- Earnings per diluted share of 29 cents, up 16 percent from first quarter of 2014
- Loans up $116 million, or 10 percent annualized
- Core transaction deposits up $206 million, or 22 percent annualized
- Net interest margin holds steady at 3.31 percent
- Regulatory approvals received for acquisition of MoneyTree Corporation / First National Bank
- Announced merger with Palmetto Bancshares
BLAIRSVILLE, Ga., April 22, 2015 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (Nasdaq:UCBI) ("United") today reported net income of $17.7 million, or 29 cents per diluted share, for the first quarter of 2015. Earnings per share were up 16 percent from a year ago. The increase reflects strong loan and core deposit growth, a stable net interest margin and growth in fee revenue.
"I am very pleased with our strong first quarter financial results and our outlook for the remainder of the year," said Jimmy Tallent, chairman and chief executive officer. "We had solid loan growth and a steady net interest margin. Fee revenue was up with meaningful increases in our mortgage and brokerage businesses and higher gains from our SBA lending business. Our return on assets was .94 percent, and return on equity was 9.3 percent."
Tallent continued, "The first quarter also included three non-core items. We repaid $6 million in structured repurchase agreements that we were paying 4 percent interest, and redeemed $15.5 million in trust preferred securities that we were paying an average rate of 11 percent interest, resulting in total prepayment charges of $1.04 million that were included in fee revenue. Repayment of these instruments will result in approximately $1.9 million in annual interest savings. Also, we paid the FDIC $690,000 to close the loss sharing agreements related to our acquisition of Southern Community Bank in June of 2009. In addition to administrative cost savings, we will now retain 100 percent of the recoveries from previously covered losses. This will more than offset the $690,000 payment within the next two years. And, we had securities gains of $1.54 million that offset most of the $1.73 million impact of these other non-core items."
Tallent continued, "First quarter net loan growth of $116 million was driven by strong loan production of $423 million across all United markets. Our community banks originated $314 million of loan production while our specialized lending area, which includes our health care, corporate, SBA, asset-based, middle market and commercial real estate lending businesses, produced $108 million. Core deposit growth was another contributing factor with a linked-quarter increase of $206 million, or 22 percent annualized. Increased demand deposits in our Atlanta and north Georgia markets drove over half of this growth."
First quarter taxable equivalent net interest revenue totaled $57.6 million, down $715,000 from the fourth quarter and up $3.45 million from the first quarter of 2014. The taxable equivalent net interest margin of 3.31 percent held steady with the prior quarter and was up 10 basis points from a year ago. Along with loan growth, this drove the increase in net interest revenue.
"The linked quarter decrease in net interest revenue was due to two fewer days of interest accruals in the first quarter," said Tallent. "We've been able to hold the margin steady in the low 3.30 percent range following our second quarter 2014 balance sheet management activities, which included restructuring the securities portfolio, interest rate hedges and wholesale borrowings. However, we continue to see loan pricing pressures and expect our margin to decline slightly through the balance of 2015. With only a modest decline, we expect loan growth to drive increases in net interest revenue going forward."
The first quarter provision for credit losses was $1.8 million, equal to the fourth quarter and down $700,000 from the first quarter of 2014. First quarter net charge-offs were $2.56 million compared with $2.51 million in the fourth quarter and $4.04 million a year ago. Nonperforming assets to total assets were .26 percent, equal to last quarter and down from .42 percent a year ago.
First quarter fee revenue totaled $15.7 million, up $859,000 from the fourth quarter and $3.51 million from the first quarter of 2014. The increase from a year ago resulted primarily from the growing SBA lending and mortgage businesses and the related gains on sales of loans. SBA loan sale gains totaled $1.14 million in the first quarter of 2015 and $926,000 in the fourth quarter of 2014. There were no gains from SBA loan sales in the first quarter of 2014. Mortgage fees were up $644,000 from the fourth quarter and $1.40 million from a year ago, reflecting strong growth in new home purchases and an increase in refinancing activity. Closed mortgage loans totaled $87.9 million in the first quarter of 2015, compared with $77.4 million and $46.0 million, respectively, in the fourth and first quarters of 2014.
First quarter brokerage fees of $1.55 million from United's advisory services business were up $375,000 from both the fourth and first quarters of 2014. Service charges and fees were down from both of these same prior quarters, mostly reflecting the declining trend in overdraft fees.
Tallent added, "The growing SBA lending business and the increase in mortgage and brokerage fees reflect our commitment to diversifying the revenue stream by focusing on fee generating products and services."
Operating expenses were $43.1 million in the first quarter compared to $41.9 million in the fourth quarter and $39.1 million a year ago. Excluding the non-core items in other operating expenses noted below, total core operating expenses were $42.4 million in the first quarter 2015 compared to $42.6 million in the fourth quarter and $39.1 million a year ago. The current quarter is down slightly compared to the fourth quarter and up $3.3 million from a year ago. The increase from a year ago was driven by higher salaries and employee benefit costs, and an increase in other operating costs.
First quarter salaries and employee benefits expense of $26.4 million was down $146,000 from the fourth quarter but up $2.05 million from a year ago. The increase from a year ago reflects investment in new producers and support staff for the specialized lending area, and higher commissions and incentives associated with growth in the mortgage and advisory services businesses, as well as growth in commercial loans and core deposits. Other operating expenses of $5.25 million for the first quarter were up $1.33 million and $1.40 million, respectively, from the fourth and first quarters of 2014. First quarter 2015 other operating expenses included a non-core charge of $690,000 associated with closing all loss sharing agreements with the FDIC, as noted earlier. The fourth quarter of 2014 included a $492,000 charge related to the FDIC's adjustment for interest claimed on the first loss share filing which was more than offset by a $1.2 million reversal of a previously established litigation reserve. Excluding these non-core items, other operating expenses were down slightly from the fourth quarter and up $705,000 from a year ago due to higher travel and lending-related costs to support loan growth.
"During the first quarter we received regulatory approvals for the previously announced merger with MoneyTree Corporation and its subsidiary First National Bank," Tallent said. "We expect the transaction to close as planned on May 1, with conversion of the operating systems by mid-July. We look forward to expanding our Tennessee markets and welcoming the First National team of bankers to the United family."
At March 31, 2015, capital ratios were as follows: Tier 1 Risk-Based of 11.5 percent; Total Risk-Based of 12.8 percent; Tier 1 Common Risk-Based of 11.5 percent; and, Tier 1 Leverage of 8.7 percent.
"We are off to a solid start in 2015, including strong growth in loans, core deposits and fee revenue," Tallent said. "We are excited about executing our growth strategies to expand the franchise and add value for shareholders. In addition to the completion of the MoneyTree transaction on May 1, we announced earlier today an agreement to acquire $1.2 billion-asset Palmetto Bancshares, Inc. and its 108 year-old bank – The Palmetto Bank – in Greenville, South Carolina. The addition of MoneyTree will significantly increase our market share and customer base in eastern Tennessee, and the addition of Palmetto will make us the number one community bank in Upstate South Carolina."
Conference Call
United will hold a conference call today, Wednesday, April 22, 2015, at 11 a.m. ET to discuss the contents of this news release and the separate news release regarding United's merger with Palmetto Bancshares, Inc., and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 15339428. The conference call also will be webcast and available for replay for 30 days by selecting "Events & Presentations" within the Investor Relations section of United's website at www.ucbi.com.
About United Community Banks, Inc.
United Community Banks, Inc. (UCBI) is a bank holding company based in Blairsville, Georgia, with $7.7 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast's largest full-service banks, operating 104 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for individuals, small businesses and corporations. A full range of consumer and commercial banking services includes mortgage, advisory, treasury management and other products. In 2014, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and in 2015 was ranked fourteenth on the Forbes list of America's Best Banks. Additional information about the company and the bank's full range of products and services can be found 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 2014 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 | ||||||
First | ||||||
2015 | 2014 | Quarter | ||||
(in thousands, except per share | First | Fourth | Third | Second | First | 2015-2014 |
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change |
INCOME SUMMARY | ||||||
Interest revenue | $ 62,909 | $ 64,353 | $ 63,338 | $ 61,783 | $ 60,495 | |
Interest expense | 5,292 | 6,021 | 6,371 | 6,833 | 6,326 | |
Net interest revenue | 57,617 | 58,332 | 56,967 | 54,950 | 54,169 | 6% |
Provision for credit losses | 1,800 | 1,800 | 2,000 | 2,200 | 2,500 | |
Fee revenue | 15,682 | 14,823 | 14,412 | 14,143 | 12,176 | 29 |
Total revenue | 71,499 | 71,355 | 69,379 | 66,893 | 63,845 | 12 |
Operating expenses | 43,061 | 41,919 | 41,364 | 40,532 | 39,050 | 10 |
Income before income taxes | 28,438 | 29,436 | 28,015 | 26,361 | 24,795 | 15 |
Income tax expense | 10,768 | 11,189 | 10,399 | 10,004 | 9,395 | 15 |
Net income | 17,670 | 18,247 | 17,616 | 16,357 | 15,400 | 15 |
Preferred dividends and discount accretion | -- | -- | -- | -- | 439 | |
Net income available to common shareholders | $ 17,670 | $ 18,247 | $ 17,616 | $ 16,357 | $ 14,961 | 18 |
PERFORMANCE MEASURES | ||||||
Per common share: | ||||||
Diluted income | $ .29 | $ .30 | $ .29 | $ .27 | $ .25 | 16 |
Cash dividends declared | .05 | .05 | .03 | .03 | -- | |
Book value | 12.58 | 12.20 | 12.15 | 11.94 | 11.66 | 8 |
Tangible book value (2) | 12.53 | 12.15 | 12.10 | 11.91 | 11.63 | 8 |
Key performance ratios: | ||||||
Return on common equity (1)(3) | 9.34% | 9.60% | 9.41% | 8.99% | 8.64% | |
Return on assets (3) | .94 | .96 | .95 | .88 | .85 | |
Dividend payout ratio | 17.24 | 16.67 | 10.34 | 11.11 | -- | |
Net interest margin (3) | 3.31 | 3.31 | 3.32 | 3.21 | 3.21 | |
Efficiency ratio | 59.15 | 57.47 | 57.96 | 58.65 | 59.05 | |
Average equity to average assets | 9.86 | 9.76 | 9.85 | 9.61 | 9.52 | |
Average tangible equity to average assets (2) | 9.82 | 9.72 | 9.83 | 9.58 | 9.50 | |
Average tangible common equity to average assets (2) | 9.82 | 9.72 | 9.83 | 9.58 | 9.22 | |
Tangible common equity to risk-weighted assets (2) (4) | 13.53 | 13.82 | 14.10 | 13.92 | 13.63 | |
ASSET QUALITY | ||||||
Nonperforming loans | $ 19,015 | $ 17,881 | $ 18,745 | $ 20,724 | $ 25,250 | (25) |
Foreclosed properties | 1,158 | 1,726 | 3,146 | 2,969 | 5,594 | (79) |
Total nonperforming assets (NPAs) | 20,173 | 19,607 | 21,891 | 23,693 | 30,844 | (35) |
Allowance for loan losses | 70,007 | 71,619 | 71,928 | 73,248 | 75,223 | |
Net charge-offs | 2,562 | 2,509 | 3,155 | 4,175 | 4,039 | (37) |
Allowance for loan losses to loans | 1.46% | 1.53% | 1.57% | 1.66% | 1.73% | |
Net charge-offs to average loans (3) | .22 | .22 | .28 | .38 | .38 | |
NPAs to loans and foreclosed properties | .42 | .42 | .48 | .54 | .71 | |
NPAs to total assets | .26 | .26 | .29 | .32 | .42 | |
AVERAGE BALANCES ($ in millions) | ||||||
Loans | $ 4,725 | $ 4,621 | $ 4,446 | $ 4,376 | $ 4,356 | 8 |
Investment securities | 2,203 | 2,222 | 2,231 | 2,326 | 2,320 | (5) |
Earning assets | 7,070 | 7,013 | 6,820 | 6,861 | 6,827 | 4 |
Total assets | 7,617 | 7,565 | 7,374 | 7,418 | 7,384 | 3 |
Deposits | 6,369 | 6,383 | 6,143 | 6,187 | 6,197 | 3 |
Shareholders' equity | 751 | 738 | 726 | 713 | 703 | 7 |
Common shares - basic (thousands) | 60,905 | 60,830 | 60,776 | 60,712 | 60,059 | |
Common shares - diluted (thousands) | 60,909 | 60,833 | 60,779 | 60,714 | 60,061 | |
AT PERIOD END ($ in millions) | ||||||
Loans | $ 4,788 | $ 4,672 | $ 4,569 | $ 4,410 | $ 4,356 | 10 |
Investment securities | 2,201 | 2,198 | 2,222 | 2,190 | 2,302 | (4) |
Total assets | 7,664 | 7,567 | 7,526 | 7,352 | 7,398 | 4 |
Deposits | 6,438 | 6,327 | 6,241 | 6,164 | 6,248 | 3 |
Shareholders' equity | 764 | 740 | 736 | 722 | 704 | 9 |
Common shares outstanding (thousands) | 60,309 | 60,259 | 60,248 | 60,139 | 60,092 | |
(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) March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015. | ||||||
UNITED COMMUNITY BANKS, INC. | ||||||||||
Non-GAAP Performance Measures Reconciliation | ||||||||||
Selected Financial Information | ||||||||||
2015 | 2014 | |||||||||
(in thousands, except per share | First | Fourth | Third | Second | First | |||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||
Interest revenue reconciliation | ||||||||||
Interest revenue - taxable equivalent | $ 62,909 | $ 64,353 | $ 63,338 | $ 61,783 | $ 60,495 | |||||
Taxable equivalent adjustment | (375) | (398) | (405) | (377) | (357) | |||||
Interest revenue (GAAP) | $ 62,534 | $ 63,955 | $ 62,933 | $ 61,406 | $ 60,138 | |||||
Net interest revenue reconciliation | ||||||||||
Net interest revenue - taxable equivalent | $ 57,617 | $ 58,332 | $ 56,967 | $ 54,950 | $ 54,169 | |||||
Taxable equivalent adjustment | (375) | (398) | (405) | (377) | (357) | |||||
Net interest revenue (GAAP) | $ 57,242 | $ 57,934 | $ 56,562 | $ 54,573 | $ 53,812 | |||||
Total revenue reconciliation | ||||||||||
Total operating revenue | $ 71,499 | $ 71,355 | $ 69,379 | $ 66,893 | $ 63,845 | |||||
Taxable equivalent adjustment | (375) | (398) | (405) | (377) | (357) | |||||
Total revenue (GAAP) | $ 71,124 | $ 70,957 | $ 68,974 | $ 66,516 | $ 63,488 | |||||
Income before taxes reconciliation | ||||||||||
Income before taxes | $ 28,438 | $ 29,436 | $ 28,015 | $ 26,361 | $ 24,795 | |||||
Taxable equivalent adjustment | (375) | (398) | (405) | (377) | (357) | |||||
Income before taxes (GAAP) | $ 28,063 | $ 29,038 | $ 27,610 | $ 25,984 | $ 24,438 | |||||
Income tax expense (benefit) reconciliation | ||||||||||
Income tax expense (benefit) | $ 10,768 | $ 11,189 | $ 10,399 | $ 10,004 | $ 9,395 | |||||
Taxable equivalent adjustment | (375) | (398) | (405) | (377) | (357) | |||||
Income tax expense (benefit) (GAAP) | $ 10,393 | $ 10,791 | $ 9,994 | $ 9,627 | $ 9,038 | |||||
Book value per common share reconciliation | ||||||||||
Tangible book value per common share | $ 12.53 | $ 12.15 | $ 12.10 | $ 11.91 | $ 11.63 | |||||
Effect of goodwill and other intangibles | .05 | .05 | .05 | .03 | .03 | |||||
Book value per common share (GAAP) | $ 12.58 | $ 12.20 | $ 12.15 | $ 11.94 | $ 11.66 | |||||
Average equity to assets reconciliation | ||||||||||
Tangible common equity to assets | 9.82% | 9.72% | 9.83% | 9.58% | 9.22% | |||||
Effect of preferred equity | -- | -- | -- | -- | .28 | |||||
Tangible equity to assets | 9.82 | 9.72 | 9.83 | 9.58 | 9.50 | |||||
Effect of goodwill and other intangibles | .04 | .04 | .02 | .03 | .02 | |||||
Equity to assets (GAAP) | 9.86% | 9.76% | 9.85% | 9.61% | 9.52% | |||||
Tangible common equity to risk-weighted assets reconciliation (1) | ||||||||||
Tangible common equity to risk-weighted assets | 13.53% | 13.82% | 14.10% | 13.92% | 13.63% | |||||
Effect of other comprehensive income | .19 | .35 | .34 | .53 | .36 | |||||
Effect of deferred tax limitation | (2.86) | (3.11) | (3.39) | (3.74) | (3.92) | |||||
Effect of trust preferred | .67 | 1.00 | 1.02 | 1.04 | 1.03 | |||||
Tier I capital ratio (Regulatory) | 11.53% | 12.06% | 12.07% | 11.75% | 11.10% | |||||
(1) March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015. |
UNITED COMMUNITY BANKS, INC. | |||||
Financial Highlights | |||||
Loan Portfolio Composition at Period-End | |||||
2015 | 2014 | ||||
First | Fourth | Third | Second | First | |
(in millions) | Quarter | Quarter | Quarter | Quarter | Quarter |
LOANS BY CATEGORY | |||||
Owner occupied commercial RE | $ 1,167 | $ 1,163 | $ 1,153 | $ 1,163 | $ 1,142 |
Income producing commercial RE | 636 | 599 | 605 | 598 | 624 |
Commercial & industrial | 716 | 710 | 650 | 554 | 495 |
Commercial construction | 230 | 196 | 181 | 160 | 148 |
Total commercial | 2,749 | 2,668 | 2,589 | 2,475 | 2,409 |
Residential mortgage | 864 | 866 | 866 | 861 | 866 |
Home equity lines of credit | 465 | 466 | 459 | 451 | 447 |
Residential construction | 291 | 299 | 307 | 302 | 318 |
Consumer installment | 419 | 373 | 348 | 321 | 316 |
Total loans | $ 4,788 | $ 4,672 | $ 4,569 | $ 4,410 | $ 4,356 |
LOANS BY MARKET | |||||
North Georgia | $ 1,150 | $ 1,163 | $ 1,168 | $ 1,175 | $ 1,205 |
Atlanta MSA | 1,296 | 1,282 | 1,289 | 1,305 | 1,290 |
North Carolina | 539 | 553 | 553 | 555 | 563 |
Coastal Georgia | 476 | 456 | 444 | 426 | 425 |
Gainesville MSA | 255 | 257 | 254 | 257 | 262 |
East Tennessee | 281 | 280 | 281 | 270 | 272 |
South Carolina / Specialized Lending | 475 | 412 | 337 | 206 | 131 |
Indirect auto | 316 | 269 | 243 | 216 | 208 |
Total loans | $ 4,788 | $ 4,672 | $ 4,569 | $ 4,410 | $ 4,356 |
UNITED COMMUNITY BANKS, INC. | |||||
Financial Highlights | |||||
Loan Portfolio Composition at Period-End | |||||
2015 | 2014 | Linked | Year over | ||
First | Fourth | First | Quarter | Year | |
(in millions) | Quarter | Quarter | Quarter | Change | Change |
LOANS BY CATEGORY | |||||
Owner occupied commercial RE | $ 1,167 | $ 1,163 | $ 1,142 | $ 4 | $ 25 |
Income producing commercial RE | 636 | 599 | 624 | 37 | 12 |
Commercial & industrial | 716 | 710 | 495 | 6 | 221 |
Commercial construction | 230 | 196 | 148 | 34 | 82 |
Total commercial | 2,749 | 2,668 | 2,409 | 81 | 340 |
Residential mortgage | 864 | 866 | 866 | (2) | (2) |
Home equity lines of credit | 465 | 466 | 447 | (1) | 18 |
Residential construction | 291 | 299 | 318 | (8) | (27) |
Consumer installment | 419 | 373 | 316 | 46 | 103 |
Total loans | $ 4,788 | $ 4,672 | $ 4,356 | 116 | 432 |
LOANS BY MARKET | |||||
North Georgia | $ 1,150 | $ 1,163 | $ 1,205 | (13) | (55) |
Atlanta MSA | 1,296 | 1,282 | 1,290 | 14 | 6 |
North Carolina | 539 | 553 | 563 | (14) | (24) |
Coastal Georgia | 476 | 456 | 425 | 20 | 51 |
Gainesville MSA | 255 | 257 | 262 | (2) | (7) |
East Tennessee | 281 | 280 | 272 | 1 | 9 |
South Carolina / Specialized Lending | 475 | 412 | 131 | 63 | 344 |
Indirect auto | 316 | 269 | 208 | 47 | 108 |
Total loans | $ 4,788 | $ 4,672 | $ 4,356 | 116 | 432 |
UNITED COMMUNITY BANKS, INC. | |||
Financial Highlights | |||
Credit Quality | |||
First Quarter 2015 | |||
Nonperforming | Foreclosed | Total | |
(in thousands) | Loans | Properties | NPAs |
NONPERFORMING ASSETS BY CATEGORY | |||
Owner occupied CRE | $ 4,360 | $ 173 | $ 4,533 |
Income producing CRE | 835 | -- | 835 |
Commercial & industrial | 1,629 | -- | 1,629 |
Commercial construction | 60 | -- | 60 |
Total commercial | 6,884 | 173 | 7,057 |
Residential mortgage | 8,669 | 796 | 9,465 |
Home equity lines of credit | 693 | 50 | 743 |
Residential construction | 2,127 | 139 | 2,266 |
Consumer installment | 642 | -- | 642 |
Total NPAs | $ 19,015 | $ 1,158 | $ 20,173 |
Balance as a % of | |||
Unpaid Principal | 72.0% | 56.6% | 70.9% |
NONPERFORMING ASSETS BY MARKET | |||
North Georgia | $ 6,101 | $ 662 | $ 6,763 |
Atlanta MSA | 1,903 | 227 | 2,130 |
North Carolina | 5,321 | 159 | 5,480 |
Coastal Georgia | 901 | -- | 901 |
Gainesville MSA | 781 | 22 | 803 |
East Tennessee | 1,808 | 30 | 1,838 |
South Carolina / Specialized Lending | 1,700 | 58 | 1,758 |
Indirect auto | 500 | -- | 500 |
Total NPAs | $ 19,015 | $ 1,158 | $ 20,173 |
NONPERFORMING ASSETS ACTIVITY | |||
Beginning Balance | $ 17,881 | $ 1,726 | $ 19,607 |
Loans placed on non-accrual | 5,944 | -- | 5,944 |
Payments received | (1,513) | -- | (1,513) |
Loan charge-offs | (2,838) | -- | (2,838) |
Foreclosures | (459) | 459 | -- |
Capitalized costs | -- | -- | -- |
Property sales | -- | (1,108) | (1,108) |
Write downs | -- | (166) | (166) |
Net gains (losses) on sales | -- | 247 | 247 |
Ending Balance | $ 19,015 | $ 1,158 | $ 20,173 |
UNITED COMMUNITY BANKS, INC. | |||
Financial Highlights | |||
Credit Quality | |||
Fourth Quarter 2014 | |||
Nonperforming | Foreclosed | Total | |
(in thousands) | Loans | Properties | NPAs |
NONPERFORMING ASSETS BY CATEGORY | |||
Owner occupied CRE | $ 4,133 | $ 355 | $ 4,488 |
Income producing CRE | 717 | -- | 717 |
Commercial & industrial | 1,571 | -- | 1,571 |
Commercial construction | 83 | 15 | 98 |
Total commercial | 6,504 | 370 | 6,874 |
Residential mortgage | 8,196 | 1,183 | 9,379 |
Home equity lines of credit | 695 | 40 | 735 |
Residential construction | 2,006 | 133 | 2,139 |
Consumer installment | 480 | -- | 480 |
Total NPAs | $ 17,881 | $ 1,726 | $ 19,607 |
Balance as a % of | |||
Unpaid Principal | 69.9% | 54.1% | 68.1% |
NONPERFORMING ASSETS BY MARKET | |||
North Georgia | $ 5,669 | $ 711 | $ 6,380 |
Atlanta MSA | 1,837 | 372 | 2,209 |
North Carolina | 5,221 | 234 | 5,455 |
Coastal Georgia | 799 | 105 | 904 |
Gainesville MSA | 1,310 | 81 | 1,391 |
East Tennessee | 1,414 | 201 | 1,615 |
South Carolina / Specialized Lending | 1,285 | 22 | 1,307 |
Indirect auto | 346 | -- | 346 |
Total NPAs | $ 17,881 | $ 1,726 | $ 19,607 |
NONPERFORMING ASSETS ACTIVITY | |||
Beginning Balance | $ 18,745 | $ 3,146 | $ 21,891 |
Loans placed on non-accrual | 7,140 | -- | 7,140 |
Payments received | (5,286) | -- | (5,286) |
Loan charge-offs | (1,841) | -- | (1,841) |
Foreclosures | (877) | 877 | -- |
Capitalized costs | -- | -- | -- |
Property sales | -- | (2,483) | (2,483) |
Write downs | -- | (1) | (1) |
Net gains (losses) on sales | -- | 187 | 187 |
Ending Balance | $ 17,881 | $ 1,726 | $ 19,607 |
UNITED COMMUNITY BANKS, INC. | |||
Financial Highlights | |||
Credit Quality | |||
Third Quarter 2014 | |||
Nonperforming | Foreclosed | Total | |
(in thousands) | Loans | Properties | NPAs |
NONPERFORMING ASSETS BY CATEGORY | |||
Owner occupied CRE | $ 2,156 | $ 1,024 | $ 3,180 |
Income producing CRE | 1,742 | 42 | 1,784 |
Commercial & industrial | 1,593 | -- | 1,593 |
Commercial construction | 148 | -- | 148 |
Total commercial | 5,639 | 1,066 | 6,705 |
Residential mortgage | 8,350 | 1,769 | 10,119 |
Home equity lines of credit | 720 | 90 | 810 |
Residential construction | 3,543 | 221 | 3,764 |
Consumer installment | 493 | -- | 493 |
Total NPAs | $ 18,745 | $ 3,146 | $ 21,891 |
Balance as a % of | |||
Unpaid Principal | 68.6% | 54.5% | 66.1% |
NONPERFORMING ASSETS BY MARKET | |||
North Georgia | $ 7,392 | $ 1,717 | $ 9,109 |
Atlanta MSA | 1,724 | 364 | 2,088 |
North Carolina | 4,919 | 398 | 5,317 |
Coastal Georgia | 781 | 160 | 941 |
Gainesville MSA | 1,403 | 85 | 1,488 |
East Tennessee | 1,227 | 245 | 1,472 |
South Carolina / Specialized Lending | 945 | 177 | 1,122 |
Indirect auto | 354 | -- | 354 |
Total NPAs | $ 18,745 | $ 3,146 | $ 21,891 |
NONPERFORMING ASSETS ACTIVITY | |||
Beginning Balance | $ 20,724 | $ 2,969 | $ 23,693 |
Loans placed on non-accrual | 7,665 | -- | 7,665 |
Payments received | (3,129) | -- | (3,129) |
Loan charge-offs | (4,353) | -- | (4,353) |
Foreclosures | (2,162) | 2,162 | -- |
Capitalized costs | -- | 209 | 209 |
Property sales | -- | (2,350) | (2,350) |
Write downs | -- | (108) | (108) |
Net gains (losses) on sales | -- | 264 | 264 |
Ending Balance | $ 18,745 | $ 3,146 | $ 21,891 |
UNITED COMMUNITY BANKS, INC. | ||||||
Financial Highlights | ||||||
Credit Quality | ||||||
First Quarter 2015 | Fourth Quarter 2014 | Third Quarter 2014 | ||||
Net Charge- | Net Charge- | Net Charge- | ||||
Offs to | Offs to | Offs to | ||||
Net | Average | Net | Average | Net | Average | |
(in thousands) | Charge-Offs | Loans (1) | Charge-Offs | Loans (1) | Charge-Offs | Loans (1) |
NET CHARGE-OFFS BY CATEGORY | ||||||
Owner occupied CRE | $ 351 | .12% | $ 891 | .31% | $ 746 | .26% |
Income producing CRE | 247 | .16 | 143 | .09 | 104 | .07 |
Commercial & industrial | 341 | .19 | (295) | (.17) | (341) | (.23) |
Commercial construction | 22 | .04 | (6) | (.01) | 103 | .24 |
Total commercial | 961 | .14 | 733 | .11 | 612 | .10 |
Residential mortgage | 416 | .20 | 1,226 | .56 | 1,116 | .52 |
Home equity lines of credit | 59 | .05 | 238 | .20 | 356 | .31 |
Residential construction | 1,060 | 1.46 | (44) | (.06) | 712 | .94 |
Consumer installment | 66 | .07 | 356 | .39 | 359 | .43 |
Total | $ 2,562 | .22 | $ 2,509 | .22 | $ 3,155 | .28 |
NET CHARGE-OFFS BY MARKET | ||||||
North Georgia | $ 1,053 | .37% | $ 791 | .27% | $ 1,861 | .63% |
Atlanta MSA | 188 | .06 | 147 | .05 | (250) | (.08) |
North Carolina | 666 | .49 | 1,103 | .79 | 656 | .47 |
Coastal Georgia | 134 | .12 | 30 | .03 | 228 | .21 |
Gainesville MSA | (65) | (.10) | 94 | .15 | 259 | .40 |
East Tennessee | 471 | .68 | 54 | .08 | 230 | .33 |
South Carolina / Specialized Lending | -- | -- | 110 | .11 | 5 | .01 |
Indirect auto | 115 | .16 | 180 | .29 | 166 | .31 |
Total | $ 2,562 | .22 | $ 2,509 | .22 | $ 3,155 | .28 |
(1) Annualized. | ||||||
UNITED COMMUNITY BANKS, INC. | ||
Consolidated Statement of Income (Unaudited) | ||
Three Months Ended | ||
March 31, | ||
(in thousands, except per share data) | 2015 | 2014 |
Interest revenue: | ||
Loans, including fees | $ 49,664 | $ 47,688 |
Investment securities, including tax exempt of $158 and $188 | 12,058 | 11,607 |
Deposits in banks and short-term investments | 812 | 843 |
Total interest revenue | 62,534 | 60,138 |
Interest expense: | ||
Deposits: | ||
NOW | 394 | 440 |
Money market | 673 | 563 |
Savings | 20 | 20 |
Time | 1,109 | 1,771 |
Total deposit interest expense | 2,196 | 2,794 |
Short-term borrowings | 98 | 840 |
Federal Home Loan Bank advances | 392 | 58 |
Long-term debt | 2,606 | 2,634 |
Total interest expense | 5,292 | 6,326 |
Net interest revenue | 57,242 | 53,812 |
Provision for credit losses | 1,800 | 2,500 |
Net interest revenue after provision for credit losses | 55,442 | 51,312 |
Fee revenue: | ||
Service charges and fees | 7,615 | 7,898 |
Mortgage loan and other related fees | 2,755 | 1,354 |
Brokerage fees | 1,551 | 1,177 |
Gains from sales of SBA loans | 1,141 | -- |
Securities gains, net | 1,539 | 217 |
Loss from prepayment of debt | (1,038) | -- |
Other | 2,119 | 1,530 |
Total fee revenue | 15,682 | 12,176 |
Total revenue | 71,124 | 63,488 |
Operating expenses: | ||
Salaries and employee benefits | 26,446 | 24,396 |
Communications and equipment | 3,271 | 3,239 |
Occupancy | 3,278 | 3,378 |
Advertising and public relations | 750 | 626 |
Postage, printing and supplies | 938 | 776 |
Professional fees | 1,919 | 1,427 |
FDIC assessments and other regulatory charges | 1,209 | 1,353 |
Other | 5,250 | 3,855 |
Total operating expenses | 43,061 | 39,050 |
Net income before income taxes | 28,063 | 24,438 |
Income tax expense | 10,393 | 9,038 |
Net income | 17,670 | 15,400 |
Preferred stock dividends and discount accretion | -- | 439 |
Net income available to common shareholders | $ 17,670 | $ 14,961 |
Earnings per common share: | ||
Basic | $ .29 | $ .25 |
Diluted | .29 | .25 |
Weighted average common shares outstanding: | ||
Basic | 60,905 | 60,059 |
Diluted | 60,909 | 60,061 |
UNITED COMMUNITY BANKS, INC. | |||
Consolidated Balance Sheet (Unaudited) | |||
March 31, | December 31, | March 31, | |
(in thousands, except share and per share data) | 2015 | 2014 | 2014 |
ASSETS | |||
Cash and due from banks | $ 77,493 | $ 77,180 | $ 52,813 |
Interest-bearing deposits in banks | 82,269 | 89,074 | 110,529 |
Short-term investments | 25,902 | 26,401 | 49,999 |
Cash and cash equivalents | 185,664 | 192,655 | 213,341 |
Securities available for sale | 1,801,973 | 1,782,734 | 1,837,676 |
Securities held to maturity (fair value $413,550, $425,233 and $473,136) | 399,228 | 415,267 | 464,697 |
Mortgage loans held for sale | 15,723 | 13,737 | 10,933 |
Loans, net of unearned income | 4,787,689 | 4,672,119 | 4,355,708 |
Less allowance for loan losses | (70,007) | (71,619) | (75,223) |
Loans, net | 4,717,682 | 4,600,500 | 4,280,485 |
Assets covered by loss sharing agreements with the FDIC | -- | 3,315 | 21,353 |
Premises and equipment, net | 159,036 | 159,390 | 161,540 |
Bank owned life insurance | 81,490 | 81,294 | 80,790 |
Accrued interest receivable | 20,154 | 20,103 | 18,572 |
Net deferred tax asset | 201,898 | 215,503 | 243,683 |
Derivative financial instruments | 20,291 | 20,599 | 21,563 |
Other assets | 60,764 | 61,889 | 43,604 |
Total assets | $ 7,663,903 | $ 7,566,986 | $ 7,398,237 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Liabilities: | |||
Deposits: | |||
Demand | $ 1,694,755 | $ 1,574,317 | $ 1,471,781 |
NOW | 1,420,956 | 1,504,887 | 1,392,863 |
Money market | 1,306,421 | 1,273,283 | 1,235,429 |
Savings | 312,013 | 292,308 | 270,910 |
Time: | |||
Less than $100,000 | 723,323 | 748,478 | 833,188 |
Greater than $100,000 | 482,955 | 508,228 | 572,889 |
Brokered | 497,508 | 425,011 | 470,481 |
Total deposits | 6,437,931 | 6,326,512 | 6,247,541 |
Repurchase agreements | -- | 6,000 | 123,075 |
Federal Home Loan Bank advances | 270,125 | 270,125 | 50,125 |
Long-term debt | 113,901 | 129,865 | 129,865 |
Derivative financial instruments | 29,276 | 31,997 | 42,309 |
Unsettled securities purchases | -- | 5,425 | 63,999 |
Accrued expenses and other liabilities | 48,965 | 57,485 | 37,593 |
Total liabilities | 6,900,198 | 6,827,409 | 6,694,507 |
Shareholders' equity: | |||
Common stock, $1 par value; 100,000,000 shares authorized; | |||
50,228,075, 50,178,605 and 50,011,094 shares issued and outstanding | 50,228 | 50,178 | 50,011 |
Common stock, non-voting, $1 par value; 26,000,000 shares authorized; | |||
10,080,787, 10,080,787 and 10,080,787 shares issued and outstanding | 10,081 | 10,081 | 10,081 |
Common stock issuable; 400,369, 357,983 and 237,763 shares | 5,895 | 5,168 | 3,840 |
Capital surplus | 1,081,110 | 1,080,508 | 1,091,696 |
Accumulated deficit | (372,933) | (387,568) | (433,130) |
Accumulated other comprehensive loss | (10,676) | (18,790) | (18,768) |
Total shareholders' equity | 763,705 | 739,577 | 703,730 |
Total liabilities and shareholders' equity | $ 7,663,903 | $ 7,566,986 | $ 7,398,237 |
UNITED COMMUNITY BANKS, INC. | ||||||
Average Consolidated Balance Sheets and Net Interest Analysis | ||||||
For the Three Months Ended March 31, | ||||||
2015 | 2014 | |||||
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) | $ 4,725,304 | $ 49,865 | 4.28% | $ 4,355,572 | $ 47,868 | 4.46% |
Taxable securities (3) | 2,186,756 | 11,900 | 2.18 | 2,300,316 | 11,419 | 1.99 |
Tax-exempt securities (1)(3) | 16,236 | 259 | 6.38 | 20,173 | 308 | 6.11 |
Federal funds sold and other interest-earning assets | 141,414 | 885 | 2.50 | 150,841 | 900 | 2.39 |
Total interest-earning assets | 7,069,710 | 62,909 | 3.60 | 6,826,902 | 60,495 | 3.58 |
Non-interest-earning assets: | ||||||
Allowance for loan losses | (72,192) | (77,491) | ||||
Cash and due from banks | 79,025 | 62,054 | ||||
Premises and equipment | 159,502 | 162,788 | ||||
Other assets (3) | 381,300 | 410,175 | ||||
Total assets | $ 7,617,345 | $ 7,384,428 | ||||
Liabilities and Shareholders' Equity: | ||||||
Interest-bearing liabilities: | ||||||
Interest-bearing deposits: | ||||||
NOW | $ 1,475,913 | 394 | .11 | $ 1,416,119 | 440 | .13 |
Money market | 1,466,913 | 673 | .19 | 1,376,993 | 563 | .17 |
Savings | 300,344 | 20 | .03 | 259,548 | 20 | .03 |
Time less than $100,000 | 737,254 | 724 | .40 | 877,695 | 1,013 | .47 |
Time greater than $100,000 | 494,451 | 664 | .54 | 578,190 | 918 | .64 |
Brokered time deposits | 273,327 | (279) | (.41) | 287,979 | (160) | (.23) |
Total interest-bearing deposits | 4,748,202 | 2,196 | .19 | 4,796,524 | 2,794 | .24 |
Federal funds purchased and other borrowings | 36,145 | 98 | 1.10 | 112,583 | 840 | 3.03 |
Federal Home Loan Bank advances | 239,181 | 392 | .66 | 125,069 | 58 | .19 |
Long-term debt | 127,740 | 2,606 | 8.27 | 129,865 | 2,634 | 8.23 |
Total borrowed funds | 403,066 | 3,096 | 3.12 | 367,517 | 3,532 | 3.90 |
Total interest-bearing liabilities | 5,151,268 | 5,292 | .42 | 5,164,041 | 6,326 | .50 |
Non-interest-bearing liabilities: | ||||||
Non-interest-bearing deposits | 1,620,984 | 1,400,619 | ||||
Other liabilities | 94,207 | 116,667 | ||||
Total liabilities | 6,866,459 | 6,681,327 | ||||
Shareholders' equity | 750,886 | 703,101 | ||||
Total liabilities and shareholders' equity | $ 7,617,345 | $ 7,384,428 | ||||
Net interest revenue | $ 57,617 | $ 54,169 | ||||
Net interest-rate spread | 3.18% | 3.08% | ||||
Net interest margin (4) | 3.31% | 3.21% | ||||
(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 $10.8 million in 2015 and pretax unrealized losses of $4.63 million in 2014 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. | ||||||