United Community Banks, Inc. Reports Diluted Earnings per Share of 34 Cents for First Quarter 2008
BLAIRSVILLE, GA, Apr 24, 2008 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI) today announced diluted earnings per share of 34 cents for the first quarter of 2008, compared to 44 cents for the first quarter of 2007. Total revenue on a taxable equivalent basis was $73.0 million for the quarter, compared to $75.8 million for the first quarter of 2007. Net income was $16.1 million, compared with $19.3 million in the first quarter of 2007. Return on tangible equity was 13.16 percent and return on assets was .78 percent for the first quarter of 2008, compared with 17.18 percent and 1.11 percent a year ago, respectively.
"Continued weakness in the residential construction and housing markets and uncertainty in the general economy made for a very challenging quarter," said Jimmy Tallent, president and chief executive officer. "We expect the business environment to remain difficult for 2008. However, we are confident that our business model, strong high-growth markets, and customer service focus will continue to create the foundation for future growth over the longer term."
Loans were up $566 million, or 10 percent, from the first quarter of 2007 due primarily to the acquisition of First Bank of the South in the second quarter of 2007. "Excluding acquisitions, loans were basically flat year over year," Tallent said. "During the first quarter, total loans were up $39 million, or 3 percent on an annualized basis. Commercial loans during the quarter saw growth of $90 million, or 15 percent annualized. This was offset partially by a $39 million decrease in our residential construction loan portfolio. We are actively pursuing high-quality borrowers in all of our markets, with an emphasis on small business and commercial lending. Through these efforts, we have been able to reduce residential construction loans over the past year from 35 percent to 30 percent of our total loan portfolio."
Total deposits increased $334 million, or 6 percent, from a year ago due to the acquisition of First Bank of the South. Excluding acquired deposits, total deposits decreased by $234 million primarily due to the run-off of higher-rate certificates of deposits. We elected not to compete for these high cost deposits without other customer relationships. "While overall account balances are lower, the number of customer relationships has continued to increase and our customer satisfaction scores continue to be at record levels," Tallent said. "This bodes well for us when the economy rebounds."
Taxable equivalent net interest revenue of $66.3 million reflected an increase of $1.2 million from the first quarter of 2007. Taxable equivalent net interest margin was 3.55 percent, compared with 3.73 percent for the fourth quarter of 2007 and 3.99 percent for the first quarter of 2007. "Our net interest margin continues to be under pressure on two fronts," Tallent said. "One is competitive deposit pricing that has kept us from lowering rates on our deposits as quickly as we repriced our prime based loans. The second is the increase in the level of non-performing assets this quarter. We expect these conditions to continue to put pressure on our margin as financial institutions compete for liquidity and as we aggressively move non-performing assets off of our books."
The first quarter provision for loan losses was $7.5 million. Net charge-offs for the first quarter were $7.1 million compared with $13.0 million for the fourth quarter of 2007 (excluding the Spruce Pine fraud-related charge-offs), and $1.5 million for the first quarter of 2007. Annualized net charge-offs to average loans was 48 basis points for the first quarter of 2008 compared to 87 basis points for the fourth quarter of 2007 and 11 basis points for the first quarter of 2007.
"In the fourth quarter, we identified problem credits, aggressively took charge-offs and write-downs, and increased our allowance for loan losses to prepare for the challenges of 2008," Tallent said. "We continued this process in the first quarter and provided $7.5 million for loan losses. This enables us to maintain our allowance for loan losses at an appropriate level for the current credit environment. We will continue to closely monitor our credit quality and the loan portfolio to ensure that we remain adequately reserved."
At quarter-end, non-performing assets totaled $89.9 million, compared with $46.3 million at December 31, 2007 and $14.3 million at March 31, 2007. The ratio of non-performing assets to total assets at the end of each quarter was 1.07, .56 and .20 percent, respectively.
"United's credit quality indicators reflected the national trend of rising delinquencies and foreclosures in the housing and residential construction markets," stated Tallent. "We will remain diligent in managing through the challenges, taking whatever steps are necessary to put problem credits behind us. Although we remain guarded in our credit quality outlook, we are cautiously optimistic that the traditionally higher-sales months in the spring and summer will bring buyers back into the housing market, providing some welcome relief."
Fee revenue of $14.2 million was down slightly from $14.4 million for the first quarter of 2007, primarily due to nonrecurring revenue in the first quarter of 2007. Service charges and fees on deposit accounts of $7.8 million increased $560,000, or 8 percent, from the first quarter of 2007 due to growth in transactions and new accounts as well as higher ATM and debit card usage. Brokerage fees were up $149,000 to $1.1 million due to strong retention efforts and new customer outreach. Other fee revenue of $1.5 million was down $487,000 due to a gain on the sale of property and a recovery of overpaid brokered deposit interest in the first quarter of 2007.
Operating expenses of $47.5 million reflected an increase of $2.7 million, or 6 percent, from the first quarter of 2007. Salaries and employee benefit costs of $28.8 million were $437,000, or 2 percent, higher than the first quarter of 2007. The acquisition in the second quarter last year added approximately $1.4 million, which was more than offset by lower incentive compensation in 2008. Occupancy expense increased $525,000 to $3.7 million due to the cost of operating additional banking offices. Professional fees increased $442,000 to $1.9 million, reflecting higher fees associated with loan work-outs and foreclosures. Other expenses of $5.6 million were $1.8 million higher than a year ago due to $911,000 of additional write-downs and related costs on foreclosed properties and an increase in FDIC insurance premiums of $923,000.
"The efficiency ratio for the first quarter of 59.05 percent was above our long-term target range of 56 to 58 percent," Tallent said. "This was driven primarily by higher legal costs and write-downs on foreclosed property. We continue to remain disciplined on expense controls."
The Board of Directors approved the second quarter 2008 dividend of 9 cents per share, which is the same dividend level that was paid in 2007. "At quarter-end, all of our regulatory capital ratios were above the 'well-capitalized' level and our tangible equity-to-assets ratio was 6.73 percent," Tallent said. "Our core earnings have allowed us to build capital, improve ratios and provide strength for current and future challenges. We are intently focused on maintaining capital at a level appropriate for the economic environment.
"With the uncertainty of the economy and the ongoing credit issues in the housing and residential construction market, 2008 will not be an easy year for banks," Tallent concluded. "I want to thank our employees for their dedication and focus: no matter the economic cycle they continue to deliver the highest customer satisfaction scores in the industry. True to form, they are maintaining and enhancing the kind of deep customer relationships that will drive United's growth and success when the economy improves."
Conference Call
United Community Banks will hold a conference call on Thursday, April 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) 660-8922 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 $8.4 billion and operates 27 community banks with 109 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 First Fourth Third
data; taxable equivalent) Quarter Quarter Quarter
----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 129,041 $ 140,768 $ 144,884
Interest expense 62,754 71,038 73,203
----------- ----------- -----------
Net interest revenue 66,287 69,730 71,681
Provision for loan losses (1) 7,500 26,500 3,700
Fee revenue 14,197 16,100 15,615
----------- ----------- -----------
Total operating revenue 72,984 59,330 83,596
Operating expenses 47,529 49,336 48,182
----------- ----------- -----------
Income before taxes 25,455 9,994 35,414
Income taxes 9,377 3,960 12,878
----------- ----------- -----------
Net operating income 16,078 6,034 22,536
Fraud loss provision, net of tax (1) - 1,833 -
----------- ----------- -----------
Net income $ 16,078 $ 4,201 $ 22,536
=========== =========== ===========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ .34 $ .13 $ .47
Diluted .34 .13 .46
Return on tangible equity
(2)(3)(4) 13.16% 5.06% 17.54%
Return on assets (4) .78 .29 1.11
Dividend payout ratio 26.47 69.23 19.15
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings $ .34 $ .09 $ .47
Diluted earnings .34 .09 .46
Cash dividends declared .09 .09 .09
Book value 18.50 17.70 17.51
Tangible book value (3) 11.76 10.92 10.81
Key performance ratios:
Return on equity (2)(4) 7.85% 2.01% 10.66%
Return on assets .78 .20 1.11
Net interest margin (4) 3.55 3.73 3.89
Efficiency ratio 59.05 57.67 55.34
Tangible equity to assets (3) 6.73 6.58 6.65
ASSET QUALITY
Allowance for loan losses $ 89,848 $ 89,423 $ 90,935
Net charge-offs (1) 7,075 13,012 5,236
Non-performing loans 67,728 28,219 46,783
OREO 22,136 18,039 16,554
----------- ----------- -----------
Total non-performing assets 89,864 46,258 63,337
Allowance for loan losses to loans
(1) 1.51% 1.51% 1.28%
Net charge-offs to average loans
(1)(4) .48 .87 .35
Non-performing assets to loans and
OREO 1.50 .78 1.06
Non-performing assets to total
assets 1.07 .56 .77
AVERAGE BALANCES
Loans $ 5,958,296 $ 5,940,230 $ 5,966,933
Investment securities 1,485,515 1,404,796 1,308,192
Earning assets 7,491,480 7,424,992 7,332,492
Total assets 8,305,621 8,210,120 8,083,739
Deposits 6,051,069 6,151,476 6,246,319
Shareholders' equity 855,659 837,195 834,094
Common shares - basic 46,966 47,203 48,348
Common shares - diluted 47,272 47,652 48,977
AT PERIOD END
Loans $ 5,967,839 $ 5,929,263 $ 5,952,749
Investment securities 1,508,402 1,356,846 1,296,826
Total assets 8,386,255 8,207,302 8,180,600
Deposits 6,175,769 6,075,951 6,154,308
Shareholders' equity 871,452 831,902 833,761
Common shares outstanding 47,004 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
First
2007 Quarter
------------------------
(in thousands, except per share Second First 2008-2007
data; taxable equivalent) Quarter Quarter Change
----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 136,237 $ 129,028
Interest expense 68,270 63,923
----------- -----------
Net interest revenue 67,967 65,105 2%
Provision for loan losses (1) 3,700 3,700
Fee revenue 16,554 14,382 (1)
----------- -----------
Total operating revenue 80,821 75,787 (4)
Operating expenses 47,702 44,841 6
----------- -----------
Income before taxes 33,119 30,946 (18)
Income taxes 12,043 11,601
----------- -----------
Net operating income 21,076 19,345 (17)
Fraud loss provision, net of tax (1) 9,165 -
----------- -----------
Net income $ 11,911 $ 19,345 (17)
=========== ===========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ .47 $ .45 (24)
Diluted .46 .44 (23)
Return on tangible equity
(2)(3)(4) 17.52% 17.18%
Return on assets (4) 1.12 1.11
Dividend payout ratio 19.15 20.00
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings $ .26 $ .45 (24)
Diluted earnings .26 .44 (23)
Cash dividends declared .09 .09 -
Book value 16.96 14.82 25
Tangible book value (3) 10.43 11.05 6
Key performance ratios:
Return on equity (2)(4) 7.05% 12.47%
Return on assets .64 1.11
Net interest margin (4) 3.94 3.99
Efficiency ratio 56.59 56.56
Tangible equity to assets (3) 6.65 6.66
ASSET QUALITY
Allowance for loan losses $ 92,471 $ 68,804
Net charge-offs (1) 2,124 1,462
Non-performing loans 30,849 12,319
OREO 12,752 1,971
----------- -----------
Total non-performing assets 43,601 14,290
Allowance for loan losses to loans
(1) 1.29% 1.27%
Net charge-offs to average loans
(1)(4) .15 .11
Non-performing assets to loans and
OREO .73 .26
Non-performing assets to total
assets .54 .20
AVERAGE BALANCES
Loans $ 5,619,950 $ 5,402,860 10
Investment securities 1,242,448 1,153,208 29
Earning assets 6,915,134 6,599,035 14
Total assets 7,519,392 7,092,710 17
Deposits 5,945,633 5,764,426 5
Shareholders' equity 672,348 624,100 37
Common shares - basic 44,949 43,000
Common shares - diluted 45,761 43,912
AT PERIOD END
Loans $ 5,999,093 $ 5,402,198 10
Investment securities 1,213,659 1,150,424 31
Total assets 8,087,667 7,186,602 17
Deposits 6,361,269 5,841,687 6
Shareholders' equity 828,731 638,456 36
Common shares outstanding 48,781 43,038
(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
---------- --------------------------------
First Fourth Third Second
(in millions) Quarter Quarter Quarter Quarter(1)
---------- ---------- ---------- ----------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,526 $ 1,476 $ 1,441 $ 1,461
Commercial construction 548 527 527 509
Commercial & industrial 437 418 408 421
---------- ---------- ---------- ----------
Total commercial 2,511 2,421 2,376 2,391
Residential construction 1,791 1,830 1,939 2,013
Residential mortgage 1,491 1,502 1,459 1,413
Consumer / installment 175 176 179 182
---------- ---------- ---------- ----------
Total loans $ 5,968 $ 5,929 $ 5,953 $ 5,999
========== ========== ========== ==========
LOANS BY MARKET
Atlanta Region $ 2,393 $ 2,402 $ 2,451 $ 2,518
North Georgia 2,071 2,060 2,026 2,032
Western North Carolina 816 806 834 816
Coastal Georgia 439 416 402 396
East Tennessee 249 245 240 237
---------- ---------- ---------- ----------
Total loans $ 5,968 $ 5,929 $ 5,953 $ 5,999
========== ========== ========== ==========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 583 $ 593 $ 596 $ 602
Land loans 130 126 125 113
Lot loans 406 407 403 393
---------- ---------- ---------- ----------
Total 1,119 1,126 1,124 1,108
---------- ---------- ---------- ----------
House loans
Spec 460 473 539 596
Sold 212 231 276 309
---------- ---------- ---------- ----------
Total 672 704 815 905
---------- ---------- ---------- ----------
Total residential construction $ 1,791 $ 1,830 $ 1,939 $ 2,013
========== ========== ========== ==========
RESIDENTIAL CONSTRUCTION - ATLANTA REGION
Dirt loans
Acquisition & development $ 305 $ 311 $ 312 $ 336
Land loans 55 54 53 50
Lot loans 129 131 135 140
---------- ---------- ---------- ----------
Total 489 496 500 526
---------- ---------- ---------- ----------
House loans
Spec 279 286 328 378
Sold 76 82 112 140
---------- ---------- ---------- ----------
Total 355 368 440 518
---------- ---------- ---------- ----------
Total residential construction $ 844 $ 864 $ 940 $ 1,044
========== ========== ========== ==========
(1) Acquired Gwinnett Commercial Group on June 1, 2007 with total loans of
$534 million in the Atlanta Region:
(2) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
Linked
Quarter
2007 Change(2) Year over Year Change
--------- --------- ----------------------
First Excluding
(in millions) Quarter Actual Actual Acquired
--------- --------- --------- ----------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,227 14 % 24 % 7 %
Commercial construction 462 16 19 14
Commercial & industrial 315 18 39 4
---------
Total commercial 2,004 15 25 8
Residential construction 1,874 (9) (4) (14)
Residential mortgage 1,353 (3) 10 9
Consumer / installment 171 (2) 2 (2)
---------
Total loans $ 5,402 3 10 1
=========
LOANS BY MARKET
Atlanta Region $ 2,015 (1)% 19 % (8)%
North Georgia 2,010 2 3 3
Western North Carolina 782 5 4 4
Coastal Georgia 372 22 18 18
East Tennessee 223 7 12 12
---------
Total loans $ 5,402 3 10 1
=========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 580 (7)% 1 % (8)%
Land loans 122 13 7 4
Lot loans 362 (1) 12 5
---------
Total 1,064 (2) 5 (2)
---------
House loans
Spec 533 (11)% (14)% (26)%
Sold 277 (33) (23) (35)
---------
Total 810 (18) (17) (29)
---------
Total residential
construction $ 1,874 (9) (4) (14)
=========
RESIDENTIAL CONSTRUCTION - ATLANTA REGION
Dirt loans
Acquisition & development $ 317 (8)% (4)% (19)%
Land loans 52 7 6 -
Lot loans 113 (6) 14 (8)
---------
Total 482 (6) 1 (14)
---------
House loans
Spec 298 (10)% (6)% (28)%
Sold 124 (29) (39) (65)
---------
Total 422 (14) (16) (38)
---------
Total residential
construction $ 904 (9) (7) (25)
=========
(1) Acquired Gwinnett Commercial Group on June 1, 2007 with total loans of
$534 million in the Atlanta Region:
(2) Annualized.
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
First Fourth
Quarter Quarter
2008 2007
-------- --------
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 $ 16,078 $ 6,034
After-tax effect of special provision and
merger-related charges - (1,833)
-------- --------
Net income (GAAP) $ 16,078 $ 4,201
======== ========
Basic Earnings Per Share Reconciliation
Basic operating earnings per share $ .34 $ .13
Per share effect of special provision and
merger-related charges - (.04)
-------- --------
Basic earnings per share (GAAP) $ .34 $ .09
======== ========
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share $ .34 $ .13
Per share effect of special provision and
merger-related charges - (.04)
-------- --------
Diluted earnings per share (GAAP) $ .34 $ .09
======== ========
Provision for Loan Losses Reconciliation
Operating provision for loan losses $ 7,500 $ 26,500
Special provision for fraud related loan losses - 3,000
-------- --------
Provision for loan losses (GAAP) $ 7,500 $ 29,500
======== ========
Nonperforming Assets Reconciliation
Nonperforming assets excluding fraud-related assets $ 85,182 $ 40,956
Fraud-related loans and OREO included in nonperforming
assets 4,682 5,302
-------- --------
Nonperforming assets (GAAP) $ 89,864 $ 46,258
======== ========
Allowance for Loan Losses Reconciliation
Allowance for loan losses excluding special
fraud-related allowance $ 89,848 $ 89,423
Fraud-related allowance for loan losses - -
-------- --------
Allowance for loan losses (GAAP) $ 89,848 $ 89,423
======== ========
Net Charge Offs Reconciliation
Net charge offs excluding charge off of fraud-related
loans $ 7,075 $ 13,012
Fraud-related loans charged off - 18,000
-------- --------
Net charge offs (GAAP) $ 7,075 $ 31,012
======== ========
Allowance for Loan Losses to Loans Ratio Reconciliation
Allowance for loan losses to loans ratio excluding
fraud-related allowance 1.51% 1.51%
Portion of allowance assigned to fraud-related loans - -
-------- --------
Allowance for loan losses to loans ratio (GAAP) 1.51% 1.51%
======== ========
Nonperforming Assets to Total Assets Ratio
Reconciliation
Nonperforming assets to total assets ratio excluding
fraud-related assets 1.02% .50%
Fraud-related nonperforming assets .05 .06
-------- --------
Nonperforming assets to total assets ratio (GAAP) 1.07% .56%
======== ========
Net Charge Offs to Average Loans Ratio Reconciliation
Net charge offs to average loans ratio excluding
fraud-related loans .48% .87%
Charge offs of fraud-related loans - 1.20
-------- --------
Net charge offs to average loans ratio (GAAP) .48% 2.07%
======== ========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
Third Second
Quarter Quarter
2007 2007
-------- --------
Special provision for fraud related loan losses $ - $ 15,000
-------- --------
Income tax effect of special provision - 5,835
-------- --------
After-tax effect of special provision $ - $ 9,165
======== ========
Net Income Reconciliation
Operating net income $ 22,536 $ 21,076
After-tax effect of special provision and
merger-related charges - (9,165)
-------- --------
Net income (GAAP) $ 22,536 $ 11,911
======== ========
Basic Earnings Per Share Reconciliation
Basic operating earnings per share $ .47 $ .47
Per share effect of special provision and
merger-related charges - (.21)
-------- --------
Basic earnings per share (GAAP) $ .47 $ .26
======== ========
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share $ .46 $ .46
Per share effect of special provision and
merger-related charges - (.20)
-------- --------
Diluted earnings per share (GAAP) $ .46 $ .26
======== ========
Provision for Loan Losses Reconciliation
Operating provision for loan losses $ 3,700 $ 3,700
Special provision for fraud related loan losses - 15,000
-------- --------
Provision for loan losses (GAAP) $ 3,700 $ 18,700
======== ========
Nonperforming Assets Reconciliation
Nonperforming assets excluding fraud-related assets $ 39,761 $ 19,968
Fraud-related loans and OREO included in nonperforming
assets 23,576 23,633
-------- --------
Nonperforming assets (GAAP) $ 63,337 $ 43,601
======== ========
Allowance for Loan Losses Reconciliation
Allowance for loan losses excluding special
fraud-related allowance $ 75,935 $ 77,471
Fraud-related allowance for loan losses 15,000 15,000
-------- --------
Allowance for loan losses (GAAP) $ 90,935 $ 92,471
======== ========
Net Charge Offs Reconciliation
Net charge offs excluding charge off of fraud-related
loans $ 5,236 $ 2,124
Fraud-related loans charged off - -
-------- --------
Net charge offs (GAAP) $ 5,236 $ 2,124
======== ========
Allowance for Loan Losses to Loans Ratio Reconciliation
Allowance for loan losses to loans ratio excluding
fraud-related allowance 1.28% 1.29%
Portion of allowance assigned to fraud-related loans .25 .25
-------- --------
Allowance for loan losses to loans ratio (GAAP) 1.53% 1.54%
======== ========
Nonperforming Assets to Total Assets Ratio
Reconciliation
Nonperforming assets to total assets ratio excluding
fraud-related assets .49% .25%
Fraud-related nonperforming assets .28 .29
-------- --------
Nonperforming assets to total assets ratio (GAAP) .77% .54%
======== ========
Net Charge Offs to Average Loans Ratio Reconciliation
Net charge offs to average loans ratio excluding
fraud-related loans .35% .15%
Charge offs of fraud-related loans - -
-------- --------
Net charge offs to average loans ratio (GAAP) .35% .15%
======== ========
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (unaudited)
Three Months Ended
March 31,
-------------------
(in thousands, except per share data) 2008 2007
--------- ---------
Interest revenue:
Loans, including fees $ 109,266 $ 114,073
Investment securities:
Taxable 18,628 13,968
Tax exempt 394 447
Federal funds sold and deposits in banks 222 58
--------- ---------
Total interest revenue 128,510 128,546
--------- ---------
Interest expense:
Deposits:
NOW 8,587 10,627
Money market 2,913 2,540
Savings 227 309
Time 38,884 41,625
--------- ---------
Total deposit interest expense 50,611 55,101
Federal funds purchased, repurchase agreements,
and other short-term borrowings 4,318 1,817
Federal Home Loan Bank advances 5,745 4,801
Long-term debt 2,080 2,204
--------- ---------
Total interest expense 62,754 63,923
--------- ---------
Net interest revenue 65,756 64,623
Provision for loan losses 7,500 3,700
--------- ---------
Net interest revenue after provision for loan losses 58,256 60,923
--------- ---------
Fee revenue:
Service charges and fees 7,813 7,253
Mortgage loan and other related fees 1,963 2,223
Consulting fees 1,807 1,747
Brokerage fees 1,093 944
Securities gains, net - 207
Other 1,521 2,008
--------- ---------
Total fee revenue 14,197 14,382
--------- ---------
Total revenue 72,453 75,305
--------- ---------
Operating expenses:
Salaries and employee benefits 28,754 28,317
Communications and equipment 3,832 3,812
Occupancy 3,716 3,191
Advertising and public relations 1,351 2,016
Postage, printing and supplies 1,592 1,660
Professional fees 1,921 1,479
Amortization of intangibles 767 564
Other 5,596 3,802
--------- ---------
Total operating expenses 47,529 44,841
--------- ---------
Income before income taxes 24,924 30,464
Income taxes 8,846 11,119
--------- ---------
Net income $ 16,078 $ 19,345
========= =========
Earnings per common share:
Basic $ .34 $ .45
Diluted .34 .44
Dividends per common share .09 .09
Weighted average common shares outstanding:
Basic 46,966 43,000
Diluted 47,272 43,912
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
December
(in thousands, except share and per March 31, 31, March 31,
share data) 2008 2007 2007
----------- ----------- -----------
(unaudited) (audited) (unaudited)
ASSETS
Cash and due from banks $ 169,538 $ 157,549 $ 159,543
Interest-bearing deposits in
banks 13,417 62,074 22,644
----------- ----------- -----------
Cash and cash equivalents 182,955 219,623 182,187
Securities available for sale 1,508,402 1,356,846 1,150,424
Mortgage loans held for sale 28,451 28,004 31,633
Loans, net of unearned income 5,967,839 5,929,263 5,402,198
Less allowance for loan
losses 89,848 89,423 68,804
----------- ----------- -----------
Loans, net 5,877,991 5,839,840 5,333,394
Premises and equipment, net 180,746 180,088 150,332
Accrued interest receivable 59,585 62,828 60,677
Goodwill and other intangible
assets 324,041 325,305 166,073
Other assets 224,084 194,768 111,882
----------- ----------- -----------
Total assets $ 8,386,255 $ 8,207,302 $ 7,186,602
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 690,028 $ 700,941 $ 675,969
NOW 1,523,942 1,474,818 1,406,287
Money market 431,623 452,917 277,184
Savings 187,911 186,392 176,891
Time:
Less than $100,000 1,535,742 1,573,604 1,619,865
Greater than $100,000 1,375,000 1,364,763 1,366,360
Brokered 431,523 322,516 319,131
----------- ----------- -----------
Total deposits 6,175,769 6,075,951 5,841,687
Federal funds purchased,
repurchase agreements, and other
short-term borrowings 532,896 638,462 77,367
Federal Home Loan Bank advances 615,324 519,782 464,072
Long-term debt 107,996 107,996 113,151
Accrued expenses and other
liabilities 82,818 33,209 51,869
----------- ----------- -----------
Total liabilities 7,514,803 7,375,400 6,548,146
----------- ----------- -----------
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
43,037,840 shares issued 48,809 48,809 43,038
Common stock issuable; 90,505,
73,250 and 35,154 shares 2,410 2,100 1,043
Capital surplus 463,095 462,881 273,575
Retained earnings 359,248 347,391 321,721
Treasury stock; 1,805,078 and
1,905,921 shares, at cost (41,351) (43,798) -
Accumulated other comprehensive
income (loss) 38,983 14,261 (1,243)
----------- ----------- -----------
Total shareholders' equity 871,452 831,902 638,456
----------- ----------- -----------
Total liabilities and
shareholders' equity $ 8,386,255 $ 8,207,302 $ 7,186,602
=========== =========== ===========
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
2008
----------- ------------ -----------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,958,296 $ 109,252 7.37%
Taxable securities (3) 1,448,224 18,628 5.15
Tax-exempt securities (1)(3) 37,291 648 6.95
Federal funds sold and other
interest-earning assets 47,669 513 4.30
----------- ------------
Total interest-earning assets 7,491,480 129,041 6.92
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (92,025)
Cash and due from banks 154,706
Premises and equipment 181,355
Other assets (3) 570,105
-----------
Total assets $ 8,305,621
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,462,116 $ 8,587 2.36
Money market 439,049 2,913 2.67
Savings 184,812 227 .49
Time less than $100,000 1,553,313 18,223 4.72
Time greater than $100,000 1,365,307 16,370 4.82
Brokered 374,402 4,291 4.61
----------- ------------
Total interest-bearing
deposits 5,378,999 50,611 3.78
----------- ------------
Federal funds purchased and
other borrowings 551,812 4,318 3.15
Federal Home Loan Bank advances 661,498 5,745 3.49
Long-term debt 107,996 2,080 7.75
----------- ------------
Total borrowed funds 1,321,306 12,143 3.70
----------- ------------
Total interest-bearing
liabilities 6,700,305 62,754 3.77
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 672,070
Other liabilities 77,587
-----------
Total liabilities 7,449,962
Shareholders' equity 855,659
-----------
Total liabilities and
shareholders' equity $ 8,305,621
===========
Net interest revenue $ 66,287
============
Net interest-rate spread 3.15%
===========
Net interest margin (4) 3.55%
===========
(1) Interest revenue on tax-exempt securities and loans has been increased
to reflect comparable interest on taxable securities and loans. The
rate used was 39%, reflecting the statutory federal income tax rate
and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where
the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $15.9 million in 2008 and pretax unrealized losses
of $10.0 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 March 31,
2007
----------- ------------ -----------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,402,860 $ 113,868 8.55%
Taxable securities (3) 1,109,847 13,968 5.03
Tax-exempt securities (1)(3) 43,361 735 6.78
Federal funds sold and other
interest-earning assets 42,967 457 4.25
----------- ------------
Total interest-earning assets 6,599,035 129,028 7.92
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (68,187)
Cash and due from banks 120,637
Premises and equipment 146,832
Other assets (3) 294,393
-----------
Total assets $ 7,092,710
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,322,818 $ 10,627 3.26
Money market 261,753 2,540 3.94
Savings 175,275 309 .71
Time less than $100,000 1,641,507 19,796 4.89
Time greater than $100,000 1,385,401 17,916 5.24
Brokered 334,753 3,913 4.74
----------- ------------
Total interest-bearing
deposits 5,121,507 55,101 4.36
----------- ------------
Federal funds purchased and
other borrowings 139,256 1,817 5.29
Federal Home Loan Bank advances 395,746 4,801 4.92
Long-term debt 113,234 2,204 7.89
----------- ------------
Total borrowed funds 648,236 8,822 5.52
----------- ------------
Total interest-bearing
liabilities 5,769,743 63,923 4.49
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 642,919
Other liabilities 55,948
-----------
Total liabilities 6,468,610
Shareholders' equity 624,100
-----------
Total liabilities and
shareholders' equity $ 7,092,710
===========
Net interest revenue $ 65,105
============
Net interest-rate spread 3.43%
===========
Net interest margin (4) 3.99%
===========
(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 $15.9 million in 2008 and pretax unrealized losses
of $10.0 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=CDC91F9154597DB0
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