Press Release Details

Diluted earnings per share up 33 percent to 36 cents from third quarter 2015
Excluding merger-related charges, diluted operating EPS up 18 percent to 39 cents

• Return on assets of 1.00 percent; 1.08 percent, excluding merger-related charges
• Loan growth of $133 million from second quarter, or 8 percent annualized
• Core transaction deposits up $254 million from second quarter, or 19 percent annualized
• Fee revenue of $26.4 million, up $2.9 million from the second quarter
• Efficiency ratio of 60.8 percent; 57.8 percent, excluding merger-related charges

BLAIRSVILLE, Ga., Oct. 26, 2016 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today announced continued momentum in the third quarter with strong fee revenue and loan growth, as well as sound credit quality and capital management.  Net income grew to $25.9 million, or 36 cents per diluted share, compared with $17.9 million, or 27 cents per diluted share, for the third quarter of 2015.  Net income for the first nine months of 2016 was $73.4 million, or $1.02 per diluted share.  This compares with net income of $53.4 million, or 84 cents per diluted share, for the first nine months of 2015.

On an operating basis, net income rose to $27.8 million for the third quarter of 2016 compared with $21.7 million for the third quarter of 2015. Operating net income excludes pre-tax merger-related charges of $3.15 million in the third quarter of 2016 and $5.74 million in the third quarter of 2015. On a per diluted share basis, operating net income was 39 cents for the third quarter of 2016 compared with 33 cents for the third quarter of 2015.  For the first nine months of 2016, operating net income was $77.8 million, or $1.08 per diluted share, compared with $59.3 million, or 94 cents per diluted share, for the first nine months of 2015.

At September 30, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.1 percent; Total Risk-Based of 11.9 percent; Common Equity Tier 1 Risk-Based of 11.1 percent; and, Tier 1 Leverage of 8.4 percent.

"Our third quarter results underscore the positive momentum from our investments in new businesses and markets," said Jimmy Tallent, chairman and chief executive officer.  "Our mortgage banking business continued to produce record quarterly results which, combined with strong performance from our SBA business and solid customer derivative sales, led to a 44 percent increase in fee revenue from a year ago."

The third quarter's return on assets was 1.00 percent including the effect of merger-related charges of $3.15 million.  Exclusive of these charges, the operating return on assets for the third quarter was 1.08 percent.

Tallent noted the positive impact of the Tidelands Bancshares acquisition, which was completed on July 1, 2016.  "As expected, the acquisition was immediately accretive to earnings per share," he said.  "Systems conversions are scheduled to take place in November, after which we expect to achieve the remaining targeted cost savings. The Tidelands acquisition is meeting or exceeding objectives consistent with our coastal South Carolina expansion strategy and I could not be more pleased with the results.

"Third quarter loan production was $641 million," Tallent added.  "Excluding acquired loans from Tidelands, linked-quarter growth of $133 million, or 8 percent annualized, was within our 2016 loan growth target of mid-to-upper single-digit.  Our community banks originated $436 million in loans while specialized lending produced $166 million.  United's specialized lending area encompasses commercial real estate, middle market, SBA, builder finance and asset-based lending.  Funding these loans was strong linked-quarter core transaction deposit growth of $254 million, or 19 percent annualized, excluding Tidelands.  Core deposits comprise 90 percent of total deposits, which is one of the best ratios in the country."

Third quarter net interest revenue totaled $79.0 million, up $4.1 million from the second quarter and up $13.6 million from the third quarter of 2015.  The increase from both periods reflects growth in the loan portfolio as well as net interest revenue from recent acquisitions.

The taxable-equivalent net interest margin of 3.34 percent, while one basis point lower than the second quarter, was up eight basis points from the third quarter of 2015. The decrease from second quarter was expected and resulted mostly from loan pricing competition.

The third quarter provision for credit losses was a recovery of $300,000, equal to the second quarter of 2016.  It was down from a provision charge of $700,000 in the third quarter of 2015.  Strong recoveries of previously charged-off loans continued to contribute to the low level of net charge-offs.  Third quarter net charge-offs totaled $1.4 million, compared with $1.7 million in the second quarter and $1.4 million in the third quarter of 2015.  Nonperforming assets were .30 percent of total assets at September 30, 2016, compared with .28 percent at June 30, 2016 and .29 percent at September 30, 2015.

"The recoveries of our provisions reflect continued strong credit quality and a low overall level of net charge-offs," Tallent commented.  "Our credit quality indicators are very favorable and our outlook is for positive credit quality in the fourth quarter and into 2017.  This will result in low provision levels that we expect will gradually increase with loan growth through 2017, while slightly decreasing our allowance and the related ratio to total loans."

Third quarter fee revenue totaled $26.4 million, an increase of $2.86 million from the second quarter and up $8.06 million from a year ago.  Mortgage fees were up $1.59 million from the second quarter and $2.20 million from a year ago. Customer derivative fees also contributed to the increase in fee revenue from both prior periods.  Gains from sales of SBA loans were up $833,000 from a year ago, but down $322,000 from the second quarter due to slightly lower premiums and loans sold.

"The increase in mortgage fees correlates to our strategic investment in additional mortgage lenders where we see opportunities to gain market share and higher spreads on loan sales," Tallent said.  "Although production of SBA loans remained high, $32 million of loans were sold in the third quarter compared to $33 million during the second quarter, but up from $17.8 million during the third quarter of 2015."

Operating expenses were $64.0 million for the third quarter, compared with $58.1 million for the second quarter and $54.3 million for the third quarter of 2015.  Included in operating expenses were merger-related charges of $3.15 million for the third quarter, $1.18 million for the second quarter and $5.74 million for the third quarter of 2015.  Excluding these charges, third quarter operating expenses were $60.9 million compared with $56.9 million for the second quarter and $48.5 million a year ago.  The increases from the second quarter and a year ago reflect additional operating expenses following the acquisitions of Tidelands Bank on July 1, 2016 and The Palmetto Bank on September 1, 2015.  The operating expenses of the acquired companies are included in United's financial results beginning on their respective acquisition dates.

Excluding merger-related charges of $3.15 million in the third quarter, operating expenses were $60.9 million and up $3.99 million from the second quarter. The inclusion of Tidelands' $2.76 million of operating expense accounted for 70 percent of the linked-quarter increase in operating expenses. The balance of the increase was primarily due to higher salary costs for commissions and incentives related to truing-up the quarter and year-to-date for performance targets.

"Our bankers continue to perform exceptionally well as we build on the successes of investing to grow our franchise and earnings," Tallent said. "We take tremendous pride that our bankers provide the best in customer service by treating customers the way we would want to be treated.  This is at the foundation of our success and the core of everything we do.  With strong earnings momentum and a high-quality balance sheet, I am optimistic about our future," Tallent concluded.

Conference Call
United will hold a conference call today, Wednesday, October 26, 2016, at 11 a.m. ET to discuss the contents of this earnings release and to share business highlights for the quarter.  To access the call, dial (877) 380-5665 and use the conference number 86742023.  The conference call also will be webcast and available for replay for 30 days by selecting "Events & Presentations" within the Investor Relations section of United's website at www.ucbi.com.

About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ:UCBI) is a registered bank holding company based in Blairsville, Georgia, with $10.3 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the Southeast region's largest full-service banks, operating 140 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 Bank 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. 

Non-GAAP Financial Measures
This News Release contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP.  This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as "operating net income," "operating net income per diluted share," "tangible book value," "operating return on common equity," "operating return on tangible common equity," "operating return on assets," "operating dividend payout ratio," "operating efficiency ratio," "average tangible equity to average assets," "average tangible common equity to average assets" and "tangible common equity to risk-weighted assets."  These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United's underlying performance trends.  These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies.  To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

Safe Harbor
This News Release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment.  These statements are based on current expectations and are provided to assist in the understanding of future financial performance.  Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements.  For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 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
																					Third
	2016												2015								Quarter
	Third				Second				First				Fourth				Third				2016-2015
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter				Change
INCOME SUMMARY
Interest revenue	$	85,439			$	81,082			$	80,721			$	79,362			$	70,828
Interest expense		6,450				6,164				5,769				5,598				5,402
Net interest revenue		78,989				74,918				74,952				73,764				65,426				21		%
Provision for credit losses		(300	)			(300	)			(200	)			300				700
Fee revenue		26,361				23,497				18,606				21,284				18,297				44
Total revenue		105,650				98,715				93,758				94,748				83,023				27
Expenses		64,023				58,060				57,885				65,488				54,269				18
Income before income tax expense		41,627				40,655				35,873				29,260				28,754				45
Income tax expense		15,753				15,389				13,578				11,052				10,867				45
Net income		25,874				25,266				22,295				18,208				17,887				45
Preferred dividends		-				-				21				25				25
Net income available to common shareholders	$	25,874			$	25,266			$	22,274			$	18,183			$	17,862				45
Merger-related and other charges		3,152				1,176				2,653				9,078				5,744
Income tax benefit of merger-related and other charges		(1,193	)			(445	)			(1,004	)			(3,486	)			(1,905	)
Net income available to common shareholders - operating (1)	$	27,833			$	25,997			$	23,923			$	23,775			$	21,701				28
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	.36			$	.35			$	.31			$	.25			$	.27				33
Diluted net income - operating  (1)		.39				.36				.33				.33				.33				18
Cash dividends declared		.08				.07				.07				.06				.06
Book value		15.12				14.80				14.35				14.02				13.95				8
Tangible book value (3)		13.00				12.84				12.40				12.06				12.08				8
Key performance ratios:
Return on common equity - GAAP (2)(4)		9.61		%		9.54		%		8.57		%		7.02		%		7.85		%
Return on common equity - operating (1)(2)(4)		10.34				9.81				9.20				9.18				9.54
Return on tangible common equity - operating (1)(2)(3)(4)		12.45				11.56				10.91				10.87				10.29
Return on assets - GAAP (4)		1.00				1.04				.93				.76				.82
Return on assets - operating (1)(4)		1.08				1.07				1.00				.99				1.00
Dividend payout ratio - GAAP		22.22				20.00				22.58				24.00				22.22
Dividend payout ratio - operating (1)		20.51				19.44				21.21				18.18				18.18
Net interest margin (fully taxable equivalent) (4)		3.34				3.35				3.41				3.34				3.26
Efficiency ratio - GAAP		60.78				59.02				61.94				68.97				64.65
Efficiency ratio - operating  (1)		57.79				57.82				59.10				59.41				57.81
Average equity to average assets		10.38				10.72				10.72				10.68				10.39
Average tangible equity to average assets (3)		8.98				9.43				9.41				9.40				9.88
Average tangible common equity to average assets (3)		8.98				9.43				9.32				9.29				9.77
Tangible common equity to risk-weighted assets (3)(5)		12.26				12.87				12.77				12.82				13.08
ASSET QUALITY
Nonperforming loans	$	21,572			$	21,348			$	22,419			$	22,653			$	20,064				8
Foreclosed properties		9,187				6,176				5,163				4,883				7,669				20
Total nonperforming assets (NPAs)		30,759				27,524				27,582				27,536				27,733				11
Allowance for loan losses		62,961				64,253				66,310				68,448				69,062				(9	)
Net charge-offs		1,359				1,730				2,138				1,302				1,417				(4	)
Allowance for loan losses to loans		0.94		%		1.02		%		1.09		%		1.14		%		1.15		%
Net charge-offs to average loans (4)		.08				.11				.14				.09				.10
NPAs to loans and foreclosed properties		.46				.44				.45				.46				.46
NPAs to total assets		.30				.28				.28				.29				.29
AVERAGE BALANCES ($ in millions)
Loans	$	6,675			$	6,151			$	6,004			$	5,975			$	5,457				22
Investment securities		2,610				2,747				2,718				2,607				2,396				9
Earning assets		9,443				9,037				8,876				8,792				8,009				18
Total assets		10,281				9,809				9,634				9,558				8,634				19
Deposits		8,307				7,897				7,947				8,028				7,135				16
Shareholders' equity		1,067				1,051				1,033				1,021				897				19
Common shares - basic (thousands)		71,556				72,202				72,162				72,135				66,294				8
Common shares - diluted (thousands)		71,561				72,207				72,166				72,140				66,300				8
AT PERIOD END ($ in millions)
Loans	$	6,725			$	6,287			$	6,106			$	5,995			$	6,024				12
Investment securities		2,560				2,677				2,757				2,656				2,457				4
Total assets		10,298				9,928				9,781				9,616				9,404				10
Deposits		8,442				7,857				7,960				7,873				7,897				7
Shareholders' equity		1,079				1,060				1,034				1,018				1,013				7
Common shares outstanding (thousands)		70,861				71,122				71,544				71,484				71,472				(1	)
(1)  Excludes merger-related charges and fourth quarter 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)  Third quarter 2016 ratio is preliminary.

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
	For the Nine
	Months Ended								YTD
	September 30,								2016-2015
(in thousands, except per share data)		2016				2015			Change
INCOME SUMMARY
Interest revenue	$	247,242			$	199,170
Interest expense		18,383				15,511
Net interest revenue		228,859				183,659				25		%
Provision for credit losses		(800	)			3,400
Fee revenue		68,464				51,245				34
Total revenue		298,123				231,504				29
Expenses		179,968				145,750				23
Income before income tax expense		118,155				85,754				38
Income tax expense		44,720				32,384				38
Net income		73,435				53,370				38
Preferred dividends		21				42
Net income available to common shareholders	$	73,414			$	53,328				38
Merger-related and other charges		6,981				8,917
Income tax benefit of merger-related and other charges		(2,642	)			(2,902	)
Net income available to common shareholders - operating (1)	$	77,753			$	59,343				31
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	1.02			$	.84				21
Diluted net income - operating  (1)		1.08				.94				15
Cash dividends declared		.22				.16
Book value		15.12				13.95				8
Tangible book value (3)		13.00				12.08				8
Key performance ratios:
Return on common equity - GAAP (2)(4)		9.25		%		8.63		%
Return on common equity - operating (1)(2)(4)		9.79				9.60
Return on tangible common equity - operating (1)(2)(3)(4)		11.64				10.00
Return on assets - GAAP (4)		.99				.88
Return on assets - operating (1)(4)		1.05				.98
Dividend payout ratio - GAAP		21.57				19.05
Dividend payout ratio - operating (1)		20.37				17.02
Net interest margin (fully taxable equivalent) (4)		3.36				3.29
Efficiency ratio - GAAP		60.56				61.94
Efficiency ratio - operating  (1)		58.21				58.15
Average equity to average assets		10.60				10.11
Average tangible equity to average assets (3)		9.27				9.88
Average tangible common equity to average assets (3)		9.24				9.81
Tangible common equity to risk-weighted assets (3)(5)		12.26				13.08
ASSET QUALITY
Nonperforming loans	$	21,572			$	20,064				8
Foreclosed properties		9,187				7,669				20
Total nonperforming assets (NPAs)		30,759				27,733				11
Allowance for loan losses		62,961				69,062				(9	)
Net charge-offs		5,227				4,957				5
Allowance for loan losses to loans		0.94		%		1.15		%
Net charge-offs to average loans (4)		.11				.13
NPAs to loans and foreclosed properties		.46				.46
NPAs to total assets		.30				.29
AVERAGE BALANCES ($ in millions)
Loans	$	6,278			$	5,069				24
Investment securities		2,692				2,288				18
Earning assets		9,120				7,511				21
Total assets		9,909				8,093				22
Deposits		8,051				6,727				20
Shareholders' equity		1,051				818				28
Common shares - basic (thousands)		71,992				63,297				14
Common shares - diluted (thousands)		71,996				63,302				14
AT PERIOD END ($ in millions)
Loans	$	6,725			$	6,024				12
Investment securities		2,560				2,457				4
Total assets		10,298				9,404				10
Deposits		8,442				7,897				7
Shareholders' equity		1,079				1,013				7
Common shares outstanding (thousands)		70,861				71,472				(1	)
(1)  Excludes merger-related charges and fourth quarter 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)  Third quarter 2016 ratio is preliminary.

 

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
	2016												2015
	Third				Second				First				Fourth				Third
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter
Expense reconciliation
Expenses (GAAP)	$	64,023			$	58,060			$	57,885			$	65,488			$	54,269
Merger-related and other charges		(3,152	)			(1,176	)			(2,653	)			(9,078	)			(5,744	)
Expenses - operating	$	60,871			$	56,884			$	55,232			$	56,410			$	48,525
Net income reconciliation
Net income (GAAP)	$	25,874			$	25,266			$	22,295			$	18,208			$	17,887
Merger-related and other charges		3,152				1,176				2,653				9,078				5,744
Income tax benefit of merger-related and other charges		(1,193	)			(445	)			(1,004	)			(3,486	)			(1,905	)
Net income - operating	$	27,833			$	25,997			$	23,944			$	23,800			$	21,726
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)	$	25,874			$	25,266			$	22,274			$	18,183			$	17,862
Merger-related and other charges		3,152				1,176				2,653				9,078				5,744
Income tax benefit of merger-related and other charges		(1,193	)			(445	)			(1,004	)			(3,486	)			(1,905	)
Net income available to common shareholders - operating	$	27,833			$	25,997			$	23,923			$	23,775			$	21,701
Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	.36			$	.35			$	.31			$	.25			$	.27
Merger-related and other charges		.03				.01				.02				.08				.06
Diluted income per common share - operating	$	.39			$	.36			$	.33			$	.33			$	.33
Book value per common share reconciliation
Book value per common share (GAAP)	$	15.12			$	14.80			$	14.35			$	14.02			$	13.95
Effect of goodwill and other intangibles		(2.12	)			(1.96	)			(1.95	)			(1.96	)			(1.87	)
Tangible book value per common share	$	13.00			$	12.84			$	12.40			$	12.06			$	12.08
Return on tangible common equity reconciliation
Return on common equity (GAAP)		9.61		%		9.54		%		8.57		%		7.02		%		7.85		%
Merger-related  and other charges		.73				.27				.63				2.16				1.69
Return on common equity - operating		10.34				9.81				9.20				9.18				9.54
Effect of goodwill and other intangibles		2.11				1.75				1.71				1.69				.75
Return on tangible common equity - operating		12.45		%		11.56		%		10.91		%		10.87		%		10.29		%
Return on assets reconciliation
Return on assets (GAAP)		1.00		%		1.04		%		.93		%		.76		%		.82		%
Merger-related  and other charges		.08				.03				.07				.23				.18
Return on assets - operating		1.08		%		1.07		%		1.00		%		.99		%		1.00		%
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		22.22		%		20.00		%		22.58		%		24.00		%		22.22		%
Merger-related and other charges		(1.71	)			(.56)				(1.37	)			(5.82	)			(4.04	)
Dividend payout ratio - operating		20.51		%		19.44		%		21.21		%		18.18		%		18.18		%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)		60.78		%		59.02		%		61.94		%		68.97		%		64.65		%
Merger-related and other charges		(2.99	)			(1.20	)			(2.84	)			(9.56	)			(6.84	)
Efficiency ratio - operating		57.79		%		57.82		%		59.10		%		59.41		%		57.81		%
Average equity to assets reconciliation
Equity to assets (GAAP)		10.38		%		10.72		%		10.72		%		10.68		%		10.39		%
Effect of goodwill and other intangibles		(1.40	)			(1.29	)			(1.31	)			(1.28	)			(.51	)
Tangible equity to assets		8.98				9.43				9.41				9.40				9.88
Effect of preferred equity		-				-				(.09	)			(.11	)			(.11	)
Tangible common equity to assets		8.98		%		9.43		%		9.32		%		9.29		%		9.77		%
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory)		11.08		%		11.44		%		11.32		%		11.45		%		11.40		%
Effect of other comprehensive income		-				(.06	)			(.25	)			(.38	)			(.23	)
Effect of deferred tax limitation		1.50				1.63				1.85				2.05				2.24
Effect of trust preferred		(.26	)			(.08	)			(.08	)			(.08	)			(.08	)
Effect of preferred equity		-				-				-				(.15	)			(.15	)
Basel III intangibles transition adjustment		(.06	)			(.06	)			(.07	)			(.10	)			(.13	)
Basel III disallowed investments		-				-				-				.03				.03
Tangible common equity to risk-weighted assets		12.26		%		12.87		%		12.77		%		12.82		%		13.08		%
(1)  Third quarter 2016 ratios are preliminary.

 

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
	For the Nine Months Ended September 30,
(in thousands, except per share data)		2016				2015
Expense reconciliation
Expenses (GAAP)	$	179,968			$	145,750
Merger-related and other charges		(6,981	)			(8,917	)
Expenses - operating	$	172,987			$	136,833
Net income reconciliation
Net income (GAAP)	$	73,435			$	53,370
Merger-related and other charges		6,981				8,917
Income tax benefit of merger-related and other charges		(2,642	)			(2,902	)
Net income - operating	$	77,774			$	59,385
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)	$	73,414			$	53,328
Merger-related and other charges		6,981				8,917
Income tax benefit of merger-related and other charges		(2,642	)			(2,902	)
Net income available to common shareholders - operating	$	77,753			$	59,343
Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	1.02			$	.84
Merger-related and other charges		-				.10
Diluted income per common share - operating	$	1.02			$	.94
Book value per common share reconciliation
Book value per common share (GAAP)	$	15.12			$	13.95
Effect of goodwill and other intangibles		(2.12	)			(1.87	)
Tangible book value per common share	$	13.00			$	12.08
Return on tangible common equity reconciliation
Return on common equity (GAAP)		9.25		%		8.63		%
Merger-related  and other charges		.54				.97
Return on common equity - operating		9.79				9.60
Effect of goodwill and other intangibles		1.85				.40
Return on tangible common equity - operating		11.64		%		10.00		%
Return on assets reconciliation
Return on assets (GAAP)		.99		%		.88		%
Merger-related  and other charges		.06				.10
Return on assets - operating		1.05		%		.98		%
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		21.57		%		19.05		%
Merger-related and other charges		(1.20	)			(2.03	)
Dividend payout ratio - operating		20.37		%		17.02		%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)		60.56		%		61.94		%
Merger-related and other charges		(2.35	)			(3.79	)
Efficiency ratio - operating		58.21		%		58.15		%
Average equity to assets reconciliation
Equity to assets (GAAP)		10.60		%		10.11		%
Effect of goodwill and other intangibles		(1.33	)			(.23	)
Tangible equity to assets		9.27				9.88
Effect of preferred equity		(.03)				(.07	)
Tangible common equity to assets		9.24		%		9.81		%
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory)		11.08		%		11.40		%
Effect of other comprehensive income		-				(.23	)
Effect of deferred tax limitation		1.50				2.24
Effect of trust preferred		(.26	)			(.08	)
Effect of preferred equity		-				(.15	)
Basel III intangibles transition adjustment		(.06	)			(.13	)
Basel III disallowed investments		-				.03
Tangible common equity to risk-weighted assets		12.26		%		13.08		%
(1)  Third quarter 2016 ratios are preliminary.

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
			2016												2015
		Third				Second				First				Fourth				Third
(in millions)		Quarter				Quarter				Quarter				Quarter				Quarter
LOANS BY CATEGORY
Owner occupied commercial RE		$	1,512			$	1,450			$	1,434			$	1,494			$	1,479
Income producing commercial RE			1,105				919				880				824				818
Commercial & industrial			994				926				855				785				890
Commercial construction			389				384				354				342				319
Total commercial			4,000				3,679				3,523				3,445				3,506
Residential mortgage			1,056				1,035				1,032				1,029				1,062
Home equity lines of credit			698				623				604				598				585
Residential construction			378				351				348				352				334
Consumer installment			593				599				599				571				537
Total loans		$	6,725			$	6,287			$	6,106			$	5,995			$	6,024
LOANS BY MARKET
North Georgia		$	1,110			$	1,097			$	1,097			$	1,125			$	1,130
Atlanta MSA			1,332				1,314				1,257				1,259				1,266
North Carolina			548				543				543				549				546
Coastal Georgia			565				541				543				537				506
Gainesville MSA			236				240				248				254				252
East Tennessee			506				509				495				504				511
South Carolina			1,199				862				821				819				783
Specialized Lending			763				706				628				492				609
Indirect auto			466				475				474				456				421
Total loans		$	6,725			$	6,287			$	6,106			$	5,995			$	6,024

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
		2016								2015				Linked				Year over
		Third				Second				Third				Quarter				Year
(in millions)		Quarter				Quarter				Quarter				Change				Change
LOANS BY CATEGORY
Owner occupied commercial RE		$	1,512			$	1,450			$	1,479			$	62			$	33
Income producing commercial RE			1,105				919				818				186				287
Commercial & industrial			994				926				890				68				104
Commercial construction			389				384				319				5				70
Total commercial			4,000				3,679				3,506				321				494
Residential mortgage			1,056				1,035				1,062				21				(6	)
Home equity lines of credit			698				623				585				75				113
Residential construction			378				351				334				27				44
Consumer installment			593				599				537				(6	)			56
Total loans		$	6,725			$	6,287			$	6,024				438				701
LOANS BY MARKET
North Georgia		$	1,110			$	1,097			$	1,130				13				(20	)
Atlanta MSA			1,332				1,314				1,266				18				66
North Carolina			548				543				546				5				2
Coastal Georgia			565				541				506				24				59
Gainesville MSA			236				240				252				(4	)			(16	)
East Tennessee			506				509				511				(3	)			(5	)
South Carolina			1,199				862				783				337				416
Specialized Lending			763				706				609				57				154
Indirect auto			466				475				421				(9	)			45
Total loans		$	6,725			$	6,287			$	6,024				438				701

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
		Third Quarter 2016
		Nonperforming					Foreclosed					Total
(in thousands)		Loans					Properties					NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	6,454				$	3,188				$	9,642
Income producing CRE			949					765					1,714
Commercial & industrial			1,079					-					1,079
Commercial construction			98					1,274					1,372
Total commercial			8,580					5,227					13,807
Residential mortgage			8,152					1,211					9,363
Home equity lines of credit			1,194					514					1,708
Residential construction			2,248					2,235					4,483
Consumer installment			1,398					-					1,398
Total NPAs		$	21,572				$	9,187				$	30,759
NONPERFORMING ASSETS BY MARKET
North Georgia		$	5,356				$	653				$	6,009
Atlanta MSA			979					1,530					2,509
North Carolina			5,216					543					5,759
Coastal Georgia			1,606					47					1,653
Gainesville MSA			222					-					222
East Tennessee			3,281					160					3,441
South Carolina			2,015					6,254					8,269
Specialized Lending			1,597					-					1,597
Indirect auto			1,300					-					1,300
Total NPAs		$	21,572				$	9,187				$	30,759
NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	21,348				$	6,176				$	27,524
Acquisitions			-					7,495					7,495
Loans placed on non-accrual			6,680					-					6,680
Payments received			(3,938		)			-					(3,938		)
Loan charge-offs			(1,236		)			-					(1,236		)
Foreclosures			(1,282		)			2,335					1,053
Capitalized costs			-					3					3
Property sales			-					(6,553		)			(6,553		)
Write downs			-					(53		)			(53		)
Net gains (losses) on sales			-					(216		)			(216		)
Ending Balance		$	21,572				$	9,187				$	30,759

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
		Second Quarter 2016
		Nonperforming					Foreclosed					Total
(in thousands)		Loans					Properties					NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	6,681				$	3,096				$	9,777
Income producing CRE			1,017					1,554					2,571
Commercial & industrial			949					-					949
Commercial construction			199					-					199
Total commercial			8,846					4,650					13,496
Residential mortgage			8,667					1,160					9,827
Home equity lines of credit			1,308					83					1,391
Residential construction			1,578					283					1,861
Consumer installment			949					-					949
Total NPAs		$	21,348				$	6,176				$	27,524
NONPERFORMING ASSETS BY MARKET
North Georgia		$	6,219				$	1,086				$	7,305
Atlanta MSA			1,140					2,041					3,181
North Carolina			4,762					224					4,986
Coastal Georgia			1,186					168					1,354
Gainesville MSA			234					-					234
East Tennessee			3,616					247					3,863
South Carolina			1,271					2,410					3,681
Specialized Lending			2,108					-					2,108
Indirect auto			812					-					812
Total NPAs		$	21,348				$	6,176				$	27,524
NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	22,419				$	5,163				$	27,582
Acquisitions			-					(497		)			(497		)
Loans placed on non-accrual			6,786					-					6,786
Payments received			(4,201		)			-					(4,201		)
Loan charge-offs			(1,803		)			-					(1,803		)
Foreclosures			(1,853		)			2,722					869
Capitalized costs			-					98					98
Property sales			-					(1,424		)			(1,424		)
Write downs			-					(73		)			(73		)
Net gains (losses) on sales			-					187					187
Ending Balance		$	21,348				$	6,176				$	27,524

 

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
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
		Third Quarter 2016								Second Quarter 2016								First Quarter 2016
							Net Charge-								Net Charge-								Net Charge-
							Offs to								Offs to								Offs to
		Net					Average			Net					Average			Net					Average
(in thousands)		Charge-Offs					Loans (1)			Charge-Offs					Loans (1)			Charge-Offs					Loans (1)
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE		$	168				.04	%		$	564				.16	%		$	304				.08	%
Income producing CRE			157				.06				(23		)		(.01	)			211				.10
Commercial & industrial			453				.18				(392		)		(.18	)			283				.14
Commercial construction			(86		)		(.09	)			22				.02				286				.33
Total commercial			692				.07				171				.02				1,084				.13
Residential mortgage			(256		)		(.09)				829				.32				50				.02
Home equity lines of credit			267				.16				253				.17				632				.43
Residential construction			134				.14				(8		)		(.01	)			(103		)		(.12	)
Consumer installment			522				.34				485				.33				475				.33
Total		$	1,359				.08			$	1,730				.11			$	2,138				.14
NET CHARGE-OFFS BY MARKET
North Georgia		$	68				.02	%		$	428				.16	%		$	913				.33	%
Atlanta MSA			398				.12				1				-				(25		)		(.01)
North Carolina			329				.24				575				.43				382				.28
Coastal Georgia			432				.31				177				.13				196				.15
Gainesville MSA			15				.03				(87		)		(.14	)			98				.16
East Tennessee			(69		)		(.05	)			346				.28				378				.31
South Carolina			(66		)		(.02	)			49				.02				(16		)		(.01	)
Specialized Lending			69				.04				(18		)		(.01	)			4				-
Indirect auto			183				.15				259				.22				208				.19
Total		$	1,359				.08			$	1,730				.11			$	2,138				.14
(1)  Annualized.

 

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands, except per share data)			2016				2015				2016				2015
Interest revenue:
Loans, including fees		$	69,440			$	57,174			$	196,888			$	159,814
Investment securities, including tax exempt of $134, $177, $449 and $516			15,418				12,801				48,039				36,896
Deposits in banks and short-term investments			581				853				2,315				2,460
Total interest revenue			85,439				70,828				247,242				199,170
Interest expense:
Deposits:
NOW			452				337				1,381				1,079
Money market			1,347				981				3,661				2,460
Savings			43				25				102				71
Time			667				830				2,052				2,834
Total deposit interest expense			2,509				2,173				7,196				6,444
Short-term borrowings			98				99				278				279
Federal Home Loan Bank advances			1,015				461				2,731				1,307
Long-term debt			2,828				2,669				8,178				7,481
Total interest expense			6,450				5,402				18,383				15,511
Net interest revenue			78,989				65,426				228,859				183,659
Provision for credit losses			(300	)			700				(800	)			3,400
Net interest revenue after provision for credit losses			79,289				64,726				229,659				180,259
Fee revenue:
Service charges and fees			10,819				9,335				31,460				25,325
Mortgage loan and other related fees			6,039				3,840				13,776				10,302
Brokerage fees			1,199				1,200				3,369				3,983
Gains from sales of government guaranteed loans			2,479				1,646				6,517				4,281
Securities gains, net			261				325				922				1,877
Loss from prepayment of debt			-				(256	)			-				(1,294	)
Other			5,564				2,207				12,420				6,771
Total fee revenue			26,361				18,297				68,464				51,245
Total revenue			105,650				83,023				298,123				231,504
Operating expenses:
Salaries and employee benefits			36,478				29,342				103,112				83,749
Communications and equipment			4,919				3,963				13,602				10,538
Occupancy			5,132				4,013				14,393				10,706
Advertising and public relations			1,088				812				3,275				2,689
Postage, printing and supplies			1,451				1,049				4,029				2,980
Professional fees			3,160				2,668				9,049				6,844
FDIC assessments and other regulatory charges			1,412				1,136				4,453				3,643
Amortization of intangibles			1,119				714				3,116				1,403
Merger-related and other charges			3,152				5,744				6,981				8,917
Other			6,112				4,828				17,958				14,281
Total operating expenses			64,023				54,269				179,968				145,750
Net income before income taxes			41,627				28,754				118,155				85,754
Income tax expense			15,753				10,867				44,720				32,384
Net income			25,874				17,887				73,435				53,370
Preferred stock dividends and discount accretion			-				25				21				42
Net income available to common shareholders		$	25,874			$	17,862			$	73,414			$	53,328
Earnings per common share:
Basic		$	.36			$	.27			$	1.02			$	.84
Diluted			.36				.27				1.02				.84
Weighted average common shares outstanding:
Basic			71,556				66,294				71,992				63,297
Diluted			71,561				66,300				71,996				63,302

 

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
		September 30,				December 31,
(in thousands, except share and per share data)			2016				2015
ASSETS
Cash and due from banks		$	94,744			$	86,912
Interest-bearing deposits in banks			131,415				153,451
Cash and cash equivalents			226,159				240,363
Securities available for sale			2,215,113				2,291,511
Securities held to maturity (fair value $357,550 and $371,658)			344,917				364,696
Mortgage loans held for sale (includes $279 and $0 at fair value)			30,814				24,231
Loans, net of unearned income			6,725,110				5,995,441
Less allowance for loan losses			(62,961	)			(68,448	)
Loans, net			6,662,149				5,926,993
Premises and equipment, net			189,302				178,165
Bank owned life insurance			123,129				105,493
Accrued interest receivable			26,494				25,786
Net deferred tax asset			156,408				197,613
Derivative financial instruments			25,463				20,082
Goodwill and other intangible assets			157,288				147,420
Other assets			140,379				94,075
Total assets		$	10,297,615			$	9,616,428
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand		$	2,568,756			$	2,204,755
NOW			1,821,353				1,975,884
Money market			1,798,548				1,599,637
Savings			544,029				471,129
Time			1,349,543				1,282,803
Brokered			359,370				338,985
Total deposits			8,441,599				7,873,193
Short-term borrowings			35,050				16,640
Federal Home Loan Bank advances			449,407				430,125
Long-term debt			174,959				163,836
Derivative financial instruments			32,548				28,825
Accrued expenses and other liabilities			84,759				85,524
Total liabilities			9,218,322				8,598,143
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series H; $1,000 stated value; 0 and 9,992 shares issued and outstanding			-				9,992
Common stock, $1 par value; 150,000,000 shares authorized;
70,861,025 and 66,198,477 shares issued and outstanding			70,861				66,198
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
0 and 5,285,516 shares issued and outstanding			-				5,286
Common stock issuable; 520,014 and 458,953 shares			7,179				6,779
Capital surplus			1,274,909				1,286,361
Accumulated deficit			(273,314	)			(330,879	)
Accumulated other comprehensive loss			(342	)			(25,452	)
Total shareholders' equity			1,079,293				1,018,285
Total liabilities and shareholders' equity		$	10,297,615			$	9,616,428

 

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
						2016										2015
	Average							Avg.			Average							Avg.
(dollars in thousands, fully taxable equivalent (FTE))	Balance				Interest			Rate			Balance				Interest			Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)	$	6,675,328			$	69,427		4.14	%		$	5,457,158			$	57,258		4.16	%
Taxable securities (3)		2,588,037				15,284		2.36				2,367,417				12,624		2.13
Tax-exempt securities (FTE) (1)(3)		22,113				219		3.96				28,889				290		4.02
Federal funds sold and other interest-earning assets		157,972				754		1.91				155,957				948		2.43
Total interest-earning assets (FTE)		9,443,450				85,684		3.61				8,009,421				71,120		3.53
Non-interest-earning assets:
Allowance for loan losses		(63,874	)									(71,090	)
Cash and due from banks		100,775										80,678
Premises and equipment		198,234										179,463
Other assets (3)		602,690										435,060
Total assets	$	10,281,275									$	8,633,532
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,744,473				452		.10			$	1,491,801				337		.09
Money market		1,997,165				1,347		.27				1,737,740				981		.22
Savings		537,447				43		.03				386,254				25		.03
Time		1,375,706				833		.24				1,277,829				1,155		.36
Brokered time deposits		162,255				(166	)	(.41)				268,716				(325	)	(.48)
Total interest-bearing deposits		5,817,046				2,509		.17				5,162,340				2,173		.17
Federal funds purchased and other borrowings		42,234				98		.92				72,909				99		.54
Federal Home Loan Bank advances		583,312				1,015		.69				281,429				461		.65
Long-term debt		177,333				2,828		6.34				152,105				2,669		6.96
Total borrowed funds		802,879				3,941		1.95				506,443				3,229		2.53
Total interest-bearing liabilities		6,619,925				6,450		.39				5,668,783				5,402		.38
Non-interest-bearing liabilities:
Non-interest-bearing deposits		2,490,019										1,972,291
Other liabilities		103,859										95,342
Total liabilities		9,213,803										7,736,416
Shareholders' equity		1,067,472										897,116
Total liabilities and shareholders' equity	$	10,281,275									$	8,633,532
Net interest revenue (FTE)					$	79,234									$	65,718
Net interest-rate spread (FTE)								3.22	%									3.15	%
Net interest margin (FTE) (4)								3.34	%									3.26	%
(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 $30.4 million in 2016 and $8.56 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.

 

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
						2016										2015
	Average							Avg.			Average							Avg.
(dollars in thousands, fully taxable equivalent (FTE))	Balance				Interest			Rate			Balance				Interest			Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)	$	6,277,972			$	196,956		4.19	%		$	5,069,270			$	160,204		4.23	%
Taxable securities (3)		2,665,272				47,590		2.38				2,263,907				36,380		2.14
Tax-exempt securities (FTE) (1)(3)		26,415				735		3.71				23,649				845		4.76
Federal funds sold and other interest-earning assets		150,146				2,719		2.41				154,392				2,734		2.36
Total interest-earning assets (FTE)		9,119,805				248,000		3.63				7,511,218				200,163		3.56
Non-interest-earning assets:
Allowance for loan losses		(66,142	)									(71,425	)
Cash and due from banks		93,802										78,948
Premises and equipment		187,019										169,037
Other assets (3)		574,870										405,101
Total assets	$	9,909,354									$	8,092,879
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,795,372				1,381		.10			$	1,462,344				1,079		.10
Money market		1,901,903				3,661		.26				1,605,098				2,460		.20
Savings		505,337				102		.03				340,878				71		.03
Time		1,280,503				2,325		.24				1,253,047				3,816		.41
Brokered time deposits		194,199				(273	)	(.19)				272,688				(982	)	(.48)
Total interest-bearing deposits		5,677,314				7,196		.17				4,934,055				6,444		.17
Federal funds purchased and other borrowings		29,427				278		1.26				52,385				279		.71
Federal Home Loan Bank advances		506,524				2,731		.72				270,260				1,307		.65
Long-term debt		168,955				8,178		6.47				131,338				7,481		7.62
Total borrowed funds		704,906				11,187		2.12				453,983				9,067		2.67
Total interest-bearing liabilities		6,382,220				18,383		.38				5,388,038				15,511		.38
Non-interest-bearing liabilities:
Non-interest-bearing deposits		2,374,076										1,793,181
Other liabilities		102,421										93,218
Total liabilities		8,858,717										7,274,437
Shareholders' equity		1,050,637										818,442
Total liabilities and shareholders' equity	$	9,909,354									$	8,092,879
Net interest revenue (FTE)					$	229,617									$	184,652
Net interest-rate spread (FTE)								3.25	%									3.18	%
Net interest margin (FTE) (4)								3.36	%									3.29	%
(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 $15.1 million in 2016 and $12.7 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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