United Community reports loss, had set aside more for loan losses

STAFF REPORT

YOUNGSTOWN — The holding company for Home Savings and Loan Co. lost $2.9 million in the second quarter because of an increase in money set aside for loan losses and higher federal deposit insurance premiums.

In the same quarter last year, United Community Financial Corp. earned $2.7 million.

The company set aside $12.3 million last quarter to cover loan losses, compared with $3.2 million in the same quarter last year.

Douglas McKay, company chairman, president and chief executive, said that despite the loss last quarter, he was encouraged by United Community’s efforts to reduce its past-due loans.

The company had a decrease in nonperforming loans, which are more than 90 days past due, but it had an increase in bank-owned real estate because of increased foreclosures.

Nonperforming assets, which includes nonperforming loans and real estate owned, decreased $860,000 to $135.1 million from Dec. 31, 2008 to June 30, 2009.

“While it is too early to say that the economy has turned the corner, the decrease in our nonperforming and past-due loan balances is a positive sign that our strategy of focusing on our core banking business is taking us in the right direction,” McKay said.

The increase in federal deposit insurance premiums was caused by the Federal Deposit Insurance Corp. imposing multiple assessments on all insured financial institutions.