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United Community Banks, Inc. Reports Net Income of $17.7 Million for First Quarter 2015, Up 15 Percent From a Year Ago

  • Earnings per diluted share of 29 cents, up 16 percent from first quarter of 2014
  • Loans up $116 million, or 10 percent annualized
  • Core transaction deposits up $206 million, or 22 percent annualized
  • Net interest margin holds steady at 3.31 percent
  • Regulatory approvals received for acquisition of MoneyTree Corporation / First National Bank
  • Announced merger with Palmetto Bancshares

BLAIRSVILLE, Ga., April 22, 2015 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (Nasdaq:UCBI) ("United") today reported net income of $17.7 million, or 29 cents per diluted share, for the first quarter of 2015. Earnings per share were up 16 percent from a year ago. The increase reflects strong loan and core deposit growth, a stable net interest margin and growth in fee revenue.

"I am very pleased with our strong first quarter financial results and our outlook for the remainder of the year," said Jimmy Tallent, chairman and chief executive officer. "We had solid loan growth and a steady net interest margin. Fee revenue was up with meaningful increases in our mortgage and brokerage businesses and higher gains from our SBA lending business. Our return on assets was .94 percent, and return on equity was 9.3 percent."

Tallent continued, "The first quarter also included three non-core items. We repaid $6 million in structured repurchase agreements that we were paying 4 percent interest, and redeemed $15.5 million in trust preferred securities that we were paying an average rate of 11 percent interest, resulting in total prepayment charges of $1.04 million that were included in fee revenue. Repayment of these instruments will result in approximately $1.9 million in annual interest savings. Also, we paid the FDIC $690,000 to close the loss sharing agreements related to our acquisition of Southern Community Bank in June of 2009. In addition to administrative cost savings, we will now retain 100 percent of the recoveries from previously covered losses. This will more than offset the $690,000 payment within the next two years. And, we had securities gains of $1.54 million that offset most of the $1.73 million impact of these other non-core items."

Tallent continued, "First quarter net loan growth of $116 million was driven by strong loan production of $423 million across all United markets. Our community banks originated $314 million of loan production while our specialized lending area, which includes our health care, corporate, SBA, asset-based, middle market and commercial real estate lending businesses, produced $108 million. Core deposit growth was another contributing factor with a linked-quarter increase of $206 million, or 22 percent annualized. Increased demand deposits in our Atlanta and north Georgia markets drove over half of this growth."

First quarter taxable equivalent net interest revenue totaled $57.6 million, down $715,000 from the fourth quarter and up $3.45 million from the first quarter of 2014. The taxable equivalent net interest margin of 3.31 percent held steady with the prior quarter and was up 10 basis points from a year ago. Along with loan growth, this drove the increase in net interest revenue.

"The linked quarter decrease in net interest revenue was due to two fewer days of interest accruals in the first quarter," said Tallent. "We've been able to hold the margin steady in the low 3.30 percent range following our second quarter 2014 balance sheet management activities, which included restructuring the securities portfolio, interest rate hedges and wholesale borrowings. However, we continue to see loan pricing pressures and expect our margin to decline slightly through the balance of 2015. With only a modest decline, we expect loan growth to drive increases in net interest revenue going forward."

The first quarter provision for credit losses was $1.8 million, equal to the fourth quarter and down $700,000 from the first quarter of 2014. First quarter net charge-offs were $2.56 million compared with $2.51 million in the fourth quarter and $4.04 million a year ago. Nonperforming assets to total assets were .26 percent, equal to last quarter and down from .42 percent a year ago.

First quarter fee revenue totaled $15.7 million, up $859,000 from the fourth quarter and $3.51 million from the first quarter of 2014. The increase from a year ago resulted primarily from the growing SBA lending and mortgage businesses and the related gains on sales of loans. SBA loan sale gains totaled $1.14 million in the first quarter of 2015 and $926,000 in the fourth quarter of 2014. There were no gains from SBA loan sales in the first quarter of 2014. Mortgage fees were up $644,000 from the fourth quarter and $1.40 million from a year ago, reflecting strong growth in new home purchases and an increase in refinancing activity. Closed mortgage loans totaled $87.9 million in the first quarter of 2015, compared with $77.4 million and $46.0 million, respectively, in the fourth and first quarters of 2014.

First quarter brokerage fees of $1.55 million from United's advisory services business were up $375,000 from both the fourth and first quarters of 2014. Service charges and fees were down from both of these same prior quarters, mostly reflecting the declining trend in overdraft fees.

Tallent added, "The growing SBA lending business and the increase in mortgage and brokerage fees reflect our commitment to diversifying the revenue stream by focusing on fee generating products and services."

Operating expenses were $43.1 million in the first quarter compared to $41.9 million in the fourth quarter and $39.1 million a year ago. Excluding the non-core items in other operating expenses noted below, total core operating expenses were $42.4 million in the first quarter 2015 compared to $42.6 million in the fourth quarter and $39.1 million a year ago. The current quarter is down slightly compared to the fourth quarter and up $3.3 million from a year ago. The increase from a year ago was driven by higher salaries and employee benefit costs, and an increase in other operating costs.

First quarter salaries and employee benefits expense of $26.4 million was down $146,000 from the fourth quarter but up $2.05 million from a year ago. The increase from a year ago reflects investment in new producers and support staff for the specialized lending area, and higher commissions and incentives associated with growth in the mortgage and advisory services businesses, as well as growth in commercial loans and core deposits. Other operating expenses of $5.25 million for the first quarter were up $1.33 million and $1.40 million, respectively, from the fourth and first quarters of 2014. First quarter 2015 other operating expenses included a non-core charge of $690,000 associated with closing all loss sharing agreements with the FDIC, as noted earlier. The fourth quarter of 2014 included a $492,000 charge related to the FDIC's adjustment for interest claimed on the first loss share filing which was more than offset by a $1.2 million reversal of a previously established litigation reserve. Excluding these non-core items, other operating expenses were down slightly from the fourth quarter and up $705,000 from a year ago due to higher travel and lending-related costs to support loan growth.

"During the first quarter we received regulatory approvals for the previously announced merger with MoneyTree Corporation and its subsidiary First National Bank," Tallent said. "We expect the transaction to close as planned on May 1, with conversion of the operating systems by mid-July. We look forward to expanding our Tennessee markets and welcoming the First National team of bankers to the United family."

At March 31, 2015, capital ratios were as follows: Tier 1 Risk-Based of 11.5 percent; Total Risk-Based of 12.8 percent; Tier 1 Common Risk-Based of 11.5 percent; and, Tier 1 Leverage of 8.7 percent.

"We are off to a solid start in 2015, including strong growth in loans, core deposits and fee revenue," Tallent said. "We are excited about executing our growth strategies to expand the franchise and add value for shareholders. In addition to the completion of the MoneyTree transaction on May 1, we announced earlier today an agreement to acquire $1.2 billion-asset Palmetto Bancshares, Inc. and its 108 year-old bank – The Palmetto Bank – in Greenville, South Carolina. The addition of MoneyTree will significantly increase our market share and customer base in eastern Tennessee, and the addition of Palmetto will make us the number one community bank in Upstate South Carolina."

Conference Call

United will hold a conference call today, Wednesday, April 22, 2015, at 11 a.m. ET to discuss the contents of this news release and the separate news release regarding United's merger with Palmetto Bancshares, Inc., and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 15339428. 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 $7.7 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast's largest full-service banks, operating 104 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for individuals, small businesses and corporations. A full range of consumer and commercial banking services includes mortgage, advisory, treasury management and other products. In 2014, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and in 2015 was ranked fourteenth 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
First
2015 2014 Quarter
(in thousands, except per share First Fourth Third Second First 2015-2014
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue $ 62,909 $ 64,353 $ 63,338 $ 61,783 $ 60,495
Interest expense 5,292 6,021 6,371 6,833 6,326
Net interest revenue 57,617 58,332 56,967 54,950 54,169 6%
Provision for credit losses 1,800 1,800 2,000 2,200 2,500
Fee revenue 15,682 14,823 14,412 14,143 12,176 29
Total revenue 71,499 71,355 69,379 66,893 63,845 12
Operating expenses 43,061 41,919 41,364 40,532 39,050 10
Income before income taxes 28,438 29,436 28,015 26,361 24,795 15
Income tax expense 10,768 11,189 10,399 10,004 9,395 15
Net income 17,670 18,247 17,616 16,357 15,400 15
Preferred dividends and discount accretion -- -- -- -- 439
Net income available to common shareholders $ 17,670 $ 18,247 $ 17,616 $ 16,357 $ 14,961 18
PERFORMANCE MEASURES
Per common share:
Diluted income $ .29 $ .30 $ .29 $ .27 $ .25 16
Cash dividends declared .05 .05 .03 .03 --
Book value 12.58 12.20 12.15 11.94 11.66 8
Tangible book value (2) 12.53 12.15 12.10 11.91 11.63 8
Key performance ratios:
Return on common equity (1)(3) 9.34% 9.60% 9.41% 8.99% 8.64%
Return on assets (3) .94 .96 .95 .88 .85
Dividend payout ratio 17.24 16.67 10.34 11.11 --
Net interest margin (3) 3.31 3.31 3.32 3.21 3.21
Efficiency ratio 59.15 57.47 57.96 58.65 59.05
Average equity to average assets 9.86 9.76 9.85 9.61 9.52
Average tangible equity to average assets (2) 9.82 9.72 9.83 9.58 9.50
Average tangible common equity to average assets (2) 9.82 9.72 9.83 9.58 9.22
Tangible common equity to risk-weighted assets (2) (4) 13.53 13.82 14.10 13.92 13.63
ASSET QUALITY
Nonperforming loans $ 19,015 $ 17,881 $ 18,745 $ 20,724 $ 25,250 (25)
Foreclosed properties 1,158 1,726 3,146 2,969 5,594 (79)
Total nonperforming assets (NPAs) 20,173 19,607 21,891 23,693 30,844 (35)
Allowance for loan losses 70,007 71,619 71,928 73,248 75,223
Net charge-offs 2,562 2,509 3,155 4,175 4,039 (37)
Allowance for loan losses to loans 1.46% 1.53% 1.57% 1.66% 1.73%
Net charge-offs to average loans (3) .22 .22 .28 .38 .38
NPAs to loans and foreclosed properties .42 .42 .48 .54 .71
NPAs to total assets .26 .26 .29 .32 .42
AVERAGE BALANCES ($ in millions)
Loans $ 4,725 $ 4,621 $ 4,446 $ 4,376 $ 4,356 8
Investment securities 2,203 2,222 2,231 2,326 2,320 (5)
Earning assets 7,070 7,013 6,820 6,861 6,827 4
Total assets 7,617 7,565 7,374 7,418 7,384 3
Deposits 6,369 6,383 6,143 6,187 6,197 3
Shareholders' equity 751 738 726 713 703 7
Common shares - basic (thousands) 60,905 60,830 60,776 60,712 60,059
Common shares - diluted (thousands) 60,909 60,833 60,779 60,714 60,061
AT PERIOD END ($ in millions)
Loans $ 4,788 $ 4,672 $ 4,569 $ 4,410 $ 4,356 10
Investment securities 2,201 2,198 2,222 2,190 2,302 (4)
Total assets 7,664 7,567 7,526 7,352 7,398 4
Deposits 6,438 6,327 6,241 6,164 6,248 3
Shareholders' equity 764 740 736 722 704 9
Common shares outstanding (thousands) 60,309 60,259 60,248 60,139 60,092
(1) 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). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized. (4) March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.
UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2015 2014
(in thousands, except per share First Fourth Third Second First
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 62,909 $ 64,353 $ 63,338 $ 61,783 $ 60,495
Taxable equivalent adjustment (375) (398) (405) (377) (357)
Interest revenue (GAAP) $ 62,534 $ 63,955 $ 62,933 $ 61,406 $ 60,138
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 57,617 $ 58,332 $ 56,967 $ 54,950 $ 54,169
Taxable equivalent adjustment (375) (398) (405) (377) (357)
Net interest revenue (GAAP) $ 57,242 $ 57,934 $ 56,562 $ 54,573 $ 53,812
Total revenue reconciliation
Total operating revenue $ 71,499 $ 71,355 $ 69,379 $ 66,893 $ 63,845
Taxable equivalent adjustment (375) (398) (405) (377) (357)
Total revenue (GAAP) $ 71,124 $ 70,957 $ 68,974 $ 66,516 $ 63,488
Income before taxes reconciliation
Income before taxes $ 28,438 $ 29,436 $ 28,015 $ 26,361 $ 24,795
Taxable equivalent adjustment (375) (398) (405) (377) (357)
Income before taxes (GAAP) $ 28,063 $ 29,038 $ 27,610 $ 25,984 $ 24,438
Income tax expense (benefit) reconciliation
Income tax expense (benefit) $ 10,768 $ 11,189 $ 10,399 $ 10,004 $ 9,395
Taxable equivalent adjustment (375) (398) (405) (377) (357)
Income tax expense (benefit) (GAAP) $ 10,393 $ 10,791 $ 9,994 $ 9,627 $ 9,038
Book value per common share reconciliation
Tangible book value per common share $ 12.53 $ 12.15 $ 12.10 $ 11.91 $ 11.63
Effect of goodwill and other intangibles .05 .05 .05 .03 .03
Book value per common share (GAAP) $ 12.58 $ 12.20 $ 12.15 $ 11.94 $ 11.66
Average equity to assets reconciliation
Tangible common equity to assets 9.82% 9.72% 9.83% 9.58% 9.22%
Effect of preferred equity -- -- -- -- .28
Tangible equity to assets 9.82 9.72 9.83 9.58 9.50
Effect of goodwill and other intangibles .04 .04 .02 .03 .02
Equity to assets (GAAP) 9.86% 9.76% 9.85% 9.61% 9.52%
Tangible common equity to risk-weighted assets reconciliation (1)
Tangible common equity to risk-weighted assets 13.53% 13.82% 14.10% 13.92% 13.63%
Effect of other comprehensive income .19 .35 .34 .53 .36
Effect of deferred tax limitation (2.86) (3.11) (3.39) (3.74) (3.92)
Effect of trust preferred .67 1.00 1.02 1.04 1.03
Tier I capital ratio (Regulatory) 11.53% 12.06% 12.07% 11.75% 11.10%
(1) March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2015 2014
First Fourth Third Second First
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,167 $ 1,163 $ 1,153 $ 1,163 $ 1,142
Income producing commercial RE 636 599 605 598 624
Commercial & industrial 716 710 650 554 495
Commercial construction 230 196 181 160 148
Total commercial 2,749 2,668 2,589 2,475 2,409
Residential mortgage 864 866 866 861 866
Home equity lines of credit 465 466 459 451 447
Residential construction 291 299 307 302 318
Consumer installment 419 373 348 321 316
Total loans $ 4,788 $ 4,672 $ 4,569 $ 4,410 $ 4,356
LOANS BY MARKET
North Georgia $ 1,150 $ 1,163 $ 1,168 $ 1,175 $ 1,205
Atlanta MSA 1,296 1,282 1,289 1,305 1,290
North Carolina 539 553 553 555 563
Coastal Georgia 476 456 444 426 425
Gainesville MSA 255 257 254 257 262
East Tennessee 281 280 281 270 272
South Carolina / Specialized Lending 475 412 337 206 131
Indirect auto 316 269 243 216 208
Total loans $ 4,788 $ 4,672 $ 4,569 $ 4,410 $ 4,356
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2015 2014 Linked Year over
First Fourth First Quarter Year
(in millions) Quarter Quarter Quarter Change Change
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,167 $ 1,163 $ 1,142 $ 4 $ 25
Income producing commercial RE 636 599 624 37 12
Commercial & industrial 716 710 495 6 221
Commercial construction 230 196 148 34 82
Total commercial 2,749 2,668 2,409 81 340
Residential mortgage 864 866 866 (2) (2)
Home equity lines of credit 465 466 447 (1) 18
Residential construction 291 299 318 (8) (27)
Consumer installment 419 373 316 46 103
Total loans $ 4,788 $ 4,672 $ 4,356 116 432
LOANS BY MARKET
North Georgia $ 1,150 $ 1,163 $ 1,205 (13) (55)
Atlanta MSA 1,296 1,282 1,290 14 6
North Carolina 539 553 563 (14) (24)
Coastal Georgia 476 456 425 20 51
Gainesville MSA 255 257 262 (2) (7)
East Tennessee 281 280 272 1 9
South Carolina / Specialized Lending 475 412 131 63 344
Indirect auto 316 269 208 47 108
Total loans $ 4,788 $ 4,672 $ 4,356 116 432
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2015
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 4,360 $ 173 $ 4,533
Income producing CRE 835 -- 835
Commercial & industrial 1,629 -- 1,629
Commercial construction 60 -- 60
Total commercial 6,884 173 7,057
Residential mortgage 8,669 796 9,465
Home equity lines of credit 693 50 743
Residential construction 2,127 139 2,266
Consumer installment 642 -- 642
Total NPAs $ 19,015 $ 1,158 $ 20,173
Balance as a % of
Unpaid Principal 72.0% 56.6% 70.9%
NONPERFORMING ASSETS BY MARKET
North Georgia $ 6,101 $ 662 $ 6,763
Atlanta MSA 1,903 227 2,130
North Carolina 5,321 159 5,480
Coastal Georgia 901 -- 901
Gainesville MSA 781 22 803
East Tennessee 1,808 30 1,838
South Carolina / Specialized Lending 1,700 58 1,758
Indirect auto 500 -- 500
Total NPAs $ 19,015 $ 1,158 $ 20,173
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 17,881 $ 1,726 $ 19,607
Loans placed on non-accrual 5,944 -- 5,944
Payments received (1,513) -- (1,513)
Loan charge-offs (2,838) -- (2,838)
Foreclosures (459) 459 --
Capitalized costs -- -- --
Property sales -- (1,108) (1,108)
Write downs -- (166) (166)
Net gains (losses) on sales -- 247 247
Ending Balance $ 19,015 $ 1,158 $ 20,173
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Fourth Quarter 2014
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 4,133 $ 355 $ 4,488
Income producing CRE 717 -- 717
Commercial & industrial 1,571 -- 1,571
Commercial construction 83 15 98
Total commercial 6,504 370 6,874
Residential mortgage 8,196 1,183 9,379
Home equity lines of credit 695 40 735
Residential construction 2,006 133 2,139
Consumer installment 480 -- 480
Total NPAs $ 17,881 $ 1,726 $ 19,607
Balance as a % of
Unpaid Principal 69.9% 54.1% 68.1%
NONPERFORMING ASSETS BY MARKET
North Georgia $ 5,669 $ 711 $ 6,380
Atlanta MSA 1,837 372 2,209
North Carolina 5,221 234 5,455
Coastal Georgia 799 105 904
Gainesville MSA 1,310 81 1,391
East Tennessee 1,414 201 1,615
South Carolina / Specialized Lending 1,285 22 1,307
Indirect auto 346 -- 346
Total NPAs $ 17,881 $ 1,726 $ 19,607
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 18,745 $ 3,146 $ 21,891
Loans placed on non-accrual 7,140 -- 7,140
Payments received (5,286) -- (5,286)
Loan charge-offs (1,841) -- (1,841)
Foreclosures (877) 877 --
Capitalized costs -- -- --
Property sales -- (2,483) (2,483)
Write downs -- (1) (1)
Net gains (losses) on sales -- 187 187
Ending Balance $ 17,881 $ 1,726 $ 19,607
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter 2014
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 2,156 $ 1,024 $ 3,180
Income producing CRE 1,742 42 1,784
Commercial & industrial 1,593 -- 1,593
Commercial construction 148 -- 148
Total commercial 5,639 1,066 6,705
Residential mortgage 8,350 1,769 10,119
Home equity lines of credit 720 90 810
Residential construction 3,543 221 3,764
Consumer installment 493 -- 493
Total NPAs $ 18,745 $ 3,146 $ 21,891
Balance as a % of
Unpaid Principal 68.6% 54.5% 66.1%
NONPERFORMING ASSETS BY MARKET
North Georgia $ 7,392 $ 1,717 $ 9,109
Atlanta MSA 1,724 364 2,088
North Carolina 4,919 398 5,317
Coastal Georgia 781 160 941
Gainesville MSA 1,403 85 1,488
East Tennessee 1,227 245 1,472
South Carolina / Specialized Lending 945 177 1,122
Indirect auto 354 -- 354
Total NPAs $ 18,745 $ 3,146 $ 21,891
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 20,724 $ 2,969 $ 23,693
Loans placed on non-accrual 7,665 -- 7,665
Payments received (3,129) -- (3,129)
Loan charge-offs (4,353) -- (4,353)
Foreclosures (2,162) 2,162 --
Capitalized costs -- 209 209
Property sales -- (2,350) (2,350)
Write downs -- (108) (108)
Net gains (losses) on sales -- 264 264
Ending Balance $ 18,745 $ 3,146 $ 21,891
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2015 Fourth Quarter 2014 Third Quarter 2014
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 $ 351 .12% $ 891 .31% $ 746 .26%
Income producing CRE 247 .16 143 .09 104 .07
Commercial & industrial 341 .19 (295) (.17) (341) (.23)
Commercial construction 22 .04 (6) (.01) 103 .24
Total commercial 961 .14 733 .11 612 .10
Residential mortgage 416 .20 1,226 .56 1,116 .52
Home equity lines of credit 59 .05 238 .20 356 .31
Residential construction 1,060 1.46 (44) (.06) 712 .94
Consumer installment 66 .07 356 .39 359 .43
Total $ 2,562 .22 $ 2,509 .22 $ 3,155 .28
NET CHARGE-OFFS BY MARKET
North Georgia $ 1,053 .37% $ 791 .27% $ 1,861 .63%
Atlanta MSA 188 .06 147 .05 (250) (.08)
North Carolina 666 .49 1,103 .79 656 .47
Coastal Georgia 134 .12 30 .03 228 .21
Gainesville MSA (65) (.10) 94 .15 259 .40
East Tennessee 471 .68 54 .08 230 .33
South Carolina / Specialized Lending -- -- 110 .11 5 .01
Indirect auto 115 .16 180 .29 166 .31
Total $ 2,562 .22 $ 2,509 .22 $ 3,155 .28
(1) Annualized.
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended
March 31,
(in thousands, except per share data) 2015 2014
Interest revenue:
Loans, including fees $ 49,664 $ 47,688
Investment securities, including tax exempt of $158 and $188 12,058 11,607
Deposits in banks and short-term investments 812 843
Total interest revenue 62,534 60,138
Interest expense:
Deposits:
NOW 394 440
Money market 673 563
Savings 20 20
Time 1,109 1,771
Total deposit interest expense 2,196 2,794
Short-term borrowings 98 840
Federal Home Loan Bank advances 392 58
Long-term debt 2,606 2,634
Total interest expense 5,292 6,326
Net interest revenue 57,242 53,812
Provision for credit losses 1,800 2,500
Net interest revenue after provision for credit losses 55,442 51,312
Fee revenue:
Service charges and fees 7,615 7,898
Mortgage loan and other related fees 2,755 1,354
Brokerage fees 1,551 1,177
Gains from sales of SBA loans 1,141 --
Securities gains, net 1,539 217
Loss from prepayment of debt (1,038) --
Other 2,119 1,530
Total fee revenue 15,682 12,176
Total revenue 71,124 63,488
Operating expenses:
Salaries and employee benefits 26,446 24,396
Communications and equipment 3,271 3,239
Occupancy 3,278 3,378
Advertising and public relations 750 626
Postage, printing and supplies 938 776
Professional fees 1,919 1,427
FDIC assessments and other regulatory charges 1,209 1,353
Other 5,250 3,855
Total operating expenses 43,061 39,050
Net income before income taxes 28,063 24,438
Income tax expense 10,393 9,038
Net income 17,670 15,400
Preferred stock dividends and discount accretion -- 439
Net income available to common shareholders $ 17,670 $ 14,961
Earnings per common share:
Basic $ .29 $ .25
Diluted .29 .25
Weighted average common shares outstanding:
Basic 60,905 60,059
Diluted 60,909 60,061
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
March 31, December 31, March 31,
(in thousands, except share and per share data) 2015 2014 2014
ASSETS
Cash and due from banks $ 77,493 $ 77,180 $ 52,813
Interest-bearing deposits in banks 82,269 89,074 110,529
Short-term investments 25,902 26,401 49,999
Cash and cash equivalents 185,664 192,655 213,341
Securities available for sale 1,801,973 1,782,734 1,837,676
Securities held to maturity (fair value $413,550, $425,233 and $473,136) 399,228 415,267 464,697
Mortgage loans held for sale 15,723 13,737 10,933
Loans, net of unearned income 4,787,689 4,672,119 4,355,708
Less allowance for loan losses (70,007) (71,619) (75,223)
Loans, net 4,717,682 4,600,500 4,280,485
Assets covered by loss sharing agreements with the FDIC -- 3,315 21,353
Premises and equipment, net 159,036 159,390 161,540
Bank owned life insurance 81,490 81,294 80,790
Accrued interest receivable 20,154 20,103 18,572
Net deferred tax asset 201,898 215,503 243,683
Derivative financial instruments 20,291 20,599 21,563
Other assets 60,764 61,889 43,604
Total assets $ 7,663,903 $ 7,566,986 $ 7,398,237
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 1,694,755 $ 1,574,317 $ 1,471,781
NOW 1,420,956 1,504,887 1,392,863
Money market 1,306,421 1,273,283 1,235,429
Savings 312,013 292,308 270,910
Time:
Less than $100,000 723,323 748,478 833,188
Greater than $100,000 482,955 508,228 572,889
Brokered 497,508 425,011 470,481
Total deposits 6,437,931 6,326,512 6,247,541
Repurchase agreements -- 6,000 123,075
Federal Home Loan Bank advances 270,125 270,125 50,125
Long-term debt 113,901 129,865 129,865
Derivative financial instruments 29,276 31,997 42,309
Unsettled securities purchases -- 5,425 63,999
Accrued expenses and other liabilities 48,965 57,485 37,593
Total liabilities 6,900,198 6,827,409 6,694,507
Shareholders' equity:
Common stock, $1 par value; 100,000,000 shares authorized;
50,228,075, 50,178,605 and 50,011,094 shares issued and outstanding 50,228 50,178 50,011
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
10,080,787, 10,080,787 and 10,080,787 shares issued and outstanding 10,081 10,081 10,081
Common stock issuable; 400,369, 357,983 and 237,763 shares 5,895 5,168 3,840
Capital surplus 1,081,110 1,080,508 1,091,696
Accumulated deficit (372,933) (387,568) (433,130)
Accumulated other comprehensive loss (10,676) (18,790) (18,768)
Total shareholders' equity 763,705 739,577 703,730
Total liabilities and shareholders' equity $ 7,663,903 $ 7,566,986 $ 7,398,237
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
2015 2014
Average Avg. Average Avg.
(dollars in thousands, taxable equivalent) Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2) $ 4,725,304 $ 49,865 4.28% $ 4,355,572 $ 47,868 4.46%
Taxable securities (3) 2,186,756 11,900 2.18 2,300,316 11,419 1.99
Tax-exempt securities (1)(3) 16,236 259 6.38 20,173 308 6.11
Federal funds sold and other interest-earning assets 141,414 885 2.50 150,841 900 2.39
Total interest-earning assets 7,069,710 62,909 3.60 6,826,902 60,495 3.58
Non-interest-earning assets:
Allowance for loan losses (72,192) (77,491)
Cash and due from banks 79,025 62,054
Premises and equipment 159,502 162,788
Other assets (3) 381,300 410,175
Total assets $ 7,617,345 $ 7,384,428
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,475,913 394 .11 $ 1,416,119 440 .13
Money market 1,466,913 673 .19 1,376,993 563 .17
Savings 300,344 20 .03 259,548 20 .03
Time less than $100,000 737,254 724 .40 877,695 1,013 .47
Time greater than $100,000 494,451 664 .54 578,190 918 .64
Brokered time deposits 273,327 (279) (.41) 287,979 (160) (.23)
Total interest-bearing deposits 4,748,202 2,196 .19 4,796,524 2,794 .24
Federal funds purchased and other borrowings 36,145 98 1.10 112,583 840 3.03
Federal Home Loan Bank advances 239,181 392 .66 125,069 58 .19
Long-term debt 127,740 2,606 8.27 129,865 2,634 8.23
Total borrowed funds 403,066 3,096 3.12 367,517 3,532 3.90
Total interest-bearing liabilities 5,151,268 5,292 .42 5,164,041 6,326 .50
Non-interest-bearing liabilities:
Non-interest-bearing deposits 1,620,984 1,400,619
Other liabilities 94,207 116,667
Total liabilities 6,866,459 6,681,327
Shareholders' equity 750,886 703,101
Total liabilities and shareholders' equity $ 7,617,345 $ 7,384,428
Net interest revenue $ 57,617 $ 54,169
Net interest-rate spread 3.18% 3.08%
Net interest margin (4) 3.31% 3.21%
(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $10.8 million in 2015 and pretax unrealized losses of $4.63 million in 2014 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

CONTACT: For more information: Rex S. Schuette Chief Financial Officer (706) 781-2266 Rex_Schuette@ucbi.com

Source:United Community Banks, Inc.