United reports $3.7 million earned in 1Q

Staff report

YOUNGSTOWN

Youngstown-based Home Savings & Loan Co. reported earnings of $3.7 million in the first quarter of 2015, Home Savings’ parent company United Community Financial Corp. announced.

That’s a 76 percent increase from earnings of $2.1 million generated in the same quarter last year.

“Performance for the first quarter was in line with our expectations, and we were very pleased with the continued improvement in pre-tax earnings, topping $5.5 million for the quarter,” Gary M. Small, president and CEO of United Community and Home Savings, said Tuesday.

Home Savings is a wholly-owned subsidiary of the United Community and operates 32 full-service banking offices and nine loan production offices in Ohio and western Pennsylvania.

Small attributed the positive results to a combination of strong loan and deposit growth, improvement of fee income, and a focus on expense management.

“I expect these themes to be sustained going forward as the entire Home Savings team is very focused on delivering a very strong 2015,” Small said.

Loans increased $30.9 million to $1.2 billion at March 31, compared with Dec. 31, 2014. Commercial loans, up 7.8 percent or $19.6 million, drove this improvement. Residential loans increased 1.4 percent or $10.9 million.

Total deposits increased $58.9 million to $1.4 billion at March 31, compared with $1.3 billion at Dec. 31, 2014.

Net interest income was $13.9 million in the first quarter of 2015. That’s up from the $12.6 million recorded in the first quarter of 2014 and $13.4 million recorded in the previous quarter. Net interest margin was 3.24 percent for the first quarter of 2015 compared with 3.07 percent in the first quarter of 2014, and increased from the 3.16 percent net interest margin recorded in the previous quarter.

Home Savings had a negative provision for loan losses of $184,000 in the first quarter of 2015 compared with $33,000 of provision loan expense in the same quarter last year, and $194,000 of provision expense in the previous quarter.

Positive trends and a positive economy have led to the negative loan loss provision.

An increase in the volume of loans sold into the secondary market helped to increase the non-interest income from $3.2 million in the first quarter of 2014 to $4.1 million in the first quarter of 2015.

Total non-interest expense was $12.7 million in the first quarter of 2015, an increase of $755,000 over the fourth quarter of 2014 when adjusted for a $2 million prepayment penalty that occurred at that time.

Total non-interest expense decreased $862,000 from the first quarter of 2014.

For the first quarter of 2015, the allowance for loan loss as a percentage of total loans was 1.45 percent at March 31 compared with 1.52 percent at Dec. 31, 2014, and 1.90 percent at March 31, 2014.

Measures of asset quality continue to improve, while delinquencies continue to decline.