YOUNGSTOWN - United Community Financial Corp., Home Savings' holding company, reported a third quarter loss of $26.9 million, due primarily to a $33 million charge related to a bulk loan sale in September.
Despite the loss, bank President and Chief Executive Officer Patrick W. Bevack said the sale of troubled loans which had a book balance of $114.8 million means a positive step.
''The bulk asset sale completed in September represented an enormous step forward for the company,'' Bevack said. ''We have achieved a substantial improvement in our asset quality and a dramatic reduction in our risk profile, and have exceeded our regulatory asset quality targets well ahead of schedule."
The company reported a net loss of $23 million for the nine months ended Sept. 30.
The sale of the troubled loans had been expected to negatively impact the third quarter earnings report, but at the same time meant the bank achieved a substantial improvement in asset quality and exceeded asset quality targets set in a consent order by bank regulators.
The bank had been required to reduce total adversely classified assets to a level of $219.2 million by the end of September, and $146 million by March 31.
Also included in the third quarter earnings report, the bank reported delinquent loans totaled $51.2 million at the end of September, which is down $144 million, or 74.8 percent from their high point of $195.2 million in March 2010.
Of the loans sold in the bulk sale, $91.6 million were classified, $63.3 million were nonperforming and $53 million were noncurrent.
Net interest income for the three months ended Sept. 30 was $14.1 million, a decline of $2.3 million over the prior quarter, the bank reported.
Total interest income decreased $2.7 million in the third quarter of 2012 compared to the second quarter of 2012, primarily as a result of a decrease of $85.7 million in the average balance of outstanding loans.