United Community Banks, Inc. Announces Fourth Quarter Earnings

Diluted earnings per share up 52 percent, to 38 cents, from fourth quarter 2015

Excluding merger-related and other non-operating charges, diluted operating EPS up 21 percent, to 40 cents

  • Return on assets of 1.03 percent, or 1.10 percent excluding merger-related and other charges
  • Loan growth of $196 million from the third quarter, or 12 percent annualized
  • Core transaction deposits up $62.4 million from the third quarter, or 4 percent annualized
  • Efficiency ratio of 57.7 percent, or 56.6 percent excluding merger-related and other charges

BLAIRSVILLE, Ga., Jan. 25, 2017 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today announced strong fourth quarter results with solid loan growth, effective expense management, sound credit quality and improvement in nearly every other performance measure. Net income grew to $27.2 million, or 38 cents per diluted share, compared with $18.2 million, or 25 cents per diluted share, for the fourth quarter of 2015. Net income for the full year of 2016 was $100.7 million, or $1.40 per diluted share. This compares with $71.6 million, or $1.09 per diluted share, for 2015.

On an operating basis, net income rose to $28.9 million for the fourth quarter of 2016 compared with $23.8 million for the fourth quarter of 2015. Fourth quarter 2016 operating net income excludes pre-tax merger-related charges of $1.14 million and the associated tax benefit of $432,000, as well as a tax charge of $976,000 related to the cancellation of nonqualified stock options.

Fourth quarter 2015 operating net income excludes $3.11 million in pre-tax merger-related charges and $5.97 million in pre-tax charges for impairment on properties acquired for future expansion. The tax benefit on the fourth quarter 2015 charges was $3.49 million. On a per diluted share basis, operating net income was 40 cents for the fourth quarter of 2016 compared with 33 cents for the fourth quarter of 2015. For the full year of 2016, operating net income was $106.7 million, or $1.48 per diluted share, compared with $83.1 million, or $1.27 per diluted share, for 2015.

At December 31, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.3 percent; Total Risk-Based of 12.1 percent; Common Equity Tier 1 Risk-Based of 11.3 percent; and, Tier 1 Leverage of 8.5 percent.

“Our fourth quarter results mark a solid ending to an exceptional year for United Community Banks,” said Jimmy Tallent, chairman and chief executive officer. “Our bankers continue to make progress in improving our financial performance. A year ago we set a goal of achieving a 1.10 percent operating return on assets by the fourth quarter of 2016. We knew that achieving this goal would not be easy, but we also knew our determined bankers and how they react to a challenge. I am proud to say that in the fourth quarter, not only did they achieve that goal, but they also pushed our operating return on tangible common equity to 12.5 percent and improved our operating efficiency ratio to 56.6 percent. I could not be more pleased.” Operating performance measures exclude the charges mentioned above. Including those charges, return on assets was 1.03 percent, return on common equity was 9.89 percent and the efficiency ratio was 57.7 percent.

“In the fourth quarter we completed all systems conversions for Tidelands Bank, and we have achieved all expected cost savings from that acquisition,” Tallent said. “We are proud that Tidelands is now fully integrated with United Community Bank, operating under our brand in coastal South Carolina.

“Fourth quarter loan production was $747 million,” Tallent added. “Linked-quarter loan growth of $196 million, or 12 percent annualized, was slightly above our 2016 loan growth target of mid-to-upper single-digit. Our community banks originated $490 million in loans while specialized lending produced $216 million. United’s specialized lending area encompasses commercial real estate, middle market, SBA, asset-based lending, senior living and builder finance.”

Fourth quarter net interest revenue totaled $80.9 million, up $1.9 million from the third quarter and up $7.2 million from the fourth quarter of 2015. The increase from both periods reflects loan growth, and the increase from a year ago also includes net interest revenue from recent acquisitions.

The taxable-equivalent net interest margin of 3.34 percent remained the same as in the third quarter of 2016 and the fourth quarter of 2015. The effect of rising short-term interest rates and lower wholesale borrowings offset the impact of competitive loan pricing.

No provision for credit losses was required for the fourth quarter. This compares with a provision recovery of $300,000 in the third quarter, and a provision of $300,000 in the fourth quarter of 2015. Fourth quarter net charge-offs totaled $1.5 million, compared with $1.4 million in the third quarter and $1.3 million in the fourth quarter of 2015. Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans. Nonperforming assets were .28 percent of total assets at December 31, 2016, compared with .30 percent at September 30, 2016 and .29 percent at December 31, 2015.

“Our lack of need for a provision for loan losses reflects continued strong credit quality and a low overall level of net charge-offs,” Tallent commented. “Our credit quality indicators remain favorable and our outlook is for positive credit quality and low provision levels through 2017. We expect to gradually increase provision levels with loan growth during the year, which is expected to slightly decrease our allowance and the related ratio to total loans.”

Fourth quarter fee revenue totaled $25.2 million, a decrease of $1.13 million from the third quarter and up $3.95 million from a year ago. Mortgage fees were up $477,000 from the third quarter, and $3.23 million from a year ago. Gains from sales of SBA loans were up $549,000 from the third quarter, and up $1.03 million from a year ago due to continued growth in SBA lending. Offsetting the mortgage and SBA business growth from the third quarter of 2016 were decreases in merchant services and brokerage fees, and in deposit account fees and service charges. Customer derivative fees were also down from the record level achieved in the third quarter.

“The rise in mortgage fees reflects our strategic investment in additional mortgage lenders where we see opportunities to gain market share and higher spreads on loan sales,” Tallent said. “Also, our SBA lending business remains a top priority. In the fourth quarter we sold $41 million in loans compared with $32 million in the third quarter and $25 million in the fourth quarter of 2015.”

Operating expenses were $61.3 million for the fourth quarter, compared with $64.0 million for the third quarter and $65.5 million for the fourth quarter of 2015. Included in operating expenses are merger-related and impairment charges of $1.14 million in the fourth quarter, $3.15 million in the third quarter and $9.08 million in the fourth quarter of 2015. Excluding these charges, fourth quarter operating expenses were $60.2 million compared with $60.9 million for the third quarter, and $56.4 million a year ago.

The decrease in operating expenses from the third quarter is mostly in salaries and employee benefits costs and a decrease in professional fees. The increase from a year ago reflects the additional operating expenses of Tidelands Bank following its acquisition on July 1, 2016. United’s financial results include operating expenses of acquired companies beginning on their respective acquisition dates. The benefit of higher revenue and the lower level of fourth quarter expenses compared to the third quarter also improved the operating efficiency ratio to 56.6 percent, compared to 57.8 percent in the third quarter and 59.4 percent a year ago.

Tallent concluded, “I am very proud of our bankers and the exceptional results they achieved in 2016. They steadily improved financial performance while providing the best in customer service, which is the foundation of our success and the core of everything we do. With our strong earnings momentum, a high-quality balance sheet and strategic investments in our franchise, I look forward with optimism going into 2017.”

Conference Call
United will hold a conference call today, Wednesday, January 25, 2017, 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 47644518. 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 $10.7 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the southeast region’s largest full-service banks, operating 139 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. Respected national research firms consistently recognize United Community Bank for outstanding customer service: In 2014, 2015 and 2016, J.D. Power ranked United Community Bank first in customer satisfaction in the Southeast. In 2017, for the fourth consecutive year, Forbes included United among their list of the top 100 Best Banks in America. 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
Fourth
2016 2015 Quarter
Fourth Third Second First Fourth 2016-2015
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue$87,778 $85,439 $81,082 $80,721 $79,362
Interest expense 6,853 6,450 6,164 5,769 5,598
Net interest revenue 80,925 78,989 74,918 74,952 73,764 10 %
Provision for credit losses - (300) (300) (200) 300
Fee revenue 25,233 26,361 23,497 18,606 21,284 19
Total revenue 106,158 105,650 98,715 93,758 94,748 12
Expenses 61,321 64,023 58,060 57,885 65,488 (6)
Income before income tax expense 44,837 41,627 40,655 35,873 29,260 53
Income tax expense 17,616 15,753 15,389 13,578 11,052 59
Net income 27,221 25,874 25,266 22,295 18,208 50
Preferred dividends - - - 21 25
Net income available to common shareholders$ 27,221 $ 25,874 $ 25,266 $ 22,274 $ 18,183 50
Merger-related and other charges 1,141 3,152 1,176 2,653 9,078
Income tax benefit of merger-related and other charges (432) (1,193) (445) (1,004) (3,486)
Impairment of deferred tax asset on cancelled non-
qualified stock options
976 - - - -
Net income available to common
shareholders - operating (1)
$ 28,906 $ 27,833 $ 25,997 $ 23,923 $ 23,775 22
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP$.38 $.36 $.35 $.31 $.25 52
Diluted net income - operating (1) .40 .39 .36 .33 .33 21
Cash dividends declared .08 .08 .07 .07 .06
Book value 15.06 15.12 14.80 14.35 14.02 7
Tangible book value (3) 12.95 13.00 12.84 12.40 12.06 7
Key performance ratios:
Return on common equity - GAAP (2)(4) 9.89 % 9.61 % 9.54 % 8.57 % 7.02 %
Return on common equity - operating (1)(2)(4) 10.51 10.34 9.81 9.20 9.18
Return on tangible common equity - operating (1)(2)(3)(4) 12.47 12.45 11.56 10.91 10.87
Return on assets - GAAP (4) 1.03 1.00 1.04 .93 .76
Return on assets - operating (1)(4) 1.10 1.08 1.07 1.00 .99
Dividend payout ratio - GAAP 21.05 22.22 20.00 22.58 24.00
Dividend payout ratio - operating (1) 20.00 20.51 19.44 21.21 18.18
Net interest margin (fully taxable equivalent) (4) 3.34 3.34 3.35 3.41 3.34
Efficiency ratio - GAAP 57.65 60.78 59.02 61.94 68.97
Efficiency ratio - operating (1) 56.58 57.79 57.82 59.10 59.41
Average equity to average assets 10.35 10.38 10.72 10.72 10.68
Average tangible equity to average assets (3) 9.04 8.98 9.43 9.41 9.40
Average tangible common equity to
average assets (3)
9.04 8.98 9.43 9.32 9.29
Tangible common equity to risk-weighted
assets (3)(5)
11.89 12.22 12.87 12.77 12.82
ASSET QUALITY
Nonperforming loans$21,539 $21,572 $21,348 $22,419 $22,653 (5)
Foreclosed properties 7,949 9,187 6,176 5,163 4,883 63
Total nonperforming assets (NPAs) 29,488 30,759 27,524 27,582 27,536 7
Allowance for loan losses 61,422 62,961 64,253 66,310 68,448 (10)
Net charge-offs 1,539 1,359 1,730 2,138 1,302 18
Allowance for loan losses to loans .89 % .94 % 1.02 % 1.09 % 1.14 %
Net charge-offs to average loans (4) .09 .08 .11 .14 .09
NPAs to loans and foreclosed properties .43 .46 .44 .45 .46
NPAs to total assets .28 .30 .28 .28 .29
AVERAGE BALANCES ($ in millions)
Loans$6,814 $6,675 $6,151 $6,004 $5,975 14
Investment securities 2,690 2,610 2,747 2,718 2,607 3
Earning assets 9,665 9,443 9,037 8,876 8,792 10
Total assets 10,484 10,281 9,809 9,634 9,558 10
Deposits 8,552 8,307 7,897 7,947 8,028 7
Shareholders’ equity 1,085 1,067 1,051 1,033 1,021 6
Common shares - basic (thousands) 71,641 71,556 72,202 72,162 72,135 (1)
Common shares - diluted (thousands) 71,648 71,561 72,207 72,166 72,140 (1)
AT PERIOD END ($ in millions)
Loans$6,921 $6,725 $6,287 $6,106 $5,995 15
Investment securities 2,762 2,560 2,677 2,757 2,656 4
Total assets 10,709 10,298 9,928 9,781 9,616 11
Deposits 8,638 8,442 7,857 7,960 7,873 10
Shareholders’ equity 1,076 1,079 1,060 1,034 1,018 6
Common shares outstanding (thousands) 70,899 70,861 71,122 71,544 71,484 (1)
(1) Excludes merger-related charges, a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and fourth quarter 2015 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) Fourth quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Twelve
Months Ended YTD
December 31, 2016-2015
(in thousands, except per share data) 2016 2015 Change
INCOME SUMMARY
Interest revenue $335,020 $278,532
Interest expense 25,236 21,109
Net interest revenue 309,784 257,423 20 %
Provision for credit losses (800) 3,700
Fee revenue 93,697 72,529 29
Total revenue 404,281 326,252 24
Expenses 241,289 211,238 14
Income before income tax expense 162,992 115,014 42
Income tax expense 62,336 43,436 44
Net income 100,656 71,578 41
Preferred dividends 21 67
Net income available to common shareholders $ 100,635 $ 71,511 41
Merger-related and other charges 8,122 17,995
Income tax benefit of merger-related and other charges (3,074) (6,388)
Impairment of deferred tax asset on cancelled non-
qualified stock options
976 -
Net income available to common
shareholders - operating (1)
$ 106,659 $ 83,118 28
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP $1.40 $1.09 28
Diluted net income - operating (1) 1.48 1.27 17
Cash dividends declared .30 .22
Book value 15.06 14.02 7
Tangible book value (3) 12.95 12.06 7
Key performance ratios:
Return on common equity - GAAP (2)(4) 9.41 % 8.15 %
Return on common equity - operating (1)(2)(4) 9.98 9.48
Return on tangible common equity - operating (1)(2)(3)(4) 11.86 10.24
Return on assets - GAAP (4) 1.00 .85
Return on assets - operating (1)(4) 1.06 .98
Dividend payout ratio - GAAP 21.43 20.18
Dividend payout ratio - operating (1) 20.27 17.32
Net interest margin (fully taxable equivalent) (4) 3.36 3.30
Efficiency ratio - GAAP 59.80 63.96
Efficiency ratio - operating (1) 57.78 58.51
Average equity to average assets 10.54 10.27
Average tangible equity to average assets (3) 9.21 9.74
Average tangible common equity to
average assets (3)
9.19 9.66
Tangible common equity to risk-weighted
assets (3)(5)
11.89 12.82
ASSET QUALITY
Nonperforming loans $21,539 $22,653 (5)
Foreclosed properties 7,949 4,883 63
Total nonperforming assets (NPAs) 29,488 27,536 7
Allowance for loan losses 61,422 68,448 (10)
Net charge-offs 6,766 6,259 8
Allowance for loan losses to loans .89 % 1.14 %
Net charge-offs to average loans (4) .11 .12
NPAs to loans and foreclosed properties .43 .46
NPAs to total assets .28 .29
AVERAGE BALANCES ($ in millions)
Loans $6,413 $5,298 21
Investment securities 2,691 2,368 14
Earning assets 9,257 7,834 18
Total assets 10,054 8,462 19
Deposits 8,177 7,055 16
Shareholders’ equity 1,059 869 22
Common shares - basic (thousands) 71,910 65,488 10
Common shares - diluted (thousands) 71,915 65,492 10
AT PERIOD END ($ in millions)
Loans $6,921 $5,995 15
Investment securities 2,762 2,656 4
Total assets 10,709 9,616 11
Deposits 8,638 7,873 10
Shareholders’ equity 1,076 1,018 6
Common shares outstanding (thousands) 70,899 71,484 (1)
(1) Excludes merger-related charges, a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and fourth quarter 2015 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) Fourth quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,
(in thousands, except per share data) 2016 2015 2014 2013 2012
INCOME SUMMARY
Interest revenue $335,020 $278,532 $248,432 $245,840 $265,977
Interest expense 25,236 21,109 25,551 27,682 37,909
Net interest revenue 309,784 257,423 222,881 218,158 228,068
Provision for credit losses (800) 3,700 8,500 65,500 62,500
Fee revenue 93,697 72,529 55,554 56,598 56,112
Total revenue 404,281 326,252 269,935 209,256 221,680
Expenses 241,289 211,238 162,865 174,304 186,774
Income before income tax expense 162,992 115,014 107,070 34,952 34,906
Income tax expense (benefit) 62,336 43,436 39,450 (238,188) 1,050
Net income 100,656 71,578 67,620 273,140 33,856
Preferred dividends 21 67 439 12,078 12,148
Net income available to common shareholders $ 100,635 $ 71,511 $ 67,181 $ 261,062 $ 21,708
Merger-related and other charges 8,122 17,995 - - -
Income tax benefit of merger-related and other charges (3,074) (6,388) - - -
Impairment of deferred tax asset on cancelled non-qualified stock options 976 - - - -
Net income available to common shareholders - operating (1) $ 106,659 $ 83,118 $ 67,181 $ 261,062 $ 21,708
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP $1.40 $1.09 $1.11 $4.44 $ .38
Diluted net income - operating (1) 1.48 1.27 1.11 4.44 .38
Cash dividends declared .30 .22 .11 - -
Book value 15.06 14.02 12.20 11.30 6.67
Tangible book value (3) 12.95 12.06 12.15 11.26 6.57
Key performance ratios:
Return on common equity - GAAP (2) 9.41 % 8.15 % 9.17% 46.72 % 5.43%
Return on common equity - operating (1)(2) 9.98 9.48 9.17 46.72 5.43
Return on tangible common equity - operating (1)(2)(3) 11.86 10.24 9.32 47.35 6.27
Return on assets - GAAP 1.00 .85 .91 3.86 .49
Return on assets - operating (1) 1.06 .98 .91 3.86 .49
Dividend payout ratio - GAAP 21.43 20.18 9.91 - -
Dividend payout ratio - operating (1) 20.27 17.32 9.91 - -
Net interest margin (fully taxable equivalent) 3.36 3.30 3.26 3.30 3.51
Efficiency ratio - GAAP 59.80 63.96 58.26 63.14 65.43
Efficiency ratio - operating (1) 57.78 58.51 58.26 63.14 65.43
Average equity to average assets 10.54 10.27 9.69 10.35 8.47
Average tangible equity to average assets (3) 9.21 9.74 9.67 10.31 8.38
Average tangible common equity to average assets (3) 9.19 9.66 9.60 7.55 5.54
Tangible common equity to risk-weighted assets (3)(4) 11.89 12.82 13.82 13.17 8.26
ASSET QUALITY
Nonperforming loans $21,539 $22,653 $17,881 $26,819 $109,894
Foreclosed properties 7,949 4,883 1,726 4,221 18,264
Total nonperforming assets (NPAs) 29,488 27,536 19,607 31,040 128,158
Allowance for loan losses 61,422 68,448 71,619 76,762 107,137
Net charge-offs 6,766 6,259 13,879 93,710 69,831
Allowance for loan losses to loans .89 % 1.14 % 1.53% 1.77 % 2.57%
Net charge-offs to average loans .11 .12 .31 2.22 1.69
NPAs to loans and foreclosed properties .43 .46 .42 .72 3.06
NPAs to total assets .28 .29 .26 .42 1.88
AVERAGE BALANCES ($ in millions)
Loans $6,413 $5,298 $4,450 $4,254 $4,166
Investment securities 2,691 2,368 2,274 2,190 2,089
Earning assets 9,257 7,834 6,880 6,649 6,547
Total assets 10,054 8,462 7,436 7,074 6,865
Deposits 8,177 7,055 6,228 6,027 5,885
Shareholders’ equity 1,059 869 720 732 582
Common shares - basic (thousands) 71,910 65,488 60,588 58,787 57,857
Common shares - diluted (thousands) 71,915 65,492 60,590 58,845 57,857
AT PERIOD END ($ in millions)
Loans $6,921 $5,995 $4,672 $4,329 $4,175
Investment securities 2,762 2,656 2,198 2,312 2,079
Total assets 10,709 9,616 7,558 7,424 6,801
Deposits 8,638 7,873 6,335 6,202 5,952
Shareholders’ equity 1,076 1,018 740 796 581
Common shares outstanding (thousands) 70,899 71,484 60,259 59,432 57,741
(1) Excludes merger-related charges, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and 2015 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) 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2016 2015
Fourth Third Second First Fourth
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter
Expense reconciliation
Expenses (GAAP)$61,321 $64,023 $58,060 $57,885 $65,488
Merger-related and other charges (1,141) (3,152) (1,176) (2,653) (9,078)
Expenses - operating$60,180 $60,871 $56,884 $55,232 $56,410
Net income reconciliation
Net income (GAAP)$27,221 $25,874 $25,266 $22,295 $18,208
Merger-related and other charges 1,141 3,152 1,176 2,653 9,078
Income tax benefit of merger-related and other charges (432) (1,193) (445) (1,004) (3,486)
Impairment of deferred tax asset on cancelled non-qualified stock options 976 - - - -
Net income - operating$28,906 $27,833 $25,997 $23,944 $23,800
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)$27,221 $25,874 $25,266 $22,274 $18,183
Merger-related and other charges 1,141 3,152 1,176 2,653 9,078
Income tax benefit of merger-related and other charges (432) (1,193) (445) (1,004) (3,486)
Impairment of deferred tax asset on cancelled non-qualified stock options 976 - - - -
Net income available to common shareholders - operating$28,906 $27,833 $25,997 $23,923 $23,775
Diluted income per common share reconciliation
Diluted income per common share (GAAP) $ .38 $.36 $.35 $.31 $.25
Merger-related and other charges .01 .03 .01 .02 .08
Impairment of deferred tax asset on cancelled non-qualified stock options .01 - - - -
Diluted income per common share - operating$.40 $.39 $.36 $.33 $.33
Book value per common share reconciliation
Book value per common share (GAAP)$15.06 $15.12 $14.80 $14.35 $14.02
Effect of goodwill and other intangibles (2.11) (2.12) (1.96) (1.95) (1.96)
Tangible book value per common share$12.95 $13.00 $12.84 $12.40 $12.06
Return on tangible common equity reconciliation
Return on common equity (GAAP) 9.89 % 9.61 % 9.54 % 8.57 % 7.02 %
Merger-related and other charges .26 .73 .27 .63 2.16
Impairment of deferred tax asset on cancelled non-qualified stock options .36 - - - -
Return on common equity - operating 10.51 10.34 9.81 9.20 9.18
Effect of goodwill and other intangibles 1.96 2.11 1.75 1.71 1.69
Return on tangible common equity - operating 12.47 % 12.45 % 11.56 % 10.91 % 10.87 %
Return on assets reconciliation
Return on assets (GAAP) 1.03 % 1.00 % 1.04 % .93 % .76 %
Merger-related and other charges .03 .08 .03 .07 .23
Impairment of deferred tax asset on cancelled non-qualified stock options .04 - - - -
Return on assets - operating 1.10 % 1.08 % 1.07 % 1.00 % .99 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 21.05 % 22.22 % 20.00 % 22.58 % 24.00 %
Merger-related and other charges (.54) (1.71) (.56) (1.37) (5.82)
Impairment of deferred tax asset on cancelled non-qualified stock options (.51) - - - -
Dividend payout ratio - operating 20.00 % 20.51 % 19.44 % 21.21 % 18.18 %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 57.65 % 60.78 % 59.02 % 61.94 % 68.97 %
Merger-related and other charges (1.07) (2.99) (1.20) (2.84) (9.56)
Efficiency ratio - operating 56.58 % 57.79 % 57.82 % 59.10 % 59.41 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.35 % 10.38 % 10.72 % 10.72 % 10.68 %
Effect of goodwill and other intangibles (1.31) (1.40) (1.29) (1.31) (1.28)
Tangible equity to assets 9.04 8.98 9.43 9.41 9.40
Effect of preferred equity - - - (.09) (.11)
Tangible common equity to assets 9.04 % 8.98 % 9.43 % 9.32 % 9.29 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 11.27 % 11.04 % 11.44 % 11.32 % 11.45 %
Effect of other comprehensive income (.34) - (.06 ) (.25) (.38)
Effect of deferred tax limitation 1.27 1.50 1.63 1.85 2.05
Effect of trust preferred (.25) (.26) (.08) (.08) (.08)
Effect of preferred equity - - - - (.15)
Basel III intangibles transition adjustment (.06) (.06) (.06) (.07) (.10)
Basel III disallowed investments - - - - .03
Tangible common equity to risk-weighted assets 11.89 % 12.22 % 12.87 % 12.77 % 12.82 %
(1) Fourth quarter 2016 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
For the Twelve Months Ended
December 31,
(in thousands, except per share data) 2016 2015 2014 2013 2012
Expense reconciliation
Expenses (GAAP)$241,289 $211,238 $162,865 $174,304 $186,774
Merger-related and other charges (8,122) (17,995) - - -
Expenses - operating$233,167 $193,243 $162,865 $174,304 $186,774
Net income reconciliation
Net income (GAAP)$100,656 $71,578 $67,620 $273,140 $33,856
Merger-related and other charges 8,122 17,995 - - -
Income tax benefit of merger-related and other charges (3,074) (6,388) - - -
Impairment of deferred tax asset on cancelled non-qualified stock options 976 - - - -
Net income - operating$106,680 $83,185 $67,620 $273,140 $33,856
Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)$100,635 $71,511 $67,181 $261,062 $21,708
Merger-related and other charges 8,122 17,995 - - -
Income tax benefit of merger-related and other charges (3,074) (6,388) - - -
Impairment of deferred tax asset on cancelled non-qualified stock options 976 - - - -
Net income available to common shareholders - operating$106,659 $83,118 $67,181 $261,062 $21,708
Diluted income per common share reconciliation
Diluted income per common share (GAAP)$1.40 $1.09 $1.11 $4.44 $.38
Merger-related and other charges .07 .18 - - -
Impairment of deferred tax asset on cancelled non-qualified stock options .01 - - - -
Diluted income per common share - operating$1.48 $1.27 $1.11 $4.44 $.38
Book value per common share reconciliation
Book value per common share (GAAP)$15.06 $14.02 $12.20 $11.30 $6.67
Effect of goodwill and other intangibles (2.11) (1.96) (.05) (.04) (.10)
Tangible book value per common share$12.95 $12.06 $12.15 $11.26 $6.57
Return on tangible common equity reconciliation
Return on common equity (GAAP) 9.41 % 8.15 % 9.17 % 46.72 % 5.43 %
Merger-related and other charges .48 1.33 - - -
Impairment of deferred tax asset on cancelled non-qualified stock options .09 - - - -
Return on common equity - operating 9.98 9.48 9.17 46.72 5.43
Effect of goodwill and other intangibles 1.88 .76 .15 .63 .84
Return on tangible common equity - operating 11.86 % 10.24 % 9.32 % 47.35 % 6.27 %
Return on assets reconciliation
Return on assets (GAAP) 1.00 % .85 % .91 % 3.86 % .49 %
Merger-related and other charges .05 .13 - - -
Impairment of deferred tax asset on cancelled non-qualified stock options .01
Return on assets - operating 1.06 % .98 % .91 % 3.86 % .49 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 21.43 % 20.18 % 9.91 % - % - %
Merger-related and other charges (1.02) (2.86) - - -
Impairment of deferred tax asset on cancelled non-qualified stock options (.14) - - - -
Dividend payout ratio - operating 20.27 % 17.32 % 9.91 % - % - %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 59.80 % 63.96 % 58.26 % 63.14 % 65.43 %
Merger-related and other charges (2.02) (5.45) - - -
Efficiency ratio - operating 57.78 % 58.51 % 58.26 % 63.14 % 65.43 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.54 % 10.27 % 9.69 % 10.35 % 8.47 %
Effect of goodwill and other intangibles (1.33) (.53) (.02) (.04) (.09)
Tangible equity to assets 9.21 9.74 9.67 10.31 8.38
Effect of preferred equity (.02) (.08) (.07) (2.76) (2.84)
Tangible common equity to assets 9.19 % 9.66 % 9.60 % 7.55 % 5.54 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 11.27 % 11.45 % 12.06 % 12.74 % 14.16 %
Effect of other comprehensive income (.34) (.38) (.35) (.39) (.51)
Effect of deferred tax limitation 1.27 2.05 3.11 4.26 -
Effect of trust preferred (.25) (.08) (1.00) (1.04) (1.15)
Effect of preferred equity - (.15) - (2.39) (4.24)
Basel III intangibles transition adjustment (.06) (.10) - - -
Basel III disallowed investments - .03 - - -
Tangible common equity to risk-weighted assets 11.89 % 12.82 % 13.82 % 13.18 % 8.26 %
(1) Fourth quarter 2016 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2016 2015
Fourth Third Second First Fourth
(in millions) Quarter Quarter (1) Quarter (1) Quarter (1) Quarter (1)
LOANS BY CATEGORY
Owner occupied commercial RE $1,650 $1,587 $1,527 $1,509 $1,571
Income producing commercial RE 1,282 1,277 1,101 1,071 1,021
Commercial & industrial 1,070 994 925 854 785
Commercial construction 634 567 565 535 518
Total commercial 4,636 4,425 4,118 3,969 3,895
Residential mortgage 857 814 784 774 764
Home equity lines of credit 655 693 616 597 589
Residential construction 190 200 170 167 176
Consumer installment 583 593 599 599 571
Total loans $6,921 $6,725 $6,287 $6,106 $5,995
LOANS BY MARKET
North Georgia $1,097 $1,110 $1,097 $1,097 $1,125
Atlanta MSA 1,399 1,332 1,314 1,257 1,259
North Carolina 545 548 543 543 549
Coastal Georgia 581 565 541 543 537
Gainesville MSA 248 236 240 248 254
East Tennessee 504 506 509 495 504
South Carolina 1,233 1,199 862 821 819
Specialized Lending 855 763 706 628 492
Indirect auto 459 466 475 474 456
Total loans $6,921 $6,725 $6,287 $6,106 $5,995
(1) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2016 2015 Linked Quarter Change Year over Year Change
Fourth Third Fourth
(in millions) Quarter Quarter (1) Quarter (1)
LOANS BY CATEGORY
Owner occupied commercial RE $1,650 $1,587 $1,571 $63 $79
Income producing commercial RE 1,282 1,277 1,021 5 261
Commercial & industrial 1,070 994 785 76 285
Commercial construction 634 567 518 67 116
Total commercial 4,636 4,425 3,895 211 741
Residential mortgage 857 814 764 43 93
Home equity lines of credit 655 693 589 (38) 66
Residential construction 190 200 176 (10) 14
Consumer installment 583 593 571 (10) 12
Total loans $6,921 $6,725 $5,995 196 926
LOANS BY MARKET
North Georgia $1,097 $1,110 $1,125 (13) (28)
Atlanta MSA 1,399 1,332 1,259 67 140
North Carolina 545 548 549 (3) (4)
Coastal Georgia 581 565 537 16 44
Gainesville MSA 248 236 254 12 (6)
East Tennessee 504 506 504 (2) -
South Carolina 1,233 1,199 819 34 414
Specialized Lending 855 763 492 92 363
Indirect auto 459 466 456 (7) 3
Total loans $6,921 $6,725 $5,995 196 926
(1) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions) 2016 2015 (1) 2014 (1) 2013 (1) 2012 (1)
LOANS BY CATEGORY
Owner occupied commercial RE $1,650 $1,571 $1,257 $1,238 $1,254
Income producing commercial RE 1,282 1,021 767 807 891
Commercial & industrial 1,070 785 710 471 456
Commercial construction 634 518 364 336 407
Total commercial 4,636 3,895 3,098 2,852 3,008
Residential mortgage 857 764 614 604 517
Home equity lines of credit 655 589 456 430 375
Residential construction 190 176 131 136 122
Consumer installment 583 571 373 307 153
Total loans $6,921 $5,995 $4,672 $4,329 $4,175
LOANS BY MARKET
North Georgia $1,097 $1,125 $1,163 $1,240 $1,364
Atlanta MSA 1,399 1,259 1,243 1,235 1,204
North Carolina 545 549 553 572 579
Coastal Georgia 581 537 456 423 400
Gainesville MSA 248 254 257 255 261
East Tennessee 504 504 280 280 283
South Carolina 1,233 819 30 4 -
Specialized Lending 855 492 421 124 46
Indirect auto 459 456 269 196 38
Total loans $6,921 $5,995 $4,672 $4,329 $4,175
(1) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Fourth Quarter 2016
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $7,373 $3,145 $10,518
Income producing CRE 1,324 36 1,360
Commercial & industrial 966 - 966
Commercial construction 1,538 2,977 4,515
Total commercial 11,201 6,158 17,359
Residential mortgage 6,368 1,260 7,628
Home equity lines of credit 1,831 531 2,362
Residential construction 776 - 776
Consumer installment 1,363 - 1,363
Total NPAs $21,539 $7,949 $29,488
NONPERFORMING ASSETS BY MARKET
North Georgia $5,278 $856 $6,134
Atlanta MSA 1,259 716 1,975
North Carolina 4,750 632 5,382
Coastal Georgia 1,778 - 1,778
Gainesville MSA 279 - 279
East Tennessee 2,354 675 3,029
South Carolina 2,494 5,070 7,564
Specialized Lending 2,072 - 2,072
Indirect auto 1,275 - 1,275
Total NPAs $21,539 $7,949 $29,488
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $21,572 $9,187 $30,759
Acquisitions - - -
Loans placed on non-accrual 6,346 - 6,346
Payments received (3,832) - (3,832)
Loan charge-offs (1,293) - (1,293)
Foreclosures (1,254) 1,530 276
Capitalized costs - 26 26
Property sales - (2,737) (2,737)
Write downs - (254) (254)
Net gains (losses) on sales - 197 197
Ending Balance $21,539 $7,949 $29,488
(1) Annualized. (2) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter 2016 (2)
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $7,693 $3,188 $10,881
Income producing CRE 2,422 765 3,187
Commercial & industrial 1,079 - 1,079
Commercial construction 1,977 1,274 3,251
Total commercial 13,171 5,227 18,398
Residential mortgage 5,440 1,211 6,651
Home equity lines of credit 1,194 514 1,708
Residential construction 369 2,235 2,604
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
(1) Annualized. (2) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Second Quarter 2016 (2)
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $8,218 $3,096 $11,314
Income producing CRE 2,511 1,554 4,065
Commercial & industrial 949 - 949
Commercial construction 1,398 - 1,398
Total commercial 13,076 4,650 17,726
Residential mortgage 5,636 1,160 6,796
Home equity lines of credit 1,308 83 1,391
Residential construction 379 283 662
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
(1) Annualized. (2) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Fourth Quarter 2016 Third Quarter 2016 (2) Second Quarter 2016 (2)
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 $1 -% $46 .01% $800 .21%
Income producing CRE 527 .16 70 .02 81 .03
Commercial & industrial (201) (.08) 453 .18 (392) (.18)
Commercial construction 241 .16 (194) (.13) (196) (.14)
Total commercial 568 .05 375 .03 293 .03
Residential mortgage 322 .15 (47) (.02) 489 .25
Home equity lines of credit 151 .09 267 .16 253 .17
Residential construction (16) (.03) 242 .51 210 .51
Consumer installment 514 .35 522 .34 485 .33
Total $1,539 .09 $1,359 .08 $1,730 .11
NET CHARGE-OFFS BY MARKET
North Georgia $575 .21% $68 .02% $428 .16%
Atlanta MSA 12 - 398 .12 1 -
North Carolina 714 .52 329 .24 575 .43
Coastal Georgia 118 .08 432 .31 177 .13
Gainesville MSA (32) (.05) 15 .03 (87) (.14)
East Tennessee (139) (.11) (69) (.05) 346 .28
South Carolina (2) - (66) (.02) 49 .02
Specialized Lending (21) (.01) 69 .04 (18) (.01)
Indirect auto 314 .27 183 .15 259 .22
Total $1,539 .09 $1,359 .08 $1,730 .11
(1) Annualized. (2) Certain prior period amounts have been reclassified to conform to the current presentation.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
(in thousands, except per share data) 2016 2015 2016 2015
Interest revenue:
Loans, including fees $71,494 $63,442 $268,382 $223,256
Investment securities, including tax exempt of $165, $189, $614 and $705 15,988 14,952 64,027 51,848
Deposits in banks and short-term investments 296 968 2,611 3,428
Total interest revenue 87,778 79,362 335,020 278,532
Interest expense:
Deposits:
NOW 522 426 1,903 1,505
Money market 1,321 1,006 4,982 3,466
Savings 33 27 135 98
Time 1,084 922 3,136 3,756
Total deposit interest expense 2,960 2,381 10,156 8,825
Short-term borrowings 121 85 399 364
Federal Home Loan Bank advances 945 436 3,676 1,743
Long-term debt 2,827 2,696 11,005 10,177
Total interest expense 6,853 5,598 25,236 21,109
Net interest revenue 80,925 73,764 309,784 257,423
Provision for credit losses - 300 (800) 3,700
Net interest revenue after provision for credit losses 80,925 73,464 310,584 253,723
Fee revenue:
Service charges and fees 10,653 11,500 42,113 36,825
Mortgage loan and other related fees 6,516 3,290 20,292 13,592
Brokerage fees 911 1,058 4,280 5,041
Gains from sales of government guaranteed loans 3,028 1,995 9,545 6,276
Securities gains, net 60 378 982 2,255
Loss from prepayment of debt - - - (1,294)
Other 4,065 3,063 16,485 9,834
Total fee revenue 25,233 21,284 93,697 72,529
Total revenue 106,158 94,748 404,281 326,252
Operating expenses:
Salaries and employee benefits 35,677 32,939 138,789 116,688
Communications and equipment 4,753 4,735 18,355 15,273
Occupancy 5,210 4,666 19,603 15,372
Advertising and public relations 1,151 978 4,426 3,667
Postage, printing and supplies 1,353 1,293 5,382 4,273
Professional fees 2,773 3,331 11,822 10,175
FDIC assessments and other regulatory charges 1,413 1,463 5,866 5,106
Amortization of intangibles 1,066 1,041 4,182 2,444
Merger-related and other charges 1,141 9,078 8,122 17,995
Other 6,784 5,964 24,742 20,245
Total operating expenses 61,321 65,488 241,289 211,238
Net income before income taxes 44,837 29,260 162,992 115,014
Income tax expense 17,616 11,052 62,336 43,436
Net income 27,221 18,208 100,656 71,578
Preferred stock dividends and discount accretion - 25 21 67
Net income available to common shareholders $27,221 $18,183 $100,635 $71,511
Earnings per common share:
Basic $ .38 $ .25 $1.40 $1.09
Diluted .38 .25 1.40 1.09
Weighted average common shares outstanding:
Basic 71,641 72,135 71,910 65,488
Diluted 71,648 72,440 71,915 65,492

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
December 31, December 31,
(in thousands, except share and per share data) 2016 2015
ASSETS
Cash and due from banks $99,489 $86,912
Interest-bearing deposits in banks 117,859 153,451
Cash and cash equivalents 217,348 240,363
Securities available for sale 2,432,438 2,291,511
Securities held to maturity (fair value $333,170 and $371,658) 329,843 364,696
Mortgage loans held for sale (includes $27,891 and $0 at fair value) 29,878 24,231
Loans, net of unearned income 6,920,636 5,995,441
Less allowance for loan losses (61,422) (68,448)
Loans, net 6,859,214 5,926,993
Premises and equipment, net 189,938 178,165
Bank owned life insurance 143,543 105,493
Accrued interest receivable 28,018 25,786
Net deferred tax asset 154,336 197,613
Derivative financial instruments 23,688 20,082
Goodwill and other intangible assets 156,222 147,420
Other assets 144,189 94,075
Total assets $10,708,655 $9,616,428
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $2,637,004 $2,204,755
NOW 1,989,763 1,975,884
Money market 1,846,440 1,599,637
Savings 549,713 471,129
Time 1,287,142 1,282,803
Brokered 327,496 338,985
Total deposits 8,637,558 7,873,193
Short-term borrowings 5,000 16,640
Federal Home Loan Bank advances 709,209 430,125
Long-term debt 175,078 163,836
Derivative financial instruments 27,648 28,825
Accrued expenses and other liabilities 78,427 85,524
Total liabilities 9,632,920 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;
70,899,114 and 66,198,477 shares issued and outstanding 70,899 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; 519,874 and 458,953 shares 7,327 6,779
Capital surplus 1,275,849 1,286,361
Accumulated deficit (251,857) (330,879)
Accumulated other comprehensive loss (26,483) (25,452)
Total shareholders' equity 1,075,735 1,018,285
Total liabilities and shareholders' equity $10,708,655 $9,616,428

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
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)$6,814,114 $71,5224.18% $5,975,491 $63,509 4.22%
Taxable securities (3) 2,664,395 15,8232.38 2,575,846 14,763 2.29
Tax-exempt securities (FTE) (1)(3) 25,735 2704.20 30,748 309 4.02
Federal funds sold and other interest-earning assets 160,391 4301.07 210,341 1,065 2.03
Total interest-earning assets (FTE) 9,664,635 88,0453.63 8,792,426 79,646 3.60
Non-interest-earning assets:
Allowance for loan losses (62,767) (69,743)
Cash and due from banks 101,006 88,057
Premises and equipment 189,719 192,040
Other assets (3) 591,491 554,974
Total assets$10,484,084 $9,557,754
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$1,920,124 522.11 $1,865,305 426 .09
Money market 2,058,589 1,321.26 1,897,364 1,006 .21
Savings 544,490 33.02 465,993 27 .02
Time 1,317,794 813.25 1,317,770 1,007 .30
Brokered time deposits 103,577 2711.04 258,698 (85)(.13)
Total interest-bearing deposits 5,944,574 - 2,960.20 5,805,130 - 2,381 .16
Federal funds purchased and other borrowings 51,224 121.94 40,148 85 .84
Federal Home Loan Bank advances 476,698 945.79 191,484 436 .90
Long-term debt 175,018 2,8276.43 165,620 2,696 6.46
Total borrowed funds 702,940 3,8932.20 397,252 3,217 3.21
Total interest-bearing liabilities 6,647,514 6,853.41 6,202,382 5,598 .36
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,607,878 2,223,011
Other liabilities 143,609 111,757
Total liabilities 9,399,001 8,537,150
Shareholders' equity 1,085,083 1,020,604
Total liabilities and shareholders' equity$10,484,084 $9,557,754
Net interest revenue (FTE) $81,192 $74,048
Net interest-rate spread (FTE) 3.22% 3.24%
Net interest margin (FTE) (4) 3.34% 3.34%
(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 $18.6 million in 2016 and $7.45 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 Twelve Months Ended December 31,
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)$6,412,740 $268,478 4.19% $5,297,687 $223,713 4.22%
Taxable securities (3) 2,665,051 63,413 2.38 2,342,533 51,143 2.18
Tax-exempt securities (FTE) (1)(3) 26,244 1,005 3.83 25,439 1,154 4.54
Federal funds sold and other interest-earning assets 152,722 3,149 2.06 168,494 3,799 2.25
Total interest-earning assets (FTE) 9,256,757 336,045 3.63 7,834,153 279,809 3.57
Non-interest-earning assets:
Allowance for loan losses (65,294) (71,001)
Cash and due from banks 95,613 81,244
Premises and equipment 187,698 174,835
Other assets (3) 579,051 442,878
Total assets$10,053,825 $8,462,109
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$1,826,729 1,903 .10 $1,563,911 1,505 .10
Money market 1,941,288 4,982 .26 1,678,765 3,466 .21
Savings 515,179 135 .03 372,414 98 .03
Time 1,289,876 3,138 .24 1,269,360 4,823 .38
Brokered time deposits 171,420 (2).00 269,162 (1,067)(.40)
Total interest-bearing deposits 5,744,492 10,156 .18 5,153,612 8,825 .17
Federal funds purchased and other borrowings 34,906 399 1.14 49,301 364 .74
Federal Home Loan Bank advances 499,026 3,676 .74 250,404 1,743 .70
Long-term debt 170,479 11,005 6.46 139,979 10,177 7.27
Total borrowed funds 704,411 15,080 2.14 439,684 12,284 2.79
Total interest-bearing liabilities 6,448,903 25,236 .39 5,593,296 21,109 .38
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,432,846 1,901,521
Other liabilities 112,774 97,890
Total liabilities 8,994,523 7,592,707
Shareholders' equity 1,059,302 869,402
Total liabilities and shareholders' equity$10,053,825 $8,462,109
Net interest revenue (FTE) $310,809 $258,700
Net interest-rate spread (FTE) 3.24% 3.19%
Net interest margin (FTE) (4) 3.36% 3.30%
(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 $16.0 million in 2016 and $11.4 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.