EXHIBIT 99.1
[UNITED COMMUNITY BANKS LOGO]
For Immediate Release
April 20, 2004
For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2265
Rex_Schuette@ucbi.com
UNITED COMMUNITY BANKS, INC. REPORTS
15% GAIN IN OPERATING EARNINGS PER SHARE
FOR FIRST QUARTER 2004
HIGHLIGHTS:
- - Record First Quarter Earnings of $.30 Per Share (post split), Up 15%
From a Year Ago
- - Strong Loan Demand Drove Growth for Quarter
- - Stable Net Interest Margin, Strong Credit Quality Provided Foundation
for Performance
- - Return on Tangible Equity Above 19%
BLAIRSVILLE, GA, April 20, 2004 - United Community Banks, Inc. (Nasdaq: UCBI),
Georgia's third largest bank holding company, today announced first quarter
results that included a 27% rise in net operating income, a 15% gain in net
operating earnings per share, and a 20% increase in total revenue from the same
period last year. For the first quarter of 2004, net operating income rose to a
record $10.9 million from $8.6 million a year earlier. Diluted operating
earnings per share of $.30 increased 15% from $.26 for the first quarter a year
ago. Total revenue, on a taxable equivalent basis, was $45.3 million compared
with $37.7 million for the first quarter of 2003. Also, return on tangible
equity was 19.87% compared with 17.79% a year ago and return on assets was 1.08%
compared with 1.07% a year ago.
On March 15, 2004, United Community Banks announced a three-for-two split of its
common stock effective April 28, 2004, for shareholders of record April 14,
2004. All per share amounts
presented in this press release and accompanying schedules have been adjusted to
reflect the split as if it had occurred prior to the earliest period presented.
"United Community Banks achieved outstanding results during the first quarter of
2004," said Jimmy Tallent, president and chief executive officer. "Loan demand
for the quarter remained strong across all our markets, providing an opportunity
for our employees to deliver the highest level of customer service. This, in
turn, provided us with a solid foundation to continue to build our business and
expand our franchise." At March 31, 2004, total loans were $3.1 billion and
excluding acquisitions loans were up 14% from last year. "This core growth was
achieved in a disciplined, step-by-step process throughout the year, without
compromising credit quality in a challenging economic environment," Tallent
added.
"For the first quarter, we again achieved our stated goals of sustained
double-digit growth in operating earnings-per-share and a return on tangible
equity, which excludes the effects of acquisition-related intangibles, above
18%," Tallent said.
Net operating income for the first quarter of last year excludes pre-tax
merger-related charges of $840 thousand related to the acquisition of First
Central Bancshares, Inc. ("First Central Bank") which was completed on March 31,
2003. The merger-related charges were for legal, investment advisor and other
professional fees, as well as the termination of equipment leases and conversion
costs. Including those merger-related charges, net income and diluted earnings
per share were $8.1 million and $.25, respectively, for the quarter ended March
31, 2003.
"Our ability to serve the needs of our customers, combined with the strength of
our markets helped increase core loans by $369 million, or 14%, from a year
ago," Tallent said. "In addition, the acquisitions of First Central Bank, First
Georgia Bank, and the three banking offices in western North Carolina
contributed $232 million in new loans, bringing our total loan growth to $601
million, or 24%, from a year ago."
Taxable equivalent net interest revenue for the first quarter rose $7.0 million,
or 23%, to $37.8 million from the same period a year ago. Acquisitions during
2003, contributed approximately
$3.5 million of this increase, leaving the core growth rate at approximately
12%. "Even without the acquisitions, we achieved solid growth in loans and new
business," Tallent added.
Taxable equivalent net interest margin for the first quarter was 3.99% versus
4.05% a year ago. "Despite this environment of historically low interest rates,
United Community Banks has maintained a net interest margin near the 4% level
for the past six quarters and we expect our margin to remain near this level
through 2004," Tallent said. "With a stable margin at the 4% level, we are
prepared to maintain our earnings momentum by achieving a strong base of core
business growth combined with our continued focus on credit quality and expense
controls."
The first quarter provision for loan losses was $1.8 million, up $300 thousand
from a year earlier and unchanged from the fourth quarter of 2003. Net
charge-offs to average loans were .08% for the first quarter, compared with .17%
for the first quarter of 2003 and .12% for the fourth quarter. Non-performing
assets totaled $7.3 million, down $.5 million from a year ago, while loans
outstanding increased $601 million. Non-performing assets as a percentage of
total assets were .18% at March 31, 2004, compared with .19% at December 31,
2003 and .22% at March 31, 2003. "Our excellent credit quality continues to be
the foundation for high performance and growth," Tallent said. "Credit quality
remains sound thanks to the tireless efforts of our exceptional team of bankers.
Our strategy of securing loans with hard assets remains the key to our credit
quality success."
Fee revenue of $9.3 million for the first quarter increased $.9 million, or 11%,
from $8.4 million a year ago. "Service charges and fees on deposit accounts were
$5.0 million, up $1.4 million due to acquisitions, increasing popularity of new
products and services, and growth in transactions and new accounts," Tallent
commented. This was offset partially by mortgage loan and related fees which
were $1.3 million and down $1.0 million from a year ago due to the lower level
of mortgage refinancing activity caused by the rise in long-term interest rates.
"We are focused on growing core deposits and related fee revenue," Tallent
added. "Early in the first quarter of 2004, we began a company-wide initiative
to increase our deposit base by engaging our many satisfied customers in the
process. The initial results of this program have been encouraging with a
significant increase in new account openings in the first quarter as compared to
last year."
Operating expenses were $28.2 million, up $4.3 million, or 18%, from the first
quarter of 2003. Included in the first quarter of 2004 were operating expenses
for the two merged banks and the three acquired banking offices completed in
2003, which added approximately $3.3 million of expenses, leaving the underlying
core expense growth rate of 4%. Salaries and employee benefits of $18.1 million
increased $3.0 million, or 20%, with approximately $2.0 million of this increase
resulting from the 2003 acquisitions. The balance of the increase was due to
normal merit increases for staff that was partially offset by lower incentive
compensation associated with the slowdown in mortgage refinancing activities.
Communications and equipment expenses of $2.5 million increased $.6 million, or
34%, due to the acquisitions and investments in technology equipment to support
business growth and enhance operating efficiency. Increases in all other
operating expense categories were primarily due to the acquisitions and business
growth.
"We continue to diligently monitor and control operating expenses while growing
our customer base and revenue," Tallent said. "Excluding acquisitions, total
revenue for the quarter increased approximately 8% while operating expenses rose
4%. This positive operating leverage contributed to our 15% growth in diluted
operating earnings per share for the first quarter. Our operating efficiency
ratio was 59.83% compared with 61.03% a year ago. We are striving for a
long-term efficiency ratio in the range of 58% to 60%, which we believe is
reasonable given our service-oriented community banking model," Tallent added.
"United Community Banks' growth strategy is focused primarily on internal growth
within our markets. Additionally, if we have the right people, we will expand
through de novo offices and selective acquisitions of banks and branch offices,"
Tallent said. "As part of this growth strategy, we announced earlier this
quarter a merger with Fairbanco Holding Company, Inc., the parent company of 1st
Community Bank headquartered in Fairburn, Georgia. 1st Community Bank has assets
of $190 million with five full-service banking offices in Peachtree City in
Fayette County, Newnan in Coweta County, and Fairburn, Union City and Palmetto
in south Fulton County. The transaction, which is subject to regulatory and
shareholder approval, is expected to close in the second quarter and will be
slightly accretive to earnings during 2004."
"Looking forward for the remainder of 2004, we feel United Community Banks is on
target to achieve operating earnings per share growth within our long-term goal
of 12% to 15%," Tallent said. "For 2004, we anticipate core loan growth will
continue in the range of 10% to 14% and our net interest margin will remain near
the 4% level. Our outlook is based on flat short-term rates through 2004 and
other assumptions that include a continued, stable economic environment in our
markets combined with strong credit quality. We remain committed to providing
superior customer service and operating performance while maintaining solid
credit quality and growing our franchise - both internally and through selective
de novo offices and mergers."
Other Items
Under the company's stock purchase program, a total of 2.25 million shares on a
post-split basis may be purchased through December 31, 2004. No shares were
purchased during the first quarter. As of March 31, 2004, a total of 1.3 million
shares had been purchased over the past three years with an average cost per
share of $14.78.
Conference Call
United Community Banks will hold a conference call to discuss the contents of
this news release, as well as business highlights and financial outlook for the
remainder of 2004, on Tuesday, April 20, 2004 at 11:00 a.m. ET. The telephone
number for the conference call is (888) 266-1047. The conference call will also
be available by web-cast within the Investor Relations section of the company's
web site.
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 $4.1 billion
and operates 20 community banks with 74 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 in its markets. United
Community Banks also offers the convenience of 24-hour access to its services
through a network of ATMs, telephone and on-line banking. United
Community Banks common stock is listed on the Nasdaq National Market under the
symbol UCBI. Additional information may be found at the company's web site,
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. annual report filed on Form 10-K with the
Securities and Exchange Commission.
(Tables Follow)
UNITED COMMUNITY BANKS, INC.
SELECTED FINANCIAL INFORMATION
FOR THE THREE MONTHS ENDED MARCH 31, 2004
- -------------------------------------------------------------------------------------------------------------------------------
2004 2003 FIRST
----------- -------------------------------------------------------- QUARTER
(in thousands, except per share FIRST FOURTH THIRD SECOND FIRST 2004-2003
data; taxable equivalent) QUARTER QUARTER QUARTER QUARTER QUARTER CHANGE
----------- ----------- ---------- ---------- ---------- ----------
INCOME SUMMARY (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest revenue $ 54,587 $ 53,943 $ 53,731 $ 53,261 $ 48,403
Interest expense 16,772 17,098 17,446 18,467 17,589
---------- ---------- ---------- ---------- ----------
Net interest revenue 37,815 36,845 36,285 34,794 30,814 23%
Provision for loan losses 1,800 1,800 1,500 1,500 1,500
Fee revenue 9,278 9,090 10,401 10,316 8,377 11
---------- ---------- ---------- ---------- ----------
TOTAL REVENUE 45,293 44,135 45,186 43,610 37,691 20
Operating expenses (1) 28,176 27,572 28,712 27,699 23,917 18
---------- ---------- ---------- ---------- ----------
Income before taxes 17,117 16,563 16,474 15,911 13,774 24
Income taxes 6,179 5,959 6,110 6,014 5,164
---------- ---------- ---------- ---------- ----------
NET OPERATING INCOME 10,938 10,604 10,364 9,897 8,610 27
Merger-related charges, net of tax -- 383 -- 428 546
---------- ---------- ---------- ---------- ----------
NET INCOME $ 10,938 $ 10,221 $ 10,364 $ 9,469 $ 8,064 36
========== ========== ========== ========== ==========
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic $ .31 $ .30 $ .29 $ .29 $ .27 15
Diluted .30 .29 .29 .28 .26 15
Return on tangible equity (3) 19.87% 19.72% 19.94% 19.54% 17.79%
Return on assets 1.08 1.06 1.06 1.06 1.07
Efficiency ratio 59.83 59.81 61.34 61.40 61.03
Dividend payout ratio 19.35 16.67 17.24 17.24 18.52
GAAP PERFORMANCE
Per common share:
Basic earnings $ .31 $ .29 $ .29 $ .28 $ .25 24
Diluted earnings .30 .28 .29 .27 .25 20
Cash dividends declared .06 .05 .05 .05 .05 20
Book value 8.80 8.47 8.20 8.15 7.39 19
Tangible book value (3) 6.86 6.52 6.44 6.37 6.40 7
Key performance ratios:
Return on equity (2) 14.87% 14.19% 14.90% 14.76% 15.50%
Return on assets 1.08 1.02 1.06 1.01 1.00
Net interest margin 3.99 3.96 3.97 3.99 4.05
Dividend payout ratio 19.35 17.24 17.24 17.86 20.00
Equity to assets 7.46 7.41 7.35 7.19 6.84
Tangible equity to assets (3) 5.88 5.82 5.85 6.03 6.47
ASSET QUALITY
Allowance for loan losses $ 39,820 $ 38,655 $ 37,773 $ 37,353 $ 33,022
Non-performing assets 7,251 7,589 7,998 8,232 7,745
Net charge-offs 635 918 1,080 1,069 1,030
Allowance for loan losses to loans 1.27% 1.28% 1.29% 1.31% 1.30%
Non-performing assets to total assets .18 .19 .20 .21 .22
Net charge-offs to average loans .08 .12 .15 .16 .17
AVERAGE BALANCES
Loans $3,095,875 $2,959,626 $2,881,375 $2,742,952 $2,422,542 28
Investment securities 652,867 699,059 664,523 689,384 614,981 6
Earning assets 3,808,877 3,695,197 3,629,819 3,497,851 3,072,719 24
Total assets 4,084,883 3,961,384 3,888,141 3,756,689 3,269,481 25
Deposits 2,955,726 2,843,600 2,826,900 2,829,986 2,466,801 20
Stockholders' equity 304,926 293,464 285,790 269,972 223,599 36
Common shares outstanding:
Basic 35,319 35,260 35,112 34,280 31,827
Diluted 36,482 36,391 36,185 35,387 32,936
AT PERIOD END
Loans $3,147,303 $3,015,997 $2,918,412 $2,861,481 $2,546,001 24
Investment securities 617,787 659,891 634,421 660,625 658,546 (6)
Earning assets 3,851,968 3,796,332 3,676,018 3,642,545 3,304,232 17
Total assets 4,118,188 4,068,834 3,942,139 3,905,929 3,579,004 15
Deposits 3,074,193 2,857,449 2,790,331 2,870,926 2,723,574 13
Stockholders' equity 311,247 299,373 289,713 285,500 245,699 27
Common shares outstanding 35,331 35,289 35,232 34,967 33,055
(1) Excludes pre-tax merger-related charges totaling $580,000 or $.01 per
diluted common share, $668,000 or $.01 per diluted common share and
$840,000 or $.01 per diluted common share recorded in the fourth,
second and first quarters, respectively, of 2003.
(2) Net income available to common stockholders divided by average realized
common equity which excludes accumulated other comprehensive income.
(3) Excludes effect of acquisition related intangibles and associated
amortization.
UNITED COMMUNITY BANKS, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
- --------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
----------------------------------
(in thousands, except per share data) 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
INTEREST REVENUE: (Unaudited) (Unaudited)
Loans, including fees $ 47,422 $ 41,106
Federal funds sold and deposits in banks 111 68
Investment securities:
Taxable 6,069 5,966
Tax exempt 566 731
-------- --------
Total interest revenue 54,168 47,871
-------- --------
INTEREST EXPENSE:
Deposits:
Demand 1,794 2,228
Savings 83 90
Time 9,297 10,108
Other borrowings 5,598 5,163
-------- --------
Total interest expense 16,772 17,589
-------- --------
Net interest revenue 37,396 30,282
Provision for loan losses 1,800 1,500
-------- --------
Net interest revenue after provision for loan losses 35,596 28,782
-------- --------
FEE REVENUE:
Service charges and fees 5,023 3,574
Mortgage loan and other related fees 1,280 2,312
Consulting fees 1,127 1,120
Brokerage fees 708 420
Securities losses, net (4) -
Other 1,144 951
-------- --------
Total fee revenue 9,278 8,377
-------- --------
TOTAL REVENUE 44,874 37,159
-------- --------
OPERATING EXPENSES:
Salaries and employee benefits 18,126 15,104
Occupancy 2,282 2,102
Communications and equipment 2,547 1,900
Postage, printing and supplies 1,142 945
Professional fees 837 895
Advertising and public relations 764 706
Amortization of intangibles 371 85
Merger-related charges - 840
Other 2,107 2,180
-------- --------
Total operating expenses 28,176 24,757
-------- --------
Income before income taxes 16,698 12,402
Income taxes 5,760 4,338
-------- --------
NET INCOME $ 10,938 $ 8,064
======== ========
Net income available to common stockholders $ 10,922 $ 8,047
======== ========
Earnings per common share:
Basic $ .31 $ .25
Diluted .30 .25
Weighted average common shares outstanding (in thousands):
Basic 35,319 31,827
Diluted 36,482 32,936
UNITED COMMUNITY BANKS, INC.
CONSOLIDATED BALANCE SHEET
FOR THE PERIOD ENDED
- ----------------------------------------------------------------------------------------------------------------------------------
MARCH 31, DECEMBER 31, MARCH 31,
($ in thousands) 2004 2003 2003
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS (Unaudited) (Audited) (Unaudited)
Cash and due from banks $ 81,723 $ 91,819 $ 138,939
Interest-bearing deposits in banks 39,587 68,374 18,262
Federal funds sold -- -- 19,220
----------- ----------- -----------
Cash and cash equivalents 121,310 160,193 176,421
Securities available for sale 617,787 659,891 658,546
Mortgage loans held for sale 14,508 10,756 30,607
Loans, net of unearned income 3,147,303 3,015,997 2,546,001
Less - allowance for loan losses 39,820 38,655 33,022
----------- ----------- -----------
Loans, net 3,107,483 2,977,342 2,512,979
Premises and equipment, net 89,625 87,439 76,612
Interest receivable 22,410 20,962 23,436
Intangible assets 71,811 72,182 33,022
Other assets 73,254 80,069 67,381
----------- ----------- -----------
TOTAL ASSETS $ 4,118,188 $ 4,068,834 $ 3,579,004
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 425,697 $ 412,309 $ 344,912
Interest-bearing demand 863,975 846,022 761,278
Savings 148,260 140,619 117,079
Time 1,636,261 1,458,499 1,500,305
----------- ----------- -----------
Total deposits 3,074,193 2,857,449 2,723,574
Federal funds purchased and repurchase agreements 128,475 102,849 40,781
Federal Home Loan Bank advances 470,271 635,420 457,001
Other borrowings 108,751 152,596 75,052
Accrued expenses and other liabilities 25,251 21,147 36,897
----------- ----------- -----------
TOTAL LIABILITIES 3,806,941 3,769,461 3,333,305
----------- ----------- -----------
Stockholders' equity:
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized;
48,300, 55,900 and 127,100 shares issued and outstanding 483 559 1,271
Common stock, $1 par value; 50,000,000 shares authorized;
35,706,573, 35,706,573 and 33,940,626 shares issued 35,707 35,707 33,941
Capital surplus 95,532 95,951 70,308
Retained earnings 175,700 166,887 142,178
Treasury stock; 375,563, 417,525 and 885,707 shares, at cost (6,414) (7,120) (13,054)
Accumulated other comprehensive income 10,239 7,389 11,055
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 311,247 299,373 245,699
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,118,188 $ 4,068,834 $ 3,579,004
=========== =========== ===========