United Community Banks, Inc. Announces First Quarter

Earnings per diluted share up 42 percent to 47 cents from first quarter 2017
Excluding merger-related and other non-operating charges,
diluted operating earnings per share up 28 percent, to 50 cents

Return on assets of 1.26 percent, or 1.33 percent excluding merger-related and other charges
Return on common equity of 11.1 percent, return on tangible common equity of 15.3 percent excluding merger-related and other charges
Net interest revenue of $103.3 million, up $19.7 million or 24 percent from year ago
Net interest margin of 3.80 percent, up 17 basis points from fourth quarter 2017 and up 35 basis points from year ago
Efficiency ratio of 57.8 percent, or 55.8 percent excluding merger-related and other charges
Completed the acquisition of Navitas Credit Corp. during the quarter

BLAIRSVILLE, Ga., April 24, 2018 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today announced its first quarter 2018 financial results reflecting solid margin improvement, effective and disciplined expense management, an acceleration of loan growth and the continuation of sound credit quality. Net income was $37.7 million, or 47 cents per diluted share, compared with $23.5 million, or 33 cents per diluted share, for the first quarter of 2017.

On an operating basis, net income rose to $39.7 million for the first quarter of 2018 compared with $28.2 million for the first quarter of 2017. First quarter 2018 operating net income excludes pre-tax merger-related charges totaling $2.50 million and pre-tax charges related to branch closures completed during the quarter of $147,000. The income tax benefit from these non-operating charges was $628,000. First quarter 2017 operating net income excludes pre-tax merger-related charges of $1.17 million and pre-tax charges related to branch closures of $831,000. The income tax benefit associated with the charges was $758,000. Also excluded from first quarter 2017 operating earnings is a non-cash tax charge of $3.4 million related to the cancellation of interest rate swaps that were designated as cash flow hedges. The non-cash tax charge was previously included in other comprehensive income until the swaps matured or were canceled.

At March 31, 2018, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.7 percent; Total Risk-Based of 13.6 percent; Common Equity Tier 1 Risk-Based of 11.3 percent, and Tier 1 Leverage of 9.1 percent.

“Our first quarter earnings are a strong start to what we expect will be another exceptional year for United Community Banks, Inc.,” said Jimmy Tallent, chairman and chief executive officer. “Our bankers excelled in nearly every financial measure, reporting solid improvement in return on assets, return on tangible common equity, operating efficiency and more. Operating return on assets was 1.33% for the first quarter, up 23 basis points from fourth quarter and only seven basis points from our goal of 1.40%. Our operating efficiency ratio was 55.7%, our best ever, which is a credit to our bankers who work hard to provide the best customer service in an efficient and cost-effective manner."

Tallent continued, “In the first quarter, we not only announced a merger with NLFC Holdings Corp. and its wholly-owned subsidiary, Navitas Credit Corp., but we completed the merger on February 1. With headquarters in Ponte Vedra, Florida, Navitas is a premier specialty lender providing equipment finance services to small and medium-sized businesses nationwide that will continue to operate under the Navitas name. This fast-growing company is a solid strategic addition to our existing specialty and commercial lending businesses and enables us to further expand our client offerings. This partnership brings exceptional growth and a significant profitability enhancement to United and is a solid win for both of us. I am excited to welcome this talented team of industry veterans to United Community Bank.

“First quarter loan production was $665.8 million with $427 million originating from our community banks and $238 million from our Commercial Banking Solutions group, which now includes our newly acquired Navitas subsidiary,” Tallent added. “Linked-quarter loans were up $448 million, mostly reflecting the $379 million in net loans received through our acquisition of Navitas. Our indirect auto loan portfolio was down $42.3 million from fourth quarter, reflecting our decision to suspend indirect auto loan purchases. Excluding the reduction in indirect auto loans and the loans acquired through the Navitas acquisition, loan growth was up at an annualized rate of approximately 6 percent from the fourth quarter.”

First quarter net interest revenue totaled $103.3 million, up $19.7 million from the first quarter of 2017 and up $5.78 million from the fourth quarter of 2017. The increases from both periods reflect acquisitions, business growth and net interest margin expansions of 35 basis points from a year ago and 17 basis points from the fourth quarter of 2017. Rising short-term interest rates and the acquisitions of Four Oaks Bank & Trust Company on November 1, 2017, and Navitas on February 1, 2018 contributed to the linked quarter net interest margin expansion as well as the increase in net interest revenue. The acquisition of Horry County State Bank on July 31, 2017 also contributed to the increase from a year ago. Acquired company results are included in United’s financial results beginning on their respective acquisition dates.

The first quarter provision for credit losses was $3.8 million compared to net charge-offs of $1.5 million. Included in the first quarter provision for credit losses was $2.3 million resulting from including Navitas’ loans and leases in our allowance for loan and lease losses model. Because Navitas’ loans and leases were recorded at a net premium of approximately $5.62 million, the allowance for loan and lease losses model required us to establish an allowance sufficient to cover credit losses inherent in the Navitas portfolio. This additional provision related to the Navitas loans and leases is in addition to $3.9 million of non-accretable discount included in the fair value mark on Navitas’ acquired loans and leases providing a conservative $6.2 million of loss absorbing capacity on the acquired Navitas portfolio.

As mentioned, first quarter net charge-offs totaled $1.5 million, down from $1.7 million in the first quarter of 2017 and up $440,000 from the fourth quarter of 2017. Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans. Nonperforming assets were 0.24 percent of total assets at March 31, 2018, compared with 0.23 percent at both December 31, 2017 and March 31, 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. Although our first quarter provision was elevated due to the acquisition of Navitas, we expect our provision levels to return to the range of our more recent quarterly experience with gradual increases each quarter due to loan growth. We expect our allowance and the related ratio to total loans may continue to decline slightly.”

First quarter fee revenue totaled $22.4 million, up $322,000 from a year ago and $468,000 from the fourth quarter of 2017. Included in first quarter 2018 fee revenue are $940,000 in losses from securities sales. The securities losses were part of a larger balance sheet management strategy that included the cancellation of $289 million notional in interest rate caps as well as the partial cancellation of other hedging instruments. The derivative cancellations resulted in gains of $1.16 million, which are included in other fee revenue. The securities losses and gains from derivative activities are mostly offsetting.

Mortgage fees were up $935,000 from a year ago and $474,000 from the fourth quarter of 2017, reflecting strong origination and rate lock activity as well as a favorable mark on our mortgage servicing asset. In the first quarter we closed 799 loans totaling $191 million compared with 795 loans totaling $197 million in the fourth quarter and 697 loans totaling $151 million in the first quarter of 2017.

Operating expenses were $73.5 million for the first quarter, compared with $62.8 million for the first quarter of 2017 and $75.9 million for the fourth quarter. Included in the first quarter’s operating expenses are $2.65 million in merger-related and branch closure expenses. We also had merger-related and branch closure charges of $2.05 million in the first quarter of 2017, and $7.36 million in merger-related expenses in the fourth quarter of 2017. Excluding these charges, first quarter operating expenses were $70.8 million compared with $68.5 million for the fourth quarter and $60.8 million a year ago. The increases from a year ago and from the fourth quarter of 2017 primarily result from the acquisitions of Navitas on February 1, 2018, Four Oaks Bank & Trust Company on November 1, 2017 and Horry County State Bank on July 31, 2017. Operating expenses of acquired companies are included in United’s consolidated operating expenses beginning on their respective acquisition dates.

Tallent concluded, “As our first quarter financial results demonstrate, we are off to a great start for 2018. United Community Banks operates in some of the most attractive markets in the United States, has an extraordinarily talented management team and the best bankers in the business. I could not be more confident in the future of this company and I eagerly anticipate the successes that will be achieved in the quarters ahead. Every day our bankers demonstrate their passion and commitment which drive our performance and ensure our success. This is a legacy I take great pride in.”

Conference Call

United will hold a conference call, Wednesday, April 25, 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 8494547. 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 $12.3 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the southeast region’s largest full-service banks, operating 151 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 2018, for the fifth 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, 2017 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
(864) 240-6208
Jefferson_Harralson@ucbi.com



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																					First
	2018				2017																Quarter
	First				Fourth				Third				Second				First				2018-2017
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter				Change
INCOME SUMMARY
Interest revenue	$	115,290			$	106,757			$	98,839			$	93,166			$	90,958
Interest expense		12,005				9,249				9,064				8,018				7,404
Net interest revenue		103,285				97,508				89,775				85,148				83,554			24		%
Provision for credit losses		3,800				1,200				1,000				800				800
Fee revenue		22,396				21,928				20,573				23,685				22,074			1
Total revenue		121,881				118,236				109,348				108,033				104,828			16
Expenses		73,475				75,882				65,674				63,229				62,826			17
Income before income tax expense		48,406				42,354				43,674				44,804				42,002			15
Income tax expense		10,748				54,270				15,728				16,537				18,478			(42	)
Net income		37,658				(11,916	)			27,946				28,267				23,524			60
Merger-related and other charges		2,646				7,358				3,420				1,830				2,054
Income tax benefit of merger-related and other charges		(628	)			(1,165	)			(1,147	)			(675	)			(758	)
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act		-				38,199				-				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				3,400
Net income - operating ⁽¹⁾	$	39,676			$	32,476			$	30,219			$	29,422			$	28,220			41

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	.47			$	(.16	)		$	.38			$	.39			$	.33			42
Diluted net income - operating ⁽¹⁾		.50				.42				.41				.41				.39			28
Cash dividends declared		.12				.10				.10				.09				.09			33
Book value		17.02				16.67				16.50				15.83				15.40			11
Tangible book value⁽³⁾		12.96				13.65				14.11				13.74				13.30			(3	)

Key performance ratios:
Return on common equity - GAAP⁽²⁾⁽⁴⁾		11.11		%		(3.57	)	%		9.22		%		9.98		%		8.54		%
Return on common equity - operating^(1)(2)(4)		11.71				9.73				9.97				10.39				10.25
Return on tangible common equity - operating^(1)(2)(3)(4)		15.26				11.93				11.93				12.19				12.10
Return on assets - GAAP⁽⁴⁾		1.26				(.40	)			1.01				1.06				.89
Return on assets - operating⁽¹⁾⁽⁴⁾		1.33				1.10				1.09				1.10				1.07
Dividend payout ratio - GAAP		25.53				(62.50	)			26.32				23.08				27.27
Dividend payout ratio - operating ⁽¹⁾		24.00				23.81				24.39				21.95				23.08
Net interest margin (fully taxable equivalent)⁽⁴⁾		3.80				3.63				3.54				3.47				3.45
Efficiency ratio - GAAP		57.83				63.03				59.27				57.89				59.29
Efficiency ratio - operating ⁽¹⁾		55.75				56.92				56.18				56.21				57.35
Average equity to average assets		11.03				11.21				10.86				10.49				10.24
Average tangible equity to average assets⁽³⁾		8.82				9.52				9.45				9.23				8.96
Average tangible common equity to average assets⁽³⁾		8.82				9.52				9.45				9.23				8.96
Tangible common equity to risk-weighted assets⁽³⁾⁽⁵⁾		11.26				12.05				12.80				12.44				12.07

ASSET QUALITY
Nonperforming loans	$	26,240			$	23,658			$	22,921			$	23,095			$	19,812			32
Foreclosed properties		2,714				3,234				2,736				2,739				5,060			(46	)
Total nonperforming assets (NPAs)		28,954				26,892				25,657				25,834				24,872			16
Allowance for loan losses		61,085				58,914				58,605				59,500				60,543			1
Net charge-offs		1,501				1,061				1,635				1,623				1,679			(11	)
Allowance for loan losses to loans		.75		%		.76		%		.81		%		.85		%		.87		%
Net charge-offs to average loans⁽⁴⁾		.08				.06				.09				.09				.10
NPAs to loans and foreclosed properties		.35				.35				.36				.37				.36
NPAs to total assets		.24				.23				.23				.24				.23

AVERAGE BALANCES ($ in millions)
Loans	$	7,993			$	7,560			$	7,149			$	6,980			$	6,904			16
Investment securities		2,870				2,991				2,800				2,775				2,822			2
Earning assets		11,076				10,735				10,133				9,899				9,872			12
Total assets		12,111				11,687				10,980				10,704				10,677			13
Deposits		9,759				9,624				8,913				8,659				8,592			14
Shareholders’ equity		1,336				1,310				1,193				1,123				1,093			22
Common shares - basic (thousands)		79,205				76,768				73,151				71,810				71,700			10
Common shares - diluted (thousands)		79,215				76,768				73,162				71,820				71,708			10

AT PERIOD END ($ in millions)
Loans	$	8,184			$	7,736			$	7,203			$	7,041			$	6,965			18
Investment securities		2,731				2,937				2,847				2,787				2,767			(1	)
Total assets		12,264				11,915				11,129				10,837				10,732			14
Deposits		9,993				9,808				9,127				8,736				8,752			14
Shareholders’ equity		1,357				1,303				1,221				1,133				1,102			23
Common shares outstanding (thousands)		79,123				77,580				73,403				70,981				70,973			11

⁽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 and a first quarter 2017 release of disproportionate tax effects lodged in OCI. ⁽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⁾ First quarter 2018 ratio is preliminary.

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


	2018					2017
	First				Fourth				Third				Second				First
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter

Expense reconciliation
Expenses (GAAP)	$	73,475			$	75,882			$	65,674			$	63,229			$	62,826
Merger-related and other charges		(2,646	)			(7,358	)			(3,420	)			(1,830	)			(2,054	)
Expenses - operating	$	70,829			$	68,524			$	62,254			$	61,399			$	60,772

Net income reconciliation
Net income (GAAP)	$	37,658			$	(11,916	)		$	27,946			$	28,267			$	23,524
Merger-related and other charges		2,646				7,358				3,420				1,830				2,054
Income tax benefit of merger-related and other charges		(628	)			(1,165	)			(1,147	)			(675	)			(758	)
Impact of tax reform on remeasurement of deferred tax asset		-				38,199				-				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				3,400
Net income - operating	$	39,676			$	32,476			$	30,219			$	29,422			$	28,220

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	.47			$	(.16	)		$	.38			$	.39			$	.33
Merger-related and other charges		.03				.08				.03				.02				.01
Impact of tax reform on remeasurement of deferred tax asset		-				.50				-				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				.05
Diluted income per common share - operating	$	.50			$	.42			$	.41			$	.41			$	.39

Book value per common share reconciliation
Book value per common share (GAAP)	$	17.02			$	16.67			$	16.50			$	15.83			$	15.40
Effect of goodwill and other intangibles		(4.06	)			(3.02	)			(2.39	)			(2.09	)			(2.10	)
Tangible book value per common share	$	12.96			$	13.65			$	14.11			$	13.74			$	13.30

Return on tangible common equity reconciliation
Return on common equity (GAAP)		11.11		%		(3.57	)	%		9.22		%		9.98		%		8.54		%
Merger-related and other charges		.60				1.86				.75				.41				.47
Impact of tax reform on remeasurement of deferred tax asset		-				11.44				-				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				1.24
Return on common equity - operating		11.71				9.73				9.97				10.39				10.25
Effect of goodwill and other intangibles		3.55				2.20				1.96				1.80				1.85
Return on tangible common equity - operating		15.26		%		11.93		%		11.93		%		12.19		%		12.10		%

Return on assets reconciliation
Return on assets (GAAP)		1.26		%		(.40)		%		1.01		%		1.06		%		.89		%
Merger-related and other charges		.07				.20				.08				.04				.05
Impact of tax reform on remeasurement of deferred tax asset		-				1.30				-				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				.13
Return on assets - operating		1.33		%		1.10		%		1.09		%		1.10		%		1.07		%

Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		25.53		%		(62.50	)	%		26.32		%		23.08		%		27.27		%
Merger-related and other charges		(1.53	)			12.04				(1.93	)			(1.13	)			(.98	)
Impact of tax reform on remeasurement of deferred tax asset		-				74.27				-				-				-
Release of disproportionate tax effects lodged in OCI		-				-				-				-				(3.21	)
Dividend payout ratio - operating		24.00		%		23.81		%		24.39		%		21.95		%		23.08		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		57.83		%		63.03		%		59.27		%		57.89		%		59.29		%
Merger-related and other charges		(2.08	)			(6.11	)			(3.09	)			(1.68	)			(1.94	)
Efficiency ratio - operating		55.75		%		56.92		%		56.18		%		56.21		%		57.35		%

Average equity to assets reconciliation
Equity to assets (GAAP)		11.03		%		11.21		%		10.86		%		10.49		%		10.24		%
Effect of goodwill and other intangibles		(2.21	)			(1.69	)			(1.41	)			(1.26	)			(1.28	)
Tangible equity to assets		8.82				9.52				9.45				9.23				8.96
Effect of preferred equity		-				-				-				-				-
Tangible common equity to assets		8.82		%		9.52		%		9.45		%		9.23		%		8.96		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tier 1 capital ratio (Regulatory)		11.68		%		12.24		%		12.27		%		11.91		%		11.46		%
Effect of other comprehensive income		(.51)				(.29)				(.13)				(.15)				(.24)
Effect of deferred tax limitation		.43				.51				.94				.95				1.13
Effect of trust preferred		(.34)				(.36)				(.24)				(.25)				(.25)
Basel III intangibles transition adjustment		-				(.05)				(.04)				(.02)				(.03)
Tangible common equity to risk-weighted assets		11.26		%		12.05		%		12.80		%		12.44		%		12.07		%

⁽¹⁾ First quarter 2018 ratios are preliminary.

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


	2018		2017
	First		Fourth		Third		Second		First
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,898	$	1,924	$	1,792	$	1,723	$	1,633
Income producing commercial RE		1,677		1,595		1,413		1,342		1,297
Commercial & industrial		1,142		1,131		1,084		1,088		1,080
Commercial construction		691		712		583		587		667
Equipment financing		423		-		-		-		-
Total commercial		5,831		5,362		4,872		4,740		4,677
Residential mortgage		992		974		933		881		860
Home equity lines of credit		712		731		689		665		659
Residential construction		190		183		190		193		197
Consumer direct		459		486		519		562		572
Total loans	$	8,184	$	7,736	$	7,203	$	7,041	$	6,965

LOANS BY MARKET
North Georgia	$	1,004	$	1,019	$	1,047	$	1,065	$	1,076
Atlanta MSA		1,513		1,510		1,477		1,445		1,408
North Carolina		1,037		1,049		542		541		541
Coastal Georgia		635		630		634		623		591
Gainesville MSA		231		248		242		246		252
East Tennessee		473		475		471		486		483
South Carolina		1,537		1,486		1,470		1,260		1,243
Commercial Banking Solutions		1,438		961		920		926		911
Indirect auto		316		358		400		449		460
Total loans	$	8,184	$	7,736	$	7,203	$	7,041	$	6,965

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


	2018		2017				Linked Quarter Change			Year over Year Change
	First		Fourth		First
(in millions)	Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,898	$	1,924	$	1,633	$	(26	)	$	265
Income producing commercial RE		1,677		1,595		1,297		82			380
Commercial & industrial		1,142		1,131		1,080		11			62
Commercial construction		691		712		667		(21	)		24
Equipment financing		423		-		-		423			423
Total commercial		5,831		5,362		4,677		469			1,154
Residential mortgage		992		974		860		18			132
Home equity lines of credit		712		731		659		(19	)		53
Residential construction		190		183		197		7			(7	)
Consumer direct		459		486		572		(27	)		(113	)
Total loans	$	8,184	$	7,736	$	6,965		448			1,219

LOANS BY MARKET
North Georgia	$	1,004	$	1,019	$	1,076		(15	)		(72	)
Atlanta MSA		1,513		1,510		1,408		3			105
North Carolina		1,037		1,049		541		(12	)		496
Coastal Georgia		635		630		591		5			44
Gainesville MSA		231		248		252		(17	)		(21	)
East Tennessee		473		475		483		(2	)		(10	)
South Carolina		1,537		1,486		1,243		51			294
Commercial Banking Solutions		1,438		961		911		477			527
Indirect auto		316		358		460		(42	)		(144	)
Total loans	$	8,184	$	7,736	$	6,965		448			1,219

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	First Quarter 2018
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	6,757		$	1,121		$	7,878
Income producing CRE		3,942			368			4,310
Commercial & industrial		1,917			-			1,917
Commercial construction		574			658			1,232
Equipment financing		428			-			428
Total commercial		13,618			2,147			15,765
Residential mortgage		8,724			232			8,956
Home equity lines of credit		2,149			335			2,484
Residential construction		378			-			378
Consumer direct		1,371			-			1,371
Total NPAs	$	26,240		$	2,714		$	28,954

NONPERFORMING ASSETS BY MARKET
North Georgia	$	8,519		$	85		$	8,604
Atlanta MSA		1,138			132			1,270
North Carolina		5,006			1,271			6,277
Coastal Georgia		1,887			-			1,887
Gainesville MSA		574			163			737
East Tennessee		1,511			10			1,521
South Carolina		3,443			483			3,926
Commercial Banking Solutions		2,937			570			3,507
Indirect auto		1,225			-			1,225
Total NPAs	$	26,240		$	2,714		$	28,954

NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	23,658		$	3,234		$	26,892
Acquisitions		428			-			428
Loans placed on non-accrual		7,463			-			7,463
Payments received		(3,534	)		-			(3,534	)
Loan charge-offs		(1,150	)		-			(1,150	)
Foreclosures		(625	)		625			-
Property sales		-			(957	)		(957	)
Write downs		-			(72	)		(72	)
Net gains (losses) on sales		-			(116	)		(116	)
Ending Balance	$	26,240		$	2,714		$	28,954

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
Equipment financing		-			-			-
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 direct		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		9,375			-			9,375
Payments received		(5,495	)		-			(5,495	)
Loan charge-offs		(1,747	)		-			(1,747	)
Foreclosures		(1,396	)		2,421			1,025
Property sales		-			(2,458	)		(2,458	)
Write downs		-			(117	)		(117	)
Net gains (losses) on sales		-			(7	)		(7	)
Ending Balance	$	23,658		$	3,234		$	26,892

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Third Quarter 2017
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	5,027		$	764		$	5,791
Income producing CRE		2,042			121			2,163
Commercial & industrial		2,378			-			2,378
Commercial construction		1,376			923			2,299
Equipment financing		-			-			-
Total commercial		10,823			1,808			12,631
Residential mortgage		8,559			392			8,951
Home equity lines of credit		1,898			195			2,093
Residential construction		178			341			519
Consumer direct		1,463			-			1,463
Total NPAs	$	22,921		$	2,736		$	25,657

NONPERFORMING ASSETS BY MARKET
North Georgia	$	6,707		$	404		$	7,111
Atlanta MSA		1,098			338			1,436
North Carolina		4,376			318			4,694
Coastal Georgia		2,532			-			2,532
Gainesville MSA		763			-			763
East Tennessee		1,734			67			1,801
South Carolina		1,903			1,609			3,512
Commercial Banking Solutions		2,429			-			2,429
Indirect auto		1,379			-			1,379
Total NPAs	$	22,921		$	2,736		$	25,657

NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	23,095		$	2,739		$	25,834
Acquisitions		20			805			825
Loans placed on non-accrual		7,964			-			7,964
Payments received		(5,192	)		-			(5,192	)
Loan charge-offs		(2,159	)		-			(2,159	)
Foreclosures		(807	)		683			(124	)
Property sales		-			(1,295	)		(1,295	)
Write downs		-			(236	)		(236	)
Net gains (losses) on sales		-			40			40
Ending Balance	$	22,921		$	2,736		$	25,657

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	First Quarter 2018					Fourth Quarter 2017					Third Quarter 2017
				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	$	(43	)	(.01)	%	$	(357	)	(.08)	%	$	(44	)	(.01)	%
Income producing CRE		422		.10			595		.16			1,159		.33
Commercial & industrial		(3	)	-			(242	)	(.09)			(200	)	(.08)
Commercial construction		266		.15			148		.09			(114	)	(.07)
Equipment financing		40		.08			-		-			-		-
Total commercial		682		.05			144		.01			801		.07
Residential mortgage		(52	)	(.02)			290		.12			313		.14
Home equity lines of credit		89		.05			137		.08			56		.03
Residential construction		(64	)	(.14)			(23	)	(.05)			36		.07
Consumer direct		846		.72			513		.40			429		.31
Total	$	1,501		.08		$	1,061		.06		$	1,635		.09

NET CHARGE-OFFS BY MARKET
North Georgia	$	772		.31	%	$	64		.02	%	$	516		.19	%
Atlanta MSA		(109	)	(.03)			26		.01			150		.04
North Carolina		144		.06			127		.06			221		.16
Coastal Georgia		137		.09			174		.11			(39	)	(.02)
Gainesville MSA		(18	)	(.03)			154		.25			(50	)	(.08)
East Tennessee		31		.03			61		.05			55		.05
South Carolina		12		-			95		.03			528		.15
Commercial Banking Solutions		176		.06			75		.03			(7	)	-
Indirect auto		356		.41			285		.30			261		.24
Total	$	1,501		.08		$	1,061		.06		$	1,635		.09

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)

	Three Months Ended
	March 31,
(in thousands, except per share data)		2018			2017

Interest revenue:
Loans, including fees	$	96,469		$	72,727
Investment securities, including tax exempt of $972 and $279		18,295			17,712
Deposits in banks and short-term investments		526			519
Total interest revenue		115,290			90,958

Interest expense:
Deposits:
NOW		1,113			597
Money market		2,175			1,426
Savings		49			27
Time		2,956			1,008
Total deposit interest expense		6,293			3,058
Short-term borrowings		300			40
Federal Home Loan Bank advances		2,124			1,430
Long-term debt		3,288			2,876
Total interest expense		12,005			7,404
Net interest revenue		103,285			83,554
Provision for credit losses		3,800			800
Net interest revenue after provision for credit losses		99,485			82,754

Fee revenue:
Service charges and fees		8,925			10,604
Mortgage loan and other related fees		5,359			4,424
Brokerage fees		872			1,410
Gains from sales of SBA/USDA loans		1,778			1,959
Securities gains (losses), net		(940	)		(2	)
Other		6,402			3,679
Total fee revenue		22,396			22,074
Total revenue		121,881			104,828

Operating expenses:
Salaries and employee benefits		42,875			36,691
Communications and equipment		4,632			4,918
Occupancy		5,613			4,949
Advertising and public relations		1,515			1,061
Postage, printing and supplies		1,637			1,370
Professional fees		4,044			3,044
FDIC assessments and other regulatory charges		2,476			1,283
Amortization of intangibles		1,898			973
Merger-related and other charges		2,054			2,054
Other		6,731			6,483
Total operating expenses		73,475			62,826
Net income before income taxes		48,406			42,002
Income tax expense		10,748			18,478
Net income	$	37,658		$	23,524
Net income available to common shareholders	$	37,381		$	23,524

Earnings per common share:
Basic	$	.47		$	.33
Diluted		.47			.33
Weighted average common shares outstanding:
Basic		79,205			71,700
Diluted		79,215			71,708

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

	March 31,			December 31,
(in thousands, except share and per share data)		2018			2017

ASSETS
Cash and due from banks	$	136,201		$	129,108
Interest-bearing deposits in banks		216,052			185,167
Cash and cash equivalents		352,253			314,275
Securities available for sale		2,419,049			2,615,850
Securities held to maturity (fair value $308,007 and $321,276)		312,080			321,094
Loans held for sale (includes $26,493 and $26,252 at fair value)		26,493			32,734
Loans and leases, net of unearned income		8,184,249			7,735,572
Less allowance for loan and lease losses		(61,085	)		(58,914	)
Loans, net		8,123,164			7,676,658
Premises and equipment, net		208,243			208,852
Bank owned life insurance		189,759			188,970
Accrued interest receivable		31,349			32,459
Net deferred tax asset		86,520			88,049
Derivative financial instruments		27,202			22,721
Goodwill and other intangible assets		328,328			244,397
Other assets		159,815			169,401
Total assets	$	12,264,255		$	11,915,460
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	3,226,111		$	3,087,797
NOW		2,106,145			2,131,939
Money market		2,052,486			2,016,748
Savings		677,020			651,742
Time		1,520,931			1,548,460
Brokered		410,747			371,011
Total deposits		9,993,440			9,807,697
Short-term borrowings		-			50,000
Federal Home Loan Bank advances		434,574			504,651
Long-term debt		325,955			120,545
Derivative financial instruments		33,236			25,376
Accrued expenses and other liabilities		120,295			103,857
Total liabilities		10,907,500			10,612,126
Shareholders' equity:
Common stock, $1 par value; 150,000,000 shares authorized;
79,122,620 and 77,579,561 shares issued and outstanding		79,123			77,580
Common stock issuable; 612,831 and 607,869 shares		9,392			9,083
Capital surplus		1,496,307			1,451,814
Accumulated deficit		(181,877	)		(209,902	)
Accumulated other comprehensive loss		(46,190	)		(25,241	)
Total shareholders' equity		1,356,755			1,303,334
Total liabilities and shareholders' equity	$	12,264,255		$	11,915,460

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

	2018								2017
	Average						Avg.		Average						Avg.
(dollars in thousands, fully taxable equivalent (FTE))	Balance				Interest		Rate		Balance				Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	7,993,339			$	96,389	4.89	%	$	6,903,860			$	72,741	4.27	%
Taxable securities ⁽³⁾		2,722,977				17,323	2.54			2,779,625				17,433	2.51
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		146,531				1,309	3.57			42,180				457	4.33
Federal funds sold and other interest-earning assets		213,055				698	1.31			146,027				664	1.82
Total interest-earning assets (FTE)		11,075,902				115,719	4.23			9,871,692				91,295	3.74
Non-interest-earning assets:
Allowance for loan losses		(59,144	)							(61,668	)
Cash and due from banks		160,486								99,253
Premises and equipment		216,723								190,096
Other assets ⁽³⁾		717,385								577,168
Total assets	$	12,111,352							$	10,676,541

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	2,083,703				1,113	.22		$	1,959,678				597	.12
Money market		2,230,620				2,175	.40			2,065,449				1,426	.28
Savings		655,746				49	.03			560,634				27	.02
Time		1,535,216				2,241	.59			1,263,946				815	.26
Brokered time deposits		158,358				715	1.83			98,340				193	.80
Total interest-bearing deposits		6,663,643		-		6,293	.38			5,948,047		-		3,058	.21

Federal funds purchased and other borrowings		78,732				300	1.55			19,031				40	.85
Federal Home Loan Bank advances		511,727				2,124	1.68			681,117				1,430	.85
Long-term debt		274,480				3,288	4.86			175,142				2,876	6.66
Total borrowed funds		864,939				5,712	2.68			875,290				4,346	2.01

Total interest-bearing liabilities		7,528,582				12,005	.65			6,823,337				7,404	.44
Non-interest-bearing liabilities:
Non-interest-bearing deposits		3,095,405								2,643,630
Other liabilities		150,955								116,752
Total liabilities		10,774,942								9,583,719
Shareholders' equity		1,336,410								1,092,822
Total liabilities and shareholders' equity	$	12,111,352							$	10,676,541

Net interest revenue (FTE)					$	103,714							$	83,891
Net interest-rate spread (FTE)							3.58	%							3.30	%

Net interest margin (FTE) ⁽⁴⁾							3.80	%							3.45	%

⁽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 losses of $28.3 million in 2018 and $5.38 million in 2017 are included in other assets for purposes of this presentation.
⁽⁴⁾ Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

United Community Banks, Inc. Announces First Quarter Earnings

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