United Community Financial Corp. in Youngstown, Ohio, announced Monday that the Office of Thrift Supervision is delaying approval of a deal to acquire another Ohio thrift company until the agency completes its examination of United's thrift subsidiary, Home Federal Savings and Loan Co.
The $2.7 billion-asset company had said it expected to buy the $908 million-asset PVF Capital Corp. of Solon in January but said Monday that it is now unlikely the deal will close before the end of the first quarter. The Federal Deposit Insurance Corp. and Ohio state regulators are expected to begin their examination of Home Federal next month.
In late trading Monday, PVF's shares were down more than 8% from Friday's closing price, to $11.73. United's shares, which have lost more than half their value this year, were down about 1.5%, to $5.37.
United announced its deal for PVF in July, saying at the time that economic conditions in Ohio had made organic growth difficult and that its best chance for growth was through acquisitions.
United has been struggling with credit quality issues of late. At Sept. 30 United reported that nonperforming assets had more than doubled since the end of 2006, to $112.5 million. Its third-quarter earnings fell more than 57% from a year earlier, to $2.1 million.
United's deal for PVF is not the first regulators have delayed this year. The OTS has held off on approving the sale of First Mutual Bancshares Inc. of Bellevue, Wash., to Washington Federal Inc. in Seattle while it considers the deal's effect on compliance-related issues revealed in an August examination. The sale had been scheduled to close next quarter, but Washington Federal said last month that "no assurances can be given as to when or whether the OTS will approve the application."
Also, the FDIC delayed its approval of Sterling Financial Corp.'s acquisition of North Valley Bancorp of Redding, Calif., in October over concerns that the Spokane company's compliance program was not keeping pace with its growth. The two companies terminated the deal this month, because they were unsure if or when the FDIC would approve it.
