Press Release Details

Diluted earnings per share up 6 percent, to 33 cents, from first quarter 2016
Excluding merger-related and other non-operating charges,
diluted operating EPS up 18 percent, to 39 cents

• Net interest revenue of $83.6 million, up $8.6 million or 11 percent from year ago
• Net interest margin of 3.45 percent, up 11 basis points from fourth quarter
• Core transaction deposits up $189 million from the fourth quarter, or 13 percent annualized
• Return on assets of .89 percent, or 1.07 percent excluding merger-related and other charges
• Efficiency ratio of 59.3 percent, or 57.4 percent excluding merger-related and other charges

BLAIRSVILLE, Ga., April 26, 2017 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today announced strong first quarter results with solid margin improvement, effective expense management and sound credit quality.  Net income was $23.5 million, or 33 cents per diluted share, compared with $22.3 million, or 31 cents per diluted share, for the first quarter of 2016.

On an operating basis, net income rose to $28.2 million for the first quarter of 2017 compared with $23.9 million for the first quarter of 2016.  First quarter 2017 operating net income excludes pre-tax merger-related charges of $1.17 million and pre-tax charges related to branch closures of $831,000, net of the income tax benefit associated with the charges of $758,000. Also excluded is a non-cash tax charge of $3.4 million related to the cancellation of interest rate swaps that were designated as cash flow hedges.  The non-cash tax charge was previously included in other comprehensive income until the swaps matured or were canceled. 

First quarter 2016 operating net income excludes $2.65 million in pre-tax merger-related charges, net of the associated income tax benefit of $1.00 million.  On a per diluted share basis, operating net income was 39 cents for the first quarter of 2017 compared with 33 cents for the first quarter of 2016.

At March 31, 2017, preliminary regulatory capital ratios were as follows. Tier 1 Risk-Based of 11.5 percent; Total Risk-Based of 12.3 percent; Common Equity Tier 1 Risk-Based of 11.4 percent, and Tier 1 Leverage of 8.6 percent.

"We began 2017 with a solid first quarter," said Jimmy Tallent, chairman and chief executive officer.  "Excluding merger-related and other non-operating charges, operating net income per share was up 18 percent from a year ago to 39 cents, driven by strong loan and fee revenue growth and expense management.  Also excluding these charges, we held our operating efficiency ratio to 57.4 percent, the second best in a decade and surpassed only by the fourth quarter of 2016.  Including those charges, the efficiency ratio was 59.3 percent.

"While linked-quarter operating net income was down slightly, our margin expansion and disciplined expense management offset most of the seasonal declines in mortgage and SBA lending, as well as some seasonal decrease in loan growth," Tallent said.  "Our bankers made steady progress improving financial performance by growing core transaction deposits a healthy 13 percent in the first quarter, all while holding deposit pricing steady. 

"First quarter loan production was $615 million," Tallent added.  "Linked-quarter average loan growth was $89.8 million, or 5 percent annualized, reflecting a seasonal decrease from recent quarters.  End of period loans grew by $44.4 million.   Our community banks originated $423 million in loans, while our specialized lending area produced $151 million."  Specialized lending encompasses commercial real estate, middle market, SBA, asset-based lending, senior living and builder finance.

First quarter net interest revenue totaled $83.6 million, up $8.6 million from the first quarter of 2016 and up $2.6 million from the fourth quarter of 2016.  The increases from both periods reflect net interest margin expansions of 4 basis points from a year ago and 11 basis points from the fourth quarter, driven by rising short-term interest rates.  Loan growth and the acquisition of Tidelands Bank in July of 2016 were the primary drivers of the increase from a year ago.

The first quarter provision for credit losses was $800,000.  This compares with a provision recovery of $200,000 in the first quarter of 2016 and no provision for the fourth quarter of 2016.  First quarter net charge-offs totaled $1.7 million, compared with $2.1 million in the first quarter of 2016 and $1.5 million in the fourth quarter.  Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans.  Nonperforming assets were .23 percent of total assets at March 31, 2017, compared with .28 percent at both March 31, 2016 and December 31, 2016.

"Our first quarter provision for loan losses reflects continued strong, steady credit quality and a low level of net charge-offs," Tallent commented. "Our credit quality indicators remain favorable and our outlook is for that to continue.  We also expect our provision levels to gradually increase during the year due to loan growth, while our allowance and the related ratio to total loans will decline slightly."

Fourth quarter fee revenue totaled $22.1 million, up $3.47 million from a year ago and a decrease of $3.16 million from the fourth quarter.  Mortgage fees were up $1.14 million from a year ago, and down $2.09 million from the fourth quarter.  Gains from sales of SBA loans were up $722,000 from a year ago due to continued growth in SBA lending, and were down $1.07 million from the fourth quarter.  Partially offsetting the seasonal linked-quarter decreases in mortgage and SBA revenue was a $499,000 increase in brokerage fees.  Other fee revenue was down $386,000 from the fourth quarter, mostly reflecting a lower volume of customer derivative business.

Operating expenses were $62.8 million for the first quarter, compared with $57.9 million for the first quarter of 2016 and $61.3 million for the fourth quarter.  Included in operating expenses are merger-related and branch closure charges of $2.05 million in the first quarter, and merger-related charges of $2.65 million in the first quarter of 2016 and $1.14 million in the fourth quarter of 2016.  Excluding these charges, first quarter operating expenses were $60.8 million compared with $55.2 million a year ago and $60.2 million for the fourth quarter.

The increase in operating expenses from the fourth quarter is primarily due to higher salaries and employee benefit costs, with most of the increase related to payroll taxes that start over at the beginning of each year.  The increase from a year ago also reflects additional operating expenses following the acquisition of Tidelands Bank on July 1, 2016.  United's financial results begin including operating expenses of acquired companies on their respective acquisition dates.

Income tax expense for the first quarter totaled $18.5 million compared with $13.6 million a year ago and $17.6 million in the fourth quarter.  Included in first quarter income tax expense was a $3.4 million non-cash charge to release income taxes on hedge instruments that were held in other comprehensive income during the time in which United had a full valuation allowance on its deferred tax asset.  For accounting purposes, these disproportionate tax effects remained in other comprehensive income until the instruments that created them ceased to exist.  In the first quarter of 2017, several related interest rate swaps matured while the balance of these hedge instruments were canceled thereby requiring a transfer from other comprehensive income to a non-cash tax expense charge.  The charge had no effect on tangible book value, since there was no effect on total shareholders' equity.  Income tax expense in the fourth quarter of 2016 was elevated by a charge of $976,000 due to the impairment of a portion of the deferred tax asset as a result of cancelling nonqualified stock options.

Tallent concluded, "We are off to a good start toward another exceptional year for United Community Banks.  Our bankers continue to execute our strategic plans and serve their customers with the enthusiasm, energy and passion that are the foundation of our success.  I'm also excited about the Horry County State Bank acquisition that was announced last week and is expected to close in the third quarter. Not only is the bank in a market where we want to expand, it is also a solid cultural fit with the same emphasis on outstanding customer service for which United is known."

Conference Call
United will hold a conference call today, Wednesday, April 26, 2017, 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 97149143.  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 $10.7 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the southeast region's largest full-service banks, operating 134 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in providing personalized community banking services to individuals, small businesses and middle-market companies.  Services include a full range of consumer and commercial banking products including mortgage, advisory, and treasury management.  Respected national research firms consistently recognize United Community Bank for outstanding customer service. In 2014, 2015 and 2016, J.D. Power ranked United Community Bank first in customer satisfaction in the Southeast.  In 2017, for the fourth consecutive year, Forbes included United among their list of the top 100 Best Banks in America.  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, including the accompanying financial statement tables, 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," "operating net income available to common shareholders," "operating diluted income per common share," "tangible book value per common share," "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 2016 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
		2017				2016															Quarter
	First				Fourth				Third				Second				First				2017-2016
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter				Change
INCOME SUMMARY
Interest revenue	$	90,958			$	87,778			$	85,439			$	81,082			$	80,721
Interest expense		7,404				6,853				6,450				6,164				5,769
Net interest revenue		83,554				80,925				78,989				74,918				74,952			11		%
Provision for credit losses		800				-				(300	)			(300	)			(200	)
Fee revenue		22,074				25,233				26,361				23,497				18,606			19
Total revenue		104,828				106,158				105,650				98,715				93,758			12
Expenses		62,826				61,321				64,023				58,060				57,885			9
Income before income tax expense		42,002				44,837				41,627				40,655				35,873			17
Income tax expense		18,478				17,616				15,753				15,389				13,578			36
Net income		23,524				27,221				25,874				25,266				22,295			6
Preferred dividends		-				-				-				-				21
Net income available to common shareholders	$	23,524			$	27,221			$	25,874			$	25,266			$	22,274			6
Merger-related and other charges		2,054				1,141				3,152				1,176				2,653
Income tax benefit of merger-related and other charges		(758	)			(432	)			(1,193	)			(445	)			(1,004	)
Impairment of deferred tax asset on canceled non-qualified stock   options		-				976				-				-				-
Release of disproportionate tax effects lodged in OCI		3,400				-				-				-				-
Net income available to common shareholders - operating (1)	$	28,220			$	28,906			$	27,833			$	25,997			$	23,923			18
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	.33			$	.38			$	.36			$	.35			$	31			6
Diluted net income - operating  (1)		.39				.40				.39				.36				.33			18
Cash dividends declared		.09				.08				.08				.07				.07
Book value		15.40				15.06				15.12				14.80				14.35			7
Tangible book value (3)		13.30				12.95				13.00				12.84				12.40			7
Key performance ratios:
Return on common equity - GAAP (2)(4)		8.54		%		9.89		%		9.61		%		9.54		%		8.57		%
Return on common equity - operating (1)(2)(4)		10.25				10.51				10.34				9.81				9.20
Return on tangible common equity - operating (1)(2)(3)(4)		12.10				12.47				12.45				11.56				10.91
Return on assets - GAAP (4)		.89				1.03				1.00				1.04				.93
Return on assets - operating (1)(4)		1.07				1.10				1.08				1.07				1.00
Dividend payout ratio - GAAP		27.27				21.05				22.22				20.00				22.58
Dividend payout ratio - operating (1)		23.08				20.00				20.51				19.44				21.21
Net interest margin (fully taxable equivalent) (4)		3.45				3.34				3.34				3.35				3.41
Efficiency ratio - GAAP		59.29				57.65				60.78				59.02				61.94
Efficiency ratio - operating  (1)		57.35				56.58				57.79				57.82				59.10
Average equity to average assets		10.24				10.35				10.38				10.72				10.72
Average tangible equity to average assets (3)		8.96				9.04				8.98				9.43				9.41
Average tangible common equity to average assets (3)		8.96				9.04				8.98				9.43				9.32
Tangible common equity to risk-weighted assets (3)(5)		12.07				11.84				12.22				12.87				12.77
ASSET QUALITY
Nonperforming loans	$	19,812			$	21,539			$	21,572			$	21,348			$	22,419			(12	)
Foreclosed properties		5,060				7,949				9,187				6,176				5,163			(2	)
Total nonperforming assets (NPAs)		24,872				29,488				30,759				27,524				27,582			(10	)
Allowance for loan losses		60,543				61,422				62,961				64,253				66,310			(9	)
Net charge-offs		1,679				1,539				1,359				1,730				2,138			(21	)
Allowance for loan losses to loans		.87		%		.89		%		.94		%		1.02		%		1.09		%
Net charge-offs to average loans (4)		.10				.09				.08				.11				.14
NPAs to loans and foreclosed properties		.36				.43				.46				.44				.45
NPAs to total assets		.23				.28				.30				.28				.28
AVERAGE BALANCES ($ in millions)
Loans	$	6,904			$	6,814			$	6,675			$	6,151			$	6,004			15
Investment securities		2,822				2,690				2,610				2,747				2,718			4
Earning assets		9,872				9,665				9,443				9,037				8,876			11
Total assets		10,677				10,484				10,281				9,809				9,634			11
Deposits		8,592				8,552				8,307				7,897				7,947			8
Shareholders' equity		1,093				1,085				1,067				1,051				1,033			6
Common shares - basic (thousands)		71,700				71,641				71,556				72,202				72,162			(1	)
Common shares - diluted (thousands)		71,708				71,648				71,561				72,207				72,166			(1	)
AT PERIOD END ($ in millions)
Loans	$	6,965			$	6,921			$	6,725			$	6,287			$	6,106			14
Investment securities		2,767				2,762				2,560				2,677				2,757			-
Total assets		10,732				10,709				10,298				9,928				9,781			10
Deposits		8,752				8,638				8,442				7,857				7,960			10
Shareholders' equity		1,102				1,076				1,079				1,060				1,034			7
Common shares outstanding (thousands)		70,973				70,899				70,861				71,122				71,544			(1	)
(1)  Excludes merger-related charges, a first quarter 2017 release of disproportionate tax effects lodged in OCI and a fourth quarter 2016 deferred tax asset impairment charge related to canceled non-qualified stock options.  (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)  First quarter 2017 ratio is preliminary.

 

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
		2017				2016
	First				Fourth				Third				Second				First
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter
Expense reconciliation
Expenses (GAAP)	$	62,826			$	61,321			$	64,023			$	58,060			$	57,885
Merger-related and other charges		(2,054	)			(1,141	)			(3,152	)			(1,176	)			(2,653	)
Expenses - operating	$	60,772			$	60,180			$	60,871			$	56,884			$	55,232
Net income reconciliation
Net income (GAAP)	$	23,524			$	27,221			$	25,874			$	25,266			$	22,295
Merger-related and other charges		2,054				1,141				3,152				1,176				2,653
Income tax benefit of merger-related and other charges		(758	)			(432	)			(1,193	)			(445	)			(1,004	)
Impairment of deferred tax asset on canceled non-qualified stock options		-				976				-				-				-
Release of disproportionate tax effects lodged in OCI		3,400				-				-				-				-
Net income - operating	$	28,220			$	28,906			$	27,833			$	25,997			$	23,944
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)	$	23,524			$	27,221			$	25,874			$	25,266			$	22,274
Merger-related and other charges		2,054				1,141				3,152				1,176				2,653
Income tax benefit of merger-related and other charges		(758	)			(432	)			(1,193	)			(445	)			(1,004	)
Impairment of deferred tax asset on canceled non-qualified stock options		-				976				-				-				-
Release of disproportionate tax effects lodged in OCI		3,400				-				-				-				-
Net income available to common shareholders - operating	$	28,220			$	28,906			$	27,833			$	25,997			$	23,923
Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	.33			$	.38			$	.36			$	.35			$	.31
Merger-related and other charges		.01				.01				.03				.01				.02
Impairment of deferred tax asset on canceled non-qualified stock options		-				.01				-				-				-
Release of disproportionate tax effects lodged in OCI		.05				-				-				-				-
Diluted income per common share - operating	$	.39			$	.40			$	.39			$	.36			$	.33
Book value per common share reconciliation
Book value per common share (GAAP)	$	15.40			$	15.06			$	15.12			$	14.80			$	14.35
Effect of goodwill and other intangibles		(2.10	)			(2.11	)			(2.12	)			(1.96	)			(1.95	)
Tangible book value per common share	$	13.30			$	12.95			$	13.00			$	12.84			$	12.40
Return on tangible common equity reconciliation
Return on common equity (GAAP)		8.54		%		9.89		%		9.61		%		9.54		%		8.57		%
Merger-related and other charges		.47				.26				.73				.27				.63
Impairment of deferred tax asset on canceled non-qualified stock options		-				.36				-				-				-
Release of disproportionate tax effects lodged in OCI		1.24				-				-				-				-
Return on common equity - operating		10.25				10.51				10.34				9.81				9.20
Effect of goodwill and other intangibles		1.85				1.96				2.11				1.75				1.71
Return on tangible common equity - operating		12.10		%		12.47		%		12.45		%		11.56		%		10.91		%
Return on assets reconciliation
Return on assets (GAAP)		.89		%		1.03		%		1.00		%		1.04		%		.93		%
Merger-related and other charges		.05				.03				.08				.03				.07
Impairment of deferred tax asset on canceled non-qualified stock options		-				.04				-				-				-
Release of disproportionate tax effects lodged in OCI		.13				-				-				-				-
Return on assets - operating		1.07		%		1.10		%		1.08		%		1.07		%		1.00		%
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		27.27		%		21.05		%		22.22		%		20.00		%		22.58		%
Merger-related and other charges		(.98	)			(.54	)			(1.71	)			(.56	)			(1.37	)
Impairment of deferred tax asset on canceled non-qualified stock options		-				(.51	)			-				-				-
Release of disproportionate tax effects lodged in OCI		(3.21	)			-				-				-				-
Dividend payout ratio - operating		23.08		%		20.00		%		20.51		%		19.44		%		21.21		%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)		59.29		%		57.65		%		60.78		%		59.02		%		61.94		%
Merger-related and other charges		(1.94	)			(1.07	)			(2.99	)			(1.20	)			(2.84	)
Efficiency ratio - operating		57.35		%		56.58		%		57.79		%		57.82		%		59.10		%
Average equity to assets reconciliation
Equity to assets (GAAP)		10.24		%		10.35		%		10.38		%		10.72		%		10.72		%
Effect of goodwill and other intangibles		(1.28	)			(1.31	)			(1.40	)			(1.29	)			(1.31	)
Tangible equity to assets		8.96				9.04				8.98				9.43				9.41
Effect of preferred equity		-				-				-				-				(.09	)
Tangible common equity to assets		8.96		%		9.04		%		8.98		%		9.43		%		9.32		%
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory)		11.46		%		11.23		%		11.04		%		11.44		%		11.32		%
Effect of other comprehensive income		(.24	)			(.34	)			-				(.06	)			(.25	)
Effect of deferred tax limitation		1.13				1.26				1.50				1.63				1.85
Effect of trust preferred		(.25	)			(.25	)			(.26	)			(.08	)			(.08	)
Basel III intangibles transition adjustment		(.03	)			(.06	)			(.06	)			(.06	)			(.07	)
Tangible common equity to risk-weighted assets		12.07		%		11.84		%		12.22		%		12.87		%		12.77		%
(1)  First quarter 2017 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
		2017			2016
		First			Fourth			Third			Second			First
(in millions)		Quarter			Quarter			Quarter			Quarter			Quarter
LOANS BY CATEGORY
Owner occupied commercial RE		$	1,633		$	1,650		$	1,587		$	1,527		$	1,509
Income producing commercial RE			1,297			1,282			1,277			1,101			1,071
Commercial & industrial			1,080			1,070			994			925			854
Commercial construction			667			634			567			565			535
Total commercial			4,677			4,636			4,425			4,118			3,969
Residential mortgage			860			857			814			784			774
Home equity lines of credit			659			655			693			616			597
Residential construction			197			190			200			170			167
Consumer installment			572			583			593			599			599
Total loans		$	6,965		$	6,921		$	6,725		$	6,287		$	6,106
LOANS BY MARKET
North Georgia		$	1,076		$	1,097		$	1,110		$	1,097		$	1,097
Atlanta MSA			1,408			1,399			1,332			1,314			1,257
North Carolina			541			545			548			543			543
Coastal Georgia			591			581			565			541			543
Gainesville MSA			252			248			236			240			248
East Tennessee			483			504			506			509			495
South Carolina			1,243			1,233			1,199			862			821
Specialized Lending			911			855			763			706			628
Indirect auto			460			459			466			475			474
Total loans		$	6,965		$	6,921		$	6,725		$	6,287		$	6,106

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
		2017			2016						Linked Quarter Change				Year over Year Change
		First			Fourth			First
(in millions)		Quarter			Quarter			Quarter
LOANS BY CATEGORY
Owner occupied commercial RE		$	1,633		$	1,650		$	1,509		$	(17	)		$	124
Income producing commercial RE			1,297			1,282			1,071			15				226
Commercial & industrial			1,080			1,070			854			10				226
Commercial construction			667			634			535			33				132
Total commercial			4,677			4,636			3,969			41				708
Residential mortgage			860			857			774			3				86
Home equity lines of credit			659			655			597			4				62
Residential construction			197			190			167			7				30
Consumer installment			572			583			599			(11	)			(27	)
Total loans		$	6,965		$	6,921		$	6,106			44				859
LOANS BY MARKET
North Georgia		$	1,076		$	1,097		$	1,097			(21	)			(21	)
Atlanta MSA			1,408			1,399			1,257			9				151
North Carolina			541			545			543			(4	)			(2	)
Coastal Georgia			591			581			543			10				48
Gainesville MSA			252			248			248			4				4
East Tennessee			483			504			495			(21	)			(12	)
South Carolina			1,243			1,233			821			10				422
Specialized Lending			911			855			628			56				283
Indirect auto			460			459			474			1				(14	)
Total loans		$	6,965		$	6,921		$	6,106			44				859

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
		First Quarter 2017
		Nonperforming					Foreclosed					Total
(in thousands)		Loans					Properties					NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	6,135				$	1,238				$	7,373
Income producing CRE			1,540					21					1,561
Commercial & industrial			929					-					929
Commercial construction			1,069					2,825					3,894
Total commercial			9,673					4,084					13,757
Residential mortgage			6,455					660					7,115
Home equity lines of credit			1,848					261					2,109
Residential construction			417					55					472
Consumer installment			1,419					-					1,419
Total NPAs		$	19,812				$	5,060				$	24,872
NONPERFORMING ASSETS BY MARKET
North Georgia		$	5,344				$	570				$	5,914
Atlanta MSA			715					645					1,360
North Carolina			4,897					355					5,252
Coastal Georgia			942					-					942
Gainesville MSA			728					-					728
East Tennessee			2,112					633					2,745
South Carolina			1,725					2,857					4,582
Specialized Lending			2,032					-					2,032
Indirect auto			1,317					-					1,317
Total NPAs		$	19,812				$	5,060				$	24,872
NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	21,539				$	7,949				$	29,488
Acquisitions			-					-					-
Loans placed on non-accrual			3,172					-					3,172
Payments received			(3,046		)			-					(3,046		)
Loan charge-offs			(1,292		)			-					(1,292		)
Foreclosures			(561		)			561					-
Capitalized costs			-					-					-
Property sales			-					(3,077		)			(3,077		)
Write downs			-					(480		)			(480		)
Net gains (losses) on sales			-					107					107
Ending Balance		$	19,812				$	5,060				$	24,872

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
		Fourth Quarter 2016
		Nonperforming					Foreclosed					Total
(in thousands)		Loans					Properties					NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	7,373				$	3,145				$	10,518
Income producing CRE			1,324					36					1,360
Commercial & industrial			966					-					966
Commercial construction			1,538					2,977					4,515
Total commercial			11,201					6,158					17,359
Residential mortgage			6,368					1,260					7,628
Home equity lines of credit			1,831					531					2,362
Residential construction			776					-					776
Consumer installment			1,363					-					1,363
Total NPAs		$	21,539				$	7,949				$	29,488
NONPERFORMING ASSETS BY MARKET
North Georgia		$	5,278				$	856				$	6,134
Atlanta MSA			1,259					716					1,975
North Carolina			4,750					632					5,382
Coastal Georgia			1,778					-					1,778
Gainesville MSA			279					-					279
East Tennessee			2,354					675					3,029
South Carolina			2,494					5,070					7,564
Specialized Lending			2,072					-					2,072
Indirect auto			1,275					-					1,275
Total NPAs		$	21,539				$	7,949				$	29,488
NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	21,572				$	9,187				$	30,759
Acquisitions			-					-					-
Loans placed on non-accrual			6,346					-					6,346
Payments received			(3,832		)			-					(3,832		)
Loan charge-offs			(1,293		)			-					(1,293		)
Foreclosures			(1,254		)			1,530					276
Capitalized costs			-					26					26
Property sales			-					(2,737		)			(2,737		)
Write downs			-					(254		)			(254		)
Net gains (losses) on sales			-					197					197
Ending Balance		$	21,539				$	7,949				$	29,488

 

 

 

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		$	7,693				$	3,188				$	10,881
Income producing CRE			2,422					765					3,187
Commercial & industrial			1,079					-					1,079
Commercial construction			1,977					1,274					3,251
Total commercial			13,171					5,227					18,398
Residential mortgage			5,440					1,211					6,651
Home equity lines of credit			1,194					514					1,708
Residential construction			369					2,235					2,604
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
		First Quarter 2017								Fourth Quarter 2016								Third 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		$	(212		)		(.05)	%		$	1				-	%		$	46				.01	%
Income producing CRE			870				.28				527				.16				70				.02
Commercial & industrial			(152		)		(.06)				(201		)		(.08)				453				.18
Commercial construction			(370		)		(.23)				241				.16				(194		)		(.13)
Total commercial			136				.01				568				.05				375				.03
Residential mortgage			530				.25				322				.15				(47		)		(.02)
Home equity lines of credit			422				.26				151				.09				267				.16
Residential construction			(9		)		(.02)				(16		)		(.03)				242				.51
Consumer installment			600				.42				514				.35				522				.34
Total		$	1,679				.10			$	1,539				.09			$	1,359				.08
NET CHARGE-OFFS BY MARKET
North Georgia		$	15				.01	%		$	575				.21	%		$	68				.02	%
Atlanta MSA			(46		)		(.01)				12				-				398				.12
North Carolina			601				.45				714				.52				329				.24
Coastal Georgia			(223		)		(.15)				118				.08				432				.31
Gainesville MSA			358				.58				(32		)		(.05)				15				.03
East Tennessee			55				.05				(139		)		(.11)				(69		)		(.05)
South Carolina			425				.14				(2		)		-				(66		)		(.02)
Specialized Lending			195				.09				(21		)		(.01)				69				.04
Indirect auto			299				.27				314				.27				183				.15
Total		$	1,679				.10			$	1,539				.09			$	1,359				.08
(1)  Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
		Three Months Ended
		March 31,
(in thousands, except per share data)			2017				2016
Interest revenue:
Loans, including fees		$	72,727			$	63,976
Investment securities, including tax exempt of $279 and $166			17,712				15,788
Deposits in banks and short-term investments			519				957
Total interest revenue			90,958				80,721
Interest expense:
Deposits:
NOW			597				485
Money market			1,426				1,108
Savings			27				29
Time			1,008				642
Total deposit interest expense			3,058				2,264
Short-term borrowings			40				87
Federal Home Loan Bank advances			1,430				733
Long-term debt			2,876				2,685
Total interest expense			7,404				5,769
Net interest revenue			83,554				74,952
Release of (provision for) credit losses			800				(200	)
Net interest revenue after provision for credit losses			82,754				75,152
Fee revenue:
Service charges and fees			10,604				10,126
Mortgage loan and other related fees			4,424				3,289
Brokerage fees			1,410				1,053
Gains from sales of government guaranteed loans			1,959				1,237
Securities gains, net			(2	)			379
Other			3,679				2,522
Total fee revenue			22,074				18,606
Total revenue			104,828				93,758
Operating expenses:
Salaries and employee benefits			36,691				33,062
Communications and equipment			4,918				4,290
Occupancy			4,949				4,723
Advertising and public relations			1,061				864
Postage, printing and supplies			1,370				1,280
Professional fees			3,044				2,700
FDIC assessments and other regulatory charges			1,283				1,524
Amortization of intangibles			973				1,010
Merger-related and other charges			2,054				2,653
Other			6,483				5,779
Total operating expenses			62,826				57,885
Net income before income taxes			42,002				35,873
Income tax expense			18,478				13,578
Net income			23,524				22,295
Preferred stock dividends and discount accretion			-				21
Net income available to common shareholders		$	23,524			$	22,274
Earnings per common share:
Basic		$	.33			$	.31
Diluted			.33				.31
Weighted average common shares outstanding:
Basic			71,700				72,162
Diluted			71,708				72,166

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
		March 31,				December 31,
(in thousands, except share and per share data)			2017				2016
ASSETS
Cash and due from banks		$	90,151			$	99,489
Interest-bearing deposits in banks			140,822				117,859
Cash and cash equivalents			230,973				217,348
Securities available for sale			2,436,591				2,432,438
Securities held to maturity (fair value $333,032 and $333,170)			329,992				329,843
Mortgage loans held for sale (includes $15,845 and $27,891 at fair value)			16,491				29,878
Loans, net of unearned income			6,964,990				6,920,636
Less allowance for loan losses			(60,543	)			(61,422	)
Loans, net			6,904,447				6,859,214
Premises and equipment, net			189,437				189,938
Bank owned life insurance			154,150				143,543
Accrued interest receivable			27,020				28,018
Net deferred tax asset			139,383				154,336
Derivative financial instruments			22,131				23,688
Goodwill and other intangible assets			155,250				156,222
Other assets			125,938				144,189
Total assets		$	10,731,803			$	10,708,655
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand		$	2,752,361			$	2,637,004
NOW			1,968,493				1,989,763
Money market			1,831,145				1,846,440
Savings			574,805				549,713
Time			1,261,232				1,287,142
Brokered			364,056				327,496
Total deposits			8,752,092				8,637,558
Short-term borrowings			-				5,000
Federal Home Loan Bank advances			569,138				709,209
Long-term debt			175,238				175,078
Derivative financial instruments			26,425				27,648
Accrued expenses and other liabilities			107,367				78,427
Total liabilities			9,630,260				9,632,920
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
0 shares issued and outstanding			-				-
Common stock, $1 par value; 150,000,000 shares authorized;
70,972,753 and 70,899,114 shares issued and outstanding			70,973				70,899
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
0 shares issued and outstanding			-				-
Common stock issuable; 546,511 and 519,874 shares			7,959				7,327
Capital surplus			1,275,954				1,275,849
Accumulated deficit			(234,384	)			(251,857	)
Accumulated other comprehensive loss			(18,959	)			(26,483	)
Total shareholders' equity			1,101,543				1,075,735
Total liabilities and shareholders' equity		$	10,731,803			$	10,708,655

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
						2017									2016
	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)	$	6,903,860			$	72,741	4.27	%		$	6,003,568			$	64,044		4.29	%
Taxable securities (3)		2,779,625				17,433	2.51				2,688,564				15,622		2.32
Tax-exempt securities (FTE) (1)(3)		42,180				457	4.33				29,744				272		3.66
Federal funds sold and other interest-earning assets		146,027				664	1.82				153,759				1,053		2.74
Total interest-earning assets (FTE)		9,871,692				91,295	3.74				8,875,635				80,991		3.67
Non-interest-earning assets:
Allowance for loan losses		(61,668	)								(68,473	)
Cash and due from banks		99,253									85,635
Premises and equipment		190,096									180,090
Other assets (3)		577,168									561,261
Total assets	$	10,676,541								$	9,634,148
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,959,678				597	.12			$	1,886,472				485		.10
Money market		2,065,449				1,426	.28				1,840,584				1,108		.24
Savings		560,634				27	.02				480,238				29		.02
Time		1,263,946				815	.26				1,259,689				817		.26
Brokered time deposits		98,340				193	.80				233,213				(175	)	(.30)
Total interest-bearing deposits		5,948,047		-		3,058	.21				5,700,196		-		2,264		.16
Federal funds purchased and other borrowings		19,031				40	.85				34,906				87		1.00
Federal Home Loan Bank advances		681,117				1,430	.85				346,169				733		.85
Long-term debt		175,142				2,876	6.66				165,419				2,685		6.53
Total borrowed funds		875,290				4,346	2.01				546,494				3,505		2.58
Total interest-bearing liabilities		6,823,337				7,404	.44				6,246,690				5,769		.37
Non-interest-bearing liabilities:
Non-interest-bearing deposits		2,643,630									2,247,041
Other liabilities		116,752									107,320
Total liabilities		9,583,719									8,601,051
Shareholders' equity		1,092,822									1,033,097
Total liabilities and shareholders' equity	$	10,676,541								$	9,634,148
Net interest revenue (FTE)					$	83,891								$	75,222
Net interest-rate spread (FTE)							3.30	%									3.30	%
Net interest margin (FTE) (4)							3.45	%									3.41	%
(1)  Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans.  The rate
used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)  Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)  Securities available for sale are shown at amortized cost.  Pretax unrealized losses of $5.38 million in 2017 and pretax unrealized gains of
$2.20 million in 2016 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:

Jefferson Harralson

Chief Financial Officer

(864) 240-6208

Jefferson_Harralson@ucbi.com

Source: United Community Banks, Inc.

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