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United Community Banks, Inc. Reports Net Loss of $6.2 Million for Third Quarter 2011
United Community Banks, Inc. Reports Net Loss of $6.2 Million for Third Quarter 2011
Oct 27, 2011
- Special
$25 million loan loss provision drove net loss - Excluding this special provision, net income was
$8.8 million , or10 cents per share - Net interest margin rose 14 basis points on lower deposit pricing
- Core transaction deposits up 16 percent on an annualized basis
The year-to-date net loss of
"We believe the loss was an isolated situation that does not reflect deterioration in the remainder of our loan portfolio," stated
Total loans were
The third quarter provision for loan losses was
Nonperforming assets increased
Taxable equivalent net interest revenue of
"Growing loans and deposits are key initiatives to further building core earnings," Tallent commented. "The weak economy has created a highly competitive environment for good, quality loans and we are working diligently to get our share. We have had tremendous success in gathering core transaction deposits -- increasing the balance
Fee revenue was
Excluding foreclosed property costs and the goodwill impairment charge in 2010, third quarter 2011 operating expenses were
Foreclosed property costs for the third quarter of 2011 were
The effective tax rate for the third quarter of 2011 was 49 percent, up from the 40 percent effective tax rate for the first and second quarters of 2011. The tax benefit in the third quarter includes the release of approximately
As of
"Reporting a third quarter loss after achieving profitability last quarter is disappointing, but must be put into context," Tallent said. "Our objective is to deal aggressively and decisively with credit issues as they are identified. The large classification during the quarter was an isolated situation that we do not believe indicates a trend. Excluding this one item, our credit metrics continued to improve and we are on the right path to be profitable next quarter and into 2012."
Tallent added, "United has been working diligently with the
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.
UNITED COMMUNITY BANKS, INC. Financial Highlights Selected Financial Information 2011 2010 ----------------------------- ------------------- (in thousands, except per share data; Third Second First Fourth Third taxable equivalent) Quarter Quarter Quarter Quarter Quarter -------- -------- --------- -------- --------- INCOME SUMMARY Interest revenue $ 74,543 $ 76,931 $ 75,965 $ 81,215 $ 84,360 Interest expense 15,262 17,985 19,573 21,083 24,346 -------- -------- --------- -------- --------- Net interest revenue 59,281 58,946 56,392 60,132 60,014 Operating provision for loan losses (1) 36,000 11,000 190,000 47,750 50,500 Fee revenue (2) 11,498 13,905 11,838 12,442 12,861 -------- -------- --------- -------- --------- Total operating revenue (1)(2) 34,779 61,851 (121,770) 24,824 22,375 Operating expenses (3) 46,520 48,728 115,271 64,918 64,906 Loss on sale of nonperforming assets - - - - - -------- -------- --------- -------- --------- Operating (loss) income from continuing operations before income taxes (11,741) 13,123 (237,041) (40,094) (42,531) Operating income tax (benefit) expense (5,539) 5,506 (94,555) (16,520) (16,706) -------- -------- --------- -------- --------- Net operating (loss) income from continuing operations(1)(2)(3) (6,202) 7,617 (142,486) (23,574) (25,825) 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 (loss) income (6,202) 7,617 (142,486) (16,395) (236,415) Preferred dividends and discount accretion 3,019 3,016 2,778 2,586 2,581 -------- -------- --------- -------- --------- Net (loss) income available to common shareholders $ (9,221) $ 4,601 $(145,264) $(18,981) $(238,996) ======== ======== ========= ======== ========= PERFORMANCE MEASURES Per common share: Diluted operating (loss) income from continuing operations (1)(2)(3) $ (.16) $ .08 $ (7.87) $ (1.38) $ (1.50) Diluted (loss) income from continuing operations (.16) .08 (7.87) (1.00) (12.62) Diluted (loss) income (.16) .08 (7.87) (1.00) (12.62) Book value 11.37 11.59 14.78 24.18 25.70 Tangible book value (5) 11.26 11.47 14.44 23.78 25.26 Key performance ratios: Return on equity (4)(6) (5.72)% 5.34% (147.11)% (17.16)% (148.04)% Return on assets (6) (.34) .40 (7.61) (.89) (12.47) Net interest margin (6) 3.55 3.41 3.30 3.58 3.57 Operating efficiency ratio from continuing operations (2)(3) 65.73 66.88 169.08 89.45 89.38 Equity to assets 11.83 11.21 8.82 8.85 11.37 Tangible equity to assets (5) 11.76 11.13 8.73 8.75 9.19 Tangible common equity to assets (5) 9.09 4.79 5.51 6.35 6.78 Tangible common equity to risk- weighted assets (5) 14.41 14.26 6.40 9.05 9.60 ASSET QUALITY * Non-performing loans $144,484 $ 71,065 $ 83,769 $179,094 $ 217,766 Foreclosed properties 44,263 47,584 54,378 142,208 129,964 -------- -------- --------- -------- --------- Total non-performing assets (NPAs) 188,747 118,649 138,147 321,302 347,730 Allowance for loan losses 146,092 127,638 133,121 174,695 174,613 Operating net charge- offs (1) 17,546 16,483 231,574 47,668 49,998 Allowance for loan losses to loans 3.55% 3.07% 3.17% 3.79% 3.67% Operating net charge- offs to average loans (1)(6) 1.68 1.58 20.71 4.03 4.12 NPAs to loans and foreclosed properties 4.54 2.82 3.25 6.77 7.11 NPAs to total assets 2.64 1.60 1.73 4.32 4.96 AVERAGE BALANCES($ in millions) Loans $ 4,194 $ 4,266 $ 4,599 $ 4,768 $ 4,896 Investment securities 2,150 2,074 1,625 1,354 1,411 Earning assets 6,630 6,924 6,902 6,680 6,676 Total assets 7,261 7,624 7,595 7,338 7,522 Deposits 6,061 6,372 6,560 6,294 6,257 Shareholders' equity 859 854 670 649 855 Common shares - basic (thousands) 57,599 25,427 18,466 18,984 18,936 Common shares - diluted (thousands) 57,599 57,543 18,466 18,984 18,936 AT PERIOD END($ in millions) Loans * $ 4,110 $ 4,163 $ 4,194 $ 4,604 $ 4,760 Investment securities 2,123 2,188 1,884 1,490 1,310 Total assets 7,159 7,410 7,974 7,443 7,013 Deposits 6,005 6,183 6,598 6,469 5,999 Shareholders' equity 848 860 850 636 662 Common shares outstanding (thousands) 57,510 57,469 20,903 18,937 18,887 (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 Third (in thousands, Quarter For the Nine YTD except per share Third Quarter 2011- Months Ended 2011- data; taxable ------------------- 2010 -------------------- 2010 equivalent) 2011 2010 Change 2011 2010 Change -------- --------- ----- --------- --------- ----- INCOME SUMMARY Interest revenue $ 74,543 $ 84,360 $ 227,439 $ 261,908 Interest expense 15,262 24,346 52,820 78,988 -------- --------- --------- --------- Net interest revenue 59,281 60,014 (1)% 174,619 182,920 (5)% Operating provision for loan losses (1) 36,000 50,500 237,000 187,000 Fee revenue (2) 11,498 12,861 (11) 37,241 36,106 3 -------- --------- --------- --------- Total operating revenue (1)(2) 34,779 22,375 (25,140) 32,026 Operating expenses (3) 46,520 64,906 (28) 210,519 178,034 18 Loss on sale of nonperforming assets - - - 45,349 -------- --------- --------- --------- Operating (loss) income from continuing operations before income taxes (11,741) (42,531) (72) (235,659) (191,357) 23 Operating income tax (benefit) expense (5,539) (16,706) (94,588) (71,542) -------- --------- --------- --------- Net operating (loss) income from continuing operations (1)(2)(3) (6,202) (25,825) (76) (141,071) (119,815) 18 Noncash goodwill impairment charges - (210,590) - (210,590) 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 (loss) income (6,202) (236,415) (97) (141,071) (329,240) (57) Preferred dividends and discount accretion 3,019 2,581 8,813 7,730 -------- --------- --------- --------- Net (loss) income available to common shareholders $ (9,221) $(238,996) $(149,884) $(336,970) ======== ========= ========= ========= PERFORMANCE MEASURES Per common share: Diluted operating (loss) income from continuing operations (1)(2)(3) $ (.16) $ (1.50) (89) $ (4.41) $ (6.75) (35) Diluted (loss) income from continuing operations (.16) (12.62) (99) (4.41) (17.89) (75) Diluted (loss) income (.16) (12.62) (99) (4.41) (17.82) (75) Book value 11.37 25.70 (56) 11.37 25.70 (56) Tangible book value (5) 11.26 25.26 (55) 11.26 25.26 (55) Key performance ratios: Return on equity (4)(6) (5.72)% (148.04)% (43.31)% (65.69)% Return on assets (6) (.34) (12.47) (2.52) (5.70) Net interest margin (6) 3.55 3.57 3.42 3.56 Operating efficiency ratio from continuing operations (2)(3) 65.73 89.38 99.39 102.14 Equity to assets 11.83 11.37 10.61 11.70 Tangible equity to assets (5) 11.76 9.19 10.53 9.28 Tangible common equity to assets (5) 9.09 6.78 6.44 6.94 Tangible common equity to risk- weighted assets (5) 14.41 9.60 14.41 9.60 ASSET QUALITY * Non-performing loans $144,484 $ 217,766 $ 144,484 $ 217,766 Foreclosed properties 44,263 129,964 44,263 129,964 -------- --------- --------- --------- Total non- performing assets (NPAs) 188,747 347,730 188,747 347,730 Allowance for loan losses 146,092 174,613 146,092 174,613 Operating net charge-offs (1) 17,546 49,998 265,603 167,989 Allowance for loan losses to loans 3.55% 3.67% 3.55% 3.67% Operating net charge-offs to average loans (1)(6) 1.68 4.12 8.28 4.54 NPAs to loans and foreclosed properties 4.54 7.11 4.54 7.11 NPAs to total assets 2.64 4.96 2.64 4.96 AVERAGE BALANCES($ in millions) Loans $ 4,194 $ 4,896 (14) $ 4,352 $ 5,026 (13) Investment securities 2,150 1,411 52 1,952 1,487 31 Earning assets 6,630 6,676 (1) 6,817 6,870 (1) Total assets 7,261 7,522 (3) 7,492 7,723 (3) Deposits 6,061 6,257 (3) 6,329 6,399 (1) Shareholders' equity 859 855 - 795 904 (12) Common shares - basic (thousands) 57,599 18,936 33,973 18,905 Common shares - diluted (thousands) 57,599 18,936 33,973 18,905 AT PERIOD END($ in millions) Loans * $ 4,110 $ 4,760 (14) $ 4,110 $ 4,760 (14) Investment securities 2,123 1,310 62 2,123 1,310 62 Total assets 7,159 7,013 2 7,159 7,013 2 Deposits 6,005 5,999 - 6,005 5,999 - Shareholders' equity 848 662 28 848 662 28 Common shares outstanding (thousands) 57,510 18,887 57,510 18,887 (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; Third Second First Fourth Third taxable equivalent) Quarter Quarter Quarter Quarter Quarter -------- -------- --------- --------- --------- Interest revenue reconciliation Interest revenue - taxable equivalent $ 74,543 $ 76,931 $ 75,965 $ 81,215 $ 84,360 Taxable equivalent adjustment (420) (429) (435) (497) (511) -------- -------- --------- --------- --------- Interest revenue (GAAP) $ 74,123 $ 76,502 $ 75,530 $ 80,718 $ 83,849 ======== ======== ========= ========= ========= Net interest revenue reconciliation Net interest revenue - taxable equivalent $ 59,281 $ 58,946 $ 56,392 $ 60,132 $ 60,014 Taxable equivalent adjustment (420) (429) (435) (497) (511) -------- -------- --------- --------- --------- Net interest revenue (GAAP) $ 58,861 $ 58,517 $ 55,957 $ 59,635 $ 59,503 ======== ======== ========= ========= ========= Provision for loan losses reconciliation Operating provision for loan losses $ 36,000 $ 11,000 $ 190,000 $ 47,750 $ 50,500 Partial reversal of special fraud-related provision for loan loss - - - (11,750) - -------- -------- --------- --------- --------- Provision for loan losses (GAAP) $ 36,000 $ 11,000 $ 190,000 $ 36,000 $ 50,500 ======== ======== ========= ========= ========= Total revenue reconciliation Total operating revenue $ 34,779 $ 61,851 $(121,770) $ 24,824 $ 22,375 Taxable equivalent adjustment (420) (429) (435) (497) (511) Partial reversal of special fraud-related provision for loan loss - - - 11,750 - -------- -------- --------- --------- --------- Total revenue (GAAP) $ 34,359 $ 61,422 $(122,205) $ 36,077 $ 21,864 ======== ======== ========= ========= ========= Expense reconciliation Operating expense $ 46,520 $ 48,728 $ 115,271 $ 64,918 $ 64,906 Noncash goodwill impairment charge - - - - 210,590 -------- -------- --------- --------- --------- Operating expense (GAAP) $ 46,520 $ 48,728 $ 115,271 $ 64,918 $ 275,496 ======== ======== ========= ========= ========= (Loss) income from continuing operations before taxes reconciliation Operating (loss) income from continuing operations before taxes $(11,741) $ 13,123 $(237,041) $ (40,094) $ (42,531) Taxable equivalent adjustment (420) (429) (435) (497) (511) Noncash goodwill impairment charge - - - - (210,590) Partial reversal of special fraud-related provision for loan loss - - - 11,750 - -------- -------- --------- --------- --------- (Loss) income from continuing operations before taxes (GAAP) $(12,161) $ 12,694 $(237,476) $ (28,841) $(253,632) ======== ======== ========= ========= ========= Income tax (benefit) expense reconciliation Operating income tax (benefit) expense $ (5,539) $ 5,506 $ (94,555) $ (16,520) $ (16,706) Taxable equivalent adjustment (420) (429) (435) (497) (511) Partial reversal of special fraud-related provision for loan loss - - - 4,571 - -------- -------- --------- --------- --------- Income tax (benefit) expense (GAAP) $ (5,959) $ 5,077 $ (94,990) $ (12,446) $ (17,217) ======== ======== ========= ========= ========= Diluted (loss) earnings from continuing operations per common share reconciliation Diluted operating (loss) earnings from continuing operations per common share $ (.16) $ .08 $ (7.87) $ (1.38) $ (1.50) Noncash goodwill impairment charge - - - - (11.12) Partial reversal of special fraud-related provision for loan loss - - - .38 - -------- -------- --------- --------- --------- Diluted (loss) earnings from continuing operations per common share (GAAP) $ (.16) $ .08 $ (7.87) $ (1.00) $ (12.62) ======== ======== ========= ========= ========= Book value per common share reconciliation Tangible book value per common share $ 11.26 $ 11.47 $ 14.44 $ 23.78 $ 25.26 Effect of goodwill and other intangibles .11 .12 .34 .40 .44 -------- -------- --------- --------- --------- Book value per common share (GAAP) $ 11.37 $ 11.59 $ 14.78 $ 24.18 $ 25.70 ======== ======== ========= ========= ========= Efficiency ratio from continuing operations reconciliation Operating efficiency ratio from continuing operations 65.73% 66.88% 169.08% 89.45% 89.38% Noncash goodwill impairment charge - - - - 290.00 -------- -------- --------- --------- --------- Efficiency ratio from continuing operations (GAAP) 65.73% 66.88% 169.08% 89.45% 379.38% ======== ======== ========= ========= ========= Average equity to assets reconciliation Tangible common equity to assets 9.09% 4.79% 5.51% 6.35% 6.78% Effect of preferred equity 2.67 6.34 3.22 2.40 2.41 -------- -------- --------- --------- --------- Tangible equity to assets 11.76 11.13 8.73 8.75 9.19 Effect of goodwill and other intangibles .07 .08 .09 .10 2.18 -------- -------- --------- --------- --------- Equity to assets (GAAP) 11.83% 11.21% 8.82% 8.85% 11.37% ======== ======== ========= ========= ========= Actual tangible common equity to risk- weighted assets reconciliation Tangible common equity to risk-weighted assets 14.41% 14.26% 6.40% 9.05% 9.60% Effect of other comprehensive income (.58) (.65) (.58) (.62) (.81) Effect of deferred tax limitation (5.34) (5.04) (5.10) (3.34) (2.94) Effect of trust preferred 1.18 1.14 1.12 1.06 1.06 Effect of preferred equity 4.30 4.17 5.97 3.52 3.51 -------- -------- --------- --------- --------- Tier I capital ratio (Regulatory) 13.97% 13.88% 7.81% 9.67% 10.42% ======== ======== ========= ========= ========= Net charge-offs reconciliation Operating net charge- offs $ 17,546 $ 16,483 $ 231,574 $ 47,668 $ 49,998 Subsequent partial recovery of fraud- related charge-off - - - (11,750) - -------- -------- --------- --------- --------- Net charge-offs (GAAP) $ 17,546 $ 16,483 $ 231,574 $ 35,918 $ 49,998 ======== ======== ========= ========= ========= Net charge-offs to average loans reconciliation Operating net charge- offs to average loans 1.68% 1.58% 20.71% 4.03% 4.12% Subsequent partial recovery of fraud- related charge-off - - - (1.00) - -------- -------- --------- --------- --------- Net charge-offs to average loans (GAAP) 1.68% 1.58% 20.71% 3.03% 4.12% ======== ======== ========= ========= ========= Net (loss) income reconciliation Net income excluding special provision $ 8,798 Effect of special provision for loan losses on largest lending relationship (15,000) -------- Net loss (GAAP) $ (6,202) ======== Net (loss) income per diluted share reconciliation Net income per diluted share excluding special provision $ .10 Effect of special provision for loan losses on largest lending relationship (.26) -------- Net loss per diluted share (GAAP) $ (.16) ========UNITED COMMUNITY BANKS, INC. Operating Earnings to GAAP Earnings Reconciliation Selected Financial Information (in thousands, except per share data; taxable For the Nine Months equivalent) Ended ---------------------- 2011 2010 ---------- ---------- Interest revenue reconciliation Interest revenue - taxable equivalent $ 227,439 $ 261,908 Taxable equivalent adjustment (1,284) (1,504) ---------- ---------- Interest revenue (GAAP) $ 226,155 $ 260,404 ========== ========== Net interest revenue reconciliation Net interest revenue - taxable equivalent $ 174,619 $ 182,920 Taxable equivalent adjustment (1,284) (1,504) ---------- ---------- Net interest revenue (GAAP) $ 173,335 $ 181,416 ========== ========== Provision for loan losses reconciliation Operating provision for loan losses $ 237,000 $ 187,000 Partial reversal of special fraud-related provision for loan loss - - ---------- ---------- Provision for loan losses (GAAP) $ 237,000 $ 187,000 ========== ========== Total revenue reconciliation Total operating revenue $ (25,140) $ 32,026 Taxable equivalent adjustment (1,284) (1,504) Partial reversal of special fraud-related provision for loan loss - - ---------- ---------- Total revenue (GAAP) $ (26,424) $ 30,522 ========== ========== Expense reconciliation Operating expense $ 210,519 $ 223,383 Noncash goodwill impairment charge - 210,590 ---------- ---------- Operating expense (GAAP) $ 210,519 $ 433,973 ========== ========== (Loss) income from continuing operations before taxes reconciliation Operating (loss) income from continuing operations before taxes $ (235,659) $ (191,357) Taxable equivalent adjustment (1,284) (1,504) Noncash goodwill impairment charge - (210,590) Partial reversal of special fraud-related provision for loan loss - - ---------- ---------- (Loss) income from continuing operations before taxes (GAAP) $ (236,943) $ (403,451) ========== ========== Income tax (benefit) expense reconciliation Operating income tax (benefit) expense $ (94,588) $ (71,542) Taxable equivalent adjustment (1,284) (1,504) Partial reversal of special fraud-related provision for loan loss - - ---------- ---------- Income tax (benefit) expense (GAAP) $ (95,872) $ (73,046) ========== ========== Diluted (loss) earnings from continuing operations per common share reconciliation Diluted operating (loss) earnings from continuing operations per common share $ (4.41) $ (6.75) Noncash goodwill impairment charge - (11.14) Partial reversal of special fraud-related provision for loan loss - - ---------- ---------- Diluted (loss) earnings from continuing operations per common share (GAAP) $ (4.41) $ (17.89) ========== ========== Book value per common share reconciliation Tangible book value per common share $ 11.26 $ 25.26 Effect of goodwill and other intangibles .11 .44 ---------- ---------- Book value per common share (GAAP) $ 11.37 $ 25.70 ========== ========== Efficiency ratio from continuing operations reconciliation Operating efficiency ratio from continuing operations 99.39% 102.14% Noncash goodwill impairment charge - 96.29 ---------- ---------- Efficiency ratio from continuing operations (GAAP) 99.39% 198.43% ========== ========== Average equity to assets reconciliation Tangible common equity to assets 6.44% 6.94% Effect of preferred equity 4.09 2.34 ---------- ---------- Tangible equity to assets 10.53 9.28 Effect of goodwill and other intangibles .08 2.42 ---------- ---------- Equity to assets (GAAP) 10.61% 11.70% ========== ========== Actual tangible common equity to risk-weighted assets reconciliation Tangible common equity to risk-weighted assets 14.41% 9.60% Effect of other comprehensive income (.58) (.81) Effect of deferred tax limitation (5.34) (2.94) Effect of trust preferred 1.18 1.06 Effect of preferred equity 4.30 3.51 ---------- ---------- Tier I capital ratio (Regulatory) 13.97% 10.42% ========== ========== Net charge-offs reconciliation Operating net charge-offs $ 265,603 $ 167,989 Subsequent partial recovery of fraud-related charge- off - - ---------- ---------- Net charge-offs (GAAP) $ 265,603 $ 167,989 ========== ========== Net charge-offs to average loans reconciliation Operating net charge-offs to average loans 8.28% 4.54% Subsequent partial recovery of fraud-related charge- off - - ---------- ---------- Net charge-offs to average loans (GAAP) 8.28% 4.54% ========== ==========UNITED COMMUNITY BANKS, INC. Financial Highlights Loan Portfolio Composition at Period-End (1) 2011 2010 -------------------------- ----------------- Third Second First Fourth Third (in millions) Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- LOANS BY CATEGORY Commercial (sec.by RE) $ 1,771 $ 1,742 $ 1,692 $ 1,761 $ 1,781 Commercial construction 169 195 213 297 310 Commercial & industrial 429 428 431 441 456 -------- -------- -------- -------- -------- Total commercial 2,369 2,365 2,336 2,499 2,547 Residential construction 474 502 550 695 764 Residential mortgage 1,150 1,177 1,187 1,279 1,316 Consumer / installment 117 119 121 131 133 -------- -------- -------- -------- -------- Total loans $ 4,110 $ 4,163 $ 4,194 $ 4,604 $ 4,760 ======== ======== ======== ======== ======== LOANS BY MARKET Atlanta MSA $ 1,192 $ 1,188 $ 1,179 $ 1,310 $ 1,365 Gainesville MSA 272 275 282 312 316 North Georgia 1,478 1,500 1,531 1,689 1,755 Western North Carolina 607 626 640 702 719 Coastal Georgia 316 325 312 335 345 East Tennessee 245 249 250 256 260 -------- -------- -------- -------- -------- Total loans $ 4,110 $ 4,163 $ 4,194 $ 4,604 $ 4,760 ======== ======== ======== ======== ======== RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 97 $ 105 $ 116 $ 174 $ 190 Land loans 60 62 69 99 104 Lot loans 216 218 228 275 303 -------- -------- -------- -------- -------- Total 373 385 413 548 597 -------- -------- -------- -------- -------- House loans Spec 64 74 88 97 109 Sold 37 43 49 50 58 -------- -------- -------- -------- -------- Total 101 117 137 147 167 -------- -------- -------- -------- -------- Total residential construction $ 474 $ 502 $ 550 $ 695 $ 764 ======== ======== ======== ======== ======== RESIDENTIAL CONSTRUCTION -ATLANTA MSA Dirt loans Acquisition & development $ 19 $ 20 $ 22 $ 30 $ 34 Land loans 15 16 19 23 27 Lot loans 22 22 24 32 45 -------- -------- -------- -------- -------- Total 56 58 65 85 106 -------- -------- -------- -------- -------- House loans Spec 28 30 34 38 42 Sold 8 9 11 10 11 -------- -------- -------- -------- -------- Total 36 39 45 48 53 -------- -------- -------- -------- -------- Total residential construction $ 92 $ 97 $ 110 $ 133 $ 159 ======== ======== ======== ======== ======== (1) Excludes total loans of$57.8 million ,$70.8 million ,$63.3 million ,$68.2 million and$75.2 million as ofSeptember 30, 2011 ,June 30, 2011 ,March 31, 2011 ,December 31, 2010 andSeptember 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 ----------------- -------- Linked Year over Third Second Third Quarter Year (in millions) Quarter Quarter Quarter Change Change -------- -------- -------- --------- --------- LOANS BY CATEGORY Commercial (sec.by RE) $ 1,771 $ 1,742 $ 1,781 $ 29 $ (10) Commercial construction 169 195 310 (26) (141) Commercial & industrial 429 428 456 1 (27) -------- -------- -------- Total commercial 2,369 2,365 2,547 4 (178) Residential construction 474 502 764 (28) (290) Residential mortgage 1,150 1,177 1,316 (27) (166) Consumer / installment 117 119 133 (2) (16) -------- -------- -------- Total loans $ 4,110 $ 4,163 $ 4,760 (53) (650) ======== ======== ======== LOANS BY MARKET Atlanta MSA $ 1,192 $ 1,188 $ 1,365 4 (173) Gainesville MSA 272 275 316 (3) (44) North Georgia 1,478 1,500 1,755 (22) (277) Western North Carolina 607 626 719 (19) (112) Coastal Georgia 316 325 345 (9) (29) East Tennessee 245 249 260 (4) (15) -------- -------- -------- Total loans $ 4,110 $ 4,163 $ 4,760 (53) (650) ======== ======== ======== RESIDENTIAL CONSTRUCTION Dirt loans Acquisition & development $ 97 $ 105 $ 190 (8) (93) Land loans 60 62 104 (2) (44) Lot loans 216 218 303 (2) (87) -------- -------- -------- Total 373 385 597 (12) (224) -------- -------- -------- House loans Spec 64 74 109 (10) (45) Sold 37 43 58 (6) (21) -------- -------- -------- Total 101 117 167 (16) (66) -------- -------- -------- Total residential construction $ 474 $ 502 $ 764 (28) (290) ======== ======== ======== RESIDENTIAL CONSTRUCTION -ATLANTA MSA Dirt loans Acquisition & development $ 19 $ 20 $ 34 (1) (15) Land loans 15 16 27 (1) (12) Lot loans 22 22 45 - (23) -------- -------- -------- Total 56 58 106 (2) (50) -------- -------- -------- House loans Spec 28 30 42 (2) (14) Sold 8 9 11 (1) (3) -------- -------- -------- Total 36 39 53 (3) (17) -------- -------- -------- Total residential construction $ 92 $ 97 $ 159 (5) (67) ======== ======== ======== (1) Excludes total loans of$57.8 million ,$70.8 million ,$63.3 million ,$68.2 million and$75.2 million as ofSeptember 30, 2011 ,June 30, 2011 ,March 31, 2011 ,December 31, 2010 andSeptember 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) Third Quarter 2011 ---------------------------------------- Non- performing Foreclosed Total (in thousands) Loans Properties NPAs ------------ ------------ ------------ NPAs BY CATEGORY Commercial (sec.by RE) $ 21,998 $ 8,880 $ 30,878 Commercial construction 11,370 5,862 17,232 Commercial & industrial 53,009 - 53,009 ------------ ------------ ------------ Total commercial 86,377 14,742 101,119 Residential construction 34,472 21,561 56,033 Residential mortgage 22,671 7,960 30,631 Consumer / installment 964 - 964 ------------ ------------ ------------ Total NPAs $ 144,484 $ 44,263 $ 188,747 ============ ============ ============ Balance as a % of Unpaid Principal 77.8% 33.4% 59.3% NPAs BY MARKET Atlanta MSA $ 13,350 $ 12,971 $ 26,321 Gainesville MSA 5,311 2,495 7,806 North Georgia 105,078 17,467 122,545 Western North Carolina 13,243 7,941 21,184 Coastal Georgia 5,600 2,354 7,954 East Tennessee 1,902 1,035 2,937 ------------ ------------ ------------ Total NPAs $ 144,484 $ 44,263 $ 188,747 ============ ============ ============ NPA ACTIVITY Beginning Balance $ 71,065 $ 47,584 $ 118,649 Loans placed on non-accrual 103,365 - 103,365 Payments received (3,995) - (3,995) Loan charge-offs (15,335) - (15,335) Foreclosures (10,616) 10,616 - Capitalized costs - 818 818 Note / property sales - (13,787) (13,787) Loans held for sale - - - Write downs - (1,772) (1,772) Net gains (losses) on sales - 804 804 ------------ ------------ ------------ Ending Balance $ 144,484 $ 44,263 $ 188,747 ============ ============ ============ (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) Annualized.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 gains (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) 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 gains (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) Annualized.UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality(1) Third Quarter Second Quarter First Quarter 2011 2011(3) 2011(3) ---------------- ----------------- ----------------- 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(4) Offs Loans(4) Offs Loans(4) ------- -------- -------- -------- -------- -------- NET CHARGE-OFFS BY CATEGORY Commercial (sec.by RE) $ 2,192 .50% $ 3,259 .76% $ 48,607 11.07% Commercial construction 1,625 3.54 869 1.70 49,715 76.95 Commercial & industrial 420 .39 523 .49 4,040 3.64 ------- -------- -------- Total commercial 4,237 .71 4,651 .79 102,362 16.66 Residential construction 6,381 5.19 6,629 5.04 92,138 58.20 Residential mortgage 6,110 2.09 4,589 1.55 36,383 11.62 Consumer / installment 818 2.75 614 2.04 691 2.16 ------- -------- -------- Total $17,546 1.68 $ 16,483 1.58 $231,574 20.71 ======= ======== ======== NET CHARGE-OFFS BY MARKET Atlanta MSA $ 2,813 .94% $ 2,920 .99% $ 56,489 17.86% Gainesville MSA 1,804 2.64 2,318 3.36 8,616 11.93 North Georgia 8,124 2.16 6,575 1.72 123,305 29.66 Western North Carolina 3,608 2.31 3,522 2.21 26,447 15.61 Coastal Georgia 709 .88 815 1.02 12,003 14.80 East Tennessee 488 .78 333 .54 4,714 7.47 ------- -------- -------- Total $17,546 1.68 $ 16,483 1.58 $231,574 20.71 ======= ======== ======== (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) 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 September 30, -------------------- (in thousands, except per share data) 2011 2010 --------- --------- Interest revenue: Loans, including fees $ 59,294 $ 68,419 Investment securities, including tax exempt of$244 , $279, $754 and $886 14,568 14,711 Federal funds sold, commercial paper and deposits in banks 261 719 --------- --------- Total interest revenue 74,123 83,849 --------- --------- Interest expense: Deposits: NOW 831 1,705 Money market 1,129 1,930 Savings 52 83 Time 9,086 16,099 --------- --------- Total deposit interest expense 11,098 19,817 Federal funds purchased, repurchase agreements and other short-term borrowings 1,081 1,068 Federal Home Loan Bank advances 441 796 Long-term debt 2,642 2,665 --------- --------- Total interest expense 15,262 24,346 --------- --------- Net interest revenue 58,861 59,503 Provision for loan losses 36,000 50,500 --------- --------- Net interest revenue after provision for loan losses 22,861 9,003 --------- --------- Fee revenue: Service charges and fees 7,534 7,648 Mortgage loan and other related fees 1,148 2,071 Brokerage fees 836 731 Securities gains, net - 2,491 Loss from prepayment of debt - (2,233) Other 1,980 2,153 --------- --------- Total fee revenue 11,498 12,861 --------- --------- Total revenue 34,359 21,864 --------- --------- Operating expenses: Salaries and employee benefits 25,262 24,891 Communications and equipment 3,284 3,620 Occupancy 3,794 3,720 Advertising and public relations 1,052 1,128 Postage, printing and supplies 1,036 1,019 Professional fees 2,051 2,117 Foreclosed property 2,813 19,752 FDIC assessments and other regulatory charges 2,603 3,256 Amortization of intangibles 748 793 Other 3,877 4,610 Goodwill impairment - 210,590 Loss on sale of nonperforming assets - - --------- --------- Total operating expenses 46,520 275,496 --------- --------- Loss from continuing operations before income taxes (12,161) (253,632) Income tax benefit (5,959) (17,217) --------- --------- Net loss from continuing operations (6,202) (236,415) Loss from discontinued operations, net of income taxes - - Gain from sale of subsidiary, net of income taxes and selling costs - - --------- --------- Net loss (6,202) (236,415) Preferred stock dividends and discount accretion 3,019 2,581 --------- --------- Net loss available to common shareholders $ (9,221) $(238,996) ========= ========= Loss from continuing operations per common share - Basic $ (.16) $ (12.62) Loss from continuing operations per common share - Diluted (.16) (12.62) Loss per common share - Basic (.16) (12.62) Loss per common share - Diluted (.16) (12.62) Weighted average common shares outstanding - Basic 57,599 18,936 Weighted average common shares outstanding - Diluted 57,599 18,936UNITED COMMUNITY BANKS, INC. Consolidated Statement of Operations (Unaudited) Nine Months Ended September 30, ---------------------- (in thousands, except per share data) 2011 2010 ---------- ---------- Interest revenue: Loans, including fees $ 181,359 $ 211,245 Investment securities, including tax exempt of $244, $279, $754 and $886 42,964 46,743 Federal funds sold, commercial paper and deposits in banks 1,832 2,416 ---------- ---------- Total interest revenue 226,155 260,404 ---------- ---------- Interest expense: Deposits: NOW 3,191 5,304 Money market 4,656 5,516 Savings 193 250 Time 31,813 54,015 ---------- ---------- Total deposit interest expense 39,853 65,085 Federal funds purchased, repurchase agreements and other short-term borrowings 3,197 3,162 Federal Home Loan Bank advances 1,601 2,747 Long-term debt 8,169 7,994 ---------- ---------- Total interest expense 52,820 78,988 ---------- ---------- Net interest revenue 173,335 181,416 Provision for loan losses 237,000 187,000 ---------- ---------- Net interest revenue after provision for loan losses (63,665) (5,584) ---------- ---------- Fee revenue: Service charges and fees 21,862 23,088 Mortgage loan and other related fees 3,594 5,151 Brokerage fees 2,204 1,884 Securities gains, net 838 2,552 Loss from prepayment of debt (791) (2,233) Other 9,534 5,664 ---------- ---------- Total fee revenue 37,241 36,106 ---------- ---------- Total revenue (26,424) 30,522 ---------- ---------- Operating expenses: Salaries and employee benefits 76,622 72,841 Communications and equipment 10,006 10,404 Occupancy 11,673 11,370 Advertising and public relations 3,347 3,523 Postage, printing and supplies 3,239 3,009 Professional fees 7,731 6,238 Foreclosed property 69,603 45,105 FDIC assessments and other regulatory charges 11,660 10,448 Amortization of intangibles 2,270 2,389 Other 14,368 12,707 Goodwill impairment - 210,590 Loss on sale of nonperforming assets - 45,349 ---------- ---------- Total operating expenses 210,519 433,973 ---------- ---------- Loss from continuing operations before income taxes (236,943) (403,451) Income tax benefit (95,872) (73,046) ---------- ---------- Net loss from continuing operations (141,071) (330,405) Loss from discontinued operations, net of income taxes - (101) Gain from sale of subsidiary, net of income taxes and selling costs - 1,266 ---------- ---------- Net loss (141,071) (329,240) Preferred stock dividends and discount accretion 8,813 7,730 ---------- ---------- Net loss available to common shareholders $ (149,884) $ (336,970) ========== ========== Loss from continuing operations per common share - Basic $ (4.41) $ (17.89) Loss from continuing operations per common share - Diluted (4.41) (17.89) Loss per common share - Basic (4.41) (17.82) Loss per common share - Diluted (4.41) (17.82) Weighted average common shares outstanding - Basic 33,973 18,905 Weighted average common shares outstanding - Diluted 33,973 18,905UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheet (in thousands, except share andSeptember 30 ,December 31 ,September 30 , per share data) 2011 2010 2010 ------------- ------------ ------------- (unaudited) (audited) (unaudited) ASSETS Cash and due from banks $ 57,780 $ 95,994 $ 104,033 Interest-bearing deposits in banks 241,440 111,901 64,408 Federal funds sold, commercial paper and short-term investments - 441,562 108,579 ------------- ------------ ------------- Cash and cash equivalents 299,220 649,457 277,020 Securities available for sale 1,769,083 1,224,417 1,053,518 Securities held to maturity (fair value$369,020 ,$267,988 and $263,012) 353,739 265,807 256,694 Mortgage loans held for sale 22,050 35,908 20,630 Loans, net of unearned income 4,109,875 4,604,126 4,759,504 Less allowance for loan losses 146,092 174,695 174,613 ------------- ------------ ------------- Loans, net 3,963,783 4,429,431 4,584,891 Assets covered by loss sharing agreements with the FDIC 83,623 131,887 144,581 Premises and equipment, net 176,839 178,239 178,842 Accrued interest receivable 19,744 24,299 24,672 Goodwill and other intangible assets 9,175 11,446 12,217 Foreclosed property 44,263 142,208 129,964 Net deferred tax asset 264,275 166,937 146,831 Other assets 153,329 183,160 183,189 ------------- ------------ ------------- Total assets $ 7,159,123 $ 7,443,196 $ 7,013,049 ============= ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Demand $ 966,452 $ 793,414 $ 783,251 NOW 1,299,512 1,424,781 1,338,371 Money market 1,030,370 891,252 804,644 Savings 200,231 183,894 186,617 Time: Less than $100,000 1,393,559 1,496,700 1,498,379 Greater than $100,000 905,183 1,002,359 1,033,132 Brokered 209,998 676,772 354,243 ------------- ------------ ------------- Total deposits 6,005,305 6,469,172 5,998,637 Federal funds purchased, repurchase agreements, and other short-term borrowings 102,883 101,067 103,780 Federal Home Loan Bank advances 40,625 55,125 55,125 Long-term debt 120,206 150,146 150,126 Unsettled securities purchases 10,585 - - Accrued expenses and other liabilities 31,302 32,171 42,906 ------------- ------------ ------------- Total liabilities 6,310,906 6,807,681 6,350,574 ------------- ------------ ------------- 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 176,739 175,711 175,378 Series D;$1,000 stated value; 16,613 shares issued and outstanding 16,613 - - Common stock,$1 par value; 100,000,000 shares authorized; 41,595,692, 18,937,001 and 18,886,660 shares issued and outstanding 41,596 18,937 18,887 Common stock, non-voting,$1 par value; 30,000,000 shares authorized; 15,914,209 shares issued and outstanding 15,914 - - Common stock issuable; 88,501, 67,287 and 61,119 shares 3,590 3,894 3,961 Capital surplus 1,052,690 741,244 740,151 Accumulated deficit (485,451) (335,567) (316,587) Accumulated other comprehensive income 26,309 31,079 40,468 ------------- ------------ ------------- Total shareholders' equity 848,217 635,515 662,475 ------------- ------------ ------------- Total liabilities and shareholders' equity $ 7,159,123 $ 7,443,196 $ 7,013,049 ============= ============ =============UNITED COMMUNITY BANKS, INC. Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended September 30, 2011 ------------------------------ Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate ----------- ---------- ------ Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 4,193,951 $ 59,394 5.62% Taxable securities (3) 2,125,154 14,324 2.70 Tax-exempt securities (1)(3) 24,675 399 6.47 Federal funds sold and other interest- earning assets 286,194 426 .60 ----------- ---------- Total interest-earning assets 6,629,974 74,543 4.47 ----------- ---------- Non-interest-earning assets: Allowance for loan losses (128,654) Cash and due from banks 53,500 Premises and equipment 177,798 Other assets (3) 528,461 ----------- Total assets $ 7,261,079 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,258,929 831 .26 Money market 1,024,559 1,129 .44 Savings 199,793 52 .10 Time less than $100,000 1,448,024 4,539 1.24 Time greater than $100,000 940,864 3,456 1.46 Brokered 260,423 1,091 1.66 ----------- ---------- Total interest-bearing deposits 5,132,592 11,098 .86 ----------- ---------- Federal funds purchased and other borrowings 103,850 1,081 4.13 Federal Home Loan Bank advances 40,625 441 4.31 Long-term debt 138,457 2,642 7.57 ----------- ---------- Total borrowed funds 282,932 4,164 5.84 ----------- ---------- Total interest-bearing liabilities 5,415,524 15,262 1.12 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 928,788 Other liabilities 57,427 ----------- Total liabilities 6,401,739 Shareholders' equity 859,340 ----------- Total liabilities and shareholders' equity $ 7,261,079 =========== Net interest revenue $ 59,281 ========== Net interest-rate spread 3.35% ====== 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$37.9 million in 2011 and$45.4 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 Three Months Ended September 30, 2010 ------------------------------ Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate ----------- ---------- ------ Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 4,896,471 $ 68,540 5.55% Taxable securities (3) 1,384,682 14,431 4.17 Tax-exempt securities (1)(3) 26,481 459 6.93 Federal funds sold and other interest- earning assets 368,108 930 1.01 ----------- ---------- Total interest-earning assets 6,675,742 84,360 5.02 ----------- ---------- Non-interest-earning assets: Allowance for loan losses (194,300) Cash and due from banks 107,825 Premises and equipment 179,839 Other assets (3) 752,780 ----------- Total assets $ 7,521,886 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,318,779 1,705 .51 Money market 781,903 1,930 .98 Savings 186,123 83 .18 Time less than $100,000 1,541,772 7,190 1.85 Time greater than $100,000 1,065,789 5,506 2.05 Brokered 573,606 3,403 2.35 ----------- ---------- Total interest-bearing deposits 5,467,972 19,817 1.44 ----------- ---------- Federal funds purchased and other borrowings 104,370 1,068 4.06 Federal Home Loan Bank advances 80,220 796 3.94 Long-term debt 150,119 2,665 7.04 ----------- ---------- Total borrowed funds 334,709 4,529 5.37 ----------- ---------- Total interest-bearing liabilities 5,802,681 24,346 1.66 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 789,231 Other liabilities 74,482 ----------- Total liabilities 6,666,394 Shareholders' equity 855,492 ----------- Total liabilities and shareholders' equity $ 7,521,886 =========== Net interest revenuea $ 60,014 ========== Net interest-rate spread 3.36% ====== Net interest margin (4) 3.57% ====== (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$37.9 million in 2011 and$45.4 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 Nine Months Ended September 30, 2011 ------------------------------ Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate ----------- ---------- ------ Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 4,351,524 $ 181,422 5.57% Taxable securities (3) 1,926,365 42,210 2.92 Tax-exempt securities (1)(3) 25,178 1,234 6.53 Federal funds sold and other interest- earning assets 514,392 2,573 .67 ----------- ---------- Total interest-earning assets 6,817,459 227,439 4.46 ----------- ---------- Non-interest-earning assets: Allowance for loan losses (145,689) Cash and due from banks 102,251 Premises and equipment 178,694 Other assets (3) 539,177 ----------- Total assets $ 7,491,892 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,313,752 3,191 .32 Money market 977,863 4,656 .64 Savings 194,433 193 .13 Time less than $100,000 1,509,753 14,980 1.33 Time greater than $100,000 973,335 11,480 1.58 Brokered 475,687 5,353 1.50 ----------- ---------- Total interest-bearing deposits 5,444,823 39,853 .98 ----------- ---------- Federal funds purchased and other borrowings 102,711 3,197 4.16 Federal Home Loan Bank advances 49,442 1,601 4.33 Long-term debt 146,221 8,169 7.47 ----------- ---------- Total borrowed funds 298,374 12,967 5.81 ----------- ---------- Total interest-bearing liabilities 5,743,197 52,820 1.23 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 884,417 Other liabilities 69,131 ----------- Total liabilities 6,696,745 Shareholders' equity 795,147 ----------- Total liabilities and shareholders' equity $ 7,491,892 =========== Net interest revenue $ 174,619 ========== Net interest-rate spread 3.23% ====== Net interest margin (4) 3.42% ====== (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$32.4 million in 2011 and$44.1 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 Nine Months Ended September 30, 2010 ------------------------------ Average Avg. (dollars in thousands, taxable equivalent) Balance Interest Rate ----------- ---------- ------ Assets: Interest-earning assets: Loans, net of unearned income (1)(2) $ 5,025,739 $ 211,399 5.62% Taxable securities (3) 1,458,120 45,857 4.19 Tax-exempt securities (1)(3) 28,470 1,450 6.79 Federal funds sold and other interest- earning assets 357,881 3,202 1.19 ----------- ---------- Total interest-earning assets 6,870,210 261,908 5.09 ----------- ---------- Non-interest-earning assets: Allowance for loan losses (191,888) Cash and due from banks 104,446 Premises and equipment 180,936 Other assets (3) 758,903 ----------- Total assets $ 7,722,607 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW $ 1,335,034 5,304 .53 Money market 750,685 5,516 .98 Savings 184,420 250 .18 Time less than $100,000 1,612,691 23,968 1.99 Time greater than $100,000 1,110,195 18,378 2.21 Brokered 650,588 11,669 2.40 ----------- ---------- Total interest-bearing deposits 5,643,613 65,085 1.54 ----------- ---------- Federal funds purchased and other borrowings 103,697 3,162 4.08 Federal Home Loan Bank advances 100,727 2,747 3.65 Long-term debt 150,098 7,994 7.12 ----------- ---------- Total borrowed funds 354,522 13,903 5.24 ----------- ---------- Total interest-bearing liabilities 5,998,135 78,988 1.76 ---------- Non-interest-bearing liabilities: Non-interest-bearing deposits 755,845 Other liabilities 64,622 ----------- Total liabilities 6,818,602 Shareholders' equity 904,005 ----------- Total liabilities and shareholders' equity $ 7,722,607 =========== Net interest revenue $ 182,920 ========== Net interest-rate spread 3.33% ====== Net interest margin (4) 3.56% ====== (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$32.4 million in 2011 and$44.1 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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