SOURCE: United Community Banks, Inc.

United Community Banks, Inc.

April 26, 2012 05:30 ET

United Community Banks, Inc. Reports Earnings of $11.5 Million for First Quarter 2012

BLAIRSVILLE, GA--(Marketwire - Apr 26, 2012) - United Community Banks, Inc. (NASDAQ: UCBI)

  • Net income of $11.5 million, or 15 cents per share
  • Pre-tax, pre-credit earnings, excluding one-time items, highest since fourth quarter 2009
  • Loan growth continues, up $18 million from fourth quarter, or 2 percent annualized
  • Core transaction deposits up $151 million from fourth quarter, or 21 percent annualized
  • Capital ratios strengthen

United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $11.5 million, or 15 cents per share, for the first quarter of 2012. The positive results reflect strong core transaction deposit growth, modest loan growth, a fee revenue increase and lower operating expenses compared with the fourth quarter of 2011.

"Momentum continues to build in restoring and improving our financial performance," said Jimmy Tallent, president and chief executive officer. "With credit problems now at a manageable level, we have increased our focus on improving core pre-tax, pre-credit earnings through revenue growth and higher efficiency. The results are encouraging: Core pre-tax, pre-credit earnings, excluding one-time items, were at their highest level since the fourth quarter of 2009."

Total loans were $4.13 billion at quarter-end, up $18 million from the fourth quarter and down $66 million from a year earlier. "In the fourth quarter we reversed the trend of declining loan balances, and in the first quarter we achieved modest loan growth," stated Tallent. "We are prudently growing our portfolio by focusing on full-service relationships with small-to-medium sized businesses. During the first quarter we added $169 million in new loan commitments of which $131 million were funded by quarter-end. The majority were commercial loans."

The first quarter provision for loan losses was $15 million, down from $190 million a year ago and up slightly from $14 million in the fourth quarter of 2011. The first quarter 2011 provision was elevated due to execution of United's problem asset disposition plan following the successful raising of $380 million in capital.

First quarter net charge-offs were $15.9 million, compared to $232 million in the first quarter of 2011 and $45.6 million in the fourth quarter. A bulk loan sale, part of the problem asset disposition plan, elevated net charge-offs in the 2011 first quarter. Fourth quarter 2011 net charge-offs included $25 million related to United's largest loan relationship.

Nonperforming assets of $161.6 million reflected a $1.3 million increase from the fourth quarter of 2011, and a $23.4 million increase from the first quarter of 2011. Said Tallent, "Nonperforming asset levels are impacted significantly by the inflow of new nonperforming loans and our ability to liquidate foreclosed properties. While the inflow of new nonperforming loans fell from $46 million in the fourth quarter to $32 million in the first quarter, nonperforming assets did not decline due to slow foreclosed property sales, which is typical in the winter months. We expect our overall credit trends to improve during 2012, although not necessarily on a straight line."

Taxable equivalent net interest revenue of $58.9 million reflected a slight decline from the fourth quarter of 2011, and an increase of $2.5 million from the first quarter of 2011 due to the $2 million reversal of accrued interest last year on performing loans included in the bulk loan sale. The net interest margin was 3.53 percent for the first quarter of 2012, up 23 basis points from a year ago and two basis points from the fourth quarter of 2011.

"Growing quality loan and deposit relationships is a key focus in 2012," Tallent commented. "The weak economy has created a highly competitive environment for good, quality loans; yet, our momentum continues to build as the seasoned relationship managers we have added in key markets attract new business. Our success attracting core transaction deposits also has continued, with balances increasing $151 million during the first quarter. That is 21 percent growth on an annualized basis."

Fee revenue was $15.4 million in the first quarter of 2012, compared to $12.7 million in the fourth quarter and $11.8 million a year ago. Service charges and fees were $7.8 million, up $535,000 from the fourth quarter and $1.1 million from a year ago. The increase in service charges and fees from both periods reflects new charges on deposit accounts that became effective in the first quarter of 2012, and higher debit card revenue. Combined, these revenue increases more than offset lower overdraft fees.

Mortgage fee revenue increased $274,000 from the fourth quarter, and $605,000 from a year ago, to $2.1 million. The comparisons to prior periods are influenced significantly by the interest rate environment and refinancing activities. Mortgage loans closed totaled $81.7 million in the first quarter of 2012 compared with $78.8 million and $74.5 million, respectively, in the fourth and first quarters of 2011. Other fee revenue of $4.6 million reflected a $1.8 million increase from the fourth quarter, and a $1.7 million increase from the first quarter of 2011. The increase from both prior periods was primarily due to the recognition of $1.1 million in interest received for 2008's federal tax refund.

Excluding foreclosed property costs, first quarter 2012 operating expenses were $43.1 million compared to $41.8 million for the fourth quarter of 2011. Operating expenses increased $1.3 million on a linked-quarter basis due to a reclassification of expenses reflected in the fourth quarter of 2011 that transferred $2.2 million of salary and employee benefit costs to other comprehensive income for unamortized prior service costs and actuarial losses related to United's modified retirement plan. Excluding this one-time adjustment, the first quarter's total operating expenses were down $900,000 from the fourth quarter, primarily due to lower staff costs. First quarter operating expenses decreased by $7.2 million in the first quarter compared to the same period a year ago, primarily due to $2.9 million in higher FDIC premium assessments in the first quarter of 2011, and costs incurred during that period related to the problem asset disposition plan: $1.0 million in professional fees and $2.6 million in property taxes paid on assets sold.

Foreclosed property costs for the first quarter of 2012 were $3.8 million, compared to $9.3 million in the fourth quarter of 2011 and $64.9 million in the first quarter a year ago. First quarter 2012 costs included $1.6 million for maintenance and $2.2 million in net losses and write-downs. For the fourth quarter of 2011, foreclosed property costs included $2.4 million in maintenance and $6.9 million in net losses and write-downs. First quarter 2011 costs included $4.3 million in maintenance and $60.6 million in net write-downs and losses, mostly related to the problem asset disposition plan.

As of March 31, 2012, capital ratios were as follows: Tier 1 Risk-Based of 13.7 percent; Tier 1 Leverage of 8.9 percent; and Total Risk-Based of 15.4 percent. The Tier 1 Common Risk-Based ratio was 8.3 and the Tangible Equity-to-Assets ratio was 8.1 percent.

"We are on the path to recovery as indicated by three profitable quarters out of the past four," stated Tallent. "The economy is still weak and work remains to resolve credit problems, though we believe far more of that work is behind us. Looking forward, we expect continued profitability and improved financial performance from revenue enhancements and expense reductions."

Conference Call

United will hold a conference call today, Thursday, April 26, 2012, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 69716155. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of the United's website at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $7.2 billion and operates 27 community banks with 106 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United's common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United's web site at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2011 Annual Report on Form 10-K under the section entitled "Forward-Looking Statements" and "Risk Factors." Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
2012 2011
(in thousands, except per share First Fourth Third Second First
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter
INCOME SUMMARY
Interest revenue $ 70,221 $ 71,905 $ 74,543 $ 76,931 $ 75,965
Interest expense 11,357 12,855 15,262 17,985 19,573
Net interest revenue 58,864 59,050 59,281 58,946 56,392
Provision for loan losses 15,000 14,000 36,000 11,000 190,000
Fee revenue 15,379 12,667 11,498 13,905 11,838
Total revenue 59,243 57,717 34,779 61,851 (121,770 )
Operating expenses 46,955 51,080 46,520 48,728 115,271
Income (loss) before income taxes 12,288 6,637 (11,741 ) 13,123 (237,041 )
Income tax expense (benefit) 760 (3,264 ) (402 ) 1,095 295
Net income (loss) 11,528 9,901 (11,339 ) 12,028 (237,336 )
Preferred dividends and discount accretion 3,030 3,025 3,019 3,016 2,778
Net income (loss) available to common shareholders $ 8,498 $ 6,876 $ (14,358 ) $ 9,012 $ (240,114 )
PERFORMANCE MEASURES
Per common share:
Diluted income (loss) $ .15 $ .12 $ (.25 ) $ .16 $ (13.00 )
Book value 6.68 6.62 6.77 7.11 2.20
Tangible book value (2) 6.54 6.47 6.61 6.94 1.69
Key performance ratios:
Return on equity (1)(3) 8.78 % 7.40 % (15.06) % 42.60 % (526.54) %
Return on assets (3) .66 .56 (.64 ) .66 (13.04 )
Net interest margin (3) 3.53 3.51 3.55 3.41 3.30
Efficiency ratio 63.31 71.23 65.73 66.88 169.08
Equity to assets 8.19 8.28 8.55 8.06 6.15
Tangible equity to assets (2) 8.08 8.16 8.42 7.93 6.01
Tangible common equity to assets (2) 5.33 5.38 5.65 1.37 2.70
Tangible common equity to risk-weighted assets (2) 8.21 8.25 8.52 8.69 .75
ASSET QUALITY *
Non-performing loans $ 129,704 $ 127,479 $ 144,484 $ 71,065 $ 83,769
Foreclosed properties 31,887 32,859 44,263 47,584 54,378
Total non-performing assets (NPAs) 161,591 160,338 188,747 118,649 138,147
Allowance for loan losses 113,601 114,468 146,092 127,638 133,121
Net charge-offs 15,867 45,624 17,546 16,483 231,574
Allowance for loan losses to loans 2.75 % 2.79 % 3.55 % 3.07 % 3.17 %
Net charge-offs to average loans (3) 1.55 4.39 1.68 1.58 20.71
NPAs to loans and foreclosed properties 3.88 3.87 4.54 2.82 3.25
NPAs to total assets 2.25 2.30 2.74 1.66 1.79
AVERAGE BALANCES($ in millions)
Loans $ 4,168 $ 4,175 $ 4,194 $ 4,266 $ 4,599
Investment securities 2,153 2,141 2,150 2,074 1,625
Earning assets 6,700 6,688 6,630 6,924 6,902
Total assets 7,045 7,019 7,000 7,363 7,379
Deposits 6,028 6,115 6,061 6,372 6,560
Shareholders' equity 577 581 598 594 454
Common shares - basic (thousands) 57,764 57,646 57,599 25,427 18,466
Common shares - diluted (thousands) 57,764 57,646 57,599 57,543 18,466
AT PERIOD END($ in millions)
Loans * $ 4,128 $ 4,110 $ 4,110 $ 4,163 $ 4,194
Investment securities 2,202 2,120 2,123 2,188 1,884
Total assets 7,174 6,983 6,894 7,152 7,709
Deposits 6,001 6,098 6,005 6,183 6,598
Shareholders' equity 580 575 583 603 586
Common shares outstanding (thousands) 57,603 57,561 57,510 57,469 20,903
(1) Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized.
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
First
2012 2011 Quarter
(in thousands, except per share First First 2012-2011
data; taxable equivalent) Quarter Quarter Change
INCOME SUMMARY
Interest revenue $ 70,221 $ 75,965
Interest expense 11,357 19,573
Net interest revenue 58,864 56,392 4 %
Provision for loan losses 15,000 190,000
Fee revenue 15,379 11,838 30
Total revenue 59,243 (121,770 )
Operating expenses 46,955 115,271 (59 )
Income (loss) before income taxes 12,288 (237,041 )
Income tax expense (benefit) 760 295
Net income (loss) 11,528 (237,336 )
Preferred dividends and discount accretion 3,030 2,778
Net income (loss) available to common shareholders $ 8,498 $ (240,114 )
PERFORMANCE MEASURES
Per common share:
Diluted income (loss) $ .15 $ (13.00 )
Book value 6.68 2.20 204
Tangible book value (2) 6.54 1.69 287
Key performance ratios:
Return on equity (1)(3) 8.78 % (526.54) %
Return on assets (3) .66 (13.04 )
Net interest margin (3) 3.53 3.30
Efficiency ratio 63.31 169.08
Equity to assets 8.19 6.15
Tangible equity to assets (2) 8.08 6.01
Tangible common equity to assets (2) 5.33 2.70
Tangible common equity to risk-weighted assets (2) 8.21 .75
ASSET QUALITY *
Non-performing loans $ 129,704 $ 83,769
Foreclosed properties 31,887 54,378
Total non-performing assets (NPAs) 161,591 138,147
Allowance for loan losses 113,601 133,121
Net charge-offs 15,867 231,574
Allowance for loan losses to loans 2.75 % 3.17 %
Net charge-offs to average loans (3) 1.55 20.71
NPAs to loans and foreclosed properties 3.88 3.25
NPAs to total assets 2.25 1.79
AVERAGE BALANCES($ in millions)
Loans $ 4,168 $ 4,599 (9 )
Investment securities 2,153 1,625 32
Earning assets 6,700 6,902 (3 )
Total assets 7,045 7,379 (5 )
Deposits 6,028 6,560 (8 )
Shareholders' equity 577 454 27
Common shares - basic (thousands) 57,764 18,466
Common shares - diluted (thousands) 57,764 18,466
AT PERIOD END($ in millions)
Loans * $ 4,128 $ 4,194 (2 )
Investment securities 2,202 1,884 17
Total assets 7,174 7,709 (7 )
Deposits 6,001 6,598 (9 )
Shareholders' equity 580 586 (1 )
Common shares outstanding (thousands) 57,603 20,903
(1) Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized.
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2012 2011
(in thousands, except per share First Fourth Third Second First
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 70,221 $ 71,905 $ 74,543 $ 76,931 $ 75,965
Taxable equivalent adjustment (446 ) (423 ) (420 ) (429 ) (435 )
Interest revenue (GAAP) $ 69,775 $ 71,482 $ 74,123 $ 76,502 $ 75,530
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 58,864 $ 59,050 $ 59,281 $ 58,946 $ 56,392
Taxable equivalent adjustment (446 ) (423 ) (420 ) (429 ) (435 )
Net interest revenue (GAAP) $ 58,418 $ 58,627 $ 58,861 $ 58,517 $ 55,957
Total revenue reconciliation
Total operating revenue $ 59,243 $ 57,717 $ 34,779 $ 61,851 $ (121,770 )
Taxable equivalent adjustment (446 ) (423 ) (420 ) (429 ) (435 )
Total revenue (GAAP) $ 58,797 $ 57,294 $ 34,359 $ 61,422 $ (122,205 )
Income (loss) before taxes reconciliation
Income (loss) before taxes $ 12,288 $ 6,637 $ (11,741 ) $ 13,123 $ (237,041 )
Taxable equivalent adjustment (446 ) (423 ) (420 ) (429 ) (435 )
Income (loss) before taxes (GAAP) $ 11,842 $ 6,214 $ (12,161 ) $ 12,694 $ (237,476 )
Income tax (benefit) expense reconciliation
Income tax (benefit) expense $ 760 $ (3,264 ) $ (402 ) $ 1,095 $ 295
Taxable equivalent adjustment (446 ) (423 ) (420 ) (429 ) (435 )
Income tax (benefit) expense (GAAP) $ 314 $ (3,687 ) $ (822 ) $ 666 $ (140 )
Book value per common share reconciliation
Tangible book value per common share $ 6.54 $ 6.47 $ 6.61 $ 6.94 $ 1.69
Effect of goodwill and other intangibles .14 .15 .16 .17 .51
Book value per common share (GAAP) $ 6.68 $ 6.62 $ 6.77 $ 7.11 $ 2.20
Average equity to assets reconciliation
Tangible common equity to assets 5.33 % 5.38 % 5.65 % 1.37 % 2.70 %
Effect of preferred equity 2.75 2.78 2.77 6.56 3.31
Tangible equity to assets 8.08 8.16 8.42 7.93 6.01
Effect of goodwill and other intangibles .11 .12 .13 .13 .14
Equity to assets (GAAP) 8.19 % 8.28 % 8.55 % 8.06 % 6.15 %
Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets 8.21 % 8.25 % 8.52 % 8.69 % .75 %
Effect of other comprehensive income .10 (.03 ) (.29 ) (.42 ) (.32 )
Effect of trust preferred 1.15 1.18 1.19 1.15 1.13
Effect of preferred equity 4.23 4.29 4.33 4.20 5.87
Tier I capital ratio (Regulatory) 13.69 % 13.69 % 13.75 % 13.62 % 7.43 %
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
2012 2011
First Fourth Third Second First
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Commercial (sec.by RE) $ 1,843 $ 1,822 $ 1,771 $ 1,742 $ 1,692
Commercial & industrial 440 428 429 428 431
Commercial construction 167 164 169 195 213
Total commercial 2,450 2,414 2,369 2,365 2,336
Residential mortgage 1,131 1,135 1,150 1,177 1,187
Residential construction 436 448 474 502 550
Consumer installment 111 113 117 119 121
Total loans $ 4,128 $ 4,110 $ 4,110 $ 4,163 $ 4,194
LOANS BY MARKET
North Georgia $ 1,408 $ 1,426 $ 1,478 $ 1,500 $ 1,531
Atlanta MSA 1,239 1,220 1,192 1,188 1,179
North Carolina 588 597 607 626 640
Coastal Georgia 366 346 316 325 312
Gainesville MSA 262 265 272 275 282
East Tennessee 265 256 245 249 250
Total loans $ 4,128 $ 4,110 $ 4,110 $ 4,163 $ 4,194
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 86 $ 88 $ 97 $ 105 $ 116
Land loans 57 61 60 62 69
Lot loans 203 207 216 218 228
Total 346 356 373 385 413
House loans
Spec 57 59 64 74 88
Sold 32 33 37 43 49
Total 89 92 101 117 137
Total residential construction $ 435 $ 448 $ 474 $ 502 $ 550
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development $ 17 $ 17 $ 19 $ 20 $ 22
Land loans 13 14 15 16 19
Lot loans 22 22 22 22 24
Total 52 53 56 58 65
House loans
Spec 27 27 28 30 34
Sold 7 6 8 9 11
Total 34 33 36 39 45
Total residential construction $ 86 $ 86 $ 92 $ 97 $ 110
(1) Excludes total loans of $47.2 million, $54.5 million, $57.8 million, $70.8 million and $63.3 million as of March 31, 2012, December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
2012 2011
First Fourth First Linked Quarter Year over Year
(in millions) Quarter Quarter Quarter Change Change
LOANS BY CATEGORY
Commercial (sec.by RE) $ 1,843 $ 1,822 $ 1,692 $ 21 $ 151
Commercial & industrial 440 428 431 12 9
Commercial construction 167 164 213 3 (46 )
Total commercial 2,450 2,414 2,336 36 114
Residential mortgage 1,131 1,135 1,187 (4 ) (56 )
Residential construction 436 448 550 (12 ) (114 )
Consumer installment 111 113 121 (2 ) (10 )
Total loans $ 4,128 $ 4,110 $ 4,194 18 (66 )
LOANS BY MARKET
North Georgia $ 1,408 $ 1,426 $ 1,531 (18 ) (123 )
Atlanta MSA 1,239 1,220 1,179 19 60
North Carolina 588 597 640 (9 ) (52 )
Coastal Georgia 366 346 312 20 54
Gainesville MSA 262 265 282 (3 ) (20 )
East Tennessee 265 256 250 9 15
Total loans $ 4,128 $ 4,110 $ 4,194 18 (66 )
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 86 $ 88 $ 116 (2 ) (30 )
Land loans 57 61 69 (4 ) (12 )
Lot loans 203 207 228 (4 ) (25 )
Total 346 356 413 (10 ) (67 )
House loans
Spec 57 59 88 (2 ) (31 )
Sold 32 33 49 (1 ) (17 )
Total 89 92 137 (3 ) (48 )
Total residential construction $ 435 $ 448 $ 550 (13 ) (115 )
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development $ 17 $ 17 $ 22 - (5 )
Land loans 13 14 19 (1 ) (6 )
Lot loans 22 22 24 - (2 )
Total 52 53 65 (1 ) (13 )
House loans
Spec 27 27 34 - (7 )
Sold 7 6 11 1 (4 )
Total 34 33 45 1 (11 )
Total residential construction $ 86 $ 86 $ 110 - (24 )
(1) Excludes total loans of $47.2 million, $54.5 million, $57.8 million, $70.8 million and $63.3 million as of March 31, 2012, December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality(1)
First Quarter 2012
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
NPAs BY CATEGORY
Commercial (sec.by RE) $ 26,081 $ 10,808 $ 36,889
Commercial & industrial 36,314 - 36,314
Commercial construction 23,319 3,266 26,585
Total commercial 85,714 14,074 99,788
Residential mortgage 18,741 5,882 24,623
Residential construction 24,341 11,931 36,272
Consumer installment 908 - 908
Total NPAs $ 129,704 $ 31,887 $ 161,591
Balance as a % of Unpaid Principal 70.6 % 36.1 % 59.4 %
NPAs BY MARKET
North Georgia $ 81,117 $ 14,559 $ 95,676
Atlanta MSA 22,321 7,647 29,968
North Carolina 15,765 4,650 20,415
Coastal Georgia 5,622 1,268 6,890
Gainesville MSA 2,210 3,387 5,597
East Tennessee 2,669 376 3,045
Total NPAs $ 129,704 $ 31,887 $ 161,591
NPA ACTIVITY
Beginning Balance $ 127,479 $ 32,859 $ 160,338
Loans placed on non-accrual 32,437 - 32,437
Payments received (5,945 ) - (5,945 )
Loan charge-offs (14,733 ) - (14,733 )
Foreclosures (9,534 ) 9,534 -
Capitalized costs - 329 329
Note / property sales - (8,631 ) (8,631 )
Write downs - (2,111 ) (2,111 )
Net gains (losses) on sales - (93 ) (93 )
Ending Balance $ 129,704 $ 31,887 $ 161,591
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality(1)
Fourth Quarter 2011
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
NPAs BY CATEGORY
Commercial (sec.by RE) $ 27,322 $ 9,745 $ 37,067
Commercial & industrial 34,613 - 34,613
Commercial construction 16,655 3,336 19,991
Total commercial 78,590 13,081 91,671
Residential mortgage 22,358 6,927 29,285
Residential construction 25,523 12,851 38,374
Consumer installment 1,008 - 1,008
Total NPAs $ 127,479 $ 32,859 $ 160,338
Balance as a % of Unpaid Principal 71.3 % 35.9 % 59.3 %
NPAs BY MARKET
North Georgia $ 88,600 $ 15,136 $ 103,736
Atlanta MSA 14,480 6,169 20,649
North Carolina 15,100 5,365 20,465
Coastal Georgia 5,248 1,620 6,868
Gainesville MSA 2,069 3,760 5,829
East Tennessee 1,982 809 2,791
Total NPAs $ 127,479 $ 32,859 $ 160,338
NPA ACTIVITY
Beginning Balance $ 144,484 $ 44,263 $ 188,747
Loans placed on non-accrual 45,675 - 45,675
Payments received (1,884 ) - (1,884 )
Loan charge-offs (44,757 ) - (44,757 )
Foreclosures (16,039 ) 16,039 -
Capitalized costs - 141 141
Note / property sales - (20,651 ) (20,651 )
Write downs - (3,893 ) (3,893 )
Net gains (losses) on sales - (3,040 ) (3,040 )
Ending Balance $ 127,479 $ 32,859 $ 160,338
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality(1)
Third Quarter 2011
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
NPAs BY CATEGORY
Commercial (sec.by RE) $ 21,998 $ 8,880 $ 30,878
Commercial & industrial 53,009 - 53,009
Commercial construction 11,370 5,862 17,232
Total commercial 86,377 14,742 101,119
Residential mortgage 22,671 7,960 30,631
Residential construction 34,472 21,561 56,033
Consumer installment 964 - 964
Total NPAs $ 144,484 $ 44,263 $ 188,747
Balance as a % of Unpaid Principal 77.8 % 33.4 % 59.3 %
NPAs BY MARKET
North Georgia $ 105,078 $ 17,467 $ 122,545
Atlanta MSA 13,350 12,971 26,321
North Carolina 13,243 7,941 21,184
Coastal Georgia 5,600 2,354 7,954
Gainesville MSA 5,311 2,495 7,806
East Tennessee 1,902 1,035 2,937
Total NPAs $ 144,484 $ 44,263 $ 188,747
NPA ACTIVITY
Beginning Balance $ 71,065 $ 47,584 $ 118,649
Loans placed on non-accrual 103,365 - 103,365
Payments received (3,995 ) - (3,995 )
Loan charge-offs (15,335 ) - (15,335 )
Foreclosures (10,616 ) 10,616 -
Capitalized costs - 818 818
Note / property sales - (13,787 ) (13,787 )
Write downs - (1,772 ) (1,772 )
Net gains (losses) on sales - 804 804
Ending Balance $ 144,484 $ 44,263 $ 188,747
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality(1)
First Quarter 2012 Fourth Quarter 2011 Third Quarter 2011
Net Charge- Net Charge- Net Charge-
Offs to Offs to Offs to
Net Average Net Average Net Average
(in thousands) Charge-Offs Loans(2) Charge-Offs Loans(2) Charge-Offs Loans(2)
NET CHARGE-OFFS BY CATEGORY
Commercial (sec.by RE) $ 3,697 .81 % $ 4,962 1.09 % $ 2,192 .50 %
Commercial & industrial 669 .62 18,940 17.47 420 .39
Commercial construction 334 .81 3,318 7.88 1,625 3.54
Total commercial 4,700 .78 27,220 4.51 4,237 .71
Residential mortgage 5,375 1.91 5,887 2.04 6,110 2.09
Residential construction 5,314 4.84 12,090 10.36 6,381 5.19
Consumer installment 478 1.72 427 1.47 818 2.75
Total $ 15,867 1.55 $ 45,624 4.39 $ 17,546 1.68
NET CHARGE-OFFS BY MARKET
North Georgia $ 9,022 2.56 % $ 34,970 9.46 % $ 8,124 2.16 %
Atlanta MSA 2,729 .89 4,195 1.37 2,813 .94
North Carolina 1,679 1.14 3,180 2.10 3,608 2.31
Coastal Georgia 1,329 1.53 335 .41 709 .88
Gainesville MSA 883 1.35 2,572 3.84 1,804 2.64
East Tennessee 225 .34 372 .59 488 .78
Total $ 15,867 1.55 $ 45,624 4.39 $ 17,546 1.68
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2) Annualized.
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
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
(in thousands, except share and per share data) March 31, 2012 December 31, 2011 March 31, 2011
(unaudited) (unaudited) (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
Goodwill and other 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
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
2012
Average Avg.
(dollars in thousands, taxable equivalent) Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 4,168,440 $ 55,842 5.39 %
Taxable securities (3) 2,127,794 12,754 2.40
Tax-exempt securities (1)(3) 25,438 410 6.45
Federal funds sold and other interest-earning assets 377,988 1,215 1.29
Total interest-earning assets 6,699,660 70,221 4.21
Non-interest-earning assets:
Allowance for loan losses (117,803 )
Cash and due from banks 54,664
Premises and equipment 174,849
Other assets (3) 233,676
Total assets $ 7,045,046
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,458,112 637 .18
Money market 1,069,658 641 .24
Savings 205,402 37 .07
Time less than $100,000 1,271,351 3,026 .96
Time greater than $100,000 821,164 2,415 1.18
Brokered 161,335 718 1.79
Total interest-bearing deposits 4,987,022 7,474 .60
Federal funds purchased and other borrowings 102,258 1,045 4.11
Federal Home Loan Bank advances 138,372 466 1.35
Long-term debt 120,237 2,372 7.93
Total borrowed funds 360,867 3,883 4.33
Total interest-bearing liabilities 5,347,889 11,357 .85
Non-interest-bearing liabilities:
Non-interest-bearing deposits 1,040,587
Other liabilities 79,612
Total liabilities 6,468,088
Shareholders' equity 576,958
Total liabilities and shareholders' equity $ 7,045,046
Net interest revenue $ 58,864
Net interest-rate spread 3.36 %
Net interest margin(4) 3.53 %
(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rateused was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $23.6 million in 2012 and $27.2 million in 2011 are includedin other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
2011
Average Avg.
(dollars in thousands, taxable equivalent) Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 4,598,860 $ 61,070 5.39 %
Taxable securities (3) 1,599,481 13,345 3.34
Tax-exempt securities (1)(3) 25,827 424 6.57
Federal funds sold and other interest-earning assets 677,453 1,126 .66
Total interest-earning assets 6,901,621 75,965 4.45
Non-interest-earning assets:
Allowance for loan losses (169,113 )
Cash and due from banks 134,341
Premises and equipment 179,353
Other assets (3) 332,827
Total assets $ 7,379,029
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,373,142 1,324 .39
Money market 928,542 2,028 .89
Savings 187,423 77 .17
Time less than $100,000 1,540,342 5,451 1.44
Time greater than $100,000 990,881 4,151 1.70
Brokered 698,288 2,130 1.24
Total interest-bearing deposits 5,718,618 15,161 1.08
Federal funds purchased and other borrowings 101,097 1,042 4.18
Federal Home Loan Bank advances 55,125 590 4.34
Long-term debt 150,157 2,780 7.51
Total borrowed funds 306,379 4,412 5.84
Total interest-bearing liabilities 6,024,997 19,573 1.32
Non-interest-bearing liabilities:
Non-interest-bearing deposits 841,351
Other liabilities 58,634
Total liabilities 6,924,982
Shareholders' equity 454,047
Total liabilities and shareholders' equity $ 7,379,029
Net interest revenue $ 56,392
Net interest-rate spread 3.13 %
Net interest margin(4) 3.30 %
(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $23.6 million in 2012 and $27.2 million in 2011 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

Contact Information

  • For more information:
    Rex S. Schuette
    Chief Financial Officer
    (706) 781-2266
    Email Contact