UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the Quarterly Period Ended March 31, 2008
OR
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the Transition Period from ___________ to ___________
Commission
file number 0-21656
UNITED
COMMUNITY BANKS, INC.
(Exact
name of registrant as specified in its charter)
|
Georgia
|
58-1807304
|
|
(State
of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
63
Highway 515
|
|
|
Blairsville,
Georgia
|
30512
|
|
Address
of Principal Executive Offices
|
(Zip
Code)
|
(706)
781-2265
(Telephone
Number)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES x NO o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer or a smaller reporting
company. See definitions of “large accelerated filer”, “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
|
Large
accelerated filer x
|
Accelerated
filer
|
o
|
|
Non-accelerated
filer o
(Do not check if a smaller reporting company)
|
Smaller
Reporting Company
|
o
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
YES o NO x
Common
stock, par value $1 per share: 47,004,223 shares
outstanding
as of March 31, 2008
INDEX
|
PART
I - Financial Information
|
|||
|
|
Item 1. Financial Statements. | ||
|
|
Consolidated
Statement of Income (unaudited) for the Three Months Ended March
31, 2008 and 2007
|
2
|
|
|
|
Consolidated
Balance Sheet at March 31, 2008 (unaudited), December 31, 2007 (audited)
and March 31, 2007 (unaudited)
|
3
|
|
|
|
Consolidated
Statement of Changes in Shareholders’ Equity (unaudited) for
the Three
Months Ended March 31, 2008 and 2007
|
4
|
|
|
|
Consolidated
Statement of Cash Flows (unaudited) for the Three Months
Ended March
31, 2008 and 2007
|
5
|
|
|
|
Notes
to Consolidated Financial Statements
|
6
|
|
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
12
|
||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk. |
28
|
||
| Item 4. Controls and Procedures. |
28
|
||
|
PART
II - Other Information
|
|||
| Item 1. Legal Proceedings. |
29
|
||
| Item 1A. Risk Factors. |
29
|
||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. |
29
|
||
| Item 3. Defaults Upon Senior Securities. |
29
|
||
| Item 4. Submission of Matters to a Vote of Security Holders. |
29
|
||
| Item 5. Other Information. |
29
|
||
| Item 6. Exhibits. |
29
|
||
1
Part
I – Financial Information
Item
1 – Financial Statements
|
UNITED
COMMUNITY BANKS, INC.
|
||||||||
|
Consolidated Statement of
Income
(unaudited)
|
||||||||
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(in
thousands, except per share data)
|
2008
|
2007
|
||||||
|
Interest
revenue:
|
||||||||
|
Loans,
including fees
|
$ | 109,266 | $ | 114,073 | ||||
|
Investment
securities:
|
||||||||
|
Taxable
|
18,628 | 13,968 | ||||||
|
Tax
exempt
|
394 | 447 | ||||||
|
Federal
funds sold and deposits in banks
|
222 | 58 | ||||||
|
Total
interest revenue
|
128,510 | 128,546 | ||||||
|
Interest
expense:
|
||||||||
|
Deposits:
|
||||||||
|
NOW
|
8,587 | 10,627 | ||||||
|
Money
market
|
2,913 | 2,540 | ||||||
|
Savings
|
227 | 309 | ||||||
|
Time
|
38,884 | 41,625 | ||||||
|
Total
deposit interest expense
|
50,611 | 55,101 | ||||||
|
Federal
funds purchased, repurchase agreements, & other short-term
borrowings
|
4,318 | 1,817 | ||||||
|
Federal
Home Loan Bank advances
|
5,745 | 4,801 | ||||||
|
Long-term
debt
|
2,080 | 2,204 | ||||||
|
Total
interest expense
|
62,754 | 63,923 | ||||||
|
Net
interest revenue
|
65,756 | 64,623 | ||||||
|
Provision
for loan losses
|
7,500 | 3,700 | ||||||
|
Net
interest revenue after provision for loan losses
|
58,256 | 60,923 | ||||||
|
Fee
revenue:
|
||||||||
|
Service
charges and fees
|
7,813 | 7,253 | ||||||
|
Mortgage
loan and other related fees
|
1,963 | 2,223 | ||||||
|
Consulting
fees
|
1,807 | 1,747 | ||||||
|
Brokerage
fees
|
1,093 | 944 | ||||||
|
Securities
gains, net
|
- | 207 | ||||||
|
Other
|
1,521 | 2,008 | ||||||
|
Total
fee revenue
|
14,197 | 14,382 | ||||||
|
Total
revenue
|
72,453 | 75,305 | ||||||
|
Operating
expenses:
|
||||||||
|
Salaries
and employee benefits
|
28,754 | 28,317 | ||||||
|
Communications
and equipment
|
3,832 | 3,812 | ||||||
|
Occupancy
|
3,716 | 3,191 | ||||||
|
Advertising
and public relations
|
1,351 | 2,016 | ||||||
|
Postage,
printing and supplies
|
1,592 | 1,660 | ||||||
|
Professional
fees
|
1,921 | 1,479 | ||||||
|
Amortization
of intangibles
|
767 | 564 | ||||||
|
Other
|
5,596 | 3,802 | ||||||
|
Total
operating expenses
|
47,529 | 44,841 | ||||||
|
Income
before income taxes
|
24,924 | 30,464 | ||||||
|
Income
taxes
|
8,846 | 11,119 | ||||||
|
Net
income
|
$ | 16,078 | $ | 19,345 | ||||
|
Net
income available to common shareholders
|
$ | 16,074 | $ | 19,340 | ||||
|
Earnings
per common share:
|
||||||||
|
Basic
|
$ | .34 | $ | .45 | ||||
|
Diluted
|
.34 | .44 | ||||||
|
Dividends
per common share
|
.09 | .09 | ||||||
|
Weighted
average common shares outstanding:
|
||||||||
|
Basic
|
46,966 | 43,000 | ||||||
|
Diluted
|
47,272 | 43,912 | ||||||
SEE NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
2
|
UNITED
COMMUNITY BANKS, INC.
|
||||||||||||
|
Consolidated
Balance Sheet
|
||||||||||||
|
March
31,
|
December
31,
|
March
31,
|
||||||||||
|
(in
thousands, except share and per share data)
|
2008
|
2007
|
2007
|
|||||||||
|
(unaudited)
|
(audited)
|
(unaudited)
|
||||||||||
|
ASSETS
|
||||||||||||
|
Cash
and due from banks
|
$ | 169,538 | $ | 157,549 | $ | 159,543 | ||||||
|
Interest-bearing
deposits in banks
|
13,417 | 62,074 | 22,644 | |||||||||
|
Cash
and cash equivalents
|
182,955 | 219,623 | 182,187 | |||||||||
|
Securities
available for sale
|
1,508,402 | 1,356,846 | 1,150,424 | |||||||||
|
Mortgage
loans held for sale
|
28,451 | 28,004 | 31,633 | |||||||||
|
Loans,
net of unearned income
|
5,967,839 | 5,929,263 | 5,402,198 | |||||||||
|
Less
allowance for loan losses
|
89,848 | 89,423 | 68,804 | |||||||||
|
Loans,
net
|
5,877,991 | 5,839,840 | 5,333,394 | |||||||||
|
Premises
and equipment, net
|
180,746 | 180,088 | 150,332 | |||||||||
|
Accrued
interest receivable
|
59,585 | 62,828 | 60,677 | |||||||||
|
Goodwill
and other intangible assets
|
324,041 | 325,305 | 166,073 | |||||||||
|
Other
assets
|
224,084 | 194,768 | 111,882 | |||||||||
|
Total
assets
|
$ | 8,386,255 | $ | 8,207,302 | $ | 7,186,602 | ||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||||||
|
Liabilities:
|
||||||||||||
|
Deposits:
|
||||||||||||
|
Demand
|
$ | 690,028 | $ | 700,941 | $ | 675,969 | ||||||
|
NOW
|
1,523,942 | 1,474,818 | 1,406,287 | |||||||||
|
Money
market
|
431,623 | 452,917 | 277,184 | |||||||||
|
Savings
|
187,911 | 186,392 | 176,891 | |||||||||
|
Time:
|
||||||||||||
|
Less
than $100,000
|
1,535,742 | 1,573,604 | 1,619,865 | |||||||||
|
Greater
than $100,000
|
1,375,000 | 1,364,763 | 1,366,360 | |||||||||
|
Brokered
|
431,523 | 322,516 | 319,131 | |||||||||
|
Total
deposits
|
6,175,769 | 6,075,951 | 5,841,687 | |||||||||
|
Federal
funds purchased, repurchase agreements, and other short-term
borrowings
|
532,896 | 638,462 | 77,367 | |||||||||
|
Federal
Home Loan Bank advances
|
615,324 | 519,782 | 464,072 | |||||||||
|
Long-term
debt
|
107,996 | 107,996 | 113,151 | |||||||||
|
Accrued
expenses and other liabilities
|
82,818 | 33,209 | 51,869 | |||||||||
|
Total
liabilities
|
7,514,803 | 7,375,400 | 6,548,146 | |||||||||
|
Shareholders'
equity:
|
||||||||||||
|
Preferred
stock, $1 par value; $10 stated value; 10,000,000 shares
authorized;
|
||||||||||||
|
25,800,
25,800 and 32,200 shares issued and outstanding
|
258 | 258 | 322 | |||||||||
|
Common
stock, $1 par value; 100,000,000 shares authorized;
|
||||||||||||
|
48,809,301,
48,809,301 and 43,037,840 shares issued
|
48,809 | 48,809 | 43,038 | |||||||||
|
Common
stock issuable; 90,505, 73,250 and 35,154 shares
|
2,410 | 2,100 | 1,043 | |||||||||
|
Capital
surplus
|
463,095 | 462,881 | 273,575 | |||||||||
|
Retained
earnings
|
359,248 | 347,391 | 321,721 | |||||||||
|
Treasury
stock; 1,805,078 and 1,905,921 shares, at cost
|
(41,351 | ) | (43,798 | ) | - | |||||||
|
Accumulated
other comprehensive income (loss)
|
38,983 | 14,261 | (1,243 | ) | ||||||||
|
Total
shareholders' equity
|
871,452 | 831,902 | 638,456 | |||||||||
|
Total
liabilities and shareholders' equity
|
$ | 8,386,255 | $ | 8,207,302 | $ | 7,186,602 | ||||||
SEE NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
3
|
UNITED
COMMUNITY BANKS, INC.
|
||||||||||||||||||||||||||||||||
|
Consolidated Statement of
Changes in Shareholders' Equity
(Unaudited)
|
||||||||||||||||||||||||||||||||
|
For
the Three Months Ended March 31,
|
||||||||||||||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||||||||||||||
|
Common
|
Other
|
|||||||||||||||||||||||||||||||
|
Preferred
|
Common
|
Stock
|
Capital
|
Retained
|
Treasury
|
Comprehensive
|
||||||||||||||||||||||||||
|
(in
thousands, except share and per share data)
|
Stock
|
Stock
|
Issuable
|
Surplus
|
Earnings
|
Stock
|
Income
(Loss)
|
Total
|
||||||||||||||||||||||||
|
Balance,
December 31, 2006
|
$ | 322 | $ | 42,891 | $ | 862 | $ | 270,383 | $ | 306,261 | $ | - | $ | (3,952 | ) | $ | 616,767 | |||||||||||||||
|
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
|
Net
income
|
19,345 | 19,345 | ||||||||||||||||||||||||||||||
|
Other
comprehensive income:
|
||||||||||||||||||||||||||||||||
|
Unrealized
holding gains on available for
|
||||||||||||||||||||||||||||||||
|
sale
securities, net of deferred tax
|
||||||||||||||||||||||||||||||||
|
expense
and reclassification adjustment
|
2,000 | 2,000 | ||||||||||||||||||||||||||||||
|
Unrealized
gains on derivative financial
|
||||||||||||||||||||||||||||||||
|
instruments
qualifying as cash flow
|
||||||||||||||||||||||||||||||||
|
hedges,
net of deferred tax expense
|
709 | 709 | ||||||||||||||||||||||||||||||
|
Comprehensive
income
|
19,345 | 2,709 | 22,054 | |||||||||||||||||||||||||||||
|
Cash
dividends declared on common stock
|
||||||||||||||||||||||||||||||||
|
($.09
per share)
|
(3,880 | ) | (3,880 | ) | ||||||||||||||||||||||||||||
|
Exercise
of stock options (72,703 shares)
|
73 | 629 | 702 | |||||||||||||||||||||||||||||
|
Common
stock issued to Dividend Reinvestment
|
||||||||||||||||||||||||||||||||
|
Plan
and employee benefit plans (52,914 shares)
|
53 | 1,693 | 1,746 | |||||||||||||||||||||||||||||
|
Amortization
of stock option and restricted
|
||||||||||||||||||||||||||||||||
|
stock
awards
|
729 | 729 | ||||||||||||||||||||||||||||||
|
Vesting
of restricted stock (21,360 shares)
|
21 | (21 | ) | - | ||||||||||||||||||||||||||||
|
Deferred
compensation plan, net, including
|
||||||||||||||||||||||||||||||||
|
dividend
equivalents
|
181 | 181 | ||||||||||||||||||||||||||||||
|
Tax
benefit from options exercised
|
162 | 162 | ||||||||||||||||||||||||||||||
|
Dividends
declared on preferred stock
|
||||||||||||||||||||||||||||||||
|
($.15
per share)
|
(5 | ) | (5 | ) | ||||||||||||||||||||||||||||
|
Balance,
March 31, 2007
|
$ | 322 | $ | 43,038 | $ | 1,043 | $ | 273,575 | $ | 321,721 | $ | - | $ | (1,243 | ) | $ | 638,456 | |||||||||||||||
|
Balance,
December 31, 2007
|
$ | 258 | $ | 48,809 | $ | 2,100 | $ | 462,881 | $ | 347,391 | $ | (43,798 | ) | $ | 14,261 | $ | 831,902 | |||||||||||||||
|
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
|
Net
income
|
16,078 | 16,078 | ||||||||||||||||||||||||||||||
|
Other
comprehensive income:
|
||||||||||||||||||||||||||||||||
|
Unrealized
holding gains on available for
|
||||||||||||||||||||||||||||||||
|
sale
securities, net of deferred tax expense
|
12,341 | 12,341 | ||||||||||||||||||||||||||||||
|
Unrealized
gains on derivative financial
|
||||||||||||||||||||||||||||||||
|
instruments
qualifying as cash flow
|
||||||||||||||||||||||||||||||||
|
hedges,
net of deferred tax expense
|
12,381 | 12,381 | ||||||||||||||||||||||||||||||
|
Comprehensive
income
|
16,078 | 24,722 | 40,800 | |||||||||||||||||||||||||||||
|
Cash
dividends declared on common stock
|
||||||||||||||||||||||||||||||||
|
($.09
per share)
|
(4,217 | ) | (4,217 | ) | ||||||||||||||||||||||||||||
|
Exercise
of stock options (60,271 shares)
|
(691 | ) | 1,470 | 779 | ||||||||||||||||||||||||||||
|
Common
stock issued to Dividend Reinvestment
|
||||||||||||||||||||||||||||||||
|
Plan
and employee benefit plans (31,944 shares)
|
(266 | ) | 769 | 503 | ||||||||||||||||||||||||||||
|
Amortization
of stock options and restricted stock
|
975 | 975 | ||||||||||||||||||||||||||||||
|
Vesting
of restricted stock (7,912 shares issued,
|
||||||||||||||||||||||||||||||||
|
3,125
shares deferred)
|
91 | (282 | ) | 191 | - | |||||||||||||||||||||||||||
|
Deferred
compensation plan, net, including
|
||||||||||||||||||||||||||||||||
|
dividend
equivalents
|
238 | 238 | ||||||||||||||||||||||||||||||
|
Shares
issued from deferred compensation plan
|
||||||||||||||||||||||||||||||||
|
(716
shares)
|
(19 | ) | 2 | 17 | - | |||||||||||||||||||||||||||
|
Tax
benefit from options exercised
|
476 | 476 | ||||||||||||||||||||||||||||||
|
Dividends
declared on preferred stock
|
||||||||||||||||||||||||||||||||
|
($.15
per share)
|
(4 | ) | (4 | ) | ||||||||||||||||||||||||||||
|
Balance,
March 31, 2008
|
$ | 258 | $ | 48,809 | $ | 2,410 | $ | 463,095 | $ | 359,248 | $ | (41,351 | ) | $ | 38,983 | $ | 871,452 | |||||||||||||||
SEE NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
4
|
UNITED
COMMUNITY BANKS, INC.
|
||||||||
|
Consolidated Statement of Cash
Flows
(Unaudited)
|
||||||||
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(in
thousands)
|
2008
|
2007
|
||||||
|
Operating
activities:
|
||||||||
|
Net
income
|
$ | 16,078 | $ | 19,345 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation,
amortization and accretion
|
3,568 | 3,372 | ||||||
|
Provision
for loan losses
|
7,500 | 3,700 | ||||||
|
Stock
based compensation
|
975 | 729 | ||||||
|
Gain
on sale of securities available for sale
|
- | (207 | ) | |||||
|
Gain
on sale of other assets
|
(7 | ) | (207 | ) | ||||
|
Changes
in assets and liabilities:
|
||||||||
|
Other
assets and accrued interest receivable
|
8,867 | (1,143 | ) | |||||
|
Accrued
expenses and other liabilities
|
(4,783 | ) | 8,340 | |||||
|
Mortgage
loans held for sale
|
(447 | ) | 3,692 | |||||
|
Net
cash provided by operating activities
|
31,751 | 37,621 | ||||||
|
Investing
activities:
|
||||||||
|
Proceeds
from sales of securities available for sale
|
25,000 | 915 | ||||||
|
Proceeds
from maturities and calls of securities available for sale
|
174,956 | 78,934 | ||||||
|
Purchases
of securities available for sale
|
(296,228 | ) | (120,125 | ) | ||||
|
Net
increase in loans
|
(63,119 | ) | (29,622 | ) | ||||
|
Proceeds
from sales of premises and equipment
|
288 | 635 | ||||||
|
Purchases
of premises and equipment
|
(3,773 | ) | (13,549 | ) | ||||
|
Proceeds
from sale of other real estate
|
8,156 | 1,804 | ||||||
|
Net
cash used by investing activities
|
(154,720 | ) | (81,008 | ) | ||||
|
Financing
activities:
|
||||||||
|
Net
change in deposits
|
99,818 | 68,801 | ||||||
|
Net
change in federal funds purchased, repurchase agreements,
|
||||||||
|
and
other short-term borrowings
|
(105,566 | ) | 11,483 | |||||
|
Proceeds
from FHLB advances
|
300,000 | 425,000 | ||||||
|
Repayments
of FHLB advances
|
(205,000 | ) | (450,000 | ) | ||||
|
Proceeds
from exercise of stock options
|
779 | 702 | ||||||
|
Proceeds
from issuance of common stock for dividend reinvestment
|
||||||||
|
and
employee benefit plans
|
503 | 1,746 | ||||||
|
Cash
dividends on common stock
|
(4,229 | ) | (3,437 | ) | ||||
|
Cash
dividends on preferred stock
|
(4 | ) | (5 | ) | ||||
|
Net
cash provided by financing activities
|
86,301 | 54,290 | ||||||
|
Net
change in cash and cash equivalents
|
(36,668 | ) | 10,903 | |||||
|
Cash
and cash equivalents at beginning of period
|
219,623 | 171,284 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 182,955 | $ | 182,187 | ||||
|
Supplemental
disclosures of cash flow information:
|
||||||||
|
Cash
paid during the period for:
|
||||||||
|
Interest
|
$ | 65,789 | $ | 65,675 | ||||
|
Income
taxes
|
152 | 1,506 | ||||||
SEE NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
5
United
Community Banks, Inc.
Notes to
Consolidated Financial Statements
Note
1 - Accounting Policies
The accounting and financial reporting
policies of United Community Banks, Inc. (“United”) and its subsidiaries conform
to accounting principles generally accepted in the United States of America and
general banking industry practices. The accompanying interim
consolidated financial statements have not been audited. All material
intercompany balances and transactions have been eliminated. A more
detailed description of United’s accounting policies is included in the 2007
annual report filed on Form 10-K.
In management’s opinion, all accounting
adjustments necessary to accurately reflect the financial position and results
of operations on the accompanying financial statements have been made. These
adjustments are normal and recurring accruals considered necessary for a fair
and accurate presentation. The results for interim periods are not necessarily
indicative of results for the full year or any other interim
periods.
Note
2 - Stock-Based Compensation
United has an equity compensation plan
that allows for grants of incentive stock options, nonqualified stock options,
restricted stock awards (also referred to as “nonvested stock” awards), stock
awards, performance share awards or stock appreciation
rights. Options granted under the plan can have an exercise price no
less than the fair market value of the underlying stock at the date of
grant. The general terms of the plan include a vesting period
(usually four years) with an exercisable period not to exceed ten
years. Certain option and restricted stock awards provide for
accelerated vesting if there is a change in control (as defined in the
plan). As of March 31, 2008, approximately 1,953,000 additional
awards could be granted under the plan. Through March 31, 2008, only
incentive stock options, nonqualified stock options and restricted stock awards
had been granted under the plan.
The
following table shows stock option activity for the first quarter of
2008.
|
Options
|
Shares
|
Weighted-
Average
Exercise Price
|
Weighted-
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinisic
Value
($000)
|
||||||||||||
|
Outstanding
at December 31, 2007
|
2,912,557 | $ | 21.57 | |||||||||||||
|
Granted
|
15,000 | 15.32 | ||||||||||||||
|
Exercised
|
(65,450 | ) | 13.54 | |||||||||||||
|
Forfeited
|
(33,875 | ) | 29.14 | |||||||||||||
|
Expired
|
(15,800 | ) | 24.65 | |||||||||||||
|
Outstanding
at March 31, 2008
|
2,812,432 | $ | 21.62 | 6.2 | $ | 3,936 | ||||||||||
|
Exercisable
at March 31, 2008
|
1,658,316 | $ | 16.99 | 4.6 | $ | 3,911 | ||||||||||
The
weighted average fair value of stock options granted in the first quarter of
2008 and 2007 was $3.33 and $8.80, respectively. The fair value of
each option granted was estimated on the date of grant using the Black-Scholes
model. Because United’s option plan has not been in place long enough
to gather sufficient information about exercise patterns to establish an
expected life, United uses the formula provided by the Securities and Exchange
Commission in Staff Accounting Bulletin No. 107 to determine the expected life
of options. The key assumptions used to determine the fair value of
stock options are presented in the table below.
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Expected
volatility
|
23 | % | 20 | % | ||||
|
Expected
dividend yield
|
2.1%
to 2.5%
|
1.1 | % | |||||
|
Expected
life (in years)
|
6.25 | 6.25 | ||||||
|
Risk-free
rate
|
2.9%
to 3.5%
|
4.7 | % | |||||
6
United’s
stock trading history began in March of 2002 when United listed on the Nasdaq
National Market. For 2008 and 2007, expected volatility was
determined using United’s historical monthly volatility over the period
beginning in March of 2002 through the end of the last completed
year. Compensation expense for stock options was $549,000 and
$486,000 for the three months ended March 31, 2008 and 2007, respectively, which
was net of deferred tax benefits of $222,000 and $114,000,
respectively. The amount of compensation expense for both periods was
determined based on the fair value of the options at the time of grant,
multiplied by the number of options granted that were expected to vest, which
was then amortized, net of any applicable tax benefit, over the vesting
period. The forfeiture rate for options is estimated to be
approximately 3% per year. The total intrinsic value of options
exercised during the quarter ended March 31, 2008 and 2007 was $275,000 and
$1,693,000, respectively.
The table
below presents the activity in restricted stock awards for the first quarter of
2008.
|
Restricted
Stock
|
Shares
|
Weighted-
Average
Grant-
Date
Fair Value
|
||||||
|
Outstanding
at December 31, 2007
|
84,413 | $ | 29.26 | |||||
|
Granted
|
7,000 | 14.83 | ||||||
|
Vested
|
(11,037 | ) | 25.67 | |||||
|
Cancelled
|
(3,000 | ) | 30.10 | |||||
|
Outstanding
at March 31, 2008
|
77,376 | $ | 28.43 | |||||
Compensation
expense for restricted stock is based on the fair value of restricted stock
awards at the time of grant, which is equal to the value of United’s common
stock on the date of grant. The value of restricted stock grants that
are expected to vest is amortized into expense over the vesting
period. For the three months ended March 31, 2008 and 2007,
compensation expense of $204,000 and $129,000, respectively, was recognized
related to restricted stock awards. The total intrinsic value of the
restricted stock was $1.3 million at March 31, 2008.
As of
March 31, 2008, there was $7.9 million of unrecognized compensation cost related
to nonvested stock options and restricted stock awards granted under the
plan. That cost is expected to be recognized over a weighted-average
period of 1.4 years. The aggregate grant date fair value of options
and restricted stock awards that vested during the quarter ended March 31, 2008,
was $322,000.
Note
3 – Common Stock Issued / Common Stock Issuable
United provides a Dividend Reinvestment
and Share Purchase Plan (DRIP) to its shareholders. Under the DRIP, shareholders
of record can voluntarily reinvest all or a portion of their cash dividends into
shares of United’s common stock, as well as purchase additional stock through
the plan for cash. United’s 401(k) retirement plan regularly
purchases shares of United’s common stock directly from United. In
addition, United has an Employee Stock Purchase Program (ESPP) that allows
eligible employees to purchase shares of common stock at a 5% discount, with no
commission charges. For the three months ended March 31, 2008 and
2007, United issued 31,944 and 52,914 shares, respectively, and increased
capital by $503,000 and $1.7 million, respectively, through these
programs.
In the fourth quarter of 2005, United
began offering its common stock as an investment option in its deferred
compensation plan. The common stock component of the deferred
compensation plan is accounted for as an equity instrument and is reflected in
the consolidated financial statements as common stock issuable. At
March 31, 2008 and 2007, 90,505 and 35,154 shares, respectively, are issuable
under the deferred compensation plan.
7
Note
4 - Earnings Per Share
The
following table sets forth the computation of basic and diluted earnings per
share for the three months ended March 31.
(in
thousands, except per share data)
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Net
income available to common shareholders
|
$ | 16,074 | $ | 19,340 | ||||
|
Weighted
average shares outstanding:
|
||||||||
|
Basic
|
46,966 | 43,000 | ||||||
|
Effect
of dilutive securities:
|
||||||||
|
Stock
options and restricted stock
|
220 | 878 | ||||||
|
Common
stock issuable under deferred compensation plan
|
86 | 34 | ||||||
|
Diluted
|
47,272 | 43,912 | ||||||
|
Earnings
per common share:
|
||||||||
|
Basic
|
$ | .34 | $ | .45 | ||||
|
Diluted
|
$ | .34 | $ | .44 | ||||
Note
5 - Mergers and Acquisitions
On June
1, 2007, United acquired 100 percent of the outstanding common shares of
Gwinnett Commercial Group, Inc. (Gwinnett), a community bank holding company
headquartered in Lawrenceville, Georgia. Gwinnett’s results of
operations are included in consolidated financial results from the acquisition
date. Gwinnett was the parent company of First Bank of the South, a
community bank with five full service banking offices serving the north metro
Atlanta counties of Gwinnett, DeKalb and north Fulton and a commercial loan
office in Walton County. United has continued to expand its presence
in metropolitan Atlanta and the acquisition of Gwinnett accomplished a
long-standing strategic goal of encircling metro
Atlanta. Additionally, Gwinnett brings strong commercial lending
experience to better diversify United’s business mix. The aggregate
purchase price was approximately $222.9 million, including 5,691,948 shares of
United’s common stock and $31.5 million in cash that was exchanged for all of
the outstanding common shares and options to purchase common shares of
Gwinnett. The value of the common stock issued of $33.62 per share
was determined based on the average of the closing market price of United’s
common shares over the period beginning two days before and ending two days
after the terms of the acquisition were agreed to and announced.
The financial information below
presents the pro forma earnings of United assuming that the results of
operations of Gwinnett were included in consolidated earnings for the three
months ended March 31.
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Total
revenue
|
$ | 72,453 | $ | 82,709 | ||||
|
Net
income
|
16,078 | 22,498 | ||||||
|
Diluted
earnings per common share
|
.34 | .45 | ||||||
At March 31, 2008, accrued merger costs
of $608,000 remained unpaid relating to acquisitions closed in 2007, 2006 and
2004. The severance and related costs include change of control
payments for which payment had been deferred.
|
Activity
with accrued merger cost
|
||||||||||||
|
For
the Three Months Ended March 31, 2008
|
||||||||||||
|
Beginning
Balance
|
Amounts
Paid
|
Ending
Balance
|
||||||||||
|
Severance
and related costs
|
$ | 2,481 | $ | (1,877 | ) | $ | 604 | |||||
|
Professional
fees
|
4 | - | 4 | |||||||||
|
Totals
|
$ | 2,485 | $ | (1,877 | ) | $ | 608 | |||||
8
Note
6 - Assets and Liabilities Measured at Fair Value
On
January 1, 2008, United adopted Statement of Financial Accounting Standards No.
157, Fair Value
Measurements (“SFAS No. 157”). SFAS No. 157 defines fair
value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. SFAS No. 157 applies to reported
balances that are required or permitted to be measured at fair value under
existing accounting pronouncements; accordingly, the standard does not require
any new fair value measurements of reported balances.
SFAS No.
157 emphasizes that fair value is a market-based measurement, not an
entity-specific measurement. Therefore, a fair value measurement
should be determined based on the assumptions that market participants would use
in pricing the asset or liability. As a basis for considering market
participant assumptions in fair value measurements, SFAS No. 157 establishes a
fair value hierarchy that distinguishes between market participant assumptions
based on market data obtained from sources independent of the reporting entity
(observable inputs that are classified within Levels 1 and 2 of the hierarchy)
and the reporting entity’s own assumptions about market participant assumptions
(unobservable inputs classified within Level 3 of the hierarchy).
Fair
Value Hierarchy
|
Level
1
|
Valuation
is based upon quoted prices (unadjusted) in active markets for identical
assets or liabilities that United has the ability to
access.
|
|
Level
2
|
Valuation
is based upon quoted prices for similar assets and liabilities in active
markets, as well as inputs that are observable for the asset or liability
(other than quoted prices), such as interest rates, foreign exchange
rates, and yield curves that are observable at commonly quoted
intervals.
|
|
Level
3
|
Valuation
is generated from model-based techniques that use at least one significant
assumption based on unobservable inputs for the asset or liability, which
are typically based on an entity’s own assumptions, as there is little, if
any, related market activity. In instances where the determination of the
fair value measurement is based on inputs from different levels of the
fair value hierarchy, the level in the fair value hierarchy within which
the entire fair value measurement falls is based on the lowest level input
that is significant to the fair value measurement in its entirety.
United’s assessment of the significance of a particular input to the fair
value measurement in its entirety requires judgment, and considers factors
specific to the asset or liability.
|
The
following is a description of valuation methodologies used for assets and
liabilities recorded at fair value
Securities
Available for Sale
Investment
securities available-for-sale are recorded at fair value on a recurring basis.
Fair value measurement is based upon quoted prices, if available. If quoted
prices are not available, fair values are measured using independent pricing
models or other model-based valuation techniques such as the present value of
future cash flows, adjusted for the security’s credit rating, prepayment
assumptions and other factors such as credit loss assumptions. Level 1
securities include those traded on an active exchange, such as the New York
Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers
in active over-the-counter markets and money market funds. Level 2 securities
include mortgage-backed securities issued by government sponsored entities,
municipal bonds and corporate debt securities. Securities classified as Level 3
include asset-backed securities in less liquid markets.
Deferred
Compensation Plan Assets and Liabilities
Included
in other assets in the consolidated balance sheet are assets related to employee
deferred compensation plans. The assets associated with these plans are invested
in mutual funds and classified as Level 1. Deferred compensation liabilities,
also classified as Level 1, are carried at the fair value of the obligation to
the employee, which mirrors the fair value of the invested assets and is
included in other liabilities in the consolidated balance sheet.
Loans
Held for Sale
Loans
held for sale are carried at the lower of cost or market value. The fair value
of loans held for sale is based on what secondary markets are currently offering
for portfolios with similar characteristics. As such, United classifies loans
subjected to nonrecurring fair value adjustments as Level 2.
9
Loans
United
does not record loans at fair value on a recurring basis. However, from time to
time, a loan is considered impaired and an allowance for loan losses is
established. Loans for which it is probable that payment of interest and
principal will not be made in accordance with the contractual terms of the loan
agreement are considered impaired. Once a loan is identified as individually
impaired, management measures impairment in accordance with SFAS 114,
“Accounting by Creditors for Impairment of a Loan,” (SFAS 114). The fair value
of impaired loans is estimated using one of several methods, including
collateral value, market value of similar debt, enterprise value, liquidation
value and discounted cash flows. Those impaired loans not requiring an allowance
represent loans for which the fair value of the expected repayments or
collateral exceed the recorded investments in such loans. At March 31, 2008,
substantially all of the total impaired loans were evaluated based on the fair
value of the collateral. In accordance with SFAS 157, impaired loans where an
allowance is established based on the fair value of collateral require
classification in the fair value hierarchy. When the fair value of the
collateral is based on an observable market price or a current appraised value,
United records the impaired loan as nonrecurring Level 2. When an appraised
value is not available or management determines the fair value of the collateral
is further impaired below the appraised value and there is no observable market
price, United records the impaired loan as nonrecurring Level 3.
Foreclosed
Assets
Foreclosed
assets are adjusted to fair value upon transfer of the loans to foreclosed
assets. Subsequently, foreclosed assets are carried at the lower of carrying
value or fair value. Fair value is based upon independent market prices,
appraised values of the collateral or management’s estimation of the value of
the collateral. When the fair value of the collateral is based on an observable
market price or a current appraised value, United records the foreclosed asset
as nonrecurring Level 2. When an appraised value is not available or management
determines the fair value of the collateral is further impaired below the
appraised value and there is no observable market price, United records the
foreclosed asset as nonrecurring Level 3.
Goodwill
and Other Intangible Assets
Goodwill
and identified intangible assets are subject to impairment testing. United’s
approach to testing goodwill for impairment is to compare the business unit’s
carrying value to the implied fair value based on multiples of earnings and
tangible book value for recently completed merger transactions. In
the event the fair value is determined to be less than the carrying value, the
asset is recorded at fair value as determined by the valuation model. As such,
United classifies goodwill and other intangible assets subjected to nonrecurring
fair value adjustments as Level 3.
Derivative
Financial Instruments
Currently,
United uses interest rate swaps and interest rate floors to manage its interest
rate risk. The valuation of these instruments is determined using
widely accepted valuation techniques including discounted cash flow analysis on
the expected cash flows of each derivative. This analysis reflects the
contractual terms of the derivatives, including the period to maturity, and uses
observable market-based inputs, including interest rate curves and implied
volatilities. The fair values of interest rate swaps are determined
using the market standard methodology of netting the discounted future fixed
cash receipts and the discounted expected variable cash payments. The
variable cash payments are based on an expectation of future interest rates
(forward curves) derived from observable market interest rate
curves.
The fair
values of interest rate options are determined using the market standard
methodology of discounting the future expected cash receipts that would occur if
variable interest rates fell below the strike rate of the floors. The
variable interest rates used in the calculation of projected receipts on the
floor are based on an expectation of future interest rates derived from
observable market interest rate curves and volatilities. To comply
with the provisions of SFAS No. 157, United incorporates credit valuation
adjustments to appropriately reflect both its own nonperformance risk and the
respective counterparty’s nonperformance risk in the fair value
measurements. In adjusting the fair value of its derivative contracts
for the effect of nonperformance risk, United has considered the impact of
netting and any applicable credit enhancements, such as collateral postings,
thresholds, mutual puts, and guarantees.
Although
United has determined that the majority of the inputs used to value its
derivatives fall within Level 2 of the fair value hierarchy, the credit
valuation adjustments associated with its derivatives utilize Level 3 inputs,
such as estimates of current credit spreads to evaluate the likelihood of
default by itself and its counterparties. However, as of March 31,
2008, United has assessed the significance of the impact of the credit valuation
adjustments on the overall valuation of its derivative positions and has
determined that the credit valuation adjustments are not significant to the
overall valuation of its derivatives. As a result, United has
determined that its derivative valuations in their entirety are classified in
Level 2 of the fair value hierarchy.
10
Assets
and Liabilities Measured at Fair Value on a Recurring Basis
The table
below presents United’s assets and liabilities measured at fair value on a
recurring basis as of March 31, 2008, aggregated by the level in the fair value
hierarchy within which those measurements fall.
|
(in
thousands)
|
||||||||||||||||
|
Balance
at
|
||||||||||||||||
|
Description
|
Level
1
|
Level
2
|
Level
3
|
March 31,
2008
|
||||||||||||
|
Assets
|
||||||||||||||||
|
Securities
available for sale
|
$ | - | $ | 1,508,402 | $ | - | $ | 1,508,402 | ||||||||
|
Deferred
compensation plan assets
|
4,884 | - | - | 4,884 | ||||||||||||
|
Derivative
financial instruments
|
- | 48,454 | - | 48,454 | ||||||||||||
|
Total
|
$ | 4,884 | $ | 1,556,856 | $ | - | $ | 1,561,740 | ||||||||
|
Liabilities
|
||||||||||||||||
|
Deferred
compensation plan liability
|
$ | 4,884 | $ | - | $ | - | $ | 4,884 | ||||||||
|
Total
|
$ | 4,884 | $ | - | $ | - | $ | 4,884 | ||||||||
Assets
and Liabilities Measured at Fair Value on a Nonrecurring Basis
United
may be required, from time to time, to measure certain assets at fair value on a
nonrecurring basis in accordance with U.S. Generally Accepted Accounting
Principles. These include assets that are measured at the lower of
cost or market that were recognized at fair value below cost at the end of the
period. The table below presents United’s assets and liabilities
measured at fair value on a nonrecurring basis as of March 31, 2008, aggregated
by the level in the fair value hierarchy within which those measurements
fall.
|
(in
thousands)
|
||||||||||||||||
|
Balance
at
|
||||||||||||||||
|
Description
|
Level
1
|
Level
2
|
Level
3
|
March 31,
2008
|
||||||||||||
|
Assets
|
|
|||||||||||||||
|
Loans
|
$ | - | $ | - | $ | 44,749 | $ | 44,749 | ||||||||
|
Foreclosed
assets
|
- | - | 13,583 | 13,583 | ||||||||||||
|
Total
|
$ | - | $ | - | $ | 58,332 | $ | 58,332 | ||||||||
Note
7 – Recent Accounting Pronouncements
In February 2007, the Financial
Accounting Standards Board (“FASB”) issued Statement of Financial Accounting
Standards No. 159 (SFAS No. 159), The Fair Value for Financial Assets
and Financial Liabilities—including an amendment of FASB Statement No.
115. This statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. This statement is expected to expand the use
of fair value measurement, which is consistent with the FASB’s long-term
measurement objective for accounting for financial instruments. This
statement became effective for United beginning January 1,
2008. United chose not to apply fair value measurements to any
financial instruments in accordance with SFAS No. 159, and therefore, the
adoption of this standard did not have a material effect on United’s financial
position, results of operations or disclosures.
11
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking
Statements
This Form 10-Q contains forward-looking
statements regarding United Community Banks, Inc. (“United”), including, without
limitation, statements relating to United’s 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 forward-looking statements
are not guarantees of future performance and involve certain risks and
uncertainties that are subject to change based on various factors (many of which
are beyond United’s control). The following factors, among others,
could cause United’s financial performance to differ materially from the
expectations expressed in such forward-looking statements:
|
●
|
our
recent operating results may not be indicative of future operating
results;
|
|
|
●
|
our
business is subject to the success of the local economies in which we
operate;
|
|
|
●
|
our
concentration of construction and land development loans is subject to
unique risks that could adversely affect our earnings;
|
|
|
●
|
we
may face risks with respect to future expansion and acquisitions or
mergers;
|
|
|
●
|
changes
in prevailing interest rates may negatively affect our net income and the
value of our assets;
|
|
|
●
|
if
our allowance for loan losses is not sufficient to cover actual loan
losses, our earnings would decrease;
|
|
|
●
|
we
may be subject to losses due to fraudulent and negligent conduct of our
loan customers, third party service providers or
employees;
|
|
|
●
|
competition
from financial institutions and other financial service providers may
adversely affect our profitability;
|
|
|
●
|
business
increases, productivity gains and other investments are lower than
expected or do not occur as quickly as anticipated;
|
|
|
●
|
competitive
pressures among financial services companies increase
significantly;
|
|
|
●
|
the
success of our business strategy;
|
|
|
●
|
the
strength of the United States economy in general
changes;
|
|
|
●
|
trade,
monetary and fiscal policies and laws, including interest rate policies of
the Board of Governors of the Federal Reserve System,
change;
|
|
|
●
|
inflation
or market conditions fluctuate;
|
|
|
●
|
conditions
in the stock market, the public debt market and other capital markets
deteriorate;
|
|
|
●
|
financial
services laws and regulations change;
|
|
|
●
|
technology
changes and United fails to adapt to those changes;
|
|
|
●
|
consumer
spending and saving habits change;
|
|
|
●
|
unanticipated
regulatory or judicial proceedings occur; and
|
|
|
●
|
United
is unsuccessful at managing the risks involved in the
foregoing.
|
Additional information with respect to
factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements may also be included in other
reports that United files with the Securities and Exchange
Commission. United cautions that the foregoing list of factors is not
exclusive and not to place undue reliance on forward-looking
statements. United does not intend to update any forward-looking
statement, whether written or oral, relating to the matters discussed in this
Form 10-Q.
12
Overview
The following discussion is intended to
provide insight into the results of operations and financial condition of United
and its subsidiaries and should be read in conjunction with the consolidated
financial statements and accompanying notes.
United is a bank holding company
registered with the Federal Reserve under the Bank Holding Company Act of 1956
that was incorporated under the laws of the state of Georgia in 1987 and
commenced operations in 1988. At March 31, 2008, United had total
consolidated assets of $8.4 billion, total loans of $6.0 billion, total deposits
of $6.2 billion and stockholders’ equity of $871.5 million.
United activities are primarily
conducted by its wholly-owned Georgia banking subsidiary (the “Bank”) and
Brintech, Inc., a consulting firm providing professional services to the
financial services industry. The Bank operations are conducted under
a community bank model that operates 27 “Community Banks” with local bank
presidents and boards in north Georgia, the Atlanta and Gainesville metropolitan
statistical area (the “Atlanta Region”), coastal Georgia, western North
Carolina, and east Tennessee.
Net income was $16.1 million during the
first quarter of 2008, a decrease of 17% from the $19.3 million
during the first quarter of 2007. Diluted earnings per common share
was $.34 for the first quarter of 2008, a decrease of 23% from the $.44 for the
first quarter of 2007. Return on tangible equity for the first
quarter of 2008 was 13.16%, compared to 17.18% for the first quarter of
2007. Return on assets for the first quarter of 2008 was .78% as
compared to 1.11% for the first quarter of 2007.
Earnings decreased primarily as a
result of higher credit costs and margin compression due to competitive deposit
pricing and higher levels of non-performing assets. Housing starts have slowed
significantly, leading to a surplus of lot inventory in our footprint, most
notably in the Atlanta Region. This increase in lot inventory
negatively affects both the cash flows of our residential construction and land
development customers, and the demand for new land development
loans.
Nonperforming assets increased to 1.07%
of total assets as of March 31, 2008, a significant increase from .20% as of
March 31, 2007. This increase is a reflection of the downstream
effects of the lot inventory buildup in the Atlanta Region, which itself is
indicative of the regional economic slowdown that is occurring in much of the
Southeast. To date, the rise in nonperforming assets has been mostly
confined to the residential construction portfolio and predominantly within the
Atlanta Region.
Fee revenue was flat and operating
expenses increased 6% from the first quarter
of 2007. Operating expenses increased across most categories
primarily due to the acquisition of First Bank of the South (“Gwinnett”) in
June, 2007, the higher level of legal fees and write downs on foreclosed
properties, and the increase in FDIC insurance premiums.
Critical
Accounting Policies
The accounting and reporting policies
of United are in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) and conform to general practices within the
banking industry. The more critical accounting and reporting policies
include United’s accounting for the allowance for loan losses and accounting for
intangible assets. In particular, United’s accounting policies
related to allowance for loan losses and intangibles involve the use of
estimates and require significant judgment to be made by
management. Different assumptions in the application of these
policies could result in material changes in United’s consolidated financial
position or consolidated results of operations. See “Asset Quality
and Risk Elements” herein for additional discussion of United’s accounting
methodologies related to the allowance.
Non-GAAP
Performance Measures
The presentation of United’s financial
results herein include references to operating performance measures, which are
measures of performance determined by methods other than GAAP. Management
included non-GAAP performance measures because it believes they are useful for
evaluating United’s operations and performance over periods of time, and uses
operating performance measures in managing and evaluating United’s business and
intends to use them in discussions about United’s operations and
performance.
Operating performance measures exclude
the effect of the special $15 million fraud-related provision for loan losses
recorded in the second quarter of 2007 and an additional $3 million provision
and $18 million in related charge-offs in the fourth quarter of 2007 involving
lot loans near Spruce Pine, North Carolina. Management believes that
the circumstances leading to the special provision and subsequent charge-offs
were isolated, non-recurring events and do not reflect overall trends in
United’s performance. Management also believes that these non-GAAP
performance measures provide users of United’s financial information with a
meaningful measure for assessing United’s financial results and credit trends
and comparing financial results to prior periods.
13
A reconciliation of operating earnings
measures to reported earnings measures using GAAP is presented
below:
|
Table
1 - Operating Earnings to GAAP Earnings Reconciliation
|
||||||||||||||||
|
(in
thousands, except per share data)
|
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|
First
|
Fourth
|
Third
|
Second
|
|||||||||||||
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||
|
2008
|
2007
|
2007
|
2007
|
|||||||||||||
|
Special
provision for fraud related loan losses
|
$ | - | $ | 3,000 | $ | - | $ | 15,000 | ||||||||
|
Income
tax effect of special provision
|
- | 1,167 | - | 5,835 | ||||||||||||
|
After-tax
effect of special provision
|
$ | - | $ | 1,833 | $ | - | $ | 9,165 | ||||||||
|
Net
Income Reconciliation
|
||||||||||||||||
|
Operating
net income
|
$ | 16,078 | $ | 6,034 | $ | 22,536 | $ | 21,076 | ||||||||
|
After-tax
effect of special provision and merger-related charges
|
- | (1,833 | ) | - | (9,165 | ) | ||||||||||
|
Net
income (GAAP)
|
$ | 16,078 | $ | 4,201 | $ | 22,536 | $ | 11,911 | ||||||||
|
|
||||||||||||||||
|
Basic
Earnings Per Share Reconciliation
|
||||||||||||||||
|
Basic
operating earnings per share
|
$ | .34 | $ | .13 | $ | .47 | $ | .47 | ||||||||
|
Per
share effect of special provision and merger-related
charges
|
- | (.04 | ) | - | (.21 | ) | ||||||||||
|
Basic
earnings per share (GAAP)
|
$ | .34 | $ | .09 | $ | .47 | $ | .26 | ||||||||
|
Diluted
Earnings Per Share Reconciliation
|
||||||||||||||||
|
Diluted
operating earnings per share
|
$ | .34 | $ | .13 | $ | .46 | $ | .46 | ||||||||
|
Per
share effect of special provision and merger-related
charges
|
- | (.04 | ) | - | (.20 | ) | ||||||||||
|
Diluted
earnings per share (GAAP)
|
$ | .34 | $ | .09 | $ | .46 | $ | .26 | ||||||||
|
Provision
for Loan Losses Reconciliation
|
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