United Community Banks, Inc. reports Third Quarter Results - United Community Banks (NASDAQ:UCBI)

GREENVILLE, S.C., Oct. 22, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. UCBI ("United") today reported strong third quarter financial results, including solid year-over-year loan and deposit growth, record operating efficiency and strong asset quality. Diluted earnings per share were $0.60, an increase of $0.06 or 11% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.63, up 15% over last year. United's return on assets ("ROA") was 1.51% and its return on common equity was 12.2% for the quarter. On an operating basis, United's ROA was 1.58% and its return on tangible common equity was 16.4%.

In the third quarter, loans grew at a 3% annualized rate, or at 4% annualized excluding the planned runoff of the discontinued indirect auto portfolio. With this loan growth and continued balance sheet remixing opportunities, United maintained its net interest margin during the quarter, despite declining interest rates. Core transaction deposits grew by $105 million, or 6% annualized, and total customer deposits increased by $197 million during the quarter. Finally, United's combination of revenue growth and expense management resulted in a 55.64% efficiency ratio, or 53.90% on an operating basis, which represented a new Company best for the second consecutive quarter.

"We are pleased to report such a successful quarter, which is a testament to our team and their tireless dedication to providing outstanding customer service and to executing on our plans to deliver top quartile results," said Lynn Harton, Chairman and CEO of United. "I am also tremendously proud that United was named one of the "Best Banks to Work For" by American Banker for the third year in a row. This honor is achieved through the focus and energy of our bankers to build a company where great people can find fulfillment in helping others reach their financial goals."

Third Quarter 2019 Financial Highlights:

EPS growth of 11% over last year, or 15% on an operating basis
Return on assets of 1.51%, or 1.58% excluding merger-related and other charges
Return on common equity of 12.2%
Return on tangible common equity of 16.4% excluding merger-related and other charges
Loan production of $896 million compared to $778 million in Q3 2018
Loan growth, excluding planned runoff of the indirect portfolio of 4% for the quarter and 7% year-to-date on an annualized basis, excluding the acquisition of First Madison on May 1, 2019
Loan growth of $89 million, excluding planned run off of the indirect portfolio, was more than funded by core transaction deposit growth of $105 million
Mortgage locks of $508 million, a company high, compared to $298 million a year ago
Stable net interest margin of 4.12% was flat compared to the second quarter and up 17 basis points from a year ago
Efficiency ratio of 55.64%, or 53.90%, excluding merger-related and other charges
Net charge-offs of 12 basis points, up one basis point from last quarter and remaining at historically low levels
Nonperforming assets of 0.24% of total assets, compared with 0.21% at June 30, 2019 and 0.19% at September 30, 2018
Repurchased approximately 195,000 shares at an average price of $26.51 in the quarter

Conference Call
United will hold a conference call, Wednesday, October 23, 2019, 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 8899475. 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.

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
	2019									2018						Third Quarter 2019 - 2018 Change		For the Nine Months Ended September 30,						YTD 2019 - 2018 Change
*(in thousands, except per share data)*	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Third Quarter 2019 - 2018 Change		2019			2018			YTD 2019 - 2018 Change
INCOME SUMMARY
Interest revenue	$	140,615		$	139,156		$	136,516		$	133,854		$	128,721				$	416,287		$	366,226
Interest expense	21,277			21,372			20,882			18,975			16,611					63,531			42,355
Net interest revenue	119,338			117,784			115,634			114,879			112,110			6	%	352,756			323,871			9	%
Provision for credit losses	3,100			3,250			3,300			2,100			1,800			72		9,650			7,400			30
Noninterest income	29,031			24,531			20,968			23,045			24,180			20		74,530			69,916			7
Total revenue	145,269			139,065			133,302			135,824			134,490			8		417,636			386,387			8
Expenses	82,924			81,813			76,084			78,242			77,718			7		240,821			228,043			6
Income before income tax expense	62,345			57,252			57,218			57,582			56,772			10		176,815			158,344			12
Income tax expense	13,983			13,167			12,956			12,445			13,090			7		40,106			37,370			7
Net income	48,362			44,085			44,262			45,137			43,682			11		136,709			120,974			13
Merger-related and other charges	2,605			4,087			739			1,234			592					7,431			6,111
Income tax benefit of merger-related and other charges	(600		)	(940		)	(172		)	(604		)	(141		)			(1,712		)	(890		)
Net income - operating ⁽¹⁾	$	50,367		$	47,232		$	44,829		$	45,767		$	44,133		14		$	142,428		$	126,195		13

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.60		$	0.55		$	0.55		$	0.56		$	0.54		11		$	1.70		$	1.51		13
Diluted net income - operating ⁽¹⁾	0.63			0.59			0.56			0.57			0.55			15		1.77			1.57			13
Cash dividends declared	0.17			0.17			0.16			0.16			0.15			13		0.50			0.42			19
Book value	20.16			19.65			18.93			18.24			17.56			15		20.16			17.56			15
Tangible book value ⁽³⁾	15.90			15.38			14.93			14.24			13.54			17		15.90			13.54			17
Key performance ratios:
Return on common equity - GAAP ⁽²⁾⁽⁴⁾	12.16		%	11.45		%	11.85		%	12.08		%	11.96		%			11.83		%	11.43		%
Return on common equity - operating ^(1)(2)(4)	12.67			12.27			12.00			12.25			12.09					12.32			11.93
Return on tangible common equity - operating ^(1)(2)(3)(4)	16.38			15.88			15.46			15.88			15.81					15.92			15.62
Return on assets - GAAP ⁽⁴⁾	1.51			1.40			1.44			1.43			1.41					1.45			1.32
Return on assets - operating ⁽¹⁾⁽⁴⁾	1.58			1.50			1.45			1.45			1.42					1.51			1.38
Net interest margin (fully taxable equivalent) ⁽⁴⁾	4.12			4.12			4.10			3.97			3.95					4.11			3.88
Efficiency ratio - GAAP	55.64			57.28			55.32			56.73			56.82					56.09			57.52
Efficiency ratio - operating ⁽¹⁾	53.90			54.42			54.78			55.83			56.39					54.36			55.98
Equity to total assets	12.53			12.25			12.06			11.60			11.30					12.53			11.30
Tangible common equity to tangible assets ⁽³⁾	10.16			9.86			9.76			9.29			8.95					10.16			8.95

ASSET QUALITY
Nonperforming loans	$	30,832		$	26,597		$	23,624		$	23,778		$	22,530		37		$	30,832		$	22,530		37
Foreclosed properties	102			75			1,127			1,305			1,336			(92	)	102			1,336			(92	)
Total nonperforming assets ("NPAs")	30,934			26,672			24,751			25,083			23,866			30		30,934			23,866			30
Allowance for loan losses	62,514			62,204			61,642			61,203			60,940			3		62,514			60,940			3
Net charge-offs	2,723			2,438			3,130			1,787			1,466			86		8,291			4,326			92
Allowance for loan losses to loans	0.70		%	0.70		%	0.73		%	0.73		%	0.74		%			0.70		%	0.74		%
Net charge-offs to average loans ⁽⁴⁾	0.12			0.11			0.15			0.09			0.07					0.13			0.07
NPAs to loans and foreclosed properties	0.35			0.30			0.29			0.30			0.29					0.35			0.29
NPAs to total assets	0.24			0.21			0.20			0.20			0.19					0.24			0.19

AVERAGE BALANCES ($ in millions)
Loans	$	8,836		$	8,670		$	8,430		$	8,306		$	8,200		8		$	8,647		$	8,124		6
Investment securities	2,550			2,674			2,883			3,004			2,916			(13	)	2,701			2,863			(6	)
Earning assets	11,568			11,534			11,498			11,534			11,320			2		11,534			11,197			3
Total assets	12,681			12,608			12,509			12,505			12,302			3		12,600			12,209			3
Deposits	10,531			10,493			10,361			10,306			9,950			6		10,462			9,896			6
Shareholders' equity	1,588			1,531			1,478			1,420			1,394			14		1,533			1,367			12
Common shares - basic (thousands)	79,663			79,673			79,807			79,884			79,806			—		79,714			79,588			—
Common shares - diluted (thousands)	79,667			79,678			79,813			79,890			79,818			—		79,718			79,598			—

AT PERIOD END ($ in millions)
Loans	$	8,903		$	8,838		$	8,493		$	8,383		$	8,226		8		$	8,903		$	8,226		8
Investment securities	2,515			2,620			2,720			2,903			2,873			(12	)	2,515			2,873			(12	)
Total assets	12,809			12,779			12,506			12,573			12,405			3		12,809			12,405			3
Deposits	10,757			10,591			10,534			10,535			10,229			5		10,757			10,229			5
Shareholders' equity	1,605			1,566			1,508			1,458			1,402			14		1,605			1,402			14
Common shares outstanding (thousands)	78,974			79,075			79,035			79,234			79,202			—		78,974			79,202			—

⁽¹⁾ Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. ⁽²⁾ Net income 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.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
	2019									2018						For the Nine Months Ended September 30,
(in thousands, except per share data)	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2019			2018

Expense reconciliation
Expenses (GAAP)	$	82,924		$	81,813		$	76,084		$	78,242		$	77,718		$	240,821		$	228,043
Merger-related and other charges	(2,605		)	(4,087		)	(739		)	(1,234		)	(592		)	(7,431		)	(6,111		)
Expenses - operating	$	80,319		$	77,726		$	75,345		$	77,008		$	77,126		$	233,390		$	221,932

Net income reconciliation
Net income (GAAP)	$	48,362		$	44,085		$	44,262		$	45,137		$	43,682		$	136,709		$	120,974
Merger-related and other charges	2,605			4,087			739			1,234			592			7,431			6,111
Income tax benefit of merger-related and other charges	(600		)	(940		)	(172		)	(604		)	(141		)	(1,712		)	(890		)
Net income - operating	$	50,367		$	47,232		$	44,829		$	45,767		$	44,133		$	142,428		$	126,195

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.60		$	0.55		$	0.55		$	0.56		$	0.54		$	1.70		$	1.51
Merger-related and other charges	0.03			0.04			0.01			0.01			0.01			0.07			0.06
Diluted income per common share - operating	$	0.63		$	0.59		$	0.56		$	0.57		$	0.55		$	1.77		$	1.57

Book value per common share reconciliation
Book value per common share (GAAP)	$	20.16		$	19.65		$	18.93		$	18.24		$	17.56		$	20.16		$	17.56
Effect of goodwill and other intangibles	(4.26		)	(4.27		)	(4.00		)	(4.00		)	(4.02		)	(4.26		)	(4.02		)
Tangible book value per common share	$	15.90		$	15.38		$	14.93		$	14.24		$	13.54		$	15.90		$	13.54

Return on tangible common equity reconciliation
Return on common equity (GAAP)	12.16		%	11.45		%	11.85		%	12.08		%	11.96		%	11.83		%	11.43		%
Merger-related and other charges	0.51			0.82			0.15			0.17			0.13			0.49			0.50
Return on common equity - operating	12.67			12.27			12.00			12.25			12.09			12.32			11.93
Effect of goodwill and other intangibles	3.71			3.61			3.46			3.63			3.72			3.60			3.69
Return on tangible common equity - operating	16.38		%	15.88		%	15.46		%	15.88		%	15.81		%	15.92		%	15.62		%

Return on assets reconciliation
Return on assets (GAAP)	1.51		%	1.40		%	1.44		%	1.43		%	1.41		%	1.45		%	1.32		%
Merger-related and other charges	0.07			0.10			0.01			0.02			0.01			0.06			0.06
Return on assets - operating	1.58		%	1.50		%	1.45		%	1.45		%	1.42		%	1.51		%	1.38		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)	55.64		%	57.28		%	55.32		%	56.73		%	56.82		%	56.09		%	57.52		%
Merger-related and other charges	(1.74		)	(2.86		)	(0.54		)	(0.90		)	(0.43		)	(1.73		)	(1.54		)
Efficiency ratio - operating	53.90		%	54.42		%	54.78		%	55.83		%	56.39		%	54.36		%	55.98		%

Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)	12.53		%	12.25		%	12.06		%	11.60		%	11.30		%	12.53		%	11.30		%
Effect of goodwill and other intangibles	(2.37		)	(2.39		)	(2.30		)	(2.31		)	(2.35		)	(2.37		)	(2.35		)
Tangible common equity to tangible assets	10.16		%	9.86		%	9.76		%	9.29		%	8.95		%	10.16		%	8.95		%

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

	2019						2018				Linked Quarter Change			Year over Year Change
(in millions)	Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Linked Quarter Change			Year over Year Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,692	$	1,658	$	1,620	$	1,648	$	1,673	$	34		$	19
Income producing commercial RE	1,934		1,939		1,867		1,812		1,788		(5		)	146
Commercial & industrial	1,271		1,299		1,284		1,278		1,194		(28		)	77
Commercial construction	1,001		983		866		796		761		18			240
Equipment financing	729		674		606		565		509		55			220
Total commercial	6,627		6,553		6,243		6,099		5,925		74			702
Residential mortgage	1,121		1,108		1,064		1,049		1,035		13			86
Home equity lines of credit	669		675		684		694		702		(6		)	(33		)
Residential construction	229		219		200		211		198		10			31
Consumer	257		283		302		330		366		(26		)	(109		)
Total loans	$	8,903	$	8,838	$	8,493	$	8,383	$	8,226	$	65		$	677

LOANS BY MARKET
North Georgia	$	1,002	$	1,002	$	970	$	981	$	992	—			10
Atlanta	1,740		1,745		1,524		1,507		1,493		(5		)	247
North Carolina	1,117		1,084		1,074		1,072		1,078		33			39
Coastal Georgia	611		604		603		588		610		7			1
Gainesville	246		244		243		247		235		2			11
East Tennessee	435		446		458		477		460		(11		)	(25		)
South Carolina	1,705		1,674		1,674		1,645		1,586		31			119
Commercial Banking Solutions	1,916		1,884		1,766		1,658		1,530		32			386
Indirect auto	131		155		181		208		242		(24		)	(111		)
Total loans	$	8,903	$	8,838	$	8,493	$	8,383	$	8,226	$	65		$	677

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
	2019
(in thousands)	Third Quarter			Second Quarter			First Quarter
NONACCRUAL LOANS
Owner occupied RE	$	8,430		$	8,177		$	7,030
Income producing RE	2,030			1,331			1,276
Commercial & industrial	2,625			2,366			1,666
Commercial construction	1,894			1,650			473
Equipment financing	1,974			2,047			1,813
Total commercial	16,953			15,571			12,258
Residential mortgage	9,475			8,012			8,281
Home equity lines of credit	3,065			1,978			2,233
Residential construction	597			494			347
Consumer	742			542			505
Total	$	30,832		$	26,597		$	23,624

NONACCRUAL LOANS ACTIVITY
Beginning Balance	$	26,597		$	23,624		$	23,778
Loans placed on non-accrual	8,722			8,316			6,759
Payments received	(2,107		)	(3,212		)	(3,520		)
Loan charge-offs	(2,278		)	(2,131		)	(2,714		)
Foreclosures	(102		)	—			(679		)
Ending Balance	$	30,832		$	26,597		$	23,624

	2019
	Third Quarter					Second Quarter					First Quarter
(in thousands)	Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾		Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾		Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾
NET CHARGE-OFFS BY CATEGORY
Owner occupied RE	$	(39	)	(0.01	)%	$	(58	)	(0.01	)%	$	(64	)	(0.02	)%
Income producing RE	431			0.09		241			0.05		177			0.04
Commercial & industrial	691			0.21		1,141			0.35		1,356			0.43
Commercial construction	(247		)	(0.10	)	(162		)	(0.07	)	(325		)	(0.16	)
Equipment financing	1,174			0.67		890			0.56		1,281			0.89
Total commercial	2,010			0.12		2,052			0.13		2,425			0.16
Residential mortgage	158			0.06		(125		)	(0.05	)	13			—
Home equity lines of credit	83			0.05		(111		)	(0.07	)	215			0.13
Residential construction	(5		)	(0.01	)	199			0.38		(22		)	(0.04	)
Consumer	477			0.70		423			0.58		499			0.64
Total	$	2,723		0.12		$	2,438		0.11		$	3,130		0.15

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)	September 30, 2019			December 31, 2018
ASSETS
Cash and due from banks	$	108,389		$	126,083
Interest-bearing deposits in banks (includes restricted cash of $5,326 and $6,702)	252,670			201,182
Cash and cash equivalents	361,059			327,265
Debt securities available for sale	2,272,046			2,628,467
Debt securities held to maturity (fair value $248,546 and $268,803)	243,028			274,407
Loans held for sale at fair value	54,625			18,935
Loans and leases, net of unearned income	8,903,266			8,383,401
Less allowance for loan and lease losses	(62,514		)	(61,203		)
Loans and leases, net	8,840,752			8,322,198
Premises and equipment, net	215,435			206,140
Bank owned life insurance	201,955			192,616
Accrued interest receivable	33,233			35,413
Net deferred tax asset	34,591			64,224
Derivative financial instruments	43,755			24,705
Goodwill and other intangible assets	343,340			324,072
Other assets	165,667			154,750
Total assets	$	12,809,486		$	12,573,192
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	3,527,815		$	3,210,220
NOW and interest-bearing demand	2,210,352			2,369,631
Money market	2,206,496			2,002,670
Savings	699,131			669,886
Time	1,890,431			1,598,391
Brokered	222,292			683,715
Total deposits	10,756,517			10,534,513
Federal Home Loan Bank advances	40,000			160,000
Long-term debt	240,245			267,189
Derivative financial instruments	16,244			26,433
Accrued expenses and other liabilities	151,055			127,503
Total liabilities	11,204,061			11,115,638
Shareholders' equity:
Common stock, $1 par value; 150,000,000 shares authorized; 78,974,199 and 79,234,077 shares issued and outstanding	78,974			79,234
Common stock issuable; 660,581 and 674,499 shares	11,327			10,744
Capital surplus	1,495,267			1,499,584
Retained earnings (accumulated deficit)	5,594			(90,419		)
Accumulated other comprehensive income (loss)	14,263			(41,589		)
Total shareholders' equity	1,605,425			1,457,554
Total liabilities and shareholders' equity	$	12,809,486		$	12,573,192

UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2019		2018		2019			2018
Interest revenue:
Loans, including fees	$	122,645	$	108,335	$	357,575		$	308,296
Investment securities, including tax exempt of $1,118 and $1,052, and $3,409 and $3,049	17,744		19,899		57,638			56,448
Deposits in banks and short-term investments	226		487		1,074			1,482
Total interest revenue	140,615		128,721		416,287			366,226

Interest expense:
Deposits:
NOW and interest-bearing demand	3,214		1,985		10,283			4,483
Money market	5,126		3,177		14,100			7,853
Savings	41		33		115			117
Time	8,732		5,746		25,687			12,900
Total deposit interest expense	17,113		10,941		50,185			25,353
Short-term borrowings	429		274		838			772
Federal Home Loan Bank advances	521		1,791		2,695			5,551
Long-term debt	3,214		3,605		9,813			10,679
Total interest expense	21,277		16,611		63,531			42,355
Net interest revenue	119,338		112,110		352,756			323,871
Provision for credit losses	3,100		1,800		9,650			7,400
Net interest revenue after provision for credit losses	116,238		110,310		343,106			316,471

Noninterest income:
Service charges and fees	9,916		9,112		27,429			26,831
Mortgage loan and other related fees	8,658		5,262		17,750			15,928
Brokerage fees	1,699		1,525		4,624			3,598
Gains from sales of SBA/USDA loans	1,639		2,605		4,412			6,784
Securities gains (losses), net	—		2		(118		)	(1,302		)
Other	7,119		5,674		20,433			18,077
Total noninterest income	29,031		24,180		74,530			69,916
Total revenue	145,269		134,490		417,636			386,387

Noninterest expenses:
Salaries and employee benefits	50,501		47,146		146,161			135,384
Communications and equipment	6,223		5,590		18,233			15,071
Occupancy	5,921		5,779		17,424			16,939
Advertising and public relations	1,374		1,442		4,256			4,341
Postage, printing and supplies	1,618		1,574		4,733			4,896
Professional fees	4,715		3,927		11,930			11,435
FDIC assessments and other regulatory charges	314		2,228		3,571			6,677
Amortization of intangibles	1,210		1,681		3,845			5,426
Merger-related and other charges	2,541		115		6,981			4,449
Other	8,507		8,236		23,687			23,425
Total noninterest expenses	82,924		77,718		240,821			228,043
Net income before income taxes	62,345		56,772		176,815			158,344
Income tax expense	13,983		13,090		40,106			37,370
Net income	$	48,362	$	43,682	$	136,709		$	120,974

Net income available to common shareholders	$	48,011	$	43,381	$	135,727		$	120,124

Net income per common share:
Basic	$	0.60	$	0.54	$	1.70		$	1.51
Diluted	0.60		0.54		1.70			1.51
Weighted average common shares outstanding:
Basic	79,663		79,806		79,714			79,588
Diluted	79,667		79,818		79,718			79,598

Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended September 30,

	2019							2018
*(dollars in thousands, fully taxable equivalent (FTE))*	Average Balance			Interest		Average Rate		Average Balance			Interest		Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	8,835,585		$	122,526	5.50	%	$	8,199,856		$	108,197	5.23	%
Taxable securities⁽³⁾	2,379,927			16,626		2.79		2,763,461			18,847		2.73
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾	170,027			1,502		3.53		152,939			1,417		3.71
Federal funds sold and other interest-earning assets	182,935			616		1.35		203,707			751		1.47
Total interest-earning assets (FTE)	11,568,474			141,270		4.85		11,319,963			129,212		4.53

Noninterest-earning assets:
Allowance for loan losses	(63,474		)					(62,322		)
Cash and due from banks	116,922							123,290
Premises and equipment	221,930							216,775
Other assets ⁽³⁾	836,951							703,915
Total assets	$	12,680,803						$	12,301,621

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	2,123,910		3,214		0.60		$	1,963,312		1,985		0.40
Money market	2,277,162			5,126		0.89		2,078,116			3,177		0.61
Savings	695,297			41		0.02		680,640			33		0.02
Time	1,879,801			8,053		1.70		1,545,020			3,351		0.86
Brokered time deposits	102,078			679		2.64		434,182			2,395		2.19
Total interest-bearing deposits	7,078,248			17,113		0.96		6,701,270			10,941		0.65
Federal funds purchased and other borrowings	73,733			429		2.31		50,767			274		2.14
Federal Home Loan Bank advances	88,261			521		2.34		331,413			1,791		2.14
Long-term debt	243,935			3,214		5.23		296,366			3,605		4.83
Total borrowed funds	405,929			4,164		4.07		678,546			5,670		3.32
Total interest-bearing liabilities	7,484,177			21,277		1.13		7,379,816			16,611		0.89

Noninterest-bearing liabilities:
Noninterest-bearing deposits	3,453,174							3,249,218
Other liabilities	155,107							278,764
Total liabilities	11,092,458							10,907,798
Shareholders' equity	1,588,345							1,393,823
Total liabilities and shareholders' equity	$	12,680,803						$	12,301,621

Net interest revenue (FTE)				$	119,993						$	112,601
Net interest-rate spread (FTE)						3.72	%						3.64	%
Net interest margin (FTE) ⁽⁴⁾						4.12	%						3.95	%

⁽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 26%, 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 on which the accrual of interest has been discontinued and loans that are held for sale.
⁽³⁾Securities available for sale are shown at amortized cost. Pretax unrealized gains of $35.1 million in 2019 and unrealized losses of $49.9 million in 2018 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.

Average Consolidated Balance Sheets and Net Interest Analysis For the Nine Months Ended September 30,

	2019							2018
*(dollars in thousands, fully taxable equivalent (FTE))*	Average Balance			Interest		Average Rate		Average Balance			Interest		Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	8,646,622		$	357,541	5.53	%	$	8,124,269		$	307,981	5.07	%
Taxable securities ⁽³⁾	2,532,070			54,229		2.86		2,712,900			53,399		2.62
Tax-exempt securities (FTE)⁽¹⁾⁽³⁾	168,787			4,579		3.62		150,014			4,106		3.65
Federal funds sold and other interest-earning assets	186,402			1,913		1.37		209,836			2,123		1.35
Total interest-earning assets (FTE)	11,533,881			418,262		4.85		11,197,019			367,609		4.39

Non-interest-earning assets:
Allowance for loan losses	(62,664		)					(61,259		)
Cash and due from banks	121,889							138,809
Premises and equipment	220,872							217,339
Other assets ⁽³⁾	785,862							717,555
Total assets	$	12,599,840						$	12,209,463

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	2,199,607		10,283		0.63		$	2,098,734		4,483		0.29
Money market	2,187,822			14,100		0.86		2,113,972			7,853		0.50
Savings	685,167			115		0.02		671,883			117		0.02
Time	1,761,374			20,338		1.54		1,534,823			8,288		0.72
Brokered time deposits	292,835			5,349		2.44		298,653			4,612		2.06
Total interest-bearing deposits	7,126,805			50,185		0.94		6,718,065			25,353		0.50
Federal funds purchased and other borrowings	44,898			838		2.50		58,144			772		1.78
Federal Home Loan Bank advances	142,876			2,695		2.52		392,227			5,551		1.89
Long-term debt	252,686			9,813		5.19		295,966			10,679		4.82
Total borrowed funds	440,460			13,346		4.05		746,337			17,002		3.05
Total interest-bearing liabilities	7,567,265			63,531		1.12		7,464,402			42,355		0.76

Noninterest-bearing liabilities:
Noninterest-bearing deposits	3,335,450							3,178,387
Other liabilities	164,350							199,848
Total liabilities	11,067,065							10,842,637
Shareholders' equity	1,532,775							1,366,826
Total liabilities and shareholders' equity	$	12,599,840						$	12,209,463

Net interest revenue (FTE)				$	354,731						$	325,254
Net interest-rate spread (FTE)						3.73	%						3.63	%
Net interest margin (FTE) ⁽⁴⁾						4.11	%						3.88	%

⁽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 26%, 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 on which the accrual of interest has been discontinued and loans that are held for sale.
⁽³⁾Securities available for sale are shown at amortized cost. Pretax unrealized gains of $4.94 million in 2019 and unrealized losses of $40.4 million in 2018 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.

About United Community Banks, Inc.
United Community Banks, Inc. UCBI is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the southeast region's largest full-service financial institutions with $12.8 billion in assets, and 147 offices in Georgia, North Carolina, South Carolina and Tennessee. It operates principally through United Community Bank, its bank subsidiary, which specializes in personalized community banking services for individuals, small businesses and companies. 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 five of the past six years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2019, for the sixth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America, and for the first time included United on its list of The World's Best Banks. Additional information about UCBI and the Bank 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 common share," "operating earnings per share," "tangible book value per common share," "operating return on common equity," "operating return on tangible common equity," "operating return on assets," "operating efficiency ratio," and "tangible common equity to tangible 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.

For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com

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