United Community Financial Corp. (Company) (Nasdaq: UCFC), holding company of The Home Savings and Loan Company (Home Savings), today reported a consolidated net loss of $9.9 million, or $(0.32) per diluted share, for the three months ended September 30, 2010. This compares to a net loss of $867,000, or $(0.03) per diluted share, for the three months ended September 30, 2009. The Company also reported a cumulative net loss of $19.9 million, or $(0.66) per diluted share, for the nine months ended September 30, 2010 as compared to a cumulative net loss of $511,000, or $(0.02) per diluted share, for the nine months ended September 30, 2009.
The increased losses in both the third quarter and the nine months ended September 30, 2010 are substantially a result of increases in the provision for loan losses. The increased provision in both time periods is a result of a higher level of chargeoff activity, additional loan downgrades within the commercial real estate portfolio and increased specific reserves assigned to a number of commercial real estate loans.
Selected third quarter results:
- Nonperforming loans reduced $12.4 million to $142.7 million from last quarter
- Nonperforming assets reduced $14.2 million to $183.0 million from last quarter
- Net interest margin improved 12 basis points to 3.42% compared to 3.30% last quarter
- Tier 1 leverage ratio was 8.23%
- Total Risk Based Capital was 13.12%
- Book value per share and tangible book value per share were $6.51 and $6.49, respectively
As previously announced, the Board of Directors of UCFC has approved the appointment of Patrick W. Bevack as the President and Chief Executive Officer of UCFC, in addition to his current role as President and Chief Executive Officer of Home Savings. In accordance with applicable law, UCFC was required to obtain the consent of the Office of Thrift Supervision for this appointment, which the Board is pleased to announce it received on October 19, 2010. Mr. Bevack's appointment will be effective January 1, 2011, following the retirement of Douglas M. McKay on December 31, 2010.