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United Community Banks, Inc. Announces Third Quarter Earnings

Diluted earnings per share up six percent, to 38 cents, from third quarter 2016
Excluding merger-related and other non-operating charges,
diluted operating EPS up five percent, to 41 cents

  • Net interest revenue of $89.8 million, up $10.8 million or 14 percent from year ago
  • Net interest margin of 3.54 percent, up seven basis points from second quarter and up 20 basis points from year ago
  • Return on assets of 1.01 percent, or 1.09 percent excluding merger-related and other charges
  • Efficiency ratio of 59.3 percent, or 56.2 percent excluding merger-related and other charges
  • Completed the acquisition of Horry County State Bank during the quarter

BLAIRSVILLE, Ga., Oct. 24, 2017 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today announced strong third quarter results with meaningful margin expansion, disciplined expense management and sound credit quality. Net income was $27.9 million, or 38 cents per diluted share, compared with $25.9 million, or 36 cents per diluted share, for the third quarter of 2016.

On an operating basis, net income rose to $30.2 million for the third quarter of 2017 compared with $27.8 million for the third quarter of 2016. Third quarter 2017 operating net income excludes merger-related and other non-operating charges totaling $2.27 million, net of the associated income tax benefit. Third quarter 2016 operating net income excludes $1.96 million in merger-related charges, net of the associated income tax benefit. On a per diluted share basis, operating net income was 41 cents for the third quarter of 2017 compared with 39 cents for the third quarter of 2016.

At September 30, 2017, preliminary regulatory capital ratios were as follows. Tier 1 Risk-Based of 12.3 percent; Total Risk-Based of 13.0 percent; Common Equity Tier 1 Risk-Based of 12.2 percent, and Tier 1 Leverage of 9.3 percent.

“Our third quarter results demonstrate United bankers’ ability to overcome challenges and produce solid financial results,” said Jimmy Tallent, chairman and chief executive officer. “In the third quarter, we became subject to the Durbin amendment of the Dodd Frank Wall Street Reform and Consumer Protection Act which places a cap on the amount banks can charge merchants for debit card interchange fees. We also became subject to the large bank deposit insurance assessment model. The combined effect of these two items reduced our pre-tax earnings by approximately $3.4 million, or three cents per share, in the third quarter. We had been actively preparing for this for two years and our bankers were able to completely offset the impact through a higher net interest margin and disciplined expense controls.

“Despite these challenges and excluding merger-related and other non-operating charges, our third quarter operating efficiency ratio held steady at 56.2 percent, our best in more than a decade,” Tallent stated. “Including merger and other non-operating charges, the efficiency ratio was 59.3 percent. Clearly our bankers delivered solid financial performance by every measure.”

Tallent continued, “We also completed the acquisition of Horry County State Bank on July 31st, significantly enhancing our presence in the Myrtle Beach area along the South Carolina coast. The acquisition of Horry County State Bank, which is part of our larger, ongoing expansion strategy in the high-growth South Carolina coast will accelerate our growth in this attractive market. We are all set for systems conversions in mid-November at which time we expect to achieve all of our cost savings.

“We are scheduled to complete our acquisition of Four Oaks Bank & Trust Company on November 1st which will extend our footprint farther east in North Carolina to the fast-growing Raleigh MSA. All regulatory and shareholder approvals for the transaction have been received. We have long sought to enter this market and are delighted to find an exceptional partner in Four Oaks. I could not be more pleased with these two partnerships and look forward to them becoming part of United.

“Third quarter loan production was $617 million with $434 million originating from our community banks and $183 million from our Commercial Banking Solutions group,” Tallent added. “Linked-quarter loans were up $162 million, mostly reflecting the $216 million in net loans received through our acquisition of Horry County State Bank. Our indirect auto loan portfolio was down $48.7 million from second quarter reflecting our decision to suspend indirect auto loan purchases. Excluding the reduction in indirect auto loans and the loans acquired through the Horry acquisition, loan growth was essentially flat from second quarter.”

Third quarter net interest revenue totaled $89.8 million, up $10.8 million from the third quarter of 2016 and up $4.6 million from the second quarter. The increases from both periods reflect business growth and net interest margin expansions of 20 basis points from a year ago and seven basis points from the second quarter, mostly driven by rising short-term interest rates as well as the acquisition of Horry County State Bank which was completed on July 31, 2017. Horry County State Bank results are included in United’s financial results from the acquisition date.

The third quarter provision for credit losses was $1 million, up from $800,000 for the second quarter. This compares with a provision recovery of $300,000 in the third quarter of 2016. Third quarter net charge-offs totaled $1.6 million, equal to the second quarter of 2017 but up slightly from $1.4 million in the third quarter of 2016. Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans. Nonperforming assets were .23 percent of total assets at September 30, 2017, compared with .30 percent at September 30, 2016 and .24 percent at June 30, 2017.

“We continue to experience strong, steady credit quality and a low level of net charge-offs which is reflected in our low provision for loan losses,” Tallent commented. “Our credit quality indicators show no indication of credit deterioration and our outlook is for that to continue. We also expect our provision levels to gradually increase during the year due to loan growth, while our allowance and the related ratio to total loans will decline slightly.”

Third quarter fee revenue totaled $20.6 million, down $5.79 million from a year ago and down $3.11 million from the second quarter. The decrease from both prior periods was mostly due to lower debit card interchange fees as a result of the Durbin amendment becoming effective for United on July 1st. The Durbin amendment, which places a cap on the amount of interchange banks can charge merchants for use of their debit cards, reduced United’s debit card interchange fees by approximately $2.7 million in the third quarter. Also contributing to the decrease from both prior periods were lower mortgage fees and lower customer derivative fees reflecting a less favorable interest rate environment.

Operating expenses were $65.7 million for the third quarter, compared with $64.0 million for the third quarter of 2016 and $63.2 million for the second quarter. Included in the third quarter’s operating expenses are $2.3 million in merger-related expenses and $1.1 million in surplus property impairment charges, totaling $3.4 million. We also had merger-related charges of $3.15 million in the third quarter of 2016, and merger-related and executive retirement charges totaling $1.83 million in the second quarter of 2017. Excluding these charges, third quarter operating expenses were $62.3 million compared with $61.4 million for the second quarter and $60.9 million a year ago. The $855,000 increase from the second quarter was mostly due to higher deposit insurance costs as a result of being assessed under the large bank deposit insurance assessment model effective July 1, and the operating expenses of Horry County State Bank acquired on July 31. These increases were partially offset by lower communications and equipment and advertising and public relations expense.

Tallent concluded, “Our bankers always meet every challenge with diligence and perseverance. That was certainly demonstrated with our third quarter financial results. Their passion and commitment drive our performance and ensure our success. Every day I become more encouraged about the opportunities that lie ahead knowing that our exceptional team of bankers will find success in everything they do. With Horry County State Bank and Four Oaks Bank & Trust Company, we have found two outstanding strategic partners in key growth markets that share our passion for banking and our commitment to customer service. I am excited about the opportunities that these acquisitions create to recruit other talented bankers from within these markets into the United family.”

Conference Call
United will hold a conference call today, Wednesday, October 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 90798221. 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 bank holding company based in Blairsville, Georgia with $11.1 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the southeast region’s largest full-service banks, operating 142 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for 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. For the last four years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2017, for the fourth consecutive year, Forbes magazine included United on its list of the 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, including the accompanying financial statement tables, 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,” “operating net income available to common shareholders,” “operating diluted income per common share,” “tangible book value per common share,” “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 our 2016 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
2017 2016 Quarter
Third Second First Fourth Third 2017-2016
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue$ 98,839 $ 93,166 $ 90,958 $ 87,778 $ 85,439
Interest expense 9,064 8,018 7,404 6,853 6,450
Net interest revenue 89,775 85,148 83,554 80,925 78,989 14 %
Provision for credit losses 1,000 800 800 - (300)
Fee revenue 20,573 23,685 22,074 25,233 26,361 (22)
Total revenue 109,348 108,033 104,828 106,158 105,650 4
Expenses 65,674 63,229 62,826 61,321 64,023 3
Income before income tax expense 43,674 44,804 42,002 44,837 41,627 5
Income tax expense 15,728 16,537 18,478 17,616 15,753 -
Net income 27,946 28,267 23,524 27,221 25,874 8
Merger-related and other charges 3,420 1,830 2,054 1,141 3,152
Income tax benefit of merger-related and other charges (1,147) (675) (758) (432) (1,193)
Impairment of deferred tax asset on canceled
non-qualified stock options
- - - 976 -
Release of disproportionate tax effects lodged in OCI - - 3,400 - -
Net income - operating (1)$ 30,219 $ 29,422 $ 28,220 $ 28,906 $ 27,833 9
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP $.38 $.39 $ .33 $.38 $ .36 6
Diluted net income - operating (1) .41 .41 .39 .40 .39 5
Cash dividends declared .10 .09 .09 .08 .08
Book value 16.50 15.83 15.40 15.06 15.12 9
Tangible book value (3) 14.11 13.74 13.30 12.95 13.00 9
Key performance ratios:
Return on common equity - GAAP (2)(4) 9.22 % 9.98 % 8.54 % 9.89 % 9.61 %
Return on common equity - operating (1)(2)(4) 9.97 10.39 10.25 10.51 10.34
Return on tangible common equity - operating (1)(2)(3)(4) 11.93 12.19 12.10 12.47 12.45
Return on assets - GAAP (4) 1.01 1.06 .89 1.03 1.00
Return on assets - operating (1)(4) 1.09 1.10 1.07 1.10 1.08
Dividend payout ratio - GAAP 26.32 23.08 27.27 21.05 22.22
Dividend payout ratio - operating (1) 24.39 21.95 23.08 20.00 20.51
Net interest margin (fully taxable equivalent) (4) 3.54 3.47 3.45 3.34 3.34
Efficiency ratio - GAAP 59.27 57.89 59.29 57.65 60.78
Efficiency ratio - operating (1) 56.18 56.21 57.35 56.58 57.79
Average equity to average assets 10.86 10.49 10.24 10.35 10.38
Average tangible equity to average assets (3) 9.45 9.23 8.96 9.04 8.98
Average tangible common equity to average assets (3) 9.45 9.23 8.96 9.04 8.98
Tangible common equity to risk-weighted assets (3)(5) 12.81 12.44 12.07 11.84 12.22
ASSET QUALITY
Nonperforming loans$ 22,921 $ 23,095 $ 19,812 $ 21,539 $ 21,572 6
Foreclosed properties 2,736 2,739 5,060 7,949 9,187 (70)
Total nonperforming assets (NPAs) 25,657 25,834 24,872 29,488 30,759 (17)
Allowance for loan losses 58,605 59,500 60,543 61,422 62,961 (7)
Net charge-offs 1,635 1,623 1,679 1,539 1,359 20
Allowance for loan losses to loans .81 % .85 % .87 % .89 % .94 %
Net charge-offs to average loans (4) .09 .09 .10 .09 .08
NPAs to loans and foreclosed properties .36 .37 .36
.43 .46
NPAs to total assets .23 .24 .23 .28 .30
AVERAGE BALANCES ($ in millions)
Loans$ 7,149 $ 6,980 $ 6,904 $ 6,814 $ 6,675 7
Investment securities 2,800 2,775 2,822 2,690 2,610 7
Earning assets 10,133 9,899 9,872 9,665 9,443 7
Total assets 10,980 10,704 10,677 10,484 10,281 7
Deposits 8,913 8,659 8,592 8,552 8,307 7
Shareholders’ equity 1,193 1,123 1,093 1,085 1,067 12
Common shares - basic (thousands) 73,151 71,810 71,700 71,641 71,556 2
Common shares - diluted (thousands) 73,162 71,820 71,708 71,648 71,561 2
AT PERIOD END ($ in millions)
Loans$ 7,203 $ 7,041 $ 6,965 $ 6,921 $ 6,725 7
Investment securities 2,847 2,787 2,767 2,762 2,560 11
Total assets 11,129 10,837 10,732 10,709 10,298 8
Deposits 9,127 8,736 8,752 8,638 8,442 8
Shareholders’ equity 1,221 1,133 1,102 1,076 1,079 13
Common shares outstanding (thousands) 73,403 70,981 70,973 70,899 70,861 4
(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, a first quarter 2017 release of disproportionate tax effects lodged in OCI and a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options. (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 2017 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Nine
Months Ended YTD
September 30, 2017-2016
(in thousands, except per share data) 2017 2016 Change
INCOME SUMMARY
Interest revenue$ 282,963 $ 247,242
Interest expense 24,486 18,383
Net interest revenue 258,477 228,859 13 %
Provision for credit losses 2,600 (800)
Fee revenue 66,332 68,464 (3)
Total revenue 322,209 298,123 8
Expenses 191,729 179,968 7
Income before income tax expense 130,480 118,155 10
Income tax expense 50,743 44,720 13
Net income 79,737 73,435 9
Merger-related and other charges 7,304 6,981
Income tax benefit of merger-related and other charges (2,580) (2,642)
Impairment of deferred tax asset on canceled
non-qualified stock options
- -
Release of disproportionate tax effects lodged in OCI 3,400 -
Net income - operating (1)$ 87,861 $ 77,774 13
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP$ 1.10 $ 1.02 8
Diluted net income - operating (1) 1.21 1.08 12
Cash dividends declared .28 .22
Book value 16.50 15.12 9
Tangible book value (3) 14.11 13.00 9
Key performance ratios:
Return on common equity - GAAP (2)(4) 9.26 % 9.25 %
Return on common equity - operating (1)(2)(4) 10.20 9.79
Return on tangible common equity - operating (1)(2)(3)(4) 12.07 11.64
Return on assets - GAAP (4) .99 .99
Return on assets - operating (1)(4) 1.09 1.05
Dividend payout ratio - GAAP 25.45 21.57
Dividend payout ratio - operating (1) 23.14 20.37
Net interest margin (fully taxable equivalent) (4) 3.49 3.36
Efficiency ratio - GAAP 58.81 60.56
Efficiency ratio - operating (1) 56.57 58.21
Average equity to average assets 10.54 10.60
Average tangible equity to average assets (3) 9.21 9.27
Average tangible common equity to average assets (3) 9.21 9.24
Tangible common equity to risk-weighted assets (3)(5) 12.81 12.22
ASSET QUALITY
Nonperforming loans$ 22,921 $ 21,572 6
Foreclosed properties 2,736 9,187 (70)
Total nonperforming assets (NPAs) 25,657 30,759 (17)
Allowance for loan losses 58,605 62,961 (7)
Net charge-offs 4,937 5,227 (6)
Allowance for loan losses to loans .81 % .94 %
Net charge-offs to average loans (4) .09 .11
NPAs to loans and foreclosed properties .36 .46
NPAs to total assets .23 .30
AVERAGE BALANCES ($ in millions)
Loans$ 7,012 $ 6,278 12
Investment securities 2,799 2,692 4
Earning assets 9,969 9,120 9
Total assets 10,788 9,909 9
Deposits 8,723 8,051 8
Shareholders’ equity 1,137 1,051 8
Common shares - basic (thousands) 72,060 71,992 -
Common shares - diluted (thousands) 72,071 71,996 -
AT PERIOD END ($ in millions)
Loans$ 7,203 $ 6,725 7
Investment securities 2,847 2,560 11
Total assets 11,129 10,298 8
Deposits 9,127 8,442 8
Shareholders’ equity 1,221 1,079 13
Common shares outstanding (thousands) 73,403 70,861 4
(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, a first quarter 2017 release of disproportionate tax effects lodged in OCI and a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options. (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 2017 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2017 2016
Third Second First Fourth Third
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter
Expense reconciliation
Expenses (GAAP)$ 65,674 $ 63,229 $ 62,826 $ 61,321 $ 64,023
Merger-related and other charges (3,420) (1,830) (2,054) (1,141) (3,152)
Expenses - operating$ 62,254 $ 61,399 $ 60,772 $ 60,180 $ 60,871
Net income reconciliation
Net income (GAAP)$ 27,946 $ 28,267 $ 23,524 $ 27,221 $ 25,874
Merger-related and other charges 3,420 1,830 2,054 1,141 3,152
Income tax benefit of merger-related and other charges (1,147) (675) (758) (432) (1,193)
Impairment of deferred tax asset on canceled non-qualified stock options - - - 976 -
Release of disproportionate tax effects lodged in OCI - - 3,400 - -
Net income - operating$ 30,219 $ 29,422 $ 28,220 $ 28,906 $ 27,833
Diluted income per common share reconciliation
Diluted income per common share (GAAP) $.38 $ .39 $ .33 $ .38 $ .36
Merger-related and other charges .03 .02 .01 .01 .03
Impairment of deferred tax asset on canceled non-qualified stock options - - - .01 -
Release of disproportionate tax effects lodged in OCI - - .05 - -
Diluted income per common share - operating $ .41 $ .41 $ .39 $ .40 $ .39
Book value per common share reconciliation
Book value per common share (GAAP)$ 16.50 $ 15.83 $ 15.40 $ 15.06 $ 15.12
Effect of goodwill and other intangibles (2.39) (2.09) (2.10) (2.11) (2.12)
Tangible book value per common share$ 14.11 $ 13.74 $ 13.30 $ 12.95 $ 13.00
Return on tangible common equity reconciliation
Return on common equity (GAAP) 9.22 % 9.98 % 8.54 % 9.89 % 9.61 %
Merger-related and other charges .75 .41 .47 .26 .73
Impairment of deferred tax asset on canceled non-qualified stock options - - - .36 -
Release of disproportionate tax effects lodged in OCI - - 1.24 - -
Return on common equity - operating 9.97 10.39 10.25 10.51 10.34
Effect of goodwill and other intangibles 1.96 1.80 1.85 1.96 2.11
Return on tangible common equity - operating 11.93 % 12.19 % 12.10 % 12.47 % 12.45 %
Return on assets reconciliation
Return on assets (GAAP) 1.01 % 1.06 % .89 % 1.03 % 1.00 %
Merger-related and other charges .08 .04 .05 .03 .08
Impairment of deferred tax asset on canceled non-qualified stock options - - - .04 -
Release of disproportionate tax effects lodged in OCI - - .13 - -
Return on assets - operating 1.09 % 1.10 % 1.07 % 1.10 % 1.08 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 26.32 % 23.08 % 27.27 % 21.05 % 22.22 %
Merger-related and other charges (1.93) (1.13) (.98) (.54) (1.71)
Impairment of deferred tax asset on canceled non-qualified stock options - - - (.51) -
Release of disproportionate tax effects lodged in OCI - - (3.21) - -
Dividend payout ratio - operating 24.39 % 21.95 % 23.08 % 20.00 % 20.51 %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 59.27 % 57.89 % 59.29 % 57.65 % 60.78 %
Merger-related and other charges (3.09) (1.68) (1.94) (1.07) (2.99)
Efficiency ratio - operating 56.18 % 56.21 % 57.35 % 56.58 % 57.79 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.86 % 10.49 % 10.24 % 10.35 % 10.38 %
Effect of goodwill and other intangibles (1.41) (1.26) (1.28) (1.31) (1.40)
Tangible equity to assets 9.45 9.23 8.96 9.04 8.98
Effect of preferred equity - - - - -
Tangible common equity to assets 9.45 % 9.23 % 8.96 % 9.04 % 8.98 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 12.27 % 11.91 % 11.46 % 11.23 % 11.04 %
Effect of other comprehensive income (.13) (.15) (.24) (.34) -
Effect of deferred tax limitation .94 .95 1.13 1.26 1.50
Effect of trust preferred (.24) (.25) (.25) (.25) (.26)
Basel III intangibles transition adjustment (.03) (.02) (.03) (.06) (.06)
Tangible common equity to risk-weighted assets 12.81 % 12.44 % 12.07 % 11.84 % 12.22 %
(1) Third quarter 2017 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
For the Nine Months Ended
June 30,
(in thousands, except per share data) 2017 2016
Expense reconciliation
Expenses (GAAP)$ 191,729 $ 179,968
Merger-related and other charges (7,304) (6,981)
Expenses - operating$ 184,425 $ 172,987
Net income reconciliation
Net income (GAAP)$ 79,737 $ 73,435
Merger-related and other charges 7,304 6,981
Income tax benefit of merger-related and other charges (2,580) (2,642)
Impairment of deferred tax asset on canceled non-qualified stock options - -
Release of disproportionate tax effects lodged in OCI 3,400 -
Net income - operating$ 87,861 $ 77,774
Diluted income per common share reconciliation
Diluted income per common share (GAAP)$ 1.10 $ 1.02
Merger-related and other charges .06 -
Impairment of deferred tax asset on canceled non-qualified stock options - -
Release of disproportionate tax effects lodged in OCI .05 -
Diluted income per common share - operating$ 1.21 $ 1.02
Book value per common share reconciliation
Book value per common share (GAAP)$ 16.50 $ 15.12
Effect of goodwill and other intangibles (2.39) (2.12)
Tangible book value per common share$ 14.11 $ 13.00
Return on tangible common equity reconciliation
Return on common equity (GAAP) 9.26 % 9.25 %
Merger-related and other charges .55 .54
Impairment of deferred tax asset on canceled non-qualified stock options - -
Release of disproportionate tax effects lodged in OCI .39 -
Return on common equity - operating 10.20 9.79
Effect of goodwill and other intangibles 1.87 1.85
Return on tangible common equity - operating 12.07 % 11.64 %
Return on assets reconciliation
Return on assets (GAAP) .99 % .99 %
Merger-related and other charges .06 .06
Impairment of deferred tax asset on canceled non-qualified stock options - -
Release of disproportionate tax effects lodged in OCI .04 -
Return on assets - operating 1.09 % 1.05 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 25.45 % 21.57 %
Merger-related and other charges (1.31) (1.20)
Impairment of deferred tax asset on canceled non-qualified stock options - -
Release of disproportionate tax effects lodged in OCI (1.00) -
Dividend payout ratio - operating 23.14 % 20.37 %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 58.81 % 60.56 %
Merger-related and other charges (2.24) (2.35)
Efficiency ratio - operating 56.57 % 58.21 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.54 % 10.60 %
Effect of goodwill and other intangibles (1.33) (1.33)
Tangible equity to assets 9.21 9.27
Effect of preferred equity - (.03)
Tangible common equity to assets 9.21 % 9.24 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 12.27 % 11.04 %
Effect of other comprehensive income (.13) -
Effect of deferred tax limitation .94 1.50
Effect of trust preferred (.24) (.26)
Basel III intangibles transition adjustment (.03) (.06)
Tangible common equity to risk-weighted assets 12.81 % 12.22 %
(1) Third quarter 2017 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2017
2016
Third Second First Fourth Third
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,792 $ 1,723 $ 1,633 $ 1,650 $ 1,587
Income producing commercial RE 1,413 1,342 1,297 1,282 1,277
Commercial & industrial 1,084 1,088 1,080 1,070 994
Commercial construction 583 587 667 634 567
Total commercial 4,872 4,740 4,677 4,636 4,425
Residential mortgage 933 881 860 857 814
Home equity lines of credit 689 665 659 655 693
Residential construction 190 193 197 190 200
Consumer installment 519 562 572 583 593
Total loans $ 7,203 $ 7,041 $ 6,965 $ 6,921 $ 6,725
LOANS BY MARKET
North Georgia $ 1,047 $ 1,065 $ 1,076 $ 1,097 $ 1,110
Atlanta MSA 1,477 1,445 1,408 1,399 1,332
North Carolina 542 541 541 545 548
Coastal Georgia 634 623 591 581 565
Gainesville MSA 242 246 252 248 236
East Tennessee 471 486 483 504 506
South Carolina 1,470 1,260 1,243 1,233 1,199
Commercial Banking Solutions 920 926 911 855 763
Indirect auto 400 449 460 459 466
Total loans $ 7,203 $ 7,041 $ 6,965 $ 6,921 $ 6,725

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2017
2016 Linked
Quarter
Change
Year over
Year
Change
Third Second Third
(in millions) Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,792 $ 1,723 $ 1,587 $ 69 $ 205
Income producing commercial RE 1,413 1,342 1,277 71 136
Commercial & industrial 1,084 1,088 994 (4) 90
Commercial construction 583 587 567 (4) 16
Total commercial 4,872 4,740 4,425 132 447
Residential mortgage 933 881 814 52 119
Home equity lines of credit 689 665 693 24 (4)
Residential construction 190 193 200 (3) (10)
Consumer installment 519 562 593 (43) (74)
Total loans $ 7,203 $ 7,041 $ 6,725 162 478
LOANS BY MARKET
North Georgia $ 1,047 $ 1,065 $ 1,110 (18) (63)
Atlanta MSA 1,477 1,445 1,332 32 145
North Carolina 542 541 548 1 (6)
Coastal Georgia 634 623 565 11 69
Gainesville MSA 242 246 236 (4) 6
East Tennessee 471 486 506 (15) (35)
South Carolina 1,470 1,260 1,199 210 271
Commercial Banking Solutions 920 926 763 (6) 157
Indirect auto 400 449 466 (49) (66)
Total loans $ 7,203 $ 7,041 $ 6,725 162 478

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter 2017
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 5,027 $ 764 $ 5,791
Income producing CRE 2,042 121 2,163
Commercial & industrial 2,378 - 2,378
Commercial construction 1,376 923 2,299
Total commercial 10,823 1,808 12,631
Residential mortgage 8,559 392 8,951
Home equity lines of credit 1,898 195 2,093
Residential construction 178 341 519
Consumer installment 1,463 - 1,463
Total NPAs $ 22,921 $ 2,736 $ 25,657
NONPERFORMING ASSETS BY MARKET
North Georgia $ 6,707 $ 404 $ 7,111
Atlanta MSA 1,098 338 1,436
North Carolina 4,376 318 4,694
Coastal Georgia 2,532 - 2,532
Gainesville MSA 763 - 763
East Tennessee 1,734 67 1,801
South Carolina 1,903 1,609 3,512
Commercial Banking Solutions 2,429 - 2,429
Indirect auto 1,379 - 1,379
Total NPAs $ 22,921 $ 2,736 $ 25,657
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 23,095 $ 2,739 $ 25,834
Acquisitions 20 805 825
Loans placed on non-accrual 7,964 - 7,964
Payments received (5,192) - (5,192)
Loan charge-offs (2,159) - (2,159)
Foreclosures (807) 683 (124)
Property sales - (1,295) (1,295)
Write downs - (236) (236)
Net gains (losses) on sales - 40 40
Ending Balance $ 22,921 $ 2,736 $ 25,657

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Second Quarter 2017
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 5,248 $ 580 $ 5,828
Income producing CRE 2,587 - 2,587
Commercial & industrial 1,010 - 1,010
Commercial construction 2,530 611 3,141
Total commercial 11,375 1,191 12,566
Residential mortgage 7,886 457 8,343
Home equity lines of credit 2,152 201 2,353
Residential construction 287 890 1,177
Consumer installment 1,395 - 1,395
Total NPAs $ 23,095 $ 2,739 $ 25,834
NONPERFORMING ASSETS BY MARKET
North Georgia $ 5,449 $ 225 $ 5,674
Atlanta MSA 906 423 1,329
North Carolina 4,700 472 5,172
Coastal Georgia 2,542 - 2,542
Gainesville MSA 622 - 622
East Tennessee 2,216 103 2,319
South Carolina 3,472 1,516 4,988
Commercial Banking Solutions 1,914 - 1,914
Indirect auto 1,274 - 1,274
Total NPAs $ 23,095 $ 2,739 $ 25,834
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 19,812 $ 5,060 $ 24,872
Acquisitions - - -
Loans placed on non-accrual 8,110 - 8,110
Payments received (2,955) - (2,955)
Loan charge-offs (1,564) - (1,564)
Foreclosures (308) 481 173
Property sales - (2,704) (2,704)
Write downs - (294) (294)
Net gains (losses) on sales - 196 196
Ending Balance $ 23,095 $ 2,739 $ 25,834

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2017
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 6,135 $ 1,238 $ 7,373
Income producing CRE 1,540 21 1,561
Commercial & industrial 929 - 929
Commercial construction 1,069 2,825 3,894
Total commercial 9,673 4,084 13,757
Residential mortgage 6,455 660 7,115
Home equity lines of credit 1,848 261 2,109
Residential construction 417 55 472
Consumer installment 1,419 - 1,419
Total NPAs $ 19,812 $ 5,060 $ 24,872
NONPERFORMING ASSETS BY MARKET
North Georgia $ 5,344 $ 570 $ 5,914
Atlanta MSA 715 645 1,360
North Carolina 4,897 355 5,252
Coastal Georgia 942 - 942
Gainesville MSA 728 - 728
East Tennessee 2,112 633 2,745
South Carolina 1,725 2,857 4,582
Commercial Banking Solutions 2,032 - 2,032
Indirect auto 1,317 - 1,317
Total NPAs $ 19,812 $ 5,060 $ 24,872
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 21,539 $ 7,949 $ 29,488
Acquisitions - - -
Loans placed on non-accrual 3,172 - 3,172
Payments received (3,046) - (3,046)
Loan charge-offs (1,292) - (1,292)
Foreclosures (561) 561 -
Property sales - (3,077) (3,077)
Write downs - (480) (480)
Net gains (losses) on sales - 107 107
Ending Balance $ 19,812 $ 5,060 $ 24,872

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Third Quarter 2017 Second Quarter 2017 First Quarter 2017
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 $ (44) (.01) % $ 37 .01 % $ (212) (.05) %
Income producing CRE 1,159 .33 184 .06 870 .28
Commercial & industrial (200) (.08) 354 .13 (152) (.06)
Commercial construction (114) (.07) 341 .22 (370) (.23)
Total commercial 801 .07 916 .08 136 .01
Residential mortgage 313 .14 26 .01 530 .25
Home equity lines of credit 56 .03 253 .15 422 .26
Residential construction 36 .07 (53) (.11) (9) (.02)
Consumer installment 429 .31 481 .34 600 .42
Total $ 1,635 .09 $ 1,623 .09 $ 1,679 .10
NET CHARGE-OFFS BY MARKET
North Georgia $ 516 .19 % $ 681 .26 % $ 15 .01 %
Atlanta MSA 150 .04 (10) - (46) (.01)
North Carolina 221 .16 131 .10 601 .45
Coastal Georgia (39) (.02) 120 .08 (223) (.15)
Gainesville MSA (50) (.08) (54) (.09) 358 .58
East Tennessee 55 .05 27 .02 55 .05
South Carolina 528 .15 526 .17 425 .14
Commercial Banking Solutions (7) - (17) (.01) 195 .09
Indirect auto 261 .24 219 .19 299 .27
Total $ 1,635 .09 $ 1,623 .09 $ 1,679 .10
(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) 2017 2016 2017 2016
Interest revenue:
Loans, including fees $ 80,264 $ 69,440 $ 227,816 $ 196,888
Investment securities, including tax exempt of $671, $134, $1,307, and $449 17,875 15,418 53,365 48,039
Deposits in banks and short-term investments 700 581 1,782 2,315
Total interest revenue 98,839 85,439 282,963 247,242
Interest expense:
Deposits:
NOW 700 452 1,932 1,381
Money market 1,953 1,347 4,938 3,661
Savings 34 43 89 102
Time 1,870 667 4,257 2,052
Total deposit interest expense 4,557 2,509 11,216 7,196
Short-term borrowings 36 98 177 278
Federal Home Loan Bank advances 1,709 1,015 4,603 2,731
Long-term debt 2,762 2,828 8,490 8,178
Total interest expense 9,064 6,450 24,486 18,383
Net interest revenue 89,775 78,989 258,477 228,859
(Release of) provision for credit losses 1,000 (300) 2,600 (800)
Net interest revenue after provision for credit losses 88,775 79,289 255,877 229,659
Fee revenue:
Service charges and fees 8,220 10,819 29,525 31,460
Mortgage loan and other related fees 4,200 6,039 13,435 13,776
Brokerage fees 1,009 1,199 3,565 3,369
Gains from sales of SBA/USDA loans 2,806 2,479 7,391 6,517
Securities gains, net 188 261 190 922
Other 4,150 5,564 12,226 12,420
Total fee revenue 20,573 26,361 66,332 68,464
Total revenue 109,348 105,650 322,209 298,123
Operating expenses:
Salaries and employee benefits 38,027 36,478 112,056 103,112
Communications and equipment 4,547 4,919 14,443 13,602
Occupancy 4,945 5,132 14,802 14,393
Advertising and public relations 1,026 1,088 3,347 3,275
Postage, printing and supplies 1,411 1,451 4,127 4,029
Professional fees 2,976 3,160 8,391 9,049
FDIC assessments and other regulatory charges 2,127 1,412 4,758 4,453
Amortization of intangibles 1,212 1,119 3,085 3,116
Merger-related and other charges 3,176 3,152 7,060 6,981
Other 6,227 6,112 19,660 17,958
Total operating expenses 65,674 64,023 191,729 179,968
Net income before income taxes 43,674 41,627 130,480 118,155
Income tax expense 15,728 15,753 50,743 44,720
Net income $ 27,946 $ 25,874 $ 79,737 $ 73,435
Net income available to common shareholders $ 27,719 $ 25,874 $ 79,078 $ 73,414
Earnings per common share:
Basic $ .38 $ .36 $ 1.10 $ 1.02
Diluted .38 .36 1.10 1.02
Weighted average common shares outstanding:
Basic 73,151 71,556 72,060 71,992
Diluted 73,162 71,561 72,071 71,996

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
September 30, December 31,
(in thousands, except share and per share data) 2017 2016
ASSETS
Cash and due from banks $ 98,396 $ 99,489
Interest-bearing deposits in banks 148,449 117,859
Cash and cash equivalents 246,845 217,348
Securities available for sale 2,540,470 2,432,438
Securities held to maturity (fair value $310,446 and $333,170) 306,741 329,843
Mortgage loans held for sale (includes $30,093 and $27,891 at fair value) 30,292 29,878
Loans, net of unearned income 7,202,937 6,920,636
Less allowance for loan losses (58,605) (61,422)
Loans, net 7,144,332 6,859,214
Premises and equipment, net 193,915 189,938
Bank owned life insurance 167,680 143,543
Accrued interest receivable 29,573 28,018
Net deferred tax asset 128,731 154,336
Derivative financial instruments 20,972 23,688
Goodwill and other intangible assets 182,716 156,222
Other assets 136,760 144,189
Total assets $ 11,129,027 $ 10,708,655
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 2,918,428 $ 2,637,004
NOW 1,938,352 1,989,763
Money market 1,934,169 1,846,440
Savings 605,230 549,713
Time 1,363,949 1,287,142
Brokered 367,256 327,496
Total deposits 9,127,384 8,637,558
Short-term borrowings 16,005 5,000
Federal Home Loan Bank advances 494,484 709,209
Long-term debt 135,707 175,078
Derivative financial instruments 22,926 27,648
Accrued expenses and other liabilities 111,881 78,427
Total liabilities 9,908,387 9,632,920
Shareholders' equity:
Common stock, $1 par value; 150,000,000 shares authorized;
73,403,453 and 70,899,114 shares issued and outstanding 73,403 70,899
Common stock issuable; 588,445 and 519,874 shares 8,703 7,327
Capital surplus 1,341,346 1,275,849
Accumulated deficit (192,128) (251,857)
Accumulated other comprehensive loss (10,684) (26,483)
Total shareholders' equity 1,220,640 1,075,735
Total liabilities and shareholders' equity $ 11,129,027 $ 10,708,655

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
2017 2016
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)$ 7,149,348 $ 80,3014.46% $ 6,675,328 $ 69,427 4.14%
Taxable securities (3) 2,695,162 17,2042.55 2,588,037 15,284 2.36
Tax-exempt securities (FTE) (1)(3) 105,151 1,0984.18 22,113 219 3.96
Federal funds sold and other interest-earning assets 183,170 8831.93 157,972 754 1.91
Total interest-earning assets (FTE) 10,132,831 99,4863.90 9,443,450 85,684 3.61
Non-interest-earning assets:
Allowance for loan losses (60,098) (63,874)
Cash and due from banks 103,477 100,775
Premises and equipment 203,579 198,234
Other assets (3) 599,725 602,690
Total assets$ 10,979,514 $ 10,281,275
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$ 1,863,160 700.15 $ 1,744,473 452 .10
Money market 2,170,148 1,953.36 1,997,165 1,347 .27
Savings 593,823 34.02 537,447 43 .03
Time 1,338,786 1,548.46 1,375,706 833 .24
Brokered time deposits 109,811 3221.16 162,255 (166)(.41)
Total interest-bearing deposits 6,075,728 4,557.30 5,817,046 2,509 .17
Federal funds purchased and other borrowings 11,313 361.26 42,234 98 .92
Federal Home Loan Bank advances 574,404 1,7091.18 583,312 1,015 .69
Long-term debt 154,616 2,7627.09 177,333 2,828 6.34
Total borrowed funds 740,333 4,5072.42 802,879 3,941 1.95
Total interest-bearing liabilities 6,816,061 9,064.53 6,619,925 6,450 .39
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,837,378 2,490,019
Other liabilities 133,212 103,859
Total liabilities 9,786,651 9,213,803
Shareholders' equity 1,192,863 1,067,472
Total liabilities and shareholders' equity$ 10,979,514 $ 10,281,275
Net interest revenue (FTE) $ 90,422 $ 79,234
Net interest-rate spread (FTE) 3.37% 3.22%
Net interest margin (FTE) (4) 3.54% 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 $12.6 million in 2017 and $30.4 million in 2016 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,
2017 2016
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)$ 7,011,962 $ 227,8534.34% $ 6,277,972 $ 196,956 4.19%
Taxable securities (3) 2,731,081 52,0582.54 2,665,272 47,590 2.38
Tax-exempt securities (FTE) (1)(3) 68,005 2,1394.19 26,415 735 3.71
Federal funds sold and other interest-earning assets 157,582 2,2901.94 150,146 2,719 2.41
Total interest-earning assets (FTE) 9,968,630 284,3403.81 9,119,805 248,000 3.63
Non-interest-earning assets:
Allowance for loan losses (60,971) (66,142)
Cash and due from banks 102,529 93,802
Premises and equipment 195,576 187,019
Other assets (3) 582,194 574,870
Total assets$ 10,787,958 $ 9,909,354
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$ 1,907,889 1,932.14 $ 1,795,372 1,381 .10
Money market 2,100,296 4,938.31 1,901,903 3,661 .26
Savings 576,927 89.02 505,337 102 .03
Time 1,292,521 3,499.36 1,280,503 2,325 .24
Brokered time deposits 106,753 758.95 194,199 (273)(.19)
Total interest-bearing deposits 5,984,386 11,216.25 5,677,314 7,196 .17
Federal funds purchased and other borrowings 22,525 1771.05 29,427 278 1.26
Federal Home Loan Bank advances 616,388 4,6031.00 506,524 2,731 .72
Long-term debt 168,271 8,4906.75 168,955 8,178 6.47
Total borrowed funds 807,184 13,2702.20 704,906 11,187 2.12
Total interest-bearing liabilities 6,791,570 24,486.48 6,382,220 18,383 .38
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,738,118 2,374,076
Other liabilities 121,672 102,421
Total liabilities 9,651,360 8,858,717
Shareholders' equity 1,136,598 1,050,637
Total liabilities and shareholders' equity$ 10,787,958 $ 9,909,354
Net interest revenue (FTE) $ 259,854 $ 229,617
Net interest-rate spread (FTE) 3.33% 3.25%
Net interest margin (FTE) (4) 3.49% 3.36%
(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 $4.67 million in 2017 and $15.1 million in 2016 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:
Jefferson Harralson
Chief Financial Officer
(706) 781-2265
Jefferson_Harralson@ucbi.com

Source:United Community Banks, Inc.