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United Community Banks, Inc. Announces Third Quarter Earnings

Diluted earnings per share up 33 percent to 36 cents from third quarter 2015
Excluding merger-related charges, diluted operating EPS up 18 percent to 39 cents

  • Return on assets of 1.00 percent; 1.08 percent, excluding merger-related charges
  • Loan growth of $133 million from second quarter, or 8 percent annualized
  • Core transaction deposits up $254 million from second quarter, or 19 percent annualized
  • Fee revenue of $26.4 million, up $2.9 million from the second quarter
  • Efficiency ratio of 60.8 percent; 57.8 percent, excluding merger-related charges

BLAIRSVILLE, Ga., Oct. 26, 2016 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today announced continued momentum in the third quarter with strong fee revenue and loan growth, as well as sound credit quality and capital management. Net income grew to $25.9 million, or 36 cents per diluted share, compared with $17.9 million, or 27 cents per diluted share, for the third quarter of 2015. Net income for the first nine months of 2016 was $73.4 million, or $1.02 per diluted share. This compares with net income of $53.4 million, or 84 cents per diluted share, for the first nine months of 2015.

On an operating basis, net income rose to $27.8 million for the third quarter of 2016 compared with $21.7 million for the third quarter of 2015. Operating net income excludes pre-tax merger-related charges of $3.15 million in the third quarter of 2016 and $5.74 million in the third quarter of 2015. On a per diluted share basis, operating net income was 39 cents for the third quarter of 2016 compared with 33 cents for the third quarter of 2015. For the first nine months of 2016, operating net income was $77.8 million, or $1.08 per diluted share, compared with $59.3 million, or 94 cents per diluted share, for the first nine months of 2015.

At September 30, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.1 percent; Total Risk-Based of 11.9 percent; Common Equity Tier 1 Risk-Based of 11.1 percent; and, Tier 1 Leverage of 8.4 percent.

“Our third quarter results underscore the positive momentum from our investments in new businesses and markets,” said Jimmy Tallent, chairman and chief executive officer. “Our mortgage banking business continued to produce record quarterly results which, combined with strong performance from our SBA business and solid customer derivative sales, led to a 44 percent increase in fee revenue from a year ago.”

The third quarter’s return on assets was 1.00 percent including the effect of merger-related charges of $3.15 million. Exclusive of these charges, the operating return on assets for the third quarter was 1.08 percent.

Tallent noted the positive impact of the Tidelands Bancshares acquisition, which was completed on July 1, 2016. “As expected, the acquisition was immediately accretive to earnings per share,” he said. “Systems conversions are scheduled to take place in November, after which we expect to achieve the remaining targeted cost savings. The Tidelands acquisition is meeting or exceeding objectives consistent with our coastal South Carolina expansion strategy and I could not be more pleased with the results.

“Third quarter loan production was $641 million,” Tallent added. “Excluding acquired loans from Tidelands, linked-quarter growth of $133 million, or 8 percent annualized, was within our 2016 loan growth target of mid-to-upper single-digit. Our community banks originated $436 million in loans while specialized lending produced $166 million. United’s specialized lending area encompasses commercial real estate, middle market, SBA, builder finance and asset-based lending. Funding these loans was strong linked-quarter core transaction deposit growth of $254 million, or 19 percent annualized, excluding Tidelands. Core deposits comprise 90 percent of total deposits, which is one of the best ratios in the country.”

Third quarter net interest revenue totaled $79.0 million, up $4.1 million from the second quarter and up $13.6 million from the third quarter of 2015. The increase from both periods reflects growth in the loan portfolio as well as net interest revenue from recent acquisitions.

The taxable-equivalent net interest margin of 3.34 percent, while one basis point lower than the second quarter, was up eight basis points from the third quarter of 2015. The decrease from second quarter was expected and resulted mostly from loan pricing competition.

The third quarter provision for credit losses was a recovery of $300,000, equal to the second quarter of 2016. It was down from a provision charge of $700,000 in the third quarter of 2015. Strong recoveries of previously charged-off loans continued to contribute to the low level of net charge-offs. Third quarter net charge-offs totaled $1.4 million, compared with $1.7 million in the second quarter and $1.4 million in the third quarter of 2015. Nonperforming assets were .30 percent of total assets at September 30, 2016, compared with .28 percent at June 30, 2016 and .29 percent at September 30, 2015.

“The recoveries of our provisions reflect continued strong credit quality and a low overall level of net charge-offs,” Tallent commented. “Our credit quality indicators are very favorable and our outlook is for positive credit quality in the fourth quarter and into 2017. This will result in low provision levels that we expect will gradually increase with loan growth through 2017, while slightly decreasing our allowance and the related ratio to total loans.”

Third quarter fee revenue totaled $26.4 million, an increase of $2.86 million from the second quarter and up $8.06 million from a year ago. Mortgage fees were up $1.59 million from the second quarter and $2.20 million from a year ago. Customer derivative fees also contributed to the increase in fee revenue from both prior periods. Gains from sales of SBA loans were up $833,000 from a year ago, but down $322,000 from the second quarter due to slightly lower premiums and loans sold.

“The increase in mortgage fees correlates to our strategic investment in additional mortgage lenders where we see opportunities to gain market share and higher spreads on loan sales,” Tallent said. “Although production of SBA loans remained high, $32 million of loans were sold in the third quarter compared to $33 million during the second quarter, but up from $17.8 million during the third quarter of 2015.”

Operating expenses were $64.0 million for the third quarter, compared with $58.1 million for the second quarter and $54.3 million for the third quarter of 2015. Included in operating expenses were merger-related charges of $3.15 million for the third quarter, $1.18 million for the second quarter and $5.74 million for the third quarter of 2015. Excluding these charges, third quarter operating expenses were $60.9 million compared with $56.9 million for the second quarter and $48.5 million a year ago. The increases from the second quarter and a year ago reflect additional operating expenses following the acquisitions of Tidelands Bank on July 1, 2016 and The Palmetto Bank on September 1, 2015. The operating expenses of the acquired companies are included in United’s financial results beginning on their respective acquisition dates.

Excluding merger-related charges of $3.15 million in the third quarter, operating expenses were $60.9 million and up $3.99 million from the second quarter. The inclusion of Tidelands’ $2.76 million of operating expense accounted for 70 percent of the linked-quarter increase in operating expenses. The balance of the increase was primarily due to higher salary costs for commissions and incentives related to truing-up the quarter and year-to-date for performance targets.

“Our bankers continue to perform exceptionally well as we build on the successes of investing to grow our franchise and earnings,” Tallent said. “We take tremendous pride that our bankers provide the best in customer service by treating customers the way we would want to be treated. This is at the foundation of our success and the core of everything we do. With strong earnings momentum and a high-quality balance sheet, I am optimistic about our future,” Tallent concluded.

Conference Call
United will hold a conference call today, Wednesday, October 26, 2016, at 11 a.m. ET to discuss the contents of this earnings release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 86742023. 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 $10.3 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast region’s largest full-service banks, operating 140 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 Bank 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.

Non-GAAP Financial Measures
This News Release contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “operating net income per diluted share,” “tangible book value,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

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
Third
2016 2015
Quarter
Third Second First Fourth Third 2016-2015
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue$85,439 $81,082 $80,721 $79,362 $70,828
Interest expense 6,450 6,164 5,769 5,598 5,402
Net interest revenue 78,989 74,918 74,952 73,764 65,426 21 %
Provision for credit losses (300) (300) (200) 300 700
Fee revenue 26,361 23,497 18,606 21,284 18,297 44
Total revenue 105,650 98,715 93,758 94,748 83,023 27
Expenses 64,023 58,060 57,885 65,488 54,269 18
Income before income tax expense 41,627 40,655 35,873 29,260 28,754 45
Income tax expense 15,753 15,389 13,578 11,052 10,867 45
Net income 25,874 25,266 22,295 18,208 17,887 45
Preferred dividends - - 21 25 25
Net income available to common shareholders$ 25,874 $ 25,266 $ 22,274 $ 18,183 $ 17,862 45
Merger-related and other charges 3,152 1,176 2,653 9,078 5,744
Income tax benefit of merger-related and other charges (1,193) (445) (1,004) (3,486) (1,905)
Net income available to common shareholders - operating (1)$ 27,833 $ 25,997 $ 23,923 $ 23,775 $ 21,701 28
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP$.36 $.35 $.31 $.25 $.27 33
Diluted net income - operating (1) .39 .36 .33 .33 .33 18
Cash dividends declared .08 .07 .07 .06 .06
Book value 15.12 14.80 14.35 14.02 13.95 8
Tangible book value (3) 13.00 12.84 12.40 12.06 12.08 8
Key performance ratios:
Return on common equity - GAAP (2)(4) 9.61 % 9.54 % 8.57 % 7.02 % 7.85 %
Return on common equity - operating (1)(2)(4) 10.34 9.81 9.20 9.18 9.54
Return on tangible common equity - operating (1)(2)(3)(4) 12.45 11.56 10.91 10.87 10.29
Return on assets - GAAP (4) 1.00 1.04 .93 .76 .82
Return on assets - operating (1)(4) 1.08 1.07 1.00 .99 1.00
Dividend payout ratio - GAAP 22.22 20.00 22.58 24.00 22.22
Dividend payout ratio - operating (1) 20.51 19.44 21.21 18.18 18.18
Net interest margin (fully taxable equivalent) (4) 3.34 3.35 3.41 3.34 3.26
Efficiency ratio - GAAP 60.78 59.02 61.94 68.97 64.65
Efficiency ratio - operating (1) 57.79 57.82 59.10 59.41 57.81
Average equity to average assets 10.38 10.72 10.72 10.68 10.39
Average tangible equity to average assets (3) 8.98 9.43 9.41 9.40 9.88
Average tangible common equity to average assets (3) 8.98 9.43 9.32 9.29 9.77
Tangible common equity to risk-weighted assets (3)(5) 12.26 12.87 12.77 12.82 13.08
ASSET QUALITY
Nonperforming loans$21,572 $21,348 $22,419 $22,653 $20,064 8
Foreclosed properties 9,187 6,176 5,163 4,883 7,669 20
Total nonperforming assets (NPAs) 30,759 27,524 27,582 27,536 27,733 11
Allowance for loan losses 62,961 64,253 66,310 68,448 69,062 (9)
Net charge-offs 1,359 1,730 2,138 1,302 1,417 (4)
Allowance for loan losses to loans 0.94 % 1.02 % 1.09 % 1.14 % 1.15 %
Net charge-offs to average loans (4) .08 .11 .14 .09 .10
NPAs to loans and foreclosed properties .46 .44 .45 .46 .46
NPAs to total assets .30 .28 .28 .29 .29
AVERAGE BALANCES ($ in millions)
Loans$6,675 $6,151 $6,004 $5,975 $5,457 22
Investment securities 2,610 2,747 2,718 2,607 2,396 9
Earning assets 9,443 9,037 8,876 8,792 8,009 18
Total assets 10,281 9,809 9,634 9,558 8,634 19
Deposits 8,307 7,897 7,947 8,028 7,135 16
Shareholders’ equity 1,067 1,051 1,033 1,021 897 19
Common shares - basic (thousands) 71,556 72,202 72,162 72,135 66,294 8
Common shares - diluted (thousands) 71,561 72,207 72,166 72,140 66,300 8
AT PERIOD END ($ in millions)
Loans$6,725 $6,287 $6,106 $5,995 $6,024 12
Investment securities 2,560 2,677 2,757 2,656 2,457 4
Total assets 10,298 9,928 9,781 9,616 9,404 10
Deposits 8,442 7,857 7,960 7,873 7,897 7
Shareholders’ equity 1,079 1,060 1,034 1,018 1,013 7
Common shares outstanding (thousands) 70,861 71,122 71,544 71,484 71,472 (1)
(1) Excludes merger-related charges and fourth quarter 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) Third quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Nine
Months Ended YTD
September 30, 2016-2015
(in thousands, except per share data) 2016 2015 Change
INCOME SUMMARY
Interest revenue$ 247,242 $ 199,170
Interest expense 18,383 15,511
Net interest revenue 228,859 183,659 25 %
Provision for credit losses (800) 3,400
Fee revenue 68,464 51,245 34
Total revenue 298,123 231,504 29
Expenses 179,968 145,750 23
Income before income tax expense 118,155 85,754 38
Income tax expense 44,720 32,384 38
Net income 73,435 53,370 38
Preferred dividends 21 42
Net income available to common shareholders$ 73,414 $ 53,328 38
Merger-related and other charges 6,981 8,917
Income tax benefit of merger-related and other charges (2,642) (2,902)
Net income available to common shareholders - operating (1)$ 77,753 $ 59,343 31
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP$ 1.02 $ .84 21
Diluted net income - operating (1) 1.08 .94 15
Cash dividends declared .22 .16
Book value 15.12 13.95 8
Tangible book value (3) 13.00 12.08 8
Key performance ratios:
Return on common equity - GAAP (2)(4) 9.25 % 8.63 %
Return on common equity - operating (1)(2)(4) 9.79 9.60
Return on tangible common equity - operating (1)(2)(3)(4) 11.64 10.00
Return on assets - GAAP (4) .99 .88
Return on assets - operating (1)(4) 1.05 .98
Dividend payout ratio - GAAP 21.57 19.05
Dividend payout ratio - operating (1) 20.37 17.02
Net interest margin (fully taxable equivalent) (4) 3.36 3.29
Efficiency ratio - GAAP 60.56 61.94
Efficiency ratio - operating (1) 58.21 58.15
Average equity to average assets 10.60 10.11
Average tangible equity to average assets (3) 9.27 9.88
Average tangible common equity to average assets (3) 9.24 9.81
Tangible common equity to risk-weighted assets (3)(5) 12.26 13.08
ASSET QUALITY
Nonperforming loans$ 21,572 $ 20,064 8
Foreclosed properties 9,187 7,669 20
Total nonperforming assets (NPAs) 30,759 27,733 11
Allowance for loan losses 62,961 69,062 (9)
Net charge-offs 5,227 4,957 5
Allowance for loan losses to loans 0.94 % 1.15 %
Net charge-offs to average loans (4) .11 .13
NPAs to loans and foreclosed properties .46 .46
NPAs to total assets .30 .29
AVERAGE BALANCES ($ in millions)
Loans$ 6,278 $ 5,069 24
Investment securities 2,692 2,288 18
Earning assets 9,120 7,511 21
Total assets 9,909 8,093 22
Deposits 8,051 6,727 20
Shareholders’ equity 1,051 818 28
Common shares - basic (thousands) 71,992 63,297 14
Common shares - diluted (thousands) 71,996 63,302 14
AT PERIOD END ($ in millions)
Loans$ 6,725 $ 6,024 12
Investment securities 2,560 2,457 4
Total assets 10,298 9,404 10
Deposits 8,442 7,897 7
Shareholders’ equity 1,079 1,013 7
Common shares outstanding (thousands) 70,861 71,472 (1)
(1) Excludes merger-related charges and fourth quarter 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) Third quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2016 2015
Third Second First Fourth Third
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter
Expense reconciliation
Expenses (GAAP)$ 64,023 $ 58,060 $ 57,885 $ 65,488 $ 54,269
Merger-related and other charges (3,152) (1,176) (2,653) (9,078) (5,744)
Expenses - operating$ 60,871 $ 56,884 $ 55,232 $ 56,410 $ 48,525
Net income reconciliation
Net income (GAAP)$ 25,874 $ 25,266 $ 22,295 $ 18,208 $ 17,887
Merger-related and other charges 3,152 1,176 2,653 9,078 5,744
Income tax benefit of merger-related and other charges (1,193) (445) (1,004) (3,486) (1,905)
Net income - operating$ 27,833 $ 25,997 $ 23,944 $ 23,800 $ 21,726
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)$ 25,874 $ 25,266 $ 22,274 $ 18,183 $ 17,862
Merger-related and other charges 3,152 1,176 2,653 9,078 5,744
Income tax benefit of merger-related and other charges (1,193) (445) (1,004) (3,486) (1,905)
Net income available to common shareholders - operating$ 27,833 $ 25,997 $ 23,923 $ 23,775 $ 21,701
Diluted income per common share reconciliation
Diluted income per common share (GAAP) $ .36 $ .35 $ .31 $ .25 $ .27
Merger-related and other charges .03 .01 .02 .08 .06
Diluted income per common share - operating $ .39 $ .36 $ .33 $ .33 $ .33
Book value per common share reconciliation
Book value per common share (GAAP)$ 15.12 $ 14.80 $ 14.35 $ 14.02 $ 13.95
Effect of goodwill and other intangibles (2.12) (1.96) (1.95) (1.96) (1.87)
Tangible book value per common share$ 13.00 $ 12.84 $ 12.40 $ 12.06 $ 12.08
Return on tangible common equity reconciliation
Return on common equity (GAAP) 9.61 % 9.54 % 8.57 % 7.02 % 7.85 %
Merger-related and other charges .73 .27 .63 2.16 1.69
Return on common equity - operating 10.34 9.81 9.20 9.18 9.54
Effect of goodwill and other intangibles 2.11 1.75 1.71 1.69 .75
Return on tangible common equity - operating 12.45 % 11.56 % 10.91 % 10.87 % 10.29 %
Return on assets reconciliation
Return on assets (GAAP) 1.00 % 1.04 % .93 % .76 % .82 %
Merger-related and other charges .08 .03 .07 .23 .18
Return on assets - operating 1.08 % 1.07 % 1.00 % .99 % 1.00 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 22.22 % 20.00 % 22.58 % 24.00 % 22.22 %
Merger-related and other charges (1.71) (.56) (1.37) (5.82) (4.04)
Dividend payout ratio - operating 20.51 % 19.44 % 21.21 % 18.18 % 18.18 %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 60.78 % 59.02 % 61.94 % 68.97 % 64.65 %
Merger-related and other charges (2.99) (1.20) (2.84) (9.56) (6.84)
Efficiency ratio - operating 57.79 % 57.82 % 59.10 % 59.41 % 57.81 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.38 % 10.72 % 10.72 % 10.68 % 10.39 %
Effect of goodwill and other intangibles (1.40) (1.29) (1.31) (1.28) (.51)
Tangible equity to assets 8.98 9.43 9.41 9.40 9.88
Effect of preferred equity - - (.09) (.11) (.11)
Tangible common equity to assets 8.98 % 9.43 % 9.32 % 9.29 % 9.77 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 11.08 % 11.44 % 11.32 % 11.45 % 11.40 %
Effect of other comprehensive income - (.06) (.25) (.38) (.23)
Effect of deferred tax limitation 1.50 1.63 1.85 2.05 2.24
Effect of trust preferred (.26) (.08) (.08) (.08) (.08)
Effect of preferred equity - - - (.15) (.15)
Basel III intangibles transition adjustment (.06) (.06) (.07) (.10) (.13)
Basel III disallowed investments - - - .03 .03
Tangible common equity to risk-weighted assets 12.26 % 12.87 % 12.77 % 12.82 % 13.08 %
(1) Third quarter 2016 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
For the Nine Months Ended
September 30,
(in thousands, except per share data) 2016 2015
Expense reconciliation
Expenses (GAAP)$ 179,968 $ 145,750
Merger-related and other charges (6,981) (8,917)
Expenses - operating$ 172,987 $ 136,833
Net income reconciliation
Net income (GAAP)$ 73,435 $ 53,370
Merger-related and other charges 6,981 8,917
Income tax benefit of merger-related and other charges (2,642) (2,902)
Net income - operating$ 77,774 $ 59,385
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)$ 73,414 $ 53,328
Merger-related and other charges 6,981 8,917
Income tax benefit of merger-related and other charges (2,642) (2,902)
Net income available to common shareholders - operating$ 77,753 $ 59,343
Diluted income per common share reconciliation
Diluted income per common share (GAAP)$ 1.02 $ .84
Merger-related and other charges - .10
Diluted income per common share - operating$ 1.02 $ .94
Book value per common share reconciliation
Book value per common share (GAAP)$ 15.12 $ 13.95
Effect of goodwill and other intangibles (2.12) (1.87)
Tangible book value per common share$ 13.00 $ 12.08
Return on tangible common equity reconciliation
Return on common equity (GAAP) 9.25 % 8.63 %
Merger-related and other charges .54 .97
Return on common equity - operating 9.79 9.60
Effect of goodwill and other intangibles 1.85 .40
Return on tangible common equity - operating 11.64 % 10.00 %
Return on assets reconciliation
Return on assets (GAAP) .99 % .88 %
Merger-related and other charges .06 .10
Return on assets - operating 1.05 % .98 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 21.57 % 19.05 %
Merger-related and other charges (1.20) (2.03)
Dividend payout ratio - operating 20.37 % 17.02 %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 60.56 % 61.94 %
Merger-related and other charges (2.35) (3.79)
Efficiency ratio - operating 58.21 % 58.15 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.60 % 10.11 %
Effect of goodwill and other intangibles (1.33) (.23)
Tangible equity to assets 9.27 9.88
Effect of preferred equity (.03) (.07)
Tangible common equity to assets 9.24 % 9.81 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 11.08 % 11.40 %
Effect of other comprehensive income - (.23)
Effect of deferred tax limitation 1.50 2.24
Effect of trust preferred (.26) (.08)
Effect of preferred equity - (.15)
Basel III intangibles transition adjustment (.06) (.13)
Basel III disallowed investments - .03
Tangible common equity to risk-weighted assets 12.26 % 13.08 %
(1) Third quarter 2016 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2016 2015
Third Second First Fourth Third
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,512 $ 1,450 $ 1,434 $ 1,494 $ 1,479
Income producing commercial RE 1,105 919 880 824 818
Commercial & industrial 994 926 855 785 890
Commercial construction 389 384 354 342 319
Total commercial 4,000 3,679 3,523 3,445 3,506
Residential mortgage 1,056 1,035 1,032 1,029 1,062
Home equity lines of credit 698 623 604 598 585
Residential construction 378 351 348 352 334
Consumer installment 593 599 599 571 537
Total loans $ 6,725 $ 6,287 $ 6,106 $ 5,995 $ 6,024
LOANS BY MARKET
North Georgia $ 1,110 $ 1,097 $ 1,097 $ 1,125 $ 1,130
Atlanta MSA 1,332 1,314 1,257 1,259 1,266
North Carolina 548 543 543 549 546
Coastal Georgia 565 541 543 537 506
Gainesville MSA 236 240 248 254 252
East Tennessee 506 509 495 504 511
South Carolina 1,199 862 821 819 783
Specialized Lending 763 706 628 492 609
Indirect auto 466 475 474 456 421
Total loans $ 6,725 $ 6,287 $ 6,106 $ 5,995 $ 6,024

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2016 2015 Linked Year over
Third Second Third Quarter Year
(in millions) Quarter Quarter Quarter Change Change
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,512 $ 1,450 $ 1,479 $ 62 $ 33
Income producing commercial RE 1,105 919 818 186 287
Commercial & industrial 994 926 890 68 104
Commercial construction 389 384 319 5 70
Total commercial 4,000 3,679 3,506 321 494
Residential mortgage 1,056 1,035 1,062 21 (6)
Home equity lines of credit 698 623 585 75 113
Residential construction 378 351 334 27 44
Consumer installment 593 599 537 (6) 56
Total loans $ 6,725 $ 6,287 $ 6,024 438 701
LOANS BY MARKET
North Georgia $ 1,110 $ 1,097 $ 1,130 13 (20)
Atlanta MSA 1,332 1,314 1,266 18 66
North Carolina 548 543 546 5 2
Coastal Georgia 565 541 506 24 59
Gainesville MSA 236 240 252 (4) (16)
East Tennessee 506 509 511 (3) (5)
South Carolina 1,199 862 783 337 416
Specialized Lending 763 706 609 57 154
Indirect auto 466 475 421 (9) 45
Total loans $ 6,725 $ 6,287 $ 6,024 438 701

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter 2016
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 6,454 $ 3,188 $ 9,642
Income producing CRE 949 765 1,714
Commercial & industrial 1,079 - 1,079
Commercial construction 98 1,274 1,372
Total commercial 8,580 5,227 13,807
Residential mortgage 8,152 1,211 9,363
Home equity lines of credit 1,194 514 1,708
Residential construction 2,248 2,235 4,483
Consumer installment 1,398 - 1,398
Total NPAs $ 21,572 $ 9,187 $ 30,759
NONPERFORMING ASSETS BY MARKET
North Georgia $ 5,356 $ 653 $ 6,009
Atlanta MSA 979 1,530 2,509
North Carolina 5,216 543 5,759
Coastal Georgia 1,606 47 1,653
Gainesville MSA 222 - 222
East Tennessee 3,281 160 3,441
South Carolina 2,015 6,254 8,269
Specialized Lending 1,597 - 1,597
Indirect auto 1,300 - 1,300
Total NPAs $ 21,572 $ 9,187 $ 30,759
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 21,348 $ 6,176 $ 27,524
Acquisitions - 7,495 7,495
Loans placed on non-accrual 6,680 - 6,680
Payments received (3,938) - (3,938)
Loan charge-offs (1,236) - (1,236)
Foreclosures (1,282) 2,335 1,053
Capitalized costs - 3 3
Property sales - (6,553) (6,553)
Write downs - (53) (53)
Net gains (losses) on sales - (216) (216)
Ending Balance $ 21,572 $ 9,187 $ 30,759

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Second Quarter 2016
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 6,681 $ 3,096 $ 9,777
Income producing CRE 1,017 1,554 2,571
Commercial & industrial 949 - 949
Commercial construction 199 - 199
Total commercial 8,846 4,650 13,496
Residential mortgage 8,667 1,160 9,827
Home equity lines of credit 1,308 83 1,391
Residential construction 1,578 283 1,861
Consumer installment 949 - 949
Total NPAs $ 21,348 $ 6,176 $ 27,524
NONPERFORMING ASSETS BY MARKET
North Georgia $ 6,219 $ 1,086 $ 7,305
Atlanta MSA 1,140 2,041 3,181
North Carolina 4,762 224 4,986
Coastal Georgia 1,186 168 1,354
Gainesville MSA 234 - 234
East Tennessee 3,616 247 3,863
South Carolina 1,271 2,410 3,681
Specialized Lending 2,108 - 2,108
Indirect auto 812 - 812
Total NPAs $ 21,348 $ 6,176 $ 27,524
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 22,419 $ 5,163 $ 27,582
Acquisitions - (497) (497)
Loans placed on non-accrual 6,786 - 6,786
Payments received (4,201) - (4,201)
Loan charge-offs (1,803) - (1,803)
Foreclosures (1,853) 2,722 869
Capitalized costs - 98 98
Property sales - (1,424) (1,424)
Write downs - (73) (73)
Net gains (losses) on sales - 187 187
Ending Balance $ 21,348 $ 6,176 $ 27,524

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
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
Third Quarter 2016 Second Quarter 2016 First Quarter 2016
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 $ 168 .04% $ 564 .16% $ 304 .08%
Income producing CRE 157 .06 (23) (.01) 211 .10
Commercial & industrial 453 .18 (392) (.18) 283 .14
Commercial construction (86) (.09) 22 .02 286 .33
Total commercial 692 .07 171 .02 1,084 .13
Residential mortgage (256) (.09) 829 .32 50 .02
Home equity lines of credit 267 .16 253 .17 632 .43
Residential construction 134 .14 (8) (.01) (103) (.12)
Consumer installment 522 .34 485 .33 475 .33
Total $ 1,359 .08 $ 1,730 .11 $ 2,138 .14
NET CHARGE-OFFS BY MARKET
North Georgia $ 68 .02% $ 428 .16% $ 913 .33%
Atlanta MSA 398 .12 1 - (25) (.01)
North Carolina 329 .24 575 .43 382 .28
Coastal Georgia 432 .31 177 .13 196 .15
Gainesville MSA 15 .03 (87) (.14) 98 .16
East Tennessee (69) (.05) 346 .28 378 .31
South Carolina (66) (.02) 49 .02 (16) (.01)
Specialized Lending 69 .04 (18) (.01) 4 -
Indirect auto 183 .15 259 .22 208 .19
Total $ 1,359 .08 $ 1,730 .11 $ 2,138 .14
(1) Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per share data) 2016 2015 2016 2015
Interest revenue:
Loans, including fees $ 69,440 $ 57,174 $ 196,888 $ 159,814
Investment securities, including tax exempt of $134, $177, $449 and $516 15,418 �� 12,801 48,039 36,896
Deposits in banks and short-term investments 581 853 2,315 2,460
Total interest revenue 85,439 70,828 247,242 199,170
Interest expense:
Deposits:
NOW 452 337 1,381 1,079
Money market 1,347 981 3,661 2,460
Savings 43 25 102 71
Time 667 830 2,052 2,834
Total deposit interest expense 2,509 2,173 7,196 6,444
Short-term borrowings 98 99 278 279
Federal Home Loan Bank advances 1,015 461 2,731 1,307
Long-term debt 2,828 2,669 8,178 7,481
Total interest expense 6,450 5,402 18,383 15,511
Net interest revenue 78,989 65,426 228,859 183,659
Provision for credit losses (300) 700 (800) 3,400
Net interest revenue after provision for credit losses 79,289 64,726 229,659 180,259
Fee revenue:
Service charges and fees 10,819 9,335 31,460 25,325
Mortgage loan and other related fees 6,039 3,840 13,776 10,302
Brokerage fees 1,199 1,200 3,369 3,983
Gains from sales of government guaranteed loans 2,479 1,646 6,517 4,281
Securities gains, net 261 325 922 1,877
Loss from prepayment of debt - (256) - (1,294)
Other 5,564 2,207 12,420 6,771
Total fee revenue 26,361 18,297 68,464 51,245
Total revenue 105,650 83,023 298,123 231,504
Operating expenses:
Salaries and employee benefits 36,478 29,342 103,112 83,749
Communications and equipment 4,919 3,963 13,602 10,538
Occupancy 5,132 4,013 14,393 10,706
Advertising and public relations 1,088 812 3,275 2,689
Postage, printing and supplies 1,451 1,049 4,029 2,980
Professional fees 3,160 2,668 9,049 6,844
FDIC assessments and other regulatory charges 1,412 1,136 4,453 3,643
Amortization of intangibles 1,119 714 3,116 1,403
Merger-related and other charges 3,152 5,744 6,981 8,917
Other 6,112 4,828 17,958 14,281
Total operating expenses 64,023 54,269 179,968 145,750
Net income before income taxes 41,627 28,754 118,155 85,754
Income tax expense 15,753 10,867 44,720 32,384
Net income 25,874 17,887 73,435 53,370
Preferred stock dividends and discount accretion - 25 21 42
Net income available to common shareholders $ 25,874 $ 17,862 $ 73,414 $ 53,328
Earnings per common share:
Basic $ .36 $ .27 $ 1.02 $ .84
Diluted .36 .27 1.02 .84
Weighted average common shares outstanding:
Basic 71,556 66,294 71,992 63,297
Diluted 71,561 66,300 71,996 63,302

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
September 30, December 31,
(in thousands, except share and per share data) 2016 2015
ASSETS
Cash and due from banks $ 94,744 $ 86,912
Interest-bearing deposits in banks 131,415 153,451
Cash and cash equivalents 226,159 240,363
Securities available for sale 2,215,113 2,291,511
Securities held to maturity (fair value $357,550 and $371,658) 344,917 364,696
Mortgage loans held for sale (includes $279 and $0 at fair value) 30,814 24,231
Loans, net of unearned income 6,725,110 5,995,441
Less allowance for loan losses (62,961) (68,448)
Loans, net 6,662,149 5,926,993
Premises and equipment, net 189,302 178,165
Bank owned life insurance 123,129 105,493
Accrued interest receivable 26,494 25,786
Net deferred tax asset 156,408 197,613
Derivative financial instruments 25,463 20,082
Goodwill and other intangible assets 157,288 147,420
Other assets 140,379 94,075
Total assets $ 10,297,615 $ 9,616,428
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 2,568,756 $ 2,204,755
NOW 1,821,353 1,975,884
Money market 1,798,548 1,599,637
Savings 544,029 471,129
Time 1,349,543 1,282,803
Brokered 359,370 338,985
Total deposits 8,441,599 7,873,193
Short-term borrowings 35,050 16,640
Federal Home Loan Bank advances 449,407 430,125
Long-term debt 174,959 163,836
Derivative financial instruments 32,548 28,825
Accrued expenses and other liabilities 84,759 85,524
Total liabilities 9,218,322 8,598,143
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series H; $1,000 stated value; 0 and 9,992 shares issued and outstanding - 9,992
Common stock, $1 par value; 150,000,000 shares authorized;
70,861,025 and 66,198,477 shares issued and outstanding 70,861 66,198
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
0 and 5,285,516 shares issued and outstanding - 5,286
Common stock issuable; 520,014 and 458,953 shares 7,179 6,779
Capital surplus 1,274,909 1,286,361
Accumulated deficit (273,314) (330,879)
Accumulated other comprehensive loss (342) (25,452)
Total shareholders' equity 1,079,293 1,018,285
Total liabilities and shareholders' equity $ 10,297,615 $ 9,616,428

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
2016 2015
Average Avg. Average Avg.
(dollars in thousands, fully taxable equivalent (FTE)) Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)$ 6,675,328 $ 69,427 4.14% $ 5,457,158 $ 57,258 4.16%
Taxable securities (3) 2,588,037 15,284 2.36 2,367,417 12,624 2.13
Tax-exempt securities (FTE) (1)(3) 22,113 219 3.96 28,889 290 4.02
Federal funds sold and other interest-earning assets 157,972 754 1.91 155,957 948 2.43
Total interest-earning assets (FTE) 9,443,450 85,684 3.61 8,009,421 71,120 3.53
Non-interest-earning assets:
Allowance for loan losses (63,874) (71,090)
Cash and due from banks 100,775 80,678
Premises and equipment 198,234 179,463
Other assets (3) 602,690 435,060
Total assets$ 10,281,275 $ 8,633,532
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$ 1,744,473 452 .10 $ 1,491,801 337 .09
Money market 1,997,165 1,347 .27 1,737,740 981 .22
Savings 537,447 43 .03 386,254 25 .03
Time 1,375,706 833 .24 1,277,829 1,155 .36
Brokered time deposits 162,255 (166)(.41) 268,716 (325)(.48)
Total interest-bearing deposits 5,817,046 2,509 .17 5,162,340 2,173 .17
Federal funds purchased and other borrowings 42,234 98 .92 72,909 99 .54
Federal Home Loan Bank advances 583,312 1,015 .69 281,429 461 .65
Long-term debt 177,333 2,828 6.34 152,105 2,669 6.96
Total borrowed funds 802,879 3,941 1.95 506,443 3,229 2.53
Total interest-bearing liabilities 6,619,925 6,450 .39 5,668,783 5,402 .38
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,490,019 1,972,291
Other liabilities 103,859 95,342
Total liabilities 9,213,803 7,736,416
Shareholders' equity 1,067,472 897,116
Total liabilities and shareholders' equity$ 10,281,275 $ 8,633,532
Net interest revenue (FTE) $ 79,234 $ 65,718
Net interest-rate spread (FTE) 3.22% 3.15%
Net interest margin (FTE) (4) 3.34% 3.26%
(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 $30.4 million in 2016 and $8.56 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.

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
2016 2015
Average Avg. Average Avg.
(dollars in thousands, fully taxable equivalent (FTE)) Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)$ 6,277,972 $ 196,956 4.19% $ 5,069,270 $ 160,204 4.23%
Taxable securities (3) 2,665,272 47,590 2.38 2,263,907 36,380 2.14
Tax-exempt securities (FTE) (1)(3) 26,415 735 3.71 23,649 845 4.76
Federal funds sold and other interest-earning assets 150,146 2,719 2.41 154,392 2,734 2.36
Total interest-earning assets (FTE) 9,119,805 248,000 3.63 7,511,218 200,163 3.56
Non-interest-earning assets:
Allowance for loan losses (66,142) (71,425)
Cash and due from banks 93,802 78,948
Premises and equipment 187,019 169,037
Other assets (3) 574,870 405,101
Total assets$ 9,909,354 $ 8,092,879
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$ 1,795,372 1,381 .10 $ 1,462,344 1,079 .10
Money market 1,901,903 3,661 .26 1,605,098 2,460 .20
Savings 505,337 102 .03 340,878 71 .03
Time 1,280,503 2,325 .24 1,253,047 3,816 .41
Brokered time deposits 194,199 (273)(.19) 272,688 (982)(.48)
Total interest-bearing deposits 5,677,314 7,196 .17 4,934,055 6,444 .17
Federal funds purchased and other borrowings 29,427 278 1.26 52,385 279 .71
Federal Home Loan Bank advances 506,524 2,731 .72 270,260 1,307 .65
Long-term debt 168,955 8,178 6.47 131,338 7,481 7.62
Total borrowed funds 704,906 11,187 2.12 453,983 9,067 2.67
Total interest-bearing liabilities 6,382,220 18,383 .38 5,388,038 15,511 .38
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,374,076 1,793,181
Other liabilities 102,421 93,218
Total liabilities 8,858,717 7,274,437
Shareholders' equity 1,050,637 818,442
Total liabilities and shareholders' equity$ 9,909,354 $ 8,092,879
Net interest revenue (FTE) $ 229,617 $ 184,652
Net interest-rate spread (FTE) 3.25% 3.18%
Net interest margin (FTE) (4) 3.36% 3.29%
(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 $15.1 million in 2016 and $12.7 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.