United Community to set up special reserve in Q3
United Community Banks said Wednesday that it will set aside a special reserve of $25 million in the third quarter because of doubts its largest borrower can repay its loans.
Blairsville-based United, the third-largest bank by deposits based in Georgia, said it is unlikely to see full repayment of $76.6 million in commercial loans from the borrower, which was not identified.
The reserve, which the bank called a special loan loss provision, is expected to hurt earnings by 26 cents per share. Excluding the reserve, United said it expects third-quarter earnings of 10 cents per share.
The borrower is current on all principal and interest payments to date, but it is unlikely at present that the loans could be repaid through a sale of assets backing the loan, the bank said. The loans are being reclassified as nonperforming.
United is scheduled to report third-quarter earnings Oct. 27. United, battered like many Georgia lenders by the fallout of the housing market and recession, returned to profitability in the second quarter for the first time since the second quarter of 2008.
About the Author
J. Scott Trubey is the senior editor over business, climate and environment coverage at The Atlanta Journal-Constitution. He previously served as a business reporter for the AJC covering banking, real estate and economic development. He joined the AJC in 2010.
