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UCFC Earns $62,000 in its Second Quarter
YOUNGSTOWN, Ohio -- United Community Financial Corp., holding company of The Home Savings and Loan Co. of Youngstown, Tuesday reported consolidated net income of $62,000 for the three months ended June 30.
UCFC also reported net income of $3.9 million, or 12 cents per diluted share, for the first half.
Second-quarter results the company highlighted:
- Delinquent loans were $109.8 million at June 30, down $17.1 million year-to-date.
- Nonperforming assets were $139.3 million, down $17.3 million year-to-date.
- Classified loans were $171.8 million, down $48.6 million year-to-date.
- Home Savings’ Tier 1 leverage ratio of 9.32% and the total risk based capital ratio of 16.43% reflect improvements over the first quarter and exceed regulatory minimums.
The president and CEO of UCFC and Home Savings, Patrick W. Bevack noted Home Savings “has now achieved profitability for three consecutive quarters.”
Asset Quality
Delinquent loans (those 32 to 89 days past due) were $109.8 million at June 30, down $85.4 million, or 43.8%, from their high point of $195.2 million at March 31, 2010. Nonperforming loans (those 90 days past due) were $114.5 million, down $40.6 million, or 26.2%, from their high point of $155.1 million at June 30, 2010.
Nonperforming assets were $139.3 million, down $57.9 million, or 29.4%, from their high point of $197.2 million at June 30, 2010. Delinquent loans, nonperforming loans and nonperforming assets were affected in the second quarter by one borrower, who had seven loans totaling $8.4 million and filed bankruptcy.
The provision for loan losses was $6.3 million compared to $680,000 for the first quarter. This $5.6 million increase was primarily the result of recording a charge related to the resolution of debt of a single commercial loan customer, UCFC said.
Home Savings successfully secured a settlement of seven loans this borrower took out. The aggregate unpaid principal balance of these seven loans totaled $22.2 million, with Home Savings recognizing a loss through a charge-off of $5.2 million as part of the final settlement.
At June 30, Home Savings had on its books three loans that exceed $10 million, two of which were performing.
Net Interest Income and Margin
Net interest income was $16.4 million, an improvement of $541,000 over the first quarter. The net interest margin also improved, 0.25%, to 3.55%.
Total interest income was $668,000 in the second quarter compared to the first quarter, primarily as a result of a decrease of $60.0 million in the average balance of outstanding loans, UCFC said.
Total interest expense fell $1.2 million as compared to the previous quarter. UCFC attributed this to $1.1 million in interest less paid on deposits.
The net interest margin was 3.42% for the first six months compared with 3.45% for the six months ended June 30, 2011.
Total interest income decreased $8.1 million in the first six months of 2012 compared to the first six months of 2011, primarily as a result of a decrease of $288.2 million in the average balance of outstanding loans.
Noninterest income rose in the second quarter 6.9 million compared to $5.1 million in the first quarter.
Noninterest Expense
Noninterest expense (salaries and benefits, rents, Federal Deposit Insurance Corp. premiums) was $17.0 million in the second quarter compared to $16.5 million in the first, or an increase of $550,000. Noninterest expense was $33.5 million in the first six months compared to $32.4 million in the first six months of 2011 for an increase of $1.1 million. In the first half of 2012, salaries and employee benefits were up $1.6 million.
Published by The Business Journal, Youngstown, Ohio.