United Community Financial (UCFC) in Youngstown, Ohio, has begun a $42 million capital raise.
The $1.8 billion-asset parent of The Home Savings and Loan Co. said Tuesday it has agreed to sell roughly $39.9 million of its stock via a private offering to financially sophisticated investors and to issue roughly $2.1 million in common stock to directors, officers and other people affiliated with the company.
United Community also said it would sell roughly $5 million of common stock to existing shareholders as part of the capital raise, which is expected to allow the company to uphold its promise under an agreement in March with regulators to cut classified assets and boost its Tier 1 leverage ratio to 9% within a year.
As of Sept. 30, the bank's Tier 1 leverage was 8.27%.
In September, United Community sold $114.8 million in troubled loans and other assets as a way to meet the targets set in the consent order.
"This capital raise is the final step in the execution of our current capital plan, and it provides [United Community] and Home Savings with the capital we need to grow our company and its businesses," Patrick Bevack, United Community's chief executive, said in a news release.