SEC Filing | United Community Banks, Inc.

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10-Q

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, 2012

¨	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 001-35095

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.)

125 Highway 515 East

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, 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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x

Common stock, par value $1 per share 57,613,842 shares outstanding as of April 30, 2012

INDEX


PART I - Financial Information

Item 1. Financial Statements

Consolidated Statement of Operations (unaudited) for the Three Months Ended March 31, 2012 and 2011			3

Consolidated Statement of Comprehensive Income (Loss) (unaudited) for the Three Months Ended March 31, 2012 and 2011			4

Consolidated Balance Sheet at March 31, 2012 (unaudited), December 31, 2011 (audited) and March 31, 2011 (unaudited)			5

Consolidated Statement of Changes in Shareholders’ Equity (unaudited) for the Three Months Ended March 31, 2012 and 2011			6

Consolidated Statement of Cash Flows (unaudited) for the Three Months Ended March 31, 2012 and 2011			7

Notes to Consolidated Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			28

Item 3. Quantitative and Qualitative Disclosures About Market Risk			51

Item 4. Controls and Procedures			51

PART II - Other Information

Item 1. Legal Proceedings			51
Item 1A. Risk Factors			51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			51
Item 3. Defaults Upon Senior Securities			51
Item 4. Mine Safety Disclosures			51
Item 5. Other Information			51
Item 6. Exhibits			52

Part I – Financial Information

Item 1 – Financial Statements

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Operations (Unaudited)


	Three Months Ended
	March 31,
(in thousands, except per share data)	2012			2011
Interest revenue:
Loans, including fees	$	55,759		$	61,107
Investment securities, including tax exempt of $250 and $259		13,004			13,604
Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks		1,012			819

Total interest revenue		69,775			75,530

Interest expense:
Deposits:
NOW		637			1,324
Money market		641			2,028
Savings		37			77
Time		6,159			11,732

Total deposit interest expense		7,474			15,161
Federal funds purchased, repurchase agreements and other short-term borrowings		1,045			1,042
Federal Home Loan Bank advances		466			590
Long-term debt		2,372			2,780

Total interest expense		11,357			19,573

Net interest revenue		58,418			55,957
Provision for loan losses		15,000			190,000

Net interest revenue after provision for loan losses		43,418			(134,043	)

Fee revenue:
Service charges and fees		7,783			6,720
Mortgage loan and other related fees		2,099			1,494
Brokerage fees		813			677
Securities gains, net		557			55
Loss from prepayment of debt		(482	)		—
Other		4,609			2,892

Total fee revenue		15,379			11,838

Total revenue		58,797			(122,205	)

Operating expenses:
Salaries and employee benefits		25,225			24,924
Communications and equipment		3,155			3,344
Occupancy		3,771			4,074
Advertising and public relations		846			978
Postage, printing and supplies		979			1,118
Professional fees		1,975			3,330
Foreclosed property		3,825			64,899
FDIC assessments and other regulatory charges		2,510			5,413
Amortization of intangibles		732			762
Other		3,937			6,429

Total operating expenses		46,955			115,271

Net income (loss) before income taxes		11,842			(237,476	)
Income tax expense (benefit)		314			(140	)

Net income (loss)		11,528			(237,336	)
Preferred stock dividends and discount accretion		3,030			2,778

Net income (loss) available to common shareholders	$	8,498		$	(240,114	)

Earnings (loss) per common share—Basic / Diluted	$	.15		$	(13.00	)
Weighted average common shares outstanding—Basic / Diluted		57,764			18,466

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Comprehensive Income (Loss) (Unaudited)


	Three Months Ended
	March 31,
(in thousands)	2012			2011
Net income (loss)	$	11,528		$	(237,336	)
Other comprehensive loss:
Unrealized losses on available for sale securities:
Unrealized holding losses arising during period		(3,340	)		(959	)
Reclassification adjustment for gains included in net income		(557	)		(55	)
Amortization of gains included in net income (loss) on available for sale securities transferred to held to maturity		(413	)		(663	)
Amortization of gains included in net income (loss) on derivative financial instruments accounted for as cash flow hedges		(1,600	)		(4,223	)
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plans		154			—

Total other comprehensive loss		(5,756	)		(5,900	)

Comprehensive income (loss)	$	5,772		$	(243,236	)

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheet


	March 31,			December 31,			March 31,
	2012			2011			2011
(in thousands, except share and per share data)	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and due from banks	$	53,147		$	53,807		$	153,891
Interest-bearing deposits in banks		139,439			139,609			465,656
Federal funds sold, reverse repurchase agreements, commercial paper and short-term investments		235,000			185,000			470,087

Cash and cash equivalents		427,586			378,416			1,089,634
Securities available for sale		1,898,815			1,790,047			1,638,494
Securities held to maturity (fair value $318,490, $343,531 and $248,361)		303,636			330,203			245,430
Loans held for sale		—			—			80,629
Mortgage loans held for sale		24,809			23,881			25,364
Loans, net of unearned income		4,127,566			4,109,614			4,194,372
Less allowance for loan losses		113,601			114,468			133,121

Loans, net		4,013,965			3,995,146			4,061,251
Assets covered by loss sharing agreements with the FDIC		72,854			78,145			125,789
Premises and equipment, net		174,419			175,088			179,143
Bank owned life insurance		80,956			80,599			79,777
Accrued interest receivable		20,292			20,693			21,687
Intangible assets		7,695			8,428			10,684
Foreclosed property		31,887			32,859			54,378
Unsettled securities sales		43,527			—			—
Other assets		73,252			69,915			97,228

Total assets	$	7,173,693		$	6,983,420		$	7,709,488

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	1,101,757		$	992,109		$	864,708
NOW		1,389,016			1,509,896			1,320,136
Money market		1,123,734			1,038,778			967,938
Savings		214,150			199,007			193,591
Time:
Less than $100,000		1,207,479			1,332,394			1,576,505
Greater than $100,000		796,882			847,152			990,289
Brokered		167,521			178,647			684,581

Total deposits		6,000,539			6,097,983			6,597,748
Federal funds purchased, repurchase agreements, and other short-term borrowings		101,925			102,577			102,107
Federal Home Loan Bank advances		215,125			40,625			55,125
Long-term debt		120,245			120,225			150,166
Unsettled securities purchases		119,565			10,325			177,532
Accrued expenses and other liabilities		36,755			36,199			40,766

Total liabilities		6,594,154			6,407,934			7,123,444

Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 21,700 shares issued and outstanding		217			217			217
Series B; $1,000 stated value; 180,000 shares issued and outstanding		177,451			177,092			176,049
Series D; $1,000 stated value; 16,613 shares issued and outstanding		16,613			16,613			16,613
Series F; $1,000 stated value; 195,872 shares issued and outstanding		—			—			195,872
Series G; $1,000 stated value; 151,185 shares issued and outstanding		—			—			151,185
Common stock, $1 par value; 100,000,000 shares authorized; 41,688,647, 41,647,100 and 20,903,111 shares issued and outstanding		41,689			41,647			20,903
Common stock, non-voting, $1 par value; 30,000,000 shares authorized; 15,914,209 shares issued and outstanding		15,914			15,914			—
Common stock issuable; 90,126, 93,681 and 79,428 shares		2,948			3,233			3,681
Capital surplus		1,056,135			1,054,940			738,963
Accumulated deficit		(722,363	)		(730,861	)		(732,390	)
Accumulated other comprehensive (loss) income		(9,065	)		(3,309	)		14,951

Total shareholders’ equity		579,539			575,486			586,044

Total liabilities and shareholders’ equity	$	7,173,693		$	6,983,420		$	7,709,488

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

For the Three Months Ended March 31,


																									Accumulated
	Preferred Stock													Non-Voting		Common									Other
(in thousands, except share and per share data)	Series A		Series B		Series D		Series F		Series G		Common Stock			Common Stock		Stock Issuable			Capital Surplus			Accumulated Deficit			Comprehensive Income (Loss)			Total
Balance, December 31, 2010	$	217	$	175,711	$	—	$	—	$	—	$	18,937		$	—	$	3,894		$	741,244		$	(492,276	)	$	20,851		$	468,578
Net loss																							(237,336	)					(237,336	)
Other comprehensive loss																										(5,900	)		(5,900	)
Preferred for common equity exchange related to tax benefits preservation plan (1,551,126 common shares)						16,613						(1,551	)							(15,062	)								—
Common stock issued to dividend reinvestment plan and employee benefit plans (46,019 shares)												46								329									375
Common and preferred stock issued (3,467,699 common shares)								195,872		151,185		3,468								12,004									362,529
Amortization of stock options and restricted stock awards																				549									549
Vesting of restricted stock (1,419 shares issued, 6,382 shares deferred)												1					54			(55	)								—
Deferred compensation plan, net, including dividend equivalents																	65												65
Shares issued from deferred compensation plan (2,098 shares)												2					(332	)		330									—
Tax on option exercise and restricted stock vesting																				(376	)								(376	)
Preferred stock dividends:
Series A																							(3	)					(3	)
Series B				338																			(2,602	)					(2,264	)
Series D																							(173	)					(173	)

Balance, March 31, 2011	$	217	$	176,049	$	16,613	$	195,872	$	151,185	$	20,903		$	—	$	3,681		$	738,963		$	(732,390	)	$	14,951		$	586,044

Balance, December 31, 2011	$	217	$	177,092	$	16,613	$	—	$	—	$	41,647		$	15,914	$	3,233		$	1,054,940		$	(730,861	)	$	(3,309	)	$	575,486
Net income																							11,528						11,528
Other comprehensive loss																										(5,756	)		(5,756	)
Common stock issued to dividend reinvestment plan and to employee benefit plans (35,648 shares)												36								242									278
Amortization of stock options and restricted stock awards																				585									585
Vesting of restricted stock (4,397 shares issued, 8,399 shares deferred)												4					(151	)		187									40
Deferred compensation plan, net, including dividend equivalents																	49												49
Shares issued from deferred compensation plan (1,502 shares)												2					(183	)		181									—
Preferred stock dividends:
Series A																							(3	)					(3	)
Series B				359																			(2,608	)					(2,249	)
Series D																							(419	)					(419	)

Balance, March 31, 2012	$	217	$	177,451	$	16,613	$	—	$	—	$	41,689		$	15,914	$	2,948		$	1,056,135		$	(722,363	)	$	(9,065	)	$	579,539

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Cash Flows (Unaudited)


	Three Months Ended
	March 31,
(in thousands)	2012			2011
Operating activities:
Net income (loss)	$	11,528		$	(237,336	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion		6,803			4,743
Provision for loan losses		15,000			190,000
Stock based compensation		585			549
Securities gains, net		(557	)		(55	)
Losses and write downs on sales of other real estate owned		2,204			60,605
Loss on prepayment of borrowings		482			—
Changes in assets and liabilities:
Other assets and accrued interest receivable		(2,612	)		(4,770	)
Accrued expenses and other liabilities		646			6,518
Mortgage loans held for sale		(928	)		10,544

Net cash provided by operating activities		33,151			30,798

Investing activities:
Investment securities held to maturity:
Proceeds from maturities and calls		25,653			21,116
Purchases		—			(1,500	)
Investment securities available for sale:
Proceeds from sales		61,585			51,240
Proceeds from maturities and calls		142,236			116,175
Purchases		(253,229	)		(405,979	)
Net (increase) decrease in loans		(41,418	)		93,949
Funds collected from FDIC under loss sharing agreements		2,568			9,299
Proceeds from sales of premises and equipment		14			160
Purchases of premises and equipment		(1,614	)		(3,604	)
Proceeds from sale of other real estate		6,696			36,003

Net cash used in investing activities		(57,509	)		(83,141	)

Financing activities:
Net change in deposits		(97,444	)		128,576
Net change in federal funds purchased, repurchase agreements, and other short-term borrowings		(652	)		1,040
Proceeds from Federal Home Loan Bank advances		499,000			—
Settlement of Federal Home Loan Bank advances		(324,982	)		—
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans		278			375
Proceeds from issuance of common and preferred stock, net of offering costs		—			362,529
Cash dividends on preferred stock		(2,672	)		—

Net cash provided by financing activities		73,528			492,520

Net change in cash and cash equivalents		49,170			440,177
Cash and cash equivalents at beginning of period		378,416			649,457

Cash and cash equivalents at end of period	$	427,586		$	1,089,634

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	12,252		$	17,936
Income taxes		1,026			1,287
Unsettled securities sales		43,527			—
Unsettled securities purchases		119,565			177,532

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

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 (“GAAP”) 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 its Annual Report on Form 10-K for the year ended December 31, 2011.

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.

Foreclosed property is initially recorded at fair value, less estimated costs to sell. If the fair value, less estimated costs to sell at the time of foreclosure, is less than the loan balance, the deficiency is charged against the allowance for loan losses. If the fair value, less cost to sell, of the foreclosed property decreases during the holding period, a valuation allowance is established with a charge to operating expenses. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Financed sales of foreclosed property are accounted for in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 360-20, Real Estate Sales.

Note 2 – Accounting Standards Updates

In April 2012, the Financial Accounting Standards Board issued a proposed Accounting Standards Update to address the subsequent measurement of indemnification assets recognized as a result of a government assisted acquisition of a financial institution. The proposal requires an indemnification asset recognized as a result of a government assisted acquisition to be subsequently measured on the same basis as the indemnified item subject to the contractual limitations and amounts of the underlying contract. Comment letters on this proposed guidance are due by July 16, 2012. Because this standard is still in the proposal stage, the impact on United’s financial position, results of operations and disclosures has not been assessed.

Note 3 – Mergers and Acquisitions

On June 19, 2009, United Community Bank (“UCB” or the “Bank”) purchased substantially all the assets and assumed substantially all the liabilities of Southern Community Bank (“SCB”) from the Federal Deposit Insurance Corporation (“FDIC”), as Receiver of SCB. UCB and the FDIC entered loss sharing agreements regarding future losses incurred on loans and foreclosed loan collateral existing at June 19, 2009. Under the terms of the loss sharing agreements, the FDIC will absorb 80 percent of losses and share 80 percent of loss recoveries on the first $109 million of losses and, absorb 95 percent of losses and share in 95 percent of loss recoveries on losses exceeding $109 million. The term for loss sharing on 1-4 Family loans is ten years, while the term for loss sharing on all other loans is five years.

Under the loss sharing agreement, the portion of the losses expected to be indemnified by FDIC is considered an indemnification asset in accordance with ASC 805, Business Combinations. The indemnification asset, referred to as “estimated loss reimbursement from the FDIC” is included in the balance of “Assets covered by loss sharing agreements with the FDIC” on the Consolidated Balance Sheet. The indemnification asset was recognized at fair value, which was estimated at the acquisition date based on the terms of the loss sharing agreement. The indemnification asset is expected to be collected over a four-year average life. No valuation allowance was required.

Loans, foreclosed property and the estimated FDIC reimbursement resulting from the loss sharing agreements with the FDIC are reported as “assets covered by loss sharing agreements with the FDIC” in the consolidated balance sheet.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The table below shows the components of covered assets at March 31, 2012 (in thousands).


(in thousands)	Purchased Impaired Loans		Other Purchased Loans		Other		Total
Commercial (secured by real estate)	$	—	$	29,888	$	—	$	29,888
Commercial & industrial		—		1,751		—		1,751
Construction and land development		546		7,896		—		8,442
Residential mortgage		145		6,797		—		6,942
Consumer installment		—		143		—		143

Total covered loans		691		46,475		—		47,166
Covered foreclosed property		—		—		13,983		13,983
Estimated loss reimbursement from the FDIC		—		—		11,705		11,705

Total covered assets	$	691	$	46,475	$	25,688	$	72,854

Note 4 – Reverse Repurchase Agreements

United enters into reverse repurchase agreements in order to invest short-term funds. In addition, United enters into repurchase agreements and reverse repurchase agreements with the same counter party in transactions that are subject to master netting agreements under which the balances are netted in the balance sheet in accordance with ASC 210-20. The following table presents a summary of amounts outstanding under reverse repurchase agreements including those entered into in connection with repurchase agreements with the same counterparty under master netting agreements (in thousands).


	March 31, 2012
	Reverse Repurchase Agreements (Assets)			Repurchase Agreements (Liabilities)			Net Reported Balance (Asset)
Amounts subject to master netting agreements	$	171,000		$	171,000		$	—
Other reverse repurchase agreements		235,000			—			235,000

Total	$	406,000		$	171,000		$	235,000

Weighted average interest rate		1.17	%		.32	%

United did not have any outstanding reverse repurchase agreements at March 31, 2011.

Note 5 – Securities

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three months ended March 31, 2012 and 2011(in thousands).


	Three Months Ended March 31,
	2012		2011
Proceeds from sales	$	105,111	$	51,240

Gross gains on sales	$	557	$	331
Gross losses on sales		—		(276	)

Net gains on sales of securities	$	557	$	55

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Substantially all securities with a carrying value of $1.38 billion, $1.72 billion, and $1.83 billion were pledged to secure public deposits, FHLB advances and other secured borrowings at March 31, 2012, December 31, 2011 and March 31, 2011, respectively.

Securities are classified as held to maturity when management has the positive intent and ability to hold them until maturity. Securities held to maturity are carried at amortized cost. The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at March 31, 2012, December 31, 2011, and March 31, 2011 are as follows (in thousands).


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
As of March 31, 2012
State and political subdivisions	$	51,893		4,413		—	$	56,306
Mortgage-backed securities⁽¹⁾		251,743		10,441		—		262,184

Total	$	303,636	$	14,854	$	—	$	318,490

As of December 31, 2011
U.S. Government agencies	$	5,000	$	6	$	—	$	5,006
State and political subdivisions		51,903		4,058		13		55,948
Mortgage-backed securities⁽¹⁾		273,300		9,619		342		282,577

Total	$	330,203	$	13,683	$	355	$	343,531

As of March 31, 2011
U.S. Government agencies	$	4,989	$	12	$	—	$	5,001
State and political subdivisions		48,497		616		731		48,382
Mortgage-backed securities⁽¹⁾		191,944		3,041		7		194,978

Total	$	245,430	$	3,669	$	738	$	248,361

⁽¹⁾	All are residential type mortgage-backed securities

The cost basis, unrealized gains and losses, and fair value of securities available for sale at March 31, 2012, December 31, 2011 and March 31, 2011 are presented below (in thousands).


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
As of March 31, 2012
U.S. Government agencies	$	43,593	$	286	$	90	$	43,789
State and political subdivisions		21,490		1,321		3		22,808
Mortgage-backed securities⁽¹⁾		1,692,446		33,212		590		1,725,068
Corporate bonds		119,154		—		14,568		104,586
Other		2,564		—		—		2,564

Total	$	1,879,247	$	34,819	$	15,251	$	1,898,815

As of December 31, 2011
U.S. Government agencies	$	43,592	$	158	$	—	$	43,750
State and political subdivisions		24,997		1,345		3		26,339
Mortgage-backed securities⁽¹⁾		1,576,064		33,988		143		1,609,909
Corporate bonds		119,110		—		11,432		107,678
Other		2,371		—		—		2,371

Total	$	1,766,134	$	35,491	$	11,578	$	1,790,047

As of March 31, 2011
U.S. Government agencies	$	94,966	$	16	$	1,204	$	93,778
State and political subdivisions		26,870		983		20		27,833
Mortgage-backed securities⁽¹⁾		1,388,702		27,617		1,474		1,414,845
Corporate bonds		100,956		150		1,520		99,586
Other		2,452		—		—		2,452

Total	$	1,613,946	$	28,766	$	4,218	$	1,638,494

⁽¹⁾	All are residential type mortgage-backed securities

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

There were no held to maturity securities in an unrealized loss position at March 31, 2012. The following table summarizes held to maturity securities in an unrealized loss position as of December 31, 2011 and March 31, 2011 (in thousands).


	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	363	$	13	$	363	$	13
Mortgage-backed securities		10,967		342		—		—		10,967		342

Total unrealized loss position	$	10,967	$	342	$	363	$	13	$	11,330	$	355

As of March 31, 2011
State and political subdivisions	$	21,313	$	731	$	—	$	—	$	21,313	$	731
Mortgage-backed securities		1,942		7		—		—		1,942		7

Total unrealized loss position	$	23,255	$	738	$	—	$	—	$	23,255	$	738

The following table summarizes available for sale securities in an unrealized loss position as of March 31, 2012, December 31, 2011 and March 31, 2011 (in thousands).


	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of March 31, 2012
U.S. Government agencies	$	9,905	$	90	$	—	$	—	$	9,905	$	90
State and political subdivisions		—		—		11		3		11		3
Mortgage-backed securities		405,039		574		21,067		16		426,106		590
Corporate bonds		35,306		2,872		69,230		11,696		104,536		14,568

Total unrealized loss position	$	450,250	$	3,536	$	90,308	$	11,715	$	540,558	$	15,251

As of December 31, 2011
State and political subdivisions	$	—	$	—	$	11	$	3	$	11	$	3
Mortgage-backed securities		98,687		110		22,719		33		121,406		143
Corporate bonds		42,864		5,197		64,765		6,235		107,629		11,432

Total unrealized loss position	$	141,551	$	5,307	$	87,495	$	6,271	$	229,046	$	11,578

As of March 31, 2011
U.S. Government agencies	$	73,763	$	1,204	$	—	$	—	$	73,763	$	1,204
State and political subdivisions		1,098		15		11		5		1,109		20
Mortgage-backed securities		292,379		1,474		—		—		292,379		1,474
Corporate bonds		79,386		1,520		—		—		79,386		1,520

Total unrealized loss position	$	446,626	$	4,213	$	11	$	5	$	446,637	$	4,218

At March 31, 2012, there were 53 available for sale securities and no held to maturity securities that were in an unrealized loss position. United does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of its amortized cost basis. Unrealized losses at March 31, 2012 are primarily related to changes in interest rates, however the unrealized losses in corporate bonds also reflect downgrades in the underlying securities ratings. The bonds remain above investment grade and United does not consider them to be impaired. Unrealized losses at March 31, 2011 were primarily attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analyst’s reports. No impairment charges were recognized during the first quarter of 2012 or 2011.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The amortized cost and fair value of available for sale and held to maturity securities at March 31, 2012, by contractual maturity, are presented in the following table (in thousands).


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Government agencies:
5 to 10 years	$	34,995	$	35,153	$	—	$	—
More than 10 years		8,598		8,636		—		—

		43,593		43,789		—		—

State and political subdivisions:
Within 1 year		1,600		1,608		—		—
1 to 5 years		14,121		14,966		4,813		5,132
5 to 10 years		4,921		5,317		23,667		25,896
More than 10 years		848		917		23,413		25,278

		21,490		22,808		51,893		56,306

Corporate bonds:
1 to 5 years		18,594		17,668		—		—
5 to 10 years		99,560		86,618		—		—
More than 10 years		1,000		300		—		—

		119,154		104,586		—		—

Other:
More than 10 years		2,564		2,564		—		—

		2,564		2,564		—		—

Total securities other than mortgage-backed securities:
Within 1 year		1,600		1,608		—		—
1 to 5 years		32,715		32,634		4,813		5,132
5 to 10 years		139,476		127,088		23,667		25,896
More than 10 years		13,010		12,417		23,413		25,278
Mortgage-backed securities		1,692,446		1,725,068		251,743		262,184

	$	1,879,247	$	1,898,815	$	303,636	$	318,490

Maturities of mortgage-backed securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 6 – Loans and Allowance for Loan Losses

Major classifications of loans as of March 31, 2012, December 31, 2011 and March 31, 2011, are summarized as follows (in thousands).


	March 31,		December 31,		March 31,
	2012		2011		2011
Commercial (secured by real estate)	$	1,843,207	$	1,821,414	$	1,692,154
Commercial & industrial		439,496		428,249		431,473
Commercial construction		167,122		164,155		213,177

Total commercial		2,449,825		2,413,818		2,336,804
Residential mortgage		1,131,248		1,134,902		1,186,531
Residential construction		435,375		448,391		549,618
Consumer installment		111,118		112,503		121,419

Total loans		4,127,566		4,109,614		4,194,372
Less allowance for loan losses		113,601		114,468		133,121

Loans, net	$	4,013,965	$	3,995,146	$	4,061,251

The Bank makes loans and extensions of credit to individuals and a variety of firms and corporations located primarily in counties in north Georgia, the Atlanta, Georgia metropolitan statistical area, the Gainesville, Georgia metropolitan statistical area, coastal Georgia, western North Carolina and east Tennessee. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market.

Changes in the allowance for loan losses for the three months ended March 31, 2012 and 2011 are summarized as follows (in thousands).


	Three Months Ended
	March 31,
	2012		2011
Balance beginning of period	$	114,468	$	174,695
Provision for loan losses		15,000		190,000
Charge-offs:
Commercial (secured by real estate)		3,928		48,707
Commercial & industrial		756		4,362
Commercial construction		364		49,715
Residential mortgage		5,767		36,676
Residential construction		5,629		92,255
Consumer installment		753		1,096

Total loans charged-off		17,197		232,811

Recoveries:
Commercial (secured by real estate)		231		100
Commercial & industrial		87		322
Commercial construction		30		—
Residential mortgage		392		293
Residential construction		315		117
Consumer installment		275		405

Total recoveries		1,330		1,237

Net charge-offs		15,867		231,574

Balance end of period	$	113,601	$	133,121

At March 31, 2012, December 31, 2011 and March 31, 2011, loans with a carrying value of $1.58 billion, $1.52 billion and $857 million were pledged as collateral to secure FHLB advances and other contingent funding sources.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the balance and activity in the allowance for loan losses by portfolio segment and the recorded investment in loans by portfolio segment based on impairment method as of March 31, 2012, December 31, 2011 and March 31, 2011 (in thousands).


	Commercial (Secured by Real Estate)			Commercial & Industrial			Commercial Construction			Residential Mortgage			Residential Construction			Consumer Installment			Unallocated			Total
Three Months Ended March 31, 2012
Allowance for loan losses:
Beginning balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Charge-offs		(3,928	)		(756	)		(364	)		(5,767	)		(5,629	)		(753	)		—			(17,197	)
Recoveries		231			87			30			392			315			275			—			1,330
Provision		2,667			460			3,820			3,655			4,408			252			(262	)		15,000

Ending balance	$	30,614		$	5,472		$	9,583		$	27,356		$	29,473		$	1,898		$	9,205		$	113,601

Ending allowance attributable to loans:
Individually evaluated for impairment	$	7,654		$	1,122		$	1,920		$	2,254		$	3,236		$	63		$	—		$	16,249
Collectively evaluated for impairment		22,960			4,350			7,663			25,102			26,237			1,835			9,205			97,352

Total ending allowance balance	$	30,614		$	5,472		$	9,583		$	27,356		$	29,473		$	1,898		$	9,205		$	113,601

Loans:
Individually evaluated for impairment	$	117,999		$	60,568		$	46,549		$	21,525		$	47,048		$	331		$	—		$	294,020
Collectively evaluated for impairment		1,725,208			378,928			120,573			1,109,723			388,327			110,787			—			3,833,546

Total loans	$	1,843,207		$	439,496		$	167,122		$	1,131,248		$	435,375		$	111,118		$	—		$	4,127,566

December 31, 2011
Allowance for loan losses:
Ending allowance attributable to loans:
Individually evaluated for impairment	$	7,491		$	1,117		$	236		$	2,234		$	3,731		$	16		$	—		$	14,825
Collectively evaluated for impairment		24,153			4,564			5,861			26,842			26,648			2,108			9,467			99,643

Total ending allowance balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468

Loans:
Individually evaluated for impairment	$	107,831		$	57,828		$	26,245		$	18,376		$	46,687		$	292		$	—		$	257,259
Collectively evaluated for impairment		1,713,583			370,421			137,910			1,116,526			401,704			112,211			—			3,852,355

Total loans	$	1,821,414		$	428,249		$	164,155		$	1,134,902		$	448,391		$	112,503		$	—		$	4,109,614

Three Months Ended March 31, 2011
Allowance for loan losses:
Beginning balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695
Charge-offs		(48,707	)		(4,362	)		(49,715	)		(36,676	)		(92,255	)		(1,096	)		—			(232,811	)
Recoveries		100			322			—			293			117			405			—			1,237
Provision		37,675			4,047			48,916			39,207			62,087			217			(2,149	)		190,000

Ending balance	$	20,259		$	7,587		$	5,981		$	25,129		$	62,520		$	2,556		$	9,089		$	133,121

Ending allowance attributable to loans:
Individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Collectively evaluated for impairment		20,259			7,587			5,981			25,129			62,520			2,556			9,089			133,121

Total ending allowance balance	$	20,259		$	7,587		$	5,981		$	25,129		$	62,520		$	2,556		$	9,089		$	133,121

Loans:
Individually evaluated for impairment	$	17,154		$	—		$	3,624		$	5,157		$	22,667		$	—		$	—		$	48,602
Collectively evaluated for impairment		1,675,000			431,473			209,553			1,181,374			526,951			121,419			—			4,145,770

Total loans	$	1,692,154		$	431,473		$	213,177		$	1,186,531		$	549,618		$	121,419		$	—		$	4,194,372

United reviews all loans that are on nonaccrual with a balance of $500,000 or greater for impairment as well as accruing substandard relationships greater than $2 million and all troubled debt restructurings (“TDRs”). A loan is considered impaired when, based on current events and circumstances, it is probable that all amounts due, according to the contractual terms of the loan, will not be collected. All troubled debt restructurings are considered impaired regardless of accrual status. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Interest payments received on impaired loans that are on nonaccrual status are applied as a reduction of the outstanding principal balance. For impaired loans not on nonaccrual status, interest is accrued according to the terms of the loan agreement. Impairment amounts are recorded quarterly and specific reserves are recorded in the allowance for loan losses.

In the first quarter of 2011, United’s Board of Directors adopted an accelerated problem asset disposition plan which included the bulk sale of $267 million in classified loans. Those loans were classified as held for sale at the end of the first quarter and were written down to the expected proceeds from the sale. The charge-offs on the loans transferred to held for sale in anticipation of the bulk loan sale, which closed on April 18, 2011, increased first quarter 2011 loan charge-offs by $186 million. The actual loss on the bulk loan sale at closing was less than the amount charged-off in the first quarter, resulting in a $7.27 million reduction of second quarter 2011 charge-offs.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The recorded investments in individually evaluated impaired loans at March 31, 2012, December 31, 2011 and March 31, 2011 were as follows (in thousands).


	March 31,		December 31,		March 31,
	2012		2011		2011
Period-end loans with no allocated allowance for loan losses	$	208,302	$	188,509	$	48,602
Period-end loans with allocated allowance for loan losses		85,718		68,750		—

Total	$	294,020	$	257,259	$	48,602

Amount of allowance for loan losses allocated	$	16,249	$	14,825	$	—

The increase in the amount of impaired loans is due to an increase in the number and balance of TDRs. The average balances of impaired loans and income recognized on impaired loans while they were considered impaired is presented below for the three months ended March 31, 2012 and March 31, 2011 (in thousands).


	Three Months Ended
	March 31,
	2012		2011
Average balance of individually evaluated impaired loans during period	$	280,626	$	95,163
Interest income recognized during impairment		2,267		—
Cash-basis interest income recognized		3,192		—

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2012, December 31, 2011 and March 31, 2011 (in thousands).


	March 31, 2012						December 31, 2011						March 31, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial (secured by real estate)	$	91,399	$	82,593	$	—	$	82,887	$	76,215	$	—	$	27,811	$	17,154	$	—
Commercial & industrial		81,896		56,896		—		77,628		52,628		—		—		—		—
Commercial construction		30,188		27,295		—		24,927		23,609		—		4,360		3,624		—

Total commercial		203,483		166,784		—		185,442		152,452		—		32,171		20,778		—
Residential mortgage		15,375		13,041		—		13,845		10,804		—		8,801		5,157		—
Residential construction		44,018		28,477		—		38,955		25,190		—		49,205		22,667		—
Consumer installment		—		—		—		63		63		—		—		—		—

Total with no related allowance recorded		262,876		208,302		—		238,305		188,509		—		90,177		48,602		—

With an allowance recorded:
Commercial (secured by real estate)		36,536		35,406		7,654		31,806		31,616		7,491		—		—		—
Commercial & industrial		3,672		3,672		1,122		5,200		5,200		1,117		—		—		—
Commercial construction		20,056		19,254		1,920		2,636		2,636		236		—		—		—

Total commercial		60,264		58,332		10,696		39,642		39,452		8,844		—		—		—
Residential mortgage		9,255		8,484		2,254		7,642		7,572		2,234		—		—		—
Residential construction		19,235		18,571		3,236		21,629		21,497		3,731		—		—		—
Consumer installment		340		331		63		235		229		16		—		—		—

Total with an allowance recorded		89,094		85,718		16,249		69,148		68,750		14,825		—		—		—

Total	$	351,970	$	294,020	$	16,249	$	307,453	$	257,259	$	14,825	$	90,177	$	48,602	$	—

There were no loans more than 90 days past due and still accruing interest at March 31, 2012, December 31, 2011 or March 31, 2011. Nonaccrual loans at March 31, 2012, December 31, 2011 and March 31, 2011 were $130 million, $127 million and $83.8, respectively. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans with larger balances.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the recorded investment (unpaid principal less amounts charged-off) in nonaccrual loans by loan class as of March 31, 2012, December 31, 2011 and March 31, 2011 (in thousands).


	Nonaccrual Loans
	March 31, 2012			December 31, 2011			March 31, 2011
Commercial (secured by real estate)	$	26,081		$	27,322		$	20,648
Commercial & industrial		36,314			34,613			2,198
Commercial construction		23,319			16,655			3,701

Total commercial		85,714			78,590			26,547
Residential mortgage		18,741			22,358			23,711
Residential construction		24,341			25,523			32,038
Consumer installment		908			1,008			1,473

Total	$	129,704		$	127,479		$	83,769

Balance as a percentage of unpaid principal		70.6	%		71.3	%		57.3	%

The following table presents the aging of the recorded investment in past due loans as of March 31, 2012, December 31, 2011 and March 31, 2011 by class of loans (in thousands).


	Loans Past Due								Loans Not
	30 - 59 Days		60 - 89 Days		> 90 Days		Total		Past Due		Total
As of March 31, 2012
Commercial (secured by real estate)	$	6,777	$	3,219	$	14,461	$	24,457	$	1,818,750	$	1,843,207
Commercial & industrial		1,930		244		2,905		5,079		434,417		439,496
Commercial construction		256		55		8,620		8,931		158,191		167,122

Total commercial		8,963		3,518		25,986		38,467		2,411,358		2,449,825
Residential mortgage		14,540		5,223		9,103		28,866		1,102,382		1,131,248
Residential construction		7,462		1,584		11,201		20,247		415,128		435,375
Consumer installment		961		248		346		1,555		109,563		111,118

Total loans	$	31,926	$	10,573	$	46,636	$	89,135	$	4,038,431	$	4,127,566

As of December 31, 2011
Commercial (secured by real estate)	$	8,036	$	4,182	$	10,614	$	22,832	$	1,798,582	$	1,821,414
Commercial & industrial		3,869		411		407		4,687		423,562		428,249
Commercial construction		166		—		1,128		1,294		162,861		164,155

Total commercial		12,071		4,593		12,149		28,813		2,385,005		2,413,818
Residential mortgage		15,185		4,617		9,071		28,873		1,106,029		1,134,902
Residential construction		3,940		2,636		10,270		16,846		431,545		448,391
Consumer installment		1,534		308		430		2,272		110,231		112,503

Total loans	$	32,730	$	12,154	$	31,920	$	76,804	$	4,032,810	$	4,109,614

As of March 31, 2011
Commercial (secured by real estate)	$	11,522	$	9,244	$	9,659	$	30,425	$	1,661,729	$	1,692,154
Commercial & industrial		1,485		854		876		3,215		428,258		431,473
Commercial construction		5,458		1,880		1,237		8,575		204,602		213,177

Total commercial		18,465		11,978		11,772		42,215		2,294,589		2,336,804
Residential mortgage		16,439		6,658		10,789		33,886		1,152,645		1,186,531
Residential construction		13,349		9,514		13,405		36,268		513,350		549,618
Consumer installment		1,705		346		573		2,624		118,795		121,419

Total loans	$	49,958	$	28,496	$	36,539	$	114,993	$	4,079,379	$	4,194,372

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of March 31, 2012 and December 31, 2011, United has allocated $12.2 million and $8.65 million, respectively, of specific reserves to customers whose loan terms have been modified in troubled debt restructurings. There were no specific reserves established for loans considered to be troubled debt restructurings at March 31, 2011. United committed to lend additional amounts totaling up to $891,000, $1.12 million and $519,000 as of March 31, 2012, December 31, 2011 and March 31, 2011, respectively, to customers with outstanding loans that are classified as TDRs.

The modification of the terms of troubled debt restructurings included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date or an extension of the amortization period at a stated rate lower than the current market rate for new debt with similar risk; or a permanent reduction of the principal amount.

The following table presents additional information on troubled debt restructurings including the number of loan contracts restructured and the pre and post modification recorded investment (dollars in thousands).


	March 31, 2012						December 31, 2011						March 31, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial (sec by RE)		92	$	83,230	$	79,844		74	$	70,380	$	69,054		29	$	25,094	$	22,211
Commercial & industrial		26		3,487		3,487		18		806		806		5		155		155
Commercial construction		16		35,184		34,066		11		18,053		18,053		6		9,622		9,622

Total commercial		134		121,901		117,397		103		89,239		87,913		40		34,871		31,988
Residential mortgage		99		15,718		14,832		80		11,943		11,379		32		4,013		3,882
Residential construction		63		27,128		25,948		54		24,921		24,145		54		14,582		13,759
Consumer installment		40		340		330		34		298		293		7		122		117

Total loans		336	$	165,087	$	158,507		271	$	126,401	$	123,730		133	$	53,588	$	49,746

The following table presents new troubled debt restructurings during the three months ended March 31, 2012 and those troubled debt restructurings that have subsequently defaulted, which we define as 90 days or more past due (dollars in thousands).


	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Troubled Debt Restructurings Modified Within the Previous Twelve Months that Have Subsequently Defaulted During the Three Months Ended March 31, 2012
New Troubled Debt Restructurings for the Three Months Ended March 31, 2012	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Recorded Investment
Commercial (secured by real estate)		24	$	15,099	$	13,741	$	—	$	—
Commercial & industrial		10		2,724		2,724		1		43
Commercial construction		7		20,781		20,781		2		4,174

Total commercial		41		38,604		37,246		3		4,217
Residential mortgage		24		5,279		5,273		3		373
Residential construction		14		3,751		3,189		3		1,476
Consumer installment		7		60		55		—		—

Total loans		86	$	47,694	$	45,763		9	$	6,066

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Risk Ratings

United categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic trends, among other factors. United analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. United uses the following definitions for its risk ratings:

Watch. Loans in this category are presently protected from apparent loss; however weaknesses exist that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. These loans require more than the ordinary amount of supervision. Collateral values generally afford adequate coverage, but may not be immediately marketable.

Substandard. These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged. Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. There is the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. Immediate corrective action is necessary.

Doubtful. Specific weaknesses characterized as Substandard that are severe enough to make collection in full highly questionable and improbable. There is no reliable secondary source of full repayment.

Loss. Loans categorized as Loss have the same characteristics as Doubtful however probability of loss is certain. Loans classified as Loss are charged-off.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are generally deposit account overdrafts or new loans that have not yet been assigned a grade.

As of March 31, 2012, December 31, 2011 and March 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands).


	Pass		Watch		Substandard		Doubtful / Loss		Not Rated		Total
As of March 31, 2012
Commercial (secured by real estate)	$	1,586,934	$	96,352	$	159,921	$	—	$	—	$	1,843,207
Commercial & industrial		381,097		4,126		53,532		—		741		439,496
Commercial construction		99,825		20,722		46,575		—		—		167,122

Total commercial		2,067,856		121,200		260,028		—		741		2,449,825
Residential mortgage		995,982		40,790		94,476		—		—		1,131,248
Residential construction		298,592		48,168		88,615		—		—		435,375
Consumer installment		106,124		1,476		3,518		—		—		111,118

Total loans	$	3,468,554	$	211,634	$	446,637	$	—	$	741	$	4,127,566

As of December 31, 2011
Commercial (secured by real estate)	$	1,561,204	$	89,830	$	170,380	$	—	$	—	$	1,821,414
Commercial & industrial		369,343		7,630		50,366		—		910		428,249
Commercial construction		114,817		14,173		35,165		—		—		164,155

Total commercial		2,045,364		111,633		255,911		—		910		2,413,818
Residential mortgage		993,779		42,323		98,800		—		—		1,134,902
Residential construction		312,527		38,386		97,478		—		—		448,391
Consumer installment		107,333		1,411		3,759		—		—		112,503

Total loans	$	3,459,003	$	193,753	$	455,948	$	—	$	910	$	4,109,614

As of March 31, 2011
Commercial (secured by real estate)	$	1,469,140	$	82,715	$	140,299	$	—	$	—	$	1,692,154
Commercial & industrial		405,059		6,824		18,608		—		982		431,473
Commercial construction		166,386		8,205		38,586		—		—		213,177

Total commercial		2,040,585		97,744		197,493		—		982		2,336,804
Residential mortgage		1,052,909		40,779		92,843		—		—		1,186,531
Residential construction		376,583		60,463		112,572		—		—		549,618
Consumer installment		116,964		626		3,829		—		—

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