Exhibit 99.1
For Immediate Release
For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com
UNITED COMMUNITY BANKS, INC. REPORTS
NET OPERATING LOSS FOR FOURTH QUARTER 2009
• | Non-performing assets down $30 million to $385 million from last quarter |
• | Provision for loan losses of $90 million exceeded charge-offs by $5.4 million |
• | Allowance-to-loans ratio of 3.02 percent, up from 2.80 percent last quarter |
• | Margin continues to improve to 3.40%, up 70 basis points from a year ago |
• | Capital ratios remain strong |
BLAIRSVILLE, GA – January 29, 2010 – United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss of $39.8 million, or 45 cents per diluted share, for the fourth quarter of 2009.
Net operating loss for the year 2009 was $138.6 million, or $2.47 per diluted share, and did not reflect $95 million of non-cash charges for goodwill impairment in the first and third quarters. Also not included were $2.9 million in severance costs in the first quarter and the $11.4 million gain on the Southern Community Bank acquisition in the second quarter, all of which are considered non-operating items and are therefore excluded from operating earnings. Including these non-operating items, the net loss for 2009 was $228.3 million, or $3.95 per diluted share.
“Credit continues to be our major challenge,” stated Jimmy Tallent, president and chief executive officer. “We were able to sell non-performing loans and foreclosed properties totaling $81 million, up from $55 million in the third quarter. In addition, we made significant progress in 2009 in terms of implementing offensive strategies that allowed us to almost double our quarter’s core earnings from a year ago.”
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Total loans were $5.151 billion at year-end, down $212 million from the third quarter and $554 million from year-end 2008, reflecting ongoing reductions due to weakness in the residential construction market and the overall weak business environment. “The decline in loans was primarily in residential construction and acquisition and development loans,” stated Tallent. As of December 31, 2009, residential construction loans were $1.050 billion, or 20 percent of total loans, a decrease of $429 million from a year ago and $135 million from the third quarter of 2009. Our new loan business continues to offset some of this decline and totaled $273 million, or five percent for the year. The growth was consistent for all quarters, with the majority of the growth in commercial loans within the Atlanta market.
Taxable equivalent net interest revenue of $63.9 million reflected an increase of $925 thousand from last quarter. “The taxable equivalent net interest margin was 3.40 percent, up slightly from 3.39 percent last quarter,” stated Tallent. “The margin improvement would have been greater, but we made a decision to build liquidity due to uncertainties in the market. This lowered our margin by approximately 20 basis points this quarter compared to two basis points last quarter. We expect most of the excess liquidity to run off in the first half of 2010. During the quarter we continued to maintain our loan pricing while significantly reducing deposit costs, which drove the expansion of our net interest margin.”
“Though core customer transaction deposits were up only slightly from the third quarter, they grew $205 million for the year, or 10 percent, excluding the acquisition in the second quarter,” Tallent said. “This growth reflects the continued success of adding to our customer base through customer referral and cross-selling programs. For the full year of 2009, we opened 9,904 net new core deposit accounts and added 60,318 new services.”
The fourth quarter provision for loan losses was $90.0 million compared to $95.0 million for the third quarter of 2009. Net charge-offs for the fourth quarter were $84.6 million compared to $90.5 million for the third quarter of 2009. At quarter-end, non-performing assets totaled $385 million compared to $415 million at September 30, 2009. The ratio of non-performing assets to total assets at the end of the fourth and third quarters was 4.81 percent and 4.91 percent, respectively. The allowance for loan losses to total loans was 3.02 percent and 2.80 percent, respectively.
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“We are pleased to report a decline in non-performing assets in the fourth quarter,” stated Tallent. “Also, on the positive side, we did see a decline this quarter in our classified and watch list loans. Our past due loans over 30 days declined from 2.02 percent to 1.44 percent. Residential construction loans continue to be at the center of our challenges. In terms of non-performing assets, we are hopeful our declining trend will continue given the portfolio run-off in Atlanta, and the decline in past dues and classified loans. However, we could face more difficulty liquidating properties in our non-Atlanta markets. We expect charge-offs to decline from current levels, but remain elevated in 2010.”
Operating fee revenue of $17.2 million for the fourth quarter of 2009 increased $1.6 million from last quarter and $6.5 million from last year primarily due to non-core revenue items. These non-core items included securities gains of $2.0 million, $1.1 million and $838 thousand for the fourth quarter 2009, third quarter 2009 and fourth quarter 2008, respectively. Also, the fourth quarter 2008 included $2.7 million in prepayment charges to restructure borrowings. Excluding these items, core fee revenue was $15.2 million for the fourth quarter of 2009, compared to $14.5 million for last quarter and $12.6 million a year ago. Service charges and fees of $8.3 million for the fourth quarter of 2009 were up $515 thousand from a year ago, primarily due to higher ATM and debit card fees relating to an increase in transactions and new customer accounts. Consulting fees of $2.8 million were up $492 thousand from last quarter and $1.5 million from a year ago due in large part to increasing demand for regulatory compliance assistance. Consulting fees were down in the fourth quarter of 2008 due to an internal project for United to improve profitability that did not result in the recognition of revenue.
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Operating expenses for the fourth quarter of 2009 were $62.5 million, an increase of $10.1 million from fourth quarter 2008, driven by the $9.2 million increase in foreclosed property costs and $1.7 million increase in FDIC insurance premiums. Foreclosed property costs for the fourth quarter were $14.4 million as compared to $5.2 million last year and $7.9 million last quarter. Foreclosed property costs this quarter included $9.6 million for write-downs and losses on sales and $4.8 million for maintenance, property taxes, and other related costs. This quarter included $7.4 million of losses on sales due to the higher volume of property sold during the quarter. Also, $2.2 million of additional write downs were taken on existing foreclosed properties to help expedite future sales. Salary and benefit costs for the fourth quarter totaled $26.2 million, up from $24.4 million last year due primarily to a $3.0 million bonus accrual reduction and a deferred compensation credit adjustment of $736 thousand recorded last year. Excluding these items, salary and benefit costs were down $2.0 million compared to last year, reflective of the reduction in work force of 183 staff positions during 2009, that was offset partially by the acquisition of Southern Community Bank in June 2009. Communications costs for the quarter remained flat, while advertising and printing costs were down $325 thousand and $448 thousand, respectively, from last year. Other expenses of $4.5 million decreased $2.5 million from the fourth quarter of 2008, due primarily to $2.0 million of bank owned life insurance expenses accrued last year that were later recovered in the second quarter of 2009 with the decision to cancel the surrender of our bank owned life insurance policies.
The effective tax rate for the fourth quarter of 2009 was 45 percent, compared to 28 percent last quarter and 38 percent last year. The fourth quarter 2009 tax benefit includes the favorable settlement of a several-year state tax audit dispute that was fully reserved due to the uncertainty of the tax position. The third quarter 2008 effective rate was lower due to a goodwill impairment charge which was not a taxable event and therefore did not result in the recognition of a tax benefit. The effective tax rate for 2010 is expected to be 40 percent, slightly higher than the effective tax rate for 2008.
On December 31, 2009, the company’s regulatory capital ratios were as follows: Tier I Risk-Based Capital of 12.4 percent; Leverage of 8.5 percent; and Total Risk-Based of 15.1 percent. Also, the quarterly average tangible equity-to-assets ratio was 9.5 percent and tangible common equity-to-assets ratio was 7.4 percent.
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“Our ultimate goal is to return to profitability as soon as possible, and our attention is relentlessly focused toward that goal,” concluded Tallent.
Conference Call
United Community Banks will hold a conference call today, Friday, January 29, 2010, 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 (888) 806-6208 and use the password ‘8006436.’ 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 web site at ir.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 $8.0 billion and operates 27 community banks with 107 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 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 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 “Forward-Looking Statements” on page 3 of United Community Banks, Inc.’s annual report filed onForm 10-K with the Securities and Exchange Commission.
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Financial Highlights
Selected Financial Information
Fourth | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | Quarter | For the Twelve | YTD | ||||||||||||||||||||||||||||||||
(in thousands, except per share | Fourth | Third | Second | First | Fourth | 2009-2008 | Months Ended | 2009-2008 | ||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2009 | 2008 | Change | |||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
Interest revenue | $ | 97,481 | $ | 101,181 | $ | 102,737 | $ | 103,562 | $ | 108,434 | $ | 404,961 | $ | 466,969 | ||||||||||||||||||||||
Interest expense | 33,552 | 38,177 | 41,855 | 46,150 | 56,561 | 159,734 | 228,265 | |||||||||||||||||||||||||||||
Net interest revenue | 63,929 | 63,004 | 60,882 | 57,412 | 51,873 | 23 | % | 245,227 | 238,704 | 3 | % | |||||||||||||||||||||||||
Provision for loan losses | 90,000 | 95,000 | 60,000 | 65,000 | 85,000 | 310,000 | 184,000 | |||||||||||||||||||||||||||||
Operating fee revenue(1) | 17,221 | 15,671 | 13,050 | 12,846 | 10,718 | 61 | 58,788 | 53,141 | 11 | |||||||||||||||||||||||||||
Total operating revenue(1) | (8,850 | ) | (16,325 | ) | 13,932 | 5,258 | (22,409 | ) | 61 | (5,985 | ) | 107,845 | (106 | ) | ||||||||||||||||||||||
Operating expenses(2) | 62,532 | 53,606 | 55,348 | 52,569 | 52,439 | 19 | 224,055 | 206,699 | 8 | |||||||||||||||||||||||||||
Operating loss before taxes | (71,382 | ) | (69,931 | ) | (41,416 | ) | (47,311 | ) | (74,848 | ) | 5 | (230,040 | ) | (98,854 | ) | (133 | ) | |||||||||||||||||||
Operating income tax benefit | (31,547 | ) | (26,213 | ) | (18,353 | ) | (15,335 | ) | (28,101 | ) | (91,448 | ) | (35,404 | ) | ||||||||||||||||||||||
Net operating loss(1)(2) | (39,835 | ) | (43,718 | ) | (23,063 | ) | (31,976 | ) | (46,747 | ) | 15 | (138,592 | ) | (63,450 | ) | (118 | ) | |||||||||||||||||||
Gain from acquisition, net of tax expense | — | — | 7,062 | — | — | 7,062 | — | |||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | (25,000 | ) | — | (70,000 | ) | — | (95,000 | ) | — | ||||||||||||||||||||||||||
Severance costs, net of tax benefit | — | — | — | (1,797 | ) | — | (1,797 | ) | — | |||||||||||||||||||||||||||
Net loss | (39,835 | ) | (68,718 | ) | (16,001 | ) | (103,773 | ) | (46,747 | ) | 15 | (228,327 | ) | (63,450 | ) | (260 | ) | |||||||||||||||||||
Preferred dividends and discount accretion | 2,567 | 2,562 | 2,559 | 2,554 | 712 | 10,242 | 724 | |||||||||||||||||||||||||||||
Net loss available to common shareholders | $ | (42,402 | ) | $ | (71,280 | ) | $ | (18,560 | ) | $ | (106,327 | ) | $ | (47,459 | ) | $ | (238,569 | ) | $ | (64,174 | ) | |||||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||||
Diluted operating loss(1)(2) | $ | (.45 | ) | $ | (.93 | ) | $ | (.53 | ) | $ | (.71 | ) | $ | (.99 | ) | 55 | $ | (2.47 | ) | $ | (1.35 | ) | (83 | ) | ||||||||||||
Diluted loss | (.45 | ) | (1.43 | ) | (.38 | ) | (2.20 | ) | (.99 | ) | 55 | (3.95 | ) | (1.35 | ) | (193 | ) | |||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | .18 | |||||||||||||||||||||||||||||
Stock dividends declared(6) | — | 1 for 130 | 1 for 130 | 1 for 130 | 1 for 130 | 3 for 130 | 2 for 130 | |||||||||||||||||||||||||||||
Book value | 8.36 | 8.85 | 13.87 | 14.70 | 16.95 | (51 | ) | 8.36 | 16.95 | (51 | ) | |||||||||||||||||||||||||
Tangible book value(4) | 6.02 | 6.50 | 8.85 | 9.65 | 10.39 | (42 | ) | 6.02 | 10.39 | (42 | ) | |||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||||
Return on equity(3)(5) | (22.08 | )% | (45.52 | )% | (11.42 | )% | (58.28 | )% | (23.83 | )% | (34.40 | )% | (7.82 | )% | ||||||||||||||||||||||
Return on assets(5) | (1.91 | ) | (3.32 | ) | (.78 | ) | (5.03 | ) | (2.19 | ) | (2.76 | ) | (.76 | ) | ||||||||||||||||||||||
Net interest margin(5) | 3.40 | 3.39 | 3.28 | 3.08 | 2.70 | 3.29 | 3.18 | |||||||||||||||||||||||||||||
Operating efficiency ratio(1)(2) | 79.02 | 69.15 | 74.15 | 75.15 | 81.34 | 74.37 | 70.49 | |||||||||||||||||||||||||||||
Equity to assets | 11.94 | 10.27 | 10.71 | 11.56 | 10.04 | 11.12 | 10.22 | |||||||||||||||||||||||||||||
Tangible equity to assets(4) | 9.53 | 7.55 | 7.96 | 8.24 | 6.56 | 8.33 | 6.67 | |||||||||||||||||||||||||||||
Tangible common equity to assets(4) | 7.37 | 5.36 | 5.77 | 6.09 | 6.21 | 6.15 | 6.57 | |||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets(4) | 10.39 | 10.67 | 7.49 | 8.03 | 8.34 | 10.39 | 8.34 | |||||||||||||||||||||||||||||
ASSET QUALITY * | ||||||||||||||||||||||||||||||||||||
Non-performing loans (NPLs) | $ | 264,092 | $ | 304,381 | $ | 287,848 | $ | 259,155 | $ | 190,723 | $ | 264,092 | $ | 190,723 | ||||||||||||||||||||||
Foreclosed properties | 120,770 | 110,610 | 104,754 | 75,383 | 59,768 | 120,770 | 59,768 | |||||||||||||||||||||||||||||
Total non-performing assets (NPAs) | 384,862 | 414,991 | 392,602 | 334,538 | 250,491 | 384,862 | 250,491 | |||||||||||||||||||||||||||||
Allowance for loan losses | 155,602 | 150,187 | 145,678 | 143,990 | 122,271 | 155,602 | 122,271 | |||||||||||||||||||||||||||||
Net charge-offs | 84,585 | 90,491 | 58,312 | 43,281 | 74,028 | 276,669 | 151,152 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans | 3.02 | % | 2.80 | % | 2.64 | % | 2.56 | % | 2.14 | % | 3.02 | % | 2.14 | % | ||||||||||||||||||||||
Net charge-offs to average loans(5) | 6.37 | 6.57 | 4.18 | 3.09 | 5.09 | 5.03 | 2.57 | |||||||||||||||||||||||||||||
NPAs to loans and foreclosed properties | 7.30 | 7.58 | 6.99 | 5.86 | 4.35 | 7.30 | 4.35 | |||||||||||||||||||||||||||||
NPAs to total assets | 4.81 | 4.91 | 4.63 | 4.09 | 2.92 | 4.81 | 2.92 | |||||||||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||||||||||
Loans | $ | 5,357,150 | $ | 5,565,498 | $ | 5,597,259 | $ | 5,675,054 | $ | 5,784,139 | (7 | ) | $ | 5,547,915 | $ | 5,890,889 | (6 | ) | ||||||||||||||||||
Investment securities | 1,528,805 | 1,615,499 | 1,771,482 | 1,712,654 | 1,508,808 | 1 | 1,656,492 | 1,489,036 | 11 | |||||||||||||||||||||||||||
Earning assets | 7,486,790 | 7,400,539 | 7,442,178 | 7,530,230 | 7,662,536 | (2 | ) | 7,464,639 | 7,504,186 | (1 | ) | |||||||||||||||||||||||||
Total assets | 8,286,544 | 8,208,199 | 8,212,140 | 8,372,281 | 8,487,017 | (2 | ) | 8,269,387 | 8,319,201 | (1 | ) | |||||||||||||||||||||||||
Deposits | 6,835,052 | 6,689,948 | 6,544,537 | 6,780,531 | 6,982,229 | (2 | ) | 6,712,605 | 6,524,457 | 3 | ||||||||||||||||||||||||||
Shareholders’ equity | 989,279 | 843,130 | 879,210 | 967,505 | 851,956 | 16 | 919,631 | 850,426 | 8 | |||||||||||||||||||||||||||
Common shares — basic | 94,219 | 49,771 | 48,794 | 48,324 | 47,844 | 60,374 | 47,369 | |||||||||||||||||||||||||||||
Common shares — diluted | 94,219 | 49,771 | 48,794 | 48,324 | 47,844 | 60,374 | 47,369 | |||||||||||||||||||||||||||||
AT PERIOD END | ||||||||||||||||||||||||||||||||||||
Loans | $ | 5,151,476 | $ | 5,362,689 | $ | 5,513,087 | $ | 5,632,705 | $ | 5,704,861 | (10 | ) | $ | 5,151,476 | $ | 5,704,861 | (10 | ) | ||||||||||||||||||
Investment securities | 1,530,047 | 1,532,514 | 1,816,787 | 1,719,033 | 1,617,187 | (5 | ) | 1,530,047 | 1,617,187 | (5 | ) | |||||||||||||||||||||||||
Total assets | 7,999,914 | 8,443,617 | 8,477,355 | 8,171,663 | 8,591,933 | (7 | ) | 7,999,914 | 8,591,933 | (7 | ) | |||||||||||||||||||||||||
Deposits | 6,627,834 | 6,821,306 | 6,848,760 | 6,616,488 | 7,003,624 | (5 | ) | 6,627,834 | 7,003,624 | (5 | ) | |||||||||||||||||||||||||
Shareholders’ equity | 962,321 | 1,006,638 | 855,272 | 888,853 | 989,382 | (3 | ) | 962,321 | 989,382 | (3 | ) | |||||||||||||||||||||||||
Common shares outstanding | 94,046 | 93,901 | 48,933 | 48,487 | 48,009 | 94,046 | 48,009 |
(1) | Excludes the gain from acquisition of $11.4 million, net of income tax expense of $4.3 million in the second quarter of 2009. | |
(2) | Excludes the goodwill impairment charges of $25 million and $70 million in the third and first quarters of 2009, respectively, and severance costs of $2.9 million, net of income tax benefit of $1.1 million in the first quarter of 2009. | |
(3) | 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). | |
(4) | Excludes effect of acquisition related intangibles and associated amortization. | |
(5) | Annualized. | |
(6) | Number of new shares issued for shares currently held. | |
NM — | Not meaningful. | |
* | Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC. |
Selected Financial Information
For the Years Ended December 31,
(in thousands, except per share data; | ||||||||||||||||||||
taxable equivalent) | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||
Net interest revenue | $ | 245,227 | $ | 238,704 | $ | 274,483 | $ | 237,880 | $ | 196,799 | ||||||||||
Provision for loan losses(1) | 310,000 | 184,000 | 37,600 | 14,600 | 12,100 | |||||||||||||||
Operating fee revenue(2) | 58,788 | 53,141 | 62,651 | 49,095 | 46,148 | |||||||||||||||
Total operating revenue(1)(2) | (5,985 | ) | 107,845 | 299,534 | 272,375 | 230,847 | ||||||||||||||
Operating expenses(3) | 224,055 | 206,699 | 190,061 | 162,070 | 140,808 | |||||||||||||||
Operating (loss) income before taxes | (230,040 | ) | (98,854 | ) | 109,473 | 110,305 | 90,039 | |||||||||||||
Operating income taxes | (91,448 | ) | (35,404 | ) | 40,482 | 41,490 | 33,297 | |||||||||||||
Net operating (loss) income | (138,592 | ) | (63,450 | ) | 68,991 | 68,815 | 56,742 | |||||||||||||
Gain from acquisition, net of tax | 7,062 | — | — | — | — | |||||||||||||||
Noncash goodwill impairment charge | (95,000 | ) | — | — | — | — | ||||||||||||||
Severance cost, net of tax benefit | (1,797 | ) | — | — | — | — | ||||||||||||||
Fraud loss provision, net of tax benefit | — | — | (10,998 | ) | — | — | ||||||||||||||
Net (loss) income | (228,327 | ) | (63,450 | ) | 57,993 | 68,815 | 56,742 | |||||||||||||
Preferred dividends and discount accretion | 10,242 | 724 | 18 | 19 | 23 | |||||||||||||||
Net (loss) income available to common shareholders | $ | (238,569 | ) | $ | (64,174 | ) | $ | 57,975 | $ | 68,796 | $ | 56,719 | ||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||
Per common share: | ||||||||||||||||||||
Diluted operating (loss) earnings(1)(2)(3) | $ | (2.47 | ) | $ | (1.35 | ) | $ | 1.48 | $ | 1.66 | $ | 1.43 | ||||||||
Diluted (loss) earnings | (3.95 | ) | (1.35 | ) | 1.24 | 1.66 | 1.43 | |||||||||||||
Cash dividends declared (rounded) | — | .18 | .36 | .32 | .28 | |||||||||||||||
Stock dividends declared (6) | 3 for 130 | 2 for 130 | — | — | — | |||||||||||||||
Book value | 8.36 | 16.95 | 17.73 | 14.37 | 11.80 | |||||||||||||||
Tangible book value (5) | 6.02 | 10.39 | 10.94 | 10.57 | 8.94 | |||||||||||||||
Key performance ratios: | ||||||||||||||||||||
Return on equity(4) | (34.40 | )% | (7.82 | )% | 7.79 | % | 13.28 | % | 13.46 | % | ||||||||||
Return on assets | (2.76 | ) | (.76 | ) | .75 | 1.09 | 1.04 | |||||||||||||
Net interest margin | 3.29 | 3.18 | 3.88 | 4.05 | 3.85 | |||||||||||||||
Operating efficiency ratio(2)(3) | 74.37 | 70.49 | 56.53 | 56.35 | 57.77 | |||||||||||||||
Equity to assets | 11.12 | 10.22 | 9.61 | 8.06 | 7.63 | |||||||||||||||
Tangible equity to assets(5) | 8.33 | 6.67 | 6.63 | 6.32 | 5.64 | |||||||||||||||
Tangible common equity to assets(5) | 6.15 | 6.57 | 6.63 | 6.32 | 5.64 | |||||||||||||||
Tangible common equity to risk-weighted assets (5) | 10.39 | 8.34 | 8.21 | 8.09 | 7.75 | |||||||||||||||
ASSET QUALITY * | ||||||||||||||||||||
Non-performing loans (NPLs) | $ | 264,092 | $ | 190,723 | $ | 28,219 | $ | 12,458 | $ | 11,997 | ||||||||||
Foreclosed properties | 120,770 | 59,768 | 18,039 | 1,196 | 998 | |||||||||||||||
Total non-performing assets (NPAs) | 384,862 | 250,491 | 46,258 | 13,654 | 12,995 | |||||||||||||||
Allowance for loan losses | 155,602 | 122,271 | 89,423 | 66,566 | 53,595 | |||||||||||||||
Operating net charge-offs (1) | 276,669 | 151,152 | 21,834 | 5,524 | 5,701 | |||||||||||||||
Allowance for loan losses to loans | 3.02 | % | 2.14 | % | 1.51 | % | 1.24 | % | 1.22 | % | ||||||||||
Operating net charge-offs to average loans (1) | 5.03 | 2.57 | .38 | .12 | .14 | |||||||||||||||
NPAs to loans and foreclosed properties | 7.30 | 4.35 | .78 | .25 | .30 | |||||||||||||||
NPAs to total assets | 4.81 | 2.92 | .56 | .19 | .22 | |||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||
Loans | $ | 5,547,915 | $ | 5,890,889 | $ | 5,734,608 | $ | 4,800,981 | $ | 4,061,091 | ||||||||||
Investment securities | 1,656,492 | 1,489,036 | 1,277,935 | 1,041,897 | 989,201 | |||||||||||||||
Earning assets | 7,464,639 | 7,504,186 | 7,070,900 | 5,877,483 | 5,109,053 | |||||||||||||||
Total assets | 8,269,387 | 8,319,201 | 7,730,530 | 6,287,148 | 5,472,200 | |||||||||||||||
Deposits | 6,712,605 | 6,524,457 | 6,028,625 | 5,017,435 | 4,003,084 | |||||||||||||||
Shareholders’ equity | 919,631 | 850,426 | 742,771 | 506,946 | 417,309 | |||||||||||||||
Common shares — Basic | 60,374 | 47,369 | 45,948 | 40,413 | 38,477 | |||||||||||||||
Common shares — Diluted | 60,374 | 47,369 | 46,593 | 41,575 | 39,721 | |||||||||||||||
AT YEAR END | ||||||||||||||||||||
Loans | $ | 5,151,476 | $ | 5,704,861 | $ | 5,929,263 | $ | 5,376,538 | $ | 4,398,286 | ||||||||||
Investment securities | 1,530,047 | 1,617,187 | 1,356,846 | 1,107,153 | 990,687 | |||||||||||||||
Total assets | 7,999,914 | 8,591,933 | 8,207,302 | 7,101,249 | 5,865,756 | |||||||||||||||
Deposits | 6,627,834 | 7,003,624 | 6,075,951 | 5,772,886 | 4,477,600 | |||||||||||||||
Shareholders’ equity | 962,321 | 989,382 | 831,902 | 616,767 | 472,686 | |||||||||||||||
Common shares outstanding | 94,046 | 48,009 | 46,903 | 42,891 | 40,020 |
(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. | |
(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 charge of $95 million 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. | |
NM — | Not meaningful. | |
* | Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC. |
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
2009 | 2008 | For the Twelve | ||||||||||||||||||||||||||||||||||||||
(in thousands, except per share | Fourth | Third | Second | First | Fourth | Months Ended | ||||||||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||
Interest revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Interest revenue — taxable equivalent | $ | 97,481 | $ | 101,181 | $ | 102,737 | $ | 103,562 | $ | 108,434 | $ | 404,961 | $ | 466,969 | $ | 550,917 | $ | 446,695 | $ | 324,225 | ||||||||||||||||||||
Taxable equivalent adjustment | (601 | ) | (580 | ) | (463 | ) | (488 | ) | (553 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | (1,636 | ) | ||||||||||||||||||||
Interest revenue (GAAP) | $ | 96,880 | $ | 100,601 | $ | 102,274 | $ | 103,074 | $ | 107,881 | $ | 402,829 | $ | 464,708 | $ | 549,036 | $ | 444,827 | $ | 322,589 | ||||||||||||||||||||
Net interest revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Net interest revenue — taxable equivalent | $ | 63,929 | $ | 63,004 | $ | 60,882 | $ | 57,412 | $ | 51,873 | $ | 245,227 | $ | 238,704 | $ | 274,483 | $ | 237,880 | $ | 196,799 | ||||||||||||||||||||
Taxable equivalent adjustment | (601 | ) | (580 | ) | (463 | ) | (488 | ) | (553 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | (1,636 | ) | ||||||||||||||||||||
Net interest revenue (GAAP) | $ | 63,328 | $ | 62,424 | $ | 60,419 | $ | 56,924 | $ | 51,320 | $ | 243,095 | $ | 236,443 | $ | 272,602 | $ | 236,012 | $ | 195,163 | ||||||||||||||||||||
Provision for loan losses reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating provision for loan losses | $ | 90,000 | $ | 95,000 | $ | 60,000 | $ | 65,000 | $ | 85,000 | $ | 310,000 | $ | 184,000 | $ | 37,600 | $ | 14,600 | $ | 12,100 | ||||||||||||||||||||
Special fraud-related provision for loan losses | — | — | — | — | — | — | — | 18,000 | — | — | ||||||||||||||||||||||||||||||
Provision for loan losses (GAAP) | $ | 90,000 | $ | 95,000 | $ | 60,000 | $ | 65,000 | $ | 85,000 | $ | 310,000 | $ | 184,000 | $ | 55,600 | $ | 14,600 | $ | 12,100 | ||||||||||||||||||||
Fee revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating fee revenue | $ | 17,221 | $ | 15,671 | $ | 13,050 | $ | 12,846 | $ | 10,718 | $ | 58,788 | $ | 53,141 | $ | 62,651 | $ | 49,095 | $ | 46,148 | ||||||||||||||||||||
Gain from acquisition | — | — | 11,390 | — | — | 11,390 | — | — | — | — | ||||||||||||||||||||||||||||||
Fee revenue (GAAP) | $ | 17,221 | $ | 15,671 | $ | 24,440 | $ | 12,846 | $ | 10,718 | $ | 70,178 | $ | 53,141 | $ | 62,651 | $ | 49,095 | $ | 46,148 | ||||||||||||||||||||
Total revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Total operating revenue | $ | (8,850 | ) | $ | (16,325 | ) | $ | 13,932 | $ | 5,258 | $ | (22,409 | ) | $ | (5,985 | ) | $ | 107,845 | $ | 299,534 | $ | 272,375 | $ | 230,847 | ||||||||||||||||
Taxable equivalent adjustment | (601 | ) | (580 | ) | (463 | ) | (488 | ) | (553 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | (1,636 | ) | ||||||||||||||||||||
Gain from acquisition | — | — | 11,390 | — | — | 11,390 | — | — | — | — | ||||||||||||||||||||||||||||||
Special fraud-related provision for loan losses | — | — | — | — | — | — | — | (18,000 | ) | — | — | |||||||||||||||||||||||||||||
Total revenue (GAAP) | $ | (9,451 | ) | $ | (16,905 | ) | $ | 24,859 | $ | 4,770 | $ | (22,962 | ) | $ | 3,273 | $ | 105,584 | $ | 279,653 | $ | 270,507 | $ | 229,211 | |||||||||||||||||
Expense reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating expense | $ | 62,532 | $ | 53,606 | $ | 55,348 | $ | 52,569 | $ | 52,439 | $ | 224,055 | $ | 206,699 | $ | 190,061 | $ | 162,070 | $ | 140,808 | ||||||||||||||||||||
Noncash goodwill impairment charge | — | 25,000 | — | 70,000 | — | 95,000 | — | — | — | — | ||||||||||||||||||||||||||||||
Severance costs | — | — | — | 2,898 | — | 2,898 | — | — | — | — | ||||||||||||||||||||||||||||||
Operating expense (GAAP) | $ | 62,532 | $ | 78,606 | $ | 55,348 | $ | 125,467 | $ | 52,439 | $ | 321,953 | $ | 206,699 | $ | 190,061 | $ | 162,070 | $ | 140,808 | ||||||||||||||||||||
(Loss) income before taxes reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating (loss) income before taxes | $ | (71,382 | ) | $ | (69,931 | ) | $ | (41,416 | ) | $ | (47,311 | ) | $ | (74,848 | ) | $ | (230,040 | ) | $ | (98,854 | ) | $ | 109,473 | $ | 110,305 | $ | 90,039 | |||||||||||||
Taxable equivalent adjustment | (601 | ) | (580 | ) | (463 | ) | (488 | ) | (553 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | (1,636 | ) | ||||||||||||||||||||
Gain from acquisition | — | — | 11,390 | — | — | 11,390 | — | — | — | — | ||||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | (25,000 | ) | — | (70,000 | ) | — | (95,000 | ) | — | — | — | — | |||||||||||||||||||||||||||
Severance costs | — | — | — | (2,898 | ) | — | (2,898 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Special fraud-related provision for loan losses | — | — | — | — | — | — | — | (18,000 | ) | — | — | |||||||||||||||||||||||||||||
(Loss) income before taxes (GAAP) | $ | (71,983 | ) | $ | (95,511 | ) | $ | (30,489 | ) | $ | (120,697 | ) | $ | (75,401 | ) | $ | (318,680 | ) | $ | (101,115 | ) | $ | 89,592 | $ | 108,437 | $ | 88,403 | |||||||||||||
Income tax (benefit) expense reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating income tax (benefit) expense | $ | (31,547 | ) | $ | (26,213 | ) | $ | (18,353 | ) | $ | (15,335 | ) | $ | (28,101 | ) | $ | (91,448 | ) | $ | (35,404 | ) | $ | 40,482 | $ | 41,490 | $ | 33,297 | |||||||||||||
Taxable equivalent adjustment | (601 | ) | (580 | ) | (463 | ) | (488 | ) | (553 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | (1,636 | ) | ||||||||||||||||||||
Gain from acquisition, tax expense | — | — | 4,328 | — | — | 4,328 | — | — | — | — | ||||||||||||||||||||||||||||||
Severance costs, tax benefit | — | — | — | (1,101 | ) | — | (1,101 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Special fraud-related provision for loan losses | — | — | — | — | — | — | — | (7,002 | ) | — | — | |||||||||||||||||||||||||||||
Income tax (benefit) expense (GAAP) | $ | (32,148 | ) | $ | (26,793 | ) | $ | (14,488 | ) | $ | (16,924 | ) | $ | (28,654 | ) | $ | (90,353 | ) | $ | (37,665 | ) | $ | 31,599 | $ | 39,622 | $ | 31,661 | |||||||||||||
(Loss) earnings per common share reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating (loss) earnings per common share | $ | (.45 | ) | $ | (.93 | ) | $ | (.53 | ) | $ | (.71 | ) | $ | (.99 | ) | $ | (2.47 | ) | $ | (1.35 | ) | $ | 1.48 | $ | 1.66 | $ | 1.43 | |||||||||||||
Gain from acquisition | — | — | .15 | — | — | .12 | — | — | — | — | ||||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | (.50 | ) | — | (1.45 | ) | — | (1.57 | ) | — | — | — | — | |||||||||||||||||||||||||||
Severance costs | — | — | — | (.04 | ) | — | (.03 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Special fraud-related provision for loan losses | — | — | — | — | — | — | — | (.24 | ) | — | — | |||||||||||||||||||||||||||||
(Loss) earnings per common share (GAAP) | $ | (.45 | ) | $ | (1.43 | ) | $ | (.38 | ) | $ | (2.20 | ) | $ | (.99 | ) | $ | (3.95 | ) | $ | (1.35 | ) | $ | 1.24 | $ | 1.66 | $ | 1.43 | |||||||||||||
Book value reconciliation | ||||||||||||||||||||||||||||||||||||||||
Tangible book value | $ | 6.02 | $ | 6.50 | $ | 8.85 | $ | 9.65 | $ | 10.39 | $ | 6.02 | $ | 10.39 | $ | 10.94 | $ | 10.57 | $ | 8.94 | ||||||||||||||||||||
Effect of goodwill and other intangibles | 2.34 | 2.35 | 5.02 | 5.05 | 6.56 | 2.34 | 6.56 | 6.79 | 3.80 | 2.86 | ||||||||||||||||||||||||||||||
Book value (GAAP) | $ | 8.36 | $ | 8.85 | $ | 13.87 | $ | 14.70 | $ | 16.95 | $ | 8.36 | $ | 16.95 | $ | 17.73 | $ | 14.37 | $ | 11.80 | ||||||||||||||||||||
Efficiency ratio reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating efficiency ratio | 79.02 | % | 69.15 | % | 74.15 | % | 75.15 | % | 81.34 | % | 74.37 | % | 70.49 | % | 56.53 | % | 56.35 | % | 57.77 | % | ||||||||||||||||||||
Gain from acquisition | — | — | (9.82 | ) | — | — | (2.71 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | 32.24 | — | 100.06 | — | 30.39 | — | — | — | — | ||||||||||||||||||||||||||||||
Severance costs | — | — | — | 4.14 | — | .93 | — | — | — | — | ||||||||||||||||||||||||||||||
Efficiency ratio (GAAP) | 79.02 | % | 101.39 | % | 64.33 | % | 179.35 | % | 81.34 | % | 102.98 | % | 70.49 | % | 56.53 | % | 56.35 | % | 57.77 | % | ||||||||||||||||||||
Average equity to assets reconciliation | ||||||||||||||||||||||||||||||||||||||||
Tangible common equity to assets | 7.37 | % | 5.36 | % | 5.77 | % | 6.09 | % | 6.21 | % | 6.15 | % | 6.57 | % | 6.63 | % | 6.32 | % | 5.64 | % | ||||||||||||||||||||
Effect of preferred equity | 2.16 | 2.19 | 2.19 | 2.15 | .35 | 2.18 | .10 | — | — | — | ||||||||||||||||||||||||||||||
Tangible equity to assets | 9.53 | 7.55 | 7.96 | 8.24 | 6.56 | 8.33 | 6.67 | 6.63 | 6.32 | 5.64 | ||||||||||||||||||||||||||||||
Effect of goodwill and other intangibles | 2.41 | 2.72 | 2.75 | 3.32 | 3.48 | 2.79 | 3.55 | 2.98 | 1.74 | 1.99 | ||||||||||||||||||||||||||||||
Equity to assets (GAAP) | 11.94 | % | 10.27 | % | 10.71 | % | 11.56 | % | 10.04 | % | 11.12 | % | 10.22 | % | 9.61 | % | 8.06 | % | 7.63 | % | ||||||||||||||||||||
Actual tangible common equity to risk-weighted assets reconciliation | ||||||||||||||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets | 10.39 | % | 10.67 | % | 7.49 | % | 8.03 | % | 8.34 | % | 10.39 | % | 8.34 | % | 8.21 | % | 8.09 | % | 7.75 | % | ||||||||||||||||||||
Effect of other comprehensive income | (.87 | ) | (.90 | ) | (.72 | ) | (1.00 | ) | (.91 | ) | (.87 | ) | (.91 | ) | (.23 | ) | .07 | .23 | ||||||||||||||||||||||
Effect of deferred tax limitation | (1.27 | ) | (.58 | ) | (.22 | ) | — | — | (1.27 | ) | — | — | — | — | ||||||||||||||||||||||||||
Effect of trust preferred | .97 | .92 | .90 | .89 | .88 | .97 | .88 | .65 | .81 | .89 | ||||||||||||||||||||||||||||||
Effect of preferred equity | 3.19 | 3.04 | 2.99 | 2.96 | 2.90 | 3.19 | 2.90 | — | .01 | .01 | ||||||||||||||||||||||||||||||
Tier I capital ratio (Regulatory) | 12.41 | % | 13.15 | % | 10.44 | % | 10.88 | % | 11.21 | % | 12.41 | % | 11.21 | % | 8.63 | % | 8.98 | % | 8.88 | % | ||||||||||||||||||||
Net charge-offs reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating net charge-offs | $ | 84,585 | $ | 90,491 | $ | 58,312 | $ | 43,281 | $ | 74,028 | $ | 276,669 | $ | 151,152 | $ | 21,834 | $ | 5,524 | $ | 5,701 | ||||||||||||||||||||
Fraud related charge-offs | — | — | — | — | — | — | — | 18,000 | — | — | ||||||||||||||||||||||||||||||
Net charge-offs (GAAP) | $ | 84,585 | $ | 90,491 | $ | 58,312 | $ | 43,281 | $ | 74,028 | $ | 276,669 | $ | 151,152 | $ | 39,834 | $ | 5,524 | $ | 5,701 | ||||||||||||||||||||
Net charge-offs to average loans reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating net charge-offs to average loans | 6.37 | % | 6.57 | % | 4.18 | % | 3.09 | % | 5.09 | % | 5.03 | % | 2.57 | % | .38 | % | .12 | % | .14 | % | ||||||||||||||||||||
Effect of fraud related charge offs | — | — | — | — | — | — | — | .31 | — | — | ||||||||||||||||||||||||||||||
Net charge-offs to average loans (GAAP) | 6.37 | % | 6.57 | % | 4.18 | % | 3.09 | % | 5.09 | % | 5.03 | % | 2.57 | % | .69 | % | .12 | % | .14 | % | ||||||||||||||||||||
Financial Highlights
Loan Portfolio Composition at Period-End
Linked | Year over | |||||||||||||||||||||||||||
2009 | 2008 | Quarter | Year | |||||||||||||||||||||||||
Fourth | Third | Second | First | Fourth | Change(2) | Change | ||||||||||||||||||||||
(in millions) | Quarter(1) | Quarter(1) | Quarter(1) | Quarter | Quarter | Actual | Actual | |||||||||||||||||||||
LOANS BY CATEGORY | ||||||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 1,779 | $ | 1,787 | $ | 1,797 | $ | 1,779 | $ | 1,627 | (2 | )% | 9 | % | ||||||||||||||
Commercial construction | 363 | 380 | 379 | 377 | 500 | (18 | ) | (27 | ) | |||||||||||||||||||
Commercial & industrial | 390 | 403 | 399 | 387 | 410 | (13 | ) | (5 | ) | |||||||||||||||||||
Total commercial | 2,532 | 2,570 | 2,575 | 2,543 | 2,537 | (6 | ) | — | ||||||||||||||||||||
Residential construction | 1,050 | 1,185 | 1,315 | 1,430 | 1,479 | (46 | ) | (29 | ) | |||||||||||||||||||
Residential mortgage | 1,427 | 1,461 | 1,470 | 1,504 | 1,526 | (9 | ) | (6 | ) | |||||||||||||||||||
Consumer / installment | 142 | 147 | 153 | 156 | 163 | (14 | ) | (13 | ) | |||||||||||||||||||
Total loans | $ | 5,151 | $ | 5,363 | $ | 5,513 | $ | 5,633 | $ | 5,705 | (16 | ) | (10 | ) | ||||||||||||||
LOANS BY MARKET | ||||||||||||||||||||||||||||
Atlanta MSA | $ | 1,435 | $ | 1,526 | $ | 1,605 | $ | 1,660 | $ | 1,706 | (24 | )% | (16 | )% | ||||||||||||||
Gainesville MSA | 390 | 402 | 413 | 422 | 420 | (12 | ) | (7 | ) | |||||||||||||||||||
North Georgia | 1,884 | 1,942 | 1,978 | 2,014 | 2,040 | (12 | ) | (8 | ) | |||||||||||||||||||
Western North Carolina | 772 | 786 | 794 | 808 | 810 | (7 | ) | (5 | ) | |||||||||||||||||||
Coastal Georgia | 405 | 440 | 455 | 460 | 464 | (32 | ) | (13 | ) | |||||||||||||||||||
East Tennessee | 265 | 267 | 268 | 269 | 265 | (3 | ) | — | ||||||||||||||||||||
Total loans | $ | 5,151 | $ | 5,363 | $ | 5,513 | $ | 5,633 | $ | 5,705 | (16 | ) | (10 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION | ||||||||||||||||||||||||||||
Dirt loans | ||||||||||||||||||||||||||||
Acquisition & development | $ | 332 | $ | 380 | $ | 413 | $ | 445 | $ | 484 | (51 | )% | (31 | )% | ||||||||||||||
Land loans | 127 | 159 | 159 | 155 | 153 | (81 | ) | (17 | ) | |||||||||||||||||||
Lot loans | 336 | 336 | 369 | 390 | 358 | — | (6 | ) | ||||||||||||||||||||
Total | 795 | 875 | 941 | 990 | 995 | (37 | ) | (20 | ) | |||||||||||||||||||
House loans | ||||||||||||||||||||||||||||
Spec | 178 | 218 | 268 | 317 | 347 | (73 | )% | (49 | )% | |||||||||||||||||||
Sold | 77 | 92 | 106 | 123 | 137 | (65 | ) | (44 | ) | |||||||||||||||||||
Total | 255 | 310 | 374 | 440 | 484 | (71 | ) | (47 | ) | |||||||||||||||||||
Total residential construction | $ | 1,050 | $ | 1,185 | $ | 1,315 | $ | 1,430 | $ | 1,479 | (46 | ) | (29 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION — ATLANTA MSA | ||||||||||||||||||||||||||||
Dirt loans | ||||||||||||||||||||||||||||
Acquisition & development | $ | 76 | $ | 100 | $ | 124 | $ | 148 | $ | 167 | (96 | )% | (54 | )% | ||||||||||||||
Land loans | 43 | 61 | 63 | 52 | 56 | (118 | ) | (23 | ) | |||||||||||||||||||
Lot loans | 52 | 54 | 81 | 98 | 86 | (15 | ) | (40 | ) | |||||||||||||||||||
Total | 171 | 215 | 268 | 298 | 309 | (82 | ) | (45 | ) | |||||||||||||||||||
House loans | ||||||||||||||||||||||||||||
Spec | 68 | 91 | 127 | 164 | 189 | (101 | )% | (64 | )% | |||||||||||||||||||
Sold | 16 | 22 | 29 | 33 | 40 | (109 | ) | (60 | ) | |||||||||||||||||||
Total | 84 | 113 | 156 | 197 | 229 | (103 | ) | (63 | ) | |||||||||||||||||||
Total residential construction | $ | 255 | $ | 328 | $ | 424 | $ | 495 | $ | 538 | (89 | ) | (53 | ) | ||||||||||||||
(1) | Excludes total loans of $85.1 million, $104.0 million and $109.9 million as of December 31, 2009, September 30, 2009 and June 30, 2009, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. | |
(2) | Annualized. |
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions) | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||
LOANS BY CATEGORY | ||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 1,779 | $ | 1,627 | $ | 1,476 | $ | 1,230 | $ | 1,055 | $ | 967 | ||||||||||||
Commercial construction | 363 | 500 | 527 | 469 | 359 | 249 | ||||||||||||||||||
Commercial & industrial | 390 | 410 | 418 | 296 | 237 | 212 | ||||||||||||||||||
Total commercial | 2,532 | 2,537 | 2,421 | 1,995 | 1,651 | 1,428 | ||||||||||||||||||
Residential construction | 1,050 | 1,479 | 1,829 | 1,864 | 1,380 | 1,055 | ||||||||||||||||||
Residential mortgage | 1,427 | 1,526 | 1,502 | 1,338 | 1,206 | 1,102 | ||||||||||||||||||
Consumer / installment | 142 | 163 | 177 | 180 | 161 | 150 | ||||||||||||||||||
Total loans | $ | 5,151 | $ | 5,705 | $ | 5,929 | $ | 5,377 | $ | 4,398 | $ | 3,735 | ||||||||||||
LOANS BY MARKET | ||||||||||||||||||||||||
Atlanta MSA | $ | 1,435 | $ | 1,706 | $ | 2,002 | $ | 1,651 | $ | 1,207 | $ | 1,061 | ||||||||||||
Gainesville MSA | 390 | 420 | 399 | 354 | 249 | — | ||||||||||||||||||
North Georgia | 1,884 | 2,040 | 2,060 | 2,034 | 1,790 | 1,627 | ||||||||||||||||||
Western North Carolina | 772 | 810 | 806 | 773 | 668 | 633 | ||||||||||||||||||
Coastal Georgia | 405 | 464 | 416 | 358 | 306 | 274 | ||||||||||||||||||
East Tennessee | 265 | 265 | 246 | 207 | 178 | 140 | ||||||||||||||||||
Total loans | $ | 5,151 | $ | 5,705 | $ | 5,929 | $ | 5,377 | $ | 4,398 | $ | 3,735 | ||||||||||||
Financial Highlights
Credit Quality(1)
Fourth Quarter 2009 | Third Quarter 2009 | Second Quarter 2009 | ||||||||||||||||||||||||||||||||||
Non-performing | Foreclosed | Total | Non-performing | Foreclosed | Total | Non-performing | Foreclosed | Total | ||||||||||||||||||||||||||||
(in thousands) | Loans | Properties | NPAs | Loans | Properties | NPAs | Loans | Properties | NPAs | |||||||||||||||||||||||||||
NPAs BY CATEGORY | ||||||||||||||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 37,040 | $ | 15,842 | $ | 52,882 | $ | 38,379 | $ | 12,566 | $ | 50,945 | $ | 37,755 | $ | 5,395 | $ | 43,150 | ||||||||||||||||||
Commercial construction | 19,976 | 9,761 | 29,737 | 38,505 | 5,543 | 44,048 | 15,717 | 5,847 | 21,564 | |||||||||||||||||||||||||||
Commercial & industrial | 3,946 | — | 3,946 | 3,794 | — | 3,794 | 11,378 | — | 11,378 | |||||||||||||||||||||||||||
Total commercial | 60,962 | 25,603 | 86,565 | 80,678 | 18,109 | 98,787 | 64,850 | 11,242 | 76,092 | |||||||||||||||||||||||||||
Residential construction | 142,332 | 76,519 | 218,851 | 171,027 | 79,045 | 250,072 | 176,400 | 81,648 | 258,048 | |||||||||||||||||||||||||||
Residential mortgage | 58,767 | 18,648 | 77,415 | 50,626 | 13,456 | 64,082 | 44,256 | 11,864 | 56,120 | |||||||||||||||||||||||||||
Consumer / installment | 2,031 | — | 2,031 | 2,050 | — | 2,050 | 2,342 | — | 2,342 | |||||||||||||||||||||||||||
Total NPAs | $ | 264,092 | $ | 120,770 | $ | 384,862 | $ | 304,381 | $ | 110,610 | $ | 414,991 | $ | 287,848 | $ | 104,754 | $ | 392,602 | ||||||||||||||||||
NPAs BY MARKET | ||||||||||||||||||||||||||||||||||||
Atlanta MSA | $ | 106,536 | $ | 41,125 | $ | 147,661 | $ | 120,599 | $ | 54,670 | $ | 175,269 | $ | 148,155 | $ | 50,450 | $ | 198,605 | ||||||||||||||||||
Gainesville MSA | 5,074 | 2,614 | 7,688 | 12,916 | 8,429 | 21,345 | 9,745 | 3,511 | 13,256 | |||||||||||||||||||||||||||
North Georgia | 87,598 | 53,072 | 140,670 | 96,373 | 36,718 | 133,091 | 72,174 | 37,454 | 109,628 | |||||||||||||||||||||||||||
Western North Carolina | 29,610 | 5,096 | 34,706 | 25,775 | 5,918 | 31,693 | 21,814 | 7,245 | 29,059 | |||||||||||||||||||||||||||
Coastal Georgia | 26,871 | 17,150 | 44,021 | 38,414 | 3,045 | 41,459 | 30,311 | 3,904 | 34,215 | |||||||||||||||||||||||||||
East Tennessee | 8,403 | 1,713 | 10,116 | 10,304 | 1,830 | 12,134 | 5,649 | 2,190 | 7,839 | |||||||||||||||||||||||||||
Total NPAs | $ | 264,092 | $ | 120,770 | $ | 384,862 | $ | 304,381 | $ | 110,610 | $ | 414,991 | $ | 287,848 | $ | 104,754 | $ | 392,602 | ||||||||||||||||||
NPA ACTIVITY | ||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | 304,381 | $ | 110,610 | $ | 414,991 | $ | 287,848 | $ | 104,754 | $ | 392,602 | $ | 259,155 | $ | 75,383 | $ | 334,538 | ||||||||||||||||||
Loans placed on non-accrual | 174,898 | — | 174,898 | 190,164 | — | 190,164 | 169,351 | — | 169,351 | |||||||||||||||||||||||||||
Payments received | (26,935 | ) | — | (26,935 | ) | (16,597 | ) | — | (16,597 | ) | (15,597 | ) | — | (15,597 | ) | |||||||||||||||||||||
Loan charge-offs | (88,427 | ) | — | (88,427 | ) | (92,359 | ) | — | (92,359 | ) | (60,644 | ) | — | (60,644 | ) | |||||||||||||||||||||
Foreclosures | (79,983 | ) | 79,983 | — | (56,624 | ) | 56,624 | — | (64,417 | ) | 64,417 | — | ||||||||||||||||||||||||
Capitalized costs | — | 981 | 981 | — | 579 | 579 | — | 1,324 | 1,324 | |||||||||||||||||||||||||||
Note / property sales | (19,842 | ) | (61,228 | ) | (81,070 | ) | (8,051 | ) | (47,240 | ) | (55,291 | ) | — | (33,752 | ) | (33,752 | ) | |||||||||||||||||||
Write downs | — | (2,209 | ) | (2,209 | ) | — | (1,906 | ) | (1,906 | ) | — | (2,738 | ) | (2,738 | ) | |||||||||||||||||||||
Net gains (losses) on sales | — | (7,367 | ) | (7,367 | ) | — | (2,201 | ) | (2,201 | ) | — | 120 | 120 | |||||||||||||||||||||||
Ending Balance | $ | 264,092 | $ | 120,770 | $ | 384,862 | $ | 304,381 | $ | 110,610 | $ | 414,991 | $ | 287,848 | $ | 104,754 | $ | 392,602 | ||||||||||||||||||
Fourth Quarter 2009 | Third Quarter 2009 | Second Quarter 2009 | ||||||||||||||||||||||
Net Charge- | Net Charge- | Net Charge- | ||||||||||||||||||||||
Offs to | Offs to | Offs to | ||||||||||||||||||||||
Net | Average | Net | Average | Net | Average | |||||||||||||||||||
(in thousands) | Charge-Offs | Loans (2) | Charge-Offs | Loans (2) | Charge-Offs | Loans (2) | ||||||||||||||||||
NET CHARGE-OFFS BY CATEGORY | ||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 3,896 | .86 | % | $ | 10,568 | 2.33 | % | $ | 5,986 | 1.34 | % | ||||||||||||
Commercial construction | 4,717 | 5.03 | 4,369 | 4.55 | 756 | .80 | ||||||||||||||||||
Commercial & industrial | 153 | .15 | 1,792 | 1.76 | 3,107 | 3.16 | ||||||||||||||||||
Total commercial | 8,766 | 1.36 | 16,729 | 2.57 | 9,849 | 1.54 | ||||||||||||||||||
Residential construction | 67,393 | 23.87 | 67,520 | 21.31 | 44,240 | 12.90 | ||||||||||||||||||
Residential mortgage | 7,026 | 1.93 | 5,051 | 1.36 | 3,526 | .95 | ||||||||||||||||||
Consumer / installment | 1,400 | 3.83 | 1,191 | 3.13 | 697 | 1.80 | ||||||||||||||||||
Total | $ | 84,585 | 6.37 | $ | 90,491 | 6.57 | $ | 58,312 | 4.18 | |||||||||||||||
NET CHARGE-OFFS BY MARKET | ||||||||||||||||||||||||
Atlanta MSA | $ | 43,595 | 12.07 | % | $ | 50,129 | 12.61 | % | $ | 37,473 | 8.89 | % | ||||||||||||
Gainesville MSA | 2,273 | 2.49 | 1,473 | 1.60 | 4,125 | 4.38 | ||||||||||||||||||
North Georgia | 18,057 | 3.57 | 24,017 | 4.74 | 12,571 | 2.52 | ||||||||||||||||||
Western North Carolina | 10,091 | 5.11 | 3,949 | 1.98 | 1,015 | .51 | ||||||||||||||||||
Coastal Georgia | 8,109 | 7.72 | 10,051 | 8.78 | 969 | .85 | ||||||||||||||||||
East Tennessee | 2,460 | 3.67 | 872 | 1.30 | 2,159 | 3.21 | ||||||||||||||||||
Total | $ | 84,585 | 6.37 | $ | 90,491 | 6.57 | $ | 58,312 | 4.18 | |||||||||||||||
(1) | Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. (2) Annualized. |
Consolidated Statement of Income (Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in thousands, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 78,064 | $ | 86,409 | $ | 322,509 | $ | 385,959 | ||||||||
Investment securities, including tax exempt of $366, $324, $1,322 and $1,464 | 17,313 | 18,964 | 77,370 | 75,869 | ||||||||||||
Federal funds sold, commercial paper, deposits in banks and other | 1,503 | 2,508 | 2,950 | 2,880 | ||||||||||||
Total interest revenue | 96,880 | 107,881 | 402,829 | 464,708 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW | 2,315 | 6,045 | 11,023 | 28,626 | ||||||||||||
Money market | 2,328 | 3,124 | 9,545 | 10,643 | ||||||||||||
Savings | 105 | 204 | 483 | 764 | ||||||||||||
Time | 24,026 | 41,512 | 120,326 | 158,268 | ||||||||||||
Total deposit interest expense | 28,774 | 50,885 | 141,377 | 198,301 | ||||||||||||
Federal funds purchased, repurchase agreements and other short-term borrowings | 1,081 | 445 | 2,842 | 7,699 | ||||||||||||
Federal Home Loan Bank advances | 1,045 | 2,358 | 4,622 | 13,026 | ||||||||||||
Long-term debt | 2,652 | 2,873 | 10,893 | 9,239 | ||||||||||||
Total interest expense | 33,552 | 56,561 | 159,734 | 228,265 | ||||||||||||
Net interest revenue | 63,328 | 51,320 | 243,095 | 236,443 | ||||||||||||
Provision for loan losses | 90,000 | 85,000 | 310,000 | 184,000 | ||||||||||||
Net interest revenue after provision for loan losses | (26,672 | ) | (33,680 | ) | (66,905 | ) | 52,443 | |||||||||
Fee revenue: | ||||||||||||||||
Service charges and fees | 8,257 | 7,742 | 30,986 | 31,683 | ||||||||||||
Mortgage loan and other related fees | 1,651 | 1,528 | 8,959 | 7,103 | ||||||||||||
Consulting fees | 2,774 | 1,260 | 7,822 | 7,046 | ||||||||||||
Brokerage fees | 443 | 645 | 2,085 | 3,457 | ||||||||||||
Securities gains, net | 2,015 | 838 | 2,756 | 1,315 | ||||||||||||
Gain from acquisition | — | — | 11,390 | — | ||||||||||||
Losses on prepayment of borrowings | — | (2,714 | ) | — | (2,714 | ) | ||||||||||
Other | 2,081 | 1,419 | 6,180 | 5,251 | ||||||||||||
Total fee revenue | 17,221 | 10,718 | 70,178 | 53,141 | ||||||||||||
Total revenue | (9,451 | ) | (22,962 | ) | 3,273 | 105,584 | ||||||||||
Operating expenses: | ||||||||||||||||
Salaries and employee benefits | 26,189 | 24,441 | 108,967 | 110,574 | ||||||||||||
Communications and equipment | 3,932 | 3,897 | 15,038 | 15,490 | ||||||||||||
Occupancy | 4,038 | 3,663 | 15,796 | 14,988 | ||||||||||||
Advertising and public relations | 1,033 | 1,358 | 4,220 | 6,117 | ||||||||||||
Postage, printing and supplies | 1,315 | 1,763 | 5,068 | 6,296 | ||||||||||||
Professional fees | 2,571 | 2,313 | 9,925 | 7,509 | ||||||||||||
Foreclosed property | 14,391 | 5,238 | 32,365 | 19,110 | ||||||||||||
FDIC assessments and other regulatory charges | 3,711 | 1,980 | 16,004 | 6,020 | ||||||||||||
Amortization of intangibles | 813 | 745 | 3,104 | 3,009 | ||||||||||||
Other | 4,539 | 7,041 | 13,568 | 17,586 | ||||||||||||
Goodwill impairment | — | — | 95,000 | — | ||||||||||||
Severance costs | — | — | 2,898 | — | ||||||||||||
Total operating expenses | 62,532 | 52,439 | 321,953 | 206,699 | ||||||||||||
Loss before income taxes | (71,983 | ) | (75,401 | ) | (318,680 | ) | (101,115 | ) | ||||||||
Income tax benefit | (32,148 | ) | (28,654 | ) | (90,353 | ) | (37,665 | ) | ||||||||
Net loss | (39,835 | ) | (46,747 | ) | (228,327 | ) | (63,450 | ) | ||||||||
Preferred stock dividends, including discount accretion | 2,567 | 712 | 10,242 | 724 | ||||||||||||
Net loss available to common shareholders | $ | (42,402 | ) | $ | (47,459 | ) | $ | (238,569 | ) | $ | (64,174 | ) | ||||
Basic loss per common share | $ | (.45 | ) | $ | (.99 | ) | $ | (3.95 | ) | $ | (1.35 | ) | ||||
Diluted loss per common share | (.45 | ) | (.99 | ) | (3.95 | ) | (1.35 | ) | ||||||||
Weighted average common shares outstanding — Basic | 94,219 | 47,844 | 60,374 | 47,369 | ||||||||||||
Weighted average common shares outstanding — Diluted | 94,219 | 47,844 | 60,374 | 47,369 |
Consolidated Balance Sheet
December 31, | December 31, | |||||||
(in thousands, except share and per share data) | 2009 | 2008 | ||||||
(unaudited) | (audited) | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 126,265 | $ | 116,395 | ||||
Interest-bearing deposits in banks | 120,382 | 8,417 | ||||||
Federal funds sold, commercial paper and short-term investments | 129,720 | 368,609 | ||||||
Cash and cash equivalents | 376,367 | 493,421 | ||||||
Securities available for sale | 1,530,047 | 1,617,187 | ||||||
Mortgage loans held for sale | 30,226 | 20,334 | ||||||
Loans, net of unearned income | 5,151,476 | 5,704,861 | ||||||
Less allowance for loan losses | 155,602 | 122,271 | ||||||
Loans, net | 4,995,874 | 5,582,590 | ||||||
Acquired assets covered by loss sharing agreements with the FDIC | 185,938 | — | ||||||
Premises and equipment, net | 182,038 | 179,160 | ||||||
Accrued interest receivable | 33,867 | 46,088 | ||||||
Goodwill and other intangible assets | 225,196 | 321,798 | ||||||
Other assets | 440,361 | 331,355 | ||||||
Total assets | $ | 7,999,914 | $ | 8,591,933 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Demand | $ | 707,826 | $ | 654,036 | ||||
NOW | 1,335,790 | 1,543,385 | ||||||
Money market | 713,901 | 466,750 | ||||||
Savings | 177,427 | 170,275 | ||||||
Time: | ||||||||
Less than $100,000 | 1,746,511 | 1,953,235 | ||||||
Greater than $100,000 | 1,187,499 | 1,422,974 | ||||||
Brokered | 758,880 | 792,969 | ||||||
Total deposits | 6,627,834 | 7,003,624 | ||||||
Federal funds purchased, repurchase agreements, and other short-term borrowings | 101,389 | 108,411 | ||||||
Federal Home Loan Bank advances | 114,501 | 235,321 | ||||||
Long-term debt | 150,066 | 150,986 | ||||||
Accrued expenses and other liabilities | 43,803 | 104,209 | ||||||
Total liabilities | 7,037,593 | 7,602,551 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock, $1 par value; 10,000,000 shares authorized; | ||||||||
Series A; $10 stated value; 21,700 and 25,800 shares issued and outstanding | 217 | 258 | ||||||
Series B; $1,000 stated value; 180,000 shares issued and outstanding | 174,408 | 173,180 | ||||||
Common stock, $1 par value; 100,000,000 shares authorized; 94,045,603 and 48,809,301 shares issued | 94,046 | 48,809 | ||||||
Common stock issuable; 221,906 and 129,304 shares | 3,597 | 2,908 | ||||||
Capital surplus | 622,034 | 460,708 | ||||||
Retained earnings | 20,384 | 265,405 | ||||||
Treasury stock; 799,892 shares, at cost | — | (16,465 | ) | |||||
Accumulated other comprehensive income | 47,635 | 54,579 | ||||||
Total shareholders’ equity | 962,321 | 989,382 | ||||||
Total liabilities and shareholders’ equity | $ | 7,999,914 | $ | 8,591,933 | ||||
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
2009 | 2008 | |||||||||||||||||||||||
Average | Avg. | Average | Avg. | |||||||||||||||||||||
(dollars in thousands, taxable equivalent) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans, net of unearned income (1)(2) | $ | 5,357,150 | $ | 78,088 | 5.78 | % | $ | 5,784,139 | $ | 86,530 | 5.95 | % | ||||||||||||
Taxable securities (3) | 1,496,251 | 16,947 | 4.53 | 1,478,427 | 18,640 | 5.04 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 32,554 | 599 | 7.36 | 30,381 | 530 | 6.98 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 600,835 | 1,847 | 1.23 | 369,589 | 2,734 | 2.96 | ||||||||||||||||||
Total interest-earning assets | 7,486,790 | 97,481 | 5.17 | 7,662,536 | 108,434 | 5.64 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (162,203 | ) | (109,956 | ) | ||||||||||||||||||||
Cash and due from banks | 107,153 | 116,463 | ||||||||||||||||||||||
Premises and equipment | 182,790 | 179,807 | ||||||||||||||||||||||
Other assets (3) | 672,014 | 638,167 | ||||||||||||||||||||||
Total assets | $ | 8,286,544 | $ | 8,487,017 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,334,578 | $ | 2,315 | .69 | $ | 1,534,370 | $ | 6,045 | 1.57 | ||||||||||||||
Money market | 726,680 | 2,328 | 1.27 | 424,940 | 3,124 | 2.92 | ||||||||||||||||||
Savings | 178,191 | 105 | .23 | 174,186 | 204 | .47 | ||||||||||||||||||
Time less than $100,000 | 1,812,823 | 10,952 | 2.40 | 1,916,811 | 18,524 | 3.84 | ||||||||||||||||||
Time greater than $100,000 | 1,215,579 | 8,074 | 2.64 | 1,448,818 | 14,558 | 4.00 | ||||||||||||||||||
Brokered | 844,462 | 5,000 | 2.35 | 818,100 | 8,430 | 4.10 | ||||||||||||||||||
Total interest-bearing deposits | 6,112,313 | 28,774 | 1.87 | 6,317,225 | 50,885 | 3.20 | ||||||||||||||||||
Federal funds purchased and other borrowings | 105,130 | 1,081 | 4.08 | 109,712 | 445 | 1.61 | ||||||||||||||||||
Federal Home Loan Bank advances | 156,979 | 1,045 | 2.64 | 284,860 | 2,358 | 3.29 | ||||||||||||||||||
Long-term debt | 150,060 | 2,652 | 7.01 | 146,746 | 2,873 | 7.79 | ||||||||||||||||||
Total borrowed funds | 412,169 | 4,778 | 4.60 | 541,318 | 5,676 | 4.17 | ||||||||||||||||||
Total interest-bearing liabilities | 6,524,482 | 33,552 | 2.04 | 6,858,543 | 56,561 | 3.28 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 722,739 | 665,004 | ||||||||||||||||||||||
Other liabilities | 50,044 | 111,514 | ||||||||||||||||||||||
Total liabilities | 7,297,265 | 7,635,061 | ||||||||||||||||||||||
Shareholders’ equity | 989,279 | 851,956 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 8,286,544 | $ | 8,487,017 | ||||||||||||||||||||
Net interest revenue | $ | 63,929 | $ | 51,873 | ||||||||||||||||||||
Net interest-rate spread | 3.13 | % | 2.36 | % | ||||||||||||||||||||
Net interest margin (4) | 3.40 | % | 2.70 | % | ||||||||||||||||||||
(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. | |
(3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains of $22.1 million in 2009 and pretax unrealized losses of $3.6 million in 2008 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. |
Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
2009 | 2008 | |||||||||||||||||||||||
Average | Avg. | Average | Avg. | |||||||||||||||||||||
(dollars in thousands, taxable equivalent) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans, net of unearned income (1)(2) | $ | 5,547,915 | $ | 322,284 | 5.81 | % | $ | 5,890,889 | $ | 386,132 | 6.55 | % | ||||||||||||
Taxable securities (3) | 1,626,032 | 76,048 | 4.68 | 1,455,206 | 74,405 | 5.11 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 30,460 | 2,164 | 7.10 | 33,830 | 2,406 | 7.11 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 260,232 | 4,465 | 1.72 | 124,261 | 4,026 | 3.24 | ||||||||||||||||||
Total interest-earning assets | 7,464,639 | 404,961 | 5.43 | 7,504,186 | 466,969 | 6.22 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (146,535 | ) | (97,385 | ) | ||||||||||||||||||||
Cash and due from banks | 105,127 | 131,778 | ||||||||||||||||||||||
Premises and equipment | 180,381 | 180,857 | ||||||||||||||||||||||
Other assets (3) | 665,775 | 599,765 | ||||||||||||||||||||||
Total assets | $ | 8,269,387 | $ | 8,319,201 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,297,139 | $ | 11,023 | .85 | $ | 1,491,419 | $ | 28,626 | 1.92 | ||||||||||||||
Money market | 589,389 | 9,545 | 1.62 | 426,988 | 10,643 | 2.49 | ||||||||||||||||||
Savings | 177,410 | 483 | .27 | 182,067 | 764 | .42 | ||||||||||||||||||
Time less than $100,000 | 1,891,774 | 56,811 | 3.00 | 1,724,036 | 71,844 | 4.17 | ||||||||||||||||||
Time greater than $100,000 | 1,306,302 | 42,518 | 3.25 | 1,457,397 | 62,888 | 4.32 | ||||||||||||||||||
Brokered | 756,122 | 20,997 | 2.78 | 565,111 | 23,536 | 4.16 | ||||||||||||||||||
Total interest-bearing deposits | 6,018,136 | 141,377 | 2.35 | 5,847,018 | 198,301 | 3.39 | ||||||||||||||||||
Federal funds purchased and other borrowings | 177,589 | 2,842 | 1.60 | 324,634 | 7,699 | 2.37 | ||||||||||||||||||
Federal Home Loan Bank advances | 220,468 | 4,622 | 2.10 | 410,605 | 13,026 | 3.17 | ||||||||||||||||||
Long-term debt | 150,604 | 10,893 | 7.23 | 120,442 | 9,239 | 7.67 | ||||||||||||||||||
Total borrowed funds | 548,661 | 18,357 | 3.35 | 855,681 | 29,964 | 3.50 | ||||||||||||||||||
Total interest-bearing liabilities | 6,566,797 | 159,734 | 2.43 | 6,702,699 | 228,265 | 3.41 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 694,469 | 677,439 | ||||||||||||||||||||||
Other liabilities | 88,490 | 88,637 | ||||||||||||||||||||||
Total liabilities | 7,349,756 | 7,468,775 | ||||||||||||||||||||||
Shareholders’ equity | 919,631 | 850,426 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 8,269,387 | $ | 8,319,201 | ||||||||||||||||||||
Net interest revenue | $ | 245,227 | $ | 238,704 | ||||||||||||||||||||
Net interest-rate spread | 3.00 | % | 2.81 | % | ||||||||||||||||||||
Net interest margin (4) | 3.29 | % | 3.18 | % | ||||||||||||||||||||
(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. | |
(3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains of $15.3 million in 2009 and $3.3 million in 2008 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. |