##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 UNITED COMMUNITY FINANCIAL CORP.
  OHIO
    
    0-024399
    
    34-1856319(State or other jurisdiction of incorporation)
    
    (Commission File No.)
    
    (IRS Employer I.D. No.)
 275 West Federal Street, Youngstown, Ohio 44503-1203
 (330) 742-0500
 (Former name or former address, if changed since last report)
 þ o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Small reporting company o
 o þ




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##### 



TABLE OF CONTENTS
 PAGEPart I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Statements of Financial Condition as of September 30, 2009 (Unaudited)
and December 31, 2008
    
    
    1Consolidated Statements of Income for the Three and Nine Months Ended
September 30, 2009 and 2008 (Unaudited)
    
    
    2Consolidated Statement of Shareholders Equity for the Nine Months ended September 30,
2009 (Unaudited)
    
    
    4Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2009 and 2008 (Unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6-23Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    24-35Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    37Part II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    38Item 1A. Risk Factors
    
    
    38Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3. Defaults Upon Senior Securities (None)Item 4. Submission of Matters to a Vote of Security Holders (None)Item 5. Other Information (None)Item 6. Exhibits
    
    
    38Signatures
    
    
    39ExhibitsExhibit 10Exhibit 31.1Exhibit 31.2Exhibit 32




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1.
    
    Financial Statements
 UNITED COMMUNITY FINANCIAL CORP.
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 (Unaudited)
 September 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Assets:Cash and deposits with banks
    
    $
    20,736
    
    
    $
    21,745Federal funds sold and other
    
    
    17,222
    
    
    
    21,672Total cash and cash equivalents
    
    
    37,958
    
    
    
    43,417Securities:Available for sale, at fair value
    
    
    296,461
    
    
    
    215,731Loans held for sale
    
    
    73,924
    
    
    
    16,032Loans, net of allowance for loan losses of $38,845 and $35,962, respectively
    
    
    1,919,803
    
    
    
    2,203,453Federal Home Loan Bank stock, at cost
    
    
    26,464
    
    
    
    26,464Premises and equipment, net
    
    
    23,899
    
    
    
    25,015Accrued interest receivable
    
    
    8,853
    
    
    
    10,082Real estate owned and other repossessed assets
    
    
    27,607
    
    
    
    29,258Core deposit intangible
    
    
    712
    
    
    
    884Cash surrender value of life insurance
    
    
    25,904
    
    
    
    25,090Assets of discontinued operationsButler Wick Corp.
    
    
    
    
    
    
    5,562Other assets
    
    
    20,600
    
    
    
    17,085Total assets
    
    $
    2,462,185
    
    
    $
    2,618,073Liabilities and Shareholders EquityLiabilities:Deposits:Interest bearing
    
    $
    1,640,411
    
    
    $
    1,779,676Non-interest bearing
    
    
    115,092
    
    
    
    106,255Total deposits
    
    
    1,755,503
    
    
    
    1,885,931Borrowed funds:Federal Home Loan Bank advances
    
    
    347,775
    
    
    
    337,603Repurchase agreements and other borrowings
    
    
    95,934
    
    
    
    125,269Total borrowings
    
    
    443,709
    
    
    
    462,872Advance payments by borrowers for taxes and insurance
    
    
    12,950
    
    
    
    19,806Accrued interest payable
    
    
    2,078
    
    
    
    3,077Liabilities of discontinued operationsButler Wick Corp.
    
    
    
    
    
    
    2,388Accrued expenses and other liabilities
    
    
    12,019
    
    
    
    9,076Total liabilities
    
    
    2,226,259
    
    
    
    2,383,150Shareholders EquityPreferred stock-no par value; 1,000,000 shares authorized and unissued
    
    
    
    
    
    
    Common stock-no par value; 499,000,000 shares authorized; 37,804,457
shares issued and 30,897,825 shares outstanding
    
    
    145,568
    
    
    
    146,439Retained earnings
    
    
    164,936
    
    
    
    165,447Accumulated other comprehensive income
    
    
    4,654
    
    
    
    3,635Unearned employee stock ownership plan shares
    
    
    (6,277
    )
    
    
    (7,643
    )Treasury stock, at cost, 6,906,632 shares
    
    
    (72,955
    )
    
    
    (72,955
    )Total shareholders equity
    
    
    235,926
    
    
    
    234,923Total liabilities and shareholders equity
    
    $
    2,462,185
    
    
    $
    2,618,073
 See Notes to Consolidated Financial Statements
  1




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##### Table of Contents



UNITED COMMUNITY FINANCIAL CORP.
 
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per share data)Interest incomeLoans
    
    $
    29,389
    
    
    $
    33,503
    
    
    $
    90,532
    
    
    $
    103,246Loans held for sale
    
    
    99
    
    
    
    76
    
    
    
    578
    
    
    
    352Securities:Trading
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    3Available for sale
    
    
    2,925
    
    
    
    3,781
    
    
    
    8,491
    
    
    
    10,826Federal Home Loan Bank stock dividends
    
    
    330
    
    
    
    352
    
    
    
    923
    
    
    
    1,032Other interest earning assets
    
    
    12
    
    
    
    34
    
    
    
    50
    
    
    
    119Total interest income
    
    
    32,755
    
    
    
    37,748
    
    
    
    100,574
    
    
    
    115,578Interest expenseDeposits
    
    
    11,037
    
    
    
    14,451
    
    
    
    35,762
    
    
    
    46,007Federal Home Loan Bank advances
    
    
    1,348
    
    
    
    3,069
    
    
    
    4,775
    
    
    
    9,952Repurchase agreements and other
    
    
    965
    
    
    
    1,421
    
    
    
    3,216
    
    
    
    4,964Total interest expense
    
    
    13,350
    
    
    
    18,951
    
    
    
    43,753
    
    
    
    60,923Net interest income
    
    
    19,405
    
    
    
    18,797
    
    
    
    56,821
    
    
    
    54,655Provision for loan losses
    
    
    5,579
    
    
    
    8,995
    
    
    
    26,334
    
    
    
    14,709Net interest income after provision for loan losses
    
    
    13,826
    
    
    
    9,802
    
    
    
    30,487
    
    
    
    39,946Non-interest incomeNon-deposit investment income
    
    
    366
    
    
    
    419
    
    
    
    1,074
    
    
    
    1,329Service fees and other charges
    
    
    2,012
    
    
    
    2,103
    
    
    
    6,245
    
    
    
    6,391Net gains (losses):Securities available for sale
    
    
    481
    
    
    
    
    
    
    
    1,863
    
    
    
    988Other than temporary impairment charges on
securities available for sale
    
    
    (572
    )
    
    
    (5,029
    )
    
    
    (722
    )
    
    
    (5,029
    )Trading securities
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    (38
    )Mortgage banking income
    
    
    559
    
    
    
    292
    
    
    
    3,487
    
    
    
    2,871Real estate owned and other repossessed assets sold
    
    
    (3,964
    )
    
    
    (1,156
    )
    
    
    (6,301
    )
    
    
    (2,830
    )Other income
    
    
    1,237
    
    
    
    1,011
    
    
    
    3,421
    
    
    
    3,122Total non-interest income
    
    
    119
    
    
    
    (2,374
    )
    
    
    9,067
    
    
    
    6,804Non-interest expenseSalaries and employee benefits
    
    
    7,558
    
    
    
    8,228
    
    
    
    23,345
    
    
    
    26,288Goodwill impairment charge
    
    
    
    
    
    
    33,593
    
    
    
    
    
    
    
    33,593Occupancy
    
    
    915
    
    
    
    910
    
    
    
    2,798
    
    
    
    2,757Equipment and data processing
    
    
    1,578
    
    
    
    1,839
    
    
    
    4,968
    
    
    
    5,108Franchise tax
    
    
    537
    
    
    
    472
    
    
    
    1,684
    
    
    
    1,596Advertising
    
    
    261
    
    
    
    302
    
    
    
    677
    
    
    
    784Amortization of core deposit intangible
    
    
    54
    
    
    
    69
    
    
    
    172
    
    
    
    220Deposit insurance premiums
    
    
    1,531
    
    
    
    1,546
    
    
    
    6,254
    
    
    
    1,816Professional fees
    
    
    951
    
    
    
    885
    
    
    
    2,574
    
    
    
    2,136Real estate owned and other repossessed asset expenses
    
    
    527
    
    
    
    449
    
    
    
    2,282
    
    
    
    1,536Other expenses
    
    
    1,473
    
    
    
    1,224
    
    
    
    4,232
    
    
    
    3,807Total non-interest expenses
    
    
    15,385
    
    
    
    49,517
    
    
    
    48,986
    
    
    
    79,641Loss before income taxes and discontinued operations
    
    
    (1,440
    )
    
    
    (42,089
    )
    
    
    (9,432
    )
    
    
    (32,891
    )Income tax benefit
    
    
    (573
    )
    
    
    (3,132
    )
    
    
    (3,972
    )
    
    
    (3
    )Net loss before discontinued operations
    
    
    (867
    )
    
    
    (38,957
    )
    
    
    (5,460
    )
    
    
    (32,888
    )Discontinued operationsNet income of Butler Wick Corp., net of tax
    
    
    
    
    
    
    403
    
    
    
    4,949
    
    
    
    1,106Net loss
    
    $
    (867
    )
    
    $
    (38,554
    )
    
    $
    (511
    )
    
    $
    (31,782
    )
   2




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##### Table of Contents



UNITED COMMUNITY FINANCIAL CORP.
 CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per share data)Comprehensive income (loss)
    
    $
    1,163
    
    
    $
    (35,135
    )
    
    $
    508
    
    
    $
    (32,688
    )Earnings (loss) per shareBasiccontinuing operations
    
    $
    (0.03
    )
    
    $
    (1.32
    )
    
    $
    (0.19
    )
    
    $
    (1.12
    )Basicdiscontinued operations
    
    
    
    
    
    
    0.01
    
    
    
    0.17
    
    
    
    0.04Basic
    
    
    (0.03
    )
    
    
    (1.31
    )
    
    
    (0.02
    )
    
    
    (1.08
    )Dilutedcontinuing operations
    
    
    (0.03
    )
    
    
    (1.32
    )
    
    
    (0.19
    )
    
    
    (1.12
    )Diluteddiscontinued operations
    
    
    
    
    
    
    0.01
    
    
    
    0.17
    
    
    
    0.04Diluted
    
    
    (0.03
    )
    
    
    (1.31
    )
    
    
    (0.02
    )
    
    
    (1.08
    )
 See notes to Consolidated Financial Statements
  3




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UNITED
COMMUNITY FINANCIAL CORP.
 
 CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(Unaudited)
 UnearnedAccumulated
    
    
    EmployeeOther
    
    
    StockShares
    
    
    Common
    
    
    Retained
    
    
    Comprehensive
    
    
    Ownership
    
    
    TreasuryOutstanding
    
    
    Stock
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Plan Shares
    
    
    Stock
    
    
    Total(Dollars in thousands, except share data)Balance December 31, 2008
    
    
    30,898
    
    
    $
    146,439
    
    
    $
    165,447
    
    
    $
    3,635
    
    
    $
    (7,643
    )
    
    $
    (72,955
    )
    
    $
    234,923Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    (511
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (511
    )Change in net unrealized gain
on securities, net of tax expense of $549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,019
    
    
    
    
    
    
    
    
    
    
    
    1,019Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    508Shares allocated to ESOP participants
    
    
    
    
    
    
    (946
    )
    
    
    
    
    
    
    
    
    
    
    1,366
    
    
    
    
    
    
    
    420Stock based compensation
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75Balance September 30, 2009
    
    
    30,898
    
    
    $
    145,568
    
    
    $
    164,936
    
    
    $
    4,654
    
    
    $
    (6,277
    )
    
    $
    (72,955
    )
    
    $
    235,926
 See Notes to Consolidated Financial Statements
  4




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##### Table of Contents



UNITED
COMMUNITY FINANCIAL CORP.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Cash Flows from Operating ActivitiesNet loss
    
    $
    (511
    )
    
    $
    (31,782
    )Adjustments to reconcile net income to net cash provided by operating activitiesProvision for loan losses
    
    
    26,334
    
    
    
    14,709Mortgage banking income
    
    
    (3,487
    )
    
    
    (2,871
    )Net losses on real estate owned and other repossessed assets sold
    
    
    6,301
    
    
    
    2,830Net gains on other assets sold
    
    
    (17
    )
    
    
    (944
    )Other than temporary impairment of securities available for sale
    
    
    722
    
    
    
    5,029Amortization of premiums and accretion of discounts
    
    
    2,148
    
    
    
    1,304Depreciation and amortization
    
    
    1,640
    
    
    
    1,919Federal Home Loan Bank stock dividends
    
    
    
    
    
    
    (1,032
    )Decrease in interest receivable
    
    
    1,229
    
    
    
    2,016Decrease in interest payable
    
    
    (999
    )
    
    
    (2,663
    )Goodwill impairment charge
    
    
    
    
    
    
    33,593(Increase) decrease in prepaid and other assets
    
    
    (4,977
    )
    
    
    7,163Increase (decrease) in other liabilities
    
    
    2,266
    
    
    
    (10,970
    )Decrease in trading securities
    
    
    
    
    
    
    274Stock based compensation
    
    
    75
    
    
    
    150Net principal disbursed on loans originated for sale
    
    
    (295,926
    )
    
    
    (127,407
    )Proceeds from sale of loans originated for sale
    
    
    311,363
    
    
    
    209,989ESOP Compensation
    
    
    420
    
    
    
    1,244Operating cash flows from discontinued operations
    
    
    (4,949
    )
    
    
    (1,052
    )Net cash from operating activities
    
    
    41,632
    
    
    
    101,499Cash Flows from Investing ActivitiesProceeds from principal repayments and maturities of:Securities available for sale
    
    
    42,139
    
    
    
    45,408Proceeds from sale of:Securities available for sale
    
    
    73,630
    
    
    
    49,399Real estate owned and other repossessed assets
    
    
    11,459
    
    
    
    10,884Purchases of:Securities available for sale
    
    
    (196,295
    )
    
    
    (157,065
    )Net change in loans
    
    
    172,872
    
    
    
    23,891Loans purchased
    
    
    (2,090
    )
    
    
    (73,823
    )Purchases of premises and equipment
    
    
    (482
    )
    
    
    (540
    )Investing cash flows from discontinued operations
    
    
    8,123
    
    
    
    2,690Net cash from investing activities
    
    
    109,356
    
    
    
    (99,156
    )Cash Flows from Financing ActivitiesNet increase (decrease) in checking, savings and money market accounts
    
    
    38,612
    
    
    
    (34,622
    )Net (decrease) increase in certificates of deposit
    
    
    (169,040
    )
    
    
    76,490Net decrease in advance payments by borrowers for taxes and insurance
    
    
    (6,856
    )
    
    
    (6,086
    )Proceeds from Federal Home Loan Bank advances
    
    
    652,400
    
    
    
    581,000Repayment of Federal Home Loan Bank advances
    
    
    (642,228
    )
    
    
    (599,819
    )Net change in repurchase agreements and other borrowed funds
    
    
    (29,335
    )
    
    
    (14,437
    )Cash dividends paid
    
    
    
    
    
    
    (4,064
    )Financing cash flows from discontinued operations
    
    
    
    
    
    
    (3,194
    )Net cash from financing activities
    
    
    (156,447
    )
    
    
    (4,732
    )Change in cash and cash equivalents
    
    
    (5,459
    )
    
    
    (2,389
    )Cash and cash equivalents, beginning of period
    
    
    43,417
    
    
    
    33,502Cash and cash equivalents, end of period
    
    $
    37,958
    
    
    $
    31,113
 See Notes to Consolidated Financial Statements
  5




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UNITED COMMUNITY FINANCIAL CORP.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. BASIS OF PRESENTATION
      2. REGULATORY ENFORCEMENT ACTION
    6




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##### Table of Contents



3. DISCONTINUED OPERATIONS
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)
    
    
    (Dollars in thousands)IncomeInterest income
    
    $
    
    
    
    $
    174
    
    
    $
    32
    
    
    $
    590Brokerage commissions
    
    
    
    
    
    
    6,402
    
    
    
    
    
    
    
    19,132Service fees and other charges
    
    
    
    
    
    
    1,410
    
    
    
    1,287
    
    
    
    4,582Underwriting and investment banking
    
    
    
    
    
    
    484
    
    
    
    
    
    
    
    718Gain on the sale of Butler Wick Trust
    
    
    
    
    
    
    
    
    
    
    7,904
    
    
    
    Other income
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    208Total income
    
    
    
    
    
    
    8,512
    
    
    
    9,223
    
    
    
    25,230ExpensesInterest expense on borrowings
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    177Salaries and employee benefits
    
    
    
    
    
    
    5,909
    
    
    
    1,198
    
    
    
    17,480Occupancy expenses
    
    
    
    
    
    
    372
    
    
    
    68
    
    
    
    1,145Equipment and data processing
    
    
    
    
    
    
    633
    
    
    
    84
    
    
    
    1,839Other expenses
    
    
    
    
    
    
    922
    
    
    
    258
    
    
    
    2,861Total expenses
    
    
    
    
    
    
    7,892
    
    
    
    1,608
    
    
    
    23,502Income before taxes
    
    
    
    
    
    
    620
    
    
    
    7,615
    
    
    
    1,728Income tax
    
    
    
    
    
    
    217
    
    
    
    2,666
    
    
    
    622Net income
    
    $
    
    
    
    $
    403
    
    
    $
    4,949
    
    
    $
    1,106
 4. RECENT ACCOUNTING DEVELOPMENTS
 Accounting for Business Combinations: Business
Combinations
 Noncontrolling Interests in Consolidated Financial Statements: Consolidation
  7




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Disclosures about Derivative Instruments and Hedging Activities: Derivatives and Hedging
 Subsequent Events: Subsequent Events
 Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly: Fair Value Measurements and Disclosures
 Interim Disclosures about Fair Value of Financial Instruments: Financial Instruments
 Recognition and Presentation of Other-Than-Temporary Impairments: Investments  Debt and Equity Securities
 Recently Issued but not yet Effective Accounting Pronouncements:
 Accounting for Transfers of Financial Assets: Consolidation
 Amendments to FASB Interpretation No. 46(R): Amendments to
FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities,
  8




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##### Table of Contents



5. STOCK COMPENSATION
     For the nine months ended September 30, 2009AggregateWeighted
    
    
    intrinsicaverage
    
    
    valueShares
    
    
    exercise price
    
    
    (in thousands)Outstanding at beginning of year
    
    
    2,092,128
    
    
    $
    9.08Granted
    
    
    344,000
    
    
    
    1.85Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (232,790
    )
    
    
    9.17Outstanding at end of period
    
    
    2,203,338
    
    
    $
    7.94
    
    
    $
    11Options exercisable at end of period
    
    
    1,859,338
    
    
    $
    9.41
    
    
    $
    4
  September 30,2009Intrinsic value of options exercised
    
    $
    Cash received from option exercises
    
    
    Tax benefit realized from option exercises
    
    
    Weighted average fair value of options granted, per share
    
    
    1.08
   9




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##### Table of Contents



May 8,
    
    
    June 25,
    
    
    August 7,
    
    
    September 23,2009
    
    
    2009
    
    
    2009
    
    
    2009Risk-free interest rate
    
    
    2.15
    %
    
    
    2.58
    %
    
    
    2.84
    %
    
    
    2.40
    %Expected term (years)
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5Expected stock volatility
    
    
    67.4
    
    
    
    67.8
    
    
    
    76.7
    
    
    
    77Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
  6. SECURITIES
  September 30, 2009(Dollars in thousands)Gross
    
    
    GrossFair
    
    
    Unrealized
    
    
    Unrealized
    
    
    AmortizedValue
    
    
    Gains
    
    
    Losses
    
    
    CostU.S. Treasury and government
sponsored entities securities
    
    $
    49,066
    
    
    $
    354
    
    
    $
    (32
    )
    
    $
    48,744Equity securities
    
    
    631
    
    
    
    104
    
    
    
    
    
    
    
    527Mortgage-backed securities
    
    
    246,764
    
    
    
    6,229
    
    
    
    (15
    )
    
    
    240,550Total
    
    $
    296,461
    
    
    $
    6,687
    
    
    $
    (47
    )
    
    $
    289,821
 December 31, 2008(Dollars in thousands)Gross
    
    
    GrossFair
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    LossesU.S. Treasury and government
sponsored entities securities
    
    $
    27,170
    
    
    $
    865
    
    
    $
    Equity securities
    
    
    910
    
    
    
    70
    
    
    
    (411
    )Mortgage-backed securities
    
    
    187,651
    
    
    
    4,527
    
    
    
    (107
    )Total
    
    $
    215,731
    
    
    $
    5,462
    
    
    $
    (518
    )
   10




---



##### Table of Contents



September 30, 2009(Dollars in thousands)Fair
    
    
    AmortizedValue
    
    
    CostDue in one year or less
    
    $
    520
    
    
    $
    499Due after one year through five years
    
    
    40,092
    
    
    
    40,076Due after five years through ten years
    
    
    8,454
    
    
    
    8,169Mortgage-backed securities
    
    
    246,764
    
    
    
    240,550Total
    
    $
    295,830
    
    
    $
    289,294
      September 30, 2009(Dollars in thousands)Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. Treasury and
government
sponsored entities
securities
    
    $
    4,980
    
    
    $
    (32
    )
    
    $
    
    
    
    $
    
    
    
    $
    4,980
    
    
    $
    (32
    )Equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed securities
    
    
    2,219
    
    
    
    (9
    )
    
    
    550
    
    
    
    (6
    )
    
    
    2,769
    
    
    
    (15
    )Total
    
    $
    7,199
    
    
    $
    (41
    )
    
    $
    550
    
    
    $
    (6
    )
    
    $
    7,749
    
    
    $
    (47
    )
   11




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##### Table of Contents



Other-Than-Temporary-Impairment
      Mortgage-backed Securities
   12




---



##### Table of Contents



7. LOANS
  September 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Real Estate:One- to four-family residential
    
    $
    771,891
    
    
    $
    909,567Multifamily residential
    
    
    158,342
    
    
    
    187,711Nonresidential
    
    
    407,853
    
    
    
    375,463Land
    
    
    23,625
    
    
    
    23,517Construction:One- to four-family residential
    
    
    190,123
    
    
    
    255,355Multifamily and non-residential
    
    
    13,675
    
    
    
    35,797Total real estate
    
    
    1,565,509
    
    
    
    1,787,410Consumer
    
    
    320,106
    
    
    
    348,834Commercial
    
    
    71,727
    
    
    
    101,489Total loans
    
    
    1,957,342
    
    
    
    2,237,733Less:Allowance for loan losses
    
    
    38,845
    
    
    
    35,962Deferred loan fees, net
    
    
    (1,306
    )
    
    
    (1,682
    )Total
    
    
    37,539
    
    
    
    34,280Loans, net
    
    $
    1,919,803
    
    
    $
    2,203,453
  Three months ended
    
    
    Nine months ended
    
    
    Twelve months endedSeptember 30,
    
    
    September 30,
    
    
    December 31,2009
    
    
    2009
    
    
    2008(Dollars in thousands)Balance, beginning of period
    
    $
    39,832
    
    
    $
    35,962
    
    
    $
    32,006Provision for loan losses
    
    
    5,579
    
    
    
    26,334
    
    
    
    25,329Amounts charged off
    
    
    (6,728
    )
    
    
    (24,234
    )
    
    
    (22,088
    )Recoveries
    
    
    162
    
    
    
    783
    
    
    
    715Balance, end of period
    
    $
    38,845
    
    
    $
    38,845
    
    
    $
    35,962
   13




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##### Table of Contents



As of or for the
    
    
    As of or forNine Months Ended
    
    
    the Year EndedSeptember 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Impaired loans on which no specific valuation allowance was provided
    
    $
    45,891
    
    
    $
    43,256Impaired loans on which a specific valuation allowance was provided
    
    
    52,342
    
    
    
    43,992Total impaired loans at period-end
    
    $
    98,233
    
    
    $
    87,248Specific valuation allowances on impaired loans at period-end
    
    $
    7,545
    
    
    $
    10,968Average impaired loans during the period
    
    
    92,740
    
    
    
    85,812Interest income recognized on impaired loans during the period
    
    
    484
    
    
    
    513Interest income received on impaired loans during the period
    
    
    484
    
    
    
    513
 8. MORTGAGE BANKING ACTIVITIES
   Nine Months Ended
    
    
    Year EndedSeptember 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Balance, beginning of year
    
    $
    5,562
    
    
    $
    6,184Originations
    
    
    2,387
    
    
    
    1,337Amortized to expense
    
    
    (1,999
    )
    
    
    (1,959
    )Balance, end of period
    
    
    5,950
    
    
    
    5,562Less valuation allowance
    
    
    (883
    )
    
    
    (2,233
    )Net balance
    
    $
    5,067
    
    
    $
    3,329
  Nine Months Ended
    
    
    Year EndedSeptember 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Balance, beginning of year
    
    $
    (2,233
    )
    
    $
    (562
    )Impairment charges
    
    
    
    
    
    
    (2,233
    )Recoveries
    
    
    1,350
    
    
    
    562Balance, end of period
    
    $
    (883
    )
    
    $
    (2,233
    )
   14




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##### Table of Contents



September 30,
    
    
    December 31,2009
    
    
    2008Weighted average prepayment rate
    
    433 PSA
    
    
    644 PSAWeighted average life (in years)
    
    
    3.49
    
    
    
    3.34Weighted average discount rate
    
    
    8
    %
    
    
    8
    %
 9. OTHER REAL ESTATE OWNED AND OTHER REPOSSESSED ASSETS
  September 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Real estate owned and other repossessed assets
    
    $
    34,281
    
    
    $
    32,012Valuation allowance
    
    
    (6,674
    )
    
    
    (2,754
    )End of period
    
    $
    27,607
    
    
    $
    29,258
  September 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Beginning of year
    
    $
    2,754
    
    
    $
    Additions charged to expense
    
    
    6,220
    
    
    
    3,753Direct write-downs
    
    
    (2,300
    )
    
    
    (999
    )End of period
    
    $
    6,674
    
    
    $
    2,754
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)
    
    
    (Dollars in thousands)Net loss on sales
    
    $
    137
    
    
    $
    662
    
    
    $
    1,287
    
    
    $
    938Provision for unrealized losses
    
    
    3,827
    
    
    
    494
    
    
    
    5,014
    
    
    
    1,892Operating expenses, net of rental income
    
    
    527
    
    
    
    449
    
    
    
    2,282
    
    
    
    1,536Total expenses
    
    $
    4,491
    
    
    $
    1,605
    
    
    $
    8,583
    
    
    $
    4,366
  15




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10. OTHER POSTRETIREMENT BENEFIT PLANS
   Three Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Service cost
    
    $
    
    
    
    $
    Interest cost
    
    
    47
    
    
    
    49Expected return on plan assets
    
    
    
    
    
    
    Net amortization of prior service cost
    
    
    
    
    
    
    (1
    )Net amortization of actuarial gain
    
    
    (4
    )
    
    
    (3
    )Net periodic benefit cost
    
    $
    43
    
    
    $
    45
 Nine Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Service cost
    
    $
    
    
    
    $
    Interest cost
    
    
    141
    
    
    
    145Expected return on plan assets
    
    
    
    
    
    
    Net amortization of prior service cost
    
    
    
    
    
    
    (1
    )Net amortization of actuarial gain
    
    
    (12
    )
    
    
    (9
    )Net periodic benefit cost
    
    $
    129
    
    
    $
    135
 11. FAIR VALUE MEASUREMENT
  Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
that the entity has the ability to access as of the measurement date.Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices
for similar assets or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data.Level 3: Significant unobservable inputs that reflect a reporting entitys own assumptions
about the assumptions that market participants would use in pricing an asset or liability.
  16




---



##### Table of Contents



Fair Value Measurements at September 30, 2009 Using:Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableSeptember 30,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(Dollars in thousands)Assets:Available for sale securitiesUS Treasury and government
sponsored entities
securities
    
    $
    49,066
    
    
    $
    
    
    
    $
    49,066
    
    
    $
    Equity securities
    
    
    631
    
    
    
    631
    
    
    
    
    
    
    
    Mortgage-backed securities
    
    
    246,764
    
    
    
    
    
    
    
    246,764
    
    
    
    
 Fair Value Measurements at December 31, 2008 Using:Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableDecember 31,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(Dollars in thousands)Assets:Available for sale securities
    
    $
    215,731
    
    
    $
    809
    
    
    $
    214,922
    
    
    $
    
  Fair Value Measurements at September 30, 2009 Using:Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableSeptember 30,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(Dollars in thousands)Assets:Impaired loans
    
    $
    44,797
    
    
    
    
    
    
    
    
    
    
    $
    44,797Mortgage servicing assets
    
    
    2,741
    
    
    
    
    
    
    
    2,741
    
    
    
    Foreclosed assets
    
    
    16,978
    
    
    
    
    
    
    
    
    
    
    
    16,978
  17




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##### Table of Contents



Fair Value Measurements at December 31, 2008 Using:Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableDecember 31,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(Dollars in thousands)Assets:Impaired loans
    
    $
    33,024
    
    
    
    
    
    
    
    
    
    
    $
    33,024Mortgage servicing rights
    
    
    2,421
    
    
    
    
    
    
    
    2,421
    
    
    
    
     September 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    Value(Dollars in thousands)Assets:Cash and cash equivalents
    
    $
    37,958
    
    
    $
    37,958
    
    
    $
    43,417
    
    
    $
    43,417Securities:Available for sale
    
    
    296,461
    
    
    
    296,461
    
    
    
    215,731
    
    
    
    215,731Loans held for sale
    
    
    73,924
    
    
    
    75,512
    
    
    
    16,032
    
    
    
    16,358Loans, net
    
    
    1,919,803
    
    
    
    1,923,553
    
    
    
    2,203,453
    
    
    
    2,203,606Federal Home Loan Bank stock
    
    
    26,464
    
    
    
    n/a
    
    
    
    26,464
    
    
    
    n/aAccrued interest receivable
    
    
    8,853
    
    
    
    8,853
    
    
    
    10,082
    
    
    
    10,082Liabilities:Deposits:Checking, savings and money market accounts
    
    
    (699,288
    )
    
    
    (699,288
    )
    
    
    (660,675
    )
    
    
    (660,675
    )Certificates of deposit
    
    
    (1,056,215
    )
    
    
    (1,069,785
    )
    
    
    (1,225,256
    )
    
    
    (1,237,262
    )Federal Home Loan Bank advances
    
    
    (347,775
    )
    
    
    (348,185
    )
    
    
    (337,603
    )
    
    
    (348,185
    )Repurchase agreements and other
    
    
    (95,934
    )
    
    
    (106,934
    )
    
    
    (125,269
    )
    
    
    (138,862
    )Advance payments by borrowers for taxes
and insurance
    
    
    (12,950
    )
    
    
    (12,950
    )
    
    
    (19,806
    )
    
    
    (19,806
    )Accrued interest payable
    
    
    (2,078
    )
    
    
    (2,078
    )
    
    
    (3,077
    )
    
    
    (3,077
    )
 Fair value of financial instruments:
   18




---



##### Table of Contents



Cash and cash equivalents, accrued interest receivable and payable and advance payments by
borrowers for taxes and insurance
 Securities
 Loans held for sale
 Loans
 Federal Home Loan Bank stock
 Deposits
 Borrowed funds
 Limitations
  12. STATEMENT OF CASH FLOWS SUPPLEMENTAL DISCLOSURE
  September 30,
    
    
    September 30,2009
    
    
    2008(Dollars in thousands)Supplemental disclosures of cash flow informationCash paid during the period for:Interest on deposits and borrowings
    
    $
    44,752
    
    
    $
    63,587Income taxes
    
    
    600
    
    
    
    3,859Supplemental schedule of noncash activities:Transfers from loans to real estate owned and
other repossessed assets
    
    
    16,109
    
    
    
    23,754Transfers from loans to loans held for sale
    
    
    69,842
    
    
    
    
  19




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##### Table of Contents



13. SEGMENT INFORMATION
   14. EARNINGS PER SHARE
  Three Months EndedSeptember 30,2009
    
    
    2008(Dollars in thousands,except per share data)Numerator:Loss from continuing operations
    
    $
    (867
    )
    
    $
    (38,957
    )Income from discontinued operations
    
    
    
    
    
    
    403Net loss
    
    $
    (867
    )
    
    $
    (38,554
    )Denominator:Weighted average common shares outstandingbasic
    
    
    29,803
    
    
    
    29,538Dilutive effect of stock options
    
    
    1
    
    
    
    Weighted average common shares outstandingdilutive
    
    
    29,804
    
    
    
    29,538Basic earnings (loss) per share:Basic loss per common sharecontinuing operations
    
    $
    (0.03
    )
    
    $
    (1.32
    )Basic earnings per common sharediscontinued operations
    
    
    
    
    
    
    0.01Basic loss per common share
    
    
    (0.03
    )
    
    
    (1.31
    )Dilutive earnings (loss) per share:Dilutive loss per common sharecontinuing operations
    
    
    (0.03
    )
    
    
    (1.32
    )Dilutive earnings per common sharediscontinued operations
    
    
    
    
    
    
    0.01Dilutive loss per common share
    
    
    (0.03
    )
    
    
    (1.31
    )
  20




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##### Table of Contents



Nine Months EndedSeptember 30,2009
    
    
    2008(Dollars in thousands,except per share data)Numerator:Loss from continuing operations
    
    $
    (5,460
    )
    
    $
    (32,888
    )Income from discontinued operations
    
    
    4,949
    
    
    
    1,106Net loss
    
    $
    (511
    )
    
    $
    (31,782
    )Denominator:Weighted average common shares outstandingbasic
    
    
    29,702
    
    
    
    29,407Dilutive effect of stock options
    
    
    
    
    
    
    Weighted average common shares outstandingdilutive
    
    
    29,702
    
    
    
    29,407Basic earnings (loss) per share:Basic loss per common sharecontinuing operations
    
    $
    (0.19
    )
    
    $
    (1.12
    )Basic earnings per common sharediscontinued operations
    
    
    0.17
    
    
    
    0.04Basic loss per common share
    
    
    (0.02
    )
    
    
    (1.08
    )Dilutive earnings (loss) per share:Dilutive loss per common sharecontinuing operations
    
    
    (0.19
    )
    
    
    (1.12
    )Dilutive earnings per common sharediscontinued operations
    
    
    0.17
    
    
    
    0.04Dilutive loss per common share
    
    
    (0.02
    )
    
    
    (1.08
    )
 15. BROKERED CERTIFICATES OF DEPOSIT
  16. OTHER COMPREHENSIVE INCOME (LOSS)
   Three months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008(Dollars in thousands)Unrealized holding gains on securities available for sale
    
    $
    2,642
    
    
    $
    5,260Reclassification adjustment for gains realized in income
    
    
    481
    
    
    
    Net unrealized gains
    
    
    3,123
    
    
    
    5,260Tax effect (35%)
    
    
    (1,093
    )
    
    
    (1,841
    )Net of tax amount
    
    $
    2,030
    
    
    $
    3,419
  21




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##### Table of Contents



Nine months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008(Dollars in thousands)Unrealized holding gains (losses) on securities available for sale
    
    $
    (295
    )
    
    $
    (2,382
    )Reclassification adjustment for gains (losses) realized in income
    
    
    1,863
    
    
    
    988Net unrealized gains (losses)
    
    
    1,568
    
    
    
    (1,394
    )Tax effect (35%)
    
    
    (549
    )
    
    
    488Net of tax amount
    
    $
    1,019
    
    
    $
    (906
    )
  Balance at
    
    
    Current
    
    
    Balance atDecember 31,
    
    
    Period
    
    
    September 30,2008
    
    
    Change
    
    
    2009(Dollars in thousands)Unrealized gains on securities available for sale
    
    $
    3,297
    
    
    $
    1,019
    
    
    $
    4,316Unrealized gains on post-retirement benefits
    
    
    338
    
    
    
    
    
    
    
    338Total
    
    $
    3,635
    
    
    $
    1,019
    
    
    $
    4,654
 17. REGULATORY CAPITAL REQUIREMENTS
   As of September 30, 2009To Be Well CapitalizedUnder PromptMinimum Capital
    
    
    Corrective ActionActual
    
    
    Requirements
    
    
    ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(In thousands)Total risk-based capital to
risk-weighted assets
    
    $
    236,941
    
    
    
    13.03
    %
    
    $
    145,505
    
    
    
    8.00
    %
    
    $
    181,881
    
    
    
    10.00
    %Tier 1 capital to risk-weighted assets
    
    
    214,007
    
    
    
    11.77
    %
    
    
    *
    
    
    
    *
    
    
    
    109,128
    
    
    
    6.00
    %Tier 1 capital to average total assets
    
    
    214,007
    
    
    
    8.68
    %
    
    
    98,613
    
    
    
    4.00
    %
    
    
    123,266
    
    
    
    5.00
    %Tangible capital to adjusted total assets
    
    
    214,007
    
    
    
    8.68
    %
    
    
    36,980
    
    
    
    1.50
    %
    
    
    *
    
    
    
    *
  22




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##### Table of Contents



As of December 31, 2008To Be Well CapitalizedUnder PromptMinimum Capital
    
    
    Corrective ActionActual
    
    
    Requirements
    
    
    ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(In thousands)Total risk-based capital to
risk-weighted assets
    
    $
    242,944
    
    
    
    12.06
    %
    
    $
    161,163
    
    
    
    8.00
    %
    
    $
    201,454
    
    
    
    10.00
    %Tier 1 capital to risk-weighted assets
    
    
    217,630
    
    
    
    10.80
    %
    
    
    *
    
    
    
    *
    
    
    
    120,872
    
    
    
    6.00
    %Tier 1 capital to average total assets
    
    
    217,630
    
    
    
    8.20
    %
    
    
    106,180
    
    
    
    4.00
    %
    
    
    132,724
    
    
    
    5.00
    %Tangible capital to adjusted total assets
    
    
    217,630
    
    
    
    8.20
    %
    
    
    39,817
    
    
    
    1.50
    %
    
    
    *
    
    
    
    *
 *
    
    Ratio is not required under regulations.    23




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 UNITED COMMUNITY FINANCIAL CORP.
 At or For the
    
    
    At or For theThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Selected financial ratios and other data: (1)Performance ratios:Return on average assets (2)
    
    
    -0.14
    %
    
    
    -5.57
    %
    
    
    -0.03
    %
    
    
    -1.54
    %Return on average equity (3)
    
    
    -1.45
    %
    
    
    -54.84
    %
    
    
    -0.28
    %
    
    
    -14.96
    %Interest rate spread (4)
    
    
    3.04
    %
    
    
    2.62
    %
    
    
    2.86
    %
    
    
    2.49
    %Net interest margin (5)
    
    
    3.32
    %
    
    
    2.92
    %
    
    
    3.16
    %
    
    
    2.83
    %Non-interest expense to average assets
    
    
    2.49
    %
    
    
    7.16
    %
    
    
    2.58
    %
    
    
    3.86
    %Efficiency ratio (6)
    
    
    65.02
    %
    
    
    70.06
    %
    
    
    68.72
    %
    
    
    67.02
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    112.39
    %
    
    
    109.98
    %
    
    
    112.18
    %
    
    
    110.66
    %Capital ratios:Average equity to average assets
    
    
    9.70
    %
    
    
    10.17
    %
    
    
    9.62
    %
    
    
    10.29
    %Equity to assets, end of period
    
    
    9.58
    %
    
    
    8.59
    %
    
    
    9.58
    %
    
    
    8.59
    %Tier 1 leverage ratio
    
    
    8.68
    %
    
    
    7.43
    %
    
    
    8.68
    %
    
    
    7.43
    %Tier 1 risk-based capital ratio
    
    
    11.77
    %
    
    
    9.86
    %
    
    
    11.77
    %
    
    
    9.86
    %Total risk-based capital ratio
    
    
    13.03
    %
    
    
    11.78
    %
    
    
    13.03
    %
    
    
    11.78
    %Asset quality ratios:Non-performing loans to total loans at end of period (7)
    
    
    5.92
    %
    
    
    4.73
    %
    
    
    5.92
    %
    
    
    4.73
    %Non-performing assets to average assets (8)
    
    
    5.73
    %
    
    
    4.58
    %
    
    
    5.58
    %
    
    
    4.61
    %Non-performing assets to total assets at end of period
    
    
    5.74
    %
    
    
    4.65
    %
    
    
    5.74
    %
    
    
    4.65
    %Allowance for loan losses as a percent of loans
    
    
    1.98
    %
    
    
    1.45
    %
    
    
    1.98
    %
    
    
    1.45
    %Allowance for loan losses as a percent of nonperforming loans (7)
    
    
    34.15
    %
    
    
    31.23
    %
    
    
    34.15
    %
    
    
    31.23
    %Texas ratio (9)
    
    
    51.44
    %
    
    
    47.39
    %
    
    
    51.44
    %
    
    
    47.39
    %Total classified assets as a percent of Tier 1 capital
    
    
    77.59
    %
    
    
    61.03
    %
    
    
    77.59
    %
    
    
    61.03
    %Net charge-offs as a percent of average loans
    
    
    1.31
    %
    
    
    0.84
    %
    
    
    1.50
    %
    
    
    0.80
    %Total 90+ days past due as a percent of total loans
    
    
    5.11
    %
    
    
    4.28
    %
    
    
    5.11
    %
    
    
    4.28
    %Office data:Number of full service banking offices
    
    
    39
    
    
    
    39
    
    
    
    39
    
    
    
    39Number of loan production offices
    
    
    6
    
    
    
    6
    
    
    
    6
    
    
    
    6Per share data:Basic earnings (loss) from continuing operations (10)
    
    $
    (0.03
    )
    
    $
    (1.32
    )
    
    $
    (0.19
    )
    
    $
    (1.12
    )Basic earnings from discontinued operations (10)
    
    
    
    
    
    
    0.01
    
    
    
    0.17
    
    
    
    0.04Basic earnings (loss) (10)
    
    
    (0.03
    )
    
    
    (1.31
    )
    
    
    (0.02
    )
    
    
    (1.08
    )Diluted earnings (loss) from continuing operations (9)
    
    
    (0.03
    )
    
    
    (1.32
    )
    
    
    (0.19
    )
    
    
    (1.12
    )Diluted earnings from discontinued operations (10)
    
    
    
    
    
    
    0.01
    
    
    
    0.17
    
    
    
    0.04Diluted earnings (loss) (10)
    
    
    (0.03
    )
    
    
    (1.31
    )
    
    
    (0.02
    )
    
    
    (1.08
    )Book value (11)
    
    
    7.64
    
    
    
    8.97
    
    
    
    7.64
    
    
    
    7.80Tangible book value (12)
    
    
    7.61
    
    
    
    7.81
    
    
    
    7.61
    
    
    
    7.77
 (1)
    
    Ratios for the three and nine month periods are annualized where appropriate. Ratios for the
period ending September 30, 2008 have been revised to reflect the impact of discontinued
operations.(2)
    
    Net income divided by average total assets.(3)
    
    Net income divided by average total equity.(4)
    
    Difference between weighted average yield on interest-earning assets and weighted average cost
of interest-bearing liabilities.(5)
    
    Net interest income as a percentage of average interest-earning assets.(6)
    
    Noninterest expense, excluding the amortization of core deposit intangible, divided by the sum
of net interest income and noninterest income, excluding gains and losses on securities, other than
temporary impairment charges and other.(7)
    
    Nonperforming loans consist of nonaccrual loans, loans past due ninety days and still accruing,
and restructured loans.(8)
    
    Nonperforming assets consist of nonperforming loans, real estate acquired in the settlement of
loans and other repossessed assets.(9)
    
    Nonperforming assets divided by the sum of shareholders equity and the allowance for loan
losses.(10)
    
    Net income divided by average number of basic or diluted shares outstanding.(11)
    
    Shareholders equity divided by number of shares outstanding.(12)
    
    Shareholders equity minus goodwill and core deposit intangible divided by the number of shares outstanding.  24




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Forward Looking Statements
  Comparison of Financial Condition at September 30, 2009 and December 31, 2008
       25




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##### Table of Contents



Allowance For Loan Losses(Dollars in thousands)December 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 30,2008
    
    
    Provision
    
    
    Recovery
    
    
    Chargeoff
    
    
    2009Real Estate LoansPermanentOne-to four-family residential
    
    $
    4,986
    
    
    $
    4,772
    
    
    $
    55
    
    
    $
    (4,043
    )
    
    $
    5,770Multifamily residential
    
    
    2,344
    
    
    
    1,475
    
    
    
    3
    
    
    
    (2,290
    )
    
    
    1,532Nonresidential
    
    
    4,870
    
    
    
    2,786
    
    
    
    3
    
    
    
    (2,783
    )
    
    
    4,876Land
    
    
    585
    
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    646Total
    
    
    12,785
    
    
    
    9,094
    
    
    
    61
    
    
    
    (9,116
    )
    
    
    12,824Construction LoansOne-to four-family residential
    
    
    10,620
    
    
    
    13,971
    
    
    
    9
    
    
    
    (8,815
    )
    
    
    15,785Multifamily and nonresidential
    
    
    722
    
    
    
    (394
    )
    
    
    
    
    
    
    
    
    
    
    328Total
    
    
    11,342
    
    
    
    13,577
    
    
    
    9
    
    
    
    (8,815
    )
    
    
    16,113Consumer LoansHome Equity
    
    
    1,386
    
    
    
    2,438
    
    
    
    1
    
    
    
    (1,620
    )
    
    
    2,205Auto
    
    
    242
    
    
    
    4
    
    
    
    14
    
    
    
    (80
    )
    
    
    180Marine
    
    
    1,504
    
    
    
    134
    
    
    
    331
    
    
    
    (1,052
    )
    
    
    917Recreational vehicle
    
    
    1,425
    
    
    
    1,235
    
    
    
    113
    
    
    
    (1,393
    )
    
    
    1,380Other
    
    
    313
    
    
    
    301
    
    
    
    251
    
    
    
    (556
    )
    
    
    309Total
    
    
    4,870
    
    
    
    4,112
    
    
    
    710
    
    
    
    (4,701
    )
    
    
    4,991Commercial LoansSecured
    
    
    3,355
    
    
    
    (158
    )
    
    
    
    
    
    
    (1,017
    )
    
    
    2,180Unsecured
    
    
    3,610
    
    
    
    (291
    )
    
    
    3
    
    
    
    (585
    )
    
    
    2,737Total
    
    
    6,965
    
    
    
    (449
    )
    
    
    3
    
    
    
    (1,602
    )
    
    
    4,917Total
    
    $
    35,962
    
    
    $
    26,334
    
    
    $
    783
    
    
    $
    (24,234
    )
    
    $
    38,845
  26




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##### Table of Contents



Nonperforming Loans(Dollars in thousands)September 30,
    
    
    December 31,2009
    
    
    2008
    
    
    ChangeReal Estate LoansPermanentOne-to four-family residential
    
    $
    25,808
    
    
    $
    21,669
    
    
    $
    4,139Multifamily residential
    
    
    5,612
    
    
    
    8,724
    
    
    
    (3,112
    )Nonresidential
    
    
    16,623
    
    
    
    15,246
    
    
    
    1,377Land
    
    
    5,168
    
    
    
    4,840
    
    
    
    328Total
    
    
    53,211
    
    
    
    50,479
    
    
    
    2,732Construction LoansOne-to four-family residential
    
    
    46,623
    
    
    
    43,167
    
    
    
    3,456Multifamily and nonresidential
    
    
    531
    
    
    
    816
    
    
    
    (285
    )Total
    
    
    47,154
    
    
    
    43,983
    
    
    
    3,171Consumer LoansHome Equity
    
    
    3,226
    
    
    
    2,312
    
    
    
    914Auto
    
    
    148
    
    
    
    154
    
    
    
    (6
    )Marine
    
    
    1,150
    
    
    
    2,614
    
    
    
    (1,464
    )Recreational vehicle
    
    
    694
    
    
    
    756
    
    
    
    (62
    )Other
    
    
    35
    
    
    
    33
    
    
    
    2Total
    
    
    5,253
    
    
    
    5,869
    
    
    
    (616
    )Commercial LoansSecured
    
    
    5,153
    
    
    
    3,496
    
    
    
    1,657Unsecured
    
    
    1,021
    
    
    
    1,057
    
    
    
    (36
    )Total
    
    
    6,174
    
    
    
    4,553
    
    
    
    1,621Restructured Loans
    
    
    1,949
    
    
    
    1,797
    
    
    
    152Total Nonperforming Loans
    
    $
    113,741
    
    
    $
    106,681
    
    
    $
    7,060
    27




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##### Table of Contents



Impaired Loans(Dollars in thousands)September 30,
    
    
    December 31,2009
    
    
    2008
    
    
    ChangeReal Estate LoansPermanentOne-to four-family residential
    
    $
    17,778
    
    
    $
    12,675
    
    
    $
    5,103Multifamily residential
    
    
    5,612
    
    
    
    8,724
    
    
    
    (3,112
    )Nonresidential
    
    
    16,623
    
    
    
    14,855
    
    
    
    1,768Land
    
    
    5,169
    
    
    
    4,757
    
    
    
    412Total
    
    
    45,182
    
    
    
    41,011
    
    
    
    4,171Construction LoansOne-to four-family residential
    
    
    43,050
    
    
    
    36,903
    
    
    
    6,147Multifamily and nonresidential
    
    
    531
    
    
    
    816
    
    
    
    (285
    )Total
    
    
    43,581
    
    
    
    37,719
    
    
    
    5,862Consumer LoansHome Equity
    
    
    1,881
    
    
    
    1,657
    
    
    
    224Auto
    
    
    
    
    
    
    
    
    
    
    Boat
    
    
    1,150
    
    
    
    2,614
    
    
    
    (1,464
    )Recreational vehicle
    
    
    265
    
    
    
    
    
    
    
    265Other
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,296
    
    
    
    4,271
    
    
    
    (975
    )Commercial LoansSecured
    
    
    5,242
    
    
    
    3,496
    
    
    
    1,746Unsecured
    
    
    932
    
    
    
    751
    
    
    
    181Total
    
    
    6,174
    
    
    
    4,247
    
    
    
    1,927Total Impaired Loans
    
    $
    98,233
    
    
    $
    87,248
    
    
    $
    10,985
   28




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##### Table of Contents



29




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##### Table of Contents



Comparison of Operating Results for the Three Months Ended
September 30, 2009 and September 30, 2008
 Net Income.
 Net Interest Income.
    30




---



##### Table of Contents



For the Three Months Ended September 30,2009 vs. 2008Increase
    
    
    Total(decrease) due to
    
    
    increaseRate
    
    
    Volume
    
    
    (decrease)(Dollars in thousands)Interest-earning assets:Loans
    
    $
    (642
    )
    
    $
    (3,472
    )
    
    $
    (4,114
    )Loans held for sale
    
    
    3
    
    
    
    20
    
    
    
    23Investment securities:Trading
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )Available for sale
    
    
    (623
    )
    
    
    (233
    )
    
    
    (856
    )Federal Home Loan Bank stock
    
    
    (27
    )
    
    
    5
    
    
    
    (22
    )Other interest earning assets
    
    
    21
    
    
    
    (43
    )
    
    
    (22
    )Total interest earning assets
    
    $
    (1,269
    )
    
    $
    (3,724
    )
    
    $
    (4,993
    )Interest bearing liabilities:Savings accounts
    
    
    14
    
    
    
    16
    
    
    
    30Checking accounts
    
    
    (859
    )
    
    
    (200
    )
    
    
    (1,059
    )Certificates of deposit
    
    
    (1,208
    )
    
    
    (1,187
    )
    
    
    (2,395
    )Federal Home Loan Bank advances
    
    
    (1,262
    )
    
    
    (459
    )
    
    
    (1,721
    )Repurchase agreements and other
    
    
    (32
    )
    
    
    (424
    )
    
    
    (456
    )Total interest bearing liabilities
    
    $
    (3,347
    )
    
    $
    (2,254
    )
    
    
    (5,601
    )Change in net interest income
    
    
    
    
    
    
    
    
    
    $
    608
 Provision for Loan Losses.
 Non-interest Income.
  31




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##### Table of Contents



Non-interest Expense.
 Comparison of Operating Results for the Nine Months Ended
September 30, 2009 and September 30, 2008
 Net Income.
 Net Interest Income.
    32




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##### Table of Contents



For the Nine Months Ended September 30,2009 vs. 2008Increase
    
    
    Total(decrease) due to
    
    
    increaseRate
    
    
    Volume
    
    
    (decrease)(Dollars in thousands)Interest-earning assets:Loans
    
    $
    (5,434
    )
    
    $
    (7,280
    )
    
    $
    (12,714
    )Loans held for sale
    
    
    14
    
    
    
    212
    
    
    
    226Investment securities:Trading
    
    
    (1
    )
    
    
    (2
    )
    
    
    (3
    )Available for sale
    
    
    (1,126
    )
    
    
    (1,209
    )
    
    
    (2,335
    )Federal Home Loan Bank stock
    
    
    (137
    )
    
    
    28
    
    
    
    (109
    )Other interest earning assets
    
    
    40
    
    
    
    (109
    )
    
    
    (69
    )Total interest earning assets
    
    $
    (6,644
    )
    
    $
    (8,360
    )
    
    $
    (15,004
    )Interest bearing liabilities:Savings accounts
    
    
    79
    
    
    
    41
    
    
    
    120Checking accounts
    
    
    (3,456
    )
    
    
    (1,040
    )
    
    
    (4,496
    )Certificates of deposit
    
    
    (5,292
    )
    
    
    (577
    )
    
    
    (5,869
    )Federal Home Loan Bank advances
    
    
    (3,553
    )
    
    
    (1,624
    )
    
    
    (5,177
    )Repurchase agreements and other
    
    
    (505
    )
    
    
    (1,243
    )
    
    
    (1,748
    )Total interest bearing liabilities
    
    $
    (12,727
    )
    
    $
    (4,443
    )
    
    
    (17,170
    )Change in net interest income
    
    
    
    
    
    
    
    
    
    $
    2,166
 Provision for Loan Losses.
 Non-interest Income.
 Non-interest Expense.
  33




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##### Table of Contents



UNITED
COMMUNITY FINANCIAL CORP.
AVERAGE BALANCE SHEETS
  Three Months Ended September 30,2009
    
    
    2008Average
    
    
    Interest
    
    
    
    
    
    
    Average
    
    
    InterestOutstanding
    
    
    Earned/
    
    
    Yield/
    
    
    Outstanding
    
    
    Earned/
    
    
    Yield/Balance
    
    
    Paid
    
    
    Cost
    
    
    Balance
    
    
    Paid
    
    
    Cost(Dollars in thousands)Interest-earning assets:Net loans (1)
    
    $
    2,000,419
    
    
    $
    29,389
    
    
    
    5.88
    %
    
    $
    2,235,986
    
    
    $
    33,503
    
    
    
    5.99
    %Net loans held for sale
    
    
    9,088
    
    
    
    99
    
    
    
    4.36
    %
    
    
    7,241
    
    
    
    76
    
    
    
    4.20
    %Investment securities:Trading
    
    
    
    
    
    
    
    
    
    
    
    %
    
    
    132
    
    
    
    2
    
    
    
    6.06
    %Available for sale
    
    
    281,343
    
    
    
    2,925
    
    
    
    4.16
    %
    
    
    300,840
    
    
    
    3,781
    
    
    
    5.03
    %Federal Home Loan Bank stock
    
    
    26,464
    
    
    
    330
    
    
    
    4.99
    %
    
    
    26,116
    
    
    
    352
    
    
    
    5.39
    %Other interest-earning assets
    
    
    20,775
    
    
    
    12
    
    
    
    0.23
    %
    
    
    7,459
    
    
    
    34
    
    
    
    1.82
    %Total interest-earning assets
    
    
    2,338,089
    
    
    
    32,755
    
    
    
    5.60
    %
    
    
    2,577,774
    
    
    
    37,748
    
    
    
    5.86
    %Noninterest-earning assets
    
    
    129,745
    
    
    
    
    
    
    
    
    
    
    
    166,203Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,305Total assets
    
    $
    2,467,834
    
    
    
    
    
    
    
    
    
    
    $
    2,766,282Interest-bearing liabilities:Checking accounts
    
    $
    383,323
    
    
    $
    1,056
    
    
    
    1.10
    %
    
    $
    427,339
    
    
    $
    2,115
    
    
    
    1.98
    %Savings accounts
    
    
    196,974
    
    
    
    236
    
    
    
    0.48
    %
    
    
    183,209
    
    
    
    206
    
    
    
    0.45
    %Certificates of deposit
    
    
    1,082,946
    
    
    
    9,745
    
    
    
    3.60
    %
    
    
    1,207,454
    
    
    
    12,140
    
    
    
    4.02
    %Federal Home Loan Bank advances
    
    
    319,551
    
    
    
    1,348
    
    
    
    1.69
    %
    
    
    385,506
    
    
    
    3,069
    
    
    
    3.18
    %Repurchase agreements and other
    
    
    97,512
    
    
    
    965
    
    
    
    3.96
    %
    
    
    140,295
    
    
    
    1,421
    
    
    
    4.05
    %Total interest-bearing liabilities
    
    
    2,080,306
    
    
    
    13,350
    
    
    
    2.56
    %
    
    
    2,343,803
    
    
    
    18,951
    
    
    
    3.24
    %Noninterest-bearing liabilities
    
    
    148,179
    
    
    
    
    
    
    
    
    
    
    
    133,054Liabilities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,232Total liabilities
    
    
    2,228,485
    
    
    
    
    
    
    
    
    
    
    
    2,485,089Equity
    
    
    239,349
    
    
    
    
    
    
    
    
    
    
    
    281,193Total liabilities and equity
    
    $
    2,467,834
    
    
    
    
    
    
    
    
    
    
    $
    2,766,282Net interest income and interest rate spread
    
    
    
    
    
    $
    19,405
    
    
    
    3.04
    %
    
    
    
    
    
    $
    18,797
    
    
    
    2.62
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.32
    %
    
    
    
    
    
    
    
    
    
    
    2.92
    %Average interest-earning assets to average
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    112.39
    %
    
    
    
    
    
    
    
    
    
    
    109.98
    %
 (1)
    
    Nonaccrual loans are included in the average balance at a yield of 0%.  34




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##### Table of Contents



UNITED COMMUNITY FINANCIAL CORP.
AVERAGE BALANCE SHEETS
  Nine Months Ended September 30,2009
    
    
    2008Average
    
    
    Interest
    
    
    
    
    
    Average
    
    
    InterestOutstanding
    
    
    Earned/
    
    
    Yield/
    
    
    Outstanding
    
    
    Earned/
    
    
    Yield/Balance
    
    
    Paid
    
    
    Cost
    
    
    Balance
    
    
    Paid
    
    
    Cost(Dollars in thousands)Interest-earning assets:Net loans (1)
    
    $
    2,077,786
    
    
    $
    90,532
    
    
    
    5.81
    %
    
    $
    2,240,853
    
    
    $
    103,246
    
    
    
    6.14
    %Net loans held for sale
    
    
    16,918
    
    
    
    578
    
    
    
    4.56
    %
    
    
    10,690
    
    
    
    352
    
    
    
    4.39
    %Investment securities:Trading
    
    
    
    
    
    
    
    
    
    
    
    %
    
    
    246
    
    
    
    3
    
    
    
    1.63
    %Available for sale
    
    
    257,371
    
    
    
    8,491
    
    
    
    4.40
    %
    
    
    291,952
    
    
    
    10,826
    
    
    
    4.94
    %Federal Home Loan Bank stock
    
    
    26,464
    
    
    
    923
    
    
    
    4.65
    %
    
    
    25,776
    
    
    
    1,032
    
    
    
    5.34
    %Other interest-earning assets
    
    
    20,473
    
    
    
    50
    
    
    
    0.33
    %
    
    
    6,081
    
    
    
    119
    
    
    
    2.61
    %Total interest-earning assets
    
    
    2,399,012
    
    
    
    100,574
    
    
    
    5.59
    %
    
    
    2,575,598
    
    
    
    115,578
    
    
    
    5.98
    %Noninterest-earning assets
    
    
    133,510
    
    
    
    
    
    
    
    
    
    
    
    156,103Assets of discontinued operations
    
    
    1,379
    
    
    
    
    
    
    
    
    
    
    
    21,638Total assets
    
    $
    2,533,901
    
    
    
    
    
    
    
    
    
    
    $
    2,753,339Interest-bearing liabilities:Checking accounts
    
    $
    378,407
    
    
    $
    3,270
    
    
    
    1.15
    %
    
    $
    446,017
    
    
    $
    7,766
    
    
    
    2.32
    %Savings accounts
    
    
    193,115
    
    
    
    704
    
    
    
    0.49
    %
    
    
    181,038
    
    
    
    584
    
    
    
    0.43
    %Certificates of deposit
    
    
    1,134,282
    
    
    
    31,788
    
    
    
    3.74
    %
    
    
    1,152,175
    
    
    
    37,657
    
    
    
    4.36
    %Federal Home Loan Bank advances
    
    
    322,725
    
    
    
    4,775
    
    
    
    1.97
    %
    
    
    397,083
    
    
    
    9,952
    
    
    
    3.34
    %Repurchase agreements and other
    
    
    110,029
    
    
    
    3,216
    
    
    
    3.90
    %
    
    
    151,079
    
    
    
    4,964
    
    
    
    4.38
    %Total interest-bearing liabilities
    
    
    2,138,558
    
    
    
    43,753
    
    
    
    2.73
    %
    
    
    2,327,392
    
    
    
    60,923
    
    
    
    3.49
    %Noninterest-bearing liabilities
    
    
    149,328
    
    
    
    
    
    
    
    
    
    
    
    136,458Liabilities of discontinued
operations
    
    
    2,360
    
    
    
    
    
    
    
    
    
    
    
    6,286Total liabilities
    
    
    2,290,246
    
    
    
    
    
    
    
    
    
    
    
    2,470,136Equity
    
    
    243,655
    
    
    
    
    
    
    
    
    
    
    
    283,203Total liabilities and equity
    
    $
    2,533,901
    
    
    
    
    
    
    
    
    
    
    $
    2,753,339Net interest income and interest
rate spread
    
    
    
    
    
    $
    56,821
    
    
    
    2.86
    %
    
    
    
    
    
    $
    54,655
    
    
    
    2.49
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.16
    %
    
    
    
    
    
    
    
    
    
    
    2.83
    %Average interest-earning assets
to average interest-bearing
liabilities
    
    
    
    
    
    
    
    
    
    
    112.18
    %
    
    
    
    
    
    
    
    
    
    
    110.66
    %
 (1)
    
    Nonaccrual loans are included in the average balance at a yield of 0%.  35




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##### Table of Contents



ITEM 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
 Qualitative Aspects of Market Risk.
 Quantitative Aspects of Market Risk.
   Quarter ended September 30, 2009NPV as % of portfolio value of assets
    
    
    Next 12 months net interest income(Dollars in thousands)Change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Internal policyin rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    limitations on(Basis
    
    
    
    
    
    
    
    
    
    Internal policy
    
    
    Change in
    
    
    
    
    
    
    maximum
    
    
    %points)
    
    
    
    
    
    NPV Ratio
    
    
    limitations
    
    
    %
    
    
    $ Change
    
    
    change
    
    
    Change+300
    
    
    
    
    
    
    7.10
    %
    
    
    6.00
    %
    
    
    (2.17
    )%
    
    $
    (6,223
    )
    
    
    (15.00
    )%
    
    
    (7.69
    )%+200
    
    
    
    
    
    
    8.42
    
    
    
    7.00
    
    
    
    (0.86
    )
    
    
    (3,198
    )
    
    
    (10.00
    )
    
    
    (3.95
    )+100
    
    
    
    
    
    
    9.24
    
    
    
    7.00
    
    
    
    (0.03
    )
    
    
    (1.147
    )
    
    
    (5.00
    )
    
    
    (1.42
    )Static
    
    
    
    
    
    
    9.27
    
    
    
    8.00
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  36




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##### Table of Contents



Year Ended December 31, 2008NPV as % of portfolio value of assets
    
    
    Next 12 months net interest incomeChangein rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Dollars in thousands)(Basis
    
    
    
    
    
    
    
    
    
    Internal policy
    
    
    Change in
    
    
    
    
    
    
    Internal policy
    
    
    %points)
    
    
    
    
    
    NPV Ratio
    
    
    limitations
    
    
    %
    
    
    $ Change
    
    
    limitations
    
    
    Change+300
    
    
    
    
    
    
    7.37
    %
    
    
    5.00
    %
    
    
    (1.38
    )%
    
    $
    (1,879
    )
    
    
    (15.00
    )%
    
    
    (2.48
    )%+200
    
    
    
    
    
    
    8.35
    
    
    
    6.00
    
    
    
    (0.40
    )
    
    
    (734
    )
    
    
    (10.00
    )
    
    
    (0.97
    )+100
    
    
    
    
    
    
    8.99
    
    
    
    6.00
    
    
    
    0.24
    
    
    
    60
    
    
    
    (5.00
    )
    
    
    0.08Static
    
    
    
    
    
    
    8.75
    
    
    
    7.00
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   Potential Impact of Changes in Interest Rates.
  
 ITEM 4.
    
    Controls and Procedures
   37




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##### Table of Contents



PART II. OTHER INFORMATION
 UNITED COMMUNITY FINANCIAL CORP.
 
 ITEM 1
    
     Legal Proceedings
  
 ITEM 1A
    
     Risk Factors
  
 ITEM 2
    
     Unregistered Sales of Equity Securities and Use of Proceeds
  
 ITEM 6
    
     Exhibits
  Exhibit Number
    
    Description3.1
    
    
    Articles of Incorporation3.2
    
    
    Amended Code of Regulations10
    
    
    Executive Incentive Plan31.1
    
    
    Section 302 Certification by Chief Executive Officer31.2
    
    
    Section 302 Certification by Chief Financial Officer32
    
    
    Certification of Statements by Chief Executive Officer and Chief Financial Officer
  38




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##### Table of Contents



UNITED COMMUNITY FINANCIAL CORP.
 
 SIGNATURES
 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
 UNITED COMMUNITY FINANCIAL CORP.Date: November 9, 2009
    
    /s/ Douglas M. McKayDouglas M. McKay
Chairman, President and Chief Executive Officer
(Principal Executive Officer)Date: November 9, 2009
    
    /s/ James R. ReskeJames R. Reske, CFA
Treasurer and Chief Financial Officer
(Principal Financial Officer)
  39




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##### Table of Contents



UNITED COMMUNITY FINANCIAL CORP.
 Exhibit 3.1
  Exhibit 3.2