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United Community Banks, Inc. Reports Net Operating Loss for Second Quarter 2010
United Community Banks, Inc. Reports Net Operating Loss for Second Quarter 2010
Jul 23, 2010
BLAIRSVILLE, GA, Jul 23, 2010 (MARKETWIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)
-- Completed sale of $103 million of nonperforming assets that resulted
in a non-cash charge of $45.3 million
-- Nonperforming assets decline 17 percent from last quarter
-- Provision for loan losses was $61.5 million, down $13.5 million from
last quarter
-- Allowance-to-loans ratio increases to 3.57 percent
-- Margin improves 11 basis points to 3.60 percent
United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $59.5 million, or 66 cents per diluted share, for the second quarter of 2010. The second quarter operating loss included a non-cash charge of $45.3 million, or $30.0 million after-tax, resulting from the transaction with Fletcher International ("Fletcher") to dispose of nonperforming assets. The charge increased the net loss for the quarter by 32 cents per diluted share.
United's net operating losses from continuing operations for the first six months of 2010 and 2009 were $94.0 million, or $1.05 per diluted share, and $55.3 million, or $1.24 per diluted share, respectively. In the attached schedules, the results of operations for all periods presented have been restated to show earnings from continuing operations, which excludes Brintech's fee revenue and operating expenses during the periods it was owned by United and the gain from the sale. The net income or loss from Brintech's discontinued operations is reported as a separate line in the consolidated statement of income. Also, the net operating loss from continuing operations for the first six months of 2009 excludes a $70 million non-cash charge for impairment of goodwill and $1.8 million in severance costs, net of taxes, relating to a reduction in work force, both of which were incurred during the first quarter and the $7.1 million gain, net of taxes, on the acquisition of Southern Community Bank in the second quarter. These charges and gains were considered non-recurring items and therefore were excluded from operating earnings. Including these non-recurring items, United's net loss for the first six months of 2010 and 2009 was $92.8 million, or $1.04 per diluted share, and $119.8 million, or $2.57 per diluted share, respectively.
"We made steady progress during the second quarter," stated Jimmy Tallent, president and chief executive officer. "We completed the sale of $103 million of our most illiquid non-performing loans and foreclosed properties with the granting of a warrant and an option to purchase capital. This transaction was a giant step forward in clearing our books of the more difficult problem assets while at the same time preserving capital. We still see credit challenges ahead of us and elevated levels of charge-offs through the balance of 2010. We are pursuing every opportunity to resolve them in the best interests of our shareholders and return to profitability in early 2011."
Total loans were $4.9 billion at quarter-end, down $119 million from the end of the first quarter and $640 million from a year earlier. As of quarter-end, residential construction loans were $820 million, or 17 percent of total loans, down $140 million from the prior quarter-end and down $495 million from a year ago. This decline was net of new lending during the quarter that totaled $101 million, primarily commercial and small business loans in metropolitan Atlanta and north Georgia.
Taxable equivalent net interest revenue of $61.6 million was $745,000 higher than the second quarter of 2009. The net interest margin was 3.60 percent for the second quarter 2010, up 32 basis points from a year ago and up 11 basis points from the first quarter. "By staying focused on deposit and loan pricing, we've been able to steadily increase our net interest margin and hold net interest revenue above $60 million despite continuing attrition in the loan portfolio," Tallent said.
"We had our sixth consecutive quarter of core transaction deposit growth, with an increase of $94 million from the first quarter, or 16 percent, on an annualized basis," Tallent continued. "That compares to core deposit growth of $53 million for the first quarter of 2010 and $224 million from a year ago. We believe this growth is related to disruption in the banking industry and the favorable perception of United as a strong bank with strong service. We are emphasizing these positive attributes, which are always valuable and especially so during difficult times in our industry. We believe this message is being heard and responded to with our successful core deposit program."
The second quarter 2010 provision for loan losses decreased to $61.5 million from $75 million in the first quarter. Net charge-offs were up $4.7 million from first quarter 2010 and $3.0 million from the second quarter of 2009. Non-performing assets decreased to $348 million at quarter-end from $417 million at March 31, 2010, the lowest level since the first quarter of 2009. The ratios of non-performing assets to total assets at the end of the second and first quarters of 2010 were 4.55 percent and 5.32 percent, respectively. The decrease in non-performing assets and improvement in the ratio of non-performing assets to total assets reflected the sale of $103 million of nonperforming assets early in the second quarter.
The transaction with Fletcher resulted in an after-tax charge of $30.0 million, or $45.3 million pre-tax, primarily due to the recognition of the value of warrant and the option to purchase convertible preferred stock that were granted as part of the sale of the non-performing assets. United recorded the equity instruments at a fair value of $39.8 million that resulted in an increase to capital surplus within shareholders' equity, which more than offset the $30 million after-tax charge to expenses.
"Even though this transaction resulted in a higher net loss for the quarter, the importance of the strategic objective achieved was very significant," stated Tallent. "We likely would have carried these illiquid nonperforming assets for many quarters and incurred considerable foreclosure and carrying costs."
Operating fee revenue was $11.6 million for the second quarter of 2010, compared to $11.3 million a year ago. Service charges and fees of $8.0 million were up $436,000, due primarily to new accounts and an increase in ATM and debit card transactions. Mortgage loan fees of $1.6 million were down $1.2 million due to lower refinancing activities. Other fee revenue increased $262,000 to $1.4 million, due primarily to the gain recognized on ineffectiveness of terminated cash flow hedges on a certain portion of United's prime-based loans.
Second quarter operating expenses of $58.3 million, excluding the $45.3 million charge for the sale the non-performing assets, increased $4.6 million compared to last year. Foreclosed property costs more than doubled to $14.5 million compared to $5.7 million in the second quarter of 2009. Foreclosed property costs in the second quarter of 2010 included $3.3 million for maintenance, property taxes and other related costs, compared to $2.5 million last year. In addition, write-downs relating to the sale of properties totaled $5.1 million and write-downs of other foreclosed properties totaled $6.1 million, both to help expedite sales of foreclosed properties. Salary and benefit costs totaled $23.6 million, a decrease of $2.7 million from last year due primarily to the 10 percent reduction in workforce in 2009.
"We continued to focus on reducing expenses, and most controllable costs were flat or down compared to a year ago," commented Tallent. "Last year included the FDIC industry-wide assessment that cost us $3.8 million and a recovery in other expenses of $2.0 million for the reversal of bank owned life insurance surrender charges."
Excluding the tax effect of the charge from the transaction with Fletcher and a $1.3 million increase in the valuation allowance for deferred tax assets, the effective tax rate for the second 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 June 30, 2010, United's capital ratios were as follows: Tier I Risk Based Capital of 11.1 percent; Leverage of 7.7 percent; and, Total Risk Based Capital of 13.8 percent. The quarterly average tangible equity-to-assets ratio was 9.3 percent and the tangible common equity-to-assets ratio was 6.9 percent.
"We are not where we want to be yet and the economy continues to be stubborn, but we are making important progress," Tallent said. "Aside from the non-cash loss on the sale of nonperforming assets this quarter, our net operating loss from continuing operations has declined for three consecutive quarters. Residential construction loans, where most of the problems have been, have decreased from a high of 35 percent to 17 percent of total loans at quarter end. We have widened our net interest margin by growing core deposits for six consecutive quarters and obtaining more favorable loan and time deposit pricing. All the while, our customer satisfaction scores lead the industry."
Conference Call
United Community Banks will hold a conference call today, Friday, July 23, 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 '85745611.' 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 $7.7 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, 2010 2009
except per share ------------------- ------------------------------
data; taxable Second First Fourth Third Second
equivalent) Quarter Quarter Quarter Quarter Quarter
-------- -------- -------- -------- --------
INCOME SUMMARY
Interest revenue $ 87,699 $ 89,849 $ 97,481 $101,181 $102,737
Interest expense 26,072 28,570 33,552 38,177 41,855
-------- -------- -------- -------- --------
Net interest
revenue 61,627 61,279 63,929 63,004 60,882
Provision for loan
losses 61,500 75,000 90,000 95,000 60,000
Operating fee
revenue (1) 11,579 11,666 14,447 13,389 11,305
-------- -------- -------- -------- --------
Total operating
revenue (1) 11,706 (2,055) (11,624) (18,607) 12,187
Operating expenses(2) 58,308 54,820 60,126 51,426 53,710
Loss on sale of
nonperforming
assets 45,349 - - - -
-------- -------- -------- -------- --------
Operating loss from
continuing
operations before
taxes (91,951) (56,875) (71,750) (70,033) (41,523)
Operating income tax
benefit (32,419) (22,417) (31,687) (26,252) (18,394)
-------- -------- -------- -------- --------
Net operating loss
from continuing
operations (1)(2) (59,532) (34,458) (40,063) (43,781) (23,129)
Gain from
acquisition, net of
tax expense - - - - 7,062
Noncash goodwill
impairment charges - - - (25,000) -
Severance costs, net
of tax benefit - - - - -
(Loss) income from
discontinued
operations - (101) 228 63 66
Gain from sale of
subsidiary, net of
income taxes and
selling costs - 1,266 - - -
-------- -------- -------- -------- --------
Net loss (59,532) (33,293) (39,835) (68,718) (16,001)
Preferred dividends
and discount
accretion 2,577 2,572 2,567 2,562 2,559
-------- -------- -------- -------- --------
Net loss available
to common
shareholders $(62,109) $(35,865) $(42,402) $(71,280) $(18,560)
======== ======== ======== ======== ========
PERFORMANCE MEASURES
Per common share:
Diluted
operating loss
from continuing
operations
(1)(2) $ (.66) $ (.39) $ (.45) $ (.93) $ (.53)
Diluted loss
from continuing
operations (.66) (.39) (.45) (1.43) (.38)
Diluted loss (.66) (.38) (.45) (1.43) (.38)
Stock dividends 1 for 1 for
declared (6) - - - 130 130
Book value 7.71 7.95 8.36 8.85 13.87
Tangible book
value (4) 5.39 5.62 6.02 6.50 8.85
Key performance
ratios:
Return on equity
(3)(5) (35.89)% (20.10)% (22.08)% (45.52)% (11.42)%
Return on assets
(5) (3.10) (1.70) (1.91) (3.32) (.78)
Net interest
margin (5) 3.60 3.49 3.40 3.39 3.28
Operating
efficiency
ratio from
continuing
operations
(1)(2) 141.60 75.22 78.74 68.35 73.68
Equity to assets 11.84 11.90 11.94 10.27 10.71
Tangible equity
to assets (4) 9.26 9.39 9.53 7.55 7.96
Tangible common
equity to
assets (4) 6.91 7.13 7.37 5.36 5.77
Tangible common
equity to
risk-weighted
assets (4) 9.97 10.03 10.39 10.67 7.49
ASSET QUALITY *
Non-performing
loans $224,335 $280,802 $264,092 $304,381 $287,848
Foreclosed
properties 123,910 136,275 120,770 110,610 104,754
-------- -------- -------- -------- --------
Total
non-performing
assets (NPAs) 348,245 417,077 384,862 414,991 392,602
Allowance for loan
losses 174,111 173,934 155,602 150,187 145,678
Net charge-offs 61,323 56,668 84,585 90,491 58,312
Allowance for loan
losses to loans 3.57 % 3.48 % 3.02 % 2.80 % 2.64 %
Net charge-offs to
average loans (5) 4.98 4.51 6.37 6.57 4.18
NPAs to loans and
foreclosed
properties 6.97 8.13 7.30 7.58 6.99
NPAs to total
assets 4.55 5.32 4.81 4.91 4.63
AVERAGE BALANCES ($
in millions)
Loans $ 5,011 $ 5,173 $ 5,357 $ 5,565 $ 5,597
Investment
securities 1,532 1,518 1,529 1,615 1,771
Earning assets 6,854 7,085 7,487 7,401 7,442
Total assets 7,704 7,946 8,287 8,208 8,212
Deposits 6,375 6,570 6,835 6,690 6,545
Shareholders'
equity 912 945 989 843 879
Common shares -
basic (thousands) 94,524 94,390 94,219 49,771 48,794
Common shares -
diluted
(thousands) 94,524 94,390 94,219 49,771 48,794
AT PERIOD END ($ in
millions)
Loans * $ 4,873 $ 4,992 $ 5,151 $ 5,363 $ 5,513
Investment
securities 1,488 1,527 1,530 1,533 1,817
Total assets 7,652 7,837 8,000 8,444 8,477
Deposits 6,330 6,488 6,628 6,821 6,849
Shareholders'
equity 904 926 962 1,007 855
Common shares
outstanding
(thousands) 94,281 94,176 94,046 93,901 48,933
(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 $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 Second
--------- --------- Quarter
(in thousands, except per share Second Second 2010-2009
data; taxable equivalent) Quarter Quarter Change
--------- --------- ----------
INCOME SUMMARY
Interest revenue $ 87,699 $ 102,737
Interest expense 26,072 41,855
--------- ---------
Net interest revenue 61,627 60,882 1%
Provision for loan losses 61,500 60,000
Operating fee revenue (1) 11,579 11,305 2
--------- ---------
Total operating revenue (1) 11,706 12,187 (4)
Operating expenses (2) 58,308 53,710 9
Loss on sale of nonperforming assets 45,349 -
--------- ---------
Operating loss from continuing
operations before taxes (91,951) (41,523) (121)
Operating income tax benefit (32,419) (18,394)
--------- ---------
Net operating loss from continuing
operations (1)(2) (59,532) (23,129) (157)
Gain from acquisition, net of tax
expense - 7,062
Noncash goodwill impairment charges - -
Severance costs, net of tax benefit - -
(Loss) income from discontinued
operations - 66
Gain from sale of subsidiary, net of
income taxes and selling costs - -
--------- ---------
Net loss (59,532) (16,001) (272)
Preferred dividends and discount
accretion 2,577 2,559
--------- ---------
Net loss available to common
shareholders $ (62,109) $ (18,560)
========= =========
PERFORMANCE MEASURES
Per common share:
Diluted operating loss from
continuing operations (1)(2) $ (.66) $ (.53) (25)
Diluted loss from continuing
operations (.66) (.38) (74)
Diluted loss (.66) (.38) (74)
Stock dividends declared (6) - 1 for 130
Book value 7.71 13.87 (44)
Tangible book value (4) 5.39 8.85 (39)
Key performance ratios:
Return on equity (3)(5) (35.89)% (11.42)%
Return on assets (5) (3.10) (.78)
Net interest margin (5) 3.60 3.28
Operating efficiency ratio from
continuing operations (1)(2) 141.60 73.68
Equity to assets 11.84 10.71
Tangible equity to assets (4) 9.26 7.96
Tangible common equity to assets
(4) 6.91 5.77
Tangible common equity to
risk-weighted assets (4) 9.97 7.49
ASSET QUALITY *
Non-performing loans $ 224,335 $ 287,848
Foreclosed properties 123,910 104,754
--------- ---------
Total non-performing assets (NPAs) 348,245 392,602
Allowance for loan losses 174,111 145,678
Net charge-offs 61,323 58,312
Allowance for loan losses to loans 3.57% 2.64%
Net charge-offs to average loans (5) 4.98 4.18
NPAs to loans and foreclosed
properties 6.97 6.99
NPAs to total assets 4.55 4.63
AVERAGE BALANCES ($ in millions)
Loans $ 5,011 $ 5,597 (10)
Investment securities 1,532 1,771 (13)
Earning assets 6,854 7,442 (8)
Total assets 7,704 8,212 (6)
Deposits 6,375 6,545 (3)
Shareholders' equity 912 879 4
Common shares - basic (thousands) 94,524 48,794 94
Common shares - diluted (thousands) 94,524 48,794 94
AT PERIOD END ($ in millions)
Loans * $ 4,873 $ 5,513 (12)
Investment securities 1,488 1,817 (18)
Total assets 7,652 8,477 (10)
Deposits 6,330 6,849 (8)
Shareholders' equity 904 855 6
Common shares outstanding (thousands) 94,281 48,933 93
(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 $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 Six
Months Ended YTD
(in thousands, except per share --------------------- 2010-2009
data; taxable equivalent) 2010 2009 Change
--------- --------- ----------
INCOME SUMMARY
Interest revenue $ 177,548 $ 206,299
Interest expense 54,642 88,005
--------- ---------
Net interest revenue 122,906 118,294 4%
Provision for loan losses 136,500 125,000
Operating fee revenue (1) 23,245 23,128 1
--------- ---------
Total operating revenue (1) 9,651 16,422 (41)
Operating expenses (2) 113,128 105,498 7
Loss on sale of nonperforming assets 45,349 -
--------- ---------
Operating loss from continuing
operations before taxes (148,826) (89,076) (67)
Operating income tax benefit (54,836) (33,815)
--------- ---------
Net operating loss from continuing
operations (1)(2) (93,990) (55,261) (70)
Gain from acquisition, net of tax
expense - 7,062
Noncash goodwill impairment charges - (70,000)
Severance costs, net of tax benefit - (1,797)
(Loss) income from discontinued
operations (101) 222
Gain from sale of subsidiary, net of
income taxes and selling costs 1,266 -
--------- ---------
Net loss (92,825) (119,774) 22
Preferred dividends and discount
accretion 5,149 5,113
--------- ---------
Net loss available to common
shareholders $ (97,974) $(124,887)
========= =========
PERFORMANCE MEASURES
Per common share:
Diluted operating loss from
continuing operations (1)(2) $ (1.05) $ (1.24) 15
Diluted loss from continuing
operations (1.05) (2.58) 59
Diluted loss (1.04) (2.57) 60
Stock dividends declared (6) - 2 for 130
Book value 7.71 13.87 (44)
Tangible book value (4) 5.39 8.85 (39)
Key performance ratios:
Return on equity (3)(5) (27.87)% (36.20)%
Return on assets (5) (2.39) (2.93)
Net interest margin (5) 3.55 3.18
Operating efficiency ratio from
continuing operations (1)(2) 108.48 74.38
Equity to assets 11.87 11.20
Tangible equity to assets (4) 9.32 8.10
Tangible common equity to assets
(4) 7.02 5.93
Tangible common equity to
risk-weighted assets (4) 9.97 7.49
ASSET QUALITY *
Non-performing loans $ 224,335 $ 287,848
Foreclosed properties 123,910 104,754
--------- ---------
Total non-performing assets (NPAs) 348,245 392,602
Allowance for loan losses 174,111 145,678
Net charge-offs 117,991 101,593
Allowance for loan losses to loans 3.57 % 2.64 %
Net charge-offs to average loans (5) 4.75 3.64
NPAs to loans and foreclosed
properties 6.97 6.99
NPAs to total assets 4.55 4.63
AVERAGE BALANCES ($ in millions)
Loans $ 5,091 $ 5,636 (10)
Investment securities 1,525 1,742 (12)
Earning assets 6,969 7,486 (7)
Total assets 7,825 8,291 (6)
Deposits 6,472 6,662 (3)
Shareholders' equity 929 923 1
Common shares - basic (thousands) 94,453 48,560 95
Common shares - diluted (thousands) 94,453 48,560 95
AT PERIOD END ($ in millions)
Loans * $ 4,873 $ 5,513 (12)
Investment securities 1,488 1,817 (18)
Total assets 7,652 8,477 (10)
Deposits 6,330 6,849 (8)
Shareholders' equity 904 855 6
Common shares outstanding (thousands) 94,281 48,933 93
(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 $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 Second First Fourth Third Second
equivalent) Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
Interest revenue
reconciliation
Interest revenue -
taxable equivalent $ 87,699 $ 89,849 $ 97,481 $ 101,181 $ 102,737
Taxable equivalent
adjustment (500) (493) (601) (580) (463)
--------- --------- --------- --------- ---------
Interest revenue
(GAAP) $ 87,199 $ 89,356 $ 96,880 $ 100,601 $ 102,274
========= ========= ========= ========= =========
Net interest revenue
reconciliation
Net interest revenue
- taxable
equivalent $ 61,627 $ 61,279 $ 63,929 $ 63,004 $ 60,882
Taxable equivalent
adjustment (500) (493) (601) (580) (463)
--------- --------- --------- --------- ---------
Net interest
revenue (GAAP) $ 61,127 $ 60,786 $ 63,328 $ 62,424 $ 60,419
========= ========= ========= ========= =========
Fee revenue
reconciliation
Operating fee
revenue $ 11,579 $ 11,666 $ 14,447 $ 13,389 $ 11,305
Gain from
acquisition - - - - 11,390
--------- --------- --------- --------- ---------
Fee revenue
(GAAP) $ 11,579 $ 11,666 $ 14,447 $ 13,389 $ 22,695
========= ========= ========= ========= =========
Total revenue
reconciliation
Total operating
revenue $ 11,706 $ (2,055) $ (11,624) $ (18,607) $ 12,187
Taxable equivalent
adjustment (500) (493) (601) (580) (463)
Gain from
acquisition - - - - 11,390
--------- --------- --------- --------- ---------
Total revenue
(GAAP) $ 11,206 $ (2,548) $ (12,225) $ (19,187) $ 23,114
========= ========= ========= ========= =========
Expense
reconciliation
Operating expense $ 103,657 $ 54,820 $ 60,126 $ 51,426 $ 53,710
Noncash goodwill
impairment charge - - - 25,000 -
Severance costs - - - - -
--------- --------- --------- --------- ---------
Operating
expense (GAAP) $ 103,657 $ 54,820 $ 60,126 $ 76,426 $ 53,710
========= ========= ========= ========= =========
Loss from continuing
operations before
taxes
reconciliation
Operating loss from
continuing
operations before
taxes $ (91,951) $ (56,875) $ (71,750) $ (70,033) $ (41,523)
Taxable equivalent
adjustment (500) (493) (601) (580) (463)
Gain from
acquisition - - - - 11,390
Noncash goodwill
impairment charge - - - (25,000) -
Severance costs - - - - -
--------- --------- --------- --------- ---------
Loss from
continuing
operations
before taxes
(GAAP) $ (92,451) $ (57,368) $ (72,351) $ (95,613) $ (30,596)
========= ========= ========= ========= =========
Income tax benefit
reconciliation
Operating income tax
benefit $ (32,419) $ (22,417) $ (31,687) $ (26,252) $ (18,394)
Taxable equivalent
adjustment (500) (493) (601) (580) (463)
Gain from
acquisition, tax
expense - - - - 4,328
Severance costs, tax
benefit - - - - -
--------- --------- --------- --------- ---------
Income tax
benefit (GAAP) $ (32,919) $ (22,910) $ (32,288) $ (26,832) $ (14,529)
========= ========= ========= ========= =========
Diluted loss from
continuing
operations per
common share
reconciliation
Diluted operating
loss from
continuing
operations per
common share $ (.66) $ (.39) $ (.45) $ (.93) $ (.53)
Gain from
acquisition - - - - .15
Noncash goodwill
impairment charge - - - (.50) -
Severance costs - - - - -
--------- --------- --------- --------- ---------
Diluted loss
from continuing
operations per
common share
(GAAP) $ (.66) $ (.39) $ (.45) $ (1.43) $ (.38)
========= ========= ========= ========= =========
Book value per
common share
reconciliation
Tangible book value
per common share $ 5.39 $ 5.62 $ 6.02 $ 6.50 $ 8.85
Effect of goodwill
and other
intangibles 2.32 2.33 2.34 2.35 5.02
--------- --------- --------- --------- ---------
Book value per
common share
(GAAP) $ 7.71 $ 7.95 $ 8.36 $ 8.85 $ 13.87
========= ========= ========= ========= =========
Efficiency ratio
from continuing
operations
reconciliation
Operating efficiency
ratio from
continuing
operations 141.60% 75.22% 78.74% 68.35% 73.68%
Gain from
acquisition - - - - (9.96)
Noncash goodwill
impairment charge - - - 33.22 -
Severance costs - - - - -
--------- --------- --------- --------- ---------
Efficiency ratio
from continuing
operations
(GAAP) 141.60% 75.22% 78.74% 101.57% 63.72%
========= ========= ========= ========= =========
Average equity to
assets
reconciliation
Tangible common
equity to assets 6.91% 7.13% 7.37% 5.36% 5.77%
Effect of preferred
equity 2.35 2.26 2.16 2.19 2.19
--------- --------- --------- --------- ---------
Tangible equity
to assets 9.26 9.39 9.53 7.55 7.96
Effect of goodwill
and other
intangibles 2.58 2.51 2.41 2.72 2.75
--------- --------- --------- --------- ---------
Equity to assets
(GAAP) 11.84% 11.90% 11.94% 10.27% 10.71%
========= ========= ========= ========= =========
Actual tangible
common equity to
risk-weighted
assets
reconciliation
Tangible common
equity to
risk-weighted
assets 9.97% 10.03% 10.39% 10.67% 7.49%
Effect of other
comprehensive
income (.87) (.85) (.87) (.90) (.72)
Effect of deferred
tax limitation (2.47) (1.75) (1.27) (.58) (.22)
Effect of trust
preferred 1.03 1.00 .97 .92 .90
Effect of preferred
equity 3.41 3.29 3.19 3.04 2.99
--------- --------- --------- --------- ---------
Tier I capital
ratio
(Regulatory) 11.07% 11.72% 12.41% 13.15% 10.44%
========= ========= ========= ========= =========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
For the Six
Months Ended
(in thousands, except per share ----------------------
data; taxable equivalent) 2010 2009
---------- ----------
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 177,548 $ 206,299
Taxable equivalent adjustment (993) (951)
---------- ----------
Interest revenue (GAAP) $ 176,555 $ 205,348
========== ==========
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 122,906 $ 118,294
Taxable equivalent adjustment (993) (951)
---------- ----------
Net interest revenue (GAAP) $ 121,913 $ 117,343
========== ==========
Fee revenue reconciliation
Operating fee revenue $ 23,245 $ 23,128
Gain from acquisition - 11,390
---------- ----------
Fee revenue (GAAP) $ 23,245 $ 34,518
========== ==========
Total revenue reconciliation
Total operating revenue $ 9,651 $ 16,422
Taxable equivalent adjustment (993) (951)
Gain from acquisition - 11,390
---------- ----------
Total revenue (GAAP) $ 8,658 $ 26,861
========== ==========
Expense reconciliation
Operating expense $ 158,477 $ 105,498
Noncash goodwill impairment charge - 70,000
Severance costs - 2,898
---------- ----------
Operating expense (GAAP) $ 158,477 $ 178,396
========== ==========
Loss from continuing operations before taxes
reconciliation
Operating loss from continuing operations before
taxes $ (148,826) $ (89,076)
Taxable equivalent adjustment (993) (951)
Gain from acquisition - 11,390
Noncash goodwill impairment charge - (70,000)
Severance costs - (2,898)
---------- ----------
Loss from continuing operations before taxes
(GAAP) $ (149,819) $ (151,535)
========== ==========
Income tax benefit reconciliation
Operating income tax benefit $ (54,836) $ (33,815)
Taxable equivalent adjustment (993) (951)
Gain from acquisition, tax expense - 4,328
Severance costs, tax benefit - (1,101)
---------- ----------
Income tax benefit (GAAP) $ (55,829) $ (31,539)
========== ==========
Diluted loss from continuing operations per common
share reconciliation
Diluted operating loss from continuing operations
per common share $ (1.05) $ (1.24)
Gain from acquisition - .15
Noncash goodwill impairment charge - (1.45)
Severance costs - (.04)
---------- ----------
Diluted loss from continuing operations per
common share (GAAP) $ (1.05) $ (2.58)
========== ==========
Book value per common share reconciliation
Tangible book value per common share $ 5.39 $ 8.85
Effect of goodwill and other intangibles 2.32 5.02
---------- ----------
Book value per common share (GAAP) $ 7.71 $ 13.87
========== ==========
Efficiency ratio from continuing operations
reconciliation
Operating efficiency ratio from continuing
operations 108.48% 74.38%
Gain from acquisition - (5.53)
Noncash goodwill impairment charge - 45.69
Severance costs - 1.89
---------- ----------
Efficiency ratio from continuing operations
(GAAP) 108.48% 116.43%
========== ==========
Average equity to assets reconciliation
Tangible common equity to assets 7.02% 5.93%
Effect of preferred equity 2.30 2.17
---------- ----------
Tangible equity to assets 9.32 8.10
Effect of goodwill and other intangibles 2.55 3.10
---------- ----------
Equity to assets (GAAP) 11.87% 11.20%
========== ==========
Actual tangible common equity to risk-weighted
assets reconciliation
Tangible common equity to risk-weighted assets 9.97% 7.49%
Effect of other comprehensive income (.87) (.72)
Effect of deferred tax limitation (2.47) (.22)
Effect of trust preferred 1.03 .90
Effect of preferred equity 3.41 2.99
---------- ----------
Tier I capital ratio (Regulatory) 11.07% 10.44%
========== ==========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2010 2009
----------------- --------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
(in millions) (1) (1) (1) (1) (1)
-------- -------- -------- -------- --------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,780 $ 1,765 $ 1,779 $ 1,787 $ 1,797
Commercial construction 342 357 363 380 379
Commercial & industrial 441 381 390 403 399
-------- -------- -------- -------- --------
Total commercial 2,563 2,503 2,532 2,570 2,575
Residential construction 820 960 1,050 1,185 1,315
Residential mortgage 1,356 1,390 1,427 1,461 1,470
Consumer / installment 134 139 142 147 153
-------- -------- -------- -------- --------
Total loans $ 4,873 $ 4,992 $ 5,151 $ 5,363 $ 5,513
======== ======== ======== ======== ========
LOANS BY MARKET
Atlanta MSA $ 1,373 $ 1,404 $ 1,435 $ 1,526 $ 1,605
Gainesville MSA 343 372 390 402 413
North Georgia 1,808 1,814 1,884 1,942 1,978
Western North Carolina 738 756 772 786 794
Coastal Georgia 356 388 405 440 455
East Tennessee 255 258 265 267 268
-------- -------- -------- -------- --------
Total loans $ 4,873 $ 4,992 $ 5,151 $ 5,363 $ 5,513
======== ======== ======== ======== ========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 214 $ 290 $ 332 $ 380 $ 413
Land loans 110 124 127 159 159
Lot loans 311 321 336 336 369
-------- -------- -------- -------- --------
Total 635 735 795 875 941
-------- -------- -------- -------- --------
House loans
Spec 125 153 178 218 268
Sold 60 72 77 92 106
-------- -------- -------- -------- --------
Total 185 225 255 310 374
-------- -------- -------- -------- --------
Total residential construction $ 820 $ 960 $ 1,050 $ 1,185 $ 1,315
======== ======== ======== ======== ========
RESIDENTIAL CONSTRUCTION -
ATLANTA MSA
Dirt loans
Acquisition & development $ 52 $ 66 $ 76 $ 100 $ 124
Land loans 32 43 43 61 63
Lot loans 39 47 52 54 81
-------- -------- -------- -------- --------
Total 123 156 171 215 268
-------- -------- -------- -------- --------
House loans
Spec 50 58 68 91 127
Sold 10 14 16 22 29
-------- -------- -------- -------- --------
Total 60 72 84 113 156
-------- -------- -------- -------- --------
Total residential construction $ 183 $ 228 $ 255 $ 328 $ 424
======== ======== ======== ======== ========
(1) Excludes total loans of $80.8 million, $79.5 million, $85.1 million,
$104.0 million and $109.9 million as of June 30, 2010, March 31, 2010,
December 31, 2009, September 30, 2009 and June 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
2010 2009
--------------- ------- Year
Second First Second Linked over
Quarter Quarter Quarter Quarter Year
(in millions) (1) (1) (1) Change Change
------- ------- ------- -------- ------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,780 $ 1,765 $ 1,797 $ 15 $ (17)
Commercial construction 342 357 379 (15) (37)
Commercial & industrial 441 381 399 60 42
------- ------- -------
Total commercial 2,563 2,503 2,575 60 (12)
Residential construction 820 960 1,315 (140) (495)
Residential mortgage 1,356 1,390 1,470 (34) (114)
Consumer / installment 134 139 153 (5) (19)
------- ------- -------
Total loans $ 4,873 $ 4,992 $ 5,513 (119) (640)
======= ======= =======
LOANS BY MARKET
Atlanta MSA $ 1,373 $ 1,404 $ 1,605 (31) (232)
Gainesville MSA 343 372 413 (29) (70)
North Georgia 1,808 1,814 1,978 (6) (170)
Western North Carolina 738 756 794 (18) (56)
Coastal Georgia 356 388 455 (32) (99)
East Tennessee 255 258 268 (3) (13)
------- ------- -------
Total loans $ 4,873 $ 4,992 $ 5,513 (119) (640)
======= ======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 214 $ 290 $ 413 (76) (199)
Land loans 110 124 159 (14) (49)
Lot loans 311 321 369 (10) (58)
------- ------- -------
Total 635 735 941 (100) (306)
------- ------- -------
House loans
Spec 125 153 268 (28) (143)
Sold 60 72 106 (12) (46)
------- ------- -------
Total 185 225 374 (40) (189)
------- ------- -------
Total residential construction $ 820 $ 960 $ 1,315 (140) (495)
======= ======= =======
RESIDENTIAL CONSTRUCTION -
ATLANTA MSA
Dirt loans
Acquisition & development $ 52 $ 66 $ 124 (14) (72)
Land loans 32 43 63 (11) (31)
Lot loans 39 47 81 (8) (42)
------- ------- -------
Total 123 156 268 (33) (145)
------- ------- -------
House loans
Spec 50 58 127 (8) (77)
Sold 10 14 29 (4) (19)
------- ------- -------
Total 60 72 156 (12) (96)
------- ------- -------
Total residential construction $ 183 $ 228 $ 424 (45) (241)
======= ======= =======
(1) Excludes total loans of $80.8 million, $79.5 million, $85.1 million,
$104.0 million and $109.9 million as of June 30, 2010, March 31, 2010,
December 31, 2009, September 30, 2009 and June 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)
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
============== ============== ==============
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.
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
============== ============== ==============
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.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Fourth Quarter 2009
----------------------------------------------
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
-------------- -------------- --------------
NPAs BY CATEGORY
Commercial (sec. by RE) $ 37,040 $ 15,842 $ 52,882
Commercial construction 19,976 9,761 29,737
Commercial & industrial 3,946 - 3,946
-------------- -------------- --------------
Total commercial 60,962 25,603 86,565
Residential construction 142,332 76,519 218,851
Residential mortgage 58,767 18,648 77,415
Consumer / installment 2,031 - 2,031
-------------- -------------- --------------
Total NPAs $ 264,092 $ 120,770 $ 384,862
============== ============== ==============
NPAs BY MARKET
Atlanta MSA $ 106,536 $ 41,125 $ 147,661
Gainesville MSA 5,074 2,614 7,688
North Georgia 87,598 53,072 140,670
Western North Carolina 29,610 5,096 34,706
Coastal Georgia 26,871 17,150 44,021
East Tennessee 8,403 1,713 10,116
-------------- -------------- --------------
Total NPAs $ 264,092 $ 120,770 $ 384,862
============== ============== ==============
NPA ACTIVITY
Beginning Balance $ 304,381 $ 110,610 $ 414,991
Loans placed on non-accrual 174,898 - 174,898
Payments received (26,935) - (26,935)
Loan charge-offs (88,427) - (88,427)
Foreclosures (79,983) 79,983 -
Capitalized costs - 981 981
Note / property sales (19,842) (61,228) (81,070)
Write downs - (2,209) (2,209)
Net losses on sales - (7,367) (7,367)
-------------- -------------- --------------
Ending Balance $ 264,092 $ 120,770 $ 384,862
============== ============== ==============
(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.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Second Quarter First Quarter Fourth Quarter
2010 2010 2009
----------------- ----------------- -----------------
Net Net Net
Charge- Charge- Charge-
Offs to Offs to Offs to
Net Average Net Average Net Average
Charge- Loans Charge- Loans Charge- Loans
(in thousands) Offs (2) Offs (2) Offs (2)
-------- ------- -------- ------- -------- -------
NET CHARGE-OFFS BY
CATEGORY
Commercial (sec. by
RE) $ 9,757 2.21% $ 1,964 .45% $ 3,896 .86%
Commercial
construction 1,460 1.67 2,206 2.48 4,717 5.03
Commercial &
industrial 867 .85 4,110 4.31 153 .15
-------- -------- --------
Total commercial 12,084 1.91 8,280 1.33 8,766 1.36
Residential
construction 41,515 18.71 43,100 17.32 67,393 23.87
Residential mortgage 6,517 1.90 4,551 1.31 7,026 1.93
Consumer /
installment 1,207 3.53 737 2.12 1,400 3.83
-------- -------- --------
Total $ 61,323 4.98 $ 56,668 4.51 $ 84,585 6.37
======== ======== ========
NET CHARGE-OFFS BY
MARKET
Atlanta MSA $ 16,926 4.85% $ 15,545 4.32% $ 43,595 12.07%
Gainesville MSA 2,547 3.01 1,675 1.92 2,273 2.49
North Georgia 28,100 6.19 29,747 6.51 18,057 3.57
Western North
Carolina 7,194 3.86 3,695 1.96 10,091 5.11
Coastal Georgia 5,581 6.07 5,649 5.74 8,109 7.72
East Tennessee 975 1.53 357 .55 2,460 3.67
-------- -------- --------
Total $ 61,323 4.98 $ 56,668 4.51 $ 84,585 6.37
======== ======== ========
(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
June 30,
--------------------
(in thousands, except per share data) 2010 2009
--------- ---------
Interest revenue:
Loans, including fees $ 70,611 $ 81,691
Investment securities, including tax exempt of $295
and $309 15,829 20,485
Federal funds sold, commercial paper and deposits in
banks 759 98
--------- ---------
Total interest revenue 87,199 102,274
--------- ---------
Interest expense:
Deposits:
NOW 1,745 2,843
Money market 1,829 2,269
Savings 83 121
Time 17,718 32,064
--------- ---------
Total deposit interest expense 21,375 37,297
Federal funds purchased, repurchase agreements and
other short-term borrowings 1,056 595
Federal Home Loan Bank advances 974 1,203
Long-term debt 2,667 2,760
--------- ---------
Total interest expense 26,072 41,855
--------- ---------
Net interest revenue 61,127 60,419
Provision for loan losses 61,500 60,000
--------- ---------
Net interest revenue after provision for loan
losses (373) 419
--------- ---------
Fee revenue:
Service charges and fees 7,993 7,557
Mortgage loan and other related fees 1,601 2,825
Brokerage fees 586 497
Securities losses, net - (711)
Gain from acquisition - 11,390
Other 1,399 1,137
--------- ---------
Total fee revenue 11,579 22,695
--------- ---------
Total revenue 11,206 23,114
--------- ---------
Operating expenses:
Salaries and employee benefits 23,590 26,305
Communications and equipment 3,511 3,571
Occupancy 3,836 3,818
Advertising and public relations 1,352 1,125
Postage, printing and supplies 765 1,288
Professional fees 2,178 3,195
Foreclosed property 14,540 5,737
FDIC assessments and other regulatory charges 3,566 6,810
Amortization of intangibles 794 739
Other 4,176 1,122
Loss on sale of nonperforming assets 45,349 -
Goodwill impairment - -
Severance costs - -
--------- ---------
Total operating expenses 103,657 53,710
--------- ---------
Loss from continuing operations before income taxes (92,451) (30,596)
Income tax benefit (32,919) (14,529)
--------- ---------
Net loss from continuing operations (59,532) (16,067)
(Loss) income from discontinued operations, net
of income taxes - 66
Gain from sale of subsidiary, net of income taxes
and selling costs - -
--------- ---------
Net loss (59,532) (16,001)
Preferred stock dividends and discount accretion 2,577 2,559
--------- ---------
Net loss available to common shareholders $ (62,109) $ (18,560)
========= =========
Loss from continuing operations per common share -
Basic / Diluted $ (.66) $ (.38)
Loss per common share - Basic / Diluted (.66) (.38)
Weighted average common shares outstanding - Basic /
Diluted 94,524 48,794
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Six Months Ended
June 30,
----------------------
(in thousands, except per share data) 2010 2009
---------- ----------
Interest revenue:
Loans, including fees $ 142,826 $ 163,571
Investment securities, including tax exempt of
$606 and $628 32,032 41,237
Federal funds sold, commercial paper and deposits
in banks 1,697 540
---------- ----------
Total interest revenue 176,555 205,348
---------- ----------
Interest expense:
Deposits:
NOW 3,599 6,180
Money market 3,586 4,506
Savings 167 248
Time 37,916 68,117
---------- ----------
Total deposit interest expense 45,268 79,051
Federal funds purchased, repurchase agreements
and other short-term borrowings 2,094 1,148
Federal Home Loan Bank advances 1,951 2,277
Long-term debt 5,329 5,529
---------- ----------
Total interest expense 54,642 88,005
---------- ----------
Net interest revenue 121,913 117,343
Provision for loan losses 136,500 125,000
---------- ----------
Net interest revenue after provision for loan
losses (14,587) (7,657)
---------- ----------
Fee revenue:
Service charges and fees 15,440 14,591
Mortgage loan and other related fees 3,080 5,476
Brokerage fees 1,153 1,186
Securities losses, net 61 (408)
Gain from acquisition - 11,390
Other 3,511 2,283
---------- ----------
Total fee revenue 23,245 34,518
---------- ----------
Total revenue 8,658 26,861
---------- ----------
Operating expenses:
Salaries and employee benefits 47,950 53,618
Communications and equipment 6,784 7,217
Occupancy 7,650 7,587
Advertising and public relations 2,395 2,169
Postage, printing and supplies 1,990 2,463
Professional fees 4,121 6,476
Foreclosed property 25,353 10,056
FDIC assessments and other regulatory charges 7,192 9,492
Amortization of intangibles 1,596 1,478
Other 8,097 4,942
Loss on sale of nonperforming assets 45,349 -
Goodwill impairment - 70,000
Severance costs - 2,898
---------- ----------
Total operating expenses 158,477 178,396
---------- ----------
Loss from continuing operations before income
taxes (149,819) (151,535)
Income tax benefit (55,829) (31,539)
---------- ----------
Net loss from continuing operations (93,990) (119,996)
(Loss) income from discontinued operations, net of
income taxes (101) 222
Gain from sale of subsidiary, net of income taxes
and selling costs 1,266 -
---------- ----------
Net loss (92,825) (119,774)
Preferred stock dividends and discount accretion 5,149 5,113
---------- ----------
Net loss available to common shareholders $ (97,974) $ (124,887)
========== ==========
Loss from continuing operations per common share -
Basic / Diluted $ (1.05) $ (2.58)
Loss per common share - Basic / Diluted (1.04) (2.57)
Weighted average common shares outstanding -
Basic / Diluted 94,453 48,560
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
June 30, December 31, June 30,
(in thousands, except share and per 2010 2009 2009
share data) ----------- ------------ ------------
(unaudited) (audited) (unaudited)
ASSETS
Cash and due from banks $ 115,088 $ 126,265 $ 110,943
Interest-bearing deposits in
banks 105,183 120,382 70,474
Federal funds sold, commercial
paper and short-term investments 148,227 129,720 -
----------- ------------ ------------
Cash and cash equivalents 368,498 376,367 181,417
Securities available for sale 1,165,776 1,530,047 1,816,787
Securities held to maturity (fair
value $327,497) 322,148 - -
Mortgage loans held for sale 22,705 30,226 42,185
Loans, net of unearned income 4,873,030 5,151,476 5,513,087
Less allowance for loan losses 174,111 155,602 145,678
----------- ------------ ------------
Loans, net 4,698,919 4,995,874 5,367,409
Assets covered by loss sharing
agreements with the FDIC 156,611 185,938 230,125
Premises and equipment, net 180,125 182,038 178,983
Accrued interest receivable 29,650 33,867 41,405
Goodwill and other intangible
assets 223,600 225,196 251,821
Foreclosed property 123,910 120,770 104,754
Other assets 360,542 319,591 262,469
----------- ------------ ------------
Total assets $ 7,652,484 $ 7,999,914 $ 8,477,355
=========== ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 779,934 $ 707,826 $ 714,630
NOW 1,326,861 1,335,790 1,273,368
Money market 756,370 713,901 573,463
Savings 185,176 177,427 180,368
Time:
Less than $100,000 1,575,211 1,746,511 1,992,056
Greater than $100,000 1,093,975 1,187,499 1,351,527
Brokered 611,985 758,880 763,348
----------- ------------ ------------
Total deposits 6,329,512 6,627,834 6,848,760
Federal funds purchased,
repurchase agreements, and
other short-term borrowings 104,127 101,389 252,493
Federal Home Loan Bank advances 104,138 114,501 283,292
Long-term debt 150,106 150,066 150,026
Accrued expenses and other
liabilities 60,184 43,803 87,512
----------- ------------ ------------
Total liabilities 6,748,067 7,037,593 7,622,083
----------- ------------ ------------
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 175,050 174,408 173,785
Common stock, $1 par value;
200,000,000 shares authorized;
94,280,925, 94,045,603 and
48,933,383 shares issued and
outstanding 94,281 94,046 48,933
Common stock issuable; 284,771,
221,906 and 182,041 shares 3,898 3,597 3,383
Capital surplus 663,836 622,034 450,514
(Accumulated deficit) retained
earnings (77,590) 20,384 136,624
Accumulated other comprehensive
income 44,725 47,635 41,816
----------- ------------ ------------
Total shareholders' equity 904,417 962,321 855,272
----------- ------------ ------------
Total liabilities and
shareholders' equity $ 7,652,484 $ 7,999,914 $ 8,477,355
=========== ============ ============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
2010
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,010,937 $ 70,640 5.65%
Taxable securities (3) 1,503,162 15,534 4.13
Tax-exempt securities (1)(3) 28,920 482 6.67
Federal funds sold and other
interest-earning assets 311,475 1,043 1.34
----------- ------------
Total interest-earning assets 6,854,494 87,699 5.13
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (193,998)
Cash and due from banks 100,931
Premises and equipment 181,064
Other assets (3) 761,803
-----------
Total assets $ 7,704,294
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,325,099 $ 1,745 .53
Money market 746,039 1,829 .98
Savings 186,628 83 .18
Time less than $100,000 1,605,308 7,887 1.97
Time greater than $100,000 1,110,010 6,102 2.20
Brokered 642,954 3,729 2.33
----------- ------------
Total interest-bearing
deposits 5,616,038 21,375 1.53
----------- ------------
Federal funds purchased and other
borrowings 104,637 1,056 4.05
Federal Home Loan Bank advances 107,948 974 3.62
Long-term debt 150,097 2,667 7.13
----------- ------------
Total borrowed funds 362,682 4,697 5.19
----------- ------------
Total interest-bearing
liabilities 5,978,720 26,072 1.75
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 758,558
Other liabilities 54,931
-----------
Total liabilities 6,792,209
Shareholders' equity 912,085
-----------
Total liabilities and
shareholders' equity $ 7,704,294
===========
Net interest revenue $ 61,627
============
Net interest-rate spread 3.38%
===========
Net interest margin (4) 3.60%
===========
(1) Interest revenue on tax-exempt securities and loans has been increased
to reflect comparable interest on taxable securities and loans. The
rate used was 39%, reflecting the statutory federal income tax rate and
the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where
the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $43.6 million in 2010 and $14.7 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 June 30,
2009
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,597,259 $ 81,567 5.85%
Taxable securities (3) 1,742,620 20,176 4.63
Tax-exempt securities (1)(3) 28,862 506 7.01
Federal funds sold and other
interest-earning assets 73,437 488 2.66
----------- ------------
Total interest-earning assets 7,442,178 102,737 5.53
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (147,691)
Cash and due from banks 101,830
Premises and equipment 179,446
Other assets (3) 636,377
-----------
Total assets $ 8,212,140
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,258,134 $ 2,843 .91
Money market 521,989 2,269 1.74
Savings 178,435 121 .27
Time less than $100,000 1,894,071 15,342 3.25
Time greater than $100,000 1,325,757 11,513 3.48
Brokered 686,070 5,209 3.05
----------- ------------
Total interest-bearing
deposits 5,864,456 37,297 2.55
----------- ------------
Federal funds purchased and other
borrowings 220,376 595 1.08
Federal Home Loan Bank advances 309,962 1,203 1.56
Long-term debt 151,019 2,760 7.33
----------- ------------
Total borrowed funds 681,357 4,558 2.68
----------- ------------
Total interest-bearing
liabilities 6,545,813 41,855 2.56
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 680,081
Other liabilities 107,036
-----------
Total liabilities 7,332,930
Shareholders' equity 879,210
-----------
Total liabilities and
shareholders' equity $ 8,212,140
===========
Net interest revenue $ 60,882
============
Net interest-rate spread 2.97%
===========
Net interest margin (4) 3.28%
===========
(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 $43.6 million in 2010 and $14.7 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 Six Months Ended June 30,
2010
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,091,445 $ 142,859 5.66%
Taxable securities (3) 1,495,447 31,426 4.20
Tax-exempt securities (1)(3) 29,482 991 6.72
Federal funds sold and other
interest-earning assets 352,683 2,272 1.29
----------- ------------
Total interest-earning assets 6,969,057 177,548 5.13
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (190,662)
Cash and due from banks 102,728
Premises and equipment 181,493
Other assets (3) 762,014
-----------
Total assets $ 7,824,630
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,343,297 $ 3,599 .54
Money market 734,817 3,586 .98
Savings 183,555 167 .18
Time less than $100,000 1,648,739 16,778 2.05
Time greater than $100,000 1,132,767 12,872 2.29
Brokered 689,717 8,266 2.42
----------- ------------
Total interest-bearing
deposits 5,732,892 45,268 1.59
----------- ------------
Federal funds purchased and other
borrowings 103,355 2,094 4.09
Federal Home Loan Bank advances 111,150 1,951 3.54
Long-term debt 150,088 5,329 7.16
----------- ------------
Total borrowed funds 364,593 9,374 5.18
----------- ------------
Total interest-bearing
liabilities 6,097,485 54,642 1.81
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 738,876
Other liabilities 59,605
-----------
Total liabilities 6,895,966
Shareholders' equity 928,664
-----------
Total liabilities and
shareholders' equity $ 7,824,630
===========
Net interest revenue $ 122,906
============
Net interest-rate spread 3.32%
===========
Net interest margin (4) 3.55%
===========
(1) Interest revenue on tax-exempt securities and loans has been increased
to reflect comparable interest on taxable securities and loans. The
rate used was 39%, reflecting the statutory federal income tax rate and
the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where
the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
unrealized gains of $43.4 million in 2010 and $12.7 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 Six Months Ended June 30,
2009
-------------------------------------
(dollars in thousands, taxable Average Avg.
equivalent) Balance Interest Rate
----------- ------------ -----------
Assets:
Interest-earning assets:
Loans, net of unearned income
(1)(2) $ 5,635,942 $ 163,316 5.84%
Taxable securities (3) 1,712,778 40,609 4.74
Tax-exempt securities (1)(3) 29,453 1,028 6.98
Federal funds sold and other
interest-earning assets 107,788 1,346 2.50
----------- ------------
Total interest-earning assets 7,485,961 206,299 5.55
----------- ------------
Non-interest-earning assets:
Allowance for loan losses (138,297)
Cash and due from banks 103,113
Premises and equipment 179,470
Other assets (3) 661,520
-----------
Total assets $ 8,291,767
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,307,865 $ 6,180 .95
Money market 499,780 4,506 1.82
Savings 175,587 248 .28
Time less than $100,000 1,918,349 32,559 3.42
Time greater than $100,000 1,359,286 24,338 3.61
Brokered 735,844 11,220 3.07
----------- ------------
Total interest-bearing
deposits 5,996,711 79,051 2.66
----------- ------------
Federal funds purchased and other
borrowings 185,639 1,148 1.25
Federal Home Loan Bank advances 257,742 2,277 1.78
Long-term debt 151,009 5,529 7.38
----------- ------------
Total borrowed funds 594,390 8,954 3.04
----------- ------------
Total interest-bearing
liabilities 6,591,101 88,005 2.69
------------
Non-interest-bearing liabilities:
Non-interest-bearing deposits 665,170
Other liabilities 112,382
-----------
Total liabilities 7,368,653
Shareholders' equity 923,114
-----------
Total liabilities and
shareholders' equity $ 8,291,767
===========
Net interest revenue $ 118,294
============
Net interest-rate spread 2.86%
===========
Net interest margin (4) 3.18%
===========
(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 $43.4 million in 2010 and $12.7 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=B27C4CF6EB7CB1BB
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