Capital Raise

3 Months Ended

Mar. 31, 2013

Other Comprehensive Income (Loss)/ Capital Raise [Abstract]

CAPITAL RAISE

15. CAPITAL RAISE

On March 22, 2013, United Community sold to 28 accredited investors (the Investors), in a private offering, an aggregate of approximately $39.9 million in United Community securities, including 6,574,272 newly issued common shares at a purchase price of $2.75 per share, and 7,942 newly created and issued perpetual mandatorily convertible non-cumulative preferred shares of United Community at a purchase price of $2,750 per share. Legal, investment banking and other consulting expenses incurred by United Community to complete this private placement portion of the capital raise aggregated $4.0 million. The increase in equity from this private placement was reduced by these expenses. On March 26, 2013, the Board of Directors of United Community approved an equity investment by United Community of $16.0 million into Home Savings.

Upon receipt of United Community shareholder approval, each of the preferred shares will automatically convert into 1,000 United Community common shares. However, there can be no assurance that United Community will receive such shareholder approval. The preferred shares will initially not pay any dividends, but if they are not converted into common shares prior to June 30, 2013, semi-annual non-cumulative cash dividends will take effect at an annual rate of 12.00%, payment of which is subject to regulatory approval. The preferred shares are redeemable by United Community at any time upon prior receipt of applicable regulatory approvals.

Also on January 11, 2013, United Community entered into subscription agreements with certain of United Community’s directors, officers and their affiliates pursuant to which these insider investors will invest an aggregate of approximately $2.1 million in United Community for 755,820 newly issued common shares, at the same purchase price of $2.75 per share. The issuance and sale of such common shares to the insider investors is subject to United Community shareholder approval.