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United Community Banks, Inc. Reports Net Operating Income of $20.0 Million for Second Quarter 2015, Up 22 Percent From a Year Ago

  • Operating earnings per diluted share of 32 cents, up 19 percent from a year ago
  • Completed merger with MoneyTree Corporation and its wholly owned subsidiary, First National Bank, on May 1st
  • Loans up $142 million from first quarter, or 12 percent annualized, excluding loans acquired in the merger
  • Core transaction deposits up $109 million, or 11 percent annualized, excluding deposits acquired in the merger
  • Net interest margin holds steady at 3.30 percent
  • Regulatory approvals received for acquisition of Palmetto Bancshares

BLAIRSVILLE, Ga., July 22, 2015 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today reported net operating income of $20.0 million for the second quarter of 2015, up 22 percent from a year ago. Operating earnings per diluted share was 32 cents, up 19 percent from a year ago. The increase reflects strong loan and core deposit growth, a stable net interest margin, growth in fee revenue and a lower provision for credit losses.

Operating earnings and diluted operating earnings per share exclude the effects of merger-related charges which are not considered part of ongoing operations. Including those charges, net income was $17.8 million for the second quarter, or 28 cents per diluted share. For the first six months, United reported net income of $35.5 million, or 57 cents per diluted share. Excluding merger related charges, net operating income was $37.6 million, or 61 cents per diluted share.

"Our second quarter financial performance was outstanding by every measure," said Jimmy Tallent, chairman and chief executive officer. "I'm especially proud to report that we achieved our goal for a one percent return on assets, excluding merger-related charges.

"We had solid loan growth combined with a steady net interest margin," Tallent continued. "Strong recoveries of previously charged-off loans drove our provision for credit losses down to half the first quarter level. Fee revenue was up significantly, with strong growth in our mortgage business and gains from our SBA lending business.

"Second quarter net loan growth of $142 million, excluding the merger with MoneyTree Corporation and its wholly owned subsidiary, First National Bank ("FNB"), was driven by strong loan production of $526 million across all United markets. Our community banks originated $296 million of loan production while our specialized lending area, which includes health care, corporate, SBA, asset-based, middle market and commercial real estate lending, produced $152 million. Core deposit growth was another contributing factor with a linked-quarter increase of $109 million, or 11 percent annualized, excluding deposits acquired in the merger. Increased demand deposits in our Atlanta and western North Carolina markets drove over half of this growth."

Second quarter taxable equivalent net interest revenue totaled $61.3 million, up $3.70 million from the first quarter and up $6.37 million from the second quarter of 2014. The acquisition of FNB added just over $2.0 million to second quarter net interest revenue. The taxable equivalent net interest margin of 3.30 percent held steady with the first quarter and was up 9 basis points from a year ago. Along with loan growth, this drove the remainder of the increase in net interest revenue.

At $900 thousand, the second quarter provision for credit losses was half of the amount from the first quarter and down $1.3 million from the second quarter of 2014. Second quarter net charge-offs were $978 thousand compared with $2.56 million in the first quarter and $4.18 million a year ago. Strong recoveries of previously charged-off loans drove net charge-offs down in the second quarter. Nonperforming assets to total assets were .26 percent, equal to last quarter, and down from .32 percent a year ago.

Second quarter fee revenue totaled $17.3 million, up $1.58 million from the first quarter and $3.12 million from the second quarter of 2014. Higher mortgage fees and an increase in gains from SBA loan sales account for most of the increase from both prior periods. Mortgage fees of $3.71 million were up $952 thousand from the first quarter and up $1.83 million from a year ago, reflecting strong growth in home purchases and an increase in refinancing activity. Closed mortgage loans totaled $128 million in the second quarter of 2015, compared with $87.9 million in the first quarter and $68.5 million in the second quarter of 2014. SBA loan sale gains totaled $1.49 million in the second quarter of 2015 compared with $1.14 million in the first quarter of 2015 and $744 thousand in the second quarter of 2014.

Second quarter brokerage fees of $1.23 million from United's advisory services business were down $319 thousand from the first quarter and were level with the second quarter of 2014. Service charges and fees of $8.38 million were up $760 thousand from the first quarter, reflecting growth in interchange fees, while down $152 thousand from a year ago, primarily reflecting the declining trend in overdraft fees.

"Our growth in fee revenue reflects our commitment to diversifying the revenue stream by focusing on fee generating products and services," stated Tallent.

Operating expenses, excluding merger-related charges of $3.17 million, were $45.2 million in the second quarter compared to $43.1 million in the first quarter and $40.5 million a year ago. The acquisition of FNB added approximately $1.6 million in operating expenses from the acquisition date of May 1. FNB's expenses are expected to decline as anticipated cost savings are realized. First quarter 2015 operating expenses included a non-core charge of $690 thousand associated with closing all loss sharing agreements with the FDIC.

Second quarter salaries and employee benefits expense of $28.0 million was up $1.52 million from the first quarter and $3.67 million from a year ago. The increases reflect the addition of FNB's compensation expenses for two months, investment in new producers and support staff for the specialized lending area, and higher commissions and incentives associated with growth in the mortgage business and in commercial loans and core deposits. Other operating expenses of $4.89 million for the second quarter were down $358 thousand from the first quarter and up $486 thousand from the second quarter of 2014. Other operating expenses for the first quarter 2015 included the $690 thousand charge associated with closing all loss sharing agreements with the FDIC. The increase from a year ago is mostly due to higher lending support costs.

Tallent noted, "The previously announced merger with FNB closed on May 1, and their results of operations are included in United's results from that date forward. Conversion of the operating systems was successfully completed last weekend.

"We also announced our planned merger with Palmetto Bancshares, Inc. and its banking subsidiary, The Palmetto Bank, which is headquartered in Greenville, South Carolina," Tallent said. "The Palmetto Bank is a high-quality franchise with $1.2 billion in assets and 25 banking offices in the Upstate South Carolina markets. The merger creates significant benefits for United, including meaningful earnings per share accretion, improved growth profile and profitability, attractive rates of return, and higher franchise value. We have received all regulatory approvals and the transaction is scheduled to close on September 1. I am very pleased to welcome both First National Bank and The Palmetto Bank to the United family."

At June 30, 2015, capital ratios were as follows: Tier 1 Risk-Based of 11.9 percent; Total Risk-Based of 13.1 percent; Tier 1 Common Risk-Based of 11.9 percent; and, Tier 1 Leverage of 9.1 percent.

"Our second quarter results continue the positive momentum from the first quarter, with 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. And, as always, we look forward to serving our customers – both existing and new – with the outstanding service for which our bankers are so very well known."

Conference Call

United will hold a conference call today, Wednesday, July 22, 2015, 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 74542415. 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 $8.2 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast's largest full-service banks, operating 114 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 and 2015, 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
Second
2015 2014 Quarter
(in thousands, except per share Second First Fourth Third Second 2015-2014
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue $ 66,134 $ 62,909 $ 64,353 $ 63,338 $ 61,783
Interest expense 4,817 5,292 6,021 6,371 6,833
Net interest revenue 61,317 57,617 58,332 56,967 54,950 12%
Provision for credit losses 900 1,800 1,800 2,000 2,200
Fee revenue 17,266 15,682 14,823 14,412 14,143 22
Total revenue 77,683 71,499 71,355 69,379 66,893 16
Expenses - operating (1) 45,247 43,061 41,919 41,364 40,532 12
Income before income tax expense - operating (1) 32,436 28,438 29,436 28,015 26,361 23
Income tax expense - operating (1) 12,447 10,768 11,189 10,399 10,004 24
Net income - operating (1) 19,989 17,670 18,247 17,616 16,357 22
Preferred dividends and discount accretion 17 -- -- -- --
Net income available to common shareholders - operating (1) 19,972 17,670 18,247 17,616 16,357 22
Merger-related charges, net of income tax benefit 2,176 -- -- -- --
Net income available to common shareholders - GAAP $ 17,796 $ 17,670 $ 18,247 $ 17,616 $ 16,357 9
PERFORMANCE MEASURES
Per common share:
Diluted income - operating (1) $ .32 $ .29 $ .30 $ .29 $ .27 19
Diluted income - GAAP .28 .29 .30 .29 .27 4
Cash dividends declared .05 .05 .05 .03 .03
Book value 12.95 12.58 12.20 12.15 11.94 8
Tangible book value (3) 12.66 12.53 12.15 12.10 11.91 6
Key performance ratios:
Return on common equity - operating (1)(2)(4) 9.90% 9.34% 9.60% 9.41% 8.99%
Return on common equity - GAAP (2)(4) 8.83 9.34 9.60 9.41 8.99
Return on assets - operating (1)(4) 1.00 .94 .96 .95 .88
Return on assets - GAAP (4) .89 .94 .96 .95 .88
Dividend payout ratio - operating (1) 15.63 17.24 16.67 10.34 11.11
Dividend payout ratio - GAAP 17.86 17.24 16.67 10.34 11.11
Net interest margin (4) 3.30 3.31 3.31 3.32 3.21
Efficiency ratio - operating (1) 57.59 59.15 57.47 57.96 58.65
Efficiency ratio - GAAP 61.63 59.15 57.47 57.96 58.65
Average equity to average assets 10.05 9.86 9.76 9.85 9.61
Average tangible equity to average assets (3) 9.91 9.82 9.72 9.83 9.58
Average tangible common equity to average assets (3) 9.83 9.82 9.72 9.83 9.58
Tangible common equity to risk-weighted assets (3)(5) 13.24 13.53 13.82 14.10 13.92
ASSET QUALITY
Nonperforming loans $ 18,805 $ 19,015 $ 17,881 $ 18,745 $ 20,724 (9)
Foreclosed properties 2,356 1,158 1,726 3,146 2,969 (21)
Total nonperforming assets (NPAs) 21,161 20,173 19,607 21,891 23,693 (11)
Allowance for loan losses 70,129 70,007 71,619 71,928 73,248
Net charge-offs 978 2,562 2,509 3,155 4,175 (77)
Allowance for loan losses to loans 1.36% 1.46% 1.53% 1.57% 1.66%
Net charge-offs to average loans (4) .08 .22 .22 .28 .38
NPAs to loans and foreclosed properties .41 .42 .42 .48 .54
NPAs to total assets .26 .26 .26 .29 .32
AVERAGE BALANCES ($ in millions)
Loans $ 5,017 $ 4,725 $ 4,621 $ 4,446 $ 4,376 15
Investment securities 2,261 2,203 2,222 2,231 2,326 (3)
Earning assets 7,444 7,070 7,013 6,820 6,861 8
Total assets 8,017 7,617 7,565 7,374 7,418 8
Deposits 6,669 6,369 6,383 6,143 6,187 8
Shareholders' equity 806 751 738 726 713 13
Common shares - basic (thousands) 62,549 60,905 60,830 60,776 60,712
Common shares - diluted (thousands) 62,553 60,909 60,833 60,779 60,714
AT PERIOD END ($ in millions)
Loans $ 5,174 $ 4,788 $ 4,672 $ 4,569 $ 4,410 17
Investment securities 2,322 2,201 2,198 2,222 2,190 6
Total assets 8,246 7,664 7,567 7,526 7,352 12
Deposits 6,808 6,438 6,327 6,241 6,164 10
Shareholders' equity 827 764 740 736 722 15
Common shares outstanding (thousands) 62,700 60,309 60,259 60,248 60,139
(1) Excludes merger-related charges. (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) June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Six
Months Ended YTD
(in thousands, except per share June 30, 2015-2014
data; taxable equivalent) 2015 2014 Change
INCOME SUMMARY
Interest revenue $ 129,043 $ 122,278
Interest expense 10,109 13,159
Net interest revenue 118,934 109,119 9%
Provision for credit losses 2,700 4,700
Fee revenue 32,948 26,319 25
Total revenue 149,182 130,738 14
Expenses - operating (1) 88,308 79,582 11
Income before income tax expense - operating (1) 60,874 51,156 19
Income tax expense - operating (1) 23,215 19,399 20
Net income - operating (1) 37,659 31,757 19
Preferred dividends and discount accretion 17 439
Net income available to common shareholders - operating (1) 37,642 31,318 20
Merger-related charges, net of income tax benefit 2,176 --
Net income available to common shareholders - GAAP $ 35,466 $ 31,318 13
PERFORMANCE MEASURES
Per common share:
Diluted income - operating (1) $ .61 $ .52 17
Diluted income - GAAP .57 .52 10
Cash dividends declared .10 .03
Book value 12.95 11.94 8
Tangible book value (3) 12.66 11.91 6
Key performance ratios:
Return on common equity - operating (1)(2)(4) 9.63% 8.82%
Return on common equity - GAAP (2)(4) 9.08 8.82
Return on assets - operating (1)(4) .97 .87
Return on assets - GAAP (4) .92 .87
Dividend payout ratio - operating (1) 16.39 5.77
Dividend payout ratio - GAAP 17.54 5.77
Net interest margin (4) 3.30 3.21
Efficiency ratio - operating (1) 58.34 58.85
Efficiency ratio - GAAP 60.44 58.85
Average equity to average assets 9.96 9.56
Average tangible equity to average assets (3) 9.87 9.54
Average tangible common equity to average assets (3) 9.83 9.40
Tangible common equity to risk-weighted assets (3)(5) 13.24 13.92
ASSET QUALITY
Nonperforming loans $ 18,805 $ 20,724
Foreclosed properties 2,356 2,969
Total nonperforming assets (NPAs) 21,161 23,693
Allowance for loan losses 70,129 73,248
Net charge-offs 3,540 8,214
Allowance for loan losses to loans 1.36% 1.66%
Net charge-offs to average loans (4) .15 .38
NPAs to loans and foreclosed properties .41 .54
NPAs to total assets .26 .32
AVERAGE BALANCES ($ in millions)
Loans $ 4,872 $ 4,366 12
Investment securities 2,232 2,323 (4)
Earning assets 7,258 6,844 6
Total assets 7,818 7,401 6
Deposits 6,520 6,192 5
Shareholders' equity 778 708 10
Common shares - basic (thousands) 61,730 60,386 2
Common shares - diluted (thousands) 61,734 60,388 2
AT PERIOD END ($ in millions)
Loans $ 5,174 $ 4,410 17
Investment securities 2,322 2,190 6
Total assets 8,246 7,352 12
Deposits 6,808 6,164 10
Shareholders' equity 827 722 15
Common shares outstanding (thousands) 62,700 60,139
(1) Excludes merger-related charges. (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) June 30 and 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 Second First Fourth Third Second
data; taxable equivalent) Quarter Quarter Quarter Quarter Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 66,134 $ 62,909 $ 64,353 $ 63,338 $ 61,783
Taxable equivalent adjustment (326) (375) (398) (405) (377)
Interest revenue (GAAP) $ 65,808 $ 62,534 $ 63,955 $ 62,933 $ 61,406
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 61,317 $ 57,617 $ 58,332 $ 56,967 $ 54,950
Taxable equivalent adjustment (326) (375) (398) (405) (377)
Net interest revenue (GAAP) $ 60,991 $ 57,242 $ 57,934 $ 56,562 $ 54,573
Total revenue reconciliation
Total operating revenue $ 77,683 $ 71,499 $ 71,355 $ 69,379 $ 66,893
Taxable equivalent adjustment (326) (375) (398) (405) (377)
Total revenue (GAAP) $ 77,357 $ 71,124 $ 70,957 $ 68,974 $ 66,516
Expense reconciliation
Expenses - operating $ 45,247 $ 43,061 $ 41,919 $ 41,364 $ 40,532
Merger-related charges 3,173 -- -- -- --
Expenses (GAAP) $ 48,420 $ 43,061 $ 41,919 $ 41,364 $ 40,532
Income before taxes reconciliation
Income before taxes - operating $ 32,436 $ 28,438 $ 29,436 $ 28,015 $ 26,361
Taxable equivalent adjustment (326) (375) (398) (405) (377)
Merger-related charges (3,173) -- -- -- --
Income before taxes (GAAP) $ 28,937 $ 28,063 $ 29,038 $ 27,610 $ 25,984
Income tax expense reconciliation
Income tax expense - operating $ 12,447 $ 10,768 $ 11,189 $ 10,399 $ 10,004
Taxable equivalent adjustment (326) (375) (398) (405) (377)
Merger-related charges, tax benefit (997) -- -- -- --
Income tax expense (GAAP) $ 11,124 $ 10,393 $ 10,791 $ 9,994 $ 9,627
Net income reconciliation
Net income - operating $ 19,989 $ 17,670 $ 18,247 $ 17,616 $ 16,357
Merger-related charges, net of income tax benefit (2,176) -- -- -- --
Net income (GAAP) $ 17,813 $ 17,670 $ 18,247 $ 17,616 $ 16,357
Net income available to common shareholders reconciliation
Net income available to common shareholders - operating $ 19,972 $ 17,670 $ 18,247 $ 17,616 $ 16,357
Merger-related charges, net of income tax benefit (2,176) -- -- -- --
Net income available to common shareholders (GAAP) $ 17,796 $ 17,670 $ 18,247 $ 17,616 $ 16,357
Diluted income per common share reconciliation
Diluted income per common share - operating $ .32 $ .29 $ .30 $ .29 $ .27
Merger-related charges (.04) -- -- -- --
Diluted income per common share (GAAP) $ .28 $ .29 $ .30 $ .29 $ .27
Book value per common share reconciliation
Tangible book value per common share $ 12.66 $ 12.53 $ 12.15 $ 12.10 $ 11.91
Effect of goodwill and other intangibles .29 .05 .05 .05 .03
Book value per common share (GAAP) $ 12.95 $ 12.58 $ 12.20 $ 12.15 $ 11.94
Return on common equity reconciliation
Return on common equity - operating 9.90% 9.34% 9.60% 9.41% 8.99%
Merger-related charges (1.07) -- -- -- --
Return on common equity (GAAP) 8.83% 9.34% 9.60% 9.41% 8.99%
Return on assets reconciliation
Return on assets - operating 1.00% .94% .96% .95% .88%
Merger-related charges (.11) -- -- -- --
Return on assets (GAAP) .89% .94% .96% .95% .88%
Dividend payout ratio reconciliation
Dividend payout ratio - operating 15.63% 17.24% 16.67% 10.34% 11.11%
Merger-related charges 2.23 -- -- -- --
Dividend payout ratio (GAAP) 17.86% 17.24% 16.67% 10.34% 11.11%
Efficiency ratio reconciliation
Efficiency ratio - operating 57.59% 59.15% 57.47% 57.96% 58.65%
Merger-related charges 4.04 -- -- -- --
Efficiency ratio (GAAP) 61.63% 59.15% 57.47% 57.96% 58.65%
Average equity to assets reconciliation
Tangible common equity to assets 9.83% 9.82% 9.72% 9.83% 9.58%
Effect of preferred equity .08 -- -- -- --
Tangible equity to assets 9.91 9.82 9.72 9.83 9.58
Effect of goodwill and other intangibles .14 .04 .04 .02 .03
Equity to assets (GAAP) 10.05% 9.86% 9.76% 9.85% 9.61%
Tangible common equity to risk-weighted assets reconciliation (1)
Tangible common equity to risk-weighted assets 13.24% 13.53% 13.82% 14.10% 13.92%
Effect of other comprehensive income .28 .19 .35 .34 .53
Effect of deferred tax limitation (2.46) (2.86) (3.11) (3.39) (3.74)
Effect of trust preferred .63 .67 1.00 1.02 1.04
Effect of preferred equity .17 -- -- -- --
Tier I capital ratio (Regulatory) 11.86% 11.53% 12.06% 12.07% 11.75%
(1) June 30 and 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
For the Six Months Ended
(in thousands, except per share June 30,
data; taxable equivalent) 2015 2014
Interest revenue reconciliation
Interest revenue - taxable equivalent $ 129,043 $ 122,278
Taxable equivalent adjustment (701) (734)
Interest revenue (GAAP) $ 128,342 $ 121,544
Net interest revenue reconciliation
Net interest revenue - taxable equivalent $ 118,934 $ 109,119
Taxable equivalent adjustment (701) (734)
Net interest revenue (GAAP) $ 118,233 $ 108,385
Total revenue reconciliation
Total operating revenue $ 149,182 $ 130,738
Taxable equivalent adjustment (701) (734)
Total revenue (GAAP) $ 148,481 $ 130,004
Expense reconciliation
Expenses - operating $ 88,308 $ 79,582
Merger-related charges 3,173 --
Expenses (GAAP) $ 91,481 $ 79,582
Income before taxes reconciliation
Income before taxes - operating $ 60,874 $ 51,156
Taxable equivalent adjustment (701) (734)
Merger-related charges (3,173) --
Income before taxes (GAAP) $ 57,000 $ 50,422
Income tax expense reconciliation
Income tax expense - operating $ 23,215 $ 19,399
Taxable equivalent adjustment (701) (734)
Merger-related charges, tax benefit (997) --
Income tax expense (GAAP) $ 21,517 $ 18,665
Net income reconciliation
Net income - operating $ 37,659 $ 31,757
Merger-related charges, net of income tax benefit (2,176) --
Net income (GAAP) $ 35,483 $ 31,757
Net income available to common shareholders reconciliation
Net income available to common shareholders - operating $ 37,642 $ 31,318
Merger-related charges, net of income tax benefit (2,176) --
Net income available to common shareholders (GAAP) $ 35,466 $ 31,318
Diluted income per common share reconciliation
Diluted income per common share - operating $ .61 $ .52
Merger-related charges (.04) --
Diluted income per common share (GAAP) $ .57 $ .52
Book value per common share reconciliation
Tangible book value per common share $ 12.66 $ 11.91
Effect of goodwill and other intangibles .29 .03
Book value per common share (GAAP) $ 12.95 $ 11.94
Return on common equity reconciliation
Return on common equity - operating 9.63% 8.82%
Merger-related charges (.55) --
Return on common equity (GAAP) 9.08% 8.82%
Return on assets reconciliation
Return on assets - operating .97% .87%
Merger-related charges (.05) --
Return on assets (GAAP) .92% .87%
Dividend payout ratio reconciliation
Dividend payout ratio - operating 16.39% 5.77%
Merger-related charges 1.15 --
Dividend payout ratio (GAAP) 17.54% 5.77%
Efficiency ratio reconciliation
Efficiency ratio - operating 58.34% 58.85%
Merger-related charges 2.10 --
Efficiency ratio (GAAP) 60.44% 58.85%
Average equity to assets reconciliation
Tangible common equity to assets 9.83% 9.40%
Effect of preferred equity .04 .14
Tangible equity to assets 9.87 9.54
Effect of goodwill and other intangibles .09 .02
Equity to assets (GAAP) 9.96% 9.56%
Tangible common equity to risk-weighted assets reconciliation (1)
Tangible common equity to risk-weighted assets 13.24% 13.92%
Effect of other comprehensive income .28 .53
Effect of deferred tax limitation (2.46) (3.74)
Effect of trust preferred .63 1.04
Effect of preferred equity .17 --
Tier I capital ratio (Regulatory) 11.86% 11.75%
(1) June 30, 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
Second First Fourth Third Second
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,266 $ 1,167 $ 1,163 $ 1,153 $ 1,163
Income producing commercial RE 689 636 599 605 598
Commercial & industrial 793 716 710 650 554
Commercial construction 238 230 196 181 160
Total commercial 2,986 2,749 2,668 2,589 2,475
Residential mortgage 935 864 866 866 861
Home equity lines of credit 491 465 466 459 451
Residential construction 299 291 299 307 302
Consumer installment 463 419 373 348 321
Total loans $ 5,174 $ 4,788 $ 4,672 $ 4,569 $ 4,410
LOANS BY MARKET
North Georgia $ 1,155 $ 1,150 $ 1,163 $ 1,168 $ 1,175
Atlanta MSA 1,317 1,296 1,282 1,289 1,305
North Carolina 533 539 553 553 555
Coastal Georgia 499 476 456 444 426
Gainesville MSA 257 255 257 254 257
East Tennessee 525 281 280 281 270
South Carolina / Specialized Lending 531 475 412 337 206
Indirect auto 357 316 269 243 216
Total loans $ 5,174 $ 4,788 $ 4,672 $ 4,569 $ 4,410
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2015 2014 Linked Year over
Second First Second Quarter Year
(in millions) Quarter Quarter Quarter Change Change
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,266 $ 1,167 $ 1,163 $ 99 $ 103
Income producing commercial RE 689 636 598 53 91
Commercial & industrial 793 716 554 77 239
Commercial construction 238 230 160 8 78
Total commercial 2,986 2,749 2,475 237 511
Residential mortgage 935 864 861 71 74
Home equity lines of credit 491 465 451 26 40
Residential construction 299 291 302 8 (3)
Consumer installment 463 419 321 44 142
Total loans $ 5,174 $ 4,788 $ 4,410 386 764
LOANS BY MARKET
North Georgia $ 1,155 $ 1,150 $ 1,175 5 (20)
Atlanta MSA 1,317 1,296 1,305 21 12
North Carolina 533 539 555 (6) (22)
Coastal Georgia 499 476 426 23 73
Gainesville MSA 257 255 257 2 --
East Tennessee 525 281 270 244 255
South Carolina / Specialized Lending 531 475 206 56 325
Indirect auto 357 316 216 41 141
Total loans $ 5,174 $ 4,788 $ 4,410 386 764
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Second Quarter 2015
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 4,878 $ 360 $ 5,238
Income producing CRE 883 -- 883
Commercial & industrial 1,389 -- 1,389
Commercial construction 59 382 441
Total commercial 7,209 742 7,951
Residential mortgage 8,599 1,373 9,972
Home equity lines of credit 940 54 994
Residential construction 1,358 187 1,545
Consumer installment 699 -- 699
Total NPAs $ 18,805 $ 2,356 $ 21,161
Balance as a % of Unpaid Principal 64.9% 46.6% 62.2%
NONPERFORMING ASSETS BY MARKET
North Georgia $ 6,157 $ 657 $ 6,814
Atlanta MSA 2,361 135 2,496
North Carolina 4,746 690 5,436
Coastal Georgia 659 -- 659
Gainesville MSA 864 22 886
East Tennessee 1,885 852 2,737
South Carolina / Specialized Lending 1,565 -- 1,565
Indirect auto 568 -- 568
Total NPAs $ 18,805 $ 2,356 $ 21,161
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 19,015 $ 1,158 $ 20,173
Acquisitions -- 962 962
Loans placed on non-accrual 6,552 -- 6,552
Payments received (3,839) -- (3,839)
Loan charge-offs (1,854) -- (1,854)
Foreclosures (1,069) 1,069 --
Capitalized costs -- -- --
Property sales -- (895) (895)
Write downs -- (9) (9)
Net gains (losses) on sales -- 71 71
Ending Balance $ 18,805 $ 2,356 $ 21,161
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
Acquisitions -- -- --
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
Acquisitions -- -- --
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
Second Quarter 2015 First Quarter 2015 Fourth 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 $ 285 .09% $ 357 .12% $ 891 .31%
Income producing CRE (276) (.17) 241 .16 143 .09
Commercial & industrial (627) (.33) 341 .19 (295) (.17)
Commercial construction 96 .16 22 .04 (6) (.01)
Total commercial (522) (.07) 961 .14 733 .11
Residential mortgage 787 .35 416 .20 1,226 .56
Home equity lines of credit 322 .27 59 .05 238 .20
Residential construction 107 .14 1,061 1.46 (44) (.06)
Consumer installment 284 .26 65 .07 356 .39
Total $ 978 .08 $ 2,562 .22 $ 2,509 .22
NET CHARGE-OFFS BY MARKET
North Georgia $ 911 .32% $ 1,053 .37% $ 791 .27%
Atlanta MSA (234) (.07) 188 .06 147 .05
North Carolina 176 .13 666 .49 1,103 .79
Coastal Georgia (40) (.03) 134 .12 30 .03
Gainesville MSA (233) (.36) (65) (.10) 94 .15
East Tennessee 127 .11 471 .68 54 .08
South Carolina / Specialized Lending 148 .12 -- -- 110 .11
Indirect auto 123 .14 115 .16 180 .29
Total $ 978 .08 $ 2,562 .22 $ 2,509 .22
(1) Annualized.
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except per share data) 2015 2014 2015 2014
Interest revenue:
Loans, including fees $ 52,976 $ 48,261 $ 102,640 $ 95,949
Investment securities, including tax exempt of $181, $193, $339 and $381 12,037 12,165 24,095 23,772
Deposits in banks and short-term investments 795 980 1,607 1,823
Total interest revenue 65,808 61,406 128,342 121,544
Interest expense:
Deposits:
NOW 348 411 742 851
Money market 806 757 1,479 1,320
Savings 26 21 46 41
Time 895 2,018 2,004 3,789
Total deposit interest expense 2,075 3,207 4,271 6,001
Short-term borrowings 82 908 180 1,748
Federal Home Loan Bank advances 454 80 846 138
Long-term debt 2,206 2,638 4,812 5,272
Total interest expense 4,817 6,833 10,109 13,159
Net interest revenue 60,991 54,573 118,233 108,385
Provision for credit losses 900 2,200 2,700 4,700
Net interest revenue after provision for credit losses 60,091 52,373 115,533 103,685
Fee revenue:
Service charges and fees 8,375 8,527 15,990 16,425
Mortgage loan and other related fees 3,707 1,877 6,462 3,231
Brokerage fees 1,232 1,245 2,783 2,422
Gains from sales of SBA loans 1,494 744 2,635 744
Securities gains, net 13 4,435 1,552 4,652
Loss from prepayment of debt -- (4,446) (1,038) (4,446)
Other 2,445 1,761 4,564 3,291
Total fee revenue 17,266 14,143 32,948 26,319
Total revenue 77,357 66,516 148,481 130,004
Operating expenses:
Salaries and employee benefits 27,961 24,287 54,407 48,683
Communications and equipment 3,304 3,037 6,575 6,276
Occupancy 3,415 3,262 6,693 6,640
Advertising and public relations 1,127 1,139 1,877 1,765
Postage, printing and supplies 993 804 1,931 1,580
Professional fees 2,257 2,172 4,176 3,599
FDIC assessments and other regulatory charges 1,298 1,425 2,507 2,778
Merger-related charges 3,173 -- 3,173 --
Other 4,892 4,406 10,142 8,261
Total operating expenses 48,420 40,532 91,481 79,582
Net income before income taxes 28,937 25,984 57,000 50,422
Income tax expense 11,124 9,627 21,517 18,665
Net income 17,813 16,357 35,483 31,757
Preferred stock dividends and discount accretion 17 -- 17 439
Net income available to common shareholders $ 17,796 $ 16,357 $ 35,466 $ 31,318
Earnings per common share:
Basic $ .28 $ .27 $ .57 $ .52
Diluted .28 .27 .57 .52
Weighted average common shares outstanding:
Basic 62,549 60,712 61,730 60,386
Diluted 62,553 60,714 61,734 60,388
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
June 30, December 31, June 30,
(in thousands, except share and per share data) 2015 2014 2014
ASSETS
Cash and due from banks $ 80,865 $ 77,180 $ 91,791
Interest-bearing deposits in banks 94,032 89,074 100,270
Short-term investments 30,000 26,401 47,999
Cash and cash equivalents 204,897 192,655 240,060
Securities available for sale 1,942,319 1,782,734 1,741,268
Securities held to maturity (fair value $388,066, $425,233 and $458,864) 379,757 415,267 448,752
Mortgage loans held for sale 22,003 13,737 14,918
Loans, net of unearned income 5,173,517 4,672,119 4,410,285
Less allowance for loan losses (70,129) (71,619) (73,248)
Loans, net 5,103,388 4,600,500 4,337,037
Premises and equipment, net 173,313 159,390 161,614
Bank owned life insurance 92,952 81,294 80,922
Accrued interest receivable 21,030 20,103 19,141
Net deferred tax asset 195,746 215,503 233,149
Derivative financial instruments 21,728 20,599 22,024
Goodwill and other intangible assets 20,190 3,641 2,731
Other assets 68,980 61,563 50,450
Total assets $ 8,246,303 $ 7,566,986 $ 7,352,066
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 1,847,696 $ 1,574,317 $ 1,519,635
NOW 1,416,279 1,504,887 1,334,883
Money market 1,406,352 1,273,283 1,245,912
Savings 350,049 292,308 279,203
Time:
Less than $100,000 792,300 748,478 805,289
Greater than $100,000 465,347 508,228 554,310
Brokered 529,920 425,011 424,313
Total deposits 6,807,943 6,326,512 6,163,545
Short-term borrowings 25,000 6,000 76,256
Federal Home Loan Bank advances 385,125 270,125 175,125
Long-term debt 113,901 129,865 129,865
Derivative financial instruments 32,374 31,997 36,545
Unsettled securities purchases -- 5,425 7,264
Accrued expenses and other liabilities 54,728 57,485 41,497
Total liabilities 7,419,071 6,827,409 6,630,097
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized; Series H; $1,000 stated value; 9,992 shares issued and outstanding 9,992 -- --
Common stock, $1 par value; 100,000,000 shares authorized; 54,414,863, 50,178,605 and 50,058,295 shares issued and outstanding 54,415 50,178 50,058
Common stock, non-voting, $1 par value; 26,000,000 shares authorized; 8,285,516, 10,080,787 and 10,080,787 shares issued and outstanding 8,286 10,081 10,081
Common stock issuable; 413,014, 357,983 and 314,039 shares 6,071 5,168 4,649
Capital surplus 1,123,730 1,080,508 1,091,780
Accumulated deficit (358,294) (387,568) (418,583)
Accumulated other comprehensive loss (16,968) (18,790) (16,016)
Total shareholders' equity 827,232 739,577 721,969
Total liabilities and shareholders' equity $ 8,246,303 $ 7,566,986 $ 7,352,066
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
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) $ 5,017,306 $ 53,081 4.24% $ 4,376,174 $ 48,435 4.44%
Taxable securities (3) 2,235,561 11,856 2.12 2,306,457 11,972 2.08
Tax-exempt securities (1)(3) 25,685 296 4.61 19,592 316 6.45
Federal funds sold and other interest-earning assets 165,643 901 2.18 158,418 1,060 2.68
Total interest-earning assets 7,444,195 66,134 3.56 6,860,641 61,783 3.61
Non-interest-earning assets:
Allowance for loan losses (71,006) (76,843)
Cash and due from banks 77,124 63,853
Premises and equipment 167,926 161,443
Other assets (3) 398,356 408,768
Total assets $ 8,016,595 $ 7,417,862
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,419,142 348 .10 $ 1,356,141 411 .12
Money market 1,607,665 806 .20 1,361,045 757 .22
Savings 335,093 26 .03 275,540 21 .03
Time less than $100,000 774,193 791 .41 818,048 933 .46
Time greater than $100,000 474,905 482 .41 563,489 865 .62
Brokered time deposits 276,073 (378) (.55) 334,919 220 .26
Total interest-bearing deposits 4,887,071 2,075 .17 4,709,182 3,207 .27
Federal funds purchased and other borrowings 47,698 82 .69 108,311 908 3.36
Federal Home Loan Bank advances 289,707 454 .63 154,795 80 .21
Long-term debt 113,901 2,206 7.77 129,865 2,638 8.15
Total borrowed funds 451,306 2,742 2.44 392,971 3,626 3.70
Total interest-bearing liabilities 5,338,377 4,817 .36 5,102,153 6,833 .54
Non-interest-bearing liabilities:
Non-interest-bearing deposits 1,782,405 1,477,849
Other liabilities 90,091 125,173
Total liabilities 7,210,873 6,705,175
Shareholders' equity 805,722 712,687
Total liabilities and shareholders' equity $ 8,016,595 $ 7,417,862
Net interest revenue $ 61,317 $ 54,950
Net interest-rate spread 3.20% 3.07%
Net interest margin (4) 3.30% 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 $18.9 million in 2015 and pretax unrealized gains of $1.86 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.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,
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) $ 4,872,112 $ 102,946 4.26% $ 4,365,930 $ 96,303 4.45%
Taxable securities (3) 2,211,293 23,756 2.15 2,303,404 23,391 2.03
Tax-exempt securities (1)(3) 20,987 555 5.29 19,881 624 6.28
Federal funds sold and other interest-earning assets 153,597 1,786 2.33 154,651 1,960 2.53
Total interest-earning assets 7,257,989 129,043 3.58 6,843,866 122,278 3.60
Non-interest-earning assets:
Allowance for loan losses (71,596) (77,165)
Cash and due from banks 78,069 62,958
Premises and equipment 163,737 162,112
Other assets (3) 389,874 409,466
Total assets $ 7,818,073 $ 7,401,237
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW $ 1,447,370 742 .10 $ 1,385,964 851 .12
Money market 1,537,678 1,479 .19 1,368,975 1,320 .19
Savings 317,814 46 .03 267,588 41 .03
Time less than $100,000 755,826 1,515 .40 847,707 1,946 .46
Time greater than $100,000 484,624 1,146 .48 570,799 1,783 .63
Brokered time deposits 274,708 (657) (.48) 311,579 60 .04
Total interest-bearing deposits 4,818,020 4,271 .18 4,752,612 6,001 .25
Federal funds purchased and other borrowings 41,953 180 .87 110,436 1,748 3.19
Federal Home Loan Bank advances 264,584 846 .64 140,014 138 .20
Long-term debt 120,782 4,812 8.03 129,865 5,272 8.19
Total borrowed funds 427,319 5,838 2.76 380,315 7,158 3.80
Total interest-bearing liabilities 5,245,339 10,109 .39 5,132,927 13,159 .52
Non-interest-bearing liabilities:
Non-interest-bearing deposits 1,702,140 1,439,447
Other liabilities 92,138 120,943
Total liabilities 7,039,617 6,693,317
Shareholders' equity 778,456 707,920
Total liabilities and shareholders' equity $ 7,818,073 $ 7,401,237
Net interest revenue $ 118,934 $ 109,119
Net interest-rate spread 3.19% 3.08%
Net interest margin (4) 3.30% 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 $14.8 million in 2015 and pretax unrealized losses of $1.37 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.