YOUNGSTOWN — United Community Financial Corp. found itself in hot water as the company announced Wednesday it agreed to cease-and-desist orders issued by federal and state regulators.

The Youngstown-based company which owns Butler Wick Corp. and The Home Savings Loan Co. saw its stock plunge after the announcement. The stock closed at $3.73, down $2.13 for the day which amounts to a 36.3 percent drop. The company topped the list of biggest percentage decliners among common stocks on the Nasdaq Stock Market.

In its statement the holding company said regulators are requiring it to reduce exposure to high-risk commercial and construction loans. In addition, United Community is also being asked to beef up risk-management practices.

Further, the company said it expects profit to be hurt for the rest of the year as it complies with regulators, which includes the Federal Deposit Insurance Corp., the Ohio Department of Financial Institutions and the Office of Thrift Supervision. United Community also agreed to reduce debt on its balance sheet.

Douglas M. McKay, chief executive officer and chairman for Home Savings and UCFC, emphasized in a statement that deposits at Home Savings remain safe and secure.

“Federal deposit insurance remains intact, and Home Savings maintains a level of capital adequacy that further secures that safety,’’ McKay said. “We have been and will continue to implement strategies to raise regulatory capital ratios even further, however, so that by the time this process ends, we will be an even stronger company.’’

Orders from the regulators were handed down after routine regulatory exams at both the bank and brokerage firm in January. Butler Wick operates an office in downtown Sharon.

United Community said it expects there will be a short term negative impact on earnings due to higher compliance costs associated with the order, but those costs are expected to eventually be offset by lower loan loss provisions and charge-off expenses.

McKay noted financial institutions are now in a challenging market and while Home Savings is not immune to those conditions, it remains financially strong, having reported positive earnings in each of the last 13 years, including the first two quarters of 2008.

Home Savings operates 39 offices and six loan production offices located throughout Ohio and western Pennsylvania. Butler Wick conducts business from its main office in and 22 offices in northeastern Ohio, western Pennsylvania, and western New York.

“Like the boards and management teams of Home Savings and UCFC, the regulators want our companies to experience continued success,’’ McKay said. “Home Savings remains safe, sound and profitable and these orders are meant to provide operational guidelines from which we will become even stronger in the future.’’

Reaction within the financial community on Wednesday varied with one senior executive of a competing institution calling a cease-and-desist order a body slam.

“They basically have a new partner, and it’s the federal government,’’ he said.

Most agreed though they thought United Community will emerge from under the financial cloud.

“This is a shot across the bow on an institution that has been a staple of the community for decades,’’ said Michael Wiseman, a broker with Olde Hickory Financial Services LLC in Hermitage. Wiseman is a former Butler Wick broker. “But I do believe they will find way to get into compliance.’’

He speculated one way the holding company could raise funds was to sell Butler Wick

“When I worked for them there was talk of taking the company private as it was before it was sold to UCFC,’’ Wiseman said.

Another broker also from a competing firm acknowledged he held UCFC stock.

“I’m not panicking,’’ he said. “I’m still going to hold it. If something like this had happened five years ago we wouldn’t see this kind of order being issued by regulators. ’’