United Community Banks, Inc. Reports Earnings of $230 Million for Second Quarter 2013

Marketwired

Thu, Jul 25, 2013, 3:30 AM

BLAIRSVILLE, GA--(Marketwired - Jul 25, 2013) - United Community Banks, Inc. ( NASDAQ : UCBI )

Net income of $230 million, or $3.90 per share
Earnings reflect impact of reversal of valuation allowance on deferred tax asset and accelerated sales of classified assets
Credit measures now at pre-credit crisis levels
Capital levels remain strong

United Community Banks, Inc. ( NASDAQ : UCBI ) today reported net income of $230 million, or $3.90 per share, for the second quarter of 2013, and $242 million, or $4.05 per share, for the first six months of 2013. The results reflect the impact of two very significant events during the second quarter -- the reversal of the valuation allowance on United's net deferred tax asset and higher provision for loan losses and foreclosed property expenses from the accelerated sales of classified assets.

"The second quarter events mark the final phase of our recovery from the financial crisis that has affected so many banks throughout the country and especially within our footprint," said Jimmy Tallent, president and chief executive officer. "With the reversal of our valuation allowance and the accelerated sales of classified assets, the lingering effects of the credit crisis are behind us. We can now devote full attention toward growing our business and increasing the value of our shareholders' investments."

Tallent noted that the reduction in loans resulting from the accelerated classified loan sales masked an otherwise solid quarter of loan growth. Though the company sold loans with a carrying amount of $151 million, total loans were only down $5 million from the first quarter.

"Achieving quality loan growth remains a top priority despite continued challenges with the sluggish economy," Tallent said. "We are accomplishing this objective by adding lenders strategically, including in our vibrant new markets of Greenville, South Carolina and Nashville, Tennessee."

The second quarter provision for loan losses was $48.5 million compared with $11 million in the first quarter and with $18 million in the second quarter of 2012. The increase reflects the higher level of charge-offs associated with the accelerated classified loan sales. Second quarter net charge-offs were $72.4 million compared with $12.4 million in the first quarter and $18.9 million a year ago. The $48.5 million provision reflects the difference between the $72.4 million in net charge-offs offset by a $24 million reduction in the allowance for loan losses.

"We believed the time was right to take the final step toward putting the financial crisis behind us by selling our stress-related classified assets, including a bulk sale of $131 million," Tallent said. "We have cleansed our balance sheet of legacy problem credits and are turning full attention to strategic initiatives to grow our business and shareholder value."

Nonperforming assets at quarter-end were $31.8 million, representing .44 percent of total assets. This total is down from $113 million, or 1.65 percent, at March 31, 2013, and $146 million, or 2.16 percent, at June 30, 2012. The classified asset ratio, which is the ratio of classified assets to Tier 1 regulatory capital plus the allowance for loan losses, declined to 27 percent from 49 percent at March 31 and from 62 percent a year ago.

Second quarter taxable equivalent net interest revenue totaled $54.6 million, down $97,000 from the first quarter and down $2.27 million from the second quarter of 2012. "The decrease reflects the ongoing trend of lower yields on our loan and investment securities portfolios," said Tallent. "The lower loan portfolio yield reflects competitive pricing pressure on new and renewed loans and new retail product offerings with low introductory rates. Introductory rates on the new retail products will begin to expire and approximately $50 million will reset to a market rate in the third quarter of 2013. The lower investment securities yield is due to reinvestment of cash flows at record low rates. We continue to look for reinvestment opportunities, with a focus on floating-rate securities, to alleviate market and duration risk. At quarter-end, floating-rate securities accounted for 39 percent of the total investment securities portfolio compared to 34 percent last quarter. The higher proportion improves our overall interest sensitivity position by reducing exposure to rising interest rates."

The second quarter taxable equivalent net interest margin was 3.31 percent, down seven basis points from the first quarter and 12 basis points from a year ago. "Our net interest margin will remain under pressure as long as interest rates hold at these unprecedented low levels," stated Tallent. "To offset the impact on net interest revenue, we remain sharply focused on growing the loan portfolio in the mid-single digit range by focusing on retail loans and continuing to add commercial lenders in key markets."

Second quarter fee revenue was $16.3 million, compared to $12.8 million in the first quarter and $12.9 million a year ago. Contributing to these increases were higher mortgage, advisory services and interchange fee revenue, as well as two non-core items in other fee revenue. Mortgage fee revenue increased $348,000 from the first quarter and $681,000 from a year ago, to $3.0 million. Closed mortgage loans totaled $95.2 million in the second quarter, compared with $69.8 million in the first quarter and $79.8 million in the second quarter of 2012.

The two non-core items that contributed to the increase in other fee revenue were a $1.37 million recovery on a bank-owned life insurance policy and a $468,000 gain from the sale of low-income housing tax credits. In addition, other fee revenue included customer derivative fees of $488,000 compared with $252,000 in the first quarter of 2013. These fees are from the company's newly rolled-out loan swap program for commercial loan customers.

Operating expenses, excluding foreclosed property costs, were $43.7 million in the second quarter of 2013 compared to $41.4 million for the first quarter of 2013 and $42.5 million a year ago. The increase from both periods was due mostly to higher severance costs; second quarter 2013 severance costs were $1.56 million compared with $360,000 and $1.16 million for the first quarter of 2013 and the second quarter of 2012, respectively. Also contributing to the increase in operating expenses were higher mortgage and brokerage incentives related to the higher revenue levels and higher consulting fees associated with various revenue enhancement and efficiency projects.

Foreclosed property costs were $5.15 million in the second quarter of 2013 compared to $2.33 million in the first quarter and $1.85 million a year ago. The higher total reflects losses incurred on the accelerated sales of foreclosed properties. Included in second quarter 2013 costs were $4.31 million in net losses and write-downs and $837,000 for maintenance. For the first quarter of 2013, foreclosed property costs included $1.15 million in net losses and write-downs and $1.19 million in maintenance. Second quarter 2012 foreclosed property costs included $739,000 in net losses and write-downs and $1.11 million in maintenance.

As of June 30, 2013, capital ratios were as follows: Tier 1 Risk-Based of 13.7 percent; Total Risk-Based of 15.2 percent; Tier 1 Common Risk-Based of 8.5 percent; and, Tangible Equity-to-Assets of 11.5 percent. The average Tier 1 Leverage ratio was 9.8 percent at June 30, 2013.

"With credit quality now well under control, our attention is focused on growing our business and improving earnings performance," concluded Tallent. "In a competitive landscape, we must work more efficiently to achieve our goals, all while maintaining the best customer satisfaction scores in the industry. This team is more than up to the challenge and fully committed."

Conference Call
United will hold a conference call today, Thursday, July 25, 2013, 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 11766770. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of 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 103 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina, east Tennessee and western South Carolina. 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 website 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 2012 Annual Report on Form 10-K under the sections 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


			2013								2012
(in thousands, except per share data; taxable equivalent)			Second Quarter					First Quarter			Fourth Quarter			Third Quarter			Second Quarter			Second Quarter 2013- 2012 Change
INCOME SUMMARY
Interest revenue			$	61,693				$	62,134		$	64,450		$	65,978		$	66,780
Interest expense				7,131					7,475			8,422			8,607			9,944
	Net interest revenue			54,562					54,659			56,028			57,371			56,836		(4	)%
Provision for loan losses				48,500					11,000			14,000			15,500			18,000
Fee revenue				16,312					12,826			14,761			13,764			12,867		27
	Total revenue			22,374					56,485			56,789			55,635			51,703
Operating expenses				48,823					43,770			50,726			44,783			44,310		10
	(Loss) income before income taxes			(26,449	)				12,715			6,063			10,852			7,393
Income tax (benefit) expense				(256,413	)				950			802			284			894
	Net income			229,964					11,765			5,261			10,568			6,499
Preferred dividends and discount accretion				3,055					3,052			3,045			3,041			3,032
Net income available to common shareholders			$	226,909				$	8,713		$	2,216		$	7,527		$	3,467

PERFORMANCE MEASURES
	Per common share:
		Diluted income	$	3.90				$	.15		$	.04		$	.13		$	.06
		Book value		10.90					6.85			6.67			6.75			6.61		65
		Tangible book value ⁽²⁾		10.82					6.76			6.57			6.64			6.48		67

	Key performance ratios:
		Return on equity ⁽¹⁾⁽³⁾		197.22	%				8.51	%		2.15	%		7.43	%		3.51	%
		Return on assets ⁽³⁾		13.34					.70			.31			.63			.37
		Net interest margin ⁽³⁾		3.31					3.38			3.44			3.60			3.43
		Efficiency ratio		68.89					64.97			71.69			62.95			63.84
		Equity to assets		11.57		(4	)		8.60			8.63			8.75			8.33
		Tangible equity to assets ⁽²⁾		11.53		(4	)		8.53			8.55			8.66			8.24
		Tangible common equity to assets ⁽²⁾		8.79		(4	)		5.66			5.67			5.73			5.45
		Tangible common equity to risk-weighted assets ⁽²⁾		13.16					8.45			8.26			8.44			8.37

ASSET QUALITY *
	Non-performing loans		$	27,864				$	96,006		$	109,894		$	115,001		$	115,340
	Foreclosed properties			3,936					16,734			18,264			26,958			30,421
		Total non-performing assets (NPAs)		31,800					112,740			128,158			141,959			145,761
	Allowance for loan losses			81,845					105,753			107,137			107,642			112,705
	Net charge-offs			72,408					12,384			14,505			20,563			18,896
	Allowance for loan losses to loans			1.95	%				2.52	%		2.57	%		2.60	%		2.74	%
	Net charge-offs to average loans ⁽³⁾			6.87					1.21			1.39			1.99			1.85
	NPAs to loans and foreclosed properties			.76					2.68			3.06			3.41			3.51
	NPAs to total assets			.44					1.65			1.88			2.12			2.16

AVERAGE BALANCES ($ in millions)
	Loans		$	4,253				$	4,197		$	4,191		$	4,147		$	4,156		2
	Investment securities			2,161					2,141			2,088			1,971			2,145		1
	Earning assets			6,608					6,547			6,482			6,346			6,665		(1	)
	Total assets			6,915					6,834			6,778			6,648			6,993		(1	)
	Deposits			5,983					5,946			5,873			5,789			5,853		2
	Shareholders' equity			636					588			585			582			583		9
	Common shares - basic (thousands)			58,141					58,081			57,971			57,880			57,840
	Common shares - diluted (thousands)			58,141					58,081			57,971			57,880			57,840

AT PERIOD END ($ in millions)
	Loans *		$	4,189				$	4,194		$	4,175		$	4,138		$	4,119		2
	Investment securities			2,152					2,141			2,079			2,025			1,984		8
	Total assets			7,163					6,849			6,802			6,699			6,737		6
	Deposits			6,012					6,026			5,952			5,823			5,822		3
	Shareholders' equity			829					592			581			585			576		44
	Common shares outstanding (thousands)			57,831					57,767			57,741			57,710			57,641


⁽¹⁾		Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
⁽²⁾		Excludes effect of acquisition related intangibles and associated amortization.
⁽³⁾		Annualized.
⁽⁴⁾		Calculated as of period-end to reflect the full impact of the reversal of the valuation allowance on United's deferred tax asset. The period-end ratio is more indicative of the ratio going forward.
*		Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

(in thousands, except per share data; taxable equivalent)			For the Six Months Ended June 30,						YTD 2013-2012
			2013			2012			Change
INCOME SUMMARY
Interest revenue			$	123,827		$	137,001
Interest expense				14,606			21,301
	Net interest revenue			109,221			115,700		(6	)%
Provision for loan losses				59,500			33,000
Fee revenue				29,138			28,246		3
	Total revenue			78,859			110,946
Operating expenses				92,593			91,265		1
	(Loss) income before income taxes			(13,734	)		19,681
Income tax (benefit) expense				(255,463	)		1,654
	Net income			241,729			18,027
Preferred dividends and discount accretion				6,107			6,062
Net income available to common shareholders			$	235,622		$	11,965

PERFORMANCE MEASURES
	Per common share:
		Diluted income	$	4.05		$	.21
		Book value		10.90			6.61		65
		Tangible book value ⁽²⁾		10.82			6.48		67

	Key performance ratios:
		Return on equity ⁽¹⁾⁽³⁾		108.34	%		6.12	%
		Return on assets ⁽³⁾		7.09			.52
		Net interest margin ⁽³⁾		3.34			3.48
		Efficiency ratio		66.98			63.56
		Equity to assets		8.90			8.26
		Tangible equity to assets ⁽²⁾		8.83			8.16
		Tangible common equity to assets ⁽²⁾		5.99			5.39
		Tangible common equity to risk-weighted assets ⁽²⁾		13.16			8.37

ASSET QUALITY *
	Non-performing loans		$	27,864		$	115,340
	Foreclosed properties			3,936			30,421
		Total non-performing assets (NPAs)		31,800			145,761
	Allowance for loan losses			81,845			112,705
	Net charge-offs			84,792			34,763
	Allowance for loan losses to loans			1.95	%		2.74	%
	Net charge-offs to average loans ⁽³⁾			4.07			1.70
	NPAs to loans and foreclosed properties			.76			3.51
	NPAs to total assets			.44			2.16

AVERAGE BALANCES ($ in millions)
	Loans		$	4,225		$	4,162		2
	Investment securities			2,151			2,149		-
	Earning assets			6,578			6,682		(2	)
	Total assets			6,875			7,019		(2	)
	Deposits			5,964			5,940		-
	Shareholders' equity			612			580		6
	Common shares - basic (thousands)			58,111			57,803
	Common shares - diluted (thousands)			58,111			57,803

AT PERIOD END ($ in millions)
	Loans *		$	4,189		$	4,119		2
	Investment securities			2,152			1,984		8
	Total assets			7,163			6,737		6
	Deposits			6,012			5,822		3
	Shareholders' equity			829			576		44
	Common shares outstanding (thousands)			57,831			57,641


⁽¹⁾		Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
⁽²⁾		Excludes effect of acquisition related intangibles and associated amortization.
⁽³⁾		Annualized.
⁽⁴⁾		Calculated as of period-end to reflect the full impact of the reversal of the valuation allowance on United's deferred tax asset. The period-end ratio is more indicative of the ratio going forward.
*		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


(in thousands, except per share data; taxable equivalent)		2013						2012
		Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter

Interest revenue reconciliation
Interest revenue - taxable equivalent		$	61,693		$	62,134		$	64,450		$	65,978		$	66,780
Taxable equivalent adjustment			(368	)		(365	)		(381	)		(419	)		(444	)
	Interest revenue (GAAP)	$	61,325		$	61,769		$	64,069		$	65,559		$	66,336

Net interest revenue reconciliation
Net interest revenue - taxable equivalent		$	54,562		$	54,659		$	56,028		$	57,371		$	56,836
Taxable equivalent adjustment			(368	)		(365	)		(381	)		(419	)		(444	)
	Net interest revenue (GAAP)	$	54,194		$	54,294		$	55,647		$	56,952		$	56,392

Total revenue reconciliation
Total operating revenue		$	22,374		$	56,485		$	56,789		$	55,635		$	51,703
Taxable equivalent adjustment			(368	)		(365	)		(381	)		(419	)		(444	)
	Total revenue (GAAP)	$	22,006		$	56,120		$	56,408		$	55,216		$	51,259

(Loss) income before taxes reconciliation
(Loss) income before taxes		$	(26,449	)	$	12,715		$	6,063		$	10,852		$	7,393
Taxable equivalent adjustment			(368	)		(365	)		(381	)		(419	)		(444	)
	(Loss) income before taxes (GAAP)	$	(26,817	)	$	12,350		$	5,682		$	10,433		$	6,949

Income tax (benefit) expense reconciliation Income tax (benefit) expense $ (256,413 ) $ 950 $ 802 $ 284 $ 894 Taxable equivalent adjustment (368 ) (365 ) (381 ) (419 ) (444 ) Income tax (benefit) expense (GAAP) $ (256,781 ) $ 585 $ 421 $ (135 ) $ 450 Book value per common share reconciliation Tangible book value per common share $ 10.82 $ 6.76 $ 6.57 $ 6.64 $ 6.48 Effect of goodwill and other intangibles .08 .09 .10 .11 .13 Book value per common share (GAAP) $ 10.90 $ 6.85 $ 6.67 $ 6.75 $ 6.61 Average equity to assets reconciliation Tangible common equity to assets 8.79 % 5.66 % 5.67 % 5.73 % 5.45 % Effect of preferred equity 2.74 2.87 2.88 2.93 2.79 Tangible equity to assets 11.53 8.53 8.55 8.66 8.24 Effect of goodwill and other intangibles .04 .07 .08 .09 .09 Equity to assets (GAAP) 11.57 % 8.60 % 8.63 % 8.75 % 8.33 % Tangible common equity to risk-weighted assets reconciliation Tangible common equity to risk-weighted assets 13.16 % 8.45 % 8.26 % 8.44 % 8.37 % Effect of other comprehensive income .29 .49 .51 .36 .28 Effect of deferred tax limitation (4.99 ) - - - - Effect of trust preferred 1.11 1.15 1.15 1.17 1.19 Effect of preferred equity 4.11 4.22 4.24 4.29 4.35 Tier I capital ratio (Regulatory) 13.68 % 14.31 % 14.16 % 14.26 % 14.19 %



UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information

		For the Six Months Ended
(in thousands, except per sharedata; taxable equivalent)		2013			2012

Interest revenue reconciliation
Interest revenue - taxable equivalent		$	123,827		$	137,001
Taxable equivalent adjustment			(733	)		(890	)
	Interest revenue (GAAP)	$	123,094		$	136,111

Net interest revenue reconciliation
Net interest revenue - taxable equivalent		$	109,221		$	115,700
Taxable equivalent adjustment			(733	)		(890	)
	Net interest revenue (GAAP)	$	108,488		$	114,810

Total revenue reconciliation
Total operating revenue		$	78,859		$	110,946
Taxable equivalent adjustment			(733	)		(890	)
	Total revenue (GAAP)	$	78,126		$	110,056

(Loss) income before taxes reconciliation
(Loss) income before taxes		$	(13,734	)	$	19,681
Taxable equivalent adjustment			(733	)		(890	)
	(Loss) income before taxes (GAAP)	$	(14,467	)	$	18,791

Income tax (benefit) expense reconciliation
Income tax (benefit) expense		$	(255,463	)	$	1,654
Taxable equivalent adjustment			(733	)		(890	)
	Income tax (benefit) expense (GAAP)	$	(256,196	)	$	764

Book value per common share reconciliation
Tangible book value per common share		$	10.82		$	6.48
Effect of goodwill and other intangibles			.08			.13
	Book value per common share (GAAP)	$	10.90		$	6.61

Average equity to assets reconciliation
Tangible common equity to assets			5.99	%		5.39	%
Effect of preferred equity			2.84			2.77
	Tangible equity to assets		8.83			8.16
Effect of goodwill and other intangibles			.07			.10
	Equity to assets (GAAP)		8.90	%		8.26	%

Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets			13.16	%		8.37	%
Effect of other comprehensive income			.29			.28
Effect of deferred tax limitation			(4.99	)		-
Effect of trust preferred			1.11			1.19
Effect of preferred equity			4.11			4.35
	Tier I capital ratio (Regulatory)		13.68	%		14.19	%



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End ⁽¹⁾

			2013				2012
(in millions)			Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter
LOANS BY CATEGORY
Owner occupied commercial RE			$	1,119	$	1,130	$	1,131	$	1,126	$	1,140
Income producing commercial RE				629		674		682		693		697
Commercial & industrial				437		454		458		460		450
Commercial construction				133		152		155		161		169
	Total commercial			2,318		2,410		2,426		2,440		2,456
Residential mortgage				876		850		829		833		834
Home equity lines of credit				402		396		385		341		294
Residential construction				332		372		382		389		409
Consumer installment				261		166		153		135		126
	Total loans		$	4,189	$	4,194	$	4,175	$	4,138	$	4,119

LOANS BY MARKET
North Georgia			$	1,265	$	1,363	$	1,364	$	1,383	$	1,387
Atlanta MSA				1,227		1,262		1,250		1,238		1,242
North Carolina				576		575		579		579		576
Coastal Georgia				397		398		400		380		369
Gainesville MSA				256		259		261		256		259
East Tennessee				282		282		283		283		276
South Carolina				34		-		-		-		-
Other ⁽²⁾				152		55		38		19		10
	Total loans		$	4,189	$	4,194	$	4,175	$	4,138	$	4,119

RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development		$	42	$	57	$	62	$	71	$	78
	Land loans			36		42		46		41		45
	Lot loans			173		188		193		196		203
		Total		251		287		301		308		326

House loans
	Spec			34		40		41		44		49
	Sold			47		45		40		37		34
		Total		81		85		81		81		83
Total residential construction			$	332	$	372	$	382	$	389	$	409

(1)	Excludes total loans of $25.7 million, $28.3 million, $33.4 million, $37.0 million and $41.5 million as of June 30, 2013, March 31, 2013, December 31, 2012, September 30, 2012 and June 30, 2012, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2)	Includes purchased indirect auto loans that are not assigned to a geographic region.



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End ⁽¹⁾
			2013				2012
(in millions)			Second Quarter		First Quarter		Second Quarter			Linked Quarter Change			Year over Year Change
LOANS BY CATEGORY
Owner occupied commercial RE			$	1,119	$	1,130	$	1,140	$	(11	)	$	(21	)
Income producing commercial RE				629		674		697		(45	)		(68	)
Commercial & industrial				437		454		450		(17	)		(13	)
Commercial construction				133		152		169		(19	)		(36	)
	Total commercial			2,318		2,410		2,456		(92	)		(138	)
Residential mortgage				876		850		834		26			42
Home equity lines of credit				402		396		294		6			108
Residential construction				332		372		409		(40	)		(77	)
Consumer installment				261		166		126		95			135
	Total loans		$	4,189	$	4,194	$	4,119		(5	)		70

LOANS BY MARKET
North Georgia			$	1,265	$	1,363	$	1,387		(98	)		(122	)
Atlanta MSA				1,227		1,262		1,242		(35	)		(15	)
North Carolina				576		575		576		1			-
Coastal Georgia				397		398		369		(1	)		28
Gainesville MSA				256		259		259		(3	)		(3	)
East Tennessee				282		282		276		-			6
South Carolina				34		-		-		34			34
Other ⁽²⁾				152		55		10		97			142
	Total loans		$	4,189	$	4,194	$	4,119		(5	)		70

RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development		$	42	$	57	$	78		(15	)		(36	)
	Land loans			36		42		45		(6	)		(9	)
	Lot loans			173		188		203		(15	)		(30	)
		Total		251		287		326		(36	)		(75	)

House loans
	Spec			34		40		49		(6	)		(15	)
	Sold			47		45		34		2			13
		Total		81		85		83		(4	)		(2	)
Total residential construction			$	332	$	372	$	409		(40	)		(77	)


⁽¹⁾		Excludes total loans of $25.7 million, $28.3 million, $33.4 million, $37.0 million and $41.5 million as of June 30, 2013, March 31, 2013, December 31, 2012, September 30, 2012 and June 30, 2012, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.

UNITED COMMUNITY BANKS, INC. Financial Highlights Credit Quality⁽¹⁾
		Second Quarter 2013
(in thousands)		Non-performing Loans			Foreclosed Properties			Total NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	5,283		$	547		$	5,830
Income producing CRE			1,954			-			1,954
Commercial & industrial			548			-			548
Commercial construction			504			376			880
	Total commercial		8,289			923			9,212
Residential mortgage			12,847			1,303			14,150
Home equity lines of credit			1,491			140			1,631
Residential construction			4,838			1,570			6,408
Consumer installment			399			-			399
	Total NPAs	$	27,864		$	3,936		$	31,800
	Balance as a % of Unpaid Principal		62.6	%		31.6	%		55.8	%

NONPERFORMING ASSETS BY MARKET
North Georgia		$	12,830		$	1,617		$	14,447
Atlanta MSA			3,803			1,197			5,000
North Carolina			6,512			295			6,807
Coastal Georgia			2,588			627			3,215
Gainesville MSA			1,008			-			1,008
East Tennessee			1,123			200			1,323
South Carolina			-			-			-
Other ⁽³⁾			-			-			-
	Total NPAs	$	27,864		$	3,936		$	31,800

NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	96,006		$	16,734		$	112,740
Loans placed on non-accrual			13,200			-			13,200
Payments received			(47,937	)		-			(47,937	)
Loan charge-offs			(23,972	)		-			(23,972	)
Foreclosures			(9,433	)		9,433			-
Capitalized costs			-			55			55
Property sales			-			(17,972	)		(17,972	)
Write downs			-			(1,369	)		(1,369	)
Net losses on sales			-			(2,945	)		(2,945	)
	Ending Balance	$	27,864		$	3,936		$	31,800



⁽¹⁾	Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾	Annualized.
⁽³⁾	Includes purchased indirect auto loans that are not assigned to a geographic region.



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality⁽¹⁾


		First Quarter 2013
(in thousands)		Non-performing Loans			Foreclosed Properties			Total NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	8,142		$	4,750		$	12,892
Income producing CRE			9,162			834			9,996
Commercial & industrial			29,545			-			29,545
Commercial construction			22,359			3,027			25,386
	Total commercial		69,208			8,611			77,819
Residential mortgage			10,901			3,463			14,364
Home equity lines of credit			916			-			916
Residential construction			14,592			4,660			19,252
Consumer installment			389			-			389
	Total NPAs	$	96,006		$	16,734		$	112,740
	Balance as a % of Unpaid Principal		66.3	%		45.0	%		62.0	%

NONPERFORMING ASSETS BY MARKET
North Georgia		$	63,210		$	6,616		$	69,826
Atlanta MSA			17,380			3,524			20,904
North Carolina			8,519			2,533			11,052
Coastal Georgia			3,523			1,449			4,972
Gainesville MSA			911			370			1,281
East Tennessee			2,463			2,242			4,705
South Carolina			-			-			-
Other ⁽³⁾			-			-			-
	Total NPAs	$	96,006		$	16,734		$	112,740

NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	109,894		$	18,264		$	128,158
Loans placed on non-accrual			9,665			-			9,665
Payments received			(6,809	)		-			(6,809	)
Loan charge-offs			(10,456	)		-			(10,456	)
Foreclosures			(6,288	)		6,288			-
Capitalized costs			-			54			54
Property sales			-			(6,726	)		(6,726	)
Write downs			-			(1,041	)		(1,041	)
Net losses on sales			-			(105	)		(105	)
	Ending Balance	$	96,006		$	16,734		$	112,740


⁽¹⁾		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Annualized.
⁽³⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality⁽¹⁾


		Fourth Quarter 2012
(in thousands)		Non-performing Loans			Foreclosed Properties			Total NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	12,599		$	4,989		$	17,588
Income producing CRE			9,549			490			10,039
Commercial & industrial			31,817			-			31,817
Commercial construction			23,843			2,204			26,047
	Total commercial		77,808			7,683			85,491
Residential mortgage			11,151			4,753			15,904
Home equity lines of credit			1,438			-			1,438
Residential construction			18,702			5,828			24,530
Consumer installment			795			-			795
	Total NPAs	$	109,894		$	18,264		$	128,158
	Balance as a % of Unpaid Principal		69.5	%		39.7	%		62.8	%

NONPERFORMING ASSETS BY MARKET
North Georgia		$	69,950		$	8,219		$	78,169
Atlanta MSA			18,556			3,442			21,998
North Carolina			11,014			2,579			13,593
Coastal Georgia			3,810			1,609			5,419
Gainesville MSA			903			556			1,459
East Tennessee			5,661			1,859			7,520
South Carolina			-			-			-
Other ⁽³⁾			-			-			-
	Total NPAs	$	109,894		$	18,264		$	128,158

NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	115,001		$	26,958		$	141,959
Loans placed on non-accrual			20,211			-			20,211
Payments received			(6,458	)		-			(6,458	)
Loan charge-offs			(11,722	)		-			(11,722	)
Foreclosures			(7,138	)		7,138			-
Capitalized costs			-			201			201
Property sales			-			(12,845	)		(12,845	)
Write downs			-			(1,438	)		(1,438	)
Net losses on sales			-			(1,750	)		(1,750	)
	Ending Balance	$	109,894		$	18,264		$	128,158


⁽¹⁾		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Annualized.
⁽³⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality⁽¹⁾


			Second Quarter 2013				First Quarter 2013					Fourth Quarter 2012
(in thousands)			Net Charge-Offs		Net Charge- Offs to Average Loans ⁽²⁾		Net Charge-Offs			Net Charge- Offs to Average Loans ⁽²⁾		Net Charge-Offs		Net Charge- Offs to Average Loans ⁽²⁾
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE			$	16,545	5.85	%	$	1,922		.69	%	$	4,997	1.76	%
Income producing CRE				8,921	5.45			3,321		1.99			1,153	.67
Commercial & industrial				15,576	13.91			1,501		1.34			135	.12
Commercial construction				6,295	17.53			(4	)	(.01	)		1,688	4.25
		Total commercial		47,337	7.96			6,740		1.14			7,973	1.30
Residential mortgage				5,469	2.52			1,635		.79			3,254	1.55
Home equity lines of credit				1,040	1.04			512		.53			445	.49
Residential construction				18,506	20.91			2,973		3.22			2,435	2.52
Consumer installment				56	.10			524		1.35			398	1.10
	Total		$	72,408	6.87		$	12,384		1.21		$	14,505	1.39

NET CHARGE-OFFS BY MARKET
North Georgia			$	59,102	17.20	%	$	4,868		1.45	%	$	4,458	1.29	%
Atlanta MSA				9,986	3.21			3,295		1.07			3,977	1.27
North Carolina				1,952	1.36			2,249		1.59			2,032	1.39
Coastal Georgia				480	.49			821		.85			574	.60
Gainesville MSA				123	.19			430		.67			1,331	2.04
East Tennessee				711	1.01			679		.98			2,117	2.98
South Carolina				-	-			-		-			-	-
Other ⁽³⁾				54	.24			42		.39			16	.19
	Total		$	72,408	6.87		$	12,384		1.21		$	14,505	1.39


⁽¹⁾		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Annualized.
⁽³⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.


UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Operations (Unaudited)

				Three Months Ended						Six Months Ended
				June 30,						June 30,
(in thousands, except per share data)				2013			2012			2013			2012

Interest revenue:
	Loans, including fees			$	50,728		$	54,178		$	101,662		$	109,937
	Investment securities, including tax exempt of $210, $262, $422 and $512				9,681			11,062			19,646			24,066
	Deposits in banks and short-term investments				916			1,096			1,786			2,108
			Total interest revenue		61,325			66,336			123,094			136,111

Interest expense:
	Deposits:
		NOW			419			503			873			1,140
		Money market			534			661			1,096			1,302
		Savings			36			38			72			75
		Time			2,924			5,073			6,150			11,232
			Total deposit interest expense		3,913			6,275			8,191			13,749
	Short-term borrowings				522			904			1,038			1,949
	Federal Home Loan Bank advances				30			390			49			856
	Long-term debt				2,666			2,375			5,328			4,747
		Total interest expense			7,131			9,944			14,606			21,301
		Net interest revenue			54,194			56,392			108,488			114,810
	Provision for loan losses				48,500			18,000			59,500			33,000
		Net interest revenue after provision for loan losses			5,694			38,392			48,988			81,810

Fee revenue:
	Service charges and fees				7,972			7,816			15,375			15,599
	Mortgage loan and other related fees				3,003			2,322			5,658			4,421
	Brokerage fees				1,063			809			1,830			1,622
	Securities gains, net				-			6,490			116			7,047
	Loss from prepayment of debt				-			(6,199	)		-			(6,681	)
	Other				4,274			1,629			6,159			6,238
		Total fee revenue			16,312			12,867			29,138			28,246
		Total revenue			22,006			51,259			78,126			110,056

Operating expenses:
	Salaries and employee benefits				24,734			24,297			48,326			49,522
	Communications and equipment				3,468			3,211			6,514			6,366
	Occupancy				3,449			3,539			6,816			7,310
	Advertising and public relations				1,037			1,088			1,975			1,934
	Postage, printing and supplies				894			916			1,757			1,895
	Professional fees				2,499			1,952			4,865			3,927
	Foreclosed property				5,151			1,851			7,484			5,676
	FDIC assessments and other regulatory charges				2,505			2,545			5,010			5,055
	Amortization of intangibles				491			730			1,196			1,462
	Other				4,595			4,181			8,650			8,118
		Total operating expenses			48,823			44,310			92,593			91,265
		Net (loss) income before income taxes			(26,817	)		6,949			(14,467	)		18,791
	Income tax (benefit) expense				(256,781	)		450			(256,196	)		764
		Net income			229,964			6,499			241,729			18,027
	Preferred stock dividends and discount accretion				3,055			3,032			6,107			6,062
		Net income available to common shareholders		$	226,909		$	3,467		$	235,622		$	11,965

Earnings per common share - basic / diluted				$	3.90		$	.06		$	4.05		$	.21
Weighted average common shares outstanding - basic / diluted					58,141			57,840			58,111			57,803


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

(in thousands, except share and per share data)					June 30, 2013			December 31, 2012			June 30, 2012
					(unaudited)			(audited)			(audited)
ASSETS
	Cash and due from banks				$	62,564		$	66,536		$	50,596
	Interest-bearing deposits in banks					141,016			124,613			133,857
	Short-term investments					57,000			60,000			120,000
		Cash and cash equivalents				260,580			251,149			304,453
	Securities available for sale					1,937,264			1,834,593			1,701,583
	Securities held to maturity (fair value $226,695, $261,131 and $299,971)					214,947			244,184			282,750
	Mortgage loans held for sale					19,150			28,821			18,645
	Loans, net of unearned income					4,189,368			4,175,008			4,119,235
		Less allowance for loan losses				(81,845	)		(107,137	)		(112,705	)
			Loans, net			4,107,523			4,067,871			4,006,530
	Assets covered by loss sharing agreements with the FDIC					35,675			47,467			65,914
	Premises and equipment, net					167,197			168,920			172,200
	Bank owned life insurance					82,276			81,867			81,265
	Accrued interest receivable					19,279			18,659			20,151
	Goodwill and other intangible assets					4,315			5,510			6,965
	Foreclosed property					3,936			18,264			30,421
	Net deferred tax asset					272,287			-			-
	Other assets					38,206			34,954			46,229
		Total assets			$	7,162,635		$	6,802,259		$	6,737,106
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
	Deposits:
		Demand			$	1,349,804		$	1,252,605		$	1,150,444
		NOW				1,225,664			1,316,453			1,196,507
		Money market				1,167,889			1,149,912			1,117,139
		Savings				247,821			227,308			219,077
		Time:
			Less than $100,000			982,009			1,055,271			1,164,451
			Greater than $100,000			664,112			705,558			764,343
		Brokered				374,530			245,033			210,506
				Total deposits		6,011,829			5,952,140			5,822,467
	Short-term borrowings					54,163			52,574			53,656
	Federal Home Loan Bank advances					70,125			40,125			125,125
	Long-term debt					124,845			124,805			120,265
	Accrued expenses and other liabilities					72,370			51,210			39,598
		Total liabilities				6,333,332			6,220,854			6,161,111
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				179,323			178,557			177,814
		Series D; $1,000 stated value; 16,613 shares issued and outstanding				16,613			16,613			16,613
	Common stock, $1 par value; 100,000,000 shares authorized; 43,356,492, 42,423,870 and 41,726,509 shares issued and outstanding					43,356			42,424			41,727
	Common stock, non-voting, $1 par value; 30,000,000 shares authorized; 14,474,810, 15,316,794 and 15,914,209 shares issued and outstanding					14,475			15,317			15,914
	Common stock issuable; 271,215, 133,238 and 94,657 shares					4,705			3,119			2,893
	Capital surplus					1,057,931			1,057,951			1,056,819
	Accumulated deficit					(473,531	)		(709,153	)		(718,896	)
	Accumulated other comprehensive loss					(13,786	)		(23,640	)		(17,106	)
		Total shareholders' equity				829,303			581,405			575,995
		Total liabilities and shareholders' equity			$	7,162,635		$	6,802,259		$	6,737,106


UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,

				2013								2012
(dollars in thousands, taxable equivalent)				Average Balance			Interest			Avg. Rate		Average Balance			Interest		Avg. Rate
Assets:
Interest-earning assets:
	Loans, net of unearned income ⁽¹⁾⁽²⁾			$	4,253,361		$	50,806		4.79	%	$	4,155,619		$	54,296	5.25	%
	Taxable securities ⁽³⁾				2,139,221			9,471		1.77			2,121,053			10,800	2.04
	Tax-exempt securities ⁽¹⁾⁽³⁾				21,597			344		6.37			24,242			429	7.08
	Federal funds sold and other interest-earning assets				193,370			1,072		2.22			364,099			1,255	1.38

		Total interest-earning assets			6,607,549			61,693		3.74			6,665,013			66,780	4.03
Non-interest-earning assets:
	Allowance for loan losses				(106,417	)							(115,955	)
	Cash and due from banks				63,457								51,907
	Premises and equipment				168,272								173,792
	Other assets ⁽³⁾				181,987								218,347
		Total assets		$	6,914,848							$	6,993,104

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
	Interest-bearing deposits:
		NOW		$	1,245,301			419		.13		$	1,279,686			503	.16
		Money market			1,306,522			534		.16			1,132,548			661	.23
		Savings			245,211			36		.06			216,175			38	.07
		Time less than $100,000			1,000,511			1,568		.63			1,183,845			2,520	.86
		Time greater than $100,000			674,200			1,380		.82			778,477			2,063	1.07
		Brokered time deposits			195,182			(24	)	(.05	)		150,449			490	1.31
			Total interest-bearing deposits		4,666,927			3,913		.34			4,741,180			6,275	.53

		Federal funds purchased and other borrowings			72,139			522		2.90			97,134			904	3.74
		Federal Home Loan Bank advances			58,916			30		.20			278,971			390	.56
		Long-term debt			124,838			2,666		8.57			120,256			2,375	7.94
			Total borrowed funds		255,893			3,218		5.04			496,361			3,669	2.97

			Total interest-bearing liabilities		4,922,820			7,131		.58			5,237,541			9,944	.76
Non-interest-bearing liabilities:
	Non-interest-bearing deposits				1,315,812								1,112,128
	Other liabilities				40,603								60,726
			Total liabilities		6,279,235								6,410,395
Shareholders' equity					635,613								582,709
			Total liabilities and shareholders' equity	$	6,914,848							$	6,993,104

Net interest revenue							$	54,562							$	56,836
Net interest-rate spread										3.16	%						3.27	%

Net interest margin ⁽⁴⁾										3.31	%						3.43	%


⁽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 $17.7 million in 2013 and $25.7 million in 2012 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 Six Months Ended June 30,

				2013								2012
(dollars in thousands, taxable equivalent)				Average Balance			Interest			Avg. Rate		Average Balance			Interest		Avg. Rate
Assets:
	Interest-earning assets:
	Loans, net of unearned income ⁽¹⁾⁽²⁾			$	4,225,215		$	101,805		4.86	%	$	4,162,030		$	110,138	5.32	%
	Taxable securities ⁽³⁾				2,129,208			19,224		1.81			2,124,422			23,554	2.22
	Tax-exempt securities ⁽¹⁾⁽³⁾				21,665			691		6.38			24,840			839	6.76
	Federal funds sold and other interest-earning assets				201,478			2,107		2.09			371,044			2,470	1.33

		Total interest-earning assets			6,577,566			123,827		3.79			6,682,336			137,001	4.12
Non-interest-earning assets:
	Allowance for loan losses				(108,667	)							(116,879	)
	Cash and due from banks				63,873								53,286
	Premises and equipment				168,773								174,321
	Other assets ⁽³⁾				173,168								226,013
		Total assets		$	6,874,713							$	7,019,077

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
	Interest-bearing deposits:
		NOW		$	1,274,144			873		.14		$	1,368,900			1,140	.17
		Money market			1,282,101			1,096		.17			1,101,103			1,302	.24
		Savings			239,691			72		.06			210,789			75	.07
		Time less than $100,000			1,020,000			3,317		.66			1,227,599			5,546	.91
		Time greater than $100,000			684,320			2,857		.84			799,821			4,478	1.13
		Brokered time deposits			185,210			(24	)	(.03	)		155,892			1,208	1.56
			Total interest-bearing deposits		4,685,466			8,191		.35			4,864,104			13,749	.57

		Federal funds purchased and other borrowings			72,148			1,038		2.90			99,696			1,949	3.93
		Federal Home Loan Bank advances			46,064			49		.21			208,672			856	.82
		Long-term debt			124,827			5,328		8.61			120,246			4,747	7.94
			Total borrowed funds		243,039			6,415		5.32			428,614			7,552	3.54

			Total interest-bearing liabilities		4,928,505			14,606		.60			5,292,718			21,301	.81
Non-interest-bearing liabilities:
	Non-interest-bearing deposits				1,278,875								1,076,358
	Other liabilities				55,639								70,330
		Total liabilities			6,263,019								6,439,406
Shareholders' equity					611,694								579,671
		Total liabilities and shareholders' equity		$	6,874,713							$	7,019,077

Net interest revenue							$	109,221							$	115,700
Net interest-rate spread										3.19	%						3.31	%

Net interest margin ⁽⁴⁾										3.34	%						3.48	%


⁽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 $17.4 million in 2013 and $24.7 million in 2012 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.

Terms

and

Your Privacy Choices

Utah Privacy Notice

News

Life

Entertainment

Finance

Sports

New on Yahoo

Yahoo Finance

United Community Banks, Inc. Reports Earnings of $230 Million for Second Quarter 2013

Recommended Stories