Table of Contents

 

 

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

OR

 

¨	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.

 

Large accelerated filer		¨		Accelerated filer		x
Non-accelerated filer		¨  (Do not check if a smaller reporting company)		Smaller Reporting Company		¨

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

 

 

 

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Table of Contents

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

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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

 

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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

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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

 

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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				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

 

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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				—				—				121,419
Total loans		$	3,587,041			$	199,612			$	406,737			$	—			$	982			$	4,194,372

 

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UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 7 – Foreclosed Property

Major classifications of foreclosed properties at 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 real estate		$	11,463			$	10,866			$	15,500
Commercial construction			3,266				3,336				11,568
Total commercial