United Community Banks, Inc. Reports Earnings of $

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Posted On: 10/23/2014 5:45:06 AM

Posted By: News Desk 2018

United Community Banks, Inc. Reports Earnings of $17.6 Million for Third Quarter 2014, up 38 Percent From a Year Ago

BLAIRSVILLE, GA --(Marketwired - October 23, 2014) - United Community Banks, Inc. ( NASDAQ : UCBI )

Earnings are 29 cents per diluted share, up 7 percent from second quarter and 38 percent from a year ago
Loans up $159 million, or 14 percent annualized
Net interest margin increases 11 basis points from second quarter
Core transaction deposits up $90 million, or 10 percent annualized

United Community Banks, Inc. ( NASDAQ : UCBI ) ("United") today reported net income of $17.6 million, or 29 cents per diluted share, for the third quarter of 2014. Earnings per share were up 7 percent from the second quarter, reflecting strong loan growth, a widening net interest margin, and growth in fee revenue. For the first nine months of 2014, United reported net income of $49.4 million, or 81 cents per diluted share.

"By all measures, we had an exceptional third quarter," said Jimmy Tallent, president and chief executive officer. "Strong loan growth and an expanding net interest margin increased net interest revenue by $2 million over the second quarter. Our return on assets rose to 95 basis points, seven basis points higher than the second quarter, and close to our goal of 1 percent. Also, our return on equity was 9.4 percent, up 200 basis points from a year ago.

"Third quarter net loan growth of $159 million was driven by strong production across all of our markets," stated Tallent. "Our strongest area, specialized lending, increased $132 million. This category includes health care, corporate, SBA, asset-based and commercial real estate lending. We also saw solid growth in our Coastal Georgia and Tennessee markets."

Third quarter taxable equivalent net interest revenue totaled $57.0 million, up $2.0 million from the second quarter and up $2.7 million from the third quarter of 2013. The taxable equivalent net interest margin was 3.32 percent, up 11 basis points from the second quarter and six basis points from a year ago.

"Preserving our net interest margin and growing net interest revenue, while minimizing exposure to changes in interest rates, have been top priorities for growing earnings per share," said Tallent. "Our third quarter results confirm that we are on the right path. We remain sharply focused on growing loans and core deposits to increase net interest revenue, while expanding products to grow fee revenue. Second quarter balance sheet management activities, which included restructuring the securities portfolio, interest rate hedges and wholesale borrowings, contributed to the widening net interest margin and growth in net interest revenue. We expect our margin to stabilize at the current level into the fourth quarter and 2015. We are seeing the results of these efforts positively impact our earnings growth."

The third quarter provision for credit losses was $2.0 million, down $200,000 from the second quarter and down $1.0 million from the third quarter of 2013. Third quarter net charge-offs were $3.16 million, compared with $4.18 million in the second quarter and $4.47 million a year ago. Nonperforming assets at quarter-end were $21.9 million, down 8 percent from the second quarter and 28 percent from a year ago. Nonperforming assets at quarter-end represented .29 percent of total assets, compared to .32 percent last quarter and .42 percent a year ago.

Third quarter fee revenue totaled $14.4 million, up $269,000 from the second quarter and $187,000 from the third quarter of 2013. Most of the increase from both prior periods resulted from our growing SBA lending business and related gains on the sales of SBA loans. In the third quarter of 2014, we generated gains on these sales of $945,000 compared with $744,000 in the second quarter. There were no gains from the sale of SBA loans in the third quarter of 2013.

Service charges and fees dipped slightly from both the second quarter and a year ago, mostly due to lower debit card interchange fees. Overdraft fees were also down from the third quarter of 2013. Mortgage fees were up $301,000 from the second quarter, but down $376,000 from a year ago, the decrease reflecting slower mortgage refinancing activity. Closed mortgage loans totaled $84.2 million in the third quarter compared with $68.5 million in the second quarter and $76.6 million in the third quarter of 2013.

Operating expenses were $41.4 million in the third quarter compared to $40.5 million in the second quarter and $40.1 million a year ago. The increase from both prior periods is mostly due to higher staff and incentive costs. Third quarter compensation expense reflects the full cost of additional personnel added through the acquisition of Business Carolina, Inc., which occurred late in the second quarter, as well as staff added for our new vertical SBA business. Occupancy expense was up from the second quarter and a year ago due to higher utilities and maintenance charges, including lease costs for new locations.

Offsetting these increases was a reduction in the deposit insurance assessment rate due to improvement in our credit measures. Additionally, advertising costs were down $245,000 due to one-time branding costs in the second quarter, and other expenses decreased $537,000 primarily due to $486,000 in branch closure and loss share asset costs that were written off last quarter.

"Our operating efficiency ratio improved to 57.96 percent in the third quarter, compared to 58.65 percent in the second quarter," Tallent said. "We continue to focus on growing revenue while controlling costs."

On September 30, 2014, capital ratios were as follows: Tier 1 Risk-Based of 12.1 percent; Total Risk-Based of 13.3 percent; Tier 1 Common Risk-Based of 11.0 percent; and Tier 1 Leverage of 8.7 percent.

"We are beginning to see meaningful improvement in our financial results, reflecting the successes of our strategic growth initiatives," Tallent said. "Our focus on expanding the net interest margin and growing loans, deposits and fee revenue is driving earnings growth. In the third quarter, we saw a return of strong loan growth and meaningful margin expansion despite the ongoing challenging economic environment. Strategic investments in people and new businesses are driving our growth. We will continue investing in our future by hiring top talent to grow our business. As our third quarter results demonstrate, we are on the right track."

Conference Call United will hold a conference call today, Thursday, October 23, 2014, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 16941301. The conference call also will be webcast and can be accessed by selecting "Calendar of Events" within the Investor Relations section of United's website at www.ucbi.com .

About United Community Banks, Inc. United Community Banks, Inc. (UCBI) is a bank holding company based in Blairsville, Georgia, with $7.5 billion in assets. The company's banking subsidiary, United Community Bank, is one of the Southeast's largest full-service banks, operating 103 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for individuals, small businesses and corporations. A full range of consumer and commercial banking services includes mortgage, advisory, treasury management and other products. National survey organizations consistently recognize United Community Bank for outstanding customer service. Additional information about the company and the bank's full range of products and services can be found at www.ucbi.com .

Safe Harbor This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2013 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
			2014									2013						Quarter
(in thousands, except per share data; taxable equivalent)			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2014-2013 Change
			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2014-2013 Change
INCOME SUMMARY
Interest revenue			$	63,338		$	61,783		$	60,495		$	61,695		$	61,426
Interest expense				6,371			6,833			6,326			5,816			7,169
	Net interest revenue			56,967			54,950			54,169			55,879			54,257		5	%
Provision for credit losses				2,000			2,200			2,500			3,000			3,000
Fee revenue				14,412			14,143			12,176			13,519			14,225		1
	Total revenue			69,379			66,893			63,845			66,398			65,482
Operating expenses				41,364			40,532			39,050			41,614			40,097		3
	Income before income taxes			28,015			26,361			24,795			24,784			25,385		10
Income tax expense (benefit)				10,399			10,004			9,395			8,873			9,885
	Net income			17,616			16,357			15,400			15,911			15,500		14
Preferred dividends and discount accretion				-			-			439			2,912			3,059
Net income available to common shareholders			$	17,616		$	16,357		$	14,961		$	12,999		$	12,441		42

PERFORMANCE MEASURES
	Per common share:
		Diluted income	$	.29		$	.27		$	.25		$	.22		$	.21		38
		Book value		12.15			11.94			11.66			11.30			10.99		11
		Tangible book value ⁽²⁾		12.10			11.91			11.63			11.26			10.95		11

	Key performance ratios:
		Return on common equity ⁽¹⁾⁽³⁾		9.41	%		8.99	%		8.64	%		7.52	%		7.38	%
		Return on assets ⁽³⁾		.95			.88			.85			.86			.86
		Net interest margin ⁽³⁾		3.32			3.21			3.21			3.26			3.26
		Efficiency ratio		57.96			58.65			59.05			60.02			58.55
		Equity to assets		9.85			9.61			9.52			11.62			11.80
		Tangible equity to assets ⁽²⁾		9.83			9.58			9.50			11.59			11.76
		Tangible common equity to assets ⁽²⁾		9.83			9.58			9.22			8.99			9.02
		Tangible common equity to risk-weighted assets ⁽²⁾		14.10			13.92			13.63			13.18			13.34

ASSET QUALITY *
	Non-performing loans		$	18,745		$	20,724		$	25,250		$	26,819		$	26,088
	Foreclosed properties			3,146			2,969			5,594			4,221			4,467
		Total non-performing assets (NPAs)		21,891			23,693			30,844			31,040			30,555
	Allowance for loan losses			71,928			73,248			75,223			76,762			80,372
	Net charge-offs			3,155			4,175			4,039			4,445			4,473
	Allowance for loan losses to loans			1.57	%		1.66	%		1.73	%		1.77	%		1.88	%
	Net charge-offs to average loans ⁽³⁾			.28			.38			.38			.41			.42
	NPAs to loans and foreclosed properties			.48			.54			.71			.72			.72
	NPAs to total assets			.29			.32			.42			.42			.42

AVERAGE BALANCES ($ in millions)
	Loans		$	4,446		$	4,376		$	4,356		$	4,315		$	4,250		5
	Investment securities			2,231			2,326			2,320			2,280			2,178		2
	Earning assets			6,820			6,861			6,827			6,823			6,615		3
	Total assets			7,374			7,418			7,384			7,370			7,170		3
	Deposits			6,143			6,187			6,197			6,190			5,987		3
	Shareholders' equity			726			713			703			856			846		(14	)
	Common shares - basic (thousands)			60,776			60,712			60,059			59,923			59,100
	Common shares - diluted (thousands)			60,779			60,714			60,061			59,925			59,202

AT PERIOD END ($ in millions)
	Loans *		$	4,569		$	4,410		$	4,356		$	4,329		$	4,267		7
	Investment securities			2,222			2,190			2,302			2,312			2,169		2
	Total assets			7,526			7,352			7,398			7,425			7,243		4
	Deposits			6,241			6,164			6,248			6,202			6,113		2
	Shareholders' equity			736			722			704			796			852		(14	)
	Common shares outstanding (thousands)			60,248			60,139			60,092			59,432			59,412

⁽¹⁾ 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). ⁽²⁾ Excludes effect of acquisition related intangibles and associated amortization. ⁽³⁾ Annualized.

* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

			For the Nine Months Ended September 30,						YTD 2014-2013
(in thousands, except per share data; taxable equivalent)			2014			2013			Change
INCOME SUMMARY
Interest revenue			$	185,616		$	185,628
Interest expense				19,530			21,866
		Net interest revenue		166,086			163,762		1	%
Provision for credit losses				6,700			62,500
Fee revenue				40,731			43,079		(5	)
		Total revenue		200,117			144,341
Operating expenses				120,946			132,690		(9	)
		Income before income taxes		79,171			11,651
Income tax expense (benefit)				29,798			(245,578	)
		Net income		49,373			257,229
Preferred dividends and discount accretion				439			9,166
Net income available to common shareholders			$	48,934		$	248,063

PERFORMANCE MEASURES
	Per common share:
		Diluted income	$	.81		$	4.24
		Book value		12.15			10.99		11
		Tangible book value ⁽²⁾		12.10			10.95		11

	Key performance ratios:
		Return on common equity ⁽¹⁾⁽³⁾		9.02	%		64.29	%
		Return on assets ⁽³⁾		.89			4.93
		Net interest margin ⁽³⁾		3.25			3.32
		Efficiency ratio		58.54			64.19
		Equity to assets		9.66			9.91
		Tangible equity to assets ⁽²⁾		9.64			9.85
		Tangible common equity to assets ⁽²⁾		9.55			7.04
		Tangible common equity to risk-weighted assets ⁽²⁾		14.10			13.34

ASSET QUALITY *
	Non-performing loans		$	18,745		$	26,088
	Foreclosed properties			3,146			4,467
		Total non-performing assets (NPAs)		21,891			30,555
	Allowance for loan losses			71,928			80,372
	Net charge-offs			11,369			89,265
	Allowance for loan losses to loans			1.57	%		1.88	%
	Net charge-offs to average loans ⁽³⁾			.35			2.84
	NPAs to loans and foreclosed properties			.48			.72
	NPAs to total assets			.29			.42

AVERAGE BALANCES ($ in millions)
	Loans		$	4,393		$	4,234		4
	Investment securities			2,292			2,160		6
	Earning assets			6,836			6,590		4
	Total assets			7,392			6,974		6
	Deposits			6,176			5,972		3
	Shareholders' equity			714			691		3
	Common shares - basic (thousands)			60,511			58,443
	Common shares - diluted (thousands)			60,513			58,444

AT PERIOD END ($ in millions)
	Loans *		$	4,569		$	4,267		7
	Investment securities			2,222			2,169		2
	Total assets			7,526			7,243		4
	Deposits			6,241			6,113		2
	Shareholders' equity			736			852		(14	)
	Common shares outstanding (thousands)			60,248			59,412

* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.




UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information


		2014									2013
(in thousands, except per share data; taxable equivalent)		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent		$	63,338		$	61,783		$	60,495		$	61,695		$	61,426
Taxable equivalent adjustment			(405	)		(377	)		(357	)		(380	)		(370	)
	Interest revenue (GAAP)	$	62,933		$	61,406		$	60,138		$	61,315		$	61,056

Net interest revenue reconciliation
Net interest revenue - taxable equivalent		$	56,967		$	54,950		$	54,169		$	55,879		$	54,257
Taxable equivalent adjustment			(405	)		(377	)		(357	)		(380	)		(370	)
	Net interest revenue (GAAP)	$	56,562		$	54,573		$	53,812		$	55,499		$	53,887

Total revenue reconciliation
Total operating revenue		$	69,379		$	66,893		$	63,845		$	66,398		$	65,482
Taxable equivalent adjustment			(405	)		(377	)		(357	)		(380	)		(370	)
	Total revenue (GAAP)	$	68,974		$	66,516		$	63,488		$	66,018		$	65,112

Income before taxes reconciliation
Income before taxes		$	28,015		$	26,361		$	24,795		$	24,784		$	25,385
Taxable equivalent adjustment			(405	)		(377	)		(357	)		(380	)		(370	)
	Income before taxes (GAAP)	$	27,610		$	25,984		$	24,438		$	24,404		$	25,015

Income tax expense (benefit) reconciliation
Income tax expense (benefit)		$	10,399		$	10,004		$	9,395		$	8,873		$	9,885
Taxable equivalent adjustment			(405	)		(377	)		(357	)		(380	)		(370	)
	Income tax expense (benefit) (GAAP)	$	9,994		$	9,627		$	9,038		$	8,493		$	9,515

Book value per common share reconciliation
Tangible book value per common share		$	12.10		$	11.91		$	11.63		$	11.26		$	10.95
Effect of goodwill and other intangibles			.05			.03			.03			.04			.04
	Book value per common share (GAAP)	$	12.15		$	11.94		$	11.66		$	11.30		$	10.99

Average equity to assets reconciliation
Tangible common equity to assets			9.83	%		9.58	%		9.22	%		8.99	%		9.02	%
Effect of preferred equity			-			-			.28			2.60			2.74
	Tangible equity to assets		9.83			9.58			9.50			11.59			11.76
Effect of goodwill and other intangibles			.02			.03			.02			.03			.04
	Equity to assets (GAAP)		9.85	%		9.61	%		9.52	%		11.62	%		11.80	%

Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets			14.10	%		13.92	%		13.63	%		13.18	%		13.34	%
Effect of other comprehensive income			.34			.53			.36			.39			.49
Effect of deferred tax limitation			(3.39	)		(3.74	)		(3.92	)		(4.26	)		(4.72	)
Effect of trust preferred			1.02			1.04			1.03			1.04			1.09
Effect of preferred equity			-			-			-			2.39			4.01
	Tier I capital ratio (Regulatory)		12.07	%		11.75	%		11.10	%		12.74	%		14.21	%




UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information


		For the Nine Months
		Ended September 30,
(in thousands, except per share data; taxable equivalent)		2014			2013
Interest revenue reconciliation
Interest revenue - taxable equivalent		$	185,616		$	185,628
Taxable equivalent adjustment			(1,139	)		(1,103	)
	Interest revenue (GAAP)	$	184,477		$	184,525

Net interest revenue reconciliation
Net interest revenue - taxable equivalent		$	166,086		$	163,762
Taxable equivalent adjustment			(1,139	)		(1,103	)
	Net interest revenue (GAAP)	$	164,947		$	162,659

Total revenue reconciliation
Total operating revenue		$	200,117		$	144,341
Taxable equivalent adjustment			(1,139	)		(1,103	)
	Total revenue (GAAP)	$	198,978		$	143,238

Income before taxes reconciliation
Income before taxes		$	79,171		$	11,651
Taxable equivalent adjustment			(1,139	)		(1,103	)
	Income before taxes (GAAP)	$	78,032		$	10,548

Income tax expense (benefit) reconciliation
Income tax expense (benefit)		$	29,798		$	(245,578	)
Taxable equivalent adjustment			(1,139	)		(1,103	)
	Income tax expense (benefit) (GAAP)	$	28,659		$	(246,681	)

Book value per common share reconciliation
Tangible book value per common share		$	12.10		$	10.95
Effect of goodwill and other intangibles			.05			.04
	Book value per common share (GAAP)	$	12.15		$	10.99

Average equity to assets reconciliation
Tangible common equity to assets			9.55	%		7.04	%
Effect of preferred equity			.09			2.81
	Tangible equity to assets		9.64			9.85
Effect of goodwill and other intangibles			.02			.06
	Equity to assets (GAAP)		9.66	%		9.91	%

Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets			14.10	%		13.34	%
Effect of other comprehensive income			.34			.49
Effect of deferred tax limitation			(3.39	)		(4.72	)
Effect of trust preferred			1.02			1.09
Effect of preferred equity			-			4.01
	Tier I capital ratio (Regulatory)		12.07	%		14.21	%




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End ⁽¹⁾


			2014						2013
(in millions)			Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Third Quarter
LOANS BY CATEGORY
Owner occupied commercial RE			$	1,153	$	1,163	$	1,142	$	1,134	$	1,129
Income producing commercial RE				605		598		624		623		614
Commercial & industrial				650		554		495		472		457
Commercial construction				181		160		148		149		137
		Total commercial		2,589		2,475		2,409		2,378		2,337
Residential mortgage				866		861		866		875		888
Home equity lines of credit				459		451		447		441		421
Residential construction				307		302		318		328		318
Consumer installment				348		321		316		307		303
		Total loans	$	4,569	$	4,410	$	4,356	$	4,329	$	4,267

LOANS BY MARKET
North Georgia			$	1,168	$	1,175	$	1,205	$	1,240	$	1,262
Atlanta MSA				1,289		1,305		1,290		1,275		1,246
North Carolina				553		555		563		572		575
Coastal Georgia				444		426		425		423		421
Gainesville MSA				254		257		262		255		253
East Tennessee				281		270		272		280		277
South Carolina / Corporate				337		206		131		88		47
Other ⁽²⁾				243		216		208		196		186
		Total loans	$	4,569	$	4,410	$	4,356	$	4,329	$	4,267

RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development		$	36	$	34	$	37	$	39	$	40
	Land loans			35		36		37		38		35
	Lot loans			146		151		159		166		167
		Total		217		221		233		243		242

House loans
	Spec			18		19		19		23		30
	Sold			72		62		66		62		46
		Total		90		81		85		85		76
Total residential construction			$	307	$	302	$	318	$	328	$	318

⁽¹⁾ Excludes total loans of $2.8 million, $3.1 million, $19.3 million, $20.3 million and $23.3 million as of September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. ⁽²⁾ Includes purchased indirect auto loans that are not assigned to a geographic region.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End ⁽¹⁾


			2014				2013		Linked			Year over
			Third		Second		Third		Quarter			Year
(in millions)			Quarter		Quarter		Quarter		Change			Change
LOANS BY CATEGORY
Owner occupied commercial RE			$	1,153	$	1,163	$	1,129	$	(10	)	$	24
Income producing commercial RE				605		598		614		7			(9	)
Commercial & industrial				650		554		457		96			193
Commercial construction				181		160		137		21			44
		Total commercial		2,589		2,475		2,337		114			252
Residential mortgage				866		861		888		5			(22	)
Home equity lines of credit				459		451		421		8			38
Residential construction				307		302		318		5			(11	)
Consumer installment				348		321		303		27			45
		Total loans	$	4,569	$	4,410	$	4,267		159			302

LOANS BY MARKET
North Georgia			$	1,168	$	1,175	$	1,262		(7	)		(94	)
Atlanta MSA				1,289		1,305		1,246		(16	)		43
North Carolina				553		555		575		(2	)		(22	)
Coastal Georgia				444		426		421		18			23
Gainesville MSA				254		257		253		(3	)		1
East Tennessee				281		270		277		11			4
South Carolina / Corporate				337		206		47		131			290
Other ⁽²⁾				243		216		186		27			57
		Total loans	$	4,569	$	4,410	$	4,267		159			302

RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development		$	36	$	34	$	40		2			(4	)
	Land loans			35		36		35		(1	)		-
	Lot loans			146		151		167		(5	)		(21	)
		Total		217		221		242		(4	)		(25	)

House loans
	Spec			18		19		30		(1	)		(12	)
	Sold			72		62		46		10			26
		Total		90		81		76		9			14
Total residential construction			$	307	$	302	$	318		5			(11	)




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality ⁽¹⁾


		Third Quarter 2014
(in thousands)		Non-performing Loans			Foreclosed Properties			Total NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	2,156		$	1,024		$	3,180
Income producing CRE			1,742			42			1,784
Commercial & industrial			1,593			-			1,593
Commercial construction			148			-			148
	Total commercial		5,639			1,066			6,705
Residential mortgage			8,350			1,769			10,119
Home equity lines of credit			720			90			810
Residential construction			3,543			221			3,764
Consumer installment			493			-			493
	Total NPAs	$	18,745		$	3,146		$	21,891
	Balance as a % of Unpaid Principal		68.6	%		54.5	%		66.1	%

NONPERFORMING ASSETS BY MARKET
North Georgia		$	7,392		$	1,717		$	9,109
Atlanta MSA			1,724			364			2,088
North Carolina			4,919			398			5,317
Coastal Georgia			781			160			941
Gainesville MSA			1,403			85			1,488
East Tennessee			1,227			245			1,472
South Carolina / Corporate			945			177			1,122
Other ⁽³⁾			354			-			354
	Total NPAs	$	18,745		$	3,146		$	21,891


NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	20,724		$	2,969		$	23,693
Loans placed on non-accrual			7,665			-			7,665
Payments received			(3,129	)		-			(3,129	)
Loan charge-offs			(4,353	)		-			(4,353	)
Foreclosures			(2,162	)		2,162			-
Capitalized costs			-			209			209
Property sales			-			(2,350	)		(2,350	)
Write downs			-			(108	)		(108	)
Net gains (losses) on sales			-			264			264
	Ending Balance	$	18,745		$	3,146		$	21,891


⁽¹⁾		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Annualized.
⁽³⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality ⁽¹⁾


		Second Quarter 2014
(in thousands)		Non-performing Loans			Foreclosed Properties			Total NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	2,975		$	653		$	3,628
Income producing CRE			1,032			242			1,274
Commercial & industrial			1,102			-			1,102
Commercial construction			95			-			95
	Total commercial		5,204			895			6,099
Residential mortgage			10,201			1,426			11,627
Home equity lines of credit			510			128			638
Residential construction			4,248			520			4,768
Consumer installment			561			-			561
	Total NPAs	$	20,724		$	2,969		$	23,693
	Balance as a % of Unpaid Principal		66.5	%		.4	%		3.9	%

NONPERFORMING ASSETS BY MARKET
North Georgia		$	8,216		$	1,392		$	9,608
Atlanta MSA			3,883			510			4,393
North Carolina			5,314			615			5,929
Coastal Georgia			782			80			862
Gainesville MSA			921			49			970
East Tennessee			1,218			323			1,541
South Carolina / Corporate			-			-			-
Other ⁽³⁾			390			-			390
	Total NPAs	$	20,724		$	2,969		$	23,693


NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	25,250		$	5,594		$	30,844
Loans placed on non-accrual			9,529			-			9,529
Payments received			(4,027	)		-			(4,027	)
Loan charge-offs			(8,341	)		-			(8,341	)
Foreclosures			(1,687	)		1,687			-
Capitalized costs			-			-			-
Property sales			-			(4,430	)		(4,430	)
Write downs			-			(305	)		(305	)
Net gains (losses) on sales			-			423			423
	Ending Balance	$	20,724		$	2,969		$	23,693


⁽¹⁾		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Annualized.
⁽³⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality ⁽¹⁾


		First Quarter 2014
(in thousands)		Non-performing Loans			Foreclosed Properties			Total NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE		$	3,868		$	1,167		$	5,035
Income producing CRE			1,278			1,645			2,923
Commercial & industrial			822			-			822
Commercial construction			479			-			479
	Total commercial		6,447			2,812			9,259
Residential mortgage			13,307			2,146			15,453
Home equity lines of credit			1,106			362			1,468
Residential construction			3,805			274			4,079
Consumer installment			585			-			585
	Total NPAs	$	25,250		$	5,594		$	30,844
	Balance as a % of U npaid Principal		65.8	%		53.9	%		63.2	%

NONPERFORMING ASSETS BY MARKET
North Georgia		$	12,166		$	2,058		$	14,224
Atlanta MSA			2,916			904			3,820
North Carolina			6,501			866			7,367
Coastal Georgia			800			1,607			2,407
Gainesville MSA			1,145			-			1,145
East Tennessee			1,428			159			1,587
South Carolina / Corporate			-			-			-
Other ⁽³⁾			294			-			294
	Total NPAs	$	25,250		$	5,594		$	30,844


NONPERFORMING ASSETS ACTIVITY
Beginning Balance		$	26,819		$	4,221		$	31,040
Loans placed on non-accrual			9,303			-			9,303
Payments received			(1,666	)		-			(1,666	)
Loan charge-offs			(4,839	)		-			(4,839	)
Foreclosures			(4,367	)		4,367			-
Capitalized costs			-			-			-
Property sales			-			(3,238	)		(3,238	)
Write downs			-			(277	)		(277	)
Net gains (losses) on sales			-			521			521
	Ending Balance	$	25,250		$	5,594		$	30,844

(1)		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2)		Annualized.
(3)		Includes purchased indirect auto loans that are not assigned to a geographic region.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality ⁽¹⁾


		Third Quarter 2014					Second Quarter 2014					First Quarter 2014
(in thousands)		Net Charge-Offs			Net Charge- Offs to Average Loans ⁽²⁾		Net Charge-Offs			Net Charge- Offs to Average Loans ⁽²⁾		Net Charge-Offs		Net Charge- Offs to Average Loans ⁽²⁾
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE		$	746		.26	%	$	(1,836	)	(.64)	%	$	278	.10	%
Income producing CRE			104		.07			435		.29			205	.13
Commercial & industrial			(341	)	(.23	)		662		.52			421	.35
Commercial construction			103		.24			131		.34			-	-
	Total commercial		612		.10			(608	)	(.10	)		904	.15
Residential mortgage			1,116		.52			2,509		1.17			1,515	.71
Home equity lines of credit			356		.31			466		.42			993	.90
Residential construction			712		.94			1,671		2.13			212	.27
Consumer installment			359		.43			137		.18			415	.54
	Total	$	3,155		.28		$	4,175		.38		$	4,039	.38


NET CHARGE-OFFS BY MARKET
North Georgia		$	1,861		.63	%	$	(741	)	(.25)	%	$	1,272	.42	%
Atlanta MSA			(250	)	(.08	)		1,481		.46			1,232	.39
North Carolina			656		.47			2,161		1.55			577	.41
Coastal Georgia			228		.21			116		.11			512	.49
Gainesville MSA			259		.40			797		1.23			141	.22
East Tennessee			230		.33			288		.42			239	.35
South Carolina / Corporate			5		.01			-		-			-	-
Other ⁽³⁾			166		.31			73		.14			66	.14
	Total	$	3,155		.28		$	4,175		.38		$	4,039	.38


⁽¹⁾		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
⁽²⁾		Annualized.
⁽³⁾		Includes purchased indirect auto loans that are not assigned to a geographic region.




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)				2014		2013		2014			2013
Interest revenue:
	Loans, including fees			$	49,653	$	50,162	$	145,602		$	151,827
	Investment securities, including tax exempt of $177, $202, $558 and $624				12,346		9,887		36,118			29,905
	Deposits in banks and short-term investments				934		1,007		2,757			2,793
			Total interest revenue		62,933		61,056		184,477			184,525

Interest expense:
	Deposits:
		NOW			365		413		1,216			1,286
		Money market			872		545		2,192			1,641
		Savings			20		37		61			109
		Time			1,721		2,630		5,510			8,871
			Total deposit interest expense		2,978		3,625		8,979			11,907
	Short-term borrowings				316		525		2,064			1,563
	Federal Home Loan Bank advances				435		16		573			65
	Long-term debt				2,642		3,003		7,914			8,331
		Total interest expense			6,371		7,169		19,530			21,866
		Net interest revenue			56,562		53,887		164,947			162,659
	Provision for credit losses				2,000		3,000		6,700			62,500
		Net interest revenue after provision for credit losses			54,562		50,887		158,247			100,159

Fee revenue:
	Service charges and fees				8,202		8,456		24,627			23,831
	Mortgage loan and other related fees				2,178		2,554		5,409			8,212
	Brokerage fees				1,209		1,274		3,631			3,104
	Securities gains, net				11		-		4,663			116
	Loss from prepayment of debt				-		-		(4,446	)		-
	Other				2,812		1,941		6,847			7,816
		Total fee revenue			14,412		14,225		40,731			43,079
		Total revenue			68,974		65,112		198,978			143,238

Operating expenses:
	Salaries and employee benefits				25,666		23,090		74,349			71,416
	Communications and equipment				3,094		3,305		9,370			9,819
	Occupancy				3,425		3,379		10,065			10,195
	Advertising and public relations				894		962		2,659			2,937
	Postage, printing and supplies				876		644		2,456			2,401
	Professional fees				2,274		2,650		5,873			7,515
	Foreclosed property				285		194		503			7,678
	FDIC assessments and other regulatory charges				1,131		2,405		3,909			7,415
	Amortization of intangibles				313		427		1,061			1,623
	Other				3,406		3,041		10,701			11,691
		Total operating expenses			41,364		40,097		120,946			132,690
		Net income before income taxes			27,610		25,015		78,032			10,548
	Income tax expense (benefit)				9,994		9,515		28,659			(246,681	)
		Net income			17,616		15,500		49,373			257,229
	Preferred stock dividends and discount accretion				-		3,059		439			9,166
		Net income available to common shareholders		$	17,616	$	12,441	$	48,934		$	248,063

Earnings per common share:
	Basic			$	.29	$	.21	$	.81		$	4.24
	Diluted				.29		.21		.81			4.24
Weighted average common shares outstanding:
	Basic				60,776		59,100		60,511			58,443
	Diluted				60,779		59,202		60,513			58,444




UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)

(in thousands, except share and per share data)						September 30, 2014			December 31, 2013			September 30, 2013
ASSETS
	Cash and due from banks					$	75,268		$	71,230		$	70,986
	Interest-bearing deposits in banks						117,399			119,669			131,147
	Short-term investments						23,397			37,999			62,000
		Cash and cash equivalents					216,064			228,898			264,133
	Securities available for sale						1,789,667			1,832,217			1,963,424
	Securities held to maturity (fair value $440,311, $485,585 and $214,651)						432,418			479,742			205,613
	Mortgage loans held for sale						20,004			10,319			11,987
	Loans, net of unearned income						4,568,886			4,329,266			4,267,067
		Less allowance for loan losses					(71,928	)		(76,762	)		(80,372	)
			Loans, net				4,496,958			4,252,504			4,186,695
	Assets covered by loss sharing agreements with the FDIC						3,253			22,882			31,207
	Premises and equipment, net						160,454			163,589			165,993
	Bank owned life insurance						81,101			80,670			80,537
	Accrued interest receivable						19,908			19,598			18,199
	Goodwill and other intangible assets						3,910			3,480			3,888
	Foreclosed property						3,146			4,221			4,467
	Net deferred tax asset						224,734			258,518			269,784
	Derivative financial instruments						22,221			23,833			8,092
	Other assets						52,051			44,948			29,274
		Total assets				$	7,525,889		$	7,425,419		$	7,243,293
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
		Deposits:
			Demand			$	1,561,020		$	1,388,512		$	1,418,782
			NOW				1,399,449			1,427,939			1,279,134
			Money market				1,281,526			1,227,575			1,197,495
			Savings				287,797			251,125			249,044
			Time:
				Less than $100,000			774,201			892,961			925,089
				Greater than $100,000			531,428			588,689			624,019
		Brokered					405,308			424,704			419,344
					Total deposits		6,240,729			6,201,505			6,112,907
	Short-term borrowings						6,001			53,241			53,769
	Federal Home Loan Bank advances						330,125			120,125			125
	Long-term debt						129,865			129,865			129,865
	Derivative financial instruments						36,171			46,232			37,269
	Unsettled securities purchases						-			29,562			11,610
	Accrued expenses and other liabilities						46,573			49,174			45,531
		Total liabilities					6,789,464			6,629,704			6,391,076
Shareholders' equity:
	Preferred stock, $1 par value; 10,000,000 shares authorized;
		Series A; $10 stated value; 0, 0 and 21,700 shares issued and outstanding					-			-			217
		Series B; $1,000 stated value; 0, 105,000 and 180,000 shares issued and outstanding					-			105,000			179,714
		Series D; $1,000 stated value; 0, 16,613 and 16,613 shares issued and outstanding					-			16,613			16,613
	Common stock, $1 par value; 100,000,000 shares authorized; 50,167,191, 46,243,345 and 45,222,839 shares issued and outstanding						50,167			46,243			45,223
	Common stock, non-voting, $1 par value; 26,000,000 shares authorized; 10,080,787, 13,188,206 and 14,189,006 shares issued and outstanding						10,081			13,188			14,189
	Common stock issuable; 354,961, 241,832 and 242,262 shares						5,116			3,930			3,979
	Capital surplus						1,091,555			1,078,676			1,077,536
	Accumulated deficit						(402,773	)		(448,091	)		(461,090	)
	Accumulated other comprehensive loss						(17,721	)		(19,844	)		(24,164	)
		Total shareholders' equity					736,425			795,715			852,217
		Total liabilities and shareholders' equity				$	7,525,889		$	7,425,419		$	7,243,293




UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,

				2014							2013
(dollars in thousands, taxable equivalent)				Average Balance			Interest		Avg. Rate		Average Balance			Interest		Avg. Rate
Assets:
Interest-earning assets:
	Loans, net of unearned income ⁽¹⁾⁽²⁾			$	4,445,947		$	49,853	4.45	%	$	4,249,892		$	50,265	4.69	%
	Taxable securities ⁽³⁾				2,212,116			12,169	2.20			2,157,448			9,685	1.80
	Tax-exempt securities ⁽¹⁾⁽³⁾				18,794			290	6.17			20,913			331	6.32
	Federal funds sold and other interest-earning assets				143,169			1,026	2.87			186,544			1,145	2.46
		Total interest-earning assets			6,820,026			63,338	3.69			6,614,797			61,426	3.69
Non-interest-earning assets:
	Allowance for loan losses				(74,146	)						(83,408	)
	Cash and due from banks				71,224							63,890
	Premises and equipment				161,315							166,906
	Other assets ⁽³⁾				395,184							407,912
		Total assets		$	7,373,603						$	7,170,097
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
	Interest-bearing deposits:
		NOW		$	1,331,806			365	.11		$	1,222,334			413	.13
		Money market			1,387,042			872	.25			1,328,661			545	.16
		Savings			282,746			20	.03			248,937			37	.06
		Time less than $100,000			791,289			876	.44			952,320			1,369	.57
		Time greater than $100,000			542,216			827	.61			644,264			1,229	.76
		Brokered time deposits			278,330			18	.03			233,842			32	.05
			Total interest-bearing deposits		4,613,429			2,978	.26			4,630,358			3,625	.31
		Federal funds purchased and other borrowings			53,713			316	2.33			67,292			525	3.10
		Federal Home Loan Bank advances			227,190			435	.76			32,082			16	.20
		Long-term debt			129,865			2,642	8.07			144,601			3,003	8.24
			Total borrowed funds		410,768			3,393	3.28			243,975			3,544	5.76
			Total interest-bearing liabilities		5,024,197			6,371	.50			4,874,333			7,169	.58
Non-interest-bearing liabilities:
	Non-interest-bearing deposits				1,530,011							1,356,792
	Other liabilities				92,986							93,247
			Total liabilities		6,647,194							6,324,372
Shareholders' equity					726,409							845,725
			Total liabilities and shareholders' equity	$	7,373,603						$	7,170,097
Net interest revenue							$	56,967						$	54,257
Net interest-rate spread									3.19	%						3.11	%
Net interest margin ⁽⁴⁾									3.32	%						3.26	%


⁽¹⁾		Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
⁽²⁾		Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
⁽³⁾		Securities available for sale are shown at amortized cost. Pretax unrealized gains of $7.42 million in 2014 and pretax unrealized losses of $10.6 million in 2013 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,

				2014							2013
(dollars in thousands, taxable equivalent)				Average Balance			Interest		Avg. Rate		Average Balance			Interest		Avg. Rate
Assets:
Interest-earning assets:
	Loans, net of unearned income ⁽¹⁾⁽²⁾			$	4,392,895		$	146,156	4.45	%	$	4,233,531		$	152,073	4.80	%
	Taxable securities ⁽³⁾				2,272,639			35,560	2.09			2,138,725			29,281	1.83
	Tax-exempt securities ⁽¹⁾⁽³⁾				19,515			914	6.24			21,411			1,022	6.36
	Federal funds sold and other interest-earning assets				150,782			2,986	2.64			196,445			3,252	2.21
		Total interest-earning assets			6,835,831			185,616	3.63			6,590,112			185,628	3.76
Non-interest-earning assets:
	Allowance for loan losses				(76,148	)						(100,154	)
	Cash and due from banks				65,744							63,879
	Premises and equipment				161,843							168,144
	Other assets ⁽³⁾				404,654							252,275
		Total assets		$	7,391,924						$	6,974,256
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
	Interest-bearing deposits:
		NOW		$	1,367,713			1,216	.12		$	1,256,684			1,286	.14
		Money market			1,375,064			2,192	.21			1,297,792			1,641	.17
		Savings			272,696			61	.03			242,807			109	.06
		Time less than $100,000			828,694			2,822	.46			997,193			4,686	.63
		Time greater than $100,000			561,167			2,610	.62			670,821			4,086	.81
		Brokered time deposits			300,374			78	.03			201,599			99	.07
			Total interest-bearing deposits		4,705,708			8,979	.26			4,666,896			11,907	.34
		Federal funds purchased and other borrowings			91,320			2,064	3.02			70,512			1,563	2.96
		Federal Home Loan Bank advances			169,392			573	.45			41,352			65	.21
		Long-term debt			129,865			7,914	8.15			131,491			8,331	8.47
			Total borrowed funds		390,577			10,551	3.61			243,355			9,959	5.47
			Total interest-bearing liabilities		5,096,285			19,530	.51			4,910,251			21,866	.60
Non-interest-bearing liabilities:
	Non-interest-bearing deposits				1,469,967							1,305,133
	Other liabilities				111,522							68,312
			Total liabilities		6,677,774							6,283,696
Shareholders' equity					714,150							690,560
			Total liabilities and shareholders' equity	$	7,391,924						$	6,974,256
Net interest revenue							$	166,086						$	163,762
Net interest-rate spread									3.12	%						3.16	%
Net interest margin ⁽⁴⁾									3.25	%						3.32	%


⁽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 $1.59 million in 2014 and pretax unrealized gains of $7.96 million in 2013 are included in other assets for purposes of this presentation.
⁽⁴⁾		Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

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

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