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United Community Banks Inc. (UCBI) filed Amended Annual Report for the period ended 2010-12-31.
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 reported a net operating loss from continuing operations of $305 million for the twelve months ended December 31, 2010, which included the $45.3 million loss related to the Fletcher transaction and the $157 million income tax expense related to the establishment of a full deferred tax asset valuation allowance and excluded the $211 million goodwill impairment charge as well as the partial fraud loss recovery of $11.8 million. This compared to a net operating loss from continuing operations of $139 million for the same period in 2009, which excluded the $7.06 million gain on acquisition, net of tax; non-cash goodwill impairment charges of $95 million; and non-recurring severance costs of $1.8 million. The net loss for the year ended 2010, which included discontinued operations, goodwill impairment and the partial loss recovery was $502 million. Including discontinued operations, the gain on acquisition, goodwill impairment charges and severance costs, net loss was $228 million for the year ended December 31, 2009. Diluted operating loss from continuing operations per share for the twelve months ended December 31, 2010 was $16.64 of which the loss on the sale of nonperforming assets to Fletcher represented $2.40. This compared to diluted operating loss per share from continuing operations of $12.37 for the same period in 2009. The diluted operating loss per share from continuing operations for the year ended December 31, 2010 excluded $11.13 in loss related to the third quarter goodwill impairment charge and $.62 in gain related to the partial recovery. The diluted operating loss per share for the year ended December 31, 2009 excluded $.58 in earnings per share related to the gain on acquisition and $7.86 and $.15 in loss per share related to the goodwill impairment charges and severance costs, respectively. The 2010 and 2009 net operating loss from continuing operations reflect elevated foreclosed property costs related to the continuing effect of the challenging economic environment and the weak residential construction and housing markets.Operating fee revenue for the fourth quarter of 2010 of $12.4 million decreased $2.01 million, or 14%, from $14.4 million for the fourth quarter of 2009. Service charges and fees on deposit accounts decreased $1.22 million, or 15%, to $7.04 million, primarily due to lower overdraft fees resulting from regulatory changes that require customers to give consent prior to using United’s overdraft services. Mortgage fees increased $217,000, or 13%, to $1.87 million due to an increase in refinancing activity as mortgage rates remained at attractive low levels. United closed $91 million in mortgage loans in the fourth quarter of 2010, compared to $86 million in the fourth quarter of 2009. United did not recognize any net securities gains in the fourth quarter of 2010, down $2.02 million from the fourth quarter of 2009.
Operating expenses increased $4.79 million to $64.9 million, an 8% increase from the fourth quarter of 2009. Salaries and employee benefit costs of $23.8 million decreased $284,000, or 1%, from the fourth quarter of 2009 mostly due to lower stock-based compensation expense as United did not have an annual grant of equity compensation awards in 2010. Communications and equipment expenses were down 442,000, or 12%, to $3.38 million for the three months ended December 31, 2010 compared to the same period in 2009 due to lower depreciation and maintenance charges. Occupancy expense was relatively flat at $4.0 million for the fourth quarters of 2010 and 2009. Professional fees increased $370,000 to $3.02 million reflecting higher loan review charges. Postage, printing and supplies expense decreased $244,000 to $1.06 million due to increased use of electronic statements and branch capture devices that reduced the need for couriers. For the fourth quarter of 2010, advertising and public relations expense increased $144,000, or 15%, mostly reflecting the rollout of United’s “Number One in Customer Satisfaction” campaign. Total foreclosed property expense of $20.6 million increased $6.21 million from $14.4 million for the fourth quarter of 2009, due to additional losses on sales and write-downs taken to accelerate the disposition of properties. FDIC assessments and other regulatory charges decreased from $3.71 million during the fourth quarter of 2009 to $3.30 million for the same period in 2010 due to a lower level of average insured deposits upon which the assessment was based. Other operating expense decreased $530,000 to $3.89 million primarily due to lower ATM network costs.
At December 31, 2010 and 2009, there were $123 million and $198 million, respectively, of loans classified as impaired under the definition outlined in the Accounting Standards Codification. Included in impaired loans at December 31, 2010 and 2009 were $115 million and $182 million, respectively, that did not require specific reserves or had previously been charged down to net realizable value. The balance of impaired loans at December 31, 2010 of $7.64 million had specific reserves that totaled $1.05 million and the balance of impaired loans at December 31, 2009 of $16.1 million had specific reserves that totaled $2.98 million. The average recorded investment in impaired loans for the years ended December 31, 2010, 2009 and 2008 was $170 million, $229 million and $97.1 million, respectively. During 2010, 2009 and 2008, there was no interest revenue recognized on loans while they were impaired. 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 the loan meets the criteria for nonaccrual status.
United’s stock trading history began in March of 2002 when United listed on the Nasdaq Global Select Market. For 2010 and 2009, expected volatility was determined using United’s historical monthly volatility over a period of 25 quarters ending December 31, 2009 and 2008, respectively. For 2008, expected volatility was determined using United’s historical monthly volatility over the period beginning in March of 2002 through the end of the last completed year. Compensation expense relating to options of $1.97 million, $2.82 million and $2.99 million, respectively, was included in earnings in 2010, 2009 and 2008. A deferred income tax benefit related to stock option expense of $780,000, $1,040,000 and $941,000 was included in the determination of income tax expense in 2010, 2009 and 2008, respectively. The amount of compensation expense for all periods was determined based on the fair value of options at the time of grant, multiplied by the number of options granted that were expected to vest, which was then amortized over the vesting period. The forfeiture rate for options is estimated to be approximately 3% per year. The total intrinsic value of options exercised during 2009 and 2008, was $1,000 and $404,000, respectively. There were no options exercised during 2010.
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