EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
EXHIBIT 99.1
 
 GRAPHIC

For Immediate Release

For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com


UNITED COMMUNITY BANKS, INC. REPORTS
NET OPERATING LOSS FOR THIRD QUARTER 2009

 
●
Capital significantly strengthened by $222.5 million public common offering
 
●
Provision for loan losses of $95.0 million exceeded charge-offs by $4.5 million
 
●
Allowance-to-loans ratio of 2.80 percent, up from 2.64 percent last quarter
 
●
Margin improvement of 11 basis points this quarter to 3.39 percent, up 69 basis points year-to-date
 
●
Non-cash goodwill impairment charge of $25.0 million, or $.50 per diluted share



BLAIRSVILLE, GA – October 23, 2009 – United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss of $43.7 million, or 93 cents per diluted share, for the third quarter of 2009. These results reflect elevated credit costs, including a $95 million provision for loan losses.  Net operating loss does not include a $25 million non-cash charge for impairment of goodwill.  Including this non-recurring charge, the net loss for the quarter was $68.7 million, or $1.43 per diluted share.

Net operating loss for the nine months ended September 30, 2009 was $98.8 million, or $2.17 per diluted share, and did not reflect $95 million of non-cash charges for goodwill impairment in the first and third quarters.  Also not included were $2.9 million in severance costs in the first quarter and the $11.4 million gain on the Southern Community Bank acquisition in the second quarter, all of which are considered non-recurring items and therefore excluded from operating earnings.  Including these non-recurring items, the net loss for the first nine months of 2009 was $188.5 million, or $4.01 per diluted share.

 
1
 
 
“We continue our strategy of aggressively disposing of problem credits,” stated Jimmy Tallent, president and chief executive officer.  “At the same time, we are sharply focused on offensive strategies to drive shareholder value long-term by increasing core earnings through margin expansion, expense reductions and core deposit growth.  This has been accomplished each quarter throughout 2009.”

Total loans were $5.4 billion at quarter-end, down $150 million from the second quarter and $467 million from the third quarter of 2008, reflecting continued reductions in exposure to the residential construction market and the overall weak business environment.  As of September 30, 2009, residential construction loans were $1.2 billion, or 22 percent of total loans, a decrease of $411 million from a year ago and $130 million from the second quarter of 2009.  “Partially offsetting the decline in total loans was our growth in Atlanta,” stated Tallent.  “I am very pleased with our progress in restructuring the Atlanta region, where we have closed $180 million in small business and commercial loans in the first nine months of 2009.”

Taxable equivalent net interest revenue of $63.0 million reflected an increase of $2.1 million from last quarter, $4.2 million from a year ago, and an increase of $11.1 million from the fourth quarter of 2008.  The taxable equivalent net interest margin was 3.39 percent compared with 3.28 percent for the second quarter of 2009, 3.17 percent for the third quarter of 2008, and 2.70 percent for the fourth quarter of 2008.

“The 11 basis point improvement in our net interest margin this quarter reflects our ongoing efforts to improve loan and deposit pricing,” stated Tallent.  “We continued to maintain our loan pricing strategy with higher credit spreads while lowering pricing on new and renewed time deposits.  During the third quarter, over $400 million of time deposits matured that were part of a 15-month special program completed in the second quarter of 2008.  We retained about half of these deposits with a rate reduction of over 225 basis points.  We will continue to actively pursue lowering deposit rates to improve our margin while balancing liquidity needs with our goal of maximizing earnings.”

 
2
 
 
“Excluding public funds and the deposits obtained through the acquisition, core transaction deposits increased $71 million this quarter and have grown $200 million year-to-date, or 13 percent on an annualized basis,” Tallent said. “This growth reflects the success of our United Express program for customer referrals and cross-selling.  Year-to-date we opened 9,776 net new deposit accounts.  During the third quarter alone, we have added 17, 785 new services.”

The third quarter provision for loan losses was $95.0 million compared with $60.0 million for the second quarter of 2009.  Net charge-offs for the third quarter were $90.5 million compared with $58.3 million for the second quarter of 2009.  At quarter-end, non-performing assets totaled $415.0 million compared with $392.6 million at June 30, 2009.  The ratio of non-performing assets to total assets at the end of the third and second quarters was 4.91 percent and 4.63 percent, respectively.  The allowance for loan losses to total loans was 2.80 percent and 2.64 percent, respectively.

“Credit quality continues to be our primary area of focus, particularly in the residential construction portfolio,” Tallent said. “While we have seen a rise in all categories of non-performing assets, the inflow is still driven by continued weakness in the housing and construction markets.  The good news is that the residential construction problem credits in the Atlanta region are starting to decline on a linked-quarter basis.  We have seen some negative migration in the commercial real estate categories, but the amounts are still within reasonable levels in light of current economic conditions.  Though we could see more negative migration in commercial loans, we are cautiously optimistic because the portfolio is diversified, cash flow sources are varied, and a large percentage of the loans are owner-occupied.”

Operating fee revenue of $15.7 million reflected a $2.6 million increase from last quarter and a year ago. Operating fee revenue excludes the $11.4 million gain on the Southern Community Bank acquisition recorded last quarter.  Consulting fees of $2.3 million were up $555,000 from last year due to an increase in demand for assistance with regulatory compliance matters.  Mortgage loan fees of $1.8 million were up $422,000 from a year ago due to a high level of refinancing activity.  Net securities gains of $1.1 million were up $1.0 million compared to the third quarter of 2008.

 
3
 
 
Operating expenses for the third quarter of 2009 were $53.6 million, a decrease of $3.4 million from last year. The decrease was primarily due to lower foreclosed property costs of $2.2 million and lower salary and benefit costs of $2.7 million.  The decrease in salary and benefit costs were primarily due to the reduction in work force of 174 staff year-to-date and lower bonus incentives, which were offset partially by the 54 staff added last quarter through the acquisition.  Additionally, several expense categories benefited this quarter from cost reductions including communications, advertising and printing costs.  Partially offsetting the benefit of these lower costs were the rate increase for FDIC insurance premiums of $1.3 million and higher professional and legal fees related to the credit cycle.

The effective tax rate for the third quarter of 2009 was 28 percent, compared to 35 percent for the third quarter of 2008.  The lower effective tax rate in the third quarter of 2009 was due to the goodwill impairment charge for which no tax benefit is recognized.  Excluding the goodwill impairment charge, the effective tax rate for the third quarter of 2009 was 38 percent.  The projected effective tax rate for the balance of 2009 is 38 percent.

At September 30, 2009, the company’s regulatory capital ratios were as follows: Tier I Risk-Based Capital of 12.7 percent; Leverage of 9.5 percent; and Total Risk-Based of 15.3 percent.  Also, the quarter-end tangible equity-to-assets ratio was 9.6 percent, the tangible common equity-to-assets ratio was 7.4 percent and the tangible common equity to risk weighted assets was 10.3 percent.  The third quarter capital ratios reflect the successful common stock offering that closed on September 30, 2009.  United issued 44,505,000 shares of common stock at a price of $5.00 per share and the net proceeds increased capital by $210.9 million.

“The additional capital significantly strengthens our balance sheet, allowing us to continue to aggressively deal with problem credits,” stated Tallent.  “Even more important, it positions us to take advantage of once-in-a-lifetime opportunities to grow our business through organic growth, FDIC assisted transactions and customer dislocation within our markets.  All of our strategies support our goal of building long-term shareholder value.  While there is a lot of work yet to be done, we have the strongest sense of urgency to return United to the higher levels of profitability that it has achieved for decades.”

 
4
 
 
Conference Call
United Community Banks will hold a conference call today, Friday, October 23, 2009, 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 (888) 211-7262 and use the password ‘UCBI.’ The conference call also will be webcast and can be accessed by selecting ‘Calendar of Events’ within the Investor Relations section of the company's website at www.ucbi.com.  The Investor Presentation for Third Quarter 2009 can be accessed on the website by selecting ‘Presentations’ within the Investor Relations section.

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 $8.4 billion and operates 27 community banks with 109 banking offices 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 at www.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 3 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.

# # #

 
5
 
 
UNITED COMMUNITY BANKS, INC.
                                    
Financial Highlights
                                      
Selected Financial Information
                                    
                                       
 
                    
Third
              
 
 2009
  
 2008
  
Quarter
  
For the Nine
  
YTD
(in thousands, except per share
 Third
  
 Second
  
 First
  
 Fourth
  
 Third
  
2009-2008
Months Ended
  
2009-2008
data; taxable equivalent)
Quarter
  
Quarter
  
Quarter
  
Quarter
  
Quarter
  
 Change
  
2009
  
2008
  
 Change
INCOME SUMMARY
                                      
Interest revenue
 $   101,181
  
 $   102,737
  
 $   103,562
  
 $   108,434
  
 $   112,510
  
 
 
  
 $    307,480
  
 $    358,535
      
Interest expense
        38,177
  
        41,855
  
        46,150
  
        56,561
  
        53,719
  
 
    
       126,182
  
       171,704
      
    Net interest revenue
        63,004
  
        60,882
  
        57,412
  
        51,873
  
        58,791
  
7
%
  
       181,298
  
       186,831
  
(3)
%
Provision for loan losses
        95,000
  
        60,000
  
        65,000
  
        85,000
  
        76,000
  
 
    
       220,000
  
         99,000
      
Operating fee revenue (1)
        15,671
  
        13,050
  
        12,846
  
        10,718
  
        13,121
  
19
    
         41,567
  
         42,423
  
(2)
  
   Total revenue
       (16,325)
  
        13,932
  
          5,258
  
       (22,409)
  
         (4,088)
  
299
    
           2,865
  
       130,254
  
(98)
  
Operating expenses (2)
        53,606
  
        55,348
  
        52,569
  
        52,439
  
        56,970
  
(6)
    
       161,523
  
       154,260
  
5
  
Operating loss before taxes
       (69,931)
  
       (41,416)
  
       (47,311)
  
       (74,848)
  
       (61,058)
  
15
    
     (158,658)
  
       (24,006)
  
561
  
Income tax benefit
       (26,213)
  
       (18,353)
  
       (15,335)
  
       (28,101)
  
       (21,184)
        
       (59,901)
  
         (7,303)
      
Net operating loss (1)(2)
       (43,718)
  
       (23,063)
  
       (31,976)
  
       (46,747)
  
       (39,874)
  
10
    
       (98,757)
  
       (16,703)
  
      491
  
Gain from acquisitions, net of tax expense
                -
  
          7,062
  
                -
  
                -
  
                -
  
 
    
           7,062
  
                -
      
Noncash goodwill impairment charge
       (25,000)
  
                -
  
       (70,000)
  
                -
  
                -
  
 
    
       (95,000)
  
                -
      
Severance costs, net of tax benefit
                -
  
                -
  
         (1,797)
  
                -
  
                -
        
         (1,797)
  
                -
      
Net loss
       (68,718)
  
       (16,001)
  
     (103,773)
  
       (46,747)
  
       (39,874)
  
72
    
     (188,492)
  
       (16,703)
  
1,028
  
Preferred dividends and discount accretion
          2,562
  
          2,559
  
          2,554
  
             712
  
                 4
        
           7,675
  
                12
      
Net loss available
                                      
     to common shareholders
 $    (71,280)
  
 $    (18,560)
  
 $  (106,327)
  
 $    (47,459)
  
 $    (39,878)
        
 $  (196,167)
  
 $    (16,715)
      
 
 
  
 
  
 
  
 
  
 
        
 
  
 
      
PERFORMANCE MEASURES
                                      
  Per common share:
                                      
    Diluted operating loss (1)(2)
 $          (.93)
  
 $          (.53)
  
 $          (.71)
  
 $          (.99)
  
 $          (.84)
  
11
    
 $        (2.17)
  
 $          (.35)
  
520
  
    Diluted loss
           (1.43)
  
             (.38)
  
           (2.20)
  
             (.99)
  
             (.84)
  
70
    
           (4.01)
  
             (.35)
  
1,046
  
    Cash dividends declared
                -
  
                -
  
                -
  
                -
  
                -
        
                -
  
               .18
      
    Stock dividends declared (6)
 1 for 130
  
 1 for 130
  
 1 for 130
  
 1 for 130
  
 1 for 130
        
 3 for 130
  
 1 for 130
      
    Book value
            8.85
  
          13.87
  
          14.70
  
          16.95
  
          17.12
  
(48)
    
             8.85
  
           17.12
  
(48)
  
    Tangible book value (4)
            6.50
  
            8.85
  
            9.65
  
          10.39
  
          10.48
  
(38)
    
             6.50
  
           10.48
  
(38)
  
                                       
  Key performance ratios:
                                      
    Return on equity (3)(5)
         (45.52)
%
         (11.42)
%
         (58.28)
%
         (23.83)
%
         (19.07)
%
      
         (39.11)
%
           (2.69)
%
  
    Return on assets (5)
           (3.32)
  
             (.78)
  
           (5.03)
  
           (2.19)
  
           (1.94)
        
           (3.05)
  
             (.27)
      
    Net interest margin (5)
            3.39
  
            3.28
  
            3.08
  
            2.70
  
            3.17
        
             3.25
  
             3.35
      
    Operating efficiency ratio (1)(2)(4)
          69.15
  
          74.15
  
          75.15
  
          81.34
  
          79.35
        
           72.72
  
           67.43
      
    Equity to assets
10.27
  
10.71
  
11.56
  
10.04
  
10.26
        
10.84
  
10.29
      
    Tangible equity to assets (4)
7.55
  
7.96
  
8.24
  
6.56
  
6.64
        
7.92
  
6.71
      
    Tangible common equity to assets (4)
5.36
  
5.77
  
6.09
  
6.21
  
6.64
        
5.74
  
6.70
      
    Tangible common equity to
                                      
      risk-weighted assets (4)
10.33
  
7.49
  
8.03
  
8.34
  
8.26
        
10.33
  
8.26
      
                                       
ASSET QUALITY *
                                      
  Non-performing loans (NPLs)
 $   304,381
  
 $   287,848
  
 $   259,155
  
 $   190,723
  
 $   139,266
        
 $    304,381
  
 $    139,266
      
  Foreclosed properties
      110,610
  
      104,754
  
        75,383
  
        59,768
  
        38,438
        
       110,610
  
         38,438
      
    Total non-performing assets (NPAs)
      414,991
  
      392,602
  
      334,538
  
      250,491
  
      177,704
        
       414,991
  
       177,704
      
  Allowance for loan losses
      150,187
  
      145,678
  
      143,990
  
      122,271
  
      111,299
        
       150,187
  
       111,299
      
  Net charge-offs
        90,491
  
        58,312
  
        43,281
  
        74,028
  
        55,736
        
       192,084
  
         77,124
      
  Allowance for loan losses to loans
2.80
 %
2.64
 %
2.56
 %
2.14
 %
1.91
 %
    
2.80
 %
1.91
 %
  
  Net charge-offs to average loans (5)
            6.57
  
            4.18
  
            3.09
  
            5.09
  
            3.77
        
4.60
  
1.74
      
  NPAs to loans and foreclosed properties
            7.58
  
            6.99
  
            5.86
  
            4.35
  
            3.03
        
             7.58
  
             3.03
      
  NPAs to total assets
            4.91
  
            4.63
  
            4.09
  
            2.92
  
            2.19
        
4.91
  
2.19
      
 
                                      
AVERAGE BALANCES
                                      
  Loans
 $5,565,498
  
 $5,597,259
  
 $5,675,054
  
 $5,784,139
  
 $5,889,168
  
(5)
    
 $ 5,612,202
  
 $ 5,926,731
  
(5)
  
  Investment securities
   1,615,499
  
   1,771,482
  
   1,712,654
  
   1,508,808
  
   1,454,740
  
11
    
    1,699,522
  
    1,482,397
  
15
  
  Earning assets
   7,400,539
  
   7,442,178
  
   7,530,230
  
   7,662,536
  
   7,384,287
  
           -
    
    7,457,173
  
    7,451,017
  
           -
  
  Total assets
   8,208,199
  
   8,212,140
  
   8,372,281
  
   8,487,017
  
   8,164,694
  
1
    
    8,263,605
  
    8,262,853
  
           -
  
  Deposits
   6,689,948
  
   6,544,537
  
   6,780,531
  
   6,982,229
  
   6,597,339
  
1
    
    6,671,340
  
    6,370,753
  
5
  
  Shareholders’ equity
      843,130
  
      879,210
  
      967,505
  
      851,956
  
      837,487
  
1
    
       896,159
  
       849,912
  
5
  
  Common shares - basic
        49,771
  
        48,794
  
        48,324
  
        47,844
  
        47,417
        
         48,968
  
         47,210
      
  Common shares - diluted
        49,771
  
        48,794
  
        48,324
  
        47,844
  
        47,417
        
         48,968
  
         47,210
      
                                       
AT PERIOD END
                                      
  Loans
 $5,362,689
  
 $5,513,087
  
 $5,632,705
  
 $5,704,861
  
 $5,829,937
  
(8)
    
 $ 5,362,689
  
 $ 5,829,937
  
(8)
  
  Investment securities
   1,532,514
  
   1,816,787
  
   1,719,033
  
   1,617,187
  
   1,400,827
  
9
    
    1,532,514
  
    1,400,827
  
9
  
  Total assets
   8,443,617
  
   8,477,355
  
   8,171,663
  
   8,591,933
  
   8,113,961
  
4
    
    8,443,617
  
    8,113,961
  
4
  
  Deposits
   6,821,306
  
   6,848,760
  
   6,616,488
  
   7,003,624
  
   6,689,335
  
2
    
    6,821,306
  
    6,689,335
  
2
  
  Shareholders’ equity
   1,006,638
  
      855,272
  
      888,853
  
      989,382
  
      816,880
  
23
    
    1,006,638
  
       816,880
  
23
  
  Common shares outstanding
        93,901
  
        48,933
  
        48,487
  
        48,009
  
        47,596
        
         93,901
  
         47,596
      
                                       
 
(1) Excludes the gain from acquisition of $11.4 million, net of income tax expense of $4.3 million in the second quarter of 2009. 
(2) Excludes the non-recurring goodwill impairment charges of $25 million and $70 million in the third and first quarters of 2009, respectively, and severance costs of $2.9 million, net of income tax benefit of $1.1 million in the first quarter of 2009.
(3) Net income available to common shareholders, which excludes preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
(4) Excludes effect of acquisition related intangibles and associated amortization.
(5) Annualized.
(6) Number of new shares issued for shares currently held.
NM - Not meaningful.
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
 
 
6
 
 
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
                  
Selected Financial Information
                              
                               
 
                              
   
 2009
  
 2008
  
For the Nine
  
(in thousands, except per share
  
 Third
  
 Second
  
 First
  
 Fourth
  
 Third
  
Months Ended
  
data; taxable equivalent)
  
Quarter
  
Quarter
  
Quarter
  
Quarter
  
Quarter
  
2009
  
2008
  
                               
Interest revenue reconciliation
                              
Interest revenue - taxable equivalent
  
 $   101,181
  
 $   102,737
  
 $   103,562
  
 $   108,434
  
 $   112,510
  
 $   307,480
  
 $   358,535
  
Taxable equivalent adjustment
  
          (580)
  
          (463)
  
          (488)
  
          (553)
  
          (571)
  
       (1,531)
  
       (1,708)
  
    Interest revenue (GAAP)
  
 $   100,601
  
 $   102,274
  
 $   103,074
  
 $   107,881
  
 $   111,939
  
 $   305,949
  
 $   356,827
  
                               
Net interest revenue reconciliation
                          
Net interest revenue - taxable equivalent
  
 $    63,004
  
 $    60,882
  
 $    57,412
  
 $    51,873
  
 $    58,791
  
 $   181,298
  
 $   186,831
  
Taxable equivalent adjustment
  
          (580)
  
          (463)
  
          (488)
  
          (553)
  
          (571)
  
       (1,531)
  
       (1,708)
  
    Net interest revenue (GAAP)
  
 $    62,424
  
 $    60,419
  
 $    56,924
  
 $    51,320
  
 $    58,220
  
 $   179,767
  
 $   185,123
  
                               
Fee revenue reconciliation
                              
Operating fee revenue
  
 $    15,671
  
 $    13,050
  
 $    12,846
  
 $    10,718
  
 $    13,121
  
 $    41,567
  
 $    42,423
  
Gain from acquisition
  
              -
  
       11,390
  
              -
  
              -
  
              -
  
       11,390
  
              -
  
    Fee revenue (GAAP)
  
 $    15,671
  
 $    24,440
  
 $    12,846
  
 $    10,718
  
 $    13,121
  
 $    52,957
  
 $    42,423
  
                               
Total revenue reconciliation
                              
Total operating revenue
  
 $   (16,325)
  
 $    13,932
  
 $      5,258
  
 $   (22,409)
  
 $     (4,088)
  
 $      2,865
  
 $   130,254
  
Taxable equivalent adjustment
  
          (580)
  
          (463)
  
          (488)
  
          (553)
  
          (571)
  
       (1,531)
  
       (1,708)
  
Gain from acquisition
  
              -
  
       11,390
  
              -
  
              -
  
              -
  
       11,390
  
              -
  
    Total revenue (GAAP)
  
 $   (16,905)
  
 $    24,859
  
 $      4,770
  
 $   (22,962)
  
 $     (4,659)
  
 $    12,724
  
 $   128,546
  
                               
Expense reconciliation
                              
Operating expense
  
 $    53,606
  
 $    55,348
  
 $    52,569
  
 $    52,439
  
 $    56,970
  
 $   161,523
  
 $   154,260
  
Noncash goodwill impairment charge
  
       25,000
  
              -
  
       70,000
  
              -
  
              -
  
       95,000
  
              -
  
Severance costs
  
              -
  
              -
  
         2,898
  
              -
  
              -
  
         2,898
  
              -
  
    Operating expense (GAAP)
  
 $    78,606
  
 $    55,348
  
 $   125,467
  
 $    52,439
  
 $    56,970
  
 $   259,421
  
 $   154,260
  
                               
(Loss) income before taxes reconciliation
                      
Operating (loss) income before taxes
  
 $   (69,931)
  
 $   (41,416)
  
 $   (47,311)
  
 $   (74,848)
  
 $   (61,058)
  
 $ (158,658)
  
 $   (24,006)
  
Taxable equivalent adjustment
  
          (580)
  
          (463)
  
          (488)
  
          (553)
  
          (571)
  
       (1,531)
  
       (1,708)
  
Gain from acquisition
  
              -
  
       11,390
  
              -
  
              -
  
              -
  
       11,390
  
              -
  
Noncash goodwill impairment charge
  
      (25,000)
  
              -
  
      (70,000)
  
              -
  
              -
  
      (95,000)
  
              -
  
Severance costs
  
              -
  
              -
  
       (2,898)
  
              -
  
              -
  
       (2,898)
  
              -
  
    (Loss) income before taxes (GAAP)
  
 $   (95,511)
  
 $   (30,489)
  
 $ (120,697)
  
 $   (75,401)
  
 $   (61,629)
  
 $ (246,697)
  
 $   (25,714)
  
                               
Income tax (benefit) expense reconciliation
                      
Operating income tax (benefit) expense
  
 $   (26,213)
  
 $   (18,353)
  
 $   (15,335)
  
 $   (28,101)
  
 $   (21,184)
  
 $   (59,901)
  
 $     (7,303)
  
Taxable equivalent adjustment
  
          (580)
  
          (463)
  
          (488)
  
          (553)
  
          (571)
  
       (1,531)
  
       (1,708)
  
Gain from acquisition, tax expense
  
              -
  
         4,328
  
              -
  
              -
  
              -
  
         4,328
  
              -
  
Severance costs, tax benefit
  
              -
  
              -
  
       (1,101)
  
              -
  
              -
  
       (1,101)
  
              -
  
    Income tax (benefit) expense (GAAP)
  
 $   (26,793)
  
 $   (14,488)
  
 $   (16,924)
  
 $   (28,654)
  
 $   (21,755)
  
 $   (58,205)
  
 $     (9,011)
  
                               
(Loss) earnings per common share reconciliation
                    
Operating (loss) earnings per common share
  
 $      (0.93)
  
 $      (0.53)
  
 $      (0.71)
  
 $      (0.99)
  
 $      (0.84)
  
 $      (2.17)
  
 $      (0.35)
  
Gain from acquisition
  
              -
  
           0.15
  
              -
  
              -
  
              -
  
           0.15
  
              -
  
Noncash goodwill impairment charge
  
         (0.50)
  
              -
  
         (1.45)
  
              -
  
              -
  
         (1.95)
  
              -
  
Severance costs
  
              -
  
              -
  
         (0.04)
  
              -
  
              -
  
         (0.04)
  
              -
  
    (Loss) earnings per common share (GAAP)
  
 $      (1.43)
  
 $      (0.38)
  
 $      (2.20)
  
 $      (0.99)
  
 $      (0.84)
  
 $      (4.01)
  
 $      (0.35)
  
                               
Book value reconciliation
                              
Tangible book value
  
 $        6.50
  
 $        8.85
  
 $        9.65
  
 $      10.39
  
 $      10.48
  
 $        6.50
  
 $      10.48
  
Effect of goodwill and other intangibles
  
           2.35
  
           5.02
  
           5.05
  
           6.56
  
           6.64
  
           2.35
  
           6.64
  
   Book value (GAAP)
  
 $        8.85
  
 $      13.87
  
 $      14.70
  
 $      16.95
  
 $      17.12
  
 $        8.85
  
 $      17.12
  
                               
Efficiency ratio reconciliation
                              
Operating efficiency ratio
  
         69.15
%
         74.15
%
         75.15
%
         81.34
%
         79.35
%
         72.72
%
         67.43
%
Gain from acquisition
  
              -
  
         (9.82)
  
              -
  
              -
  
              -
  
         (3.55)
  
              -
  
Noncash goodwill impairment charge
  
         32.24
  
              -
  
       100.06
  
              -
  
              -
  
         40.68
  
              -
  
Severance costs
  
              -
  
              -
  
           4.14
  
              -
  
              -
  
           1.24
  
              -
  
    Efficiency ratio (GAAP)
  
       101.39
%
         64.33
%
       179.35
%
         81.34
%
         79.35
%
       111.09
%
         67.43
%
                               
Average equity to assets reconciliation
                          
Tangible common equity to assets
  
5.36
%
5.77
%
6.09
%
6.21
%
6.64
%
5.74
%
6.70
%
Effect of preferred equity
  
           2.19
  
           2.19
  
           2.15
  
            .35
  
              -
  
           2.18
  
            .01
  
    Tangible equity to assets
  
           7.55
  
           7.96
  
           8.24
  
           6.56
  
           6.64
  
           7.92
  
           6.71
  
Effect of goodwill and other intangibles
  
           2.72
  
           2.75
  
           3.32
  
           3.48
  
           3.62
  
           2.92
  
           3.58
  
    Equity to assets (GAAP)
  
         10.27
%
         10.71
%
         11.56
%
         10.04
%
         10.26
%
         10.84
%
         10.29
%
                               
Actual tangible common equity to risk-weighted assets reconciliation
              
Tangible common equity to risk-weighted assets
  
         10.33
%
           7.49
%
           8.03
%
           8.34
%
           8.26
%
         10.33
%
           8.26
%
Effect of other comprehensive income
  
           (.87)
  
           (.72)
  
         (1.00)
  
           (.91)
  
           (.28)
  
           (.87)
  
           (.28)
  
Effect of deferred tax limitation
  
           (.56)
  
           (.22)
  
              -
  
              -
  
              -
  
           (.56)
  
              -
  
Effect of trust preferred
  
            .89
  
            .90
  
            .89
  
            .88
  
            .68
  
            .89
  
            .68
  
Effect of preferred equity
  
           2.94
  
           2.99
  
           2.96
  
           2.90
  
              -
  
           2.94
  
              -
  
    Tier I capital ratio (Regulatory)
  
         12.73
%
         10.44
%
         10.88
%
         11.21
%
           8.66
%
         12.73
%
           8.66
%
                               
 
 
7
 
 
UNITED COMMUNITY BANKS, INC.
                          
Financial Highlights
                              
Loan Portfolio Composition at Period-End
                        
 
2009
  
2008
  
Linked
Quarter
Change(2)
    
Year over
Year
Change
  
  Third   Second   First   Fourth   Third            
(in millions)
Quarter (1)
  
Quarter (1)
  
Quarter
  
Quarter
  
Quarter
  
Actual
    
Actual
  
LOANS BY CATEGORY
                              
Commercial (sec. by RE)
 $    1,787
  
 $    1,797
  
 $    1,779
  
 $    1,627
  
 $    1,604
  
(2)
%
  
11
%
Commercial construction
          380
  
          379
  
          377
  
          500
  
          509
  
1
    
(25)
  
Commercial & industrial
          403
  
          399
  
          387
  
          410
  
          425
  
4
    
(5)
  
     Total commercial
       2,570
  
       2,575
  
       2,543
  
       2,537
  
       2,538
  
(1)
    
1
  
Residential construction
       1,185
  
       1,315
  
       1,430
  
       1,479
  
       1,596
  
(40)
    
(26)
  
Residential mortgage
       1,461
  
       1,470
  
       1,504
  
       1,526
  
       1,528
  
(2)
    
(4)
  
Consumer / installment
          147
  
          153
  
          156
  
          163
  
          168
  
(16)
    
(13)
  
     Total loans
 $    5,363
  
 $    5,513
  
 $    5,633
  
 $    5,705
  
 $    5,830
  
(11)
    
(8)
  
                               
                               
LOANS BY MARKET
                              
Atlanta MSA
 $    1,526
  
 $    1,605
  
 $    1,660
  
 $    1,706
  
 $    1,800
  
(20)
%
  
(15)
%
Gainesville MSA
          402
  
          413
  
          422
  
          420
  
          426
  
(11)
    
(6)
  
North Georgia
       1,942
  
       1,978
  
       2,014
  
       2,040
  
       2,066
  
(7)
    
(6)
  
Western North Carolina
          786
  
          794
  
          808
  
          810
  
          815
  
(4)
    
(4)
  
Coastal Georgia
          440
  
          455
  
          460
  
          464
  
          458
  
(13)
    
(4)
  
East Tennessee
          267
  
          268
  
          269
  
          265
  
          265
  
(1)
    
1
  
     Total loans
 $    5,363
  
 $    5,513
  
 $    5,633
  
 $    5,705
  
 $    5,830
  
(11)
    
(8)
  
                               
                               
RESIDENTIAL CONSTRUCTION
                            
Dirt loans
                              
   Acquisition & development
 $       380
  
 $       413
  
 $       445
  
 $       484
  
 $       516
  
      (32)
%
  
      (26)
%
   Land loans
          159
  
          159
  
          155
  
          153
  
          142
  
        -
    
       12
  
   Lot loans
          336
  
          369
  
          390
  
          358
  
          385
  
      (36)
    
      (13)
  
      Total
          875
  
          941
  
          990
  
          995
  
       1,043
  
      (28)
    
      (16)
  
                               
House loans
                              
   Spec
          218
  
          268
  
          317
  
          347
  
          393
  
      (75)
%
  
      (45)
%
   Sold
           92
  
          106
  
          123
  
          137
  
          160
  
      (53)
    
      (43)
  
      Total
          310
  
          374
  
          440
  
          484
  
          553
  
      (68)
    
      (44)
  
Total residential construction
 $    1,185
  
 $    1,315
  
 $    1,430
  
 $    1,479
  
 $    1,596
  
      (40)
    
      (26)
  
                               
                               
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
                      
Dirt loans
                              
   Acquisition & development
 $       100
  
 $       124
  
 $       148
  
 $       167
  
 $       185
  
      (77)
%
  
      (46)
%
   Land loans
           61
  
           63
  
           52
  
           56
  
           47
  
      (13)
    
       30
  
   Lot loans
           54
  
           81
  
           98
  
           86
  
          103
  
    (133)
    
      (48)
  
      Total
          215
  
          268
  
          298
  
          309
  
          335
  
      (79)
    
      (36)
  
                               
House loans
                              
   Spec
           91
  
          127
  
          164
  
          189
  
          227
  
    (113)
%
  
      (60)
%
   Sold
           22
  
           29
  
           33
  
           40
  
           49
  
      (97)
    
      (55)
  
      Total
          113
  
          156
  
          197
  
          229
  
          276
  
    (110)
    
      (59)
  
Total residential construction
 $       328
  
 $       424
  
 $       495
  
 $       538
  
 $       611
  
      (91)
    
      (46)
  
                               
(1)  Excludes total loans of $104.0 million and $109.9 million as of September 30, 2009 and June 30, 2009, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2)  Annualized.
 
 
8
 
 
UNITED COMMUNITY BANKS, INC.
                                            
Financial Highlights
                                                  
Credit Quality (1)
 
                                                      
   
Third Quarter 2009
          
Second Quarter 2009
          
First Quarter 2009
        
   
 Non-performing
 Foreclosed
 Total
    
 Non-performing
 Foreclosed
 Total
    
 Non-performing
 Foreclosed
 Total
  
(in thousands)
  
Loans
    
Properties
  
NPAs
    
Loans
    
Properties
  
NPAs
    
Loans
    
Properties
  
NPAs
  
NPAs BY CATEGORY
                                                  
Commercial (sec. by RE)
 $            38,379
    
 $            12,566
    
 $            50,945
    
 $            37,755
    
 $              5,395
    
 $            43,150
    
 $            18,188
    
 $              3,811
    
 $            21,999
  
Commercial construction
               38,505
    
                 5,543
    
               44,048
    
               15,717
    
                 5,847
    
               21,564
    
                 6,449
    
                 2,948
    
                 9,397
  
Commercial & industrial
                 3,794
    
                       -
    
                 3,794
    
               11,378
    
                       -
    
               11,378
    
               12,066
    
                       -
    
               12,066
  
     Total commercial
               80,678
    
               18,109
    
               98,787
    
               64,850
    
               11,242
    
               76,092
    
               36,703
    
                 6,759
    
               43,462
  
Residential construction
             171,027
    
               79,045
    
             250,072
    
             176,400
    
               81,648
    
             258,048
    
             187,656
    
               58,327
    
             245,983
  
Residential mortgage
               50,626
    
               13,456
    
               64,082
    
               44,256
    
               11,864
    
               56,120
    
               33,148
    
               10,297
    
               43,445
  
Consumer / installment
                 2,050
    
                       -
    
                 2,050
    
                 2,342
    
                       -
    
                 2,342
    
                 1,648
    
                       -
    
                 1,648
  
     Total NPAs
  
 $          304,381
    
 $          110,610
    
 $          414,991
    
 $          287,848
    
 $          104,754
    
 $          392,602
    
 $          259,155
    
 $            75,383
    
 $          334,538
  
                                                       
                                                       
NPAs BY MARKET
                                                    
Atlanta MSA
  
 $          120,599
    
 $            54,670
    
 $          175,269
    
 $          148,155
    
 $            50,450
    
 $          198,605
    
 $          131,020
    
 $            48,574
    
 $          179,594
  
Gainesville MSA
  
               12,916
    
                 8,429
    
               21,345
    
                 9,745
    
                 3,511
    
               13,256
    
               17,448
    
                    694
    
               18,142
  
North Georgia
  
               96,373
    
               36,718
    
             133,091
    
               72,174
    
               37,454
    
             109,628
    
               66,875
    
               20,811
    
               87,686
  
Western North Carolina
               25,775
    
                 5,918
    
               31,693
    
               21,814
    
                 7,245
    
               29,059
    
               21,240
    
                 3,067
    
               24,307
  
Coastal Georgia
  
               38,414
    
                 3,045
    
               41,459
    
               30,311
    
                 3,904
    
               34,215
    
               15,699
    
                 1,286
    
               16,985
  
East Tennessee
  
               10,304
    
                 1,830
    
               12,134
    
                 5,649
    
                 2,190
    
                 7,839
    
                 6,873
    
                    951
    
                 7,824
  
     Total NPAs
  
 $          304,381
    
 $          110,610
    
 $          414,991
    
 $          287,848
    
 $          104,754
    
 $          392,602
    
 $          259,155
    
 $            75,383
    
 $          334,538
  
                                                       
                                                       
   
Third Quarter 2009
    
Second Quarter 2009
    
First Quarter 2009
                    
          Net Charge-         Net Charge-         Net Charge-                  
         
 Offs to
        
 Offs to
        
 Offs to
                  
   
 Net
    
 Average
  
 Net
    
 Average
  
 Net
    
 Average
                  
(in thousands)
  
Charge-Offs
    
Loans (2)
  
Charge-Offs
    
Loans (2)
  
Charge-Offs
    
Loans (2)
                  
NET CHARGE-OFFS BY CATEGORY
                                            
Commercial (sec. by RE)
 $            10,568
    
        2.33
 %
  
 $              5,986
    
        1.34
 %
  
 $                 826
    
          .20
 %
                  
Commercial construction
                 4,369
    
        4.55
    
                    756
    
          .80
    
                      54
    
          .05
                    
Commercial & industrial
                 1,792
    
        1.76
    
                 3,107
    
        3.16
    
                    873
    
          .89
                    
     Total commercial
               16,729
    
        2.57
    
                 9,849
    
        1.54
    
                 1,753
    
          .28
                    
Residential construction
               67,520
    
      21.31
    
               44,240
    
      12.90
    
               37,762
    
      10.52
                    
Residential mortgage
                 5,051
    
        1.36
    
                 3,526
    
          .95
    
                 2,984
    
          .80
                    
Consumer / installment
                 1,191
    
        3.13
    
                    697
    
        1.80
    
                    782
    
        1.99
                    
     Total
  
 $            90,491
    
        6.57
    
 $            58,312
    
        4.18
    
 $            43,281
    
        3.09
                    
                                                       
                                                       
NET CHARGE-OFFS BY MARKET
                                            
Atlanta MSA
  
 $            50,129
    
      12.61
 %
  
 $            37,473
    
        8.89
 %
  
 $            26,228
    
        6.16
 %
                  
Gainesville MSA
  
                 1,473
    
        1.60
    
                 4,125
    
        4.38
    
                 1,105
    
        1.18
                    
North Georgia
  
               24,017
    
        4.74
    
               12,571
    
        2.52
    
                 8,208
    
        1.64
                    
Western North Carolina
                 3,949
    
        1.98
    
                 1,015
    
          .51
    
                 3,669
    
        1.83
                    
Coastal Georgia
  
               10,051
    
        8.78
    
                    969
    
          .85
    
                 3,229
    
        2.84
                    
East Tennessee
  
                    872
    
        1.30
    
                 2,159
    
        3.21
    
                    842
    
        1.28
                    
     Total
  
 $            90,491
    
        6.57
    
 $            58,312
    
        4.18
    
 $            43,281
    
        3.09
                    
                                                       
                                                       
   
 Third
        
 Second
        
 First
                        
(in thousands)
  
Quarter 2009
        
Quarter 2009
        
Quarter 2009
                        
FORECLOSED PROPERTIES
                                                
Beginning balance
  
 $          104,754
          
 $            75,383
          
 $            59,768
                          
                                                       
Foreclosures transferred in
               56,624
          
               64,417
          
               38,742
                          
Capital costs added
  
                    579
          
                 1,324
          
                 1,452
                          
Write downs
  
               (1,906)
          
               (2,738)
          
               (2,151)
                          
Proceeds from sales
  
             (49,441)
          
             (33,632)
          
             (22,428)
                          
                                                       
     Total
  
 $          110,610
          
 $          104,754
          
 $            75,383
                          
                                                       
(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.
 
 
9
 
 
UNITED COMMUNITY BANKS, INC.
                        
Consolidated Statement of Income (Unaudited)
        
 
              
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
(in thousands, except per share data)
  
2009
    
2008
    
2009
    
2008
  
                         
Interest revenue:
                        
Loans, including fees
   $ 80,874     $ 93,233     $ 244,445     $ 299,550  
Investment securities, including tax exempt of $328, $348, $956 and $1,140
     18,820       18,606       60,057       56,905  
Federal funds sold, commercial paper, deposits in banks and other
     907       100       1,447       372  
Total interest revenue
     100,601       111,939       305,949       356,827  
                                 
Interest expense:
                                
Deposits:
                                
NOW
     2,528       6,778       8,708       22,581  
Money market
     2,711       2,296       7,217       7,519  
Savings
     130       153       378       560  
Time
     28,183       39,044       96,300       116,756  
Total deposit interest expense
     33,552       48,271       112,603       147,416  
Federal funds purchased, repurchase agreements
                                
     and other short-term borrowings
     613       1,116       1,761       7,254  
Federal Home Loan Bank advances
     1,300       2,105       3,577       10,668  
Long-term debt
     2,712       2,227       8,241       6,366  
Total interest expense
     38,177       53,719       126,182       171,704  
Net interest revenue
     62,424       58,220       179,767       185,123  
Provision for loan losses
     95,000       76,000       220,000       99,000  
Net interest revenue after provision for loan losses
     (32,576 )     (17,780 )     (40,233 )     86,123  
                                 
Fee revenue:
                                
Service charges and fees
     8,138       8,171       22,729       23,941  
Mortgage loan and other related fees
     1,832       1,410       7,308       5,575  
Consulting fees
     2,282       1,727       5,048       5,786  
Brokerage fees
     456       905       1,642       2,812  
Securities gains, net
     1,149       120       741       477  
Gain from acquisition
     -       -       11,390       -  
Other
     1,814       788       4,099       3,832  
Total fee revenue
     15,671       13,121       52,957       42,423  
Total revenue
     (16,905 )     (4,659 )     12,724       128,546  
                                 
Operating expenses:
                                
Salaries and employee benefits
     25,881       28,626       82,778       86,133  
Communications and equipment
     3,732       3,909       11,106       11,593  
Occupancy
     4,098       3,905       11,758       11,325  
Advertising and public relations
     887       1,399       3,187       4,759  
Postage, printing and supplies
     1,277       1,493       3,753       4,533  
Professional fees
     2,255       1,596       7,354       5,196  
Foreclosed property
     7,918       10,109       17,974       13,872  
FDIC assessments and other regulatory charges
     2,801       1,509       12,293       4,040  
Amortization of intangibles
     813       752       2,291       2,264  
Other
     3,944       3,672       9,029       10,545  
Goodwill impairment
     25,000       -       95,000       -  
Severance costs
     -       -       2,898       -  
Total operating expenses
     78,606       56,970       259,421       154,260  
Loss before income taxes
     (95,511 )     (61,629 )     (246,697 )     (25,714 )
Income tax benefit
     (26,793 )     (21,755 )     (58,205 )     (9,011 )
Net loss
     (68,718 )     (39,874 )     (188,492 )     (16,703 )
                                 
Preferred stock dividends, including discount accretion
     2,562       4       7,675       12  
Net loss available to common shareholders
   $ (71,280 )   $ (39,878 )   $ (196,167 )   $ (16,715 )
                                 
Basic loss per common share
   $ (1.43 )   $ (.84 )   $ (4.01 )   $ (.35 )
Diluted loss per common share
     (1.43 )     (.84 )     (4.01 )     (.35 )
Weighted average common shares outstanding - Basic
     49,771       47,417       48,968       47,210  
Weighted average common shares outstanding - Diluted
     49,771       47,417       48,968       47,210  
 
 
10
 
 
 UNITED COMMUNITY BANKS, INC.
                  
 Consolidated Balance Sheet
  
   
September 30,
    
December 31,
    
September 30,
  
 (in thousands, except share and per share data)
  
2009
    
2008
    
2008
  
   
(unaudited)
    
(audited)
    
(unaudited)
  
 ASSETS
                  
                   
   Cash and due from banks
   $ 195,559     $ 116,395     $ 126,033  
   Interest-bearing deposits in banks
     78,589       8,417       40,707  
   Federal funds sold, commercial paper and short-term investments
     397,361       368,609       -  
       Cash and cash equivalents
     671,509       493,421       166,740  
                         
   Securities available for sale
     1,532,514       1,617,187       1,400,827  
   Mortgage loans held for sale
     20,460       20,334       17,763  
   Loans, net of unearned income
     5,362,689       5,704,861       5,829,937  
        Less allowance for loan losses
     150,187       122,271       111,299  
               Loans, net
     5,212,502       5,582,590       5,718,638  
                         
   Covered assets
     197,914       -       -  
   Premises and equipment, net
     179,467       179,160       179,727  
   Accrued interest receivable
     35,679       46,088       47,920  
   Goodwill and other intangible assets
     226,008       321,798       322,544  
   Other assets
     367,564       331,355       259,802  
       Total assets
   $ 8,443,617     $ 8,591,933     $ 8,113,961  
                         
 LIABILITIES AND SHAREHOLDERS' EQUITY
                        
 Liabilities:
                        
   Deposits:
                        
        Demand
   $ 703,054     $ 654,036     $ 680,196  
        NOW
     1,318,264       1,543,385       1,393,928  
        Money market
     687,780       466,750       394,358  
        Savings
     180,738       170,275       179,274  
        Time:
                        
             Less than $100,000
     1,854,726       1,953,235       1,814,926  
             Greater than $100,000
     1,237,172       1,422,974       1,481,512  
             Brokered
     839,572       792,969       745,141  
                      Total deposits
     6,821,306       7,003,624       6,689,335  
                         
    Federal funds purchased, repurchase agreements, and other short-term borrowings
     101,951       108,411       119,699  
    Federal Home Loan Bank advances
     314,704       235,321       285,362  
    Long-term debt
     150,046       150,986       137,996  
    Accrued expenses and other liabilities
     48,972       104,209       64,689  
         Total liabilities
     7,436,979       7,602,551       7,297,081  
                         
 Shareholders' equity:
                        
     Preferred stock, $1 par value; 10,000,000 shares authorized;
                        
          Series A; $10 stated value; 21,700, 25,800 and 25,800 shares
                        
               issued and outstanding
     217       258       258  
          Series B; $1,000 stated value; 180,000 shares issued and outstanding
     174,095       173,180       -  
     Common stock, $1 par value; 100,000,000 shares authorized;
                        
          93,901,492, 48,809,301 and 48,809,301 shares issued
     93,901       48,809       48,809  
     Common stock issuable; 196,818, 129,304 and 116,567 shares
     3,471       2,908       2,762  
     Capital surplus
     620,494       460,708       457,779  
     Retained earnings
     62,786       265,405       317,544  
     Treasury stock; 799,892 and 1,213,182 shares, at cost
     -       (16,465 )     (27,024 )
     Accumulated other comprehensive income
     51,674       54,579       16,752  
         Total shareholders' equity
     1,006,638       989,382       816,880  
                         
         Total liabilities and shareholders' equity
   $ 8,443,617     $ 8,591,933     $ 8,113,961  
                         
 
 
11
 
 
UNITED COMMUNITY BANKS, INC.
                      
Average Consolidated Balance Sheets and Net Interest Analysis
                
For the Three Months Ended September 30,
     
2009
          
2008
    
 
 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)
 $  5,565,498
  
 $   80,880
5.77
%
  
 $  5,889,168
  
 $   93,270
6.30
%
  Taxable securities (3)
    1,585,154
  
     18,492
4.67
    
    1,422,321
  
     18,258
5.13
  
  Tax-exempt securities (1)(3)
         30,345
  
          537
7.08
    
         32,419
  
          573
7.07
  
  Federal funds sold and other interest-earning assets
       219,542
  
       1,272
2.32
    
         40,379
  
          409
4.05
  
 
 
          
 
        
     Total interest-earning assets
    7,400,539
  
    101,181
5.43
    
    7,384,287
  
    112,510
6.07
  
Non-interest-earning assets:
                      
  Allowance for loan losses
     (147,074)
          
       (93,687)
        
  Cash and due from banks
       107,062
          
       111,741
        
  Premises and equipment
       179,764
          
       180,825
        
  Other assets (3)
       667,908
          
       581,528
        
     Total assets
 $  8,208,199
          
 $  8,164,694
        
                       
Liabilities and Shareholders' Equity:
                      
Interest-bearing liabilities:
                      
  Interest-bearing deposits:
                      
NOW
 $  1,238,596
  
 $    2,528
.81
    
 $  1,463,744
  
 $    6,778
1.84
  
Money market
       628,392
  
       2,711
1.71
    
       421,626
  
       2,296
2.17
  
Savings
       180,216
  
          130
.29
    
       182,525
  
          153
.33
  
Time less than $100,000
    1,918,439
  
     13,300
2.75
    
    1,779,550
  
     17,812
3.98
  
Time greater than $100,000
    1,292,786
  
     10,106
3.10
    
    1,530,719
  
     15,825
4.11
  
Brokered
       707,678
  
       4,777
2.68
    
       530,705
  
       5,407
4.05
  
       Total interest-bearing deposits
    5,966,107
  
     33,552
2.23
    
    5,908,869
  
     48,271
3.25
  
                       
Federal funds purchased and other borrowings
       234,211
  
          613
1.04
    
       256,742
  
       1,116
1.73
  
Federal Home Loan Bank advances
       210,625
  
       1,300
2.45
    
       286,540
  
       2,105
2.92
  
Long-term debt
       150,353
  
       2,712
7.16
    
       118,756
  
       2,227
7.46
  
      Total borrowed funds
       595,189
  
       4,625
3.08
    
       662,038
  
       5,448
3.27
  
                       
      Total interest-bearing liabilities
    6,561,296
  
     38,177
2.31
    
    6,570,907
  
     53,719
3.25
  
Non-interest-bearing liabilities:
                      
  Non-interest-bearing deposits
       723,841
          
       688,470
        
  Other liabilities
         79,932
          
         67,830
        
     Total liabilities
    7,365,069
          
    7,327,207
        
Shareholders' equity
       843,130
          
       837,487
        
     Total liabilities and shareholders' equity
 $  8,208,199
          
 $  8,164,694
        
                       
Net interest revenue
    
 $   63,004
          
 $   58,791
    
Net interest-rate spread
      
3.12
%
        
2.82
%
                       
Net interest margin (4)
      
3.39
%
        
3.17
%
 
(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 $13.8 million in 2009 and pretax unrealized losses of
       $11.7 million in 2008 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.
    
 
 
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UNITED COMMUNITY BANKS, INC.
                      
Average Consolidated Balance Sheets and Net Interest Analysis
              
For the Nine Months Ended September 30,
     
2009
          
2008
    
 
 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)
 $  5,612,202
  
 $ 244,196
5.82
%
  
 $  5,926,731
  
 $ 299,601
6.75
%
  Taxable securities (3)
    1,669,768
  
     59,101
4.72
    
    1,447,409
  
     55,765
5.14
  
  Tax-exempt securities (1)(3)
         29,754
  
       1,565
7.01
    
         34,988
  
       1,876
7.15
  
  Federal funds sold and other interest-earning assets
       145,449
  
       2,618
2.40
    
         41,889
  
       1,292
4.11
  
 
 
          
 
        
     Total interest-earning assets
    7,457,173
  
    307,480
5.51
    
    7,451,017
  
    358,534
6.43
  
Non-interest-earning assets:
                      
  Allowance for loan losses
     (141,255)
          
       (93,165)
        
  Cash and due from banks
       104,444
          
       136,920
        
  Premises and equipment
       179,569
          
       181,210
        
  Other assets (3)
       663,674
          
       586,871
        
     Total assets
 $  8,263,605
          
 $  8,262,853
        
                       
Liabilities and Shareholders' Equity:
                      
Interest-bearing liabilities:
                      
  Interest-bearing deposits:
                      
    NOW
 $  1,284,522
  
 $    8,708
.91
    
 $  1,476,998
  
 $   22,581
2.04
  
    Money market
       543,122
  
       7,217
1.78
    
       427,676
  
       7,519
2.35
  
Savings
       177,147
  
          378
.29
    
       184,713
  
          560
.40
  
Time less than $100,000
    1,918,379
  
     45,859
3.20
    
    1,659,308
  
     53,320
4.29
  
Time greater than $100,000
    1,336,876
  
     34,444
3.44
    
    1,460,277
  
     48,330
4.42
  
Brokered
       726,352
  
     15,997
2.94
    
       480,166
  
     15,106
4.20
  
       Total interest-bearing deposits
    5,986,398
  
    112,603
2.51
    
    5,689,138
  
    147,416
3.46
  
                       
Federal funds purchased and other borrowings
       202,008
  
       1,761
1.17
    
       396,798
  
       7,254
2.44
  
Federal Home Loan Bank advances
       241,863
  
       3,577
1.98
    
       452,826
  
     10,668
3.15
  
Long-term debt
       150,788
  
       8,241
7.31
    
       111,607
  
       6,366
7.62
  
      Total borrowed funds
       594,659
  
     13,579
3.05
    
       961,231
  
     24,288
3.38
  
                       
      Total interest-bearing liabilities
    6,581,057
  
    126,182
2.56
    
    6,650,369
  
    171,704
3.45
  
Non-interest-bearing liabilities:
                      
  Non-interest-bearing deposits
       684,942
          
       681,615
        
  Other liabilities
       101,447
          
         80,957
        
     Total liabilities
    7,367,446
          
    7,412,941
        
Shareholders' equity
       896,159
          
       849,912
        
     Total liabilities and shareholders' equity
 $  8,263,605
          
 $  8,262,853
        
                       
Net interest revenue
    
 $ 181,298
          
 $ 186,830
    
Net interest-rate spread
      
2.95
%
        
2.98
%
                       
Net interest margin (4)
      
3.25
%
        
3.35
%
 
(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 $13.0 million in 2009 and $5.7 million in 2008 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.
 
 
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