United Community Financial Corp. of Youngstown, Ohio, disclosed in a Securities and Exchange Commission filing that it added $1.04 million to its loss reserves for a bloc of 13 consumer loans with a value of $6 million that it classified as impaired after a recent portfolio review.
In the report, filed Wednesday, the $2.2 billion-asset holding company for Home Savings and Loan Co. said that in some cases it "may not have a valid perfected security interest in some of the collateral" backing the loans. In others the borrowers might not be able to meet their financial obligations, it said.
United Community classified as impaired eight other consumer loans and two commercial loans with an aggregate principal balance of $8.1 million, but it did not record a loss provision for them.
Asset quality at United Community had been improving. At the end of the second quarter it reported that nonperforming loans has dropped 11.7% from the beginning of the year, to $14.4 million. It had $16.3 million in the loan-loss reserve on June 30.
United Community said Patrick A. Kelly, its chief financial officer, was unavailable for comment Thursday.
