Loan quality continued to deteriorate at United Community Banks Inc. in Blairsville, Ga., contributing to its third consecutive quarterly loss and a decision to cut its staff by 9%, or 191 people.
The $8 billion-asset United Community said Thursday that it lost $106 million, or $2.20 a share, in the first quarter after taking a $65 million provision for loan losses.
The results included a $70 million noncash goodwill impairment charge, driven by a sharp decline in the stock price, along with $2.9 million of severance expenses and $2.6 million of dividends paid on government capital.
United Community had earned $16.1 million, or 34 cents a share, in the first quarter of last year.
Nonperforming assets climbed 272% from a year earlier and 34% from the fourth quarter, to $334.5 million. The ratio of nonperformers to total assets jumped 304 basis points from a year earlier and 117 basis points from the fourth quarter, to 4.11%.
"The recession and its effect on the housing and construction markets, particularly in Atlanta, continued to drive credit quality issues," Jimmy Tallent, United Community's president and chief executive, said in a press release. He expects nonperformers to remain elevated throughout the year.
Tallent said the company would save $10 million annually from the staff cuts.
United Community stressed that its capital ratios remain strong. It received $180 million from the Treasury Department's Troubled Asset Relief Program in December.