Diluted earnings per share up 6 percent, to 33 cents, from first quarter 2016 Excluding merger-related and other non-operating charges, diluted operating EPS up 18 percent, to 39 cents
  • Net interest revenue of $83.6 million, up $8.6 million or 11 percent from year ago
  • Net interest margin of 3.45 percent, up 11 basis points from fourth quarter
  • Core transaction deposits up $189 million from the fourth quarter, or 13 percent annualized
  • Return on assets of .89 percent, or 1.07 percent excluding merger-related and other charges
  • Efficiency ratio of 59.3 percent, or 57.4 percent excluding merger-related and other charges

BLAIRSVILLE, Ga., April 26, 2017 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today announced strong first quarter results with solid margin improvement, effective expense management and sound credit quality.  Net income was $23.5 million, or 33 cents per diluted share, compared with $22.3 million, or 31 cents per diluted share, for the first quarter of 2016.

On an operating basis, net income rose to $28.2 million for the first quarter of 2017 compared with $23.9 million for the first quarter of 2016.  First quarter 2017 operating net income excludes pre-tax merger-related charges of $1.17 million and pre-tax charges related to branch closures of $831,000, net of the income tax benefit associated with the charges of $758,000. Also excluded is a non-cash tax charge of $3.4 million related to the cancellation of interest rate swaps that were designated as cash flow hedges.  The non-cash tax charge was previously included in other comprehensive income until the swaps matured or were canceled. 

First quarter 2016 operating net income excludes $2.65 million in pre-tax merger-related charges, net of the associated income tax benefit of $1.00 million.  On a per diluted share basis, operating net income was 39 cents for the first quarter of 2017 compared with 33 cents for the first quarter of 2016.

At March 31, 2017, preliminary regulatory capital ratios were as follows. Tier 1 Risk-Based of 11.5 percent; Total Risk-Based of 12.3 percent; Common Equity Tier 1 Risk-Based of 11.4 percent, and Tier 1 Leverage of 8.6 percent.

"We began 2017 with a solid first quarter," said Jimmy Tallent, chairman and chief executive officer.  "Excluding merger-related and other non-operating charges, operating net income per share was up 18 percent from a year ago to 39 cents, driven by strong loan and fee revenue growth and expense management.  Also excluding these charges, we held our operating efficiency ratio to 57.4 percent, the second best in a decade and surpassed only by the fourth quarter of 2016.  Including those charges, the efficiency ratio was 59.3 percent.

"While linked-quarter operating net income was down slightly, our margin expansion and disciplined expense management offset most of the seasonal declines in mortgage and SBA lending, as well as some seasonal decrease in loan growth," Tallent said.  "Our bankers made steady progress improving financial performance by growing core transaction deposits a healthy 13 percent in the first quarter, all while holding deposit pricing steady. 

"First quarter loan production was $615 million," Tallent added.  "Linked-quarter average loan growth was $89.8 million, or 5 percent annualized, reflecting a seasonal decrease from recent quarters.  End of period loans grew by $44.4 million.   Our community banks originated $423 million in loans, while our specialized lending area produced $151 million."  Specialized lending encompasses commercial real estate, middle market, SBA, asset-based lending, senior living and builder finance.

First quarter net interest revenue totaled $83.6 million, up $8.6 million from the first quarter of 2016 and up $2.6 million from the fourth quarter of 2016.  The increases from both periods reflect net interest margin expansions of 4 basis points from a year ago and 11 basis points from the fourth quarter, driven by rising short-term interest rates.  Loan growth and the acquisition of Tidelands Bank in July of 2016 were the primary drivers of the increase from a year ago.

The first quarter provision for credit losses was $800,000.  This compares with a provision recovery of $200,000 in the first quarter of 2016 and no provision for the fourth quarter of 2016.  First quarter net charge-offs totaled $1.7 million, compared with $2.1 million in the first quarter of 2016 and $1.5 million in the fourth quarter.  Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans.  Nonperforming assets were .23 percent of total assets at March 31, 2017, compared with .28 percent at both March 31, 2016 and December 31, 2016.

"Our first quarter provision for loan losses reflects continued strong, steady credit quality and a low level of net charge-offs," Tallent commented. "Our credit quality indicators remain favorable and our outlook is for that to continue.  We also expect our provision levels to gradually increase during the year due to loan growth, while our allowance and the related ratio to total loans will decline slightly."

Fourth quarter fee revenue totaled $22.1 million, up $3.47 million from a year ago and a decrease of $3.16 million from the fourth quarter.  Mortgage fees were up $1.14 million from a year ago, and down $2.09 million from the fourth quarter.  Gains from sales of SBA loans were up $722,000 from a year ago due to continued growth in SBA lending, and were down $1.07 million from the fourth quarter.  Partially offsetting the seasonal linked-quarter decreases in mortgage and SBA revenue was a $499,000 increase in brokerage fees.  Other fee revenue was down $386,000 from the fourth quarter, mostly reflecting a lower volume of customer derivative business.

Operating expenses were $62.8 million for the first quarter, compared with $57.9 million for the first quarter of 2016 and $61.3 million for the fourth quarter.  Included in operating expenses are merger-related and branch closure charges of $2.05 million in the first quarter, and merger-related charges of $2.65 million in the first quarter of 2016 and $1.14 million in the fourth quarter of 2016.  Excluding these charges, first quarter operating expenses were $60.8 million compared with $55.2 million a year ago and $60.2 million for the fourth quarter.

The increase in operating expenses from the fourth quarter is primarily due to higher salaries and employee benefit costs, with most of the increase related to payroll taxes that start over at the beginning of each year.  The increase from a year ago also reflects additional operating expenses following the acquisition of Tidelands Bank on July 1, 2016.  United's financial results begin including operating expenses of acquired companies on their respective acquisition dates.

Income tax expense for the first quarter totaled $18.5 million compared with $13.6 million a year ago and $17.6 million in the fourth quarter.  Included in first quarter income tax expense was a $3.4 million non-cash charge to release income taxes on hedge instruments that were held in other comprehensive income during the time in which United had a full valuation allowance on its deferred tax asset.  For accounting purposes, these disproportionate tax effects remained in other comprehensive income until the instruments that created them ceased to exist.  In the first quarter of 2017, several related interest rate swaps matured while the balance of these hedge instruments were canceled thereby requiring a transfer from other comprehensive income to a non-cash tax expense charge.  The charge had no effect on tangible book value, since there was no effect on total shareholders' equity.  Income tax expense in the fourth quarter of 2016 was elevated by a charge of $976,000 due to the impairment of a portion of the deferred tax asset as a result of cancelling nonqualified stock options.

Tallent concluded, "We are off to a good start toward another exceptional year for United Community Banks.  Our bankers continue to execute our strategic plans and serve their customers with the enthusiasm, energy and passion that are the foundation of our success.  I'm also excited about the Horry County State Bank acquisition that was announced last week and is expected to close in the third quarter. Not only is the bank in a market where we want to expand, it is also a solid cultural fit with the same emphasis on outstanding customer service for which United is known."

Conference CallUnited will hold a conference call today, Wednesday, April 26, 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 97149143.  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 134 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in providing personalized community banking services to individuals, small businesses and middle-market companies.  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, including the accompanying financial statement tables, 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," "operating net income available to common shareholders," "operating diluted income per common share," "tangible book value per common share," "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 2016 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                          
                           
                      First  
    2017       2016     Quarter  
    First       Fourth       Third       Second       First     2017-2016  
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter     Change  
INCOME SUMMARY                          
Interest revenue $ 90,958     $ 87,778     $ 85,439     $ 81,082     $ 80,721          
Interest expense   7,404       6,853       6,450       6,164       5,769          
Net interest revenue   83,554       80,925       78,989       74,918       74,952     11   %  
Provision for credit losses   800       -       (300 )     (300 )     (200 )        
Fee revenue   22,074       25,233       26,361       23,497       18,606     19      
  Total revenue   104,828       106,158       105,650       98,715       93,758     12      
Expenses   62,826       61,321       64,023       58,060       57,885     9      
Income before income tax expense   42,002       44,837       41,627       40,655       35,873     17      
Income tax expense   18,478       17,616       15,753       15,389       13,578     36      
Net income   23,524       27,221       25,874       25,266       22,295     6      
Preferred dividends   -       -       -       -       21          
Net income available to common shareholders $     23,524     $     27,221     $     25,874     $     25,266     $     22,274       6      
Merger-related and other charges   2,054       1,141       3,152       1,176       2,653          
Income tax benefit of merger-related and other charges   (758 )     (432 )     (1,193 )     (445 )     (1,004 )        
Impairment of deferred tax asset on canceled non-qualified stock   options   -       976       -       -       -          
Release of disproportionate tax effects lodged in OCI   3,400       -       -       -       -          
Net income available to common shareholders - operating (1) $     28,220     $     28,906     $     27,833     $     25,997     $     23,923       18      
                           
PERFORMANCE MEASURES                          
Per common share:                          
Diluted net income - GAAP $ .33     $ .38     $ .36     $ .35     $ 31     6      
Diluted net income - operating  (1)   .39       .40       .39       .36       .33     18      
Cash dividends declared   .09       .08       .08       .07       .07          
Book value   15.40       15.06       15.12       14.80       14.35     7      
Tangible book value (3)   13.30       12.95       13.00       12.84       12.40     7      
                           
Key performance ratios:                          
Return on common equity - GAAP (2)(4)   8.54   %   9.89   %   9.61   %   9.54   %   8.57   %    
Return on common equity - operating (1)(2)(4)   10.25       10.51       10.34       9.81       9.20          
Return on tangible common equity - operating (1)(2)(3)(4)   12.10       12.47       12.45       11.56       10.91          
Return on assets - GAAP (4)   .89       1.03       1.00       1.04       .93          
Return on assets - operating (1)(4)   1.07       1.10       1.08       1.07       1.00          
Dividend payout ratio - GAAP   27.27       21.05       22.22       20.00       22.58          
Dividend payout ratio - operating (1)   23.08       20.00       20.51       19.44       21.21          
Net interest margin (fully taxable equivalent) (4)   3.45       3.34       3.34       3.35       3.41          
Efficiency ratio - GAAP   59.29       57.65       60.78       59.02       61.94          
Efficiency ratio - operating  (1)   57.35       56.58       57.79       57.82       59.10          
Average equity to average assets   10.24       10.35       10.38       10.72       10.72          
Average tangible equity to average assets (3)   8.96       9.04       8.98       9.43       9.41          
Average tangible common equity to average assets (3)   8.96       9.04       8.98       9.43       9.32          
Tangible common equity to risk-weighted assets (3)(5)   12.07       11.84       12.22       12.87       12.77          
                           
ASSET QUALITY                          
Nonperforming loans $ 19,812     $ 21,539     $ 21,572     $ 21,348     $ 22,419     (12 )    
Foreclosed properties   5,060       7,949       9,187       6,176       5,163     (2 )    
Total nonperforming assets (NPAs)   24,872       29,488       30,759       27,524       27,582     (10 )    
Allowance for loan losses   60,543       61,422       62,961       64,253       66,310     (9 )    
Net charge-offs   1,679       1,539       1,359       1,730       2,138     (21 )    
Allowance for loan losses to loans   .87   %   .89   %   .94   %   1.02   %   1.09   %      
Net charge-offs to average loans (4)   .10       .09       .08       .11       .14          
NPAs to loans and foreclosed properties   .36       .43       .46       .44       .45          
NPAs to total assets   .23       .28       .30       .28       .28          
                           
AVERAGE BALANCES ($ in millions)                          
Loans $ 6,904     $ 6,814     $ 6,675     $ 6,151     $ 6,004     15      
Investment securities   2,822       2,690       2,610       2,747       2,718     4      
Earning assets   9,872       9,665       9,443       9,037       8,876     11      
Total assets   10,677       10,484       10,281       9,809       9,634     11      
Deposits   8,592       8,552       8,307       7,897       7,947     8      
Shareholders' equity   1,093       1,085       1,067       1,051       1,033     6      
Common shares - basic (thousands)   71,700       71,641       71,556       72,202       72,162     (1 )    
Common shares - diluted (thousands)   71,708       71,648       71,561       72,207       72,166     (1 )    
                           
AT PERIOD END ($ in millions)                          
Loans $ 6,965     $ 6,921     $ 6,725     $ 6,287     $ 6,106     14      
Investment securities   2,767       2,762       2,560       2,677       2,757     -      
Total assets   10,732       10,709       10,298       9,928       9,781     10      
Deposits   8,752       8,638       8,442       7,857       7,960     10      
Shareholders' equity   1,102       1,076       1,079       1,060       1,034     7      
Common shares outstanding (thousands)   70,973       70,899       70,861       71,122       71,544     (1 )    
                           
(1)  Excludes merger-related charges, a first quarter 2017 release of disproportionate tax effects lodged in OCI and a fourth quarter 2016 deferred tax asset impairment charge related to canceled non-qualified stock options.  (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)  First quarter 2017 ratio is preliminary.      

 
UNITED COMMUNITY BANKS, INC.                    
Non-GAAP Performance Measures Reconciliation                    
Selected Financial Information                    
                     
                     
    2017       2016    
    First       Fourth       Third       Second       First    
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter  
                     
Expense reconciliation                    
Expenses (GAAP) $ 62,826     $ 61,321     $ 64,023     $ 58,060     $ 57,885    
Merger-related and other charges   (2,054 )     (1,141 )     (3,152 )     (1,176 )     (2,653 )  
Expenses - operating $ 60,772     $ 60,180     $ 60,871     $ 56,884     $ 55,232    
                     
Net income reconciliation                    
Net income (GAAP) $ 23,524     $ 27,221     $ 25,874     $ 25,266     $ 22,295    
Merger-related and other charges   2,054       1,141       3,152       1,176       2,653    
Income tax benefit of merger-related and other charges   (758 )     (432 )     (1,193 )     (445 )     (1,004 )  
Impairment of deferred tax asset on canceled non-qualified stock options   -       976       -       -       -    
Release of disproportionate tax effects lodged in OCI   3,400       -       -       -       -    
Net income - operating $ 28,220     $ 28,906     $ 27,833     $ 25,997     $ 23,944    
                     
Net income available to common shareholders reconciliation                    
Net income available to common shareholders (GAAP) $ 23,524     $ 27,221     $ 25,874     $ 25,266     $ 22,274    
Merger-related and other charges   2,054       1,141       3,152       1,176       2,653    
Income tax benefit of merger-related and other charges   (758 )     (432 )     (1,193 )     (445 )     (1,004 )  
Impairment of deferred tax asset on canceled non-qualified stock options   -       976       -       -       -    
Release of disproportionate tax effects lodged in OCI   3,400       -       -       -       -    
Net income available to common shareholders - operating $ 28,220     $ 28,906     $ 27,833     $ 25,997     $ 23,923    
                     
Diluted income per common share reconciliation                    
Diluted income per common share (GAAP) $ .33     $ .38     $ .36     $ .35     $ .31    
Merger-related and other charges   .01       .01       .03       .01       .02    
Impairment of deferred tax asset on canceled non-qualified stock options   -       .01       -       -       -    
Release of disproportionate tax effects lodged in OCI   .05       -       -       -       -    
Diluted income per common share - operating $ .39     $ .40     $ .39     $ .36     $ .33    
                     
Book value per common share reconciliation                    
Book value per common share (GAAP) $ 15.40     $ 15.06     $ 15.12     $ 14.80     $ 14.35    
Effect of goodwill and other intangibles   (2.10 )     (2.11 )     (2.12 )     (1.96 )     (1.95 )  
Tangible book value per common share $ 13.30     $ 12.95     $ 13.00     $ 12.84     $ 12.40    
                     
Return on tangible common equity reconciliation                    
Return on common equity (GAAP)   8.54   %   9.89   %   9.61   %   9.54   %   8.57   %
Merger-related and other charges   .47       .26       .73       .27       .63    
Impairment of deferred tax asset on canceled non-qualified stock options   -       .36       -       -       -    
Release of disproportionate tax effects lodged in OCI   1.24       -       -       -       -    
Return on common equity - operating   10.25       10.51       10.34       9.81       9.20    
Effect of goodwill and other intangibles   1.85       1.96       2.11       1.75       1.71    
Return on tangible common equity - operating   12.10   %   12.47   %   12.45   %   11.56   %   10.91   %
                     
Return on assets reconciliation                    
Return on assets (GAAP)   .89   %   1.03   %   1.00   %   1.04   %   .93   %
Merger-related and other charges   .05       .03       .08       .03       .07    
Impairment of deferred tax asset on canceled non-qualified stock options   -       .04       -       -       -    
Release of disproportionate tax effects lodged in OCI   .13       -       -       -       -    
Return on assets - operating   1.07   %   1.10   %   1.08   %   1.07   %   1.00   %
                     
Dividend payout ratio reconciliation                    
Dividend payout ratio (GAAP)   27.27   %   21.05   %   22.22   %   20.00   %   22.58   %
Merger-related and other charges   (.98 )     (.54 )     (1.71 )     (.56 )     (1.37 )  
Impairment of deferred tax asset on canceled non-qualified stock options   -       (.51 )     -       -       -    
Release of disproportionate tax effects lodged in OCI   (3.21 )     -       -       -       -    
Dividend payout ratio - operating   23.08   %   20.00   %   20.51   %   19.44   %   21.21   %
                     
Efficiency ratio reconciliation                    
Efficiency ratio (GAAP)   59.29   %   57.65   %   60.78   %   59.02   %   61.94   %
Merger-related and other charges   (1.94 )     (1.07 )     (2.99 )     (1.20 )     (2.84 )  
Efficiency ratio - operating   57.35   %   56.58   %   57.79   %   57.82   %   59.10   %
                     
Average equity to assets reconciliation                    
Equity to assets (GAAP)   10.24   %   10.35   %   10.38   %   10.72   %   10.72   %
Effect of goodwill and other intangibles   (1.28 )     (1.31 )     (1.40 )     (1.29 )     (1.31 )  
Tangible equity to assets   8.96       9.04       8.98       9.43       9.41    
Effect of preferred equity   -       -       -       -       (.09 )  
Tangible common equity to assets   8.96   %   9.04   %   8.98   %   9.43   %   9.32   %
                     
Tangible common equity to risk-weighted assets reconciliation (1)                    
Tier 1 capital ratio (Regulatory)   11.46   %   11.23   %   11.04   %   11.44   %   11.32   %
Effect of other comprehensive income   (.24 )     (.34 )     -       (.06 )     (.25 )  
Effect of deferred tax limitation   1.13       1.26       1.50       1.63       1.85    
Effect of trust preferred   (.25 )     (.25 )     (.26 )     (.08 )     (.08 )  
Basel III intangibles transition adjustment   (.03 )     (.06 )     (.06 )     (.06 )     (.07 )  
Tangible common equity to risk-weighted assets   12.07   %   11.84   %   12.22   %   12.87   %   12.77   %
                     
(1)  First quarter 2017 ratios are preliminary.                    

UNITED COMMUNITY BANKS, INC.            
Financial Highlights                    
Loan Portfolio Composition at Period-End            
                     
                     
      2017     2016
      First       Fourth       Third       Second       First  
(in millions)   Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                    
Owner occupied commercial RE   $   1,633   $   1,650   $   1,587   $   1,527   $   1,509
Income producing commercial RE       1,297       1,282       1,277       1,101       1,071
Commercial & industrial       1,080       1,070       994       925       854
Commercial construction       667       634       567       565       535
  Total commercial       4,677       4,636       4,425       4,118       3,969
Residential mortgage       860       857       814       784       774
Home equity lines of credit       659       655       693       616       597
Residential construction       197       190       200       170       167
Consumer installment       572       583       593       599       599
  Total loans   $   6,965   $   6,921   $   6,725   $   6,287   $   6,106
                     
LOANS BY MARKET                    
North Georgia   $   1,076   $   1,097   $   1,110   $   1,097   $   1,097
Atlanta MSA       1,408       1,399       1,332       1,314       1,257
North Carolina       541       545       548       543       543
Coastal Georgia       591       581       565       541       543
Gainesville MSA       252       248       236       240       248
East Tennessee       483       504       506       509       495
South Carolina       1,243       1,233       1,199       862       821
Specialized Lending       911       855       763       706       628
Indirect auto       460       459       466       475       474
  Total loans   $   6,965   $   6,921   $   6,725   $   6,287   $   6,106

UNITED COMMUNITY BANKS, INC.            
Financial Highlights                    
Loan Portfolio Composition at Period-End            
                     
                     
    2017   2016   LinkedQuarterChange   Year overYear Change
      First       Fourth       First      
(in millions)   Quarter   Quarter   Quarter    
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,633   $ 1,650   $ 1,509   $ (17 )   $ 124  
Income producing commercial RE     1,297     1,282     1,071     15       226  
Commercial & industrial     1,080     1,070     854     10       226  
Commercial construction     667     634     535     33       132  
Total commercial     4,677     4,636     3,969     41       708  
Residential mortgage     860     857     774     3       86  
Home equity lines of credit     659     655     597     4       62  
Residential construction     197     190     167     7       30  
Consumer installment     572     583     599     (11 )     (27 )
  Total loans   $ 6,965   $ 6,921   $ 6,106     44       859  
                     
LOANS BY MARKET                    
North Georgia   $ 1,076   $ 1,097   $ 1,097     (21 )     (21 )
Atlanta MSA     1,408     1,399     1,257     9       151  
North Carolina     541     545     543     (4 )     (2 )
Coastal Georgia     591     581     543     10       48  
Gainesville MSA     252     248     248     4       4  
East Tennessee     483     504     495     (21 )     (12 )
South Carolina     1,243     1,233     821     10       422  
Specialized Lending     911     855     628     56       283  
Indirect auto     460     459     474     1       (14 )
  Total loans   $ 6,965   $ 6,921   $ 6,106     44       859  

UNITED COMMUNITY BANKS, INC.              
Financial Highlights                    
Credit Quality                    
                     
                     
    First Quarter 2017  
      Nonperforming       Foreclosed       Total    
(in thousands)   Loans   Properties   NPAs  
NONPERFORMING ASSETS BY CATEGORY              
Owner occupied CRE   $ 6,135     $ 1,238     $ 7,373    
Income producing CRE     1,540       21       1,561    
Commercial & industrial     929       -       929    
Commercial construction     1,069       2,825       3,894    
Total commercial     9,673       4,084       13,757    
Residential mortgage     6,455       660       7,115    
Home equity lines of credit     1,848       261       2,109    
Residential construction     417       55       472    
Consumer installment     1,419       -       1,419    
  Total NPAs   $ 19,812     $ 5,060     $ 24,872    
                     
NONPERFORMING ASSETS BY MARKET                
North Georgia   $ 5,344     $ 570     $ 5,914    
Atlanta MSA     715       645       1,360    
North Carolina     4,897       355       5,252    
Coastal Georgia     942       -       942    
Gainesville MSA     728       -       728    
East Tennessee     2,112       633       2,745    
South Carolina     1,725       2,857       4,582    
Specialized Lending     2,032       -       2,032    
Indirect auto     1,317       -       1,317    
  Total NPAs   $ 19,812     $ 5,060     $ 24,872    
                     
                     
NONPERFORMING ASSETS ACTIVITY                
Beginning Balance   $ 21,539     $ 7,949     $ 29,488    
Acquisitions     -       -       -    
Loans placed on non-accrual     3,172       -       3,172    
Payments received     (3,046 )     -       (3,046 )  
Loan charge-offs     (1,292 )     -       (1,292 )  
Foreclosures     (561 )     561       -    
Capitalized costs     -       -       -    
Property sales     -       (3,077 )     (3,077 )  
Write downs     -       (480 )     (480 )  
Net gains (losses) on sales     -       107       107    
  Ending Balance   $ 19,812     $ 5,060     $ 24,872    

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    

 

 

 
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   $ 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  

 
UNITED COMMUNITY BANKS, INC.                            
Financial Highlights                                    
Credit Quality                                    
                                     
                                     
    First Quarter 2017   Fourth Quarter 2016   Third 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   $ (212 )   (.05) %   $ 1     - %   $ 46     .01 %
Income producing CRE     870     .28       527     .16       70     .02  
Commercial & industrial     (152 )   (.06)       (201 )   (.08)       453     .18  
Commercial construction     (370 )   (.23)       241     .16       (194 )   (.13)  
Total commercial     136     .01       568     .05       375     .03  
Residential mortgage     530     .25       322     .15       (47 )   (.02)  
Home equity lines of credit     422     .26       151     .09       267     .16  
Residential construction     (9 )   (.02)       (16 )   (.03)       242     .51  
Consumer installment     600     .42       514     .35       522     .34  
  Total   $ 1,679     .10     $ 1,539     .09     $ 1,359     .08  
                                     
                                     
NET CHARGE-OFFS BY MARKET                                
North Georgia   $ 15     .01 %   $ 575     .21 %   $ 68     .02 %
Atlanta MSA     (46 )   (.01)       12     -       398     .12  
North Carolina     601     .45       714     .52       329     .24  
Coastal Georgia     (223 )   (.15)       118     .08       432     .31  
Gainesville MSA     358     .58       (32 )   (.05)       15     .03  
East Tennessee     55     .05       (139 )   (.11)       (69 )   (.05)  
South Carolina     425     .14       (2 )   -       (66 )   (.02)  
Specialized Lending     195     .09       (21 )   (.01)       69     .04  
Indirect auto     299     .27       314     .27       183     .15  
  Total   $ 1,679     .10     $ 1,539     .09     $ 1,359     .08  
                                     
(1)  Annualized.

UNITED COMMUNITY BANKS, INC.            
Consolidated Statement of Income (Unaudited)            
             
    Three Months Ended    
    March 31,    
(in thousands, except per share data)     2017       2016      
             
Interest revenue:            
Loans, including fees   $ 72,727     $ 63,976      
Investment securities, including tax exempt of $279 and $166     17,712       15,788      
Deposits in banks and short-term investments     519       957      
Total interest revenue     90,958       80,721      
             
Interest expense:            
Deposits:            
NOW     597       485      
Money market     1,426       1,108      
Savings     27       29      
Time     1,008       642      
Total deposit interest expense     3,058       2,264      
Short-term borrowings     40       87      
Federal Home Loan Bank advances     1,430       733      
Long-term debt     2,876       2,685      
Total interest expense     7,404       5,769      
Net interest revenue     83,554       74,952      
Release of (provision for) credit losses     800       (200 )    
Net interest revenue after provision for credit losses     82,754       75,152      
             
Fee revenue:            
Service charges and fees     10,604       10,126      
Mortgage loan and other related fees     4,424       3,289      
Brokerage fees     1,410       1,053      
Gains from sales of government guaranteed loans     1,959       1,237      
Securities gains, net     (2 )     379      
Other     3,679       2,522      
Total fee revenue     22,074       18,606      
Total revenue     104,828       93,758      
             
Operating expenses:            
Salaries and employee benefits     36,691       33,062      
Communications and equipment     4,918       4,290      
Occupancy     4,949       4,723      
Advertising and public relations     1,061       864      
Postage, printing and supplies     1,370       1,280      
Professional fees     3,044       2,700      
FDIC assessments and other regulatory charges     1,283       1,524      
Amortization of intangibles     973       1,010      
Merger-related and other charges     2,054       2,653      
Other     6,483       5,779      
Total operating expenses     62,826       57,885      
Net income before income taxes     42,002       35,873      
Income tax expense     18,478       13,578      
Net income     23,524       22,295      
Preferred stock dividends and discount accretion     -       21      
Net income available to common shareholders   $ 23,524     $ 22,274      
             
Earnings per common share:            
Basic   $ .33     $ .31      
Diluted     .33       .31      
Weighted average common shares outstanding:            
Basic     71,700       72,162      
Diluted     71,708       72,166      

UNITED COMMUNITY BANKS, INC.        
Consolidated Balance Sheet (Unaudited)        
         
    March 31,   December 31,
(in thousands, except share and per share data)     2017       2016  
         
ASSETS        
Cash and due from banks   $ 90,151     $ 99,489  
Interest-bearing deposits in banks     140,822       117,859  
Cash and cash equivalents     230,973       217,348  
Securities available for sale     2,436,591       2,432,438  
Securities held to maturity (fair value $333,032 and $333,170)     329,992       329,843  
Mortgage loans held for sale (includes $15,845 and $27,891 at fair value)     16,491       29,878  
Loans, net of unearned income     6,964,990       6,920,636  
Less allowance for loan losses     (60,543 )     (61,422 )
Loans, net     6,904,447       6,859,214  
Premises and equipment, net     189,437       189,938  
Bank owned life insurance     154,150       143,543  
Accrued interest receivable     27,020       28,018  
Net deferred tax asset     139,383       154,336  
Derivative financial instruments     22,131       23,688  
Goodwill and other intangible assets     155,250       156,222  
Other assets     125,938       144,189  
  Total assets   $ 10,731,803     $ 10,708,655  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Deposits:        
Demand   $ 2,752,361     $ 2,637,004  
NOW     1,968,493       1,989,763  
Money market     1,831,145       1,846,440  
Savings     574,805       549,713  
Time     1,261,232       1,287,142  
Brokered     364,056       327,496  
Total deposits     8,752,092       8,637,558  
Short-term borrowings     -       5,000  
Federal Home Loan Bank advances     569,138       709,209  
Long-term debt     175,238       175,078  
Derivative financial instruments     26,425       27,648  
Accrued expenses and other liabilities     107,367       78,427  
  Total liabilities     9,630,260       9,632,920  
Shareholders' equity:        
Preferred stock, $1 par value; 10,000,000 shares authorized;        
0 shares issued and outstanding     -       -  
Common stock, $1 par value; 150,000,000 shares authorized;        
70,972,753 and 70,899,114 shares issued and outstanding     70,973       70,899  
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;        
0 shares issued and outstanding     -       -  
Common stock issuable; 546,511 and 519,874 shares     7,959       7,327  
Capital surplus     1,275,954       1,275,849  
Accumulated deficit     (234,384 )     (251,857 )
Accumulated other comprehensive loss     (18,959 )     (26,483 )
  Total shareholders' equity     1,101,543       1,075,735  
  Total liabilities and shareholders' equity   $ 10,731,803     $ 10,708,655  

UNITED COMMUNITY BANKS, INC.                        
Average Consolidated Balance Sheets and Net Interest Analysis                  
For the Three Months Ended March 31,                        
                         
        2017             2016        
    Average       Avg.       Average       Avg.    
(dollars in thousands, fully taxable equivalent (FTE))   Balance       Interest   Rate       Balance       Interest   Rate    
Assets:                        
Interest-earning assets:                        
Loans, net of unearned income (FTE) (1)(2) $ 6,903,860     $ 72,741 4.27 %   $ 6,003,568     $ 64,044   4.29 %  
Taxable securities (3)   2,779,625       17,433 2.51       2,688,564       15,622   2.32    
Tax-exempt securities (FTE) (1)(3)   42,180       457 4.33       29,744       272   3.66    
Federal funds sold and other interest-earning assets   146,027       664 1.82       153,759       1,053   2.74    
                         
Total interest-earning assets (FTE)   9,871,692       91,295 3.74       8,875,635       80,991   3.67    
Non-interest-earning assets:                        
Allowance for loan losses   (61,668 )             (68,473 )          
Cash and due from banks   99,253               85,635            
Premises and equipment   190,096               180,090            
Other assets (3)   577,168               561,261            
Total assets $ 10,676,541             $ 9,634,148            
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW $ 1,959,678       597 .12     $ 1,886,472       485   .10    
Money market   2,065,449       1,426 .28       1,840,584       1,108   .24    
Savings   560,634       27 .02       480,238       29   .02    
Time   1,263,946       815 .26       1,259,689       817   .26    
Brokered time deposits   98,340       193 .80       233,213       (175 ) (.30)    
Total interest-bearing deposits   5,948,047   -   3,058 .21       5,700,196   -   2,264   .16    
                         
Federal funds purchased and other borrowings   19,031       40 .85       34,906       87   1.00    
Federal Home Loan Bank advances   681,117       1,430 .85       346,169       733   .85    
Long-term debt   175,142       2,876 6.66       165,419       2,685   6.53    
Total borrowed funds   875,290       4,346 2.01       546,494       3,505   2.58    
                         
Total interest-bearing liabilities   6,823,337       7,404 .44       6,246,690       5,769   .37    
Non-interest-bearing liabilities:                        
Non-interest-bearing deposits   2,643,630               2,247,041            
Other liabilities   116,752               107,320            
Total liabilities   9,583,719               8,601,051            
Shareholders' equity   1,092,822               1,033,097            
Total liabilities and shareholders' equity $ 10,676,541             $ 9,634,148            
                         
Net interest revenue (FTE)     $ 83,891           $ 75,222        
Net interest-rate spread (FTE)       3.30 %         3.30 %  
                         
Net interest margin (FTE) (4)       3.45 %         3.41 %  
                         
(1)  Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans.  The rate    
used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.          
(2)  Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.    
(3)  Securities available for sale are shown at amortized cost.  Pretax unrealized losses of $5.38 million in 2017 and pretax unrealized gains of      
$2.20 million in 2016 are included in other assets for purposes of this presentation.                  
(4)  Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.              

For more information:Jefferson Harralson Chief Financial Officer(864) 240-6208Jefferson_Harralson@ucbi.com

Primary Logo