EXHIBIT 99.1
For Immediate Release
For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2265
Rex_Schuette@ucbi.com
Rex S. Schuette
Chief Financial Officer
(706) 781-2265
Rex_Schuette@ucbi.com
UNITED COMMUNITY BANKS, INC. REPORTS
16 PERCENT GAIN IN DILUTED EARNINGS PER SHARE
FOR FOURTH QUARTER 2006
16 PERCENT GAIN IN DILUTED EARNINGS PER SHARE
FOR FOURTH QUARTER 2006
HIGHLIGHTS:
• | Record Fourth Quarter Earnings |
Diluted Earnings per Share of 44 cents – Up 16 Percent
Net Income of $18.4 Million – Up 21 Percent
Return on Tangible Equity of 17.49 Percent
Total Assets Surpass $7 Billion
Net Income of $18.4 Million – Up 21 Percent
Return on Tangible Equity of 17.49 Percent
Total Assets Surpass $7 Billion
• | Strong Loan and Deposit Growth Drive Performance |
• | Completed Acquisition of Southern National Bank |
• | Banking Offices Surpass 100 – De Novo Opportunities Continue |
BLAIRSVILLE, GA, January 23, 2007 – United Community Banks, Inc. (Nasdaq: UCBI), Georgia’s third-largest bank holding company, today announced record financial results for the fourth quarter of 2006. Compared with the fourth quarter of 2005, the company achieved an 18 percent increase in total revenue, a 21 percent rise in net income and a 16 percent gain in diluted earnings per share.
For the fourth quarter of 2006, net income was $18.4 million compared with $15.2 million for 2005. Diluted earnings per share increased to 44 cents from 38 cents a year ago. Total revenue, on a taxable equivalent basis, was $72.1 million compared with $61.3 million for the fourth
quarter of 2005. Return on tangible equity was 17.49 percent and return on assets was 1.10 percent, compared with 18.20 percent and 1.05 percent, respectively, a year ago.
For the year, net income increased $12.1 million to a record $68.8 million, up 21 percent from $56.7 million for 2005. Diluted earnings per share of $1.66 increased 23 cents, or 16 percent, from $1.43 for 2005. Total revenue, on a taxable equivalent basis, was $272.4 million, up 18 percent from $230.8 million a year ago. Return on tangible equity was 17.52 percent and return on assets was 1.09 percent, compared with 18.99 percent and 1.04 percent, respectively, a year ago.
“The fourth quarter of 2006 and year were outstanding by all measures for United Community Banks,” said Jimmy Tallent, president and chief executive officer. “Loans increased $411 million during the fourth quarter, including $267 million in loans received through our recent acquisition of Southern National Bank. Excluding acquired loans, organic loan growth was 16 percent for the year and grew $144 million, or 12% on an annualized basis, from last quarter. The growth in loans was the key driver of the increase in net interest revenue this quarter along with a five basis point expansion in our net interest margin as compared to the fourth quarter of 2005. We continued to fund our loan growth with customer deposits, adding $213 million this quarter plus $286 million that was added through the Southern National acquisition. At December 31, 2006, total loans were $5.4 billion, up $978 million, or 22 percent, from a year ago. Our strong core loan growth and the acquisition pushed total assets to $7.1 billion, a 21 percent increase from a year ago.”
“Organic growth, with an uncompromising focus on sound credit quality, is at the foundation of our balanced growth strategy. This is further supported by our focused de novo expansion and selective acquisitions,” Tallent said. “We find the right people and build around them.
During the fourth quarter, our de novo office expansion continued and we opened two banking offices in western North Carolina in Hendersonville and Blowing Rock. Also, we opened our 100th banking office in Commerce, Georgia, located along the heavily traveled Interstate 85 corridor. Those new locations follow four other banking offices that were opened earlier in 2006 in Oakwood, Cumming, Jasper and Savannah, Georgia as well as the formation of our 25th
During the fourth quarter, our de novo office expansion continued and we opened two banking offices in western North Carolina in Hendersonville and Blowing Rock. Also, we opened our 100th banking office in Commerce, Georgia, located along the heavily traveled Interstate 85 corridor. Those new locations follow four other banking offices that were opened earlier in 2006 in Oakwood, Cumming, Jasper and Savannah, Georgia as well as the formation of our 25th
community bank in Cleveland, Tennessee,” added Tallent. “We continue to look for opportunities to expand our franchise through de novo locations in both new and existing markets.”
Tallent continued, “Our balanced growth strategy also includes selective acquisitions. In December, by completing the acquisition of Southern National Bank we added two new locations in Marietta and Canton, Georgia with approximately $370 million in assets. The Southern National acquisition significantly leverages our presence in northern metro Atlanta, especially Cherokee County, which is one of the fastest-growing large counties in the country,” Tallent said. “United Community Bank – Cherokee became our 26th community bank with deposit market share in the county increasing from fifteenth to ninth. We have a great opportunity to significantly expand our franchise in this high-growth market. Also, with the addition of Southern National’s Marietta office we gained a key location and increased our deposit market share from fourteenth to seventh in Cobb County. We now have five locations in Cobb County, the fourth largest by population of 28 counties the Atlanta MSA.”
For the fourth quarter of 2006, net interest revenue of $62.6 million was up $9.1 million, or 17 percent, from the fourth quarter of 2005. Net interest margin for the fourth quarter was 3.99 percent, compared with 3.94 percent a year ago and 4.07 percent last quarter. “We benefited from rising rates over the past year, which expanded our margin by five basis points as compared to a year ago,” stated Tallent. “The decline in the margin from the third quarter was due primarily to several programs focused at generating deposits in our new markets that concluded in the fourth quarter as well as higher costs of wholesale borrowings. During the fourth quarter of 2006, the company elected to reclassify loan origination fees previously included in net interest revenue with an offsetting amount of direct loan origination costs that had been included in salaries and employee benefits,” added Tallent. “United’s net interest revenue and operating expenses as well as net interest margin and operating efficiency ratio decreased as a result of those reclassifications for the fourth quarter and prior periods. However, the reclassifications had no impact on net income or equity in any of the reported periods.”
The fourth quarter provision for loan losses was $3.7 million, an increase of $200,000 from a year earlier and equal to the third quarter of 2006. Annualized net charge-offs to average loans was 15 basis points for the fourth quarter, compared with 16 basis points for the fourth quarter of 2005 and 11 basis points for the third quarter of 2006. At year-end, non-performing assets totaled $13.7 million, compared with $13.0 million a year ago and $9.3 million at the end of the third quarter of 2006. Non-performing assets as a percentage of total assets was 19 basis points at year-end, compared with 22 basis points at December 31, 2005 and 14 basis points at September 30, 2006. “We have been at historic low levels of non-performing assets through most of 2006. Even with the slight rise at year-end, we are still operating below our long-term range of 20 to 35 basis points and well below peer banks,” Tallent stated. “Strong credit quality, rooted with our guiding principle of securing loans with hard assets, is essential to our balanced growth strategy and overall success.”
Fee revenue of $13.2 million grew 1.8 million, or 16 percent, from $11.4 million for the fourth quarter of 2005. Service charges and fees on deposit accounts increased $448,000 to $7.1 million, primarily due to growth in transactions and new accounts resulting from core deposit programs and higher ATM and debit card usage fees. Mortgage fees rose $416,000 to $2.2 million due to higher volumes and pricing of mortgages sold – mortgage loans closed during the fourth quarter were $103 million compared with $96 million for 2005. Consulting fees were up $430,000, or 26 percent, from a year ago reflecting strong growth in the risk management and advisory service practices.
Operating expenses increased $5.5 million to $42.5 million, a 15 percent increase from the fourth quarter of 2005. Of that increase, the Southern National acquisition added $670,000 in expenses, including $132,000 in non-recurring integration charges. Salaries and employee benefit costs of $26.5 million increased $4.4 million, or 20 percent, from the fourth quarter of 2005, due to the increase in staff to support our expansion activities and business growth as well as higher health care costs and expensing of stock options in 2006. Communications and equipment expenses increased $525,000 to $4.1 million due to further investments and upgrades in technology equipment to support business growth and additional banking offices. Occupancy expense increased $133,000 to $2.8 million reflecting the increase in cost to operate additional banking
offices. Postage, printing and supplies expense rose $209,000 to $1.6 million primarily due to business growth and marketing campaigns. Professional fees increased $251,000 to $1.3 million reflecting the cost of various corporate initiatives.
“We had positive operating leverage of three percent this quarter,” Tallent said. “Also, our operating efficiency ratio of 55.93 percent was below our long-term efficiency goal of 56 to 58 percent. This reflects the continued strength of our existing franchise, strong revenue growth and disciplined expense controls, which more than offset the cost of reinvesting for the future through our significant de novo expansion efforts.”
“Our outlook for 2007 is for earnings per share growth within our long-term goal of 12 to 15 percent,” Tallent said. “We anticipate core loan growth for 2007 to be within our normal range of 10 to 14 percent. For 2007, we expect our net interest margin to improve slightly from the current level due to the maturity of higher priced wholesale borrowings and swaps. This outlook assumes stable economic and rate environments and continued strong credit quality.”
“We had outstanding performance for 2006, which reflected the hard work of our exceptional team of bankers who always put their customers first,” Tallent concluded. “We are committed to excellent customer service, solid credit quality, and building shareholder value through consistent, sustained double-digit growth in earnings per share while expanding our franchise.”
Conference Call
United Community Banks will hold a conference call on Tuesday, January 23, 2007, at 11 a.m. ET to discuss the contents of this news release, as well as business highlights for the quarter and the financial outlook for 2007. The telephone number for the conference call is (866) 510-0705 and the pass code is “UCBI.” The conference call will also be available by web cast within the Investor Relations section of the company’s web site 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 $7.1 billion and operates 26
community banks with 101 banking offices located throughout north Georgia, metro Atlanta, 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 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 4 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.
(Tables Follow)
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
Selected Financial Information
Fourth | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | Quarter | For the Twelve | YTD | ||||||||||||||||||||||||||||||||
(in thousands, except per share | Fourth | Third | Second | First | Fourth | 2006-2005 | Months Ended | 2006-2005 | ||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2006 | 2005 | Change | |||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
Interest revenue | $ | 123,463 | $ | 116,304 | $ | 107,890 | $ | 99,038 | $ | 91,997 | $ | 446,695 | $ | 324,225 | ||||||||||||||||||||||
Interest expense | 60,912 | 55,431 | 49,407 | 43,065 | 38,576 | 208,815 | 127,426 | |||||||||||||||||||||||||||||
Net interest revenue | 62,551 | 60,873 | 58,483 | 55,973 | 53,421 | 17 | % | 237,880 | 196,799 | 21 | % | |||||||||||||||||||||||||
Provision for loan losses | 3,700 | 3,700 | 3,700 | 3,500 | 3,500 | 14,600 | 12,100 | |||||||||||||||||||||||||||||
Fee revenue | 13,215 | 12,146 | 11,976 | 11,758 | 11,373 | 16 | 49,095 | 46,148 | 6 | |||||||||||||||||||||||||||
Total revenue | 72,066 | 69,319 | 66,759 | 64,231 | 61,294 | 18 | 272,375 | 230,847 | 18 | |||||||||||||||||||||||||||
Operating expenses | 42,521 | 41,441 | 39,645 | 38,463 | 37,052 | 15 | 162,070 | 140,808 | 15 | |||||||||||||||||||||||||||
Income before taxes | 29,545 | 27,878 | 27,114 | 25,768 | 24,242 | 22 | 110,305 | 90,039 | 23 | |||||||||||||||||||||||||||
Income taxes | 11,111 | 10,465 | 10,185 | 9,729 | 9,012 | 41,490 | 33,297 | |||||||||||||||||||||||||||||
Net income | $ | 18,434 | $ | 17,413 | $ | 16,929 | $ | 16,039 | $ | 15,230 | 21 | $ | 68,815 | $ | 56,742 | 21 | ||||||||||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||||
Basic earnings | $ | .45 | $ | .43 | $ | .42 | $ | .40 | $ | .39 | 15 | $ | 1.70 | $ | 1.47 | 16 | ||||||||||||||||||||
Diluted earnings | .44 | .42 | .41 | .39 | .38 | 16 | 1.66 | 1.43 | 16 | |||||||||||||||||||||||||||
Cash dividends declared | .08 | .08 | .08 | .08 | .07 | 14 | .32 | .28 | 14 | |||||||||||||||||||||||||||
Book value | 14.37 | 13.07 | 12.34 | 12.09 | 11.80 | 22 | 14.37 | 11.80 | 22 | |||||||||||||||||||||||||||
Tangible book value(2) | 10.57 | 10.16 | 9.50 | 9.25 | 8.94 | 18 | 10.57 | 8.94 | 18 | |||||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||||
Return on tangible equity(1)(2)(3) | 17.49 | % | 17.29 | % | 17.68 | % | 17.66 | % | 18.20 | % | 17.52 | % | 18.99 | % | ||||||||||||||||||||||
Return on equity(1)(3) | 13.26 | 13.22 | 13.41 | 13.25 | 13.30 | 13.28 | 13.46 | |||||||||||||||||||||||||||||
Return on assets(3) | 1.10 | 1.09 | 1.10 | 1.09 | 1.05 | 1.09 | 1.04 | |||||||||||||||||||||||||||||
Net interest margin(3) | 3.99 | 4.07 | 4.07 | 4.06 | 3.94 | 4.05 | 3.85 | |||||||||||||||||||||||||||||
Efficiency ratio | 55.93 | 56.46 | 56.27 | 56.79 | 56.61 | 56.35 | 57.77 | |||||||||||||||||||||||||||||
Dividend payout ratio | 17.78 | 18.60 | 19.05 | 20.00 | 17.95 | 18.82 | 19.05 | |||||||||||||||||||||||||||||
Equity to assets | 8.21 | 8.04 | 7.95 | 8.04 | 7.69 | 8.06 | 7.63 | |||||||||||||||||||||||||||||
Tangible equity to assets(2) | 6.46 | 6.35 | 6.22 | 6.24 | 5.82 | 6.32 | 5.64 | |||||||||||||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses | $ | 66,566 | $ | 60,901 | $ | 58,508 | $ | 55,850 | $ | 53,595 | $ | 66,566 | $ | 53,595 | ||||||||||||||||||||||
Non-performing assets | 13,654 | 9,347 | 8,805 | 8,367 | 12,995 | 13,654 | 12,995 | |||||||||||||||||||||||||||||
Net charge-offs | 1,930 | 1,307 | 1,042 | 1,245 | 1,793 | 5,524 | 5,701 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans | 1.24 | % | 1.23 | % | 1.22 | % | 1.22 | % | 1.22 | % | 1.24 | % | 1.22 | % | ||||||||||||||||||||||
Non-performing assets to total assets | .19 | .14 | .14 | .14 | .22 | .19 | .22 | |||||||||||||||||||||||||||||
Net charge-offs to average loans(3) | .15 | .11 | .09 | .11 | .16 | .12 | .14 | |||||||||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||||||||||
Loans | $ | 5,134,721 | $ | 4,865,886 | $ | 4,690,196 | $ | 4,505,494 | $ | 4,328,613 | 19 | $ | 4,800,981 | $ | 4,061,091 | 18 | ||||||||||||||||||||
Investment securities | 1,059,125 | 1,029,981 | 1,039,707 | 1,038,683 | 1,004,966 | 5 | 1,041,897 | 989,201 | 5 | |||||||||||||||||||||||||||
Earning assets | 6,225,943 | 5,942,710 | 5,758,697 | 5,574,712 | 5,383,096 | 16 | 5,877,483 | 5,109,053 | 15 | |||||||||||||||||||||||||||
Total assets | 6,669,950 | 6,350,205 | 6,159,152 | 5,960,801 | 5,769,632 | 16 | 6,287,148 | 5,472,200 | 15 | |||||||||||||||||||||||||||
Deposits | 5,517,696 | 5,085,168 | 4,842,389 | 4,613,810 | 4,354,275 | 27 | 5,017,435 | 4,003,084 | 25 | |||||||||||||||||||||||||||
Shareholders’ equity | 547,419 | 510,791 | 489,821 | 478,960 | 443,746 | 23 | 506,946 | 417,309 | 21 | |||||||||||||||||||||||||||
Common shares outstanding: | ||||||||||||||||||||||||||||||||||||
Basic | 41,096 | 40,223 | 40,156 | 40,088 | 39,084 | 40,393 | 38,477 | |||||||||||||||||||||||||||||
Diluted | 42,311 | 41,460 | 41,328 | 41,190 | 40,379 | 41,575 | 39,721 | |||||||||||||||||||||||||||||
AT PERIOD END | ||||||||||||||||||||||||||||||||||||
Loans | $ | 5,376,538 | $ | 4,965,365 | $ | 4,810,277 | $ | 4,584,155 | $ | 4,398,286 | 22 | $ | 5,376,538 | $ | 4,398,286 | 22 | ||||||||||||||||||||
Investment securities | 1,107,153 | 980,273 | 974,524 | 983,846 | 990,687 | 12 | 1,107,153 | 990,687 | 12 | |||||||||||||||||||||||||||
Earning assets | 6,565,730 | 6,012,987 | 5,862,614 | 5,633,381 | 5,470,718 | 20 | 6,565,730 | 5,470,718 | 20 | |||||||||||||||||||||||||||
Total assets | 7,101,249 | 6,455,290 | 6,331,136 | 6,070,596 | 5,865,756 | 21 | 7,101,249 | 5,865,756 | 21 | |||||||||||||||||||||||||||
Deposits | 5,772,886 | 5,309,219 | 4,976,650 | 4,748,438 | 4,477,600 | 29 | 5,772,886 | 4,477,600 | 29 | |||||||||||||||||||||||||||
Shareholders’ equity | 616,767 | 526,734 | 496,297 | 485,414 | 472,686 | 30 | 616,767 | 472,686 | 30 | |||||||||||||||||||||||||||
Common shares outstanding | 42,891 | 40,269 | 40,179 | 40,119 | 40,020 | 42,891 | 40,020 |
(1) | Net income available to common shareholders, which excludes preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). | |
(2) | Excludes effect of acquisition related intangibles and associated amortization. | |
(3) | Annualized. |
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,
Selected Financial Information
For the Years Ended December 31,
(in thousands, except per share data; | 5 Year | |||||||||||||||||||||||
taxable equivalent) | 2006 | 2005 | 2004 | 2003 | 2002 | CAGR(4) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||
Interest revenue | $ | 446,695 | $ | 324,225 | $ | 227,792 | $ | 198,689 | $ | 185,498 | ||||||||||||||
Interest expense | 208,815 | 127,426 | 74,794 | 70,600 | 76,357 | |||||||||||||||||||
Net interest revenue | 237,880 | 196,799 | 152,998 | 128,089 | 109,141 | 19 | % | |||||||||||||||||
Provision for loan losses | 14,600 | 12,100 | 7,600 | 6,300 | 6,900 | |||||||||||||||||||
Fee revenue | 49,095 | 46,148 | 39,539 | 38,184 | 30,734 | 14 | ||||||||||||||||||
Total revenue | 272,375 | 230,847 | 184,937 | 159,973 | 132,975 | 18 | ||||||||||||||||||
Operating expenses(1) | 162,070 | 140,808 | 110,974 | 97,251 | 80,690 | 16 | ||||||||||||||||||
Income before taxes | 110,305 | 90,039 | 73,963 | 62,722 | 52,285 | 20 | ||||||||||||||||||
Income taxes | 41,490 | 33,297 | 26,807 | 23,247 | 19,505 | |||||||||||||||||||
Net operating income | 68,815 | 56,742 | 47,156 | 39,475 | 32,780 | 19 | ||||||||||||||||||
Merger-related charges, net of tax | — | — | 565 | 1,357 | — | |||||||||||||||||||
Net income | $ | 68,815 | $ | 56,742 | $ | 46,591 | $ | 38,118 | $ | 32,780 | 20 | |||||||||||||
OPERATING PERFORMANCE(1) | ||||||||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||
Basic | $ | 1.70 | $ | 1.47 | $ | 1.31 | $ | 1.15 | $ | 1.02 | 14 | |||||||||||||
Diluted | 1.66 | 1.43 | 1.27 | 1.12 | .99 | 14 | ||||||||||||||||||
Return on tangible equity(2)(3) | 17.52 | % | 18.99 | % | 19.74 | % | 19.24 | % | 17.88 | % | ||||||||||||||
Return on assets | 1.09 | 1.04 | 1.07 | 1.06 | 1.11 | |||||||||||||||||||
Efficiency ratio | 56.35 | 57.77 | 57.65 | 58.39 | 57.72 | |||||||||||||||||||
Dividend payout ratio | 18.82 | 19.05 | 18.32 | 17.39 | 16.34 | |||||||||||||||||||
GAAP PERFORMANCE | ||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||
Basic earnings | $ | 1.70 | $ | 1.47 | $ | 1.29 | $ | 1.11 | $ | 1.02 | 15 | |||||||||||||
Diluted earnings | 1.66 | 1.43 | 1.25 | 1.08 | .99 | 15 | ||||||||||||||||||
Cash dividends declared (rounded) | .32 | .28 | .24 | .20 | .17 | 19 | ||||||||||||||||||
Book value | 14.37 | 11.80 | 10.39 | 8.47 | 6.89 | 19 | ||||||||||||||||||
Tangible book value (3) | 10.57 | 8.94 | 7.34 | 6.52 | 6.49 | 14 | ||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||
Return on equity(2) | 13.28 | % | 13.46 | % | 14.39 | % | 14.79 | % | 16.54 | % | ||||||||||||||
Return on assets | 1.09 | 1.04 | 1.05 | 1.02 | 1.11 | |||||||||||||||||||
Net interest margin | 4.05 | 3.85 | 3.71 | 3.68 | 3.95 | |||||||||||||||||||
Dividend payout ratio | 18.82 | 19.05 | 18.60 | 18.02 | 16.34 | |||||||||||||||||||
Equity to assets | 8.06 | 7.63 | 7.45 | 7.21 | 7.01 | |||||||||||||||||||
Tangible equity to assets(3) | 6.32 | 5.64 | 5.78 | 6.02 | 6.60 | |||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||
Allowance for loan losses | $ | 66,566 | $ | 53,595 | $ | 47,196 | $ | 38,655 | $ | 30,914 | ||||||||||||||
Non-performing assets | 13,654 | 12,995 | 8,725 | 7,589 | 8,019 | |||||||||||||||||||
Net charge-offs | 5,524 | 5,701 | 3,617 | 4,097 | 3,111 | |||||||||||||||||||
Allowance for loan losses to loans | 1.24 | % | 1.22 | % | 1.26 | % | 1.28 | % | 1.30 | % | ||||||||||||||
Non-performing assets to total assets | .19 | .22 | .17 | .19 | .25 | |||||||||||||||||||
Net charge-offs to average loans | .12 | .14 | .11 | .15 | .14 | |||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||
Loans | $ | 4,800,981 | $ | 4,061,091 | $ | 3,322,916 | $ | 2,753,451 | $ | 2,239,875 | 21 | |||||||||||||
Investment securities | 1,041,897 | 989,201 | 734,577 | 667,211 | 464,468 | 16 | ||||||||||||||||||
Earning assets | 5,877,483 | 5,109,053 | 4,119,327 | 3,476,030 | 2,761,265 | 19 | ||||||||||||||||||
Total assets | 6,287,148 | 5,472,200 | 4,416,835 | 3,721,284 | 2,959,295 | 19 | ||||||||||||||||||
Deposits | 5,017,435 | 4,003,084 | 3,247,612 | 2,743,087 | 2,311,717 | 20 | ||||||||||||||||||
Stockholders’ equity | 506,946 | 417,309 | 329,225 | 268,446 | 207,312 | 24 | ||||||||||||||||||
Common shares outstanding: | ||||||||||||||||||||||||
Basic | 40,393 | 38,477 | 36,071 | 34,132 | 32,062 | |||||||||||||||||||
Diluted | 41,575 | 39,721 | 37,273 | 35,252 | 33,241 | |||||||||||||||||||
AT PERIOD END | ||||||||||||||||||||||||
Loans | $ | 5,376,538 | $ | 4,398,286 | $ | 3,734,905 | $ | 3,015,997 | $ | 2,381,798 | 22 | |||||||||||||
Investment securities | 1,107,153 | 990,687 | 879,978 | 659,891 | 559,390 | 19 | ||||||||||||||||||
Earning assets | 6,565,730 | 5,470,718 | 4,738,389 | 3,796,332 | 3,029,409 | 21 | ||||||||||||||||||
Total assets | 7,101,249 | 5,865,756 | 5,087,702 | 4,068,834 | 3,211,344 | 21 | ||||||||||||||||||
Deposits | 5,772,886 | 4,477,600 | 3,680,516 | 2,857,449 | 2,385,239 | 22 | ||||||||||||||||||
Stockholders’ equity | 616,767 | 472,686 | 397,088 | 299,373 | 221,579 | 26 | ||||||||||||||||||
Common shares outstanding | 42,891 | 40,020 | 38,168 | 35,289 | 31,895 |
(1) | Excludes pre-tax merger-related and restructuring charges totaling $.9 million, or $.02 per diluted common share, recorded in 2004 and $2.1 million, or $.04 per diluted common share, recorded in 2003. | |
(2) | Net income available to common stockholders, which excludes preferred stock dividends, divided by average realized common equity which excludes accumulated other comprehensive income (loss). | |
(3) | Excludes effect of acquisition related intangibles and associated amortization. | |
(4) | Compound annual growth rate. |
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income
Consolidated Statement of Income
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in thousands, except per share data) | 2006 | 2005 | 2006 | 2005 | ||||||||||||
(unaudited) | ||||||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 109,869 | $ | 80,138 | $ | 394,907 | $ | 279,396 | ||||||||
Investment securities: | ||||||||||||||||
Taxable | 12,488 | 10,651 | 47,149 | 40,195 | ||||||||||||
Tax exempt | 472 | 514 | 1,969 | 2,087 | ||||||||||||
Federal funds sold and deposits in banks | 117 | 249 | 802 | 911 | ||||||||||||
Total interest revenue | 122,946 | 91,552 | 444,827 | 322,589 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW | 9,120 | 5,228 | 30,549 | 16,390 | ||||||||||||
Money market | 2,527 | 873 | 7,496 | 2,804 | ||||||||||||
Savings | 248 | 226 | 928 | 791 | ||||||||||||
Time | 40,645 | 21,288 | 130,324 | 66,968 | ||||||||||||
Total deposit interest expense | 52,540 | 27,615 | 169,297 | 86,953 | ||||||||||||
Federal funds purchased, repurchase agreements, & other short-term borrowings | 1,505 | 1,581 | 7,319 | 5,304 | ||||||||||||
Federal Home Loan Bank advances | 4,677 | 7,230 | 23,514 | 26,633 | ||||||||||||
Long-term debt | 2,190 | 2,150 | 8,685 | 8,536 | ||||||||||||
Total interest expense | 60,912 | 38,576 | 208,815 | 127,426 | ||||||||||||
Net interest revenue | 62,034 | 52,976 | 236,012 | 195,163 | ||||||||||||
Provision for loan losses | 3,700 | 3,500 | 14,600 | 12,100 | ||||||||||||
Net interest revenue after provision for loan losses | 58,334 | 49,476 | 221,412 | 183,063 | ||||||||||||
Fee revenue: | ||||||||||||||||
Service charges and fees | 7,064 | 6,616 | 27,159 | 25,137 | ||||||||||||
Mortgage loan and other related fees | 2,154 | 1,738 | 7,303 | 7,330 | ||||||||||||
Consulting fees | 2,095 | 1,665 | 7,291 | 6,609 | ||||||||||||
Brokerage fees | 653 | 789 | 3,083 | 2,570 | ||||||||||||
Securities losses, net | (258 | ) | (654 | ) | (643 | ) | (809 | ) | ||||||||
Other | 1,507 | 1,219 | 4,902 | 5,311 | ||||||||||||
Total fee revenue | 13,215 | 11,373 | 49,095 | 46,148 | ||||||||||||
Total revenue | 71,549 | 60,849 | 270,507 | 229,211 | ||||||||||||
Operating expenses: | ||||||||||||||||
Salaries and employee benefits | 26,524 | 22,136 | 100,964 | 84,854 | ||||||||||||
Communications and equipment | 4,101 | 3,576 | 15,071 | 13,157 | ||||||||||||
Occupancy | 2,839 | 2,706 | 11,632 | 10,835 | ||||||||||||
Advertising and public relations | 1,905 | 1,988 | 7,623 | 6,733 | ||||||||||||
Postage, printing and supplies | 1,564 | 1,355 | 5,748 | 5,501 | ||||||||||||
Professional fees | 1,274 | 1,023 | 4,442 | 4,306 | ||||||||||||
Amortization of intangibles | 523 | 503 | 2,032 | 2,012 | ||||||||||||
Other | 3,791 | 3,765 | 14,558 | 13,410 | ||||||||||||
Total operating expenses | 42,521 | 37,052 | 162,070 | 140,808 | ||||||||||||
Income before income taxes | 29,028 | 23,797 | 108,437 | 88,403 | ||||||||||||
Income taxes | 10,594 | 8,567 | 39,622 | 31,661 | ||||||||||||
Net income | $ | 18,434 | $ | 15,230 | $ | 68,815 | $ | 56,742 | ||||||||
Net income available to common shareholders | $ | 18,430 | $ | 15,225 | $ | 68,796 | $ | 56,719 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | .45 | $ | .39 | $ | 1.70 | $ | 1.47 | ||||||||
Diluted | .44 | .38 | 1.66 | 1.43 | ||||||||||||
Dividends per common share | .08 | .07 | .32 | .28 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 41,096 | 39,084 | 40,393 | 38,477 | ||||||||||||
Diluted | 42,311 | 40,379 | 41,575 | 39,721 |
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
Consolidated Balance Sheet
December 31, | December 31, | |||||||
(in thousands, except share and per share data) | 2006 | 2005 | ||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ | 158,348 | $ | 121,963 | ||||
Interest-bearing deposits in banks | 12,936 | 20,607 | ||||||
Cash and cash equivalents | 171,284 | 142,570 | ||||||
Securities available for sale | 1,107,153 | 990,687 | ||||||
Mortgage loans held for sale | 35,325 | 22,335 | ||||||
Loans, net of unearned income | 5,376,538 | 4,398,286 | ||||||
Less allowance for loan losses | 66,566 | 53,595 | ||||||
Loans, net | 5,309,972 | 4,344,691 | ||||||
Premises and equipment, net | 139,716 | 112,887 | ||||||
Accrued interest receivable | 58,291 | 37,197 | ||||||
Goodwill and other intangible assets | 167,058 | 118,651 | ||||||
Other assets | 112,450 | 96,738 | ||||||
Total assets | $ | 7,101,249 | $ | 5,865,756 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Demand | $ | 659,892 | $ | 602,525 | ||||
NOW | 1,307,654 | 1,113,827 | ||||||
Money market | 255,862 | 151,120 | ||||||
Savings | 175,631 | 175,453 | ||||||
Time: | ||||||||
Less than $100,000 | 1,650,906 | 1,218,277 | ||||||
Greater than $100,000 | 1,397,245 | 895,466 | ||||||
Brokered | 325,696 | 320,932 | ||||||
Total deposits | 5,772,886 | 4,477,600 | ||||||
Federal funds purchased, repurchase agreements, & other short-term borrowings | 65,884 | 122,881 | ||||||
Federal Home Loan Bank advances | 489,084 | 635,616 | ||||||
Long-term debt | 113,151 | 111,869 | ||||||
Accrued expenses and other liabilities | 43,477 | 45,104 | ||||||
Total liabilities | 6,484,482 | 5,393,070 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 32,200 and 32,200 shares issued and outstanding | 322 | 322 | ||||||
Common stock, $1 par value; 100,000,000 shares authorized; 42,890,863 and 40,019,853 shares issued and outstanding | 42,891 | 40,020 | ||||||
Common stock issuable; 29,821 and 9,948 shares | 862 | 271 | ||||||
Capital surplus | 270,383 | 193,355 | ||||||
Retained earnings | 306,261 | 250,563 | ||||||
Accumulated other comprehensive loss | (3,952 | ) | (11,845 | ) | ||||
Total shareholders’ equity | 616,767 | 472,686 | ||||||
Total liabilities and shareholders’ equity | $ | 7,101,249 | $ | 5,865,756 | ||||
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
2006 | 2005 | |||||||||||||||||||||||
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) | $ | 5,134,721 | $ | 109,756 | 8.48 | % | $ | 4,328,613 | $ | 79,904 | 7.32 | % | ||||||||||||
Taxable securities(3) | 1,014,959 | 12,488 | 4.92 | 957,389 | 10,651 | 4.45 | ||||||||||||||||||
Tax-exempt securities(1) (3) | 44,166 | 777 | 7.03 | 47,577 | 845 | 7.10 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 32,097 | 442 | 5.51 | 49,517 | 597 | 4.82 | ||||||||||||||||||
Total interest-earning assets | 6,225,943 | 123,463 | 7.87 | 5,383,096 | 91,997 | 6.79 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (64,301 | ) | (53,763 | ) | ||||||||||||||||||||
Cash and due from banks | 121,276 | 125,882 | ||||||||||||||||||||||
Premises and equipment | 133,364 | 109,449 | ||||||||||||||||||||||
Other assets(3) | 253,668 | 204,968 | ||||||||||||||||||||||
Total assets | $ | 6,669,950 | $ | 5,769,632 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,181,578 | 9,120 | 3.06 | $ | 1,057,157 | 5,228 | 1.96 | ||||||||||||||||
Money market | 248,530 | 2,527 | 4.03 | 155,908 | 873 | 2.22 | ||||||||||||||||||
Savings | 170,472 | 248 | .58 | 176,672 | 226 | .51 | ||||||||||||||||||
Time deposits less than $100,000 | 1,578,369 | 19,072 | 4.79 | 1,169,382 | 10,126 | 3.44 | ||||||||||||||||||
Time deposits greater than $100,000 | 1,330,375 | 17,366 | 5.18 | 839,624 | 8,420 | 3.98 | ||||||||||||||||||
Brokered deposits | 353,133 | 4,207 | 4.73 | 311,493 | 2,742 | 3.49 | ||||||||||||||||||
Total interest-bearing deposits | 4,862,457 | 52,540 | 4.29 | 3,710,236 | 27,615 | 2.95 | ||||||||||||||||||
Federal funds purchased & other borrowings | 105,650 | 1,505 | 5.65 | 153,839 | 1,581 | 4.08 | ||||||||||||||||||
Federal Home Loan Bank advances | 334,217 | 4,677 | 5.55 | 668,022 | 7,230 | 4.29 | ||||||||||||||||||
Long-term debt | 112,923 | 2,190 | 7.69 | 111,869 | 2,150 | 7.62 | ||||||||||||||||||
Total borrowed funds | 552,790 | 8,372 | 6.01 | 933,730 | 10,961 | 4.66 | ||||||||||||||||||
Total interest-bearing liabilities | 5,415,247 | 60,912 | 4.46 | 4,643,966 | 38,576 | 3.30 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 655,239 | 644,039 | ||||||||||||||||||||||
Other liabilities | 52,045 | 37,881 | ||||||||||||||||||||||
Total liabilities | 6,122,531 | 5,325,886 | ||||||||||||||||||||||
Shareholders’ equity | 547,419 | 443,746 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,669,950 | $ | 5,769,632 | ||||||||||||||||||||
Net interest revenue | $ | 62,551 | $ | 53,421 | ||||||||||||||||||||
Net interest-rate spread | 3.41 | % | 3.49 | % | ||||||||||||||||||||
Net interest margin(4) | 3.99 | % | 3.94 | % | ||||||||||||||||||||
(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 tax rate and the federal tax adjusted state 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 losses of $12.7 million and $10.5 million in 2006 and 2005, respectively, are included in other assets for purposes of this presentation. | |
(4) | Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets. |
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
2006 | 2005 | |||||||||||||||||||||||
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) | $ | 4,800,981 | $ | 394,439 | 8.22 | % | $ | 4,061,091 | $ | 278,158 | 6.85 | % | ||||||||||||
Taxable securities(3) | 995,172 | 47,149 | 4.74 | 940,411 | 40,195 | 4.27 | ||||||||||||||||||
Tax-exempt securities(1) (3) | 46,725 | 3,240 | 6.93 | 48,790 | 3,433 | 7.04 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 34,605 | 1,867 | 5.40 | 58,761 | 2,439 | 4.15 | ||||||||||||||||||
Total interest-earning assets | 5,877,483 | 446,695 | 7.60 | 5,109,053 | 324,225 | 6.35 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (59,376 | ) | (50,710 | ) | ||||||||||||||||||||
Cash and due from banks | 122,268 | 105,488 | ||||||||||||||||||||||
Premises and equipment | 123,865 | 105,433 | ||||||||||||||||||||||
Other assets(3) | 222,908 | 202,936 | ||||||||||||||||||||||
Total assets | $ | 6,287,148 | $ | 5,472,200 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,115,434 | 30,549 | 2.74 | $ | 978,046 | 16,390 | 1.68 | ||||||||||||||||
Money market | 202,477 | 7,496 | 3.70 | 162,848 | 2,804 | 1.72 | ||||||||||||||||||
Savings | 172,698 | 928 | .54 | 175,648 | 791 | .45 | ||||||||||||||||||
Time deposits less than $100,000 | 1,410,869 | 61,676 | 4.37 | 1,066,734 | 32,334 | 3.03 | ||||||||||||||||||
Time deposits greater than $100,000 | 1,134,414 | 54,304 | 4.79 | 708,081 | 25,083 | 3.54 | ||||||||||||||||||
Brokered deposits | 334,243 | 14,344 | 4.29 | 319,372 | 9,551 | 2.99 | ||||||||||||||||||
Total interest-bearing deposits | 4,370,135 | 169,297 | 3.87 | 3,410,729 | 86,953 | 2.55 | ||||||||||||||||||
Federal funds purchased & other borrowings | 140,544 | 7,319 | 5.21 | 157,137 | 5,304 | 3.38 | ||||||||||||||||||
Federal Home Loan Bank advances | 465,820 | 23,514 | 5.05 | 750,841 | 26,633 | 3.55 | ||||||||||||||||||
Long-term debt | 112,135 | 8,685 | 7.75 | 111,869 | 8,536 | 7.63 | ||||||||||||||||||
Total borrowed funds | 718,499 | 39,518 | 5.50 | 1,019,847 | 40,473 | 3.97 | ||||||||||||||||||
Total interest-bearing liabilities | 5,088,634 | 208,815 | 4.10 | 4,430,576 | 127,426 | 2.88 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 647,300 | 592,355 | ||||||||||||||||||||||
Other liabilities | 44,268 | 31,960 | ||||||||||||||||||||||
Total liabilities | 5,780,202 | 5,054,891 | ||||||||||||||||||||||
Shareholders’ equity | 506,946 | 417,309 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,287,148 | $ | 5,472,200 | ||||||||||||||||||||
Net interest revenue | $ | 237,880 | $ | 196,799 | ||||||||||||||||||||
Net interest-rate spread | 3.50 | % | 3.47 | % | ||||||||||||||||||||
Net interest margin(4) | 4.05 | % | 3.85 | % | ||||||||||||||||||||
(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 tax rate and the federal tax adjusted state 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 losses of $17.5 million in 2006 and $2.7 million in 2005 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. |