United Community Financial Corp. (Company) (Nasdaq: UCFC), holding company of The Home Savings and Loan Company of Youngstown, Ohio (Home Savings), today reported a consolidated net loss of $17.3 million, or $(0.56) per diluted share, for the three months ended December 31, 2010. This compares to a net loss of $16.3 million, or $(0.54) per diluted share, for the three months ended December 31, 2009. The Company also reported a cumulative net loss of $37.3 million, or $(1.22) per diluted share, for the twelve months ended December 31, 2010 as compared to a cumulative net loss of $16.8 million, or $(0.56) per diluted share, for the twelve months ended December 31, 2009.
The increased losses in both the fourth quarter and the twelve months ended December 31, 2010 are primarily 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 fourth quarter results:
- Nonperforming loans reduced $3.2 million to $139.5 million from the prior quarter
- Nonperforming assets reduced $3.1 million to $179.9 million from the prior last quarter
- Net interest margin reduced 25 basis points to 3.17% from the prior quarter
- Increased the allowance for loan losses by $10.0 million from the prior quarter
- Home Savings’ Tier 1 leverage ratio reduced 39 basis points from the prior quarter to 7.84%
- Home Savings’ Total Risk Based Capital reduced 58 basis points from the prior quarter to 12.54%
- Book value per share and tangible book value per share each declined $0.82 from the prior quarter to $5.69 and $5.67, respectively
Asset QualityNonperforming loans at December 31, 2010 decreased to $139.5 million, compared to $142.7 million at September 30, 2010, a decrease of $3.2 million during the period. Real estate owned and other repossessed assets were $40.3 million at December 31, 2010 and September 30, 2010. Nonperforming assets decreased $3.1 million, from $183.0 million at September 30, 2010, to $179.9 million at September 30, 2010.
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