Though United Community Banks Inc. in Blairsville, Ga., continued to suffer worse-than-expected loan losses in the third quarter, it offered an optimistic outlook on a conference call Friday.
"We are either at or very near the peak of our credit challenges," said Jimmy Tallent, its president and chief executive officer, emphasizing that commercial real estate loans at the $8.2 billion-asset company should hold up well.
Largely because of a $95 million provision for loan losses, the third-quarter loss available to common shareholders widened by 79% from a year earlier and 284% from the second quarter, to $71.3 million.
The loss of $1.43 a share was bigger than analysts estimated. On average they had predicted a loss of 91 cents.
Nonperforming assets increased 134% from a year earlier and 6% from the second quarter, to $415 million, or 4.91% of total assets, with upticks in every loan category, Tallent said. Net chargeoffs rose 62% from a year earlier and 55% from the second quarter, to $90.5 million.
The results included a $25 million goodwill impairment charge.
Though United Community has lost $196.2 million for the first nine months of the year, its capital ratios remained healthy. It raised $222.5 million through a stock offering during the quarter, after being pressured by regulators to boost its capital.
Tallent said the added cushion would allow it to continue aggressively disposing of bad assets and capitalize on growth opportunities, including government-assisted deals for failed banks.
Pressed on the call to discuss how soon the company might consider a deal, Tallent said that he expects failures to keep coming for the next 15 months and that he would be patient and selective. United Community would want only banks that operate within its existing markets and that have core deposits.
"There is no reason to be in a hurry," Tallent said. "Our number one focus is to get our credit issues fully under control."
Despite the persistent loan trouble, Tallent said he is not expecting the company to receive any formal regulatory order, since it succeeded in raising capital.
United Community's stock fell 8.35% Friday, to $4.39.