Diluted earnings per share up 33 percent to 36 cents from third quarter 2015 Excluding merger-related charges, diluted operating EPS up 18 percent to 39 cents
  • Return on assets of 1.00 percent; 1.08 percent, excluding merger-related charges
  • Loan growth of $133 million from second quarter, or 8 percent annualized
  • Core transaction deposits up $254 million from second quarter, or 19 percent annualized
  • Fee revenue of $26.4 million, up $2.9 million from the second quarter
  • Efficiency ratio of 60.8 percent; 57.8 percent, excluding merger-related charges

BLAIRSVILLE, Ga., Oct. 26, 2016 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today announced continued momentum in the third quarter with strong fee revenue and loan growth, as well as sound credit quality and capital management.  Net income grew to $25.9 million, or 36 cents per diluted share, compared with $17.9 million, or 27 cents per diluted share, for the third quarter of 2015.  Net income for the first nine months of 2016 was $73.4 million, or $1.02 per diluted share.  This compares with net income of $53.4 million, or 84 cents per diluted share, for the first nine months of 2015.

On an operating basis, net income rose to $27.8 million for the third quarter of 2016 compared with $21.7 million for the third quarter of 2015. Operating net income excludes pre-tax merger-related charges of $3.15 million in the third quarter of 2016 and $5.74 million in the third quarter of 2015. On a per diluted share basis, operating net income was 39 cents for the third quarter of 2016 compared with 33 cents for the third quarter of 2015.  For the first nine months of 2016, operating net income was $77.8 million, or $1.08 per diluted share, compared with $59.3 million, or 94 cents per diluted share, for the first nine months of 2015.

At September 30, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.1 percent; Total Risk-Based of 11.9 percent; Common Equity Tier 1 Risk-Based of 11.1 percent; and, Tier 1 Leverage of 8.4 percent.

"Our third quarter results underscore the positive momentum from our investments in new businesses and markets," said Jimmy Tallent, chairman and chief executive officer.  "Our mortgage banking business continued to produce record quarterly results which, combined with strong performance from our SBA business and solid customer derivative sales, led to a 44 percent increase in fee revenue from a year ago."

The third quarter's return on assets was 1.00 percent including the effect of merger-related charges of $3.15 million.  Exclusive of these charges, the operating return on assets for the third quarter was 1.08 percent.

Tallent noted the positive impact of the Tidelands Bancshares acquisition, which was completed on July 1, 2016.  "As expected, the acquisition was immediately accretive to earnings per share," he said.  "Systems conversions are scheduled to take place in November, after which we expect to achieve the remaining targeted cost savings. The Tidelands acquisition is meeting or exceeding objectives consistent with our coastal South Carolina expansion strategy and I could not be more pleased with the results.

"Third quarter loan production was $641 million," Tallent added.  "Excluding acquired loans from Tidelands, linked-quarter growth of $133 million, or 8 percent annualized, was within our 2016 loan growth target of mid-to-upper single-digit.  Our community banks originated $436 million in loans while specialized lending produced $166 million.  United's specialized lending area encompasses commercial real estate, middle market, SBA, builder finance and asset-based lending.  Funding these loans was strong linked-quarter core transaction deposit growth of $254 million, or 19 percent annualized, excluding Tidelands.  Core deposits comprise 90 percent of total deposits, which is one of the best ratios in the country."

Third quarter net interest revenue totaled $79.0 million, up $4.1 million from the second quarter and up $13.6 million from the third quarter of 2015.  The increase from both periods reflects growth in the loan portfolio as well as net interest revenue from recent acquisitions.

The taxable-equivalent net interest margin of 3.34 percent, while one basis point lower than the second quarter, was up eight basis points from the third quarter of 2015. The decrease from second quarter was expected and resulted mostly from loan pricing competition.

The third quarter provision for credit losses was a recovery of $300,000, equal to the second quarter of 2016.  It was down from a provision charge of $700,000 in the third quarter of 2015.  Strong recoveries of previously charged-off loans continued to contribute to the low level of net charge-offs.  Third quarter net charge-offs totaled $1.4 million, compared with $1.7 million in the second quarter and $1.4 million in the third quarter of 2015.  Nonperforming assets were .30 percent of total assets at September 30, 2016, compared with .28 percent at June 30, 2016 and .29 percent at September 30, 2015.

"The recoveries of our provisions reflect continued strong credit quality and a low overall level of net charge-offs," Tallent commented.  "Our credit quality indicators are very favorable and our outlook is for positive credit quality in the fourth quarter and into 2017.  This will result in low provision levels that we expect will gradually increase with loan growth through 2017, while slightly decreasing our allowance and the related ratio to total loans."

Third quarter fee revenue totaled $26.4 million, an increase of $2.86 million from the second quarter and up $8.06 million from a year ago.  Mortgage fees were up $1.59 million from the second quarter and $2.20 million from a year ago. Customer derivative fees also contributed to the increase in fee revenue from both prior periods.  Gains from sales of SBA loans were up $833,000 from a year ago, but down $322,000 from the second quarter due to slightly lower premiums and loans sold.

"The increase in mortgage fees correlates to our strategic investment in additional mortgage lenders where we see opportunities to gain market share and higher spreads on loan sales," Tallent said.  "Although production of SBA loans remained high, $32 million of loans were sold in the third quarter compared to $33 million during the second quarter, but up from $17.8 million during the third quarter of 2015."

Operating expenses were $64.0 million for the third quarter, compared with $58.1 million for the second quarter and $54.3 million for the third quarter of 2015.  Included in operating expenses were merger-related charges of $3.15 million for the third quarter, $1.18 million for the second quarter and $5.74 million for the third quarter of 2015.  Excluding these charges, third quarter operating expenses were $60.9 million compared with $56.9 million for the second quarter and $48.5 million a year ago.  The increases from the second quarter and a year ago reflect additional operating expenses following the acquisitions of Tidelands Bank on July 1, 2016 and The Palmetto Bank on September 1, 2015.  The operating expenses of the acquired companies are included in United's financial results beginning on their respective acquisition dates.

Excluding merger-related charges of $3.15 million in the third quarter, operating expenses were $60.9 million and up $3.99 million from the second quarter. The inclusion of Tidelands' $2.76 million of operating expense accounted for 70 percent of the linked-quarter increase in operating expenses. The balance of the increase was primarily due to higher salary costs for commissions and incentives related to truing-up the quarter and year-to-date for performance targets.

"Our bankers continue to perform exceptionally well as we build on the successes of investing to grow our franchise and earnings," Tallent said. "We take tremendous pride that our bankers provide the best in customer service by treating customers the way we would want to be treated.  This is at the foundation of our success and the core of everything we do.  With strong earnings momentum and a high-quality balance sheet, I am optimistic about our future," Tallent concluded.

Conference CallUnited will hold a conference call today, Wednesday, October 26, 2016, at 11 a.m. ET to discuss the contents of this earnings release and to share business highlights for the quarter.  To access the call, dial (877) 380-5665 and use the conference number 86742023.  The conference call also will be webcast and available for replay for 30 days by selecting "Events & Presentations" within the Investor Relations section of United's website at www.ucbi.com.

About United Community Banks, Inc.United Community Banks, Inc. (NASDAQ:UCBI) is a registered bank holding company based in Blairsville, Georgia, with $10.3 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the Southeast region's largest full-service banks, operating 140 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in providing personalized community banking services to individuals, small businesses and corporations.  Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management.  United Community Bank is consistently recognized for its outstanding customer service by respected national research firms.  In 2014 and 2015, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and again in 2016 was ranked among the top 100 on the Forbes list of America's Best Banks.  Additional information about the company and the bank's full range of products and services can be found at  www.ucbi.com. 

Non-GAAP Financial MeasuresThis News Release contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP.  This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as "operating net income," "operating net income per diluted share," "tangible book value," "operating return on common equity," "operating return on tangible common equity," "operating return on assets," "operating dividend payout ratio," "operating efficiency ratio," "average tangible equity to average assets," "average tangible common equity to average assets" and "tangible common equity to risk-weighted assets."  These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United's underlying performance trends.  These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies.  To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

Safe HarborThis News Release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment.  These statements are based on current expectations and are provided to assist in the understanding of future financial performance.  Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements.  For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2015 Annual Report on Form 10-K under the sections entitled "Forward-Looking Statements" and "Risk Factors."  Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

 
                         
UNITED COMMUNITY BANKS, INC.                        
Financial Highlights                        
Selected Financial Information                        
                         
                      Third
  2016   2015   Quarter
    Third       Second       First       Fourth       Third     2016-2015
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter     Change
INCOME SUMMARY                        
Interest revenue $ 85,439     $ 81,082     $ 80,721     $ 79,362     $ 70,828        
Interest expense   6,450       6,164       5,769       5,598       5,402        
Net interest revenue   78,989       74,918       74,952       73,764       65,426       21   %
Provision for credit losses   (300 )     (300 )     (200 )     300       700        
Fee revenue   26,361       23,497       18,606       21,284       18,297       44    
Total revenue   105,650       98,715       93,758       94,748       83,023       27    
Expenses   64,023       58,060       57,885       65,488       54,269       18    
Income before income tax expense   41,627       40,655       35,873       29,260       28,754       45    
Income tax expense   15,753       15,389       13,578       11,052       10,867       45    
Net income   25,874       25,266       22,295       18,208       17,887       45    
Preferred dividends   -       -       21       25       25        
Net income available to common shareholders $     25,874     $     25,266     $     22,274     $     18,183     $     17,862         45    
Merger-related and other charges   3,152       1,176       2,653       9,078       5,744        
Income tax benefit of merger-related and other charges   (1,193 )     (445 )     (1,004 )     (3,486 )     (1,905 )      
Net income available to common  shareholders - operating (1) $     27,833     $     25,997     $     23,923     $     23,775     $     21,701         28    
                         
PERFORMANCE MEASURES                        
Per common share:                        
Diluted net income - GAAP $ .36     $ .35     $ .31     $ .25     $ .27       33    
Diluted net income - operating  (1)   .39       .36       .33       .33       .33       18    
Cash dividends declared   .08       .07       .07       .06       .06        
Book value   15.12       14.80       14.35       14.02       13.95       8    
Tangible book value (3)   13.00       12.84       12.40       12.06       12.08       8    
                         
Key performance ratios:                        
Return on common equity - GAAP (2)(4)   9.61   %   9.54   %   8.57   %   7.02   %   7.85   %        
Return on common equity - operating (1)(2)(4)   10.34       9.81       9.20       9.18       9.54        
Return on tangible common equity - operating (1)(2)( 3)(4)   12.45       11.56       10.91       10.87       10.29        
Return on assets - GAAP (4)   1.00       1.04       .93       .76       .82        
Return on assets - operating (1)(4)   1.08       1.07       1.00       .99       1.00        
Dividend payout ratio - GAAP   22.22       20.00       22.58       24.00       22.22        
Dividend payout ratio - operating (1)   20.51       19.44       21.21       18.18       18.18        
Net interest margin (fully taxable equivalent) (4)   3.34       3.35       3.41       3.34       3.26        
Efficiency ratio - GAAP   60.78       59.02       61.94       68.97       64.65        
Efficiency ratio - operating  (1)   57.79       57.82       59.10       59.41       57.81        
Average equity to average assets   10.38       10.72       10.72       10.68       10.39        
Average tangible equity to average assets (3)   8.98       9.43       9.41       9.40       9.88        
Average tangible common equity to average assets (3)   8.98       9.43       9.32       9.29       9.77        
Tangible common equity to risk-weighted assets (3)(5)   12.26       12.87       12.77       12.82       13.08        
                         
ASSET QUALITY                        
Nonperforming loans $ 21,572     $ 21,348     $ 22,419     $ 22,653     $ 20,064       8    
Foreclosed properties   9,187       6,176       5,163       4,883       7,669       20    
Total nonperforming assets (NPAs)   30,759       27,524       27,582       27,536       27,733       11    
Allowance for loan losses   62,961       64,253       66,310       68,448       69,062       (9 )  
Net charge-offs   1,359       1,730       2,138       1,302       1,417       (4 )  
Allowance for loan losses to loans   0.94   %   1.02   %   1.09   %   1.14   %   1.15   %    
Net charge-offs to average loans (4)   .08       .11       .14       .09       .10        
NPAs to loans and foreclosed properties   .46       .44       .45       .46       .46        
NPAs to total assets   .30       .28       .28       .29       .29        
                         
AVERAGE BALANCES ($ in millions)                        
Loans $ 6,675     $ 6,151     $ 6,004     $ 5,975     $ 5,457       22    
Investment securities   2,610       2,747       2,718       2,607       2,396       9    
Earning assets   9,443       9,037       8,876       8,792       8,009       18    
Total assets   10,281       9,809       9,634       9,558       8,634       19    
Deposits   8,307       7,897       7,947       8,028       7,135       16    
Shareholders' equity   1,067       1,051       1,033       1,021       897       19    
Common shares - basic (thousands)   71,556       72,202       72,162       72,135       66,294       8    
Common shares - diluted (thousands)   71,561       72,207       72,166       72,140       66,300       8    
                         
AT PERIOD END ($ in millions)                        
Loans $ 6,725     $ 6,287     $ 6,106     $ 5,995     $ 6,024       12    
Investment securities   2,560       2,677       2,757       2,656       2,457       4    
Total assets   10,298       9,928       9,781       9,616       9,404       10    
Deposits   8,442       7,857       7,960       7,873       7,897       7    
Shareholders' equity   1,079       1,060       1,034       1,018       1,013       7    
Common shares outstanding (thousands)   70,861       71,122       71,544       71,484       71,472       (1 )  
                         
(1)  Excludes merger-related charges and fourth quarter impairment losses on surplus bank property.  (2)  Net income available to common shareholders, which is net of preferred stock dividends, divided by
average realized common equity, which excludes accumulated other comprehensive income (loss).  (3)  Excludes effect of acquisition related intangibles and associated amortization.  (4)  Annualized.
(5)  Third quarter 2016 ratio is preliminary.
                         

 
               
UNITED COMMUNITY BANKS, INC.              
Financial Highlights              
Selected Financial Information              
               
  For the Nine      
  Months Ended   YTD  
  September 30,   2016-2015  
(in thousands, except per share data)   2016       2015       Change  
INCOME SUMMARY              
Interest revenue $   247,242     $   199,170          
Interest expense     18,383         15,511          
Net interest revenue     228,859         183,659         25   %  
Provision for credit losses     (800 )       3,400          
Fee revenue     68,464         51,245         34      
Total revenue     298,123         231,504         29      
Expenses     179,968         145,750         23      
Income before income tax expense     118,155         85,754         38      
Income tax expense     44,720         32,384         38      
Net income     73,435         53,370         38      
Preferred dividends     21         42          
Net income available to common shareholders $     73,414     $     53,328         38      
Merger-related and other charges     6,981         8,917          
Income tax benefit of merger-related and other charges     (2,642 )       (2,902 )        
Net income available to common  shareholders - operating (1) $     77,753     $     59,343         31      
               
PERFORMANCE MEASURES              
Per common share:              
Diluted net income - GAAP $   1.02      $   .84         21      
Diluted net income - operating  (1)     1.08       .94         15      
Cash dividends declared   .22       .16          
Book value     15.12         13.95         8      
Tangible book value (3)     13.00         12.08         8      
Key performance ratios:              
Return on common equity - GAAP (2)(4)     9.25   %     8.63   %    
Return on common equity - operating (1)(2)(4)     9.79         9.60          
Return on tangible common equity - operating (1)(2)( 3)(4)     11.64         10.00          
Return on assets - GAAP (4)   .99       .88          
Return on assets - operating (1)(4)     1.05       .98          
Dividend payout ratio - GAAP     21.57         19.05          
Dividend payout ratio - operating (1)     20.37         17.02          
Net interest margin (fully taxable equivalent) (4)     3.36         3.29          
Efficiency ratio - GAAP     60.56         61.94          
Efficiency ratio - operating  (1)     58.21         58.15          
Average equity to average assets   10.60       10.11          
Average tangible equity to average assets (3)   9.27       9.88          
Average tangible common equity to average assets (3)   9.24       9.81          
Tangible common equity to risk-weighted assets (3)(5)     12.26       13.08          
               
ASSET QUALITY              
Nonperforming loans $   21,572     $   20,064         8      
Foreclosed properties     9,187         7,669         20      
Total nonperforming assets (NPAs)     30,759         27,733         11      
Allowance for loan losses     62,961         69,062         (9 )    
Net charge-offs     5,227         4,957         5      
Allowance for loan losses to loans   0.94     1.15        
Net charge-offs to average loans (4)   .11       .13          
NPAs to loans and foreclosed properties   .46       .46          
NPAs to total assets   .30       .29          
                   
AVERAGE BALANCES ($ in millions)                  
Loans $   6,278     $   5,069         24      
Investment securities     2,692         2,288         18      
Earning assets     9,120         7,511         21      
Total assets     9,909         8,093         22      
Deposits     8,051         6,727         20      
Shareholders' equity     1,051         818         28      
Common shares - basic (thousands)     71,992         63,297         14      
Common shares - diluted (thousands)     71,996         63,302         14      
                           
AT PERIOD END ($ in millions)                          
Loans $   6,725     $   6,024         12      
Investment securities     2,560         2,457         4      
Total assets     10,298         9,404         10      
Deposits     8,442         7,897         7      
Shareholders' equity     1,079         1,013         7      
Common shares outstanding (thousands)     70,861         71,472         (1 )    
               
(1)  Excludes merger-related charges and fourth quarter impairment losses on surplus bank property.  (2)  Net income available to common shareholders, which is net of preferred stock dividends, divided by  
average realized common equity, which excludes accumulated other comprehensive income (loss).  (3)  Excludes effect of acquisition related intangibles and associated amortization.  (4)  Annualized.   
(5)  Third quarter 2016 ratio is preliminary.  
               

 
                     
UNITED COMMUNITY BANKS, INC.                    
Non-GAAP Performance Measures Reconciliation                    
Selected Financial Information                    
                     
                     
    2016      2015  
    Third       Second       First       Fourth       Third  
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter  
                     
Expense reconciliation                    
Expenses (GAAP) $   64,023     $   58,060     $   57,885     $   65,488     $   54,269    
Merger-related and other charges     (3,152 )       (1,176 )       (2,653 )       (9,078 )       (5,744 )  
  Expenses - operating $   60,871     $   56,884     $   55,232     $   56,410     $   48,525    
                                         
Net income reconciliation                                        
Net income (GAAP) $   25,874     $   25,266     $   22,295     $   18,208     $   17,887    
Merger-related and other charges     3,152         1,176         2,653         9,078         5,744    
Income tax benefit of merger-related and other charges     (1,193 )       (445 )       (1,004 )       (3,486 )       (1,905 )  
  Net income - operating $   27,833     $   25,997     $   23,944     $   23,800     $   21,726    
                                         
Net income available to common shareholders reconciliation                                        
Net income available to common shareholders (GAAP) $   25,874     $   25,266     $   22,274     $   18,183     $   17,862    
Merger-related and other charges     3,152         1,176         2,653         9,078         5,744    
Income tax benefit of merger-related and other charges     (1,193 )       (445 )       (1,004 )       (3,486 )       (1,905 )  
  Net income available to common shareholders - operating $   27,833     $   25,997     $   23,923     $   23,775     $   21,701    
                                         
Diluted income per common share reconciliation                                        
Diluted income per common share (GAAP)  $   .36      $   .35      $   .31      $   .25      $   .27    
Merger-related and other charges   .03       .01       .02       .08       .06    
  Diluted income per common share - operating  $   .39      $   .36      $   .33      $   .33      $   .33    
                                         
Book value per common share reconciliation                                        
Book value per common share (GAAP) $   15.12     $   14.80     $   14.35     $   14.02     $   13.95    
Effect of goodwill and other intangibles     (2.12 )       (1.96 )       (1.95 )       (1.96 )       (1.87 )  
  Tangible book value per common share $   13.00     $   12.84     $   12.40     $   12.06     $   12.08    
                                         
Return on tangible common equity reconciliation                                        
Return on common equity (GAAP)     9.61   %     9.54   %     8.57   %     7.02   %     7.85   %
Merger-related  and other charges   .73       .27       .63         2.16         1.69    
Return on common equity - operating     10.34         9.81         9.20         9.18         9.54    
Effect of goodwill and other intangibles     2.11         1.75         1.71         1.69       .75    
  Return on tangible common equity - operating     12.45   %     11.56   %     10.91   %     10.87   %     10.29   %
                     
Return on assets reconciliation                    
Return on assets (GAAP)     1.00   %     1.04   %   .93   %   .76   %   .82   %
Merger-related  and other charges   .08       .03       .07        .23       .18    
  Return on assets - operating     1.08   %     1.07   %     1.00   %   .99   %     1.00   %
                     
Dividend payout ratio reconciliation                    
Dividend payout ratio (GAAP)     22.22   %     20.00   %     22.58   %     24.00   %     22.22   %
Merger-related and other charges     (1.71 )     (.56)         (1.37 )       (5.82 )       (4.04 )  
  Dividend payout ratio - operating     20.51   %     19.44   %     21.21   %     18.18   %     18.18   %
                     
Efficiency ratio reconciliation                    
Efficiency ratio (GAAP)     60.78   %     59.02   %     61.94   %     68.97   %     64.65   %
Merger-related and other charges     (2.99 )       (1.20 )       (2.84 )       (9.56 )       (6.84 )  
  Efficiency ratio - operating     57.79   %     57.82   %     59.10   %     59.41   %     57.81   %
                     
Average equity to assets reconciliation                    
Equity to assets (GAAP)     10.38   %     10.72   %   10.72   %   10.68   %   10.39   %
Effect of goodwill and other intangibles     (1.40 )       (1.29 )       (1.31 )       (1.28 )     (.51 )  
  Tangible equity to assets     8.98         9.43         9.41         9.40         9.88    
Effect of preferred equity     -          -        (.09 )     (.11 )     (.11 )  
  Tangible common equity to assets     8.98   %     9.43   %     9.32   %     9.29   %     9.77   %
                     
Tangible common equity to risk-weighted assets reconciliation (1)                  
Tier 1 capital ratio (Regulatory)     11.08   %     11.44   %     11.32   %     11.45   %     11.40   %
Effect of other comprehensive income     -        (.06 )     (.25 )     (.38 )     (.23 )  
Effect of deferred tax limitation     1.50         1.63         1.85         2.05         2.24    
Effect of trust preferred   (.26 )     (.08 )     (.08 )     (.08 )     (.08 )  
Effect of preferred equity     -          -          -        (.15 )     (.15 )  
Basel III intangibles transition adjustment   (.06 )     (.06 )     (.07 )     (.10     (.13 )  
Basel III disallowed investments     -          -          -        .03       .03    
  Tangible common equity to risk-weighted assets     12.26   %     12.87   %     12.77   %     12.82   %     13.08   %
                     
(1)  Third quarter 2016 ratios are preliminary.                    
                     

 
         
UNITED COMMUNITY BANKS, INC.        
Non-GAAP Performance Measures Reconciliation        
Selected Financial Information        
         
         
    For the Nine Months Ended September 30,  
 
(in thousands, except per share data)   2016       2015    
         
Expense reconciliation        
Expenses (GAAP) $   179,968     $   145,750    
Merger-related and other charges     (6,981 )       (8,917 )  
  Expenses - operating $   172,987     $   136,833    
                 
Net income reconciliation                
Net income (GAAP) $   73,435     $   53,370    
Merger-related and other charges     6,981         8,917    
Income tax benefit of merger-related and other charges     (2,642 )       (2,902 )  
  Net income - operating $   77,774     $   59,385    
                 
Net income available to common shareholders reconciliation                
Net income available to common shareholders (GAAP) $   73,414     $   53,328    
Merger-related and other charges     6,981         8,917    
Income tax benefit of merger-related and other charges     (2,642 )       (2,902 )  
  Net income available to common shareholders - operating $   77,753     $   59,343    
                 
Diluted income per common share reconciliation                
Diluted income per common share (GAAP) $   1.02     $   .84    
Merger-related and other charges     -        .10    
  Diluted income per common share - operating $   1.02     $   .94    
                 
Book value per common share reconciliation                
Book value per common share (GAAP) $   15.12     $   13.95    
Effect of goodwill and other intangibles     (2.12 )       (1.87 )  
  Tangible book value per common share $   13.00     $   12.08    
                 
Return on tangible common equity reconciliation                
Return on common equity (GAAP)     9.25   %     8.63   %
Merger-related  and other charges   .54       .97    
Return on common equity - operating     9.79         9.60    
Effect of goodwill and other intangibles     1.85       .40    
  Return on tangible common equity - operating     11.64   %     10.00   %
                 
Return on assets reconciliation                
Return on assets (GAAP)   .99   %   .88   %
Merger-related  and other charges   .06       .10    
  Return on assets - operating     1.05   %   .98   %
                 
Dividend payout ratio reconciliation                
Dividend payout ratio (GAAP)     21.57   %     19.05   %
Merger-related and other charges     (1.20 )       (2.03 )  
  Dividend payout ratio - operating     20.37   %     17.02   %
         
Efficiency ratio reconciliation        
Efficiency ratio (GAAP)     60.56   %     61.94   %
Merger-related and other charges     (2.35 )       (3.79 )  
  Efficiency ratio - operating     58.21   %     58.15   %
                 
Average equity to assets reconciliation                
Equity to assets (GAAP)   10.60   %   10.11   %
Effect of goodwill and other intangibles     (1.33 )     (.23 )  
  Tangible equity to assets     9.27         9.88    
Effect of preferred equity   (.03)       (.07 )  
  Tangible common equity to assets     9.24   %     9.81   %
         
Tangible common equity to risk-weighted assets reconciliation (1)      
Tier 1 capital ratio (Regulatory)     11.08   %     11.40   %
Effect of other comprehensive income     -        (.23 )  
Effect of deferred tax limitation     1.50         2.24    
Effect of trust preferred   (.26 )     (.08 )  
Effect of preferred equity     -        (.15 )  
Basel III intangibles transition adjustment   (.06 )     (.13 )  
Basel III disallowed investments     -        .03    
  Tangible common equity to risk-weighted assets     12.26   %     13.08   %
         
(1)  Third quarter 2016 ratios are preliminary.        
         

 
             
UNITED COMMUNITY BANKS, INC.            
Financial Highlights                    
Loan Portfolio Composition at Period-End            
                     
                     
      2016       2015  
      Third       Second       First       Fourth       Third  
(in millions)   Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                    
Owner occupied commercial RE   $   1,512     $   1,450     $   1,434     $   1,494     $   1,479  
Income producing commercial RE       1,105         919         880         824         818  
Commercial & industrial       994         926         855         785         890  
Commercial construction       389         384         354         342         319  
  Total commercial       4,000         3,679         3,523         3,445         3,506  
Residential mortgage       1,056         1,035         1,032         1,029         1,062  
Home equity lines of credit       698         623         604         598         585  
Residential construction       378         351         348         352         334  
Consumer installment       593         599         599         571         537  
  Total loans   $   6,725     $   6,287     $   6,106     $   5,995     $   6,024  
                     
LOANS BY MARKET                    
North Georgia   $   1,110     $   1,097     $   1,097     $   1,125     $   1,130  
Atlanta MSA       1,332         1,314         1,257         1,259         1,266  
North Carolina       548         543         543         549         546  
Coastal Georgia       565         541         543         537         506  
Gainesville MSA       236         240         248         254         252  
East Tennessee       506         509         495         504         511  
South Carolina       1,199         862         821         819         783  
Specialized Lending       763         706         628         492         609  
Indirect auto       466         475         474         456         421  
  Total loans   $   6,725     $   6,287     $   6,106     $   5,995     $   6,024  
                     

 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights                    
Loan Portfolio Composition at Period-End            
                     
                     
    2016   2015   Linked     Year over  
      Third       Second       Third     Quarter     Year  
(in millions)   Quarter   Quarter   Quarter   Change     Change  
LOANS BY CATEGORY                    
Owner occupied commercial RE   $   1,512     $   1,450     $   1,479     $   62     $   33  
Income producing commercial RE       1,105         919         818         186         287  
Commercial & industrial       994         926         890         68         104  
Commercial construction       389         384         319         5         70  
  Total commercial       4,000         3,679         3,506         321         494  
Residential mortgage       1,056         1,035         1,062         21         (6 )
Home equity lines of credit       698         623         585         75         113  
Residential construction       378         351         334         27         44  
Consumer installment       593         599         537         (6 )       56  
  Total loans   $   6,725     $   6,287     $   6,024         438         701  
                                         
LOANS BY MARKET                                        
North Georgia   $   1,110     $   1,097     $   1,130         13         (20 )
Atlanta MSA       1,332         1,314         1,266         18         66  
North Carolina       548         543         546         5         2  
Coastal Georgia       565         541         506         24         59  
Gainesville MSA       236         240         252         (4 )       (16 )
East Tennessee       506         509         511         (3 )       (5 )
South Carolina       1,199         862         783         337         416  
Specialized Lending       763         706         609         57         154  
Indirect auto       466         475         421         (9 )       45  
  Total loans   $   6,725     $   6,287     $   6,024         438         701  
                     

 
                   
UNITED COMMUNITY BANKS, INC.                  
Financial Highlights                  
Credit Quality                  
                   
                   
    Third Quarter 2016
      Nonperforming       Foreclosed       Total  
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY                  
Owner occupied CRE   $   6,454     $   3,188     $   9,642  
Income producing CRE       949         765         1,714  
Commercial & industrial       1,079         -          1,079  
Commercial construction       98         1,274         1,372  
  Total commercial       8,580         5,227         13,807  
Residential mortgage       8,152         1,211         9,363  
Home equity lines of credit       1,194         514         1,708  
Residential construction       2,248         2,235         4,483  
Consumer installment       1,398         -          1,398  
  Total NPAs   $   21,572     $   9,187     $   30,759  
                   
NONPERFORMING ASSETS BY MARKET                  
North Georgia   $   5,356     $   653     $   6,009  
Atlanta MSA       979         1,530         2,509  
North Carolina       5,216         543         5,759  
Coastal Georgia       1,606         47         1,653  
Gainesville MSA       222         -          222  
East Tennessee       3,281         160         3,441  
South Carolina       2,015         6,254         8,269  
Specialized Lending       1,597         -          1,597  
Indirect auto       1,300         -          1,300  
  Total NPAs   $   21,572     $   9,187     $   30,759  
                   
                   
NONPERFORMING ASSETS ACTIVITY                  
Beginning Balance   $   21,348     $   6,176     $   27,524  
Acquisitions       -          7,495         7,495  
Loans placed on non-accrual       6,680         -          6,680  
Payments received       (3,938 )       -          (3,938 )
Loan charge-offs       (1,236 )       -          (1,236 )
Foreclosures       (1,282 )       2,335         1,053  
Capitalized costs       -          3         3  
Property sales       -          (6,553 )       (6,553 )
Write downs       -          (53 )       (53 )
Net gains (losses) on sales       -          (216 )       (216 )
  Ending Balance   $   21,572     $   9,187     $   30,759  
                   

 
UNITED COMMUNITY BANKS, INC.                  
Financial Highlights                  
Credit Quality                  
                   
                   
    Second Quarter 2016
      Nonperforming       Foreclosed       Total  
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY                  
Owner occupied CRE   $   6,681     $   3,096     $   9,777  
Income producing CRE       1,017         1,554         2,571  
Commercial & industrial       949         -          949  
Commercial construction       199         -          199  
  Total commercial       8,846         4,650         13,496  
Residential mortgage       8,667         1,160         9,827  
Home equity lines of credit       1,308         83         1,391  
Residential construction       1,578         283         1,861  
Consumer installment       949         -          949  
  Total NPAs   $   21,348     $   6,176     $   27,524  
                   
NONPERFORMING ASSETS BY MARKET                  
North Georgia   $   6,219     $   1,086     $   7,305  
Atlanta MSA       1,140         2,041         3,181  
North Carolina       4,762         224         4,986  
Coastal Georgia       1,186         168         1,354  
Gainesville MSA       234         -          234  
East Tennessee       3,616         247         3,863  
South Carolina       1,271         2,410         3,681  
Specialized Lending       2,108         -          2,108  
Indirect auto       812         -          812  
  Total NPAs   $   21,348     $   6,176     $   27,524  
                   
                   
NONPERFORMING ASSETS ACTIVITY                  
Beginning Balance   $   22,419     $   5,163     $   27,582  
Acquisitions       -          (497 )       (497 )
Loans placed on non-accrual       6,786         -          6,786  
Payments received       (4,201 )       -          (4,201 )
Loan charge-offs       (1,803 )       -          (1,803 )
Foreclosures       (1,853 )       2,722         869  
Capitalized costs       -          98         98  
Property sales       -          (1,424 )       (1,424 )
Write downs       -          (73 )       (73 )
Net gains (losses) on sales       -          187         187  
  Ending Balance   $   21,348     $   6,176     $   27,524  
                   

 
                   
UNITED COMMUNITY BANKS, INC.                  
Financial Highlights                  
Credit Quality                  
                   
                   
    First Quarter 2016
      Nonperforming       Foreclosed       Total  
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY                  
Owner occupied CRE   $   6,775     $   2,864     $   9,639  
Income producing CRE       2,959         -          2,959  
Commercial & industrial       978         -          978  
Commercial construction       266         152         418  
  Total commercial       10,978         3,016         13,994  
Residential mortgage       8,037         1,587         9,624  
Home equity lines of credit       1,198         125         1,323  
Residential construction       1,122         435         1,557  
Consumer installment       1,084         -          1,084  
  Total NPAs   $   22,419     $   5,163     $   27,582  
                   
NONPERFORMING ASSETS BY MARKET                  
North Georgia   $   5,353     $   1,233     $   6,586  
Atlanta MSA       2,796         902         3,698  
North Carolina       4,860         559         5,419  
Coastal Georgia       1,696         121         1,817  
Gainesville MSA       250         -          250  
East Tennessee       3,470         351         3,821  
South Carolina       935         1,997         2,932  
Specialized Lending       2,186         -          2,186  
Indirect auto       873         -          873  
  Total NPAs   $   22,419     $   5,163     $   27,582  
                   
                   
NONPERFORMING ASSETS ACTIVITY                  
Beginning Balance   $   22,653     $   4,883     $   27,536  
Acquisitions       -          -          -   
Loans placed on non-accrual       4,771         -          4,771  
Payments received       (1,812 )       -          (1,812 )
Loan charge-offs       (1,679 )       -          (1,679 )
Foreclosures       (1,514 )       1,590         76  
Capitalized costs       -          -          -   
Property sales       -          (1,524 )       (1,524 )
Write downs       -          (7 )       (7 )
Net gains (losses) on sales       -          221         221  
  Ending Balance   $   22,419     $   5,163     $   27,582  
                   

 
                               
UNITED COMMUNITY BANKS, INC.                              
Financial Highlights                                    
Credit Quality                                    
                                     
                                     
    Third Quarter 2016   Second Quarter 2016   First Quarter 2016
        Net Charge-         Net Charge-         Net Charge-  
          Offs to           Offs to           Offs to  
      Net       Average       Net       Average       Net       Average  
(in thousands)   Charge-Offs   Loans (1)   Charge-Offs   Loans (1)   Charge-Offs   Loans (1)
                         
NET CHARGE-OFFS BY CATEGORY                                
Owner occupied CRE   $   168       .04   $   564       .16   $   304       .08
Income producing CRE       157       .06         (23 )     (.01       211       .10  
Commercial & industrial       453       .18         (392 )     (.18       283       .14  
Commercial construction       (86 )     (.09       22       .02         286       .33  
  Total commercial       692       .07         171       .02         1,084       .13  
Residential mortgage       (256 )     (.09)         829       .32         50       .02  
Home equity lines of credit       267       .16         253       .17         632       .43  
Residential construction       134       .14         (8 )     (.01       (103 )     (.12
Consumer installment       522       .34         485       .33         475       .33  
  Total   $   1,359       .08     $   1,730       .11     $   2,138       .14  
                                     
                                     
NET CHARGE-OFFS BY MARKET                                
North Georgia   $   68       .02   $   428       .16   $   913       .33
Atlanta MSA       398       .12         1       -          (25 )     (.01)  
North Carolina       329       .24         575       .43         382       .28  
Coastal Georgia       432       .31         177       .13         196       .15  
Gainesville MSA       15       .03         (87 )     (.14       98       .16  
East Tennessee       (69 )     (.05       346       .28         378       .31  
South Carolina       (66 )     (.02       49       .02         (16 )     (.01
Specialized Lending       69       .04         (18 )     (.01       4       -   
Indirect auto       183       .15         259       .22         208       .19  
  Total   $   1,359       .08     $   1,730       .11     $   2,138       .14  
                                 
(1)  Annualized.

 
                   
UNITED COMMUNITY BANKS, INC.                  
Consolidated Statement of Income (Unaudited)                  
                   
    Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
(in thousands, except per share data)     2016       2015       2016       2015    
                   
Interest revenue:                  
Loans, including fees   $   69,440     $   57,174     $   196,888     $   159,814    
Investment securities, including tax exempt of $134, $177, $449 and $516       15,418         12,801         48,039         36,896    
Deposits in banks and short-term investments       581         853         2,315         2,460    
Total interest revenue       85,439         70,828         247,242         199,170    
                   
Interest expense:                  
Deposits:                  
NOW       452         337         1,381         1,079    
Money market       1,347         981         3,661         2,460    
Savings       43         25         102         71    
Time       667         830         2,052         2,834    
Total deposit interest expense       2,509         2,173         7,196         6,444    
Short-term borrowings       98         99         278         279    
Federal Home Loan Bank advances       1,015         461         2,731         1,307    
Long-term debt       2,828         2,669         8,178         7,481    
Total interest expense       6,450         5,402         18,383         15,511    
Net interest revenue       78,989         65,426         228,859         183,659    
Provision for credit losses       (300 )       700         (800 )       3,400    
Net interest revenue after provision for credit losses       79,289         64,726         229,659         180,259    
                   
Fee revenue:                  
Service charges and fees       10,819         9,335         31,460         25,325    
Mortgage loan and other related fees       6,039         3,840         13,776         10,302    
Brokerage fees       1,199         1,200         3,369         3,983    
Gains from sales of government guaranteed loans       2,479         1,646         6,517         4,281    
Securities gains, net       261         325         922         1,877    
Loss from prepayment of debt       -         (256 )       -         (1,294 )  
Other        5,564         2,207         12,420         6,771    
Total fee revenue       26,361         18,297         68,464         51,245    
Total revenue       105,650         83,023         298,123         231,504    
                   
Operating expenses:                  
Salaries and employee benefits       36,478         29,342         103,112         83,749    
Communications and equipment       4,919         3,963         13,602         10,538    
Occupancy       5,132         4,013         14,393         10,706    
Advertising and public relations       1,088         812         3,275         2,689    
Postage, printing and supplies       1,451         1,049         4,029         2,980    
Professional fees       3,160         2,668         9,049         6,844    
FDIC assessments and other regulatory charges       1,412         1,136         4,453         3,643    
Amortization of intangibles       1,119         714         3,116         1,403    
Merger-related and other charges       3,152         5,744         6,981         8,917    
Other        6,112         4,828         17,958         14,281    
Total operating expenses       64,023         54,269         179,968         145,750    
Net income before income taxes       41,627         28,754         118,155         85,754    
Income tax expense       15,753         10,867         44,720         32,384    
Net income       25,874         17,887         73,435         53,370    
Preferred stock dividends and discount accretion       -         25         21         42    
Net income available to common shareholders   $   25,874     $   17,862     $   73,414     $   53,328    
                                   
Earnings per common share:                                  
  Basic    $   .36      $   .27     $   1.02      $   .84    
  Diluted     .36       .27         1.02       .84    
Weighted average common shares outstanding:                              
  Basic       71,556         66,294         71,992         63,297    
  Diluted       71,561         66,300         71,996         63,302    
                   

 
         
UNITED COMMUNITY BANKS, INC.        
Consolidated Balance Sheet (Unaudited)        
         
    September 30,   December 31,
(in thousands, except share and per share data)     2016       2015  
         
ASSETS        
  Cash and due from banks   $   94,744     $   86,912  
  Interest-bearing deposits in banks       131,415         153,451  
  Cash and cash equivalents       226,159         240,363  
  Securities available for sale        2,215,113         2,291,511  
  Securities held to maturity (fair value $357,550 and $371,658)       344,917         364,696  
  Mortgage loans held for sale (includes $279 and $0 at fair value)       30,814         24,231  
  Loans, net of unearned income       6,725,110         5,995,441  
  Less allowance for loan losses       (62,961 )       (68,448 )
  Loans, net       6,662,149         5,926,993  
  Premises and equipment, net       189,302         178,165  
  Bank owned life insurance       123,129         105,493  
  Accrued interest receivable       26,494         25,786  
  Net deferred tax asset       156,408         197,613  
  Derivative financial instruments       25,463         20,082  
  Goodwill and other intangible assets       157,288         147,420  
  Other assets       140,379         94,075  
  Total assets   $   10,297,615     $   9,616,428  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
  Deposits:        
  Demand   $   2,568,756     $   2,204,755  
  NOW       1,821,353         1,975,884  
  Money market       1,798,548         1,599,637  
  Savings       544,029         471,129  
  Time       1,349,543         1,282,803  
  Brokered       359,370         338,985  
  Total deposits       8,441,599         7,873,193  
  Short-term borrowings       35,050         16,640  
  Federal Home Loan Bank advances       449,407         430,125  
  Long-term debt       174,959         163,836  
  Derivative financial instruments       32,548         28,825  
  Accrued expenses and other liabilities       84,759         85,524  
  Total liabilities       9,218,322         8,598,143  
Shareholders' equity:        
  Preferred stock, $1 par value; 10,000,000 shares authorized;        
  Series H; $1,000 stated value; 0 and 9,992 shares issued and outstanding       -         9,992  
  Common stock, $1 par value; 150,000,000 shares authorized;        
  70,861,025 and 66,198,477 shares issued and outstanding       70,861         66,198  
  Common stock, non-voting, $1 par value; 26,000,000 shares authorized;        
  0 and 5,285,516 shares issued and outstanding       -         5,286  
  Common stock issuable; 520,014 and 458,953 shares       7,179         6,779  
  Capital surplus       1,274,909         1,286,361  
  Accumulated deficit       (273,314 )       (330,879 )
  Accumulated other comprehensive loss       (342 )       (25,452 )
  Total shareholders' equity       1,079,293         1,018,285  
  Total liabilities and shareholders' equity   $   10,297,615     $   9,616,428  
         

 
                         
UNITED COMMUNITY BANKS, INC.                        
Average Consolidated Balance Sheets and Net Interest Analysis                  
For the Three Months Ended September 30,