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United Community Banks, Inc. Announces Fourth Quarter Earnings

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

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

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

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

At December 31, 2017, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 12.3 percent; Total Risk-Based of 13.0 percent; Common Equity Tier 1 Risk-Based of 12.0 percent, and Tier 1 Leverage of 9.4 percent.

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

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

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

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

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

The fourth quarter provision for credit losses was $1.2 million, up from $1.0 million for the third quarter and no provision in fourth quarter 2016.  Fourth quarter net charge-offs totaled $1.1 million, down from $1.6 million in the third quarter of 2017 and $1.5 million in the fourth quarter of 2016.  Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans.  Nonperforming assets were .23 percent of total assets at December 31, 2017, compared with .28 percent at December 31, 2016 and .23 percent at September 30, 2017.

“Credit quality remains strong and steady as indicated by the low level of net charge-offs,” Tallent commented.  “Our credit quality indicators show no indication of credit deterioration and our outlook is for that to continue.  We also expect our provision levels to gradually increase each quarter due to loan growth, while our allowance and the related ratio to total loans may decline slightly.”

Fourth quarter fee revenue totaled $21.9 million, down $3.31 million from a year ago but up $1.36 million from the third quarter.  The decrease from a year ago was mostly due to lower debit card interchange fees as a result of the Durbin amendment becoming effective for United on July 1, 2017.  The application of the Durbin amendment reduced United’s debit card interchange fees by approximately $2.7 million in both the third and fourth quarters.  Also contributing to the decrease from both prior periods were lower mortgage fees and lower customer derivative fees reflecting a less favorable interest rate environment.

Operating expenses were $75.9 million for the fourth quarter, compared with $61.3 million for the fourth quarter of 2016 and $65.7 million for the third quarter.  Included in the fourth quarter’s operating expenses are $7.36 million in merger-related expenses.  We also had merger-related charges of $1.14 million in the fourth quarter of 2016, and $2.3 million in merger-related expenses and $1.1 million in surplus property impairment charges, totaling $3.4 million in the third quarter of 2017.  Excluding these charges, fourth quarter operating expenses were $68.5 million compared with $62.3 million for the third quarter and $60.2 million a year ago.  More than half of the $6.3 million increase from the third quarter was due to the operating expenses of Four Oaks Bank & Trust Company acquired on November 1, 2017 and Horry County State Bank acquired on July 31, 2017.  Higher incentives for exceeding performance targets contributed to the increase from third quarter and accounted for approximately half of the linked quarter increase in salaries and benefits with the rest of the increase in salaries and benefits coming from the acquisitions.

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

/EIN News/ -- Conference Call
United will hold a conference call Wednesday, January 24, 2018, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 9796627.  The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ:UCBI) is a bank holding company based in Blairsville, Georgia with $11.9 billion in assets.  The company’s banking subsidiary, United Community Bank, is one of the southeast region’s largest full-service banks, operating 156 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in personalized community banking services for individuals, small businesses and corporations.  Services include a full range of consumer and commercial banking products including mortgage, advisory, and treasury management.  Respected national research firms consistently recognize United Community Bank for outstanding customer service.  For the last four years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast.  In 2017, for the fourth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America.  Additional information about the company and the bank’s full range of products and services can be found at www.ucbi.com.

Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP.  This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “operating net income per diluted share,” “operating earnings per diluted share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted assets.”  These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends.  These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies.  To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

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

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

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


UNITED COMMUNITY BANKS, INC.                
Financial Highlights                
Selected Financial Information                
                 
    For the Twelve      
    Months Ended   YTD  
    December 31,   2017-2016  
(in thousands, except per share data)     2017       2016      Change  
INCOME SUMMARY                
Interest revenue   $ 389,720     $ 335,020          
Interest expense     33,735       25,236          
Net interest revenue     355,985       309,784     15   %  
Provision for credit losses     3,800       (800 )        
Fee revenue     88,260       93,697     (6 )    
Total revenue     440,445       404,281     9      
Expenses     267,611       241,289     11      
Income before income tax expense     172,834       162,992     6      
Income tax expense     105,013       62,336     68      
Net income     67,821       100,656     (33 )    
Merger-related and other charges     14,662       8,122          
Income tax benefit of merger-related and other charges     (3,745 )     (3,074 )        
Impact of remeasurement of deferred tax asset resulting
  from 2017 Tax Cuts and Jobs Act
    38,199       -          
Impairment of deferred tax asset on canceled
  non-qualified stock options
    -       976          
Release of disproportionate tax effects lodged in OCI     3,400       -          
Net income - operating (1)   $    120,337     $    106,680       13      
                 
PERFORMANCE MEASURES                
Per common share:                
Diluted net income - GAAP   $  .92     $ 1.40     (34 )    
Diluted net income - operating  (1)     1.63       1.48     10      
Cash dividends declared     .38       .30      27   %  
Book value     16.67       15.06     11      
Tangible book value (3)     13.65       12.95     5      
                 
Key performance ratios:                
Return on common equity - GAAP (2)(4)     5.67   %   9.41   %        
Return on common equity - operating (1)(2)(4)     10.07       9.98          
Return on tangible common equity - operating (1)(2)(3)(4)     12.02       11.86          
Return on assets - GAAP (4)     .62       1.00          
Return on assets - operating (1)(4)     1.09       1.06          
Dividend payout ratio - GAAP     41.30       21.43          
Dividend payout ratio - operating (1)     23.31       20.27          
Net interest margin (fully taxable equivalent) (4)     3.52       3.36          
Efficiency ratio - GAAP     59.95       59.80          
Efficiency ratio - operating  (1)     56.67       57.78          
Average equity to average assets     10.71       10.54          
Average tangible equity to average assets (3)     9.29       9.21          
Average tangible common equity to average assets (3)     9.29       9.19          
Tangible common equity to risk-weighted assets (3)(5)     12.11       11.84          
                 
ASSET QUALITY                
Nonperforming loans   $ 23,658     $ 21,539     10      
Foreclosed properties     3,234       7,949     (59 )    
Total nonperforming assets (NPAs)     26,892       29,488     (9 )    
Allowance for loan losses     58,914       61,422     (4 )    
Net charge-offs     5,998       6,766     (11 )    
Allowance for loan losses to loans     .76   %   .89   %      
Net charge-offs to average loans (4)     .08       .11          
NPAs to loans and foreclosed properties     .35       .43          
NPAs to total assets     .23       .28          
                 
AVERAGE BALANCES ($ in millions)                
Loans   $ 7,150     $ 6,413     11      
Investment securities     2,847       2,691     6      
Earning assets     10,162       9,257     10      
Total assets     11,015       10,054     10      
Deposits     8,950       8,177     9      
Shareholders’ equity     1,180       1,059     11      
Common shares - basic (thousands)     73,247       71,910     2      
Common shares - diluted (thousands)     73,259       71,915     2      
                 
AT PERIOD END ($ in millions)                
Loans   $ 7,736     $ 6,921     12      
Investment securities     2,937       2,762     6      
Total assets     11,915       10,709     11      
Deposits     9,808       8,638     14      
Shareholders’ equity     1,303       1,076     21      
Common shares outstanding (thousands)     77,580       70,899     9      
                 
(1)  Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation, a first quarter 2017 release of disproportionate tax effects lodged in OCI and a fourth quarter 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options.  (2)  Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).  (3)  Excludes effect of acquisition related intangibles and associated amortization.  (4)  Annualized.  (5)  Fourth quarter 2017 ratio is preliminary.  
                 


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


UNITED COMMUNITY BANKS, INC.                      
Non-GAAP Performance Measures Reconciliation                      
Selected Financial Information                      
                       
                       
    2017       2016      
   Fourth     Third     Second     First     Fourth   
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter    
                       
Expense reconciliation                      
Expenses (GAAP) $   75,882     $   65,674     $   63,229     $   62,826     $   61,321      
Merger-related and other charges     (7,358 )       (3,420 )       (1,830 )       (2,054 )       (1,141 )    
Expenses - operating $   68,524     $   62,254     $   61,399     $   60,772     $   60,180      
                       
Net income reconciliation                      
Net income (GAAP) $   (11,916 )   $   27,946     $   28,267     $   23,524     $   27,221      
Merger-related and other charges     7,358         3,420         1,830         2,054         1,141      
Income tax benefit of merger-related and other charges     (1,165 )       (1,147 )       (675 )       (758 )       (432 )    
Impact of tax reform on remeasurement of deferred tax asset     38,199         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          -          -          -          976      
Release of disproportionate tax effects lodged in OCI     -          -          -          3,400         -       
Net income - operating $   32,476     $   30,219     $   29,422     $   28,220     $   28,906      
                       
Diluted income per common share reconciliation                      
Diluted income per common share (GAAP)  $   (.16 )    $  .38      $   .39      $   .33      $   .38      
Merger-related and other charges     .08         .03         .02         .01         .01      
Impact of tax reform on remeasurement of deferred tax asset     .50         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          -          -          -          .01      
Release of disproportionate tax effects lodged in OCI     -          -          -          .05         -       
  Diluted income per common share - operating  $  .42      $   .41      $   .41      $  .39      $   .40      
                       
Book value per common share reconciliation                      
Book value per common share (GAAP) $   16.67     $   16.50     $   15.83     $   15.40     $   15.06      
Effect of goodwill and other intangibles     (3.02 )       (2.39 )       (2.09 )       (2.10 )       (2.11 )    
Tangible book value per common share $   13.65     $   14.11     $   13.74     $   13.30     $   12.95      
                       
Return on tangible common equity reconciliation                      
Return on common equity (GAAP)     (3.57 ) %     9.22   %     9.98   %     8.54   %     9.89   %  
Merger-related and other charges     1.86         .75         .41         .47         .26      
Impact of tax reform on remeasurement of deferred tax asset     11.44         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          -          -          -          .36      
Release of disproportionate tax effects lodged in OCI     -          -          -          1.24         -       
Return on common equity - operating     9.73         9.97         10.39         10.25         10.51      
Effect of goodwill and other intangibles     2.20         1.96         1.80         1.85         1.96      
Return on tangible common equity - operating     11.93   %     11.93   %     12.19   %     12.10   %     12.47   %  
                       
Return on assets reconciliation                      
Return on assets (GAAP)     (.40 ) %     1.01   %     1.06   %     .89   %     1.03   %  
Merger-related and other charges     .20         .08         .04         .05         .03      
Impact of tax reform on remeasurement of deferred tax asset     1.30         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          -          -          -          .04      
Release of disproportionate tax effects lodged in OCI     -          -          -          .13         -       
Return on assets - operating     1.10   %     1.09   %     1.10   %     1.07   %     1.10   %  
                       
Dividend payout ratio reconciliation                      
Dividend payout ratio (GAAP)     (62.50 ) %     26.32   %     23.08   %     27.27   %     21.05   %  
Merger-related and other charges     12.04         (1.93 )       (1.13 )       (.98 )       (.54 )    
Impact of tax reform on remeasurement of deferred tax asset     74.27         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          -          -          -          (.51 )    
Release of disproportionate tax effects lodged in OCI     -          -          -          (3.21 )       -       
Dividend payout ratio - operating     23.81   %     24.39   %     21.95   %     23.08   %     20.00   %  
                       
Efficiency ratio reconciliation                      
Efficiency ratio (GAAP)     63.03   %     59.27   %     57.89   %     59.29   %     57.65   %  
Merger-related and other charges     (6.11 )       (3.09 )       (1.68 )       (1.94 )       (1.07 )    
Efficiency ratio - operating     56.92   %     56.18   %     56.21   %     57.35   %     56.58   %  
                       
Average equity to assets reconciliation                      
Equity to assets (GAAP)     11.21   %     10.86   %     10.49   %     10.24   %     10.35   %  
Effect of goodwill and other intangibles     (1.69 )       (1.41 )       (1.26 )       (1.28 )       (1.31 )    
Tangible equity to assets     9.52         9.45         9.23         8.96         9.04      
Effect of preferred equity     -          -          -          -          -       
Tangible common equity to assets     9.52   %     9.45   %     9.23   %     8.96   %     9.04   %  
                       
Tangible common equity to risk-weighted assets reconciliation (1)                      
Tier 1 capital ratio (Regulatory)     12.27   %     12.27   %     11.91   %     11.46   %     11.23   %  
Effect of other comprehensive income     (.27 )       (.13 )       (.15 )       (.24 )       (.34 )    
Effect of deferred tax limitation     .51         .94         .95         1.13         1.26      
Effect of trust preferred     (.36 )       (.24 )       (.25 )       (.25 )       (.25 )    
Effect of preferred equity     -          -          -          -          -       
Basel III intangibles transition adjustment     (.04 )       (.04 )       (.02 )       (.03 )       (.06 )    
Basel III disallowed investments     -          -          -          -          -       
Tangible common equity to risk-weighted assets     12.11   %     12.80   %     12.44   %     12.07   %     11.84   %  
                       
(1)  Fourth quarter 2017 ratios are preliminary.                      
                       


UNITED COMMUNITY BANKS, INC.                      
Non-GAAP Performance Measures Reconciliation                      
Selected Financial Information                
                       
                       
   For the Twelve Months Ended
December 31, 
 
   
(in thousands, except per share data)   2017       2016       2015       2014       2013      
                       
Expense reconciliation                      
Expenses (GAAP) $   267,611     $   241,289     $   211,238     $   162,865     $   174,304      
Merger-related and other charges     (14,662 )       (8,122 )       (17,995 )       -          -       
Expenses - operating $   252,949     $   233,167     $   193,243     $   162,865     $   174,304      
                       
Net income reconciliation                      
Net income (GAAP) $   67,821     $   100,656     $   71,578     $   67,620     $   273,140      
Merger-related and other charges     14,662         8,122         17,995         -          -       
Income tax benefit of merger-related and other charges     (3,745 )       (3,074 )       (6,388 )       -          -       
Impact of tax reform on remeasurement of deferred tax asset     38,199         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          976         -          -          -       
Release of disproportionate tax effects lodged in OCI     3,400         -          -          -          -       
Net income - operating $   120,337     $   106,680     $   83,185     $   67,620     $   273,140      
                       
Diluted income per common share reconciliation                      
Diluted income per common share (GAAP)  $  .92     $   1.40     $   1.09     $   1.11     $   4.44      
Merger-related and other charges     .14         .07         .18         -          -       
Impact of tax reform on remeasurement of deferred tax asset     .52         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          .01         -          -          -       
Release of disproportionate tax effects lodged in OCI     .05         -          -          -          -       
Diluted income per common share - operating $   1.63     $   1.48     $   1.27     $   1.11     $   4.44      
                       
Book value per common share reconciliation                      
Book value per common share (GAAP) $   16.67     $   15.06     $   14.02     $   12.20     $   11.30      
Effect of goodwill and other intangibles     (3.02 )       (2.11 )       (1.96 )       (.05 )       (.04 )    
Tangible book value per common share $   13.65     $   12.95     $   12.06     $   12.15     $   11.26      
                       
Return on tangible common equity reconciliation                      
Return on common equity (GAAP)     5.67   %     9.41   %     8.15   %     9.17   %     46.72   %  
Merger-related and other charges     .92         .48         1.33         -          -       
Impact of tax reform on remeasurement of deferred tax asset     3.20         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          .09         -          -          -       
Release of disproportionate tax effects lodged in OCI     .28         -          -          -          -       
Return on common equity - operating     10.07         9.98         9.48         9.17         46.72      
Effect of goodwill and other intangibles     1.95         1.88         .76         .15         .63      
Return on tangible common equity - operating     12.02   %     11.86   %     10.24   %     9.32   %     47.35   %  
                       
Return on assets reconciliation                      
Return on assets (GAAP)     .62   %     1.00   %     .85   %     .91   %     3.86   %  
Merger-related and other charges     .09         .05         .13         -          -       
Impact of tax reform on remeasurement of deferred tax asset     .35         -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          .01         -          -          -       
Release of disproportionate tax effects lodged in OCI     .03         -          -          -          -       
Return on assets - operating     1.09   %     1.06   %     .98   %     .91   %     3.86   %  
                       
Dividend payout ratio reconciliation                      
Dividend payout ratio (GAAP)     41.30   %     21.43   %     20.18   %     9.91   %     -    %  
Merger-related and other charges     (5.65 )       (1.02 )       (2.86 )       -          -       
Impact of tax reform on remeasurement of deferred tax asset     (11.61 )       -          -          -          -       
Impairment of deferred tax asset on canceled non-qualified stock options     -          (.14 )       -          -          -       
Release of disproportionate tax effects lodged in OCI     (.73 )       -          -          -          -       
Dividend payout ratio - operating     23.31   %     20.27   %     17.32   %     9.91   %     -    %  
                       
Efficiency ratio reconciliation                      
Efficiency ratio (GAAP)     59.95   %     59.80   %     63.96   %     58.26   %     63.14   %  
Merger-related and other charges     (3.28 )       (2.02 )       (5.45 )       -          -       
Efficiency ratio - operating     56.67   %     57.78   %     58.51   %     58.26   %     63.14   %  
                       
Average equity to assets reconciliation                      
Equity to assets (GAAP)   10.71   %   10.54   %   10.27   %   9.69   %   10.35   %  
Effect of goodwill and other intangibles     (1.42 )       (1.33 )       (.53 )       (.02 )       (.04 )    
Tangible equity to assets     9.29         9.21         9.74         9.67         10.31      
Effect of preferred equity     -          (.02 )       (.08 )       (.07 )       (2.76 )    
Tangible common equity to assets     9.29   %     9.19   %     9.66   %     9.60   %     7.55   %  
                       
Tangible common equity to risk-weighted assets reconciliation (1)                      
Tier 1 capital ratio (Regulatory)     12.27   %     11.23   %     11.45   %     12.06   %     12.74   %  
Effect of other comprehensive income     (.27 )       (.34 )       (.38 )       (.35 )       (.39 )    
Effect of deferred tax limitation     .51 )       1.26         2.05         3.11         4.26      
Effect of trust preferred     (.36         (.25 )       (.08 )       (1.00 )       (1.04 )    
Effect of preferred equity     -                  (.15 )       -          (2.39 )    
Basel III intangibles transition adjustment     (.04 )       (.06 )       (.10 )       -          -       
Basel III disallowed investments     -          -          .03         -          -       
Tangible common equity to risk-weighted assets     12.11   %     11.84   %     12.82   %     13.82   %     13.18   %  
                       
(1)  Fourth quarter 2017 ratios are preliminary.                      
                       


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


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


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


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