EX-99.1 2 t83357_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

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 $21.7 MILLION FOR THIRD QUARTER 2015,

UP 23 PERCENT FROM A YEAR AGO

Operating earnings per diluted share of 33 cents, up 14 percent from a year ago

Operating return on assets of 1.00 percent

Operating return on tangible common equity of 10.3 percent

Completed merger with Palmetto Bancshares, Inc. and its wholly owned subsidiary, The Palmetto Bank (“Palmetto”), on September 1

Loans up $310 million for 2015, or 9 percent annualized, excluding loans acquired in mergers

Core transaction deposits up $519 million for 2015, or 19 percent annualized, excluding deposits acquired in the mergers

BLAIRSVILLE, GA – October 27, 2015 – United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported net operating income of $21.7 million for the third quarter of 2015, up 23 percent from a year ago. Operating earnings per diluted share was 33 cents, up 14 percent from a year ago. The increase reflects strong loan, core deposit and fee revenue growth, 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 $17.9 million for the third quarter, or 27 cents per diluted share.

For the first nine months of 2015, United reported net income of $53.4 million, or 84 cents per diluted share. Excluding merger-related charges, net operating income was $59.4 million, or 94 cents per diluted share.

“I am very pleased with our third quarter financial performance, which reflects the successful execution of our strategic plans,” said Jimmy Tallent, chairman and chief executive officer. “I’m especially proud that we completed the merger with Palmetto and welcomed their banking team to the United family.

“Total loan production remained strong in the third quarter, though net loan growth tapered off a bit due to a higher level of pay-downs,” Tallent continued. “Year-to-date, excluding loans from mergers, loan growth is $310 million, or 9 percent annualized, which is on track for our 2015 goal of mid-to-upper-single-digit loan growth. These new loans have been funded with solid core transaction deposit growth of $519 million, or 19 percent annualized, excluding mergers.

“Third quarter net loan growth of $53 million, excluding the Palmetto merger, was driven by loan production of $452 million across all United markets,” added Tallent. “Our community banks originated $256 million in loan production while our specialized lending area, which includes corporate, SBA, asset-based, middle market and commercial real estate lending, produced $150 million. Healthcare lending was part of specialized lending and we recently announced the sale of this $190 million corporate healthcare lending unit, which is expected to close by mid-fourth quarter 2015.”

Third quarter taxable-equivalent net interest revenue totaled $65.7 million, up $4.40 million from the second quarter of 2015 and up $8.75 million from the third quarter of 2014. Core deposit growth contributed to net interest revenue with a linked-quarter increase of $204 million, or 19 percent annualized, excluding deposits acquired in the merger. United’s Atlanta and North Georgia markets drove most of the growth.

“The acquisition of Palmetto added approximately $3.30 million to third quarter net interest revenue while loan growth accounted for the balance of the increase, which was offset partially by margin compression,” said Tallent. “The taxable-equivalent net interest margin of 3.26 percent was down four basis points from the second quarter, and down six basis points from a year ago, reflecting higher debt costs for the funding of the Palmetto acquisition, continued competitive loan pricing pressures, and a shift toward more floating rate loans.”

The third quarter provision for credit losses was $700 thousand, down $200 thousand from the second quarter and down $1.3 million from the third quarter of 2014. Third quarter net charge-offs were $1.42 million compared with $978 thousand in the second quarter and $3.16 million a year ago. Strong recoveries of previously charged-off loans drove net charge-offs down in the second and third quarters of 2015 compared with third quarter 2014. Nonperforming assets were .29 percent of total assets at quarter-end, compared with .26 percent in the second quarter and .29 percent a year ago.

Third quarter fee revenue totaled $18.3 million, up $1.03 million from the second quarter and $3.89 million from the third quarter of 2014. Much of the increase resulted from the acquisition of Palmetto, mostly in the form of deposit service charges and mortgage fees. Total service charges and fees were $9.34 million, up $960 thousand from the second quarter and up $1.13 million from a year ago. Mortgage fees of $3.84 million were up $133 thousand from the second quarter and up $1.66 million from a year ago reflecting strong growth in home purchases and an increase in refinancing activities. Closed mortgage loans totaled $141 million in the third quarter of 2015, compared with $128 million in the second quarter and $84 million in the third quarter of 2014. During the third quarter, sales of $17.8 million in SBA loans resulted in net gains of $1.65 million. This compares with $14.7 million in loans sold and net gains of $1.49 million in the second quarter of 2015, and $7.4 million in loans sold and net gains of $945 thousand in the third quarter of 2014.

“We remain committed to diversifying our revenue stream by focusing on fee-generating products and services,” stated Tallent. “Our growing SBA lending business and commitment to expanding our mortgage origination business are key parts of this emphasis.”

Operating expenses, excluding merger-related charges of $5.74 million, were $48.5 million in the third quarter. This compares to $45.2 million in the second quarter of 2015 and $41.4 million in the third quarter of 2014. The September 1 acquisition of Palmetto Bancshares and its wholly owned subsidiary, The Palmetto Bank, added approximately $2.70 million to third quarter operating expenses. The May 1 acquisition of First National Bank added approximately $1.70 million to both third and second quarter operating expenses. Operating expenses from both acquired banks are expected to decline as anticipated cost savings are realized.

Third quarter salaries and employee benefits expense totaled $29.3 million, up $1.38 million from the second quarter and $3.68 million from a year ago. The linked-quarter increase reflects $1.1 million in additional compensation expense for the two acquired companies. The increase from a year ago reflects the acquisitions, investment in new producers and support staff for the specialized lending area, as well as higher commissions and incentives associated with growth in mortgage loans, commercial loans and core deposits.

Third quarter other operating expenses totaled $5.54 million, up $650 thousand from the second quarter and up $1.54 million from the third quarter of 2014. Nearly half of the linked-quarter increase in other expenses was due to higher intangible amortization costs from the two acquisitions. Most of the remaining linked-quarter increase reflected higher ATM network and lending support costs, while the increase from a year ago was due to higher lending support costs and an increase in servicing fees for the growing indirect auto loan portfolio.

“Palmetto merged into United on September 1 and its operating results are included in United’s from that date forward,” noted Tallent. “System conversions are targeted for the first quarter of 2016. First National Bank merged into United on May 1 and, during the third quarter, we successfully converted their operating systems to United and consolidated six of the combined United / FNB banking offices. All FNB banking offices now operate under the name of United Community Bank.”

At September 30, 2015, preliminary capital ratios were as follows: Tier 1 Risk-Based of 11.0 percent; Total Risk-Based of 12.1 percent; Tier 1 Common Risk-Based of 11.0 percent; and, Tier 1 Leverage of 8.2 percent.

“All of our regulatory capital ratios remain strong, though they have declined slightly from the prior quarter due to the acquisition of Palmetto,” commented Tallent. “During mid-August, we financed the cash portion of the Palmetto acquisition with the issuance of $85 million Senior Notes that had an average interest rate of 5.2 percent. Additionally, on September 15, to partially offset these higher funding costs, we redeemed $32 million of trust preferred securities with an average rate of 8.4 percent.

“Our third quarter results put us well on track to complete another remarkable year,” Tallent said. “In the second quarter we achieved our earlier goal of a 1 percent operating return on assets. Our new goal, driven by continued solid mid-to-high single-digit loan growth, is 1.10 percent for the fourth quarter of 2016.

“We are excited about executing our growth strategies to expand the franchise and add value for shareholders,” concluded Tallent. “We warmly and enthusiastically welcome First National and Palmetto to the United team. And, as always, we are dedicated every day to taking care of our customers – both existing and new – with the outstanding service for which our bankers are so very well known.”

Conference Call

United will hold a conference call today, Tuesday, October 27, 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 56009033. 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.

Investor Day Conference – October 8, 2015

On October 8, 2015, United held an Investor Day Conference in Atlanta, Georgia for its analysts and institutional investors. United’s executive and senior management presented the company’s business, growth and market strategies through a series of presentations and panel discussions. The conference was web cast on Events & Presentations from its Investor Relations page of the company’s’ website, www.ucbi.com, and will remain available for replay for one year.

About United Community Banks, Inc.

United Community Banks, Inc. (UCBI) is a bank holding company based in Blairsville, Georgia, with $9.4 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast’s largest full-service banks, operating 133 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for individuals, small businesses and corporations. United Community Bank offers a full range of consumer and commercial banking services including 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.

# # #

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Selected Financial Information

																Third			For the Nine
	2015									2014						Quarter			Months Ended						YTD
(in thousands, except per share	Third			Second			First			Fourth			Third			2015-2014			September 30,						2015-2014
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2015			2014			Change
INCOME SUMMARY
Interest revenue	$	71,120		$	66,134		$	62,909		$	64,353		$	63,338					$	200,163		$	185,616
Interest expense		5,402			4,817			5,292			6,021			6,371						15,511			19,530
Net interest revenue		65,718			61,317			57,617			58,332			56,967			15	%		184,652			166,086			11	%
Provision for credit losses		700			900			1,800			1,800			2,000						3,400			6,700
Fee revenue		18,297			17,266			15,682			14,823			14,412			27			51,245			40,731			26
Total revenue		83,315			77,683			71,499			71,355			69,379			20			232,497			200,117			16
Expenses - operating ⁽¹⁾		48,525			45,247			43,061			41,919			41,364			17			136,833			120,946			13
Income before income tax expense - operating ⁽¹⁾		34,790			32,436			28,438			29,436			28,015			24			95,664			79,171			21
Income tax expense - operating ⁽¹⁾		13,064			12,447			10,768			11,189			10,399			26			36,279			29,798			22
Net income - operating ⁽¹⁾		21,726			19,989			17,670			18,247			17,616			23			59,385			49,373			20
Preferred dividends and discount accretion		25			17			-			-			-						42			439
Net income available to common shareholders - operating ⁽¹⁾		21,701			19,972			17,670			18,247			17,616			23			59,343			48,934			21
Merger-related charges, net of income tax benefit		3,839			2,176			-			-			-						6,015			-
Net income available to common shareholders - GAAP	$	17,862		$	17,796		$	17,670		$	18,247		$	17,616			1		$	53,328		$	48,934			9

PERFORMANCE MEASURES
Per common share:
Diluted income - operating ⁽¹⁾	$	.33		$	.32		$	.29		$	.30		$	.29			14		$	.94		$	.81			16
Diluted income - GAAP		.27			.28			.29			.30			.29			(7	)		.84			.81			4
Cash dividends declared		.06			.05			.05			.05			.03						.16			.06
Book value		13.95			12.95			12.58			12.20			12.15			15			13.95			12.15			15
Tangible book value⁽³⁾		12.08			12.66			12.53			12.15			12.10			-			12.08			12.10			-

Key performance ratios:
Return on tangible common equity - operating^(1)(2)(3)(4)		10.29	%		10.20	%		9.46	%		9.74	%		9.55	%					10.00	%		9.18	%
Return on common equity - operating^(1)(2)(4)		9.54			9.90			9.34			9.60			9.41						9.60			9.02
Return on common equity - GAAP⁽²⁾⁽⁴⁾		7.85			8.83			9.34			9.60			9.41						8.63			9.02
Return on assets - operating⁽¹⁾⁽⁴⁾		1.00			1.00			.94			.96			.95						.98			.89
Return on assets - GAAP⁽⁴⁾		.82			.89			.94			.96			.95						.88			.89
Dividend payout ratio - operating ⁽¹⁾		18.18			15.63			17.24			16.67			10.34						17.02			7.41
Dividend payout ratio - GAAP		22.22			17.86			17.24			16.67			10.34						19.05			7.41
Net interest margin⁽⁴⁾		3.26			3.30			3.31			3.31			3.32						3.29			3.25
Efficiency ratio - operating ⁽¹⁾		57.81			57.59			59.15			57.47			57.96						58.15			58.54
Efficiency ratio - GAAP		64.65			61.63			59.15			57.47			57.96						61.94			58.54
Average equity to average assets		10.39			10.05			9.86			9.76			9.85						10.11			9.66
Average tangible equity to average assets⁽³⁾		9.88			9.91			9.82			9.72			9.83						9.88			9.64
Average tangible common equity to average assets⁽³⁾		9.77			9.83			9.82			9.72			9.83						9.81			9.55
Tangible common equity to risk-weighted assets^(3)(5)(6)		12.68			13.24			13.53			13.82			14.10						12.68			14.10

ASSET QUALITY
Nonperforming loans	$	20,064		$	18,805		$	19,015		$	17,881		$	18,745			7		$	20,064		$	18,745			7
Foreclosed properties		7,669			2,356			1,158			1,726			3,146			144			7,669			3,146			144
Total nonperforming assets (NPAs)		27,733			21,161			20,173			19,607			21,891			27			27,733			21,891			27
Allowance for loan losses		69,062			70,129			70,007			71,619			71,928						69,062			71,928
Net charge-offs		1,417			978			2,562			2,509			3,155			(55	)		4,957			11,369			(56	)
Allowance for loan losses to loans		1.15	%		1.36	%		1.46	%		1.53	%		1.57	%					1.15	%		1.57	%
Allowance for loan losses to loans, excl. acquired loans		1.37			1.42			1.46			1.53			1.57						1.37			1.57
Net charge-offs to average loans⁽⁴⁾		.10			.08			.22			.22			.28						.13			.35
NPAs to loans and foreclosed properties		.46			.41			.42			.42			.48						.46			.48
NPAs to total assets		.29			.26			.26			.26			.29						.29			.29

AVERAGE BALANCES ($ in millions)
Loans	$	5,457		$	5,017		$	4,725		$	4,621		$	4,446			23		$	5,069		$	4,393			15
Investment securities		2,396			2,261			2,203			2,222			2,231			7			2,288			2,292			-
Earning assets		8,009			7,444			7,070			7,013			6,820			17			7,511			6,836			10
Total assets		8,634			8,017			7,617			7,565			7,374			17			8,093			7,392			9
Deposits		7,135			6,669			6,369			6,383			6,143			16			6,727			6,176			9
Shareholders’ equity		897			806			751			738			726			24			818			714			15
Common shares - basic (thousands)		66,294			62,549			60,905			60,830			60,776			9			63,297			60,511			5
Common shares - diluted (thousands)		66,300			62,553			60,909			60,833			60,779			9			63,302			60,513			5

AT PERIOD END ($ in millions)
Loans	$	6,022		$	5,174		$	4,788		$	4,672		$	4,569			32		$	6,022		$	4,569			32
Investment securities		2,457			2,322			2,201			2,198			2,222			11			2,457			2,222			11
Total assets		9,414			8,246			7,664			7,567			7,526			25			9,414			7,526			25
Deposits		7,905			6,808			6,438			6,327			6,241			27			7,905			6,241			27
Shareholders’ equity		1,013			827			764			740			736			38			1,013			736			38
Common shares outstanding (thousands)		71,472			62,700			60,309			60,259			60,248			19			71,472			60,248			19

⁽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⁾ September 30, June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015. ⁽⁶⁾ Third quarter 2015 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.

Non-GAAP Performance Measures Reconciliation

Selected Financial Information

	2015									2014						For the Nine Months Ended
(in thousands, except per share	Third			Second			First			Fourth			Third			September 30,
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			2015			2014

Interest revenue reconciliation
Interest revenue - taxable equivalent	$	71,120		$	66,134		$	62,909		$	64,353		$	63,338		$	200,163		$	185,616
Taxable equivalent adjustment		(292	)		(326	)		(375	)		(398	)		(405	)		(993	)		(1,139	)
Interest revenue (GAAP)	$	70,828		$	65,808		$	62,534		$	63,955		$	62,933		$	199,170		$	184,477

Net interest revenue reconciliation
Net interest revenue - taxable equivalent	$	65,718		$	61,317		$	57,617		$	58,332		$	56,967		$	184,652		$	166,086
Taxable equivalent adjustment		(292	)		(326	)		(375	)		(398	)		(405	)		(993	)		(1,139	)
Net interest revenue (GAAP)	$	65,426		$	60,991		$	57,242		$	57,934		$	56,562		$	183,659		$	164,947

Total revenue reconciliation
Total operating revenue	$	83,315		$	77,683		$	71,499		$	71,355		$	69,379		$	232,497		$	200,117
Taxable equivalent adjustment		(292	)		(326	)		(375	)		(398	)		(405	)		(993	)		(1,139	)
Total revenue (GAAP)	$	83,023		$	77,357		$	71,124		$	70,957		$	68,974		$	231,504		$	198,978

Expense reconciliation
Expenses - operating	$	48,525		$	45,247		$	43,061		$	41,919		$	41,364		$	136,833		$	120,946
Merger-related charges		5,744			3,173			-			-			-			8,917			-
Expenses (GAAP)	$	54,269		$	48,420		$	43,061		$	41,919		$	41,364		$	145,750		$	120,946

Income before taxes reconciliation
Income before taxes - operating	$	34,790		$	32,436		$	28,438		$	29,436		$	28,015		$	95,664		$	79,171
Taxable equivalent adjustment		(292	)		(326	)		(375	)		(398	)		(405	)		(993	)		(1,139	)
Merger-related charges		(5,744	)		(3,173	)		-			-			-			(8,917	)		-
Income before taxes (GAAP)	$	28,754		$	28,937		$	28,063		$	29,038		$	27,610		$	85,754		$	78,032

Income tax expense reconciliation
Income tax expense - operating	$	13,064		$	12,447		$	10,768		$	11,189		$	10,399		$	36,279		$	29,798
Taxable equivalent adjustment		(292	)		(326	)		(375	)		(398	)		(405	)		(993	)		(1,139	)
Merger-related charges, tax benefit		(1,905	)		(997	)		-			-			-			(2,902	)		-
Income tax expense (GAAP)	$	10,867		$	11,124		$	10,393		$	10,791		$	9,994		$	32,384		$	28,659

Net income reconciliation
Net income - operating	$	21,726		$	19,989		$	17,670		$	18,247		$	17,616		$	59,385		$	49,373
Merger-related charges, net of income tax benefit		(3,839	)		(2,176	)		-			-			-			(6,015	)		-
Net income (GAAP)	$	17,887		$	17,813		$	17,670		$	18,247		$	17,616		$	53,370		$	49,373

Net income available to common shareholders reconciliation
Net income available to common shareholders - operating	$	21,701		$	19,972		$	17,670		$	18,247		$	17,616		$	59,343		$	48,934
Merger-related charges, net of income tax benefit		(3,839	)		(2,176	)		-			-			-			(6,015	)		-
Net income available to common shareholders (GAAP)	$	17,862		$	17,796		$	17,670		$	18,247		$	17,616		$	53,328		$	48,934

Diluted income per common share reconciliation
Diluted income per common share - operating	$	.33		$	.32		$	.29		$	.30		$	.29		$	.94		$	.81
Merger-related charges		(.06	)		(.04	)		-			-			-			(.10	)		-
Diluted income per common share (GAAP)	$	.27		$	.28		$	.29		$	.30		$	.29		$	.84		$	.81

Book value per common share reconciliation
Tangible book value per common share	$	12.08		$	12.66		$	12.53		$	12.15		$	12.10		$	12.08		$	12.10
Effect of goodwill and other intangibles		1.87			.29			.05			.05			.05			1.87			.05
Book value per common share (GAAP)	$	13.95		$	12.95		$	12.58		$	12.20		$	12.15		$	13.95		$	12.15

Return on tangible common equity reconciliation
Return on tangible common equity - operating		10.29	%		10.20	%		9.46	%		9.74	%		9.55	%		10.00	%		9.18	%
Effect of goodwill and other intangibles		(.75	)		(.30	)		(.12	)		(.14	)		(.14	)		(.40	)		(.16	)
Return on common equity - operating		9.54			9.90			9.34			9.60			9.41			9.60			9.02
Merger-related charges		(1.69	)		(1.07	)		-			-			-			(.97	)		-
Return on common equity (GAAP)		7.85	%		8.83	%		9.34	%		9.60	%		9.41	%		8.63	%		9.02	%

Return on assets reconciliation
Return on assets - operating		1.00	%		1.00	%		.94	%		.96	%		.95	%		.98	%		.89	%
Merger-related charges		(.18	)		(.11	)		-			-			-			(.10	)		-
Return on assets (GAAP)		.82	%		.89	%		.94	%		.96	%		.95	%		.88	%		.89	%

Allowance for loan losses to loans reconciliation
Allowance for loan losses to loans, excl. acquired loans		1.37	%		1.42	%		1.46	%		1.53	%		1.57	%		1.37	%		1.57	%
Effect of removing acquired loans from ratio		(.22	)		(.06	)		-			-			-			(.22	)		-
Allowance for loan losses to loans (GAAP)		1.15	%		1.36	%		1.46	%		1.53	%		1.57	%		1.15	%		1.57	%

Dividend payout ratio reconciliation
Dividend payout ratio - operating		18.18	%		15.63	%		17.24	%		16.67	%		10.34	%		17.02	%		7.41	%
Merger-related charges		4.04			2.23			-			-			-			2.03			-
Dividend payout ratio (GAAP)		22.22	%		17.86	%		17.24	%		16.67	%		10.34	%		19.05	%		7.41	%

Efficiency ratio reconciliation
Efficiency ratio - operating		57.81	%		57.59	%		59.15	%		57.47	%		57.96	%		58.15	%		58.54	%
Merger-related charges		6.84			4.04			-			-			-			3.79			-
Efficiency ratio (GAAP)		64.65	%		61.63	%		59.15	%		57.47	%		57.96	%		61.94	%		58.54	%

Average equity to assets reconciliation
Tangible common equity to assets		9.77	%		9.83	%		9.82	%		9.72	%		9.83	%		9.81	%		9.55	%
Effect of preferred equity		.11			.08			-			-			-			.07			.09
Tangible equity to assets		9.88			9.91			9.82			9.72			9.83			9.88			9.64
Effect of goodwill and other intangibles		.51			.14			.04			.04			.02			.23			.02
Equity to assets (GAAP)		10.39	%		10.05	%		9.86	%		9.76	%		9.85	%		10.11	%		9.66	%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tangible common equity to risk-weighted assets		12.68	%		13.24	%		13.53	%		13.82	%		14.10	%		12.68	%		14.10	%
Effect of other comprehensive income		.22			.28			.19			.35			.34			.22			.34
Effect of deferred tax limitation		.08			(2.49	)		(2.86	)		(3.11	)		(3.39	)		.08			(3.39	)
Effect of trust preferred		.15			.63			.67			1.00			1.02			.15			1.02
Effect of preferred equity		(2.20	)		.17			-			-			-			(2.20	)		-
Basel III intangibles transition adjustment		.12			.06			.04			-			-			.12			-
Basel III disallowed investments		(.02	)		(.03	)		(.04	)		-			-			(.02	)		-
Tier I capital ratio (Regulatory)		11.03	%		11.86	%		11.53	%		12.06	%		12.07	%		11.03	%		12.07	%

⁽¹⁾ September 30, June 30 and March 31, 2015 calculated under Basel III rules, which became effective January 1, 2015. Third quarter 2015 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Loan Portfolio Composition at Period-End

	2015						2014				Linked			Year over
	Third		Second		First		Fourth		Third		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change			Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,479	$	1,266	$	1,167	$	1,163	$	1,153	$	213		$	326
Income producing commercial RE		818		689		636		599		605		129			213
Commercial & industrial		890		793		716		710		650		97			240
Commercial construction		319		238		230		196		181		81			138
Total commercial		3,506		2,986		2,749		2,668		2,589		520			917
Residential mortgage		1,060		935		864		866		866		125			194
Home equity lines of credit		585		491		465		466		459		94			126
Residential construction		334		299		291		299		307		35			27
Consumer installment		537		463		419		373		348		74			189
Total loans	$	6,022	$	5,174	$	4,788	$	4,672	$	4,569		848			1,453

LOANS BY MARKET
North Georgia	$	1,128	$	1,155	$	1,150	$	1,163	$	1,168		(27	)		(40	)
Atlanta MSA		1,266		1,275		1,254		1,243		1,245		(9	)		21
North Carolina		546		533		539		553		553		13			(7	)
Coastal Georgia		506		499		476		456		444		7			62
Gainesville MSA		252		257		255		257		254		(5	)		(2	)
East Tennessee		511		525		281		280		281		(14	)		230
South Carolina		783		35		30		30		21		748			762
Specialized Lending		609		538		487		421		360		71			249
Indirect auto		421		357		316		269		243		64			178
Total loans	$	6,022	$	5,174	$	4,788	$	4,672	$	4,569		848			1,453

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality

	Third Quarter 2015									Second Quarter 2015									First Quarter 2015
	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	$	5,918		$	882		$	6,800		$	4,878		$	360		$	5,238		$	4,360		$	173		$	4,533
Income producing CRE		1,238			4,084			5,322			883			-			883			835			-			835
Commercial & industrial		1,068			-			1,068			1,389			-			1,389			1,629			-			1,629
Commercial construction		256			657			913			59			382			441			60			-			60
Total commercial		8,480			5,623			14,103			7,209			742			7,951			6,884			173			7,057
Residential mortgage		8,847			1,454			10,301			8,599			1,373			9,972			8,669			796			9,465
Home equity lines of credit		890			87			977			940			54			994			693			50			743
Residential construction		929			505			1,434			1,358			187			1,545			2,127			139			2,266
Consumer installment		918			-			918			699			-			699			642			-			642
Total NPAs	$	20,064		$	7,669		$	27,733		$	18,805		$	2,356		$	21,161		$	19,015		$	1,158		$	20,173
Balance as a % of
Unpaid Principal		70.3	%		45.8	%		61.2	%		64.9	%		46.6	%		62.2	%		72.0	%		56.6	%		70.9	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	6,403		$	1,263		$	7,666		$	6,157		$	657		$	6,814		$	6,101		$	662		$	6,763
Atlanta MSA		1,750			1,122			2,872			2,361			135			2,496			1,903			227			2,130
North Carolina		4,564			9			4,573			4,746			690			5,436			5,321			159			5,480
Coastal Georgia		338			66			404			659			-			659			901			-			901
Gainesville MSA		325			3			328			864			22			886			781			22			803
East Tennessee		2,886			231			3,117			1,885			852			2,737			1,808			30			1,838
South Carolina		267			4,975			5,242			-			-			-			-			36			36
Specialized Lending		2,809			-			2,809			1,565			-			1,565			1,700			22			1,722
Indirect auto		722			-			722			568			-			568			500			-			500
Total NPAs	$	20,064		$	7,669		$	27,733		$	18,805		$	2,356		$	21,161		$	19,015		$	1,158		$	20,173

NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	18,805		$	2,356		$	21,161		$	19,015		$	1,158		$	20,173		$	17,881		$	1,726		$	19,607
Acquisitions		-			4,848			4,848			-			962			962			-			-			-
Loans placed on non-accrual		8,923			-			8,923			6,552			-			6,552			5,944			-			5,944
Payments received		(4,233	)		-			(4,233	)		(3,839	)		-			(3,839	)		(1,513	)		-			(1,513	)
Loan charge-offs		(1,531	)		-			(1,531	)		(1,854	)		-			(1,854	)		(2,838	)		-			(2,838	)
Foreclosures		(1,900	)		1,900			-			(1,069	)		1,069			-			(459	)		459			-
Capitalized costs		-			256			256			-			-			-			-			-			-
Property sales		-			(1,916	)		(1,916	)		-			(895	)		(895	)		-			(1,108	)		(1,108	)
Write downs		-			(79	)		(79	)		-			(9	)		(9	)		-			(166	)		(166	)
Net gains (losses) on sales		-			304			304			-			71			71			-			247			247
Ending Balance	$	20,064		$	7,669		$	27,733		$	18,805		$	2,356		$	21,161		$	19,015		$	1,158		$	20,173

	Third Quarter 2015						Second Quarter 2015						First Quarter 2015
				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	$	236			.07	%	$	285			.09	%	$	357			.12	%
Income producing CRE		(106	)		(.06	)		(276	)		(.17	)		241			.16
Commercial & industrial		190			.09			(627	)		(.33	)		341			.19
Commercial construction		59			.09			96			.16			22			.04
Total commercial		379			.05			(522	)		(.07	)		961			.14
Residential mortgage		433			.18			787			.35			416			.20
Home equity lines of credit		293			.22			322			.27			59			.05
Residential construction		(124	)		(.16	)		107			.14			1,061			1.46
Consumer installment		436			.35			284			.26			65			.07
Total	$	1,417			.10		$	978			.08		$	2,562			.22

NET CHARGE-OFFS BY MARKET
North Georgia	$	1,352			.47	%	$	911			.32	%	$	1,053			.37	%
Atlanta MSA		74			.02			138			.04			204			.07
North Carolina		183			.13			176			.13			666			.49
Coastal Georgia		19			.02			(40	)		(.03	)		134			.12
Gainesville MSA		(236	)		(.36	)		(233	)		(.36	)		(65	)		(.10	)
East Tennessee		153			.12			127			.11			471			.68
South Carolina		(247	)		(.34	)		-			-			-			-
Specialized Lending		(42	)		(.03	)		(224	)		(.17	)		(16	)		(.01	)
Indirect auto		161			.17			123			.14			115			.16
Total	$	1,417			.10		$	978			.08		$	2,562			.22

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Income (Unaudited)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share data)	2015			2014		2015			2014

Interest revenue:
Loans, including fees	$	57,174		$	49,653	$	159,814		$	145,602
Investment securities, including tax exempt of $177, $177, $516 and $558		12,801			12,346		36,896			36,118
Deposits in banks and short-term investments		853			934		2,460			2,757
Total interest revenue		70,828			62,933		199,170			184,477

Interest expense:
Deposits:
NOW		337			365		1,079			1,216
Money market		981			872		2,460			2,192
Savings		25			20		71			61
Time		830			1,721		2,834			5,510
Total deposit interest expense		2,173			2,978		6,444			8,979
Short-term borrowings		99			316		279			2,064
Federal Home Loan Bank advances		461			435		1,307			573
Long-term debt		2,669			2,642		7,481			7,914
Total interest expense		5,402			6,371		15,511			19,530
Net interest revenue		65,426			56,562		183,659			164,947
Provision for credit losses		700			2,000		3,400			6,700
Net interest revenue after provision for credit losses		64,726			54,562		180,259			158,247

Fee revenue:
Service charges and fees		9,335			8,202		25,325			24,627
Mortgage loan and other related fees		3,840			2,178		10,302			5,409
Brokerage fees		1,200			1,209		3,983			3,631
Gains from sales of SBA loans		1,646			945		4,281			1,689
Securities gains, net		325			11		1,877			4,663
Loss from prepayment of debt		(256	)		-		(1,294	)		(4,446	)
Other		2,207			1,867		6,771			5,158
Total fee revenue		18,297			14,412		51,245			40,731
Total revenue		83,023			68,974		231,504			198,978

Operating expenses:
Salaries and employee benefits		29,342			25,666		83,749			74,349
Communications and equipment		3,963			3,094		10,538			9,370
Occupancy		4,013			3,425		10,706			10,065
Advertising and public relations		812			894		2,689			2,659
Postage, printing and supplies		1,049			876		2,980			2,456
Professional fees		2,668			2,274		6,844			5,873
FDIC assessments and other regulatory charges		1,136			1,131		3,643			3,909
Merger-related charges		5,744			-		8,917			-
Other		5,542			4,004		15,684			12,265
Total operating expenses		54,269			41,364		145,750			120,946
Net income before income taxes		28,754			27,610		85,754			78,032
Income tax expense		10,867			9,994		32,384			28,659
Net income		17,887			17,616		53,370			49,373
Preferred stock dividends and discount accretion		25			-		42			439
Net income available to common shareholders	$	17,862		$	17,616	$	53,328		$	48,934

Earnings per common share:
Basic	$	.27		$	.29	$	.84		$	.81
Diluted		.27			.29		.84			.81
Weighted average common shares outstanding:
Basic		66,294			60,776		63,297			60,511
Diluted		66,300			60,779		63,302			60,513

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheet (Unaudited)

	September 30,			December 31,			September 30,
(in thousands, except share and per share data)	2015			2014			2014

ASSETS
Cash and due from banks	$	93,975		$	77,180		$	75,268
Interest-bearing deposits in banks		112,964			89,074			117,399
Short-term investments		-			26,401			23,397
Cash and cash equivalents		206,939			192,655			216,064
Securities available for sale		2,099,868			1,782,734			1,789,667
Securities held to maturity (fair value $368,096, $425,233 and $440,311)		357,549			415,267			432,418
Mortgage loans held for sale		24,279			13,737			20,004
Loans, net of unearned income		6,022,394			4,672,119			4,568,886
Less allowance for loan losses		(69,062	)		(71,619	)		(71,928	)
Loans, net		5,953,332			4,600,500			4,496,958
Premises and equipment, net		192,992			159,390			160,454
Bank owned life insurance		105,368			81,294			81,101
Accrued interest receivable		24,563			20,103			19,908
Net deferred tax asset		197,116			215,503			224,734
Derivative financial instruments		19,906			20,599			22,221
Goodwill and other intangible assets		141,415			3,641			3,910
Other assets		90,669			61,563			58,450
Total assets	$	9,413,996		$	7,566,986		$	7,525,889
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	2,174,799		$	1,574,317		$	1,561,020
NOW		1,754,614			1,504,887			1,399,449
Money market		1,651,592			1,273,283			1,281,526
Savings		459,323			292,308			287,797
Time:
Less than $100,000		865,369			748,478			774,201
Greater than $100,000		482,567			508,228			531,428
Brokered		516,748			425,011			405,308
Total deposits		7,905,012			6,326,512			6,240,729
Short-term borrowings		18,839			6,000			6,001
Federal Home Loan Bank advances		200,125			270,125			330,125
Long-term debt		165,620			129,865			129,865
Derivative financial instruments		27,401			31,997			36,171
Unsettled securities purchases		-			5,425			-
Accrued expenses and other liabilities		83,862			57,485			46,573
Total liabilities		8,400,859			6,827,409			6,789,464
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; 63,186,437, 50,178,605 and 50,167,191 shares issued and outstanding		63,186			50,178			50,167
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; 454,870, 357,983 and 354,961 shares		6,670			5,168			5,116
Capital surplus		1,284,877			1,080,508			1,091,555
Accumulated deficit		(344,746	)		(387,568	)		(402,773	)
Accumulated other comprehensive loss		(15,128	)		(18,790	)		(17,721	)
Total shareholders' equity		1,013,137			739,577			736,425
Total liabilities and shareholders' equity	$	9,413,996		$	7,566,986		$	7,525,889

UNITED COMMUNITY BANKS, INC.

Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended September 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⁾	$	5,457,158		$	57,258			4.16	%	$	4,445,947		$	49,853		4.45	%
Taxable securities ⁽³⁾		2,367,417			12,624			2.13			2,212,116			12,169		2.20
Tax-exempt securities ⁽¹⁾⁽³⁾		28,889			290			4.02			18,794			290		6.17
Federal funds sold and other interest-earning assets		155,957			948			2.43			143,169			1,026		2.87

Total interest-earning assets		8,009,421			71,120			3.53			6,820,026			63,338		3.69
Non-interest-earning assets:
Allowance for loan losses		(71,090	)								(74,146	)
Cash and due from banks		80,678									71,224
Premises and equipment		179,463									161,315
Other assets ⁽³⁾		435,060									395,184
Total assets	$	8,633,532								$	7,373,603

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,491,801			337			.09		$	1,331,806			365		.11
Money market		1,737,740			981			.22			1,387,042			872		.25
Savings		386,254			25			.03			282,746			20		.03
Time less than $100,000		793,755			708			.35			791,289			876		.44
Time greater than $100,000		484,074			447			.37			542,216			827		.61
Brokered time deposits		268,716			(325	)		(.48	)		278,330			18		.03
Total interest-bearing deposits		5,162,340			2,173			.17			4,613,429			2,978		.26

Federal funds purchased and other borrowings		72,909			99			.54			53,713			316		2.33
Federal Home Loan Bank advances		281,429			461			.65			227,190			435		.76
Long-term debt		152,105			2,669			6.96			129,865			2,642		8.07
Total borrowed funds		506,443			3,229			2.53			410,768			3,393		3.28

Total interest-bearing liabilities		5,668,783			5,402			.38			5,024,197			6,371		.50
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,972,291									1,530,011
Other liabilities		95,342									92,986
Total liabilities		7,736,416									6,647,194
Shareholders' equity		897,116									726,409
Total liabilities and shareholders' equity	$	8,633,532								$	7,373,603

Net interest revenue				$	65,718								$	56,967
Net interest-rate spread								3.15	%							3.19	%

Net interest margin ⁽⁴⁾								3.26	%							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 $8.56 million in 2015 and pretax unrealized gains of $7.42 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 Nine Months Ended September 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⁾	$	5,069,270		$	160,204			4.23	%	$	4,392,895		$	146,156		4.45	%
Taxable securities ⁽³⁾		2,263,907			36,380			2.14			2,272,639			35,560		2.09
Tax-exempt securities ⁽¹⁾⁽³⁾		23,649			845			4.76			19,515			914		6.24
Federal funds sold and other interest-earning assets		154,392			2,734			2.36			150,782			2,986		2.64

Total interest-earning assets		7,511,218			200,163			3.56			6,835,831			185,616		3.63
Non-interest-earning assets:
Allowance for loan losses		(71,425	)								(76,148	)
Cash and due from banks		78,948									65,744
Premises and equipment		169,037									161,843
Other assets ⁽³⁾		405,101									404,654
Total assets	$	8,092,879								$	7,391,924

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,462,344			1,079			.10		$	1,367,713			1,216		.12
Money market		1,605,098			2,460			.20			1,375,064			2,192		.21
Savings		340,878			71			.03			272,696			61		.03
Time less than $100,000		768,608			2,223			.39			828,694			2,822		.46
Time greater than $100,000		484,439			1,593			.44			561,167			2,610		.62
Brokered time deposits		272,688			(982	)		(.48	)		300,374			78		.03
Total interest-bearing deposits		4,934,055			6,444			.17			4,705,708			8,979		.26

Federal funds purchased and other borrowings		52,385			279			.71			91,320			2,064		3.02
Federal Home Loan Bank advances		270,260			1,307			.65			169,392			573		.45
Long-term debt		131,338			7,481			7.62			129,865			7,914		8.15
Total borrowed funds		453,983			9,067			2.67			390,577			10,551		3.61

Total interest-bearing liabilities		5,388,038			15,511			.38			5,096,285			19,530		.51
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,793,181									1,469,967
Other liabilities		93,218									111,522
Total liabilities		7,274,437									6,677,774
Shareholders' equity		818,442									714,150
Total liabilities and shareholders' equity	$	8,092,879								$	7,391,924

Net interest revenue				$	184,652								$	166,086
Net interest-rate spread								3.18	%							3.12	%

Net interest margin ⁽⁴⁾								3.29	%							3.25	%

⁽¹⁾

⁽²⁾

Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.

⁽³⁾

Securities available for sale are shown at amortized cost. Pretax unrealized gains of $12.7 million in 2015 and pretax unrealized gains of $1.59 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.