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United Community Banks, Inc. Reports Earnings of $7.6 Million or Eight Cents per Share for Second Quarter 2011
United Community Banks, Inc. Reports Earnings of $7.6 Million or Eight Cents per Share for Second Quarter 2011
Jul 28, 2011
- Profitable quarter driven by core earnings and lower credit losses
- Nonperforming assets continue to improve; down
$19 million , or 14 percent, from last quarter to 1.60 percent of assets - Allowance for loan losses remains strong at 3.07 percent of loans
- Core transaction deposits up 10 percent on an annualized basis
- Completed conversion of preferred stock to common and reverse stock split
"The de-risking of our balance sheet and capital transaction, coupled with the execution of the Problem Asset Disposition Plan in the first quarter allowed us to return to profitability much sooner than would have otherwise been feasible," stated
Total loans were
Taxable equivalent net interest revenue of
"Growing loans and deposits is the key to building core earnings," Tallent commented. "We are making steady progress on the lending side and grew core transaction deposits in the second quarter by
Operating fee revenue was
Excluding foreclosed property costs and the loss on sale of nonperforming assets in 2010, the second quarter operating expenses were
Foreclosed property costs for the second quarter of 2011 were
The effective tax rate for the second quarter of 2011 was 40 percent, equal to the first quarter of 2011. The effective tax rate for the balance of 2011 will continue in the 40 percent range due to year-to-date net losses and will return to a normal range of 35 to 36 percent with expected profitability for 2012.
As of
"It is of course good to once again report positive earnings," Tallent said. "The last three years have been extremely challenging in our industry, and challenges remain as the economy continues to struggle. We have laid out our strategy and now we are about the business of implementation. Our company has completed the capital transaction, de-risked our balance sheet through the Problem Asset Disposition Plan, executed the reverse stock split, and achieved profitability. We are on the right track but by no means satisfied; there is more work to do on credit quality, commercial loans, core deposits, customer service, and organic growth. We are moving forward with determination and optimism."
Conference Call
About
Headquartered in
Safe Harbor
This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial United's 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 anticipated 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 "Risk Factors" of
UNITED COMMUNITY BANKS, INC. Financial Highlights Selected Financial Information 2011 2010 ------------------- ------------------------------ (in thousands, except per share data; taxable Second First Fourth Third Second equivalent) Quarter Quarter Quarter Quarter Quarter -------- ---------- -------- ---------- -------- INCOME SUMMARY Interest revenue $ 76,931 $ 75,965 $ 81,215 $ 84,360 $ 87,699 Interest expense 17,985 19,573 21,083 24,346 26,072 -------- ---------- -------- ---------- -------- Net interest revenue 58,946 56,392 60,132 60,014 61,627 Operating provision for loan losses (1) 11,000 190,000 47,750 50,500 61,500 Fee revenue (2) 13,905 11,838 12,442 12,861 11,579 -------- ---------- -------- ---------- -------- Total operating revenue (1)(2) 61,851 (121,770) 24,824 22,375 11,706 Operating expenses (3) 48,728 115,271 64,918 64,906 58,308 Loss on sale of nonperforming assets - - - - 45,349 -------- ---------- -------- ---------- -------- Operating income (loss) from continuing operations before income taxes 13,123 (237,041) (40,094) (42,531) (91,951) Operating income tax expense (benefit) 5,506 (94,555) (16,520) (16,706) (32,419) -------- ---------- -------- ---------- -------- Net operating income (loss) from continuing operations (1)(2)(3) 7,617 (142,486) (23,574) (25,825) (59,532) Noncash goodwill impairment charges - - - (210,590) - Partial reversal of fraud loss provision, net of income tax - - 7,179 - - Loss from discontinued operations, net of income tax - - - - - Gain from sale of subsidiary, net income tax - - - - - -------- ---------- -------- ---------- -------- Net income (loss) 7,617 (142,486) (16,395) (236,415) (59,532) Preferred dividends and discount accretion 3,016 2,778 2,586 2,581 2,577 -------- ---------- -------- ---------- -------- Net income (loss) available to common shareholders $ 4,601 $ (145,264) $(18,981) $ (238,996) $(62,109) ======== ========== ======== ========== ======== PERFORMANCE MEASURES Per common share: Diluted operating income (loss) from continuing operations (1)(2)(3) $ .08 $ (7.87) $ (1.38) $ (1.50) $ (3.29) Diluted income (loss) from continuing operations .08 (7.87) (1.00) (12.62) (3.29) Diluted income (loss) .08 (7.87) (1.00) (12.62) (3.29) Book value 11.59 14.78 24.18 25.70 38.55 Tangible book value (5) 11.47 14.44 23.78 25.26 26.95 Key performance ratios: Return on equity (4)(6) 5.34% (147.11)% (17.16)% (148.04)% (35.89)% Return on assets (6) .40 (7.61) (.89) (12.47) (3.10) Net interest margin (6) 3.41 3.30 3.58 3.57 3.60 Operating efficiency ratio from continuing operations (2)(3) 66.88 169.08 89.45 89.38 141.60 Equity to assets 11.21 8.82 8.85 11.37 11.84 Tangible equity to assets (5) 11.13 8.73 8.75 9.19 9.26 Tangible common equity to assets (5) 4.79 5.51 6.35 6.78 6.91 Tangible common equity to risk- weighted assets (5) 14.26 6.40 9.05 9.60 9.97 ASSET QUALITY * Non-performing loans $ 71,065 $ 83,769 $179,094 $ 217,766 $224,335 Foreclosed properties 47,584 54,378 142,208 129,964 123,910 -------- ---------- -------- ---------- -------- Total non- performing assets (NPAs) 118,649 138,147 321,302 347,730 348,245 Allowance for loan losses 127,638 133,121 174,695 174,613 174,111 Operating net charge-offs (1) 16,483 231,574 47,668 49,998 61,323 Allowance for loan losses to loans 3.07 % 3.17 % 3.79 % 3.67 % 3.57 % Operating net charge-offs to average loans (1)(6) 1.58 20.71 4.03 4.12 4.98 NPAs to loans and foreclosed properties 2.82 3.25 6.77 7.11 6.97 NPAs to total assets 1.60 1.73 4.32 4.96 4.55 AVERAGE BALANCES ($ in millions) Loans $ 4,266 $ 4,599 $ 4,768 $ 4,896 $ 5,011 Investment securities 2,074 1,625 1,354 1,411 1,532 Earning assets 6,924 6,902 6,680 6,676 6,854 Total assets 7,624 7,595 7,338 7,522 7,704 Deposits 6,372 6,560 6,294 6,257 6,375 Shareholders' equity 854 670 649 855 912 Common shares - basic (thousands) 25,427 18,466 18,984 18,936 18,905 Common shares - diluted (thousands) 57,543 18,466 18,984 18,936 18,905 AT PERIOD END ($ in millions) Loans * $ 4,163 $ 4,194 $ 4,604 $ 4,760 $ 4,873 Investment securities 2,188 1,884 1,490 1,310 1,488 Total assets 7,410 7,974 7,443 7,013 7,652 Deposits 6,183 6,598 6,469 5,999 6,330 Shareholders' equity 860 850 636 662 904 Common shares outstanding (thousands) 57,469 20,903 18,937 18,887 18,856 (1) Excludes the partial reversal of a previously established provision for fraud-related loan losses of$11.8 million , net of tax expense of$4.6 million in the fourth quarter of 2010. Operating charge-offs also exclude the$11.8 million related partial recovery of the previously charged off amount. (2) Excludes revenue generated by discontinued operations in the first quarter of 2010. (3) Excludes the goodwill impairment charge of$211 million in the third quarter of 2010 and expenses relating to discontinued operations in the first quarter of 2010. (4) 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). (5) Excludes effect of acquisition related intangibles and associated amortization. (6) Annualized. * Excludes loans and foreclosed properties covered by loss sharing agreements with theFDIC .UNITED COMMUNITY BANKS, INC. Financial Highlights Selected Financial Information (in thousands, 2011 2010 Second For the Six except per --------- --------- Quarter Months Ended YTD share data; Second Second 2011-2010 ------------------ 2011-2010 taxable Quarter Quarter Change 2011 2010 Change equivalent) --------- --------- --------- --------- -------- --------- INCOME SUMMARY Interest revenue $ 76,931 $ 87,699 $ 152,896 $ 177,548 Interest expense 17,985 26,072 37,558 54,642 --------- --------- --------- --------- Net interest revenue 58,946 61,627 (4)% 115,338 122,906 (6)% Operating provision for loan losses (1) 11,000 61,500 201,000 136,500 Fee revenue (2) 13,905 11,579 20 25,743 23,245 11 --------- --------- --------- --------- Total operating revenue (1)(2) 61,851 11,706 (59,919) 9,651 Operating expenses (3) 48,728 58,308 (16) 163,999 113,128 45 Loss on sale of nonperforming assets - 45,349 - 45,349 --------- --------- --------- --------- Operating income (loss) from continuing operations before income taxes 13,123 (91,951) 114 (223,918) (148,826) Operating income tax expense (benefit) 5,506 (32,419) (89,049) (54,836) --------- --------- --------- --------- Net operating income (loss) from continuing operations (1)(2)(3) 7,617 (59,532) 113 (134,869) (93,990) (43) Noncash goodwill impairment charges - - - - Partial reversal of fraud loss provision, net of income tax - - - - Loss from discontinued operations, net of income tax - - - (101) Gain from sale of subsidiary, net income tax - - - 1,266 --------- --------- --------- --------- Net income (loss) 7,617 (59,532) 113 (134,869) (92,825) (45) Preferred dividends and discount accretion 3,016 2,577 5,794 5,149 --------- --------- --------- --------- Net income (loss) available to common shareholders $ 4,601 $ (62,109) $(140,663) $ (97,974) ========= ========= ========= ========= PERFORMANCE MEASURES Per common share: Diluted operating income (loss) from continuing operations (1)(2)(3) $ .08 $ (3.29) 102 $ (6.40) $ (5.25) (22) Diluted income (loss) from continuing operations .08 (3.29) 102 (6.40) (5.25) (22) Diluted income (loss) .08 (3.29) 102 (6.40) (5.19) (23) Book value 11.59 38.55 (70) 11.59 38.55 (70) Tangible book value (5) 11.47 26.95 (57) 11.47 26.95 (57) Key performance ratios: Return on equity (4)(6) 5.34% (35.89)% (76.07)% (27.87)% Return on assets (6) .40 (3.10) (3.57) (2.39) Net interest margin (6) 3.41 3.60 3.36 3.55 Operating efficiency ratio from continuing operations (2)(3) 66.88 141.60 116.28 108.48 Equity to assets 11.21 11.84 10.02 11.87 Tangible equity to assets (5) 11.13 9.26 9.94 9.32 Tangible common equity to assets (5) 4.79 6.91 5.15 7.02 Tangible common equity to risk- weighted assets (5) 14.26 9.97 14.26 9.97 ASSET QUALITY * Non-performing loans $ 71,065 $ 224,335 $ 71,065 $ 224,335 Foreclosed properties 47,584 123,910 47,584 123,910 --------- --------- --------- --------- Total non- performing assets (NPAs) 118,649 348,245 118,649 348,245 Allowance for loan losses 127,638 174,111 127,638 174,111 Operating net charge-offs (1) 16,483 61,323 248,057 117,991 Allowance for loan losses to loans 3.07% 3.57% 3.07% 3.57% Operating net charge-offs to average loans (1)(6) 1.58 4.98 11.46 4.75 NPAs to loans and foreclosed properties 2.82 6.97 2.82 6.97 NPAs to total assets 1.60 4.55 1.60 4.55 AVERAGE BALANCES ($ in millions) Loans $ 4,266 $ 5,011 (15) $ 4,432 $ 5,091 (13) Investment securities 2,074 1,532 35 1,851 1,525 21 Earning assets 6,924 6,854 1 6,913 6,969 (1) Total assets 7,624 7,704 (1) 7,609 7,825 (3) Deposits 6,372 6,375 - 6,465 6,472 - Shareholders' equity 854 912 (6) 763 929 (18) Common shares - basic (thousands) 25,427 18,905 21,965 18,891 Common shares - diluted (thousands) 57,543 18,905 21,965 18,891 AT PERIOD END ($ in millions) Loans * $ 4,163 $ 4,873 (15) $ 4,163 $ 4,873 (15) Investment securities 2,188 1,488 47 2,188 1,488 47 Total assets 7,410 7,652 (3) 7,410 7,652 (3) Deposits 6,183 6,330 (2) 6,183 6,330 (2) Shareholders' equity 860 904 (5) 860 904 (5) Common shares outstanding (thousands) 57,469 18,856 57,469 18,856 (1) Excludes the partial reversal of a previously established provision for fraud-related loan losses of$11.8 million , net of tax expense of$4.6 million in the fourth quarter of 2010. Operating charge-offs also exclude the$11.8 million related partial recovery of the previously charged off amount. (2) Excludes revenue generated by discontinued operations in the first quarter of 2010. (3) Excludes the goodwill impairment charge of$211 million in the third quarter of 2010 and expenses relating to discontinued operations in the first quarter of 2010. (4) 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). (5) Excludes effect of acquisition related intangibles and associated amortization. (6) Annualized. * Excludes loans and foreclosed properties covered by loss sharing agreements with theFDIC .UNITED COMMUNITY BANKS, INC. Operating Earnings to GAAP Earnings Reconciliation Selected Financial Information 2011 2010 --------------------- -------------------------------- (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 $ 76,931 $ 75,965 $ 81,215 $ 84,360 $ 87,699 Taxable equivalent adjustment (429) (435) (497) (511) (500) --------- ---------- --------- ---------- --------- Interest revenue (GAAP) $ 76,502 $ 75,530 $ 80,718 $ 83,849 $ 87,199 ========= ========== ========= ========== ========= Net interest revenue reconciliation Net interest revenue - taxable equivalent $ 58,946 $ 56,392 $ 60,132 $ 60,014 $ 61,627 Taxable equivalent adjustment (429) (435) (497) (511) (500) --------- ---------- --------- ---------- --------- Net interest revenue (GAAP) $ 58,517 $ 55,957 $ 59,635 $ 59,503 $ 61,127 ========= ========== ========= ========== ========= Provision for loan losses reconciliation Operating provision for loan losses $ 11,000 $ 190,000 $ 47,750 $ 50,500 $ 61,500 Partial reversal of special fraud- related provision for loan loss - - (11,750) - - --------- ---------- --------- ---------- --------- Provision for loan losses (GAAP) $ 11,000 $ 190,000 $ 36,000 $ 50,500 $ 61,500 ========= ========== ========= ========== ========= Total revenue reconciliation Total operating revenue $ 61,851 $ (121,770) $ 24,824 $ 22,375 $ 11,706 Taxable equivalent adjustment (429) (435) (497) (511) (500) Partial reversal of special fraud- related provision for loan loss - - 11,750 - - --------- ---------- --------- ---------- --------- Total revenue (GAAP) $ 61,422 $ (122,205) $ 36,077 $ 21,864 $ 11,206 ========= ========== ========= ========== ========= Expense reconciliation Operating expense $ 48,728 $ 115,271 $ 64,918 $ 64,906 $ 103,657 Noncash goodwill impairment charge - - - 210,590 - --------- ---------- --------- ---------- --------- Operating expense (GAAP) $ 48,728 $ 115,271 $ 64,918 $ 275,496 $ 103,657 ========= ========== ========= ========== ========= Income (loss) from continuing operations before taxes reconciliation Operating income (loss) from continuing operations before taxes $ 13,123 $ (237,041) $ (40,094) $ (42,531) $ (91,951) Taxable equivalent adjustment (429) (435) (497) (511) (500) Noncash goodwill impairment charge - - - (210,590) - Partial reversal of special fraud- related provision for loan loss - - 11,750 - - --------- ---------- --------- ---------- --------- Income (loss) from continuing operations before taxes (GAAP) $ 12,694 $ (237,476) $ (28,841) $ (253,632) $ (92,451) ========= ========== ========= ========== ========= Income tax expense (benefit) reconciliation Operating income tax expense (benefit) $ 5,506 $ (94,555) $ (16,520) $ (16,706) $ (32,419) Taxable equivalent adjustment (429) (435) (497) (511) (500) Partial reversal of special fraud- related provision for loan loss - - 4,571 - - --------- ---------- --------- ---------- --------- Income tax expense (benefit) (GAAP) $ 5,077 $ (94,990) $ (12,446) $ (17,217) $ (32,919) ========= ========== ========= ========== ========= Diluted earnings (loss) from continuing operations per common share reconciliation Diluted operating earnings (loss) from continuing operations per common share $ .08 $ (7.87) $ (1.38) $ (1.50) $ (3.29) Noncash goodwill impairment charge - - - (11.12) - Partial reversal of special fraud- related provision for loan loss - - .38 - - --------- ---------- --------- ---------- --------- Diluted earnings (loss) from continuing operations per common share (GAAP) $ .08 $ (7.87) $ (1.00) $ (12.62) $ (3.29) ========= ========== ========= ========== ========= Book value per common share reconciliation Tangible book value per common share $ 11.47 $ 14.44 $ 23.78 $ 25.26 $ 26.95 Effect of goodwill and other intangibles .12 .34 .40 .44 11.60 --------- ---------- --------- ---------- --------- Book value per common share (GAAP) $ 11.59 $ 14.78 $ 24.18 $ 25.70 $ 38.55 ========= ========== ========= ========== ========= Efficiency ratio from continuing operations reconciliation Operating efficiency ratio from continuing operations 66.88% 169.08% 89.45% 89.38% 141.60% Noncash goodwill impairment charge - - - 290.00 - --------- ---------- --------- ---------- --------- Efficiency ratio from continuing operations (GAAP) 66.88% 169.08% 89.45% 379.38% 141.60% ========= ========== ========= ========== ========= Average equity to assets reconciliation Tangible common equity to assets 4.79% 5.51% 6.35% 6.78% 6.91% Effect of preferred equity 6.34 3.22 2.40 2.41 2.35 --------- ---------- --------- ---------- --------- Tangible equity to assets 11.13 8.73 8.75 9.19 9.26 Effect of goodwill and other intangibles .08 .09 .10 2.18 2.58 --------- ---------- --------- ---------- --------- Equity to assets (GAAP) 11.21% 8.82% 8.85% 11.37% 11.84% ========= ========== ========= ========== ========= Actual tangible common equity to risk-weighted assets reconciliation Tangible common equity to risk- weighted assets 14.26% 6.40% 9.05% 9.60% 9.97% Effect of other comprehensive income (.65) (.58) (.62) (.81) (.87) Effect of deferred tax limitation (5.04) (5.10) (3.34) (2.94) (2.47) Effect of trust preferred 1.14 1.12 1.06 1.06 1.03 Effect of preferred equity 4.17 5.97 3.52 3.51 3.41 --------- ---------- --------- ---------- --------- Tier I capital ratio (Regulatory) 13.88% 7.81% 9.67% 10.42% 11.07% ========= ========== ========= ========== ========= Net charge-offs reconciliation Operating net charge-offs $ 16,483 $ 231,574 $ 47,668 $ 49,998 $ 61,323 Subsequent partial recovery of fraud- related charge-off - - (11,750) - - --------- ---------- --------- ---------- --------- Net charge-offs (GAAP) $ 16,483 $ 231,574 $ 35,918 $ 49,998 $ 61,323 ========= ========== ========= ========== ========= Net charge-offs to average loans reconciliation Operating net charge-offs to average loans 1.58% 20.71% 4.03% 4.12% 4.98% Subsequent partial recovery of fraud- related charge-off - - (1.00) - - --------- ---------- --------- ---------- --------- Net charge-offs to average loans (GAAP) 1.58% 20.71% 3.03% 4.12% 4.98% ========= ========== ========= ========== =========UNITED COMMUNITY BANKS, INC. Operating Earnings to GAAP Earnings Reconciliation Selected Financial Information For the Six Months Ended ---------------------------- (in thousands, except per share data; taxable equivalent) 2011 2010 ------------- ------------- Interest revenue reconciliation Interest revenue - taxable equivalent $ 152,896 $ 177,548 Taxable equivalent adjustment (864) (993) ------------- ------------- Interest revenue (GAAP) $ 152,032 $ 176,555 ============= ============= Net interest revenue reconciliation Net interest revenue - taxable equivalent $ 115,338 $ 122,906 Taxable equivalent adjustment (864) (993) ------------- ------------- Net interest revenue (GAAP) $ 114,474 $ 121,913 ============= ============= Provision for loan losses reconciliation Operating provision for loan losses $ 201,000 $ 136,500 Partial reversal of special fraud-related provision for loan loss - - ------------- ------------- Provision for loan losses (GAAP) $ 201,000 $ 136,500 ============= ============= Total revenue reconciliation Total operating revenue $ (59,919) $ 9,651 Taxable equivalent adjustment (864) (993) Partial reversal of special fraud-related provision for loan loss - - ------------- ------------- Total revenue (GAAP) $ (60,783) $ 8,658 ============= ============= Expense reconciliation Operating expense $ 163,999 $ 158,477 Noncash goodwill impairment charge - - ------------- ------------- Operating expense (GAAP) $ 163,999 $ 158,477 ============= ============= Income (loss) from continuing operations before taxes reconciliation Operating income (loss) from continuing operations before taxes $ (223,918) $ (148,826) Taxable equivalent adjustment (864) (993) Noncash goodwill impairment charge - - Partial reversal of special fraud-related provision for loan loss - - ------------- ------------- Income (loss) from continuing operations before taxes (GAAP) $ (224,782) $ (149,819) ============= ============= Income tax expense (benefit) reconciliation Operating income tax expense (benefit) $ (89,049) $ (54,836) Taxable equivalent adjustment (864) (993) Partial reversal of special fraud-related provision for loan loss - - ------------- ------------- Income tax expense (benefit) (GAAP) $ (89,913) $ (55,829) ============= ============= Diluted earnings (loss) from continuing operations per common share reconciliation Diluted operating earnings (loss) from continuing operations per common share $ (6.40) $ (5.25) Noncash goodwill impairment charge - - Partial reversal of special fraud-related provision for loan loss - - ------------- ------------- Diluted earnings (loss) from continuing operations per common share (GAAP) $ (6.40) $ (5.25) ============= ============= Book value per common share reconciliation Tangible book value per common share $ 11.47 $ 26.95 Effect of goodwill and other intangibles .12 11.60 ------------- ------------- Book value per common share (GAAP) $ 11.59 $ 38.55 ============= ============= Efficiency ratio from continuing operations reconciliation Operating efficiency ratio from continuing operations % 116.28% 108.48% Noncash goodwill impairment charge - - ------------- ------------- Efficiency ratio from continuing operations (GAAP) % 116.28% 108.48% ============= ============= Average equity to assets reconciliation Tangible common equity to assets % 5.15% 7.02% Effect of preferred equity 4.79 2.30 ------------- ------------- Tangible equity to assets 9.94 9.32 Effect of goodwill and other intangibles .08 2.55 ------------- ------------- Equity to assets (GAAP) % 10.02% 11.87% ============= ============= Actual tangible common equity to risk- weighted assets reconciliation Tangible common equity to risk-weighted assets % 14.26% 9.97% Effect of other comprehensive income (.65) (.87) Effect of deferred tax limitation (5.04) (2.47) Effect of trust preferred 1.14 1.03 Effect of preferred equity 4.17 3.41 ------------- ------------- Tier I capital ratio (Regulatory) % 13.88% 11.07% ============= ============= Net charge-offs reconciliation Operating net charge-offs $ 248,057 $ 117,991 Subsequent partial recovery of fraud-related charge-off - - ------------- ------------- Net charge-offs (GAAP) $ 248,057 $ 117,991 ============= ============= Net charge-offs to average loans reconciliation Operating net charge-offs to average loans % 11.46% 4.75% Subsequent partial recovery of fraud-related charge-off - - ------------- ------------- Net charge-offs to average loans (GAAP) % 11.46% 4.75% ============= =============UNITED COMMUNITY BANKS, INC. Financial Highlights Loan Portfolio Composition at Period-End (1) 2011 2010 ----------------- -------------------------- Second First Fourth Third Second (in millions) Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- LOANS BY CATEGORY Commercial (sec. by RE) $ 1,742 $ 1,692 $ 1,761 $ 1,781 $ 1,780 Commercial construction 195 213 297 310 342 Commercial & industrial 428 431 441 456 441 -------- -------- -------- -------- -------- Total commercial 2,365 2,336 2,499 2,547 2,563 Residential construction 502 550 695 764 820 Residential mortgage 1,177 1,187 1,279 1,316 1,356 Consumer / installment 119 121 131 133 134 -------- -------- -------- -------- -------- Total loans $ 4,163 $ 4,194 $ 4,604 $ 4,760 $ 4,873 ======== ======== ======== ======== ======== LOANS BY MARKET Atlanta MSA $ 1,188 $ 1,179 $ 1,310 $ 1,365 $ 1,373 Gainesville MSA 275 282 312 316 343 North Georgia 1,500 1,531 1,689 1,755 1,808 Western North Carolina 626 640 702 719 738 Coastal Georgia 325 312 335 345 356 East Tennessee 249 250 256 260 255 -------- -------- -------- -------- -------- Total loans $ 4,163 $ 4,194 $ 4,604 $ 4,760 $ 4,873 ======== ======== ======== ======== ======== RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 105 $ 116 $ 174 $ 190 $ 214 Land loans 62 69 99 104 110 Lot loans 218 228 275 303 311 -------- -------- -------- -------- -------- Total 385 413 548 597 635 -------- -------- -------- -------- -------- House loans Spec 74 88 97 109 125 Sold 43 49 50 58 60 -------- -------- -------- -------- -------- Total 117 137 147 167 185 -------- -------- -------- -------- -------- Total residential construction $ 502 $ 550 $ 695 $ 764 $ 820 ======== ======== ======== ======== ======== RESIDENTIAL CONSTRUCTION - ATLANTA MSA Dirt loans Acquisition & development $ 20 $ 22 $ 30 $ 34 $ 40 Land loans 16 19 23 27 32 Lot loans 22 24 32 45 39 -------- -------- -------- -------- -------- Total 58 65 85 106 111 -------- -------- -------- -------- -------- House loans Spec 30 34 38 42 48 Sold 9 11 10 11 10 -------- -------- -------- -------- -------- Total 39 45 48 53 58 -------- -------- -------- -------- -------- Total residential construction $ 97 $ 110 $ 133 $ 159 $ 169 ======== ======== ======== ======== ======== (1) Excludes total loans of$70.8 million ,$63.3 million ,$68.2 million ,$75.2 million and$80.8 million as ofJune 30, 2011 ,March 31, 2011 ,December 31, 2010 ,September 30, 2010 andJune 30, 2010 , 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) 2011 2010 ----------------- -------- Year Linked over Second First Second Quarter Year (in millions) Quarter Quarter Quarter Change Change -------- -------- -------- ------- ------- LOANS BY CATEGORY Commercial (sec. by RE) $ 1,742 $ 1,692 $ 1,780 $ 50 $ (38) Commercial construction 195 213 342 (18) (147) Commercial & industrial 428 431 441 (3) (13) -------- -------- -------- Total commercial 2,365 2,336 2,563 29 (198) Residential construction 502 550 820 (48) (318) Residential mortgage 1,177 1,187 1,356 (10) (179) Consumer / installment 119 121 134 (2) (15) -------- -------- -------- Total loans $ 4,163 $ 4,194 $ 4,873 (31) (710) ======== ======== ======== LOANS BY MARKET Atlanta MSA $ 1,188 $ 1,179 $ 1,373 9 (185) Gainesville MSA 275 282 343 (7) (68) North Georgia 1,500 1,531 1,808 (31) (308) Western North Carolina 626 640 738 (14) (112) Coastal Georgia 325 312 356 13 (31) East Tennessee 249 250 255 (1) (6) -------- -------- -------- Total loans $ 4,163 $ 4,194 $ 4,873 (31) (710) ======== ======== ======== RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 105 $ 116 $ 214 (11) (109) Land loans 62 69 110 (7) (48) Lot loans 218 228 311 (10) (93) -------- -------- -------- Total 385 413 635 (28) (250) -------- -------- -------- House loans Spec 74 88 125 (14) (51) Sold 43 49 60 (6) (17) -------- -------- -------- Total 117 137 185 (20) (68) -------- -------- -------- Total residential construction $ 502 $ 550 $ 820 (48) (318) ======== ======== ======== RESIDENTIAL CONSTRUCTION - ATLANTA MSA Dirt loans Acquisition & development $ 20 $ 22 $ 40 (2) (20) Land loans 16 19 32 (3) (16) Lot loans 22 24 39 (2) (17) -------- -------- -------- Total 58 65 111 (7) (53) -------- -------- -------- House loans Spec 30 34 48 (4) (18) Sold 9 11 10 (2) (1) -------- -------- -------- Total 39 45 58 (6) (19) -------- -------- -------- Total residential construction $ 97 $ 110 $ 169 (13) (72) ======== ======== ======== (1) Excludes total loans of$70.8 million ,$63.3 million ,$68.2 million ,$75.2 million and$80.8 million as ofJune 30, 2011 ,March 31, 2011 ,December 31, 2010 ,September 30, 2010 andJune 30, 2010 , 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 2011 ---------------------------------------------- Non-performing Foreclosed Total (in thousands) Loans Properties NPAs -------------- -------------- -------------- NPAs BY CATEGORY Commercial (sec. by RE) $ 17,764 $ 6,796 $ 24,560 Commercial construction 2,782 6,764 9,546 Commercial & industrial 1,998 - 1,998 -------------- -------------- -------------- Total commercial 22,544 13,560 36,104 Residential construction 22,643 24,968 47,611 Residential mortgage 24,809 9,056 33,865 Consumer / installment 1,069 - 1,069 -------------- -------------- -------------- Total NPAs $ 71,065 $ 47,584 $ 118,649 ============== ============== ============== Balance as a % of Unpaid Principal 64.5% 32.6% 46.3% NPAs BY MARKET Atlanta MSA $ 14,700 $ 11,239 $ 25,939 Gainesville MSA 4,505 3,174 7,679 North Georgia 28,117 21,278 49,395 Western North Carolina 15,153 8,953 24,106 Coastal Georgia 5,357 2,564 7,921 East Tennessee 3,233 376 3,609 -------------- -------------- -------------- Total NPAs $ 71,065 $ 47,584 $ 118,649 ============== ============== ============== NPA ACTIVITY Beginning Balance $ 83,769 $ 54,378 $ 138,147 Loans placed on non-accrual 35,911 - 35,911 Payments received (7,702) - (7,702) Loan charge-offs (18,888) - (18,888) Foreclosures (22,025) 22,025 - Capitalized costs - 20 20 Note / property sales - (28,939) (28,939) Loans held for sale - - - Write downs - (3,118) (3,118) Net losses on sales - 3,218 3,218 -------------- -------------- -------------- Ending Balance $ 71,065 $ 47,584 $ 118,649 ============== ============== ============== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank . (2) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period. (3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011. (4)North Carolina residential construction net charge-offs for the fourth quarter of 2010 exclude a$11.8 million partial recovery of a 2007 fraud- related charge-off. (5) Annualized.UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality (1) First Quarter 2011 (2) ---------------------------------------------- Non-performing Foreclosed Total (in thousands) Loans Properties NPAs -------------- -------------- -------------- NPAs BY CATEGORY Commercial (sec. by RE) $ 20,648 $ 7,886 $ 28,534 Commercial construction 3,701 11,568 15,269 Commercial & industrial 2,198 - 2,198 -------------- -------------- -------------- Total commercial 26,547 19,454 46,001 Residential construction 32,038 25,807 57,845 Residential mortgage 23,711 9,117 32,828 Consumer / installment 1,473 - 1,473 -------------- -------------- -------------- Total NPAs $ 83,769 $ 54,378 $ 138,147 ============== ============== ============== Balance as a % of Unpaid Principal 57.3% 30.3% 42.4% NPAs BY MARKET Atlanta MSA $ 21,501 $ 16,913 $ 38,414 Gainesville MSA 4,332 2,157 6,489 North Georgia 30,214 23,094 53,308 Western North Carolina 18,849 7,802 26,651 Coastal Georgia 5,847 3,781 9,628 East Tennessee 3,026 631 3,657 -------------- -------------- -------------- Total NPAs $ 83,769 $ 54,378 $ 138,147 ============== ============== ============== NPA ACTIVITY Beginning Balance $ 179,094 $ 142,208 $ 321,302 Loans placed on non-accrual 54,730 - 54,730 Payments received (3,550) - (3,550) Loan charge-offs (43,969) - (43,969) Foreclosures (17,052) 17,052 - Capitalized costs - 270 270 Note / property sales (11,400) (44,547) (55,947) Loans held for sale (74,084) - (74,084) Write downs - (48,585) (48,585) Net losses on sales - (12,020) (12,020) -------------- -------------- -------------- Ending Balance $ 83,769 $ 54,378 $ 138,147 ============== ============== ============== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank . (2) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period. (3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011. (4)North Carolina residential construction net charge-offs for the fourth quarter of 2010 exclude a$11.8 million partial recovery of a 2007 fraud- related charge-off. (5) Annualized.UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality (1) Fourth Quarter 2010 ---------------------------------------------- Non-performing Foreclosed Total (in thousands) Loans Properties NPAs -------------- -------------- -------------- NPAs BY CATEGORY Commercial (sec. by RE) $ 44,927 $ 23,659 $ 68,586 Commercial construction 21,374 17,808 39,182 Commercial & industrial 5,611 - 5,611 -------------- -------------- -------------- Total commercial 71,912 41,467 113,379 Residential construction 54,505 78,231 132,736 Residential mortgage 51,083 22,510 73,593 Consumer / installment 1,594 - 1,594 -------------- -------------- -------------- Total NPAs $ 179,094 $ 142,208 $ 321,302 ============== ============== ============== Balance as a % of Unpaid Principal 67.2% 64.4% 65.9% NPAs BY MARKET Atlanta MSA $ 48,289 $ 41,154 $ 89,443 Gainesville MSA 5,171 9,273 14,444 North Georgia 83,551 66,211 149,762 Western North Carolina 25,832 11,553 37,385 Coastal Georgia 11,145 11,901 23,046 East Tennessee 5,106 2,116 7,222 -------------- -------------- -------------- Total NPAs $ 179,094 $ 142,208 $ 321,302 ============== ============== ============== NPA ACTIVITY Beginning Balance $ 217,766 $ 129,964 $ 347,730 Loans placed on non-accrual 81,023 - 81,023 Payments received (7,250) - (7,250) Loan charge-offs (47,913) - (47,913) Foreclosures (61,432) 61,432 - Capitalized costs - 170 170 Note / property sales (3,100) (33,509) (36,609) Loans held for sale - - - Write downs - (8,031) (8,031) Net losses on sales - (7,818) (7,818) -------------- -------------- -------------- Ending Balance $ 179,094 $ 142,208 $ 321,302 ============== ============== ============== (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank . (2) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period. (3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011. (4)North Carolina residential construction net charge-offs for the fourth quarter of 2010 exclude a$11.8 million partial recovery of a 2007 fraud- related charge-off. (5) Annualized.UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality(1) Second Quarter First Quarter Fourth Quarter 2011 (3) 2011 (3) 2010 (4) ------------------ ------------------ ------------------ Net Net Net Charge- Charge- Charge- Net Offs to Net Offs to Net Offs to Charge- Average Charge- Average Charge- Average (in thousands) Offs Loans(5) Offs Loans(5) Offs Loans(5) --------- -------- --------- -------- --------- -------- NET CHARGE-OFFS BY CATEGORY Commercial (sec. by RE) $ 3,259 .76% $ 48,607 11.07% $ 6,493 1.45% Commercial construction 869 1.70 49,715 76.95 3,924 5.12 Commercial & industrial 523 .49 4,040 3.64 2,891 2.54 --------- --------- --------- Total commercial 4,651 .79 102,362 16.66 13,308 2.09 Residential construction 6,629 5.04 92,138 58.20 24,497 13.28 Residential mortgage 4,589 1.55 36,383 11.62 9,176 2.80 Consumer / installment 614 2.04 691 2.16 687 2.06 --------- --------- --------- Total $ 16,483 1.58 $ 231,574 20.71 $ 47,668 4.03 ========= ========= ========= NET CHARGE-OFFS BY MARKET Atlanta MSA $ 2,920 .99% $ 56,489 17.86% $ 15,222 4.48% Gainesville MSA 2,318 3.36 8,616 11.93 3,434 4.37 North Georgia 6,575 1.72 123,305 29.66 18,537 4.26 Western North Carolina 3,522 2.21 26,447 15.61 5,154 2.87 Coastal Georgia 815 1.02 12,003 14.80 3,670 4.27 East Tennessee 333 .54 4,714 7.47 1,651 2.53 --------- --------- --------- Total $ 16,483 1.58 $ 231,574 20.71 $ 47,668 4.03 ========= ========= ========= (1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with theFDIC , related to the acquisition ofSouthern Community Bank . (2) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period. (3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011. (4)North Carolina residential construction net charge-offs for the fourth quarter of 2010 exclude a$11.8 million partial recovery of a 2007 fraud- related charge-off. (5) Annualized.UNITED COMMUNITY BANKS, INC. Financial Highlights Net Charge-Off Summary(1) ---------------------------------- ----------------------------------------- Second Quarter 2011 ----------------------------------------- Problem Asset Disposition (in thousands) Other Plan Total ---------------------------------- ------------- ------------ ------------- BY CATEGORY Commercial (sec. by RE) $ 4,972 $ (1,713) $ 3,259 Commercial construction 2,201 (1,332) 869 Commercial & industrial 639 (116) 523 ------------- ------------ ------------- Total commercial 7,812 (3,161) 4,651 Residential construction 9,471 (2,842) 6,629 Residential mortgage 5,844 (1,255) 4,589 Consumer / installment 625 (11) 614 ------------- ------------ ------------- Total $ 23,752 $ (7,269) $ 16,483 ============= ============ ============= BY MARKET Atlanta MSA $ 4,875 $ (1,955) $ 2,920 Gainesville MSA 2,576 (258) 2,318 North Georgia 10,360 (3,785) 6,575 Western North Carolina 4,263 (741) 3,522 Coastal Georgia 1,206 (391) 815 East Tennessee 472 (139) 333 ------------- ------------ ------------- Total $ 23,752 $ (7,269) $ 16,483 ============= ============ ============= (1) This schedule presents net charge-offs by loan type and geographic market separated between those charge offs related to United's first quarter 2011 Problem Asset Disposition Plan including losses on loans sold in the bulk loan sale transaction that closed onApril 18, 2011 and all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were estimated based on indicative bids from prospective buyers. Actual losses were less than estimated resulting in an adjustment to the loss in the second quarter.UNITED COMMUNITY BANKS, INC. Financial Highlights Net Charge-Off Summary(1) ---------------------------------- ----------------------------------------- First Quarter 2011 ----------------------------------------- Problem Asset Disposition (in thousands) Other Plan Total ---------------------------------- ------------- ------------- ------------- BY CATEGORY Commercial (sec. by RE) $ 2,842 $ 45,765 $ 48,607 Commercial construction 1,146 48,569 49,715 Commercial & industrial 513 3,527 4,040 ------------- ------------- ------------- Total commercial 4,501 97,861 102,362 Residential construction 10,643 81,495 92,138 Residential mortgage 4,989 31,394 36,383 Consumer / installment 383 308 691 ------------- ------------- ------------- Total $ 20,516 $ 211,058 $ 231,574 ============= ============= ============= BY MARKET Atlanta MSA $ 3,296 $ 53,193 $ 56,489 Gainesville MSA 954 7,662 8,616 North Georgia 8,544 114,761 123,305 Western North Carolina 6,749 19,698 26,447 Coastal Georgia 341 11,662 12,003 East Tennessee 632 4,082 4,714 ------------- ------------- ------------- Total $ 20,516 $ 211,058 $ 231,574 ============= ============= ============= (1) This schedule presents net charge-offs by loan type and geographic market separated between those charge offs related to United's first quarter 2011 Problem Asset Disposition Plan including losses on loans sold in the bulk loan sale transaction that closed onApril 18, 2011 and all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were estimated based on indicative bids from prospective buyers. Actual losses were less than estimated resulting in an adjustment to the loss in the second quarter.UNITED COMMUNITY BANKS, INC. Financial Highlights Net Charge-Off Summary(1) ---------------------------------- ----------------------------------------- First Six Months 2011 ----------------------------------------- Problem Asset Disposition (in thousands) Other Plan Total ---------------------------------- ------------- ------------- ------------- BY CATEGORY Commercial (sec. by RE) $ 7,814 $ 44,052 $ 51,866 Commercial construction 3,347 47,237 50,584 Commercial & industrial 1,152 3,411 4,563 ------------- ------------- ------------- Total commercial 12,313 94,700 107,013 Residential construction 20,114 78,653 98,767 Residential mortgage 10,833 30,139 40,972 Consumer / installment 1,008 297 1,305 ------------- ------------- ------------- Total $ 44,268 $ 203,789 $ 248,057 ============= ============= ============= BY MARKET Atlanta MSA $ 8,171 $ 51,238 $ 59,409 Gainesville MSA 3,530 7,404 10,934 North Georgia 18,904 110,976 129,880 Western North Carolina 11,012 18,957 29,969 Coastal Georgia 1,547 11,271 12,818 East Tennessee 1,104 3,943 5,047 ------------- ------------- ------------- Total $ 44,268 $ 203,789 $ 248,057 ============= ============= ============= (1) This schedule presents net charge-offs by loan type and geographic market separated between those charge offs related to United's first quarter 2011 Problem Asset Disposition Plan including losses on loans sold in the bulk loan sale transaction that closed onApril 18, 2011 and all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were estimated based on indicative bids from prospective buyers. Actual losses were less than estimated resulting in an adjustment to the loss in the second quarter.UNITED COMMUNITY BANKS, INC. Consolidated Statement of Operations (Unaudited) ---------------------------------------------- ---------------------------- Three Months Ended June 30, ---------------------------- (in thousands, except per share data) 2011 2010 ---------------------------------------------- ------------- ------------- Interest revenue: Loans, including fees $ 60,958 $ 70,611 Investment securities, including tax exempt of $251, $295, $510 and $606 14,792 15,829 Federal funds sold, commercial paper and deposits in banks 752 759 ------------- ------------- Total interest revenue 76,502 87,199 ------------- ------------- Interest expense: Deposits: NOW 1,036 1,745 Money market 1,499 1,829 Savings 64 83 Time 10,995 17,718 ------------- ------------- Total deposit interest expense 13,594 21,375 Federal funds purchased, repurchase agreements and other short-term borrowings 1,074 1,056 Federal Home Loan Bank advances 570 974 Long-term debt 2,747 2,667 ------------- ------------- Total interest expense 17,985 26,072 ------------- ------------- Net interest revenue 58,517 61,127 Provision for loan losses 11,000 61,500 ------------- ------------- Net interest revenue after provision for loan losses 47,517 (373) ------------- ------------- Fee revenue: Service charges and fees 7,608 7,993 Mortgage loan and other related fees 952 1,601 Brokerage fees 691 586 Securities gains, net 783 - Loss from prepayment of debt (791) - Other 4,662 1,399 ------------- ------------- Total fee revenue 13,905 11,579 ------------- ------------- Total revenue 61,422 11,206 ------------- ------------- Operating expenses: Salaries and employee benefits 26,436 23,590 Communications and equipment 3,378 3,511 Occupancy 3,805 3,836 Advertising and public relations 1,317 1,352 Postage, printing and supplies 1,085 765 Professional fees 2,350 2,178 Foreclosed property 1,891 14,540FDIC assessments and other regulatory charges 3,644 3,566 Amortization of intangibles 760 794 Other 4,062 4,176 Loss on sale of nonperforming assets - 45,349 ------------- ------------- Total operating expenses 48,728 103,657 ------------- ------------- Income (loss) from continuing operations before income taxes 12,694 (92,451) Income tax expense (benefit) 5,077 (32,919) ------------- ------------- Net income (loss) from continuing operations 7,617 (59,532) Loss from discontinued operations, net of income taxes - - Gain from sale of subsidiary, net of income taxes and selling costs - - ------------- ------------- Net income (loss) 7,617 (59,532) Preferred stock dividends and discount accretion 3,016 2,577 ------------- ------------- Net income (loss) available to common shareholders $ 4,601 $ (62,109) ============= ============= Earnings (loss) from continuing operations per common share - Basic $ .18 $ (3.29) Earnings (loss) from continuing operations per common share - Diluted .08 (3.29) Earnings (loss) per common share - Basic .18 (3.29) Earnings (loss) per common share - Diluted .08 (3.29) Weighted average common shares outstanding - Basic 25,427 18,905 Weighted average common shares outstanding - Diluted 57,543 18,905UNITED COMMUNITY BANKS, INC. Consolidated Statement of Operations (Unaudited) ---------------------------------------------- ---------------------------- Six Months Ended June 30, ---------------------------- (in thousands, except per share data) 2011 2010 ---------------------------------------------- ------------- ------------- Interest revenue: Loans, including fees $ 122,065 $ 142,826 Investment securities, including tax exempt of $251, $295, $510 and $606 28,396 32,032 Federal funds sold, commercial paper and deposits in banks 1,571 1,697 ------------- ------------- Total interest revenue 152,032 176,555 ------------- ------------- Interest expense: Deposits: NOW 2,360 3,599 Money market 3,527 3,586 Savings 141 167 Time 22,727 37,916 ------------- ------------- Total deposit interest expense 28,755 45,268 Federal funds purchased, repurchase agreements and other short-term borrowings 2,116 2,094 Federal Home Loan Bank advances 1,160 1,951 Long-term debt 5,527 5,329 ------------- ------------- Total interest expense 37,558 54,642 ------------- ------------- Net interest revenue 114,474 121,913 Provision for loan losses 201,000 136,500 ------------- ------------- Net interest revenue after provision for loan losses (86,526) (14,587) ------------- ------------- Fee revenue: Service charges and fees 14,328 15,440 Mortgage loan and other related fees 2,446 3,080 Brokerage fees 1,368 1,153 Securities gains, net 838 61 Loss from prepayment of debt (791) - Other 7,554 3,511 ------------- ------------- Total fee revenue 25,743 23,245 ------------- ------------- Total revenue (60,783) 8,658 ------------- ------------- Operating expenses: Salaries and employee benefits 51,360 47,950 Communications and equipment 6,722 6,784 Occupancy 7,879 7,650 Advertising and public relations 2,295 2,395 Postage, printing and supplies 2,203 1,990 Professional fees 5,680 4,121 Foreclosed property 66,790 25,353FDIC assessments and other regulatory charges 9,057 7,192 Amortization of intangibles 1,522 1,596 Other 10,491 8,097 Loss on sale of nonperforming assets - 45,349 ------------- ------------- Total operating expenses 163,999 158,477 ------------- ------------- Income (loss) from continuing operations before income taxes (224,782) (149,819) Income tax expense (benefit) (89,913) (55,829) ------------- ------------- Net income (loss) from continuing operations (134,869) (93,990) Loss from discontinued operations, net of income taxes - (101) Gain from sale of subsidiary, net of income taxes and selling costs - 1,266 ------------- ------------- Net income (loss) (134,869) (92,825) Preferred stock dividends and discount accretion 5,794 5,149 ------------- ------------- Net income (loss) available to common shareholders $ (140,663) $ (97,974) ============= ============= Earnings (loss) from continuing operations per common share - Basic $ (6.40) $ (5.25) Earnings (loss) from continuing operations per common share - Diluted (6.40) (5.25) Earnings (loss) per common share - Basic (6.40) (5.19) Earnings (loss) per common share - Diluted (6.40) (5.19) Weighted average common shares outstanding - Basic 21,965 18,891 Weighted average common shares outstanding - Diluted 21,965 18,891UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheet --------------------------------------------------------------------------- (in thousands, except share and December 31, per share data) June 30, 2011 2010 June 30, 2010 ------------------------------- ------------- ------------- ------------- (unaudited) (audited) (unaudited) ASSETS Cash and due from banks $ 163,331 $ 95,994 $ 115,088 Interest-bearing deposits in banks 41,863 111,901 105,183 Federal funds sold, commercial paper and short- term investments 174,996 441,562 148,227 ------------- ------------- ------------- Cash and cash equivalents 380,190 649,457 368,498 Securities available for sale 1,816,613 1,224,417 1,165,776 Securities held to maturity (fair value$379,231 , 267,988 and $327,497) 371,578 265,807 322,148 Mortgage loans held for sale 19,406 35,908 22,705 Loans, net of unearned income 4,163,447 4,604,126 4,873,030 Less allowance for loan losses 127,638 174,695 174,111 ------------- ------------- ------------- Loans, net 4,035,809 4,429,431 4,698,919 Assets covered by loss sharing agreements with the FDIC 95,726 131,887 156,611 Premises and equipment, net 178,208 178,239 180,125 Accrued interest receivable 21,291 24,299 29,650 Goodwill and other intangible assets 9,922 11,446 223,600 Foreclosed property 47,584 142,208 123,910 Net deferred tax asset 261,268 166,937 111,485 Other assets 172,074 183,160 249,057 ------------- ------------- ------------- Total assets $ 7,409,669 $ 7,443,196 $ 7,652,484 ============= ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Demand $ 899,017 $ 793,414 $ 779,934 NOW 1,306,109 1,424,781 1,326,861 Money market 989,600 891,252 756,370 Savings 197,927 183,894 185,176 Time: Less than $100,000 1,508,444 1,496,700 1,575,211 Greater than $100,000 981,154 1,002,359 1,093,975 Brokered 300,964 676,772 611,985 ------------- ------------- ------------- Total deposits 6,183,215 6,469,172 6,329,512 Federal funds purchased, repurchase agreements, and other short-term borrowings 103,666 101,067 104,127Federal Home Loan Bank advances 40,625 55,125 104,138 Long-term debt 150,186 150,146 150,106 Unsettled securities purchases 35,634 - 20,941 Accrued expenses and other liabilities 36,368 32,171 39,243 ------------- ------------- ------------- Total liabilities 6,549,694 6,807,681 6,748,067 ------------- ------------- ------------- 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 176,392 175,711 175,050 Series D;$1,000 stated value; 16,613 shares issued and outstanding 16,613 - - Common stock,$1 par value; 100,000,000 shares authorized; 41,554,874, 18,937,001 and 18,856,185 shares issued and outstanding 41,555 18,937 18,856 Common stock, non-voting,$1 par value; 30,000,000 shares authorized; 15,914,209 shares issued and outstanding 15,914 - - Common stock issuable; 83,575, 67,287 and 56,954 shares 3,574 3,894 3,898 Capital surplus 1,051,607 741,244 739,261 Accumulated deficit (476,230) (335,567) (77,590) Accumulated other comprehensive income 30,333 31,079 44,725 ------------- ------------- ------------- Total shareholders' equity 859,975 635,515 904,417 ------------- ------------- ------------- Total liabilities and shareholders' equity $ 7,409,669 $ 7,443,196 $ 7,652,484 ============= ============= =============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) 540,943 ---------- Total assets $7,623,719 ========== 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 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 854,447 ---------- Total liabilities and shareholders' equity $7,623,719 ========== 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$32.2 million in 2011 and$43.6 million in 2010 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 , -------------------------------------------- ------------------------------ 2010 ------------------------------ Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate -------------------------------------------- ---------- ----------- ------ Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $5,010,937 $ 70,640 5.65% Taxable securities (3) 1,503,162 15,534 4.13 Tax-exempt securities (1)(3) 28,920 482 6.67 Federal funds sold and other interest- earning assets 311,475 1,043 1.34 ---------- ----------- Total interest-earning assets 6,854,494 87,699 5.13 ---------- ----------- Non-interest-earning assets: Allowance for loan losses (193,998) Cash and due from banks 100,931 Premises and equipment 181,064 Other assets (3) 761,803 ---------- Total assets $7,704,294 ========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $1,325,099 1,745 .53 Money market 746,039 1,829 .98 Savings 186,628 83 .18 Time less than $100,000 1,605,308 7,887 1.97 Time greater than $100,000 1,110,010 6,102 2.20 Brokered 642,954 3,729 2.33 ---------- ----------- Total interest-bearing deposits 5,616,038 21,375 1.53 ---------- ----------- Federal funds purchased and other borrowings 104,637 1,056 4.05 Federal Home Loan Bank advances 107,948 974 3.62 Long-term debt 150,097 2,667 7.13 ---------- ----------- Total borrowed funds 362,682 4,697 5.19 ---------- ----------- Total interest-bearing liabilities 5,978,720 26,072 1.75 ----------- Non-interest-bearing liabilities: Non-interest-bearing deposits 758,558 Other liabilities 54,931 ---------- Total liabilities 6,792,209 Shareholders' equity 912,085 ---------- Total liabilities and shareholders' equity $7,704,294 ========== Net interest revenue $ 61,627 =========== Net interest-rate spread 3.38% ====== Net interest margin(4) 3.60% ====== (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$32.2 million in 2011 and$43.6 million in 2010 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) 544,625 ---------- Total assets $7,609,216 ========== 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 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 762,518 ---------- Total liabilities and shareholders' equity $7,609,216 ========== 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$29.7 million in 2011 and$43.4 million in 2010 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 , ------------------------------------------------------ ------------------- 2010 ----------- ------------------- Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate ------------------------------------------------------ ------------------- Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 5,091,445 $ 142,859 5.66% Taxable securities (3) 1,495,447 31,426 4.20 Tax-exempt securities (1)(3) 29,482 991 6.72 Federal funds sold and other interest- earning assets 352,683 2,272 1.29 ----------- ------------ Total interest-earning assets 6,969,057 177,548 5.13 ----------- ------------ Non-interest-earning assets: Allowance for loan losses (190,662) Cash and due from banks 102,728 Premises and equipment 181,493 Other assets (3) 762,014 ----------- Total assets $ 7,824,630 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,343,297 3,599 .54 Money market 734,817 3,586 .98 Savings 183,555 167 .18 Time less than $100,000 1,648,739 16,778 2.05 Time greater than $100,000 1,132,767 12,872 2.29 Brokered 689,717 8,266 2.42 ----------- ------------ Total interest-bearing deposits 5,732,892 45,268 1.59 ----------- ------------ Federal funds purchased and other borrowings 103,355 2,094 4.09 Federal Home Loan Bank advances 111,150 1,951 3.54 Long-term debt 150,088 5,329 7.16 ----------- ------------ Total borrowed funds 364,593 9,374 5.18 ----------- ------------ Total interest-bearing liabilities 6,097,485 54,642 1.81 ------------ Non-interest-bearing liabilities: Non-interest-bearing deposits 738,876 Other liabilities 59,605 ----------- Total liabilities 6,895,966 Shareholders' equity 928,664 ----------- Total liabilities and shareholders' equity $ 7,824,630 =========== Net interest revenue $ 122,906 ============ Net interest-rate spread 3.32% ====== Net interest margin(4) 3.55% ====== (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. (2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. (3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of$29.7 million in 2011 and$43.4 million in 2010 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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