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United Community Banks Inc. (UCBI) filed Amended Quarterly Report for the period ended 2011-09-30.
United Community Banks Inc. has a market cap of $379.1 million; its shares were traded at around $9.08 with and P/S ratio of 1.1.
This is the annual revenues and earnings per share of UCBI over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of UCBI.
Highlight of Business Operations:
United’s operating provision for loan losses was $36.0 million for the three months ended September 30, 2011, compared to $50.5 million for the same period in 2010. The third quarter 2011 loan loss provision included a $25.0 million loan loss allocation established for United’s largest lending relationship. Net charge-offs for the third quarter of 2011 were $17.5 million, compared to $50.0 million for the third quarter of 2010. For the nine months ended September 30, 2011, United’s operating provision for loan losses was $237 million, compared to $187 million for the same period of 2010. Net charge-offs for the first nine months of 2011 were $266 million, compared to $168 million for the first nine months of 2010. During the first quarter of 2011, performing substandard loans with a pre-charge down carrying amount of $166 million and nonperforming loans with a pre-charge down carrying amount of $101 million were collectively written down to the expected sales proceeds of $80.6 million, in conjunction with a bulk transaction (the “Bulk Loan Sale”). United recognized net charge-offs of $186 million related to the transfer of loans to the held for sale classification in the first quarter. The Bulk Loan Sale was completed on April 18, 2011. Proceeds from the sale were greater than originally estimated, resulting in a reduction of second quarter charge-offs of $7.27 million. As of September 30, 2011, United’s allowance for loan losses was $146 million, or 3.55% of loans, compared to $175 million, or 3.67% of loans, at September 30, 2010. Nonperforming assets of $189 million, which excludes assets of Southern Community Bank (“SCB”) that are covered by loss sharing agreements with the FDIC, decreased to 2.74% of total assets at September 30, 2011, compared to 4.42% as of December 31, 2010 and 4.96% as of September 30, 2010. The decrease in this ratio was due to the execution of a plan to sell approximately $293 million in substandard and nonperforming loans, and to accelerate the disposition of approximately $142 million in foreclosed properties (the “Problem Asset Disposition Plan”) as well as a general improving trend in credit quality indicators. During the third quarter of 2011, United classified its largest lending relationship of $76.6 million, which caused nonperforming assets to increase from 1.66% of total assets at June 30, 2011.Gains on sale of foreclosed property totaled $804,000 for the third quarter of 2011, compared to losses on sale of $7.14 million for the third quarter of 2010. For the nine months ended September 30, 2011, losses on sale were $8.00 million compared to losses on sale of $15.8 million for the same period of the prior year. Foreclosed property write-downs for the third quarter and first nine months of 2011 were $1.77 million and $53.5 million compared to $7.05 million and $17.7 million a year ago. The year to date increase reflected higher write downs in the first half of 2011 on foreclosed properties to expedite sales under the Problem Asset Disposition Plan. Foreclosed property maintenance expenses include legal fees, property taxes, marketing costs, utility services, maintenance and repair charges that totaled $1.85 million and $8.13 million, respectively, for the third quarter and first nine months of 2011 compared with $5.56 million and $11.6 million, respectively, a year ago. Foreclosed property costs in general are down in the third quarter from a year ago due to lower balances of foreclosed property after execution of United’s Problem Asset Disposition Plan beginning in the first quarter of 2011.
Income tax benefit for the third quarter of 2011 was $822,000 million as compared with income tax benefit of $17.2 million for the third quarter of 2010, representing an effective tax rate of approximately 6.76% and 6.79%, respectively. The third quarter 2011 tax benefit included the reversal of previously established reserves for uncertain tax positions of $1.09 million as the tax returns upon which the tax positions were claimed are no longer subject to audit as a result of statute expiration. Absent the reversal of the reserves and the increase to the valuation allowance for deferred tax assets for the current period tax benefit, the effective tax rate for the third quarter would have been 40%. Excluding the goodwill impairment charges in 2010, which had a very limited tax impact, the effective tax rate for the third quarter of 2010 was 40.0%. For the first nine months of 2011, income tax expense was $95.9 million as compared with income tax benefit of $73.0 million for the same period in 2010, representing an effective tax rate of 40.5% and 18.1%, respectively. The effective tax rates were different from the statutory tax rates primarily due to interest revenue on certain investment securities and loans that are exempt from income taxes, tax exempt fee revenue, tax credits received on affordable housing investments, and the change in valuation allowance on deferred tax assets as discussed below.
At September 30, 2011, December 31, 2010, and September 30, 2010, there were $183 million, $123 million and $157 million, respectively, of loans classified as impaired under the Accounting Standards Codification. Included in impaired loans at September 30, 2011, December 31, 2010 and September 30, 2010, was $62.7 million, $115 million and $150 million, respectively that did not require specific reserves or had previously been charged down to net realizable value. The balance of impaired loans at September 30, 2011, December 31, 2010 and September 30, 2010, of $120 million, $7.64 million and $7.1 million, respectively, had specific reserves that totaled $33.5 million, $1.05 million and $1.27 million, respectively. During the third quarter of 2011, United classified its largest lending relationship of $76.6 million as impaired and recorded a specific reserve of $25.0 million. The average recorded investment in impaired loans for the third quarters of 2011 and 2010 was $109 million and $159 million, respectively. For the three and nine months ended September 30, 2011, United recognized $797,000 in interest income on impaired loans. There was no interest revenue recognized on loans while they were impaired for the first nine months of 2010. United’s policy is to discontinue the recognition of interest revenue for loans classified as impaired under the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 310-10-35, Receivables, when a loan meets the criteria for nonaccrual status.
As disclosed in United’s consolidated statement of cash flows, net cash provided by operating activities was $149 million for the nine months ended September 30, 2011. The net loss of $237 million for the nine month period included non-cash expenses for the provision for loan losses of $237 million and losses and write downs on foreclosed property of $61.5 million. In addition, other assets decreased $59.8 million. Net cash used in investing activities of $350 million consisted primarily of purchases of securities of $1.14 billion and purchases of premises and equipment of $6.44 million, that were offset by proceeds from sales of securities of $107 million, maturities and calls of investment securities of $416 million, net proceeds from sales of other real estate of $71.0 million, proceeds from note sales of $99.3 million, and a net decrease in loans of $106 million. Net cash used in financing activities of $149 million consisted primarily of the proceeds of $362 million from the issuance of common and preferred stock offset by a net decrease in deposits of $464 million. United also paid $15.3 million to settle FHLB advances and repaid $30.0 million in long-term debt. In the opinion of management, United had a significant excess liquidity position at September 30, 2011, which was sufficient to meet its expected cash flow requirements.
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