United Community Banks, Inc. Reports Diluted Earnings per Share of 15 Cents for Second Quarter 2008
BLAIRSVILLE, GA, Jul 24, 2008 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI) today announced diluted operating earnings per share of 15 cents for the second quarter of 2008, compared to 46 cents per share for the second quarter of 2007. Total operating revenue on a taxable equivalent basis was $61.4 million for the quarter, compared to $80.8 million for the second quarter of 2007. Net operating income was $7.1 million, compared to $21.1 million in the second quarter of 2007. Operating return on tangible equity was 5.86 percent and return on assets was .34 percent for the second quarter of 2008, compared to 17.52 percent and 1.12 percent a year ago, respectively. Second quarter 2007 financial results included a $15 million special provision for fraud-related loan losses resulting from a failed real estate development near Spruce Pine, North Carolina. Because this was a fraud-related matter and an isolated and non-recurring event, the company has shown the special provision separate from the regular provision for loan losses and has highlighted operating earnings measures, which excluded this provision, to provide a better understanding of our underlying earnings and credit trends.
"While our operating environment continued to be very challenging in the second quarter, our solid earnings base, supported by experienced management and locations in growing markets, continues to sustain our company and keep it positioned to manage through this cycle. Despite this, we were able to cover our credit losses and strengthen our capital ratios," stated Jimmy Tallent, president and chief executive officer. "We continued to actively manage our loan portfolio, quickly identifying problem loans and aggressively taking action to move these loans and assets off our books."
Loans were down $66 million to $5.93 billion from the second quarter of 2007, and down $35 million on a linked quarter basis as the company continued to reduce its exposure to the residential construction and housing markets. At June 30, 2008, residential construction loans were $1.75 billion, or 29 percent of total loans, a decrease of $268 million from a year ago and $46 million from last quarter.
"Total loans declined from last quarter and a year ago, primarily due to a decrease in residential construction loans and we expect that trend to continue," Tallent said. "However, we did see solid growth in both commercial and residential mortgage loans of 6 percent and we expect to see slow loan growth for several more quarters. At the same time, we are very pleased with our continued progress in reducing exposure to residential construction and creating a more balanced risk portfolio."
Total customer deposits increased $148 million, or 2 percent, over second quarter 2007 and increased $417 million, or 29 percent on an annualized basis, over the prior quarter. "We ran a very successful program this quarter to increase liquidity through the promotion of customer time deposits that added $407 million to our liquidity during the second quarter," stated Tallent. "The time deposit promotion did not erode core deposits, which grew by a modest amount."
Taxable equivalent net interest revenue of $61.8 million reflected a decrease of $6.2 million from the second quarter of 2007. Taxable equivalent net interest margin was 3.32 percent, compared with 3.55 percent for the first quarter of 2008 and 3.94 percent for the second quarter of 2007. "We continued to see margin compression in the second quarter," Tallent said. "Continued competitive deposit pricing, coupled with the full quarter impact of declining rates and a higher level of non-performing assets were key contributors."
The second quarter provision for loan losses was $15.5 million. Net charge-offs for the second quarter were $14.3 million compared with $7.1 million for the first quarter of 2008 and $2.1 million for the second quarter of 2007. Annualized net charge-offs to average loans was 97 basis points for the second quarter of 2008 compared to 48 basis points for the first quarter of 2008 and 15 basis points for the second quarter of 2007.
"Net charge-offs increased this quarter as we moved problem credits off our books," said Tallent. "With the higher level of non-performing loans we expect foreclosure activity will rise for the next two quarters as we move non-performing loans through the collection process. We expect charge-offs to increase as a result."
At quarter-end, non-performing assets totaled $152.2 million, compared with $89.9 million at March 31, 2008 and $43.6 million at June 30, 2007. The ratio of non-performing assets to total assets at the end of each quarter was 1.84, 1.07 and .54 percent, respectively.
"The significant rise in non-performing assets this quarter is coming from the loan migration process," stated Tallent. "While non-performing assets were up sharply, most loans were already classified in the prior quarter and moved to non-performing status this quarter. Total classified loans were flat compared to the first quarter. We now are seeing the migration of these problem assets through the collection process."
"A positive development in credit quality this quarter was a decrease in loans past due more than 30 days to 1.10 percent of loans from 1.39 percent in the first quarter," added Tallent. "Although this was good to see, we know that the uncertainties in the economy will continue and we expect to see further increases in non-performing assets and credit costs this year."
Fee revenue of $15.1 million was down $1.4 million from the second quarter of 2007 and increased $900,000 from last quarter. Service charges and fees on deposit accounts of $8.0 million were up slightly from last quarter and flat with the second quarter of 2007. Mortgage fees were up $239,000 from last quarter, mostly seasonal, but down $274,000 from last year due to the slowdown in the housing market. Brokerage fees were down $378,000 from last year due to market conditions. Other fee revenue of $1.5 million was down $925,000 from last year primarily due to gains realized last year from the sale of foreclosed properties and a lower level of earnings on bank-owned life insurance and deferred compensation plan assets.
Operating expenses of $49.8 million reflected an increase of $2.1 million, or 4 percent, from the second quarter of 2007. Salaries and employee benefit costs of $28.8 million declined $1.3 million, or 4 percent, from last year due to lower incentive accruals. Other expenses of $7.6 million were $3.5 million higher than a year ago due to additional write-downs and related costs on foreclosed properties of $2.5 million and an increase in FDIC insurance premiums of $900,000. "We have continued to manage our salary costs, and have held staff levels flat year over year," Tallent stated. "Most of the operating expense categories were flat or down compared to last year as we focused on reducing discretionary spending."
"All of our regulatory capital ratios continue to be very strong," Tallent continued. "At June 30, 2008 our estimated Tier I Risk-Based Capital ratio was 9.17 percent, Leverage was 7.03 percent and Total Risk-Based was 11.40 percent. Also, our tangible equity-to-asset ratio was 6.77 percent. We have modeled our capital requirements under a number of loss scenarios and believe we have a strong capital position as well as a solid base of core earnings and allowance to work through this credit cycle without issuing common stock."
"This quarter has been challenging, and we've seen increases in non-performing assets and related credit costs," commented Tallent. "We have made progress getting our arms around these issues and remain intently focused on credit quality, capital and liquidity levels. While we were certainly challenged this quarter, our solid earnings base continues to sustain the company and keep it positioned to grow our business when things improve."
Conference Call
United Community Banks will hold a conference call on Thursday, July 24, 2008, at 11 a.m. ET to discuss the contents of this news release, as well as share business highlights for the quarter. The telephone number for the conference call is (877) 419-6598 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 $8.3 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 2007 ------------------------ ------------ (in thousands, except per share Second First Fourth data; taxable equivalent) Quarter Quarter Quarter ----------- ----------- ----------- INCOME SUMMARY Interest revenue $ 116,984 $ 129,041 $ 140,768 Interest expense 55,231 62,754 71,038 ----------- ----------- ----------- Net interest revenue 61,753 66,287 69,730 Provision for loan losses (1) 15,500 7,500 26,500 Fee revenue 15,105 14,197 16,100 ----------- ----------- ----------- Total operating revenue 61,358 72,984 59,330 Operating expenses 49,761 47,529 49,336 ----------- ----------- ----------- Income before taxes 11,597 25,455 9,994 Income taxes 4,504 9,377 3,960 ----------- ----------- ----------- Net operating income 7,093 16,078 6,034 Fraud loss provision, net of tax (1) - - 1,833 ----------- ----------- ----------- Net income $ 7,093 $ 16,078 $ 4,201 =========== =========== =========== OPERATING PERFORMANCE (1) Earnings per common share: Basic $ .15 $ .34 $ .13 Diluted .15 .34 .13 Return on equity (2) 3.41% 7.85% 2.89% Return on tangible equity (2)(3)(4) 5.86 13.16 5.06 Return on assets (4) .34 .78 .29 Dividend payout ratio 60.00 26.47 69.23 GAAP PERFORMANCE MEASURES Per common share: Basic earnings $ .15 $ .34 $ .09 Diluted earnings .15 .34 .09 Cash dividends declared .09 .09 .09 Book value 17.75 18.50 17.70 Tangible book value (3) 11.03 11.76 10.92 Key performance ratios: Return on equity (2)(4) 3.41% 7.85% 2.01% Return on assets .34 .78 .20 Net interest margin (4) 3.32 3.55 3.73 Efficiency Ratio 65.05 59.05 57.67 Dividend payout ratio 60.00 26.47 100.00 Equity to assets 10.33 10.30 10.20 Tangible equity to assets (3) 6.77 6.73 6.58 ASSET QUALITY Allowance for loan losses $ 91,035 $ 89,848 $ 89,423 Net charge-offs (1) 14,313 7,075 13,012 Non-performing loans 123,786 67,728 28,219 OREO 28,378 22,136 18,039 ----------- ----------- ----------- Total non-performing assets 152,164 89,864 46,258 Allowance for loan losses to loans (1) 1.53% 1.51% 1.51% Net charge-offs to average loans (1)(4) .97 .48 .87 Non-performing assets to loans and OREO 2.55 1.50 .78 Non-performing assets to total assets 1.84 1.07 .56 AVERAGE BALANCES Loans $ 5,933,143 $ 5,958,296 $ 5,940,230 Investment securities 1,507,240 1,485,515 1,404,796 Earning assets 7,478,018 7,491,480 7,424,992 Total assets 8,295,748 8,305,621 8,210,120 Deposits 6,461,361 6,051,069 6,151,476 Shareholders' equity 856,727 855,659 837,195 Common shares - basic 47,060 46,966 47,203 Common shares - diluted 47,249 47,272 47,652 AT PERIOD END Loans $ 5,933,141 $ 5,967,839 $ 5,929,263 Investment securities 1,430,588 1,508,402 1,356,846 Total assets 8,264,051 8,386,255 8,207,302 Deposits 6,696,456 6,175,769 6,075,951 Shareholders' equity 837,890 871,452 831,902 Common shares outstanding 47,096 47,004 46,903 (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 Second ------------------------ Quarter (in thousands, except per share Third Second 2008-2007 data; taxable equivalent) Quarter Quarter Change ----------- ----------- ----------- INCOME SUMMARY Interest revenue $ 144,884 $ 136,237 Interest expense 73,203 68,270 ----------- ----------- Net interest revenue 71,681 67,967 (9)% Provision for loan losses (1) 3,700 3,700 Fee revenue 15,615 16,554 (9) ----------- ----------- Total operating revenue 83,596 80,821 (24) Operating expenses 48,182 47,702 4 ----------- ----------- Income before taxes 35,414 33,119 (65) Income taxes 12,878 12,043 ----------- ----------- Net operating income 22,536 21,076 (66) Fraud loss provision, net of tax (1) - 9,165 ----------- ----------- Net income $ 22,536 $ 11,911 (40) =========== =========== OPERATING PERFORMANCE (1) Earnings per common share: Basic $ .47 $ .47 (68) Diluted .46 .46 (67) Return on equity (2) 10.66% 12.47% Return on tangible equity (2)(3)(4) 17.54 17.52 Return on assets (4) 1.11 1.12 Dividend payout ratio 19.15 19.15 GAAP PERFORMANCE MEASURES Per common share: Basic earnings $ .47 $ .26 (42) Diluted earnings .46 .26 (42) Cash dividends declared .09 .09 - Book value 17.51 16.96 5 Tangible book value (3) 10.81 10.43 6 Key performance ratios: Return on equity (2)(4) 10.66% 7.05% Return on assets 1.11 .64 Net interest margin (4) 3.89 3.94 Efficiency Ratio 55.34 56.59 Dividend payout ratio 19.15 34.62 Equity to assets 10.32 8.94 Tangible equity to assets (3) 6.65 6.65 ASSET QUALITY Allowance for loan losses $ 90,935 $ 92,471 Net charge-offs (1) 5,236 2,124 Non-performing loans 46,783 30,849 OREO 16,554 12,752 ----------- ----------- Total non-performing assets 63,337 43,601 Allowance for loan losses to loans (1) 1.28% 1.29% Net charge-offs to average loans (1)(4) .35 .15 Non-performing assets to loans and OREO 1.06 .73 Non-performing assets to total assets .77 .54 AVERAGE BALANCES Loans $ 5,966,933 $ 5,619,950 6 Investment securities 1,308,192 1,242,448 21 Earning assets 7,332,492 6,915,134 8 Total assets 8,083,739 7,519,392 10 Deposits 6,246,319 5,945,633 9 Shareholders' equity 834,094 672,348 27 Common shares - basic 48,348 44,949 Common shares - diluted 48,977 45,761 AT PERIOD END Loans $ 5,952,749 $ 5,999,093 (1) Investment securities 1,296,826 1,213,659 18 Total assets 8,180,600 8,087,667 2 Deposits 6,154,308 6,361,269 5 Shareholders' equity 833,761 828,731 1 Common shares outstanding 47,542 48,781 (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 Six Months Ended YTD (in thousands, except per share ------------------------ 2008-2007 data; taxable equivalent) 2008 2007 Change ----------- ----------- ----------- INCOME SUMMARY Interest revenue $ 246,025 $ 265,265 Interest expense 117,985 132,193 ----------- ----------- Net interest revenue 128,040 133,072 (4)% Provision for loan losses (1) 23,000 7,400 Fee revenue 29,302 30,936 (5) ----------- ----------- Total operating revenue 134,342 156,608 (14) Operating expenses 97,290 92,543 5 ----------- ----------- Income before taxes 37,052 64,065 (42) Income taxes 13,881 23,644 ----------- ----------- Net operating income 23,171 40,421 (43) Fraud loss provision, net of tax (1) - 9,165 ----------- ----------- Net income $ 23,171 $ 31,256 (26) =========== =========== OPERATING PERFORMANCE (1) Earnings per common share: Basic $ .49 $ .92 (47) Diluted .49 .90 (46) Return on equity (2) 5.61% 9.64% Return on tangible equity (2)(3)(4) 9.46 17.36 Return on assets (4) .56 1.12 Dividend payout ratio 36.73 19.57 GAAP PERFORMANCE MEASURES Per common share: Basic earnings $ .49 $ .71 (31) Diluted earnings .49 .70 (30) Cash dividends declared .18 .18 - Book value 17.75 16.96 5 Tangible book value (3) 11.03 10.43 6 Key performance ratios: Return on equity (2)(4) 5.61% 9.64% Return on assets .56 .86 Net interest margin (4) 3.43 3.96 Efficiency Ratio 61.97 56.57 Dividend payout ratio 36.73 25.35 Equity to assets 10.31 8.87 Tangible equity to assets (3) 6.75 6.65 ASSET QUALITY Allowance for loan losses $ 91,035 $ 92,471 Net charge-offs (1) 21,388 3,586 Non-performing loans 123,786 30,849 OREO 28,378 12,752 ----------- ----------- Total non-performing assets 152,164 43,601 Allowance for loan losses to loans (1) 1.53% 1.29% Net charge-offs to average loans (1)(4) .72 .13 Non-performing assets to loans and OREO 2.55 .73 Non-performing assets to total assets 1.84 .54 AVERAGE BALANCES Loans $ 5,945,720 $ 5,512,005 8 Investment securities 1,496,377 1,198,075 25 Earning assets 7,484,749 6,757,959 11 Total assets 8,300,686 7,307,231 14 Deposits 6,256,217 5,855,530 7 Shareholders' equity 856,193 648,358 32 Common shares - basic 47,013 43,980 Common shares - diluted 47,260 44,842 AT PERIOD END Loans $ 5,933,141 $ 5,999,093 (1) Investment securities 1,430,588 1,213,659 18 Total assets 8,264,051 8,087,667 2 Deposits 6,696,456 6,361,269 5 Shareholders' equity 837,890 828,731 1 Common shares outstanding 47,096 48,781 (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 2007 ----------------------- ----------- Second First Fourth (in millions) Quarter Quarter Quarter ----------- ----------- ----------- LOANS BY CATEGORY Commercial (sec. by RE) $ 1,584 $ 1,526 $ 1,476 Commercial construction 522 548 527 Commercial & industrial 417 437 418 ----------- ----------- ----------- Total commercial 2,523 2,511 2,421 Residential construction 1,745 1,791 1,830 Residential mortgage 1,494 1,491 1,502 Consumer / installment 171 175 176 ----------- ----------- ----------- Total loans $ 5,933 $ 5,968 $ 5,929 =========== =========== =========== LOANS BY MARKET Atlanta MSA $ 1,934 $ 1,978 $ 2,002 Gainesville MSA 422 415 400 North Georgia 2,065 2,071 2,060 Western North Carolina 819 816 806 Coastal Georgia 436 439 416 East Tennessee 257 249 245 ----------- ----------- ----------- Total loans $ 5,933 $ 5,968 $ 5,929 =========== =========== =========== RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 569 $ 583 $ 593 Land loans 139 130 126 Lot loans 401 406 407 ----------- ----------- ----------- Total 1,109 1,119 1,126 ----------- ----------- ----------- House loans Spec 450 460 473 Sold 186 212 231 ----------- ----------- ----------- Total 636 672 704 ----------- ----------- ----------- Total residential construction $ 1,745 $ 1,791 $ 1,830 =========== =========== =========== RESIDENTIAL CONSTRUCTION - ATLANTA MSA Dirt loans Acquisition & development $ 232 $ 252 $ 258 Land loans 50 50 52 Lot loans 117 117 117 ----------- ----------- ----------- Total 399 419 427 ----------- ----------- ----------- House loans Spec 271 271 280 Sold 58 71 77 ----------- ----------- ----------- Total 329 342 357 ----------- ----------- ----------- Total residential construction $ 728 $ 761 $ 784 =========== =========== =========== (1) Annualized. UNITED COMMUNITY BANKS, INC. Financial Highlights Loan Portfolio Composition at Period-End ------------------- Linked Year over Third Second Quarter Year (in millions) Quarter Quarter Change(1) Change --------- --------- --------- --------- LOANS BY CATEGORY Commercial (sec. by RE) $ 1,441 $ 1,461 15% 8% Commercial construction 527 509 (19) 3 Commercial & industrial 408 421 (18) (1) --------- --------- Total commercial 2,376 2,391 2 6 Residential construction 1,939 2,013 (10) (13) Residential mortgage 1,459 1,413 1 6 Consumer / installment 179 182 (9) (6) --------- --------- Total loans $ 5,953 $ 5,999 (2) (1) ========= ========= LOANS BY MARKET Atlanta MSA $ 2,057 $ 2,134 (9)% (9)% Gainesville MSA 394 384 7 10 North Georgia 2,026 2,032 (1) 2 Western North Carolina 834 816 1 - Coastal Georgia 402 396 (3) 10 East Tennessee 240 237 13 8 --------- --------- Total loans $ 5,953 $ 5,999 (2) (1) ========= ========= RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 596 $ 602 (10)% (5)% Land loans 125 113 28 23 Lot loans 403 393 (5) 2 --------- --------- Total 1,124 1,108 (4) - --------- --------- House loans Spec 539 596 (9)% (24)% Sold 276 309 (49) (40) --------- --------- Total 815 905 (21) (30) --------- --------- Total residential construction $ 1,939 $ 2,013 (10) (13) ========= ========= RESIDENTIAL CONSTRUCTION - ATLANTA MSA Dirt loans Acquisition & development $ 268 $ 278 (32)% (17)% Land loans 50 49 - 2 Lot loans 123 136 - (14) --------- --------- Total 441 463 (19) (14) --------- --------- House loans Spec 322 371 - % (27)% Sold 104 132 (73) (56) --------- --------- Total 426 503 (15) (35) --------- --------- Total residential construction $ 867 $ 966 (17) (25) ========= ========= (1) Annualized. 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 Fourth Quarter 2007 ----------------------------------- Nonaccrual Total (in thousands) Loans OREO NPAs ----------- ----------- ----------- NPAs BY CATEGORY Commercial (sec. by RE) $ - $ 68 $ 68 Commercial construction - 507 507 Commercial & industrial 3,366 - 3,366 ----------- ----------- ----------- Total commercial 3,366 575 3,941 Residential construction 11,544 14,987 26,531 Residential mortgage 12,479 2,477 14,956 Consumer / installment 830 - 830 ----------- ----------- ----------- Total NPAs $ 28,219 $ 18,039 $ 46,258 =========== =========== =========== NPAs BY MARKET Atlanta MSA $ 11,548 $ 13,019 $ 24,567 Gainesville MSA 1,544 - 1,544 North Georgia 5,469 3,469 8,938 Western North Carolina 7,455 1,178 8,633 Coastal Georgia 691 95 786 East Tennessee 1,512 278 1,790 ----------- ----------- ----------- Total NPAs $ 28,219 $ 18,039 $ 46,258 =========== =========== =========== UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality Second Quarter 2008 First Quarter 2008 ------------------------ ------------------------ Net Charge- Net Charge- Offs to Offs to Net Average Net Average (in thousands) Charge-Offs Loans (2) Charge-Offs Loans (2) ----------- ------------ ----------- ------------ NET CHARGE-OFFS BY CATEGORY Commercial (sec. by RE) $ 424 .11% $ 630 .17% Commercial construction 125 .09 - - Commercial & industrial 398 .38 304 .29 ----------- ----------- Total commercial 947 .15 934 .15 Residential construction 10,343 2.36 4,665 1.03 Residential mortgage 2,576 .70 1,011 .27 Consumer / installment 447 1.05 465 1.06 ----------- ----------- Total NPAs $ 14,313 .97 $ 7,075 .48 =========== =========== NET CHARGE-OFFS BY MARKET Atlanta MSA $ 10,682 2.22% $ 4,647 .94% Gainesville MSA 360 .34 323 .32 North Georgia 1,829 .36 1,280 .25 Western North Carolina 279 .14 57 .03 Coastal Georgia 980 .90 42 .04 East Tennessee 183 .29 726 1.18 ----------- ----------- Total NPAs $ 14,313 .97 $ 7,075 .48 =========== =========== (1) Fourth quarter residential construction charge-offs exclude $18 million in fraud-related charge-offs resulting from the failed real estate development near Spruce Pine, North Carolina (2) Annualized UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality Fourth Quarter 2007 (1) ------------------------- Net Charge- Offs to Net Average (in thousands) Charge-Offs Loans (2) ----------- ------------ NET CHARGE-OFFS BY CATEGORY Commercial (sec. by RE) $ 167 .05% Commercial construction - - Commercial & industrial 507 .49 ----------- Total commercial 674 .11 Residential construction 10,109 2.13 Residential mortgage 1,671 .45 Consumer / installment 559 1.25 ----------- Total NPAs $ 13,013 .87 =========== NET CHARGE-OFFS BY MARKET Atlanta MSA $ 8,740 1.72% Gainesville MSA 231 .23 North Georgia 2,071 .40 Western North Carolina 285 .14 Coastal Georgia (10) (.01) East Tennessee 1,696 2.76 ----------- Total NPAs $ 13,013 .87 =========== (1) Fourth quarter residential construction charge-offs exclude $18 million in fraud-related charge-offs resulting from the failed real estate development near Spruce Pine, North Carolina (2) Annualized UNITED COMMUNITY BANKS, INC. Operating Earnings to GAAP Earnings Reconciliation (in thousands, except per share data) 2008 2007 ------------------- -------- Second First Fourth Quarter Quarter Quarter --------- --------- -------- Special provision for fraud-related loan losses $ - $ - $ 3,000 --------- --------- -------- Income tax effect of special provision - - 1,167 --------- --------- -------- After-tax effect of special provision $ - $ - $ 1,833 ========= ========= ======== Net Income Reconciliation Operating net income $ 7,093 $ 16,078 $ 6,034 After-tax effect of special provision and merger-related charges - - (1,833) --------- --------- -------- Net income (GAAP) $ 7,093 $ 16,078 $ 4,201 ========= ========= ======== Basic Earnings Per Share Reconciliation Basic operating earnings per share $ .15 $ .34 $ .13 Per share effect of special provision and merger-related charges - - (.04) --------- --------- -------- Basic earnings per share (GAAP) $ .15 $ .34 $ .09 ========= ========= ======== Diluted Earnings Per Share Reconciliation Diluted operating earnings per share $ .15 $ .34 $ .13 Per share effect of special provision and merger-related charges - - (.04) --------- --------- -------- Diluted earnings per share (GAAP) $ .15 $ .34 $ .09 ========= ========= ======== Provision for Loan Losses Reconciliation Operating provision for loan losses $ 15,500 $ 7,500 $ 26,500 Special provision for fraud-related loan losses - - 3,000 --------- --------- -------- Provision for loan losses (GAAP) $ 15,500 $ 7,500 $ 29,500 ========= ========= ======== Nonperforming Assets Reconciliation Nonperforming assets excluding fraud-related assets $ 148,219 $ 85,182 $ 40,956 Fraud-related loans and OREO included in nonperforming assets 3,945 4,682 5,302 --------- --------- -------- Nonperforming assets (GAAP) $ 152,164 $ 89,864 $ 46,258 ========= ========= ======== Allowance for Loan Losses Reconciliation Allowance for loan losses excluding special fraud-related allowance $ 91,035 $ 89,848 $ 89,423 Fraud-related allowance for loan losses - - - --------- --------- -------- Allowance for loan losses (GAAP) $ 91,035 $ 89,848 $ 89,423 ========= ========= ======== Net Charge-Offs Reconciliation Net charge-offs excluding charge-off of fraud-related loans $ 14,313 $ 7,075 $ 13,012 Fraud-related loans charged off - - 18,000 --------- --------- -------- Net charge-offs (GAAP) $ 14,313 $ 7,075 $ 31,012 ========= ========= ======== Allowance for Loan Losses to Loans Ratio Reconciliation Allowance for loan losses to loans ratio excluding fraud-related allowance 1.53% 1.51% 1.51% Portion of allowance assigned to fraud-related loans - - - --------- --------- -------- Allowance for loan losses to loans ratio (GAAP) 1.53% 1.51% 1.51% ========= ========= ======== Nonperforming Assets to Total Assets Ratio Reconciliation Nonperforming assets to total assets ratio excluding fraud-related assets 1.79% 1.02% .50% Fraud-related nonperforming assets .05 .05 .06 --------- --------- -------- Nonperforming assets to total assets ratio (GAAP) 1.84% 1.07% .56% ========= ========= ======== Net Charge-Offs to Average Loans Ratio Reconciliation Net charge-offs to average loans ratio excluding fraud-related loans .97% .48% .87% Charge-offs of fraud-related loans - - 1.20 --------- --------- -------- Net charge-offs to average loans ratio (GAAP) .97% .48% 2.07% ========= ========= ======== UNITED COMMUNITY BANKS, INC. Operating Earnings to GAAP Earnings Reconciliation (in thousands, except per share data) 2007 For the Six Months ------------------- Ended June 30 Third Second ------------------- Quarter Quarter 2008 2007 --------- -------- --------- -------- Special provision for fraud- related loan losses $ - $ 15,000 $ - $ 15,000 --------- -------- --------- -------- Income tax effect of special provision - 5,835 - 5,835 --------- -------- --------- -------- After-tax effect of special provision $ - $ 9,165 $ - $ 9,165 ========= ======== ========= ======== Net Income Reconciliation Operating net income $ 22,536 $ 21,076 $ 23,171 $ 41,421 After-tax effect of special provision and merger-related charges - (9,165) - (9,165) --------- -------- --------- -------- Net income (GAAP) $ 22,536 $ 11,911 $ 23,171 $ 32,256 ========= ======== ========= ======== Basic Earnings Per Share Reconciliation Basic operating earnings per share $ .47 $ .47 $ .49 $ .92 Per share effect of special provision and merger-related charges - (.21) - (.21) --------- -------- --------- -------- Basic earnings per share (GAAP) $ .47 $ .26 $ .49 $ .71 ========= ======== ========= ======== Diluted Earnings Per Share Reconciliation Diluted operating earnings per share $ .46 $ .46 $ .49 $ .90 Per share effect of special provision and merger-related charges - (.20) - (.20) --------- -------- --------- -------- Diluted earnings per share (GAAP) $ .46 $ .26 $ .49 $ .70 ========= ======== ========= ======== Provision for Loan Losses Reconciliation Operating provision for loan losses $ 3,700 $ 3,700 $ 23,000 $ 7,400 Special provision for fraud- related loan losses - 15,000 - 15,000 --------- -------- --------- -------- Provision for loan losses (GAAP) $ 3,700 $ 18,700 $ 23,000 $ 22,400 ========= ======== ========= ======== Nonperforming Assets Reconciliation Nonperforming assets excluding fraud-related assets $ 39,761 $ 19,968 $ 148,218 $ 19,968 Fraud-related loans and OREO included in nonperforming assets 23,576 23,633 3,945 23,633 --------- -------- --------- -------- Nonperforming assets (GAAP) $ 63,337 $ 43,601 $ 152,163 $ 43,601 ========= ======== ========= ======== Allowance for Loan Losses Reconciliation Allowance for loan losses excluding special fraud-related allowance $ 75,935 $ 77,471 $ 91,035 $ 77,471 Fraud-related allowance for loan losses 15,000 15,000 - 15,000 --------- -------- --------- -------- Allowance for loan losses (GAAP) $ 90,935 $ 92,471 $ 91,035 $ 92,471 ========= ======== ========= ======== Net Charge-Offs Reconciliation Net charge-offs excluding Charge-off of fraud-related loans $ 5,236 $ 2,124 $ 21,388 $ 3,586 Fraud-related loans charged off - - - - --------- -------- --------- -------- Net charge-offs (GAAP) $ 5,236 $ 2,124 $ 21,388 $ 3,586 ========= ======== ========= ======== Allowance for Loan Losses to Loans Ratio Reconciliation Allowance for loan losses to loans ratio excluding fraud-related allowance 1.28% 1.29% 1.53% 1.29% Portion of allowance assigned to fraud-related loans .25 .25 - .25 --------- -------- --------- -------- Allowance for loan losses to loans ratio (GAAP) 1.53% 1.54% 1.53% 1.54% ========= ======== ========= ======== Nonperforming Assets to Total Assets Ratio Reconciliation Nonperforming assets to total assets ratio excluding fraud-related assets .49% .25% 1.79% .25% Fraud-related nonperforming assets .28 .29 .05 .29 --------- -------- --------- -------- Nonperforming assets to total assets ratio (GAAP) .77% .54% 1.84% .54% ========= ======== ========= ======== Net Charge-Offs to Average Loans Ratio Reconciliation Net charge-offs to average loans ratio excluding fraud-related loans .35% .15% .97% .13% Charge-offs of fraud-related loans - - - - --------- -------- --------- -------- Net charge-offs to average loans ratio (GAAP) .35% .15% .97% .13% ========= ======== ========= ======== UNITED COMMUNITY BANKS, INC. Consolidated Statement of Income (unaudited) Three Months Ended Six Months Ended June 30, June 30, --------------------- --------------------- (in thousands, except per 2008 2007 2008 2007 share data) ---------- --------- ---------- --------- Interest revenue: Loans, including fees $ 97,051 $ 119,799 $ 206,317 $ 233,872 Investment securities: Taxable 18,879 15,476 37,507 29,444 Tax exempt 398 438 792 885 Federal funds sold and deposits in banks 50 80 272 138 ---------- --------- ---------- --------- Total interest revenue 116,378 135,793 244,888 264,339 ---------- --------- ---------- --------- Interest expense: Deposits: NOW 7,216 11,470 15,803 22,097 Money market 2,310 3,540 5,223 6,080 Savings 180 374 407 683 Time 38,828 41,979 77,712 83,604 ---------- --------- ---------- --------- Total deposit interest expense 48,534 57,363 99,145 112,464 Federal funds purchased, repurchase agreements, & other short-term borrowings 1,820 3,671 6,138 5,488 Federal Home Loan Bank advances 2,818 5,035 8,563 9,836 Long-term debt 2,059 2,201 4,139 4,405 ---------- --------- ---------- --------- Total interest expense 55,231 68,270 117,985 132,193 ---------- --------- ---------- --------- Net interest revenue 61,147 67,523 126,903 132,146 Provision for loan losses 15,500 18,700 23,000 22,400 ---------- --------- ---------- --------- Net interest revenue after provision for loan losses 45,647 48,823 103,903 109,746 ---------- --------- ---------- --------- Fee revenue: Service charges and fees 7,957 7,975 15,770 15,228 Mortgage loan and other related fees 2,202 2,476 4,165 4,699 Consulting fees 2,252 2,241 4,059 3,988 Brokerage fees 814 1,192 1,907 2,136 Securities gains, net 357 1,386 357 1,593 Losses on prepayment of borrowings - (1,164) - (1,164) Other 1,523 2,448 3,044 4,456 ---------- --------- ---------- --------- Total fee revenue 15,105 16,554 29,302 30,936 ---------- --------- ---------- --------- Total revenue 60,752 65,377 133,205 140,682 ---------- --------- ---------- --------- Operating expenses: Salaries and employee benefits 28,753 30,022 57,507 58,339 Communications and equipment 3,852 3,845 7,684 7,657 Occupancy 3,704 3,316 7,420 6,507 Advertising and public relations 2,009 2,098 3,360 4,114 Postage, printing and supplies 1,448 1,680 3,040 3,340 Professional fees 1,679 2,010 3,600 3,489 Amortization of intangibles 745 633 1,512 1,197 Other 7,571 4,098 13,167 7,900 ---------- --------- ---------- --------- Total operating expenses 49,761 47,702 97,290 92,543 ---------- --------- ---------- --------- Income before income taxes 10,991 17,675 35,915 48,139 Income taxes 3,898 5,764 12,744 16,883 ---------- --------- ---------- --------- Net income $ 7,093 $ 11,911 $ 23,171 $ 31,256 ========== ========= ========== ========= Net income available to common shareholders $ 7,089 $ 11,906 $ 23,163 $ 31,246 ========== ========= ========== ========= Earnings per common share: Basic $ .15 $ .26 $ .49 $ .71 Diluted .15 .26 .49 .70 Dividends per common share .09 .09 .18 .18 Weighted average common shares outstanding: Basic 47,060 44,949 47,013 43,980 Diluted 47,249 45,761 47,260 44,842 UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheet June 30, December 31, June 30, (in thousands, except share 2008 2007 2007 and per share data) ------------ ------------ ------------ (unaudited) (audited) (unaudited) ASSETS Cash and due from banks $ 176,240 $ 157,549 $ 171,095 Interest-bearing deposits in banks 12,455 62,074 23,146 ------------ ------------ ------------ Cash and cash equivalents 188,695 219,623 194,241 Securities available for sale 1,430,588 1,356,846 1,213,659 Mortgage loans held for sale 27,094 28,004 30,615 Loans, net of unearned income 5,933,141 5,929,263 5,999,093 Less allowance for loan losses 91,035 89,423 92,471 ------------ ------------ ------------ Loans, net 5,842,106 5,839,840 5,906,622 Premises and equipment, net 181,395 180,088 171,327 Accrued interest receivable 50,399 62,828 64,538 Goodwill and other intangible assets 323,296 325,305 326,467 Other assets 220,478 194,768 180,198 ------------ ------------ ------------ Total assets $ 8,264,051 $ 8,207,302 $ 8,087,667 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Demand $ 696,575 $ 700,941 $ 773,435 NOW 1,541,609 1,474,818 1,447,789 Money market 418,935 452,917 504,730 Savings 187,088 186,392 207,468 Time: Less than $100,000 1,744,217 1,573,604 1,651,486 Greater than $100,000 1,573,078 1,364,763 1,428,841 Brokered 534,954 322,516 347,520 ------------ ------------ ------------ Total deposits 6,696,456 6,075,951 6,361,269 Federal funds purchased, repurchase agreements, and other short-term borrowings 288,650 638,462 238,429 Federal Home Loan Bank advances 285,807 519,782 499,060 Long-term debt 107,996 107,996 113,151 Accrued expenses and other liabilities 47,252 33,209 47,027 ------------ ------------ ------------ Total liabilities 7,426,161 7,375,400 7,258,936 ------------ ------------ ------------ Shareholders' equity: Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 25,800, 25,800 and 32,200 shares issued and outstanding 258 258 322 Common stock, $1 par value; 100,000,000 shares authorized; 48,809,301, 48,809,301 and 48,781,351 shares issued 48,809 48,809 48,781 Common stock issuable; 105,579, 73,250 and 60,761 shares 2,696 2,100 1,816 Capital surplus 462,939 462,881 461,226 Retained earnings 362,089 347,391 329,229 Treasury stock; 1,713,310 and 1,905,921 shares, at cost (39,222) (43,798) - Accumulated other comprehensive income (loss) 321 14,261 (12,643) ------------ ------------ ------------ Total shareholders' equity 837,890 831,902 828,731 ------------ ------------ ------------ Total liabilities and shareholders' equity $ 8,264,051 $ 8,207,302 $ 8,087,667 ============ ============ ============ UNITED COMMUNITY BANKS, INC. Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended June 30, 2008 ----------- ------------ ------------ (dollars in thousands, taxable Average Avg. equivalent) Balance Interest Rate ----------- ------------ ------------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 5,933,143 $ 97,080 6.58% Taxable securities (3) 1,471,958 18,879 5.13 Tax-exempt securities (1)(3) 35,282 655 7.43 Federal funds sold and other interest-earning assets 37,635 370 3.93 ----------- ------------ Total interest-earning assets 7,478,018 116,984 6.29 ----------- ------------ Non-interest-earning assets: Allowance for loan losses (93,776) Cash and due from banks 144,589 Premises and equipment 181,454 Other assets (3) 585,463 ----------- Total assets $ 8,295,748 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,505,280 $ 7,216 1.93 Money market 422,419 2,310 2.20 Savings 186,826 180 .39 Time less than $100,000 1,642,677 17,285 4.23 Time greater than $100,000 1,484,032 16,135 4.37 Brokered 535,898 5,408 4.06 ----------- ------------ Total interest-bearing deposits 5,777,132 48,534 3.38 ----------- ------------ Federal funds purchased and other borrowings 383,378 1,820 1.91 Federal Home Loan Bank advances 412,268 2,818 2.75 Long-term debt 107,996 2,059 7.67 ----------- ------------ Total borrowed funds 903,642 6,697 2.98 ----------- ------------ Total interest-bearing liabilities 6,680,774 55,231 3.33 ------------ Non-interest-bearing liabilities: Non-interest-bearing deposits 684,229 Other liabilities 74,018 ----------- Total liabilities 7,439,021 Shareholders' equity 856,727 ----------- Total liabilities and shareholders' equity $ 8,295,748 =========== Net interest revenue $ 61,753 ============ Net interest-rate spread 2.96% ============ Net interest margin (4) 3.32% ============ (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 $13.0 million in 2008 and pretax unrealized losses of $7.8 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 June 30, 2007 ----------- ------------ ----------- (dollars in thousands, taxable Average Avg. equivalent) Balance Interest Rate ----------- ------------ ----------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 5,619,950 $ 119,569 8.53% Taxable securities (3) 1,200,268 15,476 5.16 Tax-exempt securities (1)(3) 42,180 721 6.83 Federal funds sold and other interest-earning assets 52,736 471 3.57 ----------- ------------ Total interest-earning assets 6,915,134 136,237 7.90 ----------- ------------ Non-interest-earning assets: Allowance for loan losses (73,323) Cash and due from banks 130,046 Premises and equipment 158,290 Other assets (3) 389,245 ----------- Total assets $ 7,519,392 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,379,423 $ 11,470 3.34 Money market 354,815 3,540 4.00 Savings 186,490 374 .80 Time less than $100,000 1,627,708 19,978 4.92 Time greater than $100,000 1,372,410 17,892 5.23 Brokered 332,857 4,109 4.95 ----------- ------------ Total interest-bearing deposits 5,253,703 57,363 4.38 ----------- ------------ Federal funds purchased and other borrowings 275,319 3,671 5.35 Federal Home Loan Bank advances 419,287 5,035 4.82 Long-term debt 113,270 2,201 7.79 ----------- ------------ Total borrowed funds 807,876 10,907 5.42 ----------- ------------ Total interest-bearing liabilities 6,061,579 68,270 4.52 ------------ Non-interest-bearing liabilities: Non-interest-bearing deposits 691,930 Other liabilities 93,535 ----------- Total liabilities 6,847,044 Shareholders' equity 672,348 ----------- Total liabilities and shareholders' equity $ 7,519,392 =========== Net interest revenue $ 67,967 ============ Net interest-rate spread 3.38% =========== Net interest margin (4) 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 $13.0 million in 2008 and pretax unrealized losses of $7.8 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 Six Months Ended June 30, 2008 ----------- ------------ ----------- (dollars in thousands, taxable Average Avg. equivalent) Balance Interest Rate ----------- ------------ ----------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 5,945,720 $ 206,332 6.98% Taxable securities (3) 1,460,090 37,507 5.14 Tax-exempt securities (1)(3) 36,287 1,303 7.18 Federal funds sold and other interest-earning assets 42,652 883 4.14 ----------- ------------ Total interest-earning assets 7,484,749 246,025 6.60 ----------- ------------ Non-interest-earning assets: Allowance for loan losses (92,901) Cash and due from banks 149,648 Premises and equipment 181,405 Other assets (3) 577,785 ----------- Total assets $ 8,300,686 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,483,699 $ 15,803 2.14 Money market 430,734 5,223 2.44 Savings 185,819 407 .44 Time less than $100,000 1,597,995 35,508 4.47 Time greater than $100,000 1,424,670 32,505 4.59 Brokered 455,150 9,699 4.29 ----------- ------------ Total interest-bearing deposits 5,578,067 99,145 3.57 ----------- ------------ Federal funds purchased and other borrowings 467,596 6,138 2.64 Federal Home Loan Bank advances 536,883 8,563 3.21 Long-term debt 107,995 4,139 7.71 ----------- ------------ Total borrowed funds 1,112,474 18,840 3.41 ----------- ------------ Total interest-bearing liabilities 6,690,541 117,985 3.55 ------------ Non-interest-bearing liabilities: Non-interest-bearing deposits 678,150 Other liabilities 75,802 ----------- Total liabilities 7,444,493 Shareholders' equity 856,193 ----------- Total liabilities and shareholders' equity $ 8,300,686 =========== Net interest revenue $ 128,040 ============ Net interest-rate spread 3.05% =========== Net interest margin (4) 3.43% =========== (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 $14.5 million in 2008 and pretax unrealized losses of $8.9 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 Six Months Ended June 30, 2007 ----------- ------------ ----------- (dollars in thousands, taxable Average Avg. equivalent) Balance Interest Rate ----------- ------------ ----------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 5,512,005 $ 233,437 8.54% Taxable securities (3) 1,155,308 29,444 5.10 Tax-exempt securities (1)(3) 42,767 1,456 6.81 Federal funds sold and other interest-earning assets 47,879 928 3.88 ----------- ------------ Total interest-earning assets 6,757,959 265,265 7.91 ----------- ------------ Non-interest-earning assets: Allowance for loan losses (70,769) Cash and due from banks 125,367 Premises and equipment 152,593 Other assets (3) 342,081 ----------- Total assets $ 7,307,231 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,351,277 $ 22,097 3.30 Money market 308,541 6,080 3.97 Savings 180,913 683 .76 Time less than $100,000 1,634,569 39,774 4.91 Time greater than $100,000 1,378,870 35,808 5.24 Brokered 333,800 8,022 4.85 ----------- ------------ Total interest-bearing deposits 5,187,970 112,464 4.37 ----------- ------------ Federal funds purchased and other borrowings 207,663 5,488 5.33 Federal Home Loan Bank advances 407,583 9,836 4.87 Long-term debt 113,251 4,405 7.84 ----------- ------------ Total borrowed funds 728,497 19,729 5.46 ----------- ------------ Total interest-bearing liabilities 5,916,467 132,193 4.51 ------------ Non-interest-bearing liabilities: Non-interest-bearing deposits 667,560 Other liabilities 74,846 ----------- Total liabilities 6,658,873 Shareholders' equity 648,358 ----------- Total liabilities and shareholders' equity $ 7,307,231 =========== Net interest revenue $ 133,072 ============ Net interest-rate spread 3.40% =========== Net interest margin (4) 3.96% =========== (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 $14.5 million in 2008 and pretax unrealized losses of $8.9 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.
http://www2.marketwire.com/mw/emailprcntct?id=7953CD70A33BB9E2
Copyright 2008 Market Wire, All rights reserved.
News Provided by COMTEX