Synovus is not the only Georgia holding company padding its loan-loss cushion. United Community Banks (UCBI Quote) of Blairsville on Monday said it was setting aside $85 million for loan losses in the fourth quarter, keeping ahead of $74 million in loan charge-offs during the period.
While the company didn't provide an estimate of its fourth-quarter earnings, the consensus earnings estimate was a loss of 33 cents per share. This is a very low loss estimate, considering that in the third quarter, when the company made a $76 million provision for loan losses, its net loss was $39.9 million, or 84 cents per share. United Community, with $8 billion in total assets as of Sept. 30, said its ratio of reserves to total loans was 2.14% at the end of December, but the high level of charge-off activity pointed to more trouble ahead. While we can only come up with a very rough estimate at this point, the $74 million in fourth-quarter loan charge-offs put the company at an annualized charge-off rate approaching 5%. If loan losses continue at this pace, several more quarters of net losses will result. The market would seem to agree, as United Community's shares sank 13% Tuesday, closing at $11.07, while the S&P 600 SmallCap Financials index was up 2%. United Community Banks has received $180 million in TARP money. Finally, Georgia's largest bank holding company, SunTrust Banks(STI Quote), saw shares fall 7% Monday following the Synovus announcement, closing at $27.88.- Loading Comments...
- Loading Comments...
Recent Comments
Featured Photo Galleries
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,328.89 | 1,102.47 | 2,211.69 | 35.46 |
Oil *
73.88
|
|
UP
20.63
|
UP
6.40
|
UP
31.64
|
UP
0.59
|
10 Yr
3.55%
SPDR Gold
108.95
|
|
+0.20%
|
+0.58%
|
+1.45%
|
+1.69%
|
Data delayed 20 minutes |














