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, 2014
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ___________ to ___________
Commission file number 001-35095
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UNITED COMMUNITY BANKS, INC.
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||
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(Exact name of registrant as specified in its charter)
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Georgia
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58-1807304
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
|
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125 Highway 515 East
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|||
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Blairsville, Georgia
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30512
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||
| Address of Principal |
(Zip Code)
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||
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Executive Offices
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(706) 781-2265
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||
| (Telephone Number) | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES x NO o
Indicate by check mark whether the registrant 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 o
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 x | Accelerated filer o | |
| Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller Reporting Company o
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
YES o NO x
Common stock, par value $1 per share 50,012,974 shares voting and 10,080,787 shares non-voting outstanding as of April 30, 2014.
| INDEX | |||||
|
|
|||||
| Item 1. | Financial Statements. | ||||
| 3 | |||||
| 4 | |||||
| 5 | |||||
| 6 | |||||
| 7 | |||||
| 8 | |||||
| Item 2. | 36 | ||||
| Item 3. | 58 | ||||
| Item 4. | 58 | ||||
| PART II - Other Information | |||||
| Item 1. | 59 | ||||
| Item 1A. | 59 | ||||
| Item 2. | 59 | ||||
| Item 3. | 59 | ||||
| Item 4. | 59 | ||||
| Item 5. | 59 | ||||
| Item 6. | 60 | ||||
| 2 |
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UNITED COMMUNITY BANKS, INC.
|
||||||||
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Three Months Ended |
||||||||
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March 31,
|
||||||||
|
(in thousands, except per share data)
|
2014
|
2013
|
||||||
|
Interest revenue:
|
||||||||
|
Loans, including fees
|
$ | 47,688 | $ | 50,935 | ||||
|
Investment securities, including tax exempt of $188 and $212
|
11,607 | 9,944 | ||||||
|
Deposits in banks and short-term investments
|
843 | 870 | ||||||
|
Total interest revenue
|
60,138 | 61,749 | ||||||
|
Interest expense:
|
||||||||
|
Deposits:
|
||||||||
|
NOW
|
440 | 454 | ||||||
|
Money market
|
563 | 562 | ||||||
|
Savings
|
20 | 36 | ||||||
|
Time
|
1,771 | 3,291 | ||||||
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Total deposit interest expense
|
2,794 | 4,343 | ||||||
|
Short-term borrowings
|
840 | 516 | ||||||
|
Federal Home Loan Bank advances
|
58 | 19 | ||||||
|
Long-term debt
|
2,634 | 2,662 | ||||||
|
Total interest expense
|
6,326 | 7,540 | ||||||
|
Net interest revenue
|
53,812 | 54,209 | ||||||
|
Provision for credit losses
|
2,500 | 11,000 | ||||||
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Net interest revenue after provision for credit losses
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51,312 | 43,209 | ||||||
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Fee revenue:
|
||||||||
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Service charges and fees
|
7,898 | 7,403 | ||||||
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Mortgage loan and other related fees
|
1,354 | 2,655 | ||||||
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Brokerage fees
|
1,177 | 767 | ||||||
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Securities gains, net
|
217 | 116 | ||||||
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Other
|
1,530 | 1,970 | ||||||
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Total fee revenue
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12,176 | 12,911 | ||||||
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Total revenue
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63,488 | 56,120 | ||||||
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Operating expenses:
|
||||||||
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Salaries and employee benefits
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24,396 | 23,592 | ||||||
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Communications and equipment
|
3,239 | 3,046 | ||||||
|
Occupancy
|
3,378 | 3,367 | ||||||
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Advertising and public relations
|
626 | 938 | ||||||
|
Postage, printing and supplies
|
776 | 863 | ||||||
|
Professional fees
|
1,427 | 2,366 | ||||||
|
Foreclosed property
|
116 | 2,333 | ||||||
|
FDIC assessments and other regulatory charges
|
1,353 | 2,505 | ||||||
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Amortization of intangibles
|
387 | 705 | ||||||
|
Other
|
3,352 | 4,055 | ||||||
|
Total operating expenses
|
39,050 | 43,770 | ||||||
|
Net income before income taxes
|
24,438 | 12,350 | ||||||
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Income tax expense
|
9,038 | 585 | ||||||
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Net income
|
15,400 | 11,765 | ||||||
|
Preferred stock dividends and discount accretion
|
439 | 3,052 | ||||||
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Net income available to common shareholders
|
$ | 14,961 | $ | 8,713 | ||||
|
Earnings per common share
|
||||||||
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Basic
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$ | .25 | $ | .15 | ||||
|
Diluted
|
.25 | .15 | ||||||
|
Weighted average common shares outstanding
|
||||||||
|
Basic
|
60,059 | 58,081 | ||||||
|
Diluted
|
60,061 | 58,081 | ||||||
See accompanying notes to consolidated financial statements.
| 3 |
|
UNITED COMMUNITY BANKS, INC.
|
||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||
| March 31, | ||||||||||||||||||||||||
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(in thousands)
|
2014 | 2013 | ||||||||||||||||||||||
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Tax
|
Tax
|
|||||||||||||||||||||||
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Before-tax
|
(Expense)
|
Net of Tax
|
Before-tax
|
(Expense)
|
Net of Tax
|
|||||||||||||||||||
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Amount
|
Benefit
|
Amount
|
Amount
|
Benefit
|
Amount
|
|||||||||||||||||||
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Net income
|
24,438 | (9,038 | ) | 15,400 | 12,350 | (585 | ) | 11,765 | ||||||||||||||||
|
Other comprehensive income:
|
||||||||||||||||||||||||
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Unrealized gains on available-for-sale securities:
|
||||||||||||||||||||||||
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Unrealized holding gains arising during
|
||||||||||||||||||||||||
|
period
|
3,869 | (1,441 | ) | 2,428 | 1,641 | (621 | ) | 1,020 | ||||||||||||||||
|
Reclassification
adjustment for gains included in net income
|
(217 | ) | 92 | (125 | ) | (116 | ) | 45 | (71 | ) | ||||||||||||||
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Valuation allowance for the change in deferred taxes arising from unrealized gains and losses on available-for-sale securities
|
— | — | — | — | 576 | 576 | ||||||||||||||||||
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Net unrealized gains
|
3,652 | (1,349 | ) | 2,303 | 1,525 | — | 1,525 | |||||||||||||||||
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Amortization of losses (gains) included in net income
|
||||||||||||||||||||||||
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on available-for-sale securities transferred to held-to-
|
||||||||||||||||||||||||
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maturity
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330 | (123 | ) | 207 | (319 | ) | 124 | (195 | ) | |||||||||||||||
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Valuation allowance for the change in deferred taxes
|
||||||||||||||||||||||||
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arising from the amortization of gains and losses
|
||||||||||||||||||||||||
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included in net income on available-for-sale
|
||||||||||||||||||||||||
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securities transferred to held-to-maturity
|
— | — | — | — | (124 | ) | (124 | ) | ||||||||||||||||
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Net unrealized gains (losses)
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330 | (123 | ) | 207 | (319 | ) | — | (319 | ) | |||||||||||||||
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Amortization of gains included in net income on
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||||||||||||||||||||||||
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terminated derivative financial instruments that
|
||||||||||||||||||||||||
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were previously accounted for as cash flow hedges
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97 | (38 | ) | 59 | (538 | ) | 209 | (329 | ) | |||||||||||||||
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Unrealized (losses) gains on derivative financial
|
||||||||||||||||||||||||
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instruments accounted for as cash flow hedges
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(2,832 | ) | 1,102 | (1,730 | ) | 430 | (167 | ) | 263 | |||||||||||||||
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Valuation allowance for the change in deferred taxes
|
||||||||||||||||||||||||
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arising from unrealized gains and losses and
|
||||||||||||||||||||||||
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amortization of gains included in net income on cash
|
||||||||||||||||||||||||
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flow hedges
|
— | — | — | — | (42 | ) | (42 | ) | ||||||||||||||||
|
Net unrealized losses
|
(2,735 | ) | 1,064 | (1,671 | ) | (108 | ) | — | (108 | ) | ||||||||||||||
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Net actuarial gain (loss) on defined benefit pension plan
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296 | (115 | ) | 181 | (415 | ) | 161 | (254 | ) | |||||||||||||||
|
Amortization of prior service cost and actuarial losses
|
||||||||||||||||||||||||
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included in net periodic pension cost for defined
|
||||||||||||||||||||||||
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benefit pension plan
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91 | (35 | ) | 56 | 132 | (51 | ) | 81 | ||||||||||||||||
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Valuation allowance for the change in deferred taxes
|
||||||||||||||||||||||||
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arising from reclassification of unamortized prior
|
||||||||||||||||||||||||
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service cost and actuarial losses and amortization of
|
||||||||||||||||||||||||
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prior service cost and actuarial losses
|
— | — | — | — | (110 | ) | (110 | ) | ||||||||||||||||
|
Net defined benefit pension plan activity
|
387 | (150 | ) | 237 | (283 | ) | — | (283 | ) | |||||||||||||||
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Total other comprehensive income
|
1,634 | (558 | ) | 1,076 | 815 | — | 815 | |||||||||||||||||
|
Comprehensive income
|
26,072 | (9,596 | ) | 16,476 | 13,165 | (585 | ) | 12,580 | ||||||||||||||||
See accompanying notes to consolidated financial statements.
| 4 |
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UNITED COMMUNITY BANKS, INC.
|
||||||||||||
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March 31,
|
December 31,
|
March 31,
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||||||||||
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(in thousands, except share and per share data)
|
2014
|
2013
|
2013
|
|||||||||
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ASSETS
|
||||||||||||
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Cash and due from banks
|
$ | 52,813 | $ | 71,230 | $ | 57,638 | ||||||
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Interest-bearing deposits in banks
|
110,529 | 119,669 | 107,390 | |||||||||
|
Short-term investments
|
49,999 | 37,999 | 82,000 | |||||||||
|
Cash and cash equivalents
|
213,341 | 228,898 | 247,028 | |||||||||
|
Securities available for sale
|
1,837,676 | 1,832,217 | 1,909,426 | |||||||||
|
Securities held to maturity (fair value $473,136, $485,585 and $247,087)
|
464,697 | 479,742 | 231,087 | |||||||||
|
Mortgage loans held for sale
|
10,933 | 10,319 | 18,290 | |||||||||
|
Loans, net of unearned income
|
4,355,708 | 4,329,266 | 4,193,560 | |||||||||
|
Less allowance for loan losses
|
(75,223 | ) | (76,762 | ) | (105,753 | ) | ||||||
|
Loans, net
|
4,280,485 | 4,252,504 | 4,087,807 | |||||||||
|
Assets covered by loss sharing agreements with the FDIC
|
21,353 | 22,882 | 42,096 | |||||||||
|
Premises and equipment, net
|
161,540 | 163,589 | 168,036 | |||||||||
|
Bank owned life insurance
|
80,790 | 80,670 | 82,114 | |||||||||
|
Accrued interest receivable
|
18,572 | 19,598 | 18,302 | |||||||||
|
Intangible assets
|
3,093 | 3,480 | 4,805 | |||||||||
|
Foreclosed property
|
5,594 | 4,221 | 16,734 | |||||||||
|
Net deferred tax asset
|
243,683 | 258,518 | — | |||||||||
|
Derivative financial instruments
|
21,563 | 23,833 | 601 | |||||||||
|
Other assets
|
34,917 | 44,948 | 23,042 | |||||||||
|
Total assets
|
$ | 7,398,237 | $ | 7,425,419 | $ | 6,849,368 | ||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||
|
Liabilities:
|
||||||||||||
|
Deposits:
|
||||||||||||
|
Demand
|
$ | 1,471,781 | $ | 1,388,512 | $ | 1,298,425 | ||||||
|
NOW
|
1,392,863 | 1,427,939 | 1,281,454 | |||||||||
|
Money market
|
1,235,429 | 1,227,575 | 1,165,836 | |||||||||
|
Savings
|
270,910 | 251,125 | 243,347 | |||||||||
|
Time:
|
||||||||||||
|
Less than $100,000
|
833,188 | 892,961 | 1,019,396 | |||||||||
|
Greater than $100,000
|
572,889 | 588,689 | 685,174 | |||||||||
|
Brokered
|
470,481 | 424,704 | 332,220 | |||||||||
|
Total deposits
|
6,247,541 | 6,201,505 | 6,025,852 | |||||||||
|
Short-term borrowings
|
123,075 | 53,241 | 51,999 | |||||||||
|
Federal Home Loan Bank advances
|
50,125 | 120,125 | 125 | |||||||||
|
Long-term debt
|
129,865 | 129,865 | 124,825 | |||||||||
|
Derivative financial instruments
|
42,309 | 46,232 | 14,556 | |||||||||
|
Unsettled securities purchases
|
63,999 | 29,562 | — | |||||||||
|
Accrued expenses and other liabilities
|
37,593 | 49,174 | 39,793 | |||||||||
|
Total liabilities
|
6,694,507 | 6,629,704 | 6,257,150 | |||||||||
|
Shareholders’ equity:
|
||||||||||||
|
Preferred stock, $1 par value; 10,000,000 shares authorized;
|
||||||||||||
|
Series A; $10 stated value; 0, 0 and 21,700 shares issued and outstanding
|
— | — | 217 | |||||||||
|
Series B; $1,000 stated value; 0, 105,000 and 180,000 shares issued and outstanding
|
— | 105,000 | 178,937 | |||||||||
|
Series D; $1,000 stated value; 0, 16,613 and 16,613 shares issued and outstanding
|
— | 16,613 | 16,613 | |||||||||
|
Common stock, $1 par value; 100,000,000 shares authorized;
|
||||||||||||
|
50,011,094, 46,243,345 and 43,063,761 shares issued and outstanding
|
50,011 | 46,243 | 43,064 | |||||||||
|
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
|
||||||||||||
|
10,080,787, 13,188,206 and 14,703,636 shares issued and outstanding
|
10,081 | 13,188 | 14,704 | |||||||||
|
Common stock issuable; 237,763, 241,832 and 133,469 shares
|
3,840 | 3,930 | 2,726 | |||||||||
|
Capital surplus
|
1,091,696 | 1,078,676 | 1,059,222 | |||||||||
|
Accumulated deficit
|
(433,130 | ) | (448,091 | ) | (700,440 | ) | ||||||
|
Accumulated other comprehensive loss
|
(18,768 | ) | (19,844 | ) | (22,825 | ) | ||||||
|
Total shareholders’ equity
|
703,730 | 795,715 | 592,218 | |||||||||
|
Total liabilities and shareholders’ equity
|
$ | 7,398,237 | $ | 7,425,419 | $ | 6,849,368 | ||||||
See accompanying notes to consolidated financial statements.
| 5 |
|
UNITED COMMUNITY BANKS, INC.
|
||||||||||||||||||||||||||||||||||||||||
|
For the Three Months Ended March 31,
|
||||||||||||||||||||||||||||||||||||||||
|
Accumulated |
||||||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
Non-Voting
|
Common
|
Other
|
|||||||||||||||||||||||||||||||||||||
|
(in thousands, except share and per share data)
|
Series
|
Series
|
Series
|
Common
|
Common
|
Stock
|
Capital
|
Accumulated
|
Comprehensive
|
|||||||||||||||||||||||||||||||
| A | B | D |
Stock
|
Stock
|
Issuable
|
Surplus
|
Deficit
|
Loss
|
Total
|
|||||||||||||||||||||||||||||||
|
Balance, December 31, 2012
|
$ | 217 | $ | 178,557 | $ | 16,613 | $ | 42,424 | $ | 15,317 | $ | 3,119 | $ | 1,057,951 | $ | (709,153 | ) | $ | (23,640 | ) | $ | 581,405 | ||||||||||||||||||
|
Net income
|
11,765 | 11,765 | ||||||||||||||||||||||||||||||||||||||
|
Other comprehensive income
|
815 | 815 | ||||||||||||||||||||||||||||||||||||||
|
Common stock issued to
|
||||||||||||||||||||||||||||||||||||||||
|
dividend reinvestment
|
||||||||||||||||||||||||||||||||||||||||
|
plan and to employee
|
||||||||||||||||||||||||||||||||||||||||
|
benefit plans (18,170 shares)
|
18 | 171 | 189 | |||||||||||||||||||||||||||||||||||||
|
Conversion of non-voting
|
||||||||||||||||||||||||||||||||||||||||
|
common stock to voting
|
||||||||||||||||||||||||||||||||||||||||
|
(613,158 shares)
|
613 | (613 | ) | — | ||||||||||||||||||||||||||||||||||||
|
Amortization of stock options
|
||||||||||||||||||||||||||||||||||||||||
|
and restricted stock awards
|
626 | 626 | ||||||||||||||||||||||||||||||||||||||
|
Vesting of restricted stock
|
||||||||||||||||||||||||||||||||||||||||
|
(4,042 shares issued,
|
||||||||||||||||||||||||||||||||||||||||
|
259 shares deferred)
|
4 | 40 | 44 | |||||||||||||||||||||||||||||||||||||
|
Deferred compensation plan,
|
||||||||||||||||||||||||||||||||||||||||
|
net, including dividend
|
||||||||||||||||||||||||||||||||||||||||
|
equivalents
|
46 | 46 | ||||||||||||||||||||||||||||||||||||||
|
Shares issued from deferred
|
||||||||||||||||||||||||||||||||||||||||
|
compensation plan
|
||||||||||||||||||||||||||||||||||||||||
|
(4,521 shares)
|
5 | (439 | ) | 434 | — | |||||||||||||||||||||||||||||||||||
|
Preferred stock dividends:
|
||||||||||||||||||||||||||||||||||||||||
|
Series A
|
(3 | ) | (3 | ) | ||||||||||||||||||||||||||||||||||||
|
Series B
|
380 | (2,630 | ) | (2,250 | ) | |||||||||||||||||||||||||||||||||||
|
Series D
|
(419 | ) | (419 | ) | ||||||||||||||||||||||||||||||||||||
|
Balance, March 31, 2013
|
$ | 217 | $ | 178,937 | $ | 16,613 | $ | 43,064 | $ | 14,704 | $ | 2,726 | $ | 1,059,222 | $ | (700,440 | ) | $ | (22,825 | ) | $ | 592,218 | ||||||||||||||||||
|
Balance, December 31, 2013
|
$ | — | $ | 105,000 | $ | 16,613 | $ | 46,243 | $ | 13,188 | $ | 3,930 | $ | 1,078,676 | $ | (448,091 | ) | $ | (19,844 | ) | $ | 795,715 | ||||||||||||||||||
|
Net income
|
15,400 | 15,400 | ||||||||||||||||||||||||||||||||||||||
|
Other comprehensive income
|
1,076 | 1,076 | ||||||||||||||||||||||||||||||||||||||
|
Redemption of Series B
|
||||||||||||||||||||||||||||||||||||||||
|
preferred stock (105,000
|
||||||||||||||||||||||||||||||||||||||||
|
shares)
|
(105,000 | ) | (105,000 | ) | ||||||||||||||||||||||||||||||||||||
|
Redemption of Series D
|
||||||||||||||||||||||||||||||||||||||||
|
preferred stock (16,613
|
||||||||||||||||||||||||||||||||||||||||
|
shares)
|
(16,613 | ) | (16,613 | ) | ||||||||||||||||||||||||||||||||||||
|
Common stock issued at
|
||||||||||||||||||||||||||||||||||||||||
|
market (640,000 shares)
|
640 | 11,566 | 12,206 | |||||||||||||||||||||||||||||||||||||
|
Common stock issued to
|
||||||||||||||||||||||||||||||||||||||||
|
dividend reinvestment
|
||||||||||||||||||||||||||||||||||||||||
|
plan and to employee
|
||||||||||||||||||||||||||||||||||||||||
|
benefit plans (11,837
|
||||||||||||||||||||||||||||||||||||||||
|
shares)
|
12 | 197 | 209 | |||||||||||||||||||||||||||||||||||||
|
Conversion of non-voting
|
||||||||||||||||||||||||||||||||||||||||
|
common stock to voting
|
||||||||||||||||||||||||||||||||||||||||
|
(3,107,419 shares)
|
3,107 | (3,107 | ) | — | ||||||||||||||||||||||||||||||||||||
|
Amortization of stock options
|
||||||||||||||||||||||||||||||||||||||||
|
and restricted stock awards
|
1,120 | 1,120 | ||||||||||||||||||||||||||||||||||||||
|
Vesting of restricted stock,
|
||||||||||||||||||||||||||||||||||||||||
|
net of shares surrendered
|
||||||||||||||||||||||||||||||||||||||||
|
to cover payroll taxes
|
||||||||||||||||||||||||||||||||||||||||
|
(1,096 shares issued,
|
||||||||||||||||||||||||||||||||||||||||
|
0 shares deferred)
|
1 | (2 | ) | (1 | ) | |||||||||||||||||||||||||||||||||||
|
Deferred compensation plan,
|
||||||||||||||||||||||||||||||||||||||||
|
net, including dividend
|
||||||||||||||||||||||||||||||||||||||||
|
equivalents
|
57 | 57 | ||||||||||||||||||||||||||||||||||||||
|
Shares issued from deferred
|
||||||||||||||||||||||||||||||||||||||||
|
compensation plan
|
||||||||||||||||||||||||||||||||||||||||
|
(7,397 shares)
|
8 | (147 | ) | 139 | — | |||||||||||||||||||||||||||||||||||
|
Preferred stock dividends:
|
||||||||||||||||||||||||||||||||||||||||
|
Series B
|
(159 | ) | (159 | ) | ||||||||||||||||||||||||||||||||||||
|
Series D
|
(280 | ) | (280 | ) | ||||||||||||||||||||||||||||||||||||
|
Balance, March 31, 2014
|
$ | — | $ | — | $ | — | $ | 50,011 | $ | 10,081 | $ | 3,840 | $ | 1,091,696 | $ | (433,130 | ) | $ | (18,768 | ) | $ | 703,730 | ||||||||||||||||||
See accompanying notes to consolidated financial statements.
| 6 |
|
UNITED COMMUNITY BANKS, INC.
|
||||||||
|
Three Months Ended
|
||||||||
|
March 31,
|
||||||||
|
(in thousands)
|
2014
|
2013
|
||||||
|
Operating activities:
|
||||||||
|
Net income
|
$ | 15,400 | $ | 11,765 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Depreciation, amortization and accretion
|
4,927 | 7,505 | ||||||
|
Provision for credit losses
|
2,500 | 11,000 | ||||||
|
Stock based compensation
|
1,120 | 626 | ||||||
|
Deferred income tax expense
|
9,776 | — | ||||||
|
Securities gains, net
|
(217 | ) | (116 | ) | ||||
|
Net (gains) losses on sales of foreclosed property
|
(244 | ) | 1,146 | |||||
|
Changes in assets and liabilities:
|
||||||||
|
Other assets and accrued interest receivable
|
6,607 | 7,915 | ||||||
|
Accrued expenses and other liabilities
|
(12,230 | ) | 3,225 | |||||
|
Mortgage loans held for sale
|
(614 | ) | 10,531 | |||||
|
Net cash provided by operating activities
|
27,025 | 53,597 | ||||||
|
Investing activities:
|
||||||||
|
Investment securities held-to-maturity:
|
||||||||
|
Proceeds from maturities and calls
|
15,007 | 17,501 | ||||||
|
Purchases
|
— | (4,993 | ) | |||||
|
Investment securities available-for-sale:
|
||||||||
|
Proceeds from sales
|
153,316 | 15,751 | ||||||
|
Proceeds from maturities and calls
|
56,757 | 132,211 | ||||||
|
Purchases
|
(173,024 | ) | (219,349 | ) | ||||
|
Net increase in loans
|
(34,027 | ) | (36,224 | ) | ||||
|
Funds collected from FDIC under loss sharing agreements
|
1,623 | 2,452 | ||||||
|
Proceeds from sales of premises and equipment
|
509 | 550 | ||||||
|
Purchases of premises and equipment
|
(618 | ) | (2,001 | ) | ||||
|
Proceeds from sale of other real estate
|
2,417 | 5,726 | ||||||
|
Net cash provided by (used in) investing activities
|
21,960 | (88,376 | ) | |||||
|
Financing activities:
|
||||||||
|
Net change in deposits
|
46,036 | 73,712 | ||||||
|
Net change in short-term borrowings
|
69,834 | (575 | ) | |||||
|
Proceeds from Federal Home Loan Bank advances
|
355,000 | 185,000 | ||||||
|
Repayment of Federal Home Loan Bank advances
|
(425,000 | ) | (225,000 | ) | ||||
|
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans
|
209 | 189 | ||||||
|
Retirement of preferred stock
|
(121,613 | ) | — | |||||
|
Issuance of common stock
|
12,206 | — | ||||||
|
Cash dividends on preferred stock
|
(1,214 | ) | (2,668 | ) | ||||
|
Net cash (used in) provided by financing activities
|
(64,542 | ) | 30,658 | |||||
|
Net change in cash and cash equivalents
|
(15,557 | ) | (4,121 | ) | ||||
|
Cash and cash equivalents at beginning of period
|
228,898 | 251,149 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 213,341 | $ | 247,028 | ||||
|
Supplemental disclosures of cash flow information:
|
||||||||
|
Cash paid during the period for:
|
||||||||
|
Interest
|
$ | 7,449 | $ | 8,025 | ||||
|
Income taxes
|
1,321 | 1,659 | ||||||
|
Unsettled securities purchases
|
34,437 | — | ||||||
|
Transfers of loans to foreclosed property
|
4,367 | 6,288 | ||||||
See accompanying notes to consolidated financial statements.
| 7 |
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, 2013.
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.
Reclassifications
Certain 2013 amounts have been reclassified to conform to the 2014 presentation. During the fourth quarter of 2013, United reclassified hedge ineffectiveness gains and losses from other fee revenue to net interest revenue. The impact of the reclassification has been reflected in all periods and was not material to any period.
Note 2 –Accounting Standards Updates and Recently Adopted Standards
In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU limits the definition of discontinued operations to disposals of components of an entity that represent strategic shifts that have a major effect on an entity’s operations and financial results. It also requires expanded disclosures for discontinued operations. The standard is effective for disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. This guidance is not expected to have a material impact on United’s financial position or results of operations.
Note 3 – Balance Sheet Offsetting
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 counterparty in transactions commonly referred to as collateral swaps that are subject to master netting agreements under which the balances are netted in the balance sheet in accordance with ASC 210-20, Offsetting.
The following table presents a summary of amounts outstanding under reverse repurchase agreements and derivative financial instruments including those entered into in connection with the same counterparty under master netting agreements as of March 31, 2014, December 31, 2013 and March 31, 2013 (in thousands).
|
Gross
Amounts
Offset on the
Balance
Sheet
|
||||||||||||||||||||||||
|
Gross
Amounts of
Recognized
Assets
|
Gross Amounts not Offset
in the Balance Sheet
|
|||||||||||||||||||||||
|
Net Asset
Balance
|
Financial
Instruments
|
Collateral
Received
|
||||||||||||||||||||||
|
March 31, 2014
|
Net Amount
|
|||||||||||||||||||||||
|
Repurchase agreements / reverse repurchase agreements
|
$
|
397,000
|
$
|
(350,000
|
)
|
$
|
47,000
|
$
|
—
|
$
|
(51,243
|
)
|
$
|
—
|
||||||||||
|
Derivatives
|
21,563
|
—
|
21,563
|
(3,896
|
)
|
(704
|
)
|
16,963
|
||||||||||||||||
|
Total
|
$
|
418,563
|
$
|
(350,000
|
)
|
$
|
68,563
|
$
|
(3,896
|
)
|
$
|
(51,947
|
)
|
$
|
16,963
|
|||||||||
|
Weighted average interest rate of reverse repurchase agreements
|
1.09
|
%
|
||||||||||||||||||||||
|
Gross
Amounts of
Recognized
Liabilities
|
Gross
Amounts
Offset on the
Balance
Sheet
|
|||||||||||||||||||||||
|
Gross Amounts not Offset
in the Balance Sheet
|
||||||||||||||||||||||||
|
Net Liability
Balance
|
Financial
Instruments
|
Collateral
Pledged
|
Net Amount
|
|||||||||||||||||||||
| < | ||||||||||||||||||||||||