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United Community Banks, Inc. Reports Earnings of $6.5 Million for Second Quarter 2012
United Community Banks, Inc. Reports Earnings of $6.5 Million for Second Quarter 2012
Jul 26, 2012
Supporting Materials:
- Net income of
$6.5 million , orsix cents per share - Balance sheet restructuring includes
$6.5 million of securities gains, mostly offset by wholesale funding prepayment charges - Nonperforming assets decline
$15.8 million , or 10 percent, from first quarter - Core transaction deposits up
$163 million year-to-date, or 11 percent annualized
"Our lower operating expenses reflect ongoing efforts to meaningfully increase operating efficiency, while at the same time remaining focused on improving credit measures," said
Total loans were
"Growing quality loan and deposit relationships remains a key focus for 2012," Tallent commented. "The highly competitive market for quality lending opportunities keeps pressure on loan pricing. At the same time our success attracting core transaction deposits has continued, with balances increasing
The second quarter provision for loan losses was
"Nonperforming assets of
Taxable equivalent net interest revenue declined
Fee revenue was
Fee revenue for the quarter included
Mortgage fee revenue of
Excluding foreclosed property costs, second quarter 2012 operating expenses were
Foreclosed property costs for the second quarter of 2012 were
As of
Conference Call
United will hold a conference call today,
About
Headquartered in
Safe Harbor
This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the
UNITED COMMUNITY BANKS, INC. Financial Highlights Selected Financial Information ------------------------------------------------ 2012 2011 ------------------ ---------------------------- (in thousands, except per share data; taxable Second First Fourth Third Second equivalent) Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- INCOME SUMMARY Interest revenue $ 66,780 $ 70,221 $ 71,905 $ 74,543 $ 76,931 Interest expense 9,944 11,357 12,855 15,262 17,985 -------- -------- -------- -------- -------- Net interest revenue 56,836 58,864 59,050 59,281 58,946 Provision for loan losses 18,000 15,000 14,000 36,000 11,000 Fee revenue 12,867 15,379 12,667 11,498 13,905 -------- -------- -------- -------- -------- Total revenue 51,703 59,243 57,717 34,779 61,851 Operating expenses 44,310 46,955 51,080 46,520 48,728 -------- -------- -------- -------- -------- Income (loss) before income taxes 7,393 12,288 6,637 (11,741) 13,123 Income tax expense (benefit) 894 760 (3,264) (402) 1,095 -------- -------- -------- -------- -------- Net income (loss) 6,499 11,528 9,901 (11,339) 12,028 Preferred dividends and discount accretion 3,032 3,030 3,025 3,019 3,016 -------- -------- -------- -------- -------- Net income (loss) available to common shareholders $ 3,467 $ 8,498 $ 6,876 $(14,358) $ 9,012 ======== ======== ======== ======== ======== PERFORMANCE MEASURES Per common share: Diluted income (loss) $ .06 $ .15 $ .12 $ (.25) $ .16 Book value 6.61 6.68 6.62 6.77 7.11 Tangible book value (2) 6.48 6.54 6.47 6.61 6.94 Key performance ratios: Return on equity (1)(3) 3.51% 8.78% 7.40% (15.06)% 42.60% Return on assets (3) .37 .66 .56 (.64) .66 Net interest margin (3) 3.43 3.53 3.51 3.55 3.41 Efficiency ratio 63.84 63.31 71.23 65.73 66.88 Equity to assets 8.33 8.19 8.28 8.55 8.06 Tangible equity to assets (2) 8.24 8.08 8.16 8.42 7.93 Tangible common equity to assets (2) 5.45 5.33 5.38 5.65 1.37 Tangible common equity to risk- weighted assets (2) 8.37 8.21 8.25 8.52 8.69 ASSET QUALITY * Non-performing loans $115,340 $129,704 $127,479 $144,484 $ 71,065 Foreclosed properties 30,421 31,887 32,859 44,263 47,584 -------- -------- -------- -------- -------- Total non-performing assets (NPAs) 145,761 161,591 160,338 188,747 118,649 Allowance for loan losses 112,705 113,601 114,468 146,092 127,638 Net charge-offs 18,896 15,867 45,624 17,546 16,483 Allowance for loan losses to loans 2.74% 2.75% 2.79% 3.55% 3.07% Net charge-offs to average loans (3) 1.85 1.55 4.39 1.68 1.58 NPAs to loans and foreclosed properties 3.51 3.88 3.87 4.54 2.82 NPAs to total assets 2.16 2.25 2.30 2.74 1.66 AVERAGE BALANCES ($ in millions) Loans $ 4,156 $ 4,168 $ 4,175 $ 4,194 $ 4,266 Investment securities 2,145 2,153 2,141 2,150 2,074 Earning assets 6,665 6,700 6,688 6,630 6,924 Total assets 6,993 7,045 7,019 7,000 7,363 Deposits 5,853 6,028 6,115 6,061 6,372 Shareholders' equity 583 577 581 598 594 Common shares - basic (thousands) 57,840 57,764 57,646 57,599 25,427 Common shares - diluted (thousands) 57,840 57,764 57,646 57,599 57,543 AT PERIOD END ($ in millions) Loans * $ 4,119 $ 4,128 $ 4,110 $ 4,110 $ 4,163 Investment securities 1,984 2,202 2,120 2,123 2,188 Total assets 6,737 7,174 6,983 6,894 7,152 Deposits 5,822 6,001 6,098 6,005 6,183 Shareholders' equity 576 580 575 583 603 Common shares outstanding (thousands) 57,641 57,603 57,561 57,510 57,469 (1) Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized. * Excludes loans and foreclosed properties covered by loss sharing agreements with theFDIC .UNITED COMMUNITY BANKS, INC. Financial Highlights Selected Financial Information --------------------------------------------------------- Second For the Six (in thousands, Second Quarter Quarter Months Ended YTD except per share ------------------ 2012- ------------------- 2012- data; taxable 2011 2011 equivalent) 2012 2011 Change 2012 2011 Change -------- -------- ------- -------- --------- ------ INCOME SUMMARY Interest revenue $ 66,780 $ 76,931 $137,001 $ 152,896 Interest expense 9,944 17,985 21,301 37,558 -------- -------- -------- --------- Net interest revenue 56,836 58,946 (4)% 115,700 115,338 -% Provision for loan losses 18,000 11,000 33,000 201,000 Fee revenue 12,867 13,905 (7) 28,246 25,743 10 -------- -------- -------- --------- Total revenue 51,703 61,851 110,946 (59,919) Operating expenses 44,310 48,728 (9) 91,265 163,999 (44) -------- -------- -------- --------- Income (loss) before income taxes 7,393 13,123 19,681 (223,918) Income tax expense (benefit) 894 1,095 1,654 1,390 -------- -------- -------- --------- Net income (loss) 6,499 12,028 (46) 18,027 (225,308) Preferred dividends and discount accretion 3,032 3,016 6,062 5,794 -------- -------- -------- --------- Net income (loss) available to common shareholders $ 3,467 $ 9,012 (62) $ 11,965 $(231,102) ======== ======== ======== ========= PERFORMANCE MEASURES Per common share: Diluted income (loss) $ .06 $ .16 (63) $ .21 $ (10.52) Book value 6.61 7.11 (7) 6.61 7.11 (7) Tangible book value (2) 6.48 6.94 (7) 6.48 6.94 (7) Key performance ratios: Return on equity (1)(3) 3.51% 42.60% 6.12% (345.86)% Return on assets (3) .37 .66 .52 (6.16) Net interest margin (3) 3.43 3.41 3.48 3.36 Efficiency ratio 63.84 66.88 63.56 116.28 Equity to assets 8.33 8.06 8.26 7.11 Tangible equity to assets (2) 8.24 7.93 8.16 7.00 Tangible common equity to assets (2) 5.45 1.37 5.39 2.05 Tangible common equity to risk- weighted assets (2) 8.37 8.69 8.37 8.69 ASSET QUALITY * Non-performing loans $115,340 $ 71,065 $115,340 $ 71,065 Foreclosed properties 30,421 47,584 30,421 47,584 -------- -------- -------- --------- Total non- performing assets (NPAs) 145,761 118,649 145,761 118,649 Allowance for loan losses 112,705 127,638 112,705 127,638 Net charge-offs 18,896 16,483 34,763 248,057 Allowance for loan losses to loans 2.74% 3.07% 2.74% 3.07% Net charge-offs to average loans (3) 1.85 1.58 1.70 11.46 NPAs to loans and foreclosed properties 3.51 2.82 3.51 2.82 NPAs to total assets 2.16 1.66 2.16 1.66 AVERAGE BALANCES($ in millions) Loans $ 4,156 $ 4,266 (3) $ 4,162 $ 4,432 (6) Investment securities 2,145 2,074 3 2,149 1,851 16 Earning assets 6,665 6,924 (4) 6,682 6,913 (3) Total assets 6,993 7,363 (5) 7,019 7,371 (5) Deposits 5,853 6,372 (8) 5,940 6,465 (8) Shareholders' equity 583 594 (2) 580 524 11 Common shares - basic (thousands) 57,840 25,427 57,803 21,965 Common shares - diluted (thousands) 57,840 57,543 57,803 21,965 AT PERIOD END($ in millions) Loans * $ 4,119 $ 4,163 (1) $ 4,119 $ 4,163 (1) Investment securities 1,984 2,188 (9) 1,984 2,188 (9) Total assets 6,737 7,152 (6) 6,737 7,152 (6) Deposits 5,822 6,183 (6) 5,822 6,183 (6) Shareholders' equity 576 603 (4) 576 603 (4) Common shares outstanding (thousands) 57,641 57,469 57,641 57,469 (1) Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized. * Excludes loans and foreclosed properties covered by loss sharing agreements with theFDIC .UNITED COMMUNITY BANKS, INC. Non-GAAP Performance Measures Reconciliation Selected Financial Information ------------------------------------------------ 2012 2011 ------------------ ---------------------------- (in thousands, except per share data; taxable Second First Fourth Third Second equivalent) Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- Interest revenue reconciliation Interest revenue - taxable equivalent $ 66,780 $ 70,221 $ 71,905 $ 74,543 $ 76,931 Taxable equivalent adjustment (444) (446) (423) (420) (429) -------- -------- -------- -------- -------- Interest revenue (GAAP) $ 66,336 $ 69,775 $ 71,482 $ 74,123 $ 76,502 ======== ======== ======== ======== ======== Net interest revenue reconciliation Net interest revenue - taxable equivalent $ 56,836 $ 58,864 $ 59,050 $ 59,281 $ 58,946 Taxable equivalent adjustment (444) (446) (423) (420) (429) -------- -------- -------- -------- -------- Net interest revenue (GAAP) $ 56,392 $ 58,418 $ 58,627 $ 58,861 $ 58,517 ======== ======== ======== ======== ======== Total revenue reconciliation Total operating revenue $ 51,703 $ 59,243 $ 57,717 $ 34,779 $ 61,851 Taxable equivalent adjustment (444) (446) (423) (420) (429) -------- -------- -------- -------- -------- Total revenue (GAAP) $ 51,259 $ 58,797 $ 57,294 $ 34,359 $ 61,422 ======== ======== ======== ======== ======== Income (loss) before taxes reconciliation Income (loss) before taxes $ 7,393 $ 12,288 $ 6,637 $(11,741) $ 13,123 Taxable equivalent adjustment (444) (446) (423) (420) (429) -------- -------- -------- -------- -------- Income (loss) before taxes (GAAP) $ 6,949 $ 11,842 $ 6,214 $(12,161) $ 12,694 ======== ======== ======== ======== ======== Income tax (benefit) expense reconciliation Income tax (benefit) expense $ 894 $ 760 $ (3,264) $ (402) $ 1,095 Taxable equivalent adjustment (444) (446) (423) (420) (429) -------- -------- -------- -------- -------- Income tax (benefit) expense (GAAP) $ 450 $ 314 $ (3,687) $ (822) $ 666 ======== ======== ======== ======== ======== Book value per common share reconciliation Tangible book value per common share $ 6.48 $ 6.54 $ 6.47 $ 6.61 $ 6.94 Effect of goodwill and other intangibles .13 .14 .15 .16 .17 -------- -------- -------- -------- -------- Book value per common share (GAAP) $ 6.61 $ 6.68 $ 6.62 $ 6.77 $ 7.11 ======== ======== ======== ======== ======== Average equity to assets reconciliation Tangible common equity to assets 5.45% 5.33% 5.38% 5.65% 1.37% Effect of preferred equity 2.79 2.75 2.78 2.77 6.56 -------- -------- -------- -------- -------- Tangible equity to assets 8.24 8.08 8.16 8.42 7.93 Effect of goodwill and other intangibles .09 .11 .12 .13 .13 -------- -------- -------- -------- -------- Equity to assets (GAAP) 8.33% 8.19% 8.28% 8.55% 8.06% ======== ======== ======== ======== ======== Tangible common equity to risk-weighted assets reconciliation Tangible common equity to risk-weighted assets 8.37% 8.21% 8.25% 8.52% 8.69% Effect of other comprehensive income .28 .10 (.03) (.29) (.42) Effect of trust preferred 1.19 1.15 1.18 1.19 1.15 Effect of preferred equity 4.35 4.23 4.29 4.33 4.20 -------- -------- -------- -------- -------- Tier I capital ratio (Regulatory) 14.19% 13.69% 13.69% 13.75% 13.62% ======== ======== ======== ======== ========UNITED COMMUNITY BANKS, INC. Non-GAAP Performance Measures Reconciliation Selected Financial Information ---------------------- For the Six (in thousands, except per share Months Ended data; taxable equivalent) 2012 2011 ---------- ---------- Interest revenue reconciliation Interest revenue - taxable equivalent $ 137,001 $ 152,896 Taxable equivalent adjustment (890) (864) ---------- ---------- Interest revenue (GAAP) $ 136,111 $ 152,032 ========== ========== Net interest revenue reconciliation Net interest revenue - taxable equivalent $ 115,700 $ 115,338 Taxable equivalent adjustment (890) (864) ---------- ---------- Net interest revenue (GAAP) $ 114,810 $ 114,474 ========== ========== Total revenue reconciliation Total operating revenue $ 110,946 $ (59,919) Taxable equivalent adjustment (890) (864) ---------- ---------- Total revenue (GAAP) $ 110,056 $ (60,783) ========== ========== Income (loss) before taxes reconciliation Income (loss) before taxes $ 19,681 $ (223,918) Taxable equivalent adjustment (890) (864) ---------- ---------- Income (loss) before taxes (GAAP) $ 18,791 $ (224,782) ========== ========== Income tax (benefit) expense reconciliation Income tax (benefit) expense $ 1,654 $ 1,390 Taxable equivalent adjustment (890) (864) ---------- ---------- Income tax (benefit) expense (GAAP) $ 764 $ 526 ========== ========== Book value per common share reconciliation Tangible book value per common share $ 6.48 $ 6.94 Effect of goodwill and other intangibles .13 .17 ---------- ---------- Book value per common share (GAAP) $ 6.61 $ 7.11 ========== ========== Average equity to assets reconciliation Tangible common equity to assets 5.39% 2.05 Effect of preferred equity 2.77 4.95 ---------- ---------- Tangible equity to assets 8.16 7.00 Effect of goodwill and other intangibles .10 .11 ---------- ---------- Equity to assets (GAAP) 8.26% 7.11 ========== ========== Tangible common equity to risk-weighted assets reconciliation Tangible common equity to risk-weighted assets 8.37% 8.69 Effect of other comprehensive income .28 (.42) Effect of trust preferred 1.19 1.15 Effect of preferred equity 4.35 4.20 ---------- ---------- Tier I capital ratio (Regulatory) 14.19% 13.62 ========== ==========UNITED COMMUNITY BANKS, INC. Financial Highlights Loan Portfolio Composition at Period-End (1) --------------------------------------- 2012 2011 --------------- ----------------------- Second First Fourth Third Second (in millions) Quarter Quarter Quarter Quarter Quarter ------- ------- ------- ------- ------- LOANS BY CATEGORY Commercial (sec.by RE) $ 1,837 $ 1,843 $ 1,822 $ 1,771 $ 1,742 Commercial & industrial 450 440 428 429 428 Commercial construction 169 167 164 169 195 ------- ------- ------- ------- ------- Total commercial 2,456 2,450 2,414 2,369 2,365 Residential mortgage 1,128 1,131 1,135 1,150 1,177 Residential construction 409 436 448 474 502 Consumer installment 126 111 113 117 119 ------- ------- ------- ------- ------- Total loans $ 4,119 $ 4,128 $ 4,110 $ 4,110 $ 4,163 ======= ======= ======= ======= ======= LOANS BY MARKET North Georgia $ 1,387 $ 1,408 $ 1,426 $ 1,478 $ 1,500 Atlanta MSA 1,252 1,239 1,220 1,192 1,188 North Carolina 576 588 597 607 626 Coastal Georgia 369 366 346 316 325 Gainesville MSA 259 262 265 272 275 East Tennessee 276 265 256 245 249 ------- ------- ------- ------- ------- Total loans $ 4,119 $ 4,128 $ 4,110 $ 4,110 $ 4,163 ======= ======= ======= ======= ======= RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 78 $ 86 $ 88 $ 97 $ 105 Land loans 45 57 61 60 62 Lot loans 203 204 207 216 218 ------- ------- ------- ------- ------- Total 326 347 356 373 385 ------- ------- ------- ------- ------- House loans Spec 49 57 59 64 74 Sold 34 32 33 37 43 ------- ------- ------- ------- ------- Total 83 89 92 101 117 ------- ------- ------- ------- ------- Total residential construction $ 409 $ 436 $ 448 $ 474 $ 502 ======= ======= ======= ======= ======= RESIDENTIAL CONSTRUCTION -ATLANTA MSA Dirt loans Acquisition & development $ 14 $ 17 $ 17 $ 19 $ 20 Land loans 9 13 14 15 16 Lot loans 22 22 22 22 22 ------- ------- ------- ------- ------- Total 45 52 53 56 58 ------- ------- ------- ------- ------- House loans Spec 24 27 27 28 30 Sold 7 7 6 8 9 ------- ------- ------- ------- ------- Total 31 34 33 36 39 ------- ------- ------- ------- ------- Total residential construction $ 76 $ 86 $ 86 $ 92 $ 97 ======= ======= ======= ======= ======= (1) Excludes total loans of$41.5 million ,$47.2 million ,$54.5 million ,$57.8 million and$70.8 million as ofJune 30, 2012 ,March 31, 2012 ,December 31, 2011 ,September 30, 2011 andJune 30, 2011 , respectively, that are covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank .
UNITED COMMUNITY BANKS, INC. Financial Highlights Loan Portfolio Composition at Period-End (1) ---------------------------------------- 2012 2011 Year --------------- ------- Linked over Second First Second Quarter Year (in millions) Quarter Quarter Quarter Change Change ------- ------- ------- ------- ------- LOANS BY CATEGORY Commercial (sec.by RE) $ 1,837 $ 1,843 $ 1,742 $ (6) $ 95 Commercial & industrial 450 440 428 10 22 Commercial construction 169 167 195 2 (26) ------- ------- ------- Total commercial 2,456 2,450 2,365 6 91 Residential mortgage 1,128 1,131 1,177 (3) (49) Residential construction 409 436 502 (27) (93) Consumer installment 126 111 119 15 7 ------- ------- ------- Total loans $ 4,119 $ 4,128 $ 4,163 (9) (44) ======= ======= ======= LOANS BY MARKET North Georgia $ 1,387 $ 1,408 $ 1,500 (21) (113) Atlanta MSA 1,252 1,239 1,188 13 64 North Carolina 576 588 626 (12) (50) Coastal Georgia 369 366 325 3 44 Gainesville MSA 259 262 275 (3) (16) East Tennessee 276 265 249 11 27 ------- ------- ------- Total loans $ 4,119 $ 4,128 $ 4,163 (9) (44) ======= ======= ======= RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 78 $ 86 $ 105 (8) (27) Land loans 45 57 62 (12) (17) Lot loans 203 204 218 (1) (15) ------- ------- ------- Total 326 346 385 (21) (59) ------- ------- ------- House loans Spec 49 57 74 (8) (25) Sold 34 32 43 2 (9) ------- ------- ------- Total 83 89 117 (6) (34) ------- ------- ------- Total residential construction $ 409 $ 436 $ 502 (27) (93) ======= ======= ======= RESIDENTIAL CONSTRUCTION -ATLANTA MSA Dirt loans Acquisition & development $ 14 $ 17 $ 20 (3) (6) Land loans 9 13 16 (4) (7) Lot loans 22 22 22 - - ------- ------- ------- Total 45 52 58 (7) (13) ------- ------- ------- House loans Spec 24 27 30 (3) (6) Sold 7 7 9 - (2) ------- ------- ------- Total 31 34 39 (3) (8) ------- ------- ------- Total residential construction $ 76 $ 86 $ 97 (10) (21) ======= ======= ======= (1) Excludes total loans of$41.5 million ,$47.2 million ,$54.5 million ,$57.8 million and$70.8 million as ofJune 30, 2012 ,March 31, 2012 ,December 31, 2011 ,September 30, 2011 andJune 30, 2011 , respectively, that are covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank .UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality(1) ---------------------------------------------- Second Quarter 2012 ---------------------------------------------- Non-performing Foreclosed Total (in thousands) Loans Properties NPAs -------------- -------------- -------------- NPAs BY CATEGORY Commercial (sec.by RE) $ 19,115 $ 10,586 $ 29,701 Commercial & industrial 34,982 - 34,982 Commercial construction 18,175 2,732 20,907 -------------- -------------- -------------- Total commercial 72,272 13,318 85,590 Residential mortgage 16,631 5,591 22,222 Residential construction 25,530 11,512 37,042 Consumer installment 907 - 907 -------------- -------------- -------------- Total NPAs $ 115,340 $ 30,421 $ 145,761 ============== ============== ============== Balance as a % of Unpaid Principal 68.8% 39.3% 59.4% NPAs BY MARKET North Georgia $ 77,332 $ 13,546 $ 90,878 Atlanta MSA 17,593 8,651 26,244 North Carolina 10,657 3,287 13,944 Coastal Georgia 5,822 785 6,607 Gainesville MSA 991 2,998 3,989 East Tennessee 2,945 1,154 4,099 -------------- -------------- -------------- Total NPAs $ 115,340 $ 30,421 $ 145,761 ============== ============== ============== NPA ACTIVITY Beginning Balance $ 129,704 $ 31,887 $ 161,591 Loans placed on non-accrual 29,364 - 29,364 Payments received (15,027) - (15,027) Loan charge-offs (19,382) - (19,382) Foreclosures (9,319) 9,319 - Capitalized costs - 415 415 Note / property sales - (10,461) (10,461) Write downs - (1,008) (1,008) Net gains (losses) on sales - 269 269 -------------- -------------- -------------- Ending Balance $ 115,340 $ 30,421 $ 145,761 ============== ============== ============== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank .UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality(1) ---------------------------------------------- First Quarter 2012 ---------------------------------------------- Non-performing Foreclosed Total (in thousands) Loans Properties NPAs -------------- -------------- -------------- NPAs BY CATEGORY Commercial (sec.by RE) $ 26,081 $ 10,808 $ 36,889 Commercial & industrial 36,314 - 36,314 Commercial construction 23,319 3,266 26,585 -------------- -------------- -------------- Total commercial 85,714 14,074 99,788 Residential mortgage 18,741 5,882 24,623 Residential construction 24,341 11,931 36,272 Consumer installment 908 - 908 -------------- -------------- -------------- Total NPAs $ 129,704 $ 31,887 $ 161,591 ============== ============== ============== Balance as a % of Unpaid Principal 70.6% 36.1% 59.4% NPAs BY MARKET North Georgia $ 81,117 $ 14,559 $ 95,676 Atlanta MSA 22,321 7,647 29,968 North Carolina 15,765 4,650 20,415 Coastal Georgia 5,622 1,268 6,890 Gainesville MSA 2,210 3,387 5,597 East Tennessee 2,669 376 3,045 -------------- -------------- -------------- Total NPAs $ 129,704 $ 31,887 $ 161,591 ============== ============== ============== NPA ACTIVITY Beginning Balance $ 127,479 $ 32,859 $ 160,338 Loans placed on non-accrual 32,437 - 32,437 Payments received (5,945) - (5,945) Loan charge-offs (14,733) - (14,733) Foreclosures (9,534) 9,534 - Capitalized costs - 329 329 Note / property sales - (8,631) (8,631) Write downs - (2,111) (2,111) Net gains (losses) on sales - (93) (93) -------------- -------------- -------------- Ending Balance $ 129,704 $ 31,887 $ 161,591 ============== ============== ============== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank .UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality(1) ---------------------------------------------- Fourth Quarter 2011 ---------------------------------------------- Non-performing Foreclosed Total (in thousands) Loans Properties NPAs -------------- -------------- -------------- NPAs BY CATEGORY Commercial (sec.by RE) $ 27,322 $ 9,745 $ 37,067 Commercial & industrial 34,613 - 34,613 Commercial construction 16,655 3,336 19,991 -------------- -------------- -------------- Total commercial 78,590 13,081 91,671 Residential mortgage 22,358 6,927 29,285 Residential construction 25,523 12,851 38,374 Consumer installment 1,008 - 1,008 -------------- -------------- -------------- Total NPAs $ 127,479 $ 32,859 $ 160,338 ============== ============== ============== Balance as a % of Unpaid Principal 71.3% 35.9% 59.3% NPAs BY MARKET North Georgia $ 88,600 $ 15,136 $ 103,736 Atlanta MSA 14,480 6,169 20,649 North Carolina 15,100 5,365 20,465 Coastal Georgia 5,248 1,620 6,868 Gainesville MSA 2,069 3,760 5,829 East Tennessee 1,982 809 2,791 -------------- -------------- -------------- Total NPAs $ 127,479 $ 32,859 $ 160,338 ============== ============== ============== NPA ACTIVITY Beginning Balance $ 144,484 $ 44,263 $ 188,747 Loans placed on non-accrual 45,675 - 45,675 Payments received (1,884) - (1,884) Loan charge-offs (44,757) - (44,757) Foreclosures (16,039) 16,039 - Capitalized costs - 141 141 Note / property sales - (20,651) (20,651) Write downs - (3,893) (3,893) Net gains (losses) on sales - (3,040) (3,040) -------------- -------------- -------------- Ending Balance $ 127,479 $ 32,859 $ 160,338 ============== ============== ============== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank .UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality(1) ----------------------------------------------------- Second Quarter First Quarter Fourth Quarter 2012 2012 2011 ----------------- ---------------- ---------------- Net Net Net Charge- Charge- Charge- Offs to Offs to Offs to Net Average Net Average Net Average Charge- Loans Charge- Loans Charge- Loans (in thousands) Offs (2) Offs (2) Offs (2) -------- ------- -------- ------- -------- ------- NET CHARGE-OFFS BY CATEGORY Commercial (sec.by RE) $ 4,349 .95% $ 3,697 .81% $ 4,962 1.09% Commercial & industrial 775 .70 669 .62 18,940 17.47 Commercial construction 88 .21 334 .81 3,318 7.88 -------- -------- -------- Total commercial 5,212 .86 4,700 .78 27,220 4.51 Residential mortgage 3,862 1.38 5,375 1.91 5,887 2.04 Residential construction 9,563 9.14 5,314 4.84 12,090 10.36 Consumer installment 259 .88 478 1.72 427 1.47 -------- -------- -------- Total $ 18,896 1.85 $ 15,867 1.55 $ 45,624 4.39 ======== ======== ======== NET CHARGE-OFFS BY MARKET North Georgia $ 12,474 3.58% $ 9,022 2.56% $ 34,970 9.46% Atlanta MSA 2,307 .75 2,729 .89 4,195 1.37 North Carolina 3,634 2.52 1,679 1.14 3,180 2.10 Coastal Georgia 211 .23 1,329 1.53 335 .41 Gainesville MSA (187) (.29) 883 1.35 2,572 3.84 East Tennessee 457 .68 225 .34 372 .59 -------- -------- -------- Total $ 18,896 1.85 $ 15,867 1.55 $ 45,624 4.39 ======== ======== ======== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank . (2) Annualized.UNITED COMMUNITY BANKS, INC. Consolidated Statement of Operations (Unaudited) -------------------- -------------------- Three Months Ended Six Months Ended June 30, June 30, -------------------- -------------------- (in thousands, except per share data) 2012 2011 2012 2011 --------- --------- --------- --------- Interest revenue: Loans, including fees $ 54,178 $ 60,958 $ 109,937 $ 122,065 Investment securities, including tax exempt of$262 , $251, $512 and $510 11,062 14,792 24,066 28,396 Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks 1,096 752 2,108 1,571 --------- --------- --------- --------- Total interest revenue 66,336 76,502 136,111 152,032 --------- --------- --------- --------- Interest expense: Deposits: NOW 503 1,036 1,140 2,360 Money market 661 1,499 1,302 3,527 Savings 38 64 75 141 Time 5,073 10,995 11,232 22,727 --------- --------- --------- --------- Total deposit interest expense 6,275 13,594 13,749 28,755 Federal funds purchased, repurchase agreements and other short-term borrowings 904 1,074 1,949 2,116Federal Home Loan Bank advances 390 570 856 1,160 Long-term debt 2,375 2,747 4,747 5,527 --------- --------- --------- --------- Total interest expense 9,944 17,985 21,301 37,558 --------- --------- --------- --------- Net interest revenue 56,392 58,517 114,810 114,474 Provision for loan losses 18,000 11,000 33,000 201,000 --------- --------- --------- --------- Net interest revenue after provision for loan losses 38,392 47,517 81,810 (86,526) --------- --------- --------- --------- Fee revenue: Service charges and fees 7,816 7,608 15,599 14,328 Mortgage loan and other related fees 2,322 952 4,421 2,446 Brokerage fees 809 691 1,622 1,368 Securities gains, net 6,490 783 7,047 838 Loss from prepayment of debt (6,199) (791) (6,681) (791) Other 1,629 4,662 6,238 7,554 --------- --------- --------- --------- Total fee revenue 12,867 13,905 28,246 25,743 --------- --------- --------- --------- Total revenue 51,259 61,422 110,056 (60,783) --------- --------- --------- --------- Operating expenses: Salaries and employee benefits 24,297 26,436 49,522 51,360 Communications and equipment 3,211 3,378 6,366 6,722 Occupancy 3,539 3,805 7,310 7,879 Advertising and public relations 1,088 1,317 1,934 2,295 Postage, printing and supplies 916 1,085 1,895 2,203 Professional fees 1,952 2,350 3,927 5,680 Foreclosed property 1,851 1,891 5,676 66,790FDIC assessments and other regulatory charges 2,545 3,644 5,055 9,057 Amortization of intangibles 730 760 1,462 1,522 Other 4,181 4,062 8,118 10,491 --------- --------- --------- --------- Total operating expenses 44,310 48,728 91,265 163,999 --------- --------- --------- --------- Net income (loss) before income taxes 6,949 12,694 18,791 (224,782) Income tax expense 450 666 764 526 --------- --------- --------- --------- Net income (loss) 6,499 12,028 18,027 (225,308) Preferred stock dividends and discount accretion 3,032 3,016 6,062 5,794 --------- --------- --------- --------- Net income (loss) available to common shareholders $ 3,467 $ 9,012 $ 11,965 $(231,102) ========= ========= ========= ========= Earnings (loss) per common share - Basic $ .06 $ .35 $ .21 $ (10.52) Earnings (loss) per common share - Diluted .06 .16 .21 (10.52) Weighted average common shares outstanding - Basic 57,840 25,427 57,803 21,965 Weighted average common shares outstanding - Diluted 57,840 57,543 57,803 21,965UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheet ------------ ------------ ------------ (in thousands, except share and June 30, December 31, June 30, per share data) 2012 2011 2011 ------------ ------------ ------------ (unaudited) (audited) (unaudited) ASSETS Cash and due from banks $ 50,596 $ 53,807 $ 163,331 Interest-bearing deposits in banks 133,857 139,609 41,863 Federal funds sold, reverse repurchase agreements, commercial paper and short-term investments 120,000 185,000 174,996 ------------ ------------ ------------ Cash and cash equivalents 304,453 378,416 380,190 Securities available for sale 1,701,583 1,790,047 1,816,613 Securities held to maturity (fair value$299,971 ,$343,531 and $379,231) 282,750 330,203 371,578 Mortgage loans held for sale 18,645 23,881 19,406 Loans, net of unearned income 4,119,235 4,109,614 4,163,447 Less allowance for loan losses 112,705 114,468 127,638 ------------ ------------ ------------ Loans, net 4,006,530 3,995,146 4,035,809 Assets covered by loss sharing agreements with the FDIC 65,914 78,145 95,726 Premises and equipment, net 172,200 175,088 178,208 Bank owned life insurance 81,265 80,599 80,134 Accrued interest receivable 20,151 20,693 21,291 Goodwill and other intangible assets 6,965 8,428 9,922 Foreclosed property 30,421 32,859 47,584 Other assets 46,229 69,915 95,834 ------------ ------------ ------------ Total assets $ 6,737,106 $ 6,983,420 $ 7,152,295 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Demand $ 1,150,444 $ 992,109 $ 899,017 NOW 1,196,507 1,509,896 1,306,109 Money market 1,117,139 1,038,778 989,600 Savings 219,077 199,007 197,927 Time: Less than $100,000 1,164,451 1,332,394 1,508,444 Greater than $100,000 764,343 847,152 981,154 Brokered 210,506 178,647 300,964 ------------ ------------ ------------ Total deposits 5,822,467 6,097,983 6,183,215 Federal funds purchased, repurchase agreements, and other short-term borrowings 53,656 102,577 103,666 Federal Home Loan Bank advances 125,125 40,625 40,625 Long-term debt 120,265 120,225 150,186 Unsettled securities purchases - 10,325 35,634 Accrued expenses and other liabilities 39,598 36,199 36,368 ------------ ------------ ------------ Total liabilities 6,161,111 6,407,934 6,549,694 ------------ ------------ ------------ Shareholders' equity: Preferred stock,$1 par value; 10,000,000 shares authorized; Series A;$10 stated value; 21,700 shares issued and outstanding 217 217 217 Series B;$1,000 stated value; 180,000 shares issued and outstanding 177,814 177,092 176,392 Series D;$1,000 stated value; 16,613 shares issued and outstanding 16,613 16,613 16,613 Common stock,$1 par value; 100,000,000 shares authorized; 41,726,509, 41,647,100 and 41,554,874 shares issued and outstanding 41,727 41,647 41,555 Common stock, non-voting,$1 par value; 30,000,000 shares authorized; 15,914,209 shares issued and outstanding 15,914 15,914 15,914 Common stock issuable; 94,657, 93,681 and 83,575 shares 2,893 3,233 3,574 Capital surplus 1,056,819 1,054,940 1,052,482 Accumulated deficit (718,896) (730,861) (723,378) Accumulated other comprehensive (loss) income (17,106) (3,309) 19,232 ------------ ------------ ------------ Total shareholders' equity 575,995 575,486 602,601 ------------ ------------ ------------ Total liabilities and shareholders' equity $ 6,737,106 $ 6,983,420 $ 7,152,295 ============ ============ ============UNITED COMMUNITY BANKS, INC. Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended June 30, 2012 -------------------------------- Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate -------------------------------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $4,155,619 $ 54,296 5.25% Taxable securities (3) 2,121,053 10,800 2.04 Tax-exempt securities (1)(3) 24,242 429 7.08 Federal funds sold and other interest- earning assets 364,099 1,255 1.38 ---------- ---------- Total interest-earning assets 6,665,013 66,780 4.03 ---------- ---------- Non-interest-earning assets: Allowance for loan losses (115,955) Cash and due from banks 51,907 Premises and equipment 173,792 Other assets (3) 218,347 ---------- Total assets $6,993,104 ========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $1,279,686 503 .16 Money market 1,132,548 661 .23 Savings 216,175 38 .07 Time less than $100,000 1,183,845 2,520 .86 Time greater than $100,000 778,477 2,063 1.07 Brokered time deposits 150,449 490 1.31 ---------- ---------- Total interest-bearing deposits 4,741,180 6,275 .53 ---------- ---------- Federal funds purchased and other borrowings 97,134 904 3.74 Federal Home Loan Bank advances 278,971 390 .56 Long-term debt 120,256 2,375 7.94 ---------- ---------- Total borrowed funds 496,361 3,669 2.97 ---------- ---------- Total interest-bearing liabilities 5,237,541 9,944 .76 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 1,112,128 Other liabilities 60,726 ---------- Total liabilities 6,410,395 Shareholders' equity 582,709 ---------- Total liabilities and shareholders' equity $6,993,104 ========== Net interest revenue $ 56,836 ========== Net interest-rate spread 3.27% ========= Net interest margin (4) 3.43% ========= (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. (2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. (3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of$25.7 million in 2012 and$32.2 million in 2011 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 EndedJune 30 , -------------------------------- 2011 -------------------------------- Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate -------------------------------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $4,266,211 $ 60,958 5.73% Taxable securities (3) 2,048,683 14,541 2.84 Tax-exempt securities (1)(3) 25,044 411 6.56 Federal funds sold and other interest- earning assets 583,832 1,021 .70 ---------- ---------- Total interest-earning assets 6,923,770 76,931 4.45 ---------- ---------- Non-interest-earning assets: Allowance for loan losses (139,744) Cash and due from banks 119,801 Premises and equipment 178,949 Other assets (3) 280,204 ---------- Total assets $7,362,980 ========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $1,310,441 1,036 .32 Money market 979,432 1,499 .61 Savings 195,946 64 .13 Time less than $100,000 1,541,909 4,990 1.30 Time greater than $100,000 988,810 3,873 1.57 Brokered time deposits 473,161 2,132 1.81 ---------- ---------- Total interest-bearing deposits 5,489,699 13,594 .99 ---------- ---------- Federal funds purchased and other borrowings 103,156 1,074 4.18 Federal Home Loan Bank advances 52,735 570 4.34 Long-term debt 150,178 2,747 7.34 ---------- ---------- Total borrowed funds 306,069 4,391 5.75 ---------- ---------- Total interest-bearing liabilities 5,795,768 17,985 1.24 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 882,151 Other liabilities 91,353 ---------- Total liabilities 6,769,272 Shareholders' equity 593,708 ---------- Total liabilities and shareholders' equity $7,362,980 ========== Net interest revenue $ 58,946 ========== Net interest-rate spread 3.21% ========= Net interest margin (4) 3.41% ========= (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. (2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. (3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of$25.7 million in 2012 and$32.2 million in 2011 are included in other assets for purposes of this presentation. (4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.UNITED COMMUNITY BANKS, INC. Average Consolidated Balance Sheets and Net Interest Analysis For the Six Months EndedJune 30 , --------------------------------- 2012 --------------------------------- Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate --------------------------------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $4,162,030 $ 110,138 5.32% Taxable securities (3) 2,124,422 23,554 2.22 Tax-exempt securities (1)(3) 24,840 839 6.76 Federal funds sold and other interest- earning assets 371,044 2,470 1.33 ---------- ---------- Total interest-earning assets 6,682,336 137,001 4.12 ---------- ---------- Non-interest-earning assets: Allowance for loan losses (116,879) Cash and due from banks 53,286 Premises and equipment 174,321 Other assets (3) 226,013 ---------- Total assets $7,019,077 ========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $1,368,900 1,140 .17 Money market 1,101,103 1,302 .24 Savings 210,789 75 .07 Time less than $100,000 1,227,599 5,546 .91 Time greater than $100,000 799,821 4,478 1.13 Brokered time deposits 155,892 1,208 1.56 ---------- ---------- Total interest-bearing deposits 4,864,104 13,749 .57 ---------- ---------- Federal funds purchased and other borrowings 99,696 1,949 3.93 Federal Home Loan Bank advances 208,672 856 .82 Long-term debt 120,246 4,747 7.94 ---------- ---------- Total borrowed funds 428,614 7,552 3.54 ---------- ---------- Total interest-bearing liabilities 5,292,718 21,301 .81 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 1,076,358 Other liabilities 70,330 ---------- Total liabilities 6,439,406 Shareholders' equity 579,671 ---------- Total liabilities and shareholders' equity $7,019,077 ========== Net interest revenue $ 115,700 ========== Net interest-rate spread 3.31% ========= Net interest margin (4) 3.48% ========= (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. (2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. (3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of$24.7 million in 2012 and$29.7 million in 2011 are included in other assets for purposes of this presentation. (4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.UNITED COMMUNITY BANKS, INC. Average Consolidated Balance Sheets and Net Interest Analysis For the Six Months EndedJune 30 , ---------- ---------- --------- 2011 ---------- ---------- --------- Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate ---------- ---------- --------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $4,431,617 $ 122,028 5.55% Taxable securities (3) 1,825,322 27,886 3.06 Tax-exempt securities (1)(3) 25,434 835 6.57 Federal funds sold and other interest- earning assets 630,384 2,147 .68 ---------- ---------- Total interest-earning assets 6,912,757 152,896 4.45 ---------- ---------- Non-interest-earning assets: Allowance for loan losses (154,347) Cash and due from banks 127,031 Premises and equipment 179,150 Other assets (3) 306,495 ---------- Total assets $7,371,086 ========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $1,341,618 2,360 .35 Money market 954,128 3,527 .75 Savings 191,708 141 .15 Time less than $100,000 1,541,130 10,441 1.37 Time greater than $100,000 989,840 8,024 1.63 Brokered time deposits 585,103 4,262 1.47 ---------- ---------- Total interest-bearing deposits 5,603,527 28,755 1.03 ---------- ---------- Federal funds purchased and other borrowings 102,132 2,116 4.18 Federal Home Loan Bank advances 53,923 1,160 4.34 Long-term debt 150,169 5,527 7.42 ---------- ---------- Total borrowed funds 306,224 8,803 5.80 ---------- ---------- Total interest-bearing liabilities 5,909,751 37,558 1.28 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 861,864 Other liabilities 75,083 ---------- Total liabilities 6,846,698 Shareholders' equity 524,388 ---------- Total liabilities and shareholders' equity $7,371,086 ========== Net interest revenue $ 115,338 ========== Net interest-rate spread 3.17% ========= Net interest margin (4) 3.36% ========= (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. (2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. (3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of$24.7 million in 2012 and$29.7 million in 2011 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
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