United Community Banks, Inc.
Apr 26, 2017

United Community Banks, Inc. Announces First Quarter Earnings

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

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 Call
United 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 Measures
This 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 Harbor
This 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
 Linked
Quarter
Change
 Year over
Year
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  $72,7414.27% $6,003,568  $64,044 4.29% 
Taxable securities (3) 2,779,625   17,4332.51    2,688,564   15,622 2.32  
Tax-exempt securities (FTE) (1)(3) 42,180   4574.33   29,744   272 3.66  
Federal funds sold and other interest-earning assets 146,027   6641.82   153,759   1,053 2.74  
              
Total interest-earning assets (FTE) 9,871,692   91,2953.74   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   2,8766.66   165,419   2,685 6.53  
Total borrowed funds 875,290    4,3462.01   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) 240-6208

Jefferson_Harralson@ucbi.com

Primary Logo

Source: United Community Banks, Inc.

News Provided by Acquire Media