UNITED COMMUNITY BANKS, INC.
The
information in this prospectus supplement is not complete and
may be changed. The registration statement filed with the
Security and Exchange Commission relating to these securities is
effective. Neither the prospectus supplement nor the
accompanying prospectus is an offer to sell these securities and
neither is soliciting an offer to buy these in any jurisdiction
where the offer or sale is not
permitted.
|
Filed pursuant to
Rule 424(b)(5)
Registration Statement
No. 333-116623
SUBJECT TO COMPLETION, DATED
NOVEMBER 10, 2005
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated July 9, 2004)
1,350,000 Shares
Common Stock
We are offering 1,350,000 shares of our common stock. Our
common stock is traded on the Nasdaq National Market under the
symbol UCBI. On November 9, 2005, the last
sales price of our common stock as reported on the Nasdaq
National Market was $30.15 per share.
Investing in our common stock involves risks. See Risk
Factors beginning on page S-8 before you make your
investment decision.
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Per Share | |
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Total | |
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Price to Public
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$ |
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$ |
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Underwriting Discount
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$ |
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$ |
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Proceeds, before expenses, to United Community Banks, Inc.
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$ |
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$ |
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We have granted the underwriters a 30-day option to purchase up
to 202,500 additional shares of common stock at the public
offering price, less the underwriting discount, to cover
over-allotments, if any.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
These securities are not savings accounts, deposits or other
obligations of any bank and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental
agency.
Sandler ONeill &
Partners, L.P.
|
|
Keefe, Bruyette & Woods |
Raymond James |
The date of this prospectus supplement is
November , 2005
United Community Banks, Inc.
TABLE OF CONTENTS
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Page | |
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Prospectus Supplement |
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S-ii |
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S-1 |
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S-8 |
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S-10 |
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S-11 |
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S-12 |
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S-13 |
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S-15 |
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S-15 |
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Prospectus |
Where You Can Find More Information
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ii |
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Incorporation of Certain Documents by Reference
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ii |
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About this Prospectus
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1 |
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Business
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1 |
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Use of Proceeds
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2 |
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Ratio of Earnings to Fixed Charges
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2 |
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Description of Common Stock
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3 |
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Description of Preferred Stock
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4 |
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Description of Debt Securities
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4 |
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Description of Warrants
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14 |
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Plan of Distribution
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15 |
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Legal Matters
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16 |
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Experts
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16 |
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A Warning about Forward Looking Statements
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17 |
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You should rely only on the information contained or
incorporated by reference in this prospectus supplement or the
accompanying prospectus. We have not, and the underwriters have
not, authorized anyone to provide you with different
information. We, and the underwriters, are offering to sell
shares of common stock and seeking offers to buy shares of
common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus
supplement and the accompanying prospectus is accurate only as
of the date of each document regardless of the time of delivery
of this prospectus supplement and the accompanying prospectus or
any sale of these securities. In case there are any differences
or inconsistencies between this prospectus supplement, the
accompanying prospectus and the information incorporated by
reference, you should rely on the information in the document
with the latest date. Unless the context indicates otherwise,
all references in this prospectus to we, our, us, United or the
company refer to United Community Banks, Inc. and its
subsidiaries on a consolidated basis.
S-i
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are
part of a registration statement that we filed with the
Securities and Exchange Commission using a shelf registration
process. Under the shelf registration process, we may offer from
time to time shares of common stock, shares of preferred stock,
debt securities, warrants or any combination of the foregoing
securities of which this offering is a part. In the accompanying
prospectus, we provide you with a general description of the
securities we may offer from time to time under our shelf
registration statement. In this prospectus supplement, we
provide you with specific information about the shares of our
common stock that we are selling in this offering. Both this
prospectus supplement and the accompanying prospectus include
important information about us, our common stock and other
information you should know before investing. This prospectus
supplement also adds, updates and changes information contained
in the accompanying prospectus. You should read both this
prospectus supplement and the accompanying prospectus as well as
additional information described under Incorporation of
Certain Documents by Reference on page ii of the
accompanying prospectus before investing in our common stock.
S-ii
PROSPECTUS SUPPLEMENT SUMMARY
This prospectus supplement summary contains basic information
about us and this offering. Because it is a summary, it does not
contain all the information that you should consider before
investing. To understand this offering fully, you should read
the entire prospectus supplement and accompanying prospectus
carefully, including the section entitled Risk
Factors, our financial statements and the accompanying
notes included in our Annual Report on Form 10-K for the
year ended December 31, 2004 and Quarterly Reports on
Form 10-Q for the periods ended March 31, 2005,
June 30, 2005 and September 30, 2005, which are
incorporated herein by reference. Unless otherwise indicated,
all share information in this prospectus supplement assumes no
exercise of the underwriters over-allotment option.
Our Company
We are the third largest bank holding company based in Georgia
with assets of $5.7 billion, loans of $4.3 billion,
deposits of $4.2 billion and shareholders equity of
$424 million as of September 30, 2005. We conduct
substantially all of our operations through 24 separate
community banks at 90 locations in north
Georgia, metro Atlanta, coastal Georgia, western North Carolina
and east Tennessee through three wholly-owned state chartered
bank subsidiaries: United Community Bank Georgia,
United Community Bank North Carolina and United
Community Bank Tennessee. Our community banks offer
a full range of retail and corporate banking services, including
checking, savings and time deposit accounts, secured and
unsecured loans, wire transfers, brokerage services and other
financial services.
We have enjoyed impressive growth with consistently strong
performance. For the 10 years ended December 31, 2004
we have:
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grown assets from $630 million to over $5.0 billion, a
compound annual growth rate in excess of 23%; |
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increased total revenue at a 20% compound annual growth rate; |
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increased diluted earnings per share at an 18% compound annual
growth rate; and |
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generated a compounded annual total return of 24% for our
shareholders, assuming reinvestment of dividends. |
Our Key Strengths and Operating Strategy
We believe our success is attributable to our community banking
business model, our balanced growth strategy and our unique
footprint in attractive market areas. We believe this focus,
coupled with our credit discipline, has helped us to maintain
strong credit quality while generating consistent, high quality
operating earnings. Our goal is to increase shareholder value by
continuing to focus on these strengths. Our long-term commitment
to our shareholders is to deliver sustained double-digit growth
in operating earnings per share, and our targeted growth for
2005 and 2006 is between 12% and 15%. We are also targeting loan
growth of 10% to 14% annually and maintaining a net interest
margin of approximately 4%.
Community-focused operating model. We believe that our
community-focused operating model has contributed to our
consistently high growth and strong financial performance, and
better positions us to experience above average growth rates.
Each of our 24 community banks is led by a local president
and management team who collectively have significant experience
in and ties to their respective communities. Each of our bank
presidents has authority, alone or with other local officers, to
make most credit decisions. As a result, our customers enjoy the
personal service and decision-making of a local bank team while
benefiting from the resources of a larger financial institution.
Specifically, these resources include our well recognized
banking brand, broad product line, integrated technology and
higher lending limits. We believe that this operating philosophy
has allowed us to achieve customer satisfaction scores of over
90% in our market surveys, well above the industry average of
75%. In addition, in recent surveys, approximately 95% of our
customers have stated that they already had or would likely
recommend our banking products and services to others.
S-1
We believe these customer satisfaction levels permit us to
increase our presence in markets where our reputation is well
established. For example, in early 2004, we began a company-wide
initiative to increase our core deposits through a targeted
direct-mail campaign and by seeking referrals from our loyal
customers. In the first nine months of 2005, we opened over
33,500 core deposit accounts and increased core deposits over
$300 million. Since these initiatives began, we have opened
approximately 64,000 core deposit accounts and increased core
deposits over $500 million.
Balanced growth strategy. We believe that our growth over
the past 10 years is the direct result of expanding our
franchise into attractive markets combined with a strategy
emphasizing organic growth complemented by selective
acquisitions. During the last 10 years, approximately 70%
of our increase in total assets has been achieved through
organic growth, which includes post-acquisition growth at
acquired banking offices as well as growth at our de novo bank
locations. Our remaining growth during this period has resulted
from a series of disciplined acquisitions, typically of banks
whose management shares our community banking and customer
service philosophies. We intend to continue to engage in
selective acquisitions in our existing markets and in
complementary high-growth markets, with a primary focus on
management teams that fit this profile and banks that generally
have total assets between $100 and $400 million.
We believe that the success of this strategy is best illustrated
by our historical experience. For example, we have grown our
western North Carolina community bank, which we originally
acquired in March 1990, from approximately $55 million to
approximately $1.1 billion in assets at September 30,
2005, a compound annual growth rate of 21%. In May 2005, we
expanded into the Gainesville, Georgia market with a new de novo
community bank by initially hiring three executives and 50
bankers. This bank now has added over 70 staff members,
opened three new banking offices and has added approximately
$207 million in loans and approximately $106 million
in deposits as of September 30, 2005.
Unique footprint in attractive market areas. We believe
that our unique footprint in market areas characterized by
strong demographic trends has contributed to the success of our
balanced growth strategy and positions us well for future growth
opportunities. We currently operate in north Georgia, metro
Atlanta, coastal Georgia, western North Carolina and east
Tennessee. Our markets include 12 of the 100 fastest growing
counties in the United States (measured by percentage of
population growth based on U.S. Census data) and
$54 billion in bank deposits. All of the deposit
information and market data described in this section is based
on FDIC data as of June 30, 2005.
Our footprint includes markets in which we are well established
and those where we have significant opportunities for increasing
our market share. In these markets, we are able to generate
strong revenue and deposit growth to help fund our future
organic growth and to retain capital to finance selective
acquisitions.
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North Georgia As of June 30, 2005, we had the
highest deposit market share in the 11-county area we serve in
north Georgia, with 23% of all deposits. Our original bank
(Union County Bank) was established in north Georgia which
contains the most mature part of our franchise. North Georgia
has historically been home to many retirees and second home
buyers and, as the metro Atlanta region continues to expand
northward, many of the citys residents are finding this
region an increasingly attractive living alternative. According
to U.S. Census data, the area of north Georgia where we
operate experienced a 33% population growth from 1990 to 2000. |
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Western North Carolina As of June 30, 2005, we
had the third highest deposit market share in the 12-county area
we serve in western North Carolina, with 14% of all deposits.
Located in and around the Great Smoky Mountains, this region is
a popular outdoor recreational destination that also attracts
many new retirees and second home buyers. Tourism is also an
important, year-round contributor to the local economies in this
area. According to U.S. Census data, our western North
Carolina markets had approximately 20% population growth from
1990 to 2000. |
S-2
By applying our community-focused operating model and balanced
growth strategy, we intend to expand our presence and market
share in three of our newer market areas.
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Metro Atlanta As of June 30, 2005, we had
$907 million in deposits and the seventh highest deposit
market share in the 14-county area of metro Atlanta. The markets
we serve in metro Atlanta grew by approximately 51% between 1990
and 2000 and are a part of the larger 28-county Atlanta
metropolitan statistical area that has over 5 million
people and an estimated $95 billion in total deposits. |
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East Tennessee As of June 30, 2005, we had the
tenth highest deposit market share in our six-county east
Tennessee market, which includes the Knoxville metropolitan
statistical area, a strong commercial center that is one of the
fastest growing areas in the state. We have significant
opportunities for future growth with only $228 million in
deposits, in a market that has in excess of $10 billion in
deposits. |
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Coastal Georgia As of June 30, 2005, we had the
third highest deposit market share in the Brunswick, Georgia
market, with 16% of deposits. We recently expanded our north
coastal Georgia presence through a de novo bank in Savannah,
Georgia. Savannah is located in Chatham County, Georgia, which
has $4.1 billion in total deposits of which approximately
64% are maintained by three much larger financial institutions.
We believe that both of these markets provide excellent
opportunities for future growth in our coastal Georgia franchise
and in adjoining counties in Georgia and in bordering states. |
Strong credit quality. We believe that our balanced
growth strategy and focus on community banking, coupled with our
credit discipline, have helped us to maintain strong credit
quality. Our net charge-offs have remained low and were .13% of
average loans during the nine month period ended
September 30, 2005 and .11% for the year ended
December 31, 2004. Our nonperforming assets have also
remained low and were .24% of total assets at September 30,
2005 and .17% of total assets at December 31, 2004.
Consistent with our emphasis on lending discipline, we believe
that our community-focused operating model contributes to this
strong credit quality by allowing our local bankers to stay
involved with our loan customers.
Corporate Information
Executive offices are located at 63 Highway 515,
Blairsville, Georgia 30512, and our telephone number is
(706) 781-2265. Our website is www.ucbi.com, and
information on our website is not incorporated into this
prospectus by reference and is not a part hereof.
S-3
The Offering
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Common stock offered by United Community Banks, Inc |
|
1,350,000 shares |
|
Common stock to be outstanding after the offering |
|
39,785,906 shares |
|
Net proceeds |
|
The net proceeds from this offering will be approximately
$38.2 million without the underwriters over-allotment
option, assuming an offering price of $30.15 per share
(based on the closing price of our common stock on
November 9, 2005). |
|
Use of proceeds |
|
We plan to use the net proceeds from this offering to support
growth opportunities and for general corporate purposes. See
Use of Proceeds. |
|
Nasdaq National Market Symbol |
|
UCBI |
The number of shares of common stock that will be outstanding
after this offering includes 38,435,906 shares outstanding
as of November 7, 2005, but does not include:
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202,500 shares of common stock issuable pursuant to the
underwriters over-allotment option; |
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71,262 shares of common stock that may be issued upon the
vesting of restricted stock; |
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2,320,607 shares of common stock that may be issued upon
the exercise of options outstanding, with a weighted average
exercise price of $15.77 per share; and |
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372,000 shares of common stock reserved for issuance upon
the conversion of subordinated debt, with a conversion price of
$8.33 per share. |
Risk Factors
Before investing, you should consider carefully the matters set
forth under Risk Factors, beginning on
page S-8, for a discussion of the risks related to an
investment in our common stock.
S-4
Summary Consolidated Financial Data
The following tables set forth summary historical operations and
financial condition data and summary performance, asset quality
and other information at and for the periods indicated. You
should read this data in conjunction with our Consolidated
Financial Statements and notes thereto incorporated by reference
into this prospectus supplement and the accompanying prospectus
from our Annual Report on Form 10-K for the year ended
December 31, 2004 and Quarterly Reports on Form 10-Q
for the periods ended March 31, 2005, June 30, 2005
and September 30, 2005. Our net operating
income is determined by methods other than in accordance
with generally accepted accounting principles, or GAAP. Please
see GAAP Reconciliation and Explanation below for a
reconciliation of the difference between our non-GAAP net
operating income and our GAAP net income. Per share amounts and
weighted average shares outstanding have been restated to
reflect the three-for-two stock split effective April 28,
2004 and the two-for-one stock split effective May 29, 2002.
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For the Nine | |
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Months Ended | |
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September 30, | |
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For the Years Ended December 31, | |
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5 Year | |
|
|
2005 | |
|
2004 | |
|
Change | |
|
2004 | |
|
2003 | |
|
2002 | |
|
2001 | |
|
2000 | |
|
1999 | |
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CAGR(1) | |
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| |
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(In thousands, except per share data; taxable equivalent) | |
INCOME SUMMARY
|
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|
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|
|
|
|
|
|
|
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|
|
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|
|
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|
|
Interest revenue
|
|
$ |
243,353 |
|
|
$ |
172,625 |
|
|
|
|
|
|
$ |
239,386 |
|
|
$ |
209,338 |
|
|
$ |
195,932 |
|
|
$ |
210,036 |
|
|
$ |
213,115 |
|
|
$ |
171,211 |
|
|
|
|
|
Interest expense
|
|
|
88,850 |
|
|
|
53,346 |
|
|
|
|
|
|
|
74,794 |
|
|
|
70,600 |
|
|
|
76,357 |
|
|
|
100,874 |
|
|
|
116,591 |
|
|
|
90,242 |
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|
|
|
|
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|
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Net interest revenue
|
|
|
154,503 |
|
|
|
119,279 |
|
|
|
30 |
% |
|
|
164,592 |
|
|
|
138,738 |
|
|
|
119,575 |
|
|
|
109,162 |
|
|
|
96,524 |
|
|
|
80,969 |
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|
|
15 |
% |
Provision for loan losses
|
|
|
8,600 |
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|
|
5,600 |
|
|
|
|
|
|
|
7,600 |
|
|
|
6,300 |
|
|
|
6,900 |
|
|
|
6,000 |
|
|
|
7,264 |
|
|
|
5,966 |
|
|
|
|
|
Fee revenue
|
|
|
34,775 |
|
|
|
28,782 |
|
|
|
21 |
|
|
|
39,539 |
|
|
|
38,184 |
|
|
|
30,734 |
|
|
|
25,267 |
|
|
|
18,867 |
|
|
|
15,693 |
|
|
|
20 |
|
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|
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Total revenue
|
|
|
180,678 |
|
|
|
142,461 |
|
|
|
27 |
|
|
|
196,531 |
|
|
|
170,622 |
|
|
|
143,409 |
|
|
|
128,429 |
|
|
|
108,127 |
|
|
|
90,696 |
|
|
|
17 |
|
Operating expenses
|
|
|
114,881 |
|
|
|
88,835 |
|
|
|
29 |
|
|
|
122,568 |
|
|
|
107,900 |
|
|
|
91,124 |
|
|
|
83,906 |
|
|
|
74,043 |
|
|
|
63,505 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
65,797 |
|
|
|
53,626 |
|
|
|
23 |
|
|
|
73,963 |
|
|
|
62,722 |
|
|
|
52,285 |
|
|
|
44,523 |
|
|
|
34,084 |
|
|
|
27,191 |
|
|
|
22 |
|
Income taxes
|
|
|
24,285 |
|
|
|
19,380 |
|
|
|
|
|
|
|
26,807 |
|
|
|
23,247 |
|
|
|
19,505 |
|
|
|
16,208 |
|
|
|
12,337 |
|
|
|
9,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
41,512 |
|
|
|
34,246 |
|
|
|
21 |
|
|
|
47,156 |
|
|
|
39,475 |
|
|
|
32,780 |
|
|
|
28,315 |
|
|
|
21,747 |
|
|
|
17,253 |
|
|
|
22 |
|
Merger-related charges, net of tax
|
|
|
|
|
|
|
304 |
|
|
|
|
|
|
|
565 |
|
|
|
1,357 |
|
|
|
|
|
|
|
1,084 |
|
|
|
7,230 |
|
|
|
1,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
41,512 |
|
|
$ |
33,942 |
|
|
|
22 |
|
|
$ |
46,591 |
|
|
$ |
38,118 |
|
|
$ |
32,780 |
|
|
$ |
27,231 |
|
|
$ |
14,517 |
|
|
$ |
16,098 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
OPERATING PERFORMANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ |
1.08 |
|
|
$ |
.96 |
|
|
|
13 |
% |
|
$ |
1.31 |
|
|
$ |
1.15 |
|
|
$ |
1.02 |
|
|
$ |
.89 |
|
|
$ |
.70 |
|
|
$ |
.57 |
|
|
|
18 |
% |
|
Diluted
|
|
|
1.05 |
|
|
|
.93 |
|
|
|
13 |
|
|
|
1.27 |
|
|
|
1.12 |
|
|
|
.99 |
|
|
|
.87 |
|
|
|
.69 |
|
|
|
.56 |
|
|
|
18 |
|
Return on tangible
equity(2)(3)(4)
|
|
|
19.30 |
% |
|
|
19.67 |
% |
|
|
|
|
|
|
19.74 |
% |
|
|
19.24 |
% |
|
|
17.88 |
% |
|
|
18.19 |
% |
|
|
16.74 |
% |
|
|
16.37 |
% |
|
|
|
|
Return on
assets(4)
|
|
|
1.03 |
|
|
|
1.07 |
|
|
|
|
|
|
|
1.07 |
|
|
|
1.06 |
|
|
|
1.11 |
|
|
|
1.10 |
|
|
|
.89 |
|
|
|
.81 |
|
|
|
|
|
Efficiency ratio
|
|
|
60.64 |
|
|
|
60.00 |
|
|
|
|
|
|
|
60.05 |
|
|
|
60.89 |
|
|
|
60.66 |
|
|
|
62.52 |
|
|
|
64.15 |
|
|
|
66.07 |
|
|
|
|
|
Dividend payout ratio
|
|
|
19.44 |
|
|
|
18.75 |
|
|
|
|
|
|
|
18.32 |
|
|
|
17.39 |
|
|
|
16.34 |
|
|
|
15.04 |
|
|
|
14.29 |
|
|
|
11.70 |
|
|
|
|
|
GAAP PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
|
|
$ |
1.08 |
|
|
$ |
.95 |
|
|
|
14 |
% |
|
$ |
1.29 |
|
|
$ |
1.11 |
|
|
$ |
1.02 |
|
|
$ |
.86 |
|
|
$ |
.47 |
|
|
$ |
.53 |
|
|
|
19 |
% |
|
Diluted earnings
|
|
|
1.05 |
|
|
|
.92 |
|
|
|
14 |
|
|
|
1.25 |
|
|
|
1.08 |
|
|
|
.99 |
|
|
|
.84 |
|
|
|
.46 |
|
|
|
.52 |
|
|
|
19 |
|
|
Cash dividends declared
|
|
|
.21 |
|
|
|
.18 |
|
|
|
17 |
|
|
|
.24 |
|
|
|
.20 |
|
|
|
.17 |
|
|
|
.13 |
|
|
|
.10 |
|
|
|
.07 |
|
|
|
29 |
|
|
Book value
|
|
|
11.04 |
|
|
|
9.58 |
|
|
|
15 |
|
|
|
10.39 |
|
|
|
8.47 |
|
|
|
6.89 |
|
|
|
5.98 |
|
|
|
4.93 |
|
|
|
3.94 |
|
|
|
21 |
|
|
Tangible book value
|
|
|
8.05 |
|
|
|
7.28 |
|
|
|
11 |
|
|
|
7.34 |
|
|
|
6.52 |
|
|
|
6.49 |
|
|
|
5.40 |
|
|
|
4.49 |
|
|
|
3.93 |
|
|
|
13 |
|
(footnotes on following page)
S-5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months Ended | |
|
|
|
|
September 30, | |
|
For the Years Ended December 31, | |
|
|
| |
|
| |
|
|
|
|
|
|
5 Year | |
|
|
2005 | |
|
2004 | |
|
Change | |
|
2004 | |
|
2003 | |
|
2002 | |
|
2001 | |
|
2000 | |
|
1999 | |
|
CAGR(1) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(In thousands, except per share data; taxable equivalent) | |
GAAP PERFORMANCE CONTINUED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key performance ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity(2)(4)
|
|
|
13.51 |
% |
|
|
14.48 |
% |
|
|
|
|
|
|
14.39 |
% |
|
|
14.79 |
% |
|
|
16.54 |
% |
|
|
16.08 |
% |
|
|
10.04 |
% |
|
|
13.46 |
% |
|
|
|
|
|
Return on assets(4)
|
|
|
1.03 |
|
|
|
1.06 |
|
|
|
|
|
|
|
1.05 |
|
|
|
1.02 |
|
|
|
1.11 |
|
|
|
1.05 |
|
|
|
.59 |
|
|
|
.75 |
|
|
|
|
|
|
Net interest margin(4)
|
|
|
4.12 |
|
|
|
3.98 |
|
|
|
|
|
|
|
4.00 |
|
|
|
3.99 |
|
|
|
4.33 |
|
|
|
4.51 |
|
|
|
4.16 |
|
|
|
4.07 |
|
|
|
|
|
|
Dividend payout ratio
|
|
|
19.44 |
|
|
|
18.95 |
|
|
|
|
|
|
|
18.60 |
|
|
|
18.02 |
|
|
|
16.34 |
|
|
|
15.50 |
|
|
|
21.28 |
|
|
|
12.58 |
|
|
|
|
|
|
Equity to assets
|
|
|
7.60 |
|
|
|
7.42 |
|
|
|
|
|
|
|
7.45 |
|
|
|
7.21 |
|
|
|
7.01 |
|
|
|
6.81 |
|
|
|
5.58 |
|
|
|
5.47 |
|
|
|
|
|
|
Tangible equity to assets(5)
|
|
|
5.57 |
|
|
|
5.79 |
|
|
|
|
|
|
|
5.78 |
|
|
|
6.02 |
|
|
|
6.60 |
|
|
|
6.18 |
|
|
|
5.49 |
|
|
|
5.19 |
|
|
|
|
|
ASSET QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
$ |
51,888 |
|
|
$ |
43,548 |
|
|
|
|
|
|
$ |
47,196 |
|
|
$ |
38,655 |
|
|
$ |
30,914 |
|
|
$ |
27,124 |
|
|
$ |
24,698 |
|
|
$ |
20,043 |
|
|
|
|
|
|
Non-performing assets
|
|
|
13,565 |
|
|
|
10,527 |
|
|
|
|
|
|
|
8,725 |
|
|
|
7,589 |
|
|
|
8,019 |
|
|
|
9,670 |
|
|
|
6,716 |
|
|
|
3,652 |
|
|
|
|
|
|
Net charge-offs
|
|
|
3,908 |
|
|
|
2,434 |
|
|
|
|
|
|
|
3,617 |
|
|
|
4,097 |
|
|
|
3,111 |
|
|
|
4,578 |
|
|
|
2,976 |
|
|
|
2,147 |
|
|
|
|
|
|
Allowance for loan losses to loans
|
|
|
1.22 |
% |
|
|
1.27 |
% |
|
|
|
|
|
|
1.26 |
% |
|
|
1.28 |
% |
|
|
1.30 |
% |
|
|
1.35 |
% |
|
|
1.38 |
% |
|
|
1.28 |
% |
|
|
|
|
|
Non-performing assets to total assets
|
|
|
.24 |
|
|
|
.23 |
|
|
|
|
|
|
|
.17 |
|
|
|
.19 |
|
|
|
.25 |
|
|
|
.35 |
|
|
|
.27 |
|
|
|
.15 |
|
|
|
|
|
|
Net charge-offs to average loans(4)
|
|
|
.13 |
|
|
|
.10 |
|
|
|
|
|
|
|
.11 |
|
|
|
.15 |
|
|
|
.14 |
|
|
|
.25 |
|
|
|
.18 |
|
|
|
.15 |
|
|
|
|
|
AVERAGE BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$ |
3,970,937 |
|
|
$ |
3,239,005 |
|
|
|
23 |
% |
|
$ |
3,322,916 |
|
|
$ |
2,753,451 |
|
|
$ |
2,239,875 |
|
|
$ |
1,854,968 |
|
|
$ |
1,683,403 |
|
|
$ |
1,391,858 |
|
|
|
19 |
% |
|
Investment securities
|
|
|
983,889 |
|
|
|
710,674 |
|
|
|
38 |
|
|
|
734,577 |
|
|
|
667,211 |
|
|
|
464,468 |
|
|
|
489,332 |
|
|
|
586,222 |
|
|
|
555,832 |
|
|
|
6 |
|
|
Earning assets
|
|
|
5,016,702 |
|
|
|
4,006,149 |
|
|
|
25 |
|
|
|
4,119,327 |
|
|
|
3,476,030 |
|
|
|
2,761,265 |
|
|
|
2,419,080 |
|
|
|
2,319,389 |
|
|
|
1,987,825 |
|
|
|
16 |
|
|
Total assets
|
|
|
5,371,966 |
|
|
|
4,294,555 |
|
|
|
25 |
|
|
|
4,416,835 |
|
|
|
3,721,284 |
|
|
|
2,959,295 |
|
|
|
2,585,290 |
|
|
|
2,453,250 |
|
|
|
2,139,594 |
|
|
|
16 |
|
|
Deposits
|
|
|
3,884,733 |
|
|
|
3,162,588 |
|
|
|
23 |
|
|
|
3,247,612 |
|
|
|
2,743,087 |
|
|
|
2,311,717 |
|
|
|
2,010,105 |
|
|
|
1,941,496 |
|
|
|
1,659,534 |
|
|
|
14 |
|
|
Shareholders equity
|
|
|
408,399 |
|
|
|
318,668 |
|
|
|
28 |
|
|
|
329,225 |
|
|
|
268,446 |
|
|
|
207,312 |
|
|
|
176,144 |
|
|
|
136,810 |
|
|
|
117,064 |
|
|
|
23 |
|
|
Common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38,272 |
|
|
|
35,738 |
|
|
|
|
|
|
|
36,071 |
|
|
|
34,132 |
|
|
|
32,062 |
|
|
|
31,691 |
|
|
|
30,900 |
|
|
|
30,237 |
|
|
|
|
|
|
|
Diluted
|
|
|
39,499 |
|
|
|
36,917 |
|
|
|
|
|
|
|
37,273 |
|
|
|
35,252 |
|
|
|
33,241 |
|
|
|
32,624 |
|
|
|
31,791 |
|
|
|
31,263 |
|
|
|
|
|
AS OF PERIOD-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$ |
4,254,051 |
|
|
$ |
3,438,417 |
|
|
|
24 |
% |
|
$ |
3,734,905 |
|
|
$ |
3,015,997 |
|
|
$ |
2,381,798 |
|
|
$ |
2,007,990 |
|
|
$ |
1,792,055 |
|
|
$ |
1,564,148 |
|
|
|
19 |
% |
|
Investment securities
|
|
|
945,922 |
|
|
|
726,734 |
|
|
|
30 |
|
|
|
879,978 |
|
|
|
659,891 |
|
|
|
559,390 |
|
|
|
470,176 |
|
|
|
508,266 |
|
|
|
589,697 |
|
|
|
8 |
|
|
Earning assets
|
|
|
5,302,532 |
|
|
|
4,280,643 |
|
|
|
24 |
|
|
|
4,738,389 |
|
|
|
3,796,332 |
|
|
|
3,029,409 |
|
|
|
2,554,530 |
|
|
|
2,352,475 |
|
|
|
2,195,712 |
|
|
|
17 |
|
|
Total assets
|
|
|
5,709,666 |
|
|
|
4,592,655 |
|
|
|
24 |
|
|
|
5,087,702 |
|
|
|
4,068,834 |
|
|
|
3,211,344 |
|
|
|
2,749,257 |
|
|
|
2,528,879 |
|
|
|
2,384,678 |
|
|
|
16 |
|
|
Deposits
|
|
|
4,196,369 |
|
|
|
3,341,525 |
|
|
|
26 |
|
|
|
3,680,516 |
|
|
|
2,857,449 |
|
|
|
2,385,239 |
|
|
|
2,116,499 |
|
|
|
1,995,865 |
|
|
|
1,869,379 |
|
|
|
15 |
|
|
Shareholders equity
|
|
|
424,000 |
|
|
|
347,795 |
|
|
|
22 |
|
|
|
397,088 |
|
|
|
299,373 |
|
|
|
221,579 |
|
|
|
194,665 |
|
|
|
158,388 |
|
|
|
119,312 |
|
|
|
27 |
|
|
|
Common shares outstanding
|
|
|
38,383 |
|
|
|
36,255 |
|
|
|
|
|
|
|
38,168 |
|
|
|
35,289 |
|
|
|
31,895 |
|
|
|
32,266 |
|
|
|
31,542 |
|
|
|
30,284 |
|
|
|
|
|
|
|
(1) |
CAGR is the compound annual growth rate. |
|
(2) |
Net income available to common shareholders, which excludes
preferred stock dividends, divided by average realized common
equity, which excludes accumulated other comprehensive income. |
|
(3) |
Excludes effect of acquisition related intangibles and
associated amortization. |
|
(4) |
Annualized. |
|
(5) |
Based on average balances of tangible equity and tangible assets. |
S-6
GAAP Reconciliation and Explanation
Our net operating income is calculated on a non-GAAP basis and
excludes merger-related and restructuring charges. For analysis
purposes, we exclude these charges because we believe that
non-GAAP operating results provide a helpful measure for
assessing our financial performance because they are
non-recurring and operating income more closely reflects what we
could expect to earn during periods of no acquisitions. Our net
operating income should not be viewed as a substitute for net
income determined in accordance with GAAP and is not necessarily
comparable to non-GAAP performance measures that may be
presented by other companies. The following is a reconciliation
of our net operating income to GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months Ended | |
|
|
|
|
September 30, | |
|
For the Years Ended December 31, | |
|
|
| |
|
| |
|
|
2005 | |
|
2004 | |
|
2004 | |
|
2003 | |
|
2002 | |
|
2001 | |
|
2000 | |
|
1999 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(In thousands, except per share data) | |
Total merger-related charges
|
|
$ |
|
|
|
$ |
464 |
|
|
$ |
870 |
|
|
$ |
2,088 |
|
|
$ |
|
|
|
$ |
1,617 |
|
|
$ |
10,622 |
|
|
$ |
1,846 |
|
Income tax effect of above charges
|
|
|
|
|
|
|
160 |
|
|
|
305 |
|
|
|
731 |
|
|
|
|
|
|
|
533 |
|
|
|
3,392 |
|
|
|
691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax effect of merger-related charges
|
|
$ |
|
|
|
$ |
304 |
|
|
$ |
565 |
|
|
$ |
1,357 |
|
|
$ |
|
|
|
$ |
1,084 |
|
|
$ |
7,230 |
|
|
$ |
1,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income
|
|
$ |
41,512 |
|
|
$ |
34,246 |
|
|
$ |
47,156 |
|
|
$ |
39,475 |
|
|
$ |
32,780 |
|
|
$ |
28,315 |
|
|
$ |
21,747 |
|
|
$ |
17,253 |
|
After-tax effect of merger-related charges
|
|
|
|
|
|
|
(304 |
) |
|
|
(565 |
) |
|
|
(1,357 |
) |
|
|
|
|
|
|
(1,084 |
) |
|
|
(7,230 |
) |
|
|
(1,155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP)
|
|
$ |
41,512 |
|
|
$ |
33,942 |
|
|
$ |
46,591 |
|
|
$ |
38,118 |
|
|
$ |
32,780 |
|
|
$ |
27,231 |
|
|
$ |
14,517 |
|
|
$ |
16,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic operating earnings per share
|
|
$ |
1.08 |
|
|
$ |
.96 |
|
|
$ |
1.31 |
|
|
$ |
1.15 |
|
|
$ |
1.02 |
|
|
$ |
.89 |
|
|
$ |
.70 |
|
|
$ |
.57 |
|
Per share effect of merger-related charges
|
|
|
|
|
|
|
(.01 |
) |
|
|
(.02 |
) |
|
|
(.04 |
) |
|
|
|
|
|
|
(.03 |
) |
|
|
(.23 |
) |
|
|
(.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (GAAP)
|
|
$ |
1.08 |
|
|
$ |
.95 |
|
|
$ |
1.29 |
|
|
$ |
1.11 |
|
|
$ |
1.02 |
|
|
$ |
.86 |
|
|
$ |
.47 |
|
|
$ |
.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted operating earnings per share
|
|
$ |
1.05 |
|
|
$ |
.93 |
|
|
$ |
1.27 |
|
|
$ |
1.12 |
|
|
$ |
.99 |
|
|
$ |
.87 |
|
|
$ |
.69 |
|
|
$ |
.56 |
|
Per share effect of merger-related charges
|
|
|
|
|
|
|
(.01 |
) |
|
|
(.02 |
) |
|
|
(.04 |
) |
|
|
|
|
|
|
(.03 |
) |
|
|
(.23 |
) |
|
|
(.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share (GAAP)
|
|
$ |
1.05 |
|
|
$ |
.92 |
|
|
$ |
1.25 |
|
|
$ |
1.08 |
|
|
$ |
.99 |
|
|
$ |
.84 |
|
|
$ |
.46 |
|
|
$ |
.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-7
RISK FACTORS
An investment in our common stock involves risk. You should
carefully consider the risks described below and all other
information contained in this prospectus supplement, the
accompany prospectus and the documents incorporated by reference
before you decide to buy our common stock. It is possible that
risks and uncertainties not listed below may arise or become
material in the future and affect our business.
Our recent operating results may not be indicative of our
future operating results.
We may not be able to sustain our growth. Various factors, such
as our increased size, economic conditions, regulatory and
legislative considerations, competition and the ability to find
and retain people that can make our community-focused operating
model successful, may impede our ability to expand our market
presence. If we experience a significant decrease in our growth
rate, our results of operations and financial condition may be
adversely affected.
Our corporate culture has contributed to our success and, if
we cannot maintain this culture as we grow, we could lose the
productivity fostered by our culture, which could harm our
business.
We believe that a critical contributor to our success has been
our corporate culture, which we believe fosters teamwork and
productivity. As our organization grows, and we are required to
implement more complex organizational management structures, we
may find it increasingly difficult to maintain the beneficial
aspects of our corporate culture. For example, we may not be
able to continue our high customer satisfaction ratings or
maintain our strong asset quality. This could negatively impact
our future success.
Our business is subject to the success of the local economies
and real estate markets in which we operate.
Our success significantly depends on the growth in population,
income levels, loans and deposits and on the continued stability
in real estate values in our markets. If the communities in
which we operate do not grow or if prevailing economic
conditions locally or nationally are unfavorable, our business
may be adversely affected. Adverse economic conditions in our
specific market areas, specifically decreases in real estate
property values due to the nature of our loan portfolio, over
90% of which is secured by real estate, could reduce our growth
rate, affect the ability of our customers to repay their loans
and generally affect our financial condition and results of
operations. We are less able than a larger institution to spread
the risks of unfavorable local economic conditions across a
large number of more diverse economies.
Our concentration of construction loans is subject to unique
risks that could adversely affect our earnings.
Our construction loan portfolio was $1.6 billion at
September 30, 2005, comprising 38% of total loans.
Construction loans are often riskier than home equity loans or
residential mortgage loans to individuals. In the event of a
general economic slowdown, they would represent higher risk due
to slower sales and reduced cash flow that could impact the
borrowers ability to repay on a timely basis. In addition,
they represent more risk due to being concentrated in fewer
borrowers than home equity loans or residential mortgage loans.
We may face risks with respect to future expansion and
acquisitions.
We regularly seek to acquire other financial institutions or
parts of those institutions and may engage in de novo branch
expansion or acquisitions in the future. These involve a number
of risks, including:
|
|
|
|
|
the potential inaccuracy of the estimates and judgments used to
evaluate credit, operations, management and market risks with
respect to a target institution; |
S-8
|
|
|
|
|
the time and costs of evaluating new markets, hiring or
retaining experienced local management and opening new offices
and the time lags between these activities and the generation of
sufficient assets and deposits to support the costs of the
expansion; |
|
|
|
the incurrence and possible impairment of goodwill associated
with an acquisition and possible adverse effects on our results
of operations; and |
|
|
|
the risk of loss of key employees and customers. |
Changes in prevailing interest rates may negatively affect
our net income and the value of our assets.
Changes in prevailing interest rates may negatively affect our
level of net interest revenue, the primary component of our net
operating income. In a period of changing interest rates, our
interest expense may increase at different rates than the
interest that we earn on our assets. Accordingly, changes in
interest rates could decrease our net interest revenue. At
September 30, 2005, our simulation model indicated that a
200 basis point increase in rates over the next twelve
months would cause an approximate 3.3% increase in net interest
revenue and a 200 basis point decrease in rates over the
next twelve months would cause an approximate 6.3% decrease in
net interest revenue.
Changes in the level of interest rates may also negatively
affect the value of our assets and our ability to realize gains
from the sale of our assets, all of which ultimately affect our
earnings. In addition, an increase in interest rates may
decrease the demand for loans.
If our allowance for loan losses is not sufficient to cover
actual loan losses, our earnings would decrease.
Our loan customers may not repay their loans according to their
terms, and the collateral securing the payment of these loans
may be insufficient to assure repayment. We may experience
significant loan losses which would have a material adverse
effect on our operating results. Management makes various
assumptions and judgments about the collectibility of our loan
portfolio, including the creditworthiness of our borrowers and
the value of the real estate and other assets serving as
collateral for the repayment of our loans. We maintain an
allowance for loan losses in an attempt to cover any loan losses
inherent in the portfolio. In determining the size of the
allowance, we rely on an analysis of our loan portfolio based on
historical loss experience, volume and types of loans, trends in
classification, volume and trends in delinquencies and
non-accruals, national and local economic conditions and other
pertinent information. If our assumptions are incorrect, the
allowance may not be sufficient to cover future loan losses, and
adjustments may be necessary to allow for different economic
conditions or adverse developments in our loan portfolio. Our
ratio of non-performing assets to total assets was .17% at
December 31, 2004 and .24% at September 30, 2005.
Competition from financial institutions and other financial
service providers may adversely affect our profitability.
The banking business is highly competitive, and we experience
competition in each of our markets from many other financial
institutions. We compete with commercial banks, credit unions,
savings and loan associations, mortgage banking firms, consumer
finance companies, securities brokerage firms, insurance
companies, money market funds and other mutual funds, as well as
community, super-regional, national and international financial
institutions that operate offices in our market areas and
elsewhere. We compete with these institutions both in attracting
deposits and in making loans. Many of our competitors are
well-established, larger financial institutions that are able to
operate profitably with a narrower net interest margin and have
a more diverse revenue base than we do. We may face a
competitive disadvantage as a result of our smaller size, lack
of geographic diversification and inability to spread our costs
across broader markets. Although we attempt to compete by
concentrating our marketing efforts in our primary markets with
local advertisements, personal contacts and greater flexibility
and responsiveness in working with local customers, we can give
no assurance that this strategy will continue to be successful.
S-9
USE OF PROCEEDS
We estimate that the net proceeds from the sale of our common
stock in this offering will be approximately $38.2 million,
based on an assumed public offering price of $30.15 per
share (based on the closing price of our common stock on
November 9, 2005), after deducting the underwriting
discount and our estimated offering expenses. If the
underwriters exercise their over-allotment option in full, we
estimate that our net proceeds will be approximately
$44.0 million.
We expect to use the net proceeds from this offering as follows:
|
|
|
|
|
to support growth opportunities and |
|
|
|
for general corporate purposes. |
Our management will retain broad discretion in the allocation of
the net proceeds of this offering.
S-10
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock trades on the Nasdaq Stock Market under the
symbol UCBI. The following table sets forth, for the
periods indicated, the high, low and closing sales prices per
share of our common stock as quoted on Nasdaq, and the cash
dividends declared per share. Amounts have been restated to
reflect the pro forma effect of our three-for-two split
effective April 28, 2004:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High | |
|
Low | |
|
Close | |
|
Dividend | |
|
|
| |
|
| |
|
| |
|
| |
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter (through November 9)
|
|
$ |
30.49 |
|
|
$ |
25.32 |
|
|
$ |
30.15 |
|
|
$ |
.07 |
|
Third Quarter
|
|
|
29.36 |
|
|
|
25.70 |
|
|
|
28.50 |
|
|
|
.07 |
|
Second Quarter
|
|
|
26.44 |
|
|
|
21.70 |
|
|
|
26.02 |
|
|
|
.07 |
|
First Quarter
|
|
|
27.92 |
|
|
|
23.02 |
|
|
|
23.73 |
|
|
|
.07 |
|
2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
|
29.60 |
|
|
|
23.17 |
|
|
|
26.93 |
|
|
|
.06 |
|
Third Quarter
|
|
|
25.45 |
|
|
|
21.75 |
|
|
|
24.27 |
|
|
|
.06 |
|
Second Quarter
|
|
|
25.36 |
|
|
|
21.89 |
|
|
|
25.18 |
|
|
|
.06 |
|
First Quarter
|
|
|
24.62 |
|
|
|
21.37 |
|
|
|
23.73 |
|
|
|
.06 |
|
We had approximately 11,400 beneficial owners of our common
stock on November 7, 2005, which includes approximately
6,300 record holders. The closing price of our common stock as
reported by Nasdaq on November 9, 2005, the date
immediately prior to the public announcement of the offering,
was $30.15.
We intend to continue paying cash dividends, but make no
assurances that we will in the future. The amount and frequency
of cash dividends, if any, will be determined by our board of
directors after consideration of various factors, which may
include the following:
|
|
|
|
|
our financial condition and results of operations, |
|
|
|
investment opportunities available to us, |
|
|
|
capital requirements, |
|
|
|
tax considerations, |
|
|
|
results of regulatory examinations, and |
|
|
|
general economic conditions. |
Generally, we will not pay cash dividends except from earnings
remaining after the payment of interest to our subordinated debt
holders and under the terms of our long-term debt and trust
preferred securities. If we do not make interest payments on our
subordinated debt, long-term debt and trust preferred
securities, we will be prohibited from paying dividends on our
common stock. In addition, our ability to pay dividends depends
upon the ability of our subsidiaries to pay dividends to us and
our borrowing capacity. Because our subsidiary banks are subject
to various state and federal banking laws and regulations, the
ability of these subsidiaries to pay dividends may be limited or
otherwise restricted. For example, under the Federal Deposit
Insurance Corporation Improvement Act of 1991, a depository
institution may not pay any dividend if payment would cause it
to become undercapitalized. Moreover, applicable federal
agencies have issued policy statements that provide that bank
holding companies and insured banks should generally only pay
dividends out of current operating earnings. State and federal
statutes and regulations also provide that dividend payments of
our subsidiary banks require approval of dividend payments under
specific circumstances.
S-11
CAPITALIZATION
The following table sets forth our capitalization as of
September 30, 2005. Our capitalization is presented on a
historical basis and on an as adjusted basis to give effect to
the sale of 1,350,000 shares of common stock, based on an
assumed public offering price of $30.15 per share (based on
the closing price of our common stock on November 9, 2005),
and as if the offering had been completed as of
September 30, 2005, and assuming:
|
|
|
|
|
net proceeds of the offering are $38.2 million, after
deducting the estimated underwriting discount and estimated
offering expenses and |
|
|
|
the underwriters over-allotment option is not exercised. |
The following data should be read in conjunction with the
Consolidated Financial Statements and notes thereto incorporated
by reference into this prospectus supplement from our Annual
Report on Form 10-K for the fiscal year ended
December 31, 2004 and Quarterly Reports on Form 10-Q
for the periods ended March 31, 2005, June 30, 2005
and September 30, 2005.
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2005 | |
|
|
| |
|
|
Actual | |
|
As Adjusted(1) | |
|
|
| |
|
| |
|
|
(In thousands) | |
Long-term debt:
|
|
|
|
|
|
|
|
|
|
Subordinated debentures
|
|
$ |
69,600 |
|
|
$ |
69,600 |
|
|
Trust preferred securities
|
|
|
42,269 |
|
|
|
42,269 |
|
|
|
|
|
|
|
|
|
|
Total long-term debt
|
|
|
111,869 |
|
|
|
111,869 |
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value; $10 stated value;
10,000,000 shares authorized; 37,200 shares issued and
outstanding
|
|
|
372 |
|
|
|
372 |
|
|
Common stock, $1.00 par value; 100,000,000 shares
authorized; 38,407,874 shares outstanding and
39,757,874 shares outstanding, as adjusted
|
|
|
38,408 |
|
|
|
39,758 |
|
|
Capital surplus
|
|
|
153,712 |
|
|
|
190,564 |
|
|
Retained earnings
|
|
|
238,144 |
|
|
|
238,144 |
|
|
Treasury stock; 24,449 shares, at cost
|
|
|
(671 |
) |
|
|
(671 |
) |
|
Accumulated other comprehensive income
|
|
|
(5,965 |
) |
|
|
(5,965 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
424,000 |
|
|
|
462,202 |
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$ |
535,869 |
|
|
$ |
574,071 |
|
|
|
|
|
|
|
|
Capital ratios:
|
|
|
|
|
|
|
|
|
|
Leverage ratio
|
|
|
6.47 |
% |
|
|
7.17 |
% |
|
Tier 1 risk-based capital ratio
|
|
|
8.09 |
|
|
|
8.96 |
|
|
Total risk-based capital ratio
|
|
|
10.86 |
|
|
|
11.73 |
|
|
Tangible equity to
assets(2)
|
|
|
5.57 |
|
|
|
6.30 |
|
|
|
(1) |
If the underwriters exercise their over-allotment option in
full, 1,552,500 shares of common stock would be sold, resulting
in estimated net proceeds of $44.0 million. |
|
(2) |
Based on average balances of tangible equity and tangible assets
for the nine months ended September 30, 2005. As of
adjusted, the ratio assumes the offering had been completed at
the beginning of the nine month period. |
S-12
UNDERWRITING
We and the underwriters named below have entered into an
underwriting agreement with respect to the shares of common
stock being offered. Subject to the terms and conditions
contained in the underwriting agreement, each underwriter has
agreed to purchase from us the respective number of shares of
common stock set forth opposite its name below. The
underwriters obligations are several, which means that
each underwriter is required to purchase a specific number of
shares, but it is not responsible for the commitment of any
other underwriter to purchase shares. Sandler
ONeill & Partners, L.P. is acting as the
representative of the underwriters.
|
|
|
|
|
|
|
|
Number | |
Name |
|
of Shares | |
|
|
| |
Sandler ONeill & Partners, L.P.
|
|
|
|
|
Keefe, Bruyette & Woods, Inc.
|
|
|
|
|
Raymond James & Associates, Inc.
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,350,000 |
|
|
|
|
|
The underwriters are committed to purchase and pay for all such
shares of common stock, if any are purchased.
We have granted to the underwriters an option, exercisable no
later than 30 days after the date of this prospectus
supplement, to purchase up to 202,500 additional shares of
common stock at the public offering price less the underwriting
discount set forth on the cover page of this prospectus
supplement. The underwriters may exercise this option only to
cover over-allotments, if any, made in connection with this
offering. To the extent the option is exercised and the
conditions of the underwriting agreement are satisfied, we will
be obligated to sell to the underwriters, and the underwriters
will be obligated to purchase, these additional shares of common
stock in proportion to their respective initial purchase amounts.
The underwriters propose to offer the shares of common stock
directly to the public at the offering price set forth on the
cover page of this prospectus supplement and to certain
securities dealers at the public offering price less a
concession not in excess of
$ per
share. The underwriters may allow, and these dealers may
re-allow, a concession not in excess of
$ per
share on sales to other dealers. After the public offering of
the common stock, the underwriters may change the offering price
and other selling terms, but any such changes will not affect
the proceeds paid to us.
The following table shows the per share and total underwriting
discount that we will pay to the underwriters and the proceeds
we will receive before expenses. These amounts are shown
assuming both no exercise and full exercise of the
underwriters over-allotment option to purchase additional
shares.
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Proceeds to us, before expenses
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We estimate that the total expenses of the offering, excluding
the underwriting discount, will be approximately $200,000. We
have agreed to reimburse the underwriters for their actual
out-of-pocket expenses incurred in connection with the offering,
including certain fees and disbursements of underwriters
counsel.
The shares of common stock are being offered by the several
underwriters, subject to prior sale, when, as and if issued to
and accepted by them, subject to approval of certain legal
matters by counsel for the underwriters and other conditions
specified in the underwriting agreement. The underwriters
reserve the right to withdraw, cancel or modify this offer and
to reject orders in whole or in part.
S-13
The underwriting agreement provides that the obligations of the
underwriters are conditional and may be terminated at their
discretion based on their assessment of the state of the
financial markets. The obligations of the underwriters may also
be terminated upon the occurrence of the events specified in the
underwriting agreement. The underwriting agreement provides that
the underwriters are obligated to purchase all the shares of
common stock in this offering, if any are purchased, other than
those shares covered by the over-allotment option described
above.
Lock-up Agreements. Each of our executive officers and
directors, have agreed, for a period of 90 days after the
date of this prospectus supplement, not to sell, offer, agree to
sell, contract to sell, hypothecate, pledge, grant any option to
sell, make any short sale or otherwise dispose of or hedge,
directly or indirectly, any shares of our common stock or
securities convertible into, exchangeable or exercisable for any
shares of our common stock or warrants or other rights to
purchase shares of our common stock or other similar securities
without, in each case, the prior written consent of Sandler
ONeill & Partners, L.P. These restrictions are
expressly agreed to preclude us, and our executive officers and
directors, from engaging in any hedging or other transaction or
arrangement that is designed to, or which reasonably could be
expected to, lead to or result in a sale, disposition or
transfer, in whole or in part, of any of the economic
consequences of ownership of our common stock, whether such
transaction would be settled by delivery of common stock or
other securities, in cash, or otherwise.
Indemnity. We have agreed to indemnify the underwriters,
and persons who control the underwriters, against certain
liabilities, including liabilities under the Securities Act of
1933, and to contribute to payments that the underwriters may be
required to make in respect of these liabilities.
Stabilization. In connection with this offering, the
underwriters may engage in stabilizing transactions,
over-allotment transactions, syndicate covering transactions and
penalty bids.
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Stabilizing transactions permit bids to purchase shares of
common stock so long as the stabilizing bids do not exceed a
specified maximum, and are engaged in for the purpose of
preventing or retarding a decline in the market price of the
common stock while the offering is in progress. |
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Over-allotment transactions involve sales by the underwriters of
shares of common stock in excess of the number of shares the
underwriters are obligated to purchase. This creates a syndicate
short position which may be either a covered short position or a
naked short position. In a covered short position, the number of
shares of common stock over-allotted by the underwriters is not
greater than the number of shares that they may purchase in the
over-allotment option. In a naked short position, the number of
shares involved is greater than the number of shares in the
over-allotment option. The underwriters may close out any short
position by exercising their over-allotment option and/or
purchasing shares in the open market. |
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Syndicate covering transactions involve purchases of common
stock in the open market after the distribution has been
completed in order to cover syndicate short positions. In
determining the source of shares to close out the short
position, the underwriters will consider, among other things,
the price of shares available for purchase in the open market as
compared with the price at which they may purchase shares
through exercise of the over-allotment option. If the
underwriters sell more shares than could be covered by exercise
of the over-allotment option and, therefore, have a naked short
position, the position can be closed out only by buying shares
in the open market. A naked short position is more likely to be
created if the underwriters are concerned that after pricing
there could be downward pressure on the price of the shares in
the open market that could adversely affect investors who
purchase in the offering. |
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Penalty bids permit the representative to reclaim a selling
concession from a syndicate member when the common stock
originally sold by that syndicate member is purchased in
stabilizing or syndicate covering transactions to cover
syndicate short positions. |
These stabilizing transactions, syndicate covering transactions
and penalty bids may have the effect of raising or maintaining
the market price of our common stock or preventing or retarding
a decline in the market price of our common stock. As a result,
the price of our common stock in the open market may be
S-14
higher than it would otherwise be in the absence of these
transactions. Neither we nor the underwriters make any
representation or prediction as to the effect that the
transactions described above may have on the price of our common
stock. These transactions may be effected on the Nasdaq National
Market, in the over-the-counter market or otherwise and, if
commenced, may be discontinued at any time.
Passive Market Making. In connection with this offering,
the underwriters and selected dealers, if any, who are qualified
market makers on the Nasdaq National Market, may engage in
passive market making transactions in our common stock on the
Nasdaq National Market in accordance with Rule 103 of
Regulation M under the Securities Act of 1933.
Rule 103 permits passive market making activity by the
participants in our common stock offering. Passive market making
may occur before the pricing of our offering, or before the
commencement of offers or sales of our common stock. Each
passive market maker must comply with applicable volume and
price limitations and must be identified as a passive market
maker. In general, a passive market maker must display its bid
at a price not in excess of the highest independent bid for the
security. If all independent bids are lowered below the bid of
the passive market maker, however, the bid must then be lowered
when purchase limits are exceeded. Net purchases by a passive
market maker on each day are limited to a specified percentage
of the passive market makers average daily trading volume
in the common stock during a specified period and must be
discontinued when that limit is reached. The underwriters and
other dealers are not required to engage in passive market
making and may end passive market making activities at any time.
From time to time, some of the underwriters have provided, and
may continue to provide, investment banking services to us in
the ordinary course of their respective businesses, and have
received, and may receive, compensation for such services.
LEGAL MATTERS
The validity of the issuance of the shares of common stock
offered hereby and certain other legal matters will be passed
upon for us by Kilpatrick Stockton LLP, Atlanta, Georgia. As of
the date of this prospectus supplement, Kilpatrick Stockton
attorneys participating in this matter own an aggregate of
25,516 shares of our common stock.
Certain legal matters related to the sale of the common stock
offered hereby will be passed upon for the underwriters by
Nelson Mullins Riley & Scarborough LLP, Atlanta,
Georgia.
EXPERTS
The audited consolidated financial statements of United
Community Banks, Inc. and its subsidiaries as of
December 31, 2004 and 2003 and each of the years in the
three-year period ended December 31, 2004 incorporated by
reference in this prospectus supplement and accompanying
prospectus have been audited by Porter Keadle Moore LLP,
independent registered public accountants, as set forth in their
report thereon, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in
accounting and auditing.
S-15
PROSPECTUS
$150,000,000
The following are the types of securities that we may offer and
sell from time to time:
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shares of common stock, $1.00 par value per share; |
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shares of preferred stock, $1.00 par value per share, in one or
more series, which may be convertible into or exchangeable for
common stock or debt securities; |
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debt securities, which may be senior or subordinated and may be
convertible into or exchangeable for common stock or preferred
stock; |
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warrants to purchase our common stock or preferred stock; and |
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any combination of the foregoing securities. |
This prospectus provides you with a general description of the
securities we may offer.
Our common stock is listed on the Nasdaq National Market under
the symbol UCBI. The aggregate initial offering
price of the securities that we offer will not exceed
$150,000,000. We will offer the securities in amounts, at prices
and on terms to be determined by market conditions at the time
of our offering. The specific terms for each security will be
included in a prospectus supplement which will contain
information on the offering terms, the initial public offering
price and the net proceeds we will receive from securities sales.
For more detail, see Description of Common Stock,
Description of Preferred Stock, Description of
Debt Securities and Description of
Warrants.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense. An investment in securities of United Community Banks,
Inc. is not insured by the Federal Deposit Insurance Corporation
or any other government agency.
We may sell securities directly to you, through agents we select
or through underwriters and dealers we select. If we use agents,
underwriters or dealers to sell the securities, we will name
them and describe their compensation in a prospectus supplement.
Our net proceeds from securities sales will be the initial
public offering price minus any applicable underwriters
discount, agents commission and other offering expenses.
The date of this prospectus is July 9, 2004.
TABLE OF CONTENTS
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i
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities
Exchange Act of 1934, which means that we are required to
file reports, proxy statements and other information, all of
which are available at the Public Reference Section of the
Securities and Exchange Commission at Room 1580,
100 F. Street, NE, Washington, D.C. 20549. You
may also obtain copies of the reports, proxy statements and
other information from the Public Reference Section of the SEC,
at prescribed rates, by calling 1-800-SEC-0330. The SEC
maintains a website on the Internet at http://www.sec.gov where
you can access reports, proxy, information and registration
statements, and other information regarding registrants that
file electronically with the SEC through the EDGAR system.
We have filed a registration statement on Form S-3 to
register the securities to be issued pursuant to this
prospectus. As allowed by SEC rules, this prospectus does not
contain all of the information you can find in the registration
statement or the exhibits to the registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus incorporates important business and financial
information about United which is not included in or delivered
with this prospectus. The following documents previously filed
by United under the Securities Exchange Act of 1934 are
incorporated by reference into this prospectus:
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Uniteds Form 10-K for the fiscal year ended
December 31, 2003; |
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Uniteds Proxy Statement for the 2004 Annual Meeting; |
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Uniteds Form 10-Q for the quarter ended
March 31, 2004; |
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All other reports filed by United pursuant to
Sections 13(a) or 15(d) of the Exchange Act since
December 31, 2003; and |
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All documents filed after the date of this prospectus pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act. |
Documents incorporated by reference are available from United
without charge, excluding all exhibits, unless an exhibit has
been specifically incorporated by reference in this prospectus.
You may obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from
Rex S. Schuette, Chief Financial Officer, United Community
Banks, Inc., at P.O. Box 398, 63 Highway 515,
Blairsville, Georgia 30512, telephone number
(706) 745-2151.
ii
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that United
Community Banks, Inc filed with the Securities and Exchange
Commission using a shelf registration process. Under this shelf
registration process, we may, from time to time, sell any
combination of the securities described in this prospectus in
one or more offerings up to a total dollar amount of
$150,000,000. We may sell:
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shares of common stock, $1.00 par value per share; |
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shares of preferred stock, $1.00 par value per share, in one or
more series, which may be convertible into or exchangeable for
common stock or debt securities; |
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debt securities, which may be senior or subordinated and may be
convertible into or exchangeable for common stock or preferred
stock; |
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warrants to purchase our common stock or preferred stock; and |
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any combination of the foregoing securities. |
This prospectus provides you with a general description of the
common stock, preferred stock, debt securities and warrants.
Each time we sell common stock, preferred stock, debt securities
or warrants, we will provide an applicable prospectus supplement
that will contain specific information about the terms of that
offering. That prospectus supplement may include a discussion of
any risk factors or other special considerations that apply to
those securities. The applicable prospectus supplement may also
add, update or change information in this prospectus. If there
is any inconsistency between the information in this prospectus
and any prospectus supplement, you should rely on the
information in the prospectus supplement. You should read this
prospectus and the applicable prospectus supplement together
with the additional information described under the heading
Where You Can Find More Information.
The registration statement containing this prospectus, including
exhibits to the registration statement, provides additional
information about us and the securities offered under this
prospectus. The registration statement can be read at the SEC
website or at the SECs office mentioned under the heading
Where You Can Find More Information.
BUSINESS
United Community Banks, Inc., Blairsville, Georgia, is the
third-largest bank holding company headquartered in Georgia.
Substantially all of our activities are conducted through our
three wholly-owned subsidiaries, United Community Bank, a
Georgia bank, United Community Bank, a North Carolina bank and
United Community Bank Tennessee, a Tennessee bank. Our
subsidiaries operate as 21 separately managed community banks
with 78 locations throughout north Georgia, metro Atlanta,
coastal Georgia, western North Carolina and east Tennessee. Our
banks provide customary types of banking services, such as
checking accounts, savings accounts and time deposits. They also
engage in commercial and consumer lending, make secured and
unsecured loans and provide other financial services.
We also operate, as a division of our Georgia bank subsidiary,
United Community Mortgage Services, a full-service retail
mortgage lending operation approved as a seller/servicer for
Fannie Mae and the Federal Home Mortgage Corporation, and
Brintech, Inc., a New Smyrna Beach, Florida based consulting
firm for the financial services industry. Brintech provides
consulting, advisory and implementation services in the areas of
strategic planning, profitability improvement, technology,
efficiency, security, network, networking, Internet banking,
website development, marketing, core processing and
telecommunications. Additionally, we provide retail brokerage
services through an affiliation with a third party broker/dealer.
1
At March 31, 2004, we had total consolidated assets of
approximately $4.1 billion, total consolidated loans of
approximately $3.1 billion, total consolidated deposits of
approximately $3.1 billion and total consolidated
stockholders equity of approximately $311 million.
United was incorporated in 1987 as a Georgia corporation. Our
principal executive offices are located at Post Office Box 398,
63 Highway 515, Blairsville, Georgia 30512, and our
telephone number is (706) 745-2151. Our company website is
www.ucbi.com.
Other financial and other information about us is set forth on
our Annual Report on Form 10-K for the year ended
December 31, 2003, our proxy statement for our 2004 annual
meeting and our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004, each of which is incorporated
herein by reference.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus
supplement, we will use the net proceeds we receive from any
offering of these securities for general corporate purposes,
which may include funding our bank and non-bank subsidiaries,
financing business expansion, refinancing or extending the
maturity of debt obligations, investments at the holding company
level and stock repurchases. The applicable prospectus
supplement will provide more detail on the use of proceeds of
any specific offering.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of
earnings to fixed charges for the periods indicated.
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Ratio of earnings to fixed charges
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Earnings consist of net income plus income taxes and fixed
charges. Fixed charges consist of interest expense on deposits
and indebtedness, and an estimated amount of rental expense that
is deemed to be representative of the interest factor.
The following is a general description of the terms and
provisions of the securities we may offer and sell by this
prospectus. These summaries are not meant to be a complete
description of each security. This prospectus and any
accompanying prospectus supplement will contain the material
terms and conditions for each security. The accompanying
prospectus supplement may add to, update or change the terms and
conditions of the securities as described in this prospectus.
2
DESCRIPTION OF COMMON STOCK
Our authorized common stock currently consists of 100,000,000
shares, $1.00 par value per share. All voting rights are vested
in the holders of the common stock. Each holder of common stock
is entitled to one vote per share on any issue requiring a vote
at any meeting. The shares do not have cumulative voting rights.
Subject to the right of holders of our Series A
Non-Cumulative Preferred Stock to receive dividends, all shares
of our common stock are entitled to share equally in any
dividends that our board of directors may declare on our common
stock from sources legally available for distribution. The
determination and declaration of dividends is within the
discretion of our board of directors. Upon liquidation, holders
of our common stock will be entitled to receive on a pro rata
basis, after payment or provision for payment of all of our
debts and liabilities, and after all distributions payments are
made to holders of our Series A Non-Cumulative Preferred
Stock, all of our assets available for distribution, in cash or
in kind.
As of June 15, 2004, 36,620,754 shares of common stock
were issued and outstanding, exclusive of 374,362 shares
held as treasury shares, 372,000 shares were reserved for
issuance upon the conversion of subordinated debt and
2,181,298 shares of common stock were reserved for issuance
upon the exercise of outstanding options and vesting of
restricted stock.
Matters Relevant to Common Stock
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Ability to Consider Other Constituencies |
Our articles of incorporation permit our board of directors, in
determining what is believed to be in the best interest of
United and our shareholders, to consider the interests of our
employees, customers, suppliers and creditors, the communities
in which our offices are located and all other factors that they
consider pertinent, in addition to considering the effects of
any actions on United and our shareholders. This provision
permits our board of directors to consider numerous judgmental
or subjective factors affecting a proposal, including some
non-financial matters, and on the basis of these considerations
may oppose a business combination or some other transaction
which, viewed exclusively from a financial perspective, might be
attractive to some, or even a majority, of our shareholders.
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Amendments to Articles of Incorporation and Bylaws |
Our articles of incorporation specifically provide that neither
the articles of incorporation nor the bylaws of United may be
amended without the affirmative vote the holders of two-thirds
of the shares issued and outstanding and entitled to vote
thereon, except for provisions relating to increasing the number
of authorized shares of our common and preferred stock. This
provision could allow the holders of 33.4% of our outstanding
capital stock to exercise an effective veto over a proposed
amendment to the articles or bylaws, despite the fact that the
holders of 66.6% of the shares favor the proposal. This
provision protects, among other things, the defensive measures
included in our articles of incorporation and bylaws by making
more difficult future amendments to the articles of
incorporation and bylaws that could result in the deletion or
revision of such defensive measures.
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Supermajority Approval of Interested Business
Combinations |
Our articles of incorporation provide that if a proposed
business combination between United and any interested
shareholder is not approved by three-fourths of all of our
directors then in office, the business combination must be
approved by the affirmative vote of the holders of at least 75%
of the outstanding shares of our common stock, including the
affirmative vote of the holders of at least 75% of the
outstanding shares of common stock held by shareholders other
than the interested shareholder. This provision may discourage
attempts by other corporations or groups to acquire control of
United, without negotiation with management, through the
acquisition of a substantial number of shares of our stock
followed by a forced merger. This provision may also enable a
minority of our shareholders to prevent a
3
transaction favored by a majority of the shareholders, and may
discourage tender offers or other non-open market acquisitions
of our common stock because of the potentially higher vote
requirements for shareholder approval of any subsequent business
combination. Additionally, in some circumstances, our board of
directors could, by withholding its consent to such a
transaction, cause the 75%/75% shareholder vote to be required
to approve a business combination, thereby enabling management
to retain control over our affairs and their present positions
with United.
Our articles of incorporation provide that a member of our board
of directors may only be removed for cause, and only upon the
affirmative vote of two-thirds of the outstanding shares of our
capital stock entitled to vote thereon. This provision may
prevent a significant shareholder from avoiding board scrutiny
of a proposed business combination by merely removing directors
with conflicting views, and may encourage individuals or groups
who desire to propose takeover bids or similar transactions to
negotiate with the board of directors. However, outside of the
context of an acquisition attempt, it may serve as an impediment
to a more legitimate need to remove a director.
DESCRIPTION OF PREFERRED STOCK
We are authorized to issue 10,000,000 shares of preferred stock,
$1.00 par value per share, issuable in specified series and
having specified voting, dividend, conversion, liquidation, and
other rights and preferences as our board of directors may
determine. The preferred stock may be issued for any lawful
corporate purpose without further action by our shareholders.
The issuance of any preferred stock having conversion rights
might have the effect of diluting the interests of our other
shareholders. In addition, shares of preferred stock could be
issued with rights, privileges and preferences which would deter
a tender or exchange offer or discourage the acquisition of
control of United.
As of June 15, 2004, 48,300 shares of Series A
Non-Cumulative Preferred Stock were issued and outstanding.
DESCRIPTION OF DEBT SECURITIES
We may offer from time to time debt securities in the form of
either senior debt securities or subordinated debt securities.
Unless otherwise specified in a supplement to this prospectus,
the debt securities will be our direct, unsecured obligations
and will rank equally with all of our other unsecured and
unsubordinated indebtedness.
The debt securities will be issued under one or more separate
indentures between us and a trustee to be identified in the
applicable prospectus supplement. The indentures are
substantially identical except for the subordination provisions
described below under Subordinated Debt Securities
in this Description of the Debt Securities. This
summary refers to both indentures as the indenture.
We have summarized the general terms and provisions of the
indenture below. The summary is not complete. The form of
indenture for senior indebtedness and indenture for subordinated
indebtedness have been incorporated by reference as exhibits to
the registration statement and you should read the indentures
for provisions that may be important to you. When we offer to
sell a particular series of debt securities, we will describe
the specific terms of the series in a supplement to this
prospectus. We will also indicate in the supplement whether the
general terms and provisions described in this prospectus apply
to a particular series of debt securities. Capitalized terms
used in the summary have the meanings specified in the indenture.
4
General
The terms of each series of debt securities will be established
by or pursuant to a resolution of our Board of Directors and set
forth or determined in the manner provided in an officers
certificate or by a supplemental indenture. The particular terms
of each series of debt securities will be described in a
prospectus supplement relating to such series.
We can issue an unlimited amount of debt securities under the
indenture. The debt securities may be in one or more series with
the same or various maturities, at par, at a premium or at a
discount. We will set forth in a prospectus supplement relating
to any series of debt securities being offered, the aggregate
principal amount and the following terms of the debt securities:
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the title of the debt securities; |
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the price or prices, expressed as a percentage of the principal
amount, at which we will sell the debt securities; |
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whether the debt securities will be senior or subordinated; |
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any subordination provisions, if different from those described
below under Subordinated Debt Securities; |
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any limit on the aggregate principal amount of the debt
securities; |
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the date or dates on which we will pay the principal on the debt
securities; |
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the rate or rates, which may be fixed or variable, per annum or
the method used to determine the rate or rates (including any
commodity, commodity index, stock exchange index or financial
index) at which the debt securities will bear interest, the date
or dates from which interest will accrue, the date or dates on
which interest will commence and be payable and any regular
record date for the interest payable on any interest payment
date; |
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the place or places where principal of, premium and interest on
the debt securities will be payable; |
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the terms and conditions upon which we may redeem the debt
securities; |
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any obligation we have to redeem or purchase the debt securities
pursuant to any sinking fund or analogous provisions or at the
option of a holder of debt securities; |
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the dates on which and the price or prices at which we will
repurchase debt securities at the option of the holders of debt
securities and other detailed terms and provisions of these
repurchase obligations; |
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the denominations in which the debt securities will be issued,
if other than denominations of $1,000 and any integral multiple
thereof; |
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whether the debt securities will be issued in the form of
certificated debt securities or global debt securities; |
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the portion of principal amount of the debt securities payable
upon declaration of acceleration of the maturity date, if other
than the principal amount; |
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any addition to or change in the events of default described in
this prospectus or in the indenture with respect to the debt
securities and any change in the acceleration provisions
described in this prospectus or in the indenture with respect to
the debt securities; |
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any addition to or change in the covenants described in this
prospectus or in the indenture with respect to the debt
securities; |
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any other terms of the debt securities, which may modify or
delete any provision of the indenture as it applies to that
series; and |
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any depositaries, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the debt
securities. |
In addition, the indenture does not limit our ability to issue
convertible debt securities. Any conversion provisions of a
particular series of debt securities will be set forth in the
officers certificate or supplemental indenture related to
that series of debt securities and will be described in the
relevant prospectus supplement. Such terms may include
provisions for conversion, either mandatory, at the option of
the holder or at our option, in which case the number of shares
of common stock or other securities to be received by the
holders of debt securities would be calculated as of a time and
in the manner stated in the prospectus supplement.
We may issue debt securities that provide for an amount less
than their stated principal amount to be due and payable upon
declaration of acceleration of their maturity pursuant to the
terms of the indenture. We will provide you with information on
the federal income tax considerations and other special
considerations applicable to any of these debt securities in the
applicable prospectus supplement.
Transfer and Exchange
Each debt security will be represented by either one or more
global securities registered in the name of The Depository Trust
Company, as Depositary, or a nominee (we will refer to any debt
security represented by a global debt security as a
book-entry debt security), or a certificate issued
in definitive registered form (we will refer to any debt
security represented by a certificated security as a
certificated debt security) as set forth in the
applicable prospectus supplement. Except as set forth under the
heading Global Debt Securities and Book-Entry System
below, book-entry debt securities will not be issuable in
certificated form.
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Certificated Debt Securities. |
You may transfer or exchange certificated debt securities at any
office we maintain for this purpose in accordance with the terms
of the indenture. No service charge will be made for any
transfer or exchange of certificated debt securities, but we may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with a transfer or
exchange.
You may effect the transfer of certificated debt securities and
the right to receive the principal of, premium and interest on
certificated debt securities only by surrendering the
certificate representing those certificated debt securities and
either reissuance by us or the trustee of the certificate to the
new holder or the issuance by us or the trustee of a new
certificate to the new holder.
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Global Debt Securities and Book-Entry System. |
Each global debt security representing book-entry debt
securities will be deposited with, or on behalf of, the
depositary, and registered in the name of the depositary or a
nominee of the depositary. The depositary has indicated it
intends to follow the following procedures with respect to
book-entry debt securities.
Ownership of beneficial interests in book-entry debt securities
will be limited to persons that have accounts with the
depositary for the related global debt security, which we refer
to as participants, or persons that may hold interests through
participants. Upon the issuance of a global debt security, the
depositary will credit, on its book-entry registration and
transfer system, the participants accounts with the
respective principal amounts of the book-entry debt securities
represented by such global debt security beneficially owned by
such participants. The accounts to be credited will be
designated by any dealers,
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underwriters or agents participating in the distribution of the
book-entry debt securities. Ownership of book-entry debt
securities will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by
the depositary for the related global debt security (with
respect to interests of participants) and on the records of
participants (with respect to interests of persons holding
through participants). The laws of some states may require that
certain purchasers of securities take physical delivery of such
securities in definitive form. These laws may impair the ability
to own, transfer or pledge beneficial interests in book-entry
debt securities.
So long as the depositary for a global debt security, or its
nominee, is the registered owner of that global debt security,
the depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the book-entry debt
securities represented by such global debt security for all
purposes under the indenture. Except as described below,
beneficial owners of book-entry debt securities will not be
entitled to have securities registered in their names, will not
receive or be entitled to receive physical delivery of a
certificate in definitive form representing securities and will
not be considered the owners or holders of those securities
under the indenture. Accordingly, each person beneficially
owning book-entry debt securities must rely on the procedures of
the depositary for the related global debt security and, if such
person is not a participant, on the procedures of the
participant through which such person owns its interest, to
exercise any rights of a holder under the indenture.
We understand, however, that under existing industry practice,
the depositary will authorize the persons on whose behalf it
holds a global debt security to exercise certain rights of
holders of debt securities, and the indenture provides that we,
the trustee and our respective agents will treat as the holder
of a debt security the persons specified in a written statement
of the depositary with respect to that global debt security for
purposes of obtaining any consents or directions required to be
given by holders of the debt securities pursuant to the
indenture.
We will make payments of principal of, and premium and interest
on book-entry debt securities to the depositary or its nominee,
as the case may be, as the registered holder of the related
global debt security. United, the trustee and any other agent of
ours or agent of the trustee will not have any responsibility or
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in a global
debt security or for maintaining, supervising or reviewing any
records relating to beneficial ownership interests.
We expect that the depositary, upon receipt of any payment of
principal of, premium or interest on a global debt security,
will immediately credit participants accounts with
payments in amounts proportionate to the respective amounts of
book-entry debt securities held by each participant as shown on
the records of such depositary. We also expect that payments by
participants to owners of beneficial interests in book-entry
debt securities held through those participants will be governed
by standing customer instructions and customary practices, as is
now the case with the securities held for the accounts of
customers in bearer form or registered in street
name, and will be the responsibility of those participants.
We will issue certificated debt securities in exchange for each
global debt security if the depositary is at any time unwilling
or unable to continue as depositary or ceases to be a clearing
agency registered under the Exchange Act, and a successor
depositary registered as a clearing agency under the Exchange
Act is not appointed by us within 90 days. In addition, we
may at any time and in our sole discretion determine not to have
the book-entry debt securities of any series represented by one
or more global debt securities and, in that event, will issue
certificated debt securities in exchange for the global debt
securities of that series. Global debt securities will also be
exchangeable by the holders for certificated debt securities if
an event of default with respect to the book-entry debt
securities represented by those global debt securities has
occurred and is continuing. Any certificated debt securities
issued in exchange for a global debt security will be registered
in such name or names as the depositary shall instruct the
trustee. We expect that such instructions will be based upon
directions received by the depositary from participants with
respect to ownership of book-entry debt securities relating to
such global debt security.
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We have obtained the foregoing information concerning the
depositary and the depositarys book-entry system from
sources we believe to be reliable, but we take no responsibility
for the accuracy of this information.
No Protection in the Event of a Change of Control
Unless we state otherwise in the applicable prospectus
supplement, the debt securities will not contain any provisions
which may afford holders of the debt securities protection, such
as acceleration, in the event we have a change in control or in
the event of a highly leveraged transaction (whether or not such
transaction results in a change in control), which could
adversely affect holders of debt securities.
Covenants
We will set forth in the applicable prospectus supplement any
restrictive covenants applicable to any issue of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of our properties and
assets to, any person, which we refer to as a successor person,
unless:
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we are the surviving corporation or the successor person (if
other than United) is a corporation organized and validly
existing under the laws of any U.S. domestic jurisdiction
and expressly assumes our obligations on the debt securities and
under the indenture; |
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immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time, or
both, would become an event of default, shall have occurred and
be continuing under the indenture; and |
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certain other conditions are met. |
Events of Default
Event of default means, with respect to any series of debt
securities, any of the following:
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default in the payment of any interest upon any debt security of
that series when it becomes due and payable, and continuance of
that default for a period of 30 days (unless the entire
amount of the payment is deposited by us with the trustee or
with a paying agent prior to the expiration of the 30-day
period); |
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default in the payment of principal of or premium on any debt
security of that series when due and payable; |
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default in the deposit of any sinking fund payment, when and as
due in respect of any debt security of that series; |
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default in the performance or breach of any other covenant or
warranty by us in the indenture (other than a covenant or
warranty that has been included in the indenture solely for the
benefit of a series of debt securities other than that series),
which default continues uncured for a period of 60 days
after we receive written notice from the trustee or we and the
trustee receive written notice from the holders of not less than
a majority in principal amount of the outstanding debt
securities of that series as provided in the indenture; |
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certain events of bankruptcy, insolvency or reorganization of
our company; and |
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any other event of default provided with respect to debt
securities of that series that is described in the applicable
prospectus supplement accompanying this prospectus. |
No event of default with respect to a particular series of debt
securities (except as to certain events of bankruptcy,
insolvency or reorganization) necessarily constitutes an event
of default with respect to any other series of debt securities.
The occurrence of an event of default may constitute an event of
default under our bank credit agreements in existence from time
to time. In addition, the occurrence of certain events of
default or an acceleration under the indenture may constitute an
event of default under certain of our other indebtedness
outstanding from time to time.
If an event of default with respect to debt securities of any
series at the time outstanding occurs and is continuing, then
the trustee or the holders of not less than a majority in
principal amount of the outstanding debt securities of that
series may, by a notice in writing to us (and to the trustee if
given by the holders), declare to be due and payable immediately
the principal (or, if the debt securities of that series are
discount securities, that portion of the principal amount as may
be specified in the terms of that series) of and accrued and
unpaid interest, if any, on all debt securities of that series.
In the case of an event of default resulting from certain events
of bankruptcy, insolvency or reorganization, the principal (or
such specified amount) of and accrued and unpaid interest, if
any, on all outstanding debt securities will become and be
immediately due and payable without any declaration or other act
on the part of the trustee or any holder of outstanding debt
securities. Any payment by us on the subordinated debt
securities following any such acceleration will be subject to
the subordination provisions described below under
Subordinated Debt Securities. At any time after a
declaration of acceleration with respect to debt securities of
any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the trustee, the
holders of a majority in principal amount of the outstanding
debt securities of that series may rescind and annul the
acceleration if all events of default, other than the
non-payment of accelerated principal and interest, if any, with
respect to debt securities of that series, have been cured or
waived as provided in the indenture. We refer you to the
prospectus supplement relating to any series of debt securities
that are discount securities for the particular provisions
relating to acceleration of a portion of the principal amount of
such discount securities upon the occurrence of an event of
default.
The indenture provides that the trustee will be under no
obligation to exercise any of its rights or powers under the
indenture at the request of any holder of outstanding debt
securities, unless the trustee receives indemnity satisfactory
to it against any loss, liability or expense. Subject to certain
rights of the trustee, the holders of a majority in principal
amount of the outstanding debt securities of any series will
have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
trustee or exercising any trust or power conferred on the
trustee with respect to the debt securities of that series.
No holder of any debt security of any series will have any right
to institute any proceeding, judicial or otherwise, with respect
to the indenture or for the appointment of a receiver or
trustee, or for any remedy under the indenture, unless:
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that holder has previously given to the trustee written notice
of a continuing event of default with respect to debt securities
of that series; and |
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the holders of at least a majority in principal amount of the
outstanding debt securities of that series have made written
request, and offered reasonable indemnity, to the trustee to
institute the proceeding as trustee, and the trustee has not
received from the holders of a majority in principal amount of
the outstanding debt securities of that series a direction
inconsistent with that request and has failed to institute the
proceeding within 60 days. |
Notwithstanding the foregoing, the holder of any debt security
will have an absolute and unconditional right to receive payment
of the principal of, premium and any interest on that debt
security on or after the due dates expressed in that debt
security and to institute suit for the enforcement of payment.
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The indenture requires us, within 120 days after the end of
our fiscal year, to furnish to the trustee a statement as to
compliance with the indenture. The indenture provides that the
trustee may withhold notice to the holders of debt securities of
any series of any default or event of default (except in payment
on any debt securities of that series) with respect to debt
securities of that series if it in good faith determines that
withholding notice is in the interest of the holders of those
debt securities.
Modification and Waiver
We may modify and amend the indenture with the consent of the
holders of at least a majority in principal amount of the
outstanding debt securities of each series affected by the
modifications or amendments. We may not make any modification or
amendment without the consent of the holders of each affected
debt security then outstanding if that amendment will:
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reduce the amount of debt securities whose holders must consent
to an amendment or waiver; |
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reduce the rate of or extend the time for payment of interest
(including default interest) on any debt security; |
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reduce the principal of or premium on or change the fixed
maturity of any debt security or reduce the amount of, or
postpone the date fixed for, the payment of any sinking fund or
analogous obligation with respect to any series of debt
securities; |
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reduce the principal amount of discount securities payable upon
acceleration of maturity; |
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waive a default in the payment of the principal of, premium or
interest on any debt security (except a rescission of
acceleration of the debt securities of any series by the holders
of at least a majority in aggregate principal amount of the then
outstanding debt securities of that series and a waiver of the
payment default that resulted from such acceleration); |
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make the principal of or premium or interest on any debt
security payable in currency other than that stated in the debt
security; |
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adversely affect the right to convert any debt security; |
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make any change to certain provisions of the indenture relating
to, among other things, the right of holders of debt securities
to receive payment of the principal of, premium and interest on
those debt securities and to institute suit for the enforcement
of any such payment and to waivers or amendments; or |
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waive a redemption payment with respect to any debt security. |
Except for certain specified provisions, the holders of at least
a majority in principal amount of the outstanding debt
securities of any series may on behalf of the holders of all
debt securities of that series waive our compliance with
provisions of the indenture. The holders of a majority in
principal amount of the outstanding debt securities of any
series may on behalf of the holders of all the debt securities
of such series waive any past default under the indenture with
respect to that series and its consequences, except a default in
the payment of the principal of, premium or any interest on any
debt security of that series or in respect of a covenant or
provision, which cannot be modified or amended without the
consent of the holder of each outstanding debt security of the
series affected; provided, however, that the holders of a
majority in principal amount of the outstanding debt securities
of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from the
acceleration.
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Defeasance of Debt Securities and Certain Covenants in
Certain Circumstances
The indenture provides that, unless otherwise provided by the
terms of the applicable series of debt securities, we may be
discharged from any and all obligations in respect of the debt
securities of any series (except for certain obligations to
register the transfer or exchange of debt securities of such
series, to replace stolen, lost or mutilated debt securities of
such series, and to maintain paying agencies and certain
provisions relating to the treatment of funds held by paying
agents). We will be so discharged upon the deposit with the
trustee, in trust, of money or U.S. government obligations
or, in the case of debt securities denominated in a single
currency other than U.S. dollars, foreign government
obligations, that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount
sufficient in the opinion of our independent public accountants
to pay and discharge each installment of principal, premium and
interest on and any mandatory sinking fund payments in respect
of the debt securities of that series on the stated maturity of
those payments in accordance with the terms of the indenture and
those debt securities.
This discharge may occur only if, among other things, we have
delivered to the trustee an opinion of counsel stating that we
have received from, or there has been published by, the United
States Internal Revenue Service a ruling or, since the date of
execution of the indenture, there has been a change in the
applicable United States federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm
that, the holders of the debt securities of that series will not
recognize income, gain or loss for United States federal income
tax purposes as a result of the deposit, defeasance and
discharge and will be subject to United States federal income
tax on the same amounts and in the same manner and at the same
times as would have been the case if the deposit, defeasance and
discharge had not occurred.
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Defeasance of Certain Covenants. |
The indenture provides that, unless otherwise provided by the
terms of the applicable series of debt securities, upon
compliance with certain conditions:
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we may omit to comply with the covenant described under the
heading Consolidation, Merger and Sale of Assets and
certain other covenants set forth in the indenture, as well as
any additional covenants that may be set forth in the applicable
prospectus supplement; and |
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any omission to comply with those covenants will not constitute
a default or an event of default with respect to the debt
securities of that series, or covenant defeasance. |
The conditions include:
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depositing with the trustee money or U.S. government obligations
or, in the case of debt securities denominated in a single
currency other than U.S. dollars, foreign government
obligations, that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount
sufficient in the opinion of our independent public accountants
to pay and discharge each installment of principal of, premium
and interest on and any mandatory sinking fund payments in
respect of the debt securities of that series on the stated
maturity of those payments in accordance with the terms of the
indenture and those debt securities; and |
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delivering to the trustee an opinion of counsel to the effect
that the holders of the debt securities of that series will not
recognize income, gain or loss for United States federal income
tax purposes as a result of the deposit and related covenant
defeasance and will be subject to United States federal income
tax on the same amounts and in the same manner and at the same
times as would have been the case if the deposit and related
covenant defeasance had not occurred. |
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Covenant Defeasance and Events of Default. |
In the event we exercise our option to effect covenant
defeasance with respect to any series of debt securities and the
debt securities of that series are declared due and payable
because of the occurrence of any event of default, the amount of
money or U.S. government obligations or foreign government
obligations on deposit with the trustee will be sufficient to
pay amounts due on the debt securities of that series at the
time of their stated maturity but may not be sufficient to pay
amounts due on the debt securities of that series at the time of
the acceleration resulting from the event of default. We will
remain liable for those payments.
The Trustee
The indenture limits the right of the trustee, should it become
a creditor of us, to obtain payment of claims or secure its
claims.
The trustee is permitted to engage in certain other
transactions. However, if the trustee, acquires any conflicting
interest, and there is a default under the debt securities of
any series for which they are trustee, the trustee must
eliminate the conflict or resign.
Subordinated Debt Securities
Payment on the subordinated debt securities will, to the extent
provided in the indenture, be subordinated in right of payment
to the prior payment in full of all of our senior indebtedness.
The subordinated debt securities also are effectively
subordinated to all debt and other liabilities, including trade
payables and lease obligations, if any, of our subsidiaries.
Upon any distribution of our assets upon any dissolution,
winding up, liquidation or reorganization, the payment of the
principal of and interest on the subordinated debt securities
will be subordinated in right of payment to the prior payment in
full in cash or other payment satisfactory to the holders of
senior indebtedness of all senior indebtedness. In the event of
any acceleration of the subordinated debt securities because of
an event of default, the holders of any senior indebtedness
would be entitled to payment in full in cash or other payment
satisfactory to such holders of all senior indebtedness
obligations before the holders of the subordinated debt
securities are entitled to receive any payment or distribution.
The indenture requires us or the trustee to promptly notify
holders of designated senior indebtedness if payment of the
subordinated debt securities is accelerated because of an event
of default.
We may not make any payment on the subordinated debt securities,
including upon redemption at the option of the holder of any
subordinated debt securities or at our option, if:
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a default in the payment of the principal, premium, if any,
interest, rent or other obligations in respect of designated
senior indebtedness occurs and is continuing beyond any
applicable period of grace (called a payment
default); or |
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a default other than a payment default on any designated senior
indebtedness occurs and is continuing that permits holders of
designated senior indebtedness to accelerate its maturity, and
the trustee receives a notice of such default (called a
payment blockage notice) from us or any other person
permitted to give such notice under the indenture (called a
non-payment default). |
We may resume payments and distributions on the subordinated
debt securities:
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in the case of a payment default, upon the date on which such
default is cured or waived or ceases to exist; and |
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in the case of a non-payment default, the earlier of the date on
which such nonpayment default is cured or waived or ceases to
exist and 179 days after the date on which the payment
blockage |
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notice is received by the trustee, if the maturity of the
designated senior indebtedness has not been accelerated. |
No new period of payment blockage may be commenced pursuant to a
payment blockage notice unless 365 days have elapsed since
the initial effectiveness of the immediately prior payment
blockage notice and all scheduled payments of principal, premium
and interest, including any liquidated damages, on the notes
that have come due have been paid in full in cash. No
non-payment default that existed or was continuing on the date
of delivery of any payment blockage notice shall be the basis
for any later payment blockage notice unless the non-payment
default is based upon facts or events arising after the date of
delivery of such payment blockage notice.
If the trustee or any holder of the notes receives any payment
or distribution of our assets in contravention of the
subordination provisions on the subordinated debt securities
before all senior indebtedness is paid in full in cash, property
or securities, including by way of set-off, or other payment
satisfactory to holders of senior indebtedness, then such
payment or distribution will be held in trust for the benefit of
holders of senior indebtedness or their representatives to the
extent necessary to make payment in full in cash or payment
satisfactory to the holders of senior indebtedness of all unpaid
senior indebtedness.
In the event of our bankruptcy, dissolution or reorganization,
holders of senior indebtedness may receive more, ratably, and
holders of the subordinated debt securities may receive less,
ratably, than our other creditors (including our trade
creditors). This subordination will not prevent the occurrence
of any event of default under the indenture.
We are not prohibited from incurring debt, including senior
indebtedness, under the indenture. We may from time to time
incur additional debt, including senior indebtedness.
We are obligated to pay reasonable compensation to the trustee
and to indemnify the trustee against certain losses, liabilities
or expenses incurred by the trustee in connection with its
duties relating to the subordinated debt securities. The
trustees claims for these payments will generally be
senior to those of noteholders in respect of all funds collected
or held by the trustee.
Certain Definitions
indebtedness means:
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(1) all indebtedness, obligations and other liabilities for
borrowed money, including overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate
protection agreements, and any loans or advances from banks, or
evidenced by bonds, debentures, notes or similar instruments,
other than any account payable or other accrued current
liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or
services; |
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(2) all reimbursement obligations and other liabilities
with respect to letters of credit, bank guarantees or
bankers acceptances; |
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(3) all obligations and liabilities in respect of leases
required in conformity with generally accepted accounting
principles to be accounted for as capitalized lease obligations
on our balance sheet; |
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(4) all obligations and other liabilities under any lease
or related document in connection with the lease of real
property which provides that we are contractually obligated to
purchase or cause a third party to purchase the leased property
and thereby guarantee a minimum residual value of the leased
property to the lessor and our obligations under the lease or
related document to purchase or to cause a third party to
purchase the leased property; |
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(5) all obligations with respect to an interest rate or
other swap, cap or collar agreement or other similar instrument
or agreement or foreign currency hedge, exchange, purchase
agreement or other similar instrument or agreement; |
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(6) all direct or indirect guaranties or similar agreements
in respect of, and our obligations or liabilities to purchase,
acquire or otherwise assure a creditor against loss in respect
of, indebtedness, obligations or liabilities of others of the
type described in (1) through (5) above; |
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(7) any indebtedness or other obligations described in (1)
through (6) above secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by us;
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(8) any and all refinancings, replacements, deferrals,
renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (1) through (7)
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senior indebtedness means the principal, premium, if
any, interest, including any interest accruing after bankruptcy,
and rent or termination payment on or other amounts due on our
current or future indebtedness, whether created, incurred,
assumed, guaranteed or in effect guaranteed by us, including any
deferrals, renewals, extensions, refundings, amendments,
modifications or supplements to the above. However, senior
indebtedness does not include:
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indebtedness that expressly provides that it shall not be senior
in right of payment to subordinated debt securities or expressly
provides that it is on the same basis or junior to subordinated
debt securities; and |
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our indebtedness to any of our majority-owned subsidiaries. |
Governing Law
The indenture and the debt securities will be governed by, and
construed in accordance with, the laws of the State of New York.
DESCRIPTION OF WARRANTS
This section describes the general terms and provisions of the
warrants. The applicable prospectus supplement will describe the
specific terms of the warrants offered under that applicable
prospectus supplement and any contrary general terms outlined in
this section that will not apply to those warrants.
We may issue warrants independently or together with debt
securities. The warrants will be issued under warrant agreements
between us and a bank or trust company, as warrant agent, all as
stated in the applicable prospectus supplement. The warrant
agent will act solely as our agent in connection with the
warrants and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of
warrants.
The applicable prospectus supplement will describe the terms of
the warrants offered in this prospectus, including the
following, if applicable:
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the offering price; |
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the title of the warrants; |
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the designation and terms of any related debt securities with
which the warrants are to be issued and the number of the
warrants offered with each debt security; |
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the date, if any, on and after which the holder of the warrants
can transfer them separately from the related debt securities; |
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the date on which the right to exercise the warrants will
commence and the date on which this right will expire; and |
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whether the warrant certificates representing the warrants will
be issued in registered or bearer form, and if registered, where
they are transferred and registered. |
A holder can exchange warrant certificates for new warrant
certificates of different authorized denominations, and can
exercise his or her warrants at the corporate trust office of
the warrant agent or any other office indicated in the
applicable prospectus supplement.
Each warrant entitles the holder of that warrant to purchase the
principal amount of securities at the price stated, or
determinable in the applicable prospectus supplement. A holder
can exercise warrants during the period stated in the applicable
prospectus supplement. After the close of business on the
expiration date, unexercised warrants will become void.
A holder can exercise warrants as stated in the applicable
prospectus supplement relating to the warrants. We will, as soon
as practicable, forward to you the securities purchased upon
exercise. If less than all of the warrants represented by the
warrant certificates are exercised, a new warrant certificate
will be issued for the remaining warrants.
PLAN OF DISTRIBUTION
We may sell the securities offered pursuant to this prospectus
and any prospectus supplement to or through one or more
underwriters or dealers or through agents. Each prospectus
supplement, to the extent applicable, will describe the number
and terms of the securities to which such prospectus supplement
relates, the name or names of any underwriters or agents with
whom we have entered into arrangements with respect to the sale
of such securities, the public offering or purchase price of
such securities and the net proceeds we will receive from such
sale. Any underwriter or agent involved in the offer and sale of
the securities will be named in the applicable prospectus
supplement. We may sell securities directly to investors on our
own behalf in those jurisdictions where we are authorized to do
so.
Underwriters may offer and sell the securities at a fixed price
or prices, which may be changed, at market prices prevailing at
the time of sale, at prices related to the prevailing market
prices or at negotiated prices. We also may, from time to time,
authorize dealers or agents to offer and sell these securities
upon such terms and conditions as may be set forth in the
applicable prospectus supplement. In connection with the sale of
any of these securities, underwriters may receive compensation
from us in the form of underwriting discounts or commissions and
may also receive commissions from purchasers of the securities
for whom they may act as agent. Underwriters may sell the
securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the
purchasers for which they may act as agents.
Shares may also be sold in one or more of the following
transactions: (1) block transactions (which may involve
crosses) in which a broker-dealer may sell all or a portion of
the shares as agent but may position and resell all or a portion
of the block as principal to facilitate the transaction;
(2) purchases by a broker-dealer as principal and resale by
the broker-dealer for its own account pursuant to a prospectus
supplement; (3) a special offering, an exchange
distribution or a secondary distribution in accordance with
applicable stock exchange or NASD rules; (4) ordinary
brokerage transactions and transactions in which a broker-dealer
solicits purchasers; (5) sales at the market to
or through a market maker or into an existing trading market, on
an exchange or otherwise, for shares; and (6) sales in
other ways not involving market makers or established trading
markets, including direct sales to purchasers. Broker-dealers
may also receive compensation from purchasers of the shares
which is not expected to exceed that customary in the types of
transactions involved.
Any underwriting compensation paid by us to underwriters or
agents in connection with the offering of these securities, and
any discounts or concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the
applicable prospectus supplement. Dealers and agents
participating in the distribution of the securities may be
deemed to be underwriters, and any discounts and commissions
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received by them and any profit realized by them on resale of
the securities may be deemed to be underwriting discounts and
commissions.
Underwriters, dealers and agents may be entitled, under
agreements entered into with us, to indemnification against and
contribution toward certain civil liabilities, including
liabilities under the Securities Act of 1933. Unless otherwise
set forth in the accompanying prospectus supplement, the
obligations of any underwriters to purchase any of these
securities will be subject to certain conditions precedent.
In connection with the offering of the securities hereby,
certain underwriters, and selling group members and their
respective affiliates, may engage in transactions that
stabilize, maintain or otherwise affect the market price of the
applicable securities. These transactions may include
stabilization transactions effected in accordance with
Rule 104 of Regulation M promulgated by the SEC
pursuant to which these persons may bid for or purchase
securities for the purpose of stabilizing their market price.
The underwriters in an offering of securities may also create a
short position for their account by selling more
securities in connection with the offering than they are
committed to purchase from us. In that case, the underwriters
could cover all or a portion of the short position by either
purchasing securities in the open market following completion of
the offering of these securities or by exercising any
over-allotment option granted to them by us. In addition, the
managing underwriter may impose penalty bids under
contractual arrangements with other underwriters, which means
that they can reclaim from an underwriter (or any selling group
member participating in the offering) for the account of the
other underwriters, the selling concession for the securities
that are distributed in the offering but subsequently purchased
for the account of the underwriters in the open market. Any of
the transactions described in this paragraph or comparable
transactions that are described in any accompanying prospectus
supplement may result in the maintenance of the price of the
securities at a level above that which might otherwise prevail
in the open market. None of the transactions described in this
paragraph or in an accompanying prospectus supplement are
required to be taken by any underwriters and, if they are
undertaken, may be discontinued at any time.
Our common stock is listed on the Nasdaq National Market under
the symbol UCBI. Our preferred stock will be new
issues of securities with no established trading market and may
or may not be listed on a national securities exchange. Any
underwriters or agents to or through which securities are sold
by us may make a market in the securities, but these
underwriters or agents will not be obligated to do so and any of
them may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of or
trading market for any securities sold by us.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, us and our affiliates in the
ordinary course of business. Underwriters have from time to time
in the past provided, and may from time to time in the future
provide, investment banking services to us for which they have
in the past received, and may in the future receive, customary
fees.
LEGAL MATTERS
Kilpatrick Stockton LLP will provide an opinion as to the
legality of the securities. As of the date of this prospectus,
members of Kilpatrick Stockton LLP participating in this matter
own an aggregate of 21,336 shares of our common stock.
EXPERTS
Our audited consolidated financial statements incorporated by
reference in this prospectus have been audited by Porter Keadle
Moore LLP, independent public accountants, as indicated in its
related audit reports, and are included on the authority of that
firm as experts in giving those reports.
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A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This prospectus (and other documents to which it refers)
contains forward-looking statements regarding us, including,
without limitation, statements relating to our expectations with
respect to revenue, credit losses, levels of nonperforming
assets, expenses, earnings and other measures of financial
performance. Words such as may, could,
would, should, believes,
expects, anticipates,
estimates, intends, plans,
targets or similar expressions are intended to
identify forward-looking statements. These statements are based
on the beliefs, assumptions and expectations of our management,
and on information currently available to those members of
management. They are expressions based on historical fact, but
do not guarantee future performance. Forward-looking statements
involve risks, uncertainties and assumptions, and certain
factors could cause actual results to differ from results
expressed or implied by the forward-looking statements,
including:
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economic conditions (both generally, and more specifically in
the markets where we operate); |
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competition from other companies that provide financial services
similar to those offered by us; |
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government regulation and legislation; |
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changes in interest rates; |
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unexpected changes in the financial stability and liquidity of
our credit customers; |
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retaining our key personnel may be more difficult than expected;
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technological changes may increase competitive pressures and
increase costs. |
We believe these forward-looking statements are reasonable, but
we caution that the foregoing list of factors is not exclusive
and that you should not place undue reliance on these
forward-looking statements, because our future results and
shareholder values may differ materially from those expressed or
implied by these forward-looking statements. We do not intend to
update any forward-looking statement, whether written or oral,
relating to the matters discussed in this prospectus.
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1,350,000 Shares
Common Stock
PROSPECTUS SUPPLEMENT
Sandler ONeill &
Partners, L.P.
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Keefe, Bruyette & Woods |
Raymond James |
November , 2005