UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 2011
United Community Banks, Inc.
(Exact name of registrant as specified in its charter)
| Georgia | No. 001-35095 | No. 58-180-7304 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 125 Highway 515 East, P.O. Box 398 Blairsville, Georgia |
30512 |
|
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (706) 781-2265
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operation and Financial Condition
On July 28, 2011, United Community Banks, Inc. (the “Registrant”) issued a news release
announcing its financial results for the quarter ended June 30, 2011 (the “News Release”). The News
Release, including financial schedules, is attached as Exhibit 99.1 to this report. In connection
with issuing the News Release, on July 28, 2011 at 11:00 a.m. EST, the Registrant intends to hold a
conference call/webcast to discuss the News Release. In addition to the News Release, during the
conference call the Registrant intends to discuss certain financial information contained in the
June 30, 2011 Investor Presentation (the “Investor Presentation”) which will be posted to the
Registrant’s website. The Investor Presentation is attached as Exhibit 99.2 to this report.
The presentation of the Registrant’s financial results included operating performance measures and
core earnings measures, which are measures of performance determined by methods other than in
accordance with generally accepted accounting principles, or GAAP. Management included non-GAAP
operating performance and core earnings measures because it believes they are useful for evaluating
the Registrant’s operations and performance over periods of time, and uses operating performance
and core earnings measures in managing and evaluating the Registrant’s business and intends to
refer to them in discussions about the Registrant’s operations and performance. Operating
performance measures for the fourth quarter of 2010 exclude the effects of an $11.75 million
pre-tax partial recovery of a 2007 fraud loss and third quarter 2010 operating performance measures
exclude the effects of a $210.6 million non-cash goodwill impairment charge. These items have been
excluded from operating performance measures because management believes that the items are
non-recurring in nature and do not reflect overall trends in the Registrant’s earnings.
Additionally, core earnings measures exclude credit related costs such as the provision for loan
losses, certain expenses and charges related to United’s 2011 asset disposition plans in the first
quarter of 2011, the loss from sale of nonperforming assets to Fletcher International in the second
quarter of 2010 and foreclosed property expense, securities gains and losses, income taxes and
other items of a non-recurring nature. Core earnings are useful in evaluating the underlying
earnings performance trends of the Registrant. Management believes these non-GAAP performance
measures may provide users of the Registrant’s financial information with a meaningful measure for
assessing the Registrant’s financial results and comparing those financial results to prior
periods.
Operating performance and core earnings measures should be viewed in addition to, and not as an
alternative or substitute for, the Registrant’s performance measures determined in accordance with
GAAP, and is not necessarily comparable to non-GAAP performance measures that may be presented by
other companies.
Item 9.01 Financial Statements and Exhibits
(a) Financial statements: None
(b) Pro forma financial information: None
(c) Exhibits:
| 99.1 | Press Release, dated July 28, 2011 |
|||
| 99.2 | Investor Presentation, Second Quarter 2011 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
| /s/ Rex S. Schuette
|
||||
| Executive Vice President and | ||||
July 28, 2011
|
Chief Financial Officer |
Exhibit 99.1
For Immediate Release
For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com
UNITED COMMUNITY BANKS, INC. REPORTS
EARNINGS OF $7.6 MILLION OR EIGHT CENTS PER SHARE
FOR SECOND QUARTER 2011
| • | Profitable quarter driven by core earnings and lower credit losses |
| • | Nonperforming assets continue to improve; down $19 million, or 14 percent, from last quarter to 1.60
percent of assets |
| • | Allowance for loan losses remains strong at 3.07 percent of loans |
| • | Core transaction deposits up 10 percent on an annualized basis |
| • | Completed conversion of preferred stock to common and reverse stock split |
BLAIRSVILLE, GA – July 28, 2011 – United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $7.6 million, or 8 cents per diluted share, for the second quarter of 2011. The year-to-date net loss of $135 million reflects the significant credit losses in the first quarter incurred in connection with the Problem Asset Disposition Plan which was announced last quarter in conjunction with the raising of $380 million in new capital.
“The de-risking of our balance sheet and capital transaction, coupled with the execution of the Problem Asset Disposition Plan in the first quarter allowed us to return to profitability much sooner than would have otherwise been feasible,” stated Jimmy Tallent, president and chief executive officer. “While we still have work to do in this difficult economic environment, our credit trends show improvement by every measure and we expect that positive trend to continue.”
- 1 -
Total loans were $4.2 billion at quarter-end, down $31 million from the end of the first quarter and $710 million from a year earlier. “The $31 million decrease from last quarter is actually a very encouraging sign in that it is the smallest quarterly decrease in loan balances since the first quarter of 2008,” stated Tallent. “We believe the slowing attrition in the loan portfolio marks the approach of an inflection point upon which we can once again begin to grow our loan portfolio. We were pleased with our new loans made during the second quarter that included $136 million of loan commitments with $105 million funded of which the majority were commercial loans. Our pipeline of new business continues to gain momentum and we continue to add commercial lenders to our metro markets across our footprint. I’m encouraged by the direction in which we are heading. I can’t overemphasize the importance of restoring modest growth to our loan portfolio and growing net interest revenue.”
Taxable equivalent net interest revenue of $58.9 million was up $2.6 million from the first quarter due mostly to the impact last quarter of a $2 million interest reversal on the performing classified loans that were included in the bulk loan sale. Compared with the second quarter of 2010, net interest revenue was $2.7 million lower, primarily due to the $745 million reduction in average loan balances that was offset partially by lower rates on our deposits. Net interest margin was 3.41 percent for the second quarter of 2011, down 19 basis points from a year ago and equal to the first quarter after adding back the $2 million interest reversal in the bulk loan sale.
“Growing loans and deposits is the key to building core earnings,” Tallent commented. “We are making steady progress on the lending side and grew core transaction deposits in the second quarter by $69 million, or 10 percent, on an annualized basis. This was the tenth consecutive quarter of core deposit growth.”
- 2 -
Operating fee revenue was $13.9 million in the second quarter of 2011, compared to $11.6 million a year ago and $11.8 million last quarter. Service charges and fees were $7.6 million, down $385,000 from a year ago, due primarily to lower overdraft fees resulting from regulatory changes last year that required customers to provide consent before using overdraft services. Partially offsetting this reduction in overdraft fees was an increase in ATM and debit card usage fees. Service charges and fees were up $888,000 from last quarter due to the increase in ATM and debit card usage fees. Mortgage fees of $952,000 were down $649,000 from a year ago and down $542,000 from last quarter due to the lower level of refinancing activities. Other fee revenue of $4.7 million reflected an increase of $3.3 million from a year ago and $1.8 million from the first quarter primarily due to the accelerated recognition of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans. Gains recognized in the second quarter were $2.8 million compared with $1.3 million in the first quarter of 2011 and $239,000 in the second quarter of 2010.
Excluding foreclosed property costs and the loss on sale of nonperforming assets in 2010, the second quarter operating expenses were $46.8 million, flat with the first quarter and $3.1 million higher than a year ago. Salary and benefit costs totaled $26.4 million and increased $2.8 million from last year and $1.5 million from first quarter. Severance costs for eliminated staff positions account for $1.2 million of the increase from both periods. Also contributing to the increase from a year ago were $717,000 in higher incentive costs, lower deferred direct loan origination costs of $518,000 and a $288,000 change in the value of our deferred compensation liability.
Foreclosed property costs for the second quarter of 2011 were $1.9 million as compared to $64.9 million last quarter and $14.5 million a year ago. For the second quarter of 2011, these costs were for maintenance of foreclosed properties. For the first quarter of 2011, foreclosed property costs included $60.6 million of write downs and losses on accelerated sales related to the asset disposition plan and $4.3 million of maintenance costs. Second quarter 2010 included $11.2 million of write downs and losses and $3.3 million for maintenance costs.
- 3 -
The effective tax rate for the second quarter of 2011 was 40 percent, equal to the first quarter of 2011. The effective tax rate for the balance of 2011 will continue in the 40 percent range due to year-to-date net losses and will return to a normal range of 35 to 36 percent with expected profitability for 2012.
As of June 30, 2011, the capital ratios for United were as follows: Tier 1 Risk Based of 13.9 percent; Tier 1 Leverage of 8.7 percent; and, Total Risk Based of 16.4 percent. The quarterly average tangible equity-to-assets ratio was 11.1 percent. As of quarter-end, tangible common equity-to-assets ratio was 8.9 percent compared to the quarterly average of 4.8 percent which was distorted by the late-quarter timing of the conversion of the mandatorily convertible preferred stock that occurred late in the quarter. The quarter-end tangible common equity to assets ratio of 8.9 percent is more representative of United’s current capital strength.
“It is of course good to once again report positive earnings,” Tallent said. “The last three years have been extremely challenging in our industry, and challenges remain as the economy continues to struggle. We have laid out our strategy and now we are about the business of implementation. Our company has completed the capital transaction, de-risked our balance sheet through the Problem Asset Disposition Plan, executed the reverse stock split, and achieved profitability. We are on the right track but by no means satisfied; there is more work to do on credit quality, commercial loans, core deposits, customer service, and organic growth. We are moving forward with determination and optimism.”
Conference Call
United Community Banks will hold a conference call today, Thursday, July 28, 2011, at 11 a.m. ET to discuss the
contents of this news release and to share business highlights for the quarter. To access the call, dial (877)
380-5665 and use the conference number 78907241. The conference call also will be webcast and can be accessed by
selecting ‘Calendar of Events’ within the Investor Relations section of the company’s website at www.ucbi.com.
- 4 -
About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United
Community Banks has assets of $7.4 billion and operates 27 community banks with 106 banking offices throughout north
Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The Company specializes in
providing personalized community banking services to individuals and small to mid-size businesses. United Community
Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United
Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional
information may be found at the Company’s web site at www.ucbi.com.
Safe Harbor
This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements
about financial United’s outlook and business environment. These statements are provided to assist in the
understanding of future financial performance and such performance involves risks and uncertainties that may cause
actual results to differ materially from those anticipated in such statements. Any such statements are based on
current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause
such forward-looking statements to differ materially from actual results, please refer to the section entitled “Risk
Factors” of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange
Commission. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to
update or revise forward-looking statements.
# # #
- 5 -
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
Financial Highlights
Selected Financial Information
| Second | ||||||||||||||||||||||||||||||||||||
| 2011 | 2010 | Quarter | For the Six | YTD | ||||||||||||||||||||||||||||||||
| (in thousands, except per share | Second | First | Fourth | Third | Second | 2011-2010 | Months Ended | 2011-2010 | ||||||||||||||||||||||||||||
| data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2011 | 2010 | Change | |||||||||||||||||||||||||||
INCOME SUMMARY |
||||||||||||||||||||||||||||||||||||
Interest revenue |
$ | 76,931 | $ | 75,965 | $ | 81,215 | $ | 84,360 | $ | 87,699 | $ | 152,896 | $ | 177,548 | ||||||||||||||||||||||
Interest expense |
17,985 | 19,573 | 21,083 | 24,346 | 26,072 | 37,558 | 54,642 | |||||||||||||||||||||||||||||
Net interest revenue |
58,946 | 56,392 | 60,132 | 60,014 | 61,627 | (4 | )% | 115,338 | 122,906 | (6 | )% | |||||||||||||||||||||||||
Operating provision for loan losses (1) |
11,000 | 190,000 | 47,750 | 50,500 | 61,500 | 201,000 | 136,500 | |||||||||||||||||||||||||||||
Fee revenue (2) |
13,905 | 11,838 | 12,442 | 12,861 | 11,579 | 20 | 25,743 | 23,245 | 11 | |||||||||||||||||||||||||||
Total operating revenue (1)(2) |
61,851 | (121,770 | ) | 24,824 | 22,375 | 11,706 | (59,919 | ) | 9,651 | |||||||||||||||||||||||||||
Operating expenses (3) |
48,728 | 115,271 | 64,918 | 64,906 | 58,308 | (16 | ) | 163,999 | 113,128 | 45 | ||||||||||||||||||||||||||
Loss on sale of nonperforming assets |
— | — | — | — | 45,349 | — | 45,349 | |||||||||||||||||||||||||||||
Operating income (loss) from continuing operations
before income taxes |
13,123 | (237,041 | ) | (40,094 | ) | (42,531 | ) | (91,951 | ) | 114 | (223,918 | ) | (148,826 | ) | ||||||||||||||||||||||
Operating income tax expense (benefit) |
5,506 | (94,555 | ) | (16,520 | ) | (16,706 | ) | (32,419 | ) | (89,049 | ) | (54,836 | ) | |||||||||||||||||||||||
Net operating income (loss) from continuing
operations (1)(2)(3) |
7,617 | (142,486 | ) | (23,574 | ) | (25,825 | ) | (59,532 | ) | 113 | (134,869 | ) | (93,990 | ) | (43 | ) | ||||||||||||||||||||
Noncash goodwill impairment charges |
— | — | — | (210,590 | ) | — | — | — | ||||||||||||||||||||||||||||
Partial reversal of fraud loss provision, net of income tax |
— | — | 7,179 | — | — | — | — | |||||||||||||||||||||||||||||
Loss from discontinued operations, net of income tax |
— | — | — | — | — | — | (101 | ) | ||||||||||||||||||||||||||||
Gain from sale of subsidiary, net income tax |
— | — | — | — | — | — | 1,266 | |||||||||||||||||||||||||||||
Net income (loss) |
7,617 | (142,486 | ) | (16,395 | ) | (236,415 | ) | (59,532 | ) | 113 | (134,869 | ) | (92,825 | ) | (45 | ) | ||||||||||||||||||||
Preferred dividends and discount accretion |
3,016 | 2,778 | 2,586 | 2,581 | 2,577 | 5,794 | 5,149 | |||||||||||||||||||||||||||||
Net income (loss) available to common shareholders |
$ | 4,601 | $ | (145,264 | ) | $ | (18,981 | ) | $ | (238,996 | ) | $ | (62,109 | ) | $ | (140,663 | ) | $ | (97,974 | ) | ||||||||||||||||
PERFORMANCE MEASURES |
||||||||||||||||||||||||||||||||||||
Per common share: |
||||||||||||||||||||||||||||||||||||
Diluted operating income (loss) from continuing
operations (1)(2)(3) |
$ | .08 | $ | (7.87 | ) | $ | (1.38 | ) | $ | (1.50 | ) | $ | (3.29 | ) | 102 | $ | (6.40 | ) | $ | (5.25 | ) | (22 | ) | |||||||||||||
Diluted income (loss) from continuing operations |
.08 | (7.87 | ) | (1.00 | ) | (12.62 | ) | (3.29 | ) | 102 | (6.40 | ) | (5.25 | ) | (22 | ) | ||||||||||||||||||||
Diluted income (loss) |
.08 | (7.87 | ) | (1.00 | ) | (12.62 | ) | (3.29 | ) | 102 | (6.40 | ) | (5.19 | ) | (23 | ) | ||||||||||||||||||||
Book value |
11.59 | 14.78 | 24.18 | 25.70 | 38.55 | (70 | ) | 11.59 | 38.55 | (70 | ) | |||||||||||||||||||||||||
Tangible book value (5) |
11.47 | 14.44 | 23.78 | 25.26 | 26.95 | (57 | ) | 11.47 | 26.95 | (57 | ) | |||||||||||||||||||||||||
Key performance ratios: |
||||||||||||||||||||||||||||||||||||
Return on equity (4)(6) |
5.34 | % | (147.11 | )% | (17.16 | )% | (148.04 | )% | (35.89 | )% | (76.07 | )% | (27.87 | )% | ||||||||||||||||||||||
Return on assets (6) |
.40 | (7.61 | ) | (.89 | ) | (12.47 | ) | (3.10 | ) | (3.57 | ) | (2.39 | ) | |||||||||||||||||||||||
Net interest margin (6) |
3.41 | 3.30 | 3.58 | 3.57 | 3.60 | 3.36 | 3.55 | |||||||||||||||||||||||||||||
Operating efficiency ratio from continuing operations
(2)(3) |
66.88 | 169.08 | 89.45 | 89.38 | 141.60 | 116.28 | 108.48 | |||||||||||||||||||||||||||||
Equity to assets |
11.21 | 8.82 | 8.85 | 11.37 | 11.84 | 10.02 | 11.87 | |||||||||||||||||||||||||||||
Tangible equity to assets (5) |
11.13 | 8.73 | 8.75 | 9.19 | 9.26 | 9.94 | 9.32 | |||||||||||||||||||||||||||||
Tangible common equity to assets (5) |
4.79 | 5.51 | 6.35 | 6.78 | 6.91 | 5.15 | 7.02 | |||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets (5) |
14.26 | 6.40 | 9.05 | 9.60 | 9.97 | 14.26 | 9.97 | |||||||||||||||||||||||||||||
ASSET QUALITY * |
||||||||||||||||||||||||||||||||||||
Non-performing loans |
$ | 71,065 | $ | 83,769 | $ | 179,094 | $ | 217,766 | $ | 224,335 | $ | 71,065 | $ | 224,335 | ||||||||||||||||||||||
Foreclosed properties |
47,584 | 54,378 | 142,208 | 129,964 | 123,910 | 47,584 | 123,910 | |||||||||||||||||||||||||||||
Total non-performing assets (NPAs) |
118,649 | 138,147 | 321,302 | 347,730 | 348,245 | 118,649 | 348,245 | |||||||||||||||||||||||||||||
Allowance for loan losses |
127,638 | 133,121 | 174,695 | 174,613 | 174,111 | 127,638 | 174,111 | |||||||||||||||||||||||||||||
Operating net charge-offs (1) |
16,483 | 231,574 | 47,668 | 49,998 | 61,323 | 248,057 | 117,991 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans |
3.07 | % | 3.17 | % | 3.79 | % | 3.67 | % | 3.57 | % | 3.07 | % | 3.57 | % | ||||||||||||||||||||||
Operating net charge-offs to average loans (1)(6) |
1.58 | 20.71 | 4.03 | 4.12 | 4.98 | 11.46 | 4.75 | |||||||||||||||||||||||||||||
NPAs to loans and foreclosed properties |
2.82 | 3.25 | 6.77 | 7.11 | 6.97 | 2.82 | 6.97 | |||||||||||||||||||||||||||||
NPAs to total assets |
1.60 | 1.73 | 4.32 | 4.96 | 4.55 | 1.60 | 4.55 | |||||||||||||||||||||||||||||
AVERAGE BALANCES ($ in millions) |
||||||||||||||||||||||||||||||||||||
Loans |
$ | 4,266 | $ | 4,599 | $ | 4,768 | $ | 4,896 | $ | 5,011 | (15 | ) | $ | 4,432 | $ | 5,091 | (13 | ) | ||||||||||||||||||
Investment securities |
2,074 | 1,625 | 1,354 | 1,411 | 1,532 | 35 | 1,851 | 1,525 | 21 | |||||||||||||||||||||||||||
Earning assets |
6,924 | 6,902 | 6,680 | 6,676 | 6,854 | 1 | 6,913 | 6,969 | (1 | ) | ||||||||||||||||||||||||||
Total assets |
7,624 | 7,595 | 7,338 | 7,522 | 7,704 | (1 | ) | 7,609 | 7,825 | (3 | ) | |||||||||||||||||||||||||
Deposits |
6,372 | 6,560 | 6,294 | 6,257 | 6,375 | — | 6,465 | 6,472 | — | |||||||||||||||||||||||||||
Shareholders’ equity |
854 | 670 | 649 | 855 | 912 | (6 | ) | 763 | 929 | (18 | ) | |||||||||||||||||||||||||
Common shares — basic (thousands) |
25,427 | 18,466 | 18,984 | 18,936 | 18,905 | 21,965 | 18,891 | |||||||||||||||||||||||||||||
Common shares — diluted (thousands) |
57,543 | 18,466 | 18,984 | 18,936 | 18,905 | 21,965 | 18,891 | |||||||||||||||||||||||||||||
AT PERIOD END ($ in millions) |
||||||||||||||||||||||||||||||||||||
Loans * |
$ | 4,163 | $ | 4,194 | $ | 4,604 | $ | 4,760 | $ | 4,873 | (15 | ) | $ | 4,163 | $ | 4,873 | (15 | ) | ||||||||||||||||||
Investment securities |
2,188 | 1,884 | 1,490 | 1,310 | 1,488 | 47 | 2,188 | 1,488 | 47 | |||||||||||||||||||||||||||
Total assets |
7,410 | 7,974 | 7,443 | 7,013 | 7,652 | (3 | ) | 7,410 | 7,652 | (3 | ) | |||||||||||||||||||||||||
Deposits |
6,183 | 6,598 | 6,469 | 5,999 | 6,330 | (2 | ) | 6,183 | 6,330 | (2 | ) | |||||||||||||||||||||||||
Shareholders’ equity |
860 | 850 | 636 | 662 | 904 | (5 | ) | 860 | 904 | (5 | ) | |||||||||||||||||||||||||
Common shares outstanding (thousands) |
57,469 | 20,903 | 18,937 | 18,887 | 18,856 | 57,469 | 18,856 | |||||||||||||||||||||||||||||
| (1) | Excludes the partial reversal of a previously established provision for
fraud-related loan losses of $11.8 million, net of tax expense of $4.6 million in the fourth
quarter of 2010. Operating charge-offs also exclude the $11.8 million related partial recovery of
the previously charged off amount. |
|
| (2) | Excludes revenue generated by discontinued
operations in the first quarter of 2010. |
|
| (3) | Excludes the goodwill impairment charge of
$211 million in the third quarter of 2010 and expenses relating to discontinued operations in the
first quarter of 2010. |
|
| (4) | Net loss available to common shareholders, which is net of
preferred stock dividends, divided by average realized common equity, which excludes accumulated
other comprehensive income (loss). |
|
| (5) | Excludes effect of acquisition related
intangibles and associated amortization. |
|
| (6) | Annualized. |
|
| * | Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC. |
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
| 2011 | 2010 | |||||||||||||||||||||||||||
| (in thousands, except per share | Second | First | Fourth | Third | Second | For the Six Months Ended | ||||||||||||||||||||||
| data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | 2011 | 2010 | |||||||||||||||||||||
Interest revenue reconciliation |
||||||||||||||||||||||||||||
Interest revenue — taxable equivalent |
$ | 76,931 | $ | 75,965 | $ | 81,215 | $ | 84,360 | $ | 87,699 | $ | 152,896 | $ | 177,548 | ||||||||||||||
Taxable equivalent adjustment |
(429 | ) | (435 | ) | (497 | ) | (511 | ) | (500 | ) | (864 | ) | (993 | ) | ||||||||||||||
Interest revenue (GAAP) |
$ | 76,502 | $ | 75,530 | $ | 80,718 | $ | 83,849 | $ | 87,199 | $ | 152,032 | $ | 176,555 | ||||||||||||||
Net interest revenue reconciliation |
||||||||||||||||||||||||||||
Net interest revenue — taxable equivalent |
$ | 58,946 | $ | 56,392 | $ | 60,132 | $ | 60,014 | $ | 61,627 | $ | 115,338 | $ | 122,906 | ||||||||||||||
Taxable equivalent adjustment |
(429 | ) | (435 | ) | (497 | ) | (511 | ) | (500 | ) | (864 | ) | (993 | ) | ||||||||||||||
Net interest revenue (GAAP) |
$ | 58,517 | $ | 55,957 | $ | 59,635 | $ | 59,503 | $ | 61,127 | $ | 114,474 | $ | 121,913 | ||||||||||||||
Provision for loan losses reconciliation |
||||||||||||||||||||||||||||
Operating provision for loan losses |
$ | 11,000 | $ | 190,000 | $ | 47,750 | $ | 50,500 | $ | 61,500 | $ | 201,000 | $ | 136,500 | ||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | (11,750 | ) | — | — | — | — | ||||||||||||||||||||
Provision for loan losses (GAAP) |
$ | 11,000 | $ | 190,000 | $ | 36,000 | $ | 50,500 | $ | 61,500 | $ | 201,000 | $ | 136,500 | ||||||||||||||
Total revenue reconciliation |
||||||||||||||||||||||||||||
Total operating revenue |
$ | 61,851 | $ | (121,770 | ) | $ | 24,824 | $ | 22,375 | $ | 11,706 | $ | (59,919 | ) | $ | 9,651 | ||||||||||||
Taxable equivalent adjustment |
(429 | ) | (435 | ) | (497 | ) | (511 | ) | (500 | ) | (864 | ) | (993 | ) | ||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | 11,750 | — | — | — | — | |||||||||||||||||||||
Total revenue (GAAP) |
$ | 61,422 | $ | (122,205 | ) | $ | 36,077 | $ | 21,864 | $ | 11,206 | $ | (60,783 | ) | $ | 8,658 | ||||||||||||
Expense reconciliation |
||||||||||||||||||||||||||||
Operating expense |
$ | 48,728 | $ | 115,271 | $ | 64,918 | $ | 64,906 | $ | 103,657 | $ | 163,999 | $ | 158,477 | ||||||||||||||
Noncash goodwill impairment charge |
— | — | — | 210,590 | — | — | — | |||||||||||||||||||||
Operating expense (GAAP) |
$ | 48,728 | $ | 115,271 | $ | 64,918 | $ | 275,496 | $ | 103,657 | $ | 163,999 | $ | 158,477 | ||||||||||||||
Income (loss) from continuing operations before taxes reconciliation |
||||||||||||||||||||||||||||
Operating income (loss) from continuing operations before taxes |
$ | 13,123 | $ | (237,041 | ) | $ | (40,094 | ) | $ | (42,531 | ) | $ | (91,951 | ) | $ | (223,918 | ) | $ | (148,826 | ) | ||||||||
Taxable equivalent adjustment |
(429 | ) | (435 | ) | (497 | ) | (511 | ) | (500 | ) | (864 | ) | (993 | ) | ||||||||||||||
Noncash goodwill impairment charge |
— | — | — | (210,590 | ) | — | — | — | ||||||||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | 11,750 | — | — | — | — | |||||||||||||||||||||
Income (loss) from continuing operations before taxes (GAAP) |
$ | 12,694 | $ | (237,476 | ) | $ | (28,841 | ) | $ | (253,632 | ) | $ | (92,451 | ) | $ | (224,782 | ) | $ | (149,819 | ) | ||||||||
Income tax expense (benefit) reconciliation |
||||||||||||||||||||||||||||
Operating income tax expense (benefit) |
$ | 5,506 | $ | (94,555 | ) | $ | (16,520 | ) | $ | (16,706 | ) | $ | (32,419 | ) | $ | (89,049 | ) | $ | (54,836 | ) | ||||||||
Taxable equivalent adjustment |
(429 | ) | (435 | ) | (497 | ) | (511 | ) | (500 | ) | (864 | ) | (993 | ) | ||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | 4,571 | — | — | — | — | |||||||||||||||||||||
Income tax expense (benefit) (GAAP) |
$ | 5,077 | $ | (94,990 | ) | $ | (12,446 | ) | $ | (17,217 | ) | $ | (32,919 | ) | $ | (89,913 | ) | $ | (55,829 | ) | ||||||||
Diluted earnings (loss) from continuing operations
per common share reconciliation |
||||||||||||||||||||||||||||
Diluted operating earnings (loss) from continuing operations per
common share |
$ | .08 | $ | (7.87 | ) | $ | (1.38 | ) | $ | (1.50 | ) | $ | (3.29 | ) | $ | (6.40 | ) | $ | (5.25 | ) | ||||||||
Noncash goodwill impairment charge |
— | — | — | (11.12 | ) | — | — | — | ||||||||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | .38 | — | — | — | — | |||||||||||||||||||||
Diluted earnings (loss) from continuing operations per common
share (GAAP) |
$ | .08 | $ | (7.87 | ) | $ | (1.00 | ) | $ | (12.62 | ) | $ | (3.29 | ) | $ | (6.40 | ) | $ | (5.25 | ) | ||||||||
Book value per common share reconciliation |
||||||||||||||||||||||||||||
Tangible book value per common share |
$ | 11.47 | $ | 14.44 | $ | 23.78 | $ | 25.26 | $ | 26.95 | $ | 11.47 | $ | 26.95 | ||||||||||||||
Effect of goodwill and other intangibles |
.12 | .34 | .40 | .44 | 11.60 | .12 | 11.60 | |||||||||||||||||||||
Book value per common share (GAAP) |
$ | 11.59 | $ | 14.78 | $ | 24.18 | $ | 25.70 | $ | 38.55 | $ | 11.59 | $ | 38.55 | ||||||||||||||
Efficiency ratio from continuing operations reconciliation |
||||||||||||||||||||||||||||
Operating efficiency ratio from continuing operations |
66.88 | % | 169.08 | % | 89.45 | % | 89.38 | % | 141.60 | % | 116.28 | % | 108.48 | % | ||||||||||||||
Noncash goodwill impairment charge |
— | — | — | 290.00 | — | — | — | |||||||||||||||||||||
Efficiency ratio from continuing operations (GAAP) |
66.88 | % | 169.08 | % | 89.45 | % | 379.38 | % | 141.60 | % | 116.28 | % | 108.48 | % | ||||||||||||||
Average equity to assets reconciliation |
||||||||||||||||||||||||||||
Tangible common equity to assets |
4.79 | % | 5.51 | % | 6.35 | % | 6.78 | % | 6.91 | % | 5.15 | % | 7.02 | % | ||||||||||||||
Effect of preferred equity |
6.34 | 3.22 | 2.40 | 2.41 | 2.35 | 4.79 | 2.30 | |||||||||||||||||||||
Tangible equity to assets |
11.13 | 8.73 | 8.75 | 9.19 | 9.26 | 9.94 | 9.32 | |||||||||||||||||||||
Effect of goodwill and other intangibles |
.08 | .09 | .10 | 2.18 | 2.58 | .08 | 2.55 | |||||||||||||||||||||
Equity to assets (GAAP) |
11.21 | % | 8.82 | % | 8.85 | % | 11.37 | % | 11.84 | % | 10.02 | % | 11.87 | % | ||||||||||||||
Actual tangible common equity to risk-weighted assets reconciliation |
||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets |
14.26 | % | 6.40 | % | 9.05 | % | 9.60 | % | 9.97 | % | 14.26 | % | 9.97 | % | ||||||||||||||
Effect of other comprehensive income |
(.65 | ) | (.58 | ) | (.62 | ) | (.81 | ) | (.87 | ) | (.65 | ) | (.87 | ) | ||||||||||||||
Effect of deferred tax limitation |
(5.04 | ) | (5.10 | ) | (3.34 | ) | (2.94 | ) | (2.47 | ) | (5.04 | ) | (2.47 | ) | ||||||||||||||
Effect of trust preferred |
1.14 | 1.12 | 1.06 | 1.06 | 1.03 | 1.14 | 1.03 | |||||||||||||||||||||
Effect of preferred equity |
4.17 | 5.97 | 3.52 | 3.51 | 3.41 | 4.17 | 3.41 | |||||||||||||||||||||
Tier I capital ratio (Regulatory) |
13.88 | % | 7.81 | % | 9.67 | % | 10.42 | % | 11.07 | % | 13.88 | % | 11.07 | % | ||||||||||||||
Net charge-offs reconciliation |
||||||||||||||||||||||||||||
Operating net charge-offs |
$ | 16,483 | $ | 231,574 | $ | 47,668 | $ | 49,998 | $ | 61,323 | $ | 248,057 | $ | 117,991 | ||||||||||||||
Subsequent partial recovery of fraud-related charge-off |
— | — | (11,750 | ) | — | — | — | — | ||||||||||||||||||||
Net charge-offs (GAAP) |
$ | 16,483 | $ | 231,574 | $ | 35,918 | $ | 49,998 | $ | 61,323 | $ | 248,057 | $ | 117,991 | ||||||||||||||
Net charge-offs to average loans reconciliation |
||||||||||||||||||||||||||||
Operating net charge-offs to average loans |
1.58 | % | 20.71 | % | 4.03 | % | 4.12 | % | 4.98 | % | 11.46 | % | 4.75 | % | ||||||||||||||
Subsequent partial recovery of fraud-related charge-off |
— | — | (1.00 | ) | — | — | — | — | ||||||||||||||||||||
Net charge-offs to average loans (GAAP) |
1.58 | % | 20.71 | % | 3.03 | % | 4.12 | % | 4.98 | % | 11.46 | % | 4.75 | % | ||||||||||||||
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
Financial Highlights
Loan Portfolio Composition at Period-End (1)
| 2011 | 2010 | Linked | Year over | |||||||||||||||||||||||||
| Second | First | Fourth | Third | Second | Quarter | Year | ||||||||||||||||||||||
| (in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Change | |||||||||||||||||||||
LOANS BY CATEGORY |
||||||||||||||||||||||||||||
Commercial (sec. by RE) |
$ | 1,742 | $ | 1,692 | $ | 1,761 | $ | 1,781 | $ | 1,780 | $ | 50 | $ | (38 | ) | |||||||||||||
Commercial construction |
195 | 213 | 297 | 310 | 342 | (18 | ) | (147 | ) | |||||||||||||||||||
Commercial & industrial |
428 | 431 | 441 | 456 | 441 | (3 | ) | (13 | ) | |||||||||||||||||||
Total commercial |
2,365 | 2,336 | 2,499 | 2,547 | 2,563 | 29 | (198 | ) | ||||||||||||||||||||
Residential construction |
502 | 550 | 695 | 764 | 820 | (48 | ) | (318 | ) | |||||||||||||||||||
Residential mortgage |
1,177 | 1,187 | 1,279 | 1,316 | 1,356 | (10 | ) | (179 | ) | |||||||||||||||||||
Consumer / installment |
119 | 121 | 131 | 133 | 134 | (2 | ) | (15 | ) | |||||||||||||||||||
Total loans |
$ | 4,163 | $ | 4,194 | $ | 4,604 | $ | 4,760 | $ | 4,873 | (31 | ) | (710 | ) | ||||||||||||||
LOANS BY MARKET |
||||||||||||||||||||||||||||
Atlanta MSA |
$ | 1,188 | $ | 1,179 | $ | 1,310 | $ | 1,365 | $ | 1,373 | 9 | (185 | ) | |||||||||||||||
Gainesville MSA |
275 | 282 | 312 | 316 | 343 | (7 | ) | (68 | ) | |||||||||||||||||||
North Georgia |
1,500 | 1,531 | 1,689 | 1,755 | 1,808 | (31 | ) | (308 | ) | |||||||||||||||||||
Western North Carolina |
626 | 640 | 702 | 719 | 738 | (14 | ) | (112 | ) | |||||||||||||||||||
Coastal Georgia |
325 | 312 | 335 | 345 | 356 | 13 | (31 | ) | ||||||||||||||||||||
East Tennessee |
249 | 250 | 256 | 260 | 255 | (1 | ) | (6 | ) | |||||||||||||||||||
Total loans |
$ | 4,163 | $ | 4,194 | $ | 4,604 | $ | 4,760 | $ | 4,873 | (31 | ) | (710 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION |
||||||||||||||||||||||||||||
Dirt loans |
||||||||||||||||||||||||||||
Acquisition & development |
$ | 105 | $ | 116 | $ | 174 | $ | 190 | $ | 214 | (11 | ) | (109 | ) | ||||||||||||||
Land loans |
62 | 69 | 99 | 104 | 110 | (7 | ) | (48 | ) | |||||||||||||||||||
Lot loans |
218 | 228 | 275 | 303 | 311 | (10 | ) | (93 | ) | |||||||||||||||||||
Total |
385 | 413 | 548 | 597 | 635 | (28 | ) | (250 | ) | |||||||||||||||||||
House loans |
||||||||||||||||||||||||||||
Spec |
74 | 88 | 97 | 109 | 125 | (14 | ) | (51 | ) | |||||||||||||||||||
Sold |
43 | 49 | 50 | 58 | 60 | (6 | ) | (17 | ) | |||||||||||||||||||
Total |
117 | 137 | 147 | 167 | 185 | (20 | ) | (68 | ) | |||||||||||||||||||
Total residential construction |
$ | 502 | $ | 550 | $ | 695 | $ | 764 | $ | 820 | (48 | ) | (318 | ) | ||||||||||||||
RESIDENTIAL
CONSTRUCTION
- ATLANTA MSA |
||||||||||||||||||||||||||||
Dirt loans |
||||||||||||||||||||||||||||
Acquisition & development |
$ | 20 | $ | 22 | $ | 30 | $ | 34 | $ | 40 | (2 | ) | (20 | ) | ||||||||||||||
Land loans |
16 | 19 | 23 | 27 | 32 | (3 | ) | (16 | ) | |||||||||||||||||||
Lot loans |
22 | 24 | 32 | 45 | 39 | (2 | ) | (17 | ) | |||||||||||||||||||
Total |
58 | 65 | 85 | 106 | 111 | (7 | ) | (53 | ) | |||||||||||||||||||
House loans |
||||||||||||||||||||||||||||
Spec |
30 | 34 | 38 | 42 | 48 | (4 | ) | (18 | ) | |||||||||||||||||||
Sold |
9 | 11 | 10 | 11 | 10 | (2 | ) | (1 | ) | |||||||||||||||||||
Total |
39 | 45 | 48 | 53 | 58 | (6 | ) | (19 | ) | |||||||||||||||||||
Total residential construction |
$ | 97 | $ | 110 | $ | 133 | $ | 159 | $ | 169 | (13 | ) | (72 | ) | ||||||||||||||
| (1) | Excludes total loans of $70.8 million, $63.3 million, $68.2 million, $75.2 million
and $80.8 million as of June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and
June 30, 2010, respectively, that are covered by the loss-sharing agreement with the FDIC, related
to the acquisition of Southern Community Bank. |
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Financial Highlights
Credit Quality (1)
| Second Quarter 2011 | First Quarter 2011 (2) | Fourth Quarter 2010 | ||||||||||||||||||||||||||||||||||
| Non-performing | Foreclosed | Total | Non-performing | Foreclosed | Total | Non-performing | Foreclosed | Total | ||||||||||||||||||||||||||||
| (in thousands) | Loans | Properties | NPAs | Loans | Properties | NPAs | Loans | Properties | NPAs | |||||||||||||||||||||||||||
NPAs BY CATEGORY |
||||||||||||||||||||||||||||||||||||
Commercial (sec. by RE) |
$ | 17,764 | $ | 6,796 | $ | 24,560 | $ | 20,648 | $ | 7,886 | $ | 28,534 | $ | 44,927 | $ | 23,659 | $ | 68,586 | ||||||||||||||||||
Commercial construction |
2,782 | 6,764 | 9,546 | 3,701 | 11,568 | 15,269 | 21,374 | 17,808 | 39,182 | |||||||||||||||||||||||||||
Commercial & industrial |
1,998 | — | 1,998 | 2,198 | — | 2,198 | 5,611 | — | 5,611 | |||||||||||||||||||||||||||
Total commercial |
22,544 | 13,560 | 36,104 | 26,547 | 19,454 | 46,001 | 71,912 | 41,467 | 113,379 | |||||||||||||||||||||||||||
Residential construction |
22,643 | 24,968 | 47,611 | 32,038 | 25,807 | 57,845 | 54,505 | 78,231 | 132,736 | |||||||||||||||||||||||||||
Residential mortgage |
24,809 | 9,056 | 33,865 | 23,711 | 9,117 | 32,828 | 51,083 | 22,510 | 73,593 | |||||||||||||||||||||||||||
Consumer / installment |
1,069 | — | 1,069 | 1,473 | — | 1,473 | 1,594 | — | 1,594 | |||||||||||||||||||||||||||
Total NPAs |
$ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | $ | 179,094 | $ | 142,208 | $ | 321,302 | ||||||||||||||||||
Balance as a % of
Unpaid Principal |
64.5 | % | 32.6 | % | 46.3 | % | 57.3 | % | 30.3 | % | 42.4 | % | 67.2 | % | 64.4 | % | 65.9 | % | ||||||||||||||||||
NPAs BY MARKET |
||||||||||||||||||||||||||||||||||||
Atlanta MSA |
$ | 14,700 | $ | 11,239 | $ | 25,939 | $ | 21,501 | $ | 16,913 | $ | 38,414 | $ | 48,289 | $ | 41,154 | $ | 89,443 | ||||||||||||||||||
Gainesville MSA |
4,505 | 3,174 | 7,679 | 4,332 | 2,157 | 6,489 | 5,171 | 9,273 | 14,444 | |||||||||||||||||||||||||||
North Georgia |
28,117 | 21,278 | 49,395 | 30,214 | 23,094 | 53,308 | 83,551 | 66,211 | 149,762 | |||||||||||||||||||||||||||
Western North Carolina |
15,153 | 8,953 | 24,106 | 18,849 | 7,802 | 26,651 | 25,832 | 11,553 | 37,385 | |||||||||||||||||||||||||||
Coastal Georgia |
5,357 | 2,564 | 7,921 | 5,847 | 3,781 | 9,628 | 11,145 | 11,901 | 23,046 | |||||||||||||||||||||||||||
East Tennessee |
3,233 | 376 | 3,609 | 3,026 | 631 | 3,657 | 5,106 | 2,116 | 7,222 | |||||||||||||||||||||||||||
Total NPAs |
$ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | $ | 179,094 | $ | 142,208 | $ | 321,302 | ||||||||||||||||||
NPA ACTIVITY |
||||||||||||||||||||||||||||||||||||
Beginning Balance |
$ | 83,769 | $ | 54,378 | $ | 138,147 | $ | 179,094 | $ | 142,208 | $ | 321,302 | $ | 217,766 | $ | 129,964 | $ | 347,730 | ||||||||||||||||||
Loans placed on non-accrual |
35,911 | — | 35,911 | 54,730 | — | 54,730 | 81,023 | — | 81,023 | |||||||||||||||||||||||||||
Payments received |
(7,702 | ) | — | (7,702 | ) | (3,550 | ) | — | (3,550 | ) | (7,250 | ) | — | (7,250 | ) | |||||||||||||||||||||
Loan charge-offs |
(18,888 | ) | — | (18,888 | ) | (43,969 | ) | — | (43,969 | ) | (47,913 | ) | — | (47,913 | ) | |||||||||||||||||||||
Foreclosures |
(22,025 | ) | 22,025 | — | (17,052 | ) | 17,052 | — | (61,432 | ) | 61,432 | — | ||||||||||||||||||||||||
Capitalized costs |
— | 20 | 20 | — | 270 | 270 | — | 170 | 170 | |||||||||||||||||||||||||||
Note / property sales |
— | (28,939 | ) | (28,939 | ) | (11,400 | ) | (44,547 | ) | (55,947 | ) | (3,100 | ) | (33,509 | ) | (36,609 | ) | |||||||||||||||||||
Loans held for sale |
— | — | — | (74,084 | ) | — | (74,084 | ) | — | — | — | |||||||||||||||||||||||||
Write downs |
— | (3,118 | ) | (3,118 | ) | — | (48,585 | ) | (48,585 | ) | — | (8,031 | ) | (8,031 | ) | |||||||||||||||||||||
Net losses on sales |
— | 3,218 | 3,218 | — | (12,020 | ) | (12,020 | ) | — | (7,818 | ) | (7,818 | ) | |||||||||||||||||||||||
Ending Balance |
$ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | $ | 179,094 | $ | 142,208 | $ | 321,302 | ||||||||||||||||||
| Second Quarter 2011 (3) | First Quarter 2011 (3) | Fourth Quarter 2010 (4) | ||||||||||||||||||||||
| Net Charge- | Net Charge- | Net Charge- | ||||||||||||||||||||||
| Offs to | Offs to | Offs to | ||||||||||||||||||||||
| Net | Average | Net | Average | Net | Average | |||||||||||||||||||
| (in thousands) | Charge-Offs | Loans (5) | Charge-Offs | Loans (5) | Charge-Offs | Loans (5) | ||||||||||||||||||
NET CHARGE-OFFS BY CATEGORY |
||||||||||||||||||||||||
Commercial (sec. by RE) |
$ | 3,259 | .76 | % | $ | 48,607 | 11.07 | % | $ | 6,493 | 1.45 | % | ||||||||||||
Commercial construction |
869 | 1.70 | 49,715 | 76.95 | 3,924 | 5.12 | ||||||||||||||||||
Commercial & industrial |
523 | .49 | 4,040 | 3.64 | 2,891 | 2.54 | ||||||||||||||||||
Total commercial |
4,651 | .79 | 102,362 | 16.66 | 13,308 | 2.09 | ||||||||||||||||||
Residential construction |
6,629 | 5.04 | 92,138 | 58.20 | 24,497 | 13.28 | ||||||||||||||||||
Residential mortgage |
4,589 | 1.55 | 36,383 | 11.62 | 9,176 | 2.80 | ||||||||||||||||||
Consumer / installment |
614 | 2.04 | 691 | 2.16 | 687 | 2.06 | ||||||||||||||||||
Total |
$ | 16,483 | 1.58 | $ | 231,574 | 20.71 | $ | 47,668 | 4.03 | |||||||||||||||
NET CHARGE-OFFS BY MARKET |
||||||||||||||||||||||||
Atlanta MSA |
$ | 2,920 | .99 | % | $ | 56,489 | 17.86 | % | $ | 15,222 | 4.48 | % | ||||||||||||
Gainesville MSA |
2,318 | 3.36 | 8,616 | 11.93 | 3,434 | 4.37 | ||||||||||||||||||
North Georgia |
6,575 | 1.72 | 123,305 | 29.66 | 18,537 | 4.26 | ||||||||||||||||||
Western North Carolina |
3,522 | 2.21 | 26,447 | 15.61 | 5,154 | 2.87 | ||||||||||||||||||
Coastal Georgia |
815 | 1.02 | 12,003 | 14.80 | 3,670 | 4.27 | ||||||||||||||||||
East Tennessee |
333 | .54 | 4,714 | 7.47 | 1,651 | 2.53 | ||||||||||||||||||
Total |
$ | 16,483 | 1.58 | $ | 231,574 | 20.71 | $ | 47,668 | 4.03 | |||||||||||||||
| (1) | Excludes non-performing loans and foreclosed properties covered by the loss-sharing
agreement with the FDIC, related to the acquisition of Southern Community Bank. |
|
| (2) | The NPA activity shown for the first quarter of 2011 is presented with all activity
related to loans transferred to the loans held for sale classification on one line as if those
loans were transferred to held for sale at the beginning of the period. |
|
| (3) | Includes charge-offs on loans related to United’s previously announced asset
disposition plan. Such charge-offs severely distorted charge off rates for the first and second
quarters of 2011. A separate schedule has been included in this earnings release presenting the
components of net charge-offs by loan category and geographic market for the first and second
quarters of 2011. |
|
| (4) | North Carolina residential construction net charge-offs for the fourth quarter of
2010 exclude a $11.8 million partial recovery of a 2007 fraud-related charge-off. |
|
| (5) | Annualized. |
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary (1)
Financial Highlights
Net Charge-Off Summary (1)
| Second Quarter 2011 | First Quarter 2011 | First Six Months 2011 | ||||||||||||||||||||||||||||||||||
| Problem | Problem | Problem | ||||||||||||||||||||||||||||||||||
| Asset | Asset | Asset | ||||||||||||||||||||||||||||||||||
| Disposition | Disposition | Disposition | ||||||||||||||||||||||||||||||||||
| (in thousands) | Other | Plan | Total | Other | Plan | Total | Other | Plan | Total | |||||||||||||||||||||||||||
BY CATEGORY |
||||||||||||||||||||||||||||||||||||
Commercial (sec. by RE) |
$ | 4,972 | $ | (1,713 | ) | $ | 3,259 | $ | 2,842 | $ | 45,765 | $ | 48,607 | $ | 7,814 | $ | 44,052 | $ | 51,866 | |||||||||||||||||
Commercial construction |
2,201 | (1,332 | ) | 869 | 1,146 | 48,569 | 49,715 | 3,347 | 47,237 | 50,584 | ||||||||||||||||||||||||||
Commercial & industrial |
639 | (116 | ) | 523 | 513 | 3,527 | 4,040 | 1,152 | 3,411 | 4,563 | ||||||||||||||||||||||||||
Total commercial |
7,812 | (3,161 | ) | 4,651 | 4,501 | 97,861 | 102,362 | 12,313 | 94,700 | 107,013 | ||||||||||||||||||||||||||
Residential construction |
9,471 | (2,842 | ) | 6,629 | 10,643 | 81,495 | 92,138 | 20,114 | 78,653 | 98,767 | ||||||||||||||||||||||||||
Residential mortgage |
5,844 | (1,255 | ) | 4,589 | 4,989 | 31,394 | 36,383 | 10,833 | 30,139 | 40,972 | ||||||||||||||||||||||||||
Consumer / installment |
625 | (11 | ) | 614 | 383 | 308 | 691 | 1,008 | 297 | 1,305 | ||||||||||||||||||||||||||
Total |
$ | 23,752 | $ | (7,269 | ) | $ | 16,483 | $ | 20,516 | $ | 211,058 | $ | 231,574 | $ | 44,268 | $ | 203,789 | $ | 248,057 | |||||||||||||||||
BY MARKET |
||||||||||||||||||||||||||||||||||||
Atlanta MSA |
$ | 4,875 | $ | (1,955 | ) | $ | 2,920 | $ | 3,296 | $ | 53,193 | $ | 56,489 | $ | 8,171 | $ | 51,238 | $ | 59,409 | |||||||||||||||||
Gainesville MSA |
2,576 | (258 | ) | 2,318 | 954 | 7,662 | 8,616 | 3,530 | 7,404 | 10,934 | ||||||||||||||||||||||||||
North Georgia |
10,360 | (3,785 | ) | 6,575 | 8,544 | 114,761 | 123,305 | 18,904 | 110,976 | 129,880 | ||||||||||||||||||||||||||
Western North Carolina |
4,263 | (741 | ) | 3,522 | 6,749 | 19,698 | 26,447 | 11,012 | 18,957 | 29,969 | ||||||||||||||||||||||||||
Coastal Georgia |
1,206 | (391 | ) | 815 | 341 | 11,662 | 12,003 | 1,547 | 11,271 | 12,818 | ||||||||||||||||||||||||||
East Tennessee |
472 | (139 | ) | 333 | 632 | 4,082 | 4,714 | 1,104 | 3,943 | 5,047 | ||||||||||||||||||||||||||
Total |
$ | 23,752 | $ | (7,269 | ) | $ | 16,483 | $ | 20,516 | $ | 211,058 | $ | 231,574 | $ | 44,268 | $ | 203,789 | $ | 248,057 | |||||||||||||||||
| (1) | This schedule presents net charge-offs by loan type and geographic market separated
between those charge offs related to United’s first quarter 2011 Problem Asset Disposition Plan
including losses on loans sold in the bulk loan sale transaction that closed on April 18, 2011 and
all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were
estimated based on indicative bids from prospective buyers. Actual losses were less than estimated
resulting in an adjustment to the loss in the second quarter. |
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Operations (Unaudited)
Consolidated Statement of Operations (Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (in thousands, except per share data) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest revenue: |
||||||||||||||||
Loans, including fees |
$ | 60,958 | $ | 70,611 | $ | 122,065 | $ | 142,826 | ||||||||
Investment securities, including tax exempt of $251, $295, $510 and $606 |
14,792 | 15,829 | 28,396 | 32,032 | ||||||||||||
Federal funds sold, commercial paper and deposits in banks |
752 | 759 | 1,571 | 1,697 | ||||||||||||
Total interest revenue |
76,502 | 87,199 | 152,032 | 176,555 | ||||||||||||
Interest expense: |
||||||||||||||||
Deposits: |
||||||||||||||||
NOW |
1,036 | 1,745 | 2,360 | 3,599 | ||||||||||||
Money market |
1,499 | 1,829 | 3,527 | 3,586 | ||||||||||||
Savings |
64 | 83 | 141 | 167 | ||||||||||||
Time |
10,995 | 17,718 | 22,727 | 37,916 | ||||||||||||
Total deposit interest expense |
13,594 | 21,375 | 28,755 | 45,268 | ||||||||||||
Federal funds purchased, repurchase agreements and other short-term borrowings |
1,074 | 1,056 | 2,116 | 2,094 | ||||||||||||
Federal Home Loan Bank advances |
570 | 974 | 1,160 | 1,951 | ||||||||||||
Long-term debt |
2,747 | 2,667 | 5,527 | 5,329 | ||||||||||||
Total interest expense |
17,985 | 26,072 | 37,558 | 54,642 | ||||||||||||
Net interest revenue |
58,517 | 61,127 | 114,474 | 121,913 | ||||||||||||
Provision for loan losses |
11,000 | 61,500 | 201,000 | 136,500 | ||||||||||||
Net interest revenue after provision for loan losses |
47,517 | (373 | ) | (86,526 | ) | (14,587 | ) | |||||||||
Fee revenue: |
||||||||||||||||
Service charges and fees |
7,608 | 7,993 | 14,328 | 15,440 | ||||||||||||
Mortgage loan and other related fees |
952 | 1,601 | 2,446 | 3,080 | ||||||||||||
Brokerage fees |
691 | 586 | 1,368 | 1,153 | ||||||||||||
Securities gains, net |
783 | — | 838 | 61 | ||||||||||||
Loss from prepayment of debt |
(791 | ) | — | (791 | ) | — | ||||||||||
Other |
4,662 | 1,399 | 7,554 | 3,511 | ||||||||||||
Total fee revenue |
13,905 | 11,579 | 25,743 | 23,245 | ||||||||||||
Total revenue |
61,422 | 11,206 | (60,783 | ) | 8,658 | |||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
26,436 | 23,590 | 51,360 | 47,950 | ||||||||||||
Communications and equipment |
3,378 | 3,511 | 6,722 | 6,784 | ||||||||||||
Occupancy |
3,805 | 3,836 | 7,879 | 7,650 | ||||||||||||
Advertising and public relations |
1,317 | 1,352 | 2,295 | 2,395 | ||||||||||||
Postage, printing and supplies |
1,085 | 765 | 2,203 | 1,990 | ||||||||||||
Professional fees |
2,350 | 2,178 | 5,680 | 4,121 | ||||||||||||
Foreclosed property |
1,891 | 14,540 | 66,790 | 25,353 | ||||||||||||
FDIC assessments and other regulatory charges |
3,644 | 3,566 | 9,057 | 7,192 | ||||||||||||
Amortization of intangibles |
760 | 794 | 1,522 | 1,596 | ||||||||||||
Other |
4,062 | 4,176 | 10,491 | 8,097 | ||||||||||||
Loss on sale of nonperforming assets |
— | 45,349 | — | 45,349 | ||||||||||||
Total operating expenses |
48,728 | 103,657 | 163,999 | 158,477 | ||||||||||||
Income (loss) from continuing operations before income taxes |
12,694 | (92,451 | ) | (224,782 | ) | (149,819 | ) | |||||||||
Income tax expense (benefit) |
5,077 | (32,919 | ) | (89,913 | ) | (55,829 | ) | |||||||||
Net income (loss) from continuing operations |
7,617 | (59,532 | ) | (134,869 | ) | (93,990 | ) | |||||||||
Loss from discontinued operations, net of income taxes |
— | — | — | (101 | ) | |||||||||||
Gain from sale of subsidiary, net of income taxes and selling costs |
— | — | — | 1,266 | ||||||||||||
Net income (loss) |
7,617 | (59,532 | ) | (134,869 | ) | (92,825 | ) | |||||||||
Preferred stock dividends and discount accretion |
3,016 | 2,577 | 5,794 | 5,149 | ||||||||||||
Net income (loss) available to common shareholders |
$ | 4,601 | $ | (62,109 | ) | $ | (140,663 | ) | $ | (97,974 | ) | |||||
Earnings (loss) from continuing operations per common share — Basic |
$ | .18 | $ | (3.29 | ) | $ | (6.40 | ) | $ | (5.25 | ) | |||||
Earnings (loss) from continuing operations per common share — Diluted |
.08 | (3.29 | ) | (6.40 | ) | (5.25 | ) | |||||||||
Earnings (loss) per common share — Basic |
.18 | (3.29 | ) | (6.40 | ) | (5.19 | ) | |||||||||
Earnings (loss) per common share — Diluted |
.08 | (3.29 | ) | (6.40 | ) | (5.19 | ) | |||||||||
Weighted average common shares outstanding — Basic |
25,427 | 18,905 | 21,965 | 18,891 | ||||||||||||
Weighted average common shares outstanding — Diluted |
57,543 | 18,905 | 21,965 | 18,891 | ||||||||||||
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
Consolidated Balance Sheet
| June 30, | December 31, | June 30, | ||||||||||
| (in thousands, except share and per share data) | 2011 | 2010 | 2010 | |||||||||
| (unaudited) | (audited) | (unaudited) | ||||||||||
ASSETS |
||||||||||||
Cash and due from banks |
$ | 163,331 | $ | 95,994 | $ | 115,088 | ||||||
Interest-bearing deposits in banks |
41,863 | 111,901 | 105,183 | |||||||||
Federal funds sold, commercial paper and short-term investments |
174,996 | 441,562 | 148,227 | |||||||||
Cash and cash equivalents |
380,190 | 649,457 | 368,498 | |||||||||
Securities available for sale |
1,816,613 | 1,224,417 | 1,165,776 | |||||||||
Securities held to maturity (fair value $379,231, 267,988 and $327,497) |
371,578 | 265,807 | 322,148 | |||||||||
Mortgage loans held for sale |
19,406 | 35,908 | 22,705 | |||||||||
Loans, net of unearned income |
4,163,447 | 4,604,126 | 4,873,030 | |||||||||
Less allowance for loan losses |
127,638 | 174,695 | 174,111 | |||||||||
Loans, net |
4,035,809 | 4,429,431 | 4,698,919 | |||||||||
Assets covered by loss sharing agreements with the FDIC |
95,726 | 131,887 | 156,611 | |||||||||
Premises and equipment, net |
178,208 | 178,239 | 180,125 | |||||||||
Accrued interest receivable |
21,291 | 24,299 | 29,650 | |||||||||
Goodwill and other intangible assets |
9,922 | 11,446 | 223,600 | |||||||||
Foreclosed property |
47,584 | 142,208 | 123,910 | |||||||||
Net deferred tax asset |
261,268 | 166,937 | 111,485 | |||||||||
Other assets |
172,074 | 183,160 | 249,057 | |||||||||
Total assets |
$ | 7,409,669 | $ | 7,443,196 | $ | 7,652,484 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Liabilities: |
||||||||||||
Deposits: |
||||||||||||
Demand |
$ | 899,017 | $ | 793,414 | $ | 779,934 | ||||||
NOW |
1,306,109 | 1,424,781 | 1,326,861 | |||||||||
Money market |
989,600 | 891,252 | 756,370 | |||||||||
Savings |
197,927 | 183,894 | 185,176 | |||||||||
Time: |
||||||||||||
Less than $100,000 |
1,508,444 | 1,496,700 | 1,575,211 | |||||||||
Greater than $100,000 |
981,154 | 1,002,359 | 1,093,975 | |||||||||
Brokered |
300,964 | 676,772 | 611,985 | |||||||||
Total deposits |
6,183,215 | 6,469,172 | 6,329,512 | |||||||||
Federal funds purchased, repurchase agreements, and other short-term borrowings |
103,666 | 101,067 | 104,127 | |||||||||
Federal Home Loan Bank advances |
40,625 | 55,125 | 104,138 | |||||||||
Long-term debt |
150,186 | 150,146 | 150,106 | |||||||||
Unsettled securities purchases |
35,634 | — | 20,941 | |||||||||
Accrued expenses and other liabilities |
36,368 | 32,171 | 39,243 | |||||||||
Total liabilities |
6,549,694 | 6,807,681 | 6,748,067 | |||||||||
Shareholders’ equity: |
||||||||||||
Preferred stock, $1 par value; 10,000,000 shares authorized; |
||||||||||||
Series A; $10 stated value; 21,700 shares issued and outstanding |
217 | 217 | 217 | |||||||||
Series B; $1,000 stated value; 180,000 shares issued and outstanding |
176,392 | 175,711 | 175,050 | |||||||||
Series D; $1,000 stated value; 16,613 shares issued and outstanding |
16,613 | — | — | |||||||||
Common stock, $1 par value; 100,000,000 shares authorized; 41,554,874, 18,937,001 and 18,856,185 shares issued and outstanding |
41,555 | 18,937 | 18,856 | |||||||||
Common stock, non-voting, $1 par value; 30,000,000 shares authorized;
15,914,209 shares issued and outstanding |
15,914 | — | — | |||||||||
Common stock issuable; 83,575, 67,287 and 56,954 shares |
3,574 | 3,894 | 3,898 | |||||||||
Capital surplus |
1,051,607 | 741,244 | 739,261 | |||||||||
Accumulated deficit |
(476,230 | ) | (335,567 | ) | (77,590 | ) | ||||||
Accumulated other comprehensive income |
30,333 | 31,079 | 44,725 | |||||||||
Total shareholders’ equity |
859,975 | 635,515 | 904,417 | |||||||||
Total liabilities and shareholders’ equity |
$ | 7,409,669 | $ | 7,443,196 | $ | 7,652,484 | ||||||
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
| 2011 | 2010 | |||||||||||||||||||||||
| Average | Avg. | Average | Avg. | |||||||||||||||||||||
| (dollars in thousands, taxable equivalent) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans, net of unearned income (1)(2) |
$ | 4,266,211 | $ | 60,958 | 5.73 | % | $ | 5,010,937 | $ | 70,640 | 5.65 | % | ||||||||||||
Taxable securities (3) |
2,048,683 | 14,541 | 2.84 | 1,503,162 | 15,534 | 4.13 | ||||||||||||||||||
Tax-exempt securities (1)(3) |
25,044 | 411 | 6.56 | 28,920 | 482 | 6.67 | ||||||||||||||||||
Federal funds sold and other interest-earning assets |
583,832 | 1,021 | .70 | 311,475 | 1,043 | 1.34 | ||||||||||||||||||
Total interest-earning assets |
6,923,770 | 76,931 | 4.45 | 6,854,494 | 87,699 | 5.13 | ||||||||||||||||||
Non-interest-earning assets: |
||||||||||||||||||||||||
Allowance for loan losses |
(139,744 | ) | (193,998 | ) | ||||||||||||||||||||
Cash and due from banks |
119,801 | 100,931 | ||||||||||||||||||||||
Premises and equipment |
178,949 | 181,064 | ||||||||||||||||||||||
Other assets (3) |
540,943 | 761,803 | ||||||||||||||||||||||
Total assets |
$ | 7,623,719 | $ | 7,704,294 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing deposits: |
||||||||||||||||||||||||
NOW |
$ | 1,310,441 | 1,036 | .32 | $ | 1,325,099 | 1,745 | .53 | ||||||||||||||||
Money market |
979,432 | 1,499 | .61 | 746,039 | 1,829 | .98 | ||||||||||||||||||
Savings |
195,946 | 64 | .13 | 186,628 | 83 | .18 | ||||||||||||||||||
Time less than $100,000 |
1,541,909 | 4,990 | 1.30 | 1,605,308 | 7,887 | 1.97 | ||||||||||||||||||
Time greater than $100,000 |
988,810 | 3,873 | 1.57 | 1,110,010 | 6,102 | 2.20 | ||||||||||||||||||
Brokered |
473,161 | 2,132 | 1.81 | 642,954 | 3,729 | 2.33 | ||||||||||||||||||
Total interest-bearing deposits |
5,489,699 | 13,594 | .99 | 5,616,038 | 21,375 | 1.53 | ||||||||||||||||||
Federal funds purchased and other borrowings |
103,156 | 1,074 | 4.18 | 104,637 | 1,056 | 4.05 | ||||||||||||||||||
Federal Home Loan Bank advances |
52,735 | 570 | 4.34 | 107,948 | 974 | 3.62 | ||||||||||||||||||
Long-term debt |
150,178 | 2,747 | 7.34 | 150,097 | 2,667 | 7.13 | ||||||||||||||||||
Total borrowed funds |
306,069 | 4,391 | 5.75 | 362,682 | 4,697 | 5.19 | ||||||||||||||||||
Total interest-bearing liabilities |
5,795,768 | 17,985 | 1.24 | 5,978,720 | 26,072 | 1.75 | ||||||||||||||||||
Non-interest-bearing liabilities: |
||||||||||||||||||||||||
Non-interest-bearing deposits |
882,151 | 758,558 | ||||||||||||||||||||||
Other liabilities |
91,353 | 54,931 | ||||||||||||||||||||||
Total liabilities |
6,769,272 | 6,792,209 | ||||||||||||||||||||||
Shareholders’ equity |
854,447 | 912,085 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity |
$ | 7,623,719 | $ | 7,704,294 | ||||||||||||||||||||
Net interest revenue |
$ | 58,946 | $ | 61,627 | ||||||||||||||||||||
Net interest-rate spread |
3.21 | % | 3.38 | % | ||||||||||||||||||||
Net interest margin (4) |
3.41 | % | 3.60 | % | ||||||||||||||||||||
| (1) | Interest revenue on tax-exempt securities and loans has been increased to
reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the
statutory federal income tax rate and the federal tax adjusted state income tax rate. |
|
| (2) | Included in the average balance of loans outstanding are loans where the accrual of
interest has been discontinued and loans that are held for sale. |
|
| (3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains
of $32.2 million in 2011 and $43.6 million in 2010 are included in other assets for purposes of
this presentation. |
|
| (4) | Net interest margin is taxable equivalent net-interest revenue divided by average
interest-earning assets. |
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,
| 2011 | 2010 | |||||||||||||||||||||||
| Average | Avg. | Average | Avg. | |||||||||||||||||||||
| (dollars in thousands, taxable equivalent) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans, net of unearned income (1)(2) |
$ | 4,431,617 | $ | 122,028 | 5.55 | % | $ | 5,091,445 | $ | 142,859 | 5.66 | % | ||||||||||||
Taxable securities (3) |
1,825,322 | 27,886 | 3.06 | 1,495,447 | 31,426 | 4.20 | ||||||||||||||||||
Tax-exempt securities (1)(3) |
25,434 | 835 | 6.57 | 29,482 | 991 | 6.72 | ||||||||||||||||||
Federal funds sold and other interest-earning assets |
630,384 | 2,147 | .68 | 352,683 | 2,272 | 1.29 | ||||||||||||||||||
Total interest-earning assets |
6,912,757 | 152,896 | 4.45 | 6,969,057 | 177,548 | 5.13 | ||||||||||||||||||
Non-interest-earning assets: |
||||||||||||||||||||||||
Allowance for loan losses |
(154,347 | ) | (190,662 | ) | ||||||||||||||||||||
Cash and due from banks |
127,031 | 102,728 | ||||||||||||||||||||||
Premises and equipment |
179,150 | 181,493 | ||||||||||||||||||||||
Other assets (3) |
544,625 | 762,014 | ||||||||||||||||||||||
Total assets |
$ | 7,609,216 | $ | 7,824,630 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing deposits: |
||||||||||||||||||||||||
NOW |
$ | 1,341,618 | 2,360 | .35 | $ | 1,343,297 | 3,599 | .54 | ||||||||||||||||
Money market |
954,128 | 3,527 | .75 | 734,817 | 3,586 | .98 | ||||||||||||||||||
Savings |
191,708 | 141 | .15 | 183,555 | 167 | .18 | ||||||||||||||||||
Time less than $100,000 |
1,541,130 | 10,441 | 1.37 | 1,648,739 | 16,778 | 2.05 | ||||||||||||||||||
Time greater than $100,000 |
989,840 | 8,024 | 1.63 | 1,132,767 | 12,872 | 2.29 | ||||||||||||||||||
Brokered |
585,103 | 4,262 | 1.47 | 689,717 | 8,266 | 2.42 | ||||||||||||||||||
Total interest-bearing deposits |
5,603,527 | 28,755 | 1.03 | 5,732,892 | 45,268 | 1.59 | ||||||||||||||||||
Federal funds purchased and other borrowings |
102,132 | 2,116 | 4.18 | 103,355 | 2,094 | 4.09 | ||||||||||||||||||
Federal Home Loan Bank advances |
53,923 | 1,160 | 4.34 | 111,150 | 1,951 | 3.54 | ||||||||||||||||||
Long-term debt |
150,169 | 5,527 | 7.42 | 150,088 | 5,329 | 7.16 | ||||||||||||||||||
Total borrowed funds |
306,224 | 8,803 | 5.80 | 364,593 | 9,374 | 5.18 | ||||||||||||||||||
Total interest-bearing liabilities |
5,909,751 | 37,558 | 1.28 | 6,097,485 | 54,642 | 1.81 | ||||||||||||||||||
Non-interest-bearing liabilities: |
||||||||||||||||||||||||
Non-interest-bearing deposits |
861,864 | 738,876 | ||||||||||||||||||||||
Other liabilities |
75,083 | 59,605 | ||||||||||||||||||||||
Total liabilities |
6,846,698 | 6,895,966 | ||||||||||||||||||||||
Shareholders’ equity |
762,518 | 928,664 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity |
$ | 7,609,216 | $ | 7,824,630 | ||||||||||||||||||||
Net interest revenue |
$ | 115,338 | $ | 122,906 | ||||||||||||||||||||
Net interest-rate spread |
3.17 | % | 3.32 | % | ||||||||||||||||||||
Net interest margin (4) |
3.36 | % | 3.55 | % | ||||||||||||||||||||
| (1) | Interest revenue on tax-exempt securities and loans has been increased to
reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the
statutory federal income tax rate and the federal tax adjusted state income tax rate. |
|
| (2) | Included in the average balance of loans outstanding are loans where the accrual of
interest has been discontinued and loans that are held for sale. |
|
| (3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains
of $29.7 million in 2011 and $43.4 million in 2010 are included in other assets for purposes of
this presentation. |
|
| (4) | Net interest margin is taxable equivalent net-interest revenue divided by average
interest-earning assets. |
Exhibit 99.2
| United Community Banks, Inc. Investor PresentationSecond Quarter 2011 Rex S. Schuette EVP & CFOrex_schuette@ucbi.com (706) 781-2266 David P. Shearrow EVP & CRO Jimmy C. Tallent President & CEO |
| This presentation contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of factors that may cause such forward-looking statements to differ materially from actual results, please refer to United Community Banks, Inc.'s Annual Report filed on Form 10-K with the Securities and Exchange Commission. 2 Cautionary Statement |
| This presentation also contains non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). Such non-GAAP financial measures include the following: net interest margin - pre credit, core net interest margin, core net interest revenue, core fee revenue, core operating expense, core earnings, net operating (loss) income and net operating (loss) earnings per share, tangible common equity to tangible assets, tangible equity to tangible assets and tangible common equity to risk-weighted assets. The most comparable GAAP measures to these measures are: net interest margin, net interest revenue, fee revenue, operating expense, net (loss) income, diluted (loss) earnings per share and equity to assets. Management uses these non-GAAP financial measures because we believe it is useful for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as comparison to financial results for prior periods. These non-GAAP financial measures should not be considered as a substitute for financial measures determined in accordance with GAAP and may not be comparable to other similarly titled financial measures used by other companies. For a reconciliation of the differences between our non-GAAP financial measures and the most comparable GAAP measures, please refer to the 'Non-GAAP Reconcilement Tables' at the end of the Appendix of this presentation. Non-GAAP Measures 3 |
| Highlights Second Quarter Returned to profitabilityCompletion of Bulk Loan SaleConversion of Preferred Stock and Reverse Stock SplitCredit Quality Continues to ImproveCustomer service and core deposits 4 |
| LOAN PORTFOLIO & CREDIT QUALITY 5 |
| Structure Centralized underwriting and approval processSegregated work-out teamsHighly skilled ORE disposition groupSeasoned regional credit professionalsProcessContinuous external loan review Intensive executive management involvement:Weekly past due meetingsWeekly NPA/ORE meetingsQuarterly criticized watch loan review meetingsQuarterly pass commercial and CRE portfolio review meetingsInternal loan review of new credit relationshipsPolicyOngoing enhancements to credit policy Periodic updates to portfolio limits Proactively Addressing Credit Environment 6 |
| North Georgia Atlanta MSA Western North Carolina Coastal Georgia Gainesville MSA East Tennessee East 0.37 0.28 0.15 0.07 0.07 0.06 Geographic Diversity Commercial Residential Mortgage Residential Construction Installment East 0.56 0.28 0.13 0.03 Loan Portfolio (total $4.16 billion) $ in millions 7 |
| Atlanta MSA North Georgia Western North Carolina Coastal Georgia Gainesville MSA East Tennessee East 0.38 0.3 0.09 0.09 0.08 0.06 Commercial Construction Owner-Occupied Income Producing C & I East 0.08 0.46 0.28 0.18 Geographic Diversity Commercial Loans (total $2.36 billion) $ in millions 8 Owner Occupied Income Producing C & I Comm Constr Avg Loan Size (,000) 390 628 83 487 |
| 58% owner-occupiedSmall business, doctors, dentists, attorneys, CPAs$12 million project limitAverage Loan Size -$453 Composite CRE -$390 Owner Occupied -$628 Income Producing Portfolio Characteristics Commercial Real Estate (by loan type) 9 |
| Average loan size: $487k Portfolio Characteristics Commercial Construction (by loan type) 10 |
| North Georgia Western North Carolina Atlanta MSA Eastern Tennessee Coastal Georgia Gainesville MSA East 0.41 0.26 0.14 0.07 0.07 0.06 Mortgage Home Equity East 0.87 0.31 Geographic Diversity Avg loan size: $44k Avg loan size: $93k Origination CharacteristicsNo broker loansNo sub-prime / Alt-APolicy Max LTV: 80-85%51% of HE Primary Lien Residential Mortgage (total $1.18 billion) $ in millions 11 |
| North Georgia Western North Carolina Atlanta MSA Coastal Georgia Gainesville MSA Eastern Tennessee East 0.49 0.19 0.19 0.05 0.05 0.03 Geographic Diversity Developing Average Loan Size Lot Spec Sold Developing Raw East 0.44 0.14 0.08 0.22 0.12 Construction Land Residential Construction (total $.50 billion) $ in millions 12 |
| Residential Construction - Total Company 13 |
| 14 Residential Construction - North Georgia 14 |
| Residential Construction - Atlanta MSA 15 |
| Credit Quality 16 |
| Quarterly NPL Inflows and Default Rates Since 2009 Quarterly Default Rate Com. Construction Resi. Mortgage Resi Construction Consumer Commercial Com. RE Total NPLs ($mm) 76.7% Decline from Peak NPL Inflows ($mm) Quarterly Default Rate 81.4% Decline from Peak NPL Inflow Trends 17 |
| Net Charge-offs by Loan Category 18 |
| Net Charge-offs by Market 19 |
| NPAs by Loan Category and Market 20 |
| FINANCIAL RESULTS 21 Financial Review |
| Core Earnings Summary 22 |
| Core margin changes -Flat with 1Q11 -19 bps vs. 2Q10Maintained loan pricing Lowered core & CD pricing2Q Excess liquidity - lowered Margin by 76 bps and 49 bps in Q1 NIM Characteristics 2Q10 3Q10 4Q10 1Q11 2Q11 Net Interest Margin 0.036 0.0357 0.0358 0.0341 0.0341 0.0064 0.0056 0.0047 0.0047 0.003 3.87% 3.71% NIM NIM - Core Credit(1)(2) (1) Adds back interest reversals on classified performing loans included in bulk loan sale - Q1 2011(2) Excluding impact of nonaccrual loans, OREO and interest reversals 4.24% 4.13% 4.05% 4.37% 4.47% Net Interest Margin 23 |
| 2Q10 3Q10 4Q10 1Q11 2Q11 Lost Interest on C/Os 0.002 0.002 0.0017 0.0019 0.0018 Nonaccrual/OREO 0.0025 0.0022 0.0019 0.0016 0.0007 Interest Reversals 0.0019 0.0014 0.0011 0.0011 0.0005 Credit CostsImpacting Margin Lost Interest on C/Os Interest Reversals Carry Cost of NPAs Margin - Credit Costs 24 Historically 8 to 12 bpsCredit costs - significantly lowerCost 2Q11 vs. Historical - 18 bps (annual earnings impact of $12.4 million)1 bps = $690K NIR(1) Excludes bulk loan sale impact of 11 bps ..64% ..47% ..46% ..30% ..56% (1) |
| Demand & NOW MMDA & Sav. Time <$100k Time >$100k Public Funds Brokered East 1620 1174 1503 936 649 301 Deposit Mix (total $6.2 billion) 25 2Q11$6.2B 4Q08$7.0B Demand & NOW MMDA & Sav. Time <$100k Time >$100k Public Funds Brokered East 1457 630 1945 1336 842 793 |
| New Loans Funded - Category & Market (quarter) 26 |
| Core Deposit Growth - Category & Market (quarter) 27 |
| Fee Revenue - Core 28 |
| Operating Expenses - Core 29 |
| Net Operating Loss - From Continuing Operations 30 |
| Net Income (Loss) 31 |
| Capital Ratios 32 |
| APPENDIX 33 |
| Assets $7.4 BillionDeposits $6.2 Billion Banks 27Offices 106 United at a Glance 34 |
| Experienced Proven Leadership Joined Years in UCBI BankingJimmy Tallent President & CEO 1984 37Guy Freeman Chief Operating Officer 1992 53Rex Schuette Chief Financial Officer 2001 34David Shearrow Chief Risk Officer 2007 30Glenn White President, Atlanta Region 2007 37Craig Metz Marketing 2002 19Bill Gilbert Retail Banking 2000 35 35 |
| Business and Operating Model Twenty-seven "community banks" Local CEOs with deep roots in their communitiesResources of $7.4 billion bankService is point of differentiation#1 in Customer Satisfaction according to Customer Service ProfilesJ.D. Power Customer Service ChampionRecognized 40 companies in the U.S.Only bank to be recognizedGolden rule of banking"The Bank That SERVICE Built"Ongoing customer surveys95% satisfaction rate in 2011Strategic footprint with substantial banking opportunitiesOperates in a number of the more demographically attractive markets in the U.S.Disciplined growth strategy Organic supported by de novos and selective acquisitions "Community bank service, large bank resources" 36 |
| Robust Demographics (fast growing markets) 37 |
| 1 FDIC deposit market share and rank as of 6/10 for markets where United takes deposits. Source: SNL and FDIC.2 Based on current quarter. Market Share Opportunities (excellent growth prospects) 38 |
| Leading Demographics 39 |
| Loans / Deposits - Liquidity 40 |
| Wholesale Borrowings - Liquidity 41 |
| Business Mix - Deposits (at quarter-end) 42 |
| Geographic Diversity $ in millions 2Q 10 2Q 11 Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee 1Q11 1018 788 477 181 171 160 1Q10 918 697 440 167 144 124 Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee Core Transaction Deposits 43 |
| Performing Classified Loans 44 |
| Business Mix Loans (at quarter-end) 45 |
| Loans - Markets Served (at quarter-end) 46 |
| Business Mix Loans (at year-end) 47 |
| Loans - Markets Served (at year-end) 48 |
| (in millions) Lending - Credit Summary Legal lending limit $222House lending limit 20Project lending limit 12Top 25 relationships 41010.0% of total loansRegional credit review - Standard underwriting 49 |
| NPAs by Loan Category, Market, and Activity 50 |
| Net Charge-offs by Category and Market 51 |
| Net Charge-offs by Category and Market Asset Disposition Plan as of March 31, 2011 52 |
| Credit Quality - Bulk Loan Sale Summary as of March 31, 2011 53 |
| NPA Sale in 2Q10 Sold $103 Million NPA's - With a $65 Million Capital Option and WarrantCompleted sale on April 30, 2010Accelerates disposition of the more illiquid assets 54 |
| NPA Sale - Fair Value Accounting 2Q10 Fair Value Accounting - Warrant / Option to Purchase EquityIncrease to Capital Surplus - $39.8 millionPre-tax expense charge - $45.3 million; after-tax cost - $30.0 millionGAAP Capital +$9.8million - Slight Negative to "Regulatory Capital" (DTA) 55 |
| Non-GAAP Reconciliation Tables 56 |
| Non-GAAP Reconciliation Tables 57 |
| Analyst Coverage 58 |
| United Community Banks, Inc. Investor PresentationSecond Quarter 2011 Copyright 2011United Community Banks, Inc.All rights reserved. 59 |