United Community Banks, Inc. Announces Fourth Quarter Results

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United Community Banks, Inc. Announces Fourth Quarter Results

Jan 22, 2019

Return on Assets of 1.43% and Return on Common Equity of 12.08%

GREENVILLE, S.C., Jan. 22, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its fourth quarter financial results, which reflected solid year-over-year loan and deposit growth, improving operating efficiency and continued strong asset quality. For the quarter, diluted earnings per share was $0.56 compared with a net loss of $0.16 per diluted share a year ago due to the impact of tax reform. Operating diluted earnings per share, which exclude merger-related and other charges, was $0.57, an increase of 36% over the previous year. Profitability ratios continued to be strong – United ended the year with a 1.43% return on assets and a 12.08% return on common equity. On an operating basis, return on assets was 1.45% and return on tangible common equity was 15.88%.

Other key banking metrics were strong. The fourth quarter saw continued net interest margin expansion and 8% annualized loan growth, the strongest growth quarter in 2018. Deposit growth reflected the strength of United’s community banking franchise – total customer deposits increased $173 million for the fourth quarter and $414 million for the year. Mortgage production grew by nearly 4% compared to the fourth quarter last year and increased 20% for the full year compared to 2017. United’s SBA business also had a strong year, with production up 12% over 2017.

“The fourth quarter was a strong finish to an outstanding year,” said Lynn Harton, Chief Executive Officer. “Our full year return on assets was up 31 basis points on an operating basis and our operating earnings per share was up 31% over 2017. These impressive results do not come easily and are attributed to the hard work of our bankers, who continue to deliver the best service in the business. We are very pleased that their efforts are being recognized. Forbes included United on their list of the top 100 Best Banks in America for the fifth consecutive year. Additionally, for the fifth straight year, we earned the top ranking for overall customer satisfaction by JD Power; our service was ranked as highest in the Southeast. We were also honored by our recognition in the 'Best Banks to Work For' program by American Banker for the second year in a row. This is a measure of employee satisfaction for all banks in the country, and we could not be more pleased by our team’s show of support for United. The strength of our culture and the strong momentum we see in the business gives me confidence that we will continue our strong performance into 2019 and continue to build long-term shareholder value.”

2018 Highlights:

2018 earnings per diluted share was $2.07, a 125% increase over 2017, which included the impact of tax reform
- Excluding merger-related and other charges and the 2017 impact of tax reform, earnings per diluted share for 2018 was $2.14 compared to $1.63 in 2017, an increase of 31%
Return on average assets was 1.35% in 2018, an increase of 73 basis points from 2017
- Excluding merger-related and other charges and the 2017 impact of tax reform, return on average assets was 1.40%, an increase of 31 basis points from 2017
Efficiency ratio of 57.31% in 2018 improved 264 basis points as compared to 2017
- Excluding merger-related and other charges, efficiency ratio of 55.94% improved 73 basis points as compared to 2017
End of period loans grew $647 million in 2018, up 8% over December 31, 2017
Common Equity Tier 1 ratio was 12.2% at December 31, 2018, compared to 12.0% at December 31, 2017
Declared $0.58 per share in common dividends in 2018, up 53% over 2017
Completed the acquisition of Navitas Credit Corporation on February 1, 2018
Issued $100 million in subordinated debt in the first quarter and redeemed $7.4 million in high rate Trust Preferred securities in the fourth quarter
Completed our CEO transition plan, elevating H. Lynn Harton into the role as Jimmy Tallent retired into the Executive Chairman position
Added two new Board members, Jennifer Mann and Lance F. Drummond, adding significant experience and expertise to our oversight function

Fourth Quarter 2018 Financial Highlights:

Return on assets of 1.43%, or 1.45% excluding merger-related and other charges
Return on common equity of 12.1% or return on tangible common equity of 15.9%, which excludes merger-related and other charges
Loan growth, excluding planned runoff of the indirect portfolio, of 10% on an annualized basis
Loan production of $868 million, as compared to $644 million in the fourth quarter of 2017
Expansion of the net interest margin to 3.97%, up two basis points from the third quarter of 2018 and up 34 basis points from a year ago
Efficiency ratio of 56.73%, or 55.83% excluding merger-related and other charges
Net charge offs of nine basis points, consistent with last quarter’s result of seven basis points
Nonperforming assets of 0.20% of total assets, compared to 0.19% at September 30, 2018 and 0.23% at December 31, 2017

Conference Call

United will hold a conference call, Wednesday, January 23, 2019, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 9381368. 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.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																					Fourth				For the Twelve
		2018																2017			Quarter				Months Ended							YTD
		Fourth				Third				Second				First				Fourth			2018-2017				December 31,							2018-2017
(in thousands, except per share data)		Quarter				Quarter				Quarter				Quarter				Quarter			Change				2018				2017			Change
INCOME SUMMARY
Interest revenue	$	133,854			$	128,721			$	122,215			$	115,290			$	106,757						$	500,080			$	389,720
Interest expense		18,975				16,611				13,739				12,005				9,249							61,330				33,735
Net interest revenue		114,879				112,110				108,476				103,285				97,508			18		%		438,750				355,985			23		%
Provision for credit losses		2,100				1,800				1,800				3,800				1,200							9,500				3,800
Noninterest income		23,045				24,180				23,340				22,396				21,928			5				92,961				88,260			5
Total revenue		135,824				134,490				130,016				121,881				118,236			15				522,211				440,445			19
Expenses		78,242				77,718				76,850				73,475				75,882			3				306,285				267,611			14
Income before income tax expense		57,582				56,772				53,166				48,406				42,354			36				215,926				172,834			25
Income tax expense		12,445				13,090				13,532				10,748				54,270							49,815				105,013
Net income (loss)		45,137				43,682				39,634				37,658				(11,916	)						166,111				67,821
Merger-related and other charges		1,234				592				2,873				2,646				7,358							7,345				14,662
Income tax benefit of merger-related and other charges		(604	)			(141	)			(121	)			(628	)			(1,165	)						(1,494	)			(3,745	)
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act		-				-				-				-				38,199							-				38,199
Release of disproportionate tax effects lodged in OCI		-				-				-				-				-							-				3,400
Net income - operating ⁽¹⁾	$	45,767			$	44,133			$	42,386			$	39,676			$	32,476			41			$	171,962			$	120,337			43

PERFORMANCE MEASURES
Per common share:
Diluted net income (loss) - GAAP	$	0.56			$	0.54			$	0.49			$	0.47			$	(0.16	)					$	2.07			$	0.92
Diluted net income - operating ⁽¹⁾		0.57				0.55				0.53				0.50				0.42			36				2.14				1.63			31
Cash dividends declared		0.16				0.15				0.15				0.12				0.10			60				0.58				0.38			53
Book value		18.24				17.56				17.29				17.02				16.67			9				18.24				16.67			9
Tangible book value⁽³⁾		14.24				13.54				13.25				12.96				13.65			4				14.24				13.65			4

Key performance ratios:
Return on common equity - GAAP⁽²⁾⁽⁴⁾		12.08		%		11.96		%		11.20		%		11.11		%		(3.57	)	%					11.60		%		5.67		%
Return on common equity - operating^(1)(2)(4)		12.25				12.09				11.97				11.71				9.73							12.01				10.07
Return on tangible common equity - operating^(1)(2)(3)(4)		15.88				15.81				15.79				15.26				11.93							15.69				12.02
Return on assets - GAAP⁽⁴⁾		1.43				1.41				1.30				1.26				(0.40	)						1.35				0.62
Return on assets - operating⁽¹⁾⁽⁴⁾		1.45				1.42				1.39				1.33				1.10							1.40				1.09
Dividend payout ratio - GAAP		28.57				27.78				30.61				25.53				(62.50	)						28.02				41.30
Dividend payout ratio - operating ⁽¹⁾		28.07				27.27				28.30				24.00				23.81							27.10				23.31
Net interest margin (fully taxable equivalent)⁽⁴⁾		3.97				3.95				3.90				3.80				3.63							3.91				3.52
Efficiency ratio - GAAP		56.73				56.82				57.94				57.83				63.03							57.31				59.95
Efficiency ratio - operating ⁽¹⁾		55.83				56.39				55.77				55.75				56.92							55.94				56.67
Average equity to average assets		11.35				11.33				11.21				11.03				11.21							11.24				10.71
Average tangible equity to average assets⁽³⁾		9.04				8.97				8.83				8.82				9.52							8.92				9.29
Average tangible common equity to average assets⁽³⁾		9.04				8.97				8.83				8.82				9.52							8.92				9.29
Tangible common equity to risk-weighted assets⁽³⁾⁽⁵⁾		11.99				11.61				11.36				11.19				12.05							11.99				12.05
																									-
ASSET QUALITY
Nonperforming loans	$	23,778			$	22,530			$	21,817			$	26,240			$	23,658			1			$	23,778			$	23,658			1
Foreclosed properties		1,305				1,336				2,597				2,714				3,234			(60	)			1,305				3,234			(60	)
Total nonperforming assets (NPAs)		25,083				23,866				24,414				28,954				26,892			(7	)			25,083				26,892			(7	)
Allowance for loan losses		61,203				60,940				61,071				61,085				58,914			4				61,203				58,914			4
Net charge-offs		1,787				1,466				1,359				1,501				1,061			68				6,113				5,998			2
Allowance for loan losses to loans		0.73		%		0.74		%		0.74		%		0.75		%		0.76		%					0.73		%		0.76		%
Net charge-offs to average loans⁽⁴⁾		0.09				0.07				0.07				0.08				0.06							0.07				0.08
NPAs to loans and foreclosed properties		0.30				0.29				0.30				0.35				0.35							0.30				0.35
NPAs to total assets		0.20				0.19				0.20				0.24				0.23							0.20				0.23

AVERAGE BALANCES ($ in millions)
Loans	$	8,306			$	8,200			$	8,177			$	7,993			$	7,560			10			$	8,170			$	7,150			14
Investment securities		3,004				2,916				2,802				2,870				2,991			-				2,899				2,847			2
Earning assets		11,534				11,320				11,193				11,076				10,735			7				11,282				10,162			11
Total assets		12,505				12,302				12,213				12,111				11,687			7				12,284				11,015			12
Deposits		10,306				9,950				9,978				9,759				9,624			7				10,000				8,950			12
Shareholders’ equity		1,420				1,394				1,370				1,336				1,310			8				1,380				1,180			17
Common shares - basic (thousands)		79,884				79,806				79,753				79,205				76,768			4				79,662				73,247			9
Common shares - diluted (thousands)		79,890				79,818				79,755				79,215				76,768			4				79,671				73,259			9

AT PERIOD END ($ in millions)
Loans	$	8,383			$	8,226			$	8,220			$	8,184			$	7,736			8			$	8,383			$	7,736			8
Investment securities		2,903				2,873				2,834				2,731				2,937			(1	)			2,903				2,937			(1	)
Total assets		12,573				12,405				12,386				12,264				11,915			6				12,573				11,915			6
Deposits		10,535				10,229				9,966				9,993				9,808			7				10,535				9,808			7
Shareholders’ equity		1,458				1,402				1,379				1,357				1,303			12				1,458				1,303			12
Common shares outstanding (thousands)		79,234				79,202				79,138				79,123				77,580			2				79,234				77,580			2

⁽¹⁾ Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation and a first quarter 2017 release of disproportionate tax effects lodged in OCI. ⁽²⁾ Net income less 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⁾ Fourth quarter 2018 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,

(in thousands, except per share data)	2018				2017				2016				2015				2014
INCOME SUMMARY
Interest revenue	$	500,080			$	389,720			$	335,020			$	278,532			$	248,432
Interest expense		61,330				33,735				25,236				21,109				25,551
Net interest revenue		438,750				355,985				309,784				257,423				222,881
Provision for credit losses		9,500				3,800				(800	)			3,700				8,500
Noninterest income		92,961				88,260				93,697				72,529				55,554
Total revenue		522,211				440,445				404,281				326,252				269,935
Expenses		306,285				267,611				241,289				211,238				162,865
Income before income tax expense		215,926				172,834				162,992				115,014				107,070
Income tax expense (benefit)		49,815				105,013				62,336				43,436				39,450
Net income		166,111				67,821				100,656				71,578				67,620
Merger-related and other charges		7,345				14,662				8,122				17,995				-
Income tax benefit of merger-related and other charges		(1,494	)			(3,745	)			(3,074	)			(6,388	)			-
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act		-				38,199				-				-				-
Impairment of deferred tax asset on cancelled non-qualified stock options		-				-				976				-				-
Release of disproportionate tax effects lodged in OCI		-				3,400				-				-				-
Net income - operating ⁽¹⁾	$	171,962			$	120,337			$	106,680			$	83,185			$	67,620

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	2.07			$	0.92			$	1.40			$	1.09			$	1.11
Diluted net income - operating ⁽¹⁾		2.14				1.63				1.48				1.27				1.11
Cash dividends declared		0.58				0.38				0.30				0.22				0.11
Book value		18.24				16.67				15.06				14.02				12.20
Tangible book value⁽³⁾		14.24				13.65				12.95				12.06				12.15

Key performance ratios:
Return on common equity - GAAP⁽²⁾		11.60		%		5.67		%		9.41		%		8.15		%		9.17	%
Return on common equity - operating⁽¹⁾⁽²⁾		12.01				10.07				9.98				9.48				9.17
Return on tangible common equity - operating^(1)(2)(3)		15.69				12.02				11.86				10.24				9.32
Return on assets - GAAP		1.35				0.62				1.00				0.85				0.91
Return on assets - operating⁽¹⁾		1.40				1.09				1.06				0.98				0.91
Dividend payout ratio - GAAP		28.02				41.30				21.43				20.18				9.91
Dividend payout ratio - operating ⁽¹⁾		27.10				23.31				20.27				17.32				9.91
Net interest margin (fully taxable equivalent)		3.91				3.52				3.36				3.30				3.26
Efficiency ratio - GAAP		57.31				59.95				59.80				63.96				58.26
Efficiency ratio - operating ⁽¹⁾		55.94				56.67				57.78				58.51				58.26
Average equity to average assets		11.24				10.71				10.54				10.27				9.69
Average tangible equity to average assets⁽³⁾		8.92				9.29				9.21				9.74				9.67
Average tangible common equity to average assets⁽³⁾		8.92				9.29				9.19				9.66				9.60
Tangible common equity to risk-weighted assets⁽³⁾⁽⁴⁾		11.99				12.05				11.84				12.82				13.82

ASSET QUALITY
Nonperforming loans	$	23,778			$	23,658			$	21,539			$	22,653			$	17,881
Foreclosed properties		1,305				3,234				7,949				4,883				1,726
Total nonperforming assets (NPAs)		25,083				26,892				29,488				27,536				19,607
Allowance for loan losses		61,203				58,914				61,422				68,448				71,619
Net charge-offs		6,113				5,998				6,766				6,259				13,879
Allowance for loan losses to loans		0.73		%		0.76		%		0.89		%		1.14		%		1.53	%
Net charge-offs to average loans		0.07				0.08				0.11				0.12				0.31
NPAs to loans and foreclosed properties		0.30				0.35				0.43				0.46				0.42
NPAs to total assets		0.20				0.23				0.28				0.29				0.26

AVERAGE BALANCES ($ in millions)
Loans	$	8,170			$	7,150			$	6,413			$	5,298			$	4,450
Investment securities		2,899				2,847				2,691				2,368				2,274
Earning assets		11,282				10,162				9,257				7,834				6,880
Total assets		12,284				11,015				10,054				8,462				7,436
Deposits		10,000				8,950				8,177				7,055				6,228
Shareholders’ equity		1,380				1,180				1,059				869				720
Common shares - basic (thousands)		79,662				73,247				71,910				65,488				60,588
Common shares - diluted (thousands)		79,671				73,259				71,915				65,492				60,590

AT PERIOD END ($ in millions)
Loans	$	8,383			$	7,736			$	6,921			$	5,995			$	4,672
Investment securities		2,903				2,937				2,762				2,656				2,198
Total assets		12,573				11,915				10,709				9,616				7,558
Deposits		10,535				9,808				8,638				7,873				6,335
Shareholders’ equity		1,458				1,303				1,076				1,018				740
Common shares outstanding (thousands)		79,234				77,580				70,899				71,484				60,259

⁽¹⁾ Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and 2015 impairment losses on surplus bank property. ⁽²⁾ Net income less 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⁾ 2018 ratio is preliminary.

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


	2018																2017				For the Twelve Months Ended December 31,
	Fourth				Third				Second				First				Fourth				For the Twelve Months Ended December 31,
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter				2018				2017				2016				2015				2014

Expense reconciliation
Expenses (GAAP)	$	78,242			$	77,718			$	76,850			$	73,475			$	75,882			$	306,285			$	267,611			$	241,289			$	211,238			$	162,865
Merger-related and other charges		(1,234	)			(592	)			(2,873	)			(2,646	)			(7,358	)			(7,345	)			(14,662	)			(8,122	)			(17,995	)			-
Expenses - operating	$	77,008			$	77,126			$	73,977			$	70,829			$	68,524			$	298,940			$	252,949			$	233,167			$	193,243			$	162,865

Net income reconciliation
Net income (loss) (GAAP)	$	45,137			$	43,682			$	39,634			$	37,658			$	(11,916	)		$	166,111			$	67,821			$	100,656			$	71,578			$	67,620
Merger-related and other charges		1,234				592				2,873				2,646				7,358				7,345				14,662				8,122				17,995				-
Income tax benefit of merger-related and other charges		(604	)			(141	)			(121	)			(628	)			(1,165	)			(1,494	)			(3,745	)			(3,074	)			(6,388	)			-
Impact of tax reform on remeasurement of deferred tax asset		-				-				-				-				38,199				-				38,199				-				-				-
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	$	45,767			$	44,133			$	42,386			$	39,676			$	32,476			$	171,962			$	120,337			$	106,680			$	83,185			$	67,620

Diluted income per common share reconciliation
Diluted income (loss) per common share (GAAP)	$	0.56			$	0.54			$	0.49			$	0.47			$	(0.16	)		$	2.07			$	0.92			$	1.40			$	1.09			$	1.11
Merger-related and other charges		0.01				0.01				0.04				0.03				0.08				0.07				0.14				0.07				0.18				-
Impact of tax reform on remeasurement of deferred tax asset		-				-				-				-				0.50				-				0.52				-				-				-
Impairment of deferred tax asset on canceled non-qualified stock options		-				-				-				-				-				-				-				0.01				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				-				-				0.05				-				-				-
Diluted income per common share - operating	$	0.57			$	0.55			$	0.53			$	0.50			$	0.42			$	2.14			$	1.63			$	1.48			$	1.27			$	1.11

Book value per common share reconciliation
Book value per common share (GAAP)	$	18.24			$	17.56			$	17.29			$	17.02			$	16.67			$	18.24			$	16.67			$	15.06			$	14.02			$	12.20
Effect of goodwill and other intangibles		(4.00	)			(4.02	)			(4.04	)			(4.06	)			(3.02	)			(4.00	)			(3.02	)			(2.11	)			(1.96	)			(0.05	)
Tangible book value per common share	$	14.24			$	13.54			$	13.25			$	12.96			$	13.65			$	14.24			$	13.65			$	12.95			$	12.06			$	12.15

Return on tangible common equity reconciliation
Return on common equity (GAAP)		12.08		%		11.96		%		11.20		%		11.11		%		(3.57	)	%		11.60		%		5.67		%		9.41		%		8.15		%		9.17		%
Merger-related and other charges		0.17				0.13				0.77				0.60				1.86				0.41				0.92				0.48				1.33				-
Impact of tax reform on remeasurement of deferred tax asset		-				-				-				-				11.44				-				3.20				-				-				-
Impairment of deferred tax asset on canceled non-qualified stock options		-				-				-				-				-				-				-				0.09				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				-				-				0.28				-				-				-
Return on common equity - operating		12.25				12.09				11.97				11.71				9.73				12.01				10.07				9.98				9.48				9.17
Effect of goodwill and other intangibles		3.63				3.72				3.82				3.55				2.20				3.68				1.95				1.88				0.76				0.15
Return on tangible common equity - operating		15.88		%		15.81		%		15.79		%		15.26		%		11.93		%		15.69		%		12.02		%		11.86		%		10.24		%		9.32		%

Return on assets reconciliation
Return on assets (GAAP)		1.43		%		1.41		%		1.30		%		1.26		%		(0.40	)	%		1.35		%		0.62		%		1.00		%		0.85		%		0.91		%
Merger-related and other charges		0.02				0.01				0.09				0.07				0.20				0.05				0.09				0.05				0.13				-
Impact of tax reform on remeasurement of deferred tax asset		-				-				-				-				1.30				-				0.35				-				-				-
Impairment of deferred tax asset on canceled non-qualified stock options		-				-				-				-				-				-				-				0.01				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				-				-				0.03				-				-				-
Return on assets - operating		1.45		%		1.42		%		1.39		%		1.33		%		1.10		%		1.40		%		1.09		%		1.06		%		0.98		%		0.91		%

Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		28.57		%		27.78		%		30.61		%		25.53		%		(62.50	)	%		28.02		%		41.30		%		21.43		%		20.18		%		9.91		%
Merger-related and other charges		(0.50	)			(0.51	)			(2.31	)			(1.53	)			12.04				(0.92	)			(5.65	)			(1.02	)			(2.86	)			-
Impact of tax reform on remeasurement of deferred tax asset		-				-				-				-				74.27				-				(11.61	)			-				-				-
Impairment of deferred tax asset on canceled non-qualified stock options		-				-				-				-				-				-				-				(0.14	)			-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				-				-				(0.73	)			-				-				-
Dividend payout ratio - operating		28.07		%		27.27		%		28.30		%		24.00		%		23.81		%		27.10		%		23.31		%		20.27		%		17.32		%		9.91		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		56.73		%		56.82		%		57.94		%		57.83		%		63.03		%		57.31		%		59.95		%		59.80		%		63.96		%		58.26		%
Merger-related and other charges		(0.90	)			(0.43	)			(2.17	)			(2.08	)			(6.11	)			(1.37	)			(3.28	)			(2.02	)			(5.45	)			-
Efficiency ratio - operating		55.83		%		56.39		%		55.77		%		55.75		%		56.92		%		55.94		%		56.67		%		57.78		%		58.51		%		58.26		%

Average equity to average assets reconciliation
Average equity to assets (GAAP)		11.35		%		11.33		%		11.21		%		11.03		%		11.21		%		11.24		%		10.71		%		10.54		%		10.27		%		9.69		%
Effect of goodwill and other intangibles		(2.31	)			(2.36	)			(2.38	)			(2.21	)			(1.69	)			(2.32	)			(1.42	)			(1.33	)			(0.53	)			(0.02	)
Average tangible equity to average assets		9.04				8.97				8.83				8.82				9.52				8.92				9.29				9.21				9.74				9.67
Effect of preferred equity		-				-				-				-				-				-				-				(0.02	)			(0.08	)			(0.07	)
Average tangible common equity to average assets		9.04		%		8.97		%		8.83		%		8.82		%		9.52		%		8.92		%		9.29		%		9.19		%		9.66		%		9.60		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tier 1 capital ratio (Regulatory)		12.41		%		12.25		%		11.94		%		11.61		%		12.24		%		12.41		%		12.24		%		11.23		%		11.45		%		12.06		%
Effect of other comprehensive income		(0.44	)			(0.68	)			(0.57	)			(0.50	)			(0.29	)			(0.44	)			(0.29	)			(0.34	)			(0.38	)			(0.35	)
Effect of deferred tax limitation		0.28				0.30				0.33				0.42				0.51				0.28				0.51				1.26				2.05				3.11
Effect of trust preferred		(0.26	)			(0.26	)			(0.34	)			(0.34	)			(0.36	)			(0.26	)			(0.36	)			(0.25	)			(0.08	)			(1.00	)
Effect of preferred equity		-				-				-				-				-				-				-				-				(0.15	)			-
Basel III intangibles transition adjustment		-				-				-				-				(0.05	)			-				(0.05	)			(0.06	)			(0.10	)			-
Basel III disallowed investments		-				-				-				-				-				-				-				-				0.03				-
Tangible common equity to risk-weighted assets		11.99		%		11.61		%		11.36		%		11.19		%		12.05		%		11.99		%		12.05		%		11.84		%		12.82		%		13.82		%

⁽¹⁾ Fourth quarter 2018 ratios are preliminary.

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


	2018								2017		Linked Quarter Change			Year over Year Change
	Fourth		Third		Second		First		Fourth
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,648	$	1,673	$	1,682	$	1,898	$	1,924	$	(25	)	$	(276	)
Income producing commercial RE		1,812		1,788		1,821		1,677		1,595		24			217
Commercial & industrial		1,278		1,194		1,193		1,142		1,131		84			147
Commercial construction		796		761		735		691		712		35			84
Equipment financing		565		509		465		423		-		56			565
Total commercial		6,099		5,925		5,896		5,831		5,362		174			737
Residential mortgage		1,049		1,035		1,021		992		974		14			75
Home equity lines of credit		694		702		708		712		731		(8	)		(37	)
Residential construction		211		198		195		190		183		13			28
Consumer		330		366		400		459		486		(36	)		(156	)
Total loans	$	8,383	$	8,226	$	8,220	$	8,184	$	7,736		157			647

LOANS BY MARKET
North Georgia	$	981	$	992	$	1,001	$	1,004	$	1,019		(11	)		(38	)
Atlanta MSA		1,507		1,493		1,533		1,513		1,510		14			(3	)
North Carolina		1,072		1,078		1,067		1,037		1,049		(6	)		23
Coastal Georgia		588		610		623		635		630		(22	)		(42	)
Gainesville MSA		247		235		230		231		248		12			(1	)
East Tennessee		477		460		474		473		475		17			2
South Carolina		1,645		1,586		1,571		1,537		1,486		59			159
Commercial Banking Solutions		1,658		1,530		1,444		1,438		961		128			697
Indirect auto		208		242		277		316		358		(34	)		(150	)
Total loans	$	8,383	$	8,226	$	8,220	$	8,184	$	7,736		157			647

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


(in millions)	2018		2017		2016		2015		2014
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,648	$	1,924	$	1,650	$	1,571	$	1,257
Income producing commercial RE		1,812		1,595		1,282		1,021		767
Commercial & industrial		1,278		1,131		1,070		785		710
Commercial construction		796		712		634		518		364
Equipment financing		565		-		-		-		-
Total commercial		6,099		5,362		4,636		3,895		3,098
Residential mortgage		1,049		974		857		764		614
Home equity lines of credit		694		731		655		589		456
Residential construction		211		183		190		176		131
Consumer installment		330		486		583		571		373
Total loans	$	8,383	$	7,736	$	6,921	$	5,995	$	4,672


LOANS BY MARKET
North Georgia	$	981	$	1,019	$	1,097	$	1,125	$	1,163
Atlanta MSA		1,507		1,510		1,399		1,259		1,243
North Carolina		1,072		1,049		545		549		553
Coastal Georgia		588		630		581		537		456
Gainesville MSA		247		248		248		254		257
East Tennessee		477		475		504		504		280
South Carolina		1,645		1,486		1,233		819		30
Commercial Banking Solutions		1,658		961		855		492		421
Indirect auto		208		358		459		456		269
Total loans	$	8,383	$	7,736	$	6,921	$	5,995	$	4,672

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Fourth Quarter 2018										Third Quarter 2018											Second Quarter 2018
	Nonperforming			Foreclosed				Total			Nonperforming				Foreclosed			Total				Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties				NPAs			Loans				Properties			NPAs				Loans			Properties			NPAs

NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	6,421		$	170			$	6,591		$	4,884			$	183		$	5,067			$	5,772		$	812		$	6,584
Income producing CRE		1,160			-				1,160			1,194				156			1,350				991			455			1,446
Commercial & industrial		1,417			-				1,417			1,516				-			1,516				2,180			-			2,180
Commercial construction		605			421				1,026			825				522			1,347				613			576			1,189
Equipment financing		2,677			-				2,677			1,181				-			1,181				1,075			-			1,075
Total commercial		12,280			591				12,871			9,600				861			10,461				10,631			1,843			12,474
Residential mortgage		8,035			654				8,689			8,928				424			9,352				7,918			184			8,102
Home equity lines of credit		2,360			60				2,420			2,814				-			2,814				1,812			550			2,362
Residential construction		288			-				288			455				51			506				637			20			657
Consumer		815			-				815			733				-			733				819			-			819
Total NPAs	$	23,778		$	1,305			$	25,083		$	22,530			$	1,336		$	23,866			$	21,817		$	2,597		$	24,414

NONPERFORMING ASSETS BY MARKET
North Georgia	$	6,527		$	286			$	6,813		$	7,170			$	361		$	7,531			$	7,583		$	640		$	8,223
Atlanta MSA		1,578			-				1,578			1,778				132			1,910				1,928			132			2,060
North Carolina		3,259			743				4,002			3,690				480			4,170				3,029			750			3,779
Coastal Georgia		1,491			-				1,491			1,498				-			1,498				943			-			943
Gainesville MSA		479			-				479			212				-			212				186			-			186
East Tennessee		1,147			-				1,147			1,403				128			1,531				1,473			143			1,616
South Carolina		4,123			276				4,399			3,280				235			3,515				3,093			362			3,455
Commercial Banking Solutions		4,448			-				4,448			2,871				-			2,871				2,831			570			3,401
Indirect auto		726			-				726			628				-			628				751			-			751
Total NPAs	$	23,778		$	1,305			$	25,083		$	22,530			$	1,336		$	23,866			$	21,817		$	2,597		$	24,414

NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	22,530		$	1,336			$	23,866		$	21,817			$	2,597		$	24,414			$	26,240		$	2,714		$	28,954
Acquisitions		-			-				-			-				-			-				-			-			-
Loans placed on non-accrual		5,829			-				5,829			5,759				-			5,759				3,612			-			3,612
Payments received		(2,780	)		-				(2,780	)		(3,095	)			-			(3,095	)			(5,314	)		-			(5,314	)
Loan charge-offs		(933	)		-				(933	)		(1,588	)			-			(1,588	)			(2,065	)		-			(2,065	)
Foreclosures		(868	)		955				87			(363	)			454			91				(656	)		984			328
Property sales		-			(1,019	)			(1,019	)		-				(1,659	)		(1,659	)			-			(1,029	)		(1,029	)
Write downs		-			(112	)			(112	)		-				(166	)		(166	)			-			(106	)		(106	)
Net gains on sales		-			145				145			-				110			110				-			34			34
Ending Balance	$	23,778		$	1,305			$	25,083		$	22,530			$	1,336		$	23,866			$	21,817		$	2,597		$	24,414

	Fourth Quarter 2018							Third Quarter 2018							Second Quarter 2018
				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	$	(52	)		(0.01	)	%	$	(251	)		(0.06	)	%	$	(578	)		(0.13	)	%
Income producing CRE		399			0.09				1			-				1,421			0.33
Commercial & industrial		(149	)		(0.05	)			418			0.14				16			0.01
Commercial construction		(230	)		(0.12	)			(43	)		(0.02	)			(107	)		(0.06	)
Equipment financing		599			0.44				482			0.39				(49	)		(0.04	)
Total commercial		567			0.04				607			0.04				703			0.05
Residential mortgage		290			0.11				171			0.07				11			-
Home equity lines of credit		382			0.22				279			0.16				21			0.01
Residential construction		(36	)		(0.07	)			(164	)		(0.33	)			(58	)		(0.12	)
Consumer		584			0.67				573			0.60				682			0.64
Total	$	1,787			0.09			$	1,466			0.07			$	1,359			0.07

NET CHARGE-OFFS BY MARKET
North Georgia	$	543			0.22		%	$	483			0.19		%	$	246			0.10		%
Atlanta MSA		(159	)		(0.04	)			99			0.03				103			0.03
North Carolina		68			0.03				(87	)		(0.03	)			1,268			0.48
Coastal Georgia		(86	)		(0.06	)			24			0.02				19			0.01
Gainesville MSA		333			0.56				(48	)		(0.08	)			(2	)		-
East Tennessee		(111	)		(0.09	)			(1	)		-				76			0.06
South Carolina		57			0.01				418			0.11				(1,057	)		(0.27	)
Commercial Banking Solutions		948			0.23				403			0.11				381			0.11
Indirect auto		194			0.34				175			0.27				325			0.44
Total	$	1,787			0.09			$	1,466			0.07			$	1,359			0.07

⁽¹⁾ Annualized.

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

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
(in thousands, except per share data)	2018		2017		2018		2017

Interest revenue:
Loans, including fees	$	112,087	$	87,234	$	420,383	$	315,050
Investment securities, including tax exempt of $1,140, $909, $4,189, and $2,216		21,237		19,023		77,685		72,388
Deposits in banks and short-term investments		530		500		2,012		2,282
Total interest revenue		133,854		106,757		500,080		389,720

Interest expense:
Deposits:
NOW and interest-bearing demand		3,073		1,433		7,390		3,365
Money market		4,078		2,095		12,097		7,033
Savings		33		46		150		135
Time		7,006		2,272		19,906		6,529
Total deposit interest expense		14,190		5,846		39,543		17,062
Short-term borrowings		340		175		1,112		352
Federal Home Loan Bank advances		794		1,492		6,345		6,095
Long-term debt		3,651		1,736		14,330		10,226
Total interest expense		18,975		9,249		61,330		33,735
Net interest revenue		114,879		97,508		438,750		355,985
Provision for credit losses		2,100		1,200		9,500		3,800
Net interest revenue after provision for credit losses		112,779

Press Release Details

United Community Banks, Inc. Announces Fourth Quarter Results