United Community Banks, Inc. Reports Special Loan Loss Provision
October 12 2011 - 4:30AM
Marketwired
United Community Banks, Inc. (NASDAQ: UCBI) announced today that it
will record a special loan loss provision of $25.0 million during
the third quarter of 2011 related to its largest single loan
relationship. The borrower continues to be current with principal
and interest payments as well as related expenses for the
underlying collateral, including the requirement to maintain
adequate carrying costs in a collateral account at United. However,
after further reassessing this $76.6 million commercial loan
relationship, it was determined that the ultimate repayment of
these loans through the sale of the underlying collateral is
unlikely at this time, primarily the result of disposition activity
below originally expected levels.
"Even though the collateral accounts would be sufficient to
cover debt service requirements and related costs for another five
to six quarters, we believe it is prudent to classify these loans
as nonperforming at quarter-end due to the uncertainties about
sources of repayment in the future," stated Jimmy Tallent,
president and chief executive officer. "We plan to obtain updated
appraisals in the fourth quarter and believe that the $25.0 million
specific reserve will be sufficient to cover any charge-offs to
fair market values."
"On the positive side," Tallent continued, "excluding this
addition to nonperforming loans and the special loan loss provision
of $25.0 million, or 26 cents per diluted share, we expect to
report earnings of 10 cents per diluted share which is equal to
consensus and slightly above the second quarter of 2011. We will
comment further on credit quality and earnings for the third
quarter during our scheduled conference call on October 27th."
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 $7.4 billion and operates 27 community banks
with 106 banking offices located 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 United's 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 anticipated 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 sections entitled "Risk Factors" of
United Community Banks, Inc.'s 2010 annual report filed on Form
10-K and first and second quarter 2011 quarterly reports filed on
Form 10-Q with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made,
and we undertake no obligation to update or revise forward-looking
statements.
For more information: Rex S. Schuette Chief Financial Officer
706-781-2265 Email Contact
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