 8.61% and the total risk based capital ratio was 14.57%, both of which reflected increases from the prior quarter. This press release does not constitute an offer of any securities for sale by United Community and should not be deemed as such. Home Savings is a wholly-owned subsidiary of United Community and operates 34 full-service banking offices and eight loan production offices located throughout Ohio and western Pennsylvania. Additional information on United Community and Home Savings may be found on United Community’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 United Community’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in United Community’s market area, Home Savings’ ability to comply with the terms of the Consent Order, Untied Community’s ability to raise capital at all or on terms satisfactory to it, 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 release publicly 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 unless required by law.