United Community Banks, Inc.
Apr 24, 2014

United Community Banks, Inc. Reports Earnings of $15.4 Million for First Quarter 2014

BLAIRSVILLE, GA -- (Marketwired) -- 04/24/14 --  United Community Banks, Inc. (NASDAQ: UCBI)

United Community Banks, Inc. (NASDAQ: UCBI) ("United") today reported net income of $15.4 million, or 25 cents per diluted share, for the first quarter of 2014. Earnings per share were up 14 percent from the fourth quarter, and 67 percent from the first quarter of 2013, reflecting a reduction in preferred stock dividends, reduced operating costs and a lower provision for loan losses.

"I am pleased with our first quarter progress and our outlook for the balance of 2014," said Jimmy Tallent, president and chief executive officer. "We achieved steady loan growth and strong deposit growth, while controlling expenses.

"I am especially pleased that we redeemed the remaining $122 million in preferred stock, completing the final phase of our TARP and other preferred stock redemptions during the first quarter," Tallent continued. "In total we redeemed $197 million in preferred stock, including $75 million in the fourth quarter, without issuing common equity that would have been dilutive to shareholders.

"The elimination of expensive preferred stock dividends had a positive impact on first quarter per share results," Tallent added. "Longer-term, it will benefit our performance and the ability to execute our strategic plan."

The first quarter provision for credit losses was $2.5 million, down $500,000 from the fourth quarter and down $8.5 million from the first quarter of 2013. First quarter net charge-offs were $4.04 million, compared with $4.44 million in the fourth quarter and $12.4 million a year ago. Nonperforming assets at quarter-end were $30.8 million, representing .42 percent of total assets. This was down slightly from the fourth quarter and down significantly from $112.7 million, or 1.65 percent of total assets, in the first quarter of 2013.

First quarter taxable equivalent net interest revenue totaled $54.2 million, down $1.71 million from the fourth quarter and down $405,000 from the first quarter of 2013. The first quarter taxable equivalent net interest margin was 3.21 percent, down five basis points from the fourth quarter and down 16 basis points from a year ago.

"The decline in net interest revenue was related primarily to two fewer days of interest accruals in the first quarter," said Tallent. "Competitive loan pricing pressures continue, and we are sharply focused on growing loans and deposits to offset the impact and grow net interest revenue. We also remain committed to prudent interest rate risk management. To that end, 39 percent of our investment portfolio consists of floating-rate securities, compared with 41 percent at year-end 2013 and 34 percent in the first quarter of 2013."

First quarter fee revenue totaled $12.2 million, down $1.34 million from the fourth quarter and $735,000 from a year earlier, primarily due to lower mortgage fees and lower customer swap fees in other fee revenue. Additionally, fourth quarter fee revenue included the recognition of $300,000 in gains on mutual fund investments. First quarter mortgage fees were down $359,000 from the fourth quarter and down $1.3 million from a year ago, reflecting slower mortgage refinancing activity related to rising long-term interest rates. Closed mortgage loans totaled $46 million in the first quarter, compared with $55.5 million in the fourth quarter and $70 million in the first quarter of 2013.

Operating expenses, excluding foreclosed property costs, were $38.9 million in the first quarter compared to $41.4 million in the fourth quarter of 2013 and $41.4 million a year ago. Expenses decreased in every category from fourth quarter totals, reflecting successful efforts to control operating costs. The most significant quarter-to-quarter decreases were $675,000 in professional fees and $451,000 in FDIC assessments and other regulatory charges, reflecting United's improved credit quality. Salaries and employee benefits decreased $421,000, in part reflecting incentive compensation accrued in the fourth quarter for achievement of the 2013 performance targets.

Foreclosed property costs were $116,000 in the first quarter compared to $191,000 in the fourth quarter and $2.33 million a year ago. These costs have remained lower following the accelerated sales of classified assets in the second quarter of 2013.

On March 31, 2014, capital ratios were as follows: Tier 1 Risk-Based of 11.1 percent; Total Risk-Based of 12.3 percent; Tier 1 Common Risk-Based of 10.0 percent; Tier 1 Leverage of 8.0 percent; and Tangible Equity-to-Assets of 9.5 percent.

"We made good progress in the first quarter," Tallent said. "A year ago our focus was resolving legacy credit-related problems, a major undertaking that has been completed. Other challenges have remained with regard to interest rates and the economic environment. But our team has kept expenses down and strengthened the business pipeline, and we have strategically added people and initiatives to drive revenue growth. Of particular note are the additions of senior talent to lead our Tennessee region, our specialized lending group, and our structured finance area. I believe we are on track to achieve our business targets and financial goals for the year."

Conference Call
United will hold a conference call today, Thursday, April 24, 2014, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 24926399. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of United's website at www.ucbi.com.

About United Community Banks, Inc.
United Community Banks, Inc. (UCBI) is a bank holding company based in Blairsville, Georgia, with $7.4 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast region's largest full-service banks, operating 102 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 services including mortgage, advisory and treasury management products. United Community Bank is consistently recognized for its outstanding customer service by national survey organizations. Additional information about the company and the bank's full range of products and services can be found at www.ucbi.com.

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 2013 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  
   
                                   
  2014     2013        
(in thousands, except per share data; taxable equivalent) First Quarter     Fourth Quarter     Third Quarter     Second Quarter     First 
Quarter
     First Quarter 2014-2013 Change  
INCOME SUMMARY                                            
Interest revenue $ 60,495     $ 61,695     $ 61,426     $ 62,088     $ 62,114        
Interest expense   6,326       5,816       7,169       7,157       7,540        
    Net interest revenue   54,169       55,879       54,257       54,931       54,574     (1) %
Provision for credit losses   2,500       3,000       3,000       48,500       11,000        
Fee revenue   12,176       13,519       14,225       15,943       12,911     (6 )
    Total revenue   63,845       66,398       65,482       22,374       56,485        
Operating expenses   39,050       41,614       40,097       48,823       43,770     (11 )
    Income (loss) before income taxes   24,795       24,784       25,385       (26,449 )     12,715     95  
Income tax expense (benefit)   9,395       8,873       9,885       (256,413 )     950        
  Net income   15,400       15,911       15,500       229,964       11,765     31  
Preferred dividends and discount accretion   439       2,912       3,059       3,055       3,052        
Net income available to common shareholders $ 14,961     $ 12,999     $ 12,441     $ 226,909     $ 8,713     72  
                                             
PERFORMANCE MEASURES                                            
  Per common share:                                            
    Diluted income $ .25     $ .22     $ .21     $ 3.90     $ .15     67  
    Book value   11.66       11.30       10.99       10.90       6.85     70  
    Tangible book value (2)   11.63       11.26       10.95       10.82       6.76     72  
                                               
  Key performance ratios:                                            
    Return on common equity (1)(3)   8.64 %     7.52 %     7.38 %     197.22 %     8.51 %      
    Return on assets (3)   .85       .86       .86       13.34       .70        
    Net interest margin (3)   3.21       3.26       3.26       3.33       3.37        
    Efficiency ratio   59.05       60.02       58.55       68.89       64.97        
    Equity to assets   9.52       11.62       11.80       11.57 (4 )     8.60        
    Tangible equity to assets (2)   9.50       11.59       11.76       11.53 (4 )     8.53        
    Tangible common equity to assets (2)   9.22       8.99       9.02       8.79 (4 )     5.66        
    Tangible common equity to risk- weighted assets (2)   13.57       13.17       13.34       13.16       8.45        
                                             
ASSET QUALITY *                                            
  Non-performing loans $ 25,250     $ 26,819     $ 26,088     $ 27,864     $ 96,006        
  Foreclosed properties   5,594       4,221       4,467       3,936       16,734        
    Total non-performing assets (NPAs)   30,844       31,040       30,555       31,800       112,740        
  Allowance for loan losses   75,223       76,762       80,372       81,845       105,753        
  Net charge-offs   4,039       4,445       4,473       72,408       12,384        
  Allowance for loan losses to loans   1.73 %     1.77 %     1.88 %     1.95 %     2.52 %      
  Net charge-offs to average loans (3)   .38       .41       .42       6.87       1.21        
  NPAs to loans and foreclosed properties   .71       .72       .72       .76       2.68        
  NPAs to total assets   .42       .42       .42       .44       1.65        
                                             
AVERAGE BALANCES ($ in millions)                                            
  Loans $ 4,356     $ 4,315     $ 4,250     $ 4,253     $ 4,197     4  
  Investment securities   2,320       2,280       2,178       2,161       2,141     8  
  Earning assets   6,827       6,823       6,615       6,608       6,547     4  
  Total assets   7,384       7,370       7,170       6,915       6,834     8  
  Deposits   6,197       6,190       5,987       5,983       5,946     4  
  Shareholders' equity   703       856       846       636       588     20  
  Common shares - basic (thousands)   60,059       59,923       59,100       58,141       58,081        
  Common shares - diluted (thousands)   60,061       59,925       59,202       58,141       58,081        
                                             
AT PERIOD END ($ in millions)                                            
  Loans * $ 4,356     $ 4,329     $ 4,267     $ 4,189     $ 4,194     4  
  Investment securities   2,302       2,312       2,169       2,152       2,141     8  
  Total assets   7,398       7,425       7,243       7,163       6,849     8  
  Deposits   6,248       6,202       6,113       6,012       6,026     4  
  Shareholders' equity   704       796       852       829       592     19  
  Common shares outstanding (thousands)   60,092       59,432       59,412       57,831       57,767        
                                             
(1) 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). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized. (4) Calculated as of period-end.  
                                             
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.  
   
   
   
UNITED COMMUNITY BANKS, INC.  
Non-GAAP Performance Measures Reconciliation  
Selected Financial Information  
   
                               
    2014     2013  
(in thousands, except per share   First     Fourth     Third     Second     First  
data; taxable equivalent)   Quarter     Quarter     Quarter     Quarter     Quarter  
                                         
Interest revenue reconciliation                                        
Interest revenue - taxable equivalent   $ 60,495     $ 61,695     $ 61,426     $ 62,088     $ 62,114  
Taxable equivalent adjustment     (357 )     (380 )     (370 )     (368 )     (365 )
  Interest revenue (GAAP)   $ 60,138     $ 61,315     $ 61,056     $ 61,720     $ 61,749  
                                         
Net interest revenue reconciliation                                        
Net interest revenue - taxable equivalent   $ 54,169     $ 55,879     $ 54,257     $ 54,931     $ 54,574  
Taxable equivalent adjustment     (357 )     (380 )     (370 )     (368 )     (365 )
  Net interest revenue (GAAP)   $ 53,812     $ 55,499     $ 53,887     $ 54,563     $ 54,209  
                                         
Total revenue reconciliation                                        
Total operating revenue   $ 63,845     $ 66,398     $ 65,482     $ 22,374     $ 56,485  
Taxable equivalent adjustment     (357 )     (380 )     (370 )     (368 )     (365 )
  Total revenue (GAAP)   $ 63,488     $ 66,018     $ 65,112     $ 22,006     $ 56,120  
                                         
Income (loss) before taxes reconciliation                                        
Income (loss) before taxes   $ 24,795     $ 24,784     $ 25,385     $ (26,449 )   $ 12,715  
Taxable equivalent adjustment     (357 )     (380 )     (370 )     (368 )     (365 )
  Income (loss) before taxes (GAAP)   $ 24,438     $ 24,404     $ 25,015     $ (26,817 )   $ 12,350  
                                         
Income tax expense (benefit) reconciliation                                        
Income tax expense (benefit)   $ 9,395     $ 8,873     $ 9,885     $ (256,413 )   $ 950  
Taxable equivalent adjustment     (357 )     (380 )     (370 )     (368 )     (365 )
  Income tax expense (benefit) (GAAP)   $ 9,038     $ 8,493     $ 9,515     $ (256,781 )   $ 585  
                                         
Book value per common share reconciliation                                        
Tangible book value per common share   $ 11.63     $ 11.26     $ 10.95     $ 10.82     $ 6.76  
Effect of goodwill and other intangibles     .03       .04       .04       .08       .09  
  Book value per common share (GAAP)   $ 11.66     $ 11.30     $ 10.99     $ 10.90     $ 6.85  
                                         
Average equity to assets reconciliation                                        
Tangible common equity to assets     9.22 %     8.99 %     9.02 %     8.79 %     5.66 %
Effect of preferred equity     .28       2.60       2.74       2.74       2.87  
  Tangible equity to assets     9.50       11.59       11.76       11.53       8.53  
Effect of goodwill and other intangibles     .02       .03       .04       .04       .07  
  Equity to assets (GAAP)     9.52 %     11.62 %     11.80 %     11.57 %     8.60 %
                                         
Tangible common equity to risk-weighted assets reconciliation                                        
Tangible common equity to risk-weighted assets     13.57 %     13.17 %     13.34 %     13.16 %     8.45
Effect of other comprehensive income     .36       .39       .49       .29       .49  
Effect of deferred tax limitation     (3.91 )     (4.25 )     (4.72 )     (4.99 )     -  
Effect of trust preferred     1.03       1.04       1.09       1.11       1.15  
Effect of preferred equity     -       2.38       4.01       4.11       4.22  
  Tier I capital ratio (Regulatory)     11.05 %     12.73 %     14.21 %     13.68 %     14.31 %
 
 
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
 
                     
    2014   2013
    First   Fourth   Third   Second   First
(in millions)   Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                              
Owner occupied commercial RE   $ 1,142   $ 1,134   $ 1,129   $ 1,119   $ 1,130
Income producing commercial RE     624     623     614     629     674
Commercial & industrial     495     472     457     437     454
Commercial construction     148     149     137     133     152
  Total commercial     2,409     2,378     2,337     2,318     2,410
Residential mortgage     866     875     888     876     850
Home equity lines of credit     447     441     421     402     396
Residential construction     318     328     318     332     372
Consumer installment     316     307     303     261     166
  Total loans   $ 4,356   $ 4,329   $ 4,267   $ 4,189   $ 4,194
                               
LOANS BY MARKET                              
North Georgia   $ 1,205   $ 1,240   $ 1,262   $ 1,265   $ 1,363
Atlanta MSA     1,290     1,275     1,246     1,227     1,262
North Carolina     563     572     575     576     575
Coastal Georgia     425     423     421     397     398
Gainesville MSA     262     255     253     256     259
East Tennessee     272     280     277     282     282
South Carolina / Corporate     131     88     47     34     -
Other (2)     208     196     186     152     55
  Total loans   $ 4,356   $ 4,329   $ 4,267   $ 4,189   $ 4,194
                               
RESIDENTIAL CONSTRUCTION                        
Dirt loans                              
  Acquisition & development   $ 37   $ 39   $ 40   $ 42   $ 57
  Land loans     37     38     35     36     42
  Lot loans     159     166     167     173     188
    Total     233     243     242     251     287
                               
House loans                              
  Spec     19     23     30     34     40
  Sold     66     62     46     47     45
    Total     85     85     76     81     85
Total residential construction   $ 318   $ 328   $ 318   $ 332   $ 372
                               
(1) Excludes total loans of $19.3 million, $20.3 million, $23.3 million, $25.7 million and $28.3 million as of March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. (2) Includes purchased indirect auto loans that are not assigned to a geographic region.
 
 
 
UNITED COMMUNITY BANKS, INC.  
Financial Highlights  
Loan Portfolio Composition at Period-End (1)  
   
                         
    2014   2013            
    First   Fourth   First   Linked Quarter     Year over Year  
(in millions)   Quarter   Quarter   Quarter   Change     Change  
LOANS BY CATEGORY                                  
Owner occupied commercial RE   $ 1,142   $ 1,134   $ 1,130   $ 8     $ 12  
Income producing commercial RE     624     623     674     1       (50 )
Commercial & industrial     495     472     454     23       41  
Commercial construction     148     149     152     (1 )     (4 )
  Total commercial     2,409     2,378     2,410     31       (1 )
Residential mortgage     866     875     850     (9 )     16  
Home equity lines of credit     447     441     396     6       51  
Residential construction     318     328     372     (10 )     (54 )
Consumer installment     316     307     166     9       150  
  Total loans   $ 4,356   $ 4,329   $ 4,194     27       162  
                                   
LOANS BY MARKET                                  
North Georgia   $ 1,205   $ 1,240   $ 1,363     (35 )     (158 )
Atlanta MSA     1,290     1,275     1,262     15       28  
North Carolina     563     572     575     (9 )     (12 )
Coastal Georgia     425     423     398     2       27  
Gainesville MSA     262     255     259     7       3  
East Tennessee     272     280     282     (8 )     (10 )
South Carolina / Corporate     131     88     -     43       131  
Other (2)     208     196     55     12       153  
  Total loans   $ 4,356   $ 4,329   $ 4,194     27       162  
                                   
RESIDENTIAL CONSTRUCTION                            
Dirt loans                                  
  Acquisition & development   $ 37   $ 39   $ 57     (2 )     (20 )
  Land loans     37     38     42     (1 )     (5 )
  Lot loans     159     166     188     (7 )     (29 )
    Total     233     243     287     (10 )     (54 )
                                   
House loans                                  
  Spec     19     23     40     (4 )     (21 )
  Sold     66     62     45     4       21  
    Total     85     85     85     -       -  
Total residential construction   $ 318   $ 328   $ 372     (10 )     (54 )
                                   
(1) Excludes total loans of $19.3 million, $20.3 million, $23.3 million, $25.7 million and $28.3 million as of March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. (2) Includes purchased indirect auto loans that are not assigned to a geographic region.  
   
   
   
UNITED COMMUNITY BANKS, INC.  
Financial Highlights  
Credit Quality (1)  
   
    First Quarter 2014  
    Non-performing     Foreclosed     Total  
(in thousands)   Loans     Properties     NPAs  
NONPERFORMING ASSETS BY CATEGORY              
Owner occupied CRE   $ 3,868     $ 1,167     $ 5,035  
Income producing CRE     1,278       1,645       2,923  
Commercial & industrial     822       -       822  
Commercial construction     479       -       479  
  Total commercial     6,447       2,812       9,259  
Residential mortgage     13,307       2,146       15,453  
Home equity lines of credit     1,106       362       1,468  
Residential construction     3,805       274       4,079  
Consumer installment     585       -       585  
  Total NPAs   $ 25,250     $ 5,594     $ 30,844  
  Balance as a % of Unpaid Principal     65.8 %     53.9 %     63.2 %
                         
NONPERFORMING ASSETS BY MARKET                  
North Georgia   $ 12,166     $ 2,058     $ 14,224  
Atlanta MSA     2,916       904       3,820  
North Carolina     6,501       866       7,367  
Coastal Georgia     800       1,607       2,407  
Gainesville MSA     1,145       -       1,145  
East Tennessee     1,428       159       1,587  
South Carolina / Corporate     -       -       -  
Other (3)     294       -       294  
  Total NPAs   $ 25,250     $ 5,594     $ 30,844  
                         
                         
NONPERFORMING ASSETS ACTIVITY                  
Beginning Balance   $ 26,819     $ 4,221     $ 31,040  
Loans placed on non-accrual     9,303       -       9,303  
Payments received     (1,666 )     -       (1,666 )
Loan charge-offs     (4,839 )     -       (4,839 )
Foreclosures     (4,367 )     4,367       -  
Capitalized costs     -       -       -  
Property sales     -       (3,238 )     (3,238 )
Write downs     -       (277 )     (277 )
Net gains (losses) on sales     -       521       521  
  Ending Balance   $ 25,250     $ 5,594     $ 30,844  
                         
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
(3) Includes purchased indirect auto loans that are not assigned to a geographic region.  
                         
                         
                         
UNITED COMMUNITY BANKS, INC.  
Financial Highlights  
Credit Quality (1)  
   
    Fourth Quarter 2013  
                   
(in thousands) Non-performing Loans Foreclosed Properties Total NPAs
NONPERFORMING ASSETS BY CATEGORY                        
Owner occupied CRE   $ 5,822     $ 832     $ 6,654  
Income producing CRE     2,518       -       2,518  
Commercial & industrial     427       -       427  
Commercial construction     361       -       361  
  Total commercial     9,128       832       9,960  
Residential mortgage     11,730       2,684       14,414  
Home equity lines of credit     1,448       389       1,837  
Residential construction     4,264       316       4,580  
Consumer installment     249       -       249  
  Total NPAs   $ 26,819     $ 4,221     $ 31,040  
  Balance as a % of  Unpaid Principal     65.3 %     44.5 %     61.4 %
                         
NONPERFORMING ASSETS BY MARKET                        
North Georgia   $ 12,352     $ 2,494     $ 14,846  
Atlanta MSA     2,830       684       3,514  
North Carolina     6,567       683       7,250  
Coastal Georgia     2,342       173       2,515  
Gainesville MSA     928       -       928  
East Tennessee     1,800       187       1,987  
South Carolina / Corporate     -       -       -  
Other (3)     -       -       -  
  Total NPAs   $ 26,819     $ 4,221     $ 31,040  
                         
NONPERFORMING ASSETS ACTIVITY                        
Beginning Balance   $ 28,088     $ 4,467     $ 30,555  
Loans placed on non-accrual     11,043       -       11,043  
Payments received     (1,688 )     -       (1,688 )
Loan charge-offs     (4,621 )     -       (4,621 )
Foreclosures     (4,003 )     4,003       -  
Capitalized costs     -       -       -  
Property sales     -       (4,684 )     (4,684 )
Write downs     -       (326 )     (326 )
Net gains (losses) on sales     -       761       761  
  Ending Balance   $ 26,819     $ 4,221     $ 31,040  
                         
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
(3) Includes purchased indirect auto loans that are not assigned to a geographic region.  
                         
                         
UNITED COMMUNITY BANKS, INC.  
Financial Highlights  
Credit Quality (1)  
   
    Third Quarter 2013  
                   
(in thousands)   Non-performing Loans     Foreclosed Properties     Total NPAs  
NONPERFORMING ASSETS BY CATEGORY                        
Owner occupied CRE   $ 6,358     $ 591     $ 6,949  
Income producing CRE     1,657       139       1,796  
Commercial & industrial     609       -       609  
Commercial construction     343       376       719  
  Total commercial     8,967       1,106       10,073  
Residential mortgage     11,335       1,679       13,014  
Home equity lines of credit     1,169       475       1,644  
Residential construction     4,097       1,207       5,304  
Consumer installment     520       -       520  
  Total NPAs   $ 26,088     $ 4,467     $ 30,055  
  Balance as a % of  Unpaid Principal     61.6 %     41.5 %     57.6 %
                         
NONPERFORMING ASSETS BY MARKET                        
North Georgia   $ 13,652     $ 1,726     $ 15,378  
Atlanta MSA     3,096       1,026       4,122  
North Carolina     5,680       762       6,442  
Coastal Georgia     995       928       1,923  
Gainesville MSA     1,036       -       1,036  
East Tennessee     1,629       25       1,654  
South Carolina / Corporate     -       -       -  
Other (3)     -       -       -  
  Total NPAs   $ 26,088     $ 4,467     $ 30,055  
                         
NONPERFORMING ASSETS ACTIVITY                        
Beginning Balance   $ 27,864     $ 3,936     $ 31,800  
Loans placed on non-accrual     9,959       -       9,959  
Payments received     (3,601 )     -       (3,601 )
Loan charge-offs     (5,395 )     -       (5,395 )
Foreclosures     (2,739 )     2,739       -  
Capitalized costs     -       7       7  
Property sales     -       (2,534 )     (2,534 )
Write downs     -       (329 )     (329 )
Net gains (losses) on sales     -       648       648  
  Ending Balance   $ 26,088     $ 4,467     $ 30,555  
                         
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
(3) Includes purchased indirect auto loans that are not assigned to a geographic region.  
   
UNITED COMMUNITY BANKS, INC.  
Financial Highlights  
Credit Quality (1)  
   
  First Quarter 2014     Fourth Quarter 2013     Third Quarter 2013  
(in thousands) Net Charge-Offs   Net Charge-Offs to Average Loans (2)     Net Charge-Offs     Net Charge-Offs to Average Loans (2)     Net Charge-Offs   Net Charge-Offs to Average Loans (2)  
NET CHARGE-OFFS BY CATEGORY                            
Owner occupied CRE $ 278   .10 %   $ 1,638     .57 %   $ 1,641   .58 %
Income producing CRE   205   .13       320     .21       216   .14  
Commercial & industrial   421   .35       (149 )   (.13 )     136   .12  
Commercial construction   -   -       (9 )   (.02 )     133   .39  
  Total commercial   904   .15       1,800     .30       2,126   .36  
Residential mortgage   1,515   .71       1,426     .64       693   .31  
Home equity lines of credit   993   .90       417     .38       382   .37  
Residential construction   212   .27       327     .40       1,072   1.31  
Consumer installment   415   .54       475     .62       200   .28  
  Total $ 4,039   .38     $ 4,445     .41     $ 4,473   .42  
                                     
                                     
NET CHARGE-OFFS BY MARKET                                
North Georgia $ 1,272   .42 %   $ 1,603     .51 %   $ 2,090   .66 %
Atlanta MSA   1,232   .39       636     .20       1,013   .33  
North Carolina   577   .41       1,104     .76       704   .49  
Coastal Georgia   512   .49       345     .33       139   .14  
Gainesville MSA   141   .22       346     .54       97   .15  
East Tennessee   239   .35       323     .46       359   .51  
South Carolina / Corporate   -   -       -     -       -   -  
Other (3)   66   .14       88     .20       71   .17  
  Total $ 4,039   .38     $ 4,445     .41     $ 4,473   .42  
                                     
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
(3) Includes purchased indirect auto loans that are not assigned to a geographic region.  
   
   
   
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income  (Unaudited)
 
    Three Months Ended
    March 31,
(in thousands, except per share data)   2014   2013
             
Interest revenue:            
  Loans, including fees   $ 47,688   $ 50,935
  Investment securities, including tax exempt of $188 and $212     11,607     9,944
  Deposits in banks and short-term investments     843     870
      Total interest revenue     60,138     61,749
             
Interest expense:            
  Deposits:            
    NOW     440     454
    Money market     563     562
    Savings     20     36
    Time     1,771     3,291
      Total deposit interest expense     2,794     4,343
  Short-term borrowings     840     516
  Federal Home Loan Bank advances     58     19
  Long-term debt     2,634     2,662
      Total interest expense     6,326     7,540
      Net interest revenue     53,812     54,209
  Provision for credit losses     2,500     11,000
      Net interest revenue after provision for credit losses     51,312     43,209
             
Fee revenue:            
  Service charges and fees     7,898     7,403
  Mortgage loan and other related fees     1,354     2,655
  Brokerage fees     1,177     767
  Securities gains, net     217     116
  Other     1,530     1,970
    Total fee revenue     12,176     12,911
    Total revenue     63,488     56,120
             
Operating expenses:            
  Salaries and employee benefits     24,396     23,592
  Communications and equipment     3,239     3,046
  Occupancy     3,378     3,367
  Advertising and public relations     626     938
  Postage, printing and supplies     776     863
  Professional fees     1,427     2,366
  Foreclosed property     116     2,333
  FDIC assessments and other regulatory charges     1,353     2,505
  Amortization of intangibles     387     705
  Other     3,352     4,055
    Total operating expenses     39,050     43,770
    Net income before income taxes     24,438     12,350
  Income tax expense     9,038     585
    Net income     15,400     11,765
  Preferred stock dividends and discount accretion     439     3,052
    Net income available to common shareholders   $ 14,961   $ 8,713
             
Earnings per common share            
  Basic   $ .25   $ .15
  Diluted     .25     .15
Weighted average common shares outstanding            
  Basic     60,059     58,081
  Diluted     60,061     58,081
               
               
               
UNITED COMMUNITY BANKS, INC.  
Consolidated Balance Sheet (Unaudited)  
   
(in thousands, except share and per share data)   March 31, 2014     December 31, 2013     March 31, 2013  
                         
ASSETS                        
  Cash and due from banks   $ 52,813     $ 71,230     $ 57,638  
  Interest-bearing deposits in banks     110,529       119,669       107,390  
  Short-term investments     49,999       37,999       82,000  
    Cash and cash equivalents     213,341       228,898       247,028  
  Securities available for sale     1,837,676       1,832,217       1,909,426  
  Securities held to maturity (fair value $473,136, $485,585 and $247,087)     464,697       479,742       231,087  
  Mortgage loans held for sale     10,933       10,319       18,290  
  Loans, net of unearned income     4,355,708       4,329,266       4,193,560  
    Less allowance for loan losses     (75,223 )     (76,762 )     (105,753 )
      Loans, net     4,280,485       4,252,504       4,087,807  
  Assets covered by loss sharing agreements with the FDIC     21,353       22,882       42,096  
  Premises and equipment, net     161,540       163,589       168,036  
  Bank owned life insurance     80,790       80,670       82,114  
  Accrued interest receivable     18,572       19,598       18,302  
  Intangible assets     3,093       3,480       4,805  
  Foreclosed property     5,594       4,221       16,734  
  Net deferred tax asset     243,683       258,518       -  
  Derivative financial instruments     21,563       23,833       601  
  Other assets     34,917       44,948       23,042  
    Total assets   $ 7,398,237     $ 7,425,419     $ 6,849,368  
LIABILITIES AND SHAREHOLDERS' EQUITY                        
Liabilities:                        
  Deposits:                        
    Demand   $ 1,471,781     $ 1,388,512     $ 1,298,425  
    NOW     1,392,863       1,427,939       1,281,454  
    Money market     1,235,429       1,227,575       1,165,836  
    Savings     270,910       251,125       243,347  
    Time:                        
      Less than $100,000     833,188       892,961       1,019,396  
      Greater than $100,000     572,889       588,689       685,174  
    Brokered     470,481       424,704       332,220  
        Total deposits     6,247,541       6,201,505       6,025,852  
  Short-term borrowings     123,075       53,241       51,999  
  Federal Home Loan Bank advances     50,125       120,125       125  
  Long-term debt     129,865       129,865       124,825  
  Derivative financial instruments     42,309       46,232       14,556  
  Unsettled securities purchases     63,999       29,562       -  
  Accrued expenses and other liabilities     37,593       49,174       39,793  
    Total liabilities     6,694,507       6,629,704       6,257,150  
Shareholders' equity:                        
  Preferred stock, $1 par value; 10,000,000 shares authorized;                        
    Series A; $10 stated value; 0, 0 and 21,700 shares issued and outstanding     -       -       217  
    Series B; $1,000 stated value; 0, 105,000 and 180,000 shares issued and outstanding     -       105,000       178,937  
    Series D; $1,000 stated value; 0, 16,613 and 16,613 shares issued and outstanding     -       16,613       16,613  
  Common stock, $1 par value; 100,000,000 shares authorized; 50,011,094, 46,243,345 and 43,063,761 shares issued and outstanding     50,011       46,243       43,064  
  Common stock, non-voting, $1 par value; 30,000,000 shares authorized; 10,080,787, 13,188,206 and 14,703,636 shares issued and outstanding     10,081       13,188       14,704  
  Common stock issuable; 237,763, 241,832 and 133,469 shares     3,840       3,930       2,726  
  Capital surplus     1,091,696       1,078,676       1,059,222  
  Accumulated deficit     (433,130 )     (448,091 )     (700,440 )
  Accumulated other comprehensive loss     (18,768 )     (19,844 )     (22,825 )
    Total shareholders' equity     703,730       795,715       592,218  
    Total liabilities and shareholders' equity   $ 7,398,237     $ 7,425,419     $ 6,849,368  
                             
                             
                             
UNITED COMMUNITY BANKS, INC.  
Average Consolidated Balance Sheets and Net Interest Analysis  
For the Three Months Ended March 31,  
                                 
  2014     2013  
(dollars in thousands, taxable equivalent) Average Balance     Interest     Avg. Rate     Average Balance     Interest   Avg. Rate  
Assets:                                        
Interest-earning assets:                                        
  Loans, net of unearned income (1)(2) $ 4,355,572     $ 47,868     4.46 %   $ 4,196,757     $ 51,000   4.93 %
  Taxable securities (3)   2,300,316       11,419     1.99       2,119,085       9,732   1.84  
  Tax-exempt securities (1)(3)   20,173       308     6.11       21,733       347   6.39  
  Federal funds sold and other interest-earning assets   150,841       900     2.39       209,674       1,035   1.97  
    Total interest-earning assets   6,826,902       60,495     3.58       6,547,249       62,114   3.84  
Non-interest-earning assets:                                        
  Allowance for loan losses   (77,491 )                   (110,941 )            
  Cash and due from banks   62,054                     64,294              
  Premises and equipment   162,788                     169,280              
  Other assets (3)   410,175                     164,250              
    Total assets $ 7,384,428                   $ 6,834,132              
                                         
Liabilities and Shareholders' Equity:                                        
Interest-bearing liabilities:                                        
  Interest-bearing deposits:                                        
    NOW $ 1,416,119       440     .13     $ 1,303,308       454   .14  
    Money market   1,376,993       563     .17       1,257,409       562   .18  
    Savings   259,548       20     .03       234,110       36   .06  
    Time less than $100,000   877,695       1,013     .47       1,039,707       1,749   .68  
    Time greater than $100,000   578,190       918     .64       694,553       1,477   .86  
    Brokered time deposits   287,979       (160 )   (.23 )     175,128       65   .15  
      Total interest-bearing deposits   4,796,524       2,794     .24       4,704,215       4,343   .37  
                                         
    Federal funds purchased and other borrowings   112,583       840     3.03       72,157       516   2.90  
    Federal Home Loan Bank advances   125,069       58     .19       33,069       19   .23  
    Long-term debt   129,865       2,634     8.23       124,816       2,662   8.65  
      Total borrowed funds   367,517       3,532     3.90       230,042       3,197   5.64  
                                         
Total interest-bearing liabilities   5,164,041       6,326     .50       4,934,257       7,540   .62  
  Non-interest-bearing liabilities:                                        
  Non-interest-bearing deposits   1,400,619                     1,241,527              
  Other liabilities   116,667                     70,839              
      Total liabilities   6,681,327                     6,246,623              
Shareholders' equity   703,101                     587,509              
      Total liabilities and shareholders' equity $ 7,384,428                   $ 6,834,132              
                                         
Net interest revenue         $ 54,169                   $ 54,574      
Net interest-rate spread                 3.08 %                 3.22 %
                                         
Net interest margin (4)                 3.21 %                 3.37 %
                                         
(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 $4.6 million in 2014 and pretax unrealized gains of $17.1 million in 2013 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:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com

Source: United Community Banks, Inc.

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