Home Savings sets aside millions to cover bad loans


January 23, 2008 at 11:35a.m.

Home Savings sets aside millions to cover bad loans

YOUNGSTOWN —The parent company of Home Savings and Loan Co. said today that it set aside $13.3 million in the fourth quarter to cover bad loans. That is an increase from $1.3 million that was set aside in the fourth quarter of 2006.

Called a provision for loan losses, the accounting move was announced by United Community Financial Corp. in advance of its quarterly earnings being posted Jan. 30.

Douglas McKay, United Community chairman and chief executive, said a slowdown in the economy has caused a decline in loans that are paid back on time. He said the increase in the loan loss provision primarily is tied to the company’s construction loan portfolio.

In trading this morning, UCFC stock was at $5.55, a gain of 19 cents.

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