United Community Banks, Inc. Reports Earnings of $9.3 Million for Fourth Quarter 2012

Marketwired

BLAIRSVILLE, GA--(Marketwire - Jan 24, 2013) - United Community Banks, Inc. (NASDAQ: UCBI)

  • Net income of $9.3 million, or 11 cents per share
  • Loans up $37.2 million from third quarter, or 4 percent annualized
  • Core transaction deposits up $75.2 million in fourth quarter, or 10 percent annualized
  • Solid improvement in credit quality

United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $9.3 million, or 11 cents per share, for the fourth quarter of 2012, and net income of $37.9 million, or 44 cents per share, for the year.  The results for the fourth quarter and year reflect modest loan growth, improved credit quality, strong core transaction deposit growth, an increase in fee revenue, and lower operating expenses compared with the same periods a year ago.

"We had another positive quarter and a very productive year in rebuilding our core earnings and positioning United for future growth," said Jimmy Tallent, president and chief executive officer.  "In the fourth quarter we achieved meaningful improvement in every key measure of credit quality, and we continued to build strong momentum in growing new customer loan and deposit relationships."

Tallent continued, "We grew our loan portfolio by $37 million from the third quarter, for an annualized rate of 4 percent.  That was no easy accomplishment in the current business environment.  Additionally, our core transaction deposits increased by $75 million, or 10 percent annualized.  At the same time we lowered nonperforming assets by 10 percent, to $128 million. This total includes our lowest level of foreclosed properties since 2007, at $18 million.  Even more encouraging was the significant drop in net charge-offs to $14.5 million, the lowest level since the second quarter of 2008."

"This was a good way to end a successful year," Tallent stated.  "During 2012, we achieved $65 million in net new loan growth and we increased core transaction deposits by $311 million or 11 percent.  Continued growth in quality loan and deposit relationships remains a top priority."

The fourth quarter provision for loan losses was $14 million, equal to a year ago and down $1.5 million from the third quarter.  Fourth quarter net charge-offs were $14.5 million compared to $20.6 million in the third quarter and $45.6 million in the fourth quarter of 2011.

"The inflow of nonperforming loans in the fourth quarter was $20 million, the lowest quarterly total since the beginning of the economic cycle," Tallent said.  "We expect this trend will lead to lower quarterly charge-offs and loan loss provisions during 2013."

Taxable equivalent net interest revenue totaled $56.0 million, down $1.34 million from the third quarter of 2012 and down $3.02 million from the fourth quarter of 2011.  "The decrease primarily reflects lower yields on our investment securities and loan portfolios, as well as the overlap of new senior debt issued at the beginning of the fourth quarter that was used to repay subordinated debt that matured late in the fourth quarter," said Tallent.

"The lower yield on our loan portfolio reflects ongoing pricing pressure on new and renewed loans," Tallent continued.  "Our investment securities interest decline was due to reinvestment of cash flows at record low rates.  We continue to look for reinvestment opportunities with a focus on floating-rate securities to alleviate market and duration risk.  Floating-rate securities, which account for 38 percent of the total investment securities portfolio, improve our interest sensitivity position by reducing our exposure to rising interest rates," Tallent continued.

The taxable equivalent net interest margin was down 16 basis points from the third quarter and 7 basis points from a year ago to 3.44 percent.  "Five of the 16 basis point linked-quarter margin decline was due to the overlap in the replacement of maturing subordinated debt," stated Tallent. "Another five basis points was due to the scheduled repricing of certain corporate bonds from a fixed to floating rate.  These floating rate securities were part of a planned strategy to maintain a neutral to slightly asset-sensitive interest rate position.  The balance of the decrease was due to a new loan product offering with a low introductory rate that will reprice in 2013 and continued loan pricing pressures."

Fee revenue was $14.8 million for the fourth quarter, compared to $13.8 million for the third quarter and $12.7 million a year ago.  The increase from prior quarters was primarily due to the higher level of mortgage loans closed and related fees.  Mortgage refinancing activity continued at a strong pace through the fourth quarter as mortgage rates remained at record low levels.  Closed mortgage loans totaled $100 million in the fourth quarter compared with $108 million in the third quarter and $78.8 million in the fourth 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, and to higher debit card interchange fees.

Other fee revenue was down $217,000 from the third quarter of 2012 and $466,000 from the fourth quarter of 2011 to $2.34 million.  The decrease was primarily due to lower hedge ineffectiveness gains and to a fourth quarter 2011 gain of $728,000 from the sale of state low-income housing tax credits.

Operating expenses, excluding foreclosed property costs, were $42.1 million for the fourth quarter of 2012 compared to $41.1 million for the third quarter and $41.8 million a year ago.  The increase from a year ago was due primarily to a $2.24 million, one-time credit adjustment in the fourth quarter of 2011 related to our retirement plan that reduced salary and employee benefit expense in that period.  Excluding the foreclosed property costs and the one-time credit adjustment, quarterly operating expenses were down $1.9 million from a year ago.  Reduced staff levels and related costs were the primary drivers of the decrease. United had 164 fewer staff positions in the fourth quarter of 2012 compared to the fourth quarter of 2011.

Foreclosed property costs for the fourth quarter of 2012 were $4.6 million, compared to $3.7 million in the third quarter and $9.3 million a year ago.  Fourth quarter 2012 costs included $1.4 million for maintenance and $3.2 million in net losses and write-downs.  For the third quarter of 2012, foreclosed property costs included $962,000 in maintenance and $2.7 million in net losses and write-downs.  Fourth quarter 2011 foreclosed property costs included $2.4 million in maintenance and $6.9 million in net losses and write-downs.

As of December 31, 2012, capital ratios were as follows: Tier 1 Risk-Based of 14.2 percent; Tier 1 Leverage of 9.7 percent; Total Risk-Based of 15.8 percent; Tier 1 Common Risk-Based of 8.9 percent; and, Tangible Equity-to-Assets of 8.6 percent.

"By every measure, 2012 has been a year of significant improvement for United Community Banks," Tallent said.  "Reflecting on all that this banking team has accomplished in restoring credit quality, regaining momentum in new business growth, and improving operating efficiency, I cannot help but look forward with excitement.

"We know that challenges remain as the economy continues to be sluggish and rates are at record lows," Tallent continued.  "At the same time we expect credit measures to continue to improve, and this will translate into lower levels of charge-offs and provisioning. We see opportunities to grow our mortgage and advisory services businesses, and will look to expand both.  We believe we can grow our loan portfolio and we will accomplish this by continuing to add lenders in key markets, as well as expanding into new markets, like Greenville, South Carolina, where we recently opened a loan production office."

Tallent concluded, "We constantly evaluate and find ways to improve this company -- to make it more productive and efficient while continuing to deliver the best customer service in the industry.  Ultimately we are committed to delivering superior financial results on behalf of our shareholders.  We are committed, we are up to the challenge, and we look ahead with determination and optimism."

Conference Call

United will hold a conference call today, Thursday, January 24, 2013, 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 86024021.  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 $6.8 billion and operates 105 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina,  east Tennessee and northwest South Carolina.  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   Fourth     Third     Second     First     Fourth  
 data; taxable equivalent)   Quarter     Quarter     Quarter     Quarter     Quarter  
INCOME SUMMARY                                        
Interest revenue   $ 64,450     $ 65,978     $ 66,780     $ 70,221     $ 71,905  
Interest expense     8,422       8,607       9,944       11,357       12,855  
  Net interest revenue     56,028       57,371       56,836       58,864       59,050  
Provision for loan losses     14,000       15,500       18,000       15,000       14,000  
Fee revenue     14,761       13,764       12,867       15,379       12,667  
  Total revenue     56,789       55,635       51,703       59,243       57,717  
Operating expenses     46,726       44,783       44,310       46,955       51,080  
  Income (loss) before income taxes     10,063       10,852       7,393       12,288       6,637  
Income tax expense (benefit)     802       284       894       760       (3,264 )
  Net income (loss)     9,261       10,568       6,499       11,528       9,901  
Preferred dividends and discount accretion     3,045       3,041       3,032       3,030       3,025  
Net income (loss) available to common shareholders   $ 6,216     $ 7,527     $ 3,467     $ 8,498     $ 6,876  
                                         
PERFORMANCE MEASURES                                        
  Per common share:                                        
    Diluted income (loss)   $ .11     $ .13     $ .06     $ .15     $ .12  
    Book value     6.74       6.75       6.61       6.68       6.62  
    Tangible book value (2)     6.64       6.64       6.48       6.54       6.47  
                                         
  Key performance ratios:                                        
    Return on equity (1)(3)     6.03 %     7.43 %     3.51 %     8.78 %     7.40 %
    Return on assets (3)     .54       .63       .37       .66       .56  
    Net interest margin (3)     3.44       3.60       3.43       3.53       3.51  
    Efficiency ratio     66.04       62.95       63.84       63.31       71.23  
    Equity to assets     8.63       8.75       8.33       8.19       8.28  
    Tangible equity to assets (2)     8.55       8.66       8.24       8.08       8.16  
    Tangible common equity to assets (2)     5.67       5.73       5.45       5.33       5.38  
    Tangible common equity to risk- weighted assets (2)     8.33       8.44       8.37       8.21       8.25  
                                         
ASSET QUALITY *                                        
  Non-performing loans   $ 109,894     $ 115,001     $ 115,340     $ 129,704     $ 127,479  
  Foreclosed properties     18,264       26,958       30,421       31,887       32,859  
    Total non-performing assets (NPAs)     128,158       141,959       145,761       161,591       160,338  
  Allowance for loan losses     107,137       107,642       112,705       113,601       114,468  
  Net charge-offs     14,505       20,563       18,896       15,867       45,624  
  Allowance for loan losses to loans     2.57 %     2.60 %     2.74 %     2.75 %     2.79 %
  Net charge-offs to average loans (3)     1.39       1.99       1.85       1.55       4.39  
  NPAs to loans and foreclosed properties     3.06       3.41       3.51       3.88       3.87  
  NPAs to total assets     1.88       2.12       2.16       2.25       2.30  
                                         
AVERAGE BALANCES($ in millions)                                        
  Loans   $ 4,191     $ 4,147     $ 4,156     $ 4,168     $ 4,175  
  Investment securities     2,088       1,971       2,145       2,153       2,141  
  Earning assets     6,482       6,346       6,665       6,700       6,688  
  Total assets     6,778       6,648       6,993       7,045       7,019  
  Deposits     5,873       5,789       5,853       6,028       6,115  
  Shareholders' equity     585       582       583       577       581  
  Common shares - basic (thousands)     57,971       57,880       57,840       57,764       57,646  
  Common shares - diluted (thousands)     57,971       57,880       57,840       57,764       57,646  
                                         
AT PERIOD END($ in millions)                                        
  Loans *   $ 4,175     $ 4,138     $ 4,119     $ 4,128     $ 4,110  
  Investment securities     2,079       2,025       1,984       2,202       2,120  
  Total assets     6,802       6,699       6,737       7,174       6,983  
  Deposits     5,952       5,823       5,822       6,001       6,098  
  Shareholders' equity     585       585       576       580       575  
  Common shares outstanding (thousands)     57,741       57,710       57,641       57,603       57,561  
                                         
(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                  
                                     
                Fourth                    
    2012     2011     Quarter     For the Twelve     YTD  
(in thousands, except per share   Fourth     Fourth     2012-2011     Months Ended     2012-2011  
 data; taxable equivalent)   Quarter     Quarter     Change     2012     2011     Change  
INCOME SUMMARY                                            
Interest revenue   $ 64,450     $ 71,905           $ 267,429     $ 299,344        
Interest expense     8,422       12,855             38,330       65,675        
    Net interest revenue     56,028       59,050     (5) %     229,099       233,669     (2) %
Provision for loan losses     14,000       14,000             62,500       251,000        
Fee revenue     14,761       12,667     17       56,771       49,908     14  
    Total revenue     56,789       57,717             223,370       32,577        
Operating expenses     46,726       51,080     (9 )     182,774       261,599     (30 )
    Income (loss) before income taxes     10,063       6,637     52       40,596       (229,022 )      
Income tax expense (benefit)     802       (3,264 )           2,740       (2,276 )      
    Net income (loss)     9,261       9,901     (6 )     37,856       (226,746 )      
Preferred dividends and discount accretion     3,045       3,025             12,148       11,838        
Net income (loss) available to common shareholders   $ 6,216     $ 6,876     (10 )   $ 25,708     $ (238,584 )      
                                             
PERFORMANCE MEASURES                                            
  Per common share:                                            
    Diluted income (loss)   $ .11     $ .12     (8 )   $ .44     $ (5.97 )      
    Book value     6.74       6.62     2       6.74       6.62     2  
    Tangible book value (2)     6.64       6.47     3       6.64       6.47     3  
                                             
  Key performance ratios:                                            
    Return on equity (1)(3)     6.03 %     7.40 %           6.43 %     (93.57 )%      
    Return on assets (3)     .54       .56             .55       (3.15 )      
    Net interest margin (3)     3.44       3.51             3.50       3.44        
    Efficiency ratio     66.04       71.23             64.02       92.27        
    Equity to assets     8.63       8.28             8.47       7.75        
    Tangible equity to assets (2)     8.55       8.16             8.38       7.62        
    Tangible common equity to assets (2)     5.67       5.38             5.54       3.74        
    Tangible common equity to risk- weighted assets (2)     8.33       8.25             8.33       8.25        
                                             
ASSET QUALITY *                                            
  Non-performing loans   $ 109,894     $ 127,479           $ 109,894     $ 127,479        
  Foreclosed properties     18,264       32,859             18,264       32,859        
    Total non-performing assets (NPAs)     128,158       160,338             128,158       160,338        
  Allowance for loan losses     107,137       114,468             107,137       114,468        
  Net charge-offs     14,505       45,624             69,831       311,227        
  Allowance for loan losses to loans     2.57 %     2.79 %           2.57 %     2.79 %      
  Net charge-offs to average loans (3)     1.39       4.39             1.69       7.33        
  NPAs to loans and foreclosed properties     3.06       3.87             3.06       3.87        
  NPAs to total assets     1.88       2.30             1.88       2.30        
                                             
AVERAGE BALANCES ($ in millions)                                            
  Loans   $ 4,191     $ 4,175     -     $ 4,166     $ 4,307     (3 )
  Investment securities     2,088       2,141     (2 )     2,089       1,999     5  
  Earning assets     6,482       6,688     (3 )     6,547       6,785     (4 )
  Total assets     6,778       7,019     (3 )     6,865       7,189     (5 )
  Deposits     5,873       6,115     (4 )     5,885       6,275     (6 )
  Shareholders' equity     585       581     1       582       557     4  
  Common shares - basic (thousands)     57,971       57,646             57,857       39,943        
  Common shares - diluted (thousands)     57,971       57,646             57,857       39,943        
                                             
AT PERIOD END ($ in millions)                                            
  Loans *   $ 4,175     $ 4,110     2     $ 4,175     $ 4,110     2  
  Investment securities     2,079       2,120     (2 )     2,079       2,120     (2 )
  Total assets     6,802       6,983     (3 )     6,802       6,983     (3 )
  Deposits     5,952       6,098     (2 )     5,952       6,098     (2 )
  Shareholders' equity     585       575     2       585       575     2  
  Common shares outstanding (thousands)     57,741       57,561             57,741       57,561        
                                             
(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.  
Selected Financial Information  
For the Years Ended December 31,  
   
(in thousands, except per share data;                              
 taxable equivalent)   2012     2011     2010     2009     2008  
INCOME SUMMARY                                        
Net interest revenue   $ 229,099     $ 233,669     $ 243,052     $ 245,227     $ 238,704  
Operating provision for loan losses (1)     62,500       251,000       234,750       310,000       184,000  
Operating fee revenue (2)     56,771       49,908       48,548       50,964       46,081  
    Total operating revenue (1)(2)     223,370       32,577       56,850       (13,809 )     100,785  
Operating expenses (3)     182,774       261,599       242,952       217,050       200,335  
Loss on sale of nonperforming assets     -       -       45,349       -       -  
    Operating income (loss) from continuing operations before taxes     40,596       (229,022 )     (231,451 )     (230,859 )     (99,550 )
Operating income taxes     2,740       (2,276 )     73,218       (91,754 )     (35,651 )
    Net operating income (loss) from continuing operations     37,856       (226,746 )     (304,669 )     (139,105 )     (63,899 )
Gain from acquisition, net of tax     -       -       -       7,062       -  
Noncash goodwill impairment charges     -       -       (210,590 )     (95,000 )     -  
Severance cost, net of tax benefit     -       -       -       (1,797 )     -  
Fraud loss provision and subsequent recovery, net of tax benefit     -       -       11,750       -       -  
Net income (loss) from discontinued operations     -       -       (101 )     513       449  
Gain from sale of subsidiary, net of income taxes and selling costs     -       -       1,266       -       -  
    Net income (loss)     37,856       (226,746 )     (502,344 )     (228,327 )     (63,450 )
Preferred dividends and discount accretion     12,148       11,838       10,316       10,242       724  
    Net income (loss) available to common shareholders   $ 25,708     $ (238,584 )   $ (512,660 )   $ (238,569 )   $ (64,174 )
                                         
PERFORMANCE MEASURES                                        
  Per common share:                                        
    Diluted operating earnings (loss) from continuing operations (1)(2)(3)   $ .44     $ (5.97 )   $ (16.64 )   $ (12.37 )   $ (6.82 )
    Diluted earnings (loss) from continuing operations     .44       (5.97 )     (27.15 )     (19.80 )     (6.82 )
    Diluted earnings (loss)     .44       (5.97 )     (27.09 )     (19.76 )     (6.77 )
    Cash dividends declared (rounded)     -       -       -       -       .87  
    Stock dividends declared (6)     -       -       -       3 for 130       2 for 130  
    Book value     6.74       6.62       15.40       41.78       84.75  
    Tangible book value (5)     6.64       6.47       14.80       30.09       51.93  
                                         
  Key performance ratios:                                        
    Return on equity (4)     6.43       (93.57) %     (85.08) %     (34.40) %     (7.82) %
    Return on assets     .55       (3.15 )     (6.61 )     (2.76 )     (.76 )
    Net interest margin     3.50       3.44       3.56       3.29       3.18  
    Operating efficiency ratio from continuing operations (2)(3)     64.02       92.27       98.98       73.97       70.00  
    Equity to assets     8.47       7.75       10.77       11.12       10.22  
    Tangible equity to assets (5)     8.38       7.62       8.88       8.33       6.67  
    Tangible common equity to assets (5)     5.54       3.74       6.52       6.15       6.57  
    Tangible common equity to risk-weighted assets (5)     8.33       8.25       5.64       10.39       8.34  
                                         
ASSET QUALITY *                                        
  Non-performing loans   $ 109,894     $ 127,479     $ 179,094     $ 264,092     $ 190,723  
  Foreclosed properties     18,264       32,859       142,208       120,770       59,768  
    Total non-performing assets (NPAs)     128,158       160,338       321,302       384,862       250,491  
  Allowance for loan losses     107,137       114,468       174,695       155,602       122,271  
  Operating net charge-offs (1)     69,831       311,227       215,657       276,669       151,152  
  Allowance for loan losses to loans     2.57 %     2.79 %     3.79 %     3.02 %     2.14 %
  Operating net charge-offs to average loans (1)     1.69       7.33       4.42       5.03       2.57  
  NPAs to loans and foreclosed properties     3.06       3.87       6.77       7.30       4.35  
  NPAs to total assets     1.88       2.30       4.42       4.81       2.92  
                                         
AVERAGE BALANCES ($ in millions)                                        
  Loans   $ 4,166     $ 4,307     $ 4,961     $ 5,548     $ 5,891  
  Investment securities     2,089       1,999       1,453       1,656       1,489  
  Earning assets     6,547       6,785       6,822       7,465       7,504  
  Total assets     6,865       7,189       7,605       8,269       8,319  
  Deposits     5,885       6,275       6,373       6,713       6,524  
  Shareholders' equity     582       557       819       920       850  
  Common shares - Basic (thousands)     57,857       39,943       18,925       12,075       9,474  
  Common shares - Diluted (thousands)     57,857       39,943       18,925       12,075       9,474  
                                         
AT YEAR END ($ in millions)                                        
  Loans *   $ 4,175     $ 4,110     $ 4,604     $ 5,151     $ 5,705  
  Investment securities     2,079       2,120       1,490       1,530       1,617  
  Total assets     6,802       6,983       7,276       8,000       8,592  
  Deposits     5,952       6,098       6,469       6,628       7,004  
  Shareholders' equity     585       575       469       962       989  
  Common shares outstanding (thousands)     57,741       57,561       18,937       18,809       9,602  
                                         
(1) Excludes the subsequent recovery of $11.8 million in previously recognized fraud related loan losses in 2010. (2) Excludes the gain from acquisition of $11.4 million, net of income tax expense of $4.3 million in 2009. (3) Excludes goodwill impairment charges of $211 million and $95 million in 2010 and 2009, respectively, and severance costs of $2.9 million, net of income tax benefit of $1.1 million in 2009. (4) Net income (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). (5) Excludes effect of acquisition related intangibles and associated amortization. (6) Number of new shares issued for shares currently held.  
   
* 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   Fourth     Third     Second     First     Fourth  
 data; taxable equivalent)   Quarter     Quarter     Quarter     Quarter     Quarter  
                                         
Interest revenue reconciliation                                        
Interest revenue - taxable equivalent   $ 64,450     $ 65,978     $ 66,780     $ 70,221     $ 71,905  
Taxable equivalent adjustment     (381 )     (419 )     (444 )     (446 )     (423 )
  Interest revenue (GAAP)   $ 64,069     $ 65,559     $ 66,336     $ 69,775     $ 71,482  
                                         
Net interest revenue reconciliation                                        
Net interest revenue - taxable equivalent   $ 56,028     $ 57,371     $ 56,836     $ 58,864     $ 59,050  
Taxable equivalent adjustment     (381 )     (419 )     (444 )     (446 )     (423 )
  Net interest revenue (GAAP)   $ 55,647     $ 56,952     $ 56,392     $ 58,418     $ 58,627  
                                         
Provision for loan losses reconciliation                                        
Operating provision for loan losses   $ 14,000     $ 15,500     $ 18,000     $ 15,000     $ 14,000  
Partial recovery of special fraud-related loan loss     -       -       -       -       -  
  Provision for loan losses (GAAP)   $ 14,000     $ 15,500     $ 18,000     $ 15,000     $ 14,000  
                                         
Fee revenue reconciliation                                        
Operating fee revenue   $ 14,761     $ 13,764     $ 12,867     $ 15,379     $ 12,667  
Gain from acquisition     -       -       -       -       -  
  Fee revenue (GAAP)   $ 14,761     $ 13,764     $ 12,867     $ 15,379     $ 12,667  
                                         
Total revenue reconciliation                                        
Total operating revenue   $ 56,789     $ 55,635     $ 51,703     $ 59,243     $ 57,717  
Taxable equivalent adjustment     (381 )     (419 )     (444 )     (446 )     (423 )
Gain from acquisition     -       -       -       -       -  
Partial recovery of special fraud-related loan loss     -       -       -       -       -  
  Total revenue (GAAP)   $ 56,408     $ 55,216     $ 51,259     $ 58,797     $ 57,294  
                                         
Expense reconciliation                                        
Operating expense   $ 46,726     $ 44,783     $ 44,310     $ 46,955     $ 51,080  
Noncash goodwill impairment charge     -       -       -       -       -  
Severance costs     -       -       -       -       -  
  Operating expense (GAAP)   $ 46,726     $ 44,783     $ 44,310     $ 46,955     $ 51,080  
                                         
Income (loss) before taxes reconciliation                                        
Income (loss) before taxes   $ 10,063     $ 10,852     $ 7,393     $ 12,288     $ 6,637  
Taxable equivalent adjustment     (381 )     (419 )     (444 )     (446 )     (423 )
Gain from acquisition     -       -       -       -       -  
Noncash goodwill impairment charge     -       -       -       -       -  
Severance costs     -       -       -       -       -  
Partial recovery of special fraud-related loan loss     -       -       -       -       -  
  Income (loss) before taxes (GAAP)   $ 9,682     $ 10,433     $ 6,949     $ 11,842     $ 6,214  
                                         
Income tax (benefit) expense reconciliation                                        
Income tax (benefit) expense   $ 802     $ 284     $ 894     $ 760     $ (3,264 )
Taxable equivalent adjustment     (381 )     (419 )     (444 )     (446 )     (423 )
Gain from acquisition, tax expense     -       -       -       -       -  
Severance costs, tax benefit     -       -       -       -       -  
  Income tax (benefit) expense (GAAP)   $ 421     $ (135 )   $ 450     $ 314     $ (3,687 )
                                         
Diluted earnings (loss) from continuing operations per common share reconciliation                                        
Diluted operating earnings (loss) from continuing operations per common share   $ .11     $ .13     $ .06     $ .15     $ .12  
Gain from acquisition     -       -       -       -       -  
Noncash goodwill impairment charge     -       -       -       -       -  
Severance costs     -       -       -       -       -  
Partial recovery of special fraud-related loan loss     -       -       -       -       -  
  Diluted earnings (loss) from continuing operations per common share (GAAP)   $ .11     $ .13     $ .06     $ .15     $ .12  
                                         
Book value per common share reconciliation                                        
Tangible book value per common share   $ 6.64     $ 6.64     $ 6.48     $ 6.54     $ 6.47  
Effect of goodwill and other intangibles     .10       .11       .13       .14       .15  
  Book value per common share (GAAP)   $ 6.74     $ 6.75     $ 6.61     $ 6.68     $ 6.62  
                                         
Efficiency ratio from continuing operations reconciliation                                        
Operating efficiency ratio from continuing operations     66.04 %     62.95 %     63.84 %     63.31 %     71.23 %
Gain from acquisition     -       -       -       -       -  
Noncash goodwill impairment charge     -       -       -       -       -  
Severance costs     -       -       -       -       -  
  Efficiency ratio from continuing operations (GAAP)     66.04 %     62.95 %     63.84 %     63.31 %     71.23 %
                                         
Average equity to assets reconciliation                                        
Tangible common equity to assets     5.67 %     5.73 %     5.45 %     5.33 %     5.38 %
Effect of preferred equity     2.88       2.93       2.79       2.75       2.78  
  Tangible equity to assets     8.55       8.66       8.24       8.08       8.16  
Effect of goodwill and other intangibles     .08       .09       .09       .11       .12  
  Equity to assets (GAAP)     8.63 %     8.75 %     8.33 %     8.19 %     8.28 %
                                         
Tangible common equity to risk-weighted assets reconciliation                                        
Tangible common equity to risk-weighted assets     8.33 %     8.44 %     8.37 %     8.21 %     8.25 %
Effect of other comprehensive income     .51       .36       .28       .10       (.03 )
Effect of deferred tax limitation     -       -       -       -       -  
Effect of trust preferred     1.15       1.17       1.19       1.15       1.18  
Effect of preferred equity     4.24       4.29       4.35       4.23       4.29  
  Tier I capital ratio (Regulatory)     14.23 %     14.26 %     14.19 %     13.69 %     13.69 %
                                         
Net charge-offs reconciliation                                        
Operating net charge-offs   $ 14,505     $ 20,563     $ 18,896     $ 15,867     $ 45,624  
Subsequent partial recovery of fraud-related charge-off     -       -       -       -       -  
  Net charge-offs (GAAP)   $ 14,505     $ 20,563     $ 18,896     $ 15,867     $ 45,624  
                                         
Net charge-offs to average loans reconciliation                                        
Operating net charge-offs to average loans     1.39 %     1.99 %     1.85 %     1.55 %     4.39 %
Subsequent partial recovery of fraud-related charge-off     -       -       -       -       -  
  Net charge-offs to average loans (GAAP)     1.39 %     1.99 %     1.85 %     1.55 %     4.39 %
                                           
                                           
   
   
UNITED COMMUNITY BANKS, INC.  
Non-GAAP Performance Measures Reconciliation  
Selected Financial Information  
       
                               

(in thousands, except per share
  For the Twelve
Months Ended
 
 data; taxable equivalent)   2012     2011     2010     2009     2008  
                                         
Interest revenue reconciliation                                        
Interest revenue - taxable equivalent   $ 267,429     $ 299,344     $ 343,123     $ 404,961     $ 466,969  
Taxable equivalent adjustment     (1,690 )     (1,707 )     (2,001 )     (2,132 )     (2,261 )
  Interest revenue (GAAP)   $ 265,739     $ 297,637     $ 341,122     $ 402,829     $ 464,708  
                                         
Net interest revenue reconciliation                                        
Net interest revenue - taxable equivalent   $ 229,099     $ 233,669     $ 243,052     $ 245,227     $ 238,704  
Taxable equivalent adjustment     (1,690 )     (1,707 )     (2,001 )     (2,132 )     (2,261 )
  Net interest revenue (GAAP)   $ 227,409     $ 231,962     $ 241,051     $ 243,095     $ 236,443  
                                         
Provision for loan losses reconciliation                                        
Operating provision for loan losses   $ 62,500     $ 251,000     $ 234,750     $ 310,000     $ 184,000  
Partial recovery of special fraud-related loan loss     -       -       (11,750 )     -       -  
  Provision for loan losses (GAAP)   $ 62,500     $ 251,000     $ 223,000     $ 310,000     $ 184,000  
                                         
Fee revenue reconciliation                                        
Operating fee revenue   $ 56,771     $ 49,908     $ 48,548     $ 50,964     $ 46,081  
Gain from acquisition     -       -       -       11,390       -  
  Fee revenue (GAAP)   $ 56,771     $ 49,908     $ 48,548     $ 62,354     $ 46,081  
                                         
Total revenue reconciliation                                        
Total operating revenue   $ 223,370     $ 32,577     $ 56,850     $ (13,809 )   $ 100,785  
Taxable equivalent adjustment     (1,690 )     (1,707 )     (2,001 )     (2,132 )     (2,261 )
Gain from acquisition     -       -       -       11,390       -  
Partial recovery of special fraud-related loan loss     -       -       11,750       -       -  
  Total revenue (GAAP)   $ 221,680     $ 30,870     $ 66,599     $ (4,551 )   $ 98,524  
                                         
Expense reconciliation                                        
Operating expense   $ 182,774     $ 261,599     $ 288,301     $ 217,050     $ 200,335  
Noncash goodwill impairment charge     -       -       210,590       95,000       -  
Severance costs     -       -       -       2,898       -  
  Operating expense (GAAP)   $ 182,774     $ 261,599     $ 498,891     $ 314,948     $ 200,335  
                                         
Income (loss) before taxes reconciliation                                        
Income (loss) before taxes   $ 40,596     $ (229,022 )   $ (231,451 )   $ (230,859 )   $ (99,550 )
Taxable equivalent adjustment     (1,690 )     (1,707 )     (2,001 )     (2,132 )     (2,261 )
Gain from acquisition     -       -       -       11,390       -  
Noncash goodwill impairment charge     -       -       (210,590 )     (95,000 )     -  
Severance costs     -       -       -       (2,898 )     -  
Partial recovery of special fraud-related loan loss     -       -       11,750       -       -  
  Income (loss) before taxes (GAAP)   $ 38,906     $ (230,729 )   $ (432,292 )   $ (319,499 )   $ (101,811 )
                                         
Income tax (benefit) expense reconciliation                                        
Income tax (benefit) expense   $ 2,740     $ (2,276 )   $ 73,218     $ (91,754 )   $ (35,651 )
Taxable equivalent adjustment     (1,690 )     (1,707 )     (2,001 )     (2,132 )     (2,261 )
Gain from acquisition, tax expense     -       -       -       4,328       -  
Severance costs, tax benefit     -       -       -       (1,101 )     -  
  Income tax (benefit) expense (GAAP)   $ 1,050     $ (3,983 )   $ 71,217     $ (90,659 )   $ (37,912 )
                                         
Diluted earnings (loss) from continuing operations per common share reconciliation                                        
Diluted operating earnings (loss) from continuing operations per common share   $ .44     $ (5.97 )   $ (16.64 )   $ (12.37 )   $ (6.82 )
Gain from acquisition     -       -       -       .58       -  
Noncash goodwill impairment charge     -       -       (11.13 )     (7.86 )     -  
Severance costs     -       -       -       (.15 )     -  
Partial recovery of special fraud-related loan loss     -       -       .62       -       -  
  Diluted earnings (loss) from continuing operations per common share (GAAP)   $ .44     $ (5.97 )   $ (27.15 )   $ (19.80 )   $ (6.82 )
                                         
Book value per common share reconciliation                                        
Tangible book value per common share   $ 6.64     $ 6.47     $ 14.80     $ 30.09     $ 51.93  
Effect of goodwill and other intangibles     .10       .15       .60       11.69       32.82  
  Book value per common share (GAAP)   $ 6.74     $ 6.62     $ 15.40     $ 41.78     $ 84.75  
                                         
Efficiency ratio from continuing operations reconciliation                                        
Operating efficiency ratio from continuing operations     64.02 %     92.27 %     98.98 %     73.97 %     70.00 %
Gain from acquisition     -       -       -       (2.77 )     -  
Noncash goodwill impairment charge     -       -       72.29       31.17       -  
Severance costs     -       -       -       .95       -  
  Efficiency ratio from continuing operations (GAAP)     64.02 %     92.27 %     171.27 %     103.32 %     70.00 %
                                         
Average equity to assets reconciliation                                        
Tangible common equity to assets     5.54 %     3.74 %     6.52 %     6.15 %     6.57 %
Effect of preferred equity     2.84       3.88       2.36       2.18       .10  
  Tangible equity to assets     8.38       7.62       8.88       8.33       6.67  
Effect of goodwill and other intangibles     .09       .13       1.89       2.79       3.55  
  Equity to assets (GAAP)     8.47 %     7.75 %     10.77 %     11.12 %     10.22 %
                                         
Tangible common equity to risk-weighted assets reconciliation                                        
Tangible common equity to risk-weighted assets     8.33 %     8.25 %     5.64 %     10.39 %     8.34 %
Effect of other comprehensive income     .51       (.03 )     (.42 )     (.87 )     (.91 )
Effect of deferred tax limitation     -       -       -       (1.27 )     -  
Effect of trust preferred     1.15       1.18       1.06       .97       .88  
Effect of preferred equity     4.24       4.29       3.53       3.19       2.90  
  Tier I capital ratio (Regulatory)     14.23 %     13.69 %     9.81 %     12.41 %     11.21 %
                                         
Net charge-offs reconciliation                                        
Operating net charge-offs   $ 69,831     $ 311,227     $ 215,657     $ 276,669     $ 151,152  
Subsequent partial recovery of fraud-related charge-off     -       -       (11,750 )     -       -  
  Net charge-offs (GAAP)   $ 69,831     $ 311,227     $ 203,907     $ 276,669     $ 151,152  
                                         
Net charge-offs to average loans reconciliation                                        
Operating net charge-offs to average loans     1.69 %     7.33 %     4.42 %     5.03 %     2.57 %
Subsequent partial recovery of fraud-related charge-off     -       -       (.25 )     -       -  
  Net charge-offs to average loans (GAAP)     1.69 %     7.33 %     4.17 %     5.03 %     2.57 %
                                           
                                           
             
             
UNITED COMMUNITY BANKS, INC.                    
Financial Highlights                    
Loan Portfolio Composition at Period-End (1)                    
                     
                     
    2012   2011
    Fourth   Third   Second   First   Fourth
(in millions)   Quarter   Quarter   Quarter   Quarter   Quarter
LOANS BY CATEGORY                              
Owner occupied commercial RE   $ 1,131   $ 1,126   $ 1,140   $ 1,137   $ 1,112
Income producing commercial RE     682     693     697     706     710
Commercial & industrial     458     460     450     440     428
Commercial construction     155     161     169     167     164
  Total commercial     2,426     2,440     2,456     2,450     2,414
Residential mortgage     829     833     834     836     835
Home equity lines of credit     385     341     294     295     300
Residential construction     382     389     409     436     448
Consumer installment     153     135     126     111     113
  Total loans   $ 4,175   $ 4,138   $ 4,119   $ 4,128   $ 4,110
                               
LOANS BY MARKET                              
North Georgia   $ 1,364   $ 1,383   $ 1,387   $ 1,408   $ 1,426
Atlanta MSA     1,288     1,257     1,252     1,239     1,220
North Carolina     579     579     576     588     597
Coastal Georgia     400     380     369     366     346
Gainesville MSA     261     256     259     262     265
East Tennessee     283     283     276     265     256
  Total loans   $ 4,175   $ 4,138   $ 4,119   $ 4,128   $ 4,110
                               
RESIDENTIAL CONSTRUCTION                              
Dirt loans                              
  Acquisition & development   $ 62   $ 71   $ 78   $ 86   $ 88
  Land loans     46     41     45     57     61
  Lot loans     193     196     203     204     207
    Total     301     308     326     347     356
                               
House loans                              
  Spec     41     44     49     57     59
  Sold     40     37     34     32     33
    Total     81     81     83     89     92
Total residential construction   $ 382   $ 389   $ 409   $ 436   $ 448
                               
(1) Excludes total loans of $33.4 million, $37.0 million, $41.5 million, $47.2 million and $54.5 million as of December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 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   Linked Quarter Change     Year over Year Change  
    Fourth   Third   Fourth  
(in millions)   Quarter   Quarter   Quarter  
LOANS BY CATEGORY                                  
Owner occupied commercial RE   $ 1,131   $ 1,126   $ 1,112   $ 5     $ 19  
Income producing commercial RE     682     693     710     (11 )     (28 )
Commercial & industrial     458     460     428     (2 )     30  
Commercial construction     155     161     164     (6 )     (9 )
  Total commercial     2,426     2,440     2,414     (14 )     12  
Residential mortgage     829     833     835     (4 )     (6 )
Home equity lines of credit     385     341     300     44       85  
Residential construction     382     389     448     (7 )     (66 )
Consumer installment     153     135     113     18       40  
  Total loans   $ 4,175   $ 4,138   $ 4,110     37       65  
                                   
LOANS BY MARKET                                  
North Georgia   $ 1,364   $ 1,383   $ 1,426     (19 )     (62 )
Atlanta MSA     1,288     1,257     1,220     31       68  
North Carolina     579     579     597     -       (18 )
Coastal Georgia     400     380     346     20       54  
Gainesville MSA     261     256     265     5       (4 )
East Tennessee     283     283     256     -       27  
  Total loans   $ 4,175   $ 4,138   $ 4,110     37       65  
                                   
RESIDENTIAL CONSTRUCTION                            
Dirt loans                                  
  Acquisition & development   $ 62   $ 71   $ 88     (9 )     (26 )
  Land loans     46     41     61     5       (15 )
  Lot loans     193     196     207     (3 )     (14 )
    Total     301     308     356     (7 )     (55 )
                                   
House loans                                  
  Spec     41     44     59     (3 )     (18 )
  Sold     40     37     33     3       7  
    Total     81     81     92     -       (11 )
Total residential construction   $ 382   $ 389   $ 448     (7 )     (66 )
                                   
(1) Excludes total loans of $33.4 million, $37.0 million, $41.5 million, $47.2 million and $54.5 million as of December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 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 Year-End (1)            
     
                     
(in millions)   2012   2011   2010   2009   2008
LOANS BY CATEGORY                              
Owner occupied commercial RE   $ 1,131   $ 1,112   $ 980   $ 963   $ 955
Income producing commercial RE     682     710     781     816     672
Commercial & industrial     458     428     441     390     410
Commercial construction     155     164     297     363     500
    Total commercial     2,426     2,414     2,499     2,532     2,537
Residential mortgage     829     835     944     1,052     1,142
Home equity lines of credit     385     300     335     375     384
Residential construction     382     448     695     1,050     1,479
Consumer / installment     153     113     131     142     163
    Total loans   $ 4,175   $ 4,110   $ 4,604   $ 5,151   $ 5,705
                               
                               
LOANS BY MARKET                              
North Georgia   $ 1,364   $ 1,426   $ 1,689   $ 1,884   $ 2,040
Atlanta MSA     1,288     1,220     1,310     1,435     1,706
North Carolina     579     597     702     772     810
Coastal Georgia     400     346     335     405     464
Gainesville MSA     261     265     312     390     420
East Tennessee     283     256     256     265     265
  Total loans   $ 4,175   $ 4,110   $ 4,604   $ 5,151   $ 5,705
                               
(1) Excludes total loans of $33.4 million, $54.5 million, $68.2 million and $85.1 million as of December 31, 2012, 2011, 2010 and 2009, 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)                  
       
                   
    Fourth Quarter 2012  
    Non-performing     Foreclosed     Total  
(in thousands)   Loans     Properties     NPAs  
NPAs BY CATEGORY                        
Owner occupied CRE