Is My Money Safe?

With all of the turmoil in the current economy, this is the biggest question on everyone’s mind.  Below are some questions and answers that may help during this time of uncertainty.   

Is United Bank still making loans?

Absolutely. In fact, our loans have increased by 7% in the past 12 months. Since our lendable funds are limited, existing customers are served first. We are receptive to new loan customers that are interested in establishing a long term loan and deposit relationship.

Will United Bank be participating in the Capital Purchase Program (CPP) sponsored by the US Treasury through the Emergency Economic Stabilization Act (EESA)?

Fortunately, United Bank enjoys a strong capital position, and if earnings continue, government capital will not be needed. The Treasury still has not advised how banks like United Bank can participate in the CPP. We will continue to evaluate the pros and cons of this program as details become available.

What best describes United Bank’s banking style?  

United Bank is a true community bank; we seek deposits from our local communities and make loans to customers who have local ties to our markets.  Our strength is based on the citizens of our communities, not speculators from out of town.  While United Bank does make loans to meet local housing needs, our portfolio is as diverse as our communities.  The Bank’s exposure to residential acquisition and development lending is well below the state average.  We have no brokered deposits, depending instead on relationships with community customers to fund our loans.

Why is capital important to a bank? 

Capital is the foundation and the strength of a bank.  United Bank is well capitalized by all regulatory standards.  Our Total Risk Based Capital Ratio is 36% greater on average than other Georgia banks and 19% greater on average than community banks nationwide.  While a number of banks have lost money in the last year, United Bank’s solid earnings performance has increased our capital by 14%, year over year.

Why are bank earnings important? 

Banks must raise capital to support deposit and loan growth, and capital can be created by selling stock or by generating earnings.  Other than new stock issued to the Employee Stock Ownership Plan, we choose to grow our capital through earnings.  Year-to-date 2008 earnings are once again strong.  United Bank has never had an unprofitable year and the prospects for the remainder of the year are good.

Who regulates United Bank? 

Unlike the Wall Street Investment Banks that have been in the news so much recently, United Bank is a commercial bank and is closely regulated and examined.  Our bank was chartered in the state of Georgia in 1905 and was the 172^nd bank in the nation to receive FDIC insurance in the early 1930’s.  The Georgia Department of Banking and Finance and the FDIC examine United Bank and United Bank Corporation on a regular schedule with the most recent successful exam having been completed this summer.  The Federal Reserve also examines United Bank Corporation.

Who owns United Bank Corporation? 

UBC is a one-bank holding company and owns all the shares of United Bank.  It is essentially an employee owned company – 87.4% of United Bank’s stock is owned by its employees, directors and their families.  One fifth of the company is owned by our Employee Stock Ownership Plan.  The remaining shareholders have been investors of United Bank for decades. 

What are bank ratings? 

Bank regulator ratings are required to be held confidential.  All banks are required to submit detailed financial information to federal regulators quarterly, and this information is in the public domain.  Bank ratings are also offered by many private entities, based on the public information posted by regulators.  United Bank continues to enjoy very good ratings. 

How do I know if my deposits are covered by FDIC insurance?

The FDIC has a new site to help you answer this question: http://myfdicinsurance.gov/. Our bankers have used a similar tool with customers over the years, and will offer to help you determine your FDIC coverage at United Bank or other institutions.  There are ways to increase your level of coverage at any given bank.

The FDIC continues to enhance deposit coverage for accounts held in financial institutions. Below is a summary of current coverage amounts:

* As of October 14, 2008, the FDIC will provide full deposit coverage for all non-interest bearing deposit accounts, regardless of the dollar amount.

* All other deposit accounts such as interest bearing checking, certificates of deposit, etc. are covered up to $250,000 per depositor, per institution.

* These coverage increases will expire 12/31/09, reducing coverage to $100,000 per depositor, per institution.

Our bankers stand ready to help you determine your coverage specifics and assist you with any additional questions concerning the safety of your deposits.

Why are banks paying such different rates on certificates of deposit? 

Over the decades the yields on bank certificates of deposits have closely tracked U.S. Treasury yields of like maturity since both investments are essentially guaranteed by the U.S. government.  Before investing, it might be wise to ask why some banks are paying so much more.

How do I select the best investment for my money?

With the uncertainty of today's economy, investors should consider security, availability and yield. United Bank's No-Risk Certificate of Deposit is designed around these considerations. It is FDIC insured, provides interest rate stability, and allows early withdrawal without penalty if you need access to your funds. See one of our United Bank employees to learn more.

Does United Bank have a connection with other financial institutions with “United” in their names?

No.  As banks have consolidated over the years the name ‘United’ has become common across the United States.  We chose it as our name when we merged several bank charters together for operational efficiency in the early 1980s.  United Bank currently has 15 banking offices in Upson, Pike, Lamar, Spalding, Morgan, and Newton Counties, and we have no affiliation with other ‘United’ banks across the United States.  

Who can answer my other questions?

 In these uncertain times when the unimaginable is becoming routine, we share your concerns. We welcome your further questions about loans, deposits, investments or anything on your mind.  Together we will get through these tough times.  Many of your questions can be answered by any of our bankers, but feel free to visit with any of our senior bank executives in their offices or by phone.