United Community Banks Inc. of Blairsville, Ga., said Thursday that its first-quarter earnings dropped nearly 17%, to $16.1 million, from the same period a year earlier. Earnings per share dropped 23%, to 34 cents, in line with analyst estimates.
The $8.4 billion-asset company said that loans increased 10%, to just under $6 billion, and deposits increased rose 6%, to $6.2 billion as a result of its July acquisition of First Bank of the South in Lawrenceville, Ga., in the second quarter of last year.
Excluding the acquired deposits, it said total deposits dropped by $234 million as higher-rate certificates of deposits ran off.
United Community's nonperforming assets rose nearly sixfold year over year, to $89.9 million, and its ratio of nonperforming assets to total assets climbed 87 basis points, to 1.07%.
Albert Savastano, an analyst with Fox-Pitt Kelton Cochran Caronia Waller, wrote in a research note Thursday that United Community's 18-basis-point decline in net interest margin, to 3.55%, was driven by deposit pricing competition and an increase in nonperforming assets. He added that he expects margin pressure to continue for the remainder of the year.
