United Community Banks, Inc. Reports Net Operating Income of $23.9 Million for First Quarter 2016, up 36 Percent From a Year Ago

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United Community Banks, Inc. Reports Net Operating Income of $23.9 Million for First Quarter 2016, up 36 Percent From a Year Ago

Apr 27, 2016

United Community Banks, Inc. Reports Net Operating Income of $23.9 Million for First Quarter 2016, up 36 Percent From a Year Ago 178.3 KB

Operating earnings per diluted share of 33 cents, up 14 percent from first quarter of 2015
Operating return on assets of 1.00 percent - compared to .94 percent a year ago
Operating return on tangible common equity of 10.91 percent - up from 9.46 percent a year ago
Loans up $111 million from the fourth quarter of 2015, or 7 percent annualized
Core transaction deposits up $113 million from the fourth quarter of 2015, or 9 percent annualized

BLAIRSVILLE, Ga., April 27, 2016 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today reported first quarter results reflecting strong credit quality, capital management, profitability and growth. Net operating income was $23.9 million, or 33 cents per diluted share, compared with $17.7 million, or 29 cents per diluted share, in the first quarter of 2015.

Net operating income and net operating income per diluted share exclude merger-related and other charges. Including those charges, first quarter 2016 net income was $22.3 million, or 31 cents per diluted share, compared with $17.7 million, or 29 cents per diluted share in the first quarter of 2015.

At March 31, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.3 percent; Total Risk-Based of 12.3 percent; Common Equity Tier 1 Risk-Based of 11.3 percent; and, Tier 1 Leverage of 8.4 percent.

"Our first quarter results continue to demonstrate the growing potential of United and our focus on increasing returns to our shareholders. Our performance reflects our emphasis on maintaining a high-quality balance sheet, increasing profitability and generating growth," said Jimmy Tallent, chairman and chief executive officer. "It underscores our ability to prudently grow our loan portfolio and high-quality, low-cost core deposits, maintain top-quartile credit quality, and expand fee revenue while maintaining operating expense discipline, and making strategic investments in technology, geographic market positioning, products and enhanced expertise.

"First quarter loan production was a solid $562 million," Tallent added. "Loan growth was $111 million, or 7 percent annualized, in line with our 2016 target of a mid-to-upper-single-digit increase. Our community banks originated $347 million in loan production, while our specialized lending area, which includes asset-based, commercial real estate, middle market, SBA and builder finance lending, produced $145 million. Helping fund these loans was quarter-to-quarter core transaction deposit growth of $113 million, or 9 percent annualized. Core deposits comprise 90 percent of total deposits, one of the best ratios in the country."

First quarter taxable-equivalent net interest revenue totaled $75.2 million, up $1.2 million from the fourth quarter of 2015 and up $17.6 million from the first quarter of 2015. This increase reflects strong loan and core deposit growth, and an increase in the net interest margin. The increase from the first quarter of 2015 also reflects net interest revenue from the Palmetto and First National Bank acquisitions.

The taxable-equivalent net interest margin of 3.41 percent reflected a seven basis point increase from the fourth quarter of 2015, and a 10 basis point increase from a year ago. The increase from the fourth quarter reflects higher yields on the loan and investment securities portfolios, offset slightly by a one basis point increase in the rate paid on interest-bearing liabilities. Yields on floating rate loans and investment securities benefited from the full quarterly impact of the Federal Reserve Bank's December 2015 rate hike.

The first quarter provision for credit losses was negative $200,000 compared with positive provisions of $300,000 during the fourth quarter of 2015 and $1.8 million during the first quarter of 2015. In addition to continued strong credit quality and a low overall level of net charge-offs, the first quarter negative provision reflects an overall improvement in a number of our largest troubled debt restructurings and the related release of reserves assigned specifically to them.

"Our credit quality indicators are very favorable, and our outlook is for this to continue, which will result in driving down our allowance for loan losses requirement," stated Tallent. "While we strive to maintain a conservative allowance for loan losses, our recent loss history and improving credit measures continue to require us to decrease our allowance each quarter."

First quarter net charge-offs totaled $2.1 million compared with $1.3 million during the fourth quarter of 2015, and $2.6 million during the first quarter of 2015. Strong recoveries of previously charged-off loans drove net charge-offs down in the third and fourth quarters of 2015 from the first and second quarters of 2015. Nonperforming assets were 0.28 percent of total assets at March 31, 2016, compared with 0.29 percent at December 31, 2015 and 0.26 percent a year ago.

First quarter fee revenue totaled $18.6 million, a decrease of $2.7 million from the fourth quarter of 2015. The decrease was mostly seasonal and primarily the result of a $1.4 million decline in service charges and fees, a $758,000 decline in gains from sales of SBA loans, and a $541,000 decline in other fee revenue. First quarter fee revenue increased $2.9 million from the first quarter of 2015, primarily due to acquisitions.

During the first quarter of 2016, sales of $13.0 million in SBA loans resulted in net gains of $1.2 million. This compares with sales of $25.1 million and net gains of $2.0 million during the fourth quarter of 2015, and sales of $13.0 million and net gains of $1.1 million during the first quarter of 2015.

Operating expenses, excluding merger-related and other charges, were $55.2 million in the first quarter of 2016. This compares to $56.4 million in the fourth quarter of 2015 and $43.1 million in the first quarter of 2015.

"The linked quarter decrease in operating expenses is primarily related to Palmetto cost savings, and is only part of the story," commented Tallent. "What also is important to our future growth are the substantial investments we made during the quarter in talented revenue producers. To leverage the United brand and gain share in high-growth areas, during the first quarter we added eight new mortgage lenders in our metro markets. In our specialized lending areas, primarily in our SBA lending business we added 11 revenue producers. We also added three lenders in our loan production office in Charleston, South Carolina, and opened a new loan production office in Macon, Georgia.

"Consistent with this strategy, on April 4, 2016, we entered into a merger agreement with Tidelands Bancshares, Inc., the holding company for Tidelands Bank which is based in Mt. Pleasant, South Carolina," Tallent said. "Tidelands Bank will merge into United Community Bank and operate under the United brand on the South Carolina coast, including Charleston, Hilton Head and Myrtle Beach.

"Following the opening of a loan production office in Charleston in the fourth quarter of 2015, this strategic purchase completes a two-step plan to launch and accelerate growth in attractive coastal South Carolina markets," said Tallent. "The Tidelands agreement is expected to close in the third quarter and will be immediately accretive to operating earnings. I am excited to have Thomas Lyles and his team join the United family.

"In the first quarter we maintained strong momentum and, with our talented bankers at work, we expect to do so again in the second quarter and throughout the remainder of 2016," Tallent said. "Our talented bankers are executing our plans as we maintain a high-quality balance sheet, increase profitability and generate growth."

Conference Call
United will hold a conference call today, Wednesday, April 27, 2016, 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 79143447. 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 $9.8 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast region's largest full-service banks, operating 135 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in providing personalized community banking services to individuals, small businesses and corporations. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. United Community Banks is consistently recognized for its outstanding customer service by respected national research firms. In 2014 and 2015, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and again in 2016 was ranked among the top 100 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 2015 Annual Report on Form 10-K under the sections entitled "Forward-Looking Statements" and "Risk Factors." Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																	First
		2016			2015												Quarter
(in thousands, except per share	First				Fourth			Third			Second			First			2016-2015
data; fully taxable equivalent)	Quarter				Quarter			Quarter			Quarter			Quarter			Change
INCOME SUMMARY
Interest revenue (FTE)	$	80,991			$	79,646		$	71,120		$	66,134		$	62,909
Interest expense		5,769				5,598			5,402			4,817			5,292
Net interest revenue (FTE)		75,222				74,048			65,718			61,317			57,617			31		%
Provision for credit losses		(200	)			300			700			900			1,800
Fee revenue		18,606				21,284			18,297			17,266			15,682			19
Total revenue (FTE)		94,028				95,032			83,315			77,683			71,499			32
Expenses - operating ⁽¹⁾		55,232				56,410			48,525			45,247			43,061			28
Income before income tax expense - (FTE) operating ⁽¹⁾		38,796				38,622			34,790			32,436			28,438			36
Income tax expense - (FTE) operating ⁽¹⁾		14,852				14,822			13,064			12,447			10,768			38
Net income - operating ⁽¹⁾		23,944				23,800			21,726			19,989			17,670			36
Preferred dividends and discount accretion		21				25			25			17			-
Net income available to common shareholders - operating ⁽¹⁾		23,923				23,775			21,701			19,972			17,670			35
Merger-related and other charges, net of income tax benefit		1,649				5,592			3,839			2,176			-
Net income available to common shareholders - GAAP	$	22,274			$	18,183		$	17,862		$	17,796		$	17,670			26

PERFORMANCE MEASURES
Per common share:
Diluted income - operating ⁽¹⁾	$	.33			$	.33		$	.33		$	.32		$	.29			14
Diluted income - GAAP		.31				.25			.27			.28			.29			7
Cash dividends declared		.07				.06			.06			.05			.05
Book value		14.35				14.02			13.95			12.95			12.58			14
Tangible book value⁽³⁾		12.40				12.06			12.08			12.66			12.53			(1	)

Key performance ratios:
Return on tangible common equity - operating^(1)(2)(3)(4)		10.91		%		10.87	%		10.29	%		10.20	%		9.46	%
Return on common equity - operating^(1)(2)(4)		9.20				9.18			9.54			9.90			9.34
Return on common equity - GAAP⁽²⁾⁽⁴⁾		8.57				7.02			7.85			8.83			9.34
Return on assets - operating⁽¹⁾⁽⁴⁾		1.00				.99			1.00			1.00			.94
Return on assets - GAAP⁽⁴⁾		.93				.76			.82			.89			.94
Dividend payout ratio - operating ⁽¹⁾		21.21				18.18			18.18			15.63			17.24
Dividend payout ratio - GAAP		22.58				24.00			22.22			17.86			17.24
Net interest margin (FTE)⁽⁴⁾		3.41				3.34			3.26			3.30			3.31
Efficiency ratio - operating ⁽¹⁾		59.10				59.41			57.81			57.59			59.15
Efficiency ratio - GAAP		61.94				68.97			64.65			61.63			59.15
Average equity to average assets		10.72				10.68			10.39			10.05			9.86
Average tangible equity to average assets⁽³⁾		9.41				9.40			9.88			9.91			9.82
Average tangible common equity to average assets⁽³⁾		9.32				9.29			9.77			9.83			9.82
Tangible common equity to risk-weighted assets^(3)(5)(6)		12.77				12.82			13.08			13.24			13.53

ASSET QUALITY
Nonperforming loans	$	22,419			$	22,653		$	20,064		$	18,805		$	19,015			18
Foreclosed properties		5,163				4,883			7,669			2,356			1,158			346
Total nonperforming assets (NPAs)		27,582				27,536			27,733			21,161			20,173			37
Allowance for loan losses		66,310				68,448			69,062			70,129			70,007			(5	)
Net charge-offs		2,138				1,302			1,417			978			2,562			(17	)
Allowance for loan losses to loans		1.09		%		1.14	%		1.15	%		1.36	%		1.46	%
Net charge-offs to average loans⁽⁴⁾		.14				.09			.10			.08			.22
NPAs to loans and foreclosed properties		.45				.46			.46			.41			.42
NPAs to total assets		.28				.29			.29			.26			.26

AVERAGE BALANCES ($ in millions)
Loans	$	6,004			$	5,975		$	5,457		$	5,017		$	4,725			27
Investment securities		2,718				2,607			2,396			2,261			2,203			23
Earning assets		8,876				8,792			8,009			7,444			7,070			26
Total assets		9,634				9,558			8,634			8,017			7,617			26
Deposits		7,947				8,028			7,135			6,669			6,369			25
Shareholders' equity		1,033				1,021			897			806			751			38
Common shares - basic (thousands)		72,162				72,135			66,294			62,549			60,905			18
Common shares - diluted (thousands)		72,166				72,140			66,300			62,553			60,909			18

AT PERIOD END ($ in millions)
Loans	$	6,106			$	5,995		$	6,024		$	5,174		$	4,788			28
Investment securities		2,757				2,656			2,457			2,322			2,201			25
Total assets		9,781				9,616			9,404			8,237			7,655			28
Deposits		7,960				7,873			7,897			6,800			6,430			24
Shareholders' equity		1,034				1,018			1,013			827			764			35
Common shares outstanding (thousands)		71,544				71,484			71,472			62,700			60,309			19

⁽¹⁾ Excludes merger-related charges and impairment losses on surplus bank property. ⁽²⁾ Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). ⁽³⁾ Excludes effect of acquisition related intangibles and associated amortization. ⁽⁴⁾ Annualized. ⁽⁵⁾ All periods are calculated under Basel III rules, which became effective January 1, 2015. ⁽⁶⁾ First quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information


		2016			2015
(in thousands, except per share	First				Fourth				Third				Second				First
data; fully taxable equivalent)	Quarter				Quarter				Quarter				Quarter				Quarter

Interest revenue reconciliation
Interest revenue - taxable equivalent	$	80,991			$	79,646			$	71,120			$	66,134			$	62,909
Taxable equivalent adjustment		(270	)			(284	)			(292	)			(326	)			(375	)
Interest revenue (GAAP)	$	80,721			$	79,362			$	70,828			$	65,808			$	62,534

Net interest revenue reconciliation
Net interest revenue - taxable equivalent	$	75,222			$	74,048			$	65,718			$	61,317			$	57,617
Taxable equivalent adjustment		(270	)			(284	)			(292	)			(326	)			(375	)
Net interest revenue (GAAP)	$	74,952			$	73,764			$	65,426			$	60,991			$	57,242

Total revenue reconciliation
Total operating revenue	$	94,028			$	95,032			$	83,315			$	77,683			$	71,499
Taxable equivalent adjustment		(270	)			(284	)			(292	)			(326	)			(375	)
Total revenue (GAAP)	$	93,758			$	94,748			$	83,023			$	77,357			$	71,124

Expense reconciliation
Expenses - operating	$	55,232			$	56,410			$	48,525			$	45,247			$	43,061
Merger-related and other charges		2,653				9,078				5,744				3,173				-
Expenses (GAAP)	$	57,885			$	65,488			$	54,269			$	48,420			$	43,061

Income before taxes reconciliation
Income before taxes - operating	$	38,796			$	38,622			$	34,790			$	32,436			$	28,438
Taxable equivalent adjustment		(270	)			(284	)			(292	)			(326	)			(375	)
Merger-related and other charges		(2,653	)			(9,078	)			(5,744	)			(3,173	)			-
Income before taxes (GAAP)	$	35,873			$	29,260			$	28,754			$	28,937			$	28,063

Income tax expense reconciliation
Income tax expense - operating	$	14,852			$	14,822			$	13,064			$	12,447			$	10,768
Taxable equivalent adjustment		(270	)			(284	)			(292	)			(326	)			(375	)
Merger-related and other charges, tax benefit		(1,004	)			(3,486	)			(1,905	)			(997	)			-
Income tax expense (GAAP)	$	13,578			$	11,052			$	10,867			$	11,124			$	10,393

Net income reconciliation
Net income - operating	$	23,944			$	23,800			$	21,726			$	19,989			$	17,670
Merger-related and other charges, net of income tax benefit		(1,649	)			(5,592	)			(3,839	)			(2,176	)			-
Net income (GAAP)	$	22,295			$	18,208			$	17,887			$	17,813			$	17,670

Net income available to common shareholders reconciliation
Net income available to common shareholders - operating	$	23,923			$	23,775			$	21,701			$	19,972			$	17,670
Merger-related and other charges, net of income tax benefit		(1,649	)			(5,592	)			(3,839	)			(2,176	)			-
Net income available to common shareholders (GAAP)	$	22,274			$	18,183			$	17,862			$	17,796			$	17,670

Diluted income per common share reconciliation
Diluted income per common share - operating	$	.33			$	.33			$	.33			$	.32			$	.29
Merger-related and other charges		(.02	)			(.08	)			(.06	)			(.04	)			-
Diluted income per common share (GAAP)	$	.31			$	.25			$	.27			$	.28			$	.29

Book value per common share reconciliation
Tangible book value per common share	$	12.40			$	12.06			$	12.08			$	12.66			$	12.53
Effect of goodwill and other intangibles		1.95				1.96				1.87				.29				.05
Book value per common share (GAAP)	$	14.35			$	14.02			$	13.95			$	12.95			$	12.58

Return on tangible common equity reconciliation
Return on tangible common equity - operating		10.91		%		10.87		%		10.29		%		10.20		%		9.46		%
Effect of goodwill and other intangibles		(1.71	)			(1.69	)			(.75	)			(.30	)			(.12	)
Return on common equity - operating		9.20				9.18				9.54				9.90				9.34
Merger-related and other charges		(.63	)			(2.16	)			(1.69	)			(1.07	)			-
Return on common equity (GAAP)		8.57		%		7.02		%		7.85		%		8.83		%		9.34		%

Return on assets reconciliation
Return on assets - operating		1.00		%		.99		%		1.00		%		1.00		%		.94		%
Merger-related and other charges		(.07	)			(.23	)			(.18	)			(.11	)			-
Return on assets (GAAP)		.93		%		.76		%		.82		%		.89		%		.94		%

Dividend payout ratio reconciliation
Dividend payout ratio - operating		21.21		%		18.18		%		18.18		%		15.63		%		17.24		%
Merger-related and other charges		1.37				5.82				4.04				2.23				-
Dividend payout ratio (GAAP)		22.58		%		24.00		%		22.22		%		17.86		%		17.24		%

Efficiency ratio reconciliation
Efficiency ratio - operating		59.10		%		59.41		%		57.81		%		57.59		%		59.15		%
Merger-related and other charges		2.84				9.56				6.84				4.04				-
Efficiency ratio (GAAP)		61.94		%		68.97		%		64.65		%		61.63		%		59.15		%

Average equity to assets reconciliation
Tangible common equity to assets		9.32		%		9.29		%		9.77		%		9.83		%		9.82		%
Effect of preferred equity		.09				.11				.11				.08				-
Tangible equity to assets		9.41				9.40				9.88				9.91				9.82
Effect of goodwill and other intangibles		1.31				1.28				.51				.14				.04
Equity to assets (GAAP)		10.72		%		10.68		%		10.39		%		10.05		%		9.86		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tangible common equity to risk-weighted assets		12.77		%		12.82		%		13.08		%		13.24		%		13.53		%
Effect of other comprehensive income		.25				.38				.23				.28				.19
Effect of deferred tax limitation		(1.85	)			(2.05	)			(2.24	)			(2.49	)			(2.86	)
Effect of trust preferred		.08				.08				.08				.63				.67
Effect of preferred equity		-				.15				.15				.17				-
Basel III intangibles transition adjustment		.07				.10				.13				.06				.04
Basel III disallowed investments		-				(.03	)			(.03	)			(.03	)			(.04	)
Tier I capital ratio (Regulatory)		11.32		%		11.45		%		11.40		%		11.86		%		11.53		%

⁽¹⁾ First quarter 2016 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End


	2016		2015
	First		Fourth		Third		Second		First
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,434	$	1,494	$	1,479	$	1,266	$	1,167
Income producing commercial RE		880		824		818		689		636
Commercial & industrial		855		785		890		793		716
Commercial construction		354		342		319		238		230
Total commercial		3,523		3,445		3,506		2,986		2,749
Residential mortgage		1,032		1,029		1,062		935		864
Home equity lines of credit		604		598		585		491		465
Residential construction		348		352		334		299		291
Consumer installment		599		571		537		463		419
Total loans	$	6,106	$	5,995	$	6,024	$	5,174	$	4,788

LOANS BY MARKET
North Georgia	$	1,097	$	1,125	$	1,130	$	1,155	$	1,150
Atlanta MSA		1,257		1,259		1,266		1,275		1,254
North Carolina		543		549		546		533		539
Coastal Georgia		543		537		506		499		476
Gainesville MSA		248		254		252		257		255
East Tennessee		495		504		511		525		281
South Carolina		821		819		783		35		30
Specialized Lending		628		492		609		538		487
Indirect auto		474		456		421		357		316
Total loans	$	6,106	$	5,995	$	6,024	$	5,174	$	4,788

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End


	2016		2015				Linked Quarter Change			Year over Year Change
	First		Fourth		First
(in millions)	Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,434	$	1,494	$	1,167	$	(60	)	$	267
Income producing commercial RE		880		824		636		56			244
Commercial & industrial		855		785		716		70			139
Commercial construction		354		342		230		12			124
Total commercial		3,523		3,445		2,749		78			774
Residential mortgage		1,032		1,029		864		3			168
Home equity lines of credit		604		598		465		6			139
Residential construction		348		352		291		(4	)		57
Consumer installment		599		571		419		28			180
Total loans	$	6,106	$	5,995	$	4,788		111			1,318

LOANS BY MARKET
North Georgia	$	1,097	$	1,125	$	1,150		(28	)		(53	)
Atlanta MSA		1,257		1,259		1,254		(2	)		3
North Carolina		543		549		539		(6	)		4
Coastal Georgia		543		537		476		6			67
Gainesville MSA		248		254		255		(6	)		(7	)
East Tennessee		495		504		281		(9	)		214
South Carolina		821		819		30		2			791
Specialized Lending		628		492		487		136			141
Indirect auto		474		456		316		18			158
Total loans	$	6,106	$	5,995	$	4,788		111			1,318

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	First Quarter 2016
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	6,775		$	2,864		$	9,639
Income producing CRE		2,959			-			2,959
Commercial & industrial		978			-			978
Commercial construction		266			152			418
Total commercial		10,978			3,016			13,994
Residential mortgage		8,037			1,587			9,624
Home equity lines of credit		1,198			125			1,323
Residential construction		1,122			435			1,557
Consumer installment		1,084			-			1,084
Total NPAs	$	22,419		$	5,163		$	27,582
Balance as a % of
Unpaid Principal		69.3	%		38.2	%		60.1	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	5,353		$	1,233		$	6,586
Atlanta MSA		2,796			902			3,698
North Carolina		4,860			559			5,419
Coastal Georgia		1,696			121			1,817
Gainesville MSA		250			-			250
East Tennessee		3,470			351			3,821
South Carolina		935			1,997			2,932
Specialized Lending		2,186			-			2,186
Indirect auto		873			-			873
Total NPAs	$	22,419		$	5,163		$	27,582


NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	22,653		$	4,883		$	27,536
Acquisitions		-			-			-
Loans placed on non-accrual		4,771			-			4,771
Payments received		(1,812	)		-			(1,812	)
Loan charge-offs		(1,679	)		-			(1,679	)
Foreclosures		(1,514	)		1,590			76
Capitalized costs		-			-			-
Property sales		-			(1,524	)		(1,524	)
Write downs		-			(7	)		(7	)
Net gains (losses) on sales		-			221			221
Ending Balance	$	22,419		$	5,163		$	27,582

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Fourth Quarter 2015
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	7,036		$	2,652		$	9,688
Income producing CRE		2,595			-			2,595
Commercial & industrial		892			-			892
Commercial construction		328			437			765
Total commercial		10,851			3,089			13,940
Residential mortgage		8,555			1,242			9,797
Home equity lines of credit		851			80			931
Residential construction		1,398			472			1,870
Consumer installment		998			-			998
Total NPAs	$	22,653		$	4,883		$	27,536
Balance as a % of
Unpaid Principal		71.4	%		34.2	%		59.8	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	5,167		$	1,612		$	6,779
Atlanta MSA		3,023			625			3,648
North Carolina		5,289			183			5,472
Coastal Georgia		2,079			-			2,079
Gainesville MSA		307			-			307
East Tennessee		3,448			157			3,605
South Carolina		323			2,306			2,629
Specialized Lending		2,231			-			2,231
Indirect auto		786			-			786
Total NPAs	$	22,653		$	4,883		$	27,536


NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	20,064		$	7,669		$	27,733
Acquisitions		-			(1,585	)		(1,585	)
Loans placed on non-accrual		10,768			-			10,768
Payments received		(4,893	)		-			(4,893	)
Loan charge-offs		(1,813	)		-			(1,813	)
Foreclosures		(1,473	)		1,497			24
Capitalized costs		-			-			-
Property sales		-			(2,968	)		(2,968	)
Write downs		-			11			11
Net gains (losses) on sales		-			259			259
Ending Balance	$	22,653		$	4,883		$	27,536

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Third Quarter 2015
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	5,918		$	882		$	6,800
Income producing CRE		1,238			4,084			5,322
Commercial & industrial		1,068			-			1,068
Commercial construction		256			657			913
Total commercial		8,480			5,623			14,103
Residential mortgage		8,847			1,454			10,301
Home equity lines of credit		890			87			977
Residential construction		929			505			1,434
Consumer installment		918			-			918
Total NPAs	$	20,064		$	7,669		$	27,733
Balance as a % of
Unpaid Principal		70.3	%		45.8	%		61.2	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	6,403		$	1,263		$	7,666
Atlanta MSA		1,750			1,122			2,872
North Carolina		4,564			9			4,573
Coastal Georgia		338			66			404
Gainesville MSA		325			3			328
East Tennessee		2,886			231			3,117
South Carolina		267			4,975			5,242
Specialized Lending		2,809			-			2,809
Indirect auto		722			-			722
Total NPAs	$	20,064		$	7,669		$	27,733


NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	18,805		$	2,356		$	21,161
Acquisitions		-			4,848			4,848
Loans placed on non-accrual		8,923			-			8,923
Payments received		(4,233	)		-			(4,233	)
Loan charge-offs		(1,531	)		-			(1,531	)
Foreclosures		(1,900	)		1,900			-
Capitalized costs		-			256			256
Property sales		-			(1,916	)		(1,916	)
Write downs		-			(79	)		(79	)
Net gains (losses) on sales		-			304			304
Ending Balance	$	20,064		$	7,669		$	27,733

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality

	First Quarter 2016					Fourth Quarter 2015					Third Quarter 2015
				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	$	304		.08	%	$	861		.23	%	$	236		.07	%
Income producing CRE		211		.10			(35	)	(.02	)		(106	)	(.06	)
Commercial & industrial		283		.14			(719	)	(.34	)		190		.09
Commercial construction		286		.33			253		.31			59		.09
Total commercial		1,084		.13			360		.04			379		.05
Residential mortgage		50		.02			(120	)	(.05	)		433		.18
Home equity lines of credit		632		.43			194		.13			293		.22
Residential construction		(103	)	(.12	)		415		.48			(124	)	(.16	)
Consumer installment		475		.33			453		.33			436		.35
Total	$	2,138		.14		$	1,302		.09		$	1,417		.10


NET CHARGE-OFFS BY MARKET
North Georgia	$	913		.33	%	$	1,011		.36	%	$	1,352		.47	%
Atlanta MSA		(25	)	(.01	)		496		.16			74		.02
North Carolina		382		.28			426		.31			183		.13
Coastal Georgia		196		.15			47		.04			19		.02
Gainesville MSA		98		.16			(340	)	(.54	)		(236	)	(.36	)
East Tennessee		378		.31			(326	)	(.26	)		153		.12
South Carolina		(16	)	(.01	)		(474	)	(.24	)		(247	)	(.34	)
Specialized Lending		4		-			253		.18			(42	)	(.03	)
Indirect auto		208		.19			209		.19			161		.17
Total	$	2,138		.14		$	1,302		.09		$	1,417		.10

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)

	Three Months Ended
	March 31,
(in thousands, except per share data)		2016			2015

Interest revenue:
Loans, including fees	$	63,976		$	49,664
Investment securities, including tax exempt of $166 and $158		15,788			12,058
Deposits in banks and short-term investments		957			812
Total interest revenue		80,721			62,534

Interest expense:
Deposits:
NOW		485			394
Money market		1,108			673
Savings		29			20
Time		642			1,109
Total deposit interest expense		2,264			2,196
Short-term borrowings		87			98
Federal Home Loan Bank advances		733			392
Long-term debt		2,685			2,606
Total interest expense		5,769			5,292
Net interest revenue		74,952			57,242
Provision for credit losses		(200	)		1,800
Net interest revenue after provision for credit losses		75,152			55,442

Fee revenue:
Service charges and fees		10,126			7,615
Mortgage loan and other related fees		3,289			2,755
Brokerage fees		1,053			1,551
Gains from sales of government guaranteed loans		1,237			1,141
Securities gains, net		379			1,539
Loss from prepayment of debt		-			(1,038	)
Other		2,522			2,119
Total fee revenue		18,606			15,682
Total revenue		93,758			71,124

Operating expenses:
Salaries and employee benefits		33,062			26,446
Communications and equipment		4,290			3,271
Occupancy		4,723			3,278
Advertising and public relations		864			750
Postage, printing and supplies		1,280			938
Professional fees		2,700			1,919
FDIC assessments and other regulatory charges		1,524			1,209
Amortization of intangibles		1,010			242
Merger-related and other charges		2,653			-
Other		5,779			5,008
Total operating expenses		57,885			43,061
Net income before income taxes		35,873			28,063
Income tax expense		13,578			10,393
Net income		22,295			17,670
Preferred stock dividends and discount accretion		21			-
Net income available to common shareholders	$	22,274		$	17,670

Earnings per common share:
Basic	$	.31		$	.29
		.31			.29
Weighted average common shares outstanding:
Basic		72,162			60,905
Diluted		72,166			60,909

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)

	March 31,			December 31,			March 31,
(in thousands, except share and per share data)		2016			2015			2015

ASSETS
Cash and due from banks	$	93,821		$	86,912		$	77,493
Interest-bearing deposits in banks		88,995			153,451			82,269
Short-term investments		-			-			25,902
Cash and cash equivalents		182,816			240,363			185,664
Securities available for sale		2,405,467			2,291,511			1,801,973
Securities held to maturity (fair value $363,092, $371,658 and $413,550)		351,700			364,696			399,228
Mortgage loans held for sale		26,578			24,231			15,723
Loans, net of unearned income		6,106,189			5,995,441			4,787,689
Less allowance for loan losses		(66,310	)		(68,448	)		(70,007	)
Loans, net		6,039,879			5,926,993			4,717,682
Premises and equipment, net		180,690			178,165			159,036
Bank owned life insurance		105,803			105,493			81,490
Accrued interest receivable		25,893			25,786			20,154
Net deferred tax asset		180,371			197,613			201,898
Derivative financial instruments		23,488			20,082			20,291
Goodwill and other intangible assets		146,409			147,420			3,399
Other assets		112,237			94,075			47,998
Total assets	$	9,781,331		$	9,616,428		$	7,654,536
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	2,370,842		$	2,204,755		$	1,694,755
NOW		1,794,241			1,975,884			1,420,956
Money market		1,630,565			1,599,637			1,306,421
Savings		491,542			471,129			312,013
Time		1,233,647			1,282,803			1,206,278
Brokered		439,486			338,985			489,141
Total deposits		7,960,323			7,873,193			6,429,564
Repurchase agreements		-			16,640			-
Federal Home Loan Bank advances		510,125			430,125			270,125
Long-term debt		163,955			163,836			112,901
Derivative financial instruments		31,374			28,825			29,276
Accrued expenses and other liabilities		81,829			85,524			48,965
Total liabilities		8,747,606			8,598,143			6,890,831
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series H; $1,000 stated value; 0, 9,992 and 0 shares issued and outstanding		-			9,992			-
Common stock, $1 par value; 100,000,000 shares authorized;
66,258,777, 66,198,477 and 50,228,075 shares issued and outstanding		66,259			66,198			50,228
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
5,285,516, 5,285,516 and 10,080,787 shares issued and outstanding		5,286			5,286			10,081
Common stock issuable; 496,515, 458,953 and 400,369 shares		6,700			6,779			5,895
Capital surplus		1,286,884			1,286,361			1,081,110
Accumulated deficit		(313,646	)		(330,879	)		(372,933	)
Accumulated other comprehensive loss		(17,758	)		(25,452	)		(10,676	)
Total shareholders' equity		1,033,725			1,018,285			763,705
Total liabilities and shareholders' equity	$	9,781,331		$	9,616,428		$	7,654,536

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,

	2016								2015
	Average						Avg.		Average						Avg.
(dollars in thousands, fully taxable equivalent)	Balance			Interest			Rate		Balance			Interest			Rate
Assets:
Interest-earning assets:
Loans, net of unearned income ⁽¹⁾⁽²⁾	$	6,003,568		$	64,044		4.29	%	$	4,725,304		$	49,865		4.28	%
Taxable securities ⁽³⁾		2,688,564			15,622		2.32			2,186,756			11,900		2.18
Tax-exempt securities ⁽¹⁾⁽³⁾		29,744			272		3.66			16,236			259		6.38
Federal funds sold and other interest-earning assets		153,759			1,053		2.74			141,414			885		2.50

Total interest-earning assets		8,875,635			80,991		3.67			7,069,710			62,909		3.60
Non-interest-earning assets:
Allowance for loan losses		(68,473	)							(72,192	)
Cash and due from banks		85,635								79,025
Premises and equipment		180,090								159,502
Other assets ⁽³⁾		561,261								381,300
Total assets	$	9,634,148							$	7,617,345

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,886,472			485		.10		$	1,475,913			394		.11
Money market		1,840,584			1,108		.24			1,466,913			673		.19
Savings		480,238			29		.02			300,344			20		.03
Time		1,259,689			817		.26			1,231,705			1,388		.46
Brokered time deposits		233,213			(175	)	(.30	)		273,327			(279	)	(.41	)
Total interest-bearing deposits		5,700,196			2,264		.16			4,748,202			2,196		.19

Federal funds purchased and other borrowings		34,906			87		1.00			36,145			98		1.10
Federal Home Loan Bank advances		346,169			733		.85			239,181			392		.66
Long-term debt		165,419			2,685		6.53			127,740			2,606		8.27
Total borrowed funds		546,494			3,505		2.58			403,066			3,096		3.12

Total interest-bearing liabilities		6,246,690			5,769		.37			5,151,268			5,292		.42
Non-interest-bearing liabilities:
Non-interest-bearing deposits		2,247,041								1,620,984
Other liabilities		107,320								94,207
Total liabilities		8,601,051								6,866,459
Shareholders' equity		1,033,097								750,886
Total liabilities and shareholders' equity	$	9,634,148							$	7,617,345

Net interest revenue				$	75,222							$	57,617
Net interest-rate spread							3.30	%							3.18	%

Net interest margin ⁽⁴⁾							3.41	%							3.31	%

⁽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 $2.20 million in 2016 and pretax unrealized gains of $10.8
million in 2015 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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Press Release Details

United Community Banks, Inc. Reports Net Operating Income of $23.9 Million for First Quarter 2016, up 36 Percent From a Year Ago