United Community Banks, Inc.
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

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

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Source: United Community Banks, Inc.

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