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United Community Banks, Inc. Reports Net Operating Income of $23.9 Million for First Quarter 2016, up 36 Percent From a Year Ago

  • Operating earnings per diluted share of 33 cents, up 14 percent from first quarter of 2015
  • Operating return on assets of 1.00 percent – compared to .94 percent a year ago
  • Operating return on tangible common equity of 10.91 percent – up from 9.46 percent a year ago
  • Loans up $111 million from the fourth quarter of 2015, or 7 percent annualized
  • Core transaction deposits up $113 million from the fourth quarter of 2015, or 9 percent annualized

BLAIRSVILLE, Ga., April 27, 2016 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today reported first quarter results reflecting strong credit quality, capital management, profitability and growth. Net operating income was $23.9 million, or 33 cents per diluted share, compared with $17.7 million, or 29 cents per diluted share, in the first quarter of 2015.

Net operating income and net operating income per diluted share exclude merger-related and other charges. Including those charges, first quarter 2016 net income was $22.3 million, or 31 cents per diluted share, compared with $17.7 million, or 29 cents per diluted share in the first quarter of 2015.

At March 31, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.3 percent; Total Risk-Based of 12.3 percent; Common Equity Tier 1 Risk-Based of 11.3 percent; and, Tier 1 Leverage of 8.4 percent.

“Our first quarter results continue to demonstrate the growing potential of United and our focus on increasing returns to our shareholders. Our performance reflects our emphasis on maintaining a high-quality balance sheet, increasing profitability and generating growth,” said Jimmy Tallent, chairman and chief executive officer. “It underscores our ability to prudently grow our loan portfolio and high-quality, low-cost core deposits, maintain top-quartile credit quality, and expand fee revenue while maintaining operating expense discipline, and making strategic investments in technology, geographic market positioning, products and enhanced expertise.

“First quarter loan production was a solid $562 million,” Tallent added. “Loan growth was $111 million, or 7 percent annualized, in line with our 2016 target of a mid-to-upper-single-digit increase. Our community banks originated $347 million in loan production, while our specialized lending area, which includes asset-based, commercial real estate, middle market, SBA and builder finance lending, produced $145 million. Helping fund these loans was quarter-to-quarter core transaction deposit growth of $113 million, or 9 percent annualized. Core deposits comprise 90 percent of total deposits, one of the best ratios in the country.”

First quarter taxable-equivalent net interest revenue totaled $75.2 million, up $1.2 million from the fourth quarter of 2015 and up $17.6 million from the first quarter of 2015. This increase reflects strong loan and core deposit growth, and an increase in the net interest margin. The increase from the first quarter of 2015 also reflects net interest revenue from the Palmetto and First National Bank acquisitions.

The taxable-equivalent net interest margin of 3.41 percent reflected a seven basis point increase from the fourth quarter of 2015, and a 10 basis point increase from a year ago. The increase from the fourth quarter reflects higher yields on the loan and investment securities portfolios, offset slightly by a one basis point increase in the rate paid on interest-bearing liabilities. Yields on floating rate loans and investment securities benefited from the full quarterly impact of the Federal Reserve Bank’s December 2015 rate hike.

The first quarter provision for credit losses was negative $200,000 compared with positive provisions of $300,000 during the fourth quarter of 2015 and $1.8 million during the first quarter of 2015. In addition to continued strong credit quality and a low overall level of net charge-offs, the first quarter negative provision reflects an overall improvement in a number of our largest troubled debt restructurings and the related release of reserves assigned specifically to them.

“Our credit quality indicators are very favorable, and our outlook is for this to continue, which will result in driving down our allowance for loan losses requirement,” stated Tallent. “While we strive to maintain a conservative allowance for loan losses, our recent loss history and improving credit measures continue to require us to decrease our allowance each quarter.”

First quarter net charge-offs totaled $2.1 million compared with $1.3 million during the fourth quarter of 2015, and $2.6 million during the first quarter of 2015. Strong recoveries of previously charged-off loans drove net charge-offs down in the third and fourth quarters of 2015 from the first and second quarters of 2015. Nonperforming assets were 0.28 percent of total assets at March 31, 2016, compared with 0.29 percent at December 31, 2015 and 0.26 percent a year ago.

First quarter fee revenue totaled $18.6 million, a decrease of $2.7 million from the fourth quarter of 2015. The decrease was mostly seasonal and primarily the result of a $1.4 million decline in service charges and fees, a $758,000 decline in gains from sales of SBA loans, and a $541,000 decline in other fee revenue. First quarter fee revenue increased $2.9 million from the first quarter of 2015, primarily due to acquisitions.

During the first quarter of 2016, sales of $13.0 million in SBA loans resulted in net gains of $1.2 million. This compares with sales of $25.1 million and net gains of $2.0 million during the fourth quarter of 2015, and sales of $13.0 million and net gains of $1.1 million during the first quarter of 2015.

Operating expenses, excluding merger-related and other charges, were $55.2 million in the first quarter of 2016. This compares to $56.4 million in the fourth quarter of 2015 and $43.1 million in the first quarter of 2015.

“The linked quarter decrease in operating expenses is primarily related to Palmetto cost savings, and is only part of the story,” commented Tallent. “What also is important to our future growth are the substantial investments we made during the quarter in talented revenue producers. To leverage the United brand and gain share in high-growth areas, during the first quarter we added eight new mortgage lenders in our metro markets. In our specialized lending areas, primarily in our SBA lending business we added 11 revenue producers. We also added three lenders in our loan production office in Charleston, South Carolina, and opened a new loan production office in Macon, Georgia.

“Consistent with this strategy, on April 4, 2016, we entered into a merger agreement with Tidelands Bancshares, Inc., the holding company for Tidelands Bank which is based in Mt. Pleasant, South Carolina,” Tallent said. “Tidelands Bank will merge into United Community Bank and operate under the United brand on the South Carolina coast, including Charleston, Hilton Head and Myrtle Beach.

“Following the opening of a loan production office in Charleston in the fourth quarter of 2015, this strategic purchase completes a two-step plan to launch and accelerate growth in attractive coastal South Carolina markets,” said Tallent. “The Tidelands agreement is expected to close in the third quarter and will be immediately accretive to operating earnings. I am excited to have Thomas Lyles and his team join the United family.

“In the first quarter we maintained strong momentum and, with our talented bankers at work, we expect to do so again in the second quarter and throughout the remainder of 2016,” Tallent said. “Our talented bankers are executing our plans as we maintain a high-quality balance sheet, increase profitability and generate growth.”

Conference Call
United will hold a conference call today, Wednesday, April 27, 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 79143447. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ:UCBI) is a registered bank holding company based in Blairsville, Georgia, with $9.8 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast region’s largest full-service banks, operating 135 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in providing personalized community banking services to individuals, small businesses and corporations. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. United Community Banks is consistently recognized for its outstanding customer service by respected national research firms. 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 2015 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
2016 2015 Quarter
(in thousands, except per share First Fourth Third Second First 2016-2015
data; fully taxable equivalent)Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue (FTE)$80,991 $79,646 $71,120 $66,134 $62,909
Interest expense 5,769 5,598 5,402 4,817 5,292
Net interest revenue (FTE) 75,222 74,048 65,718 61,317 57,617 31 %
Provision for credit losses (200) 300 700 900 1,800
Fee revenue 18,606 21,284 18,297 17,266 15,682 19
Total revenue (FTE) 94,028 95,032 83,315 77,683 71,499 32
Expenses - operating (1) 55,232 56,410 48,525 45,247 43,061 28
Income before income tax expense - (FTE) operating (1) 38,796 38,622 34,790 32,436 28,438 36
Income tax expense - (FTE) operating (1) 14,852 14,822 13,064 12,447 10,768 38
Net income - operating (1) 23,944 23,800 21,726 19,989 17,670 36
Preferred dividends and discount accretion 21 25 25 17 -
Net income available to common shareholders - operating (1) 23,923 23,775 21,701 19,972 17,670 35
Merger-related and other charges, net of income tax benefit 1,649 5,592 3,839 2,176 -
Net income available to common
shareholders - GAAP
$22,274 $18,183 $17,862 $17,796 $17,670 26
PERFORMANCE MEASURES
Per common share:
Diluted income - operating (1)$.33 $.33 $.33 $.32 $.29 14
Diluted income - GAAP .31 .25 .27 .28 .29 7
Cash dividends declared .07 .06 .06 .05 .05
Book value 14.35 14.02 13.95 12.95 12.58 14
Tangible book value (3) 12.40 12.06 12.08 12.66 12.53 (1)
Key performance ratios:
Return on tangible common equity - operating (1)(2)(3)(4) 10.91 % 10.87 % 10.29 % 10.20 % 9.46 %
Return on common equity - operating (1)(2)(4) 9.20 9.18 9.54 9.90 9.34
Return on common equity - GAAP (2)(4) 8.57 7.02 7.85 8.83 9.34
Return on assets - operating (1)(4) 1.00 .99 1.00 1.00 .94
Return on assets - GAAP (4) .93 .76 .82 .89 .94
Dividend payout ratio - operating (1) 21.21 18.18 18.18 15.63 17.24
Dividend payout ratio - GAAP 22.58 24.00 22.22 17.86 17.24
Net interest margin (FTE) (4) 3.41 3.34 3.26 3.30 3.31
Efficiency ratio - operating (1) 59.10 59.41 57.81 57.59 59.15
Efficiency ratio - GAAP 61.94 68.97 64.65 61.63 59.15
Average equity to average assets 10.72 10.68 10.39 10.05 9.86
Average tangible equity to average assets (3) 9.41 9.40 9.88 9.91 9.82
Average tangible common equity to
average assets (3)
9.32 9.29 9.77 9.83 9.82
Tangible common equity to risk-weighted
assets (3)(5)(6)
12.77 12.82 13.08 13.24 13.53
ASSET QUALITY
Nonperforming loans$22,419 $22,653 $20,064 $18,805 $19,015 18
Foreclosed properties 5,163 4,883 7,669 2,356 1,158 346
Total nonperforming assets (NPAs) 27,582 27,536 27,733 21,161 20,173 37
Allowance for loan losses 66,310 68,448 69,062 70,129 70,007 (5)
Net charge-offs 2,138 1,302 1,417 978 2,562 (17)
Allowance for loan losses to loans 1.09 % 1.14 % 1.15 % 1.36 % 1.46 %
Net charge-offs to average loans (4) .14 .09 .10 .08 .22
NPAs to loans and foreclosed properties .45 .46 .46 .41 .42
NPAs to total assets .28 .29 .29 .26 .26
AVERAGE BALANCES ($ in millions)
Loans$6,004 $5,975 $5,457 $5,017 $4,725 27
Investment securities 2,718 2,607 2,396 2,261 2,203 23
Earning assets 8,876 8,792 8,009 7,444 7,070 26
Total assets 9,634 9,558 8,634 8,017 7,617 26
Deposits 7,947 8,028 7,135 6,669 6,369 25
Shareholders’ equity 1,033 1,021 897 806 751 38
Common shares - basic (thousands) 72,162 72,135 66,294 62,549 60,905 18
Common shares - diluted (thousands) 72,166 72,140 66,300 62,553 60,909 18
AT PERIOD END ($ in millions)
Loans$6,106 $5,995 $6,024 $5,174 $4,788 28
Investment securities 2,757 2,656 2,457 2,322 2,201 25
Total assets 9,781 9,616 9,404 8,237 7,655 28
Deposits 7,960 7,873 7,897 6,800 6,430 24
Shareholders’ equity 1,034 1,018 1,013 827 764 35
Common shares outstanding (thousands) 71,544 71,484 71,472 62,700 60,309 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) All periods are calculated under Basel III rules, which became effective January 1, 2015. (6) First quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2016 2015
(in thousands, except per share First Fourth Third Second First
data; fully taxable equivalent)Quarter Quarter Quarter Quarter Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent$80,991 $79,646 $71,120 $66,134 $62,909
Taxable equivalent adjustment (270) (284) (292) (326) (375)
Interest revenue (GAAP)$80,721 $79,362 $70,828 $65,808 $62,534
Net interest revenue reconciliation
Net interest revenue - taxable equivalent$75,222 $74,048 $65,718 $61,317 $57,617
Taxable equivalent adjustment (270) (284) (292) (326) (375)
Net interest revenue (GAAP)$74,952 $73,764 $65,426 $60,991 $57,242
Total revenue reconciliation
Total operating revenue$94,028 $95,032 $83,315 $77,683 $71,499
Taxable equivalent adjustment (270) (284) (292) (326) (375)
Total revenue (GAAP)$93,758 $94,748 $83,023 $77,357 $71,124
Expense reconciliation
Expenses - operating$55,232 $56,410 $48,525 $45,247 $43,061
Merger-related and other charges 2,653 9,078 5,744 3,173 -
Expenses (GAAP)$57,885 $65,488 $54,269 $48,420 $43,061
Income before taxes reconciliation
Income before taxes - operating$38,796 $38,622 $34,790 $32,436 $28,438
Taxable equivalent adjustment (270) (284) (292) (326) (375)
Merger-related and other charges (2,653) (9,078) (5,744) (3,173) -
Income before taxes (GAAP)$35,873 $29,260 $28,754 $28,937 $28,063
Income tax expense reconciliation
Income tax expense - operating$14,852 $14,822 $13,064 $12,447 $10,768
Taxable equivalent adjustment (270) (284) (292) (326) (375)
Merger-related and other charges, tax benefit (1,004) (3,486) (1,905) (997) -
Income tax expense (GAAP)$13,578 $11,052 $10,867 $11,124 $10,393
Net income reconciliation
Net income - operating$23,944 $23,800 $21,726 $19,989 $17,670
Merger-related and other charges, net of income tax benefit (1,649) (5,592) (3,839) (2,176) -
Net income (GAAP)$22,295 $18,208 $17,887 $17,813 $17,670
Net income available to common shareholders reconciliation
Net income available to common shareholders - operating$23,923 $23,775 $21,701 $19,972 $17,670
Merger-related and other charges, net of income tax benefit (1,649) (5,592) (3,839) (2,176) -
Net income available to common shareholders (GAAP)$22,274 $18,183 $17,862 $17,796 $17,670
Diluted income per common share reconciliation
Diluted income per common share - operating$.33 $.33 $.33 $.32 $.29
Merger-related and other charges (.02) (.08) (.06) (.04) -
Diluted income per common share (GAAP)$.31 $.25 $.27 $.28 $.29
Book value per common share reconciliation
Tangible book value per common share$12.40 $12.06 $12.08 $12.66 $12.53
Effect of goodwill and other intangibles 1.95 1.96 1.87 .29 .05
Book value per common share (GAAP)$14.35 $14.02 $13.95 $12.95 $12.58
Return on tangible common equity reconciliation
Return on tangible common equity - operating 10.91 % 10.87 % 10.29 % 10.20 % 9.46 %
Effect of goodwill and other intangibles (1.71) (1.69) (.75) (.30) (.12)
Return on common equity - operating 9.20 9.18 9.54 9.90 9.34
Merger-related and other charges (.63) (2.16) (1.69) (1.07) -
Return on common equity (GAAP) 8.57 % 7.02 % 7.85 % 8.83 % 9.34 %
Return on assets reconciliation
Return on assets - operating 1.00 % .99 % 1.00 % 1.00 % .94 %
Merger-related and other charges (.07) (.23) (.18) (.11) -
Return on assets (GAAP) .93 % .76 % .82 % .89 % .94 %
Dividend payout ratio reconciliation
Dividend payout ratio - operating 21.21 % 18.18 % 18.18 % 15.63 % 17.24 %
Merger-related and other charges 1.37 5.82 4.04 2.23 -
Dividend payout ratio (GAAP) 22.58 % 24.00 % 22.22 % 17.86 % 17.24 %
Efficiency ratio reconciliation
Efficiency ratio - operating 59.10 % 59.41 % 57.81 % 57.59 % 59.15 %
Merger-related and other charges 2.84 9.56 6.84 4.04 -
Efficiency ratio (GAAP) 61.94 % 68.97 % 64.65 % 61.63 % 59.15 %
Average equity to assets reconciliation
Tangible common equity to assets 9.32 % 9.29 % 9.77 % 9.83 % 9.82 %
Effect of preferred equity .09 .11 .11 .08 -
Tangible equity to assets 9.41 9.40 9.88 9.91 9.82
Effect of goodwill and other intangibles 1.31 1.28 .51 .14 .04
Equity to assets (GAAP) 10.72 % 10.68 % 10.39 % 10.05 % 9.86 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tangible common equity to risk-weighted assets 12.77 % 12.82 % 13.08 % 13.24 % 13.53 %
Effect of other comprehensive income .25 .38 .23 .28 .19
Effect of deferred tax limitation (1.85) (2.05) (2.24) (2.49) (2.86)
Effect of trust preferred .08 .08 .08 .63 .67
Effect of preferred equity - .15 .15 .17 -
Basel III intangibles transition adjustment .07 .10 .13 .06 .04
Basel III disallowed investments - (.03) (.03) (.03) (.04)
Tier I capital ratio (Regulatory) 11.32 % 11.45 % 11.40 % 11.86 % 11.53 %
(1) First quarter 2016 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2016
2015
First Fourth Third Second First
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $1,434 $1,494 $1,479 $1,266 $1,167
Income producing commercial RE 880 824 818 689 636
Commercial & industrial 855 785 890 793 716
Commercial construction 354 342 319 238 230
Total commercial 3,523 3,445 3,506 2,986 2,749
Residential mortgage 1,032 1,029 1,062 935 864
Home equity lines of credit 604 598 585 491 465
Residential construction 348 352 334 299 291
Consumer installment 599 571 537 463 419
Total loans $6,106 $5,995 $6,024 $5,174 $4,788
LOANS BY MARKET
North Georgia $1,097 $1,125 $1,130 $1,155 $1,150
Atlanta MSA 1,257 1,259 1,266 1,275 1,254
North Carolina 543 549 546 533 539
Coastal Georgia 543 537 506 499 476
Gainesville MSA 248 254 252 257 255
East Tennessee 495 504 511 525 281
South Carolina 821 819 783 35 30
Specialized Lending 628 492 609 538 487
Indirect auto 474 456 421 357 316
Total loans $6,106 $5,995 $6,024 $5,174 $4,788

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2016
2015
Linked
Quarter
Change
Year over
Year
Change
First Fourth First
(in millions) Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $1,434 $1,494 $1,167 $(60) $267
Income producing commercial RE 880 824 636 56 244
Commercial & industrial 855 785 716 70 139
Commercial construction 354 342 230 12 124
Total commercial 3,523 3,445 2,749 78 774
Residential mortgage 1,032 1,029 864 3 168
Home equity lines of credit 604 598 465 6 139
Residential construction 348 352 291 (4) 57
Consumer installment 599 571 419 28 180
Total loans $6,106 $5,995 $4,788 111 1,318
LOANS BY MARKET
North Georgia $1,097 $1,125 $1,150 (28) (53)
Atlanta MSA 1,257 1,259 1,254 (2) 3
North Carolina 543 549 539 (6) 4
Coastal Georgia 543 537 476 6 67
Gainesville MSA 248 254 255 (6) (7)
East Tennessee 495 504 281 (9) 214
South Carolina 821 819 30 2 791
Specialized Lending 628 492 487 136 141
Indirect auto 474 456 316 18 158
Total loans $6,106 $5,995 $4,788 111 1,318

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2016
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $6,775 $2,864 $9,639
Income producing CRE 2,959 - 2,959
Commercial & industrial 978 - 978
Commercial construction 266 152 418
Total commercial 10,978 3,016 13,994
Residential mortgage 8,037 1,587 9,624
Home equity lines of credit 1,198 125 1,323
Residential construction 1,122 435 1,557
Consumer installment 1,084 - 1,084
Total NPAs $22,419 $5,163 $27,582
Balance as a % of
Unpaid Principal 69.3% 38.2% 60.1%
NONPERFORMING ASSETS BY MARKET
North Georgia $5,353 $1,233 $6,586
Atlanta MSA 2,796 902 3,698
North Carolina 4,860 559 5,419
Coastal Georgia 1,696 121 1,817
Gainesville MSA 250 - 250
East Tennessee 3,470 351 3,821
South Carolina 935 1,997 2,932
Specialized Lending 2,186 - 2,186
Indirect auto 873 - 873
Total NPAs $22,419 $5,163 $27,582
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $22,653 $4,883 $27,536
Acquisitions - - -
Loans placed on non-accrual 4,771 - 4,771
Payments received (1,812) - (1,812)
Loan charge-offs (1,679) - (1,679)
Foreclosures (1,514) 1,590 76
Capitalized costs - - -
Property sales - (1,524) (1,524)
Write downs - (7) (7)
Net gains (losses) on sales - 221 221
Ending Balance $22,419 $5,163 $27,582

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 - 256 256
Property sales - (1,916) (1,916)
Write downs - (79) (79)
Net gains (losses) on sales - 304 304
Ending Balance $20,064 $7,669 $27,733

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2016 Fourth Quarter 2015 Third Quarter 2015
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 $304 .08% $861 .23% $236 .07%
Income producing CRE 211 .10 (35) (.02) (106) (.06)
Commercial & industrial 283 .14 (719) (.34) 190 .09
Commercial construction 286 .33 253 .31 59 .09
Total commercial 1,084 .13 360 .04 379 .05
Residential mortgage 50 .02 (120) (.05) 433 .18
Home equity lines of credit 632 .43 194 .13 293 .22
Residential construction (103) (.12) 415 .48 (124) (.16)
Consumer installment 475 .33 453 .33 436 .35
Total $2,138 .14 $1,302 .09 $1,417 .10
NET CHARGE-OFFS BY MARKET
North Georgia $913 .33% $1,011 .36% $1,352 .47%
Atlanta MSA (25) (.01) 496 .16 74 .02
North Carolina 382 .28 426 .31 183 .13
Coastal Georgia 196 .15 47 .04 19 .02
Gainesville MSA 98 .16 (340) (.54) (236) (.36)
East Tennessee 378 .31 (326) (.26) 153 .12
South Carolina (16) (.01) (474) (.24) (247) (.34)
Specialized Lending 4 - 253 .18 (42) (.03)
Indirect auto 208 .19 209 .19 161 .17
Total $2,138 .14 $1,302 .09 $1,417 .10
(1) Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended
March 31,
(in thousands, except per share data) 2016 2015
Interest revenue:
Loans, including fees $63,976 $49,664
Investment securities, including tax exempt of $166 and $158 15,788 12,058
Deposits in banks and short-term investments 957 812
Total interest revenue 80,721 62,534
Interest expense:
Deposits:
NOW 485 394
Money market 1,108 673
Savings 29 20
Time 642 1,109
Total deposit interest expense 2,264 2,196
Short-term borrowings 87 98
Federal Home Loan Bank advances 733 392
Long-term debt 2,685 2,606
Total interest expense 5,769 5,292
Net interest revenue 74,952 57,242
Provision for credit losses (200) 1,800
Net interest revenue after provision for credit losses 75,152 55,442
Fee revenue:
Service charges and fees 10,126 7,615
Mortgage loan and other related fees 3,289 2,755
Brokerage fees 1,053 1,551
Gains from sales of government guaranteed loans 1,237 1,141
Securities gains, net 379 1,539
Loss from prepayment of debt - (1,038)
Other 2,522 2,119
Total fee revenue 18,606 15,682
Total revenue 93,758 71,124
Operating expenses:
Salaries and employee benefits 33,062 26,446
Communications and equipment 4,290 3,271
Occupancy 4,723 3,278
Advertising and public relations 864 750
Postage, printing and supplies 1,280 938
Professional fees 2,700 1,919
FDIC assessments and other regulatory charges 1,524 1,209
Amortization of intangibles 1,010 242
Merger-related and other charges 2,653 -
Other 5,779 5,008
Total operating expenses 57,885 43,061
Net income before income taxes 35,873 28,063
Income tax expense 13,578 10,393
Net income 22,295 17,670
Preferred stock dividends and discount accretion 21 -
Net income available to common shareholders $22,274 $17,670
Earnings per common share:
Basic $.31 $.29
.31 .29
Weighted average common shares outstanding:
Basic 72,162 60,905
Diluted 72,166 60,909

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
March 31, December 31, March 31,
(in thousands, except share and per share data) 2016 2015 2015
ASSETS
Cash and due from banks $93,821 $86,912 $77,493
Interest-bearing deposits in banks 88,995 153,451 82,269
Short-term investments - - 25,902
Cash and cash equivalents 182,816 240,363 185,664
Securities available for sale 2,405,467 2,291,511 1,801,973
Securities held to maturity (fair value $363,092, $371,658 and $413,550) 351,700 364,696 399,228
Mortgage loans held for sale 26,578 24,231 15,723
Loans, net of unearned income 6,106,189 5,995,441 4,787,689
Less allowance for loan losses (66,310) (68,448) (70,007)
Loans, net 6,039,879 5,926,993 4,717,682
Premises and equipment, net 180,690 178,165 159,036
Bank owned life insurance 105,803 105,493 81,490
Accrued interest receivable 25,893 25,786 20,154
Net deferred tax asset 180,371 197,613 201,898
Derivative financial instruments 23,488 20,082 20,291
Goodwill and other intangible assets 146,409 147,420 3,399
Other assets 112,237 94,075 47,998
Total assets $9,781,331 $9,616,428 $7,654,536
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $2,370,842 $2,204,755 $1,694,755
NOW 1,794,241 1,975,884 1,420,956
Money market 1,630,565 1,599,637 1,306,421
Savings 491,542 471,129 312,013
Time 1,233,647 1,282,803 1,206,278
Brokered 439,486 338,985 489,141
Total deposits 7,960,323 7,873,193 6,429,564
Repurchase agreements - 16,640 -
Federal Home Loan Bank advances 510,125 430,125 270,125
Long-term debt 163,955 163,836 112,901
Derivative financial instruments 31,374 28,825 29,276
Accrued expenses and other liabilities 81,829 85,524 48,965
Total liabilities 8,747,606 8,598,143 6,890,831
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series H; $1,000 stated value; 0, 9,992 and 0 shares issued and outstanding - 9,992 -
Common stock, $1 par value; 100,000,000 shares authorized;
66,258,777, 66,198,477 and 50,228,075 shares issued and outstanding 66,259 66,198 50,228
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
5,285,516, 5,285,516 and 10,080,787 shares issued and outstanding 5,286 5,286 10,081
Common stock issuable; 496,515, 458,953 and 400,369 shares 6,700 6,779 5,895
Capital surplus 1,286,884 1,286,361 1,081,110
Accumulated deficit (313,646) (330,879) (372,933)
Accumulated other comprehensive loss (17,758) (25,452) (10,676)
Total shareholders' equity 1,033,725 1,018,285 763,705
Total liabilities and shareholders' equity $9,781,331 $9,616,428 $7,654,536

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
2016 2015
Average Avg. Average Avg.
(dollars in thousands, fully taxable equivalent) Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)$6,003,568 $64,044 4.29% $4,725,304 $49,865 4.28%
Taxable securities (3) 2,688,564 15,622 2.32 2,186,756 11,900 2.18
Tax-exempt securities (1)(3) 29,744 272 3.66 16,236 259 6.38
Federal funds sold and other interest-earning assets 153,759 1,053 2.74 141,414 885 2.50
Total interest-earning assets 8,875,635 80,991 3.67 7,069,710 62,909 3.60
Non-interest-earning assets:
Allowance for loan losses (68,473) (72,192)
Cash and due from banks 85,635 79,025
Premises and equipment 180,090 159,502
Other assets (3) 561,261 381,300
Total assets$9,634,148 $7,617,345
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$1,886,472 485 .10 $1,475,913 394 .11
Money market 1,840,584 1,108 .24 1,466,913 673 .19
Savings 480,238 29 .02 300,344 20 .03
Time 1,259,689 817 .26 1,231,705 1,388 .46
Brokered time deposits 233,213 (175)(.30) 273,327 (279)(.41)
Total interest-bearing deposits 5,700,196 2,264 .16 4,748,202 2,196 .19
Federal funds purchased and other borrowings 34,906 87 1.00 36,145 98 1.10
Federal Home Loan Bank advances 346,169 733 .85 239,181 392 .66
Long-term debt 165,419 2,685 6.53 127,740 2,606 8.27
Total borrowed funds 546,494 3,505 2.58 403,066 3,096 3.12
Total interest-bearing liabilities 6,246,690 5,769 .37 5,151,268 5,292 .42
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,247,041 1,620,984
Other liabilities 107,320 94,207
Total liabilities 8,601,051 6,866,459
Shareholders' equity 1,033,097 750,886
Total liabilities and shareholders' equity$9,634,148 $7,617,345
Net interest revenue $75,222 $57,617
Net interest-rate spread 3.30% 3.18%
Net interest margin (4) 3.41% 3.31%
(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 $2.20 million in 2016 and pretax unrealized gains of $10.8
million in 2015 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

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

Source:United Community Banks, Inc.