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United Community Banks, Inc. Reports Net Operating Loss of $25.8 Million for Third Quarter 2010
United Community Banks, Inc. Reports Net Operating Loss of $25.8 Million for Third Quarter 2010
Oct 28, 2010
BLAIRSVILLE, GA, Oct 28, 2010 (MARKETWIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)
-- Net operating loss at lowest level since second quarter 2009
-- Net charge offs and nonperforming assets continue downward trend -- to
lowest level since first quarter of 2009
-- Provision for loan losses of $50.5 million is the lowest level since
the second quarter of 2008
-- Allowance-to-loans ratio increases to 3.67 percent
-- Core transaction deposits this quarter up 11 percent on annualized
basis
United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $25.8 million, or 30 cents per diluted share, for the third quarter of 2010. The third quarter operating loss excludes a non-cash charge for goodwill impairment of $210.6 million, or $2.22 per diluted share. Including the goodwill impairment charge, the third quarter net loss was $236.4 million, or $2.52 per diluted share.
United's net operating loss from continuing operations for the first nine months of 2010 and 2009 was $119.8 million and $99.0 million, or $1.35 and $2.18 per diluted share, respectively. In the attached schedules, operating loss from continuing operations for all periods excludes consulting fee revenue and operating expenses of Brintech, Inc. during the periods it was owned by United, and the gain from the sale of the company in the first quarter of 2010. The net income or loss from Brintech's discontinued operations is reported as a separate line in the consolidated statement of income.
The net operating loss from continuing operations for the first nine months of 2010 excludes the $210.6 million non-cash charge for goodwill impairment. Including the goodwill impairment charge, United's net loss for the first nine months of 2010 was $329.2 million, or $3.56 per diluted share.
The net operating loss from continuing operations for the first nine months of 2009 excludes $95 million in non-cash charges for impairment of goodwill and $1.8 million in severance costs, net of taxes, relating to a reduction in work force. Also excluded is the $7.1 million gain, net of taxes, on the acquisition of Southern Community Bank in the second quarter 2009. These charges and gains were considered non-operating items and therefore were excluded from operating earnings. Including these non-operating items, United's net loss for the first nine months of 2009 was $188.5 million, or $4.01 per diluted share.
"We are seeing several positive trends emerging in our credit quality indicators," stated Jimmy Tallent, president and chief executive officer. "Our nonperforming assets, net charge-offs and provision for loan losses continue to decline, appearing to confirm that the worst is behind us. While credit challenges remain, we are optimistic about the opportunities that lie ahead within our geographic footprint."
Tallent further commented, "With the United stock price falling in the third quarter and remaining at a substantial discount to tangible book value for an extended period, the Company could no longer support the $210.6 million balance of goodwill on its books. While reporting a charge of this magnitude is discouraging, I want to emphasize that goodwill impairment is a non-cash charge that has no impact on our regulatory capital ratios or our ability to return to profitability."
Total loans were $4.8 billion at quarter-end, down $113 million from the end of the second quarter and down $603 million from a year ago. As of quarter-end, residential construction loans were $764 million, or 16 percent of total loans, down $56 million from the prior quarter-end and down $421 million from a year ago. This decline was net of new lending during the quarter that totaled $85 million, primarily commercial and small business loans in metropolitan Atlanta and north Georgia.
Taxable equivalent net interest revenue of $60 million was $3 million lower than the third quarter of 2009 due to the lower level of interest-earning assets. Average loans and securities declined $669 million and $204 million, respectively, from the third quarter of 2009. The net interest margin was 3.57 percent for the third quarter of 2010, up 18 basis points from a year ago but down three basis points from the second quarter. "By staying focused on deposit and loan pricing, we've been able to hold net interest revenue above $60 million despite continuing attrition in the loan portfolio," Tallent said.
"We grew core transaction deposits for the seventh consecutive quarter with an increase of $67 million over the second quarter, or 11 percent on an annualized basis," Tallent stated. "That compares to core deposit growth of $94 million during the second quarter of 2010 and $219 million from a year ago. There are outstanding opportunities to gain new deposit business due to disruption in the banking industry, particularly within our markets, and our strong service culture. The exceptional growth in our core transaction deposits and our loyal customer base are a testament to the underlying value of our franchise, which I believe is not reflected in our current stock price."
The third quarter 2010 provision for loan losses decreased to $50.5 million from $61.5 million in the second quarter and $95 million a year ago. Net charge-offs were at their lowest level since the first quarter of 2009, down $11.3 million from second quarter of 2010 and down $40.5 million from the third quarter of 2009. Non-performing assets decreased to $348 million at quarter-end from $415 million at September 30, 2009, the lowest level since the first quarter of 2009. The level of nonperforming assets has declined by $69 million from its peak in the first quarter of 2010.
Operating fee revenue was $12.9 million in the third quarter of 2010, compared to $13.4 million a year ago. The decrease was caused by net gains related to balance sheet management activities that resulted from the sale of securities in both periods and losses from the prepayment of Federal Home Loan Bank advances in the third quarter of 2010. Excluding the net effect of the balance sheet management activities, operating fee revenue increased $363,000 from the third quarter of 2009. Service charges and fees of $7.6 million were down $490,000, due primarily to lower overdraft fees resulting from recent regulatory changes that require customers to give consent before using United's overdraft services. Mortgage loan fees of $2.1 million were up $239,000 from a year ago as refinancing activity increased with lower long-term rates. Other fee revenue increased $339,000 to $2.2 million, due primarily to the acceleration of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans.
Third quarter operating expenses were $64.9 million, excluding non-cash goodwill impairment charges, an increase of $13.5 million from a year ago. Foreclosed property costs of $19.8 million increased $11.8 million from the third quarter of 2009 and accounted for most of the year-over-year increase in total operating expenses. The third quarter 2010 foreclosed property costs included $5.6 million for maintenance, property taxes and other related costs, compared to $3.8 million last year. In addition, losses relating to the sale of properties totaled $7.1 million and write-downs of other foreclosed properties also totaled $7.1 million, both to help expedite sales of foreclosed properties. Salary and benefit costs totaled $24.9 million, an increase of $1.0 million from last year due primarily to decreased capitalization of direct loan origination costs and higher group medical insurance costs. Other operating expenses increased $759,000 to $4.6 million from a year ago due to an increase in collections expenses and loan workout costs.
"We continued to focus on reducing expenses; most of our controllable costs were either flat or down compared to a year ago," commented Tallent. "The rise in foreclosed property costs and collection expenses resulted from the increase in the number of properties we are managing, as well as the decline in values of properties sold and held for disposition."
Excluding the goodwill impairment charge, the effective tax rate for the third quarter of 2010 was 40 percent, which was consistent with the prior quarter. The effective tax rate for the remainder of 2010 is expected to be 40 percent, slightly higher than the effective tax rate for the full year 2009.
As of September 30, 2010, the capital ratios for United were as follows: Tier 1 Risk Based Capital of 10.4 percent; Leverage of 7.3 percent; and, Total Risk Based Capital of 13.0 percent. The quarterly average tangible equity-to-assets ratio was 9.2 percent and the tangible common equity-to-assets ratio was 6.8 percent.
"While the Company is above the regulatory well-capitalized levels, we continue to evaluate and analyze various capital alternatives to further strengthen our capital position which we believe is prudent in light of the current operating and regulatory environment," stated Tallent.
"There are many positive trends that are encouraging," Tallent said. "Our credit metrics are moving in the right direction with several of them approaching the lowest level since the beginning of the credit cycle in 2008. Also, core customer deposit growth has been the strongest in our company's history. Aside from special items like the non-cash impairment charge this quarter and the loss on sale of nonperforming assets to a private equity firm last quarter, our net operating loss from continuing operations has declined each quarter for the past four consecutive quarters. Residential construction loans, where most of the problems have been, have decreased from a high of 35 percent to 16 percent of total loans. We have widened our net interest margin by growing core deposits and obtaining more favorable loan and time deposit pricing. All the while, our customer satisfaction scores lead the industry, which is a remarkable tribute to 1,821 United bankers serving customers throughout our communities."
Conference Call
United Community Banks will hold a conference call today, Thursday, October 28, 2010, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the password '16060267.' The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of the company's website at www.ucbi.com.
About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $7.0 billion and operates 27 community banks with 106 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The Company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the Company's web site at www.ucbi.com.
Safe Harbor
This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward-Looking Statements" on page 3 of United Community Banks, Inc.'s annual report filed on Form 10-K with the Securities and Exchange Commission.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
(in thousands,
except per 2010 2009
share data; --------------------------------- ---------------------
taxable Third Second First Fourth Third
equivalent) Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
INCOME SUMMARY
Interest
revenue $ 84,360 $ 87,699 $ 89,849 $ 97,481 $ 101,181
Interest
expense 24,346 26,072 28,570 33,552 38,177
--------- --------- --------- --------- ---------
Net interest
revenue 60,014 61,627 61,279 63,929 63,004
Provision for
loan losses 50,500 61,500 75,000 90,000 95,000
Operating fee
revenue (1) 12,861 11,579 11,666 14,447 13,389
--------- --------- --------- --------- ---------
Total
operating
revenue (1) 22,375 11,706 (2,055) (11,624) (18,607)
Operating
expenses (2) 64,906 58,308 54,820 60,126 51,426
Loss on sale of
nonperforming
assets - 45,349 - - -
--------- --------- --------- --------- ---------
Operating loss
from
continuing
operations
before taxes (42,531) (91,951) (56,875) (71,750) (70,033)
Operating
income tax
benefit (16,706) (32,419) (22,417) (31,687) (26,252)
--------- --------- --------- --------- ---------
Net operating
loss from
continuing
operations
(1)(2) (25,825) (59,532) (34,458) (40,063) (43,781)
Gain from
acquisition,
net of tax
expense - - - - -
Noncash
goodwill
impairment
charges (210,590) - - - (25,000)
Severance
costs, net of
tax benefit - - - - -
(Loss) income
from
discontinued
operations - - (101) 228 63
Gain from sale
of subsidiary,
net of income
taxes and
selling costs - - 1,266 - -
--------- --------- --------- --------- ---------
Net loss (236,415) (59,532) (33,293) (39,835) (68,718)
Preferred
dividends and
discount
accretion 2,581 2,577 2,572 2,567 2,562
--------- --------- --------- --------- ---------
Net loss
available to
common
shareholders $(238,996) $ (62,109) $ (35,865) $ (42,402) $ (71,280)
========= ========= ========= ========= =========
PERFORMANCE
MEASURES
Per common
share:
Diluted
operating
loss from
continuing
operations
(1)(2) $ (.30) $ (.66) $ (.39) $ (.45) $ (.93)
Diluted
loss from
continuing
operations (2.52) (.66) (.39) (.45) (1.43)
Diluted
loss (2.52) (.66) (.38) (.45) (1.43)
Stock
dividends
declared
(6) - - - - 1 for 130
Book value 5.14 7.71 7.95 8.36 8.85
Tangible
book value
(4) 5.05 5.39 5.62 6.02 6.50
Key
performance
ratios:
Return on
equity
(3)(5) (148.04)% (35.89)% (20.10)% (22.08)% (45.52)%
Return on
assets (5) (12.47) (3.10) (1.70) (1.91) (3.32)
Net
interest
margin (5) 3.57 3.60 3.49 3.40 3.39
Operating
efficiency
ratio from
continuing
operations
(1)(2) 89.38 141.60 75.22 78.74 68.35
Equity to
assets 11.37 11.84 11.90 11.94 10.27
Tangible
equity to
assets (4) 9.19 9.26 9.39 9.53 7.55
Tangible
common
equity to
assets (4) 6.78 6.91 7.13 7.37 5.36
Tangible
common
equity to
risk-
weighted
assets (4) 9.60 9.97 10.03 10.39 10.67
ASSET QUALITY *
Non-
performing
loans $ 217,766 $ 224,335 $ 280,802 $ 264,092 $ 304,381
Foreclosed
properties 129,964 123,910 136,275 120,770 110,610
--------- --------- --------- --------- ---------
Total
non-
performing
assets
(NPAs) 347,730 348,245 417,077 384,862 414,991
Allowance for
loan losses 174,613 174,111 173,934 155,602 150,187
Net
charge-offs 49,998 61,323 56,668 84,585 90,491
Allowance for
loan losses
to loans 3.67 % 3.57 % 3.48 % 3.02 % 2.80 %
Net
charge-offs
to average
loans (5) 4.12 4.98 4.51 6.37 6.57
NPAs to loans
and
foreclosed
properties 7.11 6.97 8.13 7.30 7.58
NPAs to total
assets 4.96 4.55 5.32 4.81 4.91
AVERAGE
BALANCES ($ in
millions)
Loans $ 4,896 $ 5,011 $ 5,173 $ 5,357 $ 5,565
Investment
securities 1,411 1,532 1,518 1,529 1,615
Earning
assets 6,676 6,854 7,085 7,487 7,401
Total assets 7,522 7,704 7,946 8,287 8,208
Deposits 6,257 6,375 6,570 6,835 6,690
Shareholders'
equity 855 912 945 989 843
Common shares
- basic
(thousands) 94,679 94,524 94,390 94,219 49,771
Common shares
- diluted
(thousands) 94,679 94,524 94,390 94,219 49,771
AT PERIOD END
($ in
millions)
Loans * $ 4,760 $ 4,873 $ 4,992 $ 5,151 $ 5,363
Investment
securities 1,310 1,488 1,527 1,530 1,533
Total assets 7,013 7,652 7,837 8,000 8,444
Deposits 5,999 6,330 6,488 6,628 6,821
Shareholders'
equity 662 904 926 962 1,007
Common shares
outstanding
(thousands) 94,433 94,281 94,176 94,046 93,901
(1) Excludes the gain from acquisition of $11.4 million, (income tax
expense of $4.3 million) in the second quarter of 2009 and revenue
generated by discontinued operations in all periods presented.
(2) Excludes goodwill impairment charges of $211 million in the third
quarter of 2010 and $25 million and $70 million in the third and first
quarters of 2009, respectively, severance costs of $2.9 million, (income
tax benefit of $1.1 million) in the first quarter of 2009 and expenses
relating to discontinued operations for all periods presented. (3) 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). (4) Excludes effect of
acquisition related intangibles and associated amortization. (5)
Annualized. (6) Number of new shares issued for shares currently held.
* Excludes loans and foreclosed properties covered by loss sharing
agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
2010 2009 Third
--------- --------- Quarter
(in thousands, except per share Third Third 2010-2009
data; taxable equivalent) Quarter Quarter Change
--------- --------- ---------
INCOME SUMMARY
Interest revenue $ 84,360 $ 101,181
Interest expense 24,346 38,177
--------- ---------
Net interest revenue 60,014 63,004 (5)%
Provision for loan losses 50,500 95,000
Operating fee revenue (1) 12,861 13,389 (4)
--------- ---------
Total operating revenue (1) 22,375 (18,607)
Operating expenses (2) 64,906 51,426 26
Loss on sale of nonperforming assets - -
--------- ---------
Operating loss from continuing
operations before taxes (42,531) (70,033) 39
Operating income tax benefit (16,706) (26,252)
--------- ---------
Net operating loss from continuing
operations (1)(2) (25,825) (43,781) 41
Gain from acquisition, net of tax
expense - -
Noncash goodwill impairment charges (210,590) (25,000)
Severance costs, net of tax benefit - -
(Loss) income from discontinued
operations - 63
Gain from sale of subsidiary, net of
income taxes and selling costs - -
--------- ---------
Net loss (236,415) (68,718) (244)
Preferred dividends and discount
accretion 2,581 2,562
--------- ---------
Net loss available to common
shareholders $(238,996) $ (71,280)
========= =========
PERFORMANCE MEASURES
Per common share:
Diluted operating loss from
continuing operations (1)(2) $ (.30) $ (.93) 68
Diluted loss from continuing
operations (2.52) (1.43) (76)
Diluted loss (2.52) (1.43) (76)
Stock dividends declared (6) - 1 for 130
Book value 5.14 8.85 (42)
Tangible book value (4) 5.05 6.50 (22)
Key performance ratios:
Return on equity (3)(5) (148.04)% (45.52)%
Return on assets (5) (12.47) (3.32)
Net interest margin (5) 3.57 3.39
Operating efficiency ratio from
continuing operations (1)(2) 89.38 68.35
Equity to assets 11.37 10.27
Tangible equity to assets (4) 9.19 7.55
Tangible common equity to assets
(4) 6.78 5.36
Tangible common equity to
risk-weighted assets (4) 9.60 10.67
ASSET QUALITY *
Non-performing loans $ 217,766 $ 304,381
Foreclosed properties 129,964 110,610
--------- ---------
Total non-performing assets (NPAs) 347,730 414,991
Allowance for loan losses 174,613 150,187
Net charge-offs 49,998 90,491
Allowance for loan losses to loans 3.67 % 2.80 %
Net charge-offs to average loans (5) 4.12 6.57
NPAs to loans and foreclosed
properties 7.11 7.58
NPAs to total assets 4.96 4.91
AVERAGE BALANCES ($ in millions)
Loans $ 4,896 $ 5,565 (12)
Investment securities 1,411 1,615 (13)
Earning assets 6,676 7,401 (10)
Total assets 7,522 8,208 (8)
Deposits 6,257 6,690 (6)
Shareholders' equity 855 843 1
Common shares - basic (thousands) 94,679 49,771
Common shares - diluted (thousands) 94,679 49,771
AT PERIOD END ($ in millions)
Loans * $ 4,760 $ 5,363 (11)
Investment securities 1,310 1,533 (15)
Total assets 7,013 8,444 (17)
Deposits 5,999 6,821 (12)
Shareholders' equity 662 1,007 (34)
Common shares outstanding (thousands) 94,433 93,901
(1) Excludes the gain from acquisition of $11.4 million, (income tax
expense of $4.3 million) in the second quarter of 2009 and revenue
generated by discontinued operations in all periods presented.
(2) Excludes goodwill impairment charges of $211 million in the third
quarter of 2010 and $25 million and $70 million in the third and first
quarters of 2009, respectively, severance costs of $2.9 million, (income
tax benefit of $1.1 million) in the first quarter of 2009 and expenses
relating to discontinued operations for all periods presented.
(3) 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). (4) Excludes effect of
acquisition related intangibles and associated amortization. (5)
Annualized. (6) Number of new shares issued for shares currently held.
* Excludes loans and foreclosed properties covered by loss sharing
agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Nine
Months Ended YTD
(in thousands, except per share --------------------- 2010-2009
data; taxable equivalent) 2010 2009 Change
--------- --------- ----------
INCOME SUMMARY
Interest revenue $ 261,908 $ 307,480
Interest expense 78,988 126,182
--------- ---------
Net interest revenue 182,920 181,298 1%
Provision for loan losses 187,000 220,000
Operating fee revenue (1) 36,106 36,517 (1)
--------- ---------
Total operating revenue (1) 32,026 (2,185)
Operating expenses (2) 178,034 156,924 13
Loss on sale of nonperforming assets 45,349 -
--------- ---------
Operating loss from continuing
operations before taxes (191,357) (159,109) (20)
Operating income tax benefit (71,542) (60,067)
--------- ---------
Net operating loss from continuing
operations (1)(2) (119,815) (99,042) (21)
Gain from acquisition, net of tax
expense - 7,062
Noncash goodwill impairment charges (210,590) (95,000)
Severance costs, net of tax benefit - (1,797)
(Loss) income from discontinued
operations (101) 285
Gain from sale of subsidiary, net of
income taxes and selling costs 1,266 -
--------- ---------
Net loss (329,240) (188,492) (75)
Preferred dividends and discount
accretion 7,730 7,675
--------- ---------
Net loss available to common
shareholders $(336,970) $(196,167)
========= =========
PERFORMANCE MEASURES
Per common share:
Diluted operating loss from
continuing operations (1)(2) $ (1.35) $ (2.18) 38
Diluted loss from continuing
operations (3.58) (4.01) 11
Diluted loss (3.56) (4.01) 11
Stock dividends declared (6) - 3 for 130
Book value 5.14 8.85 (42)
Tangible book value (4) 5.05 6.50 (22)
Key performance ratios:
Return on equity (3)(5) (65.69)% (39.11)%
Return on assets (5) (5.70) (3.05)
Net interest margin (5) 3.56 3.25
Operating efficiency ratio from
continuing operations (1)(2) 102.14 72.29
Equity to assets 11.70 10.84
Tangible equity to assets (4) 9.28 7.92
Tangible common equity to assets
(4) 6.94 5.74
Tangible common equity to
risk-weighted assets (4) 9.60 10.67
ASSET QUALITY *
Non-performing loans $ 217,766 $ 304,381
Foreclosed properties 129,964 110,610
--------- ---------
Total non-performing assets (NPAs) 347,730 414,991
Allowance for loan losses 174,613 150,187
Net charge-offs 167,989 192,084
Allowance for loan losses to loans 3.67 % 2.80 %
Net charge-offs to average loans (5) 4.54 4.60
NPAs to loans and foreclosed
properties 7.11 7.58
NPAs to total assets 4.96 4.91
AVERAGE BALANCES ($ in millions)
Loans $ 5,026 $ 5,612 (10)
Investment securities 1,487 1,700 (13)
Earning assets 6,870 7,457 (8)
Total assets 7,723 8,264 (7)
Deposits 6,399 6,671 (4)
Shareholders' equity 904 896 1
Common shares - basic (thousands) 94,527 48,968
Common shares - diluted (thousands) 94,527 48,968
AT PERIOD END ($ in millions)
Loans * $ 4,760 $ 5,363 (11)
Investment securities 1,310 1,533 (15)
Total assets 7,013 8,444 (17)
Deposits 5,999 6,821 (12)
Shareholders' equity 662 1,007 (34)
Common shares outstanding (thousands) 94,433 93,901
(1) Excludes the gain from acquisition of $11.4 million, (income tax
expense of $4.3 million) in the second quarter of 2009 and revenue
generated by discontinued operations in all periods presented.
(2) Excludes goodwill impairment charges of $211 million in the third
quarter of 2010 and $25 million and $70 million in the third and first
quarters of 2009, respectively, severance costs of $2.9 million, (income
tax benefit of $1.1 million) in the first quarter of 2009 and expenses
relating to discontinued operations for all periods presented.
(3) 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). (4) Excludes effect of
acquisition related intangibles and associated amortization. (5)
Annualized. (6) Number of new shares issued for shares currently held.
* Excludes loans and foreclosed properties covered by loss sharing
agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
(in thousands, 2010 2009
except per share ------------------------------- --------------------
data; taxable Third Second First Fourth Third
equivalent) Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
Interest revenue
reconciliation
Interest revenue -
taxable equivalent $ 84,360 $ 87,699 $ 89,849 $ 97,481 $ 101,181
Taxable equivalent
adjustment (511) (500) (493) (601) (580)
--------- --------- --------- --------- ---------
Interest revenue
(GAAP) $ 83,849 $ 87,199 $ 89,356 $ 96,880 $ 100,601
========= ========= ========= ========= =========
Net interest revenue
reconciliation
Net interest revenue
- taxable
equivalent $ 60,014 $ 61,627 $ 61,279 $ 63,929 $ 63,004
Taxable equivalent
adjustment (511) (500) (493) (601) (580)
--------- --------- --------- --------- ---------
Net interest
revenue (GAAP) $ 59,503 $ 61,127 $ 60,786 $ 63,328 $ 62,424
========= ========= ========= ========= =========
Fee revenue
reconciliation
Operating fee
revenue $ 12,861 $ 11,579 $ 11,666 $ 14,447 $ 13,389
Gain from
acquisition - - - - -
--------- --------- --------- --------- ---------
Fee revenue (GAAP) $ 12,861 $ 11,579 $ 11,666 $ 14,447 $ 13,389
========= ========= ========= ========= =========
Total revenue
reconciliation
Total operating
revenue $ 22,375 $ 11,706 $ (2,055) $ (11,624) $ (18,607)
Taxable equivalent
adjustment (511) (500) (493) (601) (580)
Gain from
acquisition - - - - -
--------- --------- --------- --------- ---------
Total revenue
(GAAP) $ 21,864 $ 11,206 $ (2,548) $ (12,225) $ (19,187)
========= ========= ========= ========= =========
Expense
reconciliation
Operating expense $ 64,906 $ 103,657 $ 54,820 $ 60,126 $ 51,426
Noncash goodwill
impairment charge 210,590 - - - 25,000
Severance costs - - - - -
--------- --------- --------- --------- ---------
Operating expense
(GAAP) $ 275,496 $ 103,657 $ 54,820 $ 60,126 $ 76,426
========= ========= ========= ========= =========
Loss from continuing
operations before
taxes
reconciliation
Operating loss from
continuing
operations before
taxes $ (42,531) $ (91,951) $ (56,875) $ (71,750) $ (70,033)
Taxable equivalent
adjustment (511) (500) (493) (601) (580)
Gain from
acquisition - - - - -
Noncash goodwill
impairment charge (210,590) - - - (25,000)
Severance costs - - - - -
--------- --------- --------- --------- ---------
Loss from
continuing
operations before
taxes (GAAP) $(253,632) $ (92,451) $ (57,368) $ (72,351) $ (95,613)
========= ========= ========= ========= =========
Income tax benefit
reconciliation
Operating income tax
benefit $ (16,706) $ (32,419) $ (22,417) $ (31,687) $ (26,252)
Taxable equivalent
adjustment (511) (500) (493) (601) (580)
Gain from
acquisition, tax
expense - - - - -
Severance costs, tax
benefit - - - - -
--------- --------- --------- --------- ---------
Income tax benefit
(GAAP) $ (17,217) $ (32,919) $ (22,910) $ (32,288) $ (26,832)
========= ========= ========= ========= =========
Diluted loss from
continuing
operations per
common share
reconciliation
Diluted operating
loss from
continuing
operations per
common share $ (.30) $ (.66) $ (.39) $ (.45) $ (.93)
Gain from
acquisition - - - - -
Noncash goodwill
impairment charge (2.22) - - - (.50)
Severance costs - - - - -
--------- --------- --------- --------- ---------
Diluted loss
from continuing
operations per
common share
(GAAP) $ (2.52) $ (.66) $ (.39) $ (.45) $ (1.43)
========= ========= ========= ========= =========
Book value per
common share
reconciliation
Tangible book value
per common share $ 5.05 $ 5.39 $ 5.62 $ 6.02 $ 6.50
Effect of goodwill
and other
intangibles 0.09 2.32 2.33 2.34 2.35
--------- --------- --------- --------- ---------
Book value per
common share
(GAAP) $ 5.14 $ 7.71 $ 7.95 $ 8.36 $ 8.85
========= ========= ========= ========= =========
Efficiency ratio
from continuing
operations
reconciliation
Operating efficiency
ratio from
continuing
operations 89.38% 141.60% 75.22% 78.74% 68.35%
Gain from
acquisition - - - - -
Noncash goodwill
impairment charge 290.00 - - - 33.22
Severance costs - - - - -
--------- --------- --------- --------- ---------
Efficiency ratio
from continuing
operations (GAAP) 379.38% 141.60% 75.22% 78.74% 101.57%
========= ========= ========= ========= =========
Average equity to
assets
reconciliation
Tangible common
equity to assets 6.78% 6.91% 7.13% 7.37% 5.36%
Effect of preferred
equity 2.41 2.35 2.26 2.16 2.19
--------- --------- --------- --------- ---------
Tangible equity to
assets 9.19 9.26 9.39 9.53 7.55
Effect of goodwill
and other
intangibles 2.18 2.58 2.51 2.41 2.72
--------- --------- --------- --------- ---------
Equity to assets
(GAAP) 11.37% 11.84% 11.90% 11.94% 10.27%
========= ========= ========= ========= =========
Actual tangible
common equity to
risk-weighted
assets
reconciliation
Tangible common
equity to
risk-weighted
assets 9.60% 9.97% 10.03% 10.39% 10.67%
Effect of other
comprehensive
income (.81) (.87) (.85) (.87) (.90)
Effect of deferred
tax limitation (2.94) (2.47) (1.75) (1.27) (.58)
Effect of trust
preferred 1.06 1.03 1.00 .97 .92
Effect of preferred
equity 3.51 3.41 3.29 3.19 3.04
--------- --------- --------- --------- ---------
Tier I capital
ratio
(Regulatory) 10.42% 11.07% 11.72% 12.41% 13.15%
========= ========= ========= ========= =========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
For the Nine
(in thousands, except per share Months Ended
data; taxable equivalent) ------------------------
2010 2009
----------- -----------
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 261,908 $ 307,480
Taxable equivalent adjustment (1,504) (1,531)
----------- -----------
Interest revenue (GAAP) $ 260,404 $ 305,949
=========== ===========
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 182,920 $ 181,298
Taxable equivalent adjustment (1,504) (1,531)
----------- -----------
Net interest revenue (GAAP) $ 181,416 $ 179,767
=========== ===========
Fee revenue reconciliation
Operating fee revenue $ 36,106 $ 36,517
Gain from acquisition - 11,390
----------- -----------
Fee revenue (GAAP) $ 36,106 $ 47,907
=========== ===========
Total revenue reconciliation
Total operating revenue $ 32,026 $ (2,185)
Taxable equivalent adjustment (1,504) (1,531)
Gain from acquisition - 11,390
----------- -----------
Total revenue (GAAP) $ 30,522 $ 7,674
=========== ===========
Expense reconciliation
Operating expense $ 223,383 $ 156,924
Noncash goodwill impairment charge 210,590 95,000
Severance costs - 2,898
----------- -----------
Operating expense (GAAP) $ 433,973 $ 254,822
=========== ===========
Loss from continuing operations before taxes
reconciliation
Operating loss from continuing operations before
taxes $ (191,357) $ (159,109)
Taxable equivalent adjustment (1,504) (1,531)
Gain from acquisition - 11,390
Noncash goodwill impairment charge (210,590) (95,000)
Severance costs - (2,898)
----------- -----------
Loss from continuing operations before taxes
(GAAP) $ (403,451) $ (247,148)
=========== ===========
Income tax benefit reconciliation
Operating income tax benefit $ (71,542) $ (60,067)
Taxable equivalent adjustment (1,504) (1,531)
Gain from acquisition, tax expense - 4,328
Severance costs, tax benefit - (1,101)
----------- -----------
Income tax benefit (GAAP) $ (73,046) $ (58,371)
=========== ===========
Diluted loss from continuing operations per
common share reconciliation
Diluted operating loss from continuing operations
per common share $ (1.35) $ (2.18)
Gain from acquisition - .14
Noncash goodwill impairment charge (2.23) (1.93)
Severance costs - (.04)
----------- -----------
Diluted loss from continuing operations per
common share (GAAP) $ (3.58) $ (4.01)
=========== ===========
Book value per common share reconciliation
Tangible book value per common share $ 5.05 $ 6.50
Effect of goodwill and other intangibles 0.09 2.35
----------- -----------
Book value per common share (GAAP) $ 5.14 $ 8.85
=========== ===========
Efficiency ratio from continuing operations
reconciliation
Operating efficiency ratio from continuing
operations 102.14% 72.29%
Gain from acquisition - (3.60)
Noncash goodwill impairment charge 96.29 41.58
Severance costs - 1.27
----------- -----------
Efficiency ratio from continuing operations
(GAAP) 198.43% 111.54%
=========== ===========
Average equity to assets reconciliation
Tangible common equity to assets 6.94% 5.74%
Effect of preferred equity 2.34 2.18
----------- -----------
Tangible equity to assets 9.28 7.92
Effect of goodwill and other intangibles 2.42 2.92
----------- -----------
Equity to assets (GAAP) 11.70% 10.84%
=========== ===========
Actual tangible common equity to risk-weighted
assets reconciliation
Tangible common equity to risk-weighted assets 9.60% 10.67%
Effect of other comprehensive income (.81) (.90)
Effect of deferred tax limitation (2.94) (.58)
Effect of trust preferred 1.06 .92
Effect of preferred equity 3.51 3.04
----------- -----------
Tier I capital ratio (Regulatory) 10.42% 13.15%
=========== ===========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
2010 2009
----------------------- ---------------
Third Second First Fourth Third
(in millions) Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- -------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,781 $ 1,780 $ 1,765 $ 1,779 $ 1,787
Commercial construction 310 342 357 363 380
Commercial & industrial 456 441 381 390 403
------- ------- ------- ------- -------
Total commercial 2,547 2,563 2,503 2,532 2,570
Residential construction 764 820 960 1,050 1,185
Residential mortgage 1,316 1,356 1,390 1,427 1,461
Consumer / installment 133 134 139 142 147
------- ------- ------- ------- -------
Total loans $ 4,760 $ 4,873 $ 4,992 $ 5,151 $ 5,363
======= ======= ======= ======= =======
LOANS BY MARKET
Atlanta MSA $ 1,365 $ 1,373 $ 1,404 $ 1,435 $ 1,526
Gainesville MSA 316 343 372 390 402
North Georgia 1,755 1,808 1,814 1,884 1,942
Western North Carolina 719 738 756 772 786
Coastal Georgia 345 356 388 405 440
East Tennessee 260 255 258 265 267
------- ------- ------- ------- -------
Total loans $ 4,760 $ 4,873 $ 4,992 $ 5,151 $ 5,363
======= ======= ======= ======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 190 $ 214 $ 290 $ 332 $ 380
Land loans 104 110 124 127 159
Lot loans 303 311 321 336 336
------- ------- ------- ------- -------
Total 597 635 735 795 875
------- ------- ------- ------- -------
House loans
Spec 109 125 153 178 218
Sold 58 60 72 77 92
------- ------- ------- ------- -------
Total 167 185 225 255 310
------- ------- ------- ------- -------
Total residential construction $ 764 $ 820 $ 960 $ 1,050 $ 1,185
======= ======= ======= ======= =======
RESIDENTIAL CONSTRUCTION - ATLANTA
MSA
Dirt loans
Acquisition & development $ 34 $ 40 $ 66 $ 76 $ 100
Land loans 27 32 43 43 61
Lot loans 45 39 47 52 54
------- ------- ------- ------- -------
Total 106 111 156 171 215
------- ------- ------- ------- -------
House loans
Spec 42 48 58 68 91
Sold 11 10 14 16 22
------- ------- ------- ------- -------
Total 53 58 72 84 113
------- ------- ------- ------- -------
Total residential construction $ 159 $ 169 $ 228 $ 255 $ 328
======= ======= ======= ======= =======
(1) Excludes total loans of $75.2 million, $80.8 million, $79.5 million,
$85.1 million and $104.0 million as of September 30, 2010, June 30, 2010,
March 31, 2010, December 31, 2009 and September 30, 2009, respectively,
that are covered by the loss-sharing agreement with the FDIC, related
to the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
2010 2009 Year
--------------- --------- Linked over
Third Second Third Quarter Year
(in millions) Quarter Quarter Quarter Change Change
------- ------- --------- -------- ------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,781 $ 1,780 $ 1,787 $ 1 $ (6)
Commercial construction 310 342 380 (32) (70)
Commercial & industrial 456 441 403 15 53
------- ------- ---------
Total commercial 2,547 2,563 2,570 (16) (23)
Residential construction 764 820 1,185 (56) (421)
Residential mortgage 1,316 1,356 1,461 (40) (145)
Consumer / installment 133 134 147 (1) (14)
------- ------- ---------
Total loans $ 4,760 $ 4,873 $ 5,363 (113) (603)
======= ======= =========
LOANS BY MARKET
Atlanta MSA $ 1,365 $ 1,373 $ 1,526 (8) (161)
Gainesville MSA 316 343 402 (27) (86)
North Georgia 1,755 1,808 1,942 (53) (187)
Western North Carolina 719 738 786 (19) (67)
Coastal Georgia 345 356 440 (11) (95)
East Tennessee 260 255 267 5 (7)
------- ------- ---------
Total loans $ 4,760 $ 4,873 $ 5,363 (113) (603)
======= ======= =========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 190 $ 214 $ 380 (24) (190)
Land loans 104 110 159 (6) (55)
Lot loans 303 311 336 (8) (33)
------- ------- ---------
Total 597 635 875 (38) (278)
------- ------- ---------
House loans
Spec 109 125 218 (16) (109)
Sold 58 60 92 (2) (34)
------- ------- ---------
Total 167 185 310 (18) (143)
------- ------- ---------
Total residential construction $ 764 $ 820 $ 1,185 (56) (421)
======= ======= =========
RESIDENTIAL CONSTRUCTION -
ATLANTA MSA
Dirt loans
Acquisition & development $ 34 $ 40 $ 100 (6) (66)
Land loans 27 32 61 (5) (34)
Lot loans 45 39 54 6 (9)
------- ------- ---------
Total 106 111 215 (5) (109)
------- ------- ---------
House loans
Spec 42 48 91 (6) (49)
Sold 11 10 22 1 (11)
------- ------- ---------
Total 53 58 113 (5) (60)
------- ------- ---------
Total residential construction $ 159 $ 169 $ 328 (10) (169)
======= ======= =========
(1) Excludes total loans of $75.2 million, $80.8 million, $79.5 million,
$85.1 million and $104.0 million as of September 30, 2010, June 30, 2010,
March 31, 2010, December 31, 2009 and September 30, 2009, respectively,
that are covered by the loss-sharing agreement with the FDIC, related to
the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Third Quarter 2010
----------------------------------------------
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
-------------- -------------- --------------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 53,646 $ 14,838 $ 68,484
Commercial construction 17,279 15,125 32,404
Commercial & industrial 7,670 - 7,670
-------------- -------------- --------------
Total commercial 78,595 29,963 108,558
Residential construction 79,321 73,206 152,527
Residential mortgage 58,107 26,795 84,902
Consumer / installment 1,743 - 1,743
-------------- -------------- --------------
Total NPAs $ 217,766 $ 129,964 $ 347,730
============== ============== ==============
NPAs BY MARKET
Atlanta MSA $ 65,304 $ 32,785 $ 98,089
Gainesville MSA 11,905 5,685 17,590
North Georgia 92,295 67,439 159,734
Western North Carolina 31,545 11,559 43,104
Coastal Georgia 10,611 10,951 21,562
East Tennessee 6,106 1,545 7,651
-------------- -------------- --------------
Total NPAs $ 217,766 $ 129,964 $ 347,730
============== ============== ==============
Balance as a % of
Unpaid Principal 70.0% 65.9% 68.4%
NPA ACTIVITY
Beginning Balance $ 224,335 $ 123,910 $ 348,245
Loans placed on non-accrual 119,783 - 119,783
Payments received (11,469) - (11,469)
Loan charge-offs (52,647) - (52,647)
Foreclosures (59,844) 59,844 -
Capitalized costs - 601 601
Note / property sales (2,392) (40,203) (42,595)
Write downs - (7,051) (7,051)
Net losses on sales - (7,137) (7,137)
-------------- -------------- --------------
Ending Balance $ 217,766 $ 129,964 $ 347,730
============== ============== ==============
(1) Excludes non-performing loans and foreclosed properties covered by the
loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank. (2) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Second Quarter 2010
----------------------------------------------
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
-------------- -------------- --------------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 56,013 $ 13,297 $ 69,310
Commercial construction 17,872 11,339 29,211
Commercial & industrial 7,245 - 7,245
-------------- -------------- --------------
Total commercial 81,130 24,636 105,766
Residential construction 88,375 74,444 162,819
Residential mortgage 53,175 24,830 78,005
Consumer / installment 1,655 - 1,655
-------------- -------------- --------------
Total NPAs $ 224,335 $ 123,910 $ 348,245
============== ============== ==============
Balance as a % of
Unpaid Principal 69.4% 71.9% 70.3%
NPAs BY MARKET
Atlanta MSA $ 74,031 $ 30,605 $ 104,636
Gainesville MSA 10,730 2,750 13,480
North Georgia 102,198 60,597 162,795
Western North Carolina 22,776 11,473 34,249
Coastal Georgia 8,341 16,548 24,889
East Tennessee 6,259 1,937 8,196
-------------- -------------- --------------
Total NPAs $ 224,335 $ 123,910 $ 348,245
============== ============== ==============
NPA ACTIVITY
Beginning Balance $ 280,802 $ 136,275 $ 417,077
Loans placed on non-accrual 155,007 - 155,007
Payments received (12,189) - (12,189)
Loan charge-offs (62,693) - (62,693)
Foreclosures (66,994) 66,994 -
Capitalized costs - 305 305
Note / property sales (69,598) (68,472) (138,070)
Write downs - (6,094) (6,094)
Net losses on sales - (5,098) (5,098)
-------------- -------------- --------------
Ending Balance $ 224,335 $ 123,910 $ 348,245
============== ============== ==============
(1) Excludes non-performing loans and foreclosed properties covered by the
loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank. (2) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
First Quarter 2010
----------------------------------------------
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
-------------- -------------- --------------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 45,918 $ 21,597 $ 67,515
Commercial construction 23,556 14,285 37,841
Commercial & industrial 3,610 - 3,610
-------------- -------------- --------------
Total commercial 73,084 35,882 108,966
Residential construction 147,326 74,220 221,546
Residential mortgage 57,920 26,173 84,093
Consumer / installment 2,472 - 2,472
-------------- -------------- --------------
Total NPAs $ 280,802 $ 136,275 $ 417,077
============== ============== ==============
Balance as a % of
Unpaid Principal 71.6% 67.5% 70.2%
NPAs BY MARKET
Atlanta MSA $ 81,914 $ 36,951 $ 118,865
Gainesville MSA 17,058 3,192 20,250
North Georgia 109,280 63,128 172,408
Western North Carolina 31,353 8,588 39,941
Coastal Georgia 33,438 21,871 55,309
East Tennessee 7,759 2,545 10,304
-------------- -------------- --------------
Total NPAs $ 280,802 $ 136,275 $ 417,077
============== ============== ==============
NPA ACTIVITY
Beginning Balance $ 264,092 $ 120,770 $ 384,862
Loans placed on non-accrual 139,030 - 139,030
Payments received (5,733) - (5,733)
Loan charge-offs (58,897) - (58,897)
Foreclosures (49,233) 49,233 -
Capitalized costs - 320 320
Note / property sales (8,457) (25,951) (34,408)
Write downs - (4,579) (4,579)
Net losses on sales - (3,518) (3,518)
-------------- -------------- --------------
Ending Balance $ 280,802 $ 136,275 $ 417,077
============== ============== ==============
(1) Excludes non-performing loans and foreclosed properties covered by the
loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank. (2) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Third Quarter 2010 Second Quarter 2010 First Quarter 2010
------------------- ------------------- -------------------
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 (2) Offs Loans (2) Offs Loans (2)
--------- -------- --------- -------- --------- --------
NET CHARGE-OFFS
BY CATEGORY
Commercial
(sec. by RE) $ 14,212 3.16% $ 9,757 2.21% $ 1,964 .45%
Commercial
construction 1,972 2.40 1,460 1.67 2,206 2.48
Commercial &
industrial 1,207 1.07 867 .85 4,110 4.31
--------- --------- ---------
Total
commercial 17,391 2.70 12,084 1.91 8,280 1.33
Residential
construction 23,934 11.99 41,515 18.71 43,100 17.32
Residential
mortgage 7,695 2.29 6,517 1.90 4,551 1.31
Consumer /
installment 978 2.90 1,207 3.53 737 2.12
--------- --------- ---------
Total $ 49,998 4.12 $ 61,323 4.98 $ 56,668 4.51
========= ========= =========
NET CHARGE-OFFS
BY MARKET
Atlanta MSA $ 13,753 3.97% $ 16,926 4.85% $ 15,545 4.32%
Gainesville MSA 1,143 1.40 2,547 3.01 1,675 1.92
North Georgia 26,554 5.92 28,100 6.19 29,747 6.51
Western North
Carolina 5,509 2.99 7,194 3.86 3,695 1.96
Coastal Georgia 2,702 3.05 5,581 6.07 5,649 5.74
East Tennessee 337 .52 975 1.53 357 .55
--------- --------- ---------
Total $ 49,998 4.12 $ 61,323 4.98 $ 56,668 4.51
========= ========= =========
(1) Excludes non-performing loans and foreclosed properties covered by the
loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank. (2) Annualized.
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended
September 30,
-----------------------------
(in thousands, except per share data) 2010 2009
------------- -------------
Interest revenue:
Loans, including fees $ 68,419 $ 80,874
Investment securities, including tax
exempt of $280, $328, $886 and $956 14,711 18,820
Federal funds sold, commercial paper and
deposits in banks 719 907
------------- -------------
Total interest revenue 83,849 100,601
------------- -------------
Interest expense:
Deposits:
NOW 1,705 2,528
Money market 1,930 2,711
Savings 83 130
Time 16,099 28,183
------------- -------------
Total deposit interest expense 19,817 33,552
Federal funds purchased, repurchase
agreements and other short-term borrowings 1,068 613
Federal Home Loan Bank advances 796 1,300
Long-term debt 2,665 2,712
------------- -------------
Total interest expense 24,346 38,177
------------- -------------
Net interest revenue 59,503 62,424
Provision for loan losses 50,500 95,000
------------- -------------
Net interest revenue after provision for
loan losses 9,003 (32,576)
------------- -------------
Fee revenue:
Service charges and fees 7,648 8,138
Mortgage loan and other related fees 2,071 1,832
Brokerage fees 731 456
Securities gains, net 2,491 1,149
Gain from acquisition - -
Losses from prepayment of borrowings (2,233) -
Other 2,153 1,814
------------- -------------
Total fee revenue 12,861 13,389
------------- -------------
Total revenue 21,864 (19,187)
------------- -------------
Operating expenses:
Salaries and employee benefits 24,891 23,889
Communications and equipment 3,620 3,640
Occupancy 3,720 4,063
Advertising and public relations 1,128 823
Postage, printing and supplies 1,019 1,270
Professional fees 2,117 2,358
Foreclosed property 19,752 7,918
FDIC assessments and other regulatory
charges 3,256 2,801
Amortization of intangibles 793 813
Other 4,610 3,851
Loss on sale of nonperforming assets - -
Goodwill impairment 210,590 25,000
Severance costs - -
------------- -------------
Total operating expenses 275,496 76,426
------------- -------------
Loss from continuing operations before
income taxes (253,632) (95,613)
Income tax benefit (17,217) (26,832)
------------- -------------
Net loss from continuing operations (236,415) (68,781)
(Loss) income from discontinued
operations, net of income taxes - 63
Gain from sale of subsidiary, net of
income taxes and selling costs - -
------------- -------------
Net loss (236,415) (68,718)
Preferred stock dividends and discount
accretion 2,581 2,562
------------- -------------
Net loss available to common
shareholders $ (238,996) $ (71,280)
============= =============
Loss from continuing operations per common
share - Basic / Diluted $ (2.52) $ (1.43)
Loss per common share - Basic / Diluted (2.52) (1.43)
Weighted average common shares outstanding -
Basic / Diluted 94,679 49,771
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Nine Months Ended
September 30,
-----------------------------
(in thousands, except per share data) 2010 2009
------------- -------------
Interest revenue:
Loans, including fees $ 211,245 $ 244,445
Investment securities, including tax
exempt of $280, $328, $886 and $956 46,743 60,057
Federal funds sold, commercial paper and
deposits in banks 2,416 1,447
------------- -------------
Total interest revenue 260,404 305,949
------------- -------------
Interest expense:
Deposits:
NOW 5,304 8,708
Money market 5,516 7,217
Savings 250 378
Time 54,015 96,300
------------- -------------
Total deposit interest expense 65,085 112,603
Federal funds purchased, repurchase
agreements and other short-term borrowings 3,162 1,761
Federal Home Loan Bank advances 2,747 3,577
Long-term debt 7,994 8,241
------------- -------------
Total interest expense 78,988 126,182
------------- -------------
Net interest revenue 181,416 179,767
Provision for loan losses 187,000 220,000
------------- -------------
Net interest revenue after provision
for loan losses (5,584) (40,233)
------------- -------------
Fee revenue:
Service charges and fees 23,088 22,729
Mortgage loan and other related fees 5,151 7,308
Brokerage fees 1,884 1,642
Securities gains, net 2,552 741
Gain from acquisition - 11,390
Losses from prepayment of borrowings (2,233) -
Other 5,664 4,097
------------- -------------
Total fee revenue 36,106 47,907
------------- -------------
Total revenue 30,522 7,674
------------- -------------
Operating expenses:
Salaries and employee benefits 72,841 77,507
Communications and equipment 10,404 10,857
Occupancy 11,370 11,650
Advertising and public relations 3,523 2,992
Postage, printing and supplies 3,009 3,733
Professional fees 6,238 8,834
Foreclosed property 45,105 17,974
FDIC assessments and other regulatory
charges 10,448 12,293
Amortization of intangibles 2,389 2,291
Other 12,707 8,793
Loss on sale of nonperforming assets 45,349 -
Goodwill impairment 210,590 95,000
Severance costs - 2,898
------------- -------------
Total operating expenses 433,973 254,822
------------- -------------
Loss from continuing operations before
income taxes (403,451) (247,148)
Income tax benefit (73,046) (58,371)
------------- -------------
Net loss from continuing operations (330,405) (188,777)
(Loss) income from discontinued
operations, net of income taxes (101) 285
Gain from sale of subsidiary, net of
income taxes and selling costs 1,266 -
------------- -------------
Net loss (329,240) (188,492)
Preferred stock dividends and discount
accretion 7,730 7,675
------------- -------------
Net loss available to common
shareholders $ (336,970) $ (196,167)
============= =============
Loss from continuing operations per common
share - Basic / Diluted $ (3.58) $ (4.01)
Loss per common share - Basic / Diluted (3.56) (4.01)
Weighted average common shares outstanding -
Basic / Diluted 94,527 48,968
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
(in thousands, except share and September 30, December 31, September 30,
per share data) 2010 2009 2009
------------ ------------ ------------
(unaudited) (audited) (unaudited)
ASSETS
Cash and due from banks $ 104,033 $ 126,265 $ 195,559
Interest-bearing deposits in
banks 64,408 120,382 78,589
Federal funds sold, commercial
paper and short-term
investments 108,579 129,720 397,361
------------ ------------ ------------
Cash and cash equivalents 277,020 376,367 671,509
Securities available for sale 1,053,518 1,530,047 1,532,514
Securities held to maturity
(fair value $263,012) 256,694 - -
Mortgage loans held for sale 20,630 30,226 20,460
Loans, net of unearned income 4,759,504 5,151,476 5,362,689
Less allowance for loan
losses 174,613 155,602 150,187
------------ ------------ ------------
Loans, net 4,584,891 4,995,874 5,212,502
Assets covered by loss sharing
agreements with the FDIC 144,581 185,938 197,914
Premises and equipment, net 178,842 182,038 179,467
Accrued interest receivable 24,672 33,867 35,679
Goodwill and other intangible
assets 12,217 225,196 226,008
Foreclosed property 129,964 120,770 110,610
Other assets 330,020 319,591 256,954
------------ ------------ ------------
Total assets $ 7,013,049 $ 7,999,914 $ 8,443,617
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 783,251 $ 707,826 $ 703,054
NOW 1,338,371 1,335,790 1,318,264
Money market 804,644 713,901 687,780
Savings 186,617 177,427 180,738
Time:
Less than $100,000 1,498,379 1,746,511 1,854,726
Greater than $100,000 1,033,132 1,187,499 1,237,172
Brokered 354,243 758,880 839,572
------------ ------------ ------------
Total deposits 5,998,637 6,627,834 6,821,306
Federal funds purchased,
repurchase agreements, and
other short-term borrowings 103,780 101,389 101,951
Federal Home Loan Bank
advances 55,125 114,501 314,704
Long-term debt 150,126 150,066 150,046
Accrued expenses and other
liabilities 42,906 43,803 48,972
------------ ------------ ------------
Total liabilities 6,350,574 7,037,593 7,436,979
------------ ------------ ------------
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 175,378 174,408 174,095
Common stock, $1 par value;
200,000,000 shares authorized;
94,433,300, 94,045,603 and
93,901,492 shares issued and
outstanding 94,433 94,046 93,901
Common stock issuable; 305,594,
221,906 and 196,818 shares 3,961 3,597 3,471
Capital surplus 664,605 622,034 620,494
(Accumulated deficit)
retained earnings (316,587) 20,384 62,786
Accumulated other
comprehensive income 40,468 47,635 51,674
------------ ------------ ------------
Total shareholders' equity 662,475 962,321 1,006,638
------------ ------------ ------------
Total liabilities and
shareholders' equity $ 7,013,049 $ 7,999,914 $ 8,443,617
============ ============ ============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
2010
-------------------------------------
(dollars in thousands, taxable Average Avg.
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 revenue $ 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.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $45.4 million in 2010 and $13.8 million in 2009
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,
2009
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,565,498 $ 80,880 5.77 %
Taxable securities (3) 1,585,154 18,492 4.67
Tax-exempt securities (1)(3) 30,345 537 7.08
Federal funds sold and other
interest-earning assets 219,542 1,272 2.32
----------- ------------
Total interest-earning assets 7,400,539 101,181 5.43
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (147,074)
Cash and due from banks 107,062
Premises and equipment 179,764
Other assets (3) 667,908
-----------
Total assets $ 8,208,199
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,238,596 $ 2,528 .81
Money market 628,392 2,711 1.71
Savings 180,216 130 .29
Time less than $100,000 1,918,439 13,300 2.75
Time greater than $100,000 1,292,786 10,106 3.10
Brokered 707,678 4,777 2.68
----------- ------------
Total interest-bearing
deposits 5,966,107 33,552 2.23
----------- ------------
Federal funds purchased and other
borrowings 234,211 613 1.04
Federal Home Loan Bank advances 210,625 1,300 2.45
Long-term debt 150,353 2,712 7.16
----------- ------------
Total borrowed funds 595,189 4,625 3.08
----------- ------------
Total interest-bearing
liabilities 6,561,296 38,177 2.31
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 723,841
Other liabilities 79,932
-----------
Total liabilities 7,365,069
Shareholders' equity 843,130
-----------
Total liabilities and
shareholders' equity $ 8,208,199
===========
Net interest revenue $ 63,004
============
Net interest-rate spread 3.12 %
=========
Net interest margin (4) 3.39 %
=========
(1) Interest revenue on tax-exempt securities and loans has been increased
to reflect comparable interest on taxable securities and loans. The
rate used was 39%, reflecting the statutory federal income tax rate
and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where
the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $45.4 million in 2010 and $13.8 million in 2009
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
-------------------------------------
(dollars in thousands, taxable Average Avg.
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.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $44.1 million in 2010 and $13.0 million in 2009
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,
2009
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,612,202 $ 244,196 5.82 %
Taxable securities (3) 1,669,768 59,101 4.72
Tax-exempt securities (1)(3) 29,754 1,565 7.01
Federal funds sold and other
interest-earning assets 145,449 2,618 2.40
----------- ------------
Total interest-earning assets 7,457,173 307,480 5.51
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (141,255)
Cash and due from banks 104,444
Premises and equipment 179,569
Other assets (3) 663,674
-----------
Total assets $ 8,263,605
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,284,522 $ 8,708 .91
Money market 543,122 7,217 1.78
Savings 177,147 378 .29
Time less than $100,000 1,918,379 45,859 3.20
Time greater than $100,000 1,336,876 34,444 3.44
Brokered 726,352 15,997 2.94
----------- ------------
Total interest-bearing
deposits 5,986,398 112,603 2.51
----------- ------------
Federal funds purchased and other
borrowings 202,008 1,761 1.17
Federal Home Loan Bank advances 241,863 3,577 1.98
Long-term debt 150,788 8,241 7.31
----------- ------------
Total borrowed funds 594,659 13,579 3.05
----------- ------------
Total interest-bearing
liabilities 6,581,057 126,182 2.56
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 684,942
Other liabilities 101,447
-----------
Total liabilities 7,367,446
Shareholders' equity 896,159
-----------
Total liabilities and
shareholders' equity $ 8,263,605
===========
Net interest revenue $ 181,298
============
Net interest-rate spread 2.95 %
=========
Net interest margin (4) 3.25 %
=========
(1) Interest revenue on tax-exempt securities and loans has been increased
to reflect comparable interest on taxable securities and loans. The
rate used was 39%, reflecting the statutory federal income tax rate
and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where
the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $44.1 million in 2010 and $13.0 million in 2009
are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue
divided by average interest-earning assets.
For more information: Rex S. Schuette Chief Financial Officer (706) 781-2266 Email Contact
SOURCE: United Community Banks, Inc.
http://www2.marketwire.com/mw/emailprcntct?id=76A2CC287883EB0E
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