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 OF $23.6 MILLION FOR FOURTH QUARTER 2010
• | Net operating loss lowest since second quarter 2009 |
• | Credit measures continue to improve; nonperforming assets lowest since 2008 |
• | Allowance-to-loans ratio increases to 3.79 percent |
• | Core transaction deposits up 12 percent annualized |
BLAIRSVILLE, GA – January 28, 2011 – United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $23.6 million, or 28 cents per diluted share, for the fourth quarter of 2010. The fourth quarter operating loss excludes a partial recovery of $11.8 million, or eight cents per diluted share, from a previously incurred fraud loss related to two failed real estate developments in western North Carolina. Including the recovery, the fourth quarter net loss was $16.4 million, or 20 cents per diluted share.
For 2010 and 2009, United’s net operating losses from continuing operations were $143.4 million and $139.1 million, or $1.62 and $2.47 per diluted share, respectively. In the attached schedules, operating losses from continuing operations for all periods exclude consulting fee revenue and operating expenses of Brintech, Inc. during the periods it was owned by United. Also excluded is the gain from the sale of Brintech in the first quarter of 2010. The net income or loss from Brintech’s discontinued operations is reported as a separate line in the consolidated statement of income.
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In addition to excluding the fourth quarter partial recovery of the fraud loss from western North Carolina, the net operating loss from continuing operations for the full year 2010 excludes the $210.6 million non-cash charge for goodwill impairment. Including the partial recovery and goodwill impairment charge, United’s net loss for the full year 2010 was $345.6 million, or $3.76 per diluted share.
The net operating loss from continuing operations for the full year 2009 excludes $95 million in non-cash charges for impairment of goodwill and $1.8 million in severance costs, net of taxes, relating to a reduction in work force. Also excluded is the $7.1 million gain, net of taxes, on the acquisition of Southern Community Bank in the second quarter 2009. These charges and gains were considered non-operating items and therefore were excluded from operating earnings. Including these non-operating items, United’s net loss for 2009 was $228.3 million, or $3.95 per diluted share.
“We are encouraged by the improving trends in our credit quality indicators,” said Jimmy Tallent, president and chief executive officer. “Credit quality improved from the third quarter in every measure, with nonperforming assets, net charge-offs and provision for loan losses falling to their lowest levels in many quarters. At the same time, the housing market and general economy within our footprint remain weak, so we look toward the future with guarded optimism.”
Total loans were $4.6 billion at quarter-end, down $156 million from the end of the third quarter and down $547 million from a year ago. Residential construction loans were $695 million, or 15 percent of total loans, down $69 million from the end of the third quarter and down $355 million from a year ago. The decline in loans was net of new lending that totaled $78 million during the fourth quarter and $320 million for the full year, primarily commercial and small business loans in metropolitan Atlanta and north Georgia.
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Taxable equivalent net interest revenue of $60.1 million was $3.8 million lower than the fourth quarter of 2009 due to the lower level of interest-earning assets. Average loans and securities declined $589 million and $175 million, respectively, from the fourth quarter of 2009. The net interest margin was 3.58 percent for the fourth quarter of 2010, up 18 basis points from a year ago and up one basis point from the third quarter.
“While remaining sharply focused on deposit and loan pricing, we’ve maintained liquidity significantly above historical levels in light of the uncertain times,” Tallent said. “This excess liquidity lowered our margin by 30 basis points in the fourth quarter and 19 basis points in the third quarter.”
“We grew core transaction deposits for the eighth consecutive quarter,” Tallent continued. “The fourth quarter increase was $77 million, 12 percent on an annualized basis,” Tallent continued. “This brought our 2010 core deposit growth to $291 million, a 12 percent increase.”
“We continue to see tremendous core deposit growth opportunities in our markets due to disruption in the banking environment,” Tallent said. “We have launched a new core deposit marketing initiative that stresses our strong customer service culture, and is already showing great promise.”
The fourth quarter 2010 operating provision for loan losses decreased from $50.5 million in the third quarter and from $90 million a year ago, to $47.8 million in the fourth quarter. Operating net charge-offs continued their downward trend to $47.7 million in the fourth quarter, $2.3 million less than the third quarter and $36.9 million less than the fourth quarter of 2009. The operating provision for loan losses and operating net charge-offs for the fourth quarter of 2010 exclude the partial recovery of $11.8 million from the fraud loss incurred in 2007 in western North Carolina.
Non-performing assets decreased to $321 million at quarter-end from $348 million at September 30 and from $385 million at December 31, 2009.
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Operating fee revenue was $12.4 million in the fourth quarter of 2010, compared to $14.4 million a year ago. The fourth quarter of 2009 included $2.0 million in securities gains which accounts for the decrease. Service charges and fees of $7.0 million were down $1.2 million, due primarily to lower overdraft fees resulting from recent regulatory changes that require customers to give consent before using United’s overdraft services. Mortgage loan fees were up $217,000 from a year ago, to $1.9 million, due to higher refinancing activity resulting from low long-term interest rates. Other fee revenue increased $676,000 to $2.8 million, due primarily to the acceleration of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans.
Fourth quarter operating expenses were $64.9 million, up $4.8 million from a year ago due to higher foreclosed property costs. Foreclosed property costs were $20.6 million, a $6.2 million increase from the fourth quarter of 2009 reflecting additional losses from declining real estate values. Fourth quarter 2010 foreclosed property costs, including maintenance, property taxes and other related costs were even with last year at $4.8 million. Losses relating to the sale of properties totaled $7.8 million and write-downs of other foreclosed properties totaled $8.0 million. The losses and write-downs increased $451,000 and $5.8 million, respectively, compared to fourth quarter 2009, which helped expedite sales of foreclosed properties. Salary and benefit costs totaled $23.8 million, a decrease of $284,000 from last year due primarily to lower stock-based compensation expense. Other operating expenses decreased $530,000 from a year ago, to $3.9 million, due primarily to lower ATM network costs and appraisal fees.
The effective tax rate for the fourth quarter of 2010 was 43 percent, up slightly from the 40 percent in the third quarter due to the statute expiration of certain state tax returns and resulting release of related reserves. Absent the tax reserve adjustment, the effective tax rate would have been 40 percent, which is the expected effective rate for 2011.
As of December 31, 2010, the capital ratios for United were as follows: Tier 1 Risk Based of 9.7 percent; Leverage of 6.8 percent; and, Total Risk Based of 12.1 percent. The quarterly average tangible equity-to-assets ratio was 8.8 percent and the tangible common equity-to-assets ratio was 6.4 percent.
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“The last three years have been difficult, to state the obvious,” Tallent said. “We are seeing encouraging signs, however; our credit metrics are moving in the right direction with several approaching their lowest levels since the beginning of the credit cycle in 2008. Core customer deposit growth has been the strongest in our history and we’ve made great strides increasing the net interest margin with deference to the need to maintain higher-than-normal levels of liquidity. We’ve rebalanced our loan portfolio by shrinking residential construction loans to 15 percent of the portfolio from a high of 35 percent.”
“As to capital, we exceed regulatory well-capitalized levels but continue to evaluate alternatives to further strengthen our position,” Tallent said. “We believe this course is prudent in light of the operating and regulatory environment, and are very pleased that these efforts have advanced substantially. We expect to announce a capital plan by the end of the first quarter of 2011.”
Conference Call
United Community Banks will hold a conference call today, Friday, January 28, 2011, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the password ‘35075160.’ The conference call also will be webcast and can be accessed by selecting ‘Calendar of Events’ within the Investor Relations section of the company’s website at www.ucbi.com.
About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $7.4 billion and operates 27 community banks with 106 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.
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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 on Form 10-K with the Securities and Exchange Commission.
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Financial Highlights
Selected Financial Information
Fourth | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | Quarter | For the Twelve | YTD | ||||||||||||||||||||||||||||||||
(in thousands, except per share | Fourth | Third | Second | First | Fourth | 2010-2009 | Months Ended | 2010-2009 | ||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2010 | 2009 | Change | |||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
Interest revenue | $ | 81,215 | $ | 84,360 | $ | 87,699 | $ | 89,849 | $ | 97,481 | $ | 343,123 | $ | 404,961 | ||||||||||||||||||||||
Interest expense | 21,083 | 24,346 | 26,072 | 28,570 | 33,552 | 100,071 | 159,734 | |||||||||||||||||||||||||||||
Net interest revenue | 60,132 | 60,014 | 61,627 | 61,279 | 63,929 | (6 | )% | 243,052 | 245,227 | (1 | )% | |||||||||||||||||||||||||
Operating provision for loan losses(1) | 47,750 | 50,500 | 61,500 | 75,000 | 90,000 | 234,750 | 310,000 | |||||||||||||||||||||||||||||
Operating fee revenue (2) | 12,442 | 12,861 | 11,579 | 11,666 | 14,447 | (14 | ) | 48,548 | 50,964 | (5 | ) | |||||||||||||||||||||||||
Total operating revenue(1)(2) | 24,824 | 22,375 | 11,706 | (2,055 | ) | (11,624 | ) | 56,850 | (13,809 | ) | ||||||||||||||||||||||||||
Operating expenses (3) | 64,918 | 64,906 | 58,308 | 54,820 | 60,126 | 8 | 242,952 | 217,050 | 12 | |||||||||||||||||||||||||||
Loss on sale of nonperforming assets | — | — | 45,349 | — | — | 45,349 | — | |||||||||||||||||||||||||||||
Operating loss from continuing operations before taxes | (40,094 | ) | (42,531 | ) | (91,951 | ) | (56,875 | ) | (71,750 | ) | 44 | (231,451 | ) | (230,859 | ) | |||||||||||||||||||||
Operating income tax benefit | (16,520 | ) | (16,706 | ) | (32,419 | ) | (22,417 | ) | (31,687 | ) | (88,062 | ) | (91,754 | ) | ||||||||||||||||||||||
Net operating loss from continuing operations(1)(2)(3) | (23,574 | ) | (25,825 | ) | (59,532 | ) | (34,458 | ) | (40,063 | ) | 41 | (143,389 | ) | (139,105 | ) | (3 | ) | |||||||||||||||||||
Gain from acquisition, net of tax expense | — | — | — | — | — | — | 7,062 | |||||||||||||||||||||||||||||
Noncash goodwill impairment charges | — | (210,590 | ) | — | — | — | (210,590 | ) | (95,000 | ) | ||||||||||||||||||||||||||
Severance costs, net of tax benefit | — | — | — | — | — | — | (1,797 | ) | ||||||||||||||||||||||||||||
Partial reversal of fraud loss provision, net of tax expense | 7,179 | — | — | — | — | 7,179 | — | |||||||||||||||||||||||||||||
(Loss) income from discontinued operations | — | — | — | (101 | ) | 228 | (101 | ) | 513 | |||||||||||||||||||||||||||
Gain from sale of subsidiary, net of income taxes and selling costs | — | — | — | 1,266 | — | 1,266 | — | |||||||||||||||||||||||||||||
Net loss | (16,395 | ) | (236,415 | ) | (59,532 | ) | (33,293 | ) | (39,835 | ) | 59 | (345,635 | ) | (228,327 | ) | (51 | ) | |||||||||||||||||||
Preferred dividends and discount accretion | 2,586 | 2,581 | 2,577 | 2,572 | 2,567 | 10,316 | 10,242 | |||||||||||||||||||||||||||||
Net loss available to common shareholders | $ | (18,981 | ) | $ | (238,996 | ) | $ | (62,109 | ) | $ | (35,865 | ) | $ | (42,402 | ) | $ | (355,951 | ) | $ | (238,569 | ) | |||||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||||
Diluted operating loss from continuing operations (1)(2)(3) | $ | (.28 | ) | $ | (.30 | ) | $ | (.66 | ) | $ | (.39 | ) | $ | (.45 | ) | 38 | $ | (1.62 | ) | $ | (2.47 | ) | 34 | |||||||||||||
Diluted loss from continuing operations | (.20 | ) | (2.52 | ) | (.66 | ) | (.39 | ) | (.45 | ) | 56 | (3.77 | ) | (3.96 | ) | 5 | ||||||||||||||||||||
Diluted loss | (.20 | ) | (2.52 | ) | (.66 | ) | (.38 | ) | (.45 | ) | 56 | (3.76 | ) | (3.95 | ) | 5 | ||||||||||||||||||||
Stock dividends declared (7) | — | — | — | — | — | — | 3 for 130 | |||||||||||||||||||||||||||||
Book value | 4.84 | 5.14 | 7.71 | 7.95 | 8.36 | (42 | ) | 4.84 | 8.36 | (42 | ) | |||||||||||||||||||||||||
Tangible book value (5) | 4.76 | 5.05 | 5.39 | 5.62 | 6.02 | (21 | ) | 4.76 | 6.02 | (21 | ) | |||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||||
Return on equity (4)(6) | (17.16 | )% | (148.04 | )% | (35.89 | )% | (20.10 | )% | (22.08 | )% | (57.08 | )% | (34.40 | )% | ||||||||||||||||||||||
Return on assets (6) | (.89 | ) | (12.47 | ) | (3.10 | ) | (1.70 | ) | (1.91 | ) | (4.53 | ) | (2.76 | ) | ||||||||||||||||||||||
Net interest margin (6) | 3.58 | 3.57 | 3.60 | 3.49 | 3.40 | 3.56 | 3.29 | |||||||||||||||||||||||||||||
Operating efficiency ratio from continuing operations (2)(3) | 89.45 | 89.38 | 141.60 | 75.22 | 78.74 | 98.98 | 73.97 | |||||||||||||||||||||||||||||
Equity to assets | 8.85 | 11.37 | 11.84 | 11.90 | 11.94 | 11.01 | 11.12 | |||||||||||||||||||||||||||||
Tangible equity to assets (5) | 8.75 | 9.19 | 9.26 | 9.39 | 9.53 | 9.15 | 8.33 | |||||||||||||||||||||||||||||
Tangible common equity to assets (5) | 6.35 | 6.78 | 6.91 | 7.13 | 7.37 | 6.80 | 6.15 | |||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets (5) | 9.05 | 9.60 | 9.97 | 10.03 | 10.39 | 9.05 | 10.39 | |||||||||||||||||||||||||||||
ASSET QUALITY * | ||||||||||||||||||||||||||||||||||||
Non-performing loans | $ | 179,094 | $ | 217,766 | $ | 224,335 | $ | 280,802 | $ | 264,092 | $ | 179,094 | $ | 264,092 | ||||||||||||||||||||||
Foreclosed properties | 142,208 | 129,964 | 123,910 | 136,275 | 120,770 | 142,208 | 120,770 | |||||||||||||||||||||||||||||
Total non-performing assets (NPAs) | 321,302 | 347,730 | 348,245 | 417,077 | 384,862 | 321,302 | 384,862 | |||||||||||||||||||||||||||||
Allowance for loan losses | 174,695 | 174,613 | 174,111 | 173,934 | 155,602 | 174,695 | 155,602 | |||||||||||||||||||||||||||||
Operating net charge-offs(1) | 47,668 | 49,998 | 61,323 | 56,668 | 84,585 | 215,657 | 276,669 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans | 3.79 | % | 3.67 | % | 3.57 | % | 3.48 | % | 3.02 | % | 3.79 | % | 3.02 | % | ||||||||||||||||||||||
Operating net charge-offs to average loans (1)(6) | 4.03 | 4.12 | 4.98 | 4.51 | 6.37 | 4.42 | 5.03 | |||||||||||||||||||||||||||||
NPAs to loans and foreclosed properties | 6.77 | 7.11 | 6.97 | 8.13 | 7.30 | 6.77 | 7.30 | |||||||||||||||||||||||||||||
NPAs to total assets | 4.32 | 4.96 | 4.55 | 5.32 | 4.81 | 4.32 | 4.81 | |||||||||||||||||||||||||||||
AVERAGE BALANCES($ in millions) | ||||||||||||||||||||||||||||||||||||
Loans | $ | 4,768 | $ | 4,896 | $ | 5,011 | $ | 5,173 | $ | 5,357 | (11 | ) | $ | 4,961 | $ | 5,548 | (11 | ) | ||||||||||||||||||
Investment securities | 1,354 | 1,411 | 1,532 | 1,518 | 1,529 | (11 | ) | 1,453 | 1,656 | (12 | ) | |||||||||||||||||||||||||
Earning assets | 6,680 | 6,676 | 6,854 | 7,085 | 7,487 | (11 | ) | 6,822 | 7,465 | (9 | ) | |||||||||||||||||||||||||
Total assets | 7,338 | 7,522 | 7,704 | 7,946 | 8,287 | (11 | ) | 7,626 | 8,269 | (8 | ) | |||||||||||||||||||||||||
Deposits | 6,294 | 6,257 | 6,375 | 6,570 | 6,835 | (8 | ) | 6,373 | 6,713 | (5 | ) | |||||||||||||||||||||||||
Shareholders’ equity | 649 | 855 | 912 | 945 | 989 | (34 | ) | 840 | 920 | (9 | ) | |||||||||||||||||||||||||
Common shares — basic(thousands) | 94,918 | 94,679 | 94,524 | 94,390 | 94,219 | 94,624 | 60,374 | |||||||||||||||||||||||||||||
Common shares — diluted(thousands) | 94,918 | 94,679 | 94,524 | 94,390 | 94,219 | 94,624 | 60,374 | |||||||||||||||||||||||||||||
AT PERIOD END($ in millions) | ||||||||||||||||||||||||||||||||||||
Loans * | $ | 4,604 | $ | 4,760 | $ | 4,873 | $ | 4,992 | $ | 5,151 | (11 | ) | $ | 4,604 | $ | 5,151 | (11 | ) | ||||||||||||||||||
Investment securities | 1,490 | 1,310 | 1,488 | 1,527 | 1,530 | (3 | ) | 1,490 | 1,530 | (3 | ) | |||||||||||||||||||||||||
Total assets | 7,443 | 7,013 | 7,652 | 7,837 | 8,000 | (7 | ) | 7,443 | 8,000 | (7 | ) | |||||||||||||||||||||||||
Deposits | 6,469 | 5,999 | 6,330 | 6,488 | 6,628 | (2 | ) | 6,469 | 6,628 | (2 | ) | |||||||||||||||||||||||||
Shareholders’ equity | 636 | 662 | 904 | 926 | 962 | (34 | ) | 636 | 962 | (34 | ) | |||||||||||||||||||||||||
Common shares outstanding(thousands) | 94,685 | 94,433 | 94,281 | 94,176 | 94,046 | 94,685 | 94,046 |
(1) | Excludes the partial reversal of a previously established provision for fraud-related loan losses of $11.8 million, net of tax expense of $4.6 million in 2010. Operating charge-offs also exclude the $11.8 million related partial recovery of the previously charged off amount. | |
(2) | Excludes the gain from acquisition of $11.4 million, (income tax expense of $4.3 million) in the second quarter of 2009 and revenue generated by discontinued operations in all periods presented. | |
(3) | Excludes goodwill impairment charges of $211 million in the third quarter of 2010 and $25 million and $70 million in the third and first quarters of 2009, respectively, severance costs of $2.9 million, (income tax benefit of $1.1 million) in the first quarter of 2009 and expenses relating to discontinued operations for all periods presented. | |
(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. | |
(7) | Number of new shares issued for shares currently held. | |
* | 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) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||
Net interest revenue | $ | 243,052 | $ | 245,227 | $ | 238,704 | $ | 274,483 | $ | 237,880 | ||||||||||
Operating provision for loan losses(1) | 234,750 | 310,000 | 184,000 | 37,600 | 14,600 | |||||||||||||||
Operating fee revenue(2) | 48,548 | 50,964 | 46,081 | 53,701 | 41,671 | |||||||||||||||
Total operating revenue (1)(2) | 56,850 | (13,809 | ) | 100,785 | 290,584 | 264,951 | ||||||||||||||
Operating expenses(3) | 242,952 | 217,050 | 200,335 | 181,730 | 155,306 | |||||||||||||||
Loss on sale of nonperforming assets | 45,349 | — | — | — | — | |||||||||||||||
Operating (loss) income from continuing operations before taxes | (231,451 | ) | (230,859 | ) | (99,550 | ) | 108,854 | 109,645 | ||||||||||||
Operating income taxes | (88,062 | ) | (91,754 | ) | (35,651 | ) | 40,266 | 41,249 | ||||||||||||
Net operating (loss) income from continuing operations | (143,389 | ) | (139,105 | ) | (63,899 | ) | 68,588 | 68,396 | ||||||||||||
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 | 7,179 | — | — | (10,998 | ) | — | ||||||||||||||
Net (loss) income from discontinued operations | (101 | ) | 513 | 449 | 403 | 419 | ||||||||||||||
Gain from sale of subsidiary, net of income taxes and selling costs | 1,266 | — | — | — | — | |||||||||||||||
Net (loss) income | (345,635 | ) | (228,327 | ) | (63,450 | ) | 57,993 | 68,815 | ||||||||||||
Preferred dividends and discount accretion | 10,316 | 10,242 | 724 | 18 | 19 | |||||||||||||||
Net (loss) income available to common shareholders | $ | (355,951 | ) | $ | (238,569 | ) | $ | (64,174 | ) | $ | 57,975 | $ | 68,796 | |||||||
PERFORMANCE MEASURES | ||||||||||||||||||||
Per common share: | ||||||||||||||||||||
Diluted operating (loss) earnings from continuing operations(1)(2)(3) | $ | (1.62 | ) | $ | (2.47 | ) | $ | (1.36 | ) | $ | 1.47 | $ | 1.65 | |||||||
Diluted (loss) earnings from continuing operations | (3.77 | ) | (3.96 | ) | (1.36 | ) | 1.24 | 1.65 | ||||||||||||
Diluted (loss) earnings | (3.76 | ) | (3.95 | ) | (1.35 | ) | 1.24 | 1.66 | ||||||||||||
Cash dividends declared (rounded) | — | — | .18 | .36 | .32 | |||||||||||||||
Stock dividends declared (6) | — | 3 for 130 | 2 for 130 | — | — | |||||||||||||||
Book value | 4.84 | 8.36 | 16.95 | 17.73 | 14.37 | |||||||||||||||
Tangible book value (5) | 4.76 | 6.02 | 10.39 | 10.94 | 10.57 | |||||||||||||||
Key performance ratios: | ||||||||||||||||||||
Return on equity(4) | (57.08 | )% | (34.40 | )% | (7.82 | )% | 7.79 | % | 13.28 | % | ||||||||||
Return on assets | (4.53 | ) | (2.76 | ) | (.76 | ) | .75 | 1.09 | ||||||||||||
Net interest margin | 3.56 | 3.29 | 3.18 | 3.88 | 4.05 | |||||||||||||||
Operating efficiency ratio from continuing operations(2)(3) | 98.98 | 73.97 | 70.00 | 55.53 | 55.30 | |||||||||||||||
Equity to assets | 11.01 | 11.12 | 10.22 | 9.61 | 8.06 | |||||||||||||||
Tangible equity to assets(5) | 9.15 | 8.33 | 6.67 | 6.63 | 6.32 | |||||||||||||||
Tangible common equity to assets(5) | 6.80 | 6.15 | 6.57 | 6.63 | 6.32 | |||||||||||||||
Tangible common equity to risk-weighted assets (5) | 9.05 | 10.39 | 8.34 | 8.21 | 8.09 | |||||||||||||||
ASSET QUALITY * | ||||||||||||||||||||
Non-performing loans | $ | 179,094 | $ | 264,092 | $ | 190,723 | $ | 28,219 | $ | 12,458 | ||||||||||
Foreclosed properties | 142,208 | 120,770 | 59,768 | 18,039 | 1,196 | |||||||||||||||
Total non-performing assets (NPAs) | 321,302 | 384,862 | 250,491 | 46,258 | 13,654 | |||||||||||||||
Allowance for loan losses | 174,695 | 155,602 | 122,271 | 89,423 | 66,566 | |||||||||||||||
Operating net charge-offs (1) | 215,657 | 276,669 | 151,152 | 21,834 | 5,524 | |||||||||||||||
Allowance for loan losses to loans | 3.79 | % | 3.02 | % | 2.14 | % | 1.51 | % | 1.24 | % | ||||||||||
Operating net charge-offs to average loans (1) | 4.42 | 5.03 | 2.57 | .38 | .12 | |||||||||||||||
NPAs to loans and foreclosed properties | 6.77 | 7.30 | 4.35 | .78 | .25 | |||||||||||||||
NPAs to total assets | 4.32 | 4.81 | 2.92 | .56 | .19 | |||||||||||||||
AVERAGE BALANCES($ in millions) | ||||||||||||||||||||
Loans | $ | 4,961 | $ | 5,548 | $ | 5,891 | $ | 5,735 | $ | 4,801 | ||||||||||
Investment securities | 1,453 | 1,656 | 1,489 | 1,278 | 1,042 | |||||||||||||||
Earning assets | 6,822 | 7,465 | 7,504 | 7,071 | 5,877 | |||||||||||||||
Total assets | 7,626 | 8,269 | 8,319 | 7,731 | 6,287 | |||||||||||||||
Deposits | 6,373 | 6,713 | 6,524 | 6,029 | 5,017 | |||||||||||||||
Shareholders’ equity | 840 | 920 | 850 | 743 | 507 | |||||||||||||||
Common shares — Basic(thousands) | 94,624 | 60,374 | 47,369 | 45,948 | 40,413 | |||||||||||||||
Common shares — Diluted(thousands) | 94,624 | 60,374 | 47,369 | 46,593 | 41,575 | |||||||||||||||
AT YEAR END($ in millions) | ||||||||||||||||||||
Loans * | $ | 4,604 | $ | 5,151 | $ | 5,705 | $ | 5,929 | $ | 5,377 | ||||||||||
Investment securities | 1,490 | 1,530 | 1,617 | 1,357 | 1,107 | |||||||||||||||
Total assets | 7,443 | 8,000 | 8,592 | 8,207 | 7,101 | |||||||||||||||
Deposits | 6,469 | 6,628 | 7,004 | 6,076 | 5,773 | |||||||||||||||
Shareholders’ equity | 636 | 962 | 989 | 832 | 617 | |||||||||||||||
Common shares outstanding(thousands) | 94,685 | 94,046 | 48,009 | 46,903 | 42,891 |
(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, net of tax expense of $4.6 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. |
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||
(in thousands, except per share | Fourth | Third | Second | First | Fourth | For the Twelve Months Ended | ||||||||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||
Interest revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Interest revenue — taxable equivalent | $ | 81,215 | $ | 84,360 | $ | 87,699 | $ | 89,849 | $ | 97,481 | $ | 343,123 | $ | 404,961 | $ | 466,969 | $ | 550,917 | $ | 446,695 | ||||||||||||||||||||
Taxable equivalent adjustment | (497 | ) | (511 | ) | (500 | ) | (493 | ) | (601 | ) | (2,001 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | ||||||||||||||||||||
Interest revenue (GAAP) | $ | 80,718 | $ | 83,849 | $ | 87,199 | $ | 89,356 | $ | 96,880 | $ | 341,122 | $ | 402,829 | $ | 464,708 | $ | 549,036 | $ | 444,827 | ||||||||||||||||||||
Net interest revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Net interest revenue — taxable equivalent | $ | 60,132 | $ | 60,014 | $ | 61,627 | $ | 61,279 | $ | 63,929 | $ | 243,052 | $ | 245,227 | $ | 238,704 | $ | 274,483 | $ | 237,880 | ||||||||||||||||||||
Taxable equivalent adjustment | (497 | ) | (511 | ) | (500 | ) | (493 | ) | (601 | ) | (2,001 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | ||||||||||||||||||||
Net interest revenue (GAAP) | $ | 59,635 | $ | 59,503 | $ | 61,127 | $ | 60,786 | $ | 63,328 | $ | 241,051 | $ | 243,095 | $ | 236,443 | $ | 272,602 | $ | 236,012 | ||||||||||||||||||||
Provision for loan losses reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating provision for loan losses | $ | 47,750 | $ | 50,500 | $ | 61,500 | $ | 75,000 | $ | 90,000 | $ | 234,750 | $ | 310,000 | $ | 184,000 | $ | 37,600 | $ | 14,600 | ||||||||||||||||||||
Provision for special fraud-related loan loss and partial recovery | (11,750 | ) | — | — | — | — | (11,750 | ) | — | — | 18,000 | — | ||||||||||||||||||||||||||||
Provision for loan losses (GAAP) | $ | 36,000 | $ | 50,500 | $ | 61,500 | $ | 75,000 | $ | 90,000 | $ | 223,000 | $ | 310,000 | $ | 184,000 | $ | 55,600 | $ | 14,600 | ||||||||||||||||||||
Fee revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating fee revenue | $ | 12,442 | $ | 12,861 | $ | 11,579 | $ | 11,666 | $ | 14,447 | $ | 48,548 | $ | 50,964 | $ | 46,081 | $ | 53,701 | $ | 41,671 | ||||||||||||||||||||
Gain from acquisition | — | — | — | — | — | — | 11,390 | — | — | — | ||||||||||||||||||||||||||||||
Fee revenue (GAAP) | $ | 12,442 | $ | 12,861 | $ | 11,579 | $ | 11,666 | $ | 14,447 | $ | 48,548 | $ | 62,354 | $ | 46,081 | $ | 53,701 | $ | 41,671 | ||||||||||||||||||||
Total revenue reconciliation | ||||||||||||||||||||||||||||||||||||||||
Total operating revenue | $ | 24,824 | $ | 22,375 | $ | 11,706 | $ | (2,055 | ) | $ | (11,624 | ) | $ | 56,850 | $ | (13,809 | ) | $ | 100,785 | $ | 290,584 | $ | 264,951 | |||||||||||||||||
Taxable equivalent adjustment | (497 | ) | (511 | ) | (500 | ) | (493 | ) | (601 | ) | (2,001 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | ||||||||||||||||||||
Gain from acquisition | — | — | — | — | — | — | 11,390 | — | — | — | ||||||||||||||||||||||||||||||
Provision for special fraud-related loan loss and partial recovery | 11,750 | — | — | — | — | 11,750 | — | — | (18,000 | ) | — | |||||||||||||||||||||||||||||
Total revenue (GAAP) | $ | 36,077 | $ | 21,864 | $ | 11,206 | $ | (2,548 | ) | $ | (12,225 | ) | $ | 66,599 | $ | (4,551 | ) | $ | 98,524 | $ | 270,703 | $ | 263,083 | |||||||||||||||||
Expense reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating expense | $ | 64,918 | $ | 64,906 | $ | 103,657 | $ | 54,820 | $ | 60,126 | $ | 288,301 | $ | 217,050 | $ | 200,335 | $ | 181,730 | $ | 155,306 | ||||||||||||||||||||
Noncash goodwill impairment charge | — | 210,590 | — | — | — | 210,590 | 95,000 | — | — | — | ||||||||||||||||||||||||||||||
Severance costs | — | — | — | — | — | — | 2,898 | — | — | — | ||||||||||||||||||||||||||||||
Operating expense (GAAP) | $ | 64,918 | $ | 275,496 | $ | 103,657 | $ | 54,820 | $ | 60,126 | $ | 498,891 | $ | 314,948 | $ | 200,335 | $ | 181,730 | $ | 155,306 | ||||||||||||||||||||
(Loss) income from continuing operations before taxes reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating (loss) income from continuing operations before taxes | $ | (40,094 | ) | $ | (42,531 | ) | $ | (91,951 | ) | $ | (56,875 | ) | $ | (71,750 | ) | $ | (231,451 | ) | $ | (230,859 | ) | $ | (99,550 | ) | $ | 108,854 | $ | 109,645 | ||||||||||||
Taxable equivalent adjustment | (497 | ) | (511 | ) | (500 | ) | (493 | ) | (601 | ) | (2,001 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | ||||||||||||||||||||
Gain from acquisition | — | — | — | — | — | — | 11,390 | — | — | — | ||||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | (210,590 | ) | — | — | — | (210,590 | ) | (95,000 | ) | — | — | — | |||||||||||||||||||||||||||
Severance costs | — | — | — | — | — | — | (2,898 | ) | — | — | — | |||||||||||||||||||||||||||||
Provision for special fraud-related loan loss and partial recovery | 11,750 | — | — | — | — | 11,750 | — | — | (18,000 | ) | — | |||||||||||||||||||||||||||||
(Loss) income from continuing operations before taxes (GAAP) | $ | (28,841 | ) | $ | (253,632 | ) | $ | (92,451 | ) | $ | (57,368 | ) | $ | (72,351 | ) | $ | (432,292 | ) | $ | (319,499 | ) | $ | (101,811 | ) | $ | 88,973 | $ | 107,777 | ||||||||||||
Income tax (benefit) expense reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating income tax (benefit) expense | $ | (16,520 | ) | $ | (16,706 | ) | $ | (32,419 | ) | $ | (22,417 | ) | $ | (31,687 | ) | $ | (88,062 | ) | $ | (91,754 | ) | $ | (35,651 | ) | $ | 40,266 | $ | 41,249 | ||||||||||||
Taxable equivalent adjustment | (497 | ) | (511 | ) | (500 | ) | (493 | ) | (601 | ) | (2,001 | ) | (2,132 | ) | (2,261 | ) | (1,881 | ) | (1,868 | ) | ||||||||||||||||||||
Gain from acquisition, tax expense | — | — | — | — | — | — | 4,328 | — | — | — | ||||||||||||||||||||||||||||||
Severance costs, tax benefit | — | — | — | — | — | — | (1,101 | ) | — | — | — | |||||||||||||||||||||||||||||
Provision for special fraud-related loan loss and partial recovery, tax | 4,571 | — | — | — | — | 4,571 | — | — | (7,002 | ) | — | |||||||||||||||||||||||||||||
Income tax (benefit) expense (GAAP) | $ | (12,446 | ) | $ | (17,217 | ) | $ | (32,919 | ) | $ | (22,910 | ) | $ | (32,288 | ) | $ | (85,492 | ) | $ | (90,659 | ) | $ | (37,912 | ) | $ | 31,383 | $ | 39,381 | ||||||||||||
Diluted (loss) income from continuing operations per common share reconciliation | ||||||||||||||||||||||||||||||||||||||||
Diluted operating (loss) income from continuing operations per common share | $ | (.28 | ) | $ | (.30 | ) | $ | (.66 | ) | $ | (.39 | ) | $ | (.45 | ) | $ | (1.62 | ) | $ | (2.47 | ) | $ | (1.36 | ) | $ | 1.47 | $ | 1.65 | ||||||||||||
Gain from acquisition | — | — | — | — | — | — | .12 | — | — | — | ||||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | (2.22 | ) | — | — | — | (2.23 | ) | (1.58 | ) | — | — | — | |||||||||||||||||||||||||||
Severance costs | — | — | — | — | — | — | (.03 | ) | — | — | — | |||||||||||||||||||||||||||||
Provision for special fraud-related loan loss and partial recovery | .08 | — | — | — | — | .08 | — | — | (.23 | ) | — | |||||||||||||||||||||||||||||
Diluted (loss) income from continuing operations per common share (GAAP) | $ | (.20 | ) | $ | (2.52 | ) | $ | (.66 | ) | $ | (.39 | ) | $ | (.45 | ) | $ | (3.77 | ) | $ | (3.96 | ) | $ | (1.36 | ) | $ | 1.24 | $ | 1.65 | ||||||||||||
Book value per common share reconciliation | ||||||||||||||||||||||||||||||||||||||||
Tangible book value per common share | $ | 4.76 | $ | 5.05 | $ | 5.39 | $ | 5.62 | $ | 6.02 | $ | 4.76 | $ | 6.02 | $ | 10.39 | $ | 10.94 | $ | 10.57 | ||||||||||||||||||||
Effect of goodwill and other intangibles | .08 | .09 | 2.32 | 2.33 | 2.34 | .08 | 2.34 | 6.56 | 6.79 | 3.80 | ||||||||||||||||||||||||||||||
Book value per common share (GAAP) | $ | 4.84 | $ | 5.14 | $ | 7.71 | $ | 7.95 | $ | 8.36 | $ | 4.84 | $ | 8.36 | $ | 16.95 | $ | 17.73 | $ | 14.37 | ||||||||||||||||||||
Efficiency ratio from continuing operations reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating efficiency ratio from continuing operations | 89.45 | % | 89.38 | % | 141.60 | % | 75.22 | % | 78.74 | % | 98.98 | % | 73.97 | % | 70.00 | % | 55.53 | % | 55.30 | % | ||||||||||||||||||||
Gain from acquisition | — | — | — | — | — | — | (2.77 | ) | — | — | — | |||||||||||||||||||||||||||||
Noncash goodwill impairment charge | — | 290.00 | — | — | — | 72.29 | 31.17 | — | — | — | ||||||||||||||||||||||||||||||
Severance costs | — | — | — | — | — | — | .95 | — | — | — | ||||||||||||||||||||||||||||||
Efficiency ratio from continuing operations (GAAP) | 89.45 | % | 379.38 | % | 141.60 | % | 75.22 | % | 78.74 | % | 171.27 | % | 103.32 | % | 70.00 | % | 55.53 | % | 55.30 | % | ||||||||||||||||||||
Average equity to assets reconciliation | ||||||||||||||||||||||||||||||||||||||||
Tangible common equity to assets | 6.35 | % | 6.78 | % | 6.91 | % | 7.13 | % | 7.37 | % | 6.80 | % | 6.15 | % | 6.57 | % | 6.63 | % | 6.32 | % | ||||||||||||||||||||
Effect of preferred equity | 2.40 | 2.41 | 2.35 | 2.26 | 2.16 | 2.35 | 2.18 | .10 | — | — | ||||||||||||||||||||||||||||||
Tangible equity to assets | 8.75 | 9.19 | 9.26 | 9.39 | 9.53 | 9.15 | 8.33 | 6.67 | 6.63 | 6.32 | ||||||||||||||||||||||||||||||
Effect of goodwill and other intangibles | .10 | 2.18 | 2.58 | 2.51 | 2.41 | 1.86 | 2.79 | 3.55 | 2.98 | 1.74 | ||||||||||||||||||||||||||||||
Equity to assets (GAAP) | 8.85 | % | 11.37 | % | 11.84 | % | 11.90 | % | 11.94 | % | 11.01 | % | 11.12 | % | 10.22 | % | 9.61 | % | 8.06 | % | ||||||||||||||||||||
Actual tangible common equity to risk-weighted assets reconciliation | ||||||||||||||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets | 9.05 | % | 9.60 | % | 9.97 | % | 10.03 | % | 10.39 | % | 9.05 | % | 10.39 | % | 8.34 | % | 8.21 | % | 8.09 | % | ||||||||||||||||||||
Effect of other comprehensive income | (.62 | ) | (.81 | ) | (.87 | ) | (.85 | ) | (.87 | ) | (.62 | ) | (.87 | ) | (.91 | ) | (.23 | ) | .07 | |||||||||||||||||||||
Effect of deferred tax limitation | (3.34 | ) | (2.94 | ) | (2.47 | ) | (1.75 | ) | (1.27 | ) | (3.34 | ) | (1.27 | ) | — | — | — | |||||||||||||||||||||||
Effect of trust preferred | 1.06 | 1.06 | 1.03 | 1.00 | .97 | 1.06 | .97 | .88 | .65 | .81 | ||||||||||||||||||||||||||||||
Effect of preferred equity | 3.52 | 3.51 | 3.41 | 3.29 | 3.19 | 3.52 | 3.19 | 2.90 | — | .01 | ||||||||||||||||||||||||||||||
Tier I capital ratio (Regulatory) | 9.67 | % | 10.42 | % | 11.07 | % | 11.72 | % | 12.41 | % | 9.67 | % | 12.41 | % | 11.21 | % | 8.63 | % | 8.98 | % | ||||||||||||||||||||
Net charge-offs reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating net charge-offs | $ | 47,668 | $ | 49,998 | $ | 61,323 | $ | 56,668 | $ | 84,585 | $ | 215,657 | $ | 276,669 | $ | 151,152 | $ | 21,834 | $ | 5,524 | ||||||||||||||||||||
Fraud related charge-offs and subsequent partial recovery | (11,750 | ) | — | — | — | — | (11,750 | ) | — | — | 18,000 | — | ||||||||||||||||||||||||||||
Net charge-offs (GAAP) | $ | 35,918 | $ | 49,998 | $ | 61,323 | $ | 56,668 | $ | 84,585 | $ | 203,907 | $ | 276,669 | $ | 151,152 | $ | 39,834 | $ | 5,524 | ||||||||||||||||||||
Net charge-offs to average loans reconciliation | ||||||||||||||||||||||||||||||||||||||||
Operating net charge-offs to average loans | 4.03 | % | 4.12 | % | 4.98 | % | 4.51 | % | 6.37 | % | 4.42 | % | 5.03 | % | 2.57 | % | .38 | % | .12 | % | ||||||||||||||||||||
Effect of fraud related charge offs and subsequent partial recovery | (1.00 | ) | — | — | — | — | (.25 | ) | — | — | .31 | — | ||||||||||||||||||||||||||||
Net charge-offs to average loans (GAAP) | 3.03 | % | 4.12 | % | 4.98 | % | 4.51 | % | 6.37 | % | 4.17 | % | 5.03 | % | 2.57 | % | .69 | % | .12 | % | ||||||||||||||||||||
Financial Highlights
Loan Portfolio Composition at Period-End(1)
2010 | 2009 | Linked | Year over | |||||||||||||||||||||||||
Fourth | Third | Second | First | Fourth | Quarter | Year | ||||||||||||||||||||||
(in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Change | |||||||||||||||||||||
LOANS BY CATEGORY | ||||||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 1,761 | $ | 1,781 | $ | 1,780 | $ | 1,765 | $ | 1,779 | $ | (20 | ) | $ | (18 | ) | ||||||||||||
Commercial construction | 297 | 310 | 342 | 357 | 363 | (13 | ) | (66 | ) | |||||||||||||||||||
Commercial & industrial | 441 | 456 | 441 | 381 | 390 | (15 | ) | 51 | ||||||||||||||||||||
Total commercial | 2,499 | 2,547 | 2,563 | 2,503 | 2,532 | (48 | ) | (33 | ) | |||||||||||||||||||
Residential construction | 695 | 764 | 820 | 960 | 1,050 | (69 | ) | (355 | ) | |||||||||||||||||||
Residential mortgage | 1,279 | 1,316 | 1,356 | 1,390 | 1,427 | (37 | ) | (148 | ) | |||||||||||||||||||
Consumer / installment | 131 | 133 | 134 | 139 | 142 | (2 | ) | (11 | ) | |||||||||||||||||||
Total loans | $ | 4,604 | $ | 4,760 | $ | 4,873 | $ | 4,992 | $ | 5,151 | (156 | ) | (547 | ) | ||||||||||||||
LOANS BY MARKET | ||||||||||||||||||||||||||||
Atlanta MSA | $ | 1,310 | $ | 1,365 | $ | 1,373 | $ | 1,404 | $ | 1,435 | (55 | ) | (125 | ) | ||||||||||||||
Gainesville MSA | 312 | 316 | 343 | 372 | 390 | (4 | ) | (78 | ) | |||||||||||||||||||
North Georgia | 1,689 | 1,755 | 1,808 | 1,814 | 1,884 | (66 | ) | (195 | ) | |||||||||||||||||||
Western North Carolina | 702 | 719 | 738 | 756 | 772 | (17 | ) | (70 | ) | |||||||||||||||||||
Coastal Georgia | 335 | 345 | 356 | 388 | 405 | (10 | ) | (70 | ) | |||||||||||||||||||
East Tennessee | 256 | 260 | 255 | 258 | 265 | (4 | ) | (9 | ) | |||||||||||||||||||
Total loans | $ | 4,604 | $ | 4,760 | $ | 4,873 | $ | 4,992 | $ | 5,151 | (156 | ) | (547 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION | ||||||||||||||||||||||||||||
Dirt loans | ||||||||||||||||||||||||||||
Acquisition & development | $ | 174 | $ | 190 | $ | 214 | $ | 290 | $ | 332 | (16 | ) | (158 | ) | ||||||||||||||
Land loans | 99 | 104 | 110 | 124 | 127 | (5 | ) | (28 | ) | |||||||||||||||||||
Lot loans | 275 | 303 | 311 | 321 | 336 | (28 | ) | (61 | ) | |||||||||||||||||||
Total | 548 | 597 | 635 | 735 | 795 | (49 | ) | (247 | ) | |||||||||||||||||||
House loans | ||||||||||||||||||||||||||||
Spec | 97 | 109 | 125 | 153 | 178 | (12 | ) | (81 | ) | |||||||||||||||||||
Sold | 50 | 58 | 60 | 72 | 77 | (8 | ) | (27 | ) | |||||||||||||||||||
Total | 147 | 167 | 185 | 225 | 255 | (20 | ) | (108 | ) | |||||||||||||||||||
Total residential construction | $ | 695 | $ | 764 | $ | 820 | $ | 960 | $ | 1,050 | (69 | ) | (355 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION — ATLANTA MSA | ||||||||||||||||||||||||||||
Dirt loans | ||||||||||||||||||||||||||||
Acquisition & development | $ | 30 | $ | 34 | $ | 40 | $ | 66 | $ | 76 | (4 | ) | (46 | ) | ||||||||||||||
Land loans | 23 | 27 | 32 | 43 | 43 | (4 | ) | (20 | ) | |||||||||||||||||||
Lot loans | 32 | 45 | 39 | 47 | 52 | (13 | ) | (20 | ) | |||||||||||||||||||
Total | 85 | 106 | 111 | 156 | 171 | (21 | ) | (86 | ) | |||||||||||||||||||
House loans | ||||||||||||||||||||||||||||
Spec | 38 | 42 | 48 | 58 | 68 | (4 | ) | (30 | ) | |||||||||||||||||||
Sold | 10 | 11 | 10 | 14 | 16 | (1 | ) | (6 | ) | |||||||||||||||||||
Total | 48 | 53 | 58 | 72 | 84 | (5 | ) | (36 | ) | |||||||||||||||||||
Total residential construction | $ | 133 | $ | 159 | $ | 169 | $ | 228 | $ | 255 | (26 | ) | (122 | ) | ||||||||||||||
(1) | Excludes total loans of $68.2 million, $75.2 million, $80.8 million, $79.5 million and $85.1 million as of December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. |
Financial Highlights
Loan Portfolio Composition at Year-End(1)
(in millions) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
LOANS BY CATEGORY | ||||||||||||||||||||
Commercial (sec. by RE) | $ | 1,761 | $ | 1,779 | $ | 1,627 | $ | 1,476 | $ | 1,230 | ||||||||||
Commercial construction | 297 | 363 | 500 | 527 | 469 | |||||||||||||||
Commercial & industrial | 441 | 390 | 410 | 418 | 296 | |||||||||||||||
Total commercial | 2,499 | 2,532 | 2,537 | 2,421 | 1,995 | |||||||||||||||
Residential construction | 695 | 1,050 | 1,479 | 1,829 | 1,864 | |||||||||||||||
Residential mortgage | 1,279 | 1,427 | 1,526 | 1,502 | 1,338 | |||||||||||||||
Consumer / installment | 131 | 142 | 163 | 177 | 180 | |||||||||||||||
Total loans | $ | 4,604 | $ | 5,151 | $ | 5,705 | $ | 5,929 | $ | 5,377 | ||||||||||
LOANS BY MARKET | ||||||||||||||||||||
Atlanta MSA | $ | 1,310 | $ | 1,435 | $ | 1,706 | $ | 2,002 | $ | 1,651 | ||||||||||
Gainesville MSA | 312 | 390 | 420 | 399 | 354 | |||||||||||||||
North Georgia | 1,689 | 1,884 | 2,040 | 2,060 | 2,034 | |||||||||||||||
Western North Carolina | 702 | 772 | 810 | 806 | 773 | |||||||||||||||
Coastal Georgia | 335 | 405 | 464 | 416 | 358 | |||||||||||||||
East Tennessee | 256 | 265 | 265 | 246 | 207 | |||||||||||||||
Total loans | $ | 4,604 | $ | 5,151 | $ | 5,705 | $ | 5,929 | $ | 5,377 | ||||||||||
(1) | Excludes total loans of $68.2 million and $85.1 million as of December 31, 2010 and 2009, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. |
Financial Highlights
Credit Quality(1)
Fourth Quarter 2010 | Third Quarter 2010 | Second Quarter 2010 | ||||||||||||||||||||||||||||||||||
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) | $ | 44,927 | $ | 23,659 | $ | 68,586 | $ | 53,646 | $ | 14,838 | $ | 68,484 | $ | 56,013 | $ | 13,297 | $ | 69,310 | ||||||||||||||||||
Commercial construction | 21,374 | 17,808 | 39,182 | 17,279 | 15,125 | 32,404 | 17,872 | 11,339 | 29,211 | |||||||||||||||||||||||||||
Commercial & industrial | 5,611 | — | 5,611 | 7,670 | — | 7,670 | 7,245 | — | 7,245 | |||||||||||||||||||||||||||
Total commercial | 71,912 | 41,467 | 113,379 | 78,595 | 29,963 | 108,558 | 81,130 | 24,636 | 105,766 | |||||||||||||||||||||||||||
Residential construction | 54,505 | 78,231 | 132,736 | 79,321 | 73,206 | 152,527 | 88,375 | 74,444 | 162,819 | |||||||||||||||||||||||||||
Residential mortgage | 51,083 | 22,510 | 73,593 | 58,107 | 26,795 | 84,902 | 53,175 | 24,830 | 78,005 | |||||||||||||||||||||||||||
Consumer / installment | 1,594 | — | 1,594 | 1,743 | — | 1,743 | 1,655 | — | 1,655 | |||||||||||||||||||||||||||
Total NPAs | $ | 179,094 | $ | 142,208 | $ | 321,302 | $ | 217,766 | $ | 129,964 | $ | 347,730 | $ | 224,335 | $ | 123,910 | $ | 348,245 | ||||||||||||||||||
Balance as a % of Unpaid Principal | 67.2 | % | 64.4 | % | 65.9 | % | 70.0 | % | 65.9 | % | 68.4 | % | 69.4 | % | 71.9 | % | 70.3 | % | ||||||||||||||||||
NPAs BY MARKET | ||||||||||||||||||||||||||||||||||||
Atlanta MSA | $ | 48,289 | $ | 41,154 | $ | 89,443 | $ | 65,304 | $ | 32,785 | $ | 98,089 | $ | 74,031 | $ | 30,605 | $ | 104,636 | ||||||||||||||||||
Gainesville MSA | 5,171 | 9,273 | 14,444 | 11,905 | 5,685 | 17,590 | 10,730 | 2,750 | 13,480 | |||||||||||||||||||||||||||
North Georgia | 83,551 | 66,211 | 149,762 | 92,295 | 67,439 | 159,734 | 102,198 | 60,597 | 162,795 | |||||||||||||||||||||||||||
Western North Carolina | 25,832 | 11,553 | 37,385 | 31,545 | 11,559 | 43,104 | 22,776 | 11,473 | 34,249 | |||||||||||||||||||||||||||
Coastal Georgia | 11,145 | 11,901 | 23,046 | 10,611 | 10,951 | 21,562 | 8,341 | 16,548 | 24,889 | |||||||||||||||||||||||||||
East Tennessee | 5,106 | 2,116 | 7,222 | 6,106 | 1,545 | 7,651 | 6,259 | 1,937 | 8,196 | |||||||||||||||||||||||||||
Total NPAs | $ | 179,094 | $ | 142,208 | $ | 321,302 | $ | 217,766 | $ | 129,964 | $ | 347,730 | $ | 224,335 | $ | 123,910 | $ | 348,245 | ||||||||||||||||||
NPA ACTIVITY | ||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | 217,766 | $ | 129,964 | $ | 347,730 | $ | 224,335 | $ | 123,910 | $ | 348,245 | $ | 280,802 | $ | 136,275 | $ | 417,077 | ||||||||||||||||||
Loans placed on non-accrual | 81,023 | — | 81,023 | 119,783 | — | 119,783 | 155,007 | — | 155,007 | |||||||||||||||||||||||||||
Payments received | (7,250 | ) | — | (7,250 | ) | (11,469 | ) | — | (11,469 | ) | (12,189 | ) | — | (12,189 | ) | |||||||||||||||||||||
Loan charge-offs | (47,913 | ) | — | (47,913 | ) | (52,647 | ) | — | (52,647 | ) | (62,693 | ) | — | (62,693 | ) | |||||||||||||||||||||
Foreclosures | (61,432 | ) | 61,432 | — | (59,844 | ) | 59,844 | — | (66,994 | ) | 66,994 | — | ||||||||||||||||||||||||
Capitalized costs | — | 170 | 170 | — | 601 | 601 | — | 305 | 305 | |||||||||||||||||||||||||||
Note / property sales | (3,100 | ) | (33,509 | ) | (36,609 | ) | (2,392 | ) | (40,203 | ) | (42,595 | ) | (69,598 | ) | (68,472 | ) | (138,070 | ) | ||||||||||||||||||
Write downs | — | (8,031 | ) | (8,031 | ) | — | (7,051 | ) | (7,051 | ) | — | (6,094 | ) | (6,094 | ) | |||||||||||||||||||||
Net losses on sales | — | (7,818 | ) | (7,818 | ) | — | (7,137 | ) | (7,137 | ) | — | (5,098 | ) | (5,098 | ) | |||||||||||||||||||||
Ending Balance | $ | 179,094 | $ | 142,208 | $ | 321,302 | $ | 217,766 | $ | 129,964 | $ | 347,730 | $ | 224,335 | $ | 123,910 | $ | 348,245 | ||||||||||||||||||
Fourth Quarter 2010(3) | Third Quarter 2010 | Second Quarter 2010 | ||||||||||||||||||||||
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) | $ | 6,493 | 1.45 | % | $ | 14,212 | 3.16 | % | $ | 9,757 | 2.21 | % | ||||||||||||
Commercial construction | 3,924 | 5.12 | 1,972 | 2.40 | 1,460 | 1.67 | ||||||||||||||||||
Commercial & industrial | 2,891 | 2.54 | 1,207 | 1.07 | 867 | .85 | ||||||||||||||||||
Total commercial | 13,308 | 2.09 | 17,391 | 2.70 | 12,084 | 1.91 | ||||||||||||||||||
Residential construction | 24,497 | 13.28 | 23,934 | 11.99 | 41,515 | 18.71 | ||||||||||||||||||
Residential mortgage | 9,176 | 2.80 | 7,695 | 2.29 | 6,517 | 1.90 | ||||||||||||||||||
Consumer / installment | 687 | 2.06 | 978 | 2.90 | 1,207 | 3.53 | ||||||||||||||||||
Total | $ | 47,668 | 4.03 | $ | 49,998 | 4.12 | $ | 61,323 | 4.98 | |||||||||||||||
NET CHARGE-OFFS BY MARKET | ||||||||||||||||||||||||
Atlanta MSA | $ | 15,222 | 4.48 | % | $ | 13,753 | 3.97 | % | $ | 16,926 | 4.85 | % | ||||||||||||
Gainesville MSA | 3,434 | 4.37 | 1,143 | 1.40 | 2,547 | 3.01 | ||||||||||||||||||
North Georgia | 18,537 | 4.26 | 26,554 | 5.92 | 28,100 | 6.19 | ||||||||||||||||||
Western North Carolina | 5,154 | 2.87 | 5,509 | 2.99 | 7,194 | 3.86 | ||||||||||||||||||
Coastal Georgia | 3,670 | 4.27 | 2,702 | 3.05 | 5,581 | 6.07 | ||||||||||||||||||
East Tennessee | 1,651 | 2.53 | 337 | .52 | 975 | 1.53 | ||||||||||||||||||
Total | $ | 47,668 | 4.03 | $ | 49,998 | 4.12 | $ | 61,323 | 4.98 | |||||||||||||||
(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. | |
(3) | North Carolina residential construction net charge offs for the fourth quarter of 2010 exclude a $11.8 million partial recovery of a 2007 fraud-related charge-off. |
Consolidated Statement of Income(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in thousands, except per share data) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 66,659 | $ | 78,064 | $ | 277,904 | $ | 322,509 | ||||||||
Investment securities, including tax exempt of $251, $336, $1,137 and $1,322 | 13,215 | 17,313 | 59,958 | 77,370 | ||||||||||||
Federal funds sold, commercial paper and deposits in banks | 844 | 1,503 | 3,260 | 2,950 | ||||||||||||
Total interest revenue | 80,718 | 96,880 | 341,122 | 402,829 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW | 1,662 | 2,315 | 6,966 | 11,023 | ||||||||||||
Money market | 2,036 | 2,328 | 7,552 | 9,545 | ||||||||||||
Savings | 81 | 105 | 331 | 483 | ||||||||||||
Time | 12,868 | 24,026 | 66,883 | 120,326 | ||||||||||||
Total deposit interest expense | 16,647 | 28,774 | 81,732 | 141,377 | ||||||||||||
Federal funds purchased, repurchase agreements and other short-term borrowings | 1,073 | 1,081 | 4,235 | 2,842 | ||||||||||||
Federal Home Loan Bank advances | 608 | 1,045 | 3,355 | 4,622 | ||||||||||||
Long-term debt | 2,755 | 2,652 | 10,749 | 10,893 | ||||||||||||
Total interest expense | 21,083 | 33,552 | 100,071 | 159,734 | ||||||||||||
Net interest revenue | 59,635 | 63,328 | 241,051 | 243,095 | ||||||||||||
Provision for loan losses | 36,000 | 90,000 | 223,000 | 310,000 | ||||||||||||
Net interest revenue after provision for loan losses | 23,635 | (26,672 | ) | 18,051 | (66,905 | ) | ||||||||||
Fee revenue: | ||||||||||||||||
Service charges and fees | 7,039 | 8,257 | 30,127 | 30,986 | ||||||||||||
Mortgage loan and other related fees | 1,868 | 1,651 | 7,019 | 8,959 | ||||||||||||
Brokerage fees | 778 | 443 | 2,662 | 2,085 | ||||||||||||
Securities gains, net | — | 2,015 | 2,552 | 2,756 | ||||||||||||
Gain from acquisition | — | — | — | 11,390 | ||||||||||||
Losses from prepayment of borrowings | — | — | (2,233 | ) | — | |||||||||||
Other | 2,757 | 2,081 | 8,421 | 6,178 | ||||||||||||
Total fee revenue | 12,442 | 14,447 | 48,548 | 62,354 | ||||||||||||
Total revenue | 36,077 | (12,225 | ) | 66,599 | (4,551 | ) | ||||||||||
Operating expenses: | ||||||||||||||||
Salaries and employee benefits | 23,777 | 24,061 | 96,618 | 101,568 | ||||||||||||
Communications and equipment | 3,377 | 3,819 | 13,781 | 14,676 | ||||||||||||
Occupancy | 4,024 | 4,003 | 15,394 | 15,653 | ||||||||||||
Advertising and public relations | 1,102 | 958 | 4,625 | 3,950 | ||||||||||||
Postage, printing and supplies | 1,063 | 1,307 | 4,072 | 5,040 | ||||||||||||
Professional fees | 3,016 | 2,646 | 9,254 | 11,480 | ||||||||||||
Foreclosed property | 20,602 | 14,391 | 65,707 | 32,365 | ||||||||||||
FDIC assessments and other regulatory charges | 3,299 | 3,711 | 13,747 | 16,004 | ||||||||||||
Amortization of intangibles | 771 | 813 | 3,160 | 3,104 | ||||||||||||
Other | 3,887 | 4,417 | 16,594 | 13,210 | ||||||||||||
Loss on sale of nonperforming assets | — | — | 45,349 | — | ||||||||||||
Goodwill impairment | — | — | 210,590 | 95,000 | ||||||||||||
Severance costs | — | — | — | 2,898 | ||||||||||||
Total operating expenses | 64,918 | 60,126 | 498,891 | 314,948 | ||||||||||||
Loss from continuing operations before income taxes | (28,841 | ) | (72,351 | ) | (432,292 | ) | (319,499 | ) | ||||||||
Income tax benefit | (12,446 | ) | (32,288 | ) | (85,492 | ) | (90,659 | ) | ||||||||
Net loss from continuing operations | (16,395 | ) | (40,063 | ) | (346,800 | ) | (228,840 | ) | ||||||||
(Loss) income from discontinued operations, net of income taxes | — | 228 | (101 | ) | 513 | |||||||||||
Gain from sale of subsidiary, net of income taxes and selling costs | — | — | 1,266 | — | ||||||||||||
Net loss | (16,395 | ) | (39,835 | ) | (345,635 | ) | (228,327 | ) | ||||||||
Preferred stock dividends and discount accretion | 2,586 | 2,567 | 10,316 | 10,242 | ||||||||||||
Net loss available to common shareholders | $ | (18,981 | ) | $ | (42,402 | ) | $ | (355,951 | ) | $ | (238,569 | ) | ||||
Loss from continuing operations per common share — Basic / Diluted | $ | (.20 | ) | $ | (.45 | ) | $ | (3.77 | ) | $ | (3.96 | ) | ||||
Loss per common share — Basic / Diluted | (.20 | ) | (.45 | ) | (3.76 | ) | (3.95 | ) | ||||||||
Weighted average common shares outstanding — Basic / Diluted | 94,918 | 94,219 | 94,624 | 60,374 |
Consolidated Balance Sheet
December 31, | December 31, | |||||||
(in thousands, except share and per share data) | 2010 | 2009 | ||||||
(unaudited) | (unaudited) | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 95,994 | $ | 126,265 | ||||
Interest-bearing deposits in banks | 111,901 | 120,382 | ||||||
Federal funds sold, commercial paper and short-term investments | 441,562 | 129,720 | ||||||
Cash and cash equivalents | 649,457 | 376,367 | ||||||
Securities available for sale | 1,224,417 | 1,530,047 | ||||||
Securities held to maturity (fair value $267,988) | 265,807 | — | ||||||
Mortgage loans held for sale | 35,908 | 30,226 | ||||||
Loans, net of unearned income | 4,604,126 | 5,151,476 | ||||||
Less allowance for loan losses | 174,695 | 155,602 | ||||||
Loans, net | 4,429,431 | 4,995,874 | ||||||
Assets covered by loss sharing agreements with the FDIC | 131,887 | 185,938 | ||||||
Premises and equipment, net | 178,239 | 182,038 | ||||||
Accrued interest receivable | 24,299 | 33,867 | ||||||
Goodwill and other intangible assets | 11,446 | 225,196 | ||||||
Foreclosed property | 142,208 | 120,770 | ||||||
Other assets | 350,097 | 319,591 | ||||||
Total assets | $ | 7,443,196 | $ | 7,999,914 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Demand | $ | 793,414 | $ | 707,826 | ||||
NOW | 1,424,781 | 1,335,790 | ||||||
Money market | 891,252 | 713,901 | ||||||
Savings | 183,894 | 177,427 | ||||||
Time: | ||||||||
Less than $100,000 | 1,496,700 | 1,746,511 | ||||||
Greater than $100,000 | 1,002,359 | 1,187,499 | ||||||
Brokered | 676,772 | 758,880 | ||||||
Total deposits | 6,469,172 | 6,627,834 | ||||||
Federal funds purchased, repurchase agreements, and other short-term borrowings | 101,067 | 101,389 | ||||||
Federal Home Loan Bank advances | 55,125 | 114,501 | ||||||
Long-term debt | 150,146 | 150,066 | ||||||
Accrued expenses and other liabilities | 32,171 | 43,803 | ||||||
Total liabilities | 6,807,681 | 7,037,593 | ||||||
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 | 175,711 | 174,408 | ||||||
Common stock, $1 par value; 200,000,000 shares authorized; | ||||||||
94,685,003 and 94,045,603 shares issued and outstanding | 94,685 | 94,046 | ||||||
Common stock issuable; 336,437 and 221,906 shares | 3,894 | 3,597 | ||||||
Capital surplus | 665,496 | 622,034 | ||||||
(Accumulated deficit) retained earnings | (335,567 | ) | 20,384 | |||||
Accumulated other comprehensive income | 31,079 | 47,635 | ||||||
Total shareholders’ equity | 635,515 | 962,321 | ||||||
Total liabilities and shareholders’ equity | $ | 7,443,196 | $ | 7,999,914 | ||||
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
2010 | 2009 | |||||||||||||||||||||||
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) | $ | 4,768,120 | $ | 66,750 | 5.55 | % | $ | 5,357,150 | $ | 78,088 | 5.78 | % | ||||||||||||
Taxable securities(3) | 1,327,999 | 12,964 | 3.90 | 1,496,251 | 16,947 | 4.53 | ||||||||||||||||||
Tax-exempt securities(1)(3) | 25,917 | 410 | 6.33 | 32,554 | 599 | 7.36 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 558,143 | 1,091 | .78 | 600,835 | 1,847 | 1.23 | ||||||||||||||||||
Total interest-earning assets | 6,680,179 | 81,215 | 4.83 | 7,486,790 | 97,481 | 5.17 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (185,300 | ) | (162,203 | ) | ||||||||||||||||||||
Cash and due from banks | 112,923 | 107,153 | ||||||||||||||||||||||
Premises and equipment | 178,729 | 182,790 | ||||||||||||||||||||||
Other assets(3) | 551,340 | 672,014 | ||||||||||||||||||||||
Total assets | $ | 7,337,871 | $ | 8,286,544 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,436,976 | $ | 1,662 | .46 | $ | 1,334,578 | $ | 2,315 | .69 | ||||||||||||||
Money market | 870,884 | 2,036 | .93 | 726,680 | 2,328 | 1.27 | ||||||||||||||||||
Savings | 184,651 | 81 | .17 | 178,191 | 105 | .23 | ||||||||||||||||||
Time less than $100,000 | 1,489,933 | 6,292 | 1.68 | 1,812,823 | 10,952 | 2.40 | ||||||||||||||||||
Time greater than $100,000 | 1,010,104 | 4,736 | 1.86 | 1,215,579 | 8,074 | 2.64 | ||||||||||||||||||
Brokered | 491,477 | 1,840 | 1.49 | 844,462 | 5,000 | 2.35 | ||||||||||||||||||
Total interest-bearing deposits | 5,484,025 | 16,647 | 1.20 | 6,112,313 | 28,774 | 1.87 | ||||||||||||||||||
Federal funds purchased and other borrowings | 102,830 | 1,073 | 4.14 | 105,130 | 1,081 | 4.08 | ||||||||||||||||||
Federal Home Loan Bank advances | 58,712 | 608 | 4.11 | 156,979 | 1,045 | 2.64 | ||||||||||||||||||
Long-term debt | 150,137 | 2,755 | 7.28 | 150,060 | 2,652 | 7.01 | ||||||||||||||||||
Total borrowed funds | 311,679 | 4,436 | 5.65 | 412,169 | 4,778 | 4.60 | ||||||||||||||||||
Total interest-bearing liabilities | 5,795,704 | 21,083 | 1.44 | 6,524,482 | 33,552 | 2.04 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 809,604 | 722,739 | ||||||||||||||||||||||
Other liabilities | 83,452 | 50,044 | ||||||||||||||||||||||
Total liabilities | 6,688,760 | 7,297,265 | ||||||||||||||||||||||
Shareholders’ equity | 649,111 | 989,279 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,337,871 | $ | 8,286,544 | ||||||||||||||||||||
Net interest revenue | $ | 60,132 | $ | 63,929 | ||||||||||||||||||||
Net interest-rate spread | 3.39 | % | 3.13 | % | ||||||||||||||||||||
Net interest margin(4) | 3.58 | % | 3.40 | % | ||||||||||||||||||||
(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 $40.8 million in 2010 and $22.1 million in 2009 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,
2010 | 2009 | |||||||||||||||||||||||
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) | $ | 4,960,805 | $ | 278,149 | 5.61 | % | $ | 5,547,915 | $ | 322,284 | 5.81 | % | ||||||||||||
Taxable securities(3) | 1,425,322 | 58,821 | 4.13 | 1,626,032 | 76,048 | 4.68 | ||||||||||||||||||
Tax-exempt securities(1)(3) | 27,827 | 1,860 | 6.68 | 30,460 | 2,164 | 7.10 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 408,359 | 4,293 | 1.05 | 260,232 | 4,465 | 1.72 | ||||||||||||||||||
Total interest-earning assets | 6,822,313 | 343,123 | 5.03 | 7,464,639 | 404,961 | 5.43 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (190,227 | ) | (146,535 | ) | ||||||||||||||||||||
Cash and due from banks | 106,582 | 105,127 | ||||||||||||||||||||||
Premises and equipment | 180,379 | 180,381 | ||||||||||||||||||||||
Other assets(3) | 706,586 | 665,775 | ||||||||||||||||||||||
Total assets | $ | 7,625,633 | $ | 8,269,387 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,360,729 | $ | 6,966 | .51 | $ | 1,297,139 | $ | 11,023 | .85 | ||||||||||||||
Money market | 780,982 | 7,552 | .97 | 589,389 | 9,545 | 1.62 | ||||||||||||||||||
Savings | 184,479 | 331 | .18 | 177,410 | 483 | .27 | ||||||||||||||||||
Time less than $100,000 | 1,581,750 | 30,260 | 1.91 | 1,891,774 | 56,811 | 3.00 | ||||||||||||||||||
Time greater than $100,000 | 1,084,967 | 23,114 | 2.13 | 1,306,302 | 42,518 | 3.25 | ||||||||||||||||||
Brokered | 610,483 | 13,509 | 2.21 | 756,122 | 20,997 | 2.78 | ||||||||||||||||||
Total interest-bearing deposits | 5,603,390 | 81,732 | 1.46 | 6,018,136 | 141,377 | 2.35 | ||||||||||||||||||
Federal funds purchased and other borrowings | 103,479 | 4,235 | 4.09 | 177,589 | 2,842 | 1.60 | ||||||||||||||||||
Federal Home Loan Bank advances | 90,137 | 3,355 | 3.72 | 220,468 | 4,622 | 2.10 | ||||||||||||||||||
Long-term debt | 150,107 | 10,749 | 7.16 | 150,604 | 10,893 | 7.23 | ||||||||||||||||||
Total borrowed funds | 343,723 | 18,339 | 5.34 | 548,661 | 18,357 | 3.35 | ||||||||||||||||||
Total interest-bearing liabilities | 5,947,113 | 100,071 | 1.68 | 6,566,797 | 159,734 | 2.43 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 769,395 | 694,469 | ||||||||||||||||||||||
Other liabilities | 69,367 | 88,490 | ||||||||||||||||||||||
Total liabilities | 6,785,875 | 7,349,756 | ||||||||||||||||||||||
Shareholders’ equity | 839,758 | 919,631 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,625,633 | $ | 8,269,387 | ||||||||||||||||||||
Net interest revenue | $ | 243,052 | $ | 245,227 | ||||||||||||||||||||
Net interest-rate spread | 3.35 | % | 3.00 | % | ||||||||||||||||||||
Net interest margin(4) | 3.56 | % | 3.29 | % | ||||||||||||||||||||
(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 $43.2 million in 2010 and $15.3 million in 2009 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. |