First Niles posts loss of $151,000

Staff report

niles

First Niles Financial, the holding company for Home Federal Savings and Loan of Niles, posted a loss of $151,000 for the first quarter of 2010, the company reported Monday.

Net interest income after the provision for loan loss was $382,000 in the first three months of 2010, a 43.4 percent decrease from the first quarter of 2009.

The losses were largely the result of home foreclosures and the current mortgage crisis, said Larry Safarek, First Niles Financial president.

Nonperforming loans — loans that are not being paid or that are more than 90 days delinquent — totaled $2.1 million at the end of March.

The allowance for loan losses at that time was $308,000.

“Foreclosures are actually up this year from last year,” Safarek said. “We had to put more money in for loan loss, which directly contributes to the bottom line.”

Noninterest expense was $625,000 for the first quarter of 2010, an increase of $183,000 from the same quarter in 2009.

The primary reason for this increase was expenses due to the acquisition, maintenance and sale of foreclosed real estate, Safarek said.

The high rate of nonperforming loans appears to be slowing, however, he said. The cost of such loans decreased $72,000 from the end of 2009.

“We’ve gotten rid of a lot of the property, limiting the insurance, the taxes, the maintenance costs,” Safarek said.

“We think it should start to slow up, but a lot depends on the economy and on the borrowers.”