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 $1.8 million, or $(0.06) per diluted share, for the three months ended June 30, 2011. This compares to a net loss of $4.9 million, or $(0.16) per diluted share, for the three months ended June 30, 2010. The Company also reported cumulative net income of $1.2 million, or $0.04 per diluted share, for the six months ended June 30, 2011, as compared to a cumulative net loss of $10.0 million, or $(0.33) per diluted share, for the six months ended June 30, 2010.
Selected second quarter results:
- Delinquent loans declined $16.5 million to $141.8 million from the prior quarter
- Nonperforming loans declined $6.8 million to $139.1 million from the prior quarter
- Nonperforming assets declined $6.0 million to $182.8 million from the prior quarter
- Home Savings’ Tier 1 leverage ratio decreased 4 basis points from the prior quarter to 8.40%, still exceeding its required regulatory threshold of 8.00%. Total Risk Based Capital increased 45 basis points from the prior quarter to 13.47%
- Tangible book value per share at June 30, 2011 was $5.90, up from $5.72 at March 31, 2011
Net Interest Income and Margin
Net interest income for the three months ended June 30, 2011 was $17.1 million compared to $18.0 million for the three months ended June 30, 2010. Total interest income decreased $3.3 million in the second quarter of 2011 compared to the second quarter of 2010, primarily as a result of a decrease of $204.1 million in the average balance of outstanding loans. The Company also experienced a decrease in the yield on net loans of 17 basis points. Total interest expense, however, decreased $2.4 million for the quarter ended June 30, 2011, as compared to the same quarter last year. The change was due primarily to reductions of $2.3 million 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.