MAHONING VALLEY UCFC officials say stock is undervalued

By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- With a major acquisition in the works and several new offices opened in the past year, United Community Financial officials say they're pleased with the company's progress, despite its lagging stock prices.
"We are not satisfied with our share price. We think we are undervalued in the market," said Douglas McKay, president and chairman of the board.
The parent company of Home Savings and Loan and Butler Wick Corp., UCFC's stock has been selling in the $6 to $7 range for most of the past year. It closed at $6.54 Thursday.
What's being done: Addressing about 300 shareholders who attended UCFC's annual meeting at Mr. Anthony's Banquet Center on Thursday, McKay said he and other company leaders are making the rounds of investor conferences and meetings around the country to talk up the company's performance.
"We're getting the message out," he said.
The message bank officials want to spread is that UCFC and its subsidiaries made some major strides in 2000 toward meeting the company's growth and improvement goals.
"It was a very exciting year," said David Lodge, president and chief operating officer of Home Savings. "We are aggressively implementing long-term strategies which can be summed up in one word: growth."
UCFC expanded outside the Mahoning Valley for the first time last year, opening loan offices in Beechwood, Mentor, Stow and Canton. The new operations contributed to a 20.8 percent increase in commercial lending, a 142 percent increase in multifamily residential loans and an 11.7 percent increase in single-family mortgage loans.
Lodge said the company's plan to acquire Industrial Bancorp Inc. will continue UCFC's growth momentum. The $91.8 million acquisition, to be finalized later this year, will expand the company's service area into seven north-central Ohio counties.
With $427 million in assets, Industrial Bancorp is the holding company for Industrial Savings and Loan Association.
David M. Windau, Industrial's president and chief executive, will become a senior vice president with Home Savings when the transaction becomes final.
Making headway: UCFC pledged a year ago to expand its use of technology, and Lodge said customers have embraced its new online banking and telebanking options. In March alone Home Savings reported 10,000 visits to its online banking Web site and 27,400 calls to its telebanking services.
Tom Cavalier, president and chief executive of Butler Wick, said the investment firm's new Howland office has effectively expanded its business into Trumbull County. He said clients continue to seek and appreciate the advice and assistance Butler Wick executives offer for managing investments.
"Some people think Butler Wick is a bit of a dinosaur," Cavalier said. "I expect that this dinosaur will be around for a long time."
One shareholder asked officials what Home Savings is doing to improve its efficiency ratio, a formula indicating a financial institution's average expenditure to generate $1.
He said the thrift's ratio is generally in the 70 range -- meaning it spends about 70 cents for every $1 it generates.
McKay acknowledged that the efficiency ratio "is a concern," but he noted the company's numbers have improved after a series of cost control measures.
He said Industrial Savings and Loan has a low, 40 efficiency ratio, and adding its operations to UCFC's should improve the company's numbers overall.