BLAIRSVILLE, GA
-- (MARKET WIRE)
-- 01/25/12
United Community Banks, Inc. (NASDAQ: UCBI)
- Net income of $9.9 million, or 12 cents per share
- Loans stable with prior quarter, first time since March 2008
- Core transaction deposits up $266 million, or 10 percent, for the year
- Nonperforming assets decline to $160 million, or 2.3 percent of assets
- New director appointed
United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $9.9 million, or 12 cents per share, for the fourth quarter of 2011. The fourth quarter results included, among other items, a higher level of foreclosure costs reflecting an increase in sales activities, as well as the positive impact of a $3.5 million reversal of a previously established reserve related to the settlement of a state tax dispute.
The 2011 net loss of $227 million primarily reflects significant credit costs in the first quarter incurred in connection with United's problem asset disposition plan. The plan was executed in connection with raising $380 million of new capital in March 2011.
"United is moving forward with a sound balance sheet and strong capital structure. This is beginning to be demonstrated in our financial results including the fourth quarter profit," stated Jimmy Tallent, United's president and chief executive officer. "Our core pre-tax, pre-credit earnings, excluding one-time items, were above the third quarter. We continued to dispose of problem assets aggressively. We believe the remaining credit challenges are manageable and while we are not invulnerable to the still-fragile economy, our expectation is continued profitability during 2012."
Total loans were $4.1 billion at quarter-end, equal to third quarter and down $494 million from a year earlier. "We have worked diligently to reverse the trend of declining loan balances, and achieved great progress toward that goal during 2011," stated Tallent. "The $494 million decline included $410 million in the first quarter, primarily from the bulk loan sale and de-risking of our balance sheet, which were strategic components of our problem asset disposition plan. We are now in a position to prudently rebuild our loan portfolio and grow net interest revenue and earnings. We are encouraged to have $182 million of new loan commitments with $147 million funded in the fourth quarter and $542 million of new loan commitments with $392 million funded in the full year. The majority were commercial loans."
The fourth quarter provision for loan losses was $14 million, down from an operating provision of $47.7 million a year ago which excluded a recovery of $11.7 million related to a 2007 fraud-related loan charge-off. The third quarter 2011 provision for loan losses was $36 million, including $25 million specifically related to United's largest loan relationship.
Net charge-offs for the fourth quarter were $45.6 million, compared to $17.5 million for the third quarter and down from $47.7 million in operating net charge-offs a year ago. Fourth quarter 2011 net charge-offs included the $25 million charge-off related to a large loan relationship that was reserved for in the third quarter of 2011. Nonperforming assets decreased $28 million during the fourth quarter to $160 million at December 31, 2011, primarily related to this $25 million partial charge-off.
"Nonperforming assets have been written down to levels that should allow for continued liquidation without significant losses," Tallent said. "Total nonperforming assets will continue to be impacted by our ability to liquidate foreclosed properties, and also could be affected by uneven levels of nonperforming loan inflows and charge-offs. Looking ahead, we expect our overall credit trends to improve during 2012, although not necessarily on a straight line."
Taxable equivalent net interest revenue of $59.1 million declined slightly from the third quarter. Compared with the fourth quarter of 2010, net interest revenue declined $1.1 million, primarily due to a decrease in interest revenue resulting from a $593 million reduction in average loan balances. The effect of this reduction was significantly offset by lower interest expense due to reductions in deposit rates. Net interest margin was 3.51 percent for the fourth quarter of 2011, down seven basis points from a year ago and four basis points from the third quarter.
"Loan and deposit growth are key for increasing core earnings," Tallent commented. "The weak economy has created a highly competitive environment for good, quality loans and recognizing this, we are gaining traction with the addition of seasoned lenders in key markets. We have had tremendous success attracting core transaction deposits -- increasing the balance by $266 million in 2011, or 10 percent, from a year ago and we remain sharply focused on growing core deposits. This focus continues is 2012."
Fee revenue was $12.7 million in the fourth quarter of 2011, compared to $11.5 million in the third quarter and $12.4 million a year ago. Service charges and fees were $7.2 million, up $209,000 from a year ago, due primarily to a $434,000 increase in ATM and debit card revenue, which totaled $3.0 million. However, these fees were partially offset by a $295,000 decline in overdraft fees resulting from lower volumes. Mortgage fees of $1.8 million were up $677,000 from the third quarter and down $43,000 from a year ago. The comparisons to prior periods are significantly influenced by the interest rate environment and refinancing activities.
Other fee revenue of $2.8 million reflected an increase of $828,000 from the third quarter of 2011, and an increase of $51,000 from the fourth quarter of 2010. The increase from the third quarter was primarily due to the recognition of a $728,000 gain from the sale of low-income housing tax credits, while the fourth quarter of 2010 included a similar gain. Also included in each period was the recognition of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans. Hedge ineffectiveness gains recognized in the fourth quarter were $313,000, compared with $575,000 in the third quarter and $400,000 a year ago.
Excluding foreclosed property costs, fourth quarter 2011 operating expenses were $41.8 million, down from the third quarter of 2011 and fourth quarter of 2010 by $1.9 million and $2.5 million, respectively. The decrease from the third quarter was mostly in salaries and employee benefits. The decrease from a year ago was mostly due to lower professional fees, a lower FDIC assessment and lower salaries and employee benefits.
Foreclosed property costs for the fourth quarter of 2011 were $9.3 million as compared to $2.8 million last quarter and $20.6 million a year ago. The fourth quarter of 2011 included $2.4 million for maintenance of foreclosed properties and $6.9 million in net losses and write-downs on properties. For the third quarter of 2011, foreclosed property costs included $1.8 million in maintenance and $968,000 in net losses and write-downs. Fourth quarter 2010 costs included $4.8 million in maintenance and $15.8 million in net write-downs and losses.
The income tax benefit for the fourth quarter included the release of $3.5 million from a previously established reserve for uncertain tax positions upon the settlement of a state tax dispute. United's third quarter tax benefit also included the release of approximately $1.1 million in reserves for uncertain tax positions relating to state tax returns that have expired. Excluding these items, the tax provision for both periods was minimal due to the full deferred tax asset valuation allowance.
"Earlier this month we announced we would record a full valuation allowance for our net deferred tax asset, and that we would restate our previously filed financial reports going back to the fourth quarter of 2010," Tallent said. "This restatement results from an ongoing comment process with the SEC which we believe has now been resolved. While the comment process outcome was disappointing, it had no effect on our positive momentum and outlook."
Tallent continued, "The full valuation allowance results from a difference in judgment regarding the weighting of evidence supporting our deferred tax asset. We are now placing more weight on the objective negative evidence represented by our recent cumulative losses rather than the more subjective positive evidence represented by our future earnings forecasts. Once we have achieved sustained profitability and improved credit performance such that the weighting of the evidence shifts, we would expect to be able to reverse the valuation allowance. At December 31, 2011, the $268 million valuation allowance reduced Tangible Book Value per share by $4.65 and Tangible Common Equity-to-Assets ratio by approximately 2.83 percent.
As of December 31, 2011, capital ratios for United were as follows: Tier 1 Risk-Based of 13.6 percent; Tier 1 Leverage of 8.8 percent; and Total Risk-Based of 15.4 percent. The Tier 1 Common Risk-Based ratio was 8.2 and the Tangible Common Equity-to-Assets ratio was 5.4 percent.
United also reported today that Clifford V. Brokaw, a managing director of Corsair Capital LLC, United's largest shareholder, has been named to its board of directors, subject to regulatory approval, and to its wholly owned subsidiary, United Community Bank. Brokaw succeeds Corsair Capital's previous board appointee, Peter Raskind, who is expected to be named a director of one of the nation's largest banks. Under regulatory requirements he is unable to serve as a board member simultaneously on more than one large bank holding company or bank board. In addition to Corsair, Brokaw has been a managing director of the financial institutions group at Goldman Sachs & Co, worked in the mergers and acquisitions group of J.P. Morgan, and is a director of Torus Insurance Holdings.
"We are delighted to have Cliff join our board," Tallent said. "He has already been a valuable source for guidance and direction as a board observer over the past nine months, and we look forward to his counsel in an official capacity going forward."
Conference Call
United will hold a conference call tomorrow, January 26, 2012, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 41622107. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of the United's website at www.ucbi.com.
About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $7.0 billion and operates 27 community banks with 106 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United's common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United's web site at www.ucbi.com.
Safe Harbor
This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2010 Annual Report on Form 10-Kand Quarterly Reports on Form 10-Q for the periods ended June 30, 2011 and September 30, 2011 under the sections entitled "Forward-Looking Statements" and "Risk Factors" and in United's Current Reports on Form 8-K. 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
2011 2010
---------------------------------------- ---------
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
(in thousands, except
per share data;
taxable equivalent)
INCOME SUMMARY
Interest revenue $ 71,905 $ 74,543 $ 76,931 $ 75,965 $ 81,215
Interest expense 12,855 15,262 17,985 19,573 21,083
-------- -------- -------- --------- ---------
Net interest
revenue 59,050 59,281 58,946 56,392 60,132
Operating provision
for loan losses (1) 14,000 36,000 11,000 190,000 47,750
Fee revenue (2) 12,667 11,498 13,905 11,838 12,442
-------- -------- -------- --------- ---------
Total operating
revenue (1)(2) 57,717 34,779 61,851 (121,770) 24,824
Operating expenses
(3) 51,080 46,520 48,728 115,271 64,918
Loss on sale of
nonperforming assets - - - - -
-------- -------- -------- --------- ---------
Operating income
(loss) from
continuing
operations before
income taxes 6,637 (11,741) 13,123 (237,041) (40,094)
Operating income tax
expense (benefit) (3,264) (402) 1,095 295 144,760
-------- -------- -------- --------- ---------
Net operating
income (loss) from
continuing
operations
(1)(2)(3) 9,901 (11,339) 12,028 (237,336) (184,854)
Noncash goodwill
impairment charges - - - - -
Partial reversal of
fraud loss provision - - - - 11,750
Loss from
discontinued
operations - - - - -
Gain from sale of
subsidiary - - - - -
-------- -------- -------- --------- ---------
Net income (loss) 9,901 (11,339) 12,028 (237,336) (173,104)
Preferred dividends
and discount
accretion 3,025 3,019 3,016 2,778 2,586
-------- -------- -------- --------- ---------
Net income (loss)
available to common
shareholders $ 6,876 $(14,358) $ 9,012 $(240,114) $(175,690)
======== ======== ======== ========= =========
PERFORMANCE MEASURES
Per common share:
Diluted operating
income (loss)
from continuing
operations
(1)(2)(3) $ .12 $ (.25) $ .16 $ (13.00) $ (9.87)
Diluted income
(loss) from
continuing
operations .12 (.25) .16 (13.00) (9.25)
Diluted income
(loss) .12 (.25) .16 (13.00) (9.25)
Book value 6.62 6.77 7.11 2.20 15.40
Tangible book
value (5) 6.47 6.61 6.94 1.69 14.80
Key performance
ratios:
Return on equity
(4)(6) 7.40% (15.06)% 42.60% (526.54)% (196.10)%
Return on assets
(6) .56 (.64) .66 (13.04) (9.47)
Net interest
margin (6) 3.51 3.55 3.41 3.30 3.58
Operating
efficiency ratio
from continuing
operations
(2)(3) 71.23 65.73 66.88 169.08 89.45
Equity to assets 8.28 8.55 8.06 6.15 7.80
Tangible equity
to assets (5) 8.16 8.42 7.93 6.01 7.64
Tangible common
equity to assets
(5) 5.38 5.65 1.37 2.70 5.22
Tangible common
equity to risk-
weighted assets
(5) 8.22 8.52 8.69 .75 5.64
ASSET QUALITY *
Non-performing
loans $127,479 $144,484 $ 71,065 $ 83,769 $ 179,094
Foreclosed
properties 32,859 44,263 47,584 54,378 142,208
-------- -------- -------- --------- ---------
Total non-
performing
assets (NPAs) 160,338 188,747 118,649 138,147 321,302
Allowance for loan
losses 114,468 146,092 127,638 133,121 174,695
Operating net
charge-offs (1) 45,624 17,546 16,483 231,574 47,668
Allowance for loan
losses to loans 2.79% 3.55% 3.07% 3.17% 3.79%
Operating net
charge-offs to
average loans
(1)(6) 4.39 1.68 1.58 20.71 4.03
NPAs to loans and
foreclosed
properties 3.87 4.54 2.82 3.25 6.77
NPAs to total
assets 2.30 2.74 1.66 1.79 4.42
AVERAGE BALANCES ($
in millions)
Loans $ 4,175 $ 4,194 $ 4,266 $ 4,599 $ 4,768
Investment
securities 2,141 2,150 2,074 1,625 1,354
Earning assets 6,688 6,630 6,924 6,902 6,680
Total assets 7,019 7,000 7,363 7,379 7,254
Deposits 6,115 6,061 6,372 6,560 6,294
Shareholders'
equity 581 598 594 454 566
Common shares -
basic (thousands) 57,646 57,599 25,427 18,466 18,984
Common shares -
diluted
(thousands) 57,646 57,599 57,543 18,466 18,984
AT PERIOD END ($ in
millions)
Loans * $ 4,110 $ 4,110 $ 4,163 $ 4,194 $ 4,604
Investment
securities 2,120 2,123 2,188 1,884 1,490
Total assets 6,983 6,894 7,152 7,709 7,276
Deposits 6,098 6,005 6,183 6,598 6,469
Shareholders'
equity 575 583 603 586 469
Common shares
outstanding
(thousands) 57,561 57,510 57,469 20,903 18,937
(1) Excludes the partial reversal of a previously established provision
for fraud-related loan losses of $11.8 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
----------- ----------- ----------
Fourth
2011 2010 Quarter
----------- -----------
Fourth Fourth
Quarter Quarter 2011-2010
(in thousands, except per share
data; taxable equivalent) Change
----------- ----------- ----------
INCOME SUMMARY
Interest revenue $ 71,905 $ 81,215
Interest expense 12,855 21,083
----------- -----------
Net interest revenue 59,050 60,132 (2)%
Operating provision for loan losses
(1) 14,000 47,750
Fee revenue (2) 12,667 12,442 2
----------- -----------
Total operating revenue (1)(2) 57,717 24,824
Operating expenses (3) 51,080 64,918 (21)
Loss on sale of nonperforming assets - -
----------- -----------
Operating income (loss) from
continuing operations before
income taxes 6,637 (40,094)
Operating income tax expense
(benefit) (3,264) 144,760
----------- -----------
Net operating income (loss) from
continuing operations(1)(2)(3) 9,901 (184,854)
Noncash goodwill impairment charges - -
Partial reversal of fraud loss
provision - 11,750
Loss from discontinued operations - -
Gain from sale of subsidiary - -
----------- -----------
Net income (loss) 9,901 (173,104)
Preferred dividends and discount
accretion 3,025 2,586
----------- -----------
Net income (loss) available to
common shareholders $ 6,876 $ (175,690)
=========== ===========
PERFORMANCE MEASURES
Per common share:
Diluted operating income (loss)
from continuing operations
(1)(2)(3) $ .12 $ (9.87)
Diluted income (loss) from
continuing operations .12 (9.25)
Diluted income (loss) .12 (9.25)
Book value 6.62 15.40 (57)
Tangible book value (5) 6.47 14.80 (56)
Key performance ratios:
Return on equity (4)(6) 7.40% (196.10)%
Return on assets (6) .56 (9.47)
Net interest margin (6) 3.51 3.58
Operating efficiency ratio from
continuing operations (2)(3) 71.23 89.45
Equity to assets 8.28 7.80
Tangible equity to assets (5) 8.16 7.64
Tangible common equity to assets
(5) 5.38 5.22
Tangible common equity to risk-
weighted assets (5) 8.22 5.64
ASSET QUALITY *
Non-performing loans $ 127,479 $ 179,094
Foreclosed properties 32,859 142,208
----------- -----------
Total non-performing assets
(NPAs) 160,338 321,302
Allowance for loan losses 114,468 174,695
Operating net charge-offs (1) 45,624 47,668
Allowance for loan losses to loans 2.79% 3.79%
Operating net charge-offs to
average loans (1)(6) 4.39 4.03
NPAs to loans and foreclosed
properties 3.87 6.77
NPAs to total assets 2.30 4.42
AVERAGE BALANCES ($ in millions)
Loans $ 4,175 $ 4,768 (12)
Investment securities 2,141 1,354 58
Earning assets 6,688 6,680 -
Total assets 7,019 7,254 (3)
Deposits 6,115 6,294 (3)
Shareholders' equity 581 566 3
Common shares - basic (thousands) 57,646 18,984
Common shares - diluted
(thousands) 57,646 18,984
AT PERIOD END ($ in millions)
Loans * $ 4,110 $ 4,604 (11)
Investment securities 2,120 1,490 42
Total assets 6,983 7,276 (4)
Deposits 6,098 6,469 (6)
Shareholders' equity 575 469 23
Common shares outstanding
(thousands) 57,561 18,937
(1) Excludes the partial reversal of a previously established provision
for fraud-related loan losses of $11.8 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
YTD
For the Twelve 2011-2010
Months Ended Change
(in thousands, except per share
data; taxable equivalent) 2011 2010
----------- ----------- ----------
INCOME SUMMARY
Interest revenue $ 299,344 $ 343,123
Interest expense 65,675 100,071
----------- -----------
Net interest revenue 233,669 243,052 (4)%
Operating provision for loan losses
(1) 251,000 234,750
Fee revenue (2) 49,908 48,548 3
----------- -----------
Total operating revenue (1)(2) 32,577 56,850
Operating expenses (3) 261,599 242,952 8
Loss on sale of nonperforming
assets - 45,349
----------- -----------
Operating income (loss) from
continuing operations before
income taxes (229,022) (231,451)
Operating income tax expense
(benefit) (2,276) 73,218
----------- -----------
Net operating income (loss) from
continuing operations (1)(2)(3) (226,746) (304,669)
Noncash goodwill impairment charges - (210,590)
Partial reversal of fraud loss
provision - 11,750
Loss from discontinued operations - (101)
Gain from sale of subsidiary - 1,266
----------- -----------
Net income (loss) (226,746) (502,344)
Preferred dividends and discount
accretion 11,838 10,316
----------- -----------
Net income (loss) available to
common shareholders $ (238,584) $ (512,660)
=========== ===========
PERFORMANCE MEASURES
Per common share:
Diluted operating income (loss)
from continuing operations
(1)(2)(3) $ (5.97) $ (16.64)
Diluted income (loss) from
continuing operations (5.97) (27.15)
Diluted income (loss) (5.97) (27.09)
Book value 6.62 15.40 (57)
Tangible book value (5) 6.47 14.80 (56)
Key performance ratios:
Return on equity (4)(6) (93.57)% (85.08)%
Return on assets (6) (3.15) (6.61)
Net interest margin (6) 3.44 3.56
Operating efficiency ratio from
continuing operations (2)(3) 92.27 98.98
Equity to assets 7.75 10.77
Tangible equity to assets (5) 7.62 8.88
Tangible common equity to
assets (5) 3.74 6.52
Tangible common equity to risk-
weighted assets (5) 8.22 5.64
ASSET QUALITY *
Non-performing loans $ 127,479 $ 179,094
Foreclosed properties 32,859 142,208
----------- -----------
Total non-performing assets
(NPAs) 160,338 321,302
Allowance for loan losses 114,468 174,695
Operating net charge-offs (1) 311,227 215,657
Allowance for loan losses to
loans 2.79% 3.79%
Operating net charge-offs to
average loans (1)(6) 7.33 4.42
NPAs to loans and foreclosed
properties 3.87 6.77
NPAs to total assets 2.30 4.42
AVERAGE BALANCES ($ in millions)
Loans $ 4,307 $ 4,961 (13)
Investment securities 1,999 1,453 38
Earning assets 6,785 6,822 (1)
Total assets 7,189 7,605 (5)
Deposits 6,275 6,373 (2)
Shareholders' equity 557 819 (32)
Common shares - basic (thousands) 39,943 18,925
Common shares - diluted
(thousands) 39,943 18,925
AT PERIOD END ($ in millions)
Loans * $ 4,110 $ 4,604 (11)
Investment securities 2,120 1,490 42
Total assets 6,983 7,276 (4)
Deposits 6,098 6,469 (6)
Shareholders' equity 575 469 23
Common shares outstanding
(thousands) 57,561 18,937
(1) Excludes the partial reversal of a previously established provision
for fraud-related loan losses of $11.8 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.
Selected Financial Information
For the Years Ended December 31,
(in thousands,
except per share
data; taxable
equivalent) 2011 2010 2009 2008 2007
---------- ---------- ---------- ---------- ----------
INCOME SUMMARY
Net interest
revenue $ 233,669 $ 243,052 $ 245,227 $ 238,704 $ 274,483
Operating
provision for
loan losses (1) 251,000 234,750 310,000 184,000 37,600
Operating fee
revenue (2) 49,908 48,548 50,964 46,081 53,701
---------- ---------- ---------- ---------- ----------
Total operating
revenue (1)(2) 32,577 56,850 (13,809) 100,785 290,584
Operating
expenses (3) 261,599 242,952 217,050 200,335 181,730
Loss on sale of
nonperforming
assets - 45,349 - - -
---------- ---------- ---------- ---------- ----------
Operating
(loss) income
from
continuing
operations
before taxes (229,022) (231,451) (230,859) (99,550) 108,854
Operating income
taxes (2,276) 73,218 (91,754) (35,651) 40,266
---------- ---------- ---------- ---------- ----------
Net operating
(loss) income
from continuing
operations (226,746) (304,669) (139,105) (63,899) 68,588
Gain from
acquisition, net
of tax - - 7,062 - -
Noncash goodwill
impairment
charges - (210,590) (95,000) - -
Severance cost,
net of tax
benefit - - (1,797) - -
Fraud loss
provision and
subsequent
recovery, net of
tax benefit - 11,750 - - (10,998)
Net (loss) income
from
discontinued
operations - (101) 513 449 403
Gain from sale of
subsidiary, net
of income taxes
and selling
costs - 1,266 - - -
---------- ---------- ---------- ---------- ----------
Net (loss)
income (226,746) (502,344) (228,327) (63,450) 57,993
Preferred
dividends and
discount
accretion 11,838 10,316 10,242 724 18
---------- ---------- ---------- ---------- ----------
Net (loss)
income
available to
common
shareholders $ (238,584) $ (512,660) $ (238,569) $ (64,174) $ 57,975
========== ========== ========== ========== ==========
PERFORMANCE
MEASURES
Per common
share:
Diluted
operating
(loss)
earnings from
continuing
operations
(1)(2)(3) $ (5.97) $ (16.64) $ (12.37) $ (6.82) $ 7.36
Diluted (loss)
earnings from
continuing
operations (5.97) (27.15) (19.80) (6.82) 6.18
Diluted (loss)
earnings (5.97) (27.09) (19.76) (6.77) 6.22
Cash dividends
declared
(rounded) - - - .87 1.73
Stock dividends
declared (6) - - 3 for 130 2 for 130 -
Book value 6.62 15.40 41.78 84.75 88.52
Tangible book
value (5) 6.47 14.80 30.09 51.93 54.62
Key performance
ratios:
Return on
equity (4) (93.57)% (85.08)% (34.40)% (7.82)% 7.79%
Return on
assets (3.15) (6.61) (2.76) (.76) .75
Net interest
margin 3.44 3.56 3.29 3.18 3.88
Operating
efficiency
ratio from
continuing
operations
(2)(3) 92.27 98.98 73.97 70.00 55.53
Equity to
assets 7.75 10.77 11.12 10.22 9.61
Tangible equity
to assets (5) 7.62 8.88 8.33 6.67 6.63
Tangible common
equity to
assets (5) 3.74 6.52 6.15 6.57 6.63
Tangible common
equity to
risk-weighted
assets (5) 8.22 5.64 10.39 8.34 8.21
ASSET QUALITY *
Non-performing
loans $ 127,479 $ 179,094 $ 264,092 $ 190,723 $ 28,219
Foreclosed
properties 32,859 142,208 120,770 59,768 18,039
---------- ---------- ---------- ---------- ----------
Total non-
performing
assets (NPAs) 160,338 321,302 384,862 250,491 46,258
Allowance for
loan losses 114,468 174,695 155,602 122,271 89,423
Operating net
charge-offs (1) 311,227 215,657 276,669 151,152 21,834
Allowance for
loan losses to
loans 2.79% 3.79% 3.02% 2.14% 1.51%
Operating net
charge-offs to
average loans
(1) 7.33 4.42 5.03 2.57 .38
NPAs to loans
and foreclosed
properties 3.87 6.77 7.30 4.35 .78
NPAs to total
assets 2.30 4.42 4.81 2.92 .56
AVERAGE BALANCES
($ in millions)
Loans $ 4,307 $ 4,961 $ 5,548 $ 5,891 $ 5,735
Investment
securities 1,999 1,453 1,656 1,489 1,278
Earning assets 6,785 6,822 7,465 7,504 7,071
Total assets 7,189 7,605 8,269 8,319 7,731
Deposits 6,275 6,373 6,713 6,524 6,029
Shareholders'
equity 557 819 920 850 743
Common shares -
Basic
(thousands) 39,943 18,925 12,075 9,474 9,190
Common shares -
Diluted
(thousands) 39,943 18,925 12,075 9,474 9,319
AT YEAR END ($ in
millions)
Loans * $ 4,110 $ 4,604 $ 5,151 $ 5,705 $ 5,929
Investment
securities 2,120 1,490 1,530 1,617 1,357
Total assets 6,983 7,276 8,000 8,592 8,207
Deposits 6,098 6,469 6,628 7,004 6,076
Shareholders'
equity 575 469 962 989 832
Common shares
outstanding
(thousands) 57,561 18,937 18,809 9,602 9,381
(1) Excludes pre-tax provision for fraud-related loan losses and related
charge-offs of $18 million, net of income tax benefit of $7 million in
2007 and subsequent recovery of $11.8 million in 2010. (2) Excludes the
gain from acquisition of $11.4 million, net of income tax expense of $4.3
million in 2009. (3) Excludes the goodwill impairment charges of $211
million and $95 million in 2010 and 2009, respectively, and severance
costs of $2.9 million, net of income tax benefit of $1.1 million in 2009.
(4) Net (loss) 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). (5) Excludes
effect of acquisition related intangibles and associated amortization. (6)
Number of new shares issued for shares currently held.
* 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
------------------------------------------ ---------
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
(in thousands, except
per share data;
taxable equivalent)
Interest revenue
reconciliation
Interest revenue -
taxable equivalent $ 71,905 $ 74,543 $ 76,931 $ 75,965 $ 81,215
Taxable equivalent
adjustment (423) (420) (429) (435) (497)
--------- --------- --------- --------- ---------
Interest revenue
(GAAP) $ 71,482 $ 74,123 $ 76,502 $ 75,530 $ 80,718
========= ========= ========= ========= =========
Net interest revenue
reconciliation
Net interest revenue
- taxable equivalent $ 59,050 $ 59,281 $ 58,946 $ 56,392 $ 60,132
Taxable equivalent
adjustment (423) (420) (429) (435) (497)
--------- --------- --------- --------- ---------
Net interest
revenue (GAAP) $ 58,627 $ 58,861 $ 58,517 $ 55,957 $ 59,635
========= ========= ========= ========= =========
Provision for loan
losses
reconciliation
Operating provision
for loan losses $ 14,000 $ 36,000 $ 11,000 $ 190,000 $ 47,750
Provision for special
fraud-related loan
loss and partial
recovery - - - - (11,750)
--------- --------- --------- --------- ---------
Provision for loan
losses (GAAP) $ 14,000 $ 36,000 $ 11,000 $ 190,000 $ 36,000
========= ========= ========= ========= =========
Fee revenue
reconciliation
Operating fee revenue $ 12,667 $ 11,498 $ 13,905 $ 11,838 $ 12,442
Gain from acquisition - - - - -
--------- --------- --------- --------- ---------
Fee revenue (GAAP) $ 12,667 $ 11,498 $ 13,905 $ 11,838 $ 12,442
========= ========= ========= ========= =========
Total revenue
reconciliation
Total operating
revenue $ 57,717 $ 34,779 $ 61,851 $(121,770) $ 24,824
Taxable equivalent
adjustment (423) (420) (429) (435) (497)
Gain from acquisition - - - - -
Provision for special
fraud-related loan
loss and partial
recovery - - - - 11,750
--------- --------- --------- --------- ---------
Total revenue
(GAAP) $ 57,294 $ 34,359 $ 61,422 $(122,205) $ 36,077
========= ========= ========= ========= =========
Expense
reconciliation
Operating expense $ 51,080 $ 46,520 $ 48,728 $ 115,271 $ 64,918
Noncash goodwill
impairment charge - - - - -
Severance costs - - - - -
--------- --------- --------- --------- ---------
Operating expense
(GAAP) $ 51,080 $ 46,520 $ 48,728 $ 115,271 $ 64,918
========= ========= ========= ========= =========
Income (loss) from
continuing
operations before
taxes reconciliation
Operating income
(loss) from
continuing
operations before
taxes $ 6,637 $ (11,741) $ 13,123 $(237,041) $ (40,094)
Taxable equivalent
adjustment (423) (420) (429) (435) (497)
Gain from acquisition - - - - -
Noncash goodwill
impairment charge - - - - -
Severance costs - - - - -
Provision for special
fraud-related loan
loss and partial
recovery - - - - 11,750
--------- --------- --------- --------- ---------
Income (loss) from
continuing
operations before
taxes (GAAP) $ 6,214 $ (12,161) $ 12,694 $(237,476) $ (28,841)
========= ========= ========= ========= =========
Income tax (benefit)
expense
reconciliation
Operating income tax
(benefit) expense $ (3,264) $ (402) $ 1,095 $ 295 $ 144,760
Taxable equivalent
adjustment (423) (420) (429) (435) (497)
Gain from
acquisition, tax
expense - - - - -
Severance costs, tax
benefit - - - - -
Provision for special
fraud-related loan
loss tax benefit - - - - -
--------- --------- --------- --------- ---------
Income tax
(benefit) expense
(GAAP) $ (3,687) $ (822) $ 666 $ (140) $ 144,263
========= ========= ========= ========= =========
Diluted earnings
(loss) from
continuing
operations per
common share
reconciliation
Diluted operating
earnings (loss) from
continuing
operations per
common share $ .12 $ (.25) $ .16 $ (13.00) $ (9.87)
Gain from acquisition - - - - -
Noncash goodwill
impairment charge - - - - -
Severance costs - - - - -
Provision for special
fraud-related loan
loss and partial
recovery - - - - .62
--------- --------- --------- --------- ---------
Diluted earnings
(loss) from
continuing
operations per
common share
(GAAP) $ .12 $ (.25) $ .16 $ (13.00) $ (9.25)
========= ========= ========= ========= =========
Book value per common
share reconciliation
Tangible book value
per common share $ 6.47 $ 6.61 $ 6.94 $ 1.69 $ 14.80
Effect of goodwill
and other
intangibles .15 .16 .17 .51 .60
--------- --------- --------- --------- ---------
Book value per
common share
(GAAP) $ 6.62 $ 6.77 $ 7.11 $ 2.20 $ 15.40
========= ========= ========= ========= =========
Efficiency ratio from
continuing
operations
reconciliation
Operating efficiency
ratio from
continuing
operations 71.23% 65.73% 66.88% 169.08% 89.45%
Gain from acquisition - - - - -
Noncash goodwill
impairment charge - - - - -
Severance costs - - - - -
--------- --------- --------- --------- ---------
Efficiency ratio
from continuing
operations (GAAP) 71.23% 65.73% 66.88% 169.08% 89.45%
========= ========= ========= ========= =========
Average equity to
assets
reconciliation
Tangible common
equity to assets 5.38% 5.65% 1.37% 2.70% 5.22%
Effect of preferred
equity 2.78 2.77 6.56 3.31 2.42
--------- --------- --------- --------- ---------
Tangible equity to
assets 8.16 8.42 7.93 6.01 7.64
Effect of goodwill
and other
intangibles .12 .13 .13 .14 .16
--------- --------- --------- --------- ---------
Equity to assets
(GAAP) 8.28% 8.55% 8.06% 6.15% 7.80%
========= ========= ========= ========= =========
Actual tangible
common equity to
risk-weighted assets
reconciliation
Tangible common
equity to risk-
weighted assets 8.22% 8.52% 8.69% .75% 5.64%
Effect of other
comprehensive income (.03) (.29) (.42) (.32) (.42)
Effect of deferred
tax limitation - - - - -
Effect of trust
preferred 1.18 1.19 1.15 1.13 1.06
Effect of preferred
equity 4.27 4.33 4.20 5.87 3.53
--------- --------- --------- --------- ---------
Tier I capital
ratio (Regulatory) 13.64% 13.75% 13.62% 7.43% 9.81%
========= ========= ========= ========= =========
Net charge-offs
reconciliation
Operating net charge-
offs $ 45,624 $ 17,546 $ 16,483 $ 231,574 $ 47,668
Subsequent partial
recovery of fraud-
related charge-off - - - - (11,750)
--------- --------- --------- --------- ---------
Net charge-offs
(GAAP) $ 45,624 $ 17,546 $ 16,483 $ 231,574 $ 35,918
========= ========= ========= ========= =========
Net charge-offs to
average loans
reconciliation
Operating net charge-
offs to average
loans 4.39% 1.68% 1.58% 20.71% 4.03%
Subsequent partial
recovery of fraud-
related charge-off - - - - (1.00)
--------- --------- --------- --------- ---------
Net charge-offs to
average loans
(GAAP) 4.39% 1.68% 1.58% 20.71% 3.03%
========= ========= ========= ========= =========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
For the Twelve Months Ended
-----------------------------------------------------
(in thousands, except
per share data;
taxable equivalent) 2011 2010 2009 2008 2007
--------- --------- --------- --------- ---------
Interest revenue
reconciliation
Interest revenue -
taxable equivalent $ 299,344 $ 343,123 $ 404,961 $ 466,969 $ 550,917
Taxable equivalent
adjustment (1,707) (2,001) (2,132) (2,261) (1,881)
--------- --------- --------- --------- ---------
Interest revenue
(GAAP) $ 297,637 $ 341,122 $ 402,829 $ 464,708 $ 549,036
========= ========= ========= ========= =========
Net interest revenue
reconciliation
Net interest revenue
- taxable equivalent $ 233,669 $ 243,052 $ 245,227 $ 238,704 $ 274,483
Taxable equivalent
adjustment (1,707) (2,001) (2,132) (2,261) (1,881)
--------- --------- --------- --------- ---------
Net interest
revenue (GAAP) $ 231,962 $ 241,051 $ 243,095 $ 236,443 $ 272,602
========= ========= ========= ========= =========
Provision for loan
losses
reconciliation
Operating provision
for loan losses $ 251,000 $ 234,750 $ 310,000 $ 184,000 $ 37,600
Provision for special
fraud-related loan
loss and partial
recovery - (11,750) - - 18,000
--------- --------- --------- --------- ---------
Provision for loan
losses (GAAP) $ 251,000 $ 223,000 $ 310,000 $ 184,000 $ 55,600
========= ========= ========= ========= =========
Fee revenue
reconciliation
Operating fee revenue $ 49,908 $ 48,548 $ 50,964 $ 46,081 $ 53,701
Gain from acquisition - - 11,390 - -
--------- --------- --------- --------- ---------
Fee revenue (GAAP) $ 49,908 $ 48,548 $ 62,354 $ 46,081 $ 53,701
========= ========= ========= ========= =========
Total revenue
reconciliation
Total operating
revenue $ 32,577 $ 56,850 $ (13,809) $ 100,785 $ 290,584
Taxable equivalent
adjustment (1,707) (2,001) (2,132) (2,261) (1,881)
Gain from acquisition - - 11,390 - -
Provision for special
fraud-related loan
loss and partial
recovery - 11,750 - - (18,000)
--------- --------- --------- --------- ---------
Total revenue
(GAAP) $ 30,870 $ 66,599 $ (4,551) $ 98,524 $ 270,703
========= ========= ========= ========= =========
Expense
reconciliation
Operating expense $ 261,599 $ 288,301 $ 217,050 $ 200,335 $ 181,730
Noncash goodwill
impairment charge - 210,590 95,000 - -
Severance costs - - 2,898 - -
--------- --------- --------- --------- ---------
Operating expense
(GAAP) $ 261,599 $ 498,891 $ 314,948 $ 200,335 $ 181,730
========= ========= ========= ========= =========
Income (loss) from
continuing
operations before
taxes reconciliation
Operating income
(loss) from
continuing
operations before
taxes $(229,022) $(231,451) $(230,859) $ (99,550) $ 108,854
Taxable equivalent
adjustment (1,707) (2,001) (2,132) (2,261) (1,881)
Gain from acquisition - - 11,390 - -
Noncash goodwill
impairment charge - (210,590) (95,000) - -
Severance costs - - (2,898) - -
Provision for special
fraud-related loan
loss and partial
recovery - 11,750 - - (18,000)
--------- --------- --------- --------- ---------
Income (loss) from
continuing
operations before
taxes (GAAP) $(230,729) $(432,292) $(319,499) $(101,811) $ 88,973
========= ========= ========= ========= =========
Income tax (benefit)
expense
reconciliation
Operating income tax
(benefit) expense $ (2,276) $ 73,218 $ (91,754) $ (35,651) $ 40,266
Taxable equivalent
adjustment (1,707) (2,001) (2,132) (2,261) (1,881)
Gain from
acquisition, tax
expense - - 4,328 - -
Severance costs, tax
benefit - - (1,101) - -
Provision for special
fraud-related loan
loss tax benefit - - - - (7,002)
--------- --------- --------- --------- ---------
Income tax
(benefit) expense
(GAAP) $ (3,983) $ 71,217 $ (90,659) $ (37,912) $ 31,383
========= ========= ========= ========= =========
Diluted earnings
(loss) from
continuing
operations per
common share
reconciliation
Diluted operating
earnings (loss) from
continuing
operations per
common share $ (5.97) $ (16.64) $ (12.37) $ (6.82) $ 7.36
Gain from acquisition - - .58 - -
Noncash goodwill
impairment charge - (11.13) (7.86) - -
Severance costs - - (.15) - -
Provision for special
fraud-related loan
loss and partial
recovery - .62 - - (1.18)
--------- --------- --------- --------- ---------
Diluted earnings
(loss) from
continuing
operations per
common share
(GAAP) $ (5.97) $ (27.15) $ (19.80) $ (6.82) $ 6.18
========= ========= ========= ========= =========
Book value per common
share reconciliation
Tangible book value
per common share $ 6.47 $ 14.80 $ 30.09 $ 51.93 $ 54.62
Effect of goodwill
and other
intangibles .15 .60 11.69 32.82 33.90
--------- --------- --------- --------- ---------
Book value per
common share
(GAAP) $ 6.62 $ 15.40 $ 41.78 $ 84.75 $ 88.52
========= ========= ========= ========= =========
Efficiency ratio from
continuing
operations
reconciliation
Operating efficiency
ratio from
continuing
operations 97.27% 98.98% 73.97% 70.00% 55.53%
Gain from acquisition - - (2.77) - -
Noncash goodwill
impairment charge - 72.29 31.17 - -
Severance costs - - .95 - -
--------- --------- --------- --------- ---------
Efficiency ratio
from continuing
operations (GAAP) 97.27% 171.27% 103.32% 70.00% 55.53%
========= ========= ========= ========= =========
Average equity to
assets
reconciliation
Tangible common
equity to assets 3.74% 6.52% 6.15% 6.57% 6.63%
Effect of preferred
equity 3.88 2.36 2.18 .10 -
--------- --------- --------- --------- ---------
Tangible equity to
assets 7.62 8.88 8.33 6.67 6.63
Effect of goodwill
and other
intangibles .13 1.89 2.79 3.55 2.98
--------- --------- --------- --------- ---------
Equity to assets
(GAAP) 7.75% 10.77% 11.12% 10.22% 9.61%
========= ========= ========= ========= =========
Actual tangible
common equity to
risk-weighted assets
reconciliation
Tangible common
equity to risk-
weighted assets 8.22% 5.64% 10.39% 8.34% 8.21%
Effect of other
comprehensive income (.03) (.42) (.87) (.91) (.23)
Effect of deferred
tax limitation - - (1.27) - -
Effect of trust
preferred 1.18 1.06 .97 .88 .65
Effect of preferred
equity 4.27 3.53 3.19 2.90 -
--------- --------- --------- --------- ---------
Tier I capital
ratio (Regulatory) 13.64% 9.81% 12.41% 11.21% 8.63%
========= ========= ========= ========= =========
Net charge-offs
reconciliation
Operating net charge-
offs $ 311,227 $ 215,657 $ 276,669 $ 151,152 $ 21,834
Subsequent partial
recovery of fraud-
related charge-off - (11,750) - - 18,000
--------- --------- --------- --------- ---------
Net charge-offs
(GAAP) $ 311,227 $ 203,907 $ 276,669 $ 151,152 $ 39,834
========= ========= ========= ========= =========
Net charge-offs to
average loans
reconciliation
Operating net charge-
offs to average
loans 4.39% 4.42% 5.03% 2.57% .38%
Subsequent partial
recovery of fraud-
related charge-off - (.25) - - .31
--------- --------- --------- --------- ---------
Net charge-offs to
average loans
(GAAP) 4.39% 4.17% 5.03% 2.57% .69%
========= ========= ========= ========= =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
2011 2010
--------------------------------------- ---------
Fourth Third Second First Fourth
(in millions) Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,822 $ 1,771 $ 1,742 $ 1,692 $ 1,761
Commercial construction 164 169 195 213 297
Commercial & industrial 428 429 428 431 441
--------- --------- --------- --------- ---------
Total commercial 2,414 2,369 2,365 2,336 2,499
Residential construction 448 474 502 550 695
Residential mortgage 1,135 1,150 1,177 1,187 1,279
Consumer / installment 113 117 119 121 131
--------- --------- --------- --------- ---------
Total loans $ 4,110 $ 4,110 $ 4,163 $ 4,194 $ 4,604
========= ========= ========= ========= =========
LOANS BY MARKET
Atlanta MSA $ 1,220 $ 1,192 $ 1,188 $ 1,179 $ 1,310
Gainesville MSA 265 272 275 282 312
North Georgia 1,426 1,478 1,500 1,531 1,689
Western North Carolina 597 607 626 640 702
Coastal Georgia 346 316 325 312 335
East Tennessee 256 245 249 250 256
--------- --------- --------- --------- ---------
Total loans $ 4,110 $ 4,110 $ 4,163 $ 4,194 $ 4,604
========= ========= ========= ========= =========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition &
development $ 88 $ 97 $ 105 $ 116 $ 174
Land loans 61 60 62 69 99
Lot loans 207 216 218 228 275
--------- --------- --------- --------- ---------
Total 356 373 385 413 548
--------- --------- --------- --------- ---------
House loans
Spec 59 64 74 88 97
Sold 33 37 43 49 50
--------- --------- --------- --------- ---------
Total 92 101 117 137 147
--------- --------- --------- --------- ---------
Total residential
construction $ 448 $ 474 $ 502 $ 550 $ 695
========= ========= ========= ========= =========
RESIDENTIAL CONSTRUCTION -
ATLANTA MSA
Dirt loans
Acquisition &
development $ 17 $ 19 $ 20 $ 22 $ 30
Land loans 14 15 16 19 23
Lot loans 22 22 22 24 32
--------- --------- --------- --------- ---------
Total 53 56 58 65 85
--------- --------- --------- --------- ---------
House loans
Spec 27 28 30 34 38
Sold 6 8 9 11 10
--------- --------- --------- --------- ---------
Total 33 36 39 45 48
--------- --------- --------- --------- ---------
Total residential
construction $ 86 $ 92 $ 97 $ 110 $ 133
========= ========= ========= ========= =========
(1) Excludes total loans of $54.5 million, $57.8 million, $70.8 million,
$63.3 million and $68.2 million as of December 31, 2011, September 30,
2011, June 30, 2011, March 31, 2011 and December 31, 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 Linked Year over
------------------- ---------
Fourth Third Fourth Quarter Year
(in millions) Quarter Quarter Quarter Change Change
--------- --------- --------- --------- ---------
LOANS BY CATEGORY
Commercial (sec.by RE) $ 1,822 $ 1,771 $ 1,761 $ 51 $ 61
Commercial construction 164 169 297 (5) (133)
Commercial & industrial 428 429 441 (1) (13)
--------- --------- ---------
Total commercial 2,414 2,369 2,499 45 (85)
Residential construction 448 474 695 (26) (247)
Residential mortgage 1,135 1,150 1,279 (15) (144)
Consumer / installment 113 117 131 (4) (18)
--------- --------- ---------
Total loans $ 4,110 $ 4,110 $ 4,604 - (494)
========= ========= =========
LOANS BY MARKET
Atlanta MSA $ 1,220 $ 1,192 $ 1,310 28 (90)
Gainesville MSA 265 272 312 (7) (47)
North Georgia 1,426 1,478 1,689 (52) (263)
Western North Carolina 597 607 702 (10) (105)
Coastal Georgia 346 316 335 30 11
East Tennessee 256 245 256 11 -
--------- --------- ---------
Total loans $ 4,110 $ 4,110 $ 4,604 - (494)
========= ========= =========
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition &
development $ 88 $ 97 $ 174 (9) (86)
Land loans 61 60 99 1 (38)
Lot loans 207 216 275 (9) (68)
--------- --------- ---------
Total 356 373 548 (17) (192)
--------- --------- ---------
House loans
Spec 59 64 97 (5) (38)
Sold 33 37 50 (4) (17)
--------- --------- ---------
Total 92 101 147 (9) (55)
--------- --------- ---------
Total residential
construction $ 448 $ 474 $ 695 (26) (247)
========= ========= =========
RESIDENTIAL CONSTRUCTION
- ATLANTA MSA
Dirt loans
Acquisition &
development $ 17 $ 19 $ 30 (2) (13)
Land loans 14 15 23 (1) (9)
Lot loans 22 22 32 - (10)
--------- --------- ---------
Total 53 56 85 (3) (32)
--------- --------- ---------
House loans
Spec 27 28 38 (1) (11)
Sold 6 8 10 (2) (4)
--------- --------- ---------
Total 33 36 48 (3) (15)
--------- --------- ---------
Total residential
construction $ 86 $ 92 $ 133 (6) (47)
========= ========= =========
(1) Excludes total loans of $54.5 million, $57.8 million, $70.8 million,
$63.3 million and $68.2 million as of December 31, 2011, September 30,
2011, June 30, 2011, March 31, 2011 and December 31, 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 Year-End (1)
(in millions) 2011 2010 2009 2008 2007
--------- --------- --------- --------- ---------
LOANS BY CATEGORY
Commercial (sec. by RE) $ 1,822 $ 1,761 $ 1,779 $ 1,627 $ 1,476
Commercial construction 164 297 363 500 527
Commercial & industrial 428 441 390 410 418
--------- --------- --------- --------- ---------
Total commercial 2,414 2,499 2,532 2,537 2,421
Residential construction 448 695 1,050 1,479 1,829
Residential mortgage 1,135 1,279 1,427 1,526 1,502
Consumer / installment 113 131 142 163 177
--------- --------- --------- --------- ---------
Total loans $ 4,110 $ 4,604 $ 5,151 $ 5,705 $ 5,929
========= ========= ========= ========= =========
LOANS BY MARKET
Atlanta MSA $ 1,220 $ 1,310 $ 1,435 $ 1,706 $ 2,002
Gainesville MSA 265 312 390 420 399
North Georgia 1,426 1,689 1,884 2,040 2,060
Western North Carolina 597 702 772 810 806
Coastal Georgia 346 335 405 464 416
East Tennessee 256 256 265 265 246
--------- --------- --------- --------- ---------
Total loans $ 4,110 $ 4,604 $ 5,151 $ 5,705 $ 5,929
========= ========= ========= ========= =========
(1) Excludes total loans of $54.5 million, $68.2 million and $85.1 million
as of December 31, 2011, 2010 and 2009, 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)
Fourth Quarter 2011
-------------------------------------
Non-
performing Foreclosed Total
(in thousands) Loans Properties NPAs
----------- ----------- -----------
NPAs BY CATEGORY
Commercial (sec.by RE) $ 27,322 $ 9,745 $ 37,067
Commercial construction 16,655 3,336 19,991
Commercial & industrial 34,613 - 34,613
----------- ----------- -----------
Total commercial 78,590 13,081 91,671
Residential construction 25,523 12,851 38,374
Residential mortgage 22,358 6,927 29,285
Consumer / installment 1,008 - 1,008
----------- ----------- -----------
Total NPAs $ 127,479 $ 32,859 $ 160,338
=========== =========== ===========
Balance as a % of Unpaid Principal 71.3% 35.9% 59.3%
NPAs BY MARKET
Atlanta MSA $ 14,480 $ 6,169 $ 20,649
Gainesville MSA 2,069 3,760 5,829
North Georgia 88,600 15,136 103,736
Western North Carolina 15,100 5,365 20,465
Coastal Georgia 5,248 1,620 6,868
East Tennessee 1,982 809 2,791
----------- ----------- -----------
Total NPAs $ 127,479 $ 32,859 $ 160,338
=========== =========== ===========
NPA ACTIVITY
Beginning Balance $ 144,484 $ 44,263 $ 188,747
Loans placed on non-accrual 45,675 - 45,675
Payments received (1,884) - (1,884)
Loan charge-offs (44,757) - (44,757)
Foreclosures (16,039) 16,039 -
Capitalized costs - 141 141
Note / property sales - (20,651) (20,651)
Write downs - (3,893) (3,893)
Net gains (losses) on sales - (3,040) (3,040)
----------- ----------- -----------
Ending Balance $ 127,479 $ 32,859 $ 160,338
=========== =========== ===========
(1) Excludes non-performing loans and foreclosed properties covered by the
loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank.
(2) 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.
(3) Annualized.
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)
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) 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.
(3) 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)
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) 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.
(3) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
Fourth Quarter Third Quarter Second Quarter
2011 2011 2011(2)
---------------- ---------------- ----------------
Net Net Net
Charge- Charge- Charge-
Offs to Offs to Offs to
Net Average Net Average Net Average
Charge- Loans Charge- Loans Charge- Loans
(in thousands) Offs (3) Offs (3) Offs (3)
-------- ------- -------- ------- -------- -------
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by
RE) $ 4,962 1.09% $ 2,192 .50% $ 3,259 .76%
Commercial
construction 3,318 7.88 1,625 3.54 869 1.70
Commercial &
industrial 18,940 17.47 420 .39 523 .49
-------- -------- --------
Total commercial 27,220 4.51 4,237 .71 4,651 .79
Residential
construction 12,090 10.36 6,381 5.19 6,629 5.04
Residential mortgage 5,887 2.04 6,110 2.09 4,589 1.55
Consumer / installment 427 1.47 818 2.75 614 2.04
-------- -------- --------
Total $ 45,624 4.39 $ 17,546 1.68 $ 16,483 1.58
======== ======== ========
NET CHARGE-OFFS BY
MARKET
Atlanta MSA $ 4,195 1.37% $ 2,813 .94% $ 2,920 .99%
Gainesville MSA 2,572 3.84 1,804 2.64 2,318 3.36
North Georgia 34,970 9.46 8,124 2.16 6,575 1.72
Western North Carolina 3,180 2.10 3,608 2.31 3,522 2.21
Coastal Georgia 335 .41 709 .88 815 1.02
East Tennessee 372 .59 488 .78 333 .54
-------- -------- --------
Total $ 45,624 4.39 $ 17,546 1.68 $ 16,483 1.58
======== ======== ========
(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) 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.
(3) Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary (1)
Second Quarter 2011
--------------------------------------
Problem
Asset
Disposition
(in thousands) Other 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
============ =========== ============
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary (1)
First Quarter 2011
--------------------------
Problem
Asset
Disposition
(in thousands) Other Plan
------------ ------------
BY CATEGORY
Commercial (sec. by RE) $ 2,842 $ 45,765
Commercial construction 1,146 48,569
Commercial & industrial 513 3,527
------------ ------------
Total commercial 4,501 97,861
Residential construction 10,643 81,495
Residential mortgage 4,989 31,394
Consumer / installment 383 308
------------ ------------
Total $ 20,516 $ 211,058
============ ============
BY MARKET
Atlanta MSA $ 3,296 $ 53,193
Gainesville MSA 954 7,662
North Georgia 8,544 114,761
Western North Carolina 6,749 19,698
Coastal Georgia 341 11,662
East Tennessee 632 4,082
------------ ------------
Total $ 20,516 $ 211,058
============ ============
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Net Charge-Off Summary (1)
First
Quarter 2011 First Six Months 2011
------------ --------------------------------------
Problem
Asset
Disposition
(in thousands) Total Other Plan Total
------------ ------------ ------------ ------------
BY CATEGORY
Commercial (sec. by RE) $ 48,607 $ 7,814 $ 44,052 $ 51,866
Commercial construction 49,715 3,347 47,237 50,584
Commercial & industrial 4,040 1,152 3,411 4,563
------------ ------------ ------------ ------------
Total commercial 102,362 12,313 94,700 107,013
Residential construction 92,138 20,114 78,653 98,767
Residential mortgage 36,383 10,833 30,139 40,972
Consumer / installment 691 1,008 297 1,305
------------ ------------ ------------ ------------
Total $ 231,574 $ 44,268 $ 203,789 $ 248,057
============ ============ ============ ============
BY MARKET
Atlanta MSA $ 56,489 $ 8,171 $ 51,238 $ 59,409
Gainesville MSA 8,616 3,530 7,404 10,934
North Georgia 123,305 18,904 110,976 129,880
Western North Carolina 26,447 11,012 18,957 29,969
Coastal Georgia 12,003 1,547 11,271 12,818
East Tennessee 4,714 1,104 3,943 5,047
------------ ------------ ------------ ------------
Total $ 231,574 $ 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 Twelve Months Ended
December 31, December 31,
-------------------- --------------------
(in thousands, except per share
data) 2011 2010 2011 2010
--------- --------- --------- ---------
Interest revenue:
Loans, including fees $ 57,697 $ 66,659 $ 239,056 $ 277,904
Investment securities,
including tax exempt of $255,
$251, $1,009 and $1,137 13,296 13,215 56,260 59,958
Federal funds sold, commercial
paper and deposits in banks 489 844 2,321 3,260
--------- --------- --------- ---------
Total interest revenue 71,482 80,718 297,637 341,122
--------- --------- --------- ---------
Interest expense:
Deposits:
NOW 807 1,662 3,998 6,966
Money market 800 2,036 5,456 7,552
Savings 41 81 234 331
Time 7,338 12,868 39,151 66,883
--------- --------- --------- ---------
Total deposit interest
expense 8,986 16,647 48,839 81,732
Federal funds purchased,
repurchase agreements and
other short-term borrowings 1,053 1,073 4,250 4,235
Federal Home Loan Bank
advances 441 608 2,042 3,355
Long-term debt 2,375 2,755 10,544 10,749
--------- --------- --------- ---------
Total interest expense 12,855 21,083 65,675 100,071
--------- --------- --------- ---------
Net interest revenue 58,627 59,635 231,962 241,051
Provision for loan losses 14,000 36,000 251,000 223,000
--------- --------- --------- ---------
Net interest revenue after
provision for loan losses 44,627 23,635 (19,038) 18,051
--------- --------- --------- ---------
Fee revenue:
Service charges and fees 7,248 7,039 29,110 30,127
Mortgage loan and other
related fees 1,825 1,868 5,419 7,019
Brokerage fees 782 778 2,986 2,662
Securities gains, net 4 - 842 2,552
Loss from prepayment of debt - - (791) (2,233)
Other 2,808 2,757 12,342 8,421
--------- --------- --------- ---------
Total fee revenue 12,667 12,442 49,908 48,548
--------- --------- --------- ---------
Total revenue 57,294 36,077 30,870 66,599
--------- --------- --------- ---------
Operating expenses:
Salaries and employee benefits 23,473 23,777 100,095 96,618
Communications and equipment 3,129 3,377 13,135 13,781
Occupancy 3,972 4,024 15,645 15,394
Advertising and public
relations 944 1,102 4,291 4,625
Postage, printing and supplies 1,017 1,063 4,256 4,072
Professional fees 1,996 3,016 9,727 9,254
Foreclosed property 9,302 20,602 78,905 65,707
FDIC assessments and other
regulatory charges 2,599 3,299 14,259 13,747
Amortization of intangibles 746 771 3,016 3,160
Other 3,902 3,887 18,270 16,594
Goodwill impairment - - - 210,590
Loss on sale of nonperforming
assets - - - 45,349
--------- --------- --------- ---------
Total operating expenses 51,080 64,918 261,599 498,891
--------- --------- --------- ---------
Loss from continuing
operations before income
taxes 6,214 (28,841) (230,729) (432,292)
Income tax benefit (3,687) 144,263 (3,983) 71,217
--------- --------- --------- ---------
Net loss from continuing
operations 9,901 (173,104) (226,746) (503,509)
Loss from discontinued
operations, net of income
taxes - - - (101)
Gain from sale of subsidiary,
net of income taxes and
selling costs - - - 1,266
--------- --------- --------- ---------
Net loss 9,901 (173,104) (226,746) (502,344)
Preferred stock dividends and
discount accretion 3,025 2,586 11,838 10,316
--------- --------- --------- ---------
Net loss available to common
shareholders $ 6,876 $(175,690) $(238,584) $(512,660)
========= ========= ========= =========
Loss from continuing operations
per common share - Basic $ .12 $ (9.25) $ (5.97) $ (27.15)
Loss from continuing operations
per common share - Diluted .12 (9.25) (5.97) (27.15)
Loss per common share - Basic .12 (9.25) (5.97) (27.09)
Loss per common share - Diluted .12 (9.25) (5.97) (27.09)
Weighted average common shares
outstanding - Basic 57,646 18,984 39,943 18,925
Weighted average common shares
outstanding - Diluted 57,646 18,984 39,943 18,925
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
December 31, December 31,
(in thousands, except share and per share data) 2011 2010
------------ ------------
(unaudited) (audited)
ASSETS
Cash and due from banks $ 53,807 $ 95,994
Interest-bearing deposits in banks 139,609 111,901
Federal funds sold, reverse repurchase
agreements, commercial paper and short-term
investments 185,000 441,562
------------ ------------
Cash and cash equivalents 378,416 649,457
Securities available for sale 1,790,047 1,224,417
Securities held to maturity (fair value
$333,912 and $267,988) 330,203 265,807
Mortgage loans held for sale 23,881 35,908
Loans, net of unearned income 4,109,614 4,604,126
Less allowance for loan losses 114,468 174,695
------------ ------------
Loans, net 3,995,146 4,429,431
Assets covered by loss sharing agreements with
the FDIC 78,145 131,887
Premises and equipment, net 175,088 178,239
Accrued interest receivable 20,693 24,299
Goodwill and other intangible assets 8,428 11,446
Foreclosed property 32,859 142,208
Other assets 150,514 183,160
------------ ------------
Total assets $ 6,983,420 $ 7,276,259
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 992,109 $ 793,414
NOW 1,509,896 1,424,781
Money market 1,038,778 891,252
Savings 199,007 183,894
Time:
Less than $100,000 1,332,394 1,496,700
Greater than $100,000 847,152 1,002,359
Brokered 178,647 676,772
------------ ------------
Total deposits 6,097,983 6,469,172
Federal funds purchased, repurchase agreements,
and other short-term borrowings 102,577 101,067
Federal Home Loan Bank advances 40,625 55,125
Long-term debt 120,225 150,146
Unsettled securities purchases 10,325 -
Accrued expenses and other liabilities 36,199 32,171
------------ ------------
Total liabilities 6,407,934 6,807,681
------------ ------------
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
Series B; $1,000 stated value; 180,000
shares issued and outstanding 177,092 175,711
Series D; $1,000 stated value; 16,613 shares
issued and outstanding 16,613 -
Common stock, $1 par value; 100,000,000 shares
authorized; 41,647,100 and 18,937,001 shares
issued and outstanding 41,647 18,937
Common stock, non-voting, $1 par value;
30,000,000 shares authorized; 15,914,209
shares issued and outstanding 15,914 -
Common stock issuable; 93,681 and 67,287
shares 3,233 3,894
Capital surplus 1,054,940 741,244
Accumulated deficit (730,861) (492,276)
Accumulated other comprehensive income (3,309) 20,851
------------ ------------
Total shareholders' equity 575,486 468,578
------------ ------------
Total liabilities and shareholders' equity $ 6,983,420 $ 7,276,259
============ ============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
2011 2010
-------------------------- --------------------------
(dollars in
thousands, taxable Average Avg. Average Avg.
equivalent) Balance Interest Rate Balance Interest Rate
---------- -------- ----- ---------- -------- -----
Assets:
Interest-earning
assets:
Loans, net of
unearned income
(1)(2) $4,175,320 $ 57,773 5.49% $4,768,120 $ 66,750 5.55%
Taxable securities
(3) 2,114,069 13,041 2.47 1,327,999 12,964 3.90
Tax-exempt
securities (1)(3) 27,224 417 6.13 25,917 410 6.33
Federal funds sold
and other
interest-earning
assets 371,606 674 .73 558,143 1,091 .78
---------- -------- ---------- --------
Total interest-
earning assets 6,688,219 71,905 4.27 6,680,179 81,215 4.83
---------- -------- ---------- --------
Non-interest-earning
assets:
Allowance for loan
losses (145,559) (185,300)
Cash and due from
banks 54,485 112,923
Premises and
equipment 176,182 178,729
Other assets (3) 245,664 467,871
---------- ----------
Total assets $7,018,991 $7,254,402
========== ==========
Liabilities and
Shareholders'
Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits:
NOW $1,451,581 807 .22 $1,436,976 1,662 .46
Money market 1,041,375 800 .30 870,884 2,036 .93
Savings 198,541 41 .08 184,651 81 .17
Time less than
$100,000 1,358,367 3,668 1.07 1,489,933 6,292 1.68
Time greater than
$100,000 875,434 2,867 1.30 1,010,104 4,736 1.86
Brokered 180,933 803 1.76 491,477 1,840 1.49
---------- -------- ---------- --------
Total interest-
bearing
deposits 5,106,231 8,986 .70 5,484,025 16,647 1.20
---------- -------- ---------- --------
Federal funds
purchased and
other borrowings 102,776 1,053 4.06 102,830 1,073 4.14
Federal Home Loan
Bank advances 40,625 441 4.31 58,712 608 4.11
Long-term debt 120,217 2,375 7.84 150,137 2,755 7.28
---------- -------- ---------- --------
Total borrowed
funds 263,618 3,869 5.82 311,679 4,436 5.65
---------- -------- ---------- --------
Total interest-
bearing
liabilities 5,369,849 12,855 .95 5,795,704 21,083 1.44
-------- --------
Non-interest-bearing
liabilities:
Non-interest-
bearing deposits 1,008,327 809,604
Other liabilities 59,908 83,452
---------- ----------
Total liabilities 6,438,084 6,688,760
Shareholders' equity 580,907 565,642
---------- ----------
Total liabilities
and shareholders'
equity $7,018,991 $7,254,402
========== ==========
Net interest revenue $ 59,050 $ 60,132
======== ========
Net interest-rate
spread 3.32% 3.39%
===== =====
Net interest margin
(4) 3.51% 3.58%
===== =====
(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 $31.3 million in 2011 and $40.8 million in 2010 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.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
2011 2010
-------------------------- --------------------------
(dollars in
thousands, taxable Average Avg. Average Avg.
equivalent) Balance Interest Rate Balance Interest Rate
---------- -------- ----- ---------- -------- -----
Assets:
Interest-earning
assets:
Loans, net of
unearned income
(1)(2) $4,307,111 $239,195 5.55% $4,960,805 $278,149 5.61%
Taxable securities
(3) 1,973,678 55,251 2.80 1,425,322 58,821 4.13
Tax-exempt
securities (1)(3) 25,693 1,651 6.43 27,827 1,860 6.68
Federal funds sold
and other
interest-earning
assets 478,403 3,247 .68 408,359 4,293 1.05
---------- -------- ---------- --------
Total interest-
earning assets 6,784,885 299,344 4.41 6,822,313 343,123 5.03
---------- -------- ---------- --------
Non-interest-earning
assets:
Allowance for loan
losses (145,656) (190,227)
Cash and due from
banks 90,212 106,582
Premises and
equipment 178,061 180,379
Other assets (3) 281,233 685,547
---------- ----------
Total assets $7,188,735 $7,604,594
========== ==========
Liabilities and
Shareholders'
Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits:
NOW $1,348,493 3,998 .30 $1,360,729 6,966 .51
Money market 993,871 5,456 .55 780,982 7,552 .97
Savings 195,468 234 .12 184,479 331 .18
Time less than
$100,000 1,471,596 18,648 1.27 1,581,750 30,260 1.91
Time greater than
$100,000 948,659 14,347 1.51 1,084,967 23,114 2.13
Brokered 401,393 6,156 1.53 610,483 13,509 2.21
---------- -------- ---------- --------
Total interest-
bearing
deposits 5,359,480 48,839 .91 5,603,390 81,732 1.46
---------- -------- ---------- --------
Federal funds
purchased and
other borrowings 102,727 4,250 4.14 103,479 4,235 4.09
Federal Home Loan
Bank advances 47,220 2,042 4.32 90,137 3,355 3.72
Long-term debt 139,666 10,544 7.55 150,107 10,749 7.16
---------- -------- ---------- --------
Total borrowed
funds 289,613 16,836 5.81 343,723 18,339 5.34
---------- -------- ---------- --------
Total interest-
bearing
liabilities 5,649,093 65,675 1.16 5,947,113 100,071 1.68
-------- --------
Non-interest-bearing
liabilities:
Non-interest-
bearing deposits 915,649 769,395
Other liabilities 66,809 69,367
---------- ----------
Total liabilities 6,631,551 6,785,875
Shareholders' equity 557,184 818,719
---------- ----------
Total liabilities
and shareholders'
equity $7,188,735 $7,604,594
========== ==========
Net interest revenue $233,669 $243,052
======== ========
Net interest-rate
spread 3.25% 3.35%
===== =====
Net interest margin
(4) 3.44% 3.56%
===== =====
(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 $32.2 million in 2011 and $43.2 million in 2010 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.
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
For the Three Months Ended
-------------------------------------------------------
September 30, 2011 June 30, 2011
--------------------------- --------------------------
(in thousands,
except per share
data; taxable As Adjust- As As Adjust- As
equivalent) Reported ment Restated Reported ment Restated
-------- ------- -------- -------- ------- --------
Consolidated
Statement of
Operations
Income tax expense
(benefit) $ (5,959) $ 5,137 $ (822) $ 5,077 $(4,411) $ 666
Net income (loss)
from continuing
operations (6,202) (5,137) (11,339) 7,617 4,411 12,028
Net operating income
(loss) from
continuing
operations (6,202) (5,137) (11,339) 7,617 4,411 12,028
Net income (loss) (6,202) (5,137) (11,339) 7,617 4,411 12,028
Net income (loss)
available to common
shareholders (9,221) (5,137) (14,358) 4,601 4,411 9,012
Per Share
Information
Income (loss) from
continuing
operations - basic $ (.16) $ (.09) $ (.25) $ .18 $ .17 $ .35
Income (loss) from
continuing
operations -
diluted (.16) (.09) (.25) .08 .08 .16
Operating income
(loss) from
continuing
operations -
diluted (.16) (.09) (.25) .08 .08 .16
Income (loss) -
basic (.16) (.09) (.25) .18 .17 .35
Income (loss) -
diluted (.16) (.09) (.25) .08 .08 .16
Key Performance
Measures
Return on equity (%) (5.72) (9.34) (15.06) 5.34 37.26 42.60
Return on assets (%) (.34) (.30) (.64) .40 .26 .66
Equity to assets (%) 11.83 (3.28) 8.55 11.21 (3.15) 8.06
Tangible equity to
assets (%) 11.76 (3.34) 8.42 11.13 (3.20) 7.93
Tangible common
equity to assets
(%) 9.09 (3.44) 5.65 4.79 (3.42) 1.37
Tangible common
equity to risk-
weighted assets (%) 14.41 (5.89) 8.52 14.26 (5.57) 8.69
Average total assets
($ in millions) $ 7,261 $ (261) $ 7,000 $ 7,624 $ (261) $ 7,363
Average
shareholders'
equity ($ in
millions) 859 (261) 598 854 (260) 594
Regulatory Capital
Ratios - Holding
Company
Tier 1 leverage
ratio (%) 8.97 (.18) 8.79 8.71 (.19) 8.52
Tier 1 risk-based
capital ratio (%) 13.97 (.22) 13.75 13.88 (.26) 13.62
Total risk-based
capital ratio (%) 15.84 (.21) 15.63 16.40 (.24) 16.16
Regulatory Capital
Ratios - Bank
Tier 1 leverage
ratio (%) 8.84 (.18) 8.66 8.54 (.19) 8.35
Tier 1 risk-based
capital ratio (%) 13.80 (.26) 13.54 13.62 (.29) 13.33
Total risk-based
capital ratio (%) 15.07 (.25) 14.82 15.41 (.29) 15.12
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
For the Three Months Ended
--------------------------------------------------------------
March 31, 2011 December 31, 2010
------------------------------ ------------------------------
(in
thousands,
except per
share data;
taxable As Adjust- As As Adjust- As
equivalent) Reported ment Restated Reported ment Restated
--------- -------- --------- -------- --------- ---------
Consolidated
Statement of
Operations
Income tax
expense
(benefit) $ (94,990) $ 94,850 $ (140) $(12,446) $ 156,709 $ 144,263
Net income
(loss) from
continuing
operations (142,486) (94,850) (237,336) (16,395) (156,709) (173,104)
Net operating
income
(loss) from
continuing
operations (142,486) (94,850) (237,336) (23,574) (161,280) (184,854)
Net income
(loss) (142,486) (94,850) (237,336) (16,395) (156,709) (173,104)
Net income
(loss)
available to
common
shareholders (145,264) (94,850) (240,114) (18,981) (156,709) (175,690)
Per Share
Information
Income (loss)
from
continuing
operations -
basic $ (7.87) $ (5.13) $ (13.00) $ (1.00) $ (8.25) $ (9.25)
Income (loss)
from
continuing
operations -
diluted (7.87) (5.13) (13.00) (1.00) (8.25) (9.25)
Operating
income
(loss) from
continuing
operations -
diluted (7.87) (5.13) (13.00) (1.38) (8.49) (9.87)
Income (loss)
- basic (7.87) (5.13) (13.00) (1.00) (8.25) (9.25)
Income (loss)
- diluted (7.87) (5.13) (13.00) (1.00) (8.25) (9.25)
Key
Performance
Measures
Return on
equity (%) (147.11) (379.43) (526.54) (17.16) (178.94) (196.10)
Return on
assets (%) (7.61) (5.43) (13.04) (.89) (8.58) (9.47)
Equity to
assets (%) 8.82 (2.67) 6.15 8.85 (1.05) 7.80
Tangible
equity to
assets (%) 8.73 (2.72) 6.01 8.75 (1.11) 7.64
Tangible
common
equity to
assets (%) 5.51 (2.81) 2.70 6.35 (1.13) 5.22
Tangible
common
equity to
risk-
weighted
assets (%) 6.40 (5.65) .75 9.05 (3.41) 5.64
Average total
assets ($ in
millions) $ 7,595 $ (216) $ 7,379 $ 7,338 $ (84) $ 7,254
Average
shareholders'
equity ($
in millions) 670 (216) 454 649 (83) 566
Regulatory
Capital
Ratios -
Holding
Company
Tier 1
leverage
ratio (%) 4.95 (.20) 4.75 6.75 .01 6.76
Tier 1 risk-
based
capital
ratio (%) 7.67 (.24) 7.43 9.67 .14 9.81
Total risk-
based
capital
ratio (%) 15.34 (.49) 14.85 12.11 .14 12.25
Regulatory
Capital
Ratios -
Bank
Tier 1
leverage
ratio (%) 8.34 (.22) 8.12 7.45 - 7.45
Tier 1 risk-
based
capital
ratio (%) 12.95 (.24) 12.71 10.72 .13 10.85
Total risk-
based
capital
ratio (%) 14.73 (.24) 14.49 12.48 .13 12.61
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
For the Year to Date Period Ended
--------------------------------------------------------------
September 30, 2011 June 30, 2011
------------------------------ ------------------------------
(in
thousands,
except per
share data;
taxable As Adjustme As As Adjustme As
equivalent) Reported nt Restated Reported nt Restated
--------- -------- --------- --------- -------- ---------
Consolidated
Statement of
Operations
Income tax
expense
(benefit) $ (95,872) $ 95,576 $ (296) $ (89,913) $ 90,439 $ 526
Net income
(loss) from
continuing
operations (141,071) (95,576) (236,647) (134,869) (90,439) (225,308)
Net operating
income
(loss) from
continuing
operations (141,071) (95,576) (236,647) (134,869) (90,439) (225,308)
Net income
(loss) (141,071) (95,576) (236,647) (134,869) (90,439) (225,308)
Net income
(loss)
available to
common
shareholders (149,884) (95,576) (245,460) (140,663) (90,439) (231,102)
Per Share
Information
Income (loss)
from
continuing
operations -
basic $ (4.41) $ (2.82) $ (7.23) $ (6.40) $ (4.12) $ (10.52)
Income (loss)
from
continuing
operations -
diluted (4.41) (2.82) (7.23) (6.40) (4.12) (10.52)
Operating
income
(loss) from
continuing
operations -
diluted (4.41) (2.82) (7.23) (6.40) (4.12) (10.52)
Income (loss)
- basic (4.41) (2.82) (7.23) (6.40) (4.12) (10.52)
Income (loss)
- diluted (4.41) (2.82) (7.23) (6.40) (4.12) (10.52)
Consolidated
Statement of
Changes in
Shareholders'
Equity
Net income
(loss) $(141,071) $(95,576) $(236,647) $(134,869) $(90,439) $(225,308)
Unrealized
holding
gains
(losses) on
available
for sale
securities 2,910 1,678 4,588 5,133 2,870 8,003
Reclassifica-
tion
adjustment
for gains on
securities
available
for sale
included in
fee revenue - - - - - -
Unrealized
losses on
derivative
financial
instruments
qualifying
as cash flow
hedges (7,680) (4,890) (12,570) (5,879) (3,743) (9,622)
Comprehensive
income
(loss) (145,841) (98,788) (244,629) (135,615) (91,312) (226,927)
Penalty
received on
incomplete
private
equity
transaction 2,375 875 3,250 2,375 875 3,250
Consolidated
Statement of
Cash Flows
Net income
(loss) $(141,071) $(95,576) $(236,647) $(134,869) $(90,439) $(225,308)
Deferred
income tax
benefit - - - - - -
Net change in
other assets
and accrued
interest
receivable (35,735) 95,576 59,841 (49,255) 90,439 41,184
Key
Performance
Measures
Return on
equity (%) (43.31) (108.01) (151.32) (76.07) (269.79) (345.86)
Return on
assets (%) (2.52) (1.85) (4.37) (3.57) (2.59) (6.16)
Equity to
assets (%) 10.61 (3.03) 7.58 10.02 (2.91) 7.11
Tangible
equity to
assets (%) 10.53 (3.08) 7.45 9.94 (2.96) 6.98
Tangible
common
equity to
assets (%) 6.44 (3.23) 3.21 5.15 (3.12) 2.03
Tangible
common
equity to
risk-
weighted
assets (%) 14.41 (5.89) 8.52 14.26 (5.57) 8.69
Average total
assets ($ in
millions) $ 7,492 $ (246) $ 7,246 $ 7,609 $ (238) $ 7,371
Average
shareholders'
equity ($
in millions) 795 (246) 549 763 (239) 524
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
For the Year to Date Period Ended
---------------------------------------------------------------
March 31, 2011 December 31, 2010
------------------------------ -------------------------------
(in
thousands,
except per
share data;
taxable As Adjustme As As Adjustmen As
equivalent) Reported nt Restated Reported t Restated
--------- -------- --------- --------- --------- ---------
Consolidated
Statement
of
Operations
Income tax
expense
(benefit) $ (94,990) $ 94,850 $ (140) $ (85,492) $ 156,709 $ 71,217
Net income
(loss) from
continuing
operations (142,486) (94,850) (237,336) (346,800) (156,709) (503,509)
Net
operating
income
(loss) from
continuing
operations (142,486) (94,850) (237,336) (143,389) (161,280) (304,669)
Net income
(loss) (142,486) (94,850) (237,336) (345,635) (156,709) (502,344)
Net income
(loss)
available
to common
shareholders(145,264) (94,850) (240,114) (355,951) (156,709) (512,660)
Per Share
Information
Income
(loss) from
continuing
operations
- basic $ (7.87) $ (5.13) $ (13.00) $ (18.87) $ (8.28) $ (27.15)
Income
(loss) from
continuing
operations
- diluted (7.87) (5.13) (13.00) (18.87) (8.28) (27.15)
Operating
income
(loss) from
continuing
operations
-diluted (7.87) (5.13) (13.00) (8.12) (8.52) (16.64)
Income
(loss) -
basic (7.87) (5.13) (13.00) (18.81) (8.28) (27.09)
Income
(loss) -
diluted (7.87) (5.13) (13.00) (18.81) (8.28) (27.09)
Consolidated
Statement
of Changes
in
Shareholders'
Equity
Net income
(loss) $(142,486) $(94,850) $(237,336) $(345,635) $(156,709) $(502,344)
Unrealized
holding
gains
(losses) on
available
for sale
securities (1,003) (674) (1,677) (4,986) (3,165) (8,151)
Reclassifica-
tion
adjustment
for gains
on
securities
available
for sale
included in
fee revenue - - - (1,559) (993) (2,552)
Unrealized
losses on
derivative
financial
instruments
qualifying
as cash
flow hedges (2,580) (1,643) (4,223) (10,011) (6,070) (16,081)
Comprehens-
ive income
(loss) (146,069) (97,167) (243,236) (362,191) (166,937) (529,128)
Penalty
received on
incomplete
private
equity
transaction - - - - - -
Consolidated
Statement
of Cash
Flows
Net income
(loss) $(142,486) $(94,850) $(237,336) $(345,635) $(156,709) $(502,344)
Deferred
income tax
benefit - - - (87,455) 156,709 69,254
Net change
in other
assets and
accrued
interest
receivable (90,321) 94,850 4,529 - - -
Key
Performance
Measures
Return on
equity (%) (147.11) (379.43) (526.54) (57.08) (27.98) (85.06)
Return on
assets (%) (7.61) (5.43) (13.04) (4.53) (2.08) (6.61)
Equity to
assets (%) 8.82 (2.67) 6.15 11.01 (.24) 10.77
Tangible
equity to
assets (%) 8.73 (2.72) 6.01 9.15 (.32) 8.83
Tangible
common
equity to
assets (%) 5.51 (2.81) 2.70 6.80 (.32) 6.48
Tangible
common
equity to
risk-
weighted
assets (%) 6.40 (5.65) .75 9.05 (3.41) 5.64
Average
total
assets ($
in
millions) $ 7,595 $ (216) $ 7,379 $ 7,626 $ (21) $ 7,605
Average
shareholders'
equity
($ in
millions) 670 (216) 454 840 (21) 819
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
As Of
-----------------------------------------
September 30, 2011
----------------------------------------
(in thousands, except per share
data; taxable equivalent) As Reported Adjustment As Restated
------------ ------------ ------------
Consolidated Balance Sheet
Net deferred tax asset $ 264,275 $ (264,275) $ -
Other assets 153,329 (575) 152,754
Total assets 7,159,123 (264,850) 6,894,273
Capital surplus 1,052,690 875 1,053,565
(Accumulated deficit) retained
earnings (485,451) (252,285) (737,736)
Accumulated other comprehensive
income 26,309 (13,440) 12,869
Total shareholders' equity 848,217 (264,850) 583,367
Total liabilities and
shareholders' equity 7,159,123 (264,850) 6,894,273
Key Performance Measures
Book value per share $ 11.37 $ (4.60) $ 6.77
Tangible book value per share 11.26 (4.65) 6.61
Nonperforming assets to total
assets (%) 2.64 .10 2.74
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
As Of
-----------------------------------------
June 30, 2011
----------------------------------------
(in thousands, except per share
data; taxable equivalent) As Reported Adjustment As Restated
------------ ------------ ------------
Consolidated Balance Sheet
Net deferred tax asset $ 261,268 $ (261,268) $ -
Other assets 172,074 3,894 175,968
Total assets 7,409,669 (257,374) 7,152,295
Capital surplus 1,051,607 875 1,052,482
(Accumulated deficit) retained
earnings (476,230) (247,148) (723,378)
Accumulated other comprehensive
income 30,333 (11,101) 19,232
Total shareholders' equity 859,975 (257,374) 602,601
Total liabilities and
shareholders' equity 7,409,669 (257,374) 7,152,295
Key Performance Measures
Book value per share $ 11.59 $ (4.48) $ 7.11
Tangible book value per share 11.47 (4.53) 6.94
Nonperforming assets to total
assets (%) 1.60 .06 1.66
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
As Of
-----------------------------------------
March 31, 2011
----------------------------------------
(in thousands, except per share
data; taxable equivalent) As Reported Adjustment As Restated
------------ ------------ ------------
Consolidated Balance Sheet
Net deferred tax asset $ 266,367 $ (266,367) $ -
Other assets 174,742 2,263 177,005
Total assets 7,973,592 (264,104) 7,709,488
Capital surplus 738,963 - 738,963
(Accumulated deficit) retained
earnings (480,831) (251,559) (732,390)
Accumulated other comprehensive
income 27,496 (12,545) 14,951
Total shareholders' equity 850,148 (264,104) 586,044
Total liabilities and
shareholders' equity 7,973,592 (264,104) 7,709,488
Key Performance Measures
Book value per share $ 14.78 $ (12.58) $ 2.20
Tangible book value per share 14.44 (12.75) 1.69
Nonperforming assets to total
assets (%) 1.73 .06 1.79
UNITED COMMUNITY BANKS, INC.
Previously Reported Financial Information - As Restated for Full Valuation
Allowance on Net Deferred Tax Asset
As Of
-----------------------------------------
December 31, 2010
----------------------------------------
(in thousands, except per share
data; taxable equivalent) As Reported Adjustment As Restated
------------ ------------ ------------
Consolidated Balance Sheet
Net deferred tax asset $ 166,937 $ (166,937) $ -
Other assets 183,160 - 183,160
Total assets 7,443,196 (166,937) 7,276,259
Capital surplus 741,244 - 741,244
(Accumulated deficit) retained
earnings (335,567) (156,709) (492,276)
Accumulated other comprehensive
income 31,079 (10,228) 20,851
Total shareholders' equity 635,515 (166,937) 468,578
Total liabilities and
shareholders' equity 7,443,196 (166,937) 7,276,259
Key Performance Measures
Book value per share $ 24.48 $ (9.08) $ 15.40
Tangible book value per share 23.78 (8.98) 14.80
Nonperforming assets to total
assets (%) 4.32 .10 4.42
For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Email Contact
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