UCFC Earns $2.7M in 1Q, Delinquent Loans Decline
YOUNGSTOWN, Ohio -- United Community Financial Corp., holding company of The Home Savings and Loan Co., reports consolidated net income of $2.7 million, or 6 cents per common share, for the three months ended March 31. This compares to net earnings of $3.8 million for the first quarter of 2012 or 12 cents per share.
Said the CEO of UCFC, Patrick W. Bevack, in a statement released following the close of business Friday, “Net income for the quarter, along with improvement in asset quality and the successful completion of the private equity offering continues to move our company forward. These positive steps provide United Community and Home Savings with the capital to grow our company, raise our capital levels to levels that are commensurate with our risk profile and continue to execute our business plan.”
Selected first quarter results as itemized by UCFC include:
- Delinquent loans were $46.7 million at March 31 down 3.2% for the year to date.
- Nonperforming assets were $60.5 million at March 31, down 8.7% for the year to date.
- Classified loans were $57.6 million at March 31, down 3.8% for the year to date.
- Home Savings’ Tier 1 leverage ratio was 9.84% and the total risk based capital ratio was 18.28%.
As of March 31, delinquent loans were $46.7 million, down $1.5 million, or 3.2%, from Dec. 31. Nonperforming loans as of March 31 were down $3.1 million, or 6.4%, from $47.8 million at Dec. 31. Nonperforming assets were $60.5 million as of March 31, down $5.7 million, or 8.7%, from $66.2 million at Dec. 31.
The provision for loan losses increased to $2.1 million in the first quarter, compared to $680,000 in the first quarter of 2012. This $1.4 million increase in the provision for loan losses is primarily a result of chargeoffs of $560,000 associated with one commercial lending relationship and a $382,000 specific reserve established on another commercial relationship, the company said.
Net interest income for the three months ended March 31 and Dec. 31 was $12.9 million and $14.0 million, respectively. Total interest income decreased $1.4 million in the first quarter primarily because of a decrease of $36.7 million in the average balance of outstanding loans. United Community also experienced a decrease in the yield on net loans of 29 basis points.
Total interest expense decreased $267,000. The change was due primarily to reductions of $235,000 in interest paid on deposits. The overall decrease in interest expense was attributable to a shift in deposit balances from certificates of deposit to relatively less expensive non-time deposits.
Noninterest income decreased in the first quarter of 2013 to $5.7 million, as compared to noninterest income for the prior quarter of $6.9 million. Decreased noninterest income was a result of lower service fees and other charges, lower gains recognized on the sale of securities available for sale and decreased mortgage banking income, the company said.
The decline in mortgage banking income is attributable to a lower volume of sales as Home Savings retained a more significant portion of 15-year mortgage originations in its loan portfolio rather than selling such loans in the secondary market.
Noninterest expense was $13.9 million in the first quarter, compared to $14.3 million in the prior quarter. Deposit insurance premiums were lower due to the bank being able to avail itself of more favorable insurance rates and a lower average asset base used in the calculation of insurance premiums.
Professional fees were $796,000 lower during the quarter. The improvement in asset quality has reduced the need to engage legal and other consultants to assist in the resolution of problem assets. Home Savings’ Tier 1 leverage ratio was 9.84% as of March 31, 2013, as compared to 8.70% as of Dec. 31. Home Savings’ total risk-based capital ratio was 18.28% at March 31, as compared to 16.21% at Dec. 31. Tangible book value per common share at March 31, 2013 was $4.81; $5.16 at Dec. 31.
Home Savings is a wholly-owned subsidiary of UCFC and operates 33 full-service banking offices and nine loan production offices located throughout Ohio and western Pennsylvania.
SOURCE: United Community Financial Corp.
Published by The Business Journal, Youngstown, Ohio.
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