United Community Financial Corp. in Youngstown, Ohio, announced Friday that it has agreed to sell all the outstanding capital stock of Butler Wick & Co. Inc., the securities arm of Butler Wick Corp., to Stifel Financial Corp. in St. Louis.
The deal, which is expected to close this month, calls for Stifel to pay $12 million in cash for Butler Wick & Co., subject to certain adjustments.
The securities firm offers full-service retail brokerage and capital markets services through 23 offices in Ohio, Pennsylvania, and New York, and it employs about 175 people.
Douglas M. McKay, United Community's chairman and chief executive officer, said in an interview Friday that the thrift company bought Butler Wick Corp. in 1999. It includes the securities division that United Community is selling and a trust unit that United Community will retain.
Mr. McKay said that he is selling the unit to raise capital and strengthen United Community's balance sheet.
The company, which had $2.7 billion of assets at Sept. 30, is already well-capitalized, he said, with a Tier 1 capital ratio over 8%, but "this sale will give us additional resources to reduce outstanding debt, and it also enables us as an organization to concentrate more on our primary banking activities."
"In today's banking environment, we need to take strategic steps to concentrate on our core banking businesses and sharpen our focus," he added.
