United Community Financial Corp., parent company of The Home Savings and Loan Company, announced that net income for the quarter ended September 30, 2015 totaled $4.1 million, or $0.086 per diluted common share.
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Net income for the nine months ended September 30, 2015 totaled $12.0 million, or $0.245 per diluted common share.
Total outstanding loans, including loans held for sale, increased $146.8 million to $1.3 billion, or 15.0% on an annualized basis at September 30, 2015, compared to December 31, 2014.
The increase was driven by a 35.5% increase of $89.8 million in commercial loans during the first nine months of 2015. Additionally, during the year, unfunded commercial loan commitments grew by 42.0% to approximately $82.6 million at September 30, 2015. Residential loans, including residential loans held for sale, increased 6.7%, or $50.7 million during the first nine months of 2015.
Total deposits increased $62.6 million, or 6.2% on an annualized basis, to $1.4 billion at September 30, 2015, compared to $1.3 billion at December 31, 2014. Non-interest bearing accounts increased $20.6 million, or 11.0%, as a result of increasing commercial deposits since year end. During the same time period, interest bearing deposits increased 3.6%, or $42.0 million.
Net interest income on a fully taxable equivalent basis was $14.3 million in the third quarter of 2015, up from the $12.7 million recorded in the third quarter of 2014 and the $13.9 million recorded in the second quarter of 2015.
The improvement in net interest income, when comparing the third quarter of 2015 to the third quarter of 2014, was due to an increase in average net loan balances totaling approximately $144.7 million.
Additionally, funding costs were reduced due to a modification of an FHLB advance and the prepayment of two repurchase agreements late in 2014. Net interest margin was 3.18% for the third quarter of 2015, an increase from 3.06% for the third quarter of 2014, and an increase from the 3.16% recorded in the previous quarter.
The company recognized a provision for loan losses of $673,000 in the third quarter of 2015 compared to a provision of $116,000 in the third quarter of 2014, and a provision of $753,000 in the previous quarter. Provision expense continues to be driven primarily by strong loan growth as charge-off activity returned to more normal levels.
Non-interest income was $4.9 million in the third quarter of 2015 compared to $4.2 million in the third quarter of 2014, and down from $5.3 million in the previous quarter.
The increase in non-interest income in comparing the third quarter of 2015 to the third quarter of 2014 was primarily a result of greater mortgage banking income driven by an increase in the volume of loans sold into the secondary market.
The decrease in noninterest income compared to the prior quarter is a result of an unfavorable adjustment in the mortgage servicing rights valuation allowance.
Non-interest expense was $12.3 million for the third quarter of 2015 compared to $14.3 million for the third quarter of 2014, a decrease of $2.0 million. Significantly impacting this comparison was the recognition of a $1.4 million prepayment penalty on the early termination of a $30.0 million borrowing in 2014. ■