United Community Banks, Inc. Reports Earnings of $10.6 Million for Third Quarter 2012

Marketwired

BLAIRSVILLE, GA--(Marketwire - Oct 25, 2012) -  United Community Banks, Inc. (NASDAQ: UCBI)

  • Net income of $10.6 million, or 13 cents per share
  • Loans up $18.6 million from second quarter, and $28 million from a year ago
  • Core transaction deposits up $72 million in third quarter, or 9 percent annualized
  • Nonperforming assets decline $3.8 million, or 3 percent, from second quarter
  • Capital position sound

United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $10.6 million, or 13 cents per share, for the third quarter of 2012; and net income of $28.6 million, or 34 cents per share, year-to-date. The results for the third quarter and first nine months of 2012 reflect modest loan growth, strong core transaction deposit growth, increases in fee revenue and lower operating expenses compared with the same periods a year ago.

"United Community Banks is capitalizing on business opportunities, strengthening its financial foundation and building long-term value for customers, employees and shareholders," said Jimmy Tallent, president and chief executive officer. "Our third quarter was successful by nearly every measure, and represents the fifth profitable quarter since our 2011 capital transaction and problem asset disposition plan execution."

Tallent continued, "We achieved both positive linked-quarter and year-over-year loan growth. Our credit measures continue their positive trend, with nonperforming assets down $3.8 million, or 3 percent, from the second quarter. At the same time we reduced expenses and improved operating efficiency. We expect profitability to continue from improved efficiency and further expense reductions, as well as revenue enhancements from prudent growth of our business mix of loans and deposits. We are gaining momentum and achieving success."

Tallent said, "Continued expansion of quality loan and deposit relationships remains a top priority. Total loans were $4.138 billion at quarter-end, up $18.6 million from the second quarter and up $28 million from a year earlier, reflecting the first annual loan growth in over four years. We are strategically growing the portfolio by focusing on full-service relationships with small-to-medium-sized businesses. During the third quarter we added $218 million in new loan commitments, of which $137 million were funded by quarter-end. We also grew core transaction deposits by $72 million, contributing to an especially strong $236 million total in the first nine months. Annualized, the linked-quarter growth rate is 9 percent and year-to-date is 11 percent."

The third quarter provision for loan losses was $15.5 million, down from $36 million a year ago and $18 million in the second quarter. The third quarter 2011 provision for loan losses included $25 million specifically related to United's largest lending relationship. Third quarter net charge-offs were $20.6 million, compared to $18.9 million in the second quarter of 2012 and $17.5 million in the third quarter of 2011. Tallent added, "Net charge-offs of $20.6 million this quarter included losses from the sale of $13 million in performing classified loans that had $3.6 million in specific reserves at the end of the second quarter. The losses on the sold loans account for most of the difference between our provision for loan losses and charge-offs this quarter." 

"Overall credit trends continued to improve this quarter with the exception of a slight increase in net charge-offs," Tallent said. "Most notably our performing classified loans, which are defined as accruing substandard for regulatory purposes, decreased $41.1 million in the third quarter, or 13 percent, to $282.5 million at quarter-end. Nonperforming assets were $142 million in the third quarter, down $3.8 million from the second quarter. Nonperforming asset levels are impacted positively or negatively by the inflow of new nonperforming loans and our ability to liquidate foreclosed properties. In the third quarter, the inflow of new nonperforming loans was $30.5 million compared with $29.4 million in the second quarter and $103 million a year ago. Also, loans past due 30 to 89 days increased slightly from .65 percent of outstanding loans in the second quarter to .68 percent in the third quarter."

Taxable equivalent net interest revenue totaled $57.4 million, up $535,000 from the second quarter of 2012 but down $1.91 million from the third quarter of 2011. "The decrease from last year primarily reflects lower yields on both our investment securities and loan portfolios," stated Tallent. "Our investment securities interest decline was due to reinvestment at record low rates, combined with $179 million in lower average balances for the quarter. We continue to look for reinvestment opportunities with a focus on floating-rate securities to alleviate market and duration risk. Floating-rate securities now account for 39 percent of the total investment securities portfolio. The lower yield on our loan portfolio reflects ongoing pricing pressure on new and reviewed loans."

Taxable equivalent net interest margin of 3.60 percent was up 17 basis points from last quarter and 5 basis points from a year ago. The increase in the third quarter was primarily due to our second quarter balance sheet restructuring and the resulting smaller balance sheet. 

Fee revenue was $13.8 million for the third quarter, compared to $12.9 million for the second quarter and $11.5 million a year ago. The increase from prior quarters was primarily due to the higher level of mortgage loans closed and related mortgage fees. Mortgage refinancing activity continued to accelerate through the third quarter as mortgage rates fell to record low levels. Closed mortgage loans totaled $108 million in the third quarter of 2012 compared with $79.8 million in the second quarter and $57.4 million in the third quarter of 2011. Service charges and fees on deposit accounts were also up from a year ago due to new fees on low balance deposit accounts that became effective in the first quarter of 2012, more than offsetting lower overdraft fees.

Other fee revenue of $2.56 million was up $930,000 from the second quarter of 2012 and $579,000 from the third quarter of 2011, primarily related to fees on our new customer derivatives product and non-core items. In the third quarter of 2012, United earned $278,000 in net fees on customer derivative transactions through its recently initiated back-to-back swap program on fixed rate commercial loans. The non-core other fee revenue items in the third quarter included $608,000 in hedge ineffectiveness gains, compared with $180,000 in hedge ineffectiveness losses in the second quarter of 2012 and $575,000 in hedge ineffectiveness gains in the third quarter of 2011. Another non-core item relates to net gains or losses on United's deferred compensation plan assets. In the third quarter of 2012, United had $153,000 in gains on deferred compensation plan assets compared with $386,000 in losses a year ago and $8,000 in losses in the second quarter of 2012. Gains and losses on deferred compensation plan assets included in fee revenue are directly offset by losses or gains on United's deferred compensation plan liabilities that increase or decrease salaries and employee benefit costs each quarter.

Operating expenses, excluding foreclosed property costs, were $41.1 million for the third quarter of 2012 compared to $42.5 million for the second quarter and $43.7 million a year ago. Reduced staff levels and related costs were the primary drivers of the decrease from both periods, with 22 fewer staff positions compared to the second quarter and 170 fewer from a year ago. Most other expense categories were down as well, reflecting efforts to improve operating efficiency.

Foreclosed property costs for the third quarter of 2012 were $3.7 million, compared to $1.9 million in the second quarter and $2.8 million a year ago. Third quarter 2012 costs included $962,000 for maintenance and $2.7 million in net losses and write-downs. For the second quarter, foreclosed property costs included $1.1 million in maintenance and $739,000 in net losses and write-downs. Third quarter 2011 costs included $1.8 million in maintenance and $968,000 in net losses and write-downs. The rise this quarter in net losses and write-downs was due primarily to re-appraisals of properties held for sale.

As of September 30, 2012, capital ratios were as follows: Tier 1 Risk-Based of 14.3 percent; Tier 1 Leverage of 9.8 percent; and Total Risk-Based of 15.8 percent. The Tier 1 Common Risk-Based ratio was 8.8 percent and the tangible equity-to-assets ratio was 8.7 percent.

"We have made significant progress on all fronts to position us as the customer service leader in financial services," Tallent said. "This progress includes successfully recapitalizing the company, aggressively addressing our credit challenges, and rebalancing our loan portfolio for a more favorable risk profile going forward. We have also made significant progress in building on our already strong deposit base and improving operating efficiency."

Tallent noted the recent addition of Lynn Harton, who brings to United 29 years of executive banking experience, as chief operating officer. "Lynn has earned a high level of respect in our industry and we are delighted to have him on board," Tallent said. "We also strengthened our board of directors earlier this year with the addition of two experienced business, risk management and capital markets professionals. With this added depth and expertise, coupled with our exceptional bankers and their documented outstanding level of customer service, we are well positioned with the right people, strategies, products, and business model to be the financial services leader in our markets."

Conference Call
United will hold a conference call today, Thursday, October 25, 2012, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 36390832. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of United's website at www.ucbi.com.

About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $6.7 billion and operates 27 community banks with 104 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United's common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United's website at www.ucbi.com.

Safe Harbor
This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2011 Annual Report on Form 10-K under the sections entitled "Forward-Looking Statements" and "Risk Factors." Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

                   
                   
UNITED COMMUNITY BANKS, INC.                
Financial Highlights                
Selected Financial Information                
                     
                     
  2012   2011  
(in thousands, except per share Third   Second   First   Fourth   Third  
data; taxable equivalent) Quarter   Quarter   Quarter   Quarter   Quarter  
INCOME SUMMARY                              
Interest revenue $ 65,978   $ 66,780   $ 70,221   $ 71,905   $ 74,543  
Interest expense   8,607     9,944     11,357     12,855     15,262  
    Net interest revenue   57,371     56,836     58,864     59,050     59,281  
Provision for loan losses   15,500     18,000     15,000     14,000     36,000  
Fee revenue   13,764     12,867     15,379     12,667     11,498  
    Total revenue   55,635     51,703     59,243     57,717     34,779  
Operating expenses   44,783     44,310     46,955     51,080     46,520  
    Income (loss) before income taxes   10,852     7,393     12,288     6,637     (11,741 )
Income tax expense (benefit)   284     894     760     (3,264 )   (402 )
    Net income (loss)   10,568     6,499     11,528     9,901     (11,339 )
Preferred dividends and discount accretion   3,041     3,032     3,030     3,025     3,019  
  Net income (loss) available to common shareholders $ 7,527   $ 3,467   $ 8,498   $ 6,876   $ (14,358 )
                               
PERFORMANCE MEASURES                              
  Per common share:                              
    Diluted income (loss) $ .13   $ .06   $ .15   $ .12   $ (.25 )
    Book value   6.75     6.61     6.68     6.62     6.77  
    Tangible book value (2)   6.64     6.48     6.54     6.47     6.61  
                               
  Key performance ratios:                              
    Return on equity (1)(3)   7.43 %   3.51 %   8.78 %   7.40 %   (15.06 )
    Return on assets (3)   .63     .37     .66     .56     (.64 )
    Net interest margin (3)   3.60     3.43     3.53     3.51     3.55  
    Efficiency ratio   62.95     63.84     63.31     71.23     65.73  
    Equity to assets   8.75     8.33     8.19     8.28     8.55  
    Tangible equity to assets (2)   8.66     8.24     8.08     8.16     8.42  
    Tangible common equity to assets (2)   5.73     5.45     5.33     5.38     5.65  
    Tangible common equity to risk- weighted assets (2)   8.44     8.37     8.21     8.25     8.52  
                               
ASSET QUALITY *                              
  Non-performing loans $ 115,001   $ 115,340   $ 129,704   $ 127,479   $ 144,484  
  Foreclosed properties   26,958     30,421     31,887     32,859     44,263  
    Total non-performing assets (NPAs)   141,959     145,761     161,591     160,338     188,747  
  Allowance for loan losses   107,642     112,705     113,601     114,468     146,092  
  Net charge-offs   20,563     18,896     15,867     45,624     17,546  
  Allowance for loan losses to loans   2.60 %   2.74 %   2.75 %   2.79 %   3.55  
  Net charge-offs to average loans (3)   1.99     1.85     1.55     4.39     1.68  
  NPAs to loans and foreclosed properties   3.41     3.51     3.88     3.87     4.54  
  NPAs to total assets   2.12     2.16     2.25     2.30     2.74  
                               
AVERAGE BALANCES ($ in millions)                              
  Loans $ 4,147   $ 4,156   $ 4,168   $ 4,175   $ 4,194  
  Investment securities   1,971     2,145     2,153     2,141     2,150  
  Earning assets   6,346     6,665     6,700     6,688     6,630  
  Total assets   6,648     6,993     7,045     7,019     7,000  
  Deposits   5,789     5,853     6,028     6,115     6,061  
  Shareholders' equity   582     583     577     581     598  
  Common shares - basic (thousands)   57,880     57,840     57,764     57,646     57,599  
  Common shares - diluted (thousands)   57,880     57,840     57,764     57,646     57,599  
                               
AT PERIOD END ($ in millions)                              
  Loans * $ 4,138   $ 4,119   $ 4,128   $ 4,110   $ 4,110  
  Investment securities   2,025     1,984     2,202     2,120     2,123  
  Total assets   6,699     6,737     7,174     6,983     6,894  
  Deposits   5,823     5,822     6,001     6,098     6,005  
  Shareholders' equity   585     576     580     575     583  
  Common shares outstanding (thousands)   57,710     57,641     57,603     57,561     57,510  
                               
(1) Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized.  
                               
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.  
   
   
   
UNITED COMMUNITY BANKS, INC.                    
Financial Highlights                    
Selected Financial Information                    
                           
          Third   For the Nine    
          Quarter   Months Ended   YTD
  Third Quarter   2012-2011   September 30,   2012-2011
(in thousands, except per share data; taxable equivalent) 2012   2011   Change   2012   2011   Change
INCOME SUMMARY                                  
Interest revenue $ 65,978   $ 74,543         $ 202,979   $ 227,439      
Interest expense   8,607     15,262           29,908     52,820      
    Net interest revenue   57,371     59,281   (3) %     173,071     174,619   (1) %
Provision for loan losses   15,500     36,000           48,500     237,000      
Fee revenue   13,764     11,498   20       42,010     37,241   13  
    Total revenue   55,635     34,779           166,581     (25,140 )    
Operating expenses   44,783     46,520   (4)       136,048     210,519   (35)  
    Income (loss) before income taxes   10,852     (11,741 )         30,533     (235,659 )    
Income tax expense (benefit)   284     (402 )         1,938     988      
    Net income (loss)   10,568     (11,339 )         28,595     (236,647 )    
Preferred dividends and discount accretion   3,041     3,019           9,103     8,813      
Net income (loss) available to common shareholders $ 7,527   $ (14,358 )       $ 19,492   $ (245,460 )    
                                   
PERFORMANCE MEASURES                                  
  Per common share:                                  
    Diluted income (loss) $ .13   $ (.25 )       $ .34   $ (7.23 )    
    Book value   6.75     6.77   -       6.75     6.77   -  
    Tangible book value (2)   6.64     6.61   -       6.64     6.61   -  
                                   
  Key performance ratios:                                  
    Return on equity (1)(3)   7.43 %   (15.06 )%       6.57 %   (151.32 )%  
    Return on assets (3)   .63     (.64 )         .53     (4.37 )    
    Net interest margin (3)   3.60     3.55           3.52     3.42      
    Efficiency ratio   62.95     65.73           63.36     99.39      
    Equity to assets   8.75     8.55           8.42     7.58      
    Tangible equity to assets (2)   8.66     8.42           8.32     7.47      
    Tangible common equity to assets (2)   5.73     5.65           5.50     3.23      
    Tangible common equity to risk- weighted assets (2)   8.44     8.52           8.44     8.52      
                                   
ASSET QUALITY *                                  
  Non-performing loans $ 115,001   $ 144,484         $ 115,001   $ 144,484      
  Foreclosed properties   26,958     44,263           26,958     44,263      
    Total non-performing assets (NPAs)   141,959     188,747           141,959     188,747      
  Allowance for loan losses   107,642     146,092           107,642     146,092      
  Net charge-offs   20,563     17,546           55,326     265,603      
  Allowance for loan losses to loans   2.60 %   3.55 %         2.60 %   3.55 %    
  Net charge-offs to average loans (3)   1.99     1.68           1.80     8.28      
  NPAs to loans and foreclosed properties   3.41     4.54           3.41     4.54      
  NPAs to total assets   2.12     2.74           2.12     2.74      
                                   
AVERAGE BALANCES ($ in millions)                                  
  Loans $ 4,147   $ 4,194   (1)     $ 4,157   $ 4,352   (4)  
  Investment securities   1,971     2,150   (8)       2,089     1,952   7  
  Earning assets   6,346     6,630   (4)       6,569     6,817   (4)  
  Total assets   6,648     7,000   (5)       6,894     7,246   (5)  
  Deposits   5,789     6,061   (4)       5,890     6,329   (7)  
  Shareholders' equity   582     598   (3)       580     549   6  
  Common shares - basic (thousands)   57,880     57,599           57,826     33,973      
  Common shares - diluted (thousands)   57,880     57,599           57,826     33,973      
                                   
AT PERIOD END ($ in millions)                                  
  Loans * $ 4,138   $ 4,110   1     $ 4,138   $ 4,110   1  
  Investment securities   2,025     2,123   (5)       2,025     2,123   (5)  
  Total assets   6,699     6,894   (3)       6,699     6,894   (3)  
  Deposits   5,823     6,005   (3)       5,823     6,005   (3)  
  Shareholders' equity   585     583   -       585     583   -  
  Common shares outstanding (thousands)   57,710     57,510           57,710     57,510      
                                   
(1) Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized.
                                   
* Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
 
 
 
UNITED COMMUNITY BANKS, INC.                    
Non-GAAP Performance Measures Reconciliation                
Selected Financial Information                    
                       
                       
  2012   2011  
(in thousands, except per share Third   Second   First   Fourth     Third  
data; taxable equivalent) Quarter   Quarter   Quarter   Quarter     Quarter  
                                 
Interest revenue reconciliation                                
Interest revenue - taxable equivalent $ 65,978   $ 66,780   $ 70,221   $ 71,905     $ 74,543  
Taxable equivalent adjustment   (419 )   (444 )   (446 )   (423 )     (420 )
  Interest revenue (GAAP) $ 65,559   $ 66,336   $ 69,775   $ 71,482     $ 74,123  
                                 
Net interest revenue reconciliation                                
Net interest revenue - taxable equivalent $ 57,371   $ 56,836   $ 58,864   $ 59,050     $ 59,281  
Taxable equivalent adjustment   (419 )   (444 )   (446 )   (423 )     (420 )
  Net interest revenue (GAAP) $ 56,952   $ 56,392   $ 58,418   $ 58,627     $ 58,861  
                                 
Total revenue reconciliation                                
Total operating revenue $ 55,635   $ 51,703   $ 59,243   $ 57,717     $ 34,779  
Taxable equivalent adjustment   (419 )   (444 )   (446 )   (423 )     (420 )
  Total revenue (GAAP) $ 55,216   $ 51,259   $ 58,797   $ 57,294     $ 34,359  
                                 
Income (loss) before taxes reconciliation                                
Income (loss) before taxes $ 10,852   $ 7,393   $ 12,288   $ 6,637     $ (11,741 )
Taxable equivalent adjustment   (419 )   (444 )   (446 )   (423 )     (420 )
  Income (loss) before taxes (GAAP) $ 10,433   $ 6,949   $ 11,842   $ 6,214     $ (12,161 )
                                 
Income tax (benefit) expense reconciliation                                
Income tax (benefit) expense $ 284   $ 894   $ 760   $ (3,264 )   $ (402 )
Taxable equivalent adjustment   (419 )   (444 )   (446 )   (423 )     (420 )
  Income tax (benefit) expense (GAAP) $ (135 ) $ 450   $ 314   $ (3,687 )   $ (822 )
                                 
Book value per common share reconciliation                                
Tangible book value per common share $ 6.64   $ 6.48   $ 6.54   $ 6.47     $ 6.61  
Effect of goodwill and other intangibles   .11     .13     .14     .15       .16  
  Book value per common share (GAAP) $ 6.75   $ 6.61   $ 6.68   $ 6.62     $ 6.77  
                                 
Average equity to assets reconciliation                                
Tangible common equity to assets   5.73 %   5.45 %   5.33 %   5.38 %     5.65 %
Effect of preferred equity   2.93     2.79     2.75     2.78       2.77  
  Tangible equity to assets   8.66     8.24     8.08     8.16       8.42  
Effect of goodwill and other intangibles   .09     .09     .11     .12       .13  
  Equity to assets (GAAP)   8.75 %   8.33 %   8.19 %   8.28 %     8.55 %
                                 
Tangible common equity to risk-weighted assets reconciliation                      
Tangible common equity to risk-weighted assets   8.44 %   8.37 %   8.21 %   8.25 %     8.52 %
Effect of other comprehensive income   .36     .28     .10     (.03 )     (.29 )
Effect of trust preferred   1.17     1.19     1.15     1.18       1.19  
Effect of preferred equity   4.29     4.35     4.23     4.29       4.33  
  Tier I capital ratio (Regulatory)   14.26 %   14.19 %   13.69 %   13.69 %     13.75 %
                                 
                                 
                                 
UNITED COMMUNITY BANKS, INC.          
Non-GAAP Performance Measures Reconciliation          
Selected Financial Information          
           
           
  For the Nine  
(in thousands, except per share Months Ended  
data; taxable equivalent) 2012     2011  
               
Interest revenue reconciliation              
Interest revenue - taxable equivalent $ 202,979     $ 227,439  
Taxable equivalent adjustment   (1,309 )     (1,284 )
  Interest revenue (GAAP) $ 201,670     $ 226,155  
               
Net interest revenue reconciliation              
Net interest revenue - taxable equivalent $ 173,071     $ 174,619  
Taxable equivalent adjustment   (1,309 )     (1,284 )
  Net interest revenue (GAAP) $ 171,762     $ 173,335  
               
Total revenue reconciliation              
Total operating revenue $ 166,581     $ (25,140 )
Taxable equivalent adjustment   (1,309 )     (1,284 )
  Total revenue (GAAP) $ 165,272     $ (26,424 )
               
Income (loss) before taxes reconciliation              
Income (loss) before taxes $ 30,533     $ (235,659 )
Taxable equivalent adjustment   (1,309 )     (1,284 )
  Income (loss) before taxes (GAAP) $ 29,224     $ (236,943 )
               
Income tax (benefit) expense reconciliation              
Income tax (benefit) expense $ 1,938     $ 988  
Taxable equivalent adjustment   (1,309 )     (1,284 )
  Income tax (benefit) expense (GAAP) $ 629     $ (296 )
               
Book value per common share reconciliation              
Tangible book value per common share $ 6.64     $ 6.61  
Effect of goodwill and other intangibles   .11       .16  
  Book value per common share (GAAP) $ 6.75     $ 6.77  
               
Average equity to assets reconciliation              
Tangible common equity to assets   5.50 %     3.23 %
Effect of preferred equity   2.82       4.24  
  Tangible equity to assets   8.32       7.47  
Effect of goodwill and other intangibles   .10       .11  
  Equity to assets (GAAP)   8.42 %     7.58 %
               
Tangible common equity to risk-weighted assets reconciliation              
Tangible common equity to risk-weighted assets   8.44 %     8.52 %
Effect of other comprehensive income   .36       (.29 )
Effect of trust preferred   1.17       1.19  
Effect of preferred equity   4.29       4.33  
  Tier I capital ratio (Regulatory)   14.26 %     13.75 %
                 
                 
                 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Loan Portfolio Composition at Period-End (1)            
                   
                   
  2012   2011
  Third   Second   First   Fourth   Third
(in millions) Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                            
Commercial (sec.by RE) $ 1,819   $ 1,837   $ 1,843   $ 1,822   $ 1,771
Commercial & industrial   460     450     440     428     429
Commercial construction   161     169     167     164     169
  Total commercial   2,440     2,456     2,450     2,414     2,369
Residential mortgage   1,174     1,128     1,131     1,135     1,150
Residential construction   389     409     436     448     474
Consumer installment   135     126     111     113     117
  Total loans $ 4,138   $ 4,119   $ 4,128   $ 4,110   $ 4,110
                             
LOANS BY MARKET                            
North Georgia $ 1,383   $ 1,387   $ 1,408   $ 1,426   $ 1,478
Atlanta MSA   1,257     1,252     1,239     1,220     1,192
North Carolina   579     576     588     597     607
Coastal Georgia   380     369     366     346     316
Gainesville MSA   256     259     262     265     272
East Tennessee   283     276     265     256     245
  Total loans $ 4,138   $ 4,119   $ 4,128   $ 4,110   $ 4,110
                             
RESIDENTIAL CONSTRUCTION                        
Dirt loans                            
  Acquisition & development $ 71   $ 78   $ 86   $ 88   $ 97
  Land loans   41     45     57     61     60
  Lot loans   196     203     204     207     216
    Total   308     326     347     356     373
                             
House loans                            
  Spec   44     49     57     59     64
  Sold   37     34     32     33     37
    Total   81     83     89     92     101
Total residential construction $ 389   $ 409   $ 436   $ 448   $ 474
                             
RESIDENTIAL CONSTRUCTION - ATLANTA MSA                  
Dirt loans                            
  Acquisition & development $ 14   $ 14   $ 17   $ 17   $ 19
  Land loans   9     9     13     14     15
  Lot loans   18     22     22     22     22
    Total   41     45     52     53     56
                             
House loans                            
  Spec   19     24     27     27     28
  Sold   8     7     7     6     8
    Total   27     31     34     33     36
Total residential construction $ 68   $ 76   $ 86   $ 86   $ 92
                             
(1) Excludes total loans of $37.0 million, $41.5 million, $47.2 million, $54.5 million and $57.8 million as of September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
 
 
 
UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Loan Portfolio Composition at Period-End (1)          
             
             
  2012   Linked  
  Third   Second   Quarter
(in millions) Quarter   Quarter   Change
LOANS BY CATEGORY                  
Commercial (sec.by RE) $ 1,819   $ 1,837   $ (18 )
Commercial & industrial   460     450     10  
Commercial construction   161     169     (8 )
    Total commercial   2,440     2,456     (16 )
Residential mortgage   1,174     1,128     46  
Residential construction   389     409     (20 )
Consumer installment   135     126     9  
    Total loans $ 4,138   $ 4,119     19  
                   
LOANS BY MARKET                  
North Georgia $ 1,383   $ 1,387     (4 )
Atlanta MSA   1,257     1,252     5  
North Carolina   579     576     3  
Coastal Georgia   380     369     11  
Gainesville MSA   256     259     (3 )
East Tennessee   283     276     7  
    Total loans $ 4,138   $ 4,119     19  
                   
RESIDENTIAL CONSTRUCTION                  
Dirt loans                  
  Acquisition & development $ 71   $ 78     (7 )
  Land loans   41     45     (4 )
  Lot loans   196     203     (7 )
    Total   308     326     (18 )
                   
House loans                  
  Spec   44     49     (5 )
  Sold   37     34     3  
    Total   81     83     (2 )
Total residential construction $ 389   $ 409     (20 )
                   
RESIDENTIAL CONSTRUCTION - ATLANTA MSA                  
Dirt loans                  
  Acquisition & development $ 14   $ 14     -  
  Land loans   9     9     -  
  Lot loans   18     22     (4 )
    Total   41     45     (4 )
                   
House loans                  
  Spec   19     24     (5 )
  Sold   8     7     1  
    Total   27     31     (4 )
Total residential construction $ 68   $ 76     (8 )
                   
(1) Excludes total loans of $37.0 million, $41.5 million, $47.2 million, $54.5 million and $57.8 million as of September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
   
   
   
UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Loan Portfolio Composition at Period-End (1)            
             
             
  2012   2011   Year over  
  Third   Third   Year
(in millions) Quarter   Quarter   Change
LOANS BY CATEGORY                  
Commercial (sec.by RE) $ 1,819   $ 1,771   $ 48  
Commercial & industrial   460     429     31  
Commercial construction   161     169     (8 )
    Total commercial   2,440     2,369     71  
Residential mortgage   1,174     1,150     24  
Residential construction   389     474     (85 )
Consumer installment   135     117     18  
    Total loans $ 4,138   $ 4,110     28  
                   
LOANS BY MARKET                  
North Georgia $ 1,383   $ 1,478     (95 )
Atlanta MSA   1,257     1,192     65  
North Carolina   579     607     (28 )
Coastal Georgia   380     316     64  
Gainesville MSA   256     272     (16 )
East Tennessee   283     245     38  
    Total loans $ 4,138   $ 4,110     28  
                   
RESIDENTIAL CONSTRUCTION                  
Dirt loans                  
  Acquisition & development $ 71   $ 97     (26 )
  Land loans   41     60     (19 )
  Lot loans   196     216     (20 )
    Total   308     373     (65 )
                   
House loans                  
  Spec   44     64     (20 )
  Sold   37     37     -  
    Total   81     101     (20 )
Total residential construction $ 389   $ 474     (85 )
                   
RESIDENTIAL CONSTRUCTION - ATLANTA MSA                  
Dirt loans                  
  Acquisition & development $ 14   $ 19     (5 )
  Land loans   9     15     (6 )
  Lot loans   18     22     (4 )
    Total   41     56     (15 )
                   
House loans                  
  Spec   19     28     (9 )
  Sold   8     8     -  
    Total   27     36     (9 )
Total residential construction $ 68   $ 92     (24 )
                   
(1) Excludes total loans of $37.0 million, $41.5 million, $47.2 million, $54.5 million and $57.8 million as of September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
   
   
   
UNITED COMMUNITY BANKS, INC.        
Financial Highlights               
Credit Quality(1)               
                 
                 
  Third Quarter 2012  
  Non-performing     Foreclosed     Total  
(in thousands) Loans     Properties     NPAs  
NPAs BY CATEGORY                      
Commercial (sec.by RE) $ 25,896     $ 8,767     $ 34,663  
Commercial & industrial   32,678       -       32,678  
Commercial construction   18,590       3,121       21,711  
  Total commercial   77,164       11,888       89,052  
Residential mortgage   13,996       6,031       20,027  
Residential construction   22,935       9,039       31,974  
Consumer installment   906       -       906  
  Total NPAs $ 115,001     $ 26,958     $ 141,959  
  Balance as a % of Unpaid Principal   68.8 %     36.4 %     58.8 %
                       
NPAs BY MARKET                      
North Georgia $ 72,211     $ 14,582     $ 86,793  
Atlanta MSA   21,349       5,926       27,275  
North Carolina   9,622       2,771       12,393  
Coastal Georgia   6,822       864       7,686  
Gainesville MSA   840       1,328       2,168  
East Tennessee   4,157       1,487       5,644  
  Total NPAs $ 115,001     $ 26,958     $ 141,959  
                       
                       
NPA ACTIVITY                      
Beginning Balance $ 115,340     $ 30,421     $ 145,761  
Loans placed on non-accrual   30,535       -       30,535  
Payments received   (3,646 )     -       (3,646 )
Loan charge-offs   (19,227 )     -       (19,227 )
Foreclosures   (8,001 )     8,001       -  
Capitalized costs   -       102       102  
Note / property sales   -       (8,822 )     (8,822 )
Write downs   -       (2,394 )     (2,394 )
Net gains (losses) on sales   -       (350 )     (350 )
  Ending Balance $ 115,001     $ 26,958     $ 141,959  
                       
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
   
   
   
UNITED COMMUNITY BANKS, INC.        
Financial Highlights              
Credit Quality(1)              
                 
                 
  Second Quarter 2012  
  Non-performing     Foreclosed     Total  
(in thousands) Loans     Properties     NPAs  
NPAs BY CATEGORY                      
Commercial (sec.by RE) $ 19,115     $ 10,586     $ 29,701  
Commercial & industrial   34,982       -       34,982  
Commercial construction   18,175       2,732       20,907  
  Total commercial   72,272       13,318       85,590  
Residential mortgage   16,631       5,591       22,222  
Residential construction   25,530       11,512       37,042  
Consumer installment   907       -       907  
  Total NPAs $ 115,340     $ 30,421     $ 145,761  
  Balance as a % of Unpaid Principal   68.8 %     39.3 %     59.4 %
                       
NPAs BY MARKET                      
North Georgia $ 77,332     $ 13,546     $ 90,878  
Atlanta MSA   17,593       8,651       26,244  
North Carolina   10,657       3,287       13,944  
Coastal Georgia   5,822       785       6,607  
Gainesville MSA   991       2,998       3,989  
East Tennessee   2,945       1,154       4,099  
  Total NPAs $ 115,340     $ 30,421     $ 145,761  
                       
                       
NPA ACTIVITY                      
Beginning Balance $ 129,704     $ 31,887     $ 161,591  
Loans placed on non-accrual   29,364       -       29,364  
Payments received   (15,027 )     -       (15,027 )
Loan charge-offs   (19,382 )     -       (19,382 )
Foreclosures   (9,319 )     9,319       -  
Capitalized costs   -       415       415  
Note / property sales   -       (10,461 )     (10,461 )
Write downs   -       (1,008 )     (1,008 )
Net gains (losses) on sales   -       269       269  
  Ending Balance $ 115,340     $ 30,421     $ 145,761  
                       
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
   
   
   
UNITED COMMUNITY BANKS, INC.        
Financial Highlights              
Credit Quality(1)              
                 
                 
  First Quarter 2012  
  Non-performing     Foreclosed     Total  
(in thousands) Loans     Properties     NPAs  
NPAs BY CATEGORY                      
Commercial (sec.by RE) $ 26,081     $ 10,808     $ 36,889  
Commercial & industrial   36,314       -       36,314  
Commercial construction   23,319       3,266       26,585  
  Total commercial   85,714       14,074       99,788  
Residential mortgage   18,741       5,882       24,623  
Residential construction   24,341       11,931       36,272  
Consumer installment   908       -       908  
  Total NPAs $ 129,704     $ 31,887     $ 161,591  
  Balance as a % of Unpaid Principal   70.6 %     36.1 %     59.4 %
                       
NPAs BY MARKET                      
North Georgia $ 81,117     $ 14,559     $ 95,676  
Atlanta MSA   22,321       7,647       29,968  
North Carolina   15,765       4,650       20,415  
Coastal Georgia   5,622       1,268       6,890  
Gainesville MSA   2,210       3,387       5,597  
East Tennessee   2,669       376       3,045  
  Total NPAs $ 129,704     $ 31,887     $ 161,591  
                       
                       
NPA ACTIVITY                      
Beginning Balance $ 127,479     $ 32,859     $ 160,338  
Loans placed on non-accrual   32,437       -       32,437  
Payments received   (5,945 )     -       (5,945 )
Loan charge-offs   (14,733 )     -       (14,733 )
Foreclosures   (9,534 )     9,534       -  
Capitalized costs   -       329       329  
Note / property sales   -       (8,631 )     (8,631 )
Write downs   -       (2,111 )     (2,111 )
Net gains (losses) on sales   -       (93 )     (93 )
  Ending Balance $ 129,704     $ 31,887     $ 161,591  
                       
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  
(2) Annualized.  
   
   
   
UNITED COMMUNITY BANKS, INC.                      
Financial Highlights                            
Credit Quality(1)                            
                               
    Third Quarter 2012   Second Quarter 2012   First Quarter 2012
(in thousands)   Net
Charge-Offs
  Net Charge-Offs to
Average
Loans
(2)
  Net
Charge-Offs
  Net Charge-Offs to
 Average
Loans
(2)
  Net
Charge-Offs
  Net Charge-Offs to
Average
Loans
(2)
NET CHARGE-OFFS BY CATEGORY                          
Commercial (sec.by RE)   $ 8,174   1.79 %   $ 4,349   .95 %   $ 3,697   .81 %
Commercial & industrial     (259 ) (.23 )     775   .70       669   .62  
Commercial construction     3,190   7.74       88   .21       334   .81  
  Total commercial     11,105   1.81       5,212   .86       4,700   .78  
Residential mortgage     3,527   1.23       3,862   1.38       5,375   1.91  
Residential construction     5,676   5.69       9,563   9.14       5,314   4.84  
Consumer installment     255   .78       259   .88       478   1.72  
  Total   $ 20,563   1.99     $ 18,896   1.85     $ 15,867   1.55  
                                     
                                     
NET CHARGE-OFFS BY MARKET                              
North Georgia   $ 6,451   1.84 %   $ 12,474   3.58 %   $ 9,022   2.56 %
Atlanta MSA     9,344   3.02       2,307   .75       2,729   .89  
North Carolina     1,674   1.15       3,634   2.52       1,679   1.14  
Coastal Georgia     2,486   2.67       211   .23       1,329   1.53  
Gainesville MSA     294   .45       (187 ) (.29 )     883   1.35  
East Tennessee     314   .45       457   .68       225   .34  
  Total   $ 20,563   1.99     $ 18,896   1.85     $ 15,867   1.55  
                                     
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2) Annualized.
 
 
 
UNITED COMMUNITY BANKS, INC.               
Consolidated Statement of Operations (Unaudited)               
                 
  Three Months Ended   Nine Months Ended  
  September 30,   September 30,  
(in thousands, except per share data) 2012   2011   2012   2011  
                         
Interest revenue:                        
  Loans, including fees $ 53,868   $ 59,294   $ 163,805   $ 181,359  
  Investment securities, including tax exempt of $225, $244, $737 and $754   10,706     14,568     34,772     42,964  
  Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks   985     261     3,093     1,832  
    Total interest revenue   65,559     74,123     201,670     226,155  
                         
Interest expense:                        
  Deposits:                        
    NOW   447     831     1,587     3,191  
    Money market   599     1,129     1,901     4,656  
    Savings   37     52     112     193  
    Time   4,612     9,086     15,844     31,813  
      Total deposit interest expense   5,695     11,098     19,444     39,853  
  Federal funds purchased, repurchase agreements and other short-term borrowings   514     1,081     2,463     3,197  
  Federal Home Loan Bank advances   26     441     882     1,601  
  Long-term debt   2,372     2,642     7,119     8,169  
    Total interest expense   8,607     15,262     29,908     52,820  
    Net interest revenue   56,952     58,861     171,762     173,335  
  Provision for loan losses   15,500     36,000     48,500     237,000  
    Net interest revenue after provision for loan losses   41,452     22,861     123,262     (63,665 )
                         
Fee revenue:                        
  Service charges and fees   7,696     7,534     23,295     21,862  
  Mortgage loan and other related fees   2,800     1,148     7,221     3,594  
  Brokerage fees   709     836     2,331     2,204  
  Securities gains, net   -     -     7,047     838  
  Loss from prepayment of debt   -     -     (6,681 )   (791 )
  Other   2,559     1,980     8,797     9,534  
    Total fee revenue   13,764     11,498     42,010     37,241  
    Total revenue   55,216     34,359     165,272     (26,424 )
                         
Operating expenses:                        
  Salaries and employee benefits   22,918     25,262     72,440     76,622  
  Communications and equipment   3,254     3,284     9,620     10,006  
  Occupancy   3,539     3,794     10,849     11,673  
  Advertising and public relations   934     1,052     2,868     3,347  
  Postage, printing and supplies   954     1,036     2,849     3,239  
  Professional fees   2,180     2,051     6,107     7,731  
  Foreclosed property   3,706     2,813     9,382     69,603  
  FDIC assessments and other regulatory charges   2,537     2,603     7,592     11,660  
  Amortization of intangibles   728     748     2,190     2,270  
  Other   4,033     3,877     12,151     14,368  
    Total operating expenses   44,783     46,520     136,048     210,519  
    Net income (loss) before income taxes   10,433     (12,161 )   29,224     (236,943 )
  Income tax (benefit) expense   (135 )   (822 )   629     (296 )
    Net income (loss)   10,568     (11,339 )   28,595     (236,647 )
  Preferred stock dividends and discount accretion   3,041     3,019     9,103     8,813  
    Net income (loss) available to common shareholders $ 7,527   $ (14,358 ) $ 19,492   $ (245,460 )
                         
Earnings (loss) per common share - Basic $ .13   $ (.25 ) $ .34   $ (7.23 )
Earnings (loss) per common share - Diluted   .13     (.25 )   .34     (7.23 )
Weighted average common shares outstanding - Basic   57,880     57,599     57,826     33,973  
Weighted average common shares outstanding - Diluted   57,880     57,599     57,826     33,973  
                         
                         
                         
UNITED COMMUNITY BANKS, INC.                
Consolidated Balance Sheet                
                 
(in thousands, except share  September 30,     December 31,     September 30,  
 and per share data) 2012     2011     2011  
  (unaudited)     (audited)     (unaudited)  
ASSETS                      
  Cash and due from banks $ 57,270     $ 53,807     $ 57,780  
  Interest-bearing deposits in banks   119,355       139,609       241,440  
  Federal funds sold, reverse repurchase agreements, commercial paper and short-term investments   45,000       185,000       -  
    Cash and cash equivalents   221,625       378,416       299,220  
  Securities available for sale   1,761,994       1,790,047       1,769,083  
  Securities held to maturity (fair value $281,336, $343,531 and $369,020)   262,648       330,203       353,739  
  Mortgage loans held for sale   30,571       23,881       22,050  
  Loans, net of unearned income   4,137,845       4,109,614       4,109,875  
    Less allowance for loan losses   107,642       114,468       146,092  
      Loans, net   4,030,203       3,995,146       3,963,783  
  Assets covered by loss sharing agreements with the FDIC   53,070       78,145       83,623  
  Premises and equipment, net   170,532       175,088       176,839  
  Bank owned life insurance   81,574       80,599       80,452  
  Accrued interest receivable   19,133       20,693       19,744  
  Goodwill and other intangible assets   6,237       8,428       9,175  
  Foreclosed property   26,958       32,859       44,263  
  Other assets   34,690       69,915       72,302  
    Total assets $ 6,699,235     $ 6,983,420     $ 6,894,273  
LIABILITIES AND SHAREHOLDERS' EQUITY                      
Liabilities:                      
  Deposits:                      
    Demand $ 1,210,703     $ 992,109     $ 966,452  
    NOW   1,184,341       1,509,896       1,299,512  
    Money market   1,126,312       1,038,778       1,030,370  
    Savings   222,431       199,007       200,231  
    Time:                      
      Less than $100,000   1,123,672       1,332,394       1,393,559  
      Greater than $100,000   731,766       847,152       905,183  
    Brokered   223,474       178,647       209,998  
        Total deposits   5,822,699       6,097,983       6,005,305  
  Federal funds purchased, repurchase agreements, and other short-term borrowings   53,243       102,577       102,883  
  Federal Home Loan Bank advances   50,125       40,625       40,625  
  Long-term debt   120,285       120,225       120,206  
  Unsettled securities purchases   24,319       10,325       10,585  
  Accrued expenses and other liabilities   43,309       36,199       31,302  
    Total liabilities   6,113,980       6,407,934       6,310,906  
Shareholders' equity:                      
  Preferred stock, $1 par value; 10,000,000 shares authorized;                      
    Series A; $10 stated value; 21,700 shares issued and outstanding   217       217       217  
    Series B; $1,000 stated value; 180,000 shares issued and outstanding   178,183       177,092       176,739  
    Series D; $1,000 stated value; 16,613 shares issued and outstanding   16,613       16,613       16,613  
  Common stock, $1 par value; 100,000,000 shares authorized; 42,393,319, 41,647,100 and 41,595,692 shares issued and outstanding   42,393       41,647       41,596  
  Common stock, non-voting, $1 par value; 30,000,000 shares authorized; 15,316,794, 15,914,209 and 15,914,209 shares issued and outstanding   15,317       15,914       15,914  
  Common stock issuable; 129,270, 93,681 and 88,501 shares   3,247       3,233       3,590  
  Capital surplus   1,056,998       1,054,940       1,053,565  
  Accumulated deficit   (711,369 )     (730,861 )     (737,736 )
  Accumulated other comprehensive (loss) income   (16,344 )     (3,309 )     12,869  
    Total shareholders' equity   585,255       575,486       583,367  
    Total liabilities and shareholders' equity $ 6,699,235     $ 6,983,420     $ 6,894,273  
                       
                       
                       
UNITED COMMUNITY BANKS, INC.             
Average Consolidated Balance Sheets and Net Interest Analysis      
For the Three Months Ended September 30,             
               
        2012      
  Average         Avg.
(dollars in thousands, taxable equivalent) Balance     Interest   Rate
Assets:                  
Interest-earning assets:                  
  Loans, net of unearned income (1)(2) $ 4,147,220     $ 53,963   5.18 %
  Taxable securities (3)   1,947,780       10,481   2.15  
  Tax-exempt securities (1)(3)   22,895       368   6.43  
  Federal funds sold and other interest-earning assets   227,950       1,166   2.05  
                   
    Total interest-earning assets   6,345,845       65,978   4.14  
Non-interest-earning assets:                  
  Allowance for loan losses   (112,034 )            
  Cash and due from banks   51,705              
  Premises and equipment   171,608              
  Other assets (3)   190,439              
    Total assets $ 6,647,563              
                   
Liabilities and Shareholders' Equity:                  
Interest-bearing liabilities:                  
  Interest-bearing deposits:                  
    NOW $ 1,176,087       447   .15  
    Money market   1,157,655       599   .21  
    Savings   221,186       37   .07  
    Time less than $100,000   1,144,103       2,260   .79  
    Time greater than $100,000   750,828       1,876   .99  
    Brokered time deposits   176,114       476   1.08  
      Total interest-bearing deposits   4,625,973       5,695   .49  
                   
  Federal funds purchased and other borrowings   55,994       514   3.65  
  Federal Home Loan Bank advances   44,473       26   .23  
  Long-term debt   120,276       2,372   7.85  
    Total borrowed funds   220,743       2,912   5.25  
                   
    Total interest-bearing liabilities   4,846,716       8,607   .71  
Non-interest-bearing liabilities:                  
  Non-interest-bearing deposits   1,163,471              
  Other liabilities   55,607              
    Total liabilities   6,065,794              
Shareholders' equity   581,769              
    Total liabilities and shareholders' equity $ 6,647,563              
                   
Net interest revenue         $ 57,371      
Net interest-rate spread               3.43 %
                   
Net interest margin (4)               3.60 %
     
(1)   Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)   Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)   Securities available for sale are shown at amortized cost. Pretax unrealized gains of $22.9 million in 2012 and $37.9 million in 2011 are included in other assets for purposes of this presentation.
(4)   Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.
     
     
     
UNITED COMMUNITY BANKS, INC.            
Average Consolidated Balance Sheets and Net Interest Analysis      
For the Three Months Ended September 30,            
               
        2011      
  Average         Avg.
(dollars in thousands, taxable equivalent) Balance     Interest   Rate
Assets:                  
Interest-earning assets:                  
  Loans, net of unearned income (1)(2) $ 4,193,951     $ 59,394   5.62 %
  Taxable securities (3)   2,125,154       14,324   2.70  
  Tax-exempt securities (1)(3)   24,675       399   6.47  
  Federal funds sold and other interest-earning assets   286,194       426   .60  
                   
    Total interest-earning assets   6,629,974       74,543   4.47  
  Non-interest-earning assets:                  
  Allowance for loan losses   (128,654 )            
  Cash and due from banks   53,500              
  Premises and equipment   177,798              
  Other assets (3)   267,349              
    Total assets $ 6,999,967              
                   
Liabilities and Shareholders' Equity:                  
Interest-bearing liabilities:                  
  Interest-bearing deposits:                  
    NOW $ 1,258,929       831   .26  
    Money market   1,024,559       1,129   .44  
    Savings   199,793       52   .10  
    Time less than $100,000   1,448,024       4,539   1.24  
    Time greater than $100,000   940,864       3,456   1.46  
    Brokered time deposits   260,423       1,091   1.66  
      Total interest-bearing deposits   5,132,592       11,098   .86  
                   
    Federal funds purchased and other borrowings   103,850       1,081   4.13  
    Federal Home Loan Bank advances   40,625       441   4.31  
    Long-term debt   138,457       2,642   7.57  
      Total borrowed funds   282,932       4,164   5.84  
                   
      Total interest-bearing liabilities   5,415,524       15,262   1.12  
Non-interest-bearing liabilities:                  
    Non-interest-bearing deposits   928,788              
    Other liabilities   57,427              
      Total liabilities   6,401,739              
    Shareholders' equity   598,228              
      Total liabilities and shareholders' equity $ 6,999,967              
                   
Net interest revenue         $ 59,281      
Net interest-rate spread               3.35 %
                   
Net interest margin (4)               3.55 %
     
(1)   Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)   Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)   Securities available for sale are shown at amortized cost. Pretax unrealized gains of $22.9 million in 2012 and $37.9 million in 2011 are included in other assets for purposes of this presentation.
(4)   Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.
     
     
     
UNITED COMMUNITY BANKS, INC.            
Average Consolidated Balance Sheets and Net Interest Analysis      
For the Nine Months Ended September 30,            
               
        2012      
  Average         Avg.
(dollars in thousands, taxable equivalent) Balance     Interest   Rate
Assets:                  
Interest-earning assets:                  
  Loans, net of unearned income (1)(2) $ 4,157,057     $ 164,101   5.27 %
  Taxable securities (3)   2,065,112       34,035   2.20  
  Tax-exempt securities (1)(3)   24,187       1,207   6.65  
  Federal funds sold and other interest-earning assets   322,998       3,636   1.50  
                   
    Total interest-earning assets   6,569,354       202,979   4.13  
Non-interest-earning assets:                  
  Allowance for loan losses   (115,252 )            
  Cash and due from banks   52,755              
  Premises and equipment   173,410              
  Other assets (3)   214,068