UNITED COMNTY BK : UCBI mentioned in analysis of Street.co

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22 sept. 2010 •18:30

10. United Community Banks

Company Profile

United Community Banks (UCBI) is headquartered in Blairsville, Georgia. Shares closed at $2.42 Friday, down 29% year-to-date. Among analysts polled by Thomson Reuters, the mean 12-month price target for the shares is $3.83, indicating 58% upside potential.

Income Statement

United Community reported a second-quarter net loss to common shareholders of $62.1 million, or 66 cents a share, reflecting non-cash charge of $45.3 million from the sale of $100 million in nonperforming assets to Fletcher International. In comparison, United Community's net losses to common shareholders were $35.9 million, or 38 cents a share, during the first quarter and $18.6 million, or 38 cents, during the second quarter of 2009.

Elevated provisions for loan loss reserves have fed eight straight quarterly net losses, as the company has worked through problem loans. The second-quarter provision was $61.5 million, declining from $75 million the previous quarter and $60 million a year earlier. The annualized ratio of net charge-offs (loan losses less recoveries) to average loans for the second quarter was 4.87%, up from 4.36% the previous quarter and 4.12% in the second quarter of 2009, but down from a peak of 6.50% in the third quarter of 2009. In comparison, the aggregate second-quarter net charge-off ratio for all U.S. banks and thrifts was 2.74% according to the Federal Deposit Insurance Corp..

Balance Sheet

The company had $7.7 billion in total assets as of June 30 and owed the government $180 million in bailout money received through the Troubled Assets Relief Program, or TARP.

Nonperforming assets - including loans past due 90 days or more or in nonaccrual status (less government-guaranteed balances) and repossessed real estate - comprised 4.61% of total assets, improving from 5.48% the previous quarter and 5.26% a year earlier. In comparison, the national aggregate "noncurrent assets ratio" was 3.31% as of June 30, according to the FDIC.

Stock Ratios

Shares trade for 0.5 times tangible book value, according to SNL Financial. The consensus among analysts is that the company will return to profitability during 2012, earning 45 cents a share. Shares are trading at 5.4 times the 2012 earnings estimate.

Analyst Ratings

Three out of nine analysts covering United Community Banks rate the company a buy, with the remaining analysts all recommending investors hold the shares. Adam Barkstrom of Sterne, Agee and Leach is among the analysts with neutral ratings, saying in a Sep. 3 note that although "the slowing pace of credit deterioration is encouraging, bottom-line profitability continues to struggle limiting upside movement in the near term, in our view


Source:
http://www.thestreet.com/story/10867617/1/bank-stocks-be-careful-wi th-consensus-price-targets.html