SOURCE: United Community Banks, Inc.

United Community Banks, Inc.

October 27, 2011 05:30 ET

United Community Banks, Inc. Reports Net Loss of $6.2 Million for Third Quarter 2011

BLAIRSVILLE, GA--(Marketwire - Oct 27, 2011) - United Community Banks, Inc. (NASDAQ: UCBI)

  • Special $25 million loan loss provision drove net loss
  • Excluding this special provision, net income was $8.8 million, or 10 cents per share
  • Net interest margin rose 14 basis points on lower deposit pricing
  • Core transaction deposits up 16 percent on an annualized basis

United Community Banks, Inc. (NASDAQ: UCBI) today reported a net loss of $6.2 million, or 16 cents per share, for the third quarter of 2011. The third quarter net loss resulted from a special loan loss provision of $25 million, or 26 cents per share, recorded in connection with the nonaccrual classification of United's largest loan relationship, which was announced earlier. Excluding this special provision, net income was $8.8 million, or 10 cents per share.

The year-to-date net loss of $141 million primarily reflects significant credit costs in the first quarter incurred in connection with the Company's problem asset disposition plan. The plan was executed in conjunction with raising $380 million of new capital on March 30, 2011.

"We believe the loss was an isolated situation that does not reflect deterioration in the remainder of our loan portfolio," stated Jimmy Tallent, president and chief executive officer. "Aside from this one relationship, which we have been watching closely for several quarters, our credit quality continued to improve and stabilize in the third quarter."

Total loans were $4.1 billion at quarter-end, down $53 million from the end of the second quarter and down $650 million from a year earlier. "The $53 million decrease during the third quarter was up from the $31 million decrease during the second quarter, but still represents the second lowest quarterly decrease in loan balances since the first quarter of 2008," stated Tallent. "We remain confident that soon we can once again begin to grow our loan portfolio. We are encouraged to have $141 million of new loan commitments, with $88 million funded, during the third quarter. The majority were commercial loans."

The third quarter provision for loan losses was $36 million, up from $11 million in the second quarter, but down from $50.5 million a year ago. Included in the third quarter provision was the previously announced $25 million special provision for the Company's largest lending relationship. Net charge-offs for the third quarter were $17.5 million, compared to $16.4 million for the second quarter but down from $50.0 million a year ago. Second quarter net charge-offs included a $7.3 million recovery from an April 18 bulk loan sale transaction. Excluding that recovery, third quarter net charge-offs declined $6.2 million from last quarter.

Nonperforming assets increased $70 million to $189 million at quarter-end. The increase reflects placing the previously mentioned $76.6 million loan on nonaccrual.

Taxable equivalent net interest revenue of $59.3 million increased $335,000 from the second quarter. Compared with the third quarter of 2010, net interest revenue declined $733,000, primarily due to a $702 million reduction in average loan balances that was significantly offset by lower funding costs and deposit rates. Net interest margin was 3.55 percent for the third quarter of 2011, down two basis points from a year ago and up 14 basis points from the second quarter.

"Growing loans and deposits are key initiatives to further building core earnings," Tallent commented. "The weak economy has created a highly competitive environment for good, quality loans and we are working diligently to get our share. We have had tremendous success in gathering core transaction deposits -- increasing the balance $112 million from the second quarter, or 16 percent on an annualized basis. This was the eleventh consecutive quarter of growth in core transaction deposits, which now represents 48 percent of total deposits compared to 30 percent at the end of 2008."

Fee revenue was $11.5 million in the third quarter of 2011, compared to $12.9 million a year ago and $13.9 million last quarter. Service charges and fees were $7.5 million, down $114,000 from a year ago, due primarily to lower overdraft fees of $886,000 resulting from regulatory changes last year that required customers to provide consent before using overdraft services. Mostly offsetting this reduction in overdraft fees was an increase of $785,000 in ATM and debit card usage fees. Mortgage fees of $1.1 million were down $923,000 from a year ago and up $196,000 from last quarter. The decrease from last year was due to the lower level of refinancing activities. Other fee revenue of $2.0 million reflected a decrease of $173,000 from a year ago and $2.7 million from the second quarter. The decrease from the second quarter was primarily due to the accelerated recognition of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans. Hedge ineffectiveness gains recognized in the third quarter were $575,000 compared with $2.8 million in the second quarter of 2011 and $336,000 in the third quarter of 2010. Also contributing to the decrease in other fee revenue from the second quarter and a year ago was a change in the market value of deferred compensation plan assets which accounted for $393,000 and $657,000 of the decrease in other fee revenue from the second quarter of 2011 and the third quarter of 2010, respectively.

Excluding foreclosed property costs and the goodwill impairment charge in 2010, third quarter 2011 operating expenses were $43.7 million, down from both the second quarter of 2011 and third quarter of 2010 by $3.1 million and $1.4 million, respectively. The decreases were mostly in FDIC assessments and the other expense category. FDIC assessments and other regulatory charges of $2.6 million were down $1.0 million from the second quarter and $653,000 from a year ago primarily due to the new asset based formula and a lower assessment rate. The decrease in the other expense category was mostly due to lower collections costs. Salary and benefit costs totaled $25.3 million, a $371,000 increase from last year and a $1.2 million decrease from the second quarter due to staff reductions and related severance costs.

Foreclosed property costs for the third quarter of 2011 were $2.8 million as compared to $1.9 million last quarter and $19.8 million a year ago. The third quarter of 2011 included $1.8 million for maintenance of foreclosed properties and $1.0 million in net losses and write-downs on properties. For the second quarter of 2011, foreclosed property costs were almost entirely for maintenance costs. The third quarter of 2010 included $14.2 million of net write-downs and losses and $5.6 million of maintenance costs.

The effective tax rate for the third quarter of 2011 was 49 percent, up from the 40 percent effective tax rate for the first and second quarters of 2011. The tax benefit in the third quarter includes the release of approximately $1.1 million in reserves for uncertain tax positions relating to state tax returns whose limitations have expired. Excluding the reserve release, the third quarter effective tax rate would have been 40 percent. The effective tax rate is expected to return to a normal range of 35 to 36 percent with expected profitability for 2012.

As of September 30, 2011, the capital ratios for United were as follows: Tier 1 Risk-Based of 14.0 percent; Tier 1 Leverage of 9.0 percent; and Total Risk-Based of 15.8 percent. The quarterly average tangible equity-to-assets ratio was 11.8 percent, and the tangible common equity-to-assets ratio was 9.1 percent.

"Reporting a third quarter loss after achieving profitability last quarter is disappointing, but must be put into context," Tallent said. "Our objective is to deal aggressively and decisively with credit issues as they are identified. The large classification during the quarter was an isolated situation that we do not believe indicates a trend. Excluding this one item, our credit metrics continued to improve and we are on the right path to be profitable next quarter and into 2012."

Tallent added, "United has been working diligently with the SEC to resolve comments regarding our net deferred tax asset made during their review of two resale registration statements and related periodic reports. The SEC has inquired as to the necessity of an additional deferred tax asset valuation allowance. We continue to believe an additional valuation allowance is not required based on our expectation that, more likely than not, we will realize all of our net deferred tax assets many years prior to their expiration. However, considering the SEC's inquiry, it is possible we could be required to record a valuation allowance."

Conference Call
United Community Banks will hold a conference call today, Thursday, October 27, 2011, 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 14298726. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of the company's website at www.ucbi.com.

About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $7.2 billion and operates 27 community banks with 105 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The Company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the Company'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 financial United's outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those anticipated in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
2011 2010
(in thousands, except per share data; taxable equivalent) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
INCOME SUMMARY
Interest revenue $ 74,543 $ 76,931 $ 75,965 $ 81,215 $ 84,360
Interest expense 15,262 17,985 19,573 21,083 24,346
Net interest revenue 59,281 58,946 56,392 60,132 60,014
Operating provision for loan losses (1) 36,000 11,000 190,000 47,750 50,500
Fee revenue (2) 11,498 13,905 11,838 12,442 12,861
Total operating revenue (1)(2) 34,779 61,851 (121,770 ) 24,824 22,375
Operating expenses (3) 46,520 48,728 115,271 64,918 64,906
Loss on sale of nonperforming assets - - - - -
Operating (loss) income from continuing operations before income taxes (11,741 ) 13,123 (237,041 ) (40,094 ) (42,531 )
Operating income tax (benefit) expense (5,539 ) 5,506 (94,555 ) (16,520 ) (16,706 )
Net operating (loss) income from continuing operations(1)(2)(3) (6,202 ) 7,617 (142,486 ) (23,574 ) (25,825 )
Noncash goodwill impairment charges - - - - (210,590 )
Partial reversal of fraud loss provision, net of income tax - - - 7,179 -
Loss from discontinued operations, net of income tax - - - - -
Gain from sale of subsidiary, net income tax - - - - -
Net (loss) income (6,202 ) 7,617 (142,486 ) (16,395 ) (236,415 )
Preferred dividends and discount accretion 3,019 3,016 2,778 2,586 2,581
Net (loss) income available to common shareholders $ (9,221 ) $ 4,601 $ (145,264 ) $ (18,981 ) $ (238,996 )
PERFORMANCE MEASURES
Per common share:
Diluted operating (loss) income from continuing operations (1)(2)(3) $ (.16 ) $ .08 $ (7.87 ) $ (1.38 ) $ (1.50 )
Diluted (loss) income from continuing operations (.16 ) .08 (7.87 ) (1.00 ) (12.62 )
Diluted (loss) income (.16 ) .08 (7.87 ) (1.00 ) (12.62 )
Book value 11.37 11.59 14.78 24.18 25.70
Tangible book value (5) 11.26 11.47 14.44 23.78 25.26
Key performance ratios:
Return on equity (4)(6) (5.72 )% 5.34 % (147.11 )% (17.16 )% (148.04 )%
Return on assets (6) (.34 ) .40 (7.61 ) (.89 ) (12.47 )
Net interest margin (6) 3.55 3.41 3.30 3.58 3.57
Operating efficiency ratio from continuing operations (2)(3) 65.73 66.88 169.08 89.45 89.38
Equity to assets 11.83 11.21 8.82 8.85 11.37
Tangible equity to assets (5) 11.76 11.13 8.73 8.75 9.19
Tangible common equity to assets (5) 9.09 4.79 5.51 6.35 6.78
Tangible common equity to risk-weighted assets (5) 14.41 14.26 6.40 9.05 9.60
ASSET QUALITY *
Non-performing loans $ 144,484 $ 71,065 $ 83,769 $ 179,094 $ 217,766
Foreclosed properties 44,263 47,584 54,378 142,208 129,964
Total non-performing assets (NPAs) 188,747 118,649 138,147 321,302 347,730
Allowance for loan losses 146,092 127,638 133,121 174,695 174,613
Operating net charge-offs (1) 17,546 16,483 231,574 47,668 49,998
Allowance for loan losses to loans 3.55 % 3.07 % 3.17 % 3.79 % 3.67 %
Operating net charge-offs to average loans (1)(6) 1.68 1.58 20.71 4.03 4.12
NPAs to loans and foreclosed properties 4.54 2.82 3.25 6.77 7.11
NPAs to total assets 2.64 1.60 1.73 4.32 4.96
AVERAGE BALANCES($ in millions)
Loans $ 4,194 $ 4,266 $ 4,599 $ 4,768 $ 4,896
Investment securities 2,150 2,074 1,625 1,354 1,411
Earning assets 6,630 6,924 6,902 6,680 6,676
Total assets 7,261 7,624 7,595 7,338 7,522
Deposits 6,061 6,372 6,560 6,294 6,257
Shareholders' equity 859 854 670 649 855
Common shares - basic (thousands) 57,599 25,427 18,466 18,984 18,936
Common shares - diluted (thousands) 57,599 57,543 18,466 18,984 18,936
AT PERIOD END($ in millions)
Loans * $ 4,110 $ 4,163 $ 4,194 $ 4,604 $ 4,760
Investment securities 2,123 2,188 1,884 1,490 1,310
Total assets 7,159 7,410 7,974 7,443 7,013
Deposits 6,005 6,183 6,598 6,469 5,999
Shareholders' equity 848 860 850 636 662
Common shares outstanding (thousands) 57,510 57,469 20,903 18,937 18,887
(1) Excludes the partial reversal of a previously established provision for fraud-related loan losses of $11.8 million, net of tax expense of $4.6 million in the fourth quarter of 2010. Operating charge-offs also exclude the $11.8 million related partial recovery of the previously charged off amount. (2) Excludes revenue generated by discontinued operations in the first quarter of 2010. (3) Excludes the goodwill impairment charge of $211 million in the third quarter of 2010 and expenses relating to discontinued operations in the first quarter of 2010. (4) 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). (5) Excludes effect of acquisition related intangibles and associated amortization. (6) Annualized.
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
(in thousands, except per share data; taxable equivalent) Third Quarter Third Quarter 2011-2010
Change
For the Nine
Months Ended
YTD
2011-2010

Change
2011 2010 2011 2010
INCOME SUMMARY
Interest revenue $ 74,543 $ 84,360 $ 227,439 $ 261,908
Interest expense 15,262 24,346 52,820 78,988
Net interest revenue 59,281 60,014 (1 )% 174,619 182,920 (5 )%
Operating provision for loan losses (1) 36,000 50,500 237,000 187,000
Fee revenue (2) 11,498 12,861 (11 ) 37,241 36,106 3
Total operating revenue (1)(2) 34,779 22,375 (25,140 ) 32,026
Operating expenses (3) 46,520 64,906 (28 ) 210,519 178,034 18
Loss on sale of nonperforming assets - - - 45,349
Operating (loss) income from continuing operations before income taxes
(11,741
)
(42,531
)
(72
)
(235,659
)
(191,357
)
23
Operating income tax (benefit) expense (5,539 ) (16,706 ) (94,588 ) (71,542 )
Net operating (loss) income from continuing operations (1)(2)(3)
(6,202
)
(25,825
)
(76
)
(141,071
)
(119,815
)
18
Noncash goodwill impairment charges - (210,590 ) - (210,590 )
Partial reversal of fraud loss provision, net of income tax - - - -
Loss from discontinued operations, net of income tax - - - (101 )
Gain from sale of subsidiary, net income tax - - - 1,266
Net (loss) income (6,202 ) (236,415 ) (97 ) (141,071 ) (329,240 ) (57 )
Preferred dividends and discount accretion 3,019 2,581 8,813 7,730
Net (loss) income available to common shareholders $ (9,221 ) $ (238,996 ) $ (149,884 ) $ (336,970 )
PERFORMANCE MEASURES
Per common share:
Diluted operating (loss) income from continuing operations (1)(2)(3)
$ (.16
)
$ (1.50
)
(89
)
$ (4.41
)
$ (6.75
)
(35
)
Diluted (loss) income from continuing operations (.16 ) (12.62 ) (99 ) (4.41 ) (17.89 ) (75 )
Diluted (loss) income (.16 ) (12.62 ) (99 ) (4.41 ) (17.82 ) (75 )
Book value 11.37 25.70 (56 ) 11.37 25.70 (56 )
Tangible book value (5) 11.26 25.26 (55 ) 11.26 25.26 (55 )
Key performance ratios:
Return on equity (4)(6) (5.72 )% (148.04 )% (43.31 )% (65.69 )%
Return on assets (6) (.34 ) (12.47 ) (2.52 ) (5.70 )
Net interest margin (6) 3.55 3.57 3.42 3.56
Operating efficiency ratio from continuing operations (2)(3) 65.73 89.38 99.39 102.14
Equity to assets 11.83 11.37 10.61 11.70
Tangible equity to assets (5) 11.76 9.19 10.53 9.28
Tangible common equity to assets (5) 9.09 6.78 6.44 6.94
Tangible common equity to risk-weighted assets (5) 14.41 9.60 14.41 9.60
ASSET QUALITY *
Non-performing loans $ 144,484 $ 217,766 $ 144,484 $ 217,766
Foreclosed properties 44,263 129,964 44,263 129,964
Total non-performing assets (NPAs) 188,747 347,730 188,747 347,730
Allowance for loan losses 146,092 174,613 146,092 174,613
Operating net charge-offs (1) 17,546 49,998 265,603 167,989
Allowance for loan losses to loans 3.55 % 3.67 % 3.55 % 3.67 %
Operating net charge-offs to average loans (1)(6) 1.68 4.12 8.28 4.54
NPAs to loans and foreclosed properties 4.54 7.11 4.54 7.11
NPAs to total assets 2.64 4.96 2.64 4.96
AVERAGE BALANCES($ in millions)
Loans $ 4,194 $ 4,896 (14 ) $ 4,352 $ 5,026 (13 )
Investment securities 2,150 1,411 52 1,952 1,487 31
Earning assets 6,630 6,676 (1 ) 6,817 6,870 (1 )
Total assets 7,261 7,522 (3 ) 7,492 7,723 (3 )
Deposits 6,061 6,257 (3 ) 6,329 6,399 (1 )
Shareholders' equity 859 855 - 795 904 (12 )
Common shares - basic (thousands) 57,599 18,936 33,973 18,905
Common shares - diluted (thousands) 57,599 18,936 33,973 18,905
AT PERIOD END($ in millions)
Loans * $ 4,110 $ 4,760 (14 ) $ 4,110 $ 4,760 (14 )
Investment securities 2,123 1,310 62 2,123 1,310 62
Total assets 7,159 7,013 2 7,159 7,013 2
Deposits 6,005 5,999 - 6,005 5,999 -
Shareholders' equity 848 662 28 848 662 28
Common shares outstanding (thousands) 57,510 18,887 57,510 18,887
(1) Excludes the partial reversal of a previously established provision for fraud-related loan losses of $11.8 million, net of tax expense of $4.6 million in the fourth quarter of 2010. Operating charge-offs also exclude the $11.8 million related partial recovery of the previously charged off amount. (2) Excludes revenue generated by discontinued operations in the first quarter of 2010. (3) Excludes the goodwill impairment charge of $211 million in the third quarter of 2010 and expenses relating to discontinued operations in the first quarter of 2010. (4) 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). (5) Excludes effect of acquisition related intangibles and associated amortization. (6) Annualized.
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
2011 2010
(in thousands, except per share data; taxable equivalent) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 74,543 $ 76,931 $ 75,965 $ 81,215 $ 84,360
Taxable equivalent adjustment (420 ) (429 ) (435 ) (497 ) (511 )
Interest revenue (GAAP) $ 74,123 $ 76,502 $ 75,530 $ 80,718 $ 83,849
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 59,281 $ 58,946 $ 56,392 $ 60,132 $ 60,014
Taxable equivalent adjustment (420 ) (429 ) (435 ) (497 ) (511 )
Net interest revenue (GAAP) $ 58,861 $ 58,517 $ 55,957 $ 59,635 $ 59,503
Provision for loan losses reconciliation
Operating provision for loan losses $ 36,000 $ 11,000 $ 190,000 $ 47,750 $ 50,500
Partial reversal of special fraud-related provision for loan loss - - - (11,750 ) -
Provision for loan losses (GAAP) $ 36,000 $ 11,000 $ 190,000 $ 36,000 $ 50,500
Total revenue reconciliation
Total operating revenue $ 34,779 $ 61,851 $ (121,770 ) $ 24,824 $ 22,375
Taxable equivalent adjustment (420 ) (429 ) (435 ) (497 ) (511 )
Partial reversal of special fraud-related provision for loan loss - - - 11,750 -
Total revenue (GAAP) $ 34,359 $ 61,422 $ (122,205 ) $ 36,077 $ 21,864
Expense reconciliation
Operating expense $ 46,520 $ 48,728 $ 115,271 $ 64,918 $ 64,906
Noncash goodwill impairment charge - - - - 210,590
Operating expense (GAAP) $ 46,520 $ 48,728 $ 115,271 $ 64,918 $ 275,496
(Loss) income from continuing operations before taxes reconciliation
Operating (loss) income from continuing operations before taxes $ (11,741 ) $ 13,123 $ (237,041 ) $ (40,094 ) $ (42,531 )
Taxable equivalent adjustment (420 ) (429 ) (435 ) (497 ) (511 )
Noncash goodwill impairment charge - - - - (210,590 )
Partial reversal of special fraud-related provision for loan loss - - - 11,750 -
(Loss) income from continuing operations before taxes (GAAP) $ (12,161 ) $ 12,694 $ (237,476 ) $ (28,841 ) $ (253,632 )
Income tax (benefit) expense reconciliation
Operating income tax (benefit) expense $ (5,539 ) $ 5,506 $ (94,555 ) $ (16,520 ) $ (16,706 )
Taxable equivalent adjustment (420 ) (429 ) (435 ) (497 ) (511 )
Partial reversal of special fraud-related provision for loan loss - - - 4,571 -
Income tax (benefit) expense (GAAP) $ (5,959 ) $ 5,077 $ (94,990 ) $ (12,446 ) $ (17,217 )
Diluted (loss) earnings from continuing operations per common share reconciliation
Diluted operating (loss) earnings from continuing operations per common share $ (.16 ) $ .08 $ (7.87 ) $ (1.38 ) $ (1.50 )
Noncash goodwill impairment charge - - - - (11.12 )
Partial reversal of special fraud-related provision for loan loss - - - .38 -
Diluted (loss) earnings from continuing operations per common share (GAAP) $ (.16 ) $ .08 $ (7.87 ) $ (1.00 ) $ (12.62 )
Book value per common share reconciliation
Tangible book value per common share $ 11.26 $ 11.47 $ 14.44 $ 23.78 $ 25.26
Effect of goodwill and other intangibles .11 .12 .34 .40 .44
Book value per common share (GAAP) $ 11.37 $ 11.59 $ 14.78 $ 24.18 $ 25.70
Efficiency ratio from continuing operations reconciliation
Operating efficiency ratio from continuing operations 65.73 % 66.88 % 169.08 % 89.45 % 89.38 %
Noncash goodwill impairment charge - - - - 290.00
Efficiency ratio from continuing operations (GAAP) 65.73 % 66.88 % 169.08 % 89.45 % 379.38 %
Average equity to assets reconciliation
Tangible common equity to assets 9.09 % 4.79 % 5.51 % 6.35 % 6.78 %
Effect of preferred equity 2.67 6.34 3.22 2.40 2.41
Tangible equity to assets 11.76 11.13 8.73 8.75 9.19
Effect of goodwill and other intangibles .07 .08 .09 .10 2.18
Equity to assets (GAAP) 11.83 % 11.21 % 8.82 % 8.85 % 11.37 %
Actual tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets 14.41 % 14.26 % 6.40 % 9.05 % 9.60 %
Effect of other comprehensive income (.58 ) (.65 ) (.58 ) (.62 ) (.81 )
Effect of deferred tax limitation (5.34 ) (5.04 ) (5.10 ) (3.34 ) (2.94 )
Effect of trust preferred 1.18 1.14 1.12 1.06 1.06
Effect of preferred equity 4.30 4.17 5.97 3.52 3.51
Tier I capital ratio (Regulatory) 13.97 % 13.88 % 7.81 % 9.67 % 10.42 %
Net charge-offs reconciliation
Operating net charge-offs $ 17,546 $ 16,483 $ 231,574 $ 47,668 $ 49,998
Subsequent partial recovery of fraud-related charge-off - - - (11,750 ) -
Net charge-offs (GAAP) $ 17,546 $ 16,483 $ 231,574 $ 35,918 $ 49,998
Net charge-offs to average loans reconciliation
Operating net charge-offs to average loans 1.68 % 1.58 % 20.71 % 4.03 % 4.12 %
Subsequent partial recovery of fraud-related charge-off - - - (1.00 ) -
Net charge-offs to average loans (GAAP) 1.68 % 1.58 % 20.71 % 3.03 % 4.12 %
Net (loss) income reconciliation
Net income excluding special provision $ 8,798
Effect of special provision for loan losses on largest lending relationship (15,000 )
Net loss (GAAP) $ (6,202 )
Net (loss) income per diluted share reconciliation
Net income per diluted share excluding special provision $ .10
Effect of special provision for loan losses on largest lending relationship (.26 )
Net loss per diluted share (GAAP) $ (.16 )
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
(in thousands, except per share data; taxable equivalent) For the Nine Months Ended
2011 2010
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 227,439 $ 261,908
Taxable equivalent adjustment (1,284 ) (1,504 )
Interest revenue (GAAP) $ 226,155 $ 260,404
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 174,619 $ 182,920
Taxable equivalent adjustment (1,284 ) (1,504 )
Net interest revenue (GAAP) $ 173,335 $ 181,416
Provision for loan losses reconciliation
Operating provision for loan losses $ 237,000 $ 187,000
Partial reversal of special fraud-related provision for loan loss - -
Provision for loan losses (GAAP) $ 237,000 $ 187,000
Total revenue reconciliation
Total operating revenue $ (25,140 ) $ 32,026
Taxable equivalent adjustment (1,284 ) (1,504 )
Partial reversal of special fraud-related provision for loan loss - -
Total revenue (GAAP) $ (26,424 ) $ 30,522
Expense reconciliation
Operating expense $ 210,519 $ 223,383
Noncash goodwill impairment charge - 210,590
Operating expense (GAAP) $ 210,519 $ 433,973
(Loss) income from continuing operations before taxes reconciliation
Operating (loss) income from continuing operations before taxes $ (235,659 ) $ (191,357 )
Taxable equivalent adjustment (1,284 ) (1,504 )
Noncash goodwill impairment charge - (210,590 )
Partial reversal of special fraud-related provision for loan loss - -
(Loss) income from continuing operations before taxes (GAAP) $ (236,943 ) $ (403,451 )
Income tax (benefit) expense reconciliation
Operating income tax (benefit) expense $ (94,588 ) $ (71,542 )
Taxable equivalent adjustment (1,284 ) (1,504 )
Partial reversal of special fraud-related provision for loan loss - -
Income tax (benefit) expense (GAAP) $ (95,872 ) $ (73,046 )
Diluted (loss) earnings from continuing operations per common share reconciliation
Diluted operating (loss) earnings from continuing operations per common share $ (4.41 ) $ (6.75 )
Noncash goodwill impairment charge - (11.14 )
Partial reversal of special fraud-related provision for loan loss - -
Diluted (loss) earnings from continuing operations per common share (GAAP) $ (4.41 ) $ (17.89 )
Book value per common share reconciliation
Tangible book value per common share $ 11.26 $ 25.26
Effect of goodwill and other intangibles .11 .44
Book value per common share (GAAP) $ 11.37 $ 25.70
Efficiency ratio from continuing operations reconciliation
Operating efficiency ratio from continuing operations 99.39 % 102.14 %
Noncash goodwill impairment charge - 96.29
Efficiency ratio from continuing operations (GAAP) 99.39 % 198.43 %
Average equity to assets reconciliation
Tangible common equity to assets 6.44 % 6.94 %
Effect of preferred equity 4.09 2.34
Tangible equity to assets 10.53 9.28
Effect of goodwill and other intangibles .08 2.42
Equity to assets (GAAP) 10.61 % 11.70 %
Actual tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets 14.41 % 9.60 %
Effect of other comprehensive income (.58 ) (.81 )
Effect of deferred tax limitation (5.34 ) (2.94 )
Effect of trust preferred 1.18 1.06
Effect of preferred equity 4.30 3.51
Tier I capital ratio (Regulatory) 13.97 % 10.42 %
Net charge-offs reconciliation
Operating net charge-offs $ 265,603 $ 167,989
Subsequent partial recovery of fraud-related charge-off - -
Net charge-offs (GAAP) $ 265,603 $ 167,989
Net charge-offs to average loans reconciliation
Operating net charge-offs to average loans 8.28 % 4.54 %
Subsequent partial recovery of fraud-related charge-off - -
Net charge-offs to average loans (GAAP) 8.28 % 4.54 %
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
2011 2010
Third Second First Fourth Third
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Commercial (sec.by RE) $ 1,771 $ 1,742 $ 1,692 $ 1,761 $ 1,781
Commercial construction 169 195 213 297 310
Commercial & industrial 429 428 431 441 456
Total commercial 2,369 2,365 2,336 2,499 2,547
Residential construction 474 502 550 695 764
Residential mortgage 1,150 1,177 1,187 1,279 1,316
Consumer / installment 117 119 121 131 133
Total loans $ 4,110 $ 4,163 $ 4,194 $ 4,604 $ 4,760
LOANS BY MARKET
Atlanta MSA $ 1,192 $ 1,188 $ 1,179 $ 1,310 $ 1,365
Gainesville MSA 272 275 282 312 316
North Georgia 1,478 1,500 1,531 1,689 1,755
Western North Carolina 607 626 640 702 719
Coastal Georgia 316 325 312 335 345
East Tennessee 245 249 250 256 260
Total loans $ 4,110 $ 4,163 $ 4,194 $ 4,604 $ 4,760
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 97 $ 105 $ 116 $ 174 $ 190
Land loans 60 62 69 99 104
Lot loans 216 218 228 275 303
Total 373 385 413 548 597
House loans
Spec 64 74 88 97 109
Sold 37 43 49 50 58
Total 101 117 137 147 167
Total residential construction $ 474 $ 502 $ 550 $ 695 $ 764
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development $ 19 $ 20 $ 22 $ 30 $ 34
Land loans 15 16 19 23 27
Lot loans 22 22 24 32 45
Total 56 58 65 85 106
House loans
Spec 28 30 34 38 42
Sold 8 9 11 10 11
Total 36 39 45 48 53
Total residential construction $ 92 $ 97 $ 110 $ 133 $ 159
(1) Excludes total loans of $57.8 million, $70.8 million, $63.3 million, $68.2 million and $75.2 million as of September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, 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)
2011 2010
Third Second Third Linked Quarter Year over Year
(in millions) Quarter Quarter Quarter Change Change
LOANS BY CATEGORY
Commercial (sec.by RE) $ 1,771 $ 1,742 $ 1,781 $ 29 $ (10 )
Commercial construction 169 195 310 (26 ) (141 )
Commercial & industrial 429 428 456 1 (27 )
Total commercial 2,369 2,365 2,547 4 (178 )
Residential construction 474 502 764 (28 ) (290 )
Residential mortgage 1,150 1,177 1,316 (27 ) (166 )
Consumer / installment 117 119 133 (2 ) (16 )
Total loans $ 4,110 $ 4,163 $ 4,760 (53 ) (650 )
LOANS BY MARKET
Atlanta MSA $ 1,192 $ 1,188 $ 1,365 4 (173 )
Gainesville MSA 272 275 316 (3 ) (44 )
North Georgia 1,478 1,500 1,755 (22 ) (277 )
Western North Carolina 607 626 719 (19 ) (112 )
Coastal Georgia 316 325 345 (9 ) (29 )
East Tennessee 245 249 260 (4 ) (15 )
Total loans $ 4,110 $ 4,163 $ 4,760 (53 ) (650 )
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development $ 97 $ 105 $ 190 (8 ) (93 )
Land loans 60 62 104 (2 ) (44 )
Lot loans 216 218 303 (2 ) (87 )
Total 373 385 597 (12 ) (224 )
House loans
Spec 64 74 109 (10 ) (45 )
Sold 37 43 58 (6 ) (21 )
Total 101 117 167 (16 ) (66 )
Total residential construction $ 474 $ 502 $ 764 (28 ) (290 )
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development $ 19 $ 20 $ 34 (1 ) (15 )
Land loans 15 16 27 (1 ) (12 )
Lot loans 22 22 45 - (23 )
Total 56 58 106 (2 ) (50 )
House loans
Spec 28 30 42 (2 ) (14 )
Sold 8 9 11 (1 ) (3 )
Total 36 39 53 (3 ) (17 )
Total residential construction $ 92 $ 97 $ 159 (5 ) (67 )
(1) Excludes total loans of $57.8 million, $70.8 million, $63.3 million, $68.2 million and $75.2 million as of September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, 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)
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 construction 11,370 5,862 17,232
Commercial & industrial 53,009 - 53,009
Total commercial 86,377 14,742 101,119
Residential construction 34,472 21,561 56,033
Residential mortgage 22,671 7,960 30,631
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
Atlanta MSA $ 13,350 $ 12,971 $ 26,321
Gainesville MSA 5,311 2,495 7,806
North Georgia 105,078 17,467 122,545
Western North Carolina 13,243 7,941 21,184
Coastal Georgia 5,600 2,354 7,954
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 )
Loans held for sale - - -
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.
(2) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Second Quarter 2011
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
NPAs BY CATEGORY
Commercial (sec.by RE) $ 17,764 $ 6,796 $ 24,560
Commercial construction 2,782 6,764 9,546
Commercial & industrial 1,998 - 1,998
Total commercial 22,544 13,560 36,104
Residential construction 22,643 24,968 47,611
Residential mortgage 24,809 9,056 33,865
Consumer / installment 1,069 - 1,069
Total NPAs $ 71,065 $ 47,584 $ 118,649
Balance as a % of Unpaid Principal 64.5 % 32.6 % 46.3 %
NPAs BY MARKET
Atlanta MSA $ 14,700 $ 11,239 $ 25,939
Gainesville MSA 4,505 3,174 7,679
North Georgia 28,117 21,278 49,395
Western North Carolina 15,153 8,953 24,106
Coastal Georgia 5,357 2,564 7,921
East Tennessee 3,233 376 3,609
Total NPAs $ 71,065 $ 47,584 $ 118,649
NPA ACTIVITY
Beginning Balance $ 83,769 $ 54,378 $ 138,147
Loans placed on non-accrual 35,911 - 35,911
Payments received (7,702 ) - (7,702 )
Loan charge-offs (18,888 ) - (18,888 )
Foreclosures (22,025 ) 22,025 -
Capitalized costs - 20 20
Note / property sales - (28,939 ) (28,939 )
Loans held for sale - - -
Write downs - (3,118 ) (3,118 )
Net gains (losses) on sales - 3,218 3,218
Ending Balance $ 71,065 $ 47,584 $ 118,649
(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) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
First Quarter 2011 (2)
Non-performing Foreclosed Total
(in thousands) Loans Properties NPAs
NPAs BY CATEGORY
Commercial (sec.by RE) $ 20,648 $ 7,886 $ 28,534
Commercial construction 3,701 11,568 15,269
Commercial & industrial 2,198 - 2,198
Total commercial 26,547 19,454 46,001
Residential construction 32,038 25,807 57,845
Residential mortgage 23,711 9,117 32,828
Consumer / installment 1,473 - 1,473
Total NPAs $ 83,769 $ 54,378 $ 138,147
Balance as a % of Unpaid Principal 57.3 % 30.3 % 42.4 %
NPAs BY MARKET
Atlanta MSA $ 21,501 $ 16,913 $ 38,414
Gainesville MSA 4,332 2,157 6,489
North Georgia 30,214 23,094 53,308
Western North Carolina 18,849 7,802 26,651
Coastal Georgia 5,847 3,781 9,628
East Tennessee 3,026 631 3,657
Total NPAs $ 83,769 $ 54,378 $ 138,147
NPA ACTIVITY
Beginning Balance $ 179,094 $ 142,208 $ 321,302
Loans placed on non-accrual 54,730 - 54,730
Payments received (3,550 ) - (3,550 )
Loan charge-offs (43,969 ) - (43,969 )
Foreclosures (17,052 ) 17,052 -
Capitalized costs - 270 270
Note / property sales (11,400 ) (44,547 ) (55,947 )
Loans held for sale (74,084 ) - (74,084 )
Write downs - (48,585 ) (48,585 )
Net gains (losses) on sales - (12,020 ) (12,020 )
Ending Balance $ 83,769 $ 54,378 $ 138,147
(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) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality(1)
Third Quarter 2011 Second Quarter 2011(3) First Quarter 2011(3)
(in thousands) Net Charge-Offs Net Charge-
Offs to

Average
Loans(4)
Net Charge-Offs Net Charge-
Offs to

Average
Loans(4)
Net Charge-Offs Net Charge-
Offs to

Average
Loans(4)
NET CHARGE-OFFS BY CATEGORY
Commercial (sec.by RE) $ 2,192 .50 % $ 3,259 .76 % $ 48,607 11.07 %
Commercial construction 1,625 3.54 869 1.70 49,715 76.95
Commercial & industrial 420 .39 523 .49 4,040 3.64
Total commercial 4,237 .71 4,651 .79 102,362 16.66
Residential construction 6,381 5.19 6,629 5.04 92,138 58.20
Residential mortgage 6,110 2.09 4,589 1.55 36,383 11.62
Consumer / installment 818 2.75 614 2.04 691 2.16
Total $ 17,546 1.68 $ 16,483 1.58 $ 231,574 20.71
NET CHARGE-OFFS BY MARKET
Atlanta MSA $ 2,813 .94 % $ 2,920 .99 % $ 56,489 17.86 %
Gainesville MSA 1,804 2.64 2,318 3.36 8,616 11.93
North Georgia 8,124 2.16 6,575 1.72 123,305 29.66
Western North Carolina 3,608 2.31 3,522 2.21 26,447 15.61
Coastal Georgia 709 .88 815 1.02 12,003 14.80
East Tennessee 488 .78 333 .54 4,714 7.47
Total $ 17,546 1.68 $ 16,483 1.58 $ 231,574 20.71
(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) The NPA activity shown for the first quarter of 2011 is presented with all activity related to loans transferred to the loans held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced asset disposition plan. Such charge-offs severely distorted charge off rates for the first and second quarters of 2011. A separate schedule has been included in this earnings release presenting the components of net charge-offs by loan category and geographic market for the first and second quarters of 2011.
(4) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary(1)
Second Quarter 2011
(in thousands) Other Problem Asset Disposition Plan Total
BY CATEGORY
Commercial (sec. by RE) $ 4,972 $ (1,713 ) $ 3,259
Commercial construction 2,201 (1,332 ) 869
Commercial & industrial 639 (116 ) 523
Total commercial 7,812 (3,161 ) 4,651
Residential construction 9,471 (2,842 ) 6,629
Residential mortgage 5,844 (1,255 ) 4,589
Consumer / installment 625 (11 ) 614
Total $ 23,752 $ (7,269 ) $ 16,483
BY MARKET
Atlanta MSA $ 4,875 $ (1,955 ) $ 2,920
Gainesville MSA 2,576 (258 ) 2,318
North Georgia 10,360 (3,785 ) 6,575
Western North Carolina 4,263 (741 ) 3,522
Coastal Georgia 1,206 (391 ) 815
East Tennessee 472 (139 ) 333
Total $ 23,752 $ (7,269 ) $ 16,483
(1) This schedule presents net charge-offs by loan type and geographic market separated between those charge offs related to United's first quarter 2011 Problem Asset Disposition Plan including losses on loans sold in the bulk loan sale transaction that closed on April 18, 2011 and all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were estimated based on indicative bids from prospective buyers. Actual losses were less than estimated resulting in an adjustment to the loss in the second quarter.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary(1)
First Quarter 2011
(in thousands) Other Problem Asset Disposition Plan Total
BY CATEGORY
Commercial (sec. by RE) $ 2,842 $ 45,765 $ 48,607
Commercial construction 1,146 48,569 49,715
Commercial & industrial 513 3,527 4,040
Total commercial 4,501 97,861 102,362
Residential construction 10,643 81,495 92,138
Residential mortgage 4,989 31,394 36,383
Consumer / installment 383 308 691
Total $ 20,516 $ 211,058 $ 231,574
BY MARKET
Atlanta MSA $ 3,296 $ 53,193 $ 56,489
Gainesville MSA 954 7,662 8,616
North Georgia 8,544 114,761 123,305
Western North Carolina 6,749 19,698 26,447
Coastal Georgia 341 11,662 12,003
East Tennessee 632 4,082 4,714
Total $ 20,516 $ 211,058 $ 231,574
(1) This schedule presents net charge-offs by loan type and geographic market separated between those charge offs related to United's first quarter 2011 Problem Asset Disposition Plan including losses on loans sold in the bulk loan sale transaction that closed on April 18, 2011 and all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were estimated based on indicative bids from prospective buyers. Actual losses were less than estimated resulting in an adjustment to the loss in the second quarter.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary(1)
First Six Months 2011
(in thousands) Other Problem Asset Disposition Plan Total
BY CATEGORY
Commercial (sec. by RE) $ 7,814 $ 44,052 $ 51,866
Commercial construction 3,347 47,237 50,584
Commercial & industrial 1,152 3,411 4,563
Total commercial 12,313 94,700 107,013
Residential construction 20,114 78,653 98,767
Residential mortgage 10,833 30,139 40,972
Consumer / installment 1,008 297 1,305
Total $ 44,268 $ 203,789 $ 248,057
BY MARKET
Atlanta MSA $ 8,171 $ 51,238 $ 59,409
Gainesville MSA 3,530 7,404 10,934
North Georgia 18,904 110,976 129,880
Western North Carolina 11,012 18,957 29,969
Coastal Georgia 1,547 11,271 12,818
East Tennessee 1,104 3,943 5,047
Total $ 44,268 $ 203,789 $ 248,057
(1) This schedule presents net charge-offs by loan type and geographic market separated between those charge offs related to United's first quarter 2011 Problem Asset Disposition Plan including losses on loans sold in the bulk loan sale transaction that closed on April 18, 2011 and all other charge-offs. The charge-offs on the bulk loan sale recognized in the first quarter were estimated based on indicative bids from prospective buyers. Actual losses were less than estimated resulting in an adjustment to the loss in the second quarter.
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Operations (Unaudited)
Three Months Ended
September 30,
(in thousands, except per share data) 2011 2010
Interest revenue:
Loans, including fees $ 59,294 $ 68,419
Investment securities, including tax exempt of $244, $279, $754 and $886 14,568 14,711
Federal funds sold, commercial paper and deposits in banks 261 719
Total interest revenue 74,123 83,849
Interest expense:
Deposits:
NOW 831 1,705
Money market 1,129 1,930
Savings 52 83
Time 9,086 16,099
Total deposit interest expense 11,098 19,817
Federal funds purchased, repurchase agreements and other short-term borrowings 1,081 1,068
Federal Home Loan Bank advances 441 796
Long-term debt 2,642 2,665
Total interest expense 15,262 24,346
Net interest revenue 58,861 59,503
Provision for loan losses 36,000 50,500
Net interest revenue after provision for loan losses 22,861 9,003
Fee revenue:
Service charges and fees 7,534 7,648
Mortgage loan and other related fees 1,148 2,071
Brokerage fees 836 731
Securities gains, net - 2,491
Loss from prepayment of debt - (2,233 )
Other 1,980 2,153
Total fee revenue 11,498 12,861
Total revenue 34,359 21,864
Operating expenses:
Salaries and employee benefits 25,262 24,891
Communications and equipment 3,284 3,620
Occupancy 3,794 3,720
Advertising and public relations 1,052 1,128
Postage, printing and supplies 1,036 1,019
Professional fees 2,051 2,117
Foreclosed property 2,813 19,752
FDIC assessments and other regulatory charges 2,603 3,256
Amortization of intangibles 748 793
Other 3,877 4,610
Goodwill impairment - 210,590
Loss on sale of nonperforming assets - -
Total operating expenses 46,520 275,496
Loss from continuing operations before income taxes (12,161 ) (253,632 )
Income tax benefit (5,959 ) (17,217 )
Net loss from continuing operations (6,202 ) (236,415 )
Loss from discontinued operations, net of income taxes - -
Gain from sale of subsidiary, net of income taxes and selling costs - -
Net loss (6,202 ) (236,415 )
Preferred stock dividends and discount accretion 3,019 2,581
Net loss available to common shareholders $ (9,221 ) $ (238,996 )
Loss from continuing operations per common share - Basic $ (.16 ) $ (12.62 )
Loss from continuing operations per common share - Diluted (.16 ) (12.62 )
Loss per common share - Basic (.16 ) (12.62 )
Loss per common share - Diluted (.16 ) (12.62 )
Weighted average common shares outstanding - Basic 57,599 18,936
Weighted average common shares outstanding - Diluted 57,599 18,936
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Operations (Unaudited)
Nine Months Ended
September 30,
(in thousands, except per share data) 2011 2010
Interest revenue:
Loans, including fees $ 181,359 $ 211,245
Investment securities, including tax exempt of $244, $279, $754 and $886 42,964 46,743
Federal funds sold, commercial paper and deposits in banks 1,832 2,416
Total interest revenue 226,155 260,404
Interest expense:
Deposits:
NOW 3,191 5,304
Money market 4,656 5,516
Savings 193 250
Time 31,813 54,015
Total deposit interest expense 39,853 65,085
Federal funds purchased, repurchase agreements and other short-term borrowings 3,197 3,162
Federal Home Loan Bank advances 1,601 2,747
Long-term debt 8,169 7,994