United Community Banks, Inc. Reports Net Operating Income of $23.8 Million for Fourth Quarter 2015, up 30 Percent From a Year Ago

Jan 20, 2016

  • Operating earnings per diluted share of 33 cents, up 10 percent from a year ago
  • Operating return on assets of .99 percent
  • Operating return on tangible common equity of 10.9 percent
  • Loans up $162 million from third quarter, or 11 percent annualized, excluding sale of healthcare loans
  • Loan growth for year of $444 million, or 10 percent, excluding mergers and healthcare loan sale
  • Core transaction deposits up $524 million for 2015, or 14 percent, excluding deposits acquired in mergers

BLAIRSVILLE, Ga., Jan. 20, 2016 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today continued its strong momentum as it moves forward as a regional community bank in the Southeast, reflecting strong loan, core deposit and fee revenue growth, and a lower provision for credit losses.  For the fourth quarter of 2015, net operating income of $23.8 million increased 30 percent from a year ago and operating earnings per diluted share of 33 cents was up 10 percent from a year ago.

Operating earnings and operating earnings per diluted share for the fourth quarter of 2015 exclude the effects of merger-related and other charges for impairment on properties acquired for future expansion.  Including those charges, net income was $18.2 million for the fourth quarter, or 25 cents per diluted share.  Also, operating earnings this quarter include three months of earnings from the acquisition of The Palmetto Bank ("Palmetto"), as compared to one month for the third quarter of 2015.

For the full year of 2015, United achieved net income of $71.6 million, or $1.09 per diluted share.  Excluding merger-related and other charges, net operating income was $83.2 million, or $1.27 per diluted share.

At December 31, 2015, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.5 percent; Total Risk-Based of 12.5 percent; Common Equity Tier 1 Risk-Based of 11.5 percent; and, Tier 1 Leverage of 8.3 percent.

"United continues to enhance its long term value potential.  This past year of 2015 demonstrated the strengths of our footprint and the momentum that characterizes our organization as we enter into 2016," said Jimmy Tallent, chairman and chief executive officer.  "In 2015, we struck the proper balance of investing for our future and delivering strong financial results.  The fourth quarter was a continuation of that solid performance.

"Total loan production continued strong in the fourth quarter, though not readily apparent in our year-end loan balances due to the sale of our $190 million of healthcare loans," Tallent continued.  "Year-to-date loan growth, excluding loans acquired in mergers and our sale of healthcare loans, was $444 million, or 10 percent, slightly above our 2015 target of mid-to-upper-single-digit loan growth.  Our loan growth was funded with solid core transaction deposit growth of $524 million, or 14 percent, excluding mergers.

"Fourth quarter net loan growth of $162 million, excluding the healthcare loan sale, was driven by loan production of $590 million across all of our markets," added Tallent.  "Our community banks originated $360 million in loan production, while our specialized lending area, which includes asset-based, commercial real estate, middle market, SBA and builder finance lending, produced $157 million."

Fourth quarter taxable-equivalent net interest revenue totaled $74.0 million, up $8.33 million from the third quarter of 2015 and up $15.7 million from the fourth quarter of 2014.  The increase in net interest revenue reflects strong loan and core deposit growth, net interest revenue from the Palmetto and First National Bank acquisitions, and an increase in net interest margin.

"The taxable-equivalent net interest margin of 3.34 percent is an increase of eight basis points from the third quarter and up three basis points from a year ago," said Tallent.  "The increase from third quarter reflects higher yields on our loan and securities portfolios as well as a two basis point decrease in the average rate on our interest-bearing liabilities.

"This quarter, our loan yield, net interest margin and net interest revenue benefited from the discount accretion from the acquired loan portfolios.  The sale of our lower-yielding healthcare loans also contributed to the higher loan yield and net interest margin," commented Tallent.  "Additionally, the securities yield benefited from the mix of floating rate securities, slower prepayments and restructuring of a corporate bond, while interest-bearing liabilities benefited from Palmetto's highly desirable deposit base that provided a very low cost source of funds."

The fourth quarter provision for credit losses was $300 thousand, down $400 thousand from the third quarter and down $1.50 million from the fourth quarter of 2014.  Fourth quarter net charge-offs were $1.30 million compared with $1.42 million in the third quarter and $2.51 million a year ago.  Strong recoveries of previously charged-off loans drove net charge-offs down in the third and fourth quarters of 2015 compared with fourth quarter 2014.  Nonperforming assets were .29 percent of total assets at year-end, compared with .29 percent in the third quarter and .26 percent a year ago.

Fourth quarter fee revenue totaled $21.3 million, up $2.99 million from the third quarter and $6.46 million from the fourth quarter of 2014.  The increase from the third quarter was primarily due to the full quarter impact of the Palmetto acquisition.  Total service charges and fees were $11.5 million, up $2.17 million from the third quarter and up $3.05 million from a year ago.  Mortgage fees of $3.29 million were down $550 thousand from the third quarter and up $1.18 million from a year ago.  The decrease from the third quarter reflects seasonality and lower refinancing activity.  Closed mortgage loans totaled $138 million in the fourth quarter of 2015, compared with $141 million in the third quarter and $77.4 million in the fourth quarter of 2014.  During the fourth quarter, sales of $25.1 million in SBA loans resulted in net gains of $2.00 million.  This compares with $17.8 million in loans sold and net gains of $1.65 million in the third quarter of 2015, and $15.8 million in loans sold and net gains of $926 thousand in the fourth quarter of 2014.

"We are committed to growing our revenue stream by focusing on fee-generating products and services," stated Tallent.  "The growing SBA lending business and commitment to expanding our mortgage origination business are key parts of this strategy."

Operating expenses, excluding merger-related and other charges of $9.08 million, were $56.4 million in the fourth quarter.  This compares with $48.5 million in the third quarter of 2015 and $41.9 million in the fourth quarter of 2014.  The increase from the third quarter reflects approximately $5.6 million of operating expenses related to the full-quarter impact of the Palmetto acquisition.  Palmetto's operating expenses are expected to decline following systems conversions late in the first quarter in 2016, as anticipated cost savings are realized.

"The increase in operating expenses from third quarter also reflects higher professional fees and consulting services for several, mostly one-time, regulatory-related compliance projects throughout the company," stated Tallent.  "With the heightened sensitivity to compliance, we made a decision to accelerate these projects into the current year."

Fourth quarter salaries and employee benefits expense totaled $32.9 million, up $3.60 million from the third quarter and $6.35 million from a year ago.  The linked-quarter increase was primarily due to the full-quarter impact of Palmetto's costs, our new Charleston loan production office, and higher incentive costs associated with the growth in earnings and lending businesses.  The increase from a year ago reflects the impact of mergers, investment in new lenders and support staff for the specialized lending area, as well as higher commissions and incentives associated with the overall improvement in earnings and growth in the SBA and mortgage lending businesses, commercial loans and core deposits.

Occupancy expense of $4.67 million and communications and equipment expense of $4.74 million for the fourth quarter were up $653 thousand and $772 thousand, respectively, with the full-quarter of Palmetto's expenses accounting for most of the increase in both expense categories.

Other operating expenses for the fourth quarter totaled $7.01 million, up $1.46 million from the third quarter and up $3.08 million from the fourth quarter of 2014.  The linked-quarter increase is mostly due to the inclusion of Palmetto's operating expenses for the full-quarter versus one month in the third quarter.  The increase from last year is due to the acquisitions and higher transaction processing costs for interchange and internet banking services.

"Palmetto merged into United on September 1 and our team of bankers has been working diligently to bring these two great companies together," noted Tallent.  "System conversions are targeted for late February 2016 and, upon their completion, Palmetto branches will begin doing business under the United Community Bank brand."

Fourth quarter expenses included an after-tax merger charge of $1.94 million primarily related to severance and retention bonuses, system conversion costs, and advisory and professional services fees for the Palmetto acquisition.  United also incurred an after-tax non-operating impairment charge in the fourth quarter of $3.65 million to write-down properties acquired in prior years for future branch expansion.

"As part of our growth strategy, we are evaluating all of our delivery channels, including future branch sites," said Tallent.  "Some of these properties will be retained for future branch sites, others will be sold.  These decisions will be made over the next two years as we continue to execute on our growth strategies.  However, because we've held these properties for a long time, we evaluated them for impairment and wrote-down the properties accordingly."

"Our fourth quarter results mark the completion of another strong year," Tallent said. "We will remember 2015 as the year we successfully re-entered the mergers and acquisitions business.  I could not be more pleased with the partners we have chosen and our exceptional team of bankers who worked tirelessly to bring it all about.  I'm excited about the momentum and foundation we are building at United and the opportunities for growth and success they will bring."

Conference Call
United will hold a conference call today, Wednesday, January 20, 2016, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter.  To access the call, dial (877) 380-5665 and use the conference number 19833202.  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. (UCBI) is a bank holding company based in Blairsville, Georgia, with $9.6 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the Southeast's largest full-service banks, operating 134 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in personalized community banking services for individuals, small businesses and corporations.  United Community Bank offers a full range of consumer and commercial banking services including mortgage, advisory, treasury management and other products.  In 2014 and 2015, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and again in 2016 was ranked among the top 100 on the Forbes list of America's Best Banks.  Additional information about the company and the bank's full range of products and services can be found at www.ucbi.com.

Safe Harbor
This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment.  These statements are based on current expectations and are provided to assist in the understanding of future financial performance.  Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements.  For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2014 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   
                         
                    Fourth  
    2015       2014   Quarter  
(in thousands, except per share  Fourth     Third     Second     First     Fourth  2015-2014  
data; taxable equivalent) Quarter   Quarter   Quarter   Quarter   Quarter  Change  
INCOME SUMMARY                        
Interest revenue $   79,646     $   71,120     $   66,134     $   62,909     $   64,353        
Interest expense     5,598         5,402         4,817         5,292         6,021        
Net interest revenue     74,048         65,718         61,317         57,617         58,332       27   %  
Provision for credit losses     300         700         900         1,800         1,800        
Fee revenue     21,284         18,297         17,266         15,682         14,823       44      
Total revenue     95,032         83,315         77,683         71,499         71,355       33      
Expenses - operating  (1)     56,410         48,525         45,247         43,061         41,919       35      
Income before income tax expense - operating (1)     38,622         34,790         32,436         28,438         29,436       31      
Income tax expense - operating  (1)     14,822         13,064         12,447         10,768         11,189       32      
Net income - operating  (1)     23,800         21,726         19,989         17,670         18,247       30      
Preferred dividends and discount accretion     25         25         17         -          -         
Net income available to common
  shareholders - operating   (1)
    23,775         21,701         19,972         17,670         18,247       30      
Merger-related and other charges, net of income tax benefit     5,592         3,839         2,176         -          -         
Net income available to common
  shareholders - GAAP
$   18,183     $   17,862     $   17,796     $   17,670     $   18,247       -       
                                                 
PERFORMANCE MEASURES                                                
  Per common share:                                                
  Diluted income - operating  (1)  $   .33      $ .33     $ .32     $ .29     $ .30       10      
  Diluted income - GAAP   .25       .27       .28       .29       .30       (17 )    
  Cash dividends declared   .06       .06       .05       .05       .05        
  Book value     14.02         13.95         12.95         12.58         12.20       15      
  Tangible book value (3)     12.06         12.08         12.66         12.53         12.15       (1 )    
                                                 
  Key performance ratios:                                                
  Return on tangible common equity - operating (1)(2)(3)(4)     10.87   %     10.29   %     10.20   %     9.46   %     9.74  %      
  Return on common equity - operating (1)(2)(4)     9.18         9.54         9.90         9.34         9.60        
  Return on common equity - GAAP (2)(4)     7.02         7.85         8.83         9.34         9.60        
  Return on assets - operating (1)(4)   .99         1.00         1.00       .94       .96        
  Return on assets - GAAP (4)   .76       .82       .89       .94       .96        
  Dividend payout ratio - operating (1)     18.18         18.18         15.63         17.24         16.67        
  Dividend payout ratio - GAAP     24.00         22.22         17.86         17.24         16.67        
  Net interest margin (4)     3.34         3.26         3.30         3.31         3.31        
  Efficiency ratio - operating  (1)     59.41         57.81         57.59         59.15         57.47        
  Efficiency ratio - GAAP     68.97         64.65         61.63         59.15         57.47        
  Average equity to average assets   10.68       10.39       10.05       9.86       9.76        
  Average tangible equity to average assets (3)   9.40       9.88       9.91       9.82       9.72        
  Average tangible common equity to
  average assets (3)
  9.29       9.77       9.83       9.82       9.72        
  Tangible common equity to risk-weighted
  assets (3)(5)(6)
  12.82       13.08       13.24       13.53       13.82        
                                                 
ASSET QUALITY                                                
  Nonperforming loans $   22,653     $   20,064     $   18,805     $   19,015     $   17,881       27      
  Foreclosed properties     4,883         7,669         2,356         1,158         1,726       183      
  Total nonperforming assets (NPAs)     27,536         27,733         21,161         20,173         19,607       40      
  Allowance for loan losses     68,448         69,062         70,129         70,007         71,619       (4 )    
  Net charge-offs     1,302         1,417         978         2,562         2,509       (48 )    
  Allowance for loan losses to loans   1.14   %   1.15   %   1.36   %   1.46   %   1.53      
  Allowance for loan losses to loans, excl. acquired loans   1.35       1.37       1.42       1.46       1.53        
  Net charge-offs to average loans (4)   .09       .10       .08       .22       .22        
  NPAs to loans and foreclosed properties   .46       .46       .41       .42       .42        
  NPAs to total assets   .29       .29       .26       .26       .26        
                                                 
AVERAGE BALANCES ($ in millions)                                                
  Loans $   5,975     $   5,457     $   5,017     $   4,725     $   4,621       29      
  Investment securities     2,607         2,396         2,261         2,203         2,222       17      
  Earning assets     8,792         8,009         7,444         7,070         7,013       25      
  Total assets     9,558         8,634         8,017         7,617         7,565       26      
  Deposits     8,028         7,135         6,669         6,369         6,383       26      
  Shareholders' equity     1,021         897         806         751         738       38      
  Common shares - basic (thousands)     72,135         66,294         62,549         60,905         60,830       19      
  Common shares - diluted (thousands)     72,140         66,300         62,553         60,909         60,833       19      
                                                 
AT PERIOD END ($ in millions)                                                
  Loans $   5,995     $   6,024     $   5,174     $   4,788     $   4,672       28      
  Investment securities     2,656         2,457         2,322         2,201         2,198       21      
  Total assets     9,626         9,414         8,246         7,664         7,567       27      
  Deposits     7,881         7,905         6,808         6,438         6,327       25      
  Shareholders' equity     1,018         1,013         827         764         740       38      
  Common shares outstanding (thousands)     71,484         71,472         62,700         60,309         60,259       19      
                         
(1)  Excludes merger-related charges and impairment losses on surplus bank property.  (2)  Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).  (3)  Excludes effect of acquisition related intangibles and associated amortization.  (4)  Annualized.  (5)December 31, September 30, June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015(6)  Fourth quarter 2015 ratio is preliminary.  
                         

 

UNITED COMMUNITY BANKS, INC.   
Financial Highlights   
Selected Financial Information   
               
  For the Twelve      
  Months Ended   YTD  
(in thousands, except per share December 31,   2015-2014  
data; taxable equivalent)   2015       2014      Change  
INCOME SUMMARY              
Interest revenue $   279,809     $   249,969          
Interest expense     21,109         25,551          
Net interest revenue     258,700         224,418         15   %  
Provision for credit losses     3,700         8,500          
Fee revenue     72,529         55,554         31      
Total revenue     327,529         271,472         21      
Expenses - operating  (1)     193,243         162,865         19      
Income before income tax expense - operating (1)     134,286         108,607         24      
Income tax expense - operating  (1)     51,101         40,987         25      
Net income - operating  (1)     83,185         67,620         23      
Preferred dividends and discount accretion     67         439          
Net income available to common
  shareholders - operating  (1)
    83,118         67,181         24      
Merger-related and other charges, net of income tax benefit     11,607         -           
Net income available to common
  shareholders - GAAP
$   71,511     $   67,181         6      
                           
PERFORMANCE MEASURES                          
Per common share:                          
Diluted income - operating  (1) $   1.27     $   1.11         14      
Diluted income - GAAP     1.09         1.11         (2 )    
Cash dividends declared   .22       .11              
Book value     14.02         12.20         15      
Tangible book value (3)     12.06         12.15         (1 )    
               
Key performance ratios:              
Return on tangible common equity - operating (1)(2)(3)(4)     10.24   %     9.32   %          
Return on common equity - operating (1)(2)(4)     9.48         9.17          
Return on common equity - GAAP (2)(4)     8.15         9.17          
Return on assets - operating (1)(4)   .98       .91              
Return on assets - GAAP (4)   .85       .91              
Dividend payout ratio - operating (1)     17.32         9.91          
Dividend payout ratio - GAAP     20.18         9.91          
Net interest margin (4)     3.30         3.26          
Efficiency ratio - operating  (1)     58.51         58.26          
Efficiency ratio - GAAP     63.96         58.26          
Average equity to average assets   10.27       9.69          
Average tangible equity to average assets (3)   9.74       9.67          
Average tangible common equity to
  average assets (3)
  9.66       9.60          
Tangible common equity to risk-weighted
  assets (3)(5)(6)
    12.82       13.82          
                           
ASSET QUALITY                          
Nonperforming loans $   22,653     $   17,881         27      
Foreclosed properties     4,883         1,726         183      
Total nonperforming assets (NPAs)     27,536         19,607         40      
Allowance for loan losses     68,448         71,619         (4 )    
Net charge-offs     6,259         13,878         (55 )    
Allowance for loan losses to loans   1.14   %   1.53   %      
Allowance for loan losses to loans, excl. acquired loans   1.35       1.53          
Net charge-offs to average loans (4)   .12       .31          
NPAs to loans and foreclosed properties   .46       .42          
NPAs to total assets   .29       .26          
                           
AVERAGE BALANCES ($ in millions)                          
Loans $   5,298     $   4,450         19      
Investment securities     2,368         2,274         4      
Earning assets     7,834         6,880         14      
Total assets     8,462         7,436         14      
Deposits     7,055         6,228         13      
Shareholders' equity     869         720         21      
Common shares - basic (thousands)     65,488         60,588         8      
Common shares - diluted (thousands)     65,492         60,590         8      
               
AT PERIOD END ($ in millions)              
Loans $   5,995     $   4,672         28      
Investment securities     2,656         2,198         21      
Total assets     9,626         7,567         27      
Deposits     7,881         6,327         25      
Shareholders' equity     1,018         740         38      
Common shares outstanding (thousands)     71,484         60,259         19      
               
(1)  Excludes merger-related charges and impairment losses on surplus bank property.  (2)  Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).  (3)  Excludes effect of acquisition related intangibles and associated amortization.  (4)  Annualized.  (5)December 31, September 30, June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015(6)  Fourth quarter 2015 ratio is preliminary.  
               

 

UNITED COMMUNITY BANKS, INC.   
Selected Financial Information   
For the Years Ended December 31 ,   
                       
(in thousands, except per share data;                      
taxable equivalent)     2015       2014       2013       2012       2011    
 INCOME SUMMARY                      
Net interest revenue   $   258,700     $   224,418     $   219,641     $   229,758     $   238,670    
Provision for credit losses       3,700         8,500         65,500         62,500         251,000    
Fee revenue       72,529         55,554         56,598         56,112         44,907    
  Total revenue       327,529         271,472         210,739         223,370         32,577    
Expenses - operating (1)       193,243         162,865         174,304         186,774         261,599    
  Income (loss) before income tax expense (benefit) - operating (1)       134,286         108,607         36,435         36,596         (229,022 )  
Income tax expense (benefit) - operating (1)       51,101         40,987         (236,705 )       2,740         (2,276 )  
  Net income (loss) - operating (1)       83,185         67,620         273,140         33,856         (226,746 )  
Preferred dividends and discount accretion       67         439         12,078         12,148         11,838    
  Net income (loss) available to common shareholders - operating (1)       83,118         67,181         261,062         21,708         (238,584 )  
Merger-related and other charges, net of income tax benefit       (11,607 )       -          -          -          -     
  Net income (loss) available to common shareholders - GAAP   $   71,511     $   67,181     $   261,062     $   21,708     $   (238,584 )  
                                           
PERFORMANCE MEASURES                                          
  Per common share:                                          
  Diluted income (loss) - operating (1)   $   1.27     $   1.11     $   4.44      $ .38     $   (5.97 )  
  Diluted income (loss) - GAAP       1.09         1.11         4.44       .38         (5.97 )  
  Cash dividends declared     .22       .11         -          -          -     
  Book value       14.02         12.20         11.30         6.67         6.62    
  Tangible book value (3)       12.06         12.15         11.26         6.57         6.47    
                                           
  Key performance ratios:                                          
  Return on tangible common equity - operating (1)(2)(3)       10.24   %     9.32   %     47.35   %     6.27   %     (96.20 ) %
  Return on common equity - operating (1)(2)       9.48         9.17         46.72         5.43         (93.57 )  
  Return on common equity - GAAP (2)       8.15         9.17         46.72         5.43         (93.57 )  
  Return on assets - operating (1)     .98       .91         3.86       .49         (3.15 )  
  Return on assets - GAAP     .85       .91         3.86       .49         (3.15 )  
  Dividend payout ratio - operating (1)       17.32         9.91         -          -          -     
  Dividend payout ratio - GAAP       20.18         9.91         -          -          -     
  Net interest margin       3.30         3.26         3.30         3.51         3.52    
  Efficiency ratio - operating (1)       58.51         58.26         63.14         65.43         92.27    
  Efficiency ratio - GAAP       63.96         58.26         63.14         65.43         92.27    
  Average equity to average assets       10.27         9.69         10.35         8.47         7.75    
  Average tangible equity to average assets (3)       9.74         9.67         10.31         8.38         7.62    
  Average tangible common equity to average assets (3)       9.66         9.60         7.55         5.54         3.74    
  Tangible common equity to risk-weighted assets (3)(4)(5)       12.82         13.82         13.17         8.26         8.25    
                       
ASSET QUALITY                      
  Non-performing loans   $   22,653     $   17,881     $   26,819     $   109,894     $   127,479    
  Foreclosed properties       4,883         1,726         4,221         18,264         32,859    
  Total non-performing assets (NPAs)       27,536         19,607         31,040         128,158         160,338    
  Allowance for loan losses       68,448         71,619         76,762         107,137         114,468    
  Net charge-offs       6,259         13,879         93,710         69,831         311,227    
  Allowance for loan losses to loans       1.14   %     1.53   %     1.77   %     2.57   %     2.79   %
  Allowance for loan losses to loans, excluding acquired loans       1.35         1.53         1.77         2.57         2.79    
  Net charge-offs to average loans     .12       .31         2.22         1.69         7.33    
  NPAs to loans and foreclosed properties     .46       .42       .72         3.06         3.87    
  NPAs to total assets     .29       .26       .42         1.88         2.30    
                                           
AVERAGE BALANCES ($ in millions)                                          
  Loans   $   5,298     $   4,450     $   4,254     $   4,166     $   4,307    
  Investment securities       2,368         2,274         2,190         2,089         1,999    
  Earning assets       7,834         6,880         6,649         6,547         6,785    
  Total assets       8,462         7,436         7,074         6,865         7,189    
  Deposits       7,055         6,228         6,027         5,885         6,275    
  Shareholders' equity       869         720         732         582         557    
  Common shares - Basic (thousands)       65,488         60,588         58,787         57,857         39,943    
  Common shares - Diluted (thousands)       65,492         60,590         58,845         57,857         39,943    
                                           
AT YEAR END ($ in millions)                                          
  Loans   $   5,995     $   4,672     $   4,329     $   4,175     $   4,110    
  Investment securities       2,656         2,198         2,312         2,079         2,120    
  Total assets       9,626         7,567         7,425         6,802         6,983    
  Deposits       7,881         6,327         6,202         5,952         6,098    
  Shareholders' equity       1,018         740         796         581         575    
  Common shares outstanding (thousands)       71,484         60,259         59,432         57,741         57,561    
                       
(1)  Excludes merger-related charges and impairment losses on surplus bank property.  (2)  Net income (loss) 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)December 31, 2015 calculated under Basel III rules, which became effective January 1, 2015(5) 2015 ratio is preliminary.
                       

 

UNITED COMMUNITY BANKS, INC. 
Non-GAAP Performance Measures Reconciliation 
Selected Financial Information 
                   
                   
    2015      2014    
(in thousands, except per share  Fourth     Third     Second     First     Fourth 
data; taxable equivalent) Quarter   Quarter   Quarter   Quarter   Quarter
                   
Interest revenue reconciliation                  
Interest revenue - taxable equivalent $   79,646     $   71,120     $   66,134     $   62,909     $   64,353    
Taxable equivalent adjustment     (284 )       (292 )       (326 )       (375 )       (398 )  
  Interest revenue (GAAP) $   79,362     $   70,828     $   65,808     $   62,534     $   63,955    
                                         
Net interest revenue reconciliation                                        
Net interest revenue - taxable equivalent $   74,048     $   65,718     $   61,317     $   57,617     $   58,332    
Taxable equivalent adjustment     (284 )       (292 )       (326 )       (375 )       (398 )  
  Net interest revenue (GAAP) $   73,764     $   65,426     $   60,991     $   57,242     $   57,934    
                                         
Total revenue reconciliation                                        
Total operating revenue $   95,032     $   83,315     $   77,683     $   71,499     $   71,355    
Taxable equivalent adjustment     (284 )       (292 )       (326 )       (375 )       (398 )  
  Total revenue (GAAP) $   94,748     $   83,023     $   77,357     $   71,124     $   70,957    
                                         
Expense reconciliation                                        
Expenses - operating $   56,410     $   48,525     $   45,247     $   43,061     $   41,919    
Merger-related and other charges     9,078         5,744         3,173         -          -     
  Expenses (GAAP) $   65,488     $   54,269     $   48,420     $   43,061     $   41,919    
                                         
Income before taxes reconciliation                                        
Income before taxes - operating $   38,622     $   34,790     $   32,436     $   28,438     $   29,436    
Taxable equivalent adjustment     (284 )       (292 )       (326 )       (375 )       (398 )  
Merger-related and other charges     (9,078 )       (5,744 )       (3,173 )       -          -     
  Income before taxes (GAAP) $   29,260     $   28,754     $   28,937     $   28,063     $   29,038    
                                         
Income tax expense reconciliation                                        
Income tax expense - operating $   14,822     $   13,064     $   12,447     $   10,768     $   11,189    
Taxable equivalent adjustment     (284 )       (292 )       (326 )       (375 )       (398 )  
Merger-related and other charges, tax benefit     (3,486 )       (1,905 )       (997 )       -          -     
  Income tax expense (GAAP) $   11,052     $   10,867     $   11,124     $   10,393     $   10,791    
                                         
Net income reconciliation                                        
Net income - operating $   23,800     $   21,726     $   19,989     $   17,670     $   18,247    
Merger-related and other charges, net of income tax benefit     (5,592 )       (3,839 )       (2,176 )       -          -     
  Net income (GAAP) $   18,208     $   17,887     $   17,813     $   17,670     $   18,247    
                                         
Net income available to common shareholders reconciliation                                        
Net income available to common shareholders - operating $   23,775     $   21,701     $   19,972     $   17,670     $   18,247    
Merger-related and other charges, net of income tax benefit     (5,592 )       (3,839 )       (2,176 )       -          -     
  Net income available to common shareholders (GAAP) $   18,183     $   17,862     $   17,796     $   17,670     $   18,247    
                                         
Diluted income per common share reconciliation                                        
Diluted income per common share - operating $ .33     $ .33     $ .32     $ .29     $ .30    
Merger-related and other charges   (.08     (.06     (.04       -          -     
  Diluted income per common share (GAAP) $ .25     $ .27     $ .28     $ .29     $ .30    
                                         
Book value per common share reconciliation                                        
Tangible book value per common share $   12.06     $   12.08     $   12.66     $   12.53     $   12.15    
Effect of goodwill and other intangibles     1.96         1.87       .29       .05       .05    
  Book value per common share (GAAP) $   14.02     $   13.95     $   12.95     $   12.58     $   12.20    
                                         
Return on tangible common equity reconciliation                                        
Return on tangible common equity - operating     10.87   %     10.29   %     10.20   %     9.46   %     9.74   %
Effect of goodwill and other intangibles     (1.69 )     (.75     (.30 )     (.12     (.14 )  
Return on common equity - operating     9.18         9.54         9.90         9.34         9.60    
Merger-related and other charges     (2.16 )       (1.69 )       (1.07 )       -          -     
  Return on common equity (GAAP)     7.02   %     7.85   %     8.83   %     9.34   %     9.60   %
                                         
Return on assets reconciliation                                        
Return on assets - operating   .99   %     1.00   %     1.00   %   .94   %   .96   %
Merger-related and other charges   (.23     (.18     (.11       -          -     
  Return on assets (GAAP)   .76   %   .82   %   .89   %   .94   %   .96   %
                                         
Allowance for loan losses to loans reconciliation                                        
Allowance for loan losses to loans, excl. acquired loans     1.35   %     1.37   %     1.42   %     1.46   %     1.53   %
Effect of removing acquired loans from ratio   (.21     (.22     (.06       -          -     
  Allowance for loan losses to loans (GAAP)     1.14   %     1.15   %     1.36   %     1.46   %     1.53   %
                                         
Dividend payout ratio reconciliation                                        
Dividend payout ratio - operating     18.18   %     18.18   %     15.63   %     17.24   %     16.67   %
Merger-related and other charges     5.82         4.04         2.23         -          -     
  Dividend payout ratio (GAAP)     24.00   %     22.22   %     17.86   %     17.24   %     16.67   %
                                         
Efficiency ratio reconciliation                                        
Efficiency ratio - operating     59.41   %     57.81   %     57.59   %     59.15   %     57.47   %
Merger-related and other charges     9.56         6.84         4.04         -          -     
  Efficiency ratio (GAAP)     68.97   %     64.65   %     61.63   %     59.15   %     57.47   %
                                         
Average equity to assets reconciliation                                        
Tangible common equity to assets   9.29   %   9.77   %   9.83   %   9.82   %   9.72   %
Effect of preferred equity   .11       .11       .08         -          -     
  Tangible equity to assets     9.40         9.88         9.91         9.82         9.72    
Effect of goodwill and other intangibles     1.28       .51       .14       .04       .04    
  Equity to assets (GAAP)     10.68   %     10.39   %     10.05   %     9.86   %     9.76   %
                                         
Tangible common equity to risk-weighted assets reconciliation (1)                                        
Tangible common equity to risk-weighted assets     12.82   %     13.08   %     13.24   %     13.53   %     13.82   %
Effect of other comprehensive income   .38       .23       .28       .19       .35    
Effect of deferred tax limitation     (2.05 )       (2.24 )       (2.49 )       (2.86 )       (3.11 )  
Effect of trust preferred   .08       .08       .63       .67         1.00    
Effect of preferred equity   .15       .15       .17         -          -     
Basel III intangibles transition adjustment   .10       .13       .06       .04         -     
Basel III disallowed investments   (.03     (.03     (.03     (.04       -     
 Tier I capital ratio (Regulatory)   11.45   %   11.40   %   11.86   %   11.53   %     12.06   %
                                         
(1)  December 31, September 30, June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.  Fourth quarter 2015 ratios are preliminary.
 
                   

 

UNITED COMMUNITY BANKS, INC. 
Non-GAAP Performance Measures Reconciliation 
Selected Financial Information 
                   
  For the Twelve Months Ended
   December 31,    
(in thousands, except per share                                        
data; taxable equivalent)   2015       2014       2013       2012       2011    
                   
Interest revenue reconciliation                  
Interest revenue - taxable equivalent $   279,809     $   249,969     $   247,323     $   267,667     $   304,308    
Taxable equivalent adjustment     (1,277 )       (1,537 )       (1,483 )       (1,690 )       (1,707 )  
  Interest revenue (GAAP) $   278,532     $   248,432     $   245,840     $   265,977     $   302,601    
                                         
Net interest revenue reconciliation                                        
Net interest revenue - taxable equivalent $   258,700     $   224,418     $   219,641     $   229,758     $   238,670    
Taxable equivalent adjustment     (1,277 )       (1,537 )       (1,483 )       (1,690 )       (1,707 )  
  Net interest revenue (GAAP) $   257,423     $   222,881     $   218,158     $   228,068     $   236,963    
                                         
Total revenue reconciliation                                        
Total operating revenue $   327,529     $   271,472     $   210,739     $   223,370     $   32,577    
Taxable equivalent adjustment     (1,277 )       (1,537 )       (1,483 )       (1,690 )       (1,707 )  
  Total revenue (GAAP) $   326,252     $   269,935     $   209,256     $   221,680     $   30,870    
                                         
Expense reconciliation                                        
Expenses - operating $   193,243     $   162,865     $   174,304     $   186,774     $   261,599    
Merger-related and other charges     17,995         -          -          -          -     
  Expenses (GAAP) $   211,238     $   162,865     $   174,304     $   186,774     $   261,599    
                                         
Income before taxes reconciliation                                        
Income before taxes - operating $   134,286     $   108,607     $   36,435     $   36,596     $   (229,022 )  
Taxable equivalent adjustment     (1,277 )       (1,537 )       (1,483 )       (1,690 )       (1,707 )  
Merger-related and other charges     (17,995 )       -          -          -          -     
  Income before taxes (GAAP) $   115,014     $   107,070     $   34,952     $   34,906     $   (230,729 )  
                                         
Income tax expense reconciliation                                        
Income tax expense - operating $   51,101     $   40,987     $   (236,705 )   $   2,740     $   (2,276 )  
Taxable equivalent adjustment     (1,277 )       (1,537 )       (1,483 )       (1,690 )       (1,707 )  
Merger-related and other charges, tax benefit     (6,388 )       -          -          -          -     
  Income tax expense (GAAP) $   43,436     $   39,450     $   (238,188 )   $   1,050     $   (3,983 )  
                                         
Net income reconciliation                                        
Net income - operating $   83,185     $   67,620     $   273,140     $   33,856     $   (226,746 )  
Merger-related charges, net of income tax benefit     (11,607 )       -          -          -          -     
  Net income (GAAP) $   71,578     $   67,620     $   273,140     $   33,856     $   (226,746 )  
                                         
Net income available to common shareholders reconciliation                                        
Net income available to common shareholders - operating $   83,118     $   67,181     $   261,062     $   21,708     $   (238,584 )  
Merger-related charges, net of income tax benefit     (11,607 )       -          -          -          -     
  Net income available to common shareholders (GAAP) $   71,511     $   67,181     $   261,062     $   21,708     $   (238,584 )  
                                         
Diluted income per common share reconciliation                                        
Diluted income per common share - operating $   1.27     $   1.11     $   4.44     $ .38     $   (5.97 )  
Merger-related and other charges   (.18 )       -          -          -          -     
  Diluted income per common share (GAAP) $   1.09     $   1.11     $   4.44     $ .38     $   (5.97 )  
                                         
Book value per common share reconciliation                                        
Tangible book value per common share $   12.06     $   12.15     $   11.26     $   6.57     $   6.47    
Effect of goodwill and other intangibles     1.96       .05       .04       .10       .15    
 Book value per common share (GAAP) $ 14.02     $ 12.20     $ 11.30     $   6.67     $   6.62    
                                         
Return on tangible common equity reconciliation                  
Return on tangible common equity - operating     10.24   %     9.32   %     47.35   %     6.27   %     (96.20 ) %
Effect of goodwill and other intangibles   (.76 )     (.15 )     (.63 )     (.84 )       2.63    
Return on common equity - operating     9.48         9.17         46.72         5.43         (93.57 )  
Merger-related and other charges     (1.33 )       -          -          -          -     
  Return on common equity (GAAP)     8.15   %     9.17   %     46.72   %     5.43   %     (93.57 ) %
                                         
Return on assets reconciliation                                        
Return on assets - operating   .98   %   .91   %     3.86   %   .49   %     (3.15 ) %
Merger-related charges   (.13 )       -          -          -          -     
  Return on assets (GAAP)   .85   %   .91   %     3.86   %   .49   %     (3.15 ) %
                                         
Allowance for loan losses to loans reconciliation                                        
Allowance for loan losses to loans , excl. acquired loans     1.35   %     1.53   %     1.77   %     2.57   %     2.79   %
Effect of removing acquired loans from ratio   (.21 )       -          -          -          -     
  Allowance for loan losses to loans (GAAP)     1.14   %     1.53   %     1.77   %     2.57   %     2.79  
                                         
Dividend payout ratio reconciliation                                        
Dividend payout ratio - operating     17.32   %     9.91   %     -    %     -    %     -    %
Merger-related charges     2.86         -          -          -          -     
 Dividend payout ratio (GAAP)   20.18   %   9.91   %   -   %   -   %     -   %
                                         
Efficiency ratio reconciliation                  
Efficiency ratio - operating     58.51   %     58.26   %     63.14   %     65.43   %     92.27   %
Merger-related charges     5.45         -          -          -          -     
 Efficiency ratio (GAAP)     63.96   %     58.26   %     63.14   %   65.43   %   92.27   %
                                         
Average equity to assets reconciliation                  
Tangible common equity to assets   9.66   %   9.60   %   7.55   %   5.54   %   3.74  
Effect of preferred equity   .08       .07         2.76         2.84         3.88    
  Tangible equity to assets     9.74         9.67         10.31         8.38         7.62    
Effect of goodwill and other intangibles   .53       .02       .04       .09       .13    
 Equity to assets (GAAP)   10.27   %     9.69   %   10.35   %     8.47   %   7.75   %
                                         
Tangible common equity to risk-weighted assets reconciliation (1)                      
Tangible common equity to risk-weighted assets     12.82   %     13.82   %     13.18   %     8.26   %     8.25   %
Effect of other comprehensive income   .38       .35       .39       .51       (.03 )  
Effect of deferred tax limitation     (2.05 )       (3.11 )       (4.26 )       -          -     
Effect of trust preferred   .08         1.00         1.04         1.15         1.18    
Effect of preferred equity   .15         -          2.39         4.24         4.29    
Basel III intangibles transition adjustment   .10         -          -          -          -     
Basel III disallowed investments   (.03 )       -          -          -          -     
 Tier I capital ratio (Regulatory)   11.45   %     12.06   %   12.74   %   14.16   %   13.69   %
                                         
 (1)  December 31, September 30, June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.  Fourth quarter 2015 ratios are preliminary.
 

 

UNITED COMMUNITY BANKS, INC. 
Financial Highlights 
Loan Portfolio Composition at Period-End 
                     
                     
      2015       2014  
     Fourth     Third     Second     First     Fourth 
(in millions)   Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                    
Owner occupied commercial RE   $   1,494     $   1,479     $   1,266     $   1,167     $   1,163  
Income producing commercial RE       824         818         689         636         599  
Commercial & industrial       785         890         793         716         710  
Commercial construction       342         319         238         230         196  
  Total commercial       3,445         3,506         2,986         2,749         2,668  
Residential mortgage       1,029         1,062         935         864         866  
Home equity lines of credit       598         585         491         465         466  
Residential construction       352         334         299         291         299  
Consumer installment       571         537         463         419         373  
  Total loans   $   5,995     $   6,024     $   5,174     $   4,788     $   4,672  
                     
LOANS BY MARKET                    
North Georgia   $   1,125     $   1,130     $   1,155     $   1,150     $   1,163  
Atlanta MSA       1,259         1,266         1,275         1,254         1,243  
North Carolina       549         546         533         539         553  
Coastal Georgia       537         506         499         476         456  
Gainesville MSA       254         252         257         255         257  
East Tennessee       504         511         525         281         280  
South Carolina       819         783         35         30         30  
Specialized Lending       492         609         538         487         421  
Indirect auto       456         421         357         316         269  
  Total loans   $   5,995     $   6,024     $   5,174     $   4,788     $   4,672  
                     

 

UNITED COMMUNITY BANKS, INC. 
Financial Highlights 
Loan Portfolio Composition at Period-End 
                           
                           
  2015   2014       Linked       Year over  
   Fourth     Third     Fourth      Quarter       Year  
(in millions) Quarter   Quarter   Quarter     Change       Change  
LOANS BY CATEGORY                  
Owner occupied commercial RE $   1,494     $   1,479     $   1,163     $     15       $     331    
Income producing commercial RE     824         818         599           6             225    
Commercial & industrial     785         890         710           (105           75    
Commercial construction     342         319         196           23             146    
  Total commercial     3,445         3,506         2,668           (61           777    
Residential mortgage     1,029         1,062         866           (33 )           163    
Home equity lines of credit     598         585         466           13             132    
Residential construction     352         334         299           18             53    
Consumer installment     571         537         373           34             198    
  Total loans $   5,995     $   6,024     $   4,672           (29           1,323    
                   
LOANS BY MARKET                  
North Georgia $   1,125     $   1,130     $   1,163       $   (5       $   (38  
Atlanta MSA     1,259         1,266         1,243           (7 )           16    
North Carolina     549         546         553           3             (4  
Coastal Georgia     537         506         456           31             81    
Gainesville MSA     254         252         257           2             (3  
East Tennessee     504         511         280           (7 )           224    
South Carolina     819         783         30           36             789    
Specialized Lending     492         609         421           (117 )           71    
Indirect auto     456         421         269           35             187    
  Total loans $   5,995     $   6,024     $   4,672           (29 )           1,323    
                   

 

UNITED COMMUNITY BANKS, INC. 
Financial Highlights 
Loan Portfolio Composition at Year-End 
                     
                     
(in millions)     2015       2014       2013       2012       2011  
LOANS BY CATEGORY                    
Owner occupied commercial RE   $   1,494     $   1,163     $   1,134     $   1,131     $   1,112  
Income producing commercial RE       824         599         623         682         710  
Commercial & industrial       785         710         472         458         428  
Commercial construction       342         196         149         155         164  
  Total commercial       3,445         2,668         2,378         2,426         2,414  
Residential mortgage       1,029         866         875         829         835  
Home equity lines of credit       598         466         441         385         300  
Residential construction       352         299         328         382         448  
Consumer installment       571         373         307         153         113  
  Total loans   $   5,995     $   4,672     $   4,329     $   4,175     $   4,110  
                     
                     
LOANS BY MARKET                    
North Georgia   $   1,125     $   1,163     $   1,240     $   1,364     $   1,426  
Atlanta MSA       1,259         1,243         1,235         1,204         1,144  
North Carolina       549         553         572         579         597  
Coastal Georgia       537         456         423         400         346  
Gainesville MSA       254         257         255         261         265  
East Tennessee       504         280         280         283         256  
South Carolina       819         30         4         -          -   
Specialized Lending       492         421         124         46         76  
Indirect auto       456         269         196         38         -   
  Total loans   $   5,995     $   4,672     $   4,329     $   4,175     $   4,110  
                     

 

UNITED COMMUNITY BANKS, INC. 
Financial Highlights 
Credit Quality 
                   
                   
    Fourth Quarter 2015
     Nonperforming     Foreclosed     Total 
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY            
Owner occupied CRE   $   7,036     $   2,652     $   9,688  
Income producing CRE       2,595         -          2,595  
Commercial & industrial       892         -          892  
Commercial construction       328         437         765  
  Total commercial       10,851         3,089         13,940  
Residential mortgage       8,555         1,242         9,797  
Home equity lines of credit       851         80         931  
Residential construction       1,398         472         1,870  
Consumer installment       998         -          998  
  Total NPAs   $   22,653     $   4,883     $   27,536  
  Balance as a % of                   
  Unpaid Principal     71.4 %     34.2 %     59.8 %
                   
NONPERFORMING ASSETS BY MARKET              
North Georgia   $   5,167     $   1,612     $   6,779  
Atlanta MSA       3,023         625         3,648  
North Carolina       5,289         183         5,472  
Coastal Georgia       2,079         -          2,079  
Gainesville MSA       307         -          307  
East Tennessee       3,448         157         3,605  
South Carolina       323         2,306         2,629  
Specialized Lending       2,231         -          2,231  
Indirect auto       786         -          786  
  Total NPAs   $   22,653     $   4,883     $   27,536  
                   
                   
NONPERFORMING ASSETS ACTIVITY              
Beginning Balance   $   20,064     $   7,669     $   27,733  
Acquisitions       -          (1,585 )       (1,585 )
Loans placed on non-accrual       10,768         -          10,768  
Payments received       (4,893 )       -          (4,893 )
Loan charge-offs       (1,813 )       -          (1,813 )
Foreclosures       (1,473 )       1,497         24  
Capitalized costs       -          -          -   
Property sales       -          (2,968 )       (2,968 )
Write downs       -          11         11  
Net gains (losses) on sales       -          259         259  
  Ending Balance   $   22,653     $   4,883     $   27,536  
                   

 

UNITED COMMUNITY BANKS, INC. 
Financial Highlights 
Credit Quality 
                   
                   
    Third Quarter 2015
     Nonperforming     Foreclosed     Total 
(in thousands)   Loans   Properties   NPAs
NONPERFORMING ASSETS BY CATEGORY            
Owner occupied CRE   $   5,918     $   882     $   6,800  
Income producing CRE       1,238         4,084         5,322  
Commercial & industrial       1,068         -          1,068  
Commercial construction       256         657         913  
  Total commercial       8,480         5,623         14,103  
Residential mortgage       8,847         1,454         10,301  
Home equity lines of credit       890         87         977  
Residential construction       929         505         1,434  
Consumer installment       918         -          918  
  Total NPAs   $   20,064     $   7,669     $   27,733  
  Balance as a % of                   
  Unpaid Principal     70.3 %     45.8 %     61.2 %
                   
NONPERFORMING ASSETS BY MARKET              
North Georgia   $   6,403     $   1,263     $   7,666  
Atlanta MSA       1,750         1,122         2,872  
North Carolina       4,564         9         4,573  
Coastal Georgia       338         66         404  
Gainesville MSA       325         3         328  
East Tennessee       2,886         231         3,117  
South Carolina       267         4,975         5,242  
Specialized Lending       2,809         -          2,809  
Indirect auto       722         -          722  
  Total NPAs   $   20,064     $   7,669     $   27,733  
                   
                   
NONPERFORMING ASSETS ACTIVITY              
Beginning Balance   $   18,805     $   2,356     $   21,161  
Acquisitions       -          4,848         4,848  
Loans placed on non-accrual       8,923         -          8,923  
Payments received       (4,233 )       -          (4,233 )
Loan charge-offs       (1,531 )       -          (1,531 )
Foreclosures       (1,900 )       1,900         -   
Capitalized costs       -