United Community Banks, Inc.
Apr 22, 2015

United Community Banks, Inc. Reports Net Income of $17.7 Million for First Quarter 2015, Up 15 Percent From a Year Ago

BLAIRSVILLE, Ga., April 22, 2015 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (Nasdaq:UCBI) ("United") today reported net income of $17.7 million, or 29 cents per diluted share, for the first quarter of 2015. Earnings per share were up 16 percent from a year ago. The increase reflects strong loan and core deposit growth, a stable net interest margin and growth in fee revenue.

"I am very pleased with our strong first quarter financial results and our outlook for the remainder of the year," said Jimmy Tallent, chairman and chief executive officer. "We had solid loan growth and a steady net interest margin. Fee revenue was up with meaningful increases in our mortgage and brokerage businesses and higher gains from our SBA lending business. Our return on assets was .94 percent, and return on equity was 9.3 percent."

Tallent continued, "The first quarter also included three non-core items. We repaid $6 million in structured repurchase agreements that we were paying 4 percent interest, and redeemed $15.5 million in trust preferred securities that we were paying an average rate of 11 percent interest, resulting in total prepayment charges of $1.04 million that were included in fee revenue. Repayment of these instruments will result in approximately $1.9 million in annual interest savings. Also, we paid the FDIC $690,000 to close the loss sharing agreements related to our acquisition of Southern Community Bank in June of 2009. In addition to administrative cost savings, we will now retain 100 percent of the recoveries from previously covered losses. This will more than offset the $690,000 payment within the next two years. And, we had securities gains of $1.54 million that offset most of the $1.73 million impact of these other non-core items."

Tallent continued, "First quarter net loan growth of $116 million was driven by strong loan production of $423 million across all United markets.  Our community banks originated $314 million of loan production while our specialized lending area, which includes our health care, corporate, SBA, asset-based, middle market and commercial real estate lending businesses, produced $108 million. Core deposit growth was another contributing factor with a linked-quarter increase of $206 million, or 22 percent annualized. Increased demand deposits in our Atlanta and north Georgia markets drove over half of this growth."

First quarter taxable equivalent net interest revenue totaled $57.6 million, down $715,000 from the fourth quarter and up $3.45 million from the first quarter of 2014. The taxable equivalent net interest margin of 3.31 percent held steady with the prior quarter and was up 10 basis points from a year ago. Along with loan growth, this drove the increase in net interest revenue.

"The linked quarter decrease in net interest revenue was due to two fewer days of interest accruals in the first quarter," said Tallent. "We've been able to hold the margin steady in the low 3.30 percent range following our second quarter 2014 balance sheet management activities, which included restructuring the securities portfolio, interest rate hedges and wholesale borrowings. However, we continue to see loan pricing pressures and expect our margin to decline slightly through the balance of 2015. With only a modest decline, we expect loan growth to drive increases in net interest revenue going forward."

The first quarter provision for credit losses was $1.8 million, equal to the fourth quarter and down $700,000 from the first quarter of 2014. First quarter net charge-offs were $2.56 million compared with $2.51 million in the fourth quarter and $4.04 million a year ago. Nonperforming assets to total assets were .26 percent, equal to last quarter and down from .42 percent a year ago.

First quarter fee revenue totaled $15.7 million, up $859,000 from the fourth quarter and $3.51 million from the first quarter of 2014. The increase from a year ago resulted primarily from the growing SBA lending and mortgage businesses and the related gains on sales of loans. SBA loan sale gains totaled $1.14 million in the first quarter of 2015 and $926,000 in the fourth quarter of 2014. There were no gains from SBA loan sales in the first quarter of 2014. Mortgage fees were up $644,000 from the fourth quarter and $1.40 million from a year ago, reflecting strong growth in new home purchases and an increase in refinancing activity. Closed mortgage loans totaled $87.9 million in the first quarter of 2015, compared with $77.4 million and $46.0 million, respectively, in the fourth and first quarters of 2014.

First quarter brokerage fees of $1.55 million from United's advisory services business were up $375,000 from both the fourth and first quarters of 2014. Service charges and fees were down from both of these same prior quarters, mostly reflecting the declining trend in overdraft fees.

Tallent added, "The growing SBA lending business and the increase in mortgage and brokerage fees reflect our commitment to diversifying the revenue stream by focusing on fee generating products and services."

Operating expenses were $43.1 million in the first quarter compared to $41.9 million in the fourth quarter and $39.1 million a year ago. Excluding the non-core items in other operating expenses noted below, total core operating expenses were $42.4 million in the first quarter 2015 compared to $42.6 million in the fourth quarter and $39.1 million a year ago. The current quarter is down slightly compared to the fourth quarter and up $3.3 million from a year ago. The increase from a year ago was driven by higher salaries and employee benefit costs, and an increase in other operating costs.

First quarter salaries and employee benefits expense of $26.4 million was down $146,000 from the fourth quarter but up $2.05 million from a year ago. The increase from a year ago reflects investment in new producers and support staff for the specialized lending area, and higher commissions and incentives associated with growth in the mortgage and advisory services businesses, as well as growth in commercial loans and core deposits. Other operating expenses of $5.25 million for the first quarter were up $1.33 million and $1.40 million, respectively, from the fourth and first quarters of 2014. First quarter 2015 other operating expenses included a non-core charge of $690,000 associated with closing all loss sharing agreements with the FDIC, as noted earlier. The fourth quarter of 2014 included a $492,000 charge related to the FDIC's adjustment for interest claimed on the first loss share filing which was more than offset by a $1.2 million reversal of a previously established litigation reserve. Excluding these non-core items, other operating expenses were down slightly from the fourth quarter and up $705,000 from a year ago due to higher travel and lending-related costs to support loan growth.

"During the first quarter we received regulatory approvals for the previously announced merger with MoneyTree Corporation and its subsidiary First National Bank," Tallent said. "We expect the transaction to close as planned on May 1, with conversion of the operating systems by mid-July. We look forward to expanding our Tennessee markets and welcoming the First National team of bankers to the United family."

At March 31, 2015, capital ratios were as follows: Tier 1 Risk-Based of 11.5 percent; Total Risk-Based of 12.8 percent; Tier 1 Common Risk-Based of 11.5 percent; and, Tier 1 Leverage of 8.7 percent.

"We are off to a solid start in 2015, including strong growth in loans, core deposits and fee revenue," Tallent said. "We are excited about executing our growth strategies to expand the franchise and add value for shareholders. In addition to the completion of the MoneyTree transaction on May 1, we announced earlier today an agreement to acquire $1.2 billion-asset Palmetto Bancshares, Inc. and its 108 year-old bank - The Palmetto Bank - in Greenville, South Carolina. The addition of MoneyTree will significantly increase our market share and customer base in eastern Tennessee, and the addition of Palmetto will make us the number one community bank in Upstate South Carolina."

Conference Call

United will hold a conference call today, Wednesday, April 22, 2015, at 11 a.m. ET to discuss the contents of this news release and the separate news release regarding United's merger with Palmetto Bancshares, Inc., and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 15339428. 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. (UCBI) is a bank holding company based in Blairsville, Georgia, with $7.7 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast's largest full-service banks, operating 104 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for individuals, small businesses and corporations. A full range of consumer and commercial banking services includes mortgage, advisory, treasury management and other products.  In 2014, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and in 2015 was ranked fourteenth on the Forbes list of America's Best Banks.  Additional information about the company and the bank's full range of products and services can be found at www.ucbi.com.

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 2014 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
  2015 2014 Quarter
(in thousands, except per share  First   Fourth   Third   Second   First  2015-2014
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY            
Interest revenue  $ 62,909  $ 64,353  $ 63,338  $ 61,783  $ 60,495  
Interest expense  5,292  6,021  6,371  6,833  6,326  
Net interest revenue  57,617  58,332  56,967  54,950  54,169 6%
Provision for credit losses  1,800  1,800  2,000  2,200  2,500  
Fee revenue  15,682  14,823  14,412  14,143  12,176  29
Total revenue  71,499  71,355  69,379  66,893  63,845  12
Operating expenses  43,061  41,919  41,364  40,532  39,050  10
Income before income taxes  28,438  29,436  28,015  26,361  24,795  15
Income tax expense  10,768  11,189  10,399  10,004  9,395  15
Net income  17,670  18,247  17,616  16,357  15,400  15
Preferred dividends and discount accretion  --   --   --   --   439  
Net income available to common shareholders  $ 17,670  $ 18,247  $ 17,616  $ 16,357  $ 14,961  18
             
PERFORMANCE MEASURES            
Per common share:            
Diluted income  $ .29  $ .30  $ .29  $ .27  $ .25  16
Cash dividends declared  .05  .05  .03  .03  --   
Book value  12.58  12.20  12.15  11.94  11.66  8
Tangible book value (2)  12.53  12.15  12.10  11.91  11.63  8
             
Key performance ratios:            
Return on common equity (1)(3)  9.34%  9.60%  9.41%  8.99%  8.64%  
Return on assets (3)  .94  .96  .95  .88  .85  
Dividend payout ratio  17.24  16.67  10.34  11.11  --   
Net interest margin (3)  3.31  3.31  3.32  3.21  3.21  
Efficiency ratio  59.15  57.47  57.96  58.65  59.05  
Average equity to average assets 9.86 9.76 9.85 9.61 9.52  
Average tangible equity to average assets (2) 9.82 9.72 9.83 9.58 9.50  
Average tangible common equity to average assets (2) 9.82 9.72 9.83 9.58 9.22  
Tangible common equity to risk-weighted assets (2) (4) 13.53 13.82 14.10 13.92 13.63  
             
ASSET QUALITY            
Nonperforming loans  $ 19,015  $ 17,881  $ 18,745  $ 20,724  $ 25,250  (25)
Foreclosed properties  1,158  1,726  3,146  2,969  5,594  (79)
Total nonperforming assets (NPAs)  20,173  19,607  21,891  23,693  30,844  (35)
Allowance for loan losses  70,007  71,619  71,928  73,248  75,223  
Net charge-offs  2,562  2,509  3,155  4,175  4,039  (37)
Allowance for loan losses to loans 1.46% 1.53% 1.57% 1.66% 1.73%  
Net charge-offs to average loans (3)  .22  .22  .28  .38  .38  
NPAs to loans and foreclosed properties  .42  .42  .48  .54  .71  
NPAs to total assets  .26  .26  .29  .32  .42  
             
AVERAGE BALANCES ($ in millions)            
Loans  $ 4,725  $ 4,621  $ 4,446  $ 4,376  $ 4,356  8
Investment securities  2,203  2,222  2,231  2,326  2,320  (5)
Earning assets  7,070  7,013  6,820  6,861  6,827  4
Total assets  7,617  7,565  7,374  7,418  7,384  3
Deposits  6,369  6,383  6,143  6,187  6,197  3
Shareholders' equity  751  738  726  713  703  7
Common shares - basic (thousands)  60,905  60,830  60,776  60,712  60,059  
Common shares - diluted (thousands)  60,909  60,833  60,779  60,714  60,061  
             
AT PERIOD END ($ in millions)            
Loans  $ 4,788  $ 4,672  $ 4,569  $ 4,410  $ 4,356  10
Investment securities  2,201  2,198  2,222  2,190  2,302  (4)
Total assets  7,664  7,567  7,526  7,352  7,398  4
Deposits  6,438  6,327  6,241  6,164  6,248  3
Shareholders' equity  764  740  736  722  704  9
Common shares outstanding (thousands)  60,309  60,259  60,248  60,139  60,092  
             
(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) March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015
             
 
UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
 
  2015 2014
(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  $ 62,909  $ 64,353  $ 63,338  $ 61,783  $ 60,495
Taxable equivalent adjustment  (375)  (398)  (405)  (377)  (357)
Interest revenue (GAAP)  $ 62,534  $ 63,955  $ 62,933  $ 61,406  $ 60,138
           
Net interest revenue reconciliation          
Net interest revenue - taxable equivalent  $ 57,617  $ 58,332  $ 56,967  $ 54,950  $ 54,169
Taxable equivalent adjustment  (375)  (398)  (405)  (377)  (357)
Net interest revenue (GAAP)  $ 57,242  $ 57,934  $ 56,562  $ 54,573  $ 53,812
           
Total revenue reconciliation          
Total operating revenue  $ 71,499  $ 71,355  $ 69,379  $ 66,893  $ 63,845
Taxable equivalent adjustment  (375)  (398)  (405)  (377)  (357)
Total revenue (GAAP)  $ 71,124  $ 70,957  $ 68,974  $ 66,516  $ 63,488
           
Income before taxes reconciliation          
Income before taxes  $ 28,438  $ 29,436  $ 28,015  $ 26,361  $ 24,795
Taxable equivalent adjustment  (375)  (398)  (405)  (377)  (357)
Income before taxes (GAAP)  $ 28,063  $ 29,038  $ 27,610  $ 25,984  $ 24,438
           
Income tax expense (benefit) reconciliation          
Income tax expense (benefit)  $ 10,768  $ 11,189  $ 10,399  $ 10,004  $ 9,395
Taxable equivalent adjustment  (375)  (398)  (405)  (377)  (357)
Income tax expense (benefit) (GAAP)  $ 10,393  $ 10,791  $ 9,994  $ 9,627  $ 9,038
           
Book value per common share reconciliation          
Tangible book value per common share  $ 12.53  $ 12.15  $ 12.10  $ 11.91  $ 11.63
Effect of goodwill and other intangibles  .05  .05  .05  .03  .03
Book value per common share (GAAP)  $ 12.58  $ 12.20  $ 12.15  $ 11.94  $ 11.66
           
Average equity to assets reconciliation          
Tangible common equity to assets 9.82% 9.72% 9.83% 9.58% 9.22%
Effect of preferred equity  --   --   --   --   .28
Tangible equity to assets  9.82  9.72  9.83  9.58  9.50
Effect of goodwill and other intangibles  .04  .04  .02  .03  .02
Equity to assets (GAAP)  9.86%  9.76%  9.85%  9.61%  9.52%
           
Tangible common equity to risk-weighted assets reconciliation (1)        
Tangible common equity to risk-weighted assets  13.53%  13.82%  14.10%  13.92%  13.63%
Effect of other comprehensive income  .19  .35  .34  .53  .36
Effect of deferred tax limitation  (2.86)  (3.11)  (3.39)  (3.74)  (3.92)
Effect of trust preferred  .67  1.00  1.02  1.04  1.03
Tier I capital ratio (Regulatory)  11.53%  12.06%  12.07%  11.75%  11.10%
           
(1) March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.          
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
 
           
  2015 2014
   First   Fourth   Third   Second   First 
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY          
Owner occupied commercial RE  $ 1,167  $ 1,163  $ 1,153  $ 1,163  $ 1,142
Income producing commercial RE  636  599  605  598  624
Commercial & industrial  716  710  650  554  495
Commercial construction  230  196  181  160  148
Total commercial  2,749  2,668  2,589  2,475  2,409
Residential mortgage  864  866  866  861  866
Home equity lines of credit  465  466  459  451  447
Residential construction  291  299  307  302  318
Consumer installment  419  373  348  321  316
Total loans  $ 4,788  $ 4,672  $ 4,569  $ 4,410  $ 4,356
           
LOANS BY MARKET          
North Georgia  $ 1,150  $ 1,163  $ 1,168  $ 1,175  $ 1,205
Atlanta MSA  1,296  1,282  1,289  1,305  1,290
North Carolina  539  553  553  555  563
Coastal Georgia  476  456  444  426  425
Gainesville MSA  255  257  254  257  262
East Tennessee  281  280  281  270  272
South Carolina / Specialized Lending  475  412  337  206  131
Indirect auto  316  269  243  216  208
Total loans  $ 4,788  $ 4,672  $ 4,569  $ 4,410  $ 4,356
           
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
 
           
  2015 2014 Linked Year over
   First   Fourth   First   Quarter  Year
(in millions) Quarter Quarter Quarter  Change  Change
LOANS BY CATEGORY          
Owner occupied commercial RE  $ 1,167  $ 1,163  $ 1,142  $ 4  $ 25
Income producing commercial RE  636  599  624  37  12
Commercial & industrial  716  710  495  6  221
Commercial construction  230  196  148  34  82
Total commercial  2,749  2,668  2,409  81  340
Residential mortgage  864  866  866  (2)  (2)
Home equity lines of credit  465  466  447  (1)  18
Residential construction  291  299  318  (8)  (27)
Consumer installment  419  373  316  46  103
Total loans  $ 4,788  $ 4,672  $ 4,356  116  432
           
LOANS BY MARKET          
North Georgia  $ 1,150  $ 1,163  $ 1,205  (13)  (55)
Atlanta MSA  1,296  1,282  1,290  14  6
North Carolina  539  553  563  (14)  (24)
Coastal Georgia  476  456  425  20  51
Gainesville MSA  255  257  262  (2)  (7)
East Tennessee  281  280  272  1  9
South Carolina / Specialized Lending  475  412  131  63  344
Indirect auto  316  269  208  47  108
Total loans  $ 4,788  $ 4,672  $ 4,356  116  432
           
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
 
       
  First Quarter 2015
   Nonperforming   Foreclosed   Total 
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE  $ 4,360  $ 173  $ 4,533
Income producing CRE  835  --   835
Commercial & industrial  1,629  --   1,629
Commercial construction  60  --   60
Total commercial  6,884  173  7,057
Residential mortgage  8,669  796  9,465
Home equity lines of credit  693  50  743
Residential construction  2,127  139  2,266
Consumer installment  642  --   642
Total NPAs  $ 19,015  $ 1,158  $ 20,173
Balance as a % of      
Unpaid Principal 72.0% 56.6% 70.9%
       
NONPERFORMING ASSETS BY MARKET
North Georgia  $ 6,101  $ 662  $ 6,763
Atlanta MSA  1,903  227  2,130
North Carolina  5,321  159  5,480
Coastal Georgia  901  --   901
Gainesville MSA  781  22  803
East Tennessee  1,808  30  1,838
South Carolina / Specialized Lending  1,700  58  1,758
Indirect auto  500  --   500
Total NPAs  $ 19,015  $ 1,158  $ 20,173
       
       
NONPERFORMING ASSETS ACTIVITY
Beginning Balance  $ 17,881  $ 1,726  $ 19,607
Loans placed on non-accrual  5,944  --   5,944
Payments received  (1,513)  --   (1,513)
Loan charge-offs  (2,838)  --   (2,838)
Foreclosures  (459)  459  -- 
Capitalized costs  --   --   -- 
Property sales  --   (1,108)  (1,108)
Write downs  --   (166)  (166)
Net gains (losses) on sales  --   247  247
Ending Balance  $ 19,015  $ 1,158  $ 20,173
       
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
 
       
  Fourth Quarter 2014
   Nonperforming   Foreclosed   Total 
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE  $ 4,133  $ 355  $ 4,488
Income producing CRE  717  --   717
Commercial & industrial  1,571  --   1,571
Commercial construction  83  15  98
Total commercial  6,504  370  6,874
Residential mortgage  8,196  1,183  9,379
Home equity lines of credit  695  40  735
Residential construction  2,006  133  2,139
Consumer installment  480  --   480
Total NPAs  $ 17,881  $ 1,726  $ 19,607
Balance as a % of      
Unpaid Principal 69.9% 54.1% 68.1%
       
NONPERFORMING ASSETS BY MARKET
North Georgia  $ 5,669  $ 711  $ 6,380
Atlanta MSA  1,837  372  2,209
North Carolina  5,221  234  5,455
Coastal Georgia  799  105  904
Gainesville MSA  1,310  81  1,391
East Tennessee  1,414  201  1,615
South Carolina / Specialized Lending  1,285  22  1,307
Indirect auto  346  --   346
Total NPAs  $ 17,881  $ 1,726  $ 19,607
       
       
NONPERFORMING ASSETS ACTIVITY
Beginning Balance  $ 18,745  $ 3,146  $ 21,891
Loans placed on non-accrual  7,140  --   7,140
Payments received  (5,286)  --   (5,286)
Loan charge-offs  (1,841)  --   (1,841)
Foreclosures  (877)  877  -- 
Capitalized costs  --   --   -- 
Property sales  --   (2,483)  (2,483)
Write downs  --   (1)  (1)
Net gains (losses) on sales  --   187  187
Ending Balance  $ 17,881  $ 1,726  $ 19,607
       
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
 
       
  Third Quarter 2014
   Nonperforming   Foreclosed   Total 
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE  $ 2,156  $ 1,024  $ 3,180
Income producing CRE  1,742  42  1,784
Commercial & industrial  1,593  --   1,593
Commercial construction  148  --   148
Total commercial  5,639  1,066  6,705
Residential mortgage  8,350  1,769  10,119
Home equity lines of credit  720  90  810
Residential construction  3,543  221  3,764
Consumer installment  493  --   493
Total NPAs  $ 18,745  $ 3,146  $ 21,891
Balance as a % of      
Unpaid Principal 68.6% 54.5% 66.1%
       
NONPERFORMING ASSETS BY MARKET
North Georgia  $ 7,392  $ 1,717  $ 9,109
Atlanta MSA  1,724  364  2,088
North Carolina  4,919  398  5,317
Coastal Georgia  781  160  941
Gainesville MSA  1,403  85  1,488
East Tennessee  1,227  245  1,472
South Carolina / Specialized Lending  945  177  1,122
Indirect auto  354  --   354
Total NPAs  $ 18,745  $ 3,146  $ 21,891
       
       
NONPERFORMING ASSETS ACTIVITY
Beginning Balance  $ 20,724  $ 2,969  $ 23,693
Loans placed on non-accrual  7,665  --   7,665
Payments received  (3,129)  --   (3,129)
Loan charge-offs  (4,353)  --   (4,353)
Foreclosures  (2,162)  2,162  -- 
Capitalized costs  --   209  209
Property sales  --   (2,350)  (2,350)
Write downs  --   (108)  (108)
Net gains (losses) on sales  --   264  264
Ending Balance  $ 18,745  $ 3,146  $ 21,891
       
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
 
  First Quarter 2015 Fourth Quarter 2014 Third Quarter 2014
     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  $ 351  .12%  $ 891  .31%  $ 746  .26%
Income producing CRE  247  .16  143  .09  104  .07
Commercial & industrial  341  .19  (295)  (.17)  (341)  (.23)
Commercial construction  22  .04  (6)  (.01)  103  .24
Total commercial  961  .14  733  .11  612  .10
Residential mortgage  416  .20  1,226  .56  1,116  .52
Home equity lines of credit  59  .05  238  .20  356  .31
Residential construction  1,060  1.46  (44)  (.06)  712  .94
Consumer installment  66  .07  356  .39  359  .43
Total  $ 2,562  .22  $ 2,509  .22  $ 3,155  .28
             
             
NET CHARGE-OFFS BY MARKET
North Georgia  $ 1,053  .37%  $ 791  .27%  $ 1,861  .63%
Atlanta MSA  188  .06  147  .05  (250)  (.08)
North Carolina  666  .49  1,103  .79  656  .47
Coastal Georgia  134  .12  30  .03  228  .21
Gainesville MSA  (65)  (.10)  94  .15  259  .40
East Tennessee  471  .68  54  .08  230  .33
South Carolina / Specialized Lending  --   --   110  .11  5  .01
Indirect auto  115  .16  180  .29  166  .31
Total  $ 2,562  .22  $ 2,509  .22  $ 3,155  .28
             
(1) Annualized.
             
 
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
 
  Three Months Ended
  March 31,
(in thousands, except per share data) 2015 2014
     
Interest revenue:    
Loans, including fees  $ 49,664  $ 47,688
Investment securities, including tax exempt of $158 and $188  12,058  11,607
Deposits in banks and short-term investments  812  843
Total interest revenue  62,534  60,138
     
Interest expense:    
Deposits:    
NOW  394  440
Money market  673  563
Savings  20  20
Time  1,109  1,771
Total deposit interest expense  2,196  2,794
Short-term borrowings  98  840
Federal Home Loan Bank advances  392  58
Long-term debt  2,606  2,634
Total interest expense  5,292  6,326
Net interest revenue  57,242  53,812
Provision for credit losses  1,800  2,500
Net interest revenue after provision for credit losses  55,442  51,312
     
Fee revenue:    
Service charges and fees  7,615  7,898
Mortgage loan and other related fees  2,755  1,354
Brokerage fees  1,551  1,177
Gains from sales of SBA loans  1,141  --
Securities gains, net  1,539  217
Loss from prepayment of debt  (1,038)  --
Other  2,119  1,530
Total fee revenue  15,682  12,176
Total revenue  71,124  63,488
     
Operating expenses:    
Salaries and employee benefits  26,446  24,396
Communications and equipment  3,271  3,239
Occupancy  3,278  3,378
Advertising and public relations  750  626
Postage, printing and supplies  938  776
Professional fees  1,919  1,427
FDIC assessments and other regulatory charges  1,209  1,353
Other  5,250  3,855
Total operating expenses  43,061  39,050
Net income before income taxes  28,063  24,438
Income tax expense  10,393  9,038
Net income  17,670  15,400
Preferred stock dividends and discount accretion  --   439
Net income available to common shareholders  $ 17,670  $ 14,961
     
Earnings per common share:    
Basic  $ .29  $ .25
Diluted  .29  .25
Weighted average common shares outstanding:    
Basic  60,905  60,059
Diluted  60,909  60,061
     
 
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
 
  March 31, December 31, March 31,
(in thousands, except share and per share data) 2015 2014 2014
       
ASSETS      
Cash and due from banks  $ 77,493  $ 77,180  $ 52,813
Interest-bearing deposits in banks  82,269  89,074  110,529
Short-term investments  25,902  26,401  49,999
Cash and cash equivalents  185,664  192,655  213,341
Securities available for sale  1,801,973  1,782,734  1,837,676
Securities held to maturity (fair value $413,550, $425,233 and $473,136)  399,228  415,267  464,697
Mortgage loans held for sale  15,723  13,737  10,933
Loans, net of unearned income  4,787,689  4,672,119  4,355,708
Less allowance for loan losses  (70,007)  (71,619)  (75,223)
Loans, net  4,717,682  4,600,500  4,280,485
Assets covered by loss sharing agreements with the FDIC  --  3,315  21,353
Premises and equipment, net  159,036  159,390  161,540
Bank owned life insurance  81,490  81,294  80,790
Accrued interest receivable  20,154  20,103  18,572
Net deferred tax asset  201,898  215,503  243,683
Derivative financial instruments  20,291  20,599  21,563
Other assets  60,764  61,889  43,604
Total assets  $ 7,663,903  $ 7,566,986  $ 7,398,237
LIABILITIES AND SHAREHOLDERS' EQUITY      
Liabilities:      
Deposits:      
Demand  $ 1,694,755  $ 1,574,317  $ 1,471,781
NOW  1,420,956  1,504,887  1,392,863
Money market  1,306,421  1,273,283  1,235,429
Savings  312,013  292,308  270,910
Time:      
Less than $100,000  723,323  748,478  833,188
Greater than $100,000  482,955  508,228  572,889
Brokered  497,508  425,011  470,481
Total deposits  6,437,931  6,326,512  6,247,541
Repurchase agreements  --  6,000  123,075
Federal Home Loan Bank advances  270,125  270,125  50,125
Long-term debt  113,901  129,865  129,865
Derivative financial instruments  29,276  31,997  42,309
Unsettled securities purchases  --  5,425  63,999
Accrued expenses and other liabilities  48,965  57,485  37,593
Total liabilities  6,900,198  6,827,409  6,694,507
Shareholders' equity:      
Common stock, $1 par value; 100,000,000 shares authorized;      
50,228,075, 50,178,605 and 50,011,094 shares issued and outstanding  50,228  50,178  50,011
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;      
10,080,787, 10,080,787 and 10,080,787 shares issued and outstanding  10,081  10,081  10,081
Common stock issuable; 400,369, 357,983 and 237,763 shares  5,895  5,168  3,840
Capital surplus  1,081,110  1,080,508  1,091,696
Accumulated deficit  (372,933)  (387,568)  (433,130)
Accumulated other comprehensive loss  (10,676)  (18,790)  (18,768)
Total shareholders' equity  763,705  739,577  703,730
Total liabilities and shareholders' equity  $ 7,663,903  $ 7,566,986  $ 7,398,237
       
 
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
 
  2015 2014
   Average    Avg.  Average    Avg.
(dollars in thousands, taxable equivalent)  Balance   Interest  Rate  Balance   Interest  Rate
Assets:            
Interest-earning assets:            
Loans, net of unearned income (1)(2)  $ 4,725,304  $ 49,865 4.28%  $ 4,355,572  $ 47,868 4.46%
Taxable securities (3)  2,186,756  11,900 2.18  2,300,316  11,419 1.99
Tax-exempt securities (1)(3)  16,236  259 6.38  20,173  308 6.11
Federal funds sold and other interest-earning assets  141,414  885 2.50  150,841  900 2.39
             
Total interest-earning assets  7,069,710  62,909 3.60  6,826,902  60,495 3.58
Non-interest-earning assets:            
Allowance for loan losses  (72,192)      (77,491)    
Cash and due from banks  79,025      62,054    
Premises and equipment  159,502      162,788    
Other assets (3)  381,300      410,175    
Total assets  $ 7,617,345      $ 7,384,428    
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW  $ 1,475,913  394 .11  $ 1,416,119  440 .13
Money market  1,466,913  673 .19  1,376,993  563 .17
Savings  300,344  20 .03  259,548  20 .03
Time less than $100,000  737,254  724 .40  877,695  1,013 .47
Time greater than $100,000  494,451  664 .54  578,190  918 .64
Brokered time deposits  273,327  (279) (.41)  287,979  (160) (.23)
Total interest-bearing deposits  4,748,202  2,196 .19  4,796,524  2,794 .24
             
Federal funds purchased and other borrowings  36,145  98 1.10  112,583  840 3.03
Federal Home Loan Bank advances  239,181  392 .66  125,069  58 .19
Long-term debt  127,740  2,606 8.27  129,865  2,634 8.23
Total borrowed funds  403,066  3,096 3.12  367,517  3,532 3.90
             
Total interest-bearing liabilities  5,151,268  5,292 .42  5,164,041  6,326 .50
Non-interest-bearing liabilities:            
Non-interest-bearing deposits  1,620,984      1,400,619    
Other liabilities  94,207      116,667    
Total liabilities  6,866,459      6,681,327    
Shareholders' equity  750,886      703,101    
Total liabilities and shareholders' equity  $ 7,617,345      $ 7,384,428    
             
Net interest revenue    $ 57,617      $ 54,169  
Net interest-rate spread     3.18%     3.08%
             
Net interest margin (4)     3.31%     3.21%
             
(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 gains of $10.8 million in 2015 and pretax unrealized losses of $4.63 million in 2014 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.
             
CONTACT: For more information:

         Rex S. Schuette

         Chief Financial Officer

         (706) 781-2266

         Rex_Schuette@ucbi.com

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Source: United Community Banks, Inc.

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