Exhibit 99.1
![](https://capedge.com/proxy/8-K/0001362310-08-006074/c76275p7627501.gif)
For Immediate Release
For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com
UNITED COMMUNITY BANKS, INC. ANNOUNCES
RESULTS FOR THIRD QUARTER 2008
RESULTS FOR THIRD QUARTER 2008
•Third quarter provision for loan losses of $76 million
•Allowance-to-loans ratio of 1.91%, up from 1.53% in second quarter
•Net loss for third quarter
•Capital levels strong
BLAIRSVILLE, GA — October 23, 2008 — United Community Banks, Inc. (NASDAQ: UCBI) today announced a net loss of $39.9 million, or 84 cents per diluted share, for the third quarter of 2008 compared to net income of $22.5 million, or 46 cents per diluted share, for the third quarter of 2007. For the first nine months of 2008, the company had a net loss of $16.7 million, or 35 cents per diluted share, compared to net operating income of $63.0 million, or $1.36 per diluted share, for the first nine months of 2007.
“As we noted in our October 6 announcement, economic pressures on the housing market, particularly in Atlanta, had an impact on our loan portfolio in the third quarter,” stated Jimmy Tallent, president and chief executive officer. “As a result, we increased our provision for loan losses, which covered our higher net charge-offs and strengthened our allowance-to-loans ratio. Despite the challenging environment, we were able to negotiate sales of some of our largest and most impaired assets. We will continue our strategy to deal aggressively with problem credits, with a goal of emerging as quickly as possible from this difficult credit cycle.”
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Loans were down $123 million to $5.83 billion from the third quarter of 2007 and down $103 million on a linked-quarter basis as the company continued to reduce its exposure to the residential construction and housing markets. At September 30, 2008, residential construction loans were $1.6 billion, or 27 percent of total loans, a decrease of $339 million from a year ago and $149 million from the second quarter. “Partially off-setting the decrease in residential construction loans, we had $49 million of growth this quarter in the residential mortgage and commercial areas of our loan portfolio,” Tallent said. “We are making good progress in rebalancing our portfolio and further reducing our exposure to residential construction.”
Total customer deposits increased $98 million from the third quarter of 2007 and were down $217 million compared to the second quarter of 2008. “We saw a similar seasonal trend last year between the second and third quarters, but some of the decrease in customer deposits this quarter certainly reflects the concerns people are having about the banking industry,” stated Tallent. “In response, we launched a company-wide customer education program about our bank’s safety and soundness and about customers’ options for FDIC insurance. This effort helped assure that all customers who came to us with concerns about their deposits could have their questions answered quickly and reassuringly.”
Taxable equivalent net interest revenue of $58.8 million reflected a decrease of $3.0 million from the second quarter of 2008 and $12.9 million from the third quarter of 2007. Taxable equivalent net interest margin was 3.17 percent compared with 3.32 percent for the second quarter of 2008 and 3.89 percent for the third quarter of 2007. “We continued to see margin compression in the third quarter,” Tallent said. “A higher level of non-performing assets, continued competitive deposit pricing, and liquidity were key contributors.”
The third quarter provision for loan losses was $76.0 million. Net charge-offs for the third quarter were $55.7 million compared with $14.3 million for the second quarter of 2008. Annualized net charge-offs to average loans was 377 basis points for the third quarter of 2008 compared with 97 basis points for the second quarter of 2008. “Net charge-offs increased significantly this quarter due to our aggressive efforts to move problem credits off our books,” said Tallent. “Specifically, we sold non-performing assets totaling $66 million. Among these were 13 of our largest non-performing assets, totaling $42 million, at the very end of the third quarter. Additionally, we had verbal commitments on three non-performing assets that were written down this quarter. The losses on these 16 sales represented a significant portion of the $55.7 million in charge-offs for the third quarter.” At quarter-end, non-performing assets totaled $177.7 million compared with $152.2 million at June 30, 2008. The ratio of non-performing assets to total assets at quarter-end and last quarter was 2.20 percent and 1.84 percent, respectively.
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Fee revenue of $13.1 million was down $2.5 million from the third quarter of 2007 and down $2.0 million from the second quarter of 2008. Service charges and fees on deposit accounts of $8.2 million were up $316,000 from the third quarter of 2007 and up $214,000 from last quarter. Mortgage fees were down $708,000 from last year and $792,000 from last quarter due to the slowdown in the housing market. Consulting fees were down $654,000 from last year and $525,000 from last quarter due to weakness in the market that affected sales efforts and closing contracts. Other revenue was down $1.4 million from last year and $735,000 from the second quarter of 2008, primarily due to lower levels of earnings on bank-owned life insurance and deferred compensation plan assets.
Operating expenses of $57.0 million reflected an increase of $8.8 million from the third quarter of 2007 and $7.2 million from last quarter. Salaries and employee benefit costs of $28.6 million declined $1.1 million from last year due to lower incentive compensation. Other expenses of $15.3 million increased $10.1 million from the third quarter of 2007 and $7.7 million from last quarter primarily due to a higher level of foreclosed property costs. Foreclosed property costs, which included $8.3 million of write-downs this quarter, totaled $10.1 million for the third quarter compared with $591,000 a year ago and $2.9 million last quarter.
The board of directors approved the regular quarterly dividend that will be paid in shares of common stock on January 2, 2009 for shareholders of record as of December 10, 2008. The dividend rate is 0.7692 percent. “Each shareholder will receive one new share of common stock for every 130 shares held on December 10, 2008,” said Tallent. “This is equal to the third quarter stock dividend. The stock dividend is an appropriate balance between the company’s need to retain capital during these uncertain times and the needs of those shareholders who depend on a cash dividend. Shareholders can choose either to sell their new shares or continue to hold them, increasing their ownership at a time when the stock price is historically low.”
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At September 30, 2008, the company’s capital ratios were as follows: Tier I Risk-Based Capital of 8.66 percent; Leverage of 6.69 percent; and, Total Risk-Based of 11.40 percent. Also, the tangible equity-to-assets ratio was 6.65 percent. “We will continue to seek loan and foreclosed property sales as we expect further deterioration in real estate valuations and pricing,” said Tallent. “Our strong capital levels enable us to pursue this strategy and absorb higher credit costs without impairing our financial soundness. A company cannot have too much capital in this environment, so we will be alert for cost-effective opportunities to maintain and build our capital levels. And, we recently executed on two of these opportunities. We issued $30 million of subordinated debt in August and we will close $12 million of internally offered trust preferred securities by the end of October. Both of these securities will increase our regulatory capital levels. In addition, we are exploring the Treasury’s TARP Program that would allow us to issue preferred stock.”
“We are of course disappointed with the third quarter loss,” Tallent continued. “At the same time, we firmly believe that the company’s ability to manage through this cycle, and to support our long-term success, have been strengthened by the actions taken during the quarter. As we look ahead, we expect to see ongoing credit challenges and upward pressure on the level of non-performing assets. Charge-offs will continue to be elevated as we work through our problem credits, but we certainly don’t see a repeat of the third quarter-level charge-offs in the immediate future.”
Conference Call
United Community Banks will hold a conference call on Thursday, October 23, 2008, at 11 a.m. EDT to discuss the contents of this news release and to share business highlights for the quarter. The telephone number for the conference call is (877) 591-4953 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.
United Community Banks will hold a conference call on Thursday, October 23, 2008, at 11 a.m. EDT to discuss the contents of this news release and to share business highlights for the quarter. The telephone number for the conference call is (877) 591-4953 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.
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About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.1 billion and operates 27 community banks with 108 banking offices located 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 atwww.ucbi.com.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.1 billion and operates 27 community banks with 108 banking offices located 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 atwww.ucbi.com.
Safe Harbor
This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward-Looking Statements” on page 4 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.
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 4 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.
# # #
(Tables Follow)
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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
Financial Highlights
Selected Financial Information
Third | ||||||||||||||||||||||||||||||||||||
2008 | 2007 | Quarter | For the Nine | YTD | ||||||||||||||||||||||||||||||||
(in thousands, except per share | Third | Second | First | Fourth | Third | 2008-2007 | Months Ended | 2008-2007 | ||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2008 | 2007 | Change | |||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
Interest revenue | $ | 112,510 | $ | 116,984 | $ | 129,041 | $ | 140,768 | $ | 144,884 | $ | 358,535 | $ | 410,150 | ||||||||||||||||||||||
Interest expense | 53,719 | 55,231 | 62,754 | 71,038 | 73,203 | 171,704 | 205,396 | |||||||||||||||||||||||||||||
Net interest revenue | 58,791 | 61,753 | 66,287 | 69,730 | 71,681 | (18 | )% | 186,831 | 204,754 | (9 | )% | |||||||||||||||||||||||||
Provision for loan losses(1) | 76,000 | 15,500 | 7,500 | 26,500 | 3,700 | 99,000 | 11,100 | |||||||||||||||||||||||||||||
Fee revenue | 13,121 | 15,105 | 14,197 | 16,100 | 15,615 | (16 | ) | 42,423 | 46,551 | (9 | ) | |||||||||||||||||||||||||
Total operating revenue | (4,088 | ) | 61,358 | 72,984 | 59,330 | 83,596 | (105 | ) | 130,254 | 240,205 | (46 | ) | ||||||||||||||||||||||||
Operating expenses | 56,970 | 49,761 | 47,529 | 49,336 | 48,182 | 18 | 154,260 | 140,725 | 10 | |||||||||||||||||||||||||||
Income (loss) before taxes | (61,058 | ) | 11,597 | 25,455 | 9,994 | 35,414 | (272 | ) | (24,006 | ) | 99,480 | (124 | ) | |||||||||||||||||||||||
Income tax expense (benefit) | (21,184 | ) | 4,504 | 9,377 | 3,960 | 12,878 | (7,303 | ) | 36,523 | |||||||||||||||||||||||||||
Net operating income (loss) | (39,874 | ) | 7,093 | 16,078 | 6,034 | 22,536 | (277 | ) | (16,703 | ) | 62,957 | (127 | ) | |||||||||||||||||||||||
Fraud loss provision, net of tax (1) | — | — | — | 1,833 | — | — | 9,165 | |||||||||||||||||||||||||||||
Net income (loss) | $ | (39,874 | ) | $ | 7,093 | $ | 16,078 | $ | 4,201 | $ | 22,536 | (277 | ) | $ | (16,703 | ) | $ | 53,792 | (131 | ) | ||||||||||||||||
OPERATING PERFORMANCE(1) | ||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share: | ||||||||||||||||||||||||||||||||||||
Basic | $ | (.84 | ) | $ | .15 | $ | .34 | $ | .13 | $ | .47 | (279 | ) | $ | (.35 | ) | $ | 1.38 | (125 | ) | ||||||||||||||||
Diluted | (.84 | ) | .15 | .34 | .13 | .46 | (283 | ) | (.35 | ) | 1.36 | (126 | ) | |||||||||||||||||||||||
Return on equity (2) | (19.07 | )% | 3.41 | % | 7.85 | % | 2.89 | % | 10.66 | % | (2.69 | )% | 10.04 | % | ||||||||||||||||||||||
Return on tangible equity (2)(3)(4) | (30.43 | ) | 5.86 | 13.16 | 5.06 | 17.54 | (3.99 | ) | 17.42 | |||||||||||||||||||||||||||
Return on assets(4) | (1.95 | ) | .34 | .78 | .29 | 1.11 | (.27 | ) | 1.11 | |||||||||||||||||||||||||||
Dividend payout ratio | (10.71 | ) | 60.00 | 26.47 | 69.23 | 19.15 | (77.14 | ) | 19.57 | |||||||||||||||||||||||||||
GAAP PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||||
Basic earnings (loss) | $ | (.84 | ) | $ | .15 | $ | .34 | $ | .09 | $ | .47 | (279 | ) | $ | (.35 | ) | $ | 1.18 | (130 | ) | ||||||||||||||||
Diluted earnings (loss) | (.84 | ) | .15 | .34 | .09 | .46 | (283 | ) | (.35 | ) | 1.16 | (130 | ) | |||||||||||||||||||||||
Cash / stock dividends declared | .09 | .09 | .09 | .09 | .09 | 0 | .27 | .27 | 0 | |||||||||||||||||||||||||||
Book value | 17.12 | 17.75 | 18.50 | 17.70 | 17.51 | (2 | ) | 17.12 | 17.51 | (2 | ) | |||||||||||||||||||||||||
Tangible book value (3) | 10.48 | 11.03 | 11.76 | 10.92 | 10.81 | (3 | ) | 10.48 | 10.81 | (3 | ) | |||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||||
Return on equity (2)(4) | (19.07 | )% | 3.41 | % | 7.85 | % | 2.01 | % | 10.66 | % | (2.69 | )% | 10.04 | % | ||||||||||||||||||||||
Return on assets | (1.95 | ) | .34 | .78 | .20 | 1.11 | (.27 | ) | .95 | |||||||||||||||||||||||||||
Net interest margin(4) | 3.17 | 3.32 | 3.55 | 3.73 | 3.89 | 3.35 | 3.94 | |||||||||||||||||||||||||||||
Efficiency ratio | 79.35 | 65.05 | 59.05 | 57.67 | 55.34 | 67.43 | 56.14 | |||||||||||||||||||||||||||||
Dividend payout ratio | (10.71 | ) | 60.00 | 26.47 | 100.00 | 19.15 | (77.14 | ) | 22.88 | |||||||||||||||||||||||||||
Equity to assets | 10.28 | 10.33 | 10.30 | 10.20 | 10.32 | 10.30 | 9.39 | |||||||||||||||||||||||||||||
Tangible equity to assets(3) | 6.65 | 6.77 | 6.73 | 6.58 | 6.65 | 6.72 | 6.65 | |||||||||||||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses | $ | 111,299 | $ | 91,035 | $ | 89,848 | $ | 89,423 | $ | 90,935 | $ | 111,299 | $ | 90,935 | ||||||||||||||||||||||
Net charge-offs(1) | 55,736 | 14,313 | 7,075 | 13,012 | 5,236 | 77,124 | 8,822 | |||||||||||||||||||||||||||||
Non-performing loans | 139,266 | 123,786 | 67,728 | 28,219 | 46,783 | 139,266 | 46,783 | |||||||||||||||||||||||||||||
OREO | 38,438 | 28,378 | 22,136 | 18,039 | 16,554 | 38,438 | 16,554 | |||||||||||||||||||||||||||||
Total non-performing assets | 177,704 | 152,164 | 89,864 | 46,258 | 63,337 | 177,704 | 63,337 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans (1) | 1.91 | % | 1.53 | % | 1.51 | % | 1.51 | % | 1.28 | % | 1.91 | % | 1.28 | % | ||||||||||||||||||||||
Net charge-offs to average loans (1)(4) | 3.77 | .97 | .48 | .87 | .35 | 1.74 | .21 | |||||||||||||||||||||||||||||
Non-performing assets to loans and OREO | 3.03 | 2.55 | 1.50 | .78 | 1.06 | 3.03 | 1.06 | |||||||||||||||||||||||||||||
Non-performing assets to total assets | 2.20 | 1.84 | 1.07 | .56 | .77 | 2.20 | .77 | |||||||||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||||||||||
Loans | $ | 5,889,168 | $ | 5,933,143 | $ | 5,958,296 | $ | 5,940,230 | $ | 5,966,933 | (1 | ) | $ | 5,926,731 | $ | 5,665,314 | 5 | |||||||||||||||||||
Investment securities | 1,454,740 | 1,507,240 | 1,485,515 | 1,404,796 | 1,308,192 | 11 | 1,482,397 | 1,235,183 | 20 | |||||||||||||||||||||||||||
Earning assets | 7,384,287 | 7,478,018 | 7,491,480 | 7,424,992 | 7,332,492 | 1 | 7,451,017 | 6,951,573 | 7 | |||||||||||||||||||||||||||
Total assets | 8,146,880 | 8,295,748 | 8,305,621 | 8,210,120 | 8,083,739 | 1 | 8,249,042 | 7,568,910 | 9 | |||||||||||||||||||||||||||
Deposits | 6,597,339 | 6,461,361 | 6,051,069 | 6,151,476 | 6,246,319 | 6 | 6,370,753 | 5,987,225 | 6 | |||||||||||||||||||||||||||
Shareholders’ equity | 837,487 | 856,727 | 855,659 | 837,195 | 834,094 | 0 | 849,912 | 710,950 | 20 | |||||||||||||||||||||||||||
Common shares — basic | 47,304 | 47,060 | 46,966 | 47,203 | 48,348 | 47,111 | 45,452 | |||||||||||||||||||||||||||||
Common shares — diluted | 47,479 | 47,249 | 47,272 | 47,652 | 48,977 | 47,334 | 46,235 | |||||||||||||||||||||||||||||
AT PERIOD END | ||||||||||||||||||||||||||||||||||||
Loans | $ | 5,829,937 | $ | 5,933,141 | $ | 5,967,839 | $ | 5,929,263 | $ | 5,952,749 | (2 | ) | $ | 5,829,937 | $ | 5,952,749 | (2 | ) | ||||||||||||||||||
Investment securities | 1,400,827 | 1,430,588 | 1,508,402 | 1,356,846 | 1,296,826 | 8 | 1,400,827 | 1,296,826 | 8 | |||||||||||||||||||||||||||
Total assets | 8,072,543 | 8,264,051 | 8,386,255 | 8,207,302 | 8,180,600 | (1 | ) | 8,072,543 | 8,180,600 | (1 | ) | |||||||||||||||||||||||||
Deposits | 6,689,335 | 6,696,456 | 6,175,769 | 6,075,951 | 6,154,308 | 9 | 6,689,335 | 6,154,308 | 9 | |||||||||||||||||||||||||||
Shareholders’ equity | 816,880 | 837,890 | 871,452 | 831,902 | 833,761 | (2 | ) | 816,880 | 833,761 | (2 | ) | |||||||||||||||||||||||||
Common shares outstanding | 47,596 | 47,096 | 47,004 | 46,903 | 47,542 | 47,596 | 47,542 |
(1) | Excludes effect of special $15 million fraud related provision for loan losses recorded in the second quarter of 2007, an additional $3 million provision in the fourth quarter of 2007, and $18 million of related loan charge-offs recorded in the fourth quarter of 2007. | |
(2) | Net income available to common shareholders, 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) | Annualized. |
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
Financial Highlights
Loan Portfolio Composition at Period-End
2008 | 2007 | Linked | Year over | |||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Quarter | Year | ||||||||||||||||||||||
(in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change(1) | Change | |||||||||||||||||||||
LOANS BY CATEGORY | ||||||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 1,604 | $ | 1,584 | $ | 1,526 | $ | 1,476 | $ | 1,441 | 5 | % | 11 | % | ||||||||||||||
Commercial construction | 509 | 522 | 548 | 527 | 531 | (10 | ) | (4 | ) | |||||||||||||||||||
Commercial & industrial | 425 | 417 | 437 | 418 | 408 | 8 | 4 | |||||||||||||||||||||
Total commercial | 2,538 | 2,523 | 2,511 | 2,421 | 2,380 | 2 | 7 | |||||||||||||||||||||
Residential construction | 1,596 | 1,745 | 1,791 | 1,830 | 1,935 | (34 | ) | (18 | ) | |||||||||||||||||||
Residential mortgage | 1,528 | 1,494 | 1,491 | 1,502 | 1,459 | 9 | 5 | |||||||||||||||||||||
Consumer / installment | 168 | 171 | 175 | 176 | 179 | (7 | ) | (6 | ) | |||||||||||||||||||
Total loans | $ | 5,830 | $ | 5,933 | $ | 5,968 | $ | 5,929 | $ | 5,953 | (7 | ) | (2 | ) | ||||||||||||||
LOANS BY MARKET | ||||||||||||||||||||||||||||
Atlanta MSA | $ | 1,800 | $ | 1,934 | $ | 1,978 | $ | 2,002 | $ | 2,057 | (28 | )% | (12 | )% | ||||||||||||||
Gainesville MSA | 426 | 422 | 415 | 400 | 394 | 4 | 8 | |||||||||||||||||||||
North Georgia | 2,066 | 2,065 | 2,071 | 2,060 | 2,026 | 0 | 2 | |||||||||||||||||||||
Western North Carolina | 815 | 819 | 816 | 806 | 834 | (2 | ) | (2 | ) | |||||||||||||||||||
Coastal Georgia | 458 | 436 | 439 | 416 | 402 | 20 | 14 | |||||||||||||||||||||
East Tennessee | 265 | 257 | 249 | 245 | 240 | 12 | 10 | |||||||||||||||||||||
Total loans | $ | 5,830 | $ | 5,933 | $ | 5,968 | $ | 5,929 | $ | 5,953 | (7 | ) | (2 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION | ||||||||||||||||||||||||||||
Dirt loans | ||||||||||||||||||||||||||||
Acquisition & development | $ | 516 | $ | 569 | $ | 583 | $ | 593 | $ | 592 | (37 | )% | (13 | )% | ||||||||||||||
Land loans | 142 | 139 | 130 | 126 | 125 | 9 | 14 | |||||||||||||||||||||
Lot loans | 385 | 401 | 406 | 407 | 403 | (16 | ) | (4 | ) | |||||||||||||||||||
Total | 1,043 | 1,109 | 1,119 | 1,126 | 1,120 | (24 | ) | (7 | ) | |||||||||||||||||||
House loans | ||||||||||||||||||||||||||||
Spec | 393 | 450 | 460 | 473 | 539 | (51 | )% | (27 | )% | |||||||||||||||||||
Sold | 160 | 186 | 212 | 231 | 276 | (56 | ) | (42 | ) | |||||||||||||||||||
Total | 553 | 636 | 672 | 704 | 815 | (52 | ) | (32 | ) | |||||||||||||||||||
Total residential construction | $ | 1,596 | $ | 1,745 | $ | 1,791 | $ | 1,830 | $ | 1,935 | (34 | ) | (18 | ) | ||||||||||||||
RESIDENTIAL CONSTRUCTION — ATLANTA MSA | ||||||||||||||||||||||||||||
Dirt loans | ||||||||||||||||||||||||||||
Acquisition & development | $ | 185 | $ | 232 | $ | 252 | $ | 258 | $ | 268 | (81 | )% | (31 | )% | ||||||||||||||
Land loans | 47 | 50 | 50 | 52 | 50 | (24 | ) | (6 | ) | |||||||||||||||||||
Lot loans | 103 | 117 | 117 | 117 | 123 | (48 | ) | (16 | ) | |||||||||||||||||||
Total | 335 | 399 | 419 | 427 | 441 | (64 | ) | (24 | ) | |||||||||||||||||||
House loans | ||||||||||||||||||||||||||||
Spec | 227 | 271 | 271 | 280 | 322 | (65 | )% | (30 | )% | |||||||||||||||||||
Sold | 49 | 58 | 71 | 77 | 104 | (62 | ) | (53 | ) | |||||||||||||||||||
Total | 276 | 329 | 342 | 357 | 426 | (64 | ) | (35 | ) | |||||||||||||||||||
Total residential construction | $ | 611 | $ | 728 | $ | 761 | $ | 784 | $ | 867 | (64 | ) | (30 | ) | ||||||||||||||
(1) | Annualized. |
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Financial Highlights
Credit Quality
Third Quarter 2008 | Second Quarter 2008 | First Quarter 2008 | ||||||||||||||||||||||||||||||||||
Nonaccrual | Total | Nonaccrual | Total | Nonaccrual | Total | |||||||||||||||||||||||||||||||
(in thousands) | Loans | OREO | NPAs | Loans | OREO | NPAs | Loans | OREO | NPAs | |||||||||||||||||||||||||||
NPAs BY CATEGORY | ||||||||||||||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 9,961 | $ | 854 | $ | 10,815 | $ | 4,610 | $ | 593 | $ | 5,203 | $ | 4,070 | $ | 653 | $ | 4,723 | ||||||||||||||||||
Commercial construction | 2,924 | 375 | 3,299 | 3,027 | 1,859 | 4,886 | 1,514 | 961 | 2,475 | |||||||||||||||||||||||||||
Commercial & industrial | 1,556 | — | 1,556 | 2,950 | — | 2,950 | 1,936 | — | 1,936 | |||||||||||||||||||||||||||
Total commercial | 14,441 | 1,229 | 15,670 | 10,587 | 2,452 | 13,039 | 7,520 | 1,614 | 9,134 | |||||||||||||||||||||||||||
Residential construction | 102,095 | 32,453 | 134,548 | 90,283 | 22,075 | 112,358 | 42,249 | 16,486 | 58,735 | |||||||||||||||||||||||||||
Residential mortgage | 21,335 | 4,756 | 26,091 | 21,792 | 3,851 | 25,643 | 16,965 | 4,036 | 21,001 | |||||||||||||||||||||||||||
Consumer / installment | 1,395 | — | 1,395 | 1,124 | — | 1,124 | 994 | — | 994 | |||||||||||||||||||||||||||
Total NPAs | $ | 139,266 | $ | 38,438 | $ | 177,704 | $ | 123,786 | $ | 28,378 | $ | 152,164 | $ | 67,728 | $ | 22,136 | $ | 89,864 | ||||||||||||||||||
NPAs BY MARKET | ||||||||||||||||||||||||||||||||||||
Atlanta MSA | $ | 80,805 | $ | 27,011 | $ | 107,816 | $ | 89,327 | $ | 15,196 | $ | 104,523 | $ | 37,442 | $ | 16,121 | $ | 53,563 | ||||||||||||||||||
Gainesville MSA | 15,105 | 648 | 15,753 | 4,885 | 12 | 4,897 | 4,584 | 909 | 5,493 | |||||||||||||||||||||||||||
North Georgia | 20,812 | 8,337 | 29,149 | 16,117 | 8,277 | 24,394 | 11,969 | 3,385 | 15,354 | |||||||||||||||||||||||||||
Western North Carolina | 13,432 | 1,509 | 14,941 | 9,838 | 990 | 10,828 | 7,775 | 1,405 | 9,180 | |||||||||||||||||||||||||||
Coastal Georgia | 3,682 | 601 | 4,283 | 1,575 | 3,871 | 5,446 | 5,266 | 95 | 5,361 | |||||||||||||||||||||||||||
East Tennessee | 5,430 | 332 | 5,762 | 2,044 | 32 | 2,076 | 692 | 221 | 913 | |||||||||||||||||||||||||||
Total NPAs | $ | 139,266 | $ | 38,438 | $ | 177,704 | $ | 123,786 | $ | 28,378 | $ | 152,164 | $ | 67,728 | $ | 22,136 | $ | 89,864 | ||||||||||||||||||
Third Quarter 2008 | Second Quarter 2008 | First Quarter 2008 | ||||||||||||||||||||||
Net Charge- | Net Charge- | Net Charge- | ||||||||||||||||||||||
Offs to | Offs to | Offs to | ||||||||||||||||||||||
Net | Average | Net | Average | Net | Average | |||||||||||||||||||
(in thousands) | Charge-Offs | Loans(1) | Charge-Offs | Loans(1) | Charge-Offs | Loans(1) | ||||||||||||||||||
NET CHARGE-OFFS BY CATEGORY | ||||||||||||||||||||||||
Commercial (sec. by RE) | $ | 257 | .06 | % | $ | 424 | .11 | % | $ | 630 | .17 | % | ||||||||||||
Commercial construction | 225 | .17 | 125 | .09 | — | — | ||||||||||||||||||
Commercial & industrial | 1,018 | .96 | 398 | .38 | 304 | .29 | ||||||||||||||||||
Total commercial | 1,500 | .24 | 947 | .15 | 934 | .15 | ||||||||||||||||||
Residential construction | 50,228 | 11.94 | 10,343 | 2.36 | 4,665 | 1.03 | ||||||||||||||||||
Residential mortgage | 3,332 | .88 | 2,576 | .70 | 1,011 | .27 | ||||||||||||||||||
Consumer / installment | 676 | 1.58 | 447 | 1.05 | 465 | 1.06 | ||||||||||||||||||
Total NPAs | $ | 55,736 | 3.77 | $ | 14,313 | .97 | $ | 7,075 | .48 | |||||||||||||||
NET CHARGE-OFFS BY MARKET | ||||||||||||||||||||||||
Atlanta MSA | $ | 48,313 | 10.08 | % | $ | 10,682 | 2.22 | % | $ | 4,647 | .94 | % | ||||||||||||
Gainesville MSA | 1,470 | 1.49 | 360 | .34 | 323 | .32 | ||||||||||||||||||
North Georgia | 4,567 | .88 | 1,829 | .36 | 1,280 | .25 | ||||||||||||||||||
Western North Carolina | 855 | .42 | 279 | .14 | 57 | .03 | ||||||||||||||||||
Coastal Georgia | 249 | .22 | 980 | .90 | 42 | .04 | ||||||||||||||||||
East Tennessee | 282 | .43 | 183 | .29 | 726 | 1.18 | ||||||||||||||||||
Total NPAs | $ | 55,736 | 3.77 | $ | 14,313 | .97 | $ | 7,075 | .48 | |||||||||||||||
(1) | Annualized. |
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
2008 | 2007 | For the Nine Months Ended | ||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | September 30 | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 2008 | 2007 | ||||||||||||||||||||||
Special provision for fraud related loan losses | $ | — | $ | — | $ | — | $ | 3,000 | $ | — | $ | — | $ | 15,000 | ||||||||||||||
Income tax effect of special provision | — | — | — | 1,167 | — | — | 5,835 | |||||||||||||||||||||
After-tax effect of special provision | $ | — | $ | — | $ | — | $ | 1,833 | $ | — | $ | — | $ | 9,165 | ||||||||||||||
Net Income (Loss) Reconciliation | ||||||||||||||||||||||||||||
Operating net income (loss) | $ | (39,874 | ) | $ | 7,093 | $ | 16,078 | $ | 6,034 | $ | 22,536 | $ | (16,703 | ) | $ | 62,957 | ||||||||||||
After-tax effect of special provision and merger-related charges | — | — | — | (1,833 | ) | — | — | (9,165 | ) | |||||||||||||||||||
Net income (loss) (GAAP) | $ | (39,874 | ) | $ | 7,093 | $ | 16,078 | $ | 4,201 | $ | 22,536 | $ | (16,703 | ) | $ | 53,792 | ||||||||||||
Basic Earnings (Loss) Per Share Reconciliation | ||||||||||||||||||||||||||||
Basic operating earnings (loss) per share | $ | (.84 | ) | $ | .15 | $ | .34 | $ | .13 | $ | .47 | $ | (.35 | ) | $ | 1.38 | ||||||||||||
Per share effect of special provision and merger-related charges | — | — | — | (.04 | ) | — | — | (.20 | ) | |||||||||||||||||||
Basic earnings (loss) per share (GAAP) | $ | (.84 | ) | $ | .15 | $ | .34 | $ | .09 | $ | .47 | $ | (.35 | ) | $ | 1.18 | ||||||||||||
Diluted Earnings (Loss) Per Share Reconciliation | ||||||||||||||||||||||||||||
Diluted operating earnings (loss) per share | $ | (.84 | ) | $ | .15 | $ | .34 | $ | .13 | $ | .46 | $ | (.35 | ) | $ | 1.36 | ||||||||||||
Per share effect of special provision and merger-related charges | — | — | — | (.04 | ) | — | — | (.20 | ) | |||||||||||||||||||
Diluted earnings (loss) per share (GAAP) | $ | (.84 | ) | $ | .15 | $ | .34 | $ | .09 | $ | .46 | $ | (.35 | ) | $ | 1.16 | ||||||||||||
Provision for Loan Losses Reconciliation | ||||||||||||||||||||||||||||
Operating provision for loan losses | $ | 76,000 | $ | 15,500 | $ | 7,500 | $ | 26,500 | $ | 3,700 | $ | 99,000 | $ | 11,100 | ||||||||||||||
Special provision for fraud related loan losses | — | — | — | 3,000 | — | — | 15,000 | |||||||||||||||||||||
Provision for loan losses (GAAP) | $ | 76,000 | $ | 15,500 | $ | 7,500 | $ | 29,500 | $ | 3,700 | $ | 99,000 | $ | 26,100 | ||||||||||||||
Nonperforming Assets Reconciliation | ||||||||||||||||||||||||||||
Nonperforming assets excluding fraud-related assets | $ | 174,227 | $ | 148,219 | $ | 85,182 | $ | 40,956 | $ | 39,761 | $ | 174,227 | $ | 39,761 | ||||||||||||||
Fraud-related loans and OREO included in nonperforming assets | 3,477 | 3,945 | 4,682 | 5,302 | 23,576 | 3,477 | 23,576 | |||||||||||||||||||||
Nonperforming assets (GAAP) | $ | 177,704 | $ | 152,164 | $ | 89,864 | $ | 46,258 | $ | 63,337 | $ | 177,704 | $ | 63,337 | ||||||||||||||
Allowance for Loan Losses Reconciliation | ||||||||||||||||||||||||||||
Allowance for loan losses excluding special fraud-related allowance | $ | 111,299 | $ | 91,035 | $ | 89,848 | $ | 89,423 | $ | 75,935 | $ | 111,299 | $ | 75,935 | ||||||||||||||
Fraud-related allowance for loan losses | — | — | — | — | 15,000 | — | 15,000 | |||||||||||||||||||||
Allowance for loan losses (GAAP) | $ | 111,299 | $ | 91,035 | $ | 89,848 | $ | 89,423 | $ | 90,935 | $ | 111,299 | $ | 90,935 | ||||||||||||||
Net Charge Offs Reconciliation | ||||||||||||||||||||||||||||
Net charge offs excluding charge off of fraud-related loans | $ | 55,736 | $ | 14,313 | $ | 7,075 | $ | 13,012 | $ | 5,236 | $ | 77,124 | $ | 8,822 | ||||||||||||||
Fraud-related loans charged off | — | — | — | 18,000 | — | — | — | |||||||||||||||||||||
Net charge offs (GAAP) | $ | 55,736 | $ | 14,313 | $ | 7,075 | $ | 31,012 | $ | 5,236 | $ | 77,124 | $ | 8,822 | ||||||||||||||
Allowance for Loan Losses to Loans Ratio Reconciliation | ||||||||||||||||||||||||||||
Allowance for loan losses to loans ratio excluding fraud-related allowance | 1.91 | % | 1.53 | % | 1.51 | % | 1.51 | % | 1.28 | % | 1.91 | % | 1.28 | % | ||||||||||||||
Portion of allowance assigned to fraud-related loans | — | — | — | — | .25 | — | .25 | |||||||||||||||||||||
Allowance for loan losses to loans ratio (GAAP) | 1.91 | % | 1.53 | % | 1.51 | % | 1.51 | % | 1.53 | % | 1.91 | % | 1.53 | % | ||||||||||||||
Nonperforming Assets to Total Assets Ratio Reconciliation | ||||||||||||||||||||||||||||
Nonperforming assets to total assets ratio excluding fraud-related assets | 2.16 | % | 1.79 | % | 1.02 | % | .50 | % | .49 | % | 2.16 | % | .49 | % | ||||||||||||||
Fraud-related nonperforming assets | .04 | .05 | .05 | .06 | .28 | .04 | .28 | |||||||||||||||||||||
Nonperforming assets to total assets ratio (GAAP) | 2.20 | % | 1.84 | % | 1.07 | % | .56 | % | .77 | % | 2.20 | % | .77 | % | ||||||||||||||
Net Charge Offs to Average Loans Ratio Reconciliation | ||||||||||||||||||||||||||||
Net charge offs to average loans ratio excluding fraud-related loans | 3.77 | % | .97 | % | .48 | % | .87 | % | .35 | % | 1.74 | % | .21 | % | ||||||||||||||
Charge offs of fraud-related loans | — | — | — | 1.20 | — | — | — | |||||||||||||||||||||
Net charge offs to average loans ratio (GAAP) | 3.77 | % | .97 | % | .48 | % | 2.07 | % | .35 | % | 1.74 | % | .21 | % | ||||||||||||||
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Consolidated Statement of Income (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in thousands, except per share data) | 2008 | 2007 | 2008 | 2007 | ||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 93,233 | $ | 127,213 | $ | 299,550 | $ | 361,085 | ||||||||
Investment securities: | ||||||||||||||||
Taxable | 18,258 | 16,637 | 55,765 | 46,081 | ||||||||||||
Tax exempt | 348 | 428 | 1,140 | 1,313 | ||||||||||||
Federal funds sold and deposits in banks | 100 | 134 | 372 | 272 | ||||||||||||
Total interest revenue | 111,939 | 144,412 | 356,827 | 408,751 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW | 6,778 | 12,046 | 22,581 | 34,143 | ||||||||||||
Money market | 2,296 | 5,002 | 7,519 | 11,082 | ||||||||||||
Savings | 153 | 553 | 560 | 1,236 | ||||||||||||
Time | 39,044 | 42,862 | 116,756 | 126,466 | ||||||||||||
Total deposit interest expense | 48,271 | 60,463 | 147,416 | 172,927 | ||||||||||||
Federal funds purchased, repurchase agreements, & other short-term borrowings | 1,116 | 4,738 | 7,254 | 10,226 | ||||||||||||
Federal Home Loan Bank advances | 2,105 | 5,902 | 10,668 | 15,738 | ||||||||||||
Long-term debt | 2,227 | 2,100 | 6,366 | 6,505 | ||||||||||||
Total interest expense | 53,719 | 73,203 | 171,704 | 205,396 | ||||||||||||
Net interest revenue | 58,220 | 71,209 | 185,123 | 203,355 | ||||||||||||
Provision for loan losses | 76,000 | 3,700 | 99,000 | 26,100 | ||||||||||||
Net interest revenue after provision for loan losses | (17,780 | ) | 67,509 | 86,123 | 177,255 | |||||||||||
Fee revenue: | ||||||||||||||||
Service charges and fees | 8,171 | 7,855 | 23,941 | 23,083 | ||||||||||||
Mortgage loan and other related fees | 1,410 | 2,118 | 5,575 | 6,817 | ||||||||||||
Consulting fees | 1,727 | 2,381 | 5,786 | 6,369 | ||||||||||||
Brokerage fees | 905 | 895 | 2,812 | 3,031 | ||||||||||||
Securities gains, net | 120 | 225 | 477 | 1,818 | ||||||||||||
Losses on prepayment of borrowings | — | — | — | (1,164 | ) | |||||||||||
Other | 788 | 2,141 | 3,832 | 6,597 | ||||||||||||
Total fee revenue | 13,121 | 15,615 | 42,423 | 46,551 | ||||||||||||
Total revenue | (4,659 | ) | 83,124 | 128,546 | 223,806 | |||||||||||
Operating expenses: | ||||||||||||||||
Salaries and employee benefits | 28,626 | 29,698 | 86,133 | 88,037 | ||||||||||||
Communications and equipment | 3,909 | 3,936 | 11,593 | 11,593 | ||||||||||||
Occupancy | 3,905 | 3,617 | 11,325 | 10,124 | ||||||||||||
Advertising and public relations | 1,399 | 1,537 | 4,759 | 5,651 | ||||||||||||
Postage, printing and supplies | 1,493 | 1,479 | 4,533 | 4,819 | ||||||||||||
Professional fees | 1,596 | 1,920 | 5,196 | 5,409 | ||||||||||||
Amortization of intangibles | 752 | 771 | 2,264 | 1,968 | ||||||||||||
Other | 15,290 | 5,224 | 28,457 | 13,124 | ||||||||||||
Total operating expenses | 56,970 | 48,182 | 154,260 | 140,725 | ||||||||||||
Income (loss) before income taxes | (61,629 | ) | 34,942 | (25,714 | ) | 83,081 | ||||||||||
Income tax expense (benefit) | (21,755 | ) | 12,406 | (9,011 | ) | 29,289 | ||||||||||
Net income (loss) | $ | (39,874 | ) | $ | 22,536 | $ | (16,703 | ) | $ | 53,792 | ||||||
Net income (loss) available to common shareholders | $ | (39,878 | ) | $ | 22,532 | $ | (16,715 | ) | $ | 53,778 | ||||||
Earnings (loss) per common share: | ||||||||||||||||
Basic | $ | (.84 | ) | $ | .47 | $ | (.35 | ) | $ | 1.18 | ||||||
Diluted | (.84 | ) | .46 | (.35 | ) | 1.16 | ||||||||||
Dividends per common share | .09 | .09 | .27 | .27 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 47,304 | 48,348 | 47,111 | 45,452 | ||||||||||||
Diluted | 47,479 | 48,977 | 47,334 | 46,235 |
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
Consolidated Balance Sheet
September 30, | December 31, | September 30, | ||||||||||
(in thousands, except share and per share data) | 2008 | 2007 | 2007 | |||||||||
(unaudited) | (audited) | (unaudited) | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 126,033 | $ | 157,549 | $ | 162,710 | ||||||
Interest-bearing deposits in banks | 40,707 | 62,074 | 75,745 | |||||||||
Cash and cash equivalents | 166,740 | 219,623 | 238,455 | |||||||||
Securities available for sale | 1,400,827 | 1,356,846 | 1,296,826 | |||||||||
Mortgage loans held for sale | 17,763 | 28,004 | 23,717 | |||||||||
Loans, net of unearned income | 5,829,937 | 5,929,263 | 5,952,749 | |||||||||
Less allowance for loan losses | 111,299 | 89,423 | 90,935 | |||||||||
Loans, net | 5,718,638 | 5,839,840 | 5,861,814 | |||||||||
Premises and equipment, net | 179,727 | 180,088 | 174,918 | |||||||||
Accrued interest receivable | 47,920 | 62,828 | 67,385 | |||||||||
Goodwill and other intangible assets | 322,544 | 325,305 | 326,080 | |||||||||
Other assets | 218,384 | 194,768 | 191,405 | |||||||||
Total assets | $ | 8,072,543 | $ | 8,207,302 | $ | 8,180,600 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Demand | $ | 680,196 | $ | 700,941 | $ | 737,357 | ||||||
NOW | 1,393,928 | 1,474,818 | 1,464,956 | |||||||||
Money market | 394,358 | 452,917 | 495,092 | |||||||||
Savings | 179,274 | 186,392 | 195,132 | |||||||||
Time: | ||||||||||||
Less than $100,000 | 1,814,926 | 1,573,604 | 1,595,515 | |||||||||
Greater than $100,000 | 1,481,512 | 1,364,763 | 1,358,302 | |||||||||
Brokered | 745,141 | 322,516 | 307,954 | |||||||||
Total deposits | 6,689,335 | 6,075,951 | 6,154,308 | |||||||||
Federal funds purchased, repurchase agreements, and other short-term borrowings | 119,699 | 638,462 | 502,081 | |||||||||
Federal Home Loan Bank advances | 285,362 | 519,782 | 519,381 | |||||||||
Long-term debt | 137,996 | 107,996 | 107,996 | |||||||||
Accrued expenses and other liabilities | 23,271 | 33,209 | 63,073 | |||||||||
Total liabilities | 7,255,663 | 7,375,400 | 7,346,839 | |||||||||
Shareholders’ equity: | ||||||||||||
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 25,800, 25,800 and 25,800 shares issued and outstanding | 258 | 258 | 258 | |||||||||
Common stock, $1 par value; 100,000,000 shares authorized; 48,809,301, 48,809,301 and 48,809,301 shares issued | 48,809 | 48,809 | 48,809 | |||||||||
Common stock issuable; 116,567, 73,250 and 66,366 shares | 2,762 | 2,100 | 1,954 | |||||||||
Capital surplus | 457,779 | 462,881 | 462,499 | |||||||||
Retained earnings | 317,544 | 347,391 | 347,478 | |||||||||
Treasury stock; 1,213,182, 1,905,921 and 1,266,935 shares, at cost | (27,024 | ) | (43,798 | ) | (30,969 | ) | ||||||
Accumulated other comprehensive income | 16,752 | 14,261 | 3,732 | |||||||||
Total shareholders’ equity | 816,880 | 831,902 | 833,761 | |||||||||
Total liabilities and shareholders’ equity | $ | 8,072,543 | $ | 8,207,302 | $ | 8,180,600 | ||||||
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
2008 | 2007 | |||||||||||||||||||||||
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) | $ | 5,889,168 | $ | 93,270 | 6.30 | % | $ | 5,966,933 | $ | 126,992 | 8.44 | % | ||||||||||||
Taxable securities (3) | 1,422,321 | 18,258 | 5.13 | 1,266,609 | 16,637 | 5.25 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 32,419 | 573 | 7.07 | 41,583 | 704 | 6.77 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 40,379 | 409 | 4.05 | 57,367 | 551 | 3.84 | ||||||||||||||||||
Total interest-earning assets | 7,384,287 | 112,510 | 6.07 | 7,332,492 | 144,884 | 7.85 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (93,687 | ) | (93,832 | ) | ||||||||||||||||||||
Cash and due from banks | 111,741 | 141,536 | ||||||||||||||||||||||
Premises and equipment | 180,825 | 173,605 | ||||||||||||||||||||||
Other assets (3) | 563,714 | 529,938 | ||||||||||||||||||||||
Total assets | $ | 8,146,880 | $ | 8,083,739 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,463,744 | $ | 6,778 | 1.84 | $ | 1,431,168 | $ | 12,046 | 3.34 | ||||||||||||||
Money market | 421,626 | 2,296 | 2.17 | 496,005 | 5,002 | 4.00 | ||||||||||||||||||
Savings | 182,525 | 153 | .33 | 201,031 | 553 | 1.09 | ||||||||||||||||||
Time less than $100,000 | 1,779,550 | 17,812 | 3.98 | 1,624,698 | 20,151 | 4.92 | ||||||||||||||||||
Time greater than $100,000 | 1,530,719 | 15,825 | 4.11 | 1,391,139 | 18,192 | 5.19 | ||||||||||||||||||
Brokered | 530,705 | 5,407 | 4.05 | 358,614 | 4,519 | 5.00 | ||||||||||||||||||
Total interest-bearing deposits | 5,908,869 | 48,271 | 3.25 | 5,502,655 | 60,463 | 4.36 | ||||||||||||||||||
Federal funds purchased and other borrowings | 256,742 | 1,116 | 1.73 | 348,472 | 4,738 | 5.39 | ||||||||||||||||||
Federal Home Loan Bank advances | 286,540 | 2,105 | 2.92 | 474,555 | 5,902 | 4.93 | ||||||||||||||||||
Long-term debt | 118,756 | 2,227 | 7.46 | 119,596 | 2,100 | 6.97 | ||||||||||||||||||
Total borrowed funds | 662,038 | 5,448 | 3.27 | 942,623 | 12,740 | 5.36 | ||||||||||||||||||
Total interest-bearing liabilities | 6,570,907 | 53,719 | 3.25 | 6,445,278 | 73,203 | 4.51 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 688,470 | 743,664 | ||||||||||||||||||||||
Other liabilities | 50,016 | 60,703 | ||||||||||||||||||||||
Total liabilities | 7,309,393 | 7,249,645 | ||||||||||||||||||||||
Shareholders’ equity | 837,487 | 834,094 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 8,146,880 | $ | 8,083,739 | ||||||||||||||||||||
Net interest revenue | $ | 58,791 | $ | 71,681 | ||||||||||||||||||||
Net interest-rate spread | 2.82 | % | 3.34 | % | ||||||||||||||||||||
Net interest margin | 3.17 | % | 3.89 | % | ||||||||||||||||||||
(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 losses of $11.7 million in 2008 and $13.3 million in 2007 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 Nine Months Ended September 30,
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
2008 | 2007 | |||||||||||||||||||||||
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) | $ | 5,926,731 | $ | 299,601 | 6.75 | % | $ | 5,665,314 | $ | 360,430 | 8.51 | % | ||||||||||||
Taxable securities (3) | 1,447,409 | 55,765 | 5.14 | 1,192,815 | 46,081 | 5.15 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 34,988 | 1,876 | 7.15 | 42,368 | 2,160 | 6.80 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 41,889 | 1,292 | 4.11 | 51,076 | 1,479 | 3.86 | ||||||||||||||||||
Total interest-earning assets | 7,451,017 | 358,534 | 6.43 | 6,951,573 | 410,150 | 7.89 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (93,165 | ) | (78,541 | ) | ||||||||||||||||||||
Cash and due from banks | 136,920 | 130,816 | ||||||||||||||||||||||
Premises and equipment | 181,210 | 159,674 | ||||||||||||||||||||||
Other assets (3) | 573,060 | 405,388 | ||||||||||||||||||||||
Total assets | $ | 8,249,042 | $ | 7,568,910 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,476,998 | $ | 22,581 | 2.04 | $ | 1,378,200 | $ | 34,143 | 3.31 | ||||||||||||||
Money market | 427,676 | 7,519 | 2.35 | 371,716 | 11,082 | 3.99 | ||||||||||||||||||
Savings | 184,713 | 560 | .40 | 187,693 | 1,236 | .88 | ||||||||||||||||||
Time less than $100,000 | 1,659,308 | 53,320 | 4.29 | 1,631,243 | 59,925 | 4.91 | ||||||||||||||||||
Time greater than $100,000 | 1,460,277 | 48,330 | 4.42 | 1,383,004 | 54,000 | 5.22 | ||||||||||||||||||
Brokered | 480,166 | 15,106 | 4.20 | 342,162 | 12,541 | 4.90 | ||||||||||||||||||
Total interest-bearing deposits | 5,689,138 | 147,416 | 3.46 | 5,294,018 | 172,927 | 4.37 | ||||||||||||||||||
Federal funds purchased and other borrowings | 396,798 | 7,254 | 2.44 | 255,115 | 10,226 | 5.36 | ||||||||||||||||||
Federal Home Loan Bank advances | 452,826 | 10,668 | 3.15 | 430,151 | 15,738 | 4.89 | ||||||||||||||||||
Long-term debt | 111,607 | 6,366 | 7.62 | 115,390 | 6,505 | 7.54 | ||||||||||||||||||
Total borrowed funds | 961,231 | 24,288 | 3.38 | 800,656 | 32,469 | 5.42 | ||||||||||||||||||
Total interest-bearing liabilities | 6,650,369 | 171,704 | 3.45 | 6,094,674 | 205,396 | 4.51 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 681,615 | 693,207 | ||||||||||||||||||||||
Other liabilities | 67,146 | 70,079 | ||||||||||||||||||||||
Total liabilities | 7,399,130 | 6,857,960 | ||||||||||||||||||||||
Shareholders’ equity | 849,912 | 710,950 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 8,249,042 | $ | 7,568,910 | ||||||||||||||||||||
Net interest revenue | $ | 186,830 | $ | 204,754 | ||||||||||||||||||||
Net interest-rate spread | 2.98 | % | 3.38 | % | ||||||||||||||||||||
Net interest margin | 3.35 | % | 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 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 $5.7 million in 2008 and pretax unrealized losses of $10.4 million in 2007 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. |