United Community Banks, Inc. Reports Diluted Operating Earnings per Share of 13 Cents for Fourth Quarter 2007
BLAIRSVILLE, GA, Jan 23, 2008 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)
HIGHLIGHTS:
-- Fourth Quarter Operating Earnings
-- Diluted operating earnings per share of 13 cents, lowered
significantly by $26.5 million provision for loan losses
-- Non-performing assets slightly above third quarter level
United Community Banks, Inc. (NASDAQ: UCBI) today announced diluted operating earnings per share of 13 cents for the fourth quarter of 2007, compared to 44 cents for the fourth quarter of 2006. Total revenue on a taxable equivalent basis was $59.3 million for the quarter, compared to $72.1 million for the fourth quarter of 2006. These decreases reflect a higher provision for loan losses in the fourth quarter of 2007 and reflect a more challenging credit environment.
Net operating income was $6.0 million, compared with $18.4 million in the fourth quarter of 2006. Operating return on tangible equity was 5.06 percent and operating return on assets was .29 percent for the fourth quarter of 2007, compared with 17.49 percent and 1.10 percent a year ago, respectively.
"The residential housing market continued to weaken in the fourth quarter, making it one of the most challenging quarters we have faced in recent years," said Jimmy Tallent, president and chief executive officer. "In response to the difficult operating environment, we worked aggressively to move non-performing loans and assets out of the bank, taking charge-offs and write downs when necessary."
For the full year, diluted operating earnings per share was $1.48, compared with $1.66 for 2006. Taxable equivalent operating revenue was up 10 percent to $299.5 million versus $272.4 million for 2006, despite the increase in the provision for loan losses. Net operating income for 2007 was $69.0 million compared with $68.8 million for 2006.
Earnings measures for the fourth quarter and full year of 2007 are presented on an operating basis that excludes a second quarter $15 million special provision for loan losses related to two failed residential real estate developments near Spruce Pine, North Carolina. An additional $3 million special provision for loan losses related to these developments was recorded in the fourth quarter of 2007, bringing the total for the year to $18 million. Because the provision was the result of a fraud-related matter that is considered isolated and non-recurring, management believes the presentation of operating earnings is useful for understanding underlying core earnings and credit trends.
Loans were up $553 million from the end of 2006, due primarily to loans added through the acquisition of First Bank of the South in the second quarter. Excluding acquisitions, loans were flat year-over-year. "In 2007, residential construction loan growth slowed substantially due to the weak housing market, particularly in the Atlanta region," Tallent said. "The weak housing market reduced our ability to grow and we expect that this slower-than-normal loan growth will continue until the market stabilizes. In fact, on a linked-quarter basis residential construction loans were down $110 million. However, on the positive side, we saw $90 million loan growth in the commercial and residential mortgage portfolios. So we are getting growth across our markets, but this growth is more than offset by construction paydowns. To enhance the growth and diversity of our loan portfolio, we are actively exploring opportunities to add commercial lending expertise and to expand small business lending. We are targeting core loan growth for 2008 to be flat to 4 percent, but expect to be at the low end of that range for the first half."
Deposits increased $303 million, or 5 percent, from a year ago due to the acquisition of First Bank of the South. "Total deposits, excluding acquired deposits, decreased by $265 million from the prior year as we let non-relationship time deposits run off in view of declining loan demand," commented Tallent. "Excluding these time deposits, customer deposits were up $25 million from the prior year, but down $77 million from the third quarter."
"We believe the fourth quarter decline was temporary and directly related to the current economic environment," said Tallent. "The number of customer relationships continues to increase and our customer satisfaction scores remain at historical highs. In fact, in November we hit a record high of 95.3 percent, proof that our bankers remain focused on the all-important business of taking excellent care of customers."
For the fourth quarter 2007, taxable equivalent net interest revenue of $69.7 million reflected an increase of $7.2 million, or 11 percent, from the fourth quarter of 2006. The full year increase was $36.6 million, or 15 percent, compared to 2006. Taxable equivalent net interest margin was 3.73 percent for the fourth quarter, compared with 3.89 percent for the third quarter of 2007 and 3.99 percent for the fourth quarter of 2006. "Our net interest margin continues to be under pressure due to very competitive CD pricing, the higher level of non-performing assets, and a slight change in the mix of earning assets," stated Tallent. "With the Federal Reserve's rate cut yesterday and the outlook for the continued easing of rates, we expect to see these margin pressures continue into 2008. If liquidity pressures continue to keep an imbalance on our CD pricing, we expect to see further margin compression in the first quarter."
The fourth quarter provision for loan losses was $29.5 million, including a $3 million special provision for the Spruce Pine developments in North Carolina. This compared with provisions of $3.7 million in both the fourth quarter of 2006 and third quarter of 2007. Net charge-offs were $31.0 million, including $18 million related to the Spruce Pine loans, compared with $5.2 million for the third quarter and $1.9 million a year ago. Annualized net charge-offs to average loans, excluding Spruce Pine, was 87 basis points for the fourth quarter compared to 35 basis points for the third quarter and 15 basis points for the fourth quarter of 2006.
"The increase in the fourth quarter provision was due to management's decision to deal with problem credits assertively," Tallent said. "In the fourth quarter, we charged down non-performing loans aggressively, enabling us to reduce the level of total non-performing assets below the third quarter level. The higher provision increased our allowance-to-loans ratio to 1.51 percent. We believe that our actions in the fourth quarter better position us to manage what we expect to be a challenging 2008."
At year-end, non-performing assets totaled $46.3 million, compared with $63.3 million at September 30, 2007 and $13.7 million at December 31, 2006. The remaining balance of fraud-related assets for Spruce Pine was $5.3 million, compared with $23.6 million at September 30, 2007. Excluding Spruce Pine, non-performing assets were $41.0 million at year-end compared with $39.8 million at September 30, 2007 and $13.7 million a year ago and as a percentage of total assets was 50 basis points, 49 basis points, and 19 basis points, respectively. The Spruce Pine non-performing assets, as a percentage of total assets, was six basis points at December 31, 2007 and 28 basis points at September 30, 2007. "We continued negotiations related to Spruce Pine during the fourth quarter and have been in contact with all of the borrowers or their counsel," commented Tallent. "Even though we charged-off these loans, we will seek full recovery, and in the past 30 days, we have reached settlement with several borrowers."
"Non-performing assets, until recently, were at very low levels and at the lower end of our historic 20 to 35 basis point range," Tallent said. "During the past two quarters, excluding the Spruce Pine loans, non-performing assets increased above this range to 50 basis points. Most of the rise was construction-related due to softening in the residential housing market. We continue to see a buildup of lot inventory in the Atlanta region and a standstill in new construction lending. We don't know the length of this current cycle, but we expect several quarters will pass before we return to our historical range for non-performing assets."
Fee revenue of $16.1 million for the fourth quarter reflected an increase of $2.9 million, or 22 percent, from $13.2 million for the fourth quarter of 2006. Service charges and fees on deposit accounts of $8.4 million reflected an increase of $1.3 million, or 18 percent, from the fourth quarter of 2006 due to growth in transactions, new accounts and higher ATM and debit card usage. Consulting fees were $2.6 million -- up $482,000, or 23 percent, from a year ago -- surpassing the record level set last quarter and reflecting strong growth in the advisory services practice. Brokerage fees were up $411,000 to $1.1 million from a year ago due to strong retention rates and additional customers.
"During the fourth quarter, we took an opportunity to lower our funding costs by prepaying higher-rate Federal Home Loan Bank advances," Tallent said. "The gain from the sale of securities more than offset the charges from the prepayment of the advances." Other fee revenue of $2.1 million included $727,000 of earnings from bank-owned life insurance assets that were added in the second quarter of 2007.
Operating expenses of $49.3 million reflected an increase of $6.8 million, or 16 percent, from the fourth quarter of 2006. Salaries and employee benefit costs totaled $27.1 million, which was $592,000, or 2 percent, higher than the fourth quarter of 2006. Although acquisitions added approximately $1.5 million, this was more than offset by a reduction in bonus and profit sharing expense of $3.5 million. Occupancy expense increased $650,000 to $3.5 million due to the higher costs of operating additional banking offices. Professional fees increased $535,000 to $1.8 million, reflecting higher fees associated with loan work-outs, foreclosures and corporate initiatives. Other expenses of $8.8 million were $5.1 million higher than a year ago and included $3.7 million of write-downs and related costs on foreclosed properties and higher FDIC insurance premiums of $927,000.
"Our operating efficiency ratio of 57.67 percent for the fourth quarter was at the upper end of our long-term efficiency target range of 56 to 58 percent, primarily due to accelerated write-downs on foreclosed properties," Tallent said. "Despite these challenges, we continue to maintain disciplined expense controls."
"In the third quarter, the Board of Directors increased the level of our stock purchase program to three million shares, and we have purchased two million shares through December 2007," noted Tallent. "Even though we believe our stock price is significantly undervalued, it is important to maintain a strong capital position during this difficult credit environment. At year-end, we continued to maintain strong capital ratios, with all of our regulatory capital ratios above the well-capitalized level and our tangible equity-to-asset ratio at 6.58 percent. To help maintain this, we will wait to evaluate any additional stock purchases until the second half of 2008.
"We remain committed to increasing long-term shareholder value by delivering solid growth in earnings per share, building our franchise and providing superior customer service," said Tallent. "These are very challenging times for financial institutions, and our outlook for 2008 will be tempered by these challenges. Given the uncertainty and volatility in both the housing market and broader economy, we do not have a clear enough view to provide guidance beyond the first quarter. Based on these assumptions and continued growth in the economy, we expect core annualized loan growth for the quarter to be flat. We expect margin compression to continue, net charge-offs to be $5 million to $7 million, and operating earnings per share to be 34 to 38 cents."
"We remain focused on the solid business model and guiding principles that have resulted in our past achievements," Tallent concluded. "We will continue to provide unparalleled customer service in our markets and are optimistic about the stability and long-term growth this will bring."
Conference Call
United Community Banks will hold a conference call on Wednesday, January 23, 2008, at 11 a.m. ET to discuss the contents of this news release, as well as business highlights for the quarter and the financial outlook for 2008. The telephone number for the conference call is (888) 262-8720 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 $8.2 billion and operates 27 community banks with 111 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
2007
-------------------------------------
(in thousands, except per share Fourth Third Second
data; taxable equivalent) Quarter Quarter Quarter
----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 140,768 $ 144,884 $ 136,237
Interest expense 71,038 73,203 68,270
----------- ----------- -----------
Net interest revenue 69,730 71,681 67,967
Provision for loan losses (1) 26,500 3,700 3,700
Fee revenue 16,100 15,615 16,554
----------- ----------- -----------
Total operating revenue 59,330 83,596 80,821
Operating expenses 49,336 48,182 47,702
----------- ----------- -----------
Income before taxes 9,994 35,414 33,119
Income taxes 3,960 12,878 12,043
----------- ----------- -----------
Net operating income 6,034 22,536 21,076
Fraud loss provision, net of tax (1) 1,833 - 9,165
----------- ----------- -----------
Net income $ 4,201 $ 22,536 $ 11,911
=========== =========== ===========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ .13 $ .47 $ .47
Diluted .13 .46 .46
Return on tangible equity (2)(3)(4) 5.06% 17.54% 17.52%
Return on assets (4) .29 1.11 1.12
Dividend payout ratio 69.23 19.15 19.15
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings $ .09 $ .47 $ .26
Diluted earnings .09 .46 .26
Cash dividends declared .09 .09 .09
Book value 17.73 17.53 16.98
Tangible book value (3) 10.94 10.82 10.44
Key performance ratios:
Return on equity (2)(4) 2.01% 10.66% 7.05%
Return on assets (4) .20 1.11 .64
Net interest margin (4) 3.73 3.89 3.94
Efficiency ratio 57.67 55.34 56.59
Dividend payout ratio 100.00 19.15 34.62
Equity to assets 10.20 10.32 8.94
Tangible equity to assets (3) 6.58 6.65 6.65
ASSET QUALITY
Allowance for loan losses $ 89,423 $ 90,935 $ 92,471
Non-performing assets 46,258 63,337 43,601
Net charge-offs 31,012 5,236 2,124
Allowance for loan losses to loans 1.51% 1.53% 1.54%
Non-performing assets to total
assets .56 .77 .54
Net charge-offs to average loans (4) 2.07 .35 .15
AVERAGE BALANCES
Loans $ 5,940,230 $ 5,966,933 $ 5,619,950
Investment securities 1,404,796 1,308,192 1,242,448
Earning assets 7,424,992 7,332,492 6,915,134
Total assets 8,210,120 8,083,739 7,519,392
Deposits 6,151,476 6,246,319 5,945,633
Shareholders' equity 837,195 834,094 672,348
Common shares - basic 47,203 48,348 44,949
Common shares - diluted 47,652 48,977 45,761
AT PERIOD END
Loans $ 5,929,263 $ 5,952,749 $ 5,999,093
Investment securities 1,356,846 1,296,826 1,213,659
Total assets 8,207,302 8,180,600 8,087,667
Deposits 6,075,951 6,154,308 6,361,269
Shareholders' equity 831,902 833,761 828,731
Common shares outstanding 46,903 47,542 48,781
(1) Excludes effect of special $15 million fraud related provision for
loan losses recorded in the second quarter of 2007 and an additional $3
million 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 2006 Fourth
----------- ----------- Quarter
(in thousands, except per share First Fourth 2007-2006
data; taxable equivalent) Quarter Quarter Change
----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 129,028 $ 123,463
Interest expense 63,923 60,912
----------- -----------
Net interest revenue 65,105 62,551 11%
Provision for loan losses (1) 3,700 3,700
Fee revenue 14,382 13,215 22
----------- -----------
Total operating revenue 75,787 72,066 (18)
Operating expenses 44,841 42,521 16
----------- -----------
Income before taxes 30,946 29,545 (66)
Income taxes 11,601 11,111
----------- -----------
Net operating income 19,345 18,434 (67)
Fraud loss provision, net of tax (1) - -
----------- -----------
Net income $ 19,345 $ 18,434 (77)
=========== ===========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ .45 $ .45 (71)
Diluted .44 .44 (70)
Return on tangible equity (2)(3)(4) 17.18% 17.49%
Return on assets (4) 1.11 1.10
Dividend payout ratio 20.00 17.78
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings $ .45 $ .45 (80)
Diluted earnings .44 .44 (80)
Cash dividends declared .09 .08 13
Book value 14.83 14.37 23
Tangible book value (3) 11.06 10.57 4
Key performance ratios:
Return on equity (2)(4) 12.47% 13.26%
Return on assets (4) 1.11 1.10
Net interest margin (4) 3.99 3.99
Efficiency ratio 56.56 55.93
Dividend payout ratio 20.00 17.78
Equity to assets 8.80 8.21
Tangible equity to assets (3) 6.66 6.46
ASSET QUALITY
Allowance for loan losses $ 68,804 $ 66,566
Non-performing assets 14,290 13,654
Net charge-offs 1,462 1,930
Allowance for loan losses to loans 1.27% 1.24%
Non-performing assets to total
assets .20 .19
Net charge-offs to average loans (4) .11 .15
AVERAGE BALANCES
Loans $ 5,402,860 $ 5,134,721 16
Investment securities 1,153,208 1,059,125 33
Earning assets 6,599,035 6,225,943 19
Total assets 7,092,710 6,669,950 23
Deposits 5,764,426 5,517,696 11
Shareholders' equity 624,100 547,419 53
Common shares - basic 43,000 41,096
Common shares - diluted 43,912 42,311
AT PERIOD END
Loans $ 5,402,198 $ 5,376,538 10
Investment securities 1,150,424 1,107,153 23
Total assets 7,186,602 7,101,249 16
Deposits 5,841,687 5,772,886 5
Shareholders' equity 638,456 616,767 35
Common shares outstanding 43,038 42,891
(1) Excludes effect of special $15 million fraud related provision for
loan losses recorded in the second quarter of 2007 and an additional $3
million 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 Twelve
Months Ended YTD
(in thousands, except per share ------------------------ 2007-2006
data; taxable equivalent) 2007 2006 Change
----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 550,917 $ 446,695
Interest expense 276,434 208,815
----------- -----------
Net interest revenue 274,483 237,880 15%
Provision for loan losses (1) 37,600 14,600
Fee revenue 62,651 49,095 28
----------- -----------
Total operating revenue 299,534 272,375 10
Operating expenses 190,061 162,070 17
----------- -----------
Income before taxes 109,473 110,305 (1)
Income taxes 40,482 41,490
----------- -----------
Net operating income 68,991 68,815 -
Fraud loss provision, net of tax (1) 10,998 -
----------- -----------
Net income $ 57,993 $ 68,815 (16)
=========== ===========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ 1.50 $ 1.70 (12)
Diluted 1.48 1.66 (11)
Return on tangible equity (2)(3)(4) 14.23% 17.52%
Return on assets (4) .89 1.09
Dividend payout ratio 24.00 18.82
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings $ 1.26 $ 1.70 (26)
Diluted earnings 1.24 1.66 (25)
Cash dividends declared .36 .32 13
Book value 17.73 14.37 23
Tangible book value (3) 10.94 10.57 4
Key performance ratios:
Return on equity (2)(4) 7.79% 13.28%
Return on assets (4) .75 1.09
Net interest margin (4) 3.88 4.05
Efficiency ratio 56.53 56.22
Dividend payout ratio 28.57 18.82
Equity to assets 9.61 8.06
Tangible equity to assets (3) 6.63 6.32
ASSET QUALITY
Allowance for loan losses $ 89,423 $ 66,566
Non-performing assets 46,258 13,654
Net charge-offs 39,834 5,524
Allowance for loan losses to loans 1.51% 1.24%
Non-performing assets to total
assets .56 .19
Net charge-offs to average loans (4) .69 .12
AVERAGE BALANCES
Loans $ 5,734,608 $ 4,800,981 19
Investment securities 1,277,935 1,041,897 23
Earning assets 7,070,900 5,877,483 20
Total assets 7,730,530 6,287,148 23
Deposits 6,028,625 5,017,435 20
Shareholders' equity 742,771 506,946 47
Common shares - basic 45,893 40,393
Common shares - diluted 46,593 41,575
AT PERIOD END
Loans $ 5,929,263 $ 5,376,538 10
Investment securities 1,356,846 1,107,153 23
Total assets 8,207,302 7,101,249 16
Deposits 6,075,951 5,772,886 5
Shareholders' equity 831,902 616,767 35
Common shares outstanding 46,903 42,891
(1) Excludes effect of special $15 million fraud related provision for
loan losses recorded in the second quarter of 2007 and an additional $3
million 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.
Selected Financial Information
For the Years Ended December 31,
(in thousands, except per share data;
taxable equivalent) 2007 2006 2005
----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 550,917 $ 446,695 $ 324,225
Interest expense 276,434 208,815 127,426
----------- ----------- -----------
Net interest revenue 274,483 237,880 196,799
Provision for loan losses 37,600 14,600 12,100
Fee revenue 62,651 49,095 46,148
----------- ----------- -----------
Total revenue 299,534 272,375 230,847
Operating expenses (1) 190,061 162,070 140,808
----------- ----------- -----------
Income before taxes 109,473 110,305 90,039
Income taxes 40,482 41,490 33,297
----------- ----------- -----------
Net operating income 68,991 68,815 56,742
Fraud loss provision, net of tax 10,998 - -
Merger-related charges, net of tax - - -
----------- ----------- -----------
Net income $ 57,993 $ 68,815 $ 56,742
=========== =========== ===========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ 1.50 $ 1.70 $ 1.47
Diluted 1.48 1.66 1.43
Return on tangible equity (2)(3) 14.23% 17.52% 18.99%
Return on assets .89 1.09 1.04
Efficiency ratio 56.53 56.35 57.77
Dividend payout ratio 24.00 18.82 19.05
GAAP PERFORMANCE
Per common share:
Basic earnings $ 1.26 $ 1.70 $ 1.47
Diluted earnings 1.24 1.66 1.43
Cash dividends declared
(rounded) .36 .32 .28
Book value 17.73 14.37 11.80
Tangible book value (3) 10.94 10.57 8.94
Key performance ratios:
Return on equity (2) 7.79% 13.28% 13.46%
Return on assets .75 1.09 1.04
Net interest margin 3.88 4.05 3.85
Dividend payout ratio 28.57 18.82 19.05
Equity to assets 9.61 8.06 7.63
Tangible equity to assets (3) 6.63 6.32 5.64
ASSET QUALITY
Allowance for loan losses $ 89,423 $ 66,566 $ 53,595
Non-performing assets 46,258 13,654 12,995
Net charge-offs 39,834 5,524 5,701
Allowance for loan losses to loans 1.51% 1.24% 1.22%
Non-performing assets to total
assets .56 .19 .22
Net charge-offs to average loans .69 .12 .14
AVERAGE BALANCES
Loans $ 5,734,608 $ 4,800,981 $ 4,061,091
Investment securities 1,277,935 1,041,897 989,201
Earning assets 7,070,900 5,877,483 5,109,053
Total assets 7,730,530 6,287,148 5,472,200
Deposits 6,028,625 5,017,435 4,003,084
Shareholders' equity 742,771 506,946 417,309
Common shares - Basic 45,893 40,393 38,477
Common shares - Diluted 46,593 41,575 39,721
AT YEAR END
Loans $ 5,929,263 $ 5,376,538 $ 4,398,286
Investment securities 1,356,846 1,107,153 990,687
Total assets 8,207,302 7,101,249 5,865,756
Deposits 6,075,951 5,772,886 4,477,600
Shareholders' equity 831,902 616,767 472,686
Common shares outstanding 46,903 42,891 40,020
(1) Excludes pre-tax provision for fraud losses of $18 million, or $.24 per
diluted common share, recorded in 2007 and pre-tax merger-related charges
totaling $.9 million, or $.02 per diluted common share, recorded in 2004
and $2.1 million, or $.04 per diluted common share, recorded in 2003.
(2) Net income available to common stockholders, 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) Compound annual growth rate.
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,
(in thousands, except
per share data; 5 Year
taxable equivalent) 2004 2003 2002 CAGR (4)
----------- ----------- ----------- -----------
INCOME SUMMARY
Interest revenue $ 227,792 $ 198,689 $ 185,498
Interest expense 74,794 70,600 76,357
----------- ----------- -----------
Net interest
revenue 152,998 128,089 109,141 20%
Provision for loan
losses 7,600 6,300 6,900
Fee revenue 39,539 38,184 30,734 15
----------- ----------- -----------
Total revenue 184,937 159,973 132,975 18
Operating expenses (1) 110,974 97,251 80,690 19
----------- ----------- -----------
Income before
taxes 73,963 62,722 52,285 16
Income taxes 26,807 23,247 19,505
----------- ----------- -----------
Net operating
income 47,156 39,475 32,780 16
Fraud loss provision,
net of tax - - -
Merger-related
charges, net of tax 565 1,357 -
----------- ----------- -----------
Net income $ 46,591 $ 38,118 $ 32,780 12
=========== =========== ===========
OPERATING PERFORMANCE
(1)
Earnings per common
share:
Basic $ 1.31 $ 1.15 $ 1.02 8
Diluted 1.27 1.12 .99 8
Return on tangible
equity (2)(3) 19.74% 19.24% 17.88%
Return on assets 1.07 1.06 1.11
Efficiency ratio 57.65 58.39 57.72
Dividend payout ratio 18.32 17.39 16.34
GAAP PERFORMANCE
Per common share:
Basic earnings $ 1.29 $ 1.11 $ 1.02 4
Diluted earnings 1.25 1.08 .99 5
Cash dividends
declared (rounded) .24 .20 .17 17
Book value 10.39 8.47 6.89 21
Tangible book value
(3) 7.34 6.52 6.49 11
Key performance
ratios:
Return on equity
(2) 14.39% 14.79% 16.54%
Return on assets 1.05 1.02 1.11
Net interest margin 3.71 3.68 3.95
Dividend payout
ratio 18.60 18.02 16.34
Equity to assets 7.45 7.21 7.01
Tangible equity to
assets (3) 5.78 6.02 6.60
ASSET QUALITY
Allowance for loan
losses $ 47,196 $ 38,655 $ 30,914
Non-performing
assets 8,725 7,589 8,019
Net charge-offs 3,617 4,097 3,111
Allowance for loan
losses to loans 1.26% 1.28% 1.30%
Non-performing
assets to total
assets .17 .19 .25
Net charge-offs to
average loans .11 .15 .14
AVERAGE BALANCES
Loans $ 3,322,916 $ 2,753,451 $ 2,239,875 21
Investment
securities 734,577 667,211 464,468 22
Earning assets 4,119,327 3,476,030 2,761,265 21
Total assets 4,416,835 3,721,284 2,959,295 21
Deposits 3,247,612 2,743,087 2,311,717 21
Shareholders' equity 329,225 268,446 207,312 29
Common shares -
Basic 36,071 34,132 32,062
Common shares -
Diluted 37,273 35,252 33,241
AT YEAR END
Loans $ 3,734,905 $ 3,015,997 $ 2,381,798 20
Investment
securities 879,978 659,891 559,390 19
Total assets 5,087,702 4,068,834 3,211,344 21
Deposits 3,680,516 2,857,449 2,385,239 21
Shareholders' equity 397,088 299,373 221,579 30
Common shares
outstanding 38,168 35,289 31,895 8
(1) Excludes pre-tax provision for fraud losses of $18 million, or $.24 per
diluted common share, recorded in 2007 and pre-tax merger-related charges
totaling $.9 million, or $.02 per diluted common share, recorded in 2004
and $2.1 million, or $.04 per diluted common share, recorded in 2003.
(2) Net income available to common stockholders, 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) Compound annual growth rate.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2007
-------------------------------------------
Fourth Third Second First
(in millions) Quarter Quarter Quarter(1) Quarter
---------- ---------- ---------- ----------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,476 $ 1,441 $ 1,461 $ 1,227
Commercial construction 527 527 509 462
Commercial & industrial 418 408 421 315
---------- ---------- ---------- ----------
Total commercial 2,421 2,376 2,391 2,004
Residential construction 1,829 1,939 2,013 1,874
Residential mortgage 1,502 1,459 1,413 1,353
Consumer / installment 177 179 182 171
---------- ---------- ---------- ----------
Total loans $ 5,929 $ 5,953 $ 5,999 $ 5,402
========== ========== ========== ==========
LOANS BY MARKET
Atlanta Region $ 2,402 $ 2,451 $ 2,518 $ 2,015
North Georgia 2,060 2,026 2,032 2,010
Western North Carolina 806 834 816 782
Coastal Georgia 415 402 396 372
East Tennessee 246 240 237 223
---------- ---------- ---------- ----------
Total loans $ 5,929 $ 5,953 $ 5,999 $ 5,402
========== ========== ========== ==========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 592 $ 596 $ 602 $ 580
Land loans 126 125 113 122
Lot loans 407 403 393 362
---------- ---------- ---------- ----------
Total 1,125 1,124 1,108 1,064
---------- ---------- ---------- ----------
House loans
Spec 473 539 596 533
Sold 231 276 309 277
---------- ---------- ---------- ----------
Total 704 815 905 810
---------- ---------- ---------- ----------
Total residential construction $ 1,829 $ 1,939 $ 2,013 $ 1,874
========== ========== ========== ==========
RESIDENTIAL CONSTRUCTION -
ATLANTA REGION
Dirt loans
Acquisition & development $ 311 $ 312 $ 336 $ 317
Land loans 54 53 50 52
Lot loans 131 135 140 113
---------- ---------- ---------- ----------
Total 496 500 526 482
---------- ---------- ---------- ----------
House loans
Spec 286 328 378 298
Sold 82 112 140 124
---------- ---------- ---------- ----------
Total 368 440 518 422
---------- ---------- ---------- ----------
Total residential construction $ 864 $ 940 $ 1,044 $ 904
========== ========== ========== ==========
(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
2006 Change(2) Year over Year Change
----------- --------- ---------------------
Fourth Excluding
(in millions) Quarter Actual Actual Acquired
----------- --------- --------- ---------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,230 10% 20% 3%
Commercial construction 470 - 12 7
Commercial & industrial 296 10 41 4
-----------
Total commercial 1,996 8 21 4
Residential construction 1,864 (23) (2) (11)
Residential mortgage 1,338 12 12 11
Consumer / installment 179 (4) (1) (6)
-----------
Total loans $ 5,377 (2) 10 -
===========
LOANS BY MARKET
Atlanta Region $ 2,005 (8)% 20 % (7)%
North Georgia 2,034 7 1 1
Western North Carolina 773 (13) 4 4
Coastal Georgia 358 13 16 16
East Tennessee 207 10 19 19
-----------
Total loans $ 5,377 (2) 10 -
===========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition &
development $ 579 (3)% 2 % (6)%
Land loans 127 3 (1) (3)
Lot loans 364 4 12 5
-----------
Total 1,070 - 5 (2)
-----------
House loans
Spec 516 (49) (8) (21)
Sold 278 (65) (17) (28)
-----------
Total 794 (54) (11) (23)
-----------
Total residential
construction $ 1,864 (23) (2) (11)
===========
RESIDENTIAL CONSTRUCTION -
ATLANTA REGION
Dirt loans
Acquisition &
development $ 321 (1)% (3)% (18)%
Land loans 57 8 (5) (11)
Lot loans 109 (12) 20 (3)
-----------
Total 487 (3) 2 (14)
-----------
House loans
Spec 297 (51) (4) (25)
Sold 117 (107) (30) (57)
-----------
Total 414 (65) (11) (34)
-----------
Total residential
construction $ 901 (32) (4) (23)
===========
(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 Year-End
(in millions) 2007 2006 2005 2004 2003
------- ------- ------- ------- -------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,476 $ 1,230 $ 1,055 $ 966 $ 777
Commercial construction 527 470 358 239 164
Commercial & industrial 418 296 237 212 190
------- ------- ------- ------- -------
Total commercial 2,421 1,996 1,650 1,417 1,131
Residential construction 1,829 1,864 1,381 1,066 763
Residential mortgage 1,502 1,338 1,206 1,102 982
Consumer / installment 177 179 161 150 140
------- ------- ------- ------- -------
Total loans $ 5,929 $ 5,377 $ 4,398 $ 3,735 $ 3,016
======= ======= ======= ======= =======
LOANS BY MARKET
Atlanta Region $ 2,402 $ 2,005 $ 1,456 $ 1,061 $ 662
North Georgia 2,060 2,034 1,790 1,627 1,481
Western North Carolina 806 773 668 633 548
Coastal Georgia 415 358 306 274 222
East Tennessee 246 207 178 140 103
------- ------- ------- ------- -------
Total loans $ 5,929 $ 5,377 $ 4,398 $ 3,735 $ 3,016
======= ======= ======= ======= =======
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
Fourth Third Second
Quarter Quarter Quarter
2007 2007 2007
-------- -------- --------
Special provision for fraud related loan
losses $ 3,000 $ - $ 15,000
-------- -------- --------
Merger-related charges included in expenses:
Salaries and employee benefits -
severance and related costs - - -
Professional fees - - -
Contract termination costs - - -
Other merger-related expenses - - -
-------- -------- --------
Total merger-related charges - - -
-------- -------- --------
Pre-tax earnings impact of
non-operating charges 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 Reconciliation
Operating net income $ 6,034 $ 22,536 $ 21,076
After-tax effect of special provision and
merger-related charges (1,833) - (9,165)
-------- -------- --------
Net income (GAAP) $ 4,201 $ 22,536 $ 11,911
======== ======== ========
Basic Earnings Per Share Reconciliation
Basic operating earnings per share $ .13 $ .47 $ .47
Per share effect of special provision and
merger-related charges (.04) - (.21)
-------- -------- --------
Basic earnings per share (GAAP) $ .09 $ .47 $ .26
======== ======== ========
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share $ .13 $ .46 $ .46
Per share effect of special provision and
merger-related charges (.04) - (.20)
-------- -------- --------
Diluted earnings per share (GAAP) $ .09 $ .46 $ .26
======== ======== ========
Provision for Loan Losses Reconciliation
Operating provision for loan losses $ 26,500 $ 3,700 $ 3,700
Special provision for fraud related loan
losses 3,000 - 15,000
-------- -------- --------
Provision for loan losses (GAAP) $ 29,500 $ 3,700 $ 18,700
======== ======== ========
Nonperforming Assets Reconciliation
Nonperforming assets excluding fraud-related
assets $ 40,956 $ 39,761 $ 19,968
Fraud-related loans and OREO included in
nonperforming assets 5,302 23,576 23,633
-------- -------- --------
Nonperforming assets (GAAP) $ 46,258 $ 63,337 $ 43,601
======== ======== ========
Allowance for Loan Losses Reconciliation
Allowance for loan losses excluding special
fraud-related allowance $ 89,423 $ 75,935 $ 77,471
Fraud-related allowance for loan losses - 15,000 15,000
-------- -------- --------
Allowance for loan losses (GAAP) $ 89,423 $ 90,935 $ 92,471
======== ======== ========
Net Charge Offs Reconciliation
Net charge offs excluding charge off of
fraud-related loans $ 13,012 $ 5,236 $ 2,124
Fraud-related loans charged off 18,000 - -
-------- -------- --------
Net charge offs (GAAP) $ 31,012 $ 5,236 $ 2,124
======== ======== ========
Allowance for Loan Losses to Loans Ratio
Reconciliation
Allowance for loan losses to loans ratio
excluding fraud-related allowance 1.51% 1.28% 1.29%
Portion of allowance assigned to
fraud-related loans - .25 .25
-------- -------- --------
Allowance for loan losses to loans ratio
(GAAP) 1.51% 1.53% 1.54%
======== ======== ========
Nonperforming Assets to Total Assets Ratio
Reconciliation
Nonperforming assets to total assets ratio
excluding fraud-related assets .50% .49% .25%
Fraud-related nonperforming assets .06 .28 .29
-------- -------- --------
Nonperforming assets to total assets
ratio (GAAP) .56% .77% .54%
======== ======== ========
Net Charge Offs to Average Loans Ratio
Reconciliation
Net charge offs to average loans ratio
excluding fraud-related loans .87% .35% .15%
Charge offs of fraud-related loans 1.20 - -
-------- -------- --------
Net charge offs to average loans ratio
(GAAP) 2.07% .35% .15%
======== ======== ========
Operating Expenses Reconciliation
Operating expenses (operating basis) $ 49,336 $ 47,702 $ 47,702
Merger-related charges - - -
-------- -------- --------
Operating expenses (GAAP) $ 49,336 $ 47,702 $ 47,702
======== ======== ========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
Years Ended December 31,
-------------------------------
2007 2004 2003
--------- --------- ---------
Special provision for fraud related loan
losses $ 18,000 $ - $ -
--------- --------- ---------
Merger-related charges included in
expenses:
Salaries and employee benefits -
severance and related costs - 203 135
Professional fees - 407 885
Contract termination costs - 119 566
Other merger-related expenses - 141 502
--------- --------- ---------
Total merger-related charges - 870 2,088
--------- --------- ---------
Pre-tax earnings impact of
non-operating charges 18,000 870 2,088
Income tax effect of special provision 7,002 305 731
--------- --------- ---------
After-tax effect of special
provision $ 10,998 $ 565 $ 1,357
========= ========= =========
Net Income Reconciliation
Operating net income $ 68,991 $ 47,156 $ 39,475
After-tax effect of special provision and
merger-related charges (10,998) (565) (1,357)
--------- --------- ---------
Net income (GAAP) $ 57,993 $ 46,591 $ 38,118
========= ========= =========
Basic Earnings Per Share Reconciliation
Basic operating earnings per share $ 1.50 $ 1.31 $ 1.15
Per share effect of special provision and
merger-related charges (.24) (.02) (.04)
--------- --------- ---------
Basic earnings per share (GAAP) $ 1.26 $ 1.29 $ 1.11
========= ========= =========
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share $ 1.48 $ 1.27 $ 1.12
Per share effect of special provision and
merger-related charges (.24) (.02) (.04)
--------- --------- ---------
Diluted earnings per share (GAAP) $ 1.24 $ 1.25 $ 1.08
========= ========= =========
Provision for Loan Losses Reconciliation
Operating provision for loan losses $ 37,600 $ 7,600 $ 6,300
Special provision for fraud related loan
losses 18,000 - -
--------- --------- ---------
Provision for loan losses (GAAP) $ 55,600 $ 7,600 $ 6,300
========= ========= =========
Nonperforming Assets Reconciliation
Nonperforming assets excluding
fraud-related assets $ 40,956 $ 8,725 $ 7,589
Fraud-related loans and OREO included in
nonperforming assets 5,302 - -
--------- --------- ---------
Nonperforming assets (GAAP) $ 46,258 $ 8,725 $ 7,589
========= ========= =========
Allowance for Loan Losses Reconciliation
Allowance for loan losses excluding
special fraud-related allowance $ 89,423 $ 47,196 $ 38,655
Fraud-related allowance for loan losses - - -
--------- --------- ---------
Allowance for loan losses (GAAP) $ 89,423 $ 47,196 $ 38,655
========= ========= =========
Net Charge Offs Reconciliation
Net charge offs excluding charge off of
fraud-related loans $ 21,834 $ 3,617 $ 4,097
Fraud-related loans charged off 18,000 - -
--------- --------- ---------
Net charge offs (GAAP) $ 39,834 $ 3,617 $ 4,097
========= ========= =========
Allowance for Loan Losses to Loans Ratio
Reconciliation
Allowance for loan losses to loans ratio
excluding fraud-related allowance 1.51% 1.26% 1.28%
Portion of allowance assigned to
fraud-related loans - - -
--------- --------- ---------
Allowance for loan losses to loans
ratio (GAAP) 1.51% 1.26% 1.28%
========= ========= =========
Nonperforming Assets to Total Assets Ratio
Reconciliation
Nonperforming assets to total assets ratio
excluding fraud-related assets .50% .17% .19%
Fraud-related nonperforming assets .06 - -
--------- --------- ---------
Nonperforming assets to total assets
ratio (GAAP) .56% .17% .19%
========= ========= =========
Net Charge Offs to Average Loans Ratio
Reconciliation
Net charge offs to average loans ratio
excluding fraud-related loans .38% .11% .15%
Charge offs of fraud-related loans .31 - -
--------- --------- ---------
Net charge offs to average loans
ratio (GAAP) .69% .11% .15%
========= ========= =========
Operating Expenses Reconciliation
Operating expenses (operating basis) $ 190,061 $ 110,974 $ 97,251
Merger-related charges - 870 2,088
--------- --------- ---------
Operating expenses (GAAP) $ 190,061 $ 111,844 $ 99,339
========= ========= =========
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income
Three Months Ended
December 31,
--------------------
(in thousands, except per share data) 2007 2006
--------- ---------
Interest revenue:
Loans, including fees $ 121,248 $ 109,869
Investment securities:
Taxable 18,296 12,488
Tax exempt 405 472
Federal funds sold and deposits in banks 336 117
--------- ---------
Total interest revenue 140,285 122,946
--------- ---------
Interest expense:
Deposits:
NOW 10,999 9,120
Money market 4,314 2,527
Savings 417 248
Time 40,934 40,645
--------- ---------
Total deposit interest expense 56,664 52,540
Federal funds purchased, repurchase agreements
and other short-term borrowings 6,010 1,505
Federal Home Loan Bank advances 6,275 4,677
Long-term debt 2,089 2,190
--------- ---------
Total interest expense 71,038 60,912
--------- ---------
Net interest revenue 69,247 62,034
Provision for loan losses 29,500 3,700
--------- ---------
Net interest revenue after provision for loan
losses 39,747 58,334
--------- ---------
Fee revenue:
Service charges and fees 8,350 7,064
Mortgage loan and other related fees 1,720 2,154
Consulting fees 2,577 2,095
Brokerage fees 1,064 653
Securities gains (losses), net 1,364 (258)
Losses on prepayment of borrowings (1,078) -
Other 2,103 1,507
--------- ---------
Total fee revenue 16,100 13,215
--------- ---------
Total revenue 55,847 71,549
--------- ---------
Operating expenses:
Salaries and employee benefits 27,116 26,524
Communications and equipment 3,890 4,101
Occupancy 3,489 2,839
Advertising and public relations 1,873 1,905
Postage, printing and supplies 1,546 1,564
Professional fees 1,809 1,274
Amortization of intangibles 771 523
Other 8,842 3,791
--------- ---------
Total operating expenses 49,336 42,521
--------- ---------
Income before income taxes 6,511 29,028
Income taxes 2,310 10,594
--------- ---------
Net income $ 4,201 $ 18,434
========= =========
Earnings per common share:
Basic $ .09 $ .45
Diluted .09 .44
Dividends per common share .09 .08
Weighted average common shares outstanding:
Basic 47,203 41,096
Diluted 47,652 42,311
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income
Twelve Months Ended
December 31,
--------------------
(in thousands, except per share data) 2007 2006
--------- ---------
Interest revenue:
Loans, including fees $ 482,333 $ 394,907
Investment securities:
Taxable 64,377 47,149
Tax exempt 1,718 1,969
Federal funds sold and deposits in banks 608 802
--------- ---------
Total interest revenue 549,036 444,827
--------- ---------
Interest expense:
Deposits:
NOW 45,142 30,549
Money market 15,396 7,496
Savings 1,653 928
Time 167,400 130,324
--------- ---------
Total deposit interest expense 229,591 169,297
Federal funds purchased, repurchase agreements
and other short-term borrowings 16,236 7,319
Federal Home Loan Bank advances 22,013 23,514
Long-term debt 8,594 8,685
--------- ---------
Total interest expense 276,434 208,815
--------- ---------
Net interest revenue 272,602 236,012
Provision for loan losses 55,600 14,600
--------- ---------
Net interest revenue after provision for loan
losses 217,002 221,412
--------- ---------
Fee revenue:
Service charges and fees 31,433 27,159
Mortgage loan and other related fees 8,537 7,303
Consulting fees 8,946 7,291
Brokerage fees 4,095 3,083
Securities gains (losses), net 3,182 (643)
Losses on prepayment of borrowings (2,242) (636)
Other 8,700 5,538
--------- ---------
Total fee revenue 62,651 49,095
--------- ---------
Total revenue 279,653 270,507
--------- ---------
Operating expenses:
Salaries and employee benefits 115,153 100,964
Communications and equipment 15,483 15,071
Occupancy 13,613 11,632
Advertising and public relations 7,524 7,623
Postage, printing and supplies 6,365 5,748
Professional fees 7,218 4,442
Amortization of intangibles 2,739 2,032
Other 21,966 14,558
--------- ---------
Total operating expenses 190,061 162,070
--------- ---------
Income before income taxes 89,592 108,437
Income taxes 31,599 39,622
--------- ---------
Net income $ 57,993 $ 68,815
========= =========
Earnings per common share:
Basic $ 1.26 $ 1.70
Diluted 1.24 1.66
Dividends per common share .36 .32
Weighted average common shares outstanding:
Basic 45,893 40,393
Diluted 46,593 41,575
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
December 31, December 31,
(in thousands, except share and per share 2007 2006
data) ------------- -------------
(unaudited) (unaudited)
ASSETS
Cash and due from banks $ 157,549 $ 158,348
Interest-bearing deposits in banks 62,074 12,936
------------- -------------
Cash and cash equivalents 219,623 171,284
Securities available for sale 1,356,846 1,107,153
Mortgage loans held for sale 28,004 35,325
Loans, net of unearned income 5,929,263 5,376,538
Less allowance for loan losses 89,423 66,566
------------- -------------
Loans, net 5,839,840 5,309,972
Premises and equipment, net 180,088 139,716
Accrued interest receivable 62,828 58,291
Goodwill and other intangible assets 325,305 167,058
Other assets 194,768 112,450
------------- -------------
Total assets $ 8,207,302 $ 7,101,249
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 700,941 $ 659,892
NOW 1,474,818 1,307,654
Money market 452,917 255,862
Savings 186,392 175,631
Time:
Less than $100,000 1,573,604 1,650,906
Greater than $100,000 1,364,763 1,397,245
Brokered 322,516 325,696
------------- -------------
Total deposits 6,075,951 5,772,886
Federal funds purchased, repurchase
agreements and other short-term
borrowings 638,462 65,884
Federal Home Loan Bank advances 519,782 489,084
Long-term debt 107,996 113,151
Accrued expenses and other liabilities 33,209 43,477
------------- -------------
Total liabilities 7,375,400 6,484,482
------------- -------------
Shareholders' equity:
Preferred stock, $1 par value; $10 stated
value; 10,000,000 shares authorized;
25,800 and 32,200 shares issued and
outstanding 258 322
Common stock, $1 par value; 100,000,000
shares authorized; 48,809,301 and
42,890,863 shares issued 48,809 42,891
Common stock issuable; 73,250 and 29,821
shares 2,100 862
Capital surplus 462,881 270,383
Retained earnings 347,391 306,261
Treasury stock; 1,905,921 shares as of
December 31, 2007, at cost (43,798) -
Accumulated other comprehensive income
(loss) 14,261 (3,952)
------------- -------------
Total shareholders' equity 831,902 616,767
Total liabilities and shareholders'
equity $ 8,207,302 $ 7,101,249
============= =============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
2007
---------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -------
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 5,940,230 $ 121,161 8.09%
Taxable securities (3) 1,366,507 18,296 5.36
Tax-exempt securities (1) (3) 38,289 666 6.96
Federal funds sold and other
interest-earning assets 79,966 645 3.23
----------- ------------
Total interest-earning assets 7,424,992 140,768 7.53
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (89,797)
Cash and due from banks 147,500
Premises and equipment 177,445
Other assets (3) 549,980
-----------
Total assets $ 8,210,120
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,491,091 $ 10,999 2.93
Money market 483,289 4,314 3.54
Savings 191,133 417 .87
Time less than $100,000 1,583,777 19,408 4.86
Time greater than $100,000 1,362,812 17,467 5.08
Brokered 323,175 4,059 4.98
----------- ------------
Total interest-bearing deposits 5,435,277 56,664 4.14
----------- ------------
Federal funds purchased and other
borrowings 466,408 6,010 5.11
Federal Home Loan Bank advances 531,196 6,275 4.69
Long-term debt 143,814 2,089 5.76
----------- ------------
Total borrowed funds 1,141,418 14,374 5.00
----------- ------------
Total interest-bearing liabilities 6,576,695 71,038 4.29
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 716,199
Other liabilities 80,031
-----------
Total liabilities 7,372,925
Shareholders' equity 837,195
-----------
Total liabilities and shareholders'
equity $ 8,210,120
===========
Net interest revenue $ 69,730
============
Net interest-rate spread 3.24%
=======
Net interest margin (4) 3.73%
=======
(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 $799 thousand in 2007 and $12.7 million in 2006 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 December 31,
2006
---------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -------
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 5,134,721 $ 109,756 8.48%
Taxable securities (3) 1,014,959 12,488 4.92
Tax-exempt securities (1) (3) 44,166 777 7.04
Federal funds sold and other
interest-earning assets 32,097 442 5.51
----------- ------------
Total interest-earning assets 6,225,943 123,463 7.87
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (64,301)
Cash and due from banks 121,276
Premises and equipment 133,364
Other assets (3) 253,668
-----------
Total assets $ 6,669,950
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,181,578 $ 9,120 3.06
Money market 248,530 2,527 4.03
Savings 170,472 248 .58
Time less than $100,000 1,578,369 19,072 4.79
Time greater than $100,000 1,330,375 17,366 5.18
Brokered 353,133 4,207 4.73
----------- ------------
Total interest-bearing deposits 4,862,457 52,540 4.29
----------- ------------
Federal funds purchased and other
borrowings 105,650 1,505 5.65
Federal Home Loan Bank advances 334,217 4,677 5.55
Long-term debt 112,923 2,190 7.69
----------- ------------
Total borrowed funds 552,790 8,372 6.01
----------- ------------
Total interest-bearing liabilities 5,415,247 60,912 4.46
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 655,239
Other liabilities 52,045
-----------
Total liabilities 6,122,531
Shareholders' equity 547,419
-----------
Total liabilities and shareholders'
equity $ 6,669,950
===========
Net interest revenue $ 62,551
============
Net interest-rate spread 3.41%
=======
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 losses of $799 thousand in 2007 and $12.7 million in 2006 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 Twelve Months Ended December 31,
2007
---------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -------
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 5,734,608 $ 481,590 8.40%
Taxable securities (3) 1,236,595 64,377 5.21
Tax-exempt securities (1) (3) 41,340 2,826 6.84
Federal funds sold and other
interest-earning assets 58,357 2,124 3.64
----------- ------------
Total interest-earning assets 7,070,900 550,917 7.79
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (81,378)
Cash and due from banks 135,021
Premises and equipment 164,153
Other assets (3) 441,834
-----------
Total assets $ 7,730,530
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,406,655 $ 45,142 3.21
Money market 399,838 15,396 3.85
Savings 188,560 1,653 .88
Time less than $100,000 1,619,279 79,333 4.90
Time greater than $100,000 1,377,915 71,467 5.19
Brokered 337,376 16,600 4.92
----------- ------------
Total interest-bearing deposits 5,329,623 229,591 4.31
----------- ------------
Federal funds purchased and other
borrowings 308,372 16,236 5.27
Federal Home Loan Bank advances 455,620 22,013 4.83
Long-term debt 122,555 8,594 7.01
----------- ------------
Total borrowed funds 886,547 46,843 5.28
----------- ------------
Total interest-bearing liabilities 6,216,170 276,434 4.45
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 699,002
Other liabilities 72,587
-----------
Total liabilities 6,987,759
Shareholders' equity 742,771
-----------
Total liabilities and shareholders'
equity $ 7,730,530
===========
Net interest revenue $ 274,483
============
Net interest-rate spread 3.34%
=======
Net interest margin (4) 3.88%
=======
(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 $8.1 million in 2007 and $17.5 million in 2006 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 Twelve Months Ended December 31,
2006
---------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -------
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 4,800,981 $ 394,439 8.22%
Taxable securities (3) 995,172 47,149 4.74
Tax-exempt securities (1) (3) 46,725 3,240 6.93
Federal funds sold and other
interest-earning assets 34,605 1,867 5.40
----------- ------------
Total interest-earning assets 5,877,483 446,695 7.60
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (59,376)
Cash and due from banks 122,268
Premises and equipment 123,865
Other assets (3) 222,908
-----------
Total assets $ 6,287,148
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,115,434 $ 30,549 2.74
Money market 202,477 7,496 3.70
Savings 172,698 928 .54
Time less than $100,000 1,410,869 61,676 4.37
Time greater than $100,000 1,134,414 54,304 4.79
Brokered 334,243 14,344 4.29
----------- ------------
Total interest-bearing deposits 4,370,135 169,297 3.87
----------- ------------
Federal funds purchased and other
borrowings 140,544 7,319 5.21
Federal Home Loan Bank advances 465,820 23,514 5.05
Long-term debt 112,135 8,685 7.75
----------- ------------
Total borrowed funds 718,499 39,518 5.50
----------- ------------
Total interest-bearing liabilities 5,088,634 208,815 4.10
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 647,300
Other liabilities 44,268
-----------
Total liabilities 5,780,202
Shareholders' equity 506,946
-----------
Total liabilities and shareholders'
equity $ 6,287,148
===========
Net interest revenue $ 237,880
============
Net interest-rate spread 3.50%
=======
Net interest margin (4) 4.05%
=======
(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 $8.1 million in 2007 and $17.5 million in 2006 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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