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United Community Banks, Inc. Announces Results for Third Quarter 2008
United Community Banks, Inc. Announces Results for Third Quarter 2008
Oct 23, 2008
BLAIRSVILLE, GA, Oct 23, 2008 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)
-- Third quarter provision for loan losses of $76 million -- Allowance-to-loans ratio of 1.91%, up from 1.53% in second quarter -- Net loss for third quarter -- Capital levels strong
United Community Banks, Inc. (NASDAQ: UCBI) today announced a net loss of $39.9 million, or 84 cents per diluted share, for the third quarter of 2008 compared to net income of $22.5 million, or 46 cents per diluted share, for the third quarter of 2007. For the first nine months of 2008 the company had a net loss of $16.7 million, or 35 cents per diluted share, compared to net operating income of $63.0 million, or $1.36 per diluted share, for the first nine months of 2007.
"As we noted in our October 6 announcement, economic pressures on the housing market, particularly in Atlanta, had an impact on our loan portfolio in the third quarter," stated Jimmy Tallent, president and chief executive officer. "As a result, we increased our provision for loan losses, which covered our higher net charge-offs and strengthened our allowance-to-loans ratio. Despite the challenging environment, we were able to negotiate sales of some of our largest and most impaired assets. We will continue our strategy to deal aggressively with problem credits, with a goal of emerging as quickly as possible from this difficult credit cycle."
Loans were down $123 million to $5.83 billion from the third quarter of 2007 and down $103 million on a linked-quarter basis as the company continued to reduce its exposure to the residential construction and housing markets. At September 30, 2008, residential construction loans were $1.6 billion, or 27 percent of total loans, a decrease of $339 million from a year ago and $149 million from the second quarter. "Partially off-setting the decrease in residential construction loans, we had $49 million of growth this quarter in the residential mortgage and commercial areas of our loan portfolio," Tallent said. "We are making good progress in rebalancing our portfolio and further reducing our exposure to residential construction."
Total customer deposits increased $98 million from the third quarter of 2007 and were down $217 million compared to the second quarter of 2008. "We saw a similar seasonal trend last year between the second and third quarters, but some of the decrease in customer deposits this quarter certainly reflects the concerns people are having about the banking industry," stated Tallent. "In response, we launched a company-wide customer education program about our bank's safety and soundness and about customers' options for FDIC insurance. This effort helped assure that all customers who came to us with concerns about their deposits could have their questions answered quickly and reassuringly."
Taxable equivalent net interest revenue of $58.8 million reflected a decrease of $3.0 million from the second quarter of 2008 and $12.9 million from the third quarter of 2007. Taxable equivalent net interest margin was 3.17 percent compared with 3.32 percent for the second quarter of 2008 and 3.89 percent for the third quarter of 2007. "We continued to see margin compression in the third quarter," Tallent said. "A higher level of non-performing assets, continued competitive deposit pricing, and liquidity were key contributors."
The third quarter provision for loan losses was $76.0 million. Net charge-offs for the third quarter were $55.7 million compared with $14.3 million for the second quarter of 2008. Annualized net charge-offs to average loans was 377 basis points for the third quarter of 2008 compared with 97 basis points for the second quarter of 2008. "Net charge-offs increased significantly this quarter due to our aggressive efforts to move problem credits off our books," said Tallent. "Specifically, we sold non-performing assets totaling $66 million. Among these were 13 of our largest non-performing assets, totaling $42 million, at the very end of the third quarter. Additionally, we had verbal commitments on three non-performing assets that were written down this quarter. The losses on these 16 sales represented a significant portion of the $55.7 million in charge-offs for the third quarter." At quarter-end, non-performing assets totaled $177.7 million compared with $152.2 million at June 30, 2008. The ratio of non-performing assets to total assets at quarter-end and last quarter was 2.20 percent and 1.84 percent, respectively.
Fee revenue of $13.1 million was down $2.5 million from the third quarter of 2007 and down $2.0 million from the second quarter of 2008. Service charges and fees on deposit accounts of $8.2 million were up $316,000 from the third quarter of 2007 and up $214,000 from last quarter. Mortgage fees were down $708,000 from last year and $792,000 from last quarter due to the slowdown in the housing market. Consulting fees were down $654,000 from last year and $525,000 from last quarter due to weakness in the market that affected sales efforts and closing contracts. Other revenue was down $1.4 million from last year and $735,000 from the second quarter of 2008, primarily due to lower levels of earnings on bank-owned life insurance and deferred compensation plan assets.
Operating expenses of $57.0 million reflected an increase of $8.8 million from the third quarter of 2007 and $7.2 million from last quarter. Salaries and employee benefit costs of $28.6 million declined $1.1 million from last year due to lower incentive compensation. Other expenses of $15.3 million increased $10.1 million from the third quarter of 2007 and $7.7 million from last quarter primarily due to a higher level of foreclosed property costs. Foreclosed property costs, which included $8.3 million of write-downs this quarter, totaled $10.1 million for the third quarter compared with $591,000 a year ago and $2.9 million last quarter.
The board of directors approved the regular quarterly dividend that will be paid in shares of common stock on January 2, 2009 for shareholders of record as of December 10, 2008. The dividend rate is 0.7692 percent. "Each shareholder will receive one new share of common stock for every 130 shares held on December 10, 2008," said Tallent. "This is equal to the third quarter stock dividend. The stock dividend is an appropriate balance between the company's need to retain capital during these uncertain times and the needs of those shareholders who depend on a cash dividend. Shareholders can choose either to sell their new shares or continue to hold them, increasing their ownership at a time when the stock price is historically low."
At September 30, 2008, the company's capital ratios were as follows: Tier I Risk-Based Capital of 8.66 percent; Leverage of 6.69 percent; and, Total Risk-Based of 11.40 percent. Also, the tangible equity-to-assets ratio was 6.65 percent. "We will continue to seek loan and foreclosed property sales as we expect further deterioration in real estate valuations and pricing," said Tallent. "Our strong capital levels enable us to pursue this strategy and absorb higher credit costs without impairing our financial soundness. A company cannot have too much capital in this environment, so we will be alert for cost-effective opportunities to maintain and build our capital levels. And we recently executed on two of these opportunities. We issued $30 million of subordinated debt in August and we will close $12 million of internally offered trust preferred securities by the end of October. Both of these securities will increase our regulatory capital levels. In addition, we are exploring the Treasury's TARP Program that would allow us to issue preferred stock."
"We are of course disappointed with the third quarter loss," Tallent continued. "At the same time, we firmly believe that the company's ability to manage through this cycle, and to support our long-term success, have been strengthened by the actions taken during the quarter. As we look ahead, we expect to see ongoing credit challenges and upward pressure on the level of non-performing assets. Charge-offs will continue to be elevated as we work through our problem credits, but we certainly don't see a repeat of the third quarter-level charge-offs in the immediate future."
Conference Call
United Community Banks will hold a conference call on Thursday, October 23, 2008, at 11 a.m. EDT to discuss the contents of this news release and to share business highlights for the quarter. The telephone number for the conference call is (877) 591-4953 and the pass code is "UCBI." The conference call will also be available by web cast within the Investor Relations section of the company's web site 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 $8.1 billion and operates 27 community banks with 108 banking offices located 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 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 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 "Forward-Looking Statements" on page 4 of United Community Banks, Inc.'s annual report filed on Form 10-K with the Securities and Exchange Commission.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
2008
---------------------------------------
(in thousands, except per share Third Second First
data; taxable equivalent) Quarter Quarter Quarter
----------- ------------ ------------
INCOME SUMMARY
Interest revenue $ 112,510 $ 116,984 $ 129,041
Interest expense 53,719 55,231 62,754
----------- ------------ ------------
Net interest revenue 58,791 61,753 66,287
Provision for loan losses (1) 76,000 15,500 7,500
Fee revenue 13,121 15,105 14,197
----------- ------------ ------------
Total operating revenue (4,088) 61,358 72,984
Operating expenses 56,970 49,761 47,529
----------- ------------ ------------
Income (loss) before taxes (61,058) 11,597 25,455
Income tax expense (benefit) (21,184) 4,504 9,377
----------- ------------ ------------
Net operating income (loss) (39,874) 7,093 16,078
Fraud loss provision, net of tax
(1) - - -
----------- ------------ ------------
Net income (loss) $ (39,874) $ 7,093 $ 16,078
=========== ============ ============
OPERATING PERFORMANCE (1)
Earnings (loss) per common
share:
Basic $ (.84) $ .15 $ .34
Diluted (.84) .15 .34
Return on equity (2) (19.07)% 3.41% 7.85%
Return on tangible equity
(2)(3)(4) (30.43) 5.86 13.16
Return on assets (4) (1.95) .34 .78
Dividend payout ratio (10.71) 60.00 26.47
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings (loss) $ (.84) $ .15 $ .34
Diluted earnings (loss) (.84) .15 .34
Cash / stock dividends
declared .09 .09 .09
Book value 17.12 17.75 18.50
Tangible book value (3) 10.48 11.03 11.76
Key performance ratios:
Return on equity (2)(4) (19.07)% 3.41% 7.85%
Return on assets (1.95) .34 .78
Net interest margin (4) 3.17 3.32 3.55
Efficiency ratio 79.35 65.05 59.05
Dividend payout ratio (10.71) 60.00 26.47
Equity to assets 10.28 10.33 10.30
Tangible equity to assets (3) 6.65 6.77 6.73
ASSET QUALITY
Allowance for loan losses $ 111,299 $ 91,035 $ 89,848
Net charge-offs (1) 55,736 14,313 7,075
Non-performing loans 139,266 123,786 67,728
OREO 38,438 28,378 22,136
----------- ------------ ------------
Total non-performing assets 177,704 152,164 89,864
Allowance for loan losses to
loans (1) 1.91 % 1.53% 1.51%
Net charge-offs to average
loans (1)(4) 3.77 .97 .48
Non-performing assets to loans
and OREO 3.03 2.55 1.50
Non-performing assets to total
assets 2.20 1.84 1.07
AVERAGE BALANCES
Loans $ 5,889,168 $ 5,933,143 $ 5,958,296
Investment securities 1,454,740 1,507,240 1,485,515
Earning assets 7,384,287 7,478,018 7,491,480
Total assets 8,146,880 8,295,748 8,305,621
Deposits 6,597,339 6,461,361 6,051,069
Shareholders' equity 837,487 856,727 855,659
Common shares - basic 47,304 47,060 46,966
Common shares - diluted 47,479 47,249 47,272
AT PERIOD END
Loans $ 5,829,937 $ 5,933,141 $ 5,967,839
Investment securities 1,400,827 1,430,588 1,508,402
Total assets 8,072,543 8,264,051 8,386,255
Deposits 6,689,335 6,696,456 6,175,769
Shareholders' equity 816,880 837,890 871,452
Common shares outstanding 47,596 47,096 47,004
(1) Excludes effect of special $15 million fraud related provision for
loan losses recorded in the second quarter of 2007, an additional
$3 million provision in the fourth quarter of 2007, and $18 million
of related loan charge-offs recorded in the fourth quarter of 2007.
(2) Net income available to common shareholders, which excludes preferred
stock dividends, divided by average realized common equity, which
excludes accumulated other comprehensive income (loss).
(3) Excludes effect of acquisition related intangibles and associated
amortization.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
2007 Third
------------------------ Quarter
(in thousands, except per share Fourth Third 2008-2007
data; taxable equivalent) Quarter Quarter Change
----------- ----------- ----------
INCOME SUMMARY
Interest revenue $ 140,768 $ 144,884
Interest expense 71,038 73,203
----------- -----------
Net interest revenue 69,730 71,681 (18)%
Provision for loan losses (1) 26,500 3,700
Fee revenue 16,100 15,615 (16)
----------- -----------
Total operating revenue 59,330 83,596 (105)
Operating expenses 49,336 48,182 18
----------- -----------
Income (loss) before taxes 9,994 35,414 (272)
Income tax expense (benefit) 3,960 12,878
----------- -----------
Net operating income (loss) 6,034 22,536 (277)
Fraud loss provision, net of tax (1) 1,833 -
----------- -----------
Net income (loss) $ 4,201 $ 22,536 (277)
=========== ===========
OPERATING PERFORMANCE (1)
Earnings (loss) per common share:
Basic $ .13 $ .47 (279)
Diluted .13 .46 (283)
Return on equity (2) 2.89% 10.66%
Return on tangible equity
(2)(3)(4) 5.06 17.54
Return on assets (4) .29 1.11
Dividend payout ratio 69.23 19.15
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings (loss) $ .09 $ .47 (279)
Diluted earnings (loss) .09 .46 (283)
Cash / stock dividends declared .09 .09 0
Book value 17.70 17.51 (2)
Tangible book value (3) 10.92 10.81 (3)
Key performance ratios:
Return on equity (2)(4) 2.01% 10.66%
Return on assets .20 1.11
Net interest margin (4) 3.73 3.89
Efficiency ratio 57.67 55.34
Dividend payout ratio 100.00 19.15
Equity to assets 10.20 10.32
Tangible equity to assets (3) 6.58 6.65
ASSET QUALITY
Allowance for loan losses $ 89,423 $ 90,935
Net charge-offs (1) 13,012 5,236
Non-performing loans 28,219 46,783
OREO 18,039 16,554
----------- -----------
Total non-performing assets 46,258 63,337
Allowance for loan losses to loans
(1) 1.51% 1.28%
Net charge-offs to average loans
(1)(4) .87 .35
Non-performing assets to loans and
OREO .78 1.06
Non-performing assets to total
assets .56 .77
AVERAGE BALANCES
Loans $ 5,940,230 $ 5,966,933 (1)
Investment securities 1,404,796 1,308,192 11
Earning assets 7,424,992 7,332,492 1
Total assets 8,210,120 8,083,739 1
Deposits 6,151,476 6,246,319 6
Shareholders' equity 837,195 834,094 0
Common shares - basic 47,203 48,348
Common shares - diluted 47,652 48,977
AT PERIOD END
Loans $ 5,929,263 $ 5,952,749 (2)
Investment securities 1,356,846 1,296,826 8
Total assets 8,207,302 8,180,600 (1)
Deposits 6,075,951 6,154,308 9
Shareholders' equity 831,902 833,761 (2)
Common shares outstanding 46,903 47,542
(1) Excludes effect of special $15 million fraud related provision for
loan losses recorded in the second quarter of 2007, an additional
$3 million provision in the fourth quarter of 2007, and $18 million
of related loan charge-offs recorded in the fourth quarter of 2007.
(2) Net income available to common shareholders, which excludes preferred
stock dividends, divided by average realized common equity, which
excludes accumulated other comprehensive income (loss).
(3) Excludes effect of acquisition related intangibles and associated
amortization.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Nine
Months Ended YTD
(in thousands, except per share ------------------------- 2008-2007
data; taxable equivalent) 2008 2007 Change
----------- ------------ -----------
INCOME SUMMARY
Interest revenue $ 358,535 $ 410,150
Interest expense 171,704 205,396
----------- ------------
Net interest revenue 186,831 204,754 (9)%
Provision for loan losses (1) 99,000 11,100
Fee revenue 42,423 46,551 (9)
----------- ------------
Total operating revenue 130,254 240,205 (46)
Operating expenses 154,260 140,725 10
----------- ------------
Income (loss) before taxes (24,006) 99,480 (124)
Income tax expense (benefit) (7,303) 36,523
----------- ------------
Net operating income (loss) (16,703) 62,957 (127)
Fraud loss provision, net of tax
(1) - 9,165
----------- ------------
Net income (loss) $ (16,703) $ 53,792 (131)
=========== ============
OPERATING PERFORMANCE (1)
Earnings (loss) per common
share:
Basic $ (.35) $ 1.38 (125)
Diluted (.35) 1.36 (126)
Return on equity (2) (2.69)% 10.04%
Return on tangible equity
(2)(3)(4) (3.99) 17.42
Return on assets (4) (.27) 1.11
Dividend payout ratio (77.14) 19.57
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings (loss) $ (.35) $ 1.18 (130)
Diluted earnings (loss) (.35) 1.16 (130)
Cash / stock dividends
declared .27 .27 0
Book value 17.12 17.51 (2)
Tangible book value (3) 10.48 10.81 (3)
Key performance ratios:
Return on equity (2)(4) (2.69)% 10.04%
Return on assets (.27) .95
Net interest margin (4) 3.35 3.94
Efficiency ratio 67.43 56.14
Dividend payout ratio (77.14) 22.88
Equity to assets 10.30 9.39
Tangible equity to assets (3) 6.72 6.65
ASSET QUALITY
Allowance for loan losses $ 111,299 $ 90,935
Net charge-offs (1) 77,124 8,822
Non-performing loans 139,266 46,783
OREO 38,438 16,554
----------- ------------
Total non-performing assets 177,704 63,337
Allowance for loan losses to
loans (1) 1.91 % 1.28%
Net charge-offs to average
loans (1)(4) 1.74 .21
Non-performing assets to loans
and OREO 3.03 1.06
Non-performing assets to total
assets 2.20 .77
AVERAGE BALANCES
Loans $ 5,926,731 $ 5,665,314 5
Investment securities 1,482,397 1,235,183 20
Earning assets 7,451,017 6,951,573 7
Total assets 8,249,042 7,568,910 9
Deposits 6,370,753 5,987,225 6
Shareholders' equity 849,912 710,950 20
Common shares - basic 47,111 45,452
Common shares - diluted 47,334 46,235
AT PERIOD END
Loans $ 5,829,937 $ 5,952,749 (2)
Investment securities 1,400,827 1,296,826 8
Total assets 8,072,543 8,180,600 (1)
Deposits 6,689,335 6,154,308 9
Shareholders' equity 816,880 833,761 (2)
Common shares outstanding 47,596 47,542
(1) Excludes effect of special $15 million fraud related provision for
loan losses recorded in the second quarter of 2007, an additional
$3 million provision in the fourth quarter of 2007, and $18 million
of related loan charge-offs recorded in the fourth quarter of 2007.
(2) Net income available to common shareholders, which excludes preferred
stock dividends, divided by average realized common equity, which
excludes accumulated other comprehensive income (loss).
(3) Excludes effect of acquisition related intangibles and associated
amortization.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2008
-----------------------
Third Second First
(in millions) Quarter Quarter Quarter
------- ------- -------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,604 $ 1,584 $ 1,526
Commercial construction 509 522 548
Commercial & industrial 425 417 437
------- ------- -------
Total commercial 2,538 2,523 2,511
Residential construction 1,596 1,745 1,791
Residential mortgage 1,528 1,494 1,491
Consumer / installment 168 171 175
------- ------- -------
Total loans $ 5,830 $ 5,933 $ 5,968
======= ======= =======
LOANS BY MARKET
Atlanta MSA $ 1,800 $ 1,934 $ 1,978
Gainesville MSA 426 422 415
North Georgia 2,066 2,065 2,071
Western North Carolina 815 819 816
Coastal Georgia 458 436 439
East Tennessee 265 257 249
------- ------- -------
Total loans $ 5,830 $ 5,933 $ 5,968
======= ======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 516 $ 569 $ 583
Land loans 142 139 130
Lot loans 385 401 406
------- ------- -------
Total 1,043 1,109 1,119
------- ------- -------
House loans
Spec 393 450 460
Sold 160 186 212
------- ------- -------
Total 553 636 672
------- ------- -------
Total residential construction $ 1,596 $ 1,745 $ 1,791
======= ======= =======
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development $ 185 $ 232 $ 252
Land loans 47 50 50
Lot loans 103 117 117
------- ------- -------
Total 335 399 419
------- ------- -------
House loans
Spec 227 271 271
Sold 49 58 71
------- ------- -------
Total 276 329 342
------- ------- -------
Total residential construction $ 611 $ 728 $ 761
======= ======= =======
(1) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2007 Year
--------------- Linked over
Fourth Third Quarter Year
(in millions) Quarter Quarter Change(1) Change
------- ------- -------- -------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,476 $ 1,441 5 % 11 %
Commercial construction 527 531 (10) (4)
Commercial & industrial 418 408 8 4
------- -------
Total commercial 2,421 2,380 2 7
Residential construction 1,830 1,935 (34) (18)
Residential mortgage 1,502 1,459 9 5
Consumer / installment 176 179 (7) (6)
------- -------
Total loans $ 5,929 $ 5,953 (7) (2)
======= =======
LOANS BY MARKET
Atlanta MSA $ 2,002 $ 2,057 (28)% (12)%
Gainesville MSA 400 394 4 8
North Georgia 2,060 2,026 0 2
Western North Carolina 806 834 (2) (2)
Coastal Georgia 416 402 20 14
East Tennessee 245 240 12 10
------- -------
Total loans $ 5,929 $ 5,953 (7) (2)
======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 593 $ 592 (37)% (13)%
Land loans 126 125 9 14
Lot loans 407 403 (16) (4)
------- -------
Total 1,126 1,120 (24) (7)
------- -------
House loans
Spec 473 539 (51)% (27)%
Sold 231 276 (56) (42)
------- -------
Total 704 815 (52) (32)
------- -------
Total residential construction $ 1,830 $ 1,935 (34) (18)
======= =======
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development $ 258 $ 268 (81)% (31)%
Land loans 52 50 (24) (6)
Lot loans 117 123 (48) (16)
------- -------
Total 427 441 (64) (24)
------- -------
House loans
Spec 280 322 (65)% (30)%
Sold 77 104 (62) (53)
------- -------
Total 357 426 (64) (35)
------- -------
Total residential construction $ 784 $ 867 (64) (30)
======= =======
(1) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter 2008
-------------------------------
Nonaccrual Total
(in thousands) Loans OREO NPAs
----------- --------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 9,961 $ 854 $ 10,815
Commercial construction 2,924 375 3,299
Commercial & industrial 1,556 - 1,556
----------- --------- ---------
Total commercial 14,441 1,229 15,670
Residential construction 102,095 32,453 134,548
Residential mortgage 21,335 4,756 26,091
Consumer / installment 1,395 - 1,395
----------- --------- ---------
Total NPAs $ 139,266 $ 38,438 $ 177,704
=========== ========= =========
NPAs BY MARKET
Atlanta MSA $ 80,805 $ 27,011 $ 107,816
Gainesville MSA 15,105 648 15,753
North Georgia 20,812 8,337 29,149
Western North Carolina 13,432 1,509 14,941
Coastal Georgia 3,682 601 4,283
East Tennessee 5,430 332 5,762
----------- --------- ---------
Total NPAs $ 139,266 $ 38,438 $ 177,704
=========== ========= =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Second Quarter 2008
-------------------------------
Nonaccrual Total
(in thousands) Loans OREO NPAs
----------- --------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 4,610 $ 593 $ 5,203
Commercial construction 3,027 1,859 4,886
Commercial & industrial 2,950 - 2,950
----------- --------- ---------
Total commercial 10,587 2,452 13,039
Residential construction 90,283 22,075 112,358
Residential mortgage 21,792 3,851 25,643
Consumer / installment 1,124 - 1,124
----------- --------- ---------
Total NPAs $ 123,786 $ 28,378 $ 152,164
=========== ========= =========
NPAs BY MARKET
Atlanta MSA $ 89,327 $ 15,196 $ 104,523
Gainesville MSA 4,885 12 4,897
North Georgia 16,117 8,277 24,394
Western North Carolina 9,838 990 10,828
Coastal Georgia 1,575 3,871 5,446
East Tennessee 2,044 32 2,076
----------- --------- ---------
Total NPAs $ 123,786 $ 28,378 $ 152,164
=========== ========= =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2008
----------------------------
Nonaccrual Total
(in thousands) Loans OREO NPAs
---------- -------- --------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 4,070 $ 653 $ 4,723
Commercial construction 1,514 961 2,475
Commercial & industrial 1,936 - 1,936
---------- -------- --------
Total commercial 7,520 1,614 9,134
Residential construction 42,249 16,486 58,735
Residential mortgage 16,965 4,036 21,001
Consumer / installment 994 - 994
---------- -------- --------
Total NPAs $ 67,728 $ 22,136 $ 89,864
========== ======== ========
NPAs BY MARKET
Atlanta MSA $ 37,442 $ 16,121 $ 53,563
Gainesville MSA 4,584 909 5,493
North Georgia 11,969 3,385 15,354
Western North Carolina 7,775 1,405 9,180
Coastal Georgia 5,266 95 5,361
East Tennessee 692 221 913
---------- -------- --------
Total NPAs $ 67,728 $ 22,136 $ 89,864
========== ======== ========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter Second Quarter First Quarter
2008 2008 2008
----------------- ----------------- -----------------
Net Net Net
Charge- Charge- Charge-
Offs to Offs to Offs to
Net Average Net Average Net Average
Charge- Loans Charge- Loans Charge- Loans
(in thousands) Offs (1) Offs (1) Offs (1)
-------- ------- -------- ------- -------- -------
NET CHARGE-OFFS BY
CATEGORY
Commercial (sec. by
RE) $ 257 .06% $ 424 .11% $ 630 .17%
Commercial
construction 225 .17 125 .09 - -
Commercial &
industrial 1,018 .96 398 .38 304 .29
-------- -------- --------
Total commercial 1,500 .24 947 .15 934 .15
Residential
construction 50,228 11.94 10,343 2.36 4,665 1.03
Residential mortgage 3,332 .88 2,576 .70 1,011 .27
Consumer /
installment 676 1.58 447 1.05 465 1.06
-------- -------- --------
Total NPAs $ 55,736 3.77 $ 14,313 .97 $ 7,075 .48
======== ======== ========
NET CHARGE-OFFS BY
MARKET
Atlanta MSA $ 48,313 10.08% $ 10,682 2.22% $ 4,647 .94%
Gainesville MSA 1,470 1.49 360 .34 323 .32
North Georgia 4,567 .88 1,829 .36 1,280 .25
Western North
Carolina 855 .42 279 .14 57 .03
Coastal Georgia 249 .22 980 .90 42 .04
East Tennessee 282 .43 183 .29 726 1.18
-------- -------- --------
Total NPAs $ 55,736 3.77 $ 14,313 .97 $ 7,075 .48
======== ======== ========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
2008
-----------------------------------
Third Second First
Quarter Quarter Quarter
--------- ---------- ----------
Special provision for fraud
related loan losses $ - $ - $ -
--------- ---------- ----------
Income tax effect of
special provision - - -
--------- ---------- ----------
After-tax effect
of special provision $ - $ - $ -
========= ========== ==========
Net Income (Loss)
Reconciliation
Operating net income (loss) $ (39,874) $ 7,093 $ 16,078
After-tax effect of special
provision and
merger-related charges - - -
--------- ---------- ----------
Net income (loss) (GAAP) $ (39,874) $ 7,093 $ 16,078
========= ========== ==========
Basic Earnings (Loss) Per
Share Reconciliation
Basic operating earnings
(loss) per share $ (.84) $ .15 $ .34
Per share effect of special
provision and
merger-related charges - - -
--------- ---------- ----------
Basic earnings (loss)
per share (GAAP) $ (.84) $ .15 $ .34
========= ========== ==========
Diluted Earnings (Loss) Per
Share Reconciliation
Diluted operating earnings
(loss) per share $ (.84) $ .15 $ .34
Per share effect of special
provision and
merger-related charges - - -
--------- ---------- ----------
Diluted earnings
(loss) per share (GAAP) $ (.84) $ .15 $ .34
========= ========== ==========
Provision for Loan Losses
Reconciliation
Operating provision for
loan losses $ 76,000 $ 15,500 $ 7,500
Special provision for fraud
related loan losses - - -
--------- ---------- ----------
Provision for loan
losses (GAAP) $ 76,000 $ 15,500 $ 7,500
========= ========== ==========
Nonperforming Assets
Reconciliation
Nonperforming assets
excluding fraud-related
assets $ 174,227 $ 148,219 $ 85,182
Fraud-related loans and
OREO included in
nonperforming assets 3,477 3,945 4,682
--------- ---------- ----------
Nonperforming assets
(GAAP) $ 177,704 $ 152,164 $ 89,864
========= ========== ==========
Allowance for Loan Losses
Reconciliation
Allowance for loan losses
excluding special
fraud-related allowance $ 111,299 $ 91,035 $ 89,848
Fraud-related allowance for
loan losses - - -
--------- ---------- ----------
Allowance for loan
losses (GAAP) $ 111,299 $ 91,035 $ 89,848
========= ========== ==========
Net Charge-Offs
Reconciliation
Net charge offs excluding
charge off of
fraud-related loans $ 55,736 $ 14,313 $ 7,075
Fraud-related loans charged
off - - -
--------- ---------- ----------
Net charge offs (GAAP) $ 55,736 $ 14,313 $ 7,075
========= ========== ==========
Allowance for Loan Losses
to Loans Ratio
Reconciliation
Allowance for loan losses
to loans ratio excluding
fraud-related allowance 1.91% 1.53% 1.51%
Portion of allowance
assigned to fraud-related
loans - - -
--------- ---------- ----------
Allowance for loan
losses to loans ratio
(GAAP) 1.91% 1.53% 1.51%
========= ========== ==========
Nonperforming Assets to
Total Assets Ratio
Reconciliation
Nonperforming assets to
total assets ratio
excluding fraud-related
assets 2.16% 1.79% 1.02%
Fraud-related nonperforming
assets .04 .05 .05
--------- ---------- ----------
Nonperforming assets
to total assets ratio
(GAAP) 2.20% 1.84% 1.07%
========= ========== ==========
Net Charge Offs to Average
Loans Ratio Reconciliation
Net charge offs to average
loans ratio excluding
fraud-related loans 3.77% .97% .48%
Charge offs of
fraud-related loans - - -
--------- ---------- ----------
Net charge offs to
average loans ratio
(GAAP) 3.77% .97% .48%
========= ========== ==========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
For the Nine Months
2007 Ended
---------------------- September 30
Fourth Third ----------------------
Quarter Quarter 2008 2007
---------- ---------- ---------- ----------
Special provision for fraud
related loan losses $ 3,000 $ - $ - $ 15,000
---------- ---------- ---------- ----------
Income tax effect of
special provision 1,167 - - 5,835
---------- ---------- ---------- ----------
After-tax effect
of special provision $ 1,833 $ - $ - $ 9,165
========== ========== ========== ==========
Net Income (Loss)
Reconciliation
Operating net income (loss) $ 6,034 $ 22,536 $ (16,703) $ 62,957
After-tax effect of special
provision and
merger-related charges (1,833) - - (9,165)
---------- ---------- ---------- ----------
Net income (loss) (GAAP) $ 4,201 $ 22,536 $ (16,703) $ 53,792
========== ========== ========== ==========
Basic Earnings (Loss) Per
Share Reconciliation
Basic operating earnings
(loss) per share $ .13 $ .47 $ (.35) $ 1.38
Per share effect of special
provision and
merger-related charges (.04) - - (.20)
---------- ---------- ---------- ----------
Basic earnings (loss)
per share (GAAP) $ .09 $ .47 $ (.35) $ 1.18
========== ========== ========== ==========
Diluted Earnings (Loss) Per
Share Reconciliation
Diluted operating earnings
(loss) per share $ .13 $ .46 $ (.35) $ 1.36
Per share effect of special
provision and
merger-related charges (.04) - - (.20)
---------- ---------- ---------- ----------
Diluted earnings
(loss) per share (GAAP) $ .09 $ .46 $ (.35) $ 1.16
========== ========== ========== ==========
Provision for Loan Losses
Reconciliation
Operating provision for
loan losses $ 26,500 $ 3,700 $ 99,000 $ 11,100
Special provision for fraud
related loan losses 3,000 - - 15,000
---------- ---------- ---------- ----------
Provision for loan
losses (GAAP) $ 29,500 $ 3,700 $ 99,000 $ 26,100
========== ========== ========== ==========
Nonperforming Assets
Reconciliation
Nonperforming assets
excluding fraud-related
assets $ 40,956 $ 39,761 $ 174,227 $ 39,761
Fraud-related loans and
OREO included in
nonperforming assets 5,302 23,576 3,477 23,576
---------- ---------- ---------- ----------
Nonperforming assets
(GAAP) $ 46,258 $ 63,337 $ 177,704 $ 63,337
========== ========== ========== ==========
Allowance for Loan Losses
Reconciliation
Allowance for loan losses
excluding special
fraud-related allowance $ 89,423 $ 75,935 $ 111,299 $ 75,935
Fraud-related allowance for
loan losses - 15,000 - 15,000
---------- ---------- ---------- ----------
Allowance for loan
losses (GAAP) $ 89,423 $ 90,935 $ 111,299 $ 90,935
========== ========== ========== ==========
Net Charge-Offs
Reconciliation
Net charge offs excluding
charge off of
fraud-related loans $ 13,012 $ 5,236 $ 77,124 $ 8,822
Fraud-related loans charged
off 18,000 - - -
---------- ---------- ---------- ----------
Net charge offs (GAAP) $ 31,012 $ 5,236 $ 77,124 $ 8,822
========== ========== ========== ==========
Allowance for Loan Losses
to Loans Ratio
Reconciliation
Allowance for loan losses
to loans ratio excluding
fraud-related allowance 1.51% 1.28% 1.91% 1.28%
Portion of allowance
assigned to fraud-related
loans - .25 - .25
---------- ---------- ---------- ----------
Allowance for loan
losses to loans ratio
(GAAP) 1.51% 1.53% 1.91% 1.53%
========== ========== ========== ==========
Nonperforming Assets to
Total Assets Ratio
Reconciliation
Nonperforming assets to
total assets ratio
excluding fraud-related
assets .50% .49% 2.16% .49%
Fraud-related nonperforming
assets .06 .28 .04 .28
---------- ---------- ---------- ----------
Nonperforming assets
to total assets ratio
(GAAP) .56% .77% 2.20% .77%
========== ========== ========== ==========
Net Charge Offs to Average
Loans Ratio Reconciliation
Net charge offs to average
loans ratio excluding
fraud-related loans .87% .35% 1.74% .21%
Charge offs of
fraud-related loans 1.20 - - -
---------- ---------- ---------- ----------
Net charge offs to
average loans ratio
(GAAP) 2.07% .35% 1.74% .21%
========== ========== ========== ==========
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended
September 30,
--------------------
(in thousands, except per share data) 2008 2007
--------- ----------
Interest revenue:
Loans, including fees $ 93,233 $ 127,213
Investment securities:
Taxable 18,258 16,637
Tax exempt 348 428
Federal funds sold and deposits in banks 100 134
--------- ----------
Total interest revenue 111,939 144,412
--------- ----------
Interest expense:
Deposits:
NOW 6,778 12,046
Money market 2,296 5,002
Savings 153 553
Time 39,044 42,862
--------- ----------
Total deposit interest expense 48,271 60,463
Federal funds purchased, repurchase agreements, &
other short-term borrowings 1,116 4,738
Federal Home Loan Bank advances 2,105 5,902
Long-term debt 2,227 2,100
--------- ----------
Total interest expense 53,719 73,203
--------- ----------
Net interest revenue 58,220 71,209
Provision for loan losses 76,000 3,700
--------- ----------
Net interest revenue after provision for loan
losses (17,780) 67,509
--------- ----------
Fee revenue:
Service charges and fees 8,171 7,855
Mortgage loan and other related fees 1,410 2,118
Consulting fees 1,727 2,381
Brokerage fees 905 895
Securities gains, net 120 225
Losses on prepayment of borrowings - -
Other 788 2,141
--------- ----------
Total fee revenue 13,121 15,615
--------- ----------
Total revenue (4,659) 83,124
--------- ----------
Operating expenses:
Salaries and employee benefits 28,626 29,698
Communications and equipment 3,909 3,936
Occupancy 3,905 3,617
Advertising and public relations 1,399 1,537
Postage, printing and supplies 1,493 1,479
Professional fees 1,596 1,920
Amortization of intangibles 752 771
Other 15,290 5,224
--------- ----------
Total operating expenses 56,970 48,182
--------- ----------
Income (loss) before income taxes (61,629) 34,942
Income tax expense (benefit) (21,755) 12,406
--------- ----------
Net income (loss) $ (39,874) $ 22,536
========= ==========
Net income (loss) available to common shareholders $ (39,878) $ 22,532
========= ==========
Earnings (loss) per common share:
Basic $ (.84) $ .47
Diluted (.84) .46
Dividends per common share .09 .09
Weighted average common shares outstanding:
Basic 47,304 48,348
Diluted 47,479 48,977
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Nine Months Ended
September 30,
--------------------
(in thousands, except per share data) 2008 2007
--------- ---------
Interest revenue:
Loans, including fees $ 299,550 $ 361,085
Investment securities:
Taxable 55,765 46,081
Tax exempt 1,140 1,313
Federal funds sold and deposits in banks 372 272
--------- ---------
Total interest revenue 356,827 408,751
--------- ---------
Interest expense:
Deposits:
NOW 22,581 34,143
Money market 7,519 11,082
Savings 560 1,236
Time 116,756 126,466
--------- ---------
Total deposit interest expense 147,416 172,927
Federal funds purchased, repurchase agreements, &
other short-term borrowings 7,254 10,226
Federal Home Loan Bank advances 10,668 15,738
Long-term debt 6,366 6,505
--------- ---------
Total interest expense 171,704 205,396
--------- ---------
Net interest revenue 185,123 203,355
Provision for loan losses 99,000 26,100
--------- ---------
Net interest revenue after provision for loan
losses 86,123 177,255
--------- ---------
Fee revenue:
Service charges and fees 23,941 23,083
Mortgage loan and other related fees 5,575 6,817
Consulting fees 5,786 6,369
Brokerage fees 2,812 3,031
Securities gains, net 477 1,818
Losses on prepayment of borrowings - (1,164)
Other 3,832 6,597
--------- ---------
Total fee revenue 42,423 46,551
--------- ---------
Total revenue 128,546 223,806
--------- ---------
Operating expenses:
Salaries and employee benefits 86,133 88,037
Communications and equipment 11,593 11,593
Occupancy 11,325 10,124
Advertising and public relations 4,759 5,651
Postage, printing and supplies 4,533 4,819
Professional fees 5,196 5,409
Amortization of intangibles 2,264 1,968
Other 28,457 13,124
--------- ---------
Total operating expenses 154,260 140,725
--------- ---------
Income (loss) before income taxes (25,714) 83,081
Income tax expense (benefit) (9,011) 29,289
--------- ---------
Net income (loss) $ (16,703) $ 53,792
========= =========
Net income (loss) available to common
shareholders $ (16,715) $ 53,778
========= =========
Earnings (loss) per common share:
Basic $ (.35) $ 1.18
Diluted (.35) 1.16
Dividends per common share .27 .27
Weighted average common shares outstanding:
Basic 47,111 45,452
Diluted 47,334 46,235
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
September 30, December 31, September 30,
(in thousands, except share 2008 2007 2007
and per share data) ------------- ------------- -------------
(unaudited) (audited) (unaudited)
ASSETS
Cash and due from banks $ 126,033 $ 157,549 $ 162,710
Interest-bearing deposits
in banks 40,707 62,074 75,745
------------- ------------- -------------
Cash and cash equivalents 166,740 219,623 238,455
Securities available for
sale 1,400,827 1,356,846 1,296,826
Mortgage loans held for sale 17,763 28,004 23,717
Loans, net of unearned income 5,829,937 5,929,263 5,952,749
Less allowance for loan
losses 111,299 89,423 90,935
------------- ------------- -------------
Loans, net 5,718,638 5,839,840 5,861,814
Premises and equipment, net 179,727 180,088 174,918
Accrued interest receivable 47,920 62,828 67,385
Goodwill and other intangible
assets 322,544 325,305 326,080
Other assets 218,384 194,768 191,405
------------- ------------- -------------
Total assets $ 8,072,543 $ 8,207,302 $ 8,180,600
============= ============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Deposits:
Demand $ 680,196 $ 700,941 $ 737,357
NOW 1,393,928 1,474,818 1,464,956
Money market 394,358 452,917 495,092
Savings 179,274 186,392 195,132
Time:
Less than $100,000 1,814,926 1,573,604 1,595,515
Greater than $100,000 1,481,512 1,364,763 1,358,302
Brokered 745,141 322,516 307,954
------------- ------------- -------------
Total deposits 6,689,335 6,075,951 6,154,308
Federal funds purchased,
repurchase agreements,
and other short-term
borrowings 119,699 638,462 502,081
Federal Home Loan Bank
advances 285,362 519,782 519,381
Long-term debt 137,996 107,996 107,996
Accrued expenses and other
liabilities 23,271 33,209 63,073
------------- ------------- -------------
Total liabilities 7,255,663 7,375,400 7,346,839
------------- ------------- -------------
Shareholders' equity:
Preferred stock, $1 par
value; $10 stated value;
10,000,000 shares
authorized; 25,800, 25,800
and 25,800 shares
issued and outstanding 258 258 258
Common stock, $1 par
value; 100,000,000
shares authorized;
48,809,301, 48,809,301
and 48,809,301 shares
issued 48,809 48,809 48,809
Common stock issuable;
116,567, 73,250 and
66,366 shares 2,762 2,100 1,954
Capital surplus 457,779 462,881 462,499
Retained earnings 317,544 347,391 347,478
Treasury stock;
1,213,182, 1,905,921 and
1,266,935 shares, at cost (27,024) (43,798) (30,969)
Accumulated other
comprehensive income 16,752 14,261 3,732
------------- ------------- -------------
Total shareholders' equity 816,880 831,902 833,761
------------- ------------- -------------
Total liabilities and
shareholders' equity $ 8,072,543 $ 8,207,302 $ 8,180,600
============= ============= =============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
2008
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,889,168 $ 93,270 6.30%
Taxable securities (3) 1,422,321 18,258 5.13
Tax-exempt securities (1)(3) 32,419 573 7.07
Federal funds sold and other
interest-earning assets 40,379 409 4.05
----------- ------------
Total interest-earning assets 7,384,287 112,510 6.07
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (93,687)
Cash and due from banks 111,741
Premises and equipment 180,825
Other assets (3) 563,714
-----------
Total assets $ 8,146,880
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,463,744 $ 6,778 1.84
Money market 421,626 2,296 2.17
Savings 182,525 153 .33
Time less than $100,000 1,779,550 17,812 3.98
Time greater than $100,000 1,530,719 15,825 4.11
Brokered 530,705 5,407 4.05
----------- ------------
Total interest-bearing
deposits 5,908,869 48,271 3.25
----------- ------------
Federal funds purchased and
other borrowings 256,742 1,116 1.73
Federal Home Loan Bank advances 286,540 2,105 2.92
Long-term debt 118,756 2,227 7.46
----------- ------------
Total borrowed funds 662,038 5,448 3.27
----------- ------------
Total interest-bearing
liabilities 6,570,907 53,719 3.25
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 688,470
Other liabilities 50,016
-----------
Total liabilities 7,309,393
Shareholders' equity 837,487
-----------
Total liabilities and
shareholders' equity $ 8,146,880
===========
Net interest revenue $ 58,791
============
Net interest-rate spread 2.82%
===========
Net interest margin 3.17%
===========
(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.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized losses of $11.7 million in 2008 and $13.3 million in 2007
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 Three Months Ended September 30,
2007
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,966,933 $ 126,992 8.44%
Taxable securities (3) 1,266,609 16,637 5.25
Tax-exempt securities (1)(3) 41,583 704 6.77
Federal funds sold and other
interest-earning assets 57,367 551 3.84
----------- ------------
Total interest-earning assets 7,332,492 144,884 7.85
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (93,832)
Cash and due from banks 141,536
Premises and equipment 173,605
Other assets (3) 529,938
-----------
Total assets $ 8,083,739
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,431,168 $ 12,046 3.34
Money market 496,005 5,002 4.00
Savings 201,031 553 1.09
Time less than $100,000 1,624,698 20,151 4.92
Time greater than $100,000 1,391,139 18,192 5.19
Brokered 358,614 4,519 5.00
----------- ------------
Total interest-bearing
deposits 5,502,655 60,463 4.36
----------- ------------
Federal funds purchased and
other borrowings 348,472 4,738 5.39
Federal Home Loan Bank advances 474,555 5,902 4.93
Long-term debt 119,596 2,100 6.97
----------- ------------
Total borrowed funds 942,623 12,740 5.36
----------- ------------
Total interest-bearing
liabilities 6,445,278 73,203 4.51
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 743,664
Other liabilities 60,703
-----------
Total liabilities 7,249,645
Shareholders' equity 834,094
-----------
Total liabilities and
shareholders' equity $ 8,083,739
===========
Net interest revenue $ 71,681
============
Net interest-rate spread 3.34%
===========
Net interest margin 3.89%
===========
(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.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized losses of $11.7 million in 2008 and $13.3 million in 2007
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,
2008
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,926,731 $ 299,601 6.75%
Taxable securities (3) 1,447,409 55,765 5.14
Tax-exempt securities (1)(3) 34,988 1,876 7.15
Federal funds sold and other
interest-earning assets 41,889 1,292 4.11
----------- ------------
Total interest-earning assets 7,451,017 358,534 6.43
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (93,165)
Cash and due from banks 136,920
Premises and equipment 181,210
Other assets (3) 573,060
-----------
Total assets $ 8,249,042
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,476,998 $ 22,581 2.04
Money market 427,676 7,519 2.35
Savings 184,713 560 .40
Time less than $100,000 1,659,308 53,320 4.29
Time greater than $100,000 1,460,277 48,330 4.42
Brokered 480,166 15,106 4.20
----------- ------------
Total interest-bearing
deposits 5,689,138 147,416 3.46
----------- ------------
Federal funds purchased and
other borrowings 396,798 7,254 2.44
Federal Home Loan Bank advances 452,826 10,668 3.15
Long-term debt 111,607 6,366 7.62
----------- ------------
Total borrowed funds 961,231 24,288 3.38
----------- ------------
Total interest-bearing
liabilities 6,650,369 171,704 3.45
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 681,615
Other liabilities 67,146
-----------
Total liabilities 7,399,130
Shareholders' equity 849,912
-----------
Total liabilities and
shareholders' equity $ 8,249,042
===========
Net interest revenue $ 186,830
============
Net interest-rate spread 2.98%
===========
Net interest margin 3.35%
===========
(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.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $5.7 million in 2008 and pretax unrealized losses
of $10.4 million in 2007 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,
2007
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,665,314 $ 360,430 8.51%
Taxable securities (3) 1,192,815 46,081 5.15
Tax-exempt securities (1)(3) 42,368 2,160 6.80
Federal funds sold and other
interest-earning assets 51,076 1,479 3.86
----------- ------------
Total interest-earning assets 6,951,573 410,150 7.89
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (78,541)
Cash and due from banks 130,816
Premises and equipment 159,674
Other assets (3) 405,388
-----------
Total assets $ 7,568,910
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,378,200 $ 34,143 3.31
Money market 371,716 11,082 3.99
Savings 187,693 1,236 .88
Time less than $100,000 1,631,243 59,925 4.91
Time greater than $100,000 1,383,004 54,000 5.22
Brokered 342,162 12,541 4.90
----------- ------------
Total interest-bearing
deposits 5,294,018 172,927 4.37
----------- ------------
Federal funds purchased and
other borrowings 255,115 10,226 5.36
Federal Home Loan Bank advances 430,151 15,738 4.89
Long-term debt 115,390 6,505 7.54
----------- ------------
Total borrowed funds 800,656 32,469 5.42
----------- ------------
Total interest-bearing
liabilities 6,094,674 205,396 4.51
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 693,207
Other liabilities 70,079
-----------
Total liabilities 6,857,960
Shareholders' equity 710,950
-----------
Total liabilities and
shareholders' equity $ 7,568,910
===========
Net interest revenue $ 204,754
============
Net interest-rate spread 3.38%
===========
Net interest margin 3.94%
===========
(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.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $5.7 million in 2008 and pretax unrealized losses
of $10.4 million in 2007 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.
For more information: Rex S. Schuette Chief Financial Officer (706) 781-2266 Email Contact
SOURCE: United Community Banks, Inc.
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