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UCFC’s moves to streamline leadership
By GRACE WYLER
youngstown
After more than a century at the helm of Home Savings & Loan, the bank’s founding family will end its historic reign over the corner office of one of the city’s most iconic buildings.
Douglas McKay, great-grandson of Home Savings founder James McKay, announced this week that he will step down from his position as chief executive of Home Savings’ parent company United Community Financial Corp. at the end of 2010 after almost 30 years at the bank.
McKay stepped down from his role as chairman of the boards of both UCFC and Home Savings earlier this month.
Upon McKay’s retirement, Patrick Bevack, president and chief executive of Home Savings, will take on the leadership of both companies as UCFC’s chief executive. His appointment is subject to regulatory approval.
Bevack, who joined Home Savings in 2000, took over for McKay as chief executive of Home Savings in April 2009.
Board Director Richard Schiraldi has been appointed as chairman to both boards, a move executives said would help strengthen the company’s corporate governance by separating the roles of chairman and chief executive.
McKay will continue to play a role in the company as “director emeritus” of UCFC, Bevack said.
McKay declined to comment for this story.
By merging the head positions of Home Savings and UCFC under one executive, the company will streamline its corporate leadership, Bevack said. He noted that Home Savings has been the sole subsidiary of UCFC since the company sold its Butler Wick division in 2009.
The sale aimed to increase UCFC’s capital and reduce its debt after a 2008 cease-and-desist order. Under the order, which is still in effect, federal regulators required the company to increase cash reserves, reduce risky lending practices and make changes in its management.
Bevack said he did not know when the cease-and-desist order would be lifted.
“I can’t predict the regulators,” he said. “It is a very tough regulatory environment right now.”
Home Savings has been struggling with loan losses since 2007, when the economy — and the housing market in particular — began its slide into recession.
The company’s annual earnings dropped from $24.1 million in 2006 to a loss of $35.3 million in 2008. The bank took a $16.8 million loss last year.
“Right now, our main goal is building back the financial strength of the bank,” Bevack said. “We want to return the bank to profitability.”
The bank is continuing to work to get its problem assets “under control,” he said. The bank has had success in reducing bad loans in its commercial-loan portfolio, he said.
“We know better than ever now the risks in the portfolio,” he said. “As a result, we can implement strategies to reduce that risk.”
As leader of both companies, Bevack said his primary focus will remain the bank’s financial performance and reputation.
“We are going to try to rebuild the financial health of the bank and the holding company,” he said. “Our second goal is to make sure that everyone understands that we are a community bank.”