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): October 27, 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 October 27, 2011, United Community Banks, Inc. (the
“Registrant”) issued a news release announcing its financial
results for the quarter ended September 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 October 27, 2011 at 11:00 a.m.
EDT,
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 September 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 $25.0 million special
provision for loan losses in the third quarter of 2011, the provision for loan
losses, certain expenses and charges related to the Registrant’s 2011
asset disposition plans in the first quarter of 2011, the loss
from the 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 are not necessarily comparable to
non-GAAP performance measures that may be presented by other
companies.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits: |
| 99.1 | Press Release, dated October 27, 2011 |
|||
| 99.2 | Investor Presentation, Third 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 | ||||
| Rex S. Schuette | ||||
October 27, 2011 |
Executive Vice President and 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
NET LOSS OF $6.2 MILLION FOR THIRD QUARTER 2011
| • | Special $25 million loan loss provision drove net loss |
| • | Excluding this special provision, net income was $8.8 million, or 10 cents per share |
| • | Net interest margin rose 14 basis points on lower deposit pricing |
| • | Core transaction deposits up 16 percent on an annualized basis |
BLAIRSVILLE, GA – October 27, 2011 – United Community Banks, Inc. (NASDAQ: UCBI) today reported a net loss of $6.2 million, or 16 cents per share, for the third quarter of 2011. The third quarter net loss resulted from a special loan loss provision of $25 million, or 26 cents per share, recorded in connection with the nonaccrual classification of United’s largest loan relationship, which was announced earlier. Excluding this special provision, net income was $8.8 million, or 10 cents per share.
The year-to-date net loss of $141 million primarily reflects significant credit costs in the first quarter incurred in connection with the Company’s problem asset disposition plan. The plan was executed in conjunction with raising $380 million of new capital on March 30, 2011.
“We believe the loss was an isolated situation that does not reflect deterioration in the remainder of our loan portfolio,” stated Jimmy Tallent, president and chief executive officer. “Aside from this one relationship, which we have been watching closely for several quarters, our credit quality continued to improve and stabilize in the third quarter.”
Total loans were $4.1 billion at quarter-end, down $53 million from the end of the second quarter and down $650 million from a year earlier. “The $53 million decrease during the third quarter was up from the $31 million decrease during the second quarter, but still represents the second lowest quarterly decrease in loan balances since the first quarter of 2008,” stated Tallent. “We remain confident that soon we can once again begin to grow our loan portfolio. We are encouraged to have $141 million of new loan commitments, with $88 million funded, during the third quarter. The majority were commercial loans.”
The third quarter provision for loan losses was $36 million, up from $11 million in the second quarter, but down from $50.5 million a year ago. Included in the third quarter provision was the previously announced $25 million special provision for the Company’s largest lending relationship. Net charge-offs for the third quarter were $17.5 million, compared to $16.4 million for the second quarter but down from $50.0 million a year ago. Second quarter net charge-offs included a $7.3 million recovery from an April 18 bulk loan sale transaction. Excluding that recovery, third quarter net charge-offs declined $6.2 million from last quarter.
Nonperforming assets increased $70 million to $189 million at quarter-end. The increase reflects placing the previously mentioned $76.6 million loan on nonaccrual.
Taxable equivalent net interest revenue of $59.3 million increased $335,000 from the second quarter. Compared with the third quarter of 2010, net interest revenue declined $733,000, primarily due to a $702 million reduction in average loan balances that was significantly offset by lower funding costs and deposit rates. Net interest margin was 3.55 percent for the third quarter of 2011, down two basis points from a year ago and up 14 basis points from the second quarter.
“Growing loans and deposits are key initiatives to further building core earnings,” Tallent commented. “The weak economy has created a highly competitive environment for good, quality loans and we are working diligently to get our share. We have had tremendous success in gathering core transaction deposits – increasing the balance $112 million from the second quarter, or 16 percent on an annualized basis. This was the eleventh consecutive quarter of growth in core transaction deposits, which now represents 48 percent of total deposits compared to 30 percent at the end of 2008.”
Fee revenue was $11.5 million in the third quarter of 2011, compared to $12.9 million a year ago and $13.9 million last quarter. Service charges and fees were $7.5 million, down $114,000 from a year ago, due primarily to lower overdraft fees of $886,000 resulting from regulatory changes last year that required customers to provide consent before using overdraft services. Mostly offsetting this reduction in overdraft fees was an increase of $785,000 in ATM and debit card usage fees. Mortgage fees of $1.1 million were down $923,000 from a year ago and up $196,000 from last quarter. The decrease from last year was due to the lower level of refinancing activities. Other fee revenue of $2.0 million reflected a decrease of $173,000 from a year ago and $2.7 million from the second quarter. The decrease from the second quarter was primarily due to the accelerated recognition of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans. Hedge ineffectiveness gains recognized in the third quarter were $575,000 compared with $2.8 million in the second quarter of 2011 and $336,000 in the third quarter of 2010. Also contributing to the decrease in other fee revenue from the second quarter and a year ago was a change in the market value of deferred compensation plan assets which accounted for $393,000 and $657,000 of the decrease in other fee revenue from the second quarter of 2011 and the third quarter of 2010, respectively.
Excluding foreclosed property costs and the goodwill impairment charge in 2010, third quarter 2011 operating expenses were $43.7 million, down from both the second quarter of 2011 and third quarter of 2010 by $3.1 million and $1.4 million, respectively. The decreases were mostly in FDIC assessments and the other expense category. FDIC assessments and other regulatory charges of $2.6 million were down $1.0 million from the second quarter and $653,000 from a year ago primarily due to the new asset based formula and a lower assessment rate. The decrease in the other expense category was mostly due to lower collections costs. Salary and benefit costs totaled $25.3 million, a $371,000 increase from last year and a $1.2 million decrease from the second quarter due to staff reductions and related severance costs.
Foreclosed property costs for the third quarter of 2011 were $2.8 million as compared to $1.9 million last quarter and $19.8 million a year ago. The third quarter of 2011 included $1.8 million for maintenance of foreclosed properties and $1.0 million in net losses and write-downs on properties. For the second quarter of 2011, foreclosed property costs were almost entirely for maintenance costs. The third quarter of 2010 included $14.2 million of net write-downs and losses and $5.6 million of maintenance costs.
The effective tax rate for the third quarter of 2011 was 49 percent, up from the 40 percent effective tax rate for the first and second quarters of 2011. The tax benefit in the third quarter includes the release of approximately $1.1 million in reserves for uncertain tax positions relating to state tax returns whose limitations have expired. Excluding the reserve release, the third quarter effective tax rate would have been 40 percent. The effective tax rate is expected to return to a normal range of 35 to 36 percent with expected profitability for 2012.
As of September 30, 2011, the capital ratios for United were as follows: Tier 1 Risk-Based of 14.0 percent; Tier 1 Leverage of 9.0 percent; and Total Risk-Based of 15.8 percent. The quarterly average tangible equity-to-assets ratio was 11.8 percent, and the tangible common equity-to-assets ratio was 9.1 percent.
“Reporting a third quarter loss after achieving profitability last quarter is disappointing, but must be put into context,” Tallent said. “Our objective is to deal aggressively and decisively with credit issues as they are identified. The large classification during the quarter was an isolated situation that we do not believe indicates a trend. Excluding this one item, our credit metrics continued to improve and we are on the right path to be profitable next quarter and into 2012.”
Tallent added, “United has been working diligently with the SEC to resolve comments regarding our net deferred tax asset made during their review of two resale registration statements and related periodic reports. The SEC has inquired as to the necessity of an additional deferred tax asset valuation allowance. We continue to believe an additional valuation allowance is not required based on our expectation that, more likely than not, we will realize all of our net deferred tax assets many years prior to their expiration. However, considering the SEC’s inquiry, it is possible we could be required to record a valuation allowance.”
Conference Call
United Community Banks will hold a conference call today, Thursday, October 27, 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 14298726. 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.
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 $7.2 billion and operates 27 community banks with 105 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 2010 annual
report filed on Form 10-K and first and second quarter 2011 quarterly
reports filed on Form 10-Q 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.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
Financial Highlights
Selected Financial Information
| Third | ||||||||||||||||||||||||||||||||||||
| 2011 | 2010 | Quarter | For the Nine | YTD | ||||||||||||||||||||||||||||||||
| (in thousands, except per share | Third | Second | First | Fourth | Third | 2011-2010 | Months Ended | 2011-2010 | ||||||||||||||||||||||||||||
| data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2011 | 2010 | Change | |||||||||||||||||||||||||||
INCOME SUMMARY |
||||||||||||||||||||||||||||||||||||
Interest revenue |
$ | 74,543 | $ | 76,931 | $ | 75,965 | $ | 81,215 | $ | 84,360 | $ | 227,439 | $ | 261,908 | ||||||||||||||||||||||
Interest expense |
15,262 | 17,985 | 19,573 | 21,083 | 24,346 | 52,820 | 78,988 | |||||||||||||||||||||||||||||
Net interest revenue |
59,281 | 58,946 | 56,392 | 60,132 | 60,014 | (1 | )% | 174,619 | 182,920 | (5 | )% | |||||||||||||||||||||||||
Operating provision for loan losses (1) |
36,000 | 11,000 | 190,000 | 47,750 | 50,500 | 237,000 | 187,000 | |||||||||||||||||||||||||||||
Fee revenue (2) |
11,498 | 13,905 | 11,838 | 12,442 | 12,861 | (11 | ) | 37,241 | 36,106 | 3 | ||||||||||||||||||||||||||
Total operating revenue (1)(2) |
34,779 | 61,851 | (121,770 | ) | 24,824 | 22,375 | (25,140 | ) | 32,026 | |||||||||||||||||||||||||||
Operating expenses (3) |
46,520 | 48,728 | 115,271 | 64,918 | 64,906 | (28 | ) | 210,519 | 178,034 | 18 | ||||||||||||||||||||||||||
Loss on sale of nonperforming assets |
— | — | — | — | — | — | 45,349 | |||||||||||||||||||||||||||||
Operating (loss) income from continuing operations
before income taxes |
(11,741 | ) | 13,123 | (237,041 | ) | (40,094 | ) | (42,531 | ) | (72 | ) | (235,659 | ) | (191,357 | ) | 23 | ||||||||||||||||||||
Operating income tax (benefit) expense |
(5,539 | ) | 5,506 | (94,555 | ) | (16,520 | ) | (16,706 | ) | (94,588 | ) | (71,542 | ) | |||||||||||||||||||||||
Net operating (loss) income from continuing
operations (1)(2)(3) |
(6,202 | ) | 7,617 | (142,486 | ) | (23,574 | ) | (25,825 | ) | (76 | ) | (141,071 | ) | (119,815 | ) | 18 | ||||||||||||||||||||
Noncash goodwill impairment charges |
— | — | — | — | (210,590 | ) | — | (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 (loss) income |
(6,202 | ) | 7,617 | (142,486 | ) | (16,395 | ) | (236,415 | ) | (97 | ) | (141,071 | ) | (329,240 | ) | (57 | ) | |||||||||||||||||||
Preferred dividends and discount accretion |
3,019 | 3,016 | 2,778 | 2,586 | 2,581 | 8,813 | 7,730 | |||||||||||||||||||||||||||||
Net (loss) income available to common shareholders |
$ | (9,221 | ) | $ | 4,601 | $ | (145,264 | ) | $ | (18,981 | ) | $ | (238,996 | ) | $ | (149,884 | ) | $ | (336,970 | ) | ||||||||||||||||
PERFORMANCE MEASURES |
||||||||||||||||||||||||||||||||||||
Per common share: |
||||||||||||||||||||||||||||||||||||
Diluted operating (loss) income from continuing
operations (1)(2)(3) |
$ | (.16 | ) | $ | .08 | $ | (7.87 | ) | $ | (1.38 | ) | $ | (1.50 | ) | (89 | ) | $ | (4.41 | ) | $ | (6.75 | ) | (35 | ) | ||||||||||||
Diluted (loss) income from continuing operations |
(.16 | ) | .08 | (7.87 | ) | (1.00 | ) | (12.62 | ) | (99 | ) | (4.41 | ) | (17.89 | ) | (75 | ) | |||||||||||||||||||
Diluted (loss) income |
(.16 | ) | .08 | (7.87 | ) | (1.00 | ) | (12.62 | ) | (99 | ) | (4.41 | ) | (17.82 | ) | (75 | ) | |||||||||||||||||||
Book value |
11.37 | 11.59 | 14.78 | 24.18 | 25.70 | (56 | ) | 11.37 | 25.70 | (56 | ) | |||||||||||||||||||||||||
Tangible book value (5) |
11.26 | 11.47 | 14.44 | 23.78 | 25.26 | (55 | ) | 11.26 | 25.26 | (55 | ) | |||||||||||||||||||||||||
Key performance ratios: |
||||||||||||||||||||||||||||||||||||
Return on equity (4)(6) |
(5.72 | )% | 5.34 | % | (147.11 | )% | (17.16 | )% | (148.04 | )% | (43.31 | )% | (65.69 | )% | ||||||||||||||||||||||
Return on assets (6) |
(.34 | ) | .40 | (7.61 | ) | (.89 | ) | (12.47 | ) | (2.52 | ) | (5.70 | ) | |||||||||||||||||||||||
Net interest margin (6) |
3.55 | 3.41 | 3.30 | 3.58 | 3.57 | 3.42 | 3.56 | |||||||||||||||||||||||||||||
Operating efficiency ratio from continuing operations (2)(3) |
65.73 | 66.88 | 169.08 | 89.45 | 89.38 | 99.39 | 102.14 | |||||||||||||||||||||||||||||
Equity to assets |
11.83 | 11.21 | 8.82 | 8.85 | 11.37 | 10.61 | 11.70 | |||||||||||||||||||||||||||||
Tangible equity to assets (5) |
11.76 | 11.13 | 8.73 | 8.75 | 9.19 | 10.53 | 9.28 | |||||||||||||||||||||||||||||
Tangible common equity to assets (5) |
9.09 | 4.79 | 5.51 | 6.35 | 6.78 | 6.44 | 6.94 | |||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets (5) |
14.41 | 14.26 | 6.40 | 9.05 | 9.60 | 14.41 | 9.60 | |||||||||||||||||||||||||||||
ASSET QUALITY * |
||||||||||||||||||||||||||||||||||||
Non-performing loans |
$ | 144,484 | $ | 71,065 | $ | 83,769 | $ | 179,094 | $ | 217,766 | $ | 144,484 | $ | 217,766 | ||||||||||||||||||||||
Foreclosed properties |
44,263 | 47,584 | 54,378 | 142,208 | 129,964 | 44,263 | 129,964 | |||||||||||||||||||||||||||||
Total non-performing assets (NPAs) |
188,747 | 118,649 | 138,147 | 321,302 | 347,730 | 188,747 | 347,730 | |||||||||||||||||||||||||||||
Allowance for loan losses |
146,092 | 127,638 | 133,121 | 174,695 | 174,613 | 146,092 | 174,613 | |||||||||||||||||||||||||||||
Operating net charge-offs (1) |
17,546 | 16,483 | 231,574 | 47,668 | 49,998 | 265,603 | 167,989 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans |
3.55 | % | 3.07 | % | 3.17 | % | 3.79 | % | 3.67 | % | 3.55 | % | 3.67 | % | ||||||||||||||||||||||
Operating net charge-offs to average loans (1)(6) |
1.68 | 1.58 | 20.71 | 4.03 | 4.12 | 8.28 | 4.54 | |||||||||||||||||||||||||||||
NPAs to loans and foreclosed properties |
4.54 | 2.82 | 3.25 | 6.77 | 7.11 | 4.54 | 7.11 | |||||||||||||||||||||||||||||
NPAs to total assets |
2.64 | 1.60 | 1.73 | 4.32 | 4.96 | 2.64 | 4.96 | |||||||||||||||||||||||||||||
AVERAGE BALANCES ($ in millions) |
||||||||||||||||||||||||||||||||||||
Loans |
$ | 4,194 | $ | 4,266 | $ | 4,599 | $ | 4,768 | $ | 4,896 | (14 | ) | $ | 4,352 | $ | 5,026 | (13 | ) | ||||||||||||||||||
Investment securities |
2,150 | 2,074 | 1,625 | 1,354 | 1,411 | 52 | 1,952 | 1,487 | 31 | |||||||||||||||||||||||||||
Earning assets |
6,630 | 6,924 | 6,902 | 6,680 | 6,676 | (1 | ) | 6,817 | 6,870 | (1 | ) | |||||||||||||||||||||||||
Total assets |
7,261 | 7,624 | 7,595 | 7,338 | 7,522 | (3 | ) | 7,492 | 7,723 | (3 | ) | |||||||||||||||||||||||||
Deposits |
6,061 | 6,372 | 6,560 | 6,294 | 6,257 | (3 | ) | 6,329 | 6,399 | (1 | ) | |||||||||||||||||||||||||
Shareholders’ equity |
859 | 854 | 670 | 649 | 855 | — | 795 | 904 | (12 | ) | ||||||||||||||||||||||||||
Common shares — basic (thousands) |
57,599 | 25,427 | 18,466 | 18,984 | 18,936 | 33,973 | 18,905 | |||||||||||||||||||||||||||||
Common shares — diluted (thousands) |
57,599 | 57,543 | 18,466 | 18,984 | 18,936 | 33,973 | 18,905 | |||||||||||||||||||||||||||||
AT PERIOD END ($ in millions) |
||||||||||||||||||||||||||||||||||||
Loans * |
$ | 4,110 | $ | 4,163 | $ | 4,194 | $ | 4,604 | $ | 4,760 | (14 | ) | $ | 4,110 | $ | 4,760 | (14 | ) | ||||||||||||||||||
Investment securities |
2,123 | 2,188 | 1,884 | 1,490 | 1,310 | 62 | 2,123 | 1,310 | 62 | |||||||||||||||||||||||||||
Total assets |
7,159 | 7,410 | 7,974 | 7,443 | 7,013 | 2 | 7,159 | 7,013 | 2 | |||||||||||||||||||||||||||
Deposits |
6,005 | 6,183 | 6,598 | 6,469 | 5,999 | — | 6,005 | 5,999 | — | |||||||||||||||||||||||||||
Shareholders’ equity |
848 | 860 | 850 | 636 | 662 | 28 | 848 | 662 | 28 | |||||||||||||||||||||||||||
Common shares outstanding (thousands) |
57,510 | 57,469 | 20,903 | 18,937 | 18,887 | 57,510 | 18,887 | |||||||||||||||||||||||||||||
| (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 | Third | Second | First | Fourth | Third | For the Nine Months Ended | ||||||||||||||||||||||
| data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | 2011 | 2010 | |||||||||||||||||||||
Interest revenue reconciliation |
||||||||||||||||||||||||||||
Interest revenue — taxable equivalent |
$ | 74,543 | $ | 76,931 | $ | 75,965 | $ | 81,215 | $ | 84,360 | $ | 227,439 | $ | 261,908 | ||||||||||||||
Taxable equivalent adjustment |
(420 | ) | (429 | ) | (435 | ) | (497 | ) | (511 | ) | (1,284 | ) | (1,504 | ) | ||||||||||||||
Interest revenue (GAAP) |
$ | 74,123 | $ | 76,502 | $ | 75,530 | $ | 80,718 | $ | 83,849 | $ | 226,155 | $ | 260,404 | ||||||||||||||
Net interest revenue reconciliation |
||||||||||||||||||||||||||||
Net interest revenue — taxable equivalent |
$ | 59,281 | $ | 58,946 | $ | 56,392 | $ | 60,132 | $ | 60,014 | $ | 174,619 | $ | 182,920 | ||||||||||||||
Taxable equivalent adjustment |
(420 | ) | (429 | ) | (435 | ) | (497 | ) | (511 | ) | (1,284 | ) | (1,504 | ) | ||||||||||||||
Net interest revenue (GAAP) |
$ | 58,861 | $ | 58,517 | $ | 55,957 | $ | 59,635 | $ | 59,503 | $ | 173,335 | $ | 181,416 | ||||||||||||||
Provision for loan losses reconciliation |
||||||||||||||||||||||||||||
Operating provision for loan losses |
$ | 36,000 | $ | 11,000 | $ | 190,000 | $ | 47,750 | $ | 50,500 | $ | 237,000 | $ | 187,000 | ||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | — | (11,750 | ) | — | — | — | ||||||||||||||||||||
Provision for loan losses (GAAP) |
$ | 36,000 | $ | 11,000 | $ | 190,000 | $ | 36,000 | $ | 50,500 | $ | 237,000 | $ | 187,000 | ||||||||||||||
Total revenue reconciliation |
||||||||||||||||||||||||||||
Total operating revenue |
$ | 34,779 | $ | 61,851 | $ | (121,770 | ) | $ | 24,824 | $ | 22,375 | $ | (25,140 | ) | $ | 32,026 | ||||||||||||
Taxable equivalent adjustment |
(420 | ) | (429 | ) | (435 | ) | (497 | ) | (511 | ) | (1,284 | ) | (1,504 | ) | ||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | — | 11,750 | — | — | — | |||||||||||||||||||||
Total revenue (GAAP) |
$ | 34,359 | $ | 61,422 | $ | (122,205 | ) | $ | 36,077 | $ | 21,864 | $ | (26,424 | ) | $ | 30,522 | ||||||||||||
Expense reconciliation |
||||||||||||||||||||||||||||
Operating expense |
$ | 46,520 | $ | 48,728 | $ | 115,271 | $ | 64,918 | $ | 64,906 | $ | 210,519 | $ | 223,383 | ||||||||||||||
Noncash goodwill impairment charge |
— | — | — | — | 210,590 | — | 210,590 | |||||||||||||||||||||
Operating expense (GAAP) |
$ | 46,520 | $ | 48,728 | $ | 115,271 | $ | 64,918 | $ | 275,496 | $ | 210,519 | $ | 433,973 | ||||||||||||||
(Loss) income from continuing operations before taxes reconciliation |
||||||||||||||||||||||||||||
Operating (loss) income from continuing operations before taxes |
$ | (11,741 | ) | $ | 13,123 | $ | (237,041 | ) | $ | (40,094 | ) | $ | (42,531 | ) | $ | (235,659 | ) | $ | (191,357 | ) | ||||||||
Taxable equivalent adjustment |
(420 | ) | (429 | ) | (435 | ) | (497 | ) | (511 | ) | (1,284 | ) | (1,504 | ) | ||||||||||||||
Noncash goodwill impairment charge |
— | — | — | — | (210,590 | ) | — | (210,590 | ) | |||||||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | — | 11,750 | — | — | — | |||||||||||||||||||||
(Loss) income from continuing operations before taxes (GAAP) |
$ | (12,161 | ) | $ | 12,694 | $ | (237,476 | ) | $ | (28,841 | ) | $ | (253,632 | ) | $ | (236,943 | ) | $ | (403,451 | ) | ||||||||
Income tax (benefit) expense reconciliation |
||||||||||||||||||||||||||||
Operating income tax (benefit) expense |
$ | (5,539 | ) | $ | 5,506 | $ | (94,555 | ) | $ | (16,520 | ) | $ | (16,706 | ) | $ | (94,588 | ) | $ | (71,542 | ) | ||||||||
Taxable equivalent adjustment |
(420 | ) | (429 | ) | (435 | ) | (497 | ) | (511 | ) | (1,284 | ) | (1,504 | ) | ||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | — | 4,571 | — | — | — | |||||||||||||||||||||
Income tax (benefit) expense (GAAP) |
$ | (5,959 | ) | $ | 5,077 | $ | (94,990 | ) | $ | (12,446 | ) | $ | (17,217 | ) | $ | (95,872 | ) | $ | (73,046 | ) | ||||||||
Diluted (loss) earnings from continuing operations per common share reconciliation |
||||||||||||||||||||||||||||
Diluted operating (loss) earnings from continuing operations per common share |
$ | (.16 | ) | $ | .08 | $ | (7.87 | ) | $ | (1.38 | ) | $ | (1.50 | ) | $ | (4.41 | ) | $ | (6.75 | ) | ||||||||
Noncash goodwill impairment charge |
— | — | — | — | (11.12 | ) | — | (11.14 | ) | |||||||||||||||||||
Partial reversal of special fraud-related provision for loan loss |
— | — | — | .38 | — | — | — | |||||||||||||||||||||
Diluted (loss) earnings from continuing operations per common share (GAAP) |
$ | (.16 | ) | $ | .08 | $ | (7.87 | ) | $ | (1.00 | ) | $ | (12.62 | ) | $ | (4.41 | ) | $ | (17.89 | ) | ||||||||
Book value per common share reconciliation |
||||||||||||||||||||||||||||
Tangible book value per common share |
$ | 11.26 | $ | 11.47 | $ | 14.44 | $ | 23.78 | $ | 25.26 | $ | 11.26 | $ | 25.26 | ||||||||||||||
Effect of goodwill and other intangibles |
.11 | .12 | .34 | .40 | .44 | .11 | .44 | |||||||||||||||||||||
Book value per common share (GAAP) |
$ | 11.37 | $ | 11.59 | $ | 14.78 | $ | 24.18 | $ | 25.70 | $ | 11.37 | $ | 25.70 | ||||||||||||||
Efficiency ratio from continuing operations reconciliation |
||||||||||||||||||||||||||||
Operating efficiency ratio from continuing operations |
65.73 | % | 66.88 | % | 169.08 | % | 89.45 | % | 89.38 | % | 99.39 | % | 102.14 | % | ||||||||||||||
Noncash goodwill impairment charge |
— | — | — | — | 290.00 | — | 96.29 | |||||||||||||||||||||
Efficiency ratio from continuing operations (GAAP) |
65.73 | % | 66.88 | % | 169.08 | % | 89.45 | % | 379.38 | % | 99.39 | % | 198.43 | % | ||||||||||||||
Average equity to assets reconciliation |
||||||||||||||||||||||||||||
Tangible common equity to assets |
9.09 | % | 4.79 | % | 5.51 | % | 6.35 | % | 6.78 | % | 6.44 | % | 6.94 | % | ||||||||||||||
Effect of preferred equity |
2.67 | 6.34 | 3.22 | 2.40 | 2.41 | 4.09 | 2.34 | |||||||||||||||||||||
Tangible equity to assets |
11.76 | 11.13 | 8.73 | 8.75 | 9.19 | 10.53 | 9.28 | |||||||||||||||||||||
Effect of goodwill and other intangibles |
.07 | .08 | .09 | .10 | 2.18 | .08 | 2.42 | |||||||||||||||||||||
Equity to assets (GAAP) |
11.83 | % | 11.21 | % | 8.82 | % | 8.85 | % | 11.37 | % | 10.61 | % | 11.70 | % | ||||||||||||||
Actual tangible common equity to risk-weighted assets reconciliation |
||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets |
14.41 | % | 14.26 | % | 6.40 | % | 9.05 | % | 9.60 | % | 14.41 | % | 9.60 | % | ||||||||||||||
Effect of other comprehensive income |
(.58 | ) | (.65 | ) | (.58 | ) | (.62 | ) | (.81 | ) | (.58 | ) | (.81 | ) | ||||||||||||||
Effect of deferred tax limitation |
(5.34 | ) | (5.04 | ) | (5.10 | ) | (3.34 | ) | (2.94 | ) | (5.34 | ) | (2.94 | ) | ||||||||||||||
Effect of trust preferred |
1.18 | 1.14 | 1.12 | 1.06 | 1.06 | 1.18 | 1.06 | |||||||||||||||||||||
Effect of preferred equity |
4.30 | 4.17 | 5.97 | 3.52 | 3.51 | 4.30 | 3.51 | |||||||||||||||||||||
Tier I capital ratio (Regulatory) |
13.97 | % | 13.88 | % | 7.81 | % | 9.67 | % | 10.42 | % | 13.97 | % | 10.42 | % | ||||||||||||||
Net charge-offs reconciliation |
||||||||||||||||||||||||||||
Operating net charge-offs |
$ | 17,546 | $ | 16,483 | $ | 231,574 | $ | 47,668 | $ | 49,998 | $ | 265,603 | $ | 167,989 | ||||||||||||||
Subsequent partial recovery of fraud-related charge-off |
— | — | — | (11,750 | ) | — | — | — | ||||||||||||||||||||
Net charge-offs (GAAP) |
$ | 17,546 | $ | 16,483 | $ | 231,574 | $ | 35,918 | $ | 49,998 | $ | 265,603 | $ | 167,989 | ||||||||||||||
Net charge-offs to average loans reconciliation |
||||||||||||||||||||||||||||
Operating net charge-offs to average loans |
1.68 | % | 1.58 | % | 20.71 | % | 4.03 | % | 4.12 | % | 8.28 | % | 4.54 | % | ||||||||||||||
Subsequent partial recovery of fraud-related charge-off |
— | — | — | (1.00 | ) | — | — | — | ||||||||||||||||||||
Net charge-offs to average loans (GAAP) |
1.68 | % | 1.58 | % | 20.71 | % | 3.03 | % | 4.12 | % | 8.28 | % | 4.54 | % | ||||||||||||||
Net (loss) income reconciliation |
||||||||||||||||||||||||||||
Net income excluding special provision |
$ | 8,798 | ||||||||||||||||||||||||||
Effect of special provision for loan losses on largest lending relationship |
(15,000 | ) | ||||||||||||||||||||||||||
Net loss (GAAP) |
$ | (6,202 | ) | |||||||||||||||||||||||||
Net (loss) income per diluted share reconciliation |
||||||||||||||||||||||||||||
Net income per diluted share excluding special provision |
$ | .10 | ||||||||||||||||||||||||||
Effect of special provision for loan losses on largest lending relationship |
(.26 | ) | ||||||||||||||||||||||||||
Net loss per diluted share (GAAP) |
$ | (.16 | ) | |||||||||||||||||||||||||
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 | |||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Quarter | Year | ||||||||||||||||||||||
| (in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Change | |||||||||||||||||||||
LOANS BY CATEGORY |
||||||||||||||||||||||||||||
Commercial (sec.by RE) |
$ | 1,771 | $ | 1,742 | $ | 1,692 | $ | 1,761 | $ | 1,781 | $ | 29 | $ | (10 | ) | |||||||||||||
Commercial construction |
169 | 195 | 213 | 297 | 310 | (26 | ) | (141 | ) | |||||||||||||||||||
Commercial & industrial |
429 | 428 | 431 | 441 | 456 | 1 | (27 | ) | ||||||||||||||||||||
Total commercial |
2,369 | 2,365 | 2,336 | 2,499 | 2,547 | 4 | (178 | ) | ||||||||||||||||||||
Residential construction |
474 | 502 | 550 | 695 | 764 | (28 | ) | (290 | ) | |||||||||||||||||||
Residential mortgage |
1,150 | 1,177 | 1,187 | 1,279 | 1,316 | (27 | ) | (166 | ) | |||||||||||||||||||
Consumer / installment |
117 | 119 | 121 | 131 | 133 | (2 | ) | (16 | ) | |||||||||||||||||||
Total loans |
$ | 4,110 | $ | 4,163 | $ | 4,194 | $ | 4,604 | $ | 4,760 | (53 | ) | (650 | ) | ||||||||||||||
LOANS BY MARKET |
||||||||||||||||||||||||||||
Atlanta MSA |
$ | 1,192 | $ | 1,188 | $ | 1,179 | $ | 1,310 | $ | 1,365 | 4 | (173 | ) | |||||||||||||||
Gainesville MSA |
272 | 275 | 282 | 312 | 316 | (3 | ) | (44 | ) | |||||||||||||||||||
North Georgia |
1,478 | 1,500 | 1,531 | 1,689 | 1,755 | (22 | ) | (277 | ) | |||||||||||||||||||
Western North Carolina |
607 | 626 | 640 | 702 | 719 | (19 | ) | (112 | ) | |||||||||||||||||||
Coastal Georgia |
316 | 325 | 312 | 335 | 345 | (9 | ) | (29 | ) | |||||||||||||||||||
East Tennessee |
245 | 249 | 250 | 256 | 260 | (4 | ) | (15 | ) | |||||||||||||||||||
Total loans |
$ | 4,110 | $ | 4,163 | $ | 4,194 | $ | 4,604 | $ | 4,760 | (53 | ) | (650 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION |
||||||||||||||||||||||||||||
Dirt loans |
||||||||||||||||||||||||||||
Acquisition & development |
$ | 97 | $ | 105 | $ | 116 | $ | 174 | $ | 190 | (8 | ) | (93 | ) | ||||||||||||||
Land loans |
60 | 62 | 69 | 99 | 104 | (2 | ) | (44 | ) | |||||||||||||||||||
Lot loans |
216 | 218 | 228 | 275 | 303 | (2 | ) | (87 | ) | |||||||||||||||||||
Total |
373 | 385 | 413 | 548 | 597 | (12 | ) | (224 | ) | |||||||||||||||||||
House loans |
||||||||||||||||||||||||||||
Spec |
64 | 74 | 88 | 97 | 109 | (10 | ) | (45 | ) | |||||||||||||||||||
Sold |
37 | 43 | 49 | 50 | 58 | (6 | ) | (21 | ) | |||||||||||||||||||
Total |
101 | 117 | 137 | 147 | 167 | (16 | ) | (66 | ) | |||||||||||||||||||
Total residential construction |
$ | 474 | $ | 502 | $ | 550 | $ | 695 | $ | 764 | (28 | ) | (290 | ) | ||||||||||||||
RESIDENTIAL
CONSTRUCTION — ATLANTA MSA |
||||||||||||||||||||||||||||
Dirt loans |
||||||||||||||||||||||||||||
Acquisition & development |
$ | 19 | $ | 20 | $ | 22 | $ | 30 | $ | 34 | (1 | ) | (15 | ) | ||||||||||||||
Land loans |
15 | 16 | 19 | 23 | 27 | (1 | ) | (12 | ) | |||||||||||||||||||
Lot loans |
22 | 22 | 24 | 32 | 45 | — | (23 | ) | ||||||||||||||||||||
Total |
56 | 58 | 65 | 85 | 106 | (2 | ) | (50 | ) | |||||||||||||||||||
House loans |
||||||||||||||||||||||||||||
Spec |
28 | 30 | 34 | 38 | 42 | (2 | ) | (14 | ) | |||||||||||||||||||
Sold |
8 | 9 | 11 | 10 | 11 | (1 | ) | (3 | ) | |||||||||||||||||||
Total |
36 | 39 | 45 | 48 | 53 | (3 | ) | (17 | ) | |||||||||||||||||||
Total residential construction |
$ | 92 | $ | 97 | $ | 110 | $ | 133 | $ | 159 | (5 | ) | (67 | ) | ||||||||||||||
| (1) | Excludes total loans of $57.8 million, $70.8 million, $63.3 million, $68.2
million and $75.2 million as of September 30, 2011, June 30, 2011, March 31, 2011, December 31,
2010 and September 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)
| Third Quarter 2011 | Second Quarter 2011 | First Quarter 2011 (2) | ||||||||||||||||||||||||||||||||||
| 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) |
$ | 21,998 | $ | 8,880 | $ | 30,878 | $ | 17,764 | $ | 6,796 | $ | 24,560 | $ | 20,648 | $ | 7,886 | $ | 28,534 | ||||||||||||||||||
Commercial construction |
11,370 | 5,862 | 17,232 | 2,782 | 6,764 | 9,546 | 3,701 | 11,568 | 15,269 | |||||||||||||||||||||||||||
Commercial & industrial |
53,009 | — | 53,009 | 1,998 | — | 1,998 | 2,198 | — | 2,198 | |||||||||||||||||||||||||||
Total commercial |
86,377 | 14,742 | 101,119 | 22,544 | 13,560 | 36,104 | 26,547 | 19,454 | 46,001 | |||||||||||||||||||||||||||
Residential construction |
34,472 | 21,561 | 56,033 | 22,643 | 24,968 | 47,611 | 32,038 | 25,807 | 57,845 | |||||||||||||||||||||||||||
Residential mortgage |
22,671 | 7,960 | 30,631 | 24,809 | 9,056 | 33,865 | 23,711 | 9,117 | 32,828 | |||||||||||||||||||||||||||
Consumer / installment |
964 | — | 964 | 1,069 | — | 1,069 | 1,473 | — | 1,473 | |||||||||||||||||||||||||||
Total NPAs |
$ | 144,484 | $ | 44,263 | $ | 188,747 | $ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | ||||||||||||||||||
Balance as a % of
Unpaid Principal |
77.8 | % | 33.4 | % | 59.3 | % | 64.5 | % | 32.6 | % | 46.3 | % | 57.3 | % | 30.3 | % | 42.4 | % | ||||||||||||||||||
NPAs BY MARKET |
||||||||||||||||||||||||||||||||||||
Atlanta MSA |
$ | 13,350 | $ | 12,971 | $ | 26,321 | $ | 14,700 | $ | 11,239 | $ | 25,939 | $ | 21,501 | $ | 16,913 | $ | 38,414 | ||||||||||||||||||
Gainesville MSA |
5,311 | 2,495 | 7,806 | 4,505 | 3,174 | 7,679 | 4,332 | 2,157 | 6,489 | |||||||||||||||||||||||||||
North Georgia |
105,078 | 17,467 | 122,545 | 28,117 | 21,278 | 49,395 | 30,214 | 23,094 | 53,308 | |||||||||||||||||||||||||||
Western North Carolina |
13,243 | 7,941 | 21,184 | 15,153 | 8,953 | 24,106 | 18,849 | 7,802 | 26,651 | |||||||||||||||||||||||||||
Coastal Georgia |
5,600 | 2,354 | 7,954 | 5,357 | 2,564 | 7,921 | 5,847 | 3,781 | 9,628 | |||||||||||||||||||||||||||
East Tennessee |
1,902 | 1,035 | 2,937 | 3,233 | 376 | 3,609 | 3,026 | 631 | 3,657 | |||||||||||||||||||||||||||
Total NPAs |
$ | 144,484 | $ | 44,263 | $ | 188,747 | $ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | ||||||||||||||||||
NPA ACTIVITY |
||||||||||||||||||||||||||||||||||||
Beginning Balance |
$ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | $ | 179,094 | $ | 142,208 | $ | 321,302 | ||||||||||||||||||
Loans placed on non-accrual |
103,365 | — | 103,365 | 35,911 | — | 35,911 | 54,730 | — | 54,730 | |||||||||||||||||||||||||||
Payments received |
(3,995 | ) | — | (3,995 | ) | (7,702 | ) | — | (7,702 | ) | (3,550 | ) | — | (3,550 | ) | |||||||||||||||||||||
Loan charge-offs |
(15,335 | ) | — | (15,335 | ) | (18,888 | ) | — | (18,888 | ) | (43,969 | ) | — | (43,969 | ) | |||||||||||||||||||||
Foreclosures |
(10,616 | ) | 10,616 | — | (22,025 | ) | 22,025 | — | (17,052 | ) | 17,052 | — | ||||||||||||||||||||||||
Capitalized costs |
— | 818 | 818 | — | 20 | 20 | — | 270 | 270 | |||||||||||||||||||||||||||
Note / property sales |
— | (13,787 | ) | (13,787 | ) | — | (28,939 | ) | (28,939 | ) | (11,400 | ) | (44,547 | ) | (55,947 | ) | ||||||||||||||||||||
Loans held for sale |
— | — | — | — | — | — | (74,084 | ) | — | (74,084 | ) | |||||||||||||||||||||||||
Write downs |
— | (1,772 | ) | (1,772 | ) | — | (3,118 | ) | (3,118 | ) | — | (48,585 | ) | (48,585 | ) | |||||||||||||||||||||
Net gains (losses) on sales |
— | 804 | 804 | — | 3,218 | 3,218 | — | (12,020 | ) | (12,020 | ) | |||||||||||||||||||||||||
Ending Balance |
$ | 144,484 | $ | 44,263 | $ | 188,747 | $ | 71,065 | $ | 47,584 | $ | 118,649 | $ | 83,769 | $ | 54,378 | $ | 138,147 | ||||||||||||||||||
| Third Quarter 2011 | Second Quarter 2011 (3) | First Quarter 2011 (3) | ||||||||||||||||||||||
| Net Charge- | Net Charge- | Net Charge- | ||||||||||||||||||||||
| Offs to | Offs to | Offs to | ||||||||||||||||||||||
| Net | Average | Net | Average | Net | Average | |||||||||||||||||||
| (in thousands) | Charge-Offs | Loans (4) | Charge-Offs | Loans (4) | Charge-Offs | Loans (4) | ||||||||||||||||||
NET CHARGE-OFFS BY CATEGORY |
||||||||||||||||||||||||
Commercial (sec.by RE) |
$ | 2,192 | .50 | % | $ | 3,259 | .76 | % | $ | 48,607 | 11.07 | % | ||||||||||||
Commercial construction |
1,625 | 3.54 | 869 | 1.70 | 49,715 | 76.95 | ||||||||||||||||||
Commercial & industrial |
420 | .39 | 523 | .49 | 4,040 | 3.64 | ||||||||||||||||||
Total commercial |
4,237 | .71 | 4,651 | .79 | 102,362 | 16.66 | ||||||||||||||||||
Residential construction |
6,381 | 5.19 | 6,629 | 5.04 | 92,138 | 58.20 | ||||||||||||||||||
Residential mortgage |
6,110 | 2.09 | 4,589 | 1.55 | 36,383 | 11.62 | ||||||||||||||||||
Consumer / installment |
818 | 2.75 | 614 | 2.04 | 691 | 2.16 | ||||||||||||||||||
Total |
$ | 17,546 | 1.68 | $ | 16,483 | 1.58 | $ | 231,574 | 20.71 | |||||||||||||||
NET CHARGE-OFFS BY MARKET |
||||||||||||||||||||||||
Atlanta MSA |
$ | 2,813 | .94 | % | $ | 2,920 | .99 | % | $ | 56,489 | 17.86 | % | ||||||||||||
Gainesville MSA |
1,804 | 2.64 | 2,318 | 3.36 | 8,616 | 11.93 | ||||||||||||||||||
North Georgia |
8,124 | 2.16 | 6,575 | 1.72 | 123,305 | 29.66 | ||||||||||||||||||
Western North Carolina |
3,608 | 2.31 | 3,522 | 2.21 | 26,447 | 15.61 | ||||||||||||||||||
Coastal Georgia |
709 | .88 | 815 | 1.02 | 12,003 | 14.80 | ||||||||||||||||||
East Tennessee |
488 | .78 | 333 | .54 | 4,714 | 7.47 | ||||||||||||||||||
Total |
$ | 17,546 | 1.68 | $ | 16,483 | 1.58 | $ | 231,574 | 20.71 | |||||||||||||||
| (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) | 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands, except per share data) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest revenue: |
||||||||||||||||
Loans, including fees |
$ | 59,294 | $ | 68,419 | $ | 181,359 | $ | 211,245 | ||||||||
Investment securities, including tax exempt of $244, $279, $754 and $886 |
14,568 | 14,711 | 42,964 | 46,743 | ||||||||||||
Federal funds sold, commercial paper and deposits in banks |
261 | 719 | 1,832 | 2,416 | ||||||||||||
Total interest revenue |
74,123 | 83,849 | 226,155 | 260,404 | ||||||||||||
Interest expense: |
||||||||||||||||
Deposits: |
||||||||||||||||
NOW |
831 | 1,705 | 3,191 | 5,304 | ||||||||||||
Money market |
1,129 | 1,930 | 4,656 | 5,516 | ||||||||||||
Savings |
52 | 83 | 193 | 250 | ||||||||||||
Time |
9,086 | 16,099 | 31,813 | 54,015 | ||||||||||||
Total deposit interest expense |
11,098 | 19,817 | 39,853 | 65,085 | ||||||||||||
Federal funds purchased, repurchase agreements and other short-term borrowings |
1,081 | 1,068 | 3,197 | 3,162 | ||||||||||||
Federal Home Loan Bank advances |
441 | 796 | 1,601 | 2,747 | ||||||||||||
Long-term debt |
2,642 | 2,665 | 8,169 | 7,994 | ||||||||||||
Total interest expense |
15,262 | 24,346 | 52,820 | 78,988 | ||||||||||||
Net interest revenue |
58,861 | 59,503 | 173,335 | 181,416 | ||||||||||||
Provision for loan losses |
36,000 | 50,500 | 237,000 | 187,000 | ||||||||||||
Net interest revenue after provision for loan losses |
22,861 | 9,003 | (63,665 | ) | (5,584 | ) | ||||||||||
Fee revenue: |
||||||||||||||||
Service charges and fees |
7,534 | 7,648 | 21,862 | 23,088 | ||||||||||||
Mortgage loan and other related fees |
1,148 | 2,071 | 3,594 | 5,151 | ||||||||||||
Brokerage fees |
836 | 731 | 2,204 | 1,884 | ||||||||||||
Securities gains, net |
— | 2,491 | 838 | 2,552 | ||||||||||||
Loss from prepayment of debt |
— | (2,233 | ) | (791 | ) | (2,233 | ) | |||||||||
Other |
1,980 | 2,153 | 9,534 | 5,664 | ||||||||||||
Total fee revenue |
11,498 | 12,861 | 37,241 | 36,106 | ||||||||||||
Total revenue |
34,359 | 21,864 | (26,424 | ) | 30,522 | |||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
25,262 | 24,891 | 76,622 | 72,841 | ||||||||||||
Communications and equipment |
3,284 | 3,620 | 10,006 | 10,404 | ||||||||||||
Occupancy |
3,794 | 3,720 | 11,673 | 11,370 | ||||||||||||
Advertising and public relations |
1,052 | 1,128 | 3,347 | 3,523 | ||||||||||||
Postage, printing and supplies |
1,036 | 1,019 | 3,239 | 3,009 | ||||||||||||
Professional fees |
2,051 | 2,117 | 7,731 | 6,238 | ||||||||||||
Foreclosed property |
2,813 | 19,752 | 69,603 | 45,105 | ||||||||||||
FDIC assessments and other regulatory charges |
2,603 | 3,256 | 11,660 | 10,448 | ||||||||||||
Amortization of intangibles |
748 | 793 | 2,270 | 2,389 | ||||||||||||
Other |
3,877 | 4,610 | 14,368 | 12,707 | ||||||||||||
Goodwill impairment |
— | 210,590 | — | 210,590 | ||||||||||||
Loss on sale of nonperforming assets |
— | — | — | 45,349 | ||||||||||||
Total operating expenses |
46,520 | 275,496 | 210,519 | 433,973 | ||||||||||||
Loss from continuing operations before income taxes |
(12,161 | ) | (253,632 | ) | (236,943 | ) | (403,451 | ) | ||||||||
Income tax benefit |
(5,959 | ) | (17,217 | ) | (95,872 | ) | (73,046 | ) | ||||||||
Net loss from continuing operations |
(6,202 | ) | (236,415 | ) | (141,071 | ) | (330,405 | ) | ||||||||
Loss from discontinued operations, net of income taxes |
— | — | — | (101 | ) | |||||||||||
Gain from sale of subsidiary, net of income taxes and selling costs |
— | — | — | 1,266 | ||||||||||||
Net loss |
(6,202 | ) | (236,415 | ) | (141,071 | ) | (329,240 | ) | ||||||||
Preferred stock dividends and discount accretion |
3,019 | 2,581 | 8,813 | 7,730 | ||||||||||||
Net loss available to common shareholders |
$ | (9,221 | ) | $ | (238,996 | ) | $ | (149,884 | ) | $ | (336,970 | ) | ||||
Loss from continuing operations per common share — Basic |
$ | (.16 | ) | $ | (12.62 | ) | $ | (4.41 | ) | $ | (17.89 | ) | ||||
Loss from continuing operations per common share — Diluted |
(.16 | ) | (12.62 | ) | (4.41 | ) | (17.89 | ) | ||||||||
Loss per common share — Basic |
(.16 | ) | (12.62 | ) | (4.41 | ) | (17.82 | ) | ||||||||
Loss per common share — Diluted |
(.16 | ) | (12.62 | ) | (4.41 | ) | (17.82 | ) | ||||||||
Weighted average common shares outstanding — Basic |
57,599 | 18,936 | 33,973 | 18,905 | ||||||||||||
Weighted average common shares outstanding — Diluted |
57,599 | 18,936 | 33,973 | 18,905 | ||||||||||||
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
Consolidated Balance Sheet
| September 30, | December 31, | September 30, | ||||||||||
| (in thousands, except share and per share data) | 2011 | 2010 | 2010 | |||||||||
| (unaudited) | (audited) | (unaudited) | ||||||||||
ASSETS |
||||||||||||
Cash and due from banks |
$ | 57,780 | $ | 95,994 | $ | 104,033 | ||||||
Interest-bearing deposits in banks |
241,440 | 111,901 | 64,408 | |||||||||
Federal funds sold, commercial paper and short-term investments |
— | 441,562 | 108,579 | |||||||||
Cash and cash equivalents |
299,220 | 649,457 | 277,020 | |||||||||
Securities available for sale |
1,769,083 | 1,224,417 | 1,053,518 | |||||||||
Securities
held to maturity (fair value $369,020, $267,988 and $263,012) |
353,739 | 265,807 | 256,694 | |||||||||
Mortgage loans held for sale |
22,050 | 35,908 | 20,630 | |||||||||
Loans, net of unearned income |
4,109,875 | 4,604,126 | 4,759,504 | |||||||||
Less allowance for loan losses |
146,092 | 174,695 | 174,613 | |||||||||
Loans, net |
3,963,783 | 4,429,431 | 4,584,891 | |||||||||
Assets covered by loss sharing agreements with the FDIC |
83,623 | 131,887 | 144,581 | |||||||||
Premises and equipment, net |
176,839 | 178,239 | 178,842 | |||||||||
Accrued interest receivable |
19,744 | 24,299 | 24,672 | |||||||||
Goodwill and other intangible assets |
9,175 | 11,446 | 12,217 | |||||||||
Foreclosed property |
44,263 | 142,208 | 129,964 | |||||||||
Net deferred tax asset |
264,275 | 166,937 | 146,831 | |||||||||
Other assets |
153,329 | 183,160 | 183,189 | |||||||||
Total assets |
$ | 7,159,123 | $ | 7,443,196 | $ | 7,013,049 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Liabilities: |
||||||||||||
Deposits: |
||||||||||||
Demand |
$ | 966,452 | $ | 793,414 | $ | 783,251 | ||||||
NOW |
1,299,512 | 1,424,781 | 1,338,371 | |||||||||
Money market |
1,030,370 | 891,252 | 804,644 | |||||||||
Savings |
200,231 | 183,894 | 186,617 | |||||||||
Time: |
||||||||||||
Less than $100,000 |
1,393,559 | 1,496,700 | 1,498,379 | |||||||||
Greater than $100,000 |
905,183 | 1,002,359 | 1,033,132 | |||||||||
Brokered |
209,998 | 676,772 | 354,243 | |||||||||
Total deposits |
6,005,305 | 6,469,172 | 5,998,637 | |||||||||
Federal funds purchased, repurchase agreements, and other short-term borrowings |
102,883 | 101,067 | 103,780 | |||||||||
Federal Home Loan Bank advances |
40,625 | 55,125 | 55,125 | |||||||||
Long-term debt |
120,206 | 150,146 | 150,126 | |||||||||
Unsettled securities purchases |
10,585 | — | — | |||||||||
Accrued expenses and other liabilities |
31,302 | 32,171 | 42,906 | |||||||||
Total liabilities |
6,310,906 | 6,807,681 | 6,350,574 | |||||||||
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 |
176,739 | 175,711 | 175,378 | |||||||||
Series D; $1,000 stated value; 16,613 shares issued and outstanding |
16,613 | — | — | |||||||||
Common
stock, $1 par value; 100,000,000 shares authorized; 41,595,692, 18,937,001 and 18,886,660 shares issued and outstanding |
41,596 | 18,937 | 18,887 | |||||||||
Common
stock, non-voting, $1 par value; 30,000,000 shares authorized; 15,914,209 shares issued and outstanding |
15,914 | — | — | |||||||||
Common stock issuable; 88,501, 67,287 and 61,119 shares |
3,590 | 3,894 | 3,961 | |||||||||
Capital surplus |
1,052,690 | 741,244 | 740,151 | |||||||||
Accumulated deficit |
(485,451 | ) | (335,567 | ) | (316,587 | ) | ||||||
Accumulated other comprehensive income |
26,309 | 31,079 | 40,468 | |||||||||
Total shareholders’ equity |
848,217 | 635,515 | 662,475 | |||||||||
Total liabilities and shareholders’ equity |
$ | 7,159,123 | $ | 7,443,196 | $ | 7,013,049 | ||||||
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 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) |
$ | 4,193,951 | $ | 59,394 | 5.62 | % | $ | 4,896,471 | $ | 68,540 | 5.55 | % | ||||||||||||
Taxable securities (3) |
2,125,154 | 14,324 | 2.70 | 1,384,682 | 14,431 | 4.17 | ||||||||||||||||||
Tax-exempt securities (1)(3) |
24,675 | 399 | 6.47 | 26,481 | 459 | 6.93 | ||||||||||||||||||
Federal funds sold and other interest-earning assets |
286,194 | 426 | .60 | 368,108 | 930 | 1.01 | ||||||||||||||||||
Total interest-earning assets |
6,629,974 | 74,543 | 4.47 | 6,675,742 | 84,360 | 5.02 | ||||||||||||||||||
Non-interest-earning assets: |
||||||||||||||||||||||||
Allowance for loan losses |
(128,654 | ) | (194,300 | ) | ||||||||||||||||||||
Cash and due from banks |
53,500 | 107,825 | ||||||||||||||||||||||
Premises and equipment |
177,798 | 179,839 | ||||||||||||||||||||||
Other assets (3) |
528,461 | 752,780 | ||||||||||||||||||||||
Total assets |
$ | 7,261,079 | $ | 7,521,886 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing deposits: |
||||||||||||||||||||||||
NOW |
$ | 1,258,929 | 831 | .26 | $ | 1,318,779 | 1,705 | .51 | ||||||||||||||||
Money market |
1,024,559 | 1,129 | .44 | 781,903 | 1,930 | .98 | ||||||||||||||||||
Savings |
199,793 | 52 | .10 | 186,123 | 83 | .18 | ||||||||||||||||||
Time less than $100,000 |
1,448,024 | 4,539 | 1.24 | 1,541,772 | 7,190 | 1.85 | ||||||||||||||||||
Time greater than $100,000 |
940,864 | 3,456 | 1.46 | 1,065,789 | 5,506 | 2.05 | ||||||||||||||||||
Brokered |
260,423 | 1,091 | 1.66 | 573,606 | 3,403 | 2.35 | ||||||||||||||||||
Total interest-bearing deposits |
5,132,592 | 11,098 | .86 | 5,467,972 | 19,817 | 1.44 | ||||||||||||||||||
Federal funds purchased and other borrowings |
103,850 | 1,081 | 4.13 | 104,370 | 1,068 | 4.06 | ||||||||||||||||||
Federal Home Loan Bank advances |
40,625 | 441 | 4.31 | 80,220 | 796 | 3.94 | ||||||||||||||||||
Long-term debt |
138,457 | 2,642 | 7.57 | 150,119 | 2,665 | 7.04 | ||||||||||||||||||
Total borrowed funds |
282,932 | 4,164 | 5.84 | 334,709 | 4,529 | 5.37 | ||||||||||||||||||
Total interest-bearing liabilities |
5,415,524 | 15,262 | 1.12 | 5,802,681 | 24,346 | 1.66 | ||||||||||||||||||
Non-interest-bearing liabilities: |
||||||||||||||||||||||||
Non-interest-bearing deposits |
928,788 | 789,231 | ||||||||||||||||||||||
Other liabilities |
57,427 | 74,482 | ||||||||||||||||||||||
Total liabilities |
6,401,739 | 6,666,394 | ||||||||||||||||||||||
Shareholders’ equity |
859,340 | 855,492 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity |
$ | 7,261,079 | $ | 7,521,886 | ||||||||||||||||||||
Net interest revenue |
$ | 59,281 | $ | 60,014 | ||||||||||||||||||||
Net interest-rate spread |
3.35 | % | 3.36 | % | ||||||||||||||||||||
Net interest margin (4) |
3.55 | % | 3.57 | % | ||||||||||||||||||||
| (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 $37.9 million in 2011 and $45.4 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. |
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 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) |
$ | 4,351,524 | $ | 181,422 | 5.57 | % | $ | 5,025,739 | $ | 211,399 | 5.62 | % | ||||||||||||
Taxable securities (3) |
1,926,365 | 42,210 | 2.92 | 1,458,120 | 45,857 | 4.19 | ||||||||||||||||||
Tax-exempt securities (1)(3) |
25,178 | 1,234 | 6.53 | 28,470 | 1,450 | 6.79 | ||||||||||||||||||
Federal funds sold and other interest-earning assets |
514,392 | 2,573 | .67 | 357,881 | 3,202 | 1.19 | ||||||||||||||||||
Total interest-earning assets |
6,817,459 | 227,439 | 4.46 | 6,870,210 | 261,908 | 5.09 | ||||||||||||||||||
Non-interest-earning assets: |
||||||||||||||||||||||||
Allowance for loan losses |
(145,689 | ) | (191,888 | ) | ||||||||||||||||||||
Cash and due from banks |
102,251 | 104,446 | ||||||||||||||||||||||
Premises and equipment |
178,694 | 180,936 | ||||||||||||||||||||||
Other assets (3) |
539,177 | 758,903 | ||||||||||||||||||||||
Total assets |
$ | 7,491,892 | $ | 7,722,607 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing deposits: |
||||||||||||||||||||||||
NOW |
$ | 1,313,752 | 3,191 | .32 | $ | 1,335,034 | 5,304 | .53 | ||||||||||||||||
Money market |
977,863 | 4,656 | .64 | 750,685 | 5,516 | .98 | ||||||||||||||||||
Savings |
194,433 | 193 | .13 | 184,420 | 250 | .18 | ||||||||||||||||||
Time less than $100,000 |
1,509,753 | 14,980 | 1.33 | 1,612,691 | 23,968 | 1.99 | ||||||||||||||||||
Time greater than $100,000 |
973,335 | 11,480 | 1.58 | 1,110,195 | 18,378 | 2.21 | ||||||||||||||||||
Brokered |
475,687 | 5,353 | 1.50 | 650,588 | 11,669 | 2.40 | ||||||||||||||||||
Total interest-bearing deposits |
5,444,823 | 39,853 | .98 | 5,643,613 | 65,085 | 1.54 | ||||||||||||||||||
Federal funds purchased and other borrowings |
102,711 | 3,197 | 4.16 | 103,697 | 3,162 | 4.08 | ||||||||||||||||||
Federal Home Loan Bank advances |
49,442 | 1,601 | 4.33 | 100,727 | 2,747 | 3.65 | ||||||||||||||||||
Long-term debt |
146,221 | 8,169 | 7.47 | 150,098 | 7,994 | 7.12 | ||||||||||||||||||
Total borrowed funds |
298,374 | 12,967 | 5.81 | 354,522 | 13,903 | 5.24 | ||||||||||||||||||
Total interest-bearing liabilities |
5,743,197 | 52,820 | 1.23 | 5,998,135 | 78,988 | 1.76 | ||||||||||||||||||
Non-interest-bearing liabilities: |
||||||||||||||||||||||||
Non-interest-bearing deposits |
884,417 | 755,845 | ||||||||||||||||||||||
Other liabilities |
69,131 | 64,622 | ||||||||||||||||||||||
Total liabilities |
6,696,745 | 6,818,602 | ||||||||||||||||||||||
Shareholders’ equity |
795,147 | 904,005 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity |
$ | 7,491,892 | $ | 7,722,607 | ||||||||||||||||||||
Net interest revenue |
$ | 174,619 | $ | 182,920 | ||||||||||||||||||||
Net interest-rate spread |
3.23 | % | 3.33 | % | ||||||||||||||||||||
Net interest margin (4) |
3.42 | % | 3.56 | % | ||||||||||||||||||||
| (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 $32.4 million in 2011 and $44.1 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 PresentationThird 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 Third Quarter Special Loan Loss ProvisionOther credit trends stable or improvingMargin Improving With Lower Deposit PricingStrong Core Deposit Growth 4 |
| LOAN PORTFOLIO & CREDIT QUALITY 5 |
| Geographic Diversity Loan Portfolio (total $4.11 billion) $ in millions 6 |
| Geographic Diversity Commercial Loans (total $2.37 billion) $ in millions 7 |
| 59% owner-occupiedSmall business, doctors, dentists, attorneys, CPAs$12 million project limitAverage Loan Size -$458 Composite CRE -$396 Owner Occupied -$630 Income Producing Portfolio Characteristics Commercial Real Estate (by loan type) 8 |
| Average loan size: $450k Portfolio Characteristics Commercial Construction (by loan type) 9 |
| Geographic Diversity Avg loan size: $43k Avg loan size: $94k Origination CharacteristicsNo broker loansPolicy Max LTV: 80-85%51% of HE Primary Lien Residential Mortgage (total $1.15 billion) $ in millions 10 |
| Geographic Diversity Developing Average Loan Size Construction Land Residential Construction (total $.47 billion) $ in millions 11 |
| Residential Construction - Total Company 12 |
| New Loans Funded - Category and Market 13 |
| Credit Quality 14 |
| Quarterly NPL Inflows Since 2009 ($mm) Com. Construction Resi. Mortgage Resi Construction Consumer Commercial Com. RE Total NPLs ($mm) 46.5% Decline from Peak86.2% Decline without SLR* NPL Inflow Trends 15 *SLR - Single Loan Relationship $76.6 million added in Q3; excluding SLR NPL Inflow was $26.7 million |
| Net Charge-offs by Loan Category 16 |
| Net Charge-offs by Market 17 |
| NPAs by Loan Category and Market 18 |
| 19 Financial Review |
| Core Earnings Summary 20 |
| 3Q10 4Q10 1Q11 2Q11 3Q11 Net Interest Margin 0.0357 0.0358 0.0341 0.0341 0.0355 0.0056 0.0047 0.0047 0.003 0.0029 Core margin -Up 14 bps vs. 2Q10 -Credit costs flatMaintained loan pricing Lowered core & CD pricing3Q Excess liquidity lowered Margin by 67 bps and 76 bps in Q2 NIM Characteristics 3.87% 3.71% NIM NIM - Core Credit(1)(2) (1) Excludes impact of reversal of interest on performing loans classified as held for sale - Q1 2011(2) Excluding impact of nonaccrual loans, OREO and interest reversals 3.84% 4.13% 4.05% 4.47% 4.51% Net Interest Margin 21 |
| Historically 8 to 12 bpsSignificant improvement with de-risking balance sheet first quarterCost 3Q11 vs. Historical - 17 bps (annual earnings impact of $11.2 million)1 bps = $660 thousand in NIR*Excludes bulk loan sale impact of 10 bps Credit CostsImpacting Margin ..47% ..30% ..29% ..46%* Lost Interest on C/Os Interest Reversals Carry Cost of NPAs ..56% Margin - Credit Costs 22 |
| Loan Pricing - New and Renewed 4.11 4.35 4.31 4.74 4.76 Loan Pricing Spreads Key Drivers of Net Interest Revenue / Margin 23 Holding loan pricing flatActively lowering deposit pricing Positive Impacton Margin |
| CD Pricing Deposit Pricing, Excluding Brokered Deposits 24 Note - CD pricing reflects the quarterly average of new and renewed pricing for each quarter. MMDA / NOW pricing reflects the deposit yield for each quarter |
| Deposit Mix (total $6.0 billion) 25 3Q11$6.0B 4Q08$7.0B 48% 30% |
| Core Deposit Growth - Category and Market 26 |
| Fee Revenue - Core 27 |
| Operating Expenses - Core 28 |
| Net Operating Loss 29 |
| Net Income (Loss) 30 |
| Capital Ratios 31 |
| APPENDIX 32 |
| Assets $7.2 BillionDeposits $6.0 Billion Banks 27Offices 105 United at a Glance 33 |
| 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 34 |
| Business and Operating Model Twenty-seven "community banks" Local CEOs with deep roots in their communitiesResources of $7.2 billion bankService is point of differentiation#1 in Customer Satisfaction according to Customer Service ProfilesJ.D. Power Customer Service ChampionRecognized 40 companies in the U.S.Only bank to be recognizedGolden rule of banking"The Bank That SERVICE Built"Ongoing customer surveys95% satisfaction rate in 2011Strategic footprint with substantial banking opportunitiesOperates in a number of the more demographically attractive markets in the U.S.Disciplined growth strategy Organic supported by de novos and selective acquisitions "Community bank service, large bank resources" 35 |
| Robust Demographics (fast growing markets) 36 |
| 1 FDIC deposit market share and rank as of 6/11 for markets where United takes deposits. Source: SNL and FDIC.2 Based on current quarter. Market Share Opportunities (excellent growth prospects) 37 |
| Leading Demographics 38 Rank Ticker Company(1) State Total Assets ($ B) Total Assets ($ B) 2010 - 2015 Population Growth (2) 2010 - 2015 Population Growth (2) 1 CFR Cullen/Frost Bankers, Inc. TX $18.5 $18.5 9.07 % 2 WAL Western Alliance Bancorporation AZ 6.5 6.5 7.60 3 FCNCA First Citizens Bancshares, Inc. NC 21.0 21.0 7.41 4 GBCI Glacier Bancorp, Inc. MT 7.0 7.0 7.19 5 PRSP Prosperity Bancshares, Inc. TX 9.7 9.7 7.18 6 IBOC International Bancshares Corporation TX 11.8 11.8 7.06 7 UCBI United Community Banks, Inc. GA 7.2 7.2 7.06 8 TCBI Texas Capital Bancshares, Inc. TX 6.7 6.7 6.37 9 HBHC Hancock Holding Company MS 19.8 19.8 6.29 10 FCBN First Citizens Bancorporation, Inc. SC 8.4 8.4 6.05 11 FIBK First Interstate BancSystem, Inc. MT 7.2 7.2 5.93 12 BOKF BOK Financial Corporation OK 24.2 24.2 5.91 13 SNV Synovus Financial Corp. GA 28.3 28.3 4.85 14 FHN First Horizon National Corporation TN 25.1 25.1 4.43 15 UMPQ Umpqua Holdings Corporation OR 11.5 11.5 4.28 Note: Financial information as of June 30, 2011 Note: Financial information as of June 30, 2011 Note: Financial information as of June 30, 2011 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2011 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2011 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2011 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2011 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2011 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2011 (2) Population growth weighted by county (cumulative) (2) Population growth weighted by county (cumulative) (2) Population growth weighted by county (cumulative) (2) Population growth weighted by county (cumulative) Data Source: SNL Financial Data Source: SNL Financial Data Source: SNL Financial Data Source: SNL Financial |
| 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 39 |
| Performing Classified Loans 40 |
| Business Mix Loans (at quarter-end) 41 |
| Loans - Markets Served (at quarter-end) 42 |
| 43 Residential Construction - North Georgia 43 |
| Residential Construction - Atlanta MSA 44 |
| Business Mix Loans (at year-end) 45 |
| Loans - Markets Served (at year-end) 46 |
| (in millions) Lending - Credit Summary Legal lending limit $220House lending limit 20Project lending limit 12Top 25 relationships 410Regional credit review - Standard underwriting 47 |
| NPAs by Loan Category, Market, and Activity 48 |
| Net Charge-offs by Category and Market 49 |
| Net Charge-offs by Category and Market Asset Disposition Plan as of March 31, 2011 50 |
| Credit Quality - Bulk Loan Sale Summary as of March 31, 2011 51 |
| Loans / Deposits - Liquidity 52 |
| Wholesale Borrowings - Liquidity 53 |
| Business Mix - Deposits (at quarter-end) 54 |
| Geographic Diversity $ in millions 3Q 10 3Q 11 Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee Core Transaction Deposits 55 |
| 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 56 |
| 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) 57 |
| Non-GAAP Reconciliation Tables 58 |
| Non-GAAP Reconciliation Tables 59 |
| Analyst Coverage 60 |
| United Community Banks, Inc. Investor PresentationThird Quarter 2011 Copyright 2011United Community Banks, Inc.All rights reserved. 61 |