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United Community Banks plans for more loan losses
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United Community Banks, the state's third-largest bank holding company announced Monday that it was increasing its allowance for loan losses and expects to show a $39.9 million loss for the third quarter.

The Blairsville-based bank, which operates six branches in Hall County, placed the blame on the housing market in metro Atlanta, where the bank has expanded in recent years.

"Economic pressures on the housing market, particularly in Atlanta, continue to have an impact on our loan portfolio," said Jimmy Tallent, president and chief executive officer. "In the third quarter, we saw some rise in the level of classified and non-performing assets and also a steepening of discounts. In light of this environment, with disappointing summer sales and increasing inventories in the marketplace, we have taken steps to dispose of some of our larger exposures before surplus real estate inventory valuations deteriorate further."

The bank's stock closed down $1.30 to $12.70, a 9.29 percent drop.

The problem for United Community, like many Northeast Georgia community banks, is residential construction loans.
The bank announced that it has increased its allowance for loan losses to 1.91 percent of total loans due to continued credit deterioration in the residential construction portfolio.

The bank executive said the bank's capitalization continues to be strong.

"At quarter-end the tier 1 risk-based capital, total risk-based capital and tangible equity to assets ratios are expected to be 8.7 percent, 11.4 percent and 6.6 percent, respectively. As announced in August, we increased our regulatory capital by adding $30 million of subordinated debt and we will close an internal trust preferred offering by the end of October," he said.

"We are disappointed with expected earnings for the third quarter, but we firmly believe that the actions taken strengthen our ability to manage through this cycle and support the long-term success of the company," Tallent said.
United Community Banks has assets of $8.3 billion and operates 27 community banks with 108 banking offices located throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee.


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