First quarter 2009 staff costs did not reflect thereduction in work force of 191 staff since
First quarter 2009 staff costs did not reflect thereduction in work force of 191 staff, since most of the reduction in workforce occurred at the end of the quarter with the remainder transitioningthrough the year-end. For the first quarter of 2009,salaries and employee benefit costs of $28.8 million were at the samelevel as a year ago. The increase year over year was primarily due to higherforeclosed property costs of $3.4 million and an increase in FDICinsurance premiums of $1.4 million. Mortgage loan fees of$2.7 million were up $688,000 due to a record high level of refinancingactivity.Operating expenses, before the recognition of goodwill impairment andseverance costs, were $52.6 million reflecting an increase of $5.0 millionfrom the first quarter of 2008 and at the same level as the fourth quarterof 2008. Consulting fees were furtheraffected by weakness in the financial services industry that hinderedsales efforts and delayed consulting contracts.
Service charges andfees on deposit accounts of $7.0 million reflected a $779,000 decreasefrom a year ago due to lower activity and fewer transaction charges.Consulting fees were down $786,000 from last year primarily due to theconsulting assistance provided to United for a company-wide initiative toimprove efficiency and profitability. However, we will aggressively workthrough our problem credits and pursue the best economic outcome for ourcompany in each instance."Fee revenue of $12.8 million was up $2.1 million from the fourth quarter,but down $1.4 million from the first quarter of 2008. We expect the challenges tocontinue in 2009 and the level of charge-offs and non-performing assets tobe elevated over historical levels. The rise in non-performing assets was drivenprimarily by continued weakness in the Atlanta housing and constructionmarkets, and to softened demand from buyers. "Although we have seen some deterioration in other loancategories and markets, our principal challenge remains in the residentialconstruction portfolio. The allowancefor loan losses to total loans was 2.56 percent and 2.14 percent."The recession continued to negatively affect our credit quality,particularly within our Atlanta residential construction portfolio,"Tallent said.
The ratio ofnon-performing assets to total assets at the end of the first and fourthquarters was 4.11 percent and 2.94 percent, respectively. At quarter-end, non-performing assets totaled $334.5million compared with $250.5 million at December 31, 2008. Net charge-offs for the firstquarter were $43.3 million compared with $74 million for the fourthquarter of 2008. "We added 21,918 newservices this quarter, an annual growth rate of 11 percent, that expandedcustomer relationships and we opened 3,585 net new customer accounts."The first quarter provision for loan losses was $65 million, compared with$85 million for the fourth quarter of 2008. We will continue to actively pursue strategies toimprove our margin, while balancing liquidity needs with our goal ofmaximizing pre-tax, pre-provision earnings.""Core deposits, excluding public funds, increased in every category thisquarter reflective of our new initiatives and programs for customerreferrals and cross selling," stated Tallent. "We improved our loan pricing and credit spreads,decreased deposit interest rates and, with an overall improvement inliquidity, we were able to let higher-cost time deposits and brokereddeposits run off. The taxable equivalent net interest margin was 3.08percent compared with 2.70 percent for the fourth quarter of 2008, and3.55 percent for the first quarter of 2008."In the latter part of the fourth quarter, we were able to take severalsteps that contributed to the expansion in our first quarter margin,"stated Tallent.
At March 31, 2009, residential construction loans were $1.4billion, or 25 percent of total loans, a decrease of $361 million from ayear ago and $49 million from the fourth quarter of 2008.Taxable equivalent net interest revenue of $57.4 million reflected anincrease of $5.5 million from last quarter and a decrease of $8.9 millionfrom a year ago. While weremain committed to moving through this credit cycle as quickly aspossible, our efforts have been hindered by this difficult environment."Loans were $5.6 billion at quarter end, down $335 million from a year agoand down $72 million on a linked-quarter basis, reflecting the company'scontinued efforts to reduce exposure to the residential constructionmarket. "A rise in the level of classified andnon-performing assets, and deterioration in property valuations, led us toincrease our allowance by $22 million over net charge-offs. When we updated ourimpairment test as of March 31, 2009, we had impairment of $70 milliondriven primarily by the stock price decline.""The recession and its effect on the housing and construction markets,particularly in Atlanta, continued to drive credit quality issues in ourloan portfolio," added Tallent. The net operating loss was primarily driven byhigher credit costs, including the $22 million build-up in the allowancefor loan losses. (NASDAQ: UCBI) today reported a netoperating loss of $32 million, or 71 cents per diluted share, for thefirst quarter of 2009.
(NASDAQ: UCBI)--Provision for loan losses of $65 million exceeded charge-offs by $22million--Allowance-to-loans ratio of 2.56 percent, up from 2.14 percent lastquarter--Non-cash goodwill impairment charge of $70 million, or $1.45 perdiluted share, primarily due to stock price decline--Severance costs of $2.9 million, or 4 cents per diluted share, relatedto reduction in work force--Margin improvement of 38 basis points this quarter to 3.08 percent--Capital levels remain strongUnited Community Banks, Inc. BLAIRSVILLE, GA, Apr 23 (MARKET WIRE) -- United Community Banks, Inc. Apparently,Roman Abramovich is head over heels for Jesus and he thinks only Jesus can help Chelsea win all the titles in one season, which is a dream for the Russian billionaire.Roman Abramovich has already got his cheque book out and is desperate to bring Jesus to Stamford Bridge.Sevilla's 22 year old midfielder, Jesus Navas apparently thinks it is he, who Chelsea want and it has brought about a massive mystery yet to be solved. Will Jesus come to Chelsea, can he help them win titles?. If you thought Chelsea being linked with Sergio Ramos, David Villa, Lionel Messi, Ricardo Quaresma, Deco, Sergio Aguero, Micah Richards and Giovanni Dos Santos was strange.Wait till you here this.