EX-99.2 3 t82800_ex99-2.htm EXHIBIT 99.2

 

 

Exhibit 99.2

 


 

For Immediate Release

 

For more information:

Rex S. Schuette

Chief Financial Officer

(706) 781-2266

Rex_Schuette@ucbi.com

 

 

UNITED COMMUNITY BANKS, INC. REPORTS

NET OPERATING INCOME OF $20.0 MILLION FOR SECOND QUARTER 2015,

UP 22 PERCENT FROM A YEAR AGO

 

· Operating earnings per diluted share of 32 cents, up 19 percent from a year ago
· Completed merger with MoneyTree Corporation and its wholly owned subsidiary, First National Bank, on May 1st
· Loans up $142 million from first quarter, or 12 percent annualized, excluding loans acquired in the merger
· Core transaction deposits up $109 million, or 11 percent annualized, excluding deposits acquired in the merger
· Net interest margin holds steady at 3.30 percent
· Regulatory approvals received for acquisition of Palmetto Bancshares

 

BLAIRSVILLE, GA – July 22, 2015 – United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported net operating income of $20.0 million for the second quarter of 2015, up 22 percent from a year ago. Operating earnings per diluted share was 32 cents, up 19 percent from a year ago. The increase reflects strong loan and core deposit growth, a stable net interest margin, growth in fee revenue and a lower provision for credit losses.

 

Operating earnings and diluted operating earnings per share exclude the effects of merger-related charges which are not considered part of ongoing operations. Including those charges, net income was $17.8 million for the second quarter, or 28 cents per diluted share. For the first six months, United reported net income of $35.5 million, or 57 cents per diluted share. Excluding merger related charges, net operating income was $37.6 million, or 61 cents per diluted share.

 

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“Our second quarter financial performance was outstanding by every measure,” said Jimmy Tallent, chairman and chief executive officer. “I’m especially proud to report that we achieved our goal for a one percent return on assets, excluding merger-related charges.

 

“We had solid loan growth combined with a steady net interest margin,” Tallent continued. “Strong recoveries of previously charged-off loans drove our provision for credit losses down to half the first quarter level. Fee revenue was up significantly, with strong growth in our mortgage business and gains from our SBA lending business.

 

“Second quarter net loan growth of $142 million, excluding the merger with MoneyTree Corporation and its wholly owned subsidiary, First National Bank (“FNB”), was driven by strong loan production of $526 million across all United markets. Our community banks originated $296 million of loan production while our specialized lending area, which includes health care, corporate, SBA, asset-based, middle market and commercial real estate lending, produced $152 million. Core deposit growth was another contributing factor with a linked-quarter increase of $109 million, or 11 percent annualized, excluding deposits acquired in the merger. Increased demand deposits in our Atlanta and western North Carolina markets drove over half of this growth.”

 

Second quarter taxable equivalent net interest revenue totaled $61.3 million, up $3.70 million from the first quarter and up $6.37 million from the second quarter of 2014. The acquisition of FNB added just over $2.0 million to second quarter net interest revenue. The taxable equivalent net interest margin of 3.30 percent held steady with the first quarter and was up 9 basis points from a year ago. Along with loan growth, this drove the remainder of the increase in net interest revenue.

 

At $900 thousand, the second quarter provision for credit losses was half of the amount from the first quarter and down $1.3 million from the second quarter of 2014. Second quarter net charge-offs were $978 thousand compared with $2.56 million in the first quarter and $4.18 million a year ago. Strong recoveries of previously charged-off loans drove net charge-offs down in the second quarter. Nonperforming assets to total assets were .26 percent, equal to last quarter, and down from .32 percent a year ago.

 

2
 

 

Second quarter fee revenue totaled $17.3 million, up $1.58 million from the first quarter and $3.12 million from the second quarter of 2014. Higher mortgage fees and an increase in gains from SBA loan sales account for most of the increase from both prior periods. Mortgage fees of $3.71 million were up $952 thousand from the first quarter and up $1.83 million from a year ago, reflecting strong growth in home purchases and an increase in refinancing activity. Closed mortgage loans totaled $128 million in the second quarter of 2015, compared with $87.9 million in the first quarter and $68.5 million in the second quarter of 2014. SBA loan sale gains totaled $1.49 million in the second quarter of 2015 compared with $1.14 million in the first quarter of 2015 and $744 thousand in the second quarter of 2014.

 

Second quarter brokerage fees of $1.23 million from United’s advisory services business were down $319 thousand from the first quarter and were level with the second quarter of 2014. Service charges and fees of $8.38 million were up $760 thousand from the first quarter, reflecting growth in interchange fees, while down $152 thousand from a year ago, primarily reflecting the declining trend in overdraft fees.

 

“Our growth in fee revenue reflects our commitment to diversifying the revenue stream by focusing on fee generating products and services,” stated Tallent.

 

Operating expenses, excluding merger-related charges of $3.17 million, were $45.2 million in the second quarter compared to $43.1 million in the first quarter and $40.5 million a year ago. The acquisition of FNB added approximately $1.6 million in operating expenses from the acquisition date of May 1. FNB’s expenses are expected to decline as anticipated cost savings are realized. First quarter 2015 operating expenses included a non-core charge of $690 thousand associated with closing all loss sharing agreements with the FDIC.

 

3
 

 

Second quarter salaries and employee benefits expense of $28.0 million was up $1.52 million from the first quarter and $3.67 million from a year ago. The increases reflect the addition of FNB’s compensation expenses for two months, investment in new producers and support staff for the specialized lending area, and higher commissions and incentives associated with growth in the mortgage business and in commercial loans and core deposits. Other operating expenses of $4.89 million for the second quarter were down $358 thousand from the first quarter and up $486 thousand from the second quarter of 2014. Other operating expenses for the first quarter 2015 included the $690 thousand charge associated with closing all loss sharing agreements with the FDIC. The increase from a year ago is mostly due to higher lending support costs.

 

Tallent noted, “the previously announced merger with FNB closed on May 1, and their results of operations are included in United’s results from that date forward. Conversion of the operating systems was successfully completed last weekend.

 

“We also announced our planned merger with Palmetto Bancshares, Inc. and its banking subsidiary, The Palmetto Bank, which is headquartered in Greenville, South Carolina,” Tallent said. “The Palmetto Bank is a high-quality franchise with $1.2 billion in assets and 25 banking offices in the Upstate South Carolina markets. The merger creates significant benefits for United, including meaningful earnings per share accretion, improved growth profile and profitability, attractive rates of return, and higher franchise value. We have received all regulatory approvals and the transaction is scheduled to close on September 1. I am very pleased to welcome both First National Bank and The Palmetto Bank to the United family.”

 

At June 30, 2015, capital ratios were as follows: Tier 1 Risk-Based of 11.9 percent; Total Risk-Based of 13.1 percent; Tier 1 Common Risk-Based of 11.9 percent; and, Tier 1 Leverage of 9.1 percent.

 

“Our second quarter results continue the positive momentum from the first quarter, with strong growth in loans, core deposits, and fee revenue,” Tallent said. “We are excited about executing our growth strategies to expand the franchise and add value for shareholders. And, as always, we look forward to serving our customers – both existing and new – with the outstanding service for which our bankers are so very well known.”

 

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Conference Call

United will hold a conference call today, Wednesday, July 22, 2015, 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 74542415. 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. (UCBI) is a bank holding company based in Blairsville, Georgia, with $8.2 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast’s largest full-service banks, operating 114 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. In 2014 and 2015, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and in 2015 was ranked fourteenth on the Forbes list of America’s Best Banks. Additional information about the company and the bank’s full range of products and services can be found at www.ucbi.com.

 

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 2014 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.

# # #

 

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UNITED COMMUNITY BANKS, INC.                     
Financial Highlights                     
Selected Financial Information                     
                   Second  For the Six    
    2015  2014  Quarter  Months Ended  YTD 
(in thousands, except per share   Second  First  Fourth  Third  Second  2015-2014  June 30,  2015-2014 
data; taxable equivalent)   Quarter  Quarter  Quarter  Quarter  Quarter  Change  2015  2014  Change 
INCOME SUMMARY                                      
Interest revenue   $66,134  $62,909  $64,353  $63,338  $61,783      $129,043  $122,278     
Interest expense    4,817   5,292   6,021   6,371   6,833       10,109   13,159     
Net interest revenue    61,317   57,617   58,332   56,967   54,950   12%  118,934   109,119   9%
Provision for credit losses    900   1,800   1,800   2,000   2,200       2,700   4,700     
Fee revenue    17,266   15,682   14,823   14,412   14,143   22   32,948   26,319   25 
Total revenue    77,683   71,499   71,355   69,379   66,893   16   149,182   130,738   14 
Expenses - operating (1)    45,247   43,061   41,919   41,364   40,532   12   88,308   79,582   11 
Income before income tax expense - operating (1)    32,436   28,438   29,436   28,015   26,361   23   60,874   51,156   19 
Income tax expense - operating (1)    12,447   10,768   11,189   10,399   10,004   24   23,215   19,399   20 
Net income - operating (1)    19,989   17,670   18,247   17,616   16,357   22   37,659   31,757   19 
Preferred dividends and discount accretion    17   -   -   -   -       17   439     
Net income available to common shareholders - operating (1)    19,972   17,670   18,247   17,616   16,357   22   37,642   31,318   20 
Merger-related charges, net of income tax benefit    2,176   -   -   -   -       2,176   -     
Net income available to common shareholders - GAAP   $17,796  $17,670  $18,247  $17,616  $16,357   9  $35,466  $31,318   13 
                                       
PERFORMANCE MEASURES                                      
  Per common share:                                      
Diluted income - operating (1)   $.32  $.29  $.30  $.29  $.27   19  $.61  $.52   17 
Diluted income - GAAP    .28   .29   .30   .29   .27   4   .57   .52   10 
Cash dividends declared    .05   .05   .05   .03   .03       .10   .03     
Book value    12.95   12.58   12.20   12.15   11.94   8   12.95   11.94   8 
Tangible book value (3)    12.66   12.53   12.15   12.10   11.91   6   12.66   11.91   6 
                                       
  Key performance ratios:                                      
Return on common equity - operating (1)(2)(4)    9.90%  9.34%  9.60%  9.41%  8.99%      9.63%  8.82%    
Return on common equity - GAAP (2)(4)    8.83   9.34   9.60   9.41   8.99       9.08   8.82     
Return on assets - operating (1)(4)    1.00   .94   .96   .95   .88       .97   .87     
Return on assets - GAAP (4)    .89   .94   .96   .95   .88       .92   .87     
Dividend payout ratio - operating (1)    15.63   17.24   16.67   10.34   11.11       16.39   5.77     
Dividend payout ratio - GAAP    17.86   17.24   16.67   10.34   11.11       17.54   5.77     
Net interest margin (4)    3.30   3.31   3.31   3.32   3.21       3.30   3.21     
Efficiency ratio - operating (1)    57.59   59.15   57.47   57.96   58.65       58.34   58.85     
Efficiency ratio - GAAP    61.63   59.15   57.47   57.96   58.65       60.44   58.85     
Average equity to average assets    10.05   9.86   9.76   9.85   9.61       9.96   9.56     
Average tangible equity to average assets (3)    9.91   9.82   9.72   9.83   9.58       9.87   9.54     
Average tangible common equity to average assets (3)    9.83   9.82   9.72   9.83   9.58       9.83   9.40     
Tangible common equity to risk-weighted assets (3)(5)    13.24   13.53   13.82   14.10   13.92       13.24   13.92     
                                       
ASSET QUALITY                                      
  Nonperforming loans   $18,805  $19,015  $17,881  $18,745  $20,724   (9) $18,805  $20,724     
  Foreclosed properties    2,356   1,158   1,726   3,146   2,969   (21)  2,356   2,969     
Total nonperforming assets (NPAs)    21,161   20,173   19,607   21,891   23,693   (11)  21,161   23,693     
  Allowance for loan losses    70,129   70,007   71,619   71,928   73,248       70,129   73,248     
  Net charge-offs    978   2,562   2,509   3,155   4,175   (77)  3,540   8,214     
  Allowance for loan losses to loans    1.36%  1.46%  1.53%  1.57%  1.66%      1.36%  1.66%    
  Net charge-offs to average loans (4)    .08   .22   .22   .28   .38       .15   .38     
  NPAs to loans and foreclosed properties    .41   .42   .42   .48   .54       .41   .54     
  NPAs to total assets    .26   .26   .26   .29   .32       .26   .32     
                                       
AVERAGE BALANCES ($ in millions)                                      
  Loans   $5,017  $4,725  $4,621  $4,446  $4,376   15  $4,872  $4,366   12 
  Investment securities    2,261   2,203   2,222   2,231   2,326   (3)  2,232   2,323   (4)
  Earning assets    7,444   7,070   7,013   6,820   6,861   8   7,258   6,844   6 
  Total assets    8,017   7,617   7,565   7,374   7,418   8   7,818   7,401   6 
  Deposits    6,669   6,369   6,383   6,143   6,187   8   6,520   6,192   5 
  Shareholders’ equity    806   751   738   726   713   13   778   708   10 
  Common shares - basic (thousands)    62,549   60,905   60,830   60,776   60,712       61,730   60,386   2 
  Common shares - diluted (thousands)    62,553   60,909   60,833   60,779   60,714       61,734   60,388   2 
                                       
AT PERIOD END ($ in millions)                                      
  Loans   $5,174  $4,788  $4,672  $4,569  $4,410   17  $5,174  $4,410   17 
  Investment securities    2,322   2,201   2,198   2,222   2,190   6   2,322   2,190   6 
  Total assets    8,246   7,664   7,567   7,526   7,352   12   8,246   7,352   12 
  Deposits    6,808   6,438   6,327   6,241   6,164   10   6,808   6,164   10 
  Shareholders’ equity    827   764   740   736   722   15   827   722   15 
  Common shares outstanding (thousands)    62,700   60,309   60,259   60,248   60,139       62,700   60,139     

 

(1) Excludes merger-related charges. (2) Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.

 

 
 

 

UNITED COMMUNITY BANKS, INC.                      
Non-GAAP Performance Measures Reconciliation      
Selected Financial Information                      
    2015     2014    

For the Six Months Ended
June 30,

  
(in thousands, except per share   Second     First     Fourth     Third     Second      
data; taxable equivalent)   Quarter     Quarter     Quarter     Quarter     Quarter     2015     2014  
                                           
Interest revenue reconciliation                                          
Interest revenue - taxable equivalent   $ 66,134     $ 62,909     $ 64,353     $ 63,338     $ 61,783     $ 129,043     $ 122,278  
Taxable equivalent adjustment     (326 )     (375 )     (398 )     (405 )     (377 )     (701 )     (734 )
    Interest revenue (GAAP)   $ 65,808     $ 62,534     $ 63,955     $ 62,933     $ 61,406     $ 128,342     $ 121,544  
                                                         
Net interest revenue reconciliation                                                  
Net interest revenue - taxable equivalent   $ 61,317     $ 57,617     $ 58,332     $ 56,967     $ 54,950     $ 118,934     $ 109,119  
Taxable equivalent adjustment     (326 )     (375 )     (398 )     (405 )     (377 )     (701 )     (734 )
    Net interest revenue (GAAP)   $ 60,991     $ 57,242     $ 57,934     $ 56,562     $ 54,573     $ 118,233     $ 108,385  
                                                         
Total revenue reconciliation                                                        
Total operating revenue   $ 77,683     $ 71,499     $ 71,355     $ 69,379     $ 66,893     $ 149,182     $ 130,738  
Taxable equivalent adjustment     (326 )     (375 )     (398 )     (405 )     (377 )     (701 )     (734 )
    Total revenue (GAAP)   $ 77,357     $ 71,124     $ 70,957     $ 68,974     $ 66,516     $ 148,481     $ 130,004  
                                                         
Expense reconciliation                                                        
Expenses - operating   $ 45,247     $ 43,061     $ 41,919     $ 41,364     $ 40,532     $ 88,308     $ 79,582  
Merger-related charges     3,173       -       -       -       -       3,173       -  
    Expenses (GAAP)   $ 48,420     $ 43,061     $ 41,919     $ 41,364     $ 40,532     $ 91,481     $ 79,582  
                                                         
Income before taxes reconciliation                                                  
Income before taxes - operating   $ 32,436     $ 28,438     $ 29,436     $ 28,015     $ 26,361     $ 60,874     $ 51,156  
Taxable equivalent adjustment     (326 )     (375 )     (398 )     (405 )     (377 )     (701 )     (734 )
Merger-related charges     (3,173 )     -       -       -       -       (3,173 )     -  
    Income before taxes (GAAP)   $ 28,937     $ 28,063     $ 29,038     $ 27,610     $ 25,984     $ 57,000     $ 50,422  
                                                         
Income tax expense reconciliation                                                  
Income tax expense - operating   $ 12,447     $ 10,768     $ 11,189     $ 10,399     $ 10,004     $ 23,215     $ 19,399  
Taxable equivalent adjustment     (326 )     (375 )     (398 )     (405 )     (377 )     (701 )     (734 )
Merger-related charges, tax benefit     (997 )     -       -       -       -       (997 )     -  
    Income tax expense (GAAP)   $ 11,124     $ 10,393     $ 10,791     $ 9,994     $ 9,627     $ 21,517     $ 18,665  
                                                         
Net income reconciliation                                                        
Net income - operating   $ 19,989     $ 17,670     $ 18,247     $ 17,616     $ 16,357     $ 37,659     $ 31,757  
Merger-related charges, net of income tax benefit     (2,176 )     -       -       -       -       (2,176 )     -  
    Net income (GAAP)   $ 17,813     $ 17,670     $ 18,247     $ 17,616     $ 16,357     $ 35,483     $ 31,757  
                                                         
Net income available to common shareholders reconciliation                                  
Net income available to common shareholders - operating   $ 19,972     $ 17,670     $ 18,247     $ 17,616     $ 16,357     $ 37,642     $ 31,318  
Merger-related charges, net of income tax benefit     (2,176 )     -       -       -       -       (2,176 )     -  
    Net income available to common shareholders (GAAP)   $ 17,796     $ 17,670     $ 18,247     $ 17,616     $ 16,357     $ 35,466     $ 31,318  
                                                         
Diluted income per common share reconciliation                                          
Diluted income per common share - operating   $ .32     $ .29     $ .30     $ .29     $ .27     $ .61     $ .52  
Merger-related charges     (.04 )     -       -       -       -       (.04 )     -  
    Diluted income per common share (GAAP)   $ .28     $ .29     $ .30     $ .29     $ .27     $ .57     $ .52  
                                                         
Book value per common share reconciliation                                          
Tangible book value per common share   $ 12.66     $ 12.53     $ 12.15     $ 12.10     $ 11.91     $ 12.66     $ 11.91  
Effect of goodwill and other intangibles     .29       .05       .05       .05       .03       .29       .03  
   Book value per common share (GAAP)   $ 12.95     $ 12.58     $ 12.20     $ 12.15     $ 11.94     $ 12.95     $ 11.94  
                                                         
Return on common equity reconciliation                                                  
Return on common equity - operating     9.90 %     9.34 %     9.60 %     9.41 %     8.99 %     9.63 %     8.82 %
Merger-related charges     (1.07 )     -       -       -       -       (.55 )     -  
    Return on common equity (GAAP)     8.83 %     9.34 %     9.60 %     9.41 %     8.99 %     9.08 %     8.82 %
                                                         
Return on assets reconciliation                                                        
Return on assets - operating     1.00 %     .94 %     .96 %     .95 %     .88 %     .97 %     .87 %
Merger-related charges     (.11 )     -       -       -       -       (.05 )     -  
    Return on assets (GAAP)     .89 %     .94 %     .96 %     .95 %     .88 %     .92 %     .87 %
                                                         
Dividend payout ratio reconciliation                                                        
Dividend payout ratio - operating     15.63 %     17.24 %     16.67 %     10.34 %     11.11 %     16.39 %     5.77 %
Merger-related charges     2.23       -       -       -       -       1.15       -  
    Dividend payout ratio (GAAP)     17.86 %     17.24 %     16.67 %     10.34 %     11.11 %     17.54 %     5.77 %
                                                         
Efficiency ratio reconciliation                                                        
Efficiency ratio - operating     57.59 %     59.15 %     57.47 %     57.96 %     58.65 %     58.34 %     58.85 %
Merger-related charges     4.04       -       -       -       -       2.10       -  
    Efficiency ratio (GAAP)     61.63 %     59.15 %     57.47 %     57.96 %     58.65 %     60.44 %     58.85 %
                                                         
Average equity to assets reconciliation                                                  
Tangible common equity to assets     9.83 %     9.82 %     9.72 %     9.83 %     9.58 %     9.83 %     9.40 %
Effect of preferred equity     .08       -       -       -       -       .04       .14  
    Tangible equity to assets     9.91       9.82       9.72       9.83       9.58       9.87       9.54  
Effect of goodwill and other intangibles     .14       .04       .04       .02       .03       .09       .02  
    Equity to assets (GAAP)     10.05 %     9.86 %     9.76 %     9.85 %     9.61 %     9.96 %     9.56 %
                                                         
Tangible common equity to risk-weighted assets reconciliation (1)                          
Tangible common equity to risk-weighted assets     13.24 %     13.53 %     13.82 %     14.10 %     13.92 %     13.24 %     13.92 %
Effect of other comprehensive income     .28       .19       .35       .34       .53       .28       .53  
Effect of deferred tax limitation     (2.46 )     (2.86 )     (3.11 )     (3.39 )     (3.74 )     (2.46 )     (3.74 )
Effect of trust preferred     .63       .67       1.00       1.02       1.04       .63       1.04  
Effect of preferred equity     .17       -       -       -       -       .17       -  
    Tier I capital ratio (Regulatory)     11.86 %     11.53 %     12.06 %     12.07 %     11.75 %     11.86 %     11.75 %
                                                         
(1) June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015.

 

 
 

 

                                           
UNITED COMMUNITY BANKS, INC.
  
Financial Highlights
  
Loan Portfolio Composition at Period-End
  
   
   
2015
    
2014
    
Linked
   
Year over
 
Quarter
Change
    
Year
Change
  
   
Second
    
First
    
Fourth
    
Third
    
Second
          
(in millions)
  
Quarter
    
Quarter
    
Quarter
    
Quarter
    
Quarter
          
LOANS BY CATEGORY                                   
Owner occupied commercial RE  $1,266   $1,167   $1,163   $1,153   $1,163   $99   $103 
Income producing commercial RE   689    636    599    605    598    53    91 
Commercial & industrial   793    716    710    650    554    77    239 
Commercial construction   238    230    196    181    160    8    78 
     Total commercial   2,986    2,749    2,668    2,589    2,475    237    511 
Residential mortgage   935    864    866    866    861    71    74 
Home equity lines of credit   491    465    466    459    451    26    40 
Residential construction   299    291    299    307    302    8    (3)
Consumer installment   463    419    373    348    321    44    142 
     Total loans  $5,174   $4,788   $4,672   $4,569   $4,410    386    764 
                                    
LOANS BY MARKET                                   
North Georgia  $1,155   $1,150   $1,163   $1,168   $1,175    5    (20)
Atlanta MSA   1,317    1,296    1,282    1,289    1,305    21    12 
North Carolina   533    539    553    553    555    (6)   (22)
Coastal Georgia   499    476    456    444    426    23    73 
Gainesville MSA   257    255    257    254    257    2    -  
East Tennessee   525    281    280    281    270    244    255 
South Carolina / Specialized Lending   531    475    412    337    206    56    325 
Indirect auto   357    316    269    243    216    41    141 
     Total loans  $5,174   $4,788   $4,672   $4,569   $4,410    386    764 

 

 
 

  

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality

                                                       
    Second Quarter 2015     First Quarter 2015     Fourth Quarter 2014
    Nonperforming     Foreclosed     Total     Nonperforming     Foreclosed     Total     Nonperforming     Foreclosed     Total
(in thousands)   Loans     Properties     NPAs     Loans     Properties     NPAs     Loans     Properties     NPAs
NONPERFORMING ASSETS BY CATEGORY                                                  
Owner occupied CRE   $ 4,878     $ 360     $ 5,238     $ 4,360     $ 173     $ 4,533     $ 4,133     $ 355     $ 4,488  
Income producing CRE     883       -       883       835       -       835       717       -       717  
Commercial & industrial     1,389       -       1,389       1,629       -       1,629       1,571       -       1,571  
Commercial construction     59       382       441       60       -       60       83       15       98  
     Total commercial     7,209       742       7,951       6,884       173       7,057       6,504       370       6,874  
Residential mortgage     8,599       1,373       9,972       8,669       796       9,465       8,196       1,183       9,379  
Home equity lines of credit     940       54       994       693       50       743       695       40       735  
Residential construction     1,358       187       1,545       2,127       139       2,266       2,006       133       2,139  
Consumer installment     699       -       699       642       -       642       480       -       480  
     Total NPAs   $ 18,805     $ 2,356     $ 21,161     $ 19,015     $ 1,158     $ 20,173     $ 17,881     $ 1,726     $ 19,607  
     Balance as a % of                                                                        
          Unpaid Principal     64.9 %     46.6 %     62.2 %     72.0 %     56.6 %     70.9 %     69.9 %     54.1 %     68.1 %
                                                                         
NONPERFORMING ASSETS BY MARKET                                                                  
North Georgia   $ 6,157     $ 657     $ 6,814     $ 6,101     $ 662     $ 6,763     $ 5,669     $ 711     $ 6,380  
Atlanta MSA     2,361       135       2,496       1,903       227       2,130       1,837       372       2,209  
North Carolina     4,746       690       5,436       5,321       159       5,480       5,221       234       5,455  
Coastal Georgia     659       -       659       901       -       901       799       105       904  
Gainesville MSA     864       22       886       781       22       803       1,310       81       1,391  
East Tennessee     1,885       852       2,737       1,808       30       1,838       1,414       201       1,615  
South Carolina / Specialized Lending     1,565       -       1,565       1,700       58       1,758       1,285       22       1,307  
Indirect auto     568       -       568       500       -       500       346       -       346  
     Total NPAs   $ 18,805     $ 2,356     $ 21,161     $ 19,015     $ 1,158     $ 20,173     $ 17,881     $ 1,726     $ 19,607  
                                                                         
NONPERFORMING ASSETS ACTIVITY                                                                  
Beginning Balance   $ 19,015     $ 1,158     $ 20,173     $ 17,881     $ 1,726     $ 19,607     $ 18,745     $ 3,146     $ 21,891  
Acquisitions     -       962       962       -       -       -       -       -       -  
Loans placed on non-accrual     6,552       -       6,552       5,944       -       5,944       7,140       -       7,140  
Payments received     (3,839 )     -       (3,839 )     (1,513 )     -       (1,513 )     (5,286 )     -       (5,286 )
Loan charge-offs     (1,854 )     -       (1,854 )     (2,838 )     -       (2,838 )     (1,841 )     -       (1,841 )
Foreclosures     (1,069 )     1,069       -       (459 )     459       -       (877 )     877       -  
Capitalized costs     -       -       -       -       -       -       -       -       -  
Property sales     -       (895 )     (895 )     -       (1,108 )     (1,108 )     -       (2,483 )     (2,483 )
Write downs     -       (9 )     (9 )     -       (166 )     (166 )     -       (1 )     (1 )
Net gains (losses) on sales     -       71       71       -       247       247       -       187       187  
     Ending Balance   $ 18,805     $ 2,356     $ 21,161     $ 19,015     $ 1,158     $ 20,173     $ 17,881     $ 1,726     $ 19,607  

  

    Second Quarter 2015     First Quarter 2015     Fourth Quarter 2014  
          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   $ 285       .09 %   $ 357       .12 %   $ 891       .31 %
Income producing CRE     (276 )     (.17 )     241       .16       143       .09  
Commercial & industrial     (627 )     (.33 )     341       .19       (295 )     (.17 )
Commercial construction     96       .16       22       .04       (6 )     (.01 )
     Total commercial     (522 )     (.07 )     961       .14       733       .11  
Residential mortgage     787       .35       416       .20       1,226       .56  
Home equity lines of credit     322       .27       59       .05       238       .20  
Residential construction     107       .14       1,061       1.46       (44 )     (.06 )
Consumer installment     284       .26       65       .07       356       .39  
     Total   $ 978       .08     $ 2,562       .22     $ 2,509       .22  
                                                 
NET CHARGE-OFFS BY MARKET                                          
North Georgia   $ 911       .32 %   $ 1,053       .37 %   $ 791       .27 %
Atlanta MSA     (234 )     (.07 )     188       .06       147       .05  
North Carolina     176       .13       666       .49       1,103       .79  
Coastal Georgia     (40 )     (.03 )     134       .12       30       .03  
Gainesville MSA     (233 )     (.36 )     (65 )     (.10 )     94       .15  
East Tennessee     127       .11       471       .68       54       .08  
South Carolina / Specialized Lending     148       .12       -       -       110       .11  
Indirect auto     123       .14       115       .16       180       .29  
     Total   $ 978       .08     $ 2,562       .22     $ 2,509       .22  

 

(1)  Annualized.

 

 
 

 

UNITED COMMUNITY BANKS, INC.            
Consolidated Statement of Income (Unaudited)            
   Three Months Ended  Six Months Ended
   June 30,  June 30,
(in thousands, except per share data)  2015  2014  2015  2014
Interest revenue:                    
Loans, including fees  $52,976   $48,261   $102,640   $95,949 
Investment securities, including tax exempt of $181, $193, $339 and $381   12,037    12,165    24,095    23,772 
Deposits in banks and short-term investments   795    980    1,607    1,823 
Total interest revenue   65,808    61,406    128,342    121,544 
                     
Interest expense:                    
Deposits:                    
NOW   348    411    742    851 
Money market   806    757    1,479    1,320 
Savings   26    21    46    41 
Time   895    2,018    2,004    3,789 
Total deposit interest expense   2,075    3,207    4,271    6,001 
Short-term borrowings   82    908    180    1,748 
Federal Home Loan Bank advances   454    80    846    138 
Long-term debt   2,206    2,638    4,812    5,272 
Total interest expense   4,817    6,833    10,109    13,159 
Net interest revenue   60,991    54,573    118,233    108,385 
Provision for credit losses   900    2,200    2,700    4,700 
Net interest revenue after provision for credit losses   60,091    52,373    115,533    103,685 
                     
Fee revenue:                    
Service charges and fees   8,375    8,527    15,990    16,425 
Mortgage loan and other related fees   3,707    1,877    6,462    3,231 
Brokerage fees   1,232    1,245    2,783    2,422 
Gains from sales of SBA loans   1,494    744    2,635    744 
Securities gains, net   13    4,435    1,552    4,652 
Loss from prepayment of debt   -    (4,446)   (1,038)   (4,446)
Other   2,445    1,761    4,564    3,291 
Total fee revenue   17,266    14,143    32,948    26,319 
Total revenue   77,357    66,516    148,481    130,004 
                     
Operating expenses:                    
Salaries and employee benefits   27,961    24,287    54,407    48,683 
Communications and equipment   3,304    3,037    6,575    6,276 
Occupancy   3,415    3,262    6,693    6,640 
Advertising and public relations   1,127    1,139    1,877    1,765 
Postage, printing and supplies   993    804    1,931    1,580 
Professional fees   2,257    2,172    4,176    3,599 
FDIC assessments and other regulatory charges   1,298    1,425    2,507    2,778 
Merger-related charges   3,173    -    3,173    - 
Other   4,892    4,406    10,142    8,261 
Total operating expenses   48,420    40,532    91,481    79,582 
Net income before income taxes   28,937    25,984    57,000    50,422 
Income tax expense   11,124    9,627    21,517    18,665 
Net income   17,813    16,357    35,483    31,757 
Preferred stock dividends and discount accretion   17    -    17    439 
Net income available to common shareholders  $17,796   $16,357   $35,466   $31,318 
                     
Earnings per common share:                    
Basic  $.28   $.27   $.57   $.52 
Diluted   .28    .27    .57    .52 
Weighted average common shares outstanding:                    
Basic   62,549    60,712    61,730    60,386 
Diluted   62,553    60,714    61,734    60,388 

 

 
 

 

UNITED COMMUNITY BANKS, INC.         
Consolidated Balance Sheet (Unaudited)         
   June 30,  December 31,  June 30,
(in thousands, except share and per share data)  2015  2014  2014
                
ASSETS               
  Cash and due from banks  $80,865   $77,180   $91,791 
  Interest-bearing deposits in banks   94,032    89,074    100,270 
  Short-term investments   30,000    26,401    47,999 
      Cash and cash equivalents   204,897    192,655    240,060 
  Securities available for sale   1,942,319    1,782,734    1,741,268 
  Securities held to maturity (fair value $388,066, $425,233 and $458,864)   379,757    415,267    448,752 
  Mortgage loans held for sale   22,003    13,737    14,918 
  Loans, net of unearned income   5,173,517    4,672,119    4,410,285 
       Less allowance for loan losses   (70,129)   (71,619)   (73,248)
              Loans, net   5,103,388    4,600,500    4,337,037 
  Premises and equipment, net   173,313    159,390    161,614 
  Bank owned life insurance   92,952    81,294    80,922 
  Accrued interest receivable   21,030    20,103    19,141 
  Net deferred tax asset   195,746    215,503    233,149 
  Derivative financial instruments   21,728    20,599    22,024 
  Goodwill and other intangible assets   20,190    3,641    2,731 
  Other assets   68,980    61,563    50,450 
      Total assets  $8,246,303   $7,566,986   $7,352,066 
LIABILITIES AND SHAREHOLDERS’ EQUITY               
Liabilities:               
  Deposits:               
       Demand  $1,847,696   $1,574,317   $1,519,635 
       NOW   1,416,279    1,504,887    1,334,883 
       Money market   1,406,352    1,273,283    1,245,912 
       Savings   350,049    292,308    279,203 
       Time:               
            Less than $100,000   792,300    748,478    805,289 
            Greater than $100,000   465,347    508,228    554,310 
       Brokered   529,920    425,011    424,313 
                     Total deposits   6,807,943    6,326,512    6,163,545 
   Short-term borrowings   25,000    6,000    76,256 
   Federal Home Loan Bank advances   385,125    270,125    175,125 
   Long-term debt   113,901    129,865    129,865 
   Derivative financial instruments   32,374    31,997    36,545 
   Unsettled securities purchases   -     5,425    7,264 
   Accrued expenses and other liabilities   54,728    57,485    41,497 
        Total liabilities   7,419,071    6,827,409    6,630,097 
Shareholders’ equity:               
    Preferred stock, $1 par value; 10,000,000 shares authorized;               
        Series H; $1,000 stated value; 9,992 shares issued and outstanding   9,992    -     -  
    Common stock, $1 par value; 100,000,000 shares authorized;               
        54,414,863, 50,178,605 and 50,058,295 shares issued and outstanding   54,415    50,178    50,058 
    Common stock, non-voting, $1 par value; 26,000,000 shares authorized;               
        8,285,516, 10,080,787 and 10,080,787 shares issued and outstanding   8,286    10,081    10,081 
    Common stock issuable; 413,014, 357,983 and 314,039 shares   6,071    5,168    4,649 
    Capital surplus   1,123,730    1,080,508    1,091,780 
    Accumulated deficit   (358,294)   (387,568)   (418,583)
    Accumulated other comprehensive loss   (16,968)   (18,790)   (16,016)
        Total shareholders’ equity   827,232    739,577    721,969 
        Total liabilities and shareholders’ equity  $8,246,303   $7,566,986   $7,352,066 

 

 
 

 

UNITED COMMUNITY BANKS, INC.                                    
Average Consolidated Balance Sheets and Net Interest Analysis                          
For the Three Months Ended June 30,  
    2015     2014  
    Average           Avg.     Average           Avg.  
(dollars in thousands, taxable equivalent)   Balance     Interest     Rate     Balance     Interest     Rate  
Assets:                                    
Interest-earning assets:                                    
  Loans, net of unearned income (1)(2)   $ 5,017,306     $ 53,081       4.24 %   $ 4,376,174     $ 48,435       4.44 %
  Taxable securities (3)     2,235,561       11,856       2.12       2,306,457       11,972       2.08  
  Tax-exempt securities (1)(3)     25,685       296       4.61       19,592       316       6.45  
  Federal funds sold and other interest-earning assets     165,643       901       2.18       158,418       1,060       2.68  
                                                 
     Total interest-earning assets     7,444,195       66,134       3.56       6,860,641       61,783       3.61  
Non-interest-earning assets:                                                
  Allowance for loan losses     (71,006 )                     (76,843 )                
  Cash and due from banks     77,124                       63,853                  
  Premises and equipment     167,926                       161,443                  
  Other assets (3)     398,356                       408,768                  
     Total assets   $ 8,016,595                     $ 7,417,862                  
                                                 
Liabilities and Shareholders’ Equity:                                                
Interest-bearing liabilities:                                                
  Interest-bearing deposits:                                                
NOW   $ 1,419,142       348       .10     $ 1,356,141       411       .12  
Money market     1,607,665       806       .20       1,361,045       757       .22  
Savings     335,093       26       .03       275,540       21       .03  
Time less than $100,000     774,193       791       .41       818,048       933       .46  
Time greater than $100,000     474,905       482       .41       563,489       865       .62  
Brokered time deposits     276,073       (378 )     (.55 )     334,919       220       .26  
       Total interest-bearing deposits     4,887,071       2,075       .17       4,709,182       3,207       .27  
                                                 
Federal funds purchased and other borrowings     47,698       82       .69       108,311       908       3.36  
Federal Home Loan Bank advances     289,707       454       .63       154,795       80       .21  
Long-term debt     113,901       2,206       7.77       129,865       2,638       8.15  
      Total borrowed funds     451,306       2,742       2.44       392,971       3,626       3.70  
                                                 
      Total interest-bearing liabilities     5,338,377       4,817       .36       5,102,153       6,833       .54  
Non-interest-bearing liabilities:                                                
  Non-interest-bearing deposits     1,782,405                       1,477,849                  
  Other liabilities     90,091                       125,173                  
     Total liabilities     7,210,873                       6,705,175                  
Shareholders’ equity     805,722                       712,687                  
     Total liabilities and shareholders’ equity   $ 8,016,595                     $ 7,417,862                  
                                                 
Net interest revenue           $ 61,317                     $ 54,950          
Net interest-rate spread                     3.20 %                     3.07 %
                                                 
Net interest margin (4)                     3.30 %                     3.21 %

  

(1)     Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans.  The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)     Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)    Securities available for sale are shown at amortized cost.  Pretax unrealized gains of $18.9 million in 2015 and pretax unrealized gains of $1.86 million in 2014 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 Six Months Ended June 30,
   2015  2014  
   Average     Avg.  Average     Avg.  
(dollars in thousands, taxable equivalent)  Balance  Interest  Rate  Balance  Interest  Rate  
Assets:                              
Interest-earning assets:                              
Loans, net of unearned income (1)(2)  $4,872,112   $102,946    4.26%  $4,365,930   $96,303    4.45%
Taxable securities (3)   2,211,293    23,756    2.15    2,303,404    23,391    2.03 
Tax-exempt securities (1)(3)   20,987    555    5.29    19,881    624    6.28 
Federal funds sold and other interest-earning assets   153,597    1,786    2.33    154,651    1,960    2.53 
                               
Total interest-earning assets   7,257,989    129,043    3.58    6,843,866    122,278    3.60 
Non-interest-earning assets:                              
Allowance for loan losses   (71,596)             (77,165)          
Cash and due from banks   78,069              62,958           
Premises and equipment   163,737              162,112           
Other assets (3)   389,874              409,466           
Total assets  $7,818,073             $7,401,237           
                               
Liabilities and Shareholders’ Equity:                              
Interest-bearing liabilities:                              
Interest-bearing deposits:                              
NOW  $1,447,370    742    .10   $1,385,964    851    .12 
Money market   1,537,678    1,479    .19    1,368,975    1,320    .19 
Savings   317,814    46    .03    267,588    41    .03 
Time less than $100,000   755,826    1,515    .40    847,707    1,946    .46 
Time greater than $100,000   484,624    1,146    .48    570,799    1,783    .63 
Brokered time deposits   274,708    (657)   (.48)   311,579    60    .04 
Total interest-bearing deposits   4,818,020    4,271    .18    4,752,612    6,001    .25 
                               
Federal funds purchased and other borrowings   41,953    180    .87    110,436    1,748    3.19 
Federal Home Loan Bank advances   264,584    846    .64    140,014    138    .20 
Long-term debt   120,782    4,812    8.03    129,865    5,272    8.19 
Total borrowed funds   427,319    5,838    2.76    380,315    7,158    3.80 
                               
Total interest-bearing liabilities   5,245,339    10,109    .39    5,132,927    13,159    .52 
Non-interest-bearing liabilities:                              
Non-interest-bearing deposits   1,702,140              1,439,447           
Other liabilities   92,138              120,943           
Total liabilities   7,039,617              6,693,317           
Shareholders’ equity   778,456              707,920           
Total liabilities and shareholders’ equity  $7,818,073             $7,401,237           
                               
Net interest revenue       $118,934             $109,119      
Net interest-rate spread             3.19%             3.08%
                               
Net interest margin (4)             3.30%             3.21%

 

(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 $14.8 million in 2015 and pretax unrealized losses of $1.37 million in 2014 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.