United Community Banks Inc. of Blairsville, Ga. is back in the black — again.
The $7 billion-asset company late Wednesday reported fourth-quarter net income available to shareholders of $6.9 million, compared to a loss of $14.4 million in the third quarter and a loss of $175.7 million a year earlier. The results include the costs of paying dividends on preferred stock.
United Community started to make a comeback in last year's second quarter, when it posted its first net profit after 11 quarters of losses. But it quickly returned to the red after additional provisioning tied to a single loan relationship. The company also had to restate earnings dating back to the fourth quarter of 2010.
That single relationship was charged off during the fourth quarter, causing net chargeoffs to jump 161% from the third quarter, to $45.6 million. But nonperforming assets fell 15% from the third quarter and 50% from a year earlier, to $160.3 million.
United Community said fourth-quarter earnings were primarily hampered by higher costs from foreclosure sales, which it offset with a $3.5 million reserve reversal due to the settlement of a state tax dispute. The company also cut its provision down to $14 million from $36 million in the third quarter and $48 million a year earlier.
Lower loan balances and lower yielding rates caused the net interest margin to compress 4 basis points from the third quarter and 7 basis points from a year earlier, to 3.5%.
For the full year, United Community lost $227 million largely due to continued credit costs, primarily from its asset disposition in early 2011.
United Community also announced that it named a new director to represent its third-largest shareholder, Corsair Capital LLC, which participated in the company's $380 million recapitalization last March. Clifford V. Brokaw, a managing director at Corsair, replaced Peter Raskind, who stepped down to become a director at a bigger banking company, according to the release. The replacement is subject to regulatory approval.