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
EARNINGS OF $11.5 MILLION FOR FIRST QUARTER 2012
| ● | Net income of $11.5 million, or 15 cents per share |
| ● | Pre-tax, pre-credit earnings, excluding one-time items, highest since fourth quarter 2009 |
| ● | Loan growth continues, up $18 million from fourth quarter, or 2 percent annualized |
| ● | Core transaction deposits up $151 million from fourth quarter, or 21 percent annualized |
| ● | Capital ratios strengthen |
BLAIRSVILLE, GA – April 26, 2012 – United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $11.5 million, or 15 cents per share, for the first quarter of 2012. The positive results reflect strong core transaction deposit growth, modest loan growth, a fee revenue increase and lower operating expenses compared with the fourth quarter of 2011.
“Momentum continues to build in restoring and improving our financial performance,” said Jimmy Tallent, president and chief executive officer. “With credit problems now at a manageable level, we have increased our focus on improving core pre-tax, pre-credit earnings through revenue growth and higher efficiency. The results are encouraging: Core pre-tax, pre-credit earnings, excluding one-time items, were at their highest level since the fourth quarter of 2009.”
Total loans were $4.13 billion at quarter-end, up $18 million from the fourth quarter and down $66 million from a year earlier. “In the fourth quarter we reversed the trend of declining loan balances, and in the first quarter we achieved modest loan growth,” stated Tallent. “We are prudently growing our portfolio by focusing on full-service relationships with small-to-medium sized businesses. During the first quarter we added $169 million in new loan commitments of which $131 million were funded by quarter-end. The majority were commercial loans.”
The first quarter provision for loan losses was $15 million, down from $190 million a year ago and up slightly from $14 million in the fourth quarter of 2011. The first quarter 2011 provision was elevated due to execution of United’s problem asset disposition plan following the successful raising of $380 million in capital.
First quarter net charge-offs were $15.9 million, compared to $232 million in the first quarter of 2011 and $45.6 million in the fourth quarter. A bulk loan sale, part of the problem asset disposition plan, elevated net charge-offs in the 2011 first quarter. Fourth quarter 2011 net charge-offs included $25 million related to United’s largest loan relationship.
Nonperforming assets of $161.6 million reflected a $1.3 million increase from the fourth quarter of 2011, and a $23.4 million increase from the first quarter of 2011. Said Tallent, “Nonperforming asset levels are impacted significantly by the inflow of new nonperforming loans and our ability to liquidate foreclosed properties. While the inflow of new nonperforming loans fell from $46 million in the fourth quarter to $32 million in the first quarter, nonperforming assets did not decline due to slow foreclosed property sales, which is typical in the winter months. We expect our overall credit trends to improve during 2012, although not necessarily on a straight line.”
Taxable equivalent net interest revenue of $58.9 million reflected a slight decline from the fourth quarter of 2011, and an increase of $2.5 million from the first quarter of 2011 due to the $2 million reversal of accrued interest last year on performing loans included in the bulk loan sale. The net interest margin was 3.53 percent for the first quarter of 2012, up 23 basis points from a year ago and two basis points from the fourth quarter of 2011.
“Growing quality loan and deposit relationships is a key focus in 2012,” Tallent commented. “The weak economy has created a highly competitive environment for good, quality loans; yet, our momentum continues to build as the seasoned relationship managers we have added in key markets attract new business. Our success attracting core transaction deposits also has continued, with balances increasing $151 million during the first quarter. That is 21 percent growth on an annualized basis.”
Fee revenue was $15.4 million in the first quarter of 2012, compared to $12.7 million in the fourth quarter and $11.8 million a year ago. Service charges and fees were $7.8 million, up $535,000 from the fourth quarter and $1.1 million from a year ago. The increase in service charges and fees from both periods reflects new charges on deposit accounts that became effective in the first quarter of 2012, and higher debit card revenue. Combined, these revenue increases more than offset lower overdraft fees.
Mortgage fee revenue increased $274,000 from the fourth quarter, and $605,000 from a year ago, to $2.1 million. The comparisons to prior periods are influenced significantly by the interest rate environment and refinancing activities. Mortgage loans closed totaled $81.7 million in the first quarter of 2012 compared with $78.8 million and $74.5 million, respectively, in the fourth and first quarters of 2011. Other fee revenue of $4.6 million reflected a $1.8 million increase from the fourth quarter, and a $1.7 million increase from the first quarter of 2011. The increase from both prior periods was primarily due to the recognition of $1.1 million in interest received for 2008’s federal tax refund.
Excluding foreclosed property costs, first quarter 2012 operating expenses were $43.1 million compared to $41.8 million for the fourth quarter of 2011. Operating expenses increased $1.3 million on a linked-quarter basis due to a reclassification of expenses reflected in the fourth quarter of 2011 that transferred $2.2 million of salary and employee benefit costs to other comprehensive income for unamortized prior service costs and actuarial losses related to United’s modified retirement plan. Excluding this one-time adjustment, the first quarter’s total operating expenses were down $900,000 from the fourth quarter, primarily due to lower staff costs. First quarter operating expenses decreased by $7.2 million in the first quarter compared to the same period a year ago, primarily due to $2.9 million in higher FDIC premium assessments in the first quarter of 2011, and costs incurred during that period related to the problem asset disposition plan: $1.0 million in professional fees and $2.6 million in property taxes paid on assets sold.
Foreclosed property costs for the first quarter of 2012 were $3.8 million, compared to $9.3 million in the fourth quarter of 2011 and $64.9 million in the first quarter a year ago. First quarter 2012 costs included $1.6 million for maintenance and $2.2 million in net losses and write-downs. For the fourth quarter of 2011, foreclosed property costs included $2.4 million in maintenance and $6.9 million in net losses and write-downs. First quarter 2011 costs included $4.3 million in maintenance and $60.6 million in net write-downs and losses, mostly related to the problem asset disposition plan.
As of March 31, 2012, capital ratios were as follows: Tier 1 Risk-Based of 13.7 percent; Tier 1 Leverage of 8.9 percent; and Total Risk-Based of 15.4 percent. The Tier 1 Common Risk-Based ratio was 8.3 and the Tangible Equity-to-Assets ratio was 8.1 percent.
“We are on the path to recovery as indicated by three profitable quarters out of the past four,” stated Tallent. “The economy is still weak and work remains to resolve credit problems, though we believe far more of that work is behind us. Looking forward, we expect continued profitability and improved financial performance from revenue enhancements and expense reductions.”
Conference Call
United will hold a conference call today, Thursday, April 26, 2012, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 69716155. The conference call also will be webcast and can be accessed by selecting ‘Calendar of Events’ within the Investor Relations section of the United’s website at www.ucbi.com.
About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $7.2 billion and operates 27 community banks with 106 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United’s common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United’s web site at www.ucbi.com.
Safe Harbor
This news release contains forward-looking statements, as defined by federal securities laws, including statements about United’s financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United’s filings with the Securities and Exchange Commission including its 2011 Annual Report on Form 10-K under the section entitled “Forward-Looking Statements” and “Risk Factors.” Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.
# # #
| UNITED COMMUNITY BANKS, INC. |
| Financial Highlights |
| Selected Financial Information |
| First | ||||||||||||||||||||||||
| 2012 | 2011 | Quarter | ||||||||||||||||||||||
| (in thousands, except per share | First | Fourth | Third | Second | First | 2012-2011 | ||||||||||||||||||
| data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | ||||||||||||||||||
| INCOME SUMMARY | ||||||||||||||||||||||||
| Interest revenue | $ | 70,221 | $ | 71,905 | $ | 74,543 | $ | 76,931 | $ | 75,965 | ||||||||||||||
| Interest expense | 11,357 | 12,855 | 15,262 | 17,985 | 19,573 | |||||||||||||||||||
| Net interest revenue | 58,864 | 59,050 | 59,281 | 58,946 | 56,392 | 4 | % | |||||||||||||||||
| Provision for loan losses | 15,000 | 14,000 | 36,000 | 11,000 | 190,000 | |||||||||||||||||||
| Fee revenue | 15,379 | 12,667 | 11,498 | 13,905 | 11,838 | 30 | ||||||||||||||||||
| Total revenue | 59,243 | 57,717 | 34,779 | 61,851 | (121,770 | ) | ||||||||||||||||||
| Operating expenses | 46,955 | 51,080 | 46,520 | 48,728 | 115,271 | (59 | ) | |||||||||||||||||
| Income (loss) before income taxes | 12,288 | 6,637 | (11,741 | ) | 13,123 | (237,041 | ) | |||||||||||||||||
| Income tax expense (benefit) | 760 | (3,264 | ) | (402 | ) | 1,095 | 295 | |||||||||||||||||
| Net income (loss) | 11,528 | 9,901 | (11,339 | ) | 12,028 | (237,336 | ) | |||||||||||||||||
| Preferred dividends and discount accretion | 3,030 | 3,025 | 3,019 | 3,016 | 2,778 | |||||||||||||||||||
| Net income (loss) available to common shareholders | $ | 8,498 | $ | 6,876 | $ | (14,358 | ) | $ | 9,012 | $ | (240,114 | ) | ||||||||||||
| PERFORMANCE MEASURES | ||||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||||
| Diluted income (loss) | $ | .15 | $ | .12 | $ | (.25 | ) | $ | .16 | $ | (13.00 | ) | ||||||||||||
| Book value | 6.68 | 6.62 | 6.77 | 7.11 | 2.20 | 204 | ||||||||||||||||||
Tangible book value (2) | 6.54 | 6.47 | 6.61 | 6.94 | 1.69 | 287 | ||||||||||||||||||
| Key performance ratios: | ||||||||||||||||||||||||
Return on equity (1)(3) | 8.78 | % | 7.40 | % | (15.06 | ) % | 42.60 | % | (526.54 | ) % | ||||||||||||||
Return on assets (3) | .66 | .56 | (.64 | ) | .66 | (13.04 | ) | |||||||||||||||||
Net interest margin (3) | 3.53 | 3.51 | 3.55 | 3.41 | 3.30 | |||||||||||||||||||
| Efficiency ratio | 63.31 | 71.23 | 65.73 | 66.88 | 169.08 | |||||||||||||||||||
| Equity to assets | 8.19 | 8.28 | 8.55 | 8.06 | 6.15 | |||||||||||||||||||
Tangible equity to assets (2) | 8.08 | 8.16 | 8.42 | 7.93 | 6.01 | |||||||||||||||||||
Tangible common equity to assets (2) | 5.33 | 5.38 | 5.65 | 1.37 | 2.70 | |||||||||||||||||||
Tangible common equity to risk-weighted assets (2) | 8.21 | 8.25 | 8.52 | 8.69 | .75 | |||||||||||||||||||
| ASSET QUALITY * | ||||||||||||||||||||||||
| Non-performing loans | $ | 129,704 | $ | 127,479 | $ | 144,484 | $ | 71,065 | $ | 83,769 | ||||||||||||||
| Foreclosed properties | 31,887 | 32,859 | 44,263 | 47,584 | 54,378 | |||||||||||||||||||
| Total non-performing assets (NPAs) | 161,591 | 160,338 | 188,747 | 118,649 | 138,147 | |||||||||||||||||||
| Allowance for loan losses | 113,601 | 114,468 | 146,092 | 127,638 | 133,121 | |||||||||||||||||||
| Net charge-offs | 15,867 | 45,624 | 17,546 | 16,483 | 231,574 | |||||||||||||||||||
| Allowance for loan losses to loans | 2.75 | % | 2.79 | % | 3.55 | % | 3.07 | % | 3.17 | % | ||||||||||||||
Net charge-offs to average loans (3) | 1.55 | 4.39 | 1.68 | 1.58 | 20.71 | |||||||||||||||||||
| NPAs to loans and foreclosed properties | 3.88 | 3.87 | 4.54 | 2.82 | 3.25 | |||||||||||||||||||
| NPAs to total assets | 2.25 | 2.30 | 2.74 | 1.66 | 1.79 | |||||||||||||||||||
AVERAGE BALANCES ($ in millions) | ||||||||||||||||||||||||
| Loans | $ | 4,168 | $ | 4,175 | $ | 4,194 | $ | 4,266 | $ | 4,599 | (9 | ) | ||||||||||||
| Investment securities | 2,153 | 2,141 | 2,150 | 2,074 | 1,625 | 32 | ||||||||||||||||||
| Earning assets | 6,700 | 6,688 | 6,630 | 6,924 | 6,902 | (3 | ) | |||||||||||||||||
| Total assets | 7,045 | 7,019 | 7,000 | 7,363 | 7,379 | (5 | ) | |||||||||||||||||
| Deposits | 6,028 | 6,115 | 6,061 | 6,372 | 6,560 | (8 | ) | |||||||||||||||||
| Shareholders’ equity | 577 | 581 | 598 | 594 | 454 | 27 | ||||||||||||||||||
Common shares - basic (thousands) | 57,764 | 57,646 | 57,599 | 25,427 | 18,466 | |||||||||||||||||||
Common shares - diluted (thousands) | 57,764 | 57,646 | 57,599 | 57,543 | 18,466 | |||||||||||||||||||
AT PERIOD END ($ in millions) | ||||||||||||||||||||||||
| Loans * | $ | 4,128 | $ | 4,110 | $ | 4,110 | $ | 4,163 | $ | 4,194 | (2 | ) | ||||||||||||
| Investment securities | 2,202 | 2,120 | 2,123 | 2,188 | 1,884 | 17 | ||||||||||||||||||
| Total assets | 7,174 | 6,983 | 6,894 | 7,152 | 7,709 | (7 | ) | |||||||||||||||||
| Deposits | 6,001 | 6,098 | 6,005 | 6,183 | 6,598 | (9 | ) | |||||||||||||||||
| Shareholders’ equity | 580 | 575 | 583 | 603 | 586 | (1 | ) | |||||||||||||||||
Common shares outstanding (thousands) | 57,603 | 57,561 | 57,510 | 57,469 | 20,903 | |||||||||||||||||||
(1) 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). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized. |
| * Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC. |
| UNITED COMMUNITY BANKS, INC. |
| Non-GAAP Performance Measures Reconciliation |
| Selected Financial Information |
| 2012 | 2011 | |||||||||||||||||||
| (in thousands, except per share | First | Fourth | Third | Second | First | |||||||||||||||
| data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
| Interest revenue reconciliation | ||||||||||||||||||||
| Interest revenue - taxable equivalent | $ | 70,221 | $ | 71,905 | $ | 74,543 | $ | 76,931 | $ | 75,965 | ||||||||||
| Taxable equivalent adjustment | (446 | ) | (423 | ) | (420 | ) | (429 | ) | (435 | ) | ||||||||||
| Interest revenue (GAAP) | $ | 69,775 | $ | 71,482 | $ | 74,123 | $ | 76,502 | $ | 75,530 | ||||||||||
| Net interest revenue reconciliation | ||||||||||||||||||||
| Net interest revenue - taxable equivalent | $ | 58,864 | $ | 59,050 | $ | 59,281 | $ | 58,946 | $ | 56,392 | ||||||||||
| Taxable equivalent adjustment | (446 | ) | (423 | ) | (420 | ) | (429 | ) | (435 | ) | ||||||||||
| Net interest revenue (GAAP) | $ | 58,418 | $ | 58,627 | $ | 58,861 | $ | 58,517 | $ | 55,957 | ||||||||||
| Total revenue reconciliation | ||||||||||||||||||||
| Total operating revenue | $ | 59,243 | $ | 57,717 | $ | 34,779 | $ | 61,851 | $ | (121,770 | ) | |||||||||
| Taxable equivalent adjustment | (446 | ) | (423 | ) | (420 | ) | (429 | ) | (435 | ) | ||||||||||
| Total revenue (GAAP) | $ | 58,797 | $ | 57,294 | $ | 34,359 | $ | 61,422 | $ | (122,205 | ) | |||||||||
| Income (loss) before taxes reconciliation | ||||||||||||||||||||
| Income (loss) before taxes | $ | 12,288 | $ | 6,637 | $ | (11,741 | ) | $ | 13,123 | $ | (237,041 | ) | ||||||||
| Taxable equivalent adjustment | (446 | ) | (423 | ) | (420 | ) | (429 | ) | (435 | ) | ||||||||||
| Income (loss) before taxes (GAAP) | $ | 11,842 | $ | 6,214 | $ | (12,161 | ) | $ | 12,694 | $ | (237,476 | ) | ||||||||
| Income tax (benefit) expense reconciliation | ||||||||||||||||||||
| Income tax (benefit) expense | $ | 760 | $ | (3,264 | ) | $ | (402 | ) | $ | 1,095 | $ | 295 | ||||||||
| Taxable equivalent adjustment | (446 | ) | (423 | ) | (420 | ) | (429 | ) | (435 | ) | ||||||||||
| Income tax (benefit) expense (GAAP) | $ | 314 | $ | (3,687 | ) | $ | (822 | ) | $ | 666 | $ | (140 | ) | |||||||
| Book value per common share reconciliation | ||||||||||||||||||||
| Tangible book value per common share | $ | 6.54 | $ | 6.47 | $ | 6.61 | $ | 6.94 | $ | 1.69 | ||||||||||
| Effect of goodwill and other intangibles | .14 | .15 | .16 | .17 | .51 | |||||||||||||||
| Book value per common share (GAAP) | $ | 6.68 | $ | 6.62 | $ | 6.77 | $ | 7.11 | $ | 2.20 | ||||||||||
| Average equity to assets reconciliation | ||||||||||||||||||||
| Tangible common equity to assets | 5.33 | % | 5.38 | % | 5.65 | % | 1.37 | % | 2.70 | % | ||||||||||
| Effect of preferred equity | 2.75 | 2.78 | 2.77 | 6.56 | 3.31 | |||||||||||||||
| Tangible equity to assets | 8.08 | 8.16 | 8.42 | 7.93 | 6.01 | |||||||||||||||
| Effect of goodwill and other intangibles | .11 | .12 | .13 | .13 | .14 | |||||||||||||||
| Equity to assets (GAAP) | 8.19 | % | 8.28 | % | 8.55 | % | 8.06 | % | 6.15 | % | ||||||||||
| Tangible common equity to risk-weighted assets reconciliation | ||||||||||||||||||||
| Tangible common equity to risk-weighted assets | 8.21 | % | 8.25 | % | 8.52 | % | 8.69 | % | .75 | % | ||||||||||
| Effect of other comprehensive income | .10 | (.03 | ) | (.29 | ) | (.42 | ) | (.32 | ) | |||||||||||
| Effect of trust preferred | 1.15 | 1.18 | 1.19 | 1.15 | 1.13 | |||||||||||||||
| Effect of preferred equity | 4.23 | 4.29 | 4.33 | 4.20 | 5.87 | |||||||||||||||
| Tier I capital ratio (Regulatory) | 13.69 | % | 13.69 | % | 13.75 | % | 13.62 | % | 7.43 | % | ||||||||||
| UNITED COMMUNITY BANKS, INC. |
| Financial Highlights |
Loan Portfolio Composition at Period-End (1) |
| 2012 | 2011 | Linked | Year over | |||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Quarter | Year | ||||||||||||||||||||||
| (in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Change | |||||||||||||||||||||
| LOANS BY CATEGORY | ||||||||||||||||||||||||||||
| Commercial (sec.by RE) | $ | 1,843 | $ | 1,822 | $ | 1,771 | $ | 1,742 | $ | 1,692 | $ | 21 | $ | 151 | ||||||||||||||
| Commercial & industrial | 440 | 428 | 429 | 428 | 431 | 12 | 9 | |||||||||||||||||||||
| Commercial construction | 167 | 164 | 169 | 195 | 213 | 3 | (46 | ) | ||||||||||||||||||||
| Total commercial | 2,450 | 2,414 | 2,369 | 2,365 | 2,336 | 36 | 114 | |||||||||||||||||||||
| Residential mortgage | 1,131 | 1,135 | 1,150 | 1,177 | 1,187 | (4 | ) | (56 | ) | |||||||||||||||||||
| Residential construction | 436 | 448 | 474 | 502 | 550 | (12 | ) | (114 | ) | |||||||||||||||||||
| Consumer installment | 111 | 113 | 117 | 119 | 121 | (2 | ) | (10 | ) | |||||||||||||||||||
| Total loans | $ | 4,128 | $ | 4,110 | $ | 4,110 | $ | 4,163 | $ | 4,194 | 18 | (66 | ) | |||||||||||||||
| LOANS BY MARKET | ||||||||||||||||||||||||||||
| North Georgia | $ | 1,408 | $ | 1,426 | $ | 1,478 | $ | 1,500 | $ | 1,531 | (18 | ) | (123 | ) | ||||||||||||||
| Atlanta MSA | 1,239 | 1,220 | 1,192 | 1,188 | 1,179 | 19 | 60 | |||||||||||||||||||||
| North Carolina | 588 | 597 | 607 | 626 | 640 | (9 | ) | (52 | ) | |||||||||||||||||||
| Coastal Georgia | 366 | 346 | 316 | 325 | 312 | 20 | 54 | |||||||||||||||||||||
| Gainesville MSA | 262 | 265 | 272 | 275 | 282 | (3 | ) | (20 | ) | |||||||||||||||||||
| East Tennessee | 265 | 256 | 245 | 249 | 250 | 9 | 15 | |||||||||||||||||||||
| Total loans | $ | 4,128 | $ | 4,110 | $ | 4,110 | $ | 4,163 | $ | 4,194 | 18 | (66 | ) | |||||||||||||||
| RESIDENTIAL CONSTRUCTION | ||||||||||||||||||||||||||||
| Dirt loans | ||||||||||||||||||||||||||||
| Acquisition & development | $ | 86 | $ | 88 | $ | 97 | $ | 105 | $ | 116 | (2 | ) | (30 | ) | ||||||||||||||
| Land loans | 57 | 61 | 60 | 62 | 69 | (4 | ) | (12 | ) | |||||||||||||||||||
| Lot loans | 203 | 207 | 216 | 218 | 228 | (4 | ) | (25 | ) | |||||||||||||||||||
| Total | 346 | 356 | 373 | 385 | 413 | (10 | ) | (67 | ) | |||||||||||||||||||
| House loans | ||||||||||||||||||||||||||||
| Spec | 57 | 59 | 64 | 74 | 88 | (2 | ) | (31 | ) | |||||||||||||||||||
| Sold | 32 | 33 | 37 | 43 | 49 | (1 | ) | (17 | ) | |||||||||||||||||||
| Total | 89 | 92 | 101 | 117 | 137 | (3 | ) | (48 | ) | |||||||||||||||||||
| Total residential construction | $ | 435 | $ | 448 | $ | 474 | $ | 502 | $ | 550 | (13 | ) | (115 | ) | ||||||||||||||
| RESIDENTIAL CONSTRUCTION - ATLANTA MSA | ||||||||||||||||||||||||||||
| Dirt loans | ||||||||||||||||||||||||||||
| Acquisition & development | $ | 17 | $ | 17 | $ | 19 | $ | 20 | $ | 22 | - | (5 | ) | |||||||||||||||
| Land loans | 13 | 14 | 15 | 16 | 19 | (1 | ) | (6 | ) | |||||||||||||||||||
| Lot loans | 22 | 22 | 22 | 22 | 24 | - | (2 | ) | ||||||||||||||||||||
| Total | 52 | 53 | 56 | 58 | 65 | (1 | ) | (13 | ) | |||||||||||||||||||
| House loans | ||||||||||||||||||||||||||||
| Spec | 27 | 27 | 28 | 30 | 34 | - | (7 | ) | ||||||||||||||||||||
| Sold | 7 | 6 | 8 | 9 | 11 | 1 | (4 | ) | ||||||||||||||||||||
| Total | 34 | 33 | 36 | 39 | 45 | 1 | (11 | ) | ||||||||||||||||||||
| Total residential construction | $ | 86 | $ | 86 | $ | 92 | $ | 97 | $ | 110 | - | (24 | ) | |||||||||||||||
(1) Excludes total loans of $47.2 million, $54.5 million, $57.8 million, $70.8 million and $63.3 million as of March 31, 2012, December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
| UNITED COMMUNITY BANKS, INC. |
| Financial Highlights |
Credit Quality (1) |
| First Quarter 2012 | Fourth Quarter 2011 | Third Quarter 2011 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Non-performing Loans | Foreclosed Properties | Total NPAs | Non-performing Loans | Foreclosed Properties | Total NPAs | Non-performing Loans | Foreclosed Properties | Total NPAs | |||||||||||||||||||||||||||
| NPAs BY CATEGORY | ||||||||||||||||||||||||||||||||||||
| Commercial (sec.by RE) | $ | 26,081 | $ | 10,808 | $ | 36,889 | $ | 27,322 | $ | 9,745 | $ | 37,067 | $ | 21,998 | $ | 8,880 | $ | 30,878 | ||||||||||||||||||
| Commercial & industrial | 36,314 | - | 36,314 | 34,613 | - | 34,613 | 53,009 | - | 53,009 | |||||||||||||||||||||||||||
| Commercial construction | 23,319 | 3,266 | 26,585 | 16,655 | 3,336 | 19,991 | 11,370 | 5,862 | 17,232 | |||||||||||||||||||||||||||
| Total commercial | 85,714 | 14,074 | 99,788 | 78,590 | 13,081 | 91,671 | 86,377 | 14,742 | 101,119 | |||||||||||||||||||||||||||
| Residential mortgage | 18,741 | 5,882 | 24,623 | 22,358 | 6,927 | 29,285 | 22,671 | 7,960 | 30,631 | |||||||||||||||||||||||||||
| Residential construction | 24,341 | 11,931 | 36,272 | 25,523 | 12,851 | 38,374 | 34,472 | 21,561 | 56,033 | |||||||||||||||||||||||||||
| Consumer installment | 908 | - | 908 | 1,008 | - | 1,008 | 964 | - | 964 | |||||||||||||||||||||||||||
| Total NPAs | $ | 129,704 | $ | 31,887 | $ | 161,591 | $ | 127,479 | $ | 32,859 | $ | 160,338 | $ | 144,484 | $ | 44,263 | $ | 188,747 | ||||||||||||||||||
| Balance as a % of | ||||||||||||||||||||||||||||||||||||
| Unpaid Principal | 70.6 | % | 36.1 | % | 59.4 | % | 71.3 | % | 35.9 | % | 59.3 | % | 77.8 | % | 33.4 | % | 59.3 | % | ||||||||||||||||||
| NPAs BY MARKET | ||||||||||||||||||||||||||||||||||||
| North Georgia | $ | 81,117 | $ | 14,559 | $ | 95,676 | $ | 88,600 | $ | 15,136 | $ | 103,736 | $ | 105,078 | $ | 17,467 | $ | 122,545 | ||||||||||||||||||
| Atlanta MSA | 22,321 | 7,647 | 29,968 | 14,480 | 6,169 | 20,649 | 13,350 | 12,971 | 26,321 | |||||||||||||||||||||||||||
| North Carolina | 15,765 | 4,650 | 20,415 | 15,100 | 5,365 | 20,465 | 13,243 | 7,941 | 21,184 | |||||||||||||||||||||||||||
| Coastal Georgia | 5,622 | 1,268 | 6,890 | 5,248 | 1,620 | 6,868 | 5,600 | 2,354 | 7,954 | |||||||||||||||||||||||||||
| Gainesville MSA | 2,210 | 3,387 | 5,597 | 2,069 | 3,760 | 5,829 | 5,311 | 2,495 | 7,806 | |||||||||||||||||||||||||||
| East Tennessee | 2,669 | 376 | 3,045 | 1,982 | 809 | 2,791 | 1,902 | 1,035 | 2,937 | |||||||||||||||||||||||||||
| Total NPAs | $ | 129,704 | $ | 31,887 | $ | 161,591 | $ | 127,479 | $ | 32,859 | $ | 160,338 | $ | 144,484 | $ | 44,263 | $ | 188,747 | ||||||||||||||||||
| NPA ACTIVITY | ||||||||||||||||||||||||||||||||||||
| Beginning Balance | $ | 127,479 | $ | 32,859 | $ | 160,338 | $ | 144,484 | $ | 44,263 | $ | 188,747 | $ | 71,065 | $ | 47,584 | $ | 118,649 | ||||||||||||||||||
| Loans placed on non-accrual | 32,437 | - | 32,437 | 45,675 | - | 45,675 | 103,365 | - | 103,365 | |||||||||||||||||||||||||||
| Payments received | (5,945 | ) | - | (5,945 | ) | (1,884 | ) | - | (1,884 | ) | (3,995 | ) | - | (3,995 | ) | |||||||||||||||||||||
| Loan charge-offs | (14,733 | ) | - | (14,733 | ) | (44,757 | ) | - | (44,757 | ) | (15,335 | ) | - | (15,335 | ) | |||||||||||||||||||||
| Foreclosures | (9,534 | ) | 9,534 | - | (16,039 | ) | 16,039 | - | (10,616 | ) | 10,616 | - | ||||||||||||||||||||||||
| Capitalized costs | - | 329 | 329 | - | 141 | 141 | - | 818 | 818 | |||||||||||||||||||||||||||
| Note / property sales | - | (8,631 | ) | (8,631 | ) | - | (20,651 | ) | (20,651 | ) | - | (13,787 | ) | (13,787 | ) | |||||||||||||||||||||
| Write downs | - | (2,111 | ) | (2,111 | ) | - | (3,893 | ) | (3,893 | ) | - | (1,772 | ) | (1,772 | ) | |||||||||||||||||||||
| Net gains (losses) on sales | - | (93 | ) | (93 | ) | - | (3,040 | ) | (3,040 | ) | - | 804 | 804 | |||||||||||||||||||||||
| Ending Balance | $ | 129,704 | $ | 31,887 | $ | 161,591 | $ | 127,479 | $ | 32,859 | $ | 160,338 | $ | 144,484 | $ | 44,263 | $ | 188,747 | ||||||||||||||||||
| First Quarter 2012 | Fourth Quarter 2011 | Third Quarter 2011 | ||||||||||||||||||||||
| Net Charge- | Net Charge- | Net Charge- | ||||||||||||||||||||||
| Offs to | Offs to | Offs to | ||||||||||||||||||||||
| Net | Average | Net | Average | Net | Average | |||||||||||||||||||
| (in thousands) | Charge-Offs | Loans (2) | Charge-Offs | Loans (2) | Charge-Offs | Loans (2) | ||||||||||||||||||
| NET CHARGE-OFFS BY CATEGORY | ||||||||||||||||||||||||
| Commercial (sec.by RE) | $ | 3,697 | .81 | % | $ | 4,962 | 1.09 | % | $ | 2,192 | .50 | % | ||||||||||||
| Commercial & industrial | 669 | .62 | 18,940 | 17.47 | 420 | .39 | ||||||||||||||||||
| Commercial construction | 334 | .81 | 3,318 | 7.88 | 1,625 | 3.54 | ||||||||||||||||||
| Total commercial | 4,700 | .78 | 27,220 | 4.51 | 4,237 | .71 | ||||||||||||||||||
| Residential mortgage | 5,375 | 1.91 | 5,887 | 2.04 | 6,110 | 2.09 | ||||||||||||||||||
| Residential construction | 5,314 | 4.84 | 12,090 | 10.36 | 6,381 | 5.19 | ||||||||||||||||||
| Consumer installment | 478 | 1.72 | 427 | 1.47 | 818 | 2.75 | ||||||||||||||||||
| Total | $ | 15,867 | 1.55 | $ | 45,624 | 4.39 | $ | 17,546 | 1.68 | |||||||||||||||
| NET CHARGE-OFFS BY MARKET | ||||||||||||||||||||||||
| North Georgia | $ | 9,022 | 2.56 | % | $ | 34,970 | 9.46 | % | $ | 8,124 | 2.16 | % | ||||||||||||
| Atlanta MSA | 2,729 | .89 | 4,195 | 1.37 | 2,813 | .94 | ||||||||||||||||||
| North Carolina | 1,679 | 1.14 | 3,180 | 2.10 | 3,608 | 2.31 | ||||||||||||||||||
| Coastal Georgia | 1,329 | 1.53 | 335 | .41 | 709 | .88 | ||||||||||||||||||
| Gainesville MSA | 883 | 1.35 | 2,572 | 3.84 | 1,804 | 2.64 | ||||||||||||||||||
| East Tennessee | 225 | .34 | 372 | .59 | 488 | .78 | ||||||||||||||||||
| Total | $ | 15,867 | 1.55 | $ | 45,624 | 4.39 | $ | 17,546 | 1.68 | |||||||||||||||
| (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. |
| UNITED COMMUNITY BANKS, INC. |
Consolidated Statement of Operations (Unaudited) |
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands, except per share data) | 2012 | 2011 | ||||||
| Interest revenue: | ||||||||
| Loans, including fees | $ | 55,759 | $ | 61,107 | ||||
| Investment securities, including tax exempt of $250 and $259 | 13,004 | 13,604 | ||||||
| Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks | 1,012 | 819 | ||||||
| Total interest revenue | 69,775 | 75,530 | ||||||
| Interest expense: | ||||||||
| Deposits: | ||||||||
| NOW | 637 | 1,324 | ||||||
| Money market | 641 | 2,028 | ||||||
| Savings | 37 | 77 | ||||||
| Time | 6,159 | 11,732 | ||||||
| Total deposit interest expense | 7,474 | 15,161 | ||||||
| Federal funds purchased, repurchase agreements and other short-term borrowings | 1,045 | 1,042 | ||||||
| Federal Home Loan Bank advances | 466 | 590 | ||||||
| Long-term debt | 2,372 | 2,780 | ||||||
| Total interest expense | 11,357 | 19,573 | ||||||
| Net interest revenue | 58,418 | 55,957 | ||||||
| Provision for loan losses | 15,000 | 190,000 | ||||||
| Net interest revenue after provision for loan losses | 43,418 | (134,043 | ) | |||||
| Fee revenue: | ||||||||
| Service charges and fees | 7,783 | 6,720 | ||||||
| Mortgage loan and other related fees | 2,099 | 1,494 | ||||||
| Brokerage fees | 813 | 677 | ||||||
| Securities gains, net | 557 | 55 | ||||||
| Loss from prepayment of debt | (482 | ) | - | |||||
| Other | 4,609 | 2,892 | ||||||
| Total fee revenue | 15,379 | 11,838 | ||||||
| Total revenue | 58,797 | (122,205 | ) | |||||
| Operating expenses: | ||||||||
| Salaries and employee benefits | 25,225 | 24,924 | ||||||
| Communications and equipment | 3,155 | 3,344 | ||||||
| Occupancy | 3,771 | 4,074 | ||||||
| Advertising and public relations | 846 | 978 | ||||||
| Postage, printing and supplies | 979 | 1,118 | ||||||
| Professional fees | 1,975 | 3,330 | ||||||
| Foreclosed property | 3,825 | 64,899 | ||||||
| FDIC assessments and other regulatory charges | 2,510 | 5,413 | ||||||
| Amortization of intangibles | 732 | 762 | ||||||
| Other | 3,937 | 6,429 | ||||||
| Total operating expenses | 46,955 | 115,271 | ||||||
| Net income (loss) before income taxes | 11,842 | (237,476 | ) | |||||
| Income tax expense (benefit) | 314 | (140 | ) | |||||
| Net income (loss) | 11,528 | (237,336 | ) | |||||
| Preferred stock dividends and discount accretion | 3,030 | 2,778 | ||||||
| Net income (loss) available to common shareholders | $ | 8,498 | $ | (240,114 | ) | |||
| Earnings (loss) per common share - Basic / Diluted | $ | .15 | $ | (13.00 | ) | |||
| Weighted average common shares outstanding - Basic / Diluted | 57,764 | 18,466 | ||||||
| UNITED COMMUNITY BANKS, INC. |
| Consolidated Balance Sheet |
| March 31, | December 31, | March 31, | ||||||||||
| (in thousands, except share and per share data) | 2012 | 2011 | 2011 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 53,147 | $ | 53,807 | $ | 153,891 | ||||||
| Interest-bearing deposits in banks | 139,439 | 139,609 | 465,656 | |||||||||
| Federal funds sold, reverse repurchase agreements, commercial paper and short-term investments | 235,000 | 185,000 | 470,087 | |||||||||
| Cash and cash equivalents | 427,586 | 378,416 | 1,089,634 | |||||||||
| Securities available for sale | 1,898,815 | 1,790,047 | 1,638,494 | |||||||||
| Securities held to maturity (fair value $318,490, $343,531 and $248,361) | 303,636 | 330,203 | 245,430 | |||||||||
| Loans held for sale | - | - | 80,629 | |||||||||
| Mortgage loans held for sale | 24,809 | 23,881 | 25,364 | |||||||||
| Loans, net of unearned income | 4,127,566 | 4,109,614 | 4,194,372 | |||||||||
| Less allowance for loan losses | 113,601 | 114,468 | 133,121 | |||||||||
| Loans, net | 4,013,965 | 3,995,146 | 4,061,251 | |||||||||
| Assets covered by loss sharing agreements with the FDIC | 72,854 | 78,145 | 125,789 | |||||||||
| Premises and equipment, net | 174,419 | 175,088 | 179,143 | |||||||||
| Bank owned life insurance | 80,956 | 80,599 | 79,777 | |||||||||
| Accrued interest receivable | 20,292 | 20,693 | 21,687 | |||||||||
| Goodwill and other intangible assets | 7,695 | 8,428 | 10,684 | |||||||||
| Foreclosed property | 31,887 | 32,859 | 54,378 | |||||||||
| Unsettled securities sales | 43,527 | - | - | |||||||||
| Other assets | 73,252 | 69,915 | 97,228 | |||||||||
| Total assets | $ | 7,173,693 | $ | 6,983,420 | $ | 7,709,488 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Liabilities: | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 1,101,757 | $ | 992,109 | $ | 864,708 | ||||||
| NOW | 1,389,016 | 1,509,896 | 1,320,136 | |||||||||
| Money market | 1,123,734 | 1,038,778 | 967,938 | |||||||||
| Savings | 214,150 | 199,007 | 193,591 | |||||||||
| Time: | ||||||||||||
| Less than $100,000 | 1,207,479 | 1,332,394 | 1,576,505 | |||||||||
| Greater than $100,000 | 796,882 | 847,152 | 990,289 | |||||||||
| Brokered | 167,521 | 178,647 | 684,581 | |||||||||
| Total deposits | 6,000,539 | 6,097,983 | 6,597,748 | |||||||||
| Federal funds purchased, repurchase agreements, and other short-term borrowings | 101,925 | 102,577 | 102,107 | |||||||||
| Federal Home Loan Bank advances | 215,125 | 40,625 | 55,125 | |||||||||
| Long-term debt | 120,245 | 120,225 | 150,166 | |||||||||
| Unsettled securities purchases | 119,565 | 10,325 | 177,532 | |||||||||
| Accrued expenses and other liabilities | 36,755 | 36,199 | 40,766 | |||||||||
| Total liabilities | 6,594,154 | 6,407,934 | 7,123,444 | |||||||||
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 | 217 | |||||||||
| Series B; $1,000 stated value; 180,000 shares issued and outstanding | 177,451 | 177,092 | 176,049 | |||||||||
| Series D; $1,000 stated value; 16,613 shares issued and outstanding | 16,613 | 16,613 | 16,613 | |||||||||
| Series F; $1,000 stated value; 195,872 shares issued and outstanding | - | - | 195,872 | |||||||||
| Series G; $1,000 stated value; 151,185 shares issued and outstanding | - | - | 151,185 | |||||||||
| Common stock, $1 par value; 100,000,000 shares authorized; | ||||||||||||
| 41,688,647, 41,647,100 and 20,903,111 shares issued and outstanding | 41,689 | 41,647 | 20,903 | |||||||||
| Common stock, non-voting, $1 par value; 30,000,000 shares authorized; | ||||||||||||
| 15,914,209 shares issued and outstanding | 15,914 | 15,914 | - | |||||||||
| Common stock issuable; 90,126, 93,681 and 79,428 shares | 2,948 | 3,233 | 3,681 | |||||||||
| Capital surplus | 1,056,135 | 1,054,940 | 738,963 | |||||||||
| Accumulated deficit | (722,363 | ) | (730,861 | ) | (732,390 | ) | ||||||
| Accumulated other comprehensive (loss) income | (9,065 | ) | (3,309 | ) | 14,951 | |||||||
| Total shareholders’ equity | 579,539 | 575,486 | 586,044 | |||||||||
| Total liabilities and shareholders’ equity | $ | 7,173,693 | $ | 6,983,420 | $ | 7,709,488 | ||||||
| UNITED COMMUNITY BANKS, INC. |
| Average Consolidated Balance Sheets and Net Interest Analysis |
| For the Three Months Ended March 31, |
| 2012 | 2011 | |||||||||||||||||||||||
| 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) | $ | 4,168,440 | $ | 55,842 | 5.39 | % | $ | 4,598,860 | $ | 61,070 | 5.39 | % | ||||||||||||
Taxable securities (3) | 2,127,794 | 12,754 | 2.40 | 1,599,481 | 13,345 | 3.34 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 25,438 | 410 | 6.45 | 25,827 | 424 | 6.57 | ||||||||||||||||||
| Federal funds sold and other interest-earning assets | 377,988 | 1,215 | 1.29 | 677,453 | 1,126 | .66 | ||||||||||||||||||
| Total interest-earning assets | 6,699,660 | 70,221 | 4.21 | 6,901,621 | 75,965 | 4.45 | ||||||||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||||||
| Allowance for loan losses | (117,803 | ) | (169,113 | ) | ||||||||||||||||||||
| Cash and due from banks | 54,664 | 134,341 | ||||||||||||||||||||||
| Premises and equipment | 174,849 | 179,353 | ||||||||||||||||||||||
Other assets (3) | 233,676 | 332,827 | ||||||||||||||||||||||
| Total assets | $ | 7,045,046 | $ | 7,379,029 | ||||||||||||||||||||
| Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| NOW | $ | 1,458,112 | 637 | .18 | $ | 1,373,142 | 1,324 | .39 | ||||||||||||||||
| Money market | 1,069,658 | 641 | .24 | 928,542 | 2,028 | .89 | ||||||||||||||||||
| Savings | 205,402 | 37 | .07 | 187,423 | 77 | .17 | ||||||||||||||||||
| Time less than $100,000 | 1,271,351 | 3,026 | .96 | 1,540,342 | 5,451 | 1.44 | ||||||||||||||||||
| Time greater than $100,000 | 821,164 | 2,415 | 1.18 | 990,881 | 4,151 | 1.70 | ||||||||||||||||||
| Brokered | 161,335 | 718 | 1.79 | 698,288 | 2,130 | 1.24 | ||||||||||||||||||
| Total interest-bearing deposits | 4,987,022 | 7,474 | .60 | 5,718,618 | 15,161 | 1.08 | ||||||||||||||||||
| Federal funds purchased and other borrowings | 102,258 | 1,045 | 4.11 | 101,097 | 1,042 | 4.18 | ||||||||||||||||||
| Federal Home Loan Bank advances | 138,372 | 466 | 1.35 | 55,125 | 590 | 4.34 | ||||||||||||||||||
| Long-term debt | 120,237 | 2,372 | 7.93 | 150,157 | 2,780 | 7.51 | ||||||||||||||||||
| Total borrowed funds | 360,867 | 3,883 | 4.33 | 306,379 | 4,412 | 5.84 | ||||||||||||||||||
| Total interest-bearing liabilities | 5,347,889 | 11,357 | .85 | 6,024,997 | 19,573 | 1.32 | ||||||||||||||||||
| Non-interest-bearing liabilities: | ||||||||||||||||||||||||
| Non-interest-bearing deposits | 1,040,587 | 841,351 | ||||||||||||||||||||||
| Other liabilities | 79,612 | 58,634 | ||||||||||||||||||||||
| Total liabilities | 6,468,088 | 6,924,982 | ||||||||||||||||||||||
| Shareholders’ equity | 576,958 | 454,047 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,045,046 | $ | 7,379,029 | ||||||||||||||||||||
| Net interest revenue | $ | 58,864 | $ | 56,392 | ||||||||||||||||||||
| Net interest-rate spread | 3.36 | % | 3.13 | % | ||||||||||||||||||||
Net interest margin (4) | 3.53 | % | 3.30 | % | ||||||||||||||||||||
| (1) | Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. |
| (2) | Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. |
| (3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains of $23.6 million in 2012 and $27.2 million in 2011 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. |