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United Community Banks, Inc. Announces Fourth Quarter Earnings

Loss per diluted share of 16 cents reflects impact of remeasurement of
deferred tax asset following historic tax reform legislation
Excluding the remeasurement charge and other non-operating charges,
Operating earnings per share up five percent, to 42 cents

  • Net interest revenue of $97.5 million, up $16.6 million or 20 percent from year ago
  • Net interest margin of 3.63 percent, up nine basis points from third quarter and up 29 basis points from year ago
  • Efficiency ratio of 63 percent, or 56.9 percent excluding merger-related and other charges
  • Completed the acquisition of Four Oaks Bank & Trust Company during the quarter

BLAIRSVILLE, Ga., Jan. 23, 2018 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today announced its fourth quarter financial results. Although remeasurement of United’s deferred tax assets following December’s historic tax reform legislation led to a net loss for the quarter of $11.9 million or 16 cents per diluted share, strong margin expansion, disciplined expense controls and solid credit quality drove strong pre-tax results.

On an operating basis, United reported net income of $32.5 million for the fourth quarter of 2017 compared with $28.9 million for the fourth quarter of 2016. Fourth quarter 2017 operating net income excludes the $38.2 million impact of remeasuring United’s deferred tax assets, as well as merger-related and other non-operating charges totaling $6.19 million, net of the associated income tax benefit. Fourth quarter 2016 operating net income excludes $709,000 in merger-related charges, net of the associated income tax benefit and a $976,000 tax charge for the impairment of our deferred tax asset on cancelled non-qualified stock options. On a per diluted share basis, operating net income was 42 cents for the fourth quarter of 2017 compared with 40 cents for the fourth quarter of 2016.

At December 31, 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 12.0 percent, and Tier 1 Leverage of 9.4 percent.

“We achieved solid pre-tax financial results for the fourth quarter, marking a strong end to another exceptional year of achievement for United Community Banks,” said Jimmy Tallent, chairman and chief executive officer. “Looking back over the year, I am encouraged by all that we achieved. In 2017, we continued our strategic expansion by merging with two outstanding community banks that both extend and enhance our footprint in thriving new markets. We completed the acquisition of Horry County State Bank on July 31, significantly enhancing our presence in the Myrtle Beach area along the South Carolina coast. We completed the acquisition of Four Oaks Bank & Trust Company on November 1, extending our footprint in and around the Raleigh, North Carolina metropolitan statistical area. All systems conversions for the Horry County State Bank acquisition were completed in the fourth quarter and we are scheduled to convert Four Oaks to United’s systems in early 2018, at which time we expect to fully realize the anticipated cost savings. Both of these banks share our customer service culture and are exceptional partners for extending our footprint. I could not be more pleased with these partnerships and I am thrilled to welcome them to the United family."

Tallent continued, “A few weeks ago we announced a merger with NLFC Holdings Corp. and its wholly-owned subsidiary, Navitas Credit Corp. Navitas Credit Corp. is a premier specialty lender providing equipment finance services to small and medium-sized businesses nationwide with headquarters in Ponte Vedra, Florida. This fast-growing company will be a solid strategic addition to our existing specialty and commercial lending businesses and will enable us to further expand our client offerings. Navitas will continue to be run by their talented team of industry veterans. This partnership brings exceptional growth and a significant profitability enhancement to United and a permanent source of capital and low-cost funding to Navitas. The partnership with Navitas is a solid win for both of us and I am excited to welcome them to United Community Bank.

“While the passage of tax reform legislation in late December will have a substantial and ongoing positive impact on United’s earnings beginning in the first quarter of 2018, the required remeasurement of United’s deferred tax assets resulted in a $38.2 million non-cash charge to tax expense in the fourth quarter,” stated Tallent. “The charge results because our net deferred tax assets will now be recovered at the lower federal income tax rate of 21 percent rather than the previous rate of 35 percent. Despite the charge, we believe tax reform legislation will be good for United, our industry, our customers and our shareholders not only because it reduces our tax burden going forward but we also expect it to stimulate the economy and drive growth.

“Fourth quarter loan production was $644 million with $440 million originating from our community banks and $204 million from our Commercial Banking Solutions group,” Tallent added. “Linked-quarter loans were up $533 million, mostly reflecting the $486 million in net loans received through our acquisition of Four Oaks. Our indirect auto loan portfolio was down $42.1 million from third quarter reflecting our decision to suspend indirect auto loan purchases. Excluding the reduction in indirect auto loans and the loans acquired through the Four Oaks acquisition, loan growth was up at an annualized rate of approximately five percent from the third quarter.”

Fourth quarter net interest revenue totaled $97.5 million, up $16.6 million from the fourth quarter of 2016 and up $7.7 million from the third quarter. The increases from both periods reflect business growth and net interest margin expansions of 29 basis points from a year ago and nine basis points from the third quarter. The increases were mostly driven by rising short-term interest rates, the repayment of senior notes in August and October, as well as the acquisitions of Four Oaks Bank & Trust Company on November 1, 2017 and Horry County State Bank on July 31, 2017. Four Oaks Bank & Trust Company and Horry County State Bank results are included in United’s financial results beginning on their respective acquisition date.

The fourth quarter provision for credit losses was $1.2 million, up from $1.0 million for the third quarter and no provision in fourth quarter 2016. Fourth quarter net charge-offs totaled $1.1 million, down from $1.6 million in the third quarter of 2017 and $1.5 million in the fourth 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 December 31, 2017, compared with .28 percent at December 31, 2016 and .23 percent at September 30, 2017.

“Credit quality remains strong and steady as indicated by the low level of net charge-offs,” 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 each quarter due to loan growth, while our allowance and the related ratio to total loans may decline slightly.”

Fourth quarter fee revenue totaled $21.9 million, down $3.31 million from a year ago but up $1.36 million from the third quarter. The decrease from a year ago was mostly due to lower debit card interchange fees as a result of the Durbin amendment becoming effective for United on July 1, 2017. The application of the Durbin amendment reduced United’s debit card interchange fees by approximately $2.7 million in both the third and fourth quarters. 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 $75.9 million for the fourth quarter, compared with $61.3 million for the fourth quarter of 2016 and $65.7 million for the third quarter. Included in the fourth quarter’s operating expenses are $7.36 million in merger-related expenses. We also had merger-related charges of $1.14 million in the fourth quarter of 2016, and $2.3 million in merger-related expenses and $1.1 million in surplus property impairment charges, totaling $3.4 million in the third quarter of 2017. Excluding these charges, fourth quarter operating expenses were $68.5 million compared with $62.3 million for the third quarter and $60.2 million a year ago. More than half of the $6.3 million increase from the third quarter was due to the operating expenses of Four Oaks Bank & Trust Company acquired on November 1, 2017 and Horry County State Bank acquired on July 31, 2017. Higher incentives for exceeding performance targets contributed to the increase from third quarter and accounted for approximately half of the linked quarter increase in salaries and benefits with the rest of the increase in salaries and benefits coming from the acquisitions.

Tallent concluded, “2017 was another exceptional year for United Community Banks. We completed two outstanding acquisitions that extend our footprint in thriving markets with bankers who share our culture of customer service. Our bankers produced solid financial results allowing us to absorb the loss of revenue resulting from the application of the Durbin amendment and the higher deposit insurance assessment and still produce growth in earnings per share. That alone was a tremendous accomplishment. Every day our bankers demonstrate their passion and commitment which drive our performance and ensure our success. With an outstanding 2017 now behind us, I look forward with eager anticipation to all our bankers will accomplish in 2018.”

Conference Call
United will hold a conference call Wednesday, January 24, 2018, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 9796627. 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 $11.9 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the southeast region’s largest full-service banks, operating 156 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 press 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 earnings per diluted 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.

Caution About Forward-Looking Statements
Certain Statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise and are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or words of similar meaning or other statements concerning opinions or judgments of United and its management about future events. Although United believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of United will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements; such statements are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. Actual future results and trends may differ materially from historical results and or those anticipated depending on a variety of factors, including, but not limited to the factors and risk influences contained in the cautionary language included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in United’s Form 10-K for the year ended December 31, 2016 and other periodic reports subsequently filed by United with the SEC, available on the SEC website, www.sec.gov. For any forward-looking statements made in this press release, United claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

For more information:
Jefferson Harralson
Chief Financial Officer
(706) 781-2265
Jefferson_Harralson@ucbi.com

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
Fourth
2017 2016 Quarter
Fourth Third Second First Fourth 2017-2016
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter Change
INCOME SUMMARY
Interest revenue$106,757 $98,839 $93,166 $90,958 $87,778
Interest expense 9,249 9,064 8,018 7,404 6,853
Net interest revenue 97,508 89,775 85,148 83,554 80,925 20 %
Provision for credit losses 1,200 1,000 800 800 -
Fee revenue 21,928 20,573 23,685 22,074 25,233 (13)
Total revenue 118,236 109,348 108,033 104,828 106,158 11
Expenses 75,882 65,674 63,229 62,826 61,321 24
Income before income tax expense 42,354 43,674 44,804 42,002 44,837 (6)
Income tax expense 54,270 15,728 16,537 18,478 17,616 208
Net income (11,916) 27,946 28,267 23,524 27,221 (144)
Merger-related and other charges 7,358 3,420 1,830 2,054 1,141
Income tax benefit of merger-related and other charges (1,165) (1,147) (675) (758) (432)
Impact of remeasurement of deferred tax asset resulting
from 2017 Tax Cuts and Jobs Act
38,199 - - - -
Impairment of deferred tax asset on canceled
non-qualified stock options
- - - - 976
Release of disproportionate tax effects lodged in OCI - - - 3,400 -
Net income - operating (1)$ 32,476 $ 30,219 $ 29,422 $ 28,220 $ 28,906 12
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP$(.16) $ .38 $ .39 $ .33 $ .38 (142)
Diluted net income - operating (1).42 .41 .41 .39 .40 5
Cash dividends declared.10 .10 .09 .09 .08 25 %
Book value 16.67 16.50 15.83 15.40 15.06 11
Tangible book value (3) 13.65 14.11 13.74 13.30 12.95 5
Key performance ratios:
Return on common equity - GAAP (2)(4) (3.57)% 9.22 % 9.98 % 8.54 % 9.89 %
Return on common equity - operating (1)(2)(4) 9.73 9.97 10.39 10.25 10.51
Return on tangible common equity - operating (1)(2)(3)(4) 11.93 11.93 12.19 12.10 12.47
Return on assets - GAAP (4)(.40) 1.01 1.06 .89 1.03
Return on assets - operating (1)(4) 1.10 1.09 1.10 1.07 1.10
Dividend payout ratio - GAAP (62.50) 26.32 23.08 27.27 21.05
Dividend payout ratio - operating (1) 23.81 24.39 21.95 23.08 20.00
Net interest margin (fully taxable equivalent) (4) 3.63 3.54 3.47 3.45 3.34
Efficiency ratio - GAAP 63.03 59.27 57.89 59.29 57.65
Efficiency ratio - operating (1) 56.92 56.18 56.21 57.35 56.58
Average equity to average assets 11.21 10.86 10.49 10.24 10.35
Average tangible equity to average assets (3) 9.52 9.45 9.23 8.96 9.04
Average tangible common equity to average assets (3) 9.52 9.45 9.23 8.96 9.04
Tangible common equity to risk-weighted assets (3)(5) 12.11 12.80 12.44 12.07 11.84
ASSET QUALITY
Nonperforming loans$23,658 $22,921 $23,095 $19,812 $21,539 10
Foreclosed properties 3,234 2,736 2,739 5,060 7,949 (59)
Total nonperforming assets (NPAs) 26,892 25,657 25,834 24,872 29,488 (9)
Allowance for loan losses 58,914 58,605 59,500 60,543 61,422 (4)
Net charge-offs 1,061 1,635 1,623 1,679 1,539 (31)
Allowance for loan losses to loans.76 %.81 %.85 %.87 %.89 %
Net charge-offs to average loans (4).06 .09 .09 .10 .09
NPAs to loans and foreclosed properties.35 .36 .37 .36 .43
NPAs to total assets.23 .23 .24 .23 .28
AVERAGE BALANCES ($ in millions)
Loans$7,560 $7,149 $6,980 $6,904 $6,814 11
Investment securities 2,991 2,800 2,775 2,822 2,690 11
Earning assets 10,735 10,133 9,899 9,872 9,665 11
Total assets 11,687 10,980 10,704 10,677 10,484 11
Deposits 9,624 8,913 8,659 8,592 8,552 13
Shareholders’ equity 1,310 1,193 1,123 1,093 1,085 21
Common shares - basic (thousands) 76,768 73,151 71,810 71,700 71,641 7
Common shares - diluted (thousands) 76,768 73,162 71,820 71,708 71,648 7
AT PERIOD END ($ in millions)
Loans$7,736 $7,203 $7,041 $6,965 $6,921 12
Investment securities 2,937 2,847 2,787 2,767 2,762 6
Total assets 11,915 11,129 10,837 10,732 10,709 11
Deposits 9,808 9,127 8,736 8,752 8,638 14
Shareholders’ equity 1,303 1,221 1,133 1,102 1,076 21
Common shares outstanding (thousands) 77,580 73,403 70,981 70,973 70,899 9
(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation, 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 less 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 2017 ratio is preliminary.


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
For the Twelve
Months Ended YTD
December 31, 2017-2016
(in thousands, except per share data) 2017 2016 Change
INCOME SUMMARY
Interest revenue $389,720 $335,020
Interest expense 33,735 25,236
Net interest revenue 355,985 309,784 15 %
Provision for credit losses 3,800 (800)
Fee revenue 88,260 93,697 (6)
Total revenue 440,445 404,281 9
Expenses 267,611 241,289 11
Income before income tax expense 172,834 162,992 6
Income tax expense 105,013 62,336 68
Net income 67,821 100,656 (33)
Merger-related and other charges 14,662 8,122
Income tax benefit of merger-related and other charges (3,745) (3,074)
Impact of remeasurement of deferred tax asset resulting
from 2017 Tax Cuts and Jobs Act
38,199 -
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) $ 120,337 $ 106,680 13
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP $ .92 $1.40 (34)
Diluted net income - operating (1) 1.63 1.48 10
Cash dividends declared .38 .30 27 %
Book value 16.67 15.06 11
Tangible book value (3) 13.65 12.95 5
Key performance ratios:
Return on common equity - GAAP (2)(4) 5.67 % 9.41 %
Return on common equity - operating (1)(2)(4) 10.07 9.98
Return on tangible common equity - operating (1)(2)(3)(4) 12.02 11.86
Return on assets - GAAP (4) .62 1.00
Return on assets - operating (1)(4) 1.09 1.06
Dividend payout ratio - GAAP 41.30 21.43
Dividend payout ratio - operating (1) 23.31 20.27
Net interest margin (fully taxable equivalent) (4) 3.52 3.36
Efficiency ratio - GAAP 59.95 59.80
Efficiency ratio - operating (1) 56.67 57.78
Average equity to average assets 10.71 10.54
Average tangible equity to average assets (3) 9.29 9.21
Average tangible common equity to average assets (3) 9.29 9.19
Tangible common equity to risk-weighted assets (3)(5) 12.11 11.84
ASSET QUALITY
Nonperforming loans $23,658 $21,539 10
Foreclosed properties 3,234 7,949 (59)
Total nonperforming assets (NPAs) 26,892 29,488 (9)
Allowance for loan losses 58,914 61,422 (4)
Net charge-offs 5,998 6,766 (11)
Allowance for loan losses to loans .76 % .89 %
Net charge-offs to average loans (4) .08 .11
NPAs to loans and foreclosed properties .35 .43
NPAs to total assets .23 .28
AVERAGE BALANCES ($ in millions)
Loans $7,150 $6,413 11
Investment securities 2,847 2,691 6
Earning assets 10,162 9,257 10
Total assets 11,015 10,054 10
Deposits 8,950 8,177 9
Shareholders’ equity 1,180 1,059 11
Common shares - basic (thousands) 73,247 71,910 2
Common shares - diluted (thousands) 73,259 71,915 2
AT PERIOD END ($ in millions)
Loans $7,736 $6,921 12
Investment securities 2,937 2,762 6
Total assets 11,915 10,709 11
Deposits 9,808 8,638 14
Shareholders’ equity 1,303 1,076 21
Common shares outstanding (thousands) 77,580 70,899 9
(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation, 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 less 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 2017 ratio is preliminary.


UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,
(in thousands, except per share data) 2017 2016 2015 2014 2013
INCOME SUMMARY
Interest revenue $ 389,720 $ 335,020 $ 278,532 $ 248,432 $ 245,840
Interest expense 33,735 25,236 21,109 25,551 27,682
Net interest revenue 355,985 309,784 257,423 222,881 218,158
Provision for credit losses 3,800 (800) 3,700 8,500 65,500
Fee revenue 88,260 93,697 72,529 55,554 56,598
Total revenue 440,445 404,281 326,252 269,935 209,256
Expenses 267,611 241,289 211,238 162,865 174,304
Income before income tax expense 172,834 162,992 115,014 107,070 34,952
Income tax expense (benefit) 105,013 62,336 43,436 39,450 (238,188)
Net income 67,821 100,656 71,578 67,620 273,140
Merger-related and other charges 14,662 8,122 17,995 - -
Income tax benefit of merger-related and other charges (3,745) (3,074) (6,388) - -
Impact of remeasurement of deferred tax asset resulting
from 2017 Tax Cuts and Jobs Act
38,199 - - - -
Impairment of deferred tax asset on cancelled non-qualified stock options - 976 - - -
Release of disproportionate tax effects lodged in OCI 3,400 - - - -
Net income - operating (1) $ 120,337 $ 106,680 $ 83,185 $ 67,620 $ 273,140
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP $ .92 $ 1.40 $ 1.09 $ 1.11 $ 4.44
Diluted net income - operating (1) 1.63 1.48 1.27 1.11 4.44
Cash dividends declared .38 .30 .22 .11 -
Book value 16.67 15.06 14.02 12.20 11.30
Tangible book value (3) 13.65 12.95 12.06 12.15 11.26
Key performance ratios:
Return on common equity - GAAP (2) 5.67 % 9.41 % 8.15 % 9.17 % 46.72 %
Return on common equity - operating (1)(2) 10.07 9.98 9.48 9.17 46.72
Return on tangible common equity - operating (1)(2)(3) 12.02 11.86 10.24 9.32 47.35
Return on assets - GAAP .62 1.00 .85 .91 3.86
Return on assets - operating (1) 1.09 1.06 .98 .91 3.86
Dividend payout ratio - GAAP 41.30 21.43 20.18 9.91 -
Dividend payout ratio - operating (1) 23.31 20.27 17.32 9.91 -
Net interest margin (fully taxable equivalent) 3.52 3.36 3.30 3.26 3.30
Efficiency ratio - GAAP 59.95 59.80 63.96 58.26 63.14
Efficiency ratio - operating (1) 56.67 57.78 58.51 58.26 63.14
Average equity to average assets 10.71 10.54 10.27 9.69 10.35
Average tangible equity to average assets (3) 9.29 9.21 9.74 9.67 10.31
Average tangible common equity to average assets (3) 9.29 9.19 9.66 9.60 7.55
Tangible common equity to risk-weighted assets (3)(4) 12.11 11.84 12.82 13.82 13.17
ASSET QUALITY
Nonperforming loans $ 23,658 $ 21,539 $ 22,653 $ 17,881 $ 26,819
Foreclosed properties 3,234 7,949 4,883 1,726 4,221
Total nonperforming assets (NPAs) 26,892 29,488 27,536 19,607 31,040
Allowance for loan losses 58,914 61,422 68,448 71,619 76,762
Net charge-offs 5,998 6,766 6,259 13,879 93,710
Allowance for loan losses to loans .76 % .89 % 1.14 % 1.53 % 1.77 %
Net charge-offs to average loans .08 .11 .12 .31 2.22
NPAs to loans and foreclosed properties .35 .43 .46 .42 .72
NPAs to total assets .23 .28 .29 .26 .42
AVERAGE BALANCES ($ in millions)
Loans $ 7,150 $ 6,413 $ 5,298 $ 4,450 $ 4,254
Investment securities 2,847 2,691 2,368 2,274 2,190
Earning assets 10,162 9,257 7,834 6,880 6,649
Total assets 11,015 10,054 8,462 7,436 7,074
Deposits 8,950 8,177 7,055 6,228 6,027
Shareholders’ equity 1,180 1,059 869 720 732
Common shares - basic (thousands) 73,247 71,910 65,488 60,588 58,787
Common shares - diluted (thousands) 73,259 71,915 65,492 60,590 58,845
AT PERIOD END ($ in millions)
Loans $ 7,736 $ 6,921 $ 5,995 $ 4,672 $ 4,329
Investment securities 2,937 2,762 2,656 2,198 2,312
Total assets 11,915 10,709 9,616 7,558 7,424
Deposits 9,808 8,638 7,873 6,335 6,202
Shareholders’ equity 1,303 1,076 1,018 740 796
Common shares outstanding (thousands) 77,580 70,899 71,484 60,259 59,432
(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, 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 less 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) 2017 ratio is preliminary.


UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2017 2016
Fourth Third Second First Fourth
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter
Expense reconciliation
Expenses (GAAP)$ 75,882 $ 65,674 $ 63,229 $ 62,826 $ 61,321
Merger-related and other charges (7,358) (3,420) (1,830) (2,054) (1,141)
Expenses - operating$ 68,524 $ 62,254 $ 61,399 $ 60,772 $ 60,180
Net income reconciliation
Net income (GAAP)$ (11,916) $ 27,946 $ 28,267 $ 23,524 $ 27,221
Merger-related and other charges 7,358 3,420 1,830 2,054 1,141
Income tax benefit of merger-related and other charges (1,165) (1,147) (675) (758) (432)
Impact of tax reform on remeasurement of deferred tax asset 38,199 - - - -
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$ 32,476 $ 30,219 $ 29,422 $ 28,220 $ 28,906
Diluted income per common share reconciliation
Diluted income per common share (GAAP) $ (.16) $ .38 $ .39 $ .33 $ .38
Merger-related and other charges .08 .03 .02 .01 .01
Impact of tax reform on remeasurement of deferred tax asset .50 - - - -
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 $ .42 $ .41 $ .41 $ .39 $ .40
Book value per common share reconciliation
Book value per common share (GAAP)$ 16.67 $ 16.50 $ 15.83 $ 15.40 $ 15.06
Effect of goodwill and other intangibles (3.02) (2.39) (2.09) (2.10) (2.11)
Tangible book value per common share$ 13.65 $ 14.11 $ 13.74 $ 13.30 $ 12.95
Return on tangible common equity reconciliation
Return on common equity (GAAP) (3.57)% 9.22 % 9.98 % 8.54 % 9.89 %
Merger-related and other charges 1.86 .75 .41 .47 .26
Impact of tax reform on remeasurement of deferred tax asset 11.44 - - - -
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 9.73 9.97 10.39 10.25 10.51
Effect of goodwill and other intangibles 2.20 1.96 1.80 1.85 1.96
Return on tangible common equity - operating 11.93 % 11.93 % 12.19 % 12.10 % 12.47 %
Return on assets reconciliation
Return on assets (GAAP) (.40)% 1.01 % 1.06 % .89 % 1.03 %
Merger-related and other charges .20 .08 .04 .05 .03
Impact of tax reform on remeasurement of deferred tax asset 1.30 - - - -
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 1.10 % 1.09 % 1.10 % 1.07 % 1.10 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) (62.50)% 26.32 % 23.08 % 27.27 % 21.05 %
Merger-related and other charges 12.04 (1.93) (1.13) (.98) (.54)
Impact of tax reform on remeasurement of deferred tax asset 74.27 - - - -
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 23.81 % 24.39 % 21.95 % 23.08 % 20.00 %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 63.03 % 59.27 % 57.89 % 59.29 % 57.65 %
Merger-related and other charges (6.11) (3.09) (1.68) (1.94) (1.07)
Efficiency ratio - operating 56.92 % 56.18 % 56.21 % 57.35 % 56.58 %
Average equity to assets reconciliation
Equity to assets (GAAP) 11.21 % 10.86 % 10.49 % 10.24 % 10.35 %
Effect of goodwill and other intangibles (1.69) (1.41) (1.26) (1.28) (1.31)
Tangible equity to assets 9.52 9.45 9.23 8.96 9.04
Effect of preferred equity - - - - -
Tangible common equity to assets 9.52 % 9.45 % 9.23 % 8.96 % 9.04 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 12.27 % 12.27 % 11.91 % 11.46 % 11.23 %
Effect of other comprehensive income (.27) (.13) (.15) (.24) (.34)
Effect of deferred tax limitation .51 .94 .95 1.13 1.26
Effect of trust preferred (.36) (.24) (.25) (.25) (.25)
Effect of preferred equity - - - - -
Basel III intangibles transition adjustment (.04) (.04) (.02) (.03) (.06)
Basel III disallowed investments - - - - -
Tangible common equity to risk-weighted assets 12.11 % 12.80 % 12.44 % 12.07 % 11.84 %
(1) Fourth quarter 2017 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) 2017 2016 2015 2014 2013
Expense reconciliation
Expenses (GAAP)$ 267,611 $ 241,289 $ 211,238 $ 162,865 $ 174,304
Merger-related and other charges (14,662) (8,122) (17,995) - -
Expenses - operating$ 252,949 $ 233,167 $ 193,243 $ 162,865 $ 174,304
Net income reconciliation
Net income (GAAP)$ 67,821 $ 100,656 $ 71,578 $ 67,620 $ 273,140
Merger-related and other charges 14,662 8,122 17,995 - -
Income tax benefit of merger-related and other charges (3,745) (3,074) (6,388) - -
Impact of tax reform on remeasurement of deferred tax asset 38,199 - - - -
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$ 120,337 $ 106,680 $ 83,185 $ 67,620 $ 273,140
Diluted income per common share reconciliation
Diluted income per common share (GAAP) $ .92 $ 1.40 $ 1.09 $ 1.11 $ 4.44
Merger-related and other charges .14 .07 .18 - -
Impact of tax reform on remeasurement of deferred tax asset .52 - - - -
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$ 1.63 $ 1.48 $ 1.27 $ 1.11 $ 4.44
Book value per common share reconciliation
Book value per common share (GAAP)$ 16.67 $ 15.06 $ 14.02 $ 12.20 $ 11.30
Effect of goodwill and other intangibles (3.02) (2.11) (1.96) (.05) (.04)
Tangible book value per common share$ 13.65 $ 12.95 $ 12.06 $ 12.15 $ 11.26
Return on tangible common equity reconciliation
Return on common equity (GAAP) 5.67 % 9.41 % 8.15 % 9.17 % 46.72 %
Merger-related and other charges .92 .48 1.33 - -
Impact of tax reform on remeasurement of deferred tax asset 3.20 - - - -
Impairment of deferred tax asset on canceled non-qualified stock options - .09 - - -
Release of disproportionate tax effects lodged in OCI .28 - - - -
Return on common equity - operating 10.07 9.98 9.48 9.17 46.72
Effect of goodwill and other intangibles 1.95 1.88 .76 .15 .63
Return on tangible common equity - operating 12.02 % 11.86 % 10.24 % 9.32 % 47.35 %
Return on assets reconciliation
Return on assets (GAAP) .62 % 1.00 % .85 % .91 % 3.86 %
Merger-related and other charges .09 .05 .13 - -
Impact of tax reform on remeasurement of deferred tax asset .35 - - - -
Impairment of deferred tax asset on canceled non-qualified stock options - .01 - - -
Release of disproportionate tax effects lodged in OCI .03 - - - -
Return on assets - operating 1.09 % 1.06 % .98 % .91 % 3.86 %
Dividend payout ratio reconciliation
Dividend payout ratio (GAAP) 41.30 % 21.43 % 20.18 % 9.91 % - %
Merger-related and other charges (5.65) (1.02) (2.86) - -
Impact of tax reform on remeasurement of deferred tax asset (11.61) - - - -
Impairment of deferred tax asset on canceled non-qualified stock options - (.14) - - -
Release of disproportionate tax effects lodged in OCI (.73) - - - -
Dividend payout ratio - operating 23.31 % 20.27 % 17.32 % 9.91 % - %
Efficiency ratio reconciliation
Efficiency ratio (GAAP) 59.95 % 59.80 % 63.96 % 58.26 % 63.14 %
Merger-related and other charges (3.28) (2.02) (5.45) - -
Efficiency ratio - operating 56.67 % 57.78 % 58.51 % 58.26 % 63.14 %
Average equity to assets reconciliation
Equity to assets (GAAP) 10.71 % 10.54 % 10.27 % 9.69 % 10.35 %
Effect of goodwill and other intangibles (1.42) (1.33) (.53) (.02) (.04)
Tangible equity to assets 9.29 9.21 9.74 9.67 10.31
Effect of preferred equity - (.02) (.08) (.07) (2.76)
Tangible common equity to assets 9.29 % 9.19 % 9.66 % 9.60 % 7.55 %
Tangible common equity to risk-weighted assets reconciliation (1)
Tier 1 capital ratio (Regulatory) 12.27 % 11.23 % 11.45 % 12.06 % 12.74 %
Effect of other comprehensive income (.27) (.34) (.38) (.35) (.39)
Effect of deferred tax limitation .51) 1.26 2.05 3.11 4.26
Effect of trust preferred (.36 (.25) (.08) (1.00) (1.04)
Effect of preferred equity - (.15) - (2.39)
Basel III intangibles transition adjustment (.04) (.06) (.10) - -
Basel III disallowed investments - - .03 - -
Tangible common equity to risk-weighted assets 12.11 % 11.84 % 12.82 % 13.82 % 13.18 %
(1) Fourth quarter 2017 ratios are preliminary.


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2017 2016
Fourth Third Second First Fourth
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,924 $ 1,792 $ 1,723 $ 1,633 $ 1,650
Income producing commercial RE 1,595 1,413 1,342 1,297 1,282
Commercial & industrial 1,131 1,084 1,088 1,080 1,070
Commercial construction 712 583 587 667 634
Total commercial 5,362 4,872 4,740 4,677 4,636
Residential mortgage 974 933 881 860 857
Home equity lines of credit 731 689 665 659 655
Residential construction 183 190 193 197 190
Consumer installment 486 519 562 572 583
Total loans $ 7,736 $ 7,203 $ 7,041 $ 6,965 $ 6,921
LOANS BY MARKET
North Georgia $ 1,019 $ 1,047 $ 1,065 $ 1,076 $ 1,097
Atlanta MSA 1,510 1,477 1,445 1,408 1,399
North Carolina 1,049 542 541 541 545
Coastal Georgia 630 634 623 591 581
Gainesville MSA 248 242 246 252 248
East Tennessee 475 471 486 483 504
South Carolina 1,486 1,470 1,260 1,243 1,233
Commercial Banking Solutions 961 920 926 911 855
Indirect auto 358 400 449 460 459
Total loans $ 7,736 $ 7,203 $ 7,041 $ 6,965 $ 6,921


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2017 2016 Linked
Quarter
Change
Year over
Year
Change
Fourth Third Fourth
(in millions) Quarter Quarter Quarter
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,924 $ 1,792 $ 1,650 $ 132 $ 274
Income producing commercial RE 1,595 1,413 1,282 182 313
Commercial & industrial 1,131 1,084 1,070 47 61
Commercial construction 712 583 634 129 78
Total commercial 5,362 4,872 4,636 490 726
Residential mortgage 974 933 857 41 117
Home equity lines of credit 731 689 655 42 76
Residential construction 183 190 190 (7) (7)
Consumer installment 486 519 583 (33) (97)
Total loans $ 7,736 $ 7,203 $ 6,921 533 815
LOANS BY MARKET
North Georgia $ 1,019 $ 1,047 $ 1,097 (28) (78)
Atlanta MSA 1,510 1,477 1,399 33 111
North Carolina 1,049 542 545 507 504
Coastal Georgia 630 634 581 (4) 49
Gainesville MSA 248 242 248 6 -
East Tennessee 475 471 504 4 (29)
South Carolina 1,486 1,470 1,233 16 253
Commercial Banking Solutions 961 920 855 41 106
Indirect auto 358 400 459 (42) (101)
Total loans $ 7,736 $ 7,203 $ 6,921 533 815


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions) 2017 2016 2015 2014 2013
LOANS BY CATEGORY
Owner occupied commercial RE $ 1,924 $ 1,650 $ 1,571 $ 1,257 $ 1,238
Income producing commercial RE 1,595 1,282 1,021 767 807
Commercial & industrial 1,131 1,070 785 710 471
Commercial construction 712 634 518 364 336
Total commercial 5,362 4,636 3,895 3,098 2,852
Residential mortgage 974 857 764 614 604
Home equity lines of credit 731 655 589 456 430
Residential construction 183 190 176 131 136
Consumer installment 486 583 571 373 307
Total loans $ 7,736 $ 6,921 $ 5,995 $ 4,672 $ 4,329
LOANS BY MARKET
North Georgia $ 1,019 $ 1,097 $ 1,125 $ 1,163 $ 1,240
Atlanta MSA 1,510 1,399 1,259 1,243 1,235
North Carolina 1,049 545 549 553 572
Coastal Georgia 630 581 537 456 423
Gainesville MSA 248 248 254 257 255
East Tennessee 475 504 504 280 280
South Carolina 1,486 1,233 819 30 4
Commercial Banking Solutions 961 855 492 421 124
Indirect auto 358 459 456 269 196
Total loans $ 7,736 $ 6,921 $ 5,995 $ 4,672 $ 4,329


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Fourth Quarter 2017
Nonperforming Foreclosed Total
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE $ 4,923 $ 1,955 $ 6,878
Income producing CRE 3,208 244 3,452
Commercial & industrial 2,097 - 2,097
Commercial construction 758 884 1,642
Total commercial 10,986 3,083 14,069
Residential mortgage 8,776 136 8,912
Home equity lines of credit 2,024 15 2,039
Residential construction 192 - 192
Consumer installment 1,680 - 1,680
Total NPAs $ 23,658 $ 3,234 $ 26,892
NONPERFORMING ASSETS BY MARKET
North Georgia $ 7,310 $ 94 $ 7,404
Atlanta MSA 1,395 279 1,674
North Carolina 4,543 1,213 5,756
Coastal Georgia 2,044 20 2,064
Gainesville MSA 739 - 739
East Tennessee 1,462 - 1,462
South Carolina 3,433 1,059 4,492
Commercial Banking Solutions 1,095 569 1,664
Indirect auto 1,637 - 1,637
Total NPAs $ 23,658 $ 3,234 $ 26,892
NONPERFORMING ASSETS ACTIVITY
Beginning Balance $ 22,921 $ 2,736 $ 25,657
Acquisitions 659 659
Loans placed on non-accrual 9,375 - 9,375
Payments received (5,495) - (5,495)
Loan charge-offs (1,747) - (1,747)
Foreclosures (1,396) 2,421 1,025
Property sales - (2,458) (2,458)
Write downs - (117) (117)
Net gains (losses) on sales - (7) (7)
Ending Balance $ 23,658 $ 3,234 $ 26,892
(1) Annualized.


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
(1) Annualized.


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
(1) Annualized.


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
Fourth Quarter 2017 Third Quarter 2017 Second 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 $ (357) (.08) % $ (44) (.01) % $ 37 .01 %
Income producing CRE 595 .16 1,159 .33 184 .06
Commercial & industrial (242) (.09) (200) (.08) 354 .13
Commercial construction 148 .09 (114) (.07) 341 .22
Total commercial 144 .01 801 .07 916 .08
Residential mortgage 290 .12 313 .14 26 .01
Home equity lines of credit 137 .08 56 .03 253 .15
Residential construction (23) (.05) 36 .07 (53) (.11)
Consumer installment 513 .40 429 .31 481 .34
Total $ 1,061 .06 $ 1,635 .09 $ 1,623 .09
NET CHARGE-OFFS BY MARKET
North Georgia $ 64 .02 % $ 516 .19 % $ 681 .26 %
Atlanta MSA 26 .01 150 .04 (10) -
North Carolina 127 .06 221 .16 131 .10
Coastal Georgia 174 .11 (39) (.02) 120 .08
Gainesville MSA 154 .25 (50) (.08) (54) (.09)
East Tennessee 61 .05 55 .05 27 .02
South Carolina 95 .03 528 .15 526 .17
Commercial Banking Solutions 75 .03 (7) - (17) (.01)
Indirect auto 285 .30 261 .24 219 .19
Total $ 1,061 .06 $ 1,635 .09 $ 1,623 .09
(1) Annualized.


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) 2017 2016 2017 2016
Interest revenue:
Loans, including fees $ 87,234 $ 71,494 $ 315,050 $ 268,382
Investment securities, including tax exempt of $909, $165, $2,216, and $614 19,023 15,988 72,388 64,027
Deposits in banks and short-term investments 500 296 2,282 2,611
Total interest revenue 106,757 87,778 389,720 335,020
Interest expense:
Deposits:
NOW 1,433 522 3,365 1,903
Money market 2,095 1,321 7,033 4,982
Savings 46 33 135 135
Time 2,272 1,084 6,529 3,136
Total deposit interest expense 5,846 2,960 17,062 10,156
Short-term borrowings 175 121 352 399
Federal Home Loan Bank advances 1,492 945 6,095 3,676
Long-term debt 1,736 2,827 10,226 11,005
Total interest expense 9,249 6,853 33,735 25,236
Net interest revenue 97,508 80,925 355,985 309,784
(Release of) provision for credit losses 1,200 - 3,800 (800)
Net interest revenue after provision for credit losses 96,308 80,925 352,185 310,584
Fee revenue:
Service charges and fees 8,770 10,653 38,295 42,113
Mortgage loan and other related fees 4,885 6,516 18,320 20,292
Brokerage fees 1,068 911 4,633 4,280
Gains from sales of SBA/USDA loans 3,102 3,028 10,493 9,545
Securities gains (losses), net (148) 60 42 982
Other 4,251 4,065 16,477 16,485
Total fee revenue 21,928 25,233 88,260 93,697
Total revenue 118,236 106,158 440,445 404,281
Operating expenses:
Salaries and employee benefits 41,042 35,677 153,098 138,789
Communications and equipment 5,217 4,753 19,660 18,355
Occupancy 5,542 5,210 20,344 19,603
Advertising and public relations 895 1,151 4,242 4,426
Postage, printing and supplies 1,825 1,353 5,952 5,382
Professional fees 3,683 2,773 12,074 11,822
FDIC assessments and other regulatory charges 1,776 1,413 6,534 5,866
Amortization of intangibles 1,760 1,066 4,845 4,182
Merger-related and other charges 6,841 1,141 13,901 8,122
Other 7,301 6,784 26,961 24,742
Total operating expenses 75,882 61,321 267,611 241,289
Net income before income taxes 42,354 44,837 172,834 162,992
Income tax expense 54,270 17,616 105,013 62,336
Net (loss) income $ (11,916) $ 27,221 $ 67,821 $ 100,656
Net (loss) income available to common shareholders $ (11,986) $ 27,221 $ 67,250 $ 100,635
(Loss) earnings per common share:
Basic $(.16) $.38 $.92 $1.40
Diluted (.16) .38 .92 1.40
Weighted average common shares outstanding:
Basic 76,768 71,641 73,247 71,910
Diluted 76,768 71,648 73,259 71,915


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
December 31, December 31,
(in thousands, except share and per share data) 2017 2016
ASSETS
Cash and due from banks $ 129,108 $ 99,489
Interest-bearing deposits in banks 185,167 117,859
Cash and cash equivalents 314,275 217,348
Securities available for sale 2,615,850 2,432,438
Securities held to maturity (fair value $321,276 and $333,170) 321,094 329,843
Loans held for sale (includes $26,252 and $27,891 at fair value) 32,734 29,878
Loans, net of unearned income 7,735,572 6,920,636
Less allowance for loan losses (58,914) (61,422)
Loans, net 7,676,658 6,859,214
Premises and equipment, net 208,852 189,938
Bank owned life insurance 188,970 143,543
Accrued interest receivable 32,459 28,018
Net deferred tax asset 88,049 154,336
Derivative financial instruments 22,721 23,688
Goodwill and other intangible assets 244,397 156,222
Other assets 169,401 144,189
Total assets $ 11,915,460 $ 10,708,655
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 3,087,797 $ 2,637,004
NOW 2,131,939 1,989,763
Money market 2,016,748 1,846,440
Savings 651,742 549,713
Time 1,548,460 1,287,142
Brokered 371,011 327,496
Total deposits 9,807,697 8,637,558
Short-term borrowings 50,000 5,000
Federal Home Loan Bank advances 504,651 709,209
Long-term debt 120,545 175,078
Derivative financial instruments 25,376 27,648
Accrued expenses and other liabilities 103,857 78,427
Total liabilities 10,612,126 9,632,920
Shareholders' equity:
Common stock, $1 par value; 150,000,000 shares authorized;
77,579,561 and 70,899,114 shares issued and outstanding 77,580 70,899
Common stock issuable; 607,869 and 519,874 shares 9,083 7,327
Capital surplus 1,451,814 1,275,849
Accumulated deficit (211,929) (251,857)
Accumulated other comprehensive loss (23,214) (26,483)
Total shareholders' equity 1,303,334 1,075,735
Total liabilities and shareholders' equity $ 11,915,460 $ 10,708,655


UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
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)$ 7,560,451 $ 87,2854.58% $ 6,814,114 $ 71,5224.18%
Taxable securities (3) 2,853,671 18,1142.54 2,664,395 15,8232.38
Tax-exempt securities (FTE) (1)(3) 137,080 1,4884.34 25,735 2704.20
Federal funds sold and other interest-earning assets 184,287 6761.47 160,391 4301.07
Total interest-earning assets (FTE) 10,735,489 107,5633.98 9,664,635 88,0453.63
Non-interest-earning assets:
Allowance for loan losses (59,508) (62,767)
Cash and due from banks 120,478 101,006
Premises and equipment 209,042 189,719
Other assets (3) 681,308 591,491
Total assets$ 11,686,809 $ 10,484,084
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$ 2,078,239 1,433.27 $ 1,920,124 522.11
Money market 2,243,279 2,095.37 2,058,589 1,321.26
Savings 636,057 46.03 544,490 33.02
Time 1,476,362 1,918.52 1,317,794 813.25
Brokered time deposits 115,235 3541.22 103,577 2711.04
Total interest-bearing deposits 6,549,172 - 5,846.35 5,944,574 - 2,960.20
Federal funds purchased and other borrowings 39,704 1751.75 51,224 121.94
Federal Home Loan Bank advances 458,028 1,4921.29 476,698 945.79
Long-term debt 120,885 1,7365.70 175,018 2,8276.43
Total borrowed funds 618,617 3,4032.18 702,940 3,8932.20
Total interest-bearing liabilities 7,167,789 9,249.51 6,647,514 6,853.41
Non-interest-bearing liabilities:
Non-interest-bearing deposits 3,074,898 2,607,878
Other liabilities 134,211 143,609
Total liabilities 10,376,898 9,399,001
Shareholders' equity 1,309,911 1,085,083
Total liabilities and shareholders' equity$ 11,686,809 $ 10,484,084
Net interest revenue (FTE) $ 98,314 $ 81,192
Net interest-rate spread (FTE) 3.47% 3.22%
Net interest margin (FTE) (4) 3.63% 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 $3.32 million in 2017 and $18.6 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 Twelve Months Ended December 31,
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)$ 7,150,211 $ 315,1384.41% $ 6,412,740 $ 268,478 4.19%
Taxable securities (3) 2,761,983 70,1722.54 2,665,051 63,413 2.38
Tax-exempt securities (FTE) (1)(3) 85,415 3,6274.25 26,244 1,005 3.83
Federal funds sold and other interest-earning assets 164,314 2,9661.81 152,722 3,149 2.06
Total interest-earning assets (FTE) 10,161,923 391,9033.86 9,256,757 336,045 3.63
Non-interest-earning assets:
Allowance for loan losses (60,602) (65,294)
Cash and due from banks 107,053 95,613
Premises and equipment 198,970 187,698
Other assets (3) 607,174 579,051
Total assets$ 11,014,518 $ 10,053,825
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW$ 1,950,827 3,365.17 $ 1,826,729 1,903 .10
Money market 2,136,336 7,033.33 1,941,288 4,982 .26
Savings 591,831 135.02 515,179 135 .03
Time 1,338,859 5,417.40 1,289,876 3,138 .24
Brokered time deposits 108,891 1,1121.02 171,420 (2).00
Total interest-bearing deposits 6,126,744 17,062.28 5,744,492 10,156 .18
Federal funds purchased and other borrowings 26,856 3521.31 34,906 399 1.14
Federal Home Loan Bank advances 576,472 6,0951.06 499,026 3,676 .74
Long-term debt 156,327 10,2266.54 170,479 11,005 6.46
Total borrowed funds 759,655 16,6732.19 704,411 15,080 2.14
Total interest-bearing liabilities 6,886,399 33,735.49 6,448,903 25,236 .39
Non-interest-bearing liabilities:
Non-interest-bearing deposits 2,823,005 2,432,846
Other liabilities 124,832 112,774
Total liabilities 9,834,236 8,994,523
Shareholders' equity 1,180,282 1,059,302
Total liabilities and shareholders' equity$ 11,014,518 $ 10,053,825
Net interest revenue (FTE) $ 358,168 $ 310,809
Net interest-rate spread (FTE) 3.37% 3.24%
Net interest margin (FTE) (4) 3.52% 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 $4.33 million in 2017 and $16.0 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.

Source:United Community Banks, Inc.

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