United Community Financial (UCFC) in Youngstown, Ohio, will take a $5.2 million loss on a group of loans to a single commercial customer.
The company said in a Securities and Exchange Commission filing Monday that the unnamed customer had a total of seven loans with a combined unpaid principal balance of $22.1 million. Three of the loans had an unpaid balance of $15.7 million, representing the company's largest impaired or classified relationship.
It said that after reviewing the relationship it decided to accept a settlement that resulted in the loss. "The company believes this settlement resulted in a more favorable outcome as compared to alternative courses of action," United Community said in the SEC filing.
The $2 billion-asset United reached the settlement in late June but did not say in which quarter it would recognize the loss. The company has struggled under the weight of soured loans over the last few years, but it turned an annual profit in 2011 for the first time since 2007 and earned $3.8 million in the first quarter as delinquent and nonperforming loans declined.
The 2011 earnings were also aided by the sale of four branches.
At March 31, its nonperforming assets totaled $139 million, down 26% from the same period last year.