Diluted earnings per share up 52 percent, to 38 cents, from fourth quarter 2015

Excluding merger-related and other non-operating charges, diluted operating EPS up 21 percent, to 40 cents
  • Return on assets of 1.03 percent, or 1.10 percent excluding merger-related and other charges
  • Loan growth of $196 million from the third quarter, or 12 percent annualized
  • Core transaction deposits up $62.4 million from the third quarter, or 4 percent annualized
  • Efficiency ratio of 57.7 percent, or 56.6 percent excluding merger-related and other charges

BLAIRSVILLE, Ga., Jan. 25, 2017 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today announced strong fourth quarter results with solid loan growth, effective expense management, sound credit quality and improvement in nearly every other performance measure.  Net income grew to $27.2 million, or 38 cents per diluted share, compared with $18.2 million, or 25 cents per diluted share, for the fourth quarter of 2015.  Net income for the full year of 2016 was $100.7 million, or $1.40 per diluted share.  This compares with $71.6 million, or $1.09 per diluted share, for 2015.

On an operating basis, net income rose to $28.9 million for the fourth quarter of 2016 compared with $23.8 million for the fourth quarter of 2015.  Fourth quarter 2016 operating net income excludes pre-tax merger-related charges of $1.14 million and the associated tax benefit of $432,000, as well as a tax charge of $976,000 related to the cancellation of nonqualified stock options.

Fourth quarter 2015 operating net income excludes $3.11 million in pre-tax merger-related charges and $5.97 million in pre-tax charges for impairment on properties acquired for future expansion.  The tax benefit on the fourth quarter 2015 charges was $3.49 million.  On a per diluted share basis, operating net income was 40 cents for the fourth quarter of 2016 compared with 33 cents for the fourth quarter of 2015.  For the full year of 2016, operating net income was $106.7 million, or $1.48 per diluted share, compared with $83.1 million, or $1.27 per diluted share, for 2015.

At December 31, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.3 percent; Total Risk-Based of 12.1 percent; Common Equity Tier 1 Risk-Based of 11.3 percent; and, Tier 1 Leverage of 8.5 percent.

"Our fourth quarter results mark a solid ending to an exceptional year for United Community Banks," said Jimmy Tallent, chairman and chief executive officer.  "Our bankers continue to make progress in improving our financial performance.  A year ago we set a goal of achieving a 1.10 percent operating return on assets by the fourth quarter of 2016.  We knew that achieving this goal would not be easy, but we also knew our determined bankers and how they react to a challenge.  I am proud to say that in the fourth quarter, not only did they achieve that goal, but they also pushed our operating return on tangible common equity to 12.5 percent and improved our operating efficiency ratio to 56.6 percent.  I could not be more pleased."  Operating performance measures exclude the charges mentioned above.  Including those charges, return on assets was 1.03 percent, return on common equity was 9.89 percent and the efficiency ratio was 57.7 percent.

"In the fourth quarter we completed all systems conversions for Tidelands Bank, and we have achieved all expected cost savings from that acquisition," Tallent said.  "We are proud that Tidelands is now fully integrated with United Community Bank, operating under our brand in coastal South Carolina.

"Fourth quarter loan production was $747 million," Tallent added.  "Linked-quarter loan growth of $196 million, or 12 percent annualized, was slightly above our 2016 loan growth target of mid-to-upper single-digit.  Our community banks originated $490 million in loans while specialized lending produced $216 million.  United's specialized lending area encompasses commercial real estate, middle market, SBA, asset-based lending, senior living and builder finance."

Fourth quarter net interest revenue totaled $80.9 million, up $1.9 million from the third quarter and up $7.2 million from the fourth quarter of 2015.  The increase from both periods reflects loan growth, and the increase from a year ago also includes net interest revenue from recent acquisitions.

The taxable-equivalent net interest margin of 3.34 percent remained the same as in the third quarter of 2016 and the fourth quarter of 2015.  The effect of rising short-term interest rates and lower wholesale borrowings offset the impact of competitive loan pricing.

No provision for credit losses was required for the fourth quarter.  This compares with a provision recovery of $300,000 in the third quarter, and a provision of $300,000 in the fourth quarter of 2015.  Fourth quarter net charge-offs totaled $1.5 million, compared with $1.4 million in the third quarter and $1.3 million in the fourth quarter of 2015. Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans. Nonperforming assets were .28 percent of total assets at December 31, 2016, compared with .30 percent at September 30, 2016 and .29 percent at December 31, 2015.

"Our lack of need for a provision for loan losses reflects continued strong credit quality and a low overall level of net charge-offs," Tallent commented.  "Our credit quality indicators remain favorable and our outlook is for positive credit quality and low provision levels through 2017.  We expect to gradually increase provision levels with loan growth during the year, which is expected to slightly decrease our allowance and the related ratio to total loans."

Fourth quarter fee revenue totaled $25.2 million, a decrease of $1.13 million from the third quarter and up $3.95 million from a year ago.  Mortgage fees were up $477,000 from the third quarter, and $3.23 million from a year ago.  Gains from sales of SBA loans were up $549,000 from the third quarter, and up $1.03 million from a year ago due to continued growth in SBA lending.  Offsetting the mortgage and SBA business growth from the third quarter of 2016 were decreases in merchant services and brokerage fees, and in deposit account fees and service charges.  Customer derivative fees were also down from the record level achieved in the third quarter.

"The rise in mortgage fees reflects our strategic investment in additional mortgage lenders where we see opportunities to gain market share and higher spreads on loan sales," Tallent said.  "Also, our SBA lending business remains a top priority.  In the fourth quarter we sold $41 million in loans compared with $32 million in the third quarter and $25 million in the fourth quarter of 2015."

Operating expenses were $61.3 million for the fourth quarter, compared with $64.0 million for the third quarter and $65.5 million for the fourth quarter of 2015.  Included in operating expenses are merger-related and impairment charges of $1.14 million in the fourth quarter, $3.15 million in the third quarter and $9.08 million in the fourth quarter of 2015.  Excluding these charges, fourth quarter operating expenses were $60.2 million compared with $60.9 million for the third quarter, and $56.4 million a year ago.

The decrease in operating expenses from the third quarter is mostly in salaries and employee benefits costs and a decrease in professional fees.  The increase from a year ago reflects the additional operating expenses of Tidelands Bank following its acquisition on July 1, 2016.  United's financial results include operating expenses of acquired companies beginning on their respective acquisition dates.  The benefit of higher revenue and the lower level of fourth quarter expenses compared to the third quarter also improved the operating efficiency ratio to 56.6 percent, compared to 57.8 percent in the third quarter and 59.4 percent a year ago.

Tallent concluded, "I am very proud of our bankers and the exceptional results they achieved in 2016.  They steadily improved financial performance while providing the best in customer service, which is the foundation of our success and the core of everything we do. With our strong earnings momentum, a high-quality balance sheet and strategic investments in our franchise, I look forward with optimism going into 2017."

Conference CallUnited will hold a conference call today, Wednesday, January 25, 2017, 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 47644518.  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 $10.7 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the southeast region's largest full-service banks, operating 139 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.  Respected national research firms consistently recognize United Community Bank for outstanding customer service: In 2014, 2015 and 2016, J.D. Power ranked United Community Bank first in customer satisfaction in the Southeast. In 2017, for the fourth consecutive year, Forbes included United among their list of the top 100  Best Banks in America.  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                          
                           
                      Fourth  
    2016       2015     Quarter  
    Fourth       Third       Second       First       Fourth     2016-2015  
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter     Change  
INCOME SUMMARY                          
Interest revenue $ 87,778     $ 85,439     $ 81,082     $ 80,721     $ 79,362          
Interest expense   6,853       6,450       6,164       5,769       5,598          
Net interest revenue   80,925       78,989       74,918       74,952       73,764     10   %  
Provision for credit losses   -       (300 )     (300 )     (200 )     300          
Fee revenue   25,233       26,361       23,497       18,606       21,284     19      
Total revenue   106,158       105,650       98,715       93,758       94,748     12      
Expenses   61,321       64,023       58,060       57,885       65,488     (6 )    
Income before income tax expense   44,837       41,627       40,655       35,873       29,260     53      
Income tax expense   17,616       15,753       15,389       13,578       11,052     59      
Net income   27,221       25,874       25,266       22,295       18,208     50      
Preferred dividends   -       -       -       21       25          
Net income available to common shareholders $     27,221     $     25,874     $     25,266     $     22,274     $     18,183       50      
Merger-related and other charges   1,141       3,152       1,176       2,653       9,078          
Income tax benefit of merger-related and other charges   (432 )     (1,193 )     (445 )     (1,004 )     (3,486 )        
Impairment of deferred tax asset on cancelled non-   qualified stock options   976       -       -       -       -          
Net income available to common   shareholders - operating (1) $     28,906     $     27,833     $     25,997     $     23,923     $     23,775       22      
                           
PERFORMANCE MEASURES                          
Per common share:                          
Diluted net income - GAAP $ .38     $ .36     $ .35     $ .31     $ .25     52      
Diluted net income - operating  (1)   .40       .39       .36       .33       .33     21      
Cash dividends declared   .08       .08       .07       .07       .06          
Book value   15.06       15.12       14.80       14.35       14.02     7      
Tangible book value (3)   12.95       13.00       12.84       12.40       12.06     7      
                           
Key performance ratios:                          
Return on common equity - GAAP (2)(4)   9.89   %   9.61   %   9.54   %   8.57   %   7.02   %    
Return on common equity - operating (1)(2)(4)   10.51       10.34       9.81       9.20       9.18          
Return on tangible common equity - operating (1)(2)( 3)(4)   12.47       12.45       11.56       10.91       10.87          
Return on assets - GAAP (4)   1.03       1.00       1.04       .93       .76          
Return on assets - operating (1)(4)   1.10       1.08       1.07       1.00       .99          
Dividend payout ratio - GAAP   21.05       22.22       20.00       22.58       24.00          
Dividend payout ratio - operating (1)   20.00       20.51       19.44       21.21       18.18          
Net interest margin (fully taxable equivalent) (4)   3.34       3.34       3.35       3.41       3.34          
Efficiency ratio - GAAP   57.65       60.78       59.02       61.94       68.97          
Efficiency ratio - operating  (1)   56.58       57.79       57.82       59.10       59.41          
Average equity to average assets   10.35       10.38       10.72       10.72       10.68          
Average tangible equity to average assets (3)   9.04       8.98       9.43       9.41       9.40          
Average tangible common equity to   average assets (3)   9.04       8.98       9.43       9.32       9.29          
Tangible common equity to risk-weighted   assets (3)(5)   11.89       12.22       12.87       12.77       12.82          
                           
ASSET QUALITY                          
Nonperforming loans $ 21,539     $ 21,572     $ 21,348     $ 22,419     $ 22,653     (5 )    
Foreclosed properties   7,949       9,187       6,176       5,163       4,883     63      
Total nonperforming assets (NPAs)   29,488       30,759       27,524       27,582       27,536     7      
Allowance for loan losses   61,422       62,961       64,253       66,310       68,448     (10 )    
Net charge-offs   1,539       1,359       1,730       2,138       1,302     18      
Allowance for loan losses to loans   .89   %   .94   %   1.02   %   1.09   %   1.14   %      
Net charge-offs to average loans (4)   .09       .08       .11       .14       .09          
NPAs to loans and foreclosed properties   .43       .46       .44       .45       .46          
NPAs to total assets   .28       .30       .28       .28       .29          
                           
AVERAGE BALANCES ($ in millions)                          
Loans $ 6,814     $ 6,675     $ 6,151     $ 6,004     $ 5,975     14      
Investment securities   2,690       2,610       2,747       2,718       2,607     3      
Earning assets   9,665       9,443       9,037       8,876       8,792     10      
Total assets   10,484       10,281       9,809       9,634       9,558     10      
Deposits   8,552       8,307       7,897       7,947       8,028     7      
Shareholders' equity   1,085       1,067       1,051       1,033       1,021     6      
Common shares - basic (thousands)   71,641       71,556       72,202       72,162       72,135     (1 )    
Common shares - diluted (thousands)   71,648       71,561       72,207       72,166       72,140     (1 )    
                           
AT PERIOD END ($ in millions)                          
Loans $ 6,921     $ 6,725     $ 6,287     $ 6,106     $ 5,995     15      
Investment securities   2,762       2,560       2,677       2,757       2,656     4      
Total assets   10,709       10,298       9,928       9,781       9,616     11      
Deposits   8,638       8,442       7,857       7,960       7,873     10      
Shareholders' equity   1,076       1,079       1,060       1,034       1,018     6      
Common shares outstanding (thousands)   70,899       70,861       71,122       71,544       71,484     (1 )    
                           
(1)  Excludes merger-related charges, a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and fourth quarter 2015 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)  Fourth quarter 2016 ratio is preliminary.  
                           

 
UNITED COMMUNITY BANKS, INC.                
Financial Highlights                
Selected Financial Information                
                 
    For the Twelve      
    Months Ended   YTD  
    December 31,   2016-2015  
(in thousands, except per share data)     2016       2015       Change  
INCOME SUMMARY                
Interest revenue   $ 335,020     $ 278,532          
Interest expense     25,236       21,109          
Net interest revenue     309,784       257,423     20   %  
Provision for credit losses     (800 )     3,700          
Fee revenue     93,697       72,529     29      
Total revenue     404,281       326,252     24      
Expenses     241,289       211,238     14      
Income before income tax expense     162,992       115,014     42      
Income tax expense     62,336       43,436     44      
Net income     100,656       71,578     41      
Preferred dividends     21       67          
Net income available to common shareholders   $   100,635     $     71,511       41      
Merger-related and other charges     8,122       17,995          
Income tax benefit of merger-related and other charges     (3,074 )     (6,388 )        
Impairment of deferred tax asset on cancelled non-   qualified stock options     976       -          
Net income available to common   shareholders - operating (1)   $   106,659     $     83,118       28      
                 
PERFORMANCE MEASURES                
Per common share:                
Diluted net income - GAAP   $ 1.40     $ 1.09     28      
Diluted net income - operating  (1)     1.48       1.27     17      
Cash dividends declared     .30       .22          
Book value     15.06       14.02     7      
Tangible book value (3)     12.95       12.06     7      
                 
Key performance ratios:                
Return on common equity - GAAP (2)(4)     9.41   %   8.15   %    
Return on common equity - operating (1)(2)(4)     9.98       9.48          
Return on tangible common equity - operating (1)(2)(3)(4)   11.86       10.24          
Return on assets - GAAP (4)     1.00       .85          
Return on assets - operating (1)(4)     1.06       .98          
Dividend payout ratio - GAAP     21.43       20.18          
Dividend payout ratio - operating (1)     20.27       17.32          
Net interest margin (fully taxable equivalent) (4)     3.36       3.30          
Efficiency ratio - GAAP     59.80       63.96          
Efficiency ratio - operating  (1)     57.78       58.51          
Average equity to average assets     10.54       10.27          
Average tangible equity to average assets (3)     9.21       9.74          
Average tangible common equity to   average assets (3)     9.19       9.66          
Tangible common equity to risk-weighted   assets (3)(5)     11.89       12.82          
                 
ASSET QUALITY                
Nonperforming loans   $ 21,539     $ 22,653     (5 )    
Foreclosed properties     7,949       4,883     63      
Total nonperforming assets (NPAs)     29,488       27,536     7      
Allowance for loan losses     61,422       68,448     (10 )    
Net charge-offs     6,766       6,259     8      
Allowance for loan losses to loans     .89   %   1.14   %      
Net charge-offs to average loans (4)     .11       .12          
NPAs to loans and foreclosed properties     .43       .46          
NPAs to total assets     .28       .29          
                 
AVERAGE BALANCES ($ in millions)                
Loans   $ 6,413     $ 5,298     21      
Investment securities     2,691       2,368     14      
Earning assets     9,257       7,834     18      
Total assets     10,054       8,462     19      
Deposits     8,177       7,055     16      
Shareholders' equity     1,059       869     22      
Common shares - basic (thousands)     71,910       65,488     10      
Common shares - diluted (thousands)     71,915       65,492     10      
                 
AT PERIOD END ($ in millions)                
Loans   $ 6,921     $ 5,995     15      
Investment securities     2,762       2,656     4      
Total assets     10,709       9,616     11      
Deposits     8,638       7,873     10      
Shareholders' equity     1,076       1,018     6      
Common shares outstanding (thousands)     70,899       71,484     (1 )    
                 
(1)  Excludes merger-related charges, a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and fourth quarter 2015 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)  Fourth quarter 2016 ratio is preliminary.  
                 

 
UNITED COMMUNITY BANKS, INC.                      
Selected Financial Information                      
For the Years Ended December 31,                      
                       
(in thousands, except per share data)     2016       2015       2014     2013       2012  
INCOME SUMMARY                      
Interest revenue   $ 335,020     $ 278,532     $ 248,432   $ 245,840     $ 265,977  
Interest expense     25,236       21,109       25,551     27,682       37,909  
Net interest revenue     309,784       257,423       222,881     218,158       228,068  
Provision for credit losses     (800 )     3,700       8,500     65,500       62,500  
Fee revenue     93,697       72,529       55,554     56,598       56,112  
Total revenue     404,281       326,252       269,935     209,256       221,680  
Expenses     241,289       211,238       162,865     174,304       186,774  
Income before income tax expense     162,992       115,014       107,070     34,952       34,906  
Income tax expense (benefit)     62,336       43,436       39,450     (238,188 )     1,050  
Net income     100,656       71,578       67,620     273,140       33,856  
Preferred dividends     21       67       439     12,078       12,148  
Net income available to common shareholders   $   100,635     $     71,511     $     67,181   $   261,062     $     21,708  
Merger-related and other charges     8,122       17,995       -     -       -  
Income tax benefit of merger-related and other charges     (3,074 )     (6,388 )     -     -       -  
Impairment of deferred tax asset on cancelled non-qualified stock options     976       -       -     -       -  
Net income available to common shareholders - operating (1)   $   106,659     $     83,118     $     67,181   $   261,062     $     21,708  
                       
PERFORMANCE MEASURES                      
Per common share:                      
Diluted net income - GAAP   $ 1.40     $ 1.09     $ 1.11   $ 4.44     $  .38  
Diluted net income - operating  (1)     1.48       1.27       1.11     4.44     .38  
Cash dividends declared     .30       .22       .11     -       -  
Book value     15.06       14.02       12.20     11.30       6.67  
Tangible book value (3)     12.95       12.06       12.15     11.26       6.57  
                       
Key performance ratios:                      
Return on common equity - GAAP (2)     9.41   %   8.15   %   9.17 %   46.72   %   5.43
Return on common equity - operating (1)(2)     9.98       9.48       9.17     46.72       5.43  
Return on tangible common equity - operating (1)(2)(3)     11.86       10.24       9.32     47.35       6.27  
Return on assets - GAAP     1.00       .85       .91     3.86       .49  
Return on assets - operating (1)     1.06       .98       .91     3.86       .49  
Dividend payout ratio - GAAP     21.43       20.18       9.91     -       -  
Dividend payout ratio - operating (1)     20.27       17.32       9.91     -       -  
Net interest margin (fully taxable equivalent)     3.36       3.30       3.26     3.30       3.51  
Efficiency ratio - GAAP     59.80       63.96       58.26     63.14       65.43  
Efficiency ratio - operating  (1)     57.78       58.51       58.26     63.14       65.43  
Average equity to average assets     10.54       10.27       9.69     10.35       8.47  
Average tangible equity to average assets (3)     9.21       9.74       9.67     10.31       8.38  
Average tangible common equity to average assets (3)     9.19       9.66       9.60     7.55       5.54  
Tangible common equity to risk-weighted assets (3)(4)     11.89       12.82       13.82     13.17       8.26  
                       
ASSET QUALITY                      
Nonperforming loans   $ 21,539     $ 22,653     $ 17,881   $ 26,819     $ 109,894  
Foreclosed properties     7,949       4,883       1,726     4,221       18,264  
Total nonperforming assets (NPAs)     29,488       27,536       19,607     31,040       128,158  
Allowance for loan losses     61,422       68,448       71,619     76,762       107,137  
Net charge-offs     6,766       6,259       13,879     93,710       69,831  
Allowance for loan losses to loans     .89   %   1.14   %   1.53 %   1.77   %   2.57 %
Net charge-offs to average loans     .11       .12       .31     2.22       1.69  
NPAs to loans and foreclosed properties     .43       .46       .42     .72       3.06  
NPAs to total assets     .28       .29       .26     .42       1.88  
                           
AVERAGE BALANCES ($ in millions)                      
Loans   $ 6,413     $ 5,298     $ 4,450   $ 4,254     $ 4,166  
Investment securities     2,691       2,368       2,274     2,190       2,089  
Earning assets     9,257       7,834       6,880     6,649       6,547  
Total assets     10,054       8,462       7,436     7,074       6,865  
Deposits     8,177       7,055       6,228     6,027       5,885  
Shareholders' equity     1,059       869       720     732       582  
Common shares - basic (thousands)     71,910       65,488       60,588     58,787       57,857  
Common shares - diluted (thousands)     71,915       65,492       60,590     58,845       57,857  
                       
AT PERIOD END ($ in millions)                      
Loans   $ 6,921     $ 5,995     $ 4,672   $ 4,329     $ 4,175  
Investment securities     2,762       2,656       2,198     2,312       2,079  
Total assets     10,709       9,616       7,558     7,424       6,801  
Deposits     8,638       7,873       6,335     6,202       5,952  
Shareholders' equity     1,076       1,018       740     796       581  
Common shares outstanding (thousands)     70,899       71,484       60,259     59,432       57,741  
                       
(1)  Excludes merger-related charges, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options  and 2015 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)  2016 ratio is preliminary.  
                       

 
UNITED COMMUNITY BANKS, INC.                      
Non-GAAP Performance Measures Reconciliation                      
Selected Financial Information                      
                       
                       
    2016       2015      
    Fourth       Third       Second       First       Fourth      
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter    
                       
Expense reconciliation                      
Expenses (GAAP) $ 61,321     $ 64,023     $ 58,060     $ 57,885     $ 65,488      
Merger-related and other charges   (1,141 )     (3,152 )     (1,176 )     (2,653 )     (9,078 )    
Expenses - operating $ 60,180     $ 60,871     $ 56,884     $ 55,232     $ 56,410      
                       
Net income reconciliation                      
Net income (GAAP) $ 27,221     $ 25,874     $ 25,266     $ 22,295     $ 18,208      
Merger-related and other charges   1,141       3,152       1,176       2,653       9,078      
Income tax benefit of merger-related and other charges   (432 )     (1,193 )     (445 )     (1,004 )     (3,486 )    
Impairment of deferred tax asset on cancelled non-qualified stock options   976       -       -       -       -      
Net income - operating $ 28,906     $ 27,833     $ 25,997     $ 23,944     $ 23,800      
                       
Net income available to common shareholders reconciliation                      
Net income available to common shareholders (GAAP) $ 27,221     $ 25,874     $ 25,266     $ 22,274     $ 18,183      
Merger-related and other charges   1,141       3,152       1,176       2,653       9,078      
Income tax benefit of merger-related and other charges   (432 )     (1,193 )     (445 )     (1,004 )     (3,486 )    
Impairment of deferred tax asset on cancelled non-qualified stock options   976       -       -       -       -      
Net income available to common shareholders - operating $ 28,906     $ 27,833     $ 25,997     $ 23,923     $ 23,775      
                       
Diluted income per common share reconciliation                      
Diluted income per common share (GAAP)   $  .38     $ .36     $ .35     $ .31     $ .25      
Merger-related and other charges   .01       .03       .01       .02       .08      
Impairment of deferred tax asset on cancelled non-qualified stock options   .01       -       -       -       -      
Diluted income per common share - operating $ .40     $ .39      $ .36     $ .33     $ .33      
                       
Book value per common share reconciliation                      
Book value per common share (GAAP) $ 15.06     $ 15.12     $ 14.80     $ 14.35     $ 14.02      
Effect of goodwill and other intangibles   (2.11 )     (2.12 )     (1.96 )     (1.95 )     (1.96 )    
Tangible book value per common share $ 12.95     $ 13.00     $ 12.84     $ 12.40     $ 12.06      
                       
Return on tangible common equity reconciliation                      
Return on common equity (GAAP)   9.89   %   9.61   %   9.54   %   8.57   %   7.02   %  
Merger-related and other charges   .26       .73       .27       .63       2.16      
Impairment of deferred tax asset on cancelled non-qualified stock options   .36       -       -       -       -      
Return on common equity - operating   10.51       10.34       9.81       9.20       9.18      
Effect of goodwill and other intangibles   1.96       2.11       1.75       1.71       1.69      
Return on tangible common equity - operating   12.47   %   12.45   %   11.56   %   10.91   %   10.87   %  
                       
Return on assets reconciliation                      
Return on assets (GAAP)   1.03   %   1.00   %   1.04   %   .93   %   .76   %  
Merger-related and other charges   .03       .08       .03       .07       .23      
Impairment of deferred tax asset on cancelled non-qualified stock options   .04       -       -       -       -      
Return on assets - operating   1.10   %   1.08   %   1.07   %   1.00   %   .99   %  
                       
Dividend payout ratio reconciliation                      
Dividend payout ratio (GAAP)   21.05   %   22.22   %   20.00   %   22.58   %   24.00   %  
Merger-related and other charges   (.54 )     (1.71 )     (.56 )     (1.37 )     (5.82 )    
Impairment of deferred tax asset on cancelled non-qualified stock options   (.51 )     -       -       -       -      
Dividend payout ratio - operating   20.00   %   20.51   %   19.44   %   21.21   %   18.18   %  
                       
Efficiency ratio reconciliation                      
Efficiency ratio (GAAP)   57.65   %   60.78   %   59.02   %   61.94   %   68.97   %  
Merger-related and other charges   (1.07 )     (2.99 )     (1.20 )     (2.84 )     (9.56 )    
Efficiency ratio - operating   56.58   %   57.79   %   57.82   %   59.10   %   59.41   %  
                       
Average equity to assets reconciliation                      
Equity to assets (GAAP)   10.35   %   10.38   %   10.72   %   10.72   %   10.68   %  
Effect of goodwill and other intangibles   (1.31 )     (1.40 )     (1.29 )     (1.31 )     (1.28 )    
Tangible equity to assets   9.04       8.98       9.43       9.41       9.40      
Effect of preferred equity   -       -       -       (.09 )     (.11 )    
Tangible common equity to assets   9.04   %   8.98   %   9.43   %   9.32   %   9.29   %  
                       
Tangible common equity to risk-weighted assets reconciliation (1)                      
Tier 1 capital ratio (Regulatory)   11.27   %   11.04   %   11.44   %   11.32   %   11.45   %  
Effect of other comprehensive income   (.34 )     -       (.06      (.25 )     (.38    
Effect of deferred tax limitation   1.27       1.50       1.63       1.85       2.05      
Effect of trust preferred   (.25 )     (.26 )     (.08 )     (.08 )     (.08 )    
Effect of preferred equity   -       -       -       -       (.15 )    
Basel III intangibles transition adjustment   (.06 )     (.06 )     (.06 )     (.07 )     (.10 )    
Basel III disallowed investments   -       -       -       -       .03      
Tangible common equity to risk-weighted assets   11.89   %   12.22   %   12.87   %   12.77   %   12.82   %  
                       
(1)  Fourth quarter 2016 ratios are preliminary.                      
                       

 
UNITED COMMUNITY BANKS, INC.                      
Non-GAAP Performance Measures Reconciliation                      
Selected Financial Information              
                       
                       
    For the Twelve Months Ended December 31,    
   
(in thousands, except per share data)   2016       2015       2014       2013       2012      
                       
Expense reconciliation                      
Expenses (GAAP) $ 241,289     $ 211,238     $ 162,865     $ 174,304     $ 186,774      
Merger-related and other charges   (8,122 )     (17,995 )     -       -       -      
Expenses - operating $ 233,167     $ 193,243     $ 162,865     $ 174,304     $ 186,774      
                       
Net income reconciliation                      
Net income (GAAP) $ 100,656     $ 71,578     $ 67,620     $ 273,140     $ 33,856      
Merger-related and other charges   8,122       17,995       -       -       -      
Income tax benefit of merger-related and other charges   (3,074 )     (6,388 )     -       -       -      
Impairment of deferred tax asset on cancelled non-qualified stock options   976       -       -       -       -      
Net income - operating $ 106,680     $ 83,185     $ 67,620     $ 273,140     $ 33,856      
                       
Net income available to common shareholders reconciliation                      
Net income available to common shareholders (GAAP) $ 100,635     $ 71,511     $ 67,181     $ 261,062     $ 21,708      
Merger-related and other charges   8,122       17,995       -       -       -      
Income tax benefit of merger-related and other charges   (3,074 )     (6,388 )     -       -       -      
Impairment of deferred tax asset on cancelled non-qualified stock options   976       -       -       -       -      
Net income available to common shareholders - operating $ 106,659     $ 83,118     $ 67,181     $ 261,062     $ 21,708      
                       
Diluted income per common share reconciliation                      
Diluted income per common share (GAAP) $ 1.40     $ 1.09     $ 1.11     $ 4.44     $ .38      
Merger-related and other charges   .07       .18       -       -       -      
Impairment of deferred tax asset on cancelled non-qualified stock options   .01       -       -       -       -      
Diluted income per common share - operating $ 1.48     $ 1.27     $ 1.11     $ 4.44     $ .38      
                       
Book value per common share reconciliation                      
Book value per common share (GAAP) $ 15.06     $ 14.02     $ 12.20     $ 11.30     $ 6.67      
Effect of goodwill and other intangibles   (2.11 )     (1.96 )     (.05 )     (.04 )     (.10 )    
Tangible book value per common share $ 12.95     $ 12.06     $ 12.15     $ 11.26     $ 6.57      
                       
Return on tangible common equity reconciliation                      
Return on common equity (GAAP)   9.41   %   8.15   %   9.17   %   46.72   %   5.43   %  
Merger-related and other charges   .48       1.33       -       -       -      
Impairment of deferred tax asset on cancelled non-qualified stock options   .09       -       -       -       -      
Return on common equity - operating   9.98       9.48       9.17       46.72       5.43      
Effect of goodwill and other intangibles   1.88       .76       .15       .63       .84      
Return on tangible common equity - operating   11.86   %   10.24   %   9.32   %   47.35   %   6.27   %  
                       
Return on assets reconciliation                      
Return on assets (GAAP)   1.00   %   .85   %   .91   %   3.86   %   .49   %  
Merger-related and other charges   .05       .13       -       -       -      
Impairment of deferred tax asset on cancelled non-qualified stock options   .01                          
Return on assets - operating   1.06   %   .98   %   .91   %   3.86   %   .49   %  
                       
Dividend payout ratio reconciliation                      
Dividend payout ratio (GAAP)   21.43   %   20.18   %   9.91   %   -   %   -   %  
Merger-related and other charges   (1.02 )     (2.86 )     -       -       -      
Impairment of deferred tax asset on cancelled non-qualified stock options   (.14 )     -       -       -       -      
Dividend payout ratio - operating   20.27   %   17.32   %   9.91   %   -   %   -   %  
                       
Efficiency ratio reconciliation                      
Efficiency ratio (GAAP)   59.80   %   63.96   %   58.26   %   63.14   %   65.43   %  
Merger-related and other charges   (2.02 )     (5.45 )     -       -       -      
Efficiency ratio - operating   57.78   %   58.51   %   58.26   %   63.14   %   65.43   %  
                       
Average equity to assets reconciliation                      
Equity to assets (GAAP)   10.54   %   10.27   %   9.69   %   10.35   %   8.47   %  
Effect of goodwill and other intangibles   (1.33 )     (.53 )     (.02 )     (.04 )     (.09 )    
Tangible equity to assets   9.21       9.74       9.67       10.31       8.38      
Effect of preferred equity   (.02 )     (.08 )     (.07 )     (2.76 )     (2.84 )    
Tangible common equity to assets   9.19   %   9.66   %   9.60   %   7.55   %   5.54   %  
                       
Tangible common equity to risk-weighted assets reconciliation (1)                      
Tier 1 capital ratio (Regulatory)   11.27   %   11.45   %   12.06   %   12.74   %   14.16   %  
Effect of other comprehensive income   (.34 )     (.38 )     (.35 )     (.39 )     (.51 )    
Effect of deferred tax limitation   1.27       2.05       3.11       4.26       -      
Effect of trust preferred   (.25 )     (.08 )     (1.00 )     (1.04 )     (1.15 )    
Effect of preferred equity   -       (.15 )     -       (2.39 )     (4.24 )    
Basel III intangibles transition adjustment   (.06 )     (.10 )     -       -       -      
Basel III disallowed investments   -       .03       -       -       -      
Tangible common equity to risk-weighted assets   11.89   %   12.82   %   13.82   %   13.18   %   8.26   %  
                       
(1)  Fourth quarter 2016 ratios are preliminary.                      
                       

 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights                    
Loan Portfolio Composition at Period-End            
                     
                     
      2016     2015
      Fourth       Third       Second       First       Fourth  
(in millions)   Quarter   Quarter (1)   Quarter (1)   Quarter (1)   Quarter (1)
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,650   $ 1,587   $ 1,527   $ 1,509   $ 1,571
Income producing commercial RE     1,282     1,277     1,101     1,071     1,021
Commercial & industrial     1,070     994     925     854     785
Commercial construction     634     567     565     535     518
Total commercial     4,636     4,425     4,118     3,969     3,895
Residential mortgage     857     814     784     774     764
Home equity lines of credit     655     693     616     597     589
Residential construction     190     200     170     167     176
Consumer installment     583     593     599     599     571
Total loans   $ 6,921   $ 6,725   $ 6,287   $ 6,106   $ 5,995
                     
LOANS BY MARKET                    
North Georgia   $ 1,097   $ 1,110   $ 1,097   $ 1,097   $ 1,125
Atlanta MSA     1,399     1,332     1,314     1,257     1,259
North Carolina     545     548     543     543     549
Coastal Georgia     581     565     541     543     537
Gainesville MSA     248     236     240     248     254
East Tennessee     504     506     509     495     504
South Carolina     1,233     1,199     862     821     819
Specialized Lending     855     763     706     628     492
Indirect auto     459     466     475     474     456
Total loans   $ 6,921   $ 6,725   $ 6,287   $ 6,106   $ 5,995
                     
(1) Certain prior period amounts have been reclassified to conform to the current presentation.    
                     

 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights                    
Loan Portfolio Composition at Period-End            
                     
                     
      2016     2015   Linked Quarter Change   Year over Year Change
      Fourth       Third       Fourth      
(in millions)   Quarter   Quarter (1)   Quarter (1)    
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,650   $ 1,587   $ 1,571   $ 63     $ 79  
Income producing commercial RE     1,282     1,277     1,021     5       261  
Commercial & industrial     1,070     994     785     76       285  
Commercial construction     634     567     518     67       116  
Total commercial     4,636     4,425     3,895     211       741  
Residential mortgage     857     814     764     43       93  
Home equity lines of credit     655     693     589     (38 )     66  
Residential construction     190     200     176     (10 )     14  
Consumer installment     583     593     571     (10 )     12  
Total loans   $ 6,921   $ 6,725   $ 5,995     196       926  
                     
LOANS BY MARKET                    
North Georgia   $ 1,097   $ 1,110   $ 1,125     (13 )     (28 )
Atlanta MSA     1,399     1,332     1,259     67       140  
North Carolina     545     548     549     (3 )     (4 )
Coastal Georgia     581     565     537     16       44  
Gainesville MSA     248     236     254     12       (6 )
East Tennessee     504     506     504     (2 )     -  
South Carolina     1,233     1,199     819     34       414  
Specialized Lending     855     763     492     92       363  
Indirect auto     459     466     456     (7 )     3  
Total loans   $ 6,921   $ 6,725   $ 5,995     196       926  
                     
(1) Certain prior period amounts have been reclassified to conform to the current presentation.    
                     

 
UNITED COMMUNITY BANKS, INC.                
Financial Highlights                    
Loan Portfolio Composition at Year-End                
                     
                     
(in millions)     2016   2015 (1)   2014 (1)   2013 (1)   2012 (1)
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,650   $ 1,571   $ 1,257   $ 1,238   $ 1,254
Income producing commercial RE     1,282     1,021     767     807     891
Commercial & industrial     1,070     785     710     471     456
Commercial construction     634     518     364     336     407
Total commercial     4,636     3,895     3,098     2,852     3,008
Residential mortgage     857     764     614     604     517
Home equity lines of credit     655     589     456     430     375
Residential construction     190     176     131     136     122
Consumer installment     583     571     373     307     153
  Total loans   $ 6,921   $ 5,995   $ 4,672   $ 4,329   $ 4,175
                     
                     
LOANS BY MARKET                    
North Georgia   $ 1,097   $ 1,125   $ 1,163   $ 1,240   $ 1,364
Atlanta MSA     1,399     1,259     1,243     1,235     1,204
North Carolina     545     549     553     572     579
Coastal Georgia     581     537     456     423     400
Gainesville MSA     248     254     257     255     261
East Tennessee     504     504     280     280     283
South Carolina     1,233     819     30     4     -
Specialized Lending     855     492     421     124     46
Indirect auto     459     456     269     196     38
Total loans   $ 6,921   $ 5,995   $ 4,672   $ 4,329   $ 4,175
                     
                     
(1) Certain prior period amounts have been reclassified to conform to the current presentation.        

 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights                  
Credit Quality                  
                   
                   
    Fourth Quarter 2016
      Nonperforming       Foreclosed       Total  
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY            
Owner occupied CRE   $ 7,373     $ 3,145     $ 10,518  
Income producing CRE     1,324       36       1,360  
Commercial & industrial     966       -       966  
Commercial construction     1,538       2,977       4,515  
Total commercial     11,201       6,158       17,359  
Residential mortgage     6,368       1,260       7,628  
Home equity lines of credit     1,831       531       2,362  
Residential construction     776       -       776  
Consumer installment     1,363       -       1,363  
Total NPAs   $ 21,539     $ 7,949     $ 29,488  
                   
NONPERFORMING ASSETS BY MARKET              
North Georgia   $ 5,278     $ 856     $ 6,134  
Atlanta MSA     1,259       716       1,975  
North Carolina     4,750       632       5,382  
Coastal Georgia     1,778       -       1,778  
Gainesville MSA     279       -       279  
East Tennessee     2,354       675       3,029  
South Carolina     2,494       5,070       7,564  
Specialized Lending     2,072       -       2,072  
Indirect auto     1,275       -       1,275  
Total NPAs   $ 21,539     $ 7,949     $ 29,488  
                   
                   
NONPERFORMING ASSETS ACTIVITY              
Beginning Balance   $ 21,572     $ 9,187     $ 30,759  
Acquisitions     -       -       -  
Loans placed on non-accrual     6,346       -       6,346  
Payments received     (3,832 )     -       (3,832 )
Loan charge-offs     (1,293 )     -       (1,293 )
Foreclosures     (1,254 )     1,530       276  
Capitalized costs     -       26       26  
Property sales     -       (2,737 )     (2,737 )
Write downs     -       (254 )     (254 )
Net gains (losses) on sales     -       197       197  
Ending Balance   $ 21,539     $ 7,949     $ 29,488  
                   
                   
(1)  Annualized.  (2) Certain prior period amounts have been reclassified to conform to the current presentation.

 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights                  
Credit Quality                  
                   
                   
    Third Quarter 2016 (2)
      Nonperforming       Foreclosed       Total  
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY            
Owner occupied CRE   $ 7,693     $ 3,188     $ 10,881  
Income producing CRE     2,422       765       3,187  
Commercial & industrial     1,079       -       1,079  
Commercial construction     1,977       1,274       3,251  
Total commercial     13,171       5,227       18,398  
Residential mortgage     5,440       1,211       6,651  
Home equity lines of credit     1,194       514       1,708  
Residential construction     369       2,235       2,604  
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  
                   
                   
(1)  Annualized.  (2) Certain prior period amounts have been reclassified to conform to the current presentation.

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UNITED COMMUNITY BANKS, INC.            
Financial Highlights                  
Credit Quality                  
                   
                   
    Second Quarter 2016 (2)
      Nonperforming       Foreclosed       Total  
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY            
Owner occupied CRE   $ 8,218     $ 3,096     $ 11,314  
Income producing CRE     2,511       1,554       4,065  
Commercial & industrial     949       -       949  
Commercial construction     1,398       -       1,398  
Total commercial     13,076       4,650       17,726  
Residential mortgage     5,636       1,160       6,796  
Home equity lines of credit     1,308       83       1,391  
Residential construction     379       283       662  
Consumer installment     949       -       949  
Total NPAs   $ 21,348