EX-99.2 3 t1600240_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 $23.9 MILLION FOR FIRST QUARTER 2016,

UP 36 PERCENT FROM A YEAR AGO

 

 

  • Operating earnings per diluted share of 33 cents, up 14 percent from first quarter of 2015
  • Operating return on assets of 1.00 percent – compared to .94 percent a year ago
  • Operating return on tangible common equity of 10.91 percent – up from 9.46 percent a year ago
  • Loans up $111 million from the fourth quarter of 2015, or 7 percent annualized
  • Core transaction deposits up $113 million from the fourth quarter of 2015, or 9 percent annualized

  

BLAIRSVILLE, GA – April 27, 2016 – United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported first quarter results reflecting strong credit quality, capital management, profitability and growth. Net operating income was $23.9 million, or 33 cents per diluted share, compared with $17.7 million, or 29 cents per diluted share, in the first quarter of 2015.

 

Net operating income and net operating income per diluted share exclude merger-related and other charges. Including those charges, first quarter 2016 net income was $22.3 million, or 31 cents per diluted share, compared with $17.7 million, or 29 cents per diluted share in the first quarter of 2015.

 

 
 

 

At March 31, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.3 percent; Total Risk-Based of 12.3 percent; Common Equity Tier 1 Risk-Based of 11.3 percent; and, Tier 1 Leverage of 8.4 percent.

 

“Our first quarter results continue to demonstrate the growing potential of United and our focus on increasing returns to our shareholders. Our performance reflects our emphasis on maintaining a high-quality balance sheet, increasing profitability and generating growth,” said Jimmy Tallent, chairman and chief executive officer. “It underscores our ability to prudently grow our loan portfolio and high-quality, low-cost core deposits, maintain top-quartile credit quality, and expand fee revenue while maintaining operating expense discipline, and making strategic investments in technology, geographic market positioning, products and enhanced expertise.

 

“First quarter loan production was a solid $562 million,” Tallent added. “Loan growth was $111 million, or 7 percent annualized, in line with our 2016 target of a mid-to-upper-single-digit increase. Our community banks originated $347 million in loan production, while our specialized lending area, which includes asset-based, commercial real estate, middle market, SBA and builder finance lending, produced $145 million. Helping fund these loans was quarter-to-quarter core transaction deposit growth of $113 million, or 9 percent annualized. Core deposits comprise 90 percent of total deposits, one of the best ratios in the country.”

 

First quarter taxable-equivalent net interest revenue totaled $75.2 million, up $1.2 million from the fourth quarter of 2015 and up $17.6 million from the first quarter of 2015. This increase reflects strong loan and core deposit growth, and an increase in the net interest margin. The increase from the first quarter of 2015 also reflects net interest revenue from the Palmetto and First National Bank acquisitions.

 

The taxable-equivalent net interest margin of 3.41 percent reflected a seven basis point increase from the fourth quarter of 2015, and a 10 basis point increase from a year ago. The increase from the fourth quarter reflects higher yields on the loan and investment securities portfolios, offset slightly by a one basis point increase in the rate paid on interest-bearing liabilities. Yields on floating rate loans and investment securities benefited from the full quarterly impact of the Federal Reserve Bank’s December 2015 rate hike.

 

2 
 

 

The first quarter provision for credit losses was negative $200,000 compared with positive provisions of $300,000 during the fourth quarter of 2015 and $1.8 million during the first quarter of 2015. In addition to continued strong credit quality and a low overall level of net charge-offs, the first quarter negative provision reflects an overall improvement in a number of our largest troubled debt restructurings and the related release of reserves assigned specifically to them.

 

“Our credit quality indicators are very favorable, and our outlook is for this to continue, which will result in driving down our allowance for loan losses requirement,” stated Tallent. “While we strive to maintain a conservative allowance for loan losses, our recent loss history and improving credit measures continue to require us to decrease our allowance each quarter.”

 

First quarter net charge-offs totaled $2.1 million compared with $1.3 million during the fourth quarter of 2015, and $2.6 million during the first quarter of 2015. Strong recoveries of previously charged-off loans drove net charge-offs down in the third and fourth quarters of 2015 from the first and second quarters of 2015. Nonperforming assets were 0.28 percent of total assets at March 31, 2016, compared with 0.29 percent at December 31, 2015 and 0.26 percent a year ago.

 

First quarter fee revenue totaled $18.6 million, a decrease of $2.7 million from the fourth quarter of 2015. The decrease was mostly seasonal and primarily the result of a $1.4 million decline in service charges and fees, a $758,000 decline in gains from sales of SBA loans, and a $541,000 decline in other fee revenue. First quarter fee revenue increased $2.9 million from the first quarter of 2015, primarily due to acquisitions.

 

During the first quarter of 2016, sales of $13.0 million in SBA loans resulted in net gains of $1.2 million. This compares with sales of $25.1 million and net gains of $2.0 million during the fourth quarter of 2015, and sales of $13.0 million and net gains of $1.1 million during the first quarter of 2015.

 

3 
 

 

Operating expenses, excluding merger-related and other charges, were $55.2 million in the first quarter of 2016. This compares to $56.4 million in the fourth quarter of 2015 and $43.1 million in the first quarter of 2015.

 

“The linked quarter decrease in operating expenses is primarily related to Palmetto cost savings, and is only part of the story,” commented Tallent. “What also is important to our future growth are the substantial investments we made during the quarter in talented revenue producers. To leverage the United brand and gain share in high-growth areas, during the first quarter we added eight new mortgage lenders in our metro markets. In our specialized lending areas, primarily in our SBA lending business we added 11 revenue producers. We also added three lenders in our loan production office in Charleston, South Carolina, and opened a new loan production office in Macon, Georgia.

 

“Consistent with this strategy, on April 4, 2016, we entered into a merger agreement with Tidelands Bancshares, Inc., the holding company for Tidelands Bank which is based in Mt. Pleasant, South Carolina,” Tallent said. “Tidelands Bank will merge into United Community Bank and operate under the United brand on the South Carolina coast, including Charleston, Hilton Head and Myrtle Beach.

 

“Following the opening of a loan production office in Charleston in the fourth quarter of 2015, this strategic purchase completes a two-step plan to launch and accelerate growth in attractive coastal South Carolina markets,” said Tallent. “The Tidelands agreement is expected to close in the third quarter and will be immediately accretive to operating earnings. I am excited to have Thomas Lyles and his team join the United family.

 

“In the first quarter we maintained strong momentum and, with our talented bankers at work, we expect to do so again in the second quarter and throughout the remainder of 2016,” Tallent said. “Our talented bankers are executing our plans as we maintain a high-quality balance sheet, increase profitability and generate growth.”

 

4 
 

Conference Call

United will hold a conference call today, Wednesday, April 27, 2016, 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 79143447. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

 

About United Community Banks, Inc.

United Community Banks, Inc. (NASDAQ: UCBI) is a registered bank holding company based in Blairsville, Georgia, with $9.8 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast region’s largest full-service banks, operating 135 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in providing personalized community banking services to individuals, small businesses and corporations. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. United Community Banks is consistently recognized for its outstanding customer service by respected national research firms. In 2014 and 2015, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and again in 2016 was ranked among the top 100 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 2015 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.

 

# # #

 

5 
 

  

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                       First 
   2016   2015   Quarter 
(in thousands, except per share  First   Fourth   Third   Second   First   2016-2015 
data; fully taxable equivalent)  Quarter   Quarter   Quarter   Quarter   Quarter   Change 
INCOME SUMMARY                              
Interest revenue (FTE)  $80,991   $79,646   $71,120   $66,134   $62,909      
Interest expense   5,769    5,598    5,402    4,817    5,292      
Net interest revenue (FTE)   75,222    74,048    65,718    61,317    57,617    31%
Provision for credit losses   (200)   300    700    900    1,800      
Fee revenue   18,606    21,284    18,297    17,266    15,682    19 
Total revenue (FTE)   94,028    95,032    83,315    77,683    71,499    32 
Expenses - operating  (1)   55,232    56,410    48,525    45,247    43,061    28 
Income before income tax expense - (FTE) operating (1)   38,796    38,622    34,790    32,436    28,438    36 
Income tax expense - (FTE) operating  (1)   14,852    14,822    13,064    12,447    10,768    38 
Net income - operating  (1)   23,944    23,800    21,726    19,989    17,670    36 
Preferred dividends and discount accretion   21    25    25    17    -      
Net income available to common shareholders - operating  (1)   23,923    23,775    21,701    19,972    17,670    35 
Merger-related and other charges, net of income tax benefit   1,649    5,592    3,839    2,176    -      
Net income available to common shareholders - GAAP  $22,274   $18,183   $17,862   $17,796   $17,670    26 
                               
PERFORMANCE MEASURES                              
  Per common share:                              
Diluted income - operating  (1)  $.33   $.33   $.33   $.32   $.29    14 
Diluted income - GAAP   .31    .25    .27    .28    .29    7 
Cash dividends declared   .07    .06    .06    .05    .05      
Book value   14.35    14.02    13.95    12.95    12.58    14 
Tangible book value (3)   12.40    12.06    12.08    12.66    12.53    (1)
                               
  Key performance ratios:                              
Return on tangible common equity - operating (1)(2)(3)(4)   10.91%   10.87%   10.29%   10.20%   9.46%     
Return on common equity - operating (1)(2)(4)   9.20    9.18    9.54    9.90    9.34      
Return on common equity - GAAP (2)(4)   8.57    7.02    7.85    8.83    9.34      
Return on assets - operating (1)(4)   1.00    .99    1.00    1.00    .94      
Return on assets - GAAP (4)   .93    .76    .82    .89    .94      
Dividend payout ratio - operating (1)   21.21    18.18    18.18    15.63    17.24      
Dividend payout ratio - GAAP   22.58    24.00    22.22    17.86    17.24      
Net interest margin (FTE) (4)   3.41    3.34    3.26    3.30    3.31      
Efficiency ratio - operating  (1)   59.10    59.41    57.81    57.59    59.15      
Efficiency ratio - GAAP   61.94    68.97    64.65    61.63    59.15      
Average equity to average assets   10.72    10.68    10.39    10.05    9.86      
Average tangible equity to average assets (3)   9.41    9.40    9.88    9.91    9.82      
Average tangible common equity to average assets (3)   9.32    9.29    9.77    9.83    9.82      
Tangible common equity to risk-weighted assets (3)(5)(6)   12.77    12.82    13.08    13.24    13.53      
                               
ASSET QUALITY                              
  Nonperforming loans  $22,419   $22,653   $20,064   $18,805   $19,015    18 
  Foreclosed properties   5,163    4,883    7,669    2,356    1,158    346 
Total nonperforming assets (NPAs)   27,582    27,536    27,733    21,161    20,173    37 
  Allowance for loan losses   66,310    68,448    69,062    70,129    70,007    (5)
  Net charge-offs   2,138    1,302    1,417    978    2,562    (17)
  Allowance for loan losses to loans   1.09%   1.14%   1.15%   1.36%   1.46%     
  Net charge-offs to average loans (4)   .14    .09    .10    .08    .22      
  NPAs to loans and foreclosed properties   .45    .46    .46    .41    .42      
  NPAs to total assets   .28    .29    .29    .26    .26      
                               
AVERAGE BALANCES ($ in millions)                              
  Loans  $6,004   $5,975   $5,457   $5,017   $4,725    27 
  Investment securities   2,718    2,607    2,396    2,261    2,203    23 
  Earning assets   8,876    8,792    8,009    7,444    7,070    26 
  Total assets   9,634    9,558    8,634    8,017    7,617    26 
  Deposits   7,947    8,028    7,135    6,669    6,369    25 
  Shareholders’ equity   1,033    1,021    897    806    751    38 
  Common shares - basic (thousands)   72,162    72,135    66,294    62,549    60,905    18 
  Common shares - diluted (thousands)   72,166    72,140    66,300    62,553    60,909    18 
                               
AT PERIOD END ($ in millions)                              
  Loans  $6,106   $5,995   $6,024   $5,174   $4,788    28 
  Investment securities   2,757    2,656    2,457    2,322    2,201    25 
  Total assets   9,781    9,616    9,404    8,237    7,655    28 
  Deposits   7,960    7,873    7,897    6,800    6,430    24 
  Shareholders’ equity   1,034    1,018    1,013    827    764    35 
  Common shares outstanding (thousands)   71,544    71,484    71,472    62,700    60,309    19 

 

(1) Excludes merger-related charges and impairment losses on surplus bank property. (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) All periods are calculated under Basel III rules, which became effective January 1, 2015. (6) First quarter 2016 ratio is preliminary.

 

   

 

  

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
   2016   2015 
(in thousands, except per share  First   Fourth   Third   Second   First 
data; fully taxable equivalent)  Quarter   Quarter   Quarter   Quarter   Quarter 
                     
Interest revenue reconciliation                         
Interest revenue - taxable equivalent  $80,991   $79,646   $71,120   $66,134   $62,909 
Taxable equivalent adjustment   (270)   (284)   (292)   (326)   (375)
Interest revenue (GAAP)  $80,721   $79,362   $70,828   $65,808   $62,534 
                          
Net interest revenue reconciliation                         
Net interest revenue - taxable equivalent  $75,222   $74,048   $65,718   $61,317   $57,617 
Taxable equivalent adjustment   (270)   (284)   (292)   (326)   (375)
Net interest revenue (GAAP)  $74,952   $73,764   $65,426   $60,991   $57,242 
                          
Total revenue reconciliation                         
Total operating revenue  $94,028   $95,032   $83,315   $77,683   $71,499 
Taxable equivalent adjustment   (270)   (284)   (292)   (326)   (375)
Total revenue (GAAP)  $93,758   $94,748   $83,023   $77,357   $71,124 
                          
Expense reconciliation                         
Expenses - operating  $55,232   $56,410   $48,525   $45,247   $43,061 
Merger-related and other charges   2,653    9,078    5,744    3,173    - 
Expenses (GAAP)  $57,885   $65,488   $54,269   $48,420   $43,061 
                          
Income before taxes reconciliation                         
Income before taxes - operating  $38,796   $38,622   $34,790   $32,436   $28,438 
Taxable equivalent adjustment   (270)   (284)   (292)   (326)   (375)
Merger-related and other charges   (2,653)   (9,078)   (5,744)   (3,173)   - 
Income before taxes (GAAP)  $35,873   $29,260   $28,754   $28,937   $28,063 
                          
Income tax expense reconciliation                         
Income tax expense - operating  $14,852   $14,822   $13,064   $12,447   $10,768 
Taxable equivalent adjustment   (270)   (284)   (292)   (326)   (375)
Merger-related and other charges, tax benefit   (1,004)   (3,486)   (1,905)   (997)   - 
Income tax expense (GAAP)  $13,578   $11,052   $10,867   $11,124   $10,393 
                          
Net income reconciliation                         
Net income - operating  $23,944   $23,800   $21,726   $19,989   $17,670 
Merger-related and other charges, net of income tax benefit   (1,649)   (5,592)   (3,839)   (2,176)   - 
Net income (GAAP)  $22,295   $18,208   $17,887   $17,813   $17,670 
                          
Net income available to common shareholders reconciliation                         
Net income available to common shareholders - operating  $23,923   $23,775   $21,701   $19,972   $17,670 
Merger-related and other charges, net of income tax benefit   (1,649)   (5,592)   (3,839)   (2,176)   - 
Net income available to common shareholders (GAAP)  $22,274   $18,183   $17,862   $17,796   $17,670 
                          
Diluted income per common share reconciliation                         
Diluted income per common share - operating  $.33   $.33   $.33   $.32   $.29 
Merger-related and other charges   (.02)   (.08)   (.06)   (.04)   - 
Diluted income per common share (GAAP)  $.31   $.25   $.27   $.28   $.29 
                          
Book value per common share reconciliation                         
Tangible book value per common share  $12.40   $12.06   $12.08   $12.66   $12.53 
Effect of goodwill and other intangibles   1.95    1.96    1.87    .29    .05 
Book value per common share (GAAP)  $14.35   $14.02   $13.95   $12.95   $12.58 
                          
Return on tangible common equity reconciliation                         
Return on tangible common equity - operating   10.91%   10.87%   10.29%   10.20%   9.46%
Effect of goodwill and other intangibles   (1.71)   (1.69)   (.75)   (.30)   (.12)
Return on common equity - operating   9.20    9.18    9.54    9.90    9.34 
Merger-related and other charges   (.63)   (2.16)   (1.69)   (1.07)   - 
Return on common equity (GAAP)   8.57%   7.02%   7.85%   8.83%   9.34%
                          
Return on assets reconciliation                         
Return on assets - operating   1.00%   .99%   1.00%   1.00%   .94%
Merger-related  and other charges   (.07)   (.23)   (.18)   (.11)   - 
Return on assets (GAAP)   .93%   .76%   .82%   .89%   .94%
                          
Dividend payout ratio reconciliation                         
Dividend payout ratio - operating   21.21%   18.18%   18.18%   15.63%   17.24%
Merger-related and other charges   1.37    5.82    4.04    2.23    - 
Dividend payout ratio (GAAP)   22.58%   24.00%   22.22%   17.86%   17.24%
                          
Efficiency ratio reconciliation                         
Efficiency ratio - operating   59.10%   59.41%   57.81%   57.59%   59.15%
Merger-related and other charges   2.84    9.56    6.84    4.04    - 
Efficiency ratio (GAAP)   61.94%   68.97%   64.65%   61.63%   59.15%
                          
Average equity to assets reconciliation                         
Tangible common equity to assets   9.32%   9.29%   9.77%   9.83%   9.82%
Effect of preferred equity   .09    .11    .11    .08    - 
Tangible equity to assets   9.41    9.40    9.88    9.91    9.82 
Effect of goodwill and other intangibles   1.31    1.28    .51    .14    .04 
Equity to assets (GAAP)   10.72%   10.68%   10.39%   10.05%   9.86%
                          
Tangible common equity to risk-weighted assets reconciliation (1)                         
Tangible common equity to risk-weighted assets   12.77%   12.82%   13.08%   13.24%   13.53%
Effect of other comprehensive income   .25    .38    .23    .28    .19 
Effect of deferred tax limitation   (1.85)   (2.05)   (2.24)   (2.49)   (2.86)
Effect of trust preferred   .08    .08    .08    .63    .67 
Effect of preferred equity   -    .15    .15    .17    - 
Basel III intangibles transition adjustment   .07    .10    .13    .06    .04 
Basel III disallowed investments   -    (.03)   (.03)   (.03)   (.04)
Tier I capital ratio (Regulatory)   11.32%   11.45%   11.40%   11.86%   11.53%

 

(1) First quarter 2016 ratios are preliminary.

 

   

 

  

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

   2016   2015   Linked   Year over 
   First   Fourth   Third   Second   First   Quarter   Year 
(in millions)  Quarter   Quarter   Quarter   Quarter   Quarter   Change   Change 
LOANS BY CATEGORY                                   
Owner occupied commercial RE  $1,434   $1,494   $1,479   $1,266   $1,167   $(60)  $267 
Income producing commercial RE   880    824    818    689    636    56    244 
Commercial & industrial   855    785    890    793    716    70    139 
Commercial construction   354    342    319    238    230    12    124 
Total commercial   3,523    3,445    3,506    2,986    2,749    78    774 
Residential mortgage   1,032    1,029    1,062    935    864    3    168 
Home equity lines of credit   604    598    585    491    465    6    139 
Residential construction   348    352    334    299    291    (4)   57 
Consumer installment   599    571    537    463    419    28    180 
Total loans  $6,106   $5,995   $6,024   $5,174   $4,788    111    1,318 
                                    
LOANS BY MARKET                                   
North Georgia  $1,097   $1,125   $1,130   $1,155   $1,150    (28)   (53)
Atlanta MSA   1,257    1,259    1,266    1,275    1,254    (2)   3 
North Carolina   543    549    546    533    539    (6)   4 
Coastal Georgia   543    537    506    499    476    6    67 
Gainesville MSA   248    254    252    257    255    (6)   (7)
East Tennessee   495    504    511    525    281    (9)   214 
South Carolina   821    819    783    35    30    2    791 
Specialized Lending   628    492    609    538    487    136    141 
Indirect auto   474    456    421    357    316    18    158 
Total loans  $6,106   $5,995   $6,024   $5,174   $4,788    111    1,318 

  

   

 

  

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality

 

   First Quarter 2016   Fourth Quarter 2015   Third 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  $6,775   $2,864   $9,639   $7,036   $2,652   $9,688   $5,918   $882   $6,800 
Income producing CRE   2,959    -    2,959    2,595    -    2,595    1,238    4,084    5,322 
Commercial & industrial   978    -    978    892    -    892    1,068    -    1,068 
Commercial construction   266    152    418    328    437    765    256    657    913 
Total commercial   10,978    3,016    13,994    10,851    3,089    13,940    8,480    5,623    14,103 
Residential mortgage   8,037    1,587    9,624    8,555    1,242    9,797    8,847    1,454    10,301 
Home equity lines of credit   1,198    125    1,323    851    80    931    890    87    977 
Residential construction   1,122    435    1,557    1,398    472    1,870    929    505    1,434 
Consumer installment   1,084    -    1,084    998    -    998    918    -    918 
Total NPAs  $22,419   $5,163   $27,582   $22,653   $4,883   $27,536   $20,064   $7,669   $27,733 
Balance as a % of                                             
Unpaid Principal   69.3%   38.2%   60.1%   71.4%   34.2%   59.8%   70.3%   45.8%   61.2%
                                              
NONPERFORMING ASSETS BY MARKET                                             
North Georgia  $5,353   $1,233   $6,586   $5,167   $1,612   $6,779   $6,403   $1,263   $7,666 
Atlanta MSA   2,796    902    3,698    3,023    625    3,648    1,750    1,122    2,872 
North Carolina   4,860    559    5,419    5,289    183    5,472    4,564    9    4,573 
Coastal Georgia   1,696    121    1,817    2,079    -    2,079    338    66    404 
Gainesville MSA   250    -    250    307    -    307    325    3    328 
East Tennessee   3,470    351    3,821    3,448    157    3,605    2,886    231    3,117 
South Carolina   935    1,997    2,932    323    2,306    2,629    267    4,975    5,242 
Specialized Lending   2,186    -    2,186    2,231    -    2,231    2,809    -    2,809 
Indirect auto   873    -    873    786    -    786    722    -    722 
Total NPAs  $22,419   $5,163   $27,582   $22,653   $4,883   $27,536   $20,064   $7,669   $27,733 
                                              
NONPERFORMING ASSETS ACTIVITY                                             
Beginning Balance  $22,653   $4,883   $27,536   $20,064   $7,669   $27,733   $18,805   $2,356   $21,161 
Acquisitions   -    -    -    -    (1,585)   (1,585)   -    4,848    4,848 
Loans placed on non-accrual   4,771    -    4,771    10,768    -    10,768    8,923    -    8,923 
Payments received   (1,812)   -    (1,812)   (4,893)   -    (4,893)   (4,233)   -    (4,233)
Loan charge-offs   (1,679)   -    (1,679)   (1,813)   -    (1,813)   (1,531)   -    (1,531)
Foreclosures   (1,514)   1,590    76    (1,473)   1,497    24    (1,900)   1,900    - 
Capitalized costs   -    -    -    -    -    -    -    256    256 
Property sales   -    (1,524)   (1,524)   -    (2,968)   (2,968)   -    (1,916)   (1,916)
Write downs   -    (7)   (7)   -    11    11    -    (79)   (79)
Net gains (losses) on sales   -    221    221    -    259    259    -    304    304 
Ending Balance  $22,419   $5,163   $27,582   $22,653   $4,883   $27,536   $20,064   $7,669   $27,733 

 

   First Quarter 2016   Fourth Quarter 2015   Third 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  $304    .08%  $861    .23%  $236    .07%
Income producing CRE   211    .10    (35)   (.02)   (106)   (.06)
Commercial & industrial   283    .14    (719)   (.34)   190    .09 
Commercial construction   286    .33    253    .31    59    .09 
Total commercial   1,084    .13    360    .04    379    .05 
Residential mortgage   50    .02    (120)   (.05)   433    .18 
Home equity lines of credit   632    .43    194    .13    293    .22 
Residential construction   (103)   (.12)   415    .48    (124)   (.16)
Consumer installment   475    .33    453    .33    436    .35 
Total  $2,138    .14   $1,302    .09   $1,417    .10 
                               
NET CHARGE-OFFS BY MARKET                              
North Georgia  $913    .33%  $1,011    .36%  $1,352    .47%
Atlanta MSA   (25)   (.01)   496    .16    74    .02 
North Carolina   382    .28    426    .31    183    .13 
Coastal Georgia   196    .15    47    .04    19    .02 
Gainesville MSA   98    .16    (340)   (.54)   (236)   (.36)
East Tennessee   378    .31    (326)   (.26)   153    .12 
South Carolina   (16)   (.01)   (474)   (.24)   (247)   (.34)
Specialized Lending   4    -    253    .18    (42)   (.03)
Indirect auto   208    .19    209    .19    161    .17 
Total  $2,138    .14   $1,302    .09   $1,417    .10 

 

(1) Annualized.

 

   

 

 

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
   Three Months Ended 
   March 31, 
(in thousands, except per share data)  2016   2015 
         
Interest revenue:          
Loans, including fees  $63,976   $49,664 
Investment securities, including tax exempt of $166 and $158   15,788    12,058 
Deposits in banks and short-term investments   957    812 
Total interest revenue   80,721    62,534 
           
Interest expense:          
Deposits:          
NOW   485    394 
Money market   1,108    673 
Savings   29    20 
Time   642    1,109 
Total deposit interest expense   2,264    2,196 
Short-term borrowings   87    98 
Federal Home Loan Bank advances   733    392 
Long-term debt   2,685    2,606 
Total interest expense   5,769    5,292 
Net interest revenue   74,952    57,242 
Provision for credit losses   (200)   1,800 
Net interest revenue after provision for credit losses   75,152    55,442 
           
Fee revenue:          
Service charges and fees   10,126    7,615 
Mortgage loan and other related fees   3,289    2,755 
Brokerage fees   1,053    1,551 
Gains from sales of government guaranteed loans   1,237    1,141 
Securities gains, net   379    1,539 
Loss from prepayment of debt   -    (1,038)
Other   2,522    2,119 
Total fee revenue   18,606    15,682 
Total revenue   93,758    71,124 
           
Operating expenses:          
Salaries and employee benefits   33,062    26,446 
Communications and equipment   4,290    3,271 
Occupancy   4,723    3,278 
Advertising and public relations   864    750 
Postage, printing and supplies   1,280    938 
Professional fees   2,700    1,919 
FDIC assessments and other regulatory charges   1,524    1,209 
Amortization of intangibles   1,010    242 
Merger-related and other charges   2,653    - 
Other   5,779    5,008 
Total operating expenses   57,885    43,061 
Net income before income taxes   35,873    28,063 
Income tax expense   13,578    10,393 
Net income   22,295    17,670 
Preferred stock dividends and discount accretion   21    - 
Net income available to common shareholders  $22,274   $17,670 
           
Earnings per common share:          
Basic  $.31   $.29 
Diluted   .31    .29 
Weighted average common shares outstanding:          
Basic   72,162    60,905 
Diluted   72,166    60,909 

 

   

 

  

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
   March 31,   December 31,   March 31, 
(in thousands, except share and per share data)  2016   2015   2015 
             
ASSETS               
Cash and due from banks  $93,821   $86,912   $77,493 
Interest-bearing deposits in banks   88,995    153,451    82,269 
Short-term investments   -    -    25,902 
Cash and cash equivalents   182,816    240,363    185,664 
Securities available for sale   2,405,467    2,291,511    1,801,973 
Securities held to maturity (fair value $363,092, $371,658 and $413,550)   351,700    364,696    399,228 
Mortgage loans held for sale   26,578    24,231    15,723 
Loans, net of unearned income   6,106,189    5,995,441    4,787,689 
Less allowance for loan losses   (66,310)   (68,448)   (70,007)
Loans, net   6,039,879    5,926,993    4,717,682 
Premises and equipment, net   180,690    178,165    159,036 
Bank owned life insurance   105,803    105,493    81,490 
Accrued interest receivable   25,893    25,786    20,154 
Net deferred tax asset   180,371    197,613    201,898 
Derivative financial instruments   23,488    20,082    20,291 
Goodwill and other intangible assets   146,409    147,420    3,399 
Other assets   112,237    94,075    47,998 
Total assets  $9,781,331   $9,616,428   $7,654,536 
LIABILITIES AND SHAREHOLDERS' EQUITY               
Liabilities:               
Deposits:               
Demand  $2,370,842   $2,204,755   $1,694,755 
NOW   1,794,241    1,975,884    1,420,956 
Money market   1,630,565    1,599,637    1,306,421 
Savings   491,542    471,129    312,013 
Time   1,233,647    1,282,803    1,206,278 
Brokered   439,486    338,985    489,141 
Total deposits   7,960,323    7,873,193    6,429,564 
Repurchase agreements   -    16,640    - 
Federal Home Loan Bank advances   510,125    430,125    270,125 
Long-term debt   163,955    163,836    112,901 
Derivative financial instruments   31,374    28,825    29,276 
Accrued expenses and other liabilities   81,829    85,524    48,965 
Total liabilities   8,747,606    8,598,143    6,890,831 
Shareholders' equity:               
Preferred stock, $1 par value; 10,000,000 shares authorized; Series H; $1,000 stated value; 0, 9,992 and 0 shares issued and outstanding   -    9,992    - 
Common stock, $1 par value; 100,000,000 shares authorized; 66,258,777, 66,198,477 and 50,228,075 shares issued and outstanding   66,259    66,198    50,228 
Common stock, non-voting, $1 par value; 26,000,000 shares authorized; 5,285,516, 5,285,516 and 10,080,787 shares issued and outstanding   5,286    5,286    10,081 
Common stock issuable; 496,515, 458,953 and 400,369 shares   6,700    6,779    5,895 
Capital surplus   1,286,884    1,286,361    1,081,110 
Accumulated deficit   (313,646)   (330,879)   (372,933)
Accumulated other comprehensive loss   (17,758)   (25,452)   (10,676)
Total shareholders' equity   1,033,725    1,018,285    763,705 
Total liabilities and shareholders' equity  $9,781,331   $9,616,428   $7,654,536 

 

   

 

  

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,

 

   2016   2015 
   Average       Avg.   Average       Avg. 
(dollars in thousands, fully taxable equivalent)  Balance   Interest   Rate   Balance   Interest   Rate 
Assets:                              
Interest-earning assets:                              
Loans, net of unearned income (1)(2)  $6,003,568   $64,044    4.29%  $4,725,304   $49,865    4.28%
Taxable securities (3)   2,688,564    15,622    2.32    2,186,756    11,900    2.18 
Tax-exempt securities (1)(3)   29,744    272    3.66    16,236    259    6.38 
Federal funds sold and other interest-earning assets   153,759    1,053    2.74    141,414    885    2.50 
                               
Total interest-earning assets   8,875,635    80,991    3.67    7,069,710    62,909    3.60 
Non-interest-earning assets:                              
Allowance for loan losses   (68,473)             (72,192)          
Cash and due from banks   85,635              79,025           
Premises and equipment   180,090              159,502           
Other assets (3)   561,261              381,300           
Total assets  $9,634,148             $7,617,345           
                               
Liabilities and Shareholders' Equity:                              
Interest-bearing liabilities:                              
Interest-bearing deposits:                              
NOW  $1,886,472    485    .10   $1,475,913    394    .11 
Money market   1,840,584    1,108    .24    1,466,913    673    .19 
Savings   480,238    29    .02    300,344    20    .03 
Time   1,259,689    817    .26    1,231,705    1,388    .46 
Brokered time deposits   233,213    (175)   (.30)   273,327    (279)   (.41)
Total interest-bearing deposits   5,700,196    2,264    .16    4,748,202    2,196    .19 
                               
Federal funds purchased and other borrowings   34,906    87    1.00    36,145    98    1.10 
Federal Home Loan Bank advances   346,169    733    .85    239,181    392    .66 
Long-term debt   165,419    2,685    6.53    127,740    2,606    8.27 
Total borrowed funds   546,494    3,505    2.58    403,066    3,096    3.12 
                               
Total interest-bearing liabilities   6,246,690    5,769    .37    5,151,268    5,292    .42 
Non-interest-bearing liabilities:                              
Non-interest-bearing deposits   2,247,041              1,620,984           
Other liabilities   107,320              94,207           
Total liabilities   8,601,051              6,866,459           
Shareholders' equity   1,033,097              750,886           
Total liabilities and shareholders' equity  $9,634,148             $7,617,345           
                               
Net interest revenue       $75,222             $57,617      
Net interest-rate spread             3.30%             3.18%
                               
Net interest margin (4)             3.41%             3.31%

 

(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 $2.20 million in 2016 and pretax unrealized gains of $10.8 million in 2015 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.