SOURCE: United Community Banks, Inc.

United Community Banks, Inc.

April 25, 2013 05:30 ET

United Community Banks, Inc. Reports Earnings of $11.8 Million for First Quarter 2013

BLAIRSVILLE, GA--(Marketwired - Apr 25, 2013) - United Community Banks, Inc. (NASDAQ: UCBI)

  • Net income of $11.8 million, or 15 cents per share
  • Loans up $18.6 million from fourth quarter, or 2 percent annualized
  • Core transaction deposits up $81.2 million in first quarter, or 10 percent annualized
  • Solid improvement in key credit quality measures

United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $11.8 million, or 15 cents per share, for the first quarter of 2013. The first quarter results reflect modest loan growth, improved credit quality, strong core transaction deposit growth, and lower operating expenses compared with the same period a year ago.

"We are off to a good start to what we expect to be another productive year," said Jimmy Tallent, president and chief executive officer. "The first quarter continued our trend of meaningful improvement in every key measure of credit quality. We made particularly strong progress slowing nonperforming loan inflows which, at $9.67 million, were less than half the fourth quarter level. Nonperforming assets were $113 million and 1.65 percent of total assets at the end of the first quarter. That is down $15 million, or 12 percent, from the end of the fourth quarter, and down $49 million, or 30 percent, from a year ago. Additionally, core transaction deposits increased by $81 million, or 10 percent annualized."

Tallent continued, "We grew our loan portfolio by $19 million from the fourth quarter, for an annualized rate of 2 percent. Achieving quality loan growth remains a challenge in what continues to be a sluggish economy. We achieved this growth by bringing on new commercial lenders and by offering new retail loan products that are tailored to meet our customers' financing needs at competitive rates."

The first quarter provision for loan losses was $11 million, down $4 million from a year ago and $3 million from the fourth quarter. First quarter net charge-offs were $12.4 million compared to $14.5 million in the fourth quarter and $15.9 million a year ago.

"The inflow of nonperforming loans was the lowest quarterly total since the beginning of the economic cycle," Tallent said. "The benefit of this trend, which we expect to continue, was clearly evident in our lower net charge-offs and provisioning."

Taxable equivalent net interest revenue totaled $54.7 million, down $1.37 million from the fourth quarter and down $4.21 million from the first quarter a year ago. "The decrease primarily reflects lower yields on our loan and investment securities portfolios," said Tallent. "The lower loan portfolio yield reflects ongoing pricing pressure on new and renewed loans, and new retail product offerings with low introductory rates. The lower investment securities yield is due to reinvestment of cash flows at record low rates. We continue to look for reinvestment opportunities, with a focus on floating-rate securities, to alleviate market and duration risk. Floating-rate securities account for 34 percent of the investment securities portfolio, and improve our interest sensitivity position by reducing exposure to rising interest rates. We would like a higher yield but will not go out on the curve to chase one."

The taxable equivalent net interest margin was down six basis points from the fourth quarter, and 15 basis points from a year ago, to 3.38 percent. "Our net interest margin will remain under pressure as long as interest rates remain at this unprecedented low level," stated Tallent. "To offset the impact on net interest revenue, we remain sharply focused on growing our loan portfolio in the mid-single digit range by focusing on retail loans and by continuing to add commercial lenders in key markets."

First quarter fee revenue was $12.8 million, compared to $14.8 million in the fourth quarter and $15.4 million a year ago. The decrease from the preceding quarter was primarily due to a slow-down in mortgage refinancing activity, a lower overdraft fee total related to transaction and activity levels, and an incentive in the fourth quarter from our debit card network services provider. Closed mortgage loans totaled $69.8 million in the first quarter compared with $100 million in the fourth quarter and $81.7 million in the first quarter of 2012. The decrease in other fee revenue compared to a year earlier was primarily due to two non-core items in the first quarter of 2012: a federal tax refund of $1.1 million and $728,000 in gains from the sale of low income housing tax credits.

Operating expenses, excluding foreclosed property costs and a $4 million fourth quarter charge for settlement of litigation, were $41.4 million in the first quarter of 2013 compared to $42.1 million for the fourth quarter of 2012 and $43.1 million a year ago. The decrease from both periods was due to management's efforts to reduce costs and operate more efficiently, primarily through reduction in staff levels and related costs.

Foreclosed property costs were $2.33 million in the first quarter of 2013, compared to $4.61 million in the fourth quarter of 2012 and $3.83 million a year ago. First quarter 2013 costs included $1.19 million for maintenance and $1.15 million in net losses and write-downs. For the fourth quarter of 2012, foreclosed property costs included $1.42 million in maintenance and $3.19 million in net losses and write-downs. First quarter 2012 foreclosed property costs included $1.62 million in maintenance and $2.20 million in net losses and write-downs.

As of March 31, 2013, capital ratios were as follows: Tier 1 Risk-Based of 14.3 percent; Tier 1 Leverage of 9.7 percent; Total Risk-Based of 15.9 percent; Tier 1 Common Risk-Based of 8.9 percent; and, Tangible Equity-to-Assets of 8.5 percent.

"We know that challenges remain as the economy continues to struggle and interest rates are at record lows," Tallent continued. "Our focus is on growing net interest revenue by growing loans in a prudent and balanced manner, and pursuing opportunities to grow mortgage and advisory services market share. The environment forces us to be more efficient and work smarter to achieve our goals, and this team is fully committed and up to the challenge. We do expect continued improvement in credit measures that will translate into lower charge-off and provisioning levels."

Tallent concluded, "We constantly look for ways to improve our financial performance by growing our business and improving operating efficiency, all while maintaining the best customer satisfaction scores in the industry. We remain firmly committed to improving our financial results while delivering the best banking experience and growing shareholder value."

Conference Call
United will hold a conference call today, Thursday, April 25, 2013, 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 31826472. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of 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 $6.8 billion and operates 103 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina, east Tennessee and northwest South Carolina. 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 website 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 2012 Annual Report on Form 10-K under the sections 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  
                        First  
    2013   2012   Quarter  
(in thousands, except per share data; taxable equivalent)   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   2013-2012 Change  
INCOME SUMMARY                                    
Interest revenue   $ 62,134   $ 64,450   $ 65,978   $ 66,780   $ 70,221      
Interest expense     7,475     8,422     8,607     9,944     11,357      
  Net interest revenue     54,659     56,028     57,371     56,836     58,864   (7 )%
Provision for loan losses     11,000     14,000     15,500     18,000     15,000      
Fee revenue     12,826     14,761     13,764     12,867     15,379   (17 )
  Total revenue     56,485     56,789     55,635     51,703     59,243      
Operating expenses     43,770     50,726     44,783     44,310     46,955   (7 )
Income before income taxes     12,715     6,063     10,852     7,393     12,288   3  
Income tax expense     950     802     284     894     760      
  Net income     11,765     5,261     10,568     6,499     11,528   2  
Preferred dividends and discount accretion     3,052     3,045     3,041     3,032     3,030      
Net income available to common shareholders   $ 8,713   $ 2,216   $ 7,527   $ 3,467   $ 8,498   3  
                                     
PERFORMANCE MEASURES                                    
  Per common share:                                    
    Diluted income   $ .15   $ .04   $ .13   $ .06   $ .15   -  
    Book value     6.85     6.67     6.75     6.61     6.68   3  
    Tangible book value (2)     6.76     6.57     6.64     6.48     6.54   3  
                                     
  Key performance ratios:                                    
    Return on equity (1)(3)     8.51 %   2.15 %   7.43 %   3.51 %   8.78 %    
    Return on assets (3)     .70     .31     .63     .37     .66      
    Net interest margin (3)     3.38     3.44     3.60     3.43     3.53      
    Efficiency ratio     64.97     71.69     62.95     63.84     63.31      
    Equity to assets     8.60     8.63     8.75     8.33     8.19      
    Tangible equity to assets (2)     8.53     8.55     8.66     8.24     8.08      
    Tangible common equity to assets (2)     5.66     5.67     5.73     5.45     5.33      
    Tangible common equity to risk-weighted assets (2)     8.45     8.26     8.44     8.37     8.21      
                                     
ASSET QUALITY *                                    
  Non-performing loans   $ 96,006   $ 109,894   $ 115,001   $ 115,340   $ 129,704      
  Foreclosed properties     16,734     18,264     26,958     30,421     31,887      
    Total non-performing assets (NPAs)     112,740     128,158     141,959     145,761     161,591      
  Allowance for loan losses     105,753     107,137     107,642     112,705     113,601      
  Net charge-offs     12,384     14,505     20,563     18,896     15,867      
  Allowance for loan losses to loans     2.52 %   2.57 %   2.60 %   2.74 %   2.75 %    
  Net charge-offs to average loans (3)     1.21     1.39     1.99     1.85     1.55      
  NPAs to loans and foreclosed properties     2.68     3.06     3.41     3.51     3.88      
  NPAs to total assets     1.65     1.88     2.12     2.16     2.25      
                                     
AVERAGE BALANCES($ in millions)                                    
  Loans   $ 4,197   $ 4,191   $ 4,147   $ 4,156   $ 4,168   1  
  Investment securities     2,141     2,088     1,971     2,145     2,153   (1 )
  Earning assets     6,547     6,482     6,346     6,665     6,700   (2 )
  Total assets     6,834     6,778     6,648     6,993     7,045   (3 )
  Deposits     5,946     5,873     5,789     5,853     6,028   (1 )
  Shareholders' equity     588     585     582     583     577   2  
  Common shares - basic (thousands)     58,081     57,971     57,880     57,840     57,764      
  Common shares - diluted (thousands)     58,081     57,971     57,880     57,840     57,764      
                                     
AT PERIOD END($ in millions)                                    
  Loans *   $ 4,194   $ 4,175   $ 4,138   $ 4,119   $ 4,128   2  
  Investment securities     2,141     2,079     2,025     1,984     2,202   (3 )
  Total assets     6,849     6,802     6,699     6,737     7,174   (5 )
  Deposits     6,026     5,952     5,823     5,822     6,001   -  
  Shareholders' equity     592     581     585     576     580   2  
  Common shares outstanding (thousands)     57,767     57,741     57,710     57,641     57,603      
                                     
(1) Net income 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  
             
    2013     2012  
(in thousands, except per share data; taxable equivalent)   First Quarter     Fourth Quarter     Third Quarter     Second Quarter     First Quarter  
                                         
Interest revenue reconciliation                                        
Interest revenue - taxable equivalent   $ 62,134     $ 64,450     $ 65,978     $ 66,780     $ 70,221  
Taxable equivalent adjustment     (365 )     (381 )     (419 )     (444 )     (446 )
  Interest revenue (GAAP)   $ 61,769     $ 64,069     $ 65,559     $ 66,336     $ 69,775  
                                         
Net interest revenue reconciliation                                        
Net interest revenue - taxable equivalent   $ 54,659     $ 56,028     $ 57,371     $ 56,836     $ 58,864  
Taxable equivalent adjustment     (365 )     (381 )     (419 )     (444 )     (446 )
  Net interest revenue (GAAP)   $ 54,294     $ 55,647     $ 56,952     $ 56,392     $ 58,418  
                                         
Total revenue reconciliation                                        
Total operating revenue   $ 56,485     $ 56,789     $ 55,635     $ 51,703     $ 59,243  
Taxable equivalent adjustment     (365 )     (381 )     (419 )     (444 )     (446 )
  Total revenue (GAAP)   $ 56,120     $ 56,408     $ 55,216     $ 51,259     $ 58,797  
                                         
Income before taxes reconciliation                                        
Income before taxes   $ 12,715     $ 6,063     $ 10,852     $ 7,393     $ 12,288  
Taxable equivalent adjustment     (365 )     (381 )     (419 )     (444 )     (446 )
  Income before taxes (GAAP)   $ 12,350     $ 5,682     $ 10,433     $ 6,949     $ 11,842  
                                         
Income tax expense reconciliation                                        
Income tax expense   $ 950     $ 802     $ 284     $ 894     $ 760  
Taxable equivalent adjustment     (365 )     (381 )     (419 )     (444 )     (446 )
  Income tax expense (GAAP)   $ 585     $ 421     $ (135 )   $ 450     $ 314  
                                         
Book value per common share reconciliation                                        
Tangible book value per common share   $ 6.76     $ 6.57     $ 6.64     $ 6.48     $ 6.54  
Effect of goodwill and other intangibles     .09       .10       .11       .13       .14  
  Book value per common share (GAAP)   $ 6.85     $ 6.67     $ 6.75     $ 6.61     $ 6.68  
                                         
Average equity to assets reconciliation                                        
Tangible common equity to assets     5.66 %     5.67 %     5.73 %     5.45 %     5.33 %
Effect of preferred equity     2.87       2.88       2.93       2.79       2.75  
  Tangible equity to assets     8.53       8.55       8.66       8.24       8.08  
Effect of goodwill and other intangibles     .07       .08       .09       .09       .11  
  Equity to assets (GAAP)     8.60 %     8.63 %     8.75 %     8.33 %     8.19 %
                                         
Tangible common equity to risk-weighted assets reconciliation                                        
Tangible common equity to risk-weighted assets     8.45 %     8.26 %     8.44 %     8.37 %     8.21 %
Effect of other comprehensive income     .49       .51       .36       .28       .10  
Effect of trust preferred     1.15       1.15       1.17       1.19       1.15  
Effect of preferred equity     4.22       4.24       4.29       4.35       4.23  
  Tier I capital ratio (Regulatory)     14.31 %     14.16 %     14.26 %     14.19 %     13.69 %
                                           
                                           
                                         
UNITED COMMUNITY BANKS, INC.  
Financial Highlights  
Loan Portfolio Composition at Period-End (1)  
               
    2013   2012      
(in millions)   First Quarter   Fourth Quarter   Linked Quarter Change  
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,130   $ 1,131   $ (1 )
Income producing commercial RE     674     682     (8 )
Commercial & industrial     454     458     (4 )
Commercial construction     152     155     (3 )
  Total commercial     2,410     2,426     (16 )
Residential mortgage     850     829     21  
Home equity lines of credit     396     385     11  
Residential construction     372     382     (10 )
Consumer installment     166     153     13  
  Total loans   $ 4,194   $ 4,175     19  
                     
LOANS BY MARKET                    
North Georgia   $ 1,363   $ 1,364     (1 )
Atlanta MSA     1,317     1,288     29  
North Carolina     575     579     (4 )
Coastal Georgia     398     400     (2 )
Gainesville MSA     259     261     (2 )
East Tennessee     282     283     (1 )
  Total loans   $ 4,194   $ 4,175     19  
                     
RESIDENTIAL CONSTRUCTION              
Dirt loans                    
  Acquisition & development   $ 57   $ 62     (5 )
  Land loans     42     46     (4 )
  Lot loans     188     193     (5 )
    Total     287     301     (14 )
                     
House loans                    
  Spec     40     41     (1 )
  Sold     45     40     5  
    Total     85     81     4  
Total residential construction   $ 372   $ 382     (10 )
                     
(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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)  
               
               
    2013   2012      
(in millions)   First Quarter   First Quarter   Year over Year Change  
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,130   $ 1,137   $ (7 )
Income producing commercial RE     674     706     (32 )
Commercial & industrial     454     440     14  
Commercial construction     152     167     (15 )
  Total commercial     2,410     2,450     (40 )
Residential mortgage     850     836     14  
Home equity lines of credit     396     295     101  
Residential construction     372     436     (64 )
Consumer installment     166     111     55  
  Total loans   $ 4,194   $ 4,128     66  
                     
LOANS BY MARKET                    
North Georgia   $ 1,363   $ 1,408     (45 )
Atlanta MSA     1,317     1,239     78  
North Carolina     575     588     (13 )
Coastal Georgia     398     366     32  
Gainesville MSA     259     262     (3 )
East Tennessee     282     265     17  
  Total loans   $ 4,194   $ 4,128     66  
                     
RESIDENTIAL CONSTRUCTION              
Dirt loans                    
  Acquisition & development   $ 57   $ 86     (29 )
  Land loans     42     57     (15 )
  Lot loans     188     204     (16 )
    Total     287     347     (60 )
                     
House loans                    
  Spec     40     57     (17 )
  Sold     45     32     13  
    Total     85     89     (4 )
Total residential construction   $ 372   $ 436     (64 )
                     
(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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)
                     
    2013   2012
    First   Fourth   Third   Second   First
(in millions)   Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                              
Owner occupied commercial RE   $ 1,130   $ 1,131   $ 1,126   $ 1,140   $ 1,137
Income producing commercial RE     674     682     693     697     706
Commercial & industrial     454     458     460     450     440
Commercial construction     152     155     161     169     167
  Total commercial     2,410     2,426     2,440     2,456     2,450
Residential mortgage     850     829     833     834     836
Home equity lines of credit     396     385     341     294     295
Residential construction     372     382     389     409     436
Consumer installment     166     153     135     126     111
  Total loans   $ 4,194   $ 4,175   $ 4,138   $ 4,119   $ 4,128
                               
LOANS BY MARKET                              
North Georgia   $ 1,363   $ 1,364   $ 1,383   $ 1,387   $ 1,408
Atlanta MSA     1,317     1,288     1,257     1,252     1,239
North Carolina     575     579     579     576     588
Coastal Georgia     398     400     380     369     366
Gainesville MSA     259     261     256     259     262
East Tennessee     282     283     283     276     265
  Total loans   $ 4,194   $ 4,175   $ 4,138   $ 4,119   $ 4,128
                               
RESIDENTIAL CONSTRUCTION                              
Dirt loans                              
  Acquisition & development   $ 57   $ 62   $ 71   $ 78   $ 86
  Land loans     42     46     41     45     57
  Lot loans     188     193     196     203     204
    Total     287     301     308     326     347
                               
House loans                              
  Spec     40     41     44     49     57
  Sold     45     40     37     34     32
    Total     85     81     81     83     89
Total residential construction   $ 372   $ 382   $ 389   $ 409   $ 436
                               
(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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 2013  
    Non-performing     Foreclosed     Total  
(in thousands)   Loans     Properties     NPAs  
NPAs BY CATEGORY                   
Owner occupied CRE   $ 8,142     $ 4,750     $ 12,892  
Income producing CRE     9,162       834       9,996  
Commercial & industrial     29,545       -       29,545  
Commercial construction     22,359       3,027       25,386  
  Total commercial     69,208       8,611       77,819  
Residential mortgage     10,901       3,463       14,364  
Home equity lines of credit     916       -       916  
Residential construction     14,592       4,660       19,252  
Consumer installment     389       -       389  
  Total NPAs   $ 96,006     $ 16,734     $ 112,740  
  Balance as a % of Unpaid Principal     66.3 %     45.0 %     62.0 %
                         
NPAs BY MARKET                        
North Georgia   $ 63,210     $ 6,616     $ 69,826  
Atlanta MSA     17,380       3,524       20,904  
North Carolina     8,519       2,533       11,052  
Coastal Georgia     3,523       1,449       4,972  
Gainesville MSA     911       370       1,281  
East Tennessee     2,463       2,242       4,705  
  Total NPAs   $ 96,006     $ 16,734     $ 112,740  
                         
                         
NPA ACTIVITY                        
Beginning Balance   $ 109,894     $ 18,264     $ 128,158  
Loans placed on non-accrual     9,665       -       9,665  
Payments received     (6,809 )     -       (6,809 )
Loan charge-offs     (10,456 )     -       (10,456 )
Foreclosures     (6,288 )     6,288       -  
Capitalized costs     -       54       54  
Note / property sales     -       (6,726 )     (6,726 )
Write downs     -       (1,041 )     (1,041 )
Net losses on sales     -       (105 )     (105 )
  Ending Balance   $ 96,006     $ 16,734     $ 112,740  
                         
(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.  
Financial Highlights  
Credit Quality (1)  
   
    Fourth Quarter 2012  
    Non-performing     Foreclosed     Total  
(in thousands)   Loans     Properties     NPAs  
NPAs BY CATEGORY                   
Owner occupied CRE   $ 12,599     $ 4,989     $ 17,588  
Income producing CRE     9,549       490       10,039  
Commercial & industrial     31,817       -       31,817  
Commercial construction     23,843       2,204       26,047  
  Total commercial     77,808       7,683       85,491  
Residential mortgage     11,151       4,753       15,904  
Home equity lines of credit     1,438       -       1,438  
Residential construction     18,702       5,828       24,530  
Consumer installment     795       -       795  
  Total NPAs   $ 109,894     $ 18,264     $ 128,158  
  Balance as a% of Unpaid Principal     69.5 %     39.7 %     62.8 %
                         
NPAs BY MARKET                        
North Georgia   $ 69,950     $ 8,219     $ 78,169  
Atlanta MSA     18,556       3,442       21,998  
North Carolina     11,014       2,579       13,593  
Coastal Georgia     3,810       1,609       5,419  
Gainesville MSA     903       556       1,459  
East Tennessee     5,661       1,859       7,520  
  Total NPAs   $ 109,894     $ 18,264     $ 128,158  
                         
NPA ACTIVITY                        
Beginning Balance   $ 115,001     $ 26,958     $ 141,959  
Loans placed on non-accrual     20,211       -       20,211  
Payments received     (6,458 )     -       (6,458 )
Loan charge-offs     (11,722 )     -       (11,722 )
Foreclosures     (7,138 )     7,138       -  
Capitalized costs     -       201       201  
Note / property sales     -       (12,845 )     (12,845 )
Write downs     -       (1,438 )     (1,438 )
Net losses on sales     -       (1,750 )     (1,750 )
  Ending Balance   $ 109,894     $ 18,264     $ 128,158  
                         
(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.  
Financial Highlights  
Credit Quality (1)  
   
    Third Quarter 2012  
    Non-performing     Foreclosed     Total  
(in thousands)   Loans     Properties     NPAs  
NPAs BY CATEGORY                   
Owner occupied CRE   $ 14,140     $ 7,170     $ 21,310  
Income producing CRE     11,756       1,597       13,353  
Commercial & industrial     32,678       -       32,678  
Commercial construction     18,590       3,121       21,711  
  Total commercial     77,164       11,888       89,052  
Residential mortgage     12,629       6,031       18,660  
Home equity lines of credit     1,367       -       1,367  
Residential construction     22,935       9,039       31,974  
Consumer installment     906       -       906  
  Total NPAs   $ 115,001     $ 26,958     $ 141,959  
  Balance as a % of Unpaid Principal     68.8 %     36.4 %     58.8 %
                         
NPAs BY MARKET                        
North Georgia   $ 72,211     $ 14,582     $ 86,793  
Atlanta MSA     21,349       5,926       27,275  
North Carolina     9,622       2,771       12,393  
Coastal Georgia     6,822       864       7,686  
Gainesville MSA     840       1,328       2,168  
East Tennessee     4,157       1,487       5,644  
  Total NPAs   $ 115,001     $ 26,958     $ 141,959  
                         
                         
NPA ACTIVITY                        
Beginning Balance   $ 115,340     $ 30,421     $ 145,761  
Loans placed on non-accrual     30,535       -       30,535  
Payments received     (3,646 )     -       (3,646 )
Loan charge-offs     (19,227 )     -       (19,227 )
Foreclosures     (8,001 )     8,001       -  
Capitalized costs     -       102       102  
Note / property sales     -       (8,822 )     (8,822 )
Write downs     -       (2,394 )     (2,394 )
Net losses on sales     -       (350 )     (350 )
  Ending Balance   $ 115,001     $ 26,958     $ 141,959  
                         
(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.  
Financial Highlights  
Credit Quality(1)  
                                   
                                   
    First Quarter 2013     Fourth Quarter 2012     Third Quarter 2012  
 
 
 
(in thousands)
 
 
 
 
 
 
Net
Charge-Offs
 
 
 
 
 
 
 
 
Net Charge-
Offs to
Average
Loans
(2)
 
 
 
 
 
 
 
 
 
 
Net
Charge-Offs
 
 
 
 
Net Charge-
Offs to
Average
Loans
(2)
 
 
 
 
 
 
 
 
 
 
Net
Charge-Offs
 
 
 
 
 
 
 
 
Net Charge-
Offs to
Average
Loans (2)
 
 
 
 
NET CHARGE-OFFS BY CATEGORY                              
Owner occupied CRE   $ 1,922     .69 %   $ 4,997   1.76 %   $ 6,192     3.56 %
Income producing CRE     3,321     1.99       1,153   .67       1,982     .70  
Commercial & industrial     1,501     1.34       135   .12       (259 )   (.23 )
Commercial construction     (4 )   (.01 )     1,688   4.25       3,190     7.74  
  Total commercial     6,740     1.14       7,973   1.30       11,105     1.81  
Residential mortgage     1,635     .79       3,254   1.55       2,846     1.40  
Home equity lines of credit     512     .53       445   .49       681     .80  
Residential construction     2,973     3.22       2,435   2.52       5,676     5.69  
Consumer installment     524     1.35       398   1.10       255     .78  
  Total   $ 12,384     1.21     $ 14,505   1.39     $ 20,563     1.99  
                                         
                                         
NET CHARGE-OFFS BY MARKET                                  
North Georgia   $ 4,910     1.42 %   $ 4,474   1.26 %   $ 6,451     1.84 %
Atlanta MSA     3,295     1.07       3,977   1.27       9,344     3.02  
North Carolina     2,249     1.59       2,032   1.39       1,674     1.15  
Coastal Georgia     821     .85       574   .60       2,486     2.67  
Gainesville MSA     430     .67       1,331   2.04       294     .45  
East Tennessee     679     .98       2,117   2.98       314     .45  
  Total   $ 12,384     1.21     $ 14,505   1.39     $ 20,563     1.99  
                                         
(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)   2013   2012  
               
Interest revenue:              
  Loans, including fees   $ 50,934   $ 55,759  
  Investment securities, including tax exempt of $212 and $250     9,965     13,004  
  Deposits in banks and short-term investments     870     1,012  
      Total interest revenue     61,769     69,775  
               
Interest expense:              
  Deposits:              
    NOW     454     637  
    Money market     562     641  
    Savings     36     37  
    Time     3,226     6,159  
      Total deposit interest expense     4,278     7,474  
  Short-term borrowings     516     1,045  
  Federal Home Loan Bank advances     19     466  
  Long-term debt     2,662     2,372  
    Total interest expense     7,475     11,357  
    Net interest revenue     54,294     58,418  
  Provision for loan losses     11,000     15,000  
    Net interest revenue after provision for loan losses     43,294     43,418  
               
Fee revenue:              
  Service charges and fees     7,403     7,783  
  Mortgage loan and other related fees     2,655     2,099  
  Brokerage fees     767     813  
  Securities gains, net     116     557  
  Loss from prepayment of debt     -     (482 )
  Other     1,885     4,609  
    Total fee revenue     12,826     15,379  
    Total revenue     56,120     58,797  
               
Operating expenses:              
  Salaries and employee benefits     23,592     25,225  
  Communications and equipment     3,046     3,155  
  Occupancy     3,367     3,771  
  Advertising and public relations     938     846  
  Postage, printing and supplies     863     979  
  Professional fees     2,366     1,975  
  Foreclosed property     2,333     3,825  
  FDIC assessments and other regulatory charges     2,505     2,510  
  Amortization of intangibles     705     732  
  Other     4,055     3,937  
    Total operating expenses     43,770     46,955  
    Net income before income taxes     12,350     11,842  
  Income tax expense     585     314  
    Net income     11,765     11,528  
  Preferred stock dividends and discount accretion     3,052     3,030  
    Net income available to common shareholders   $ 8,713   $ 8,498  
               
Earnings per common share - basic / diluted   $ .15   $ .15  
Weighted average common shares outstanding - basic / diluted     58,081     57,764  
               
               
               
UNITED COMMUNITY BANKS, INC.  
Consolidated Balance Sheet  
   
(in thousands, except share and per share data)   March 31, 2013     December 31, 2012     March 31, 2012  
    (unaudited)     (audited)     (audited)  
ASSETS                        
Cash and due from banks   $ 57,638     $ 66,536     $ 53,147  
Interest-bearing deposits in banks     107,390       124,613       139,439  
Short-term investments     82,000       60,000       235,000  
    Cash and cash equivalents     247,028       251,149       427,586  
Securities available for sale     1,909,426       1,834,593       1,898,815  
Securities held to maturity (fair value $247,087, $261,131 and $318,490)     231,087       244,184       303,636  
Mortgage loans held for sale     18,290       28,821       24,809  
Loans, net of unearned income     4,193,560       4,175,008       4,127,566  
    Less allowance for loan losses     (105,753 )     (107,137 )     (113,601 )
      Loans, net     4,087,807       4,067,871       4,013,965  
Assets covered by loss sharing agreements with the FDIC     42,096       47,467       72,854  
Premises and equipment, net     168,036       168,920       174,419  
Bank owned life insurance     82,114       81,867       80,956  
Accrued interest receivable     18,302       18,659       20,292  
Goodwill and other intangible assets     4,805       5,510       7,695  
Foreclosed property     16,734       18,264       31,887  
Unsettled securities sales     -       5,763       43,527  
Other assets     23,643       29,191       73,252  
    Total assets   $ 6,849,368     $ 6,802,259     $ 7,173,693  
LIABILITIES AND SHAREHOLDERS' EQUITY                        
Liabilities:                        
  Deposits:                        
    Demand   $ 1,298,425     $ 1,252,605     $ 1,101,757  
    NOW     1,281,454       1,316,453       1,389,016  
    Money market     1,165,836       1,149,912       1,123,734  
    Savings     243,347       227,308       214,150  
    Time:                        
      Less than $100,000     1,019,396       1,055,271       1,207,479  
      Greater than $100,000     685,174       705,558       796,882  
    Brokered     332,220       245,033       167,521  
        Total deposits     6,025,852       5,952,140       6,000,539  
  Short-term borrowings     51,999       52,574       101,925  
  Federal Home Loan Bank advances     125       40,125       215,125  
  Long-term debt     124,825       124,805       120,245  
  Unsettled securities purchases     -       -       119,565  
  Accrued expenses and other liabilities     54,349       51,210       36,755  
    Total liabilities     6,257,150       6,220,854       6,594,154  
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     178,937       178,557       177,451  
    Series D; $1,000 stated value; 16,613 shares issued and outstanding     16,613       16,613       16,613  
  Common stock, $1 par value; 100,000,000 shares authorized; 43,063,761, 42,423,870 and 41,688,647 shares issued and outstanding     43,064       42,424       41,689  
  Common stock, non-voting, $1 par value; 30,000,000 shares authorized; 14,703,636, 15,316,794 and 15,914,209 shares issued and outstanding     14,704       15,317       15,914  
  Common stock issuable; 133,469, 133,238 and 90,126 shares     2,726       3,119       2,948  
  Capital surplus     1,059,222       1,057,951       1,056,135  
  Accumulated deficit     (700,440 )     (709,153 )     (722,363 )
  Accumulated other comprehensive loss     (22,825 )     (23,640 )     (9,065 )
    Total shareholders' equity     592,218       581,405       579,539  
    Total liabilities and shareholders' equity   $ 6,849,368     $ 6,802,259     $ 7,173,693  
                             
                             
                             
UNITED COMMUNITY BANKS, INC.  
Average Consolidated Balance Sheets and Net Interest Analysis  
For the Three Months Ended March 31,  
                             
    2013     2012  
(dollars in thousands, taxable equivalent)   Average Balance   Interest   Avg. Rate     Average Balance   Interest   Avg. Rate  
Assets:                                    
Interest-earning assets:                                    
  Loans, net of unearned income (1)(2)   $ 4,196,757   $ 50,999   4.93 %   $ 4,168,440   $ 55,842   5.39 %
  Taxable securities (3)     2,119,085     9,753   1.84       2,127,794     12,754   2.40  
  Tax-exempt securities (1)(3)     21,733     347   6.39       25,438     410   6.45  
  Federal funds sold and other interest-earning assets     209,674     1,035   1.97       377,988     1,215   1.29  
                                     
    Total interest-earning assets     6,547,249     62,134   3.84       6,699,660     70,221   4.21  
Non-interest-earning assets:                                    
  Allowance for loan losses     (110,941 )               (117,803 )          
  Cash and due from banks     64,294                 54,664            
  Premises and equipment     169,280                 174,849            
  Other assets (3)     164,250                 233,676            
    Total assets   $ 6,834,132               $ 7,045,046            
                                     
Liabilities and Shareholders' Equity:                                    
Interest-bearing liabilities:                                    
  Interest-bearing deposits:                                    
    NOW   $ 1,303,308     454   .14     $ 1,458,112     637   .18  
    Money market     1,257,409     562   .18       1,069,658     641   .24  
    Savings     234,110     36   .06       205,402     37   .07  
    Time less than $100,000     1,039,707     1,749   .68       1,271,351     3,026   .96  
    Time greater than $100,000     694,553     1,477   .86       821,164     2,415   1.18  
    Brokered time deposits     175,128     -   .00       161,335     718   1.79  
      Total interest-bearing deposits     4,704,215     4,278   .37       4,987,022     7,474   .60  
                                     
    Federal funds purchased and other borrowings     72,157     516   2.90       102,258     1,045   4.11  
    Federal Home Loan Bank advances     33,069     19   .23       138,372     466   1.35  
    Long-term debt     124,816     2,662   8.65       120,237     2,372   7.93  
      Total borrowed funds     230,042     3,197   5.64       360,867     3,883   4.33  
                                     
      Total interest-bearing liabilities     4,934,257     7,475   .61       5,347,889     11,357   .85  
Non-interest-bearing liabilities:                                    
    Non-interest-bearing deposits     1,241,527                 1,040,587            
    Other liabilities     70,839                 79,612            
      Total liabilities     6,246,623                 6,468,088            
Shareholders' equity     587,509                 576,958            
      Total liabilities and shareholders' equity   $ 6,834,132               $ 7,045,046            
                                     
Net interest revenue         $ 54,659               $ 58,864      
Net interest-rate spread               3.23 %               3.36 %
                                     
Net interest margin (4)               3.38 %               3.53 %
                                     
(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 $17.1 million in 2013 and $23.6 million in 2012 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