United Community Banks, Inc. Announces Second Quarter Earnings

Diluted earnings per share of 35 cents, up 25 percent from second quarter 2015
Excluding merger-related charges, diluted operating EPS of 36 cents, up 13 percent

Return on assets of 1.04 percent (1.07 percent, excluding merger-related charges)
Loan growth of $181 million from first quarter, or 12 percent annualized
Fee revenue of $23.5 million increased $4.9 million, or 26 percent from the first quarter
Efficiency ratio of 59.0 percent (57.8 percent, excluding merger-related charges)
Board approved an increase in the third quarter dividend to eight cents per share

BLAIRSVILLE, GA, July 27, 2016 (GLOBE NEWSWIRE) — United Community Banks, Inc. (NASDAQ:UCBI) (“United”) today announced continuing momentum with second quarter 2016 results reflecting strong fee revenue and loan growth, as well as solid credit quality and capital management. Net income was $25.3 million, or 35 cents per diluted share, compared with $17.8 million, or 28 cents per diluted share, for the second quarter of 2015. For the first six months of 2016, net income was $47.6 million, or 66 cents per diluted share. This compares with $35.5 million, or 57 cents per diluted share, for the first six months of 2015.

On an operating basis, which excludes pre-tax merger-related charges of $1.18 million in the second quarter of 2016 and $3.17 million in the second quarter of 2015, operating net income was $26.0 million for the second quarter of 2016 compared with $20.0 million for the second quarter of 2015. On a per diluted share basis, operating net income was 36 cents for the second quarter of 2016 compared to 32 cents for the second quarter of 2015. For the first six months of 2016, operating net income was $49.9 million, or 69 cents per diluted share, compared with $37.6 million or 61 cents per diluted share for the first six months of 2015.

At June 30, 2016, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.4 percent; Total Risk-Based of 12.4 percent; Common Equity Tier 1 Risk-Based of 11.4 percent; and, Tier 1 Leverage of 8.5 percent.

“Our second quarter results are perhaps the best demonstration to date of the successes of our investments in new businesses and markets as well as our acquisition strategy – all with a focus on increasing returns to our shareholders,” said Jimmy Tallent, chairman and chief executive officer. “Our SBA lending and mortgage banking businesses each produced record quarterly results which led to a 36 percent increase in fee revenue from a year ago. We also achieved 12 percent annualized linked-quarter loan growth in the second quarter while maintaining top-quartile credit quality and operating expense discipline. This strong performance is reflected in our 1.07 percent operating return on assets which puts us well on our way to achieving our goal of 1.10 percent for the fourth quarter of 2016.” Including merger-related charges of $1.18 million, the second quarter return on assets was 1.04 percent.

“Second quarter loan production was a record $662 million,” Tallent added. “Linked-quarter growth was $181 million, or 12 percent annualized, above our 2016 target of a mid-to-upper-single-digit increase. Our community banks originated $433 million in loans while our specialized lending area, which includes commercial real estate, middle market, SBA, builder finance and asset-based lending, had $188 million in loan production.”

Second quarter net interest revenue totaled $74.9 million, level with the first quarter and up $13.9 million from the second quarter of 2015. The increase from the second quarter of 2015 primarily reflects net interest revenue from the Palmetto acquisition in the third quarter of 2015.

The taxable-equivalent net interest margin of 3.35 percent reflected a six basis point decrease from the first quarter. The decrease resulted mostly from lower discount accretion on purchased loans and continued loan pricing competition. This offset most of the positive impact on net interest revenue in the second quarter attributed to strong loan growth.

The second quarter provision for credit losses was a recovery of $300,000 compared with a provision recovery of $200,000 during the first quarter and a provision charge of $900,000 during the second quarter of 2015. The second quarter negative provision reflects continued strong credit quality and a low overall level of net charge-offs. “Our credit quality indicators are very favorable,” Tallent said. “Our outlook is for this to continue for the balance of 2016, which will result in continued low provision levels while slightly decreasing our required allowance for loan losses.”

Second quarter net charge-offs totaled $1.7 million compared with $2.1 million in the first quarter, and $978,000 in the second quarter of 2015. Strong recoveries of previously charged-off loans continue to contribute to the low level of net charge-offs. Nonperforming assets were .28 percent of total assets at June 30, 2016, compared with .28 percent at March 31, 2016 and .26 percent at June 30, 2015.

Second quarter fee revenue totaled $23.5 million, an increase of $4.89 million from the first quarter and up $6.23 million from a year ago. The increases from both prior periods were mostly in mortgage fees and gains from sales of SBA government guaranteed loans (“SBA loans”). Mortgage fees were up $1.16 million from first quarter and $741,000 from a year ago. The increase reflects United’s investment in growing its mortgage business by adding mortgage lenders in areas of our footprint where we see opportunities to gain market share.

Gains from sales of SBA loans were up $1.56 million from first quarter and $1.31 million from a year ago. Higher production drove the increase as United continues to focus on growing this business. During the second quarter of 2016, United sold $33 million in SBA loans. This compares with sales of $13 million during the first quarter, and sales of $15 million during the second quarter of 2015.

Operating expenses were $58.1 million for the second quarter compared with $57.9 million for the first quarter and $48.4 million for the second quarter of 2015. Included in operating expenses were merger-related charges of $1.18 million, $2.65 million and $3.17 million, for each period respectively. Excluding the merger-related charges, second quarter operating expenses were $56.9 million compared with $55.2 million for the first quarter and $45.2 million a year ago. The increase from a year ago reflects additional operating expenses following the acquisition of The Palmetto Bank and First National Bank.

The $1.65 million increase in operating expenses from the first quarter, excluding merger-related charges, was primarily in salaries and employee benefits expense, up $510,000; advertising and other marketing related expenses, up $459,000; and professional fees, up $489,000. The increase in salaries and benefits expense reflects higher incentives following the record performance in the SBA and mortgage lending businesses as well as incentives for the overall strong performance for the second quarter. Additionally, annual merit increases and an increase in 401K matching contributions went into effect on April 1, further contributing to the increase. These increases, as well as the additional investment in 29 new revenue producers in the first and second quarters, more than offset the cost savings from the elimination of staff positions late in the first quarter following the Palmetto systems conversion.

The increase in advertising and marketing related expenses primarily reflects the cost of United’s annual customer appreciation day and new marketing campaigns. Professional fees were up from the first quarter reflecting ongoing projects for process and compliance improvements and increased scalability as growth continues organically and through acquisitions.

On July 1, United completed its previously announced merger with Tidelands Bancshares, Inc., the holding company for Tidelands Bank which serves coastal South Carolina with banking offices in Charleston, Hilton Head and Myrtle Beach. “I’m very excited to have Tidelands join us as a key part of our coastal South Carolina banking team,” Tallent said. “Tidelands Bank merged into United Community Bank on July 1 and is operating under the Tidelands brand until systems conversions are completed in mid-November. At that time, the Tidelands branches will operate under the United Community Bank brand.

“Our second quarter results have strengthened our optimism and led the Board of Directors to increase our dividend to eight cents per share beginning in the third quarter,” stated Tallent. “That is 14 percent higher than our current dividend and a 33 percent increase from a year ago.

“We expect our strong momentum to continue throughout the remainder of 2016 as we maintain a high-quality balance sheet, generate growth and increase profitability. All of this is a testament to our talented bankers who are carrying out our plans while providing customer service that is second to none,” Tallent concluded.

Conference Call

United will hold a conference call today, Wednesday, July 27, 2016, at 11 a.m. ET to discuss the contents of this earnings release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 42056034. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ:UCBI) is a registered bank holding company based in Blairsville, Georgia, with $10.4 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast region’s largest full-service banks, operating 140 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in providing personalized community banking services to individuals, small businesses and corporations. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. United Community Bank is consistently recognized for its outstanding customer service by respected national research firms. In 2014 and 2015, United Community Bank was ranked first in customer satisfaction in the southeast by J.D. Power and again in 2016 was ranked among the top 100 on the Forbes list of America’s Best Banks. Additional information about the company and the bank’s full range of products and services can be found at www.ucbi.com.

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

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 2015 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


		2016								2015										Second
																				Quarter
(in thousands, except per share data)	Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter			2016-2015 Change
INCOME SUMMARY
Interest revenue	$	81,082			$	80,721			$	79,362			$	70,828			$	65,808
Interest expense		6,164				5,769				5,598				5,402				4,817
Net interest revenue		74,918				74,952				73,764				65,426				60,991			23		%
Provision for credit losses		(300	)			(200	)			300				700				900
Fee revenue		23,497				18,606				21,284				18,297				17,266			36
Total revenue		98,715				93,758				94,748				83,023				77,357			28
Expenses		58,060				57,885				65,488				54,269				48,420			20
Income before income tax expense		40,655				35,873				29,260				28,754				28,937			40
Income tax expense		15,389				13,578				11,052				10,867				11,124			38
Net income		25,266				22,295				18,208				17,887				17,813			42
Preferred dividends		–				21				25				25				17
Net income available to common shareholders		25,266				22,274				18,183				17,862				17,796			42
Merger-related and other charges		1,176				2,653				9,078				5,744				3,173
Income tax benefit of merger-related and other charges		(445	)			(1,004	)			(3,486	)			(1,905	)			(997	)
Net income available to common shareholders – operating ⁽¹⁾	$	25,997			$	23,923			$	23,775			$	21,701			$	19,972			30

PERFORMANCE MEASURES
Per common share:
Diluted net income – GAAP	$	.35			$	.31			$	.25			$	.27			$	.28			25
Diluted net income – operating ⁽¹⁾		.36				.33				.33				.33				.32			13
Cash dividends declared		.07				.07				.06				.06				.05
Book value		14.80				14.35				14.02				13.95				12.95			14
Tangible book value⁽³⁾		12.84				12.40				12.06				12.08				12.66			1

Key performance ratios:
Return on common equity – GAAP⁽²⁾⁽⁴⁾		9.54		%		8.57		%		7.02		%		7.85		%		8.83		%
Return on common equity – operating^(1)(2)(4)		9.81				9.20				9.18				9.54				9.90
Return on tangible common equity – operating^(1)(2)(³⁾⁽⁴⁾		11.56				10.91				10.87				10.29				10.20
Return on assets – GAAP⁽⁴⁾		1.04				.93				.76				.82				.89
Return on assets – operating⁽¹⁾⁽⁴⁾		1.07				1.00				.99				1.00				1.00
Dividend payout ratio – GAAP		20.00				22.58				24.00				22.22				17.86
Dividend payout ratio – operating ⁽¹⁾		19.44				21.21				18.18				18.18				15.63
Net interest margin (fully taxable equivalent)⁽⁴⁾		3.35				3.41				3.34				3.26				3.30
Efficiency ratio – GAAP		59.02				61.94				68.97				64.65				61.63
Efficiency ratio – operating ⁽¹⁾		57.82				59.10				59.41				57.81				57.59
Average equity to average assets		10.72				10.72				10.68				10.39				10.05
Average tangible equity to average assets⁽³⁾		9.43				9.41				9.40				9.88				9.91
Average tangible common equity to average assets⁽³⁾		9.43				9.32				9.29				9.77				9.83
Tangible common equity to risk-weighted assets⁽³⁾⁽⁵⁾		12.87				12.77				12.82				13.08				13.24

ASSET QUALITY
Nonperforming loans	$	21,348			$	22,419			$	22,653			$	20,064			$	18,805			14
Foreclosed properties		6,176				5,163				4,883				7,669				2,356			162
Total nonperforming assets (NPAs)		27,524				27,582				27,536				27,733				21,161			30
Allowance for loan losses		64,253				66,310				68,448				69,062				70,129			(8	)
Net charge-offs		1,730				2,138				1,302				1,417				978			77
Allowance for loan losses to loans		1.02		%		1.09		%		1.14		%		1.15		%		1.36		%
Net charge-offs to average loans⁽⁴⁾		.11				.14				.09				.10				.08
NPAs to loans and foreclosed properties		.44				.45				.46				.46				.41
NPAs to total assets		.28				.28				.29				.29				.26

AVERAGE BALANCES
($ in millions)
Loans	$	6,151			$	6,004			$	5,975			$	5,457			$	5,017			23
Investment securities		2,747				2,718				2,607				2,396				2,261			21
Earning assets		9,037				8,876				8,792				8,009				7,444			21
Total assets		9,809				9,634				9,558				8,634				8,017			22
Deposits		7,897				7,947				8,028				7,135				6,669			18
Shareholders’ equity		1,051				1,033				1,021				897				806			30
Common shares – basic (thousands)		72,202				72,162				72,135				66,294				62,549			15
Common shares – diluted (thousands)		72,207				72,166				72,140				66,300				62,553			15

AT PERIOD END
($ in millions)
Loans	$	6,287			$	6,106			$	5,995			$	6,024			$	5,174			22
Investment securities		2,677				2,757				2,656				2,457				2,322			15
Total assets		9,928				9,781				9,616				9,404				8,237			21
Deposits		7,857				7,960				7,873				7,897				6,800			16
Shareholders’ equity		1,060				1,034				1,018				1,013				827			28
Common shares outstanding (thousands)		71,122				71,544				71,484				71,472				62,700			13

⁽¹⁾ Excludes merger-related charges and fourth quarter impairment losses on surplus bank property. ⁽²⁾ Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). ⁽³⁾ Excludes effect of acquisition related intangibles and associated amortization. ⁽⁴⁾ Annualized. ⁽⁵⁾ Second quarter 2016 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

	For the Six
	Months Ended								YTD
	June 30,								2016-2015
(in thousands, except per share data)		2016				2015			Change
INCOME SUMMARY
Interest revenue	$	161,803			$	128,342
Interest expense		11,933				10,109
Net interest revenue		149,870				118,233				27		%
Provision for credit losses		(500	)			2,700
Fee revenue		42,103				32,948				28
Total revenue		192,473				148,481				30
Expenses		115,945				91,481				27
Income before income tax expense		76,528				57,000				34
Income tax expense		28,967				21,517				35
Net income		47,561				35,483				34
Preferred dividends		21				17
Net income available to common shareholders		47,540				35,466				34
Merger-related and other charges		3,829				3,173
Income tax benefit of merger-related and other charges		(1,449	)			(997	)
Net income available to common shareholders – operating ⁽¹⁾	$	49,920			$	37,642				33

PERFORMANCE MEASURES
Per common share:
Diluted net income – GAAP	$	.66			$	.57				16
Diluted net income – operating ⁽¹⁾		.69				.61				13
Cash dividends declared		.14				.10
Book value		14.80				12.95				14
Tangible book value⁽³⁾		12.84				12.66				1

Key performance ratios:
Return on common equity – GAAP⁽²⁾⁽⁴⁾		9.06		%		9.08		%
Return on common equity – operating^(1)(2)(4)		9.51				9.63
Return on tangible common equity – operating^(1)(2)(3)(4)		11.24				9.84
Return on assets – GAAP⁽⁴⁾		.98				.92
Return on assets – operating⁽¹⁾⁽⁴⁾		1.03				.97
Dividend payout ratio – GAAP		21.21				17.54
Dividend payout ratio – operating ⁽¹⁾		20.29				16.39
Net interest margin (fully taxable equivalent)⁽⁴⁾		3.38				3.30
Efficiency ratio – GAAP		60.44				60.44
Efficiency ratio – operating ⁽¹⁾		58.45				58.34
Average equity to average assets		10.72				9.96
Average tangible equity to average assets⁽³⁾		9.42				9.87
Average tangible common equity to average assets⁽³⁾		9.38				9.83
Tangible common equity to risk-weighted assets⁽³⁾⁽⁵⁾		12.87				13.24

ASSET QUALITY
Nonperforming loans	$	21,348			$	18,805				14
Foreclosed properties		6,176				2,356				162
Total nonperforming assets (NPAs)		27,524				21,161				30
Allowance for loan losses		64,253				70,129				(8	)
Net charge-offs		3,868				3,540				9
Allowance for loan losses to loans		1.02		%		1.36		%
Net charge-offs to average loans⁽⁴⁾		.13				.15
NPAs to loans and foreclosed properties		.44				.41
NPAs to total assets		.28				.26

AVERAGE BALANCES ($ in millions)
Loans	$	6,077			$	4,872				25
Investment securities		2,733				2,232				22
Earning assets		8,956				7,258				23
Total assets		9,721				7,818				24
Deposits		7,922				6,520				22
Shareholders’ equity		1,042				778				34
Common shares – basic (thousands)		72,187				61,730				17
Common shares – diluted (thousands)		72,191				61,734				17

AT PERIOD END ($ in millions)
Loans	$	6,287			$	5,174				22
Investment securities		2,677				2,322				15
Total assets		9,928				8,237				21
Deposits		7,857				6,800				16
Shareholders’ equity		1,060				827				28
Common shares outstanding (thousands)		71,122				62,700				13

⁽¹⁾ Excludes merger-related charges and fourth quarter impairment losses on surplus bank property. ⁽²⁾ Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). ⁽³⁾ Excludes effect of acquisition related intangibles and associated amortization. ⁽⁴⁾ Annualized. ⁽⁵⁾ Second quarter 2016 ratio is preliminary.

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


		2016								2015
	Second				First				Fourth				Third				Second
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter

Expense reconciliation
Expenses (GAAP)	$	58,060			$	57,885			$	65,488			$	54,269			$	48,420
Merger-related and other charges		(1,176	)			(2,653	)			(9,078	)			(5,744	)			(3,173	)
Expenses – operating	$	56,884			$	55,232			$	56,410			$	48,525			$	45,247

Net income reconciliation
Net income (GAAP)	$	25,266			$	22,295			$	18,208			$	17,887			$	17,813
Merger-related and other charges		1,176				2,653				9,078				5,744				3,173
Income tax benefit of merger-related and other charges		(445	)			(1,004	)			(3,486	)			(1,905	)			(997	)
Net income – operating	$	25,997			$	23,944			$	23,800			$	21,726			$	19,989

Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)	$	25,266			$	22,274			$	18,183			$	17,862			$	17,796
Merger-related and other charges		1,176				2,653				9,078				5,744				3,173
Income tax benefit of merger-related and other charges		(445	)			(1,004	)			(3,486	)			(1,905	)			(997	)
Net income available to common shareholders – operating	$	25,997			$	23,923			$	23,775			$	21,701			$	19,972

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	.35			$	.31			$	.25			$	.27			$	.28
Merger-related and other charges		.01				.02				.08				.06				.04
Diluted income per common share – operating	$	.36			$	.33			$	.33			$	.33			$	.32

Book value per common share reconciliation
Book value per common share (GAAP)	$	14.80			$	14.35			$	14.02			$	13.95			$	12.95
Effect of goodwill and other intangibles		(1.96	)			(1.95	)			(1.96	)			(1.87	)			(.29	)
Tangible book value per common share	$	12.84			$	12.40			$	12.06			$	12.08			$	12.66

Return on tangible common equity reconciliation
Return on common equity (GAAP)		9.54		%		8.57		%		7.02		%		7.85		%		8.83		%
Merger-related and other charges		.27				.63				2.16				1.69				1.07
Return on common equity – operating		9.81				9.20				9.18				9.54				9.90
Effect of goodwill and other intangibles		1.75				1.71				1.69				.75				.30
Return on tangible common equity – operating		11.56		%		10.91		%		10.87		%		10.29		%		10.20		%

Return on assets reconciliation
Return on assets (GAAP)		1.04		%		.93		%		.76		%		.82		%		.89		%
Merger-related and other charges		.03				.07				.23				.18				.11
Return on assets – operating		1.07		%		1.00		%		.99		%		1.00		%		1.00		%

Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		20.00		%		22.58		%		24.00		%		22.22		%		17.86		%
Merger-related and other charges		(.56	)			(1.37	)			(5.82	)			(4.04	)			(2.23	)
Dividend payout ratio – operating		19.44		%		21.21		%		18.18		%		18.18		%		15.63		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		59.02		%		61.94		%		68.97		%		64.65		%		61.63		%
Merger-related and other charges		(1.20	)			(2.84	)			(9.56	)			(6.84	)			(4.04	)
Efficiency ratio – operating		57.82		%		59.10		%		59.41		%		57.81		%		57.59		%

Average equity to assets reconciliation
Equity to assets (GAAP)		10.72		%		10.72		%		10.68		%		10.39		%		10.05		%
Effect of goodwill and other intangibles		(1.29	)			(1.31	)			(1.28	)			(.51	)			(.14	)
Tangible equity to assets		9.43				9.41				9.40				9.88				9.91
Effect of preferred equity		–				(.09	)			(.11	)			(.11	)			(.08	)
Tangible common equity to assets		9.43		%		9.32		%		9.29		%		9.77		%		9.83		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tier 1 capital ratio (Regulatory)		11.44		%		11.32		%		11.45		%		11.40		%		11.86		%
Effect of other comprehensive income		(.06	)			(.25	)			(.38	)			(.23	)			(.28	)
Effect of deferred tax limitation		1.63				1.85				2.05				2.24				2.49
Effect of trust preferred		(.08	)			(.08	)			(.08	)			(.08	)			(.63	)
Effect of preferred equity		–				–				(.15	)			(.15	)			(.17	)
Basel III intangibles transition adjustment		(.06	)			(.07	)			(.10	)			(.13	)			(.06	)
Basel III disallowed investments		–				–				.03				.03				.03
Tangible common equity to risk-weighted assets		12.87		%		12.77		%		12.82		%		13.08		%		13.24		%

⁽¹⁾ Second quarter 2016 ratios are preliminary.

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


	For the Six Months Ended June 30,
	For the Six Months Ended June 30,
(in thousands, except per share data)		2016				2015

Expense reconciliation
Expenses (GAAP)	$	115,945			$	91,481
Merger-related and other charges		(3,829	)			(3,173	)
Expenses – operating	$	112,116			$	88,308

Net income reconciliation
Net income (GAAP)	$	47,561			$	35,483
Merger-related and other charges		3,829				3,173
Income tax benefit of merger-related and other charges		(1,449	)			(997	)
Net income – operating	$	49,941			$	37,659

Net income available to common shareholders reconciliation
Net income available to common shareholders (GAAP)	$	47,540			$	35,466
Merger-related and other charges		3,829				3,173
Income tax benefit of merger-related and other charges		(1,449	)			(997	)
Net income available to common shareholders – operating	$	49,920			$	37,642

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	.66			$	.57
Merger-related and other charges		.03				.04
Diluted income per common share – operating	$	.69			$	.61

Book value per common share reconciliation
Book value per common share (GAAP)	$	14.80			$	12.95
Effect of goodwill and other intangibles		(1.96	)			(.29	)
Tangible book value per common share	$	12.84			$	12.66

Return on tangible common equity reconciliation
Return on common equity (GAAP)		9.06		%		9.08		%
Merger-related and other charges		.45				.55
Return on common equity – operating		9.51				9.63
Effect of goodwill and other intangibles		1.73				.21
Return on tangible common equity – operating		11.24		%		9.84		%

Return on assets reconciliation
Return on assets (GAAP)		.98		%		.92		%
Merger-related and other charges		.05				.05
Return on assets – operating		1.03		%		.97		%

Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		21.21		%		17.54		%
Merger-related and other charges		(.92	)			(1.15	)
Dividend payout ratio – operating		20.29		%		16.39		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		60.44		%		60.44		%
Merger-related and other charges		(1.99	)			(2.10	)
Efficiency ratio – operating		58.45		%		58.34		%

Average equity to assets reconciliation
Equity to assets (GAAP)		10.72		%		9.96		%
Effect of goodwill and other intangibles		(1.30	)			(.09	)
Tangible equity to assets		9.42				9.87
Effect of preferred equity		(.04	)			(.04	)
Tangible common equity to assets		9.38		%		9.83		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tier 1 capital ratio (Regulatory)		11.44		%		11.86		%
Effect of other comprehensive income		(.06	)			(.28	)
Effect of deferred tax limitation		1.63				2.49
Effect of trust preferred		(.08	)			(.63	)
Effect of preferred equity		–				(.17	)
Basel III intangibles transition adjustment		(.06	)			(.06	)
Basel III disallowed investments		–				.03
Tangible common equity to risk-weighted assets		12.87		%		13.24		%

⁽¹⁾ Second quarter 2016 ratios are preliminary.

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


		2016				2015
	Second		First		Fourth		Third		Second
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,450	$	1,434	$	1,494	$	1,479	$	1,266
Income producing commercial RE		919		880		824		818		689
Commercial & industrial		926		855		785		890		793
Commercial construction		384		354		342		319		238
Total commercial		3,679		3,523		3,445		3,506		2,986
Residential mortgage		1,035		1,032		1,029		1,062		935
Home equity lines of credit		623		604		598		585		491
Residential construction		351		348		352		334		299
Consumer installment		599		599		571		537		463
Total loans	$	6,287	$	6,106	$	5,995	$	6,024	$	5,174

LOANS BY MARKET
North Georgia	$	1,097	$	1,097	$	1,125	$	1,130	$	1,155
Atlanta MSA		1,314		1,257		1,259		1,266		1,275
North Carolina		543		543		549		546		533
Coastal Georgia		541		543		537		506		499
Gainesville MSA		240		248		254		252		257
East Tennessee		509		495		504		511		525
South Carolina		862		821		819		783		35
Specialized Lending		706		628		492		609		538
Indirect auto		475		474		456		421		357
Total loans	$	6,287	$	6,106	$	5,995	$	6,024	$	5,174

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


		2016				2015	Linked Quarter Change			Year over Year Change
	Second		First		Second
(in millions)	Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,450	$	1,434	$	1,266	$	16		$	184
Income producing commercial RE		919		880		689		39			230
Commercial & industrial		926		855		793		71			133
Commercial construction		384		354		238		30			146
Total commercial		3,679		3,523		2,986		156			693
Residential mortgage		1,035		1,032		935		3			100
Home equity lines of credit		623		604		491		19			132
Residential construction		351		348		299		3			52
Consumer installment		599		599		463		–			136
Total loans	$	6,287	$	6,106	$	5,174		181			1,113

LOANS BY MARKET
North Georgia	$	1,097	$	1,097	$	1,155	$	–		$	(58	)
Atlanta MSA		1,314		1,257		1,275		57			39
North Carolina		543		543		533		–			10
Coastal Georgia		541		543		499		(2	)		42
Gainesville MSA		240		248		257		(8	)		(17	)
East Tennessee		509		495		525		14			(16	)
South Carolina		862		821		35		41			827
Specialized Lending		706		628		538		78			168
Indirect auto		475		474		357		1			118
Total loans	$	6,287	$	6,106	$	5,174		181			1,113

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Second Quarter 2016
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	6,681		$	3,096		$	9,777
Income producing CRE		1,017			1,554			2,571
Commercial & industrial		949			–			949
Commercial construction		199			–			199
Total commercial		8,846			4,650			13,496
Residential mortgage		8,667			1,160			9,827
Home equity lines of credit		1,308			83			1,391
Residential construction		1,578			283			1,861
Consumer installment		949			–			949
Total NPAs	$	21,348		$	6,176		$	27,524
Balance as a % of
Unpaid Principal		69.6	%		40.2	%		59.8	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	6,219		$	1,086		$	7,305
Atlanta MSA		1,140			2,041			3,181
North Carolina		4,762			224			4,986
Coastal Georgia		1,186			168			1,354
Gainesville MSA		234			–			234
East Tennessee		3,616			247			3,863
South Carolina		1,271			2,410			3,681
Specialized Lending		2,108			–			2,108
Indirect auto		812			–			812
Total NPAs	$	21,348		$	6,176		$	27,524


NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	22,419		$	5,163		$	27,582
Acquisitions		–			(497	)		(497	)
Loans placed on non-accrual		6,786			–			6,786
Payments received		(4,201	)		–			(4,201	)
Loan charge-offs		(1,803	)		–			(1,803	)
Foreclosures		(1,853	)		2,722			869
Capitalized costs		–			98			98
Property sales		–			(1,424	)		(1,424	)
Write downs		–			(73	)		(73	)
Net gains (losses) on sales		–			187			187
Ending Balance	$	21,348		$	6,176		$	27,524

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	First Quarter 2016
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	6,775		$	2,864		$	9,639
Income producing CRE		2,959			–			2,959
Commercial & industrial		978			–			978
Commercial construction		266			152			418
Total commercial		10,978			3,016			13,994
Residential mortgage		8,037			1,587			9,624
Home equity lines of credit		1,198			125			1,323
Residential construction		1,122			435			1,557
Consumer installment		1,084			–			1,084
Total NPAs	$	22,419		$	5,163		$	27,582
Balance as a % of
Unpaid Principal		69.3	%		38.2	%		60.1	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	5,353		$	1,233		$	6,586
Atlanta MSA		2,796			902			3,698
North Carolina		4,860			559			5,419
Coastal Georgia		1,696			121			1,817
Gainesville MSA		250			–			250
East Tennessee		3,470			351			3,821
South Carolina		935			1,997			2,932
Specialized Lending		2,186			–			2,186
Indirect auto		873			–			873
Total NPAs	$	22,419		$	5,163		$	27,582


NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	22,653		$	4,883		$	27,536
Acquisitions		–			–			–
Loans placed on non-accrual		4,771			–			4,771
Payments received		(1,812	)		–			(1,812	)
Loan charge-offs		(1,679	)		–			(1,679	)
Foreclosures		(1,514	)		1,590			76
Capitalized costs		–			–			–
Property sales		–			(1,524	)		(1,524	)
Write downs		–			(7	)		(7	)
Net gains (losses) on sales		–			221			221
Ending Balance	$	22,419		$	5,163		$	27,582

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Fourth Quarter 2015
	Nonperforming			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	7,036		$	2,652		$	9,688
Income producing CRE		2,595			–			2,595
Commercial & industrial		892			–			892
Commercial construction		328			437			765
Total commercial		10,851			3,089			13,940
Residential mortgage		8,555			1,242			9,797
Home equity lines of credit		851			80			931
Residential construction		1,398			472			1,870
Consumer installment		998			–			998
Total NPAs	$	22,653		$	4,883		$	27,536
Balance as a % of
Unpaid Principal		71.4	%		34.2	%		59.8	%

NONPERFORMING ASSETS BY MARKET
North Georgia	$	5,167		$	1,612		$	6,779
Atlanta MSA		3,023			625			3,648
North Carolina		5,289			183			5,472
Coastal Georgia		2,079			–			2,079
Gainesville MSA		307			–			307
East Tennessee		3,448			157			3,605
South Carolina		323			2,306			2,629
Specialized Lending		2,231			–			2,231
Indirect auto		786			–			786
Total NPAs	$	22,653		$	4,883		$	27,536


NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	20,064		$	7,669		$	27,733
Acquisitions		–			(1,585	)		(1,585	)
Loans placed on non-accrual		10,768			–			10,768
Payments received		(4,893	)		–			(4,893	)
Loan charge-offs		(1,813	)		–			(1,813	)
Foreclosures		(1,473	)		1,497			24
Capitalized costs		–			–			–
Property sales		–			(2,968	)		(2,968	)
Write downs		–			11			11
Net gains (losses) on sales		–			259			259
Ending Balance	$	22,653		$	4,883		$	27,536

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	Second Quarter 2016						First Quarter 2016						Fourth Quarter 2015
				Net Charge-						Net Charge-						Net Charge-
				Offs to						Offs to						Offs to
	Net			Average			Net			Average			Net			Average
(in thousands)	Charge-Offs			Loans⁽¹⁾			Charge-Offs			Loans⁽¹⁾			Charge-Offs			Loans⁽¹⁾
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE	$	564		.16		%	$	304		.08		%	$	861		.23		%
Income producing CRE		(23	)	(.01	)			211		.10				(35	)	(.02	)
Commercial & industrial		(392	)	(.18	)			283		.14				(719	)	(.34	)
Commercial construction		22		.02				286		.33				253		.31
Total commercial		171		.02				1,084		.13				360		.04
Residential mortgage		829		.32				50		.02				(120	)	(.05	)
Home equity lines of credit		253		.17				632		.43				194		.13
Residential construction		(8	)	(.01	)			(103	)	(.12	)			415		.48
Consumer installment		485		.33				475		.33				453		.33
Total	$	1,730		.11			$	2,138		.14			$	1,302		.09


NET CHARGE-OFFS BY MARKET
North Georgia	$	428		.16		%	$	913		.33		%	$	1,011		.36		%
Atlanta MSA		1		–				(25	)	(.01	)			496		.16
North Carolina		575		.43				382		.28				426		.31
Coastal Georgia		177		.13				196		.15				47		.04
Gainesville MSA		(87	)	(.14	)			98		.16				(340	)	(.54	)
East Tennessee		346		.28				378		.31				(326	)	(.26	)
South Carolina		49		.02				(16	)	(.01	)			(474	)	(.24	)
Specialized Lending		(18	)	(.01	)			4		–				253		.18
Indirect auto		259		.22				208		.19				209		.19
Total	$	1,730		.11			$	2,138		.14			$	1,302		.09

⁽¹⁾ Annualized.

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in thousands, except per share data)		2016			2015		2016			2015

Interest revenue:
Loans, including fees	$	63,472		$	52,976	$	127,448		$	102,640
Investment securities, including tax exempt of $149, $181, $315 and $339		16,833			12,037		32,621			24,095
Deposits in banks and short-term investments		777			795		1,734			1,607
Total interest revenue		81,082			65,808		161,803			128,342

Interest expense:
Deposits:
NOW		444			348		929			742
Money market		1,206			806		2,314			1,479
Savings		30			26		59			46
Time		743			895		1,385			2,004
Total deposit interest expense		2,423			2,075		4,687			4,271
Short-term borrowings		93			82		180			180
Federal Home Loan Bank advances		983			454		1,716			846
Long-term debt		2,665			2,206		5,350			4,812
Total interest expense		6,164			4,817		11,933			10,109
Net interest revenue		74,918			60,991		149,870			118,233
Provision for credit losses		(300	)		900		(500	)		2,700
Net interest revenue after provision for credit losses		75,218			60,091		150,370			115,533

Fee revenue:
Service charges and fees		10,515			8,375		20,641			15,990
Mortgage loan and other related fees		4,448			3,707		7,737			6,462
Brokerage fees		1,117			1,232		2,170			2,783
Gains from sales of government guaranteed loans		2,801			1,494		4,038			2,635
Securities gains, net		282			13		661			1,552
Loss from prepayment of debt		–			–		–			(1,038	)
Other		4,334			2,445		6,856			4,564
Total fee revenue		23,497			17,266		42,103			32,948
Total revenue		98,715			77,357		192,473			148,481

Operating expenses:
Salaries and employee benefits		33,572			27,961		66,634			54,407
Communications and equipment		4,393			3,304		8,683			6,575
Occupancy		4,538			3,415		9,261			6,693
Advertising and public relations		1,323			1,127		2,187			1,877
Postage, printing and supplies		1,298			993		2,578			1,931
Professional fees		3,189			2,257		5,889			4,176
FDIC assessments and other regulatory charges		1,517			1,298		3,041			2,507
Amortization of intangibles		987			447		1,997			689
Merger-related and other charges		1,176			3,173		3,829			3,173
Other		6,067			4,445		11,846			9,453
Total operating expenses		58,060			48,420		115,945			91,481
Net income before income taxes		40,655			28,937		76,528			57,000
Income tax expense		15,389			11,124		28,967			21,517
Net income		25,266			17,813		47,561			35,483
Preferred stock dividends and discount accretion		–			17		21			17
Net income available to common shareholders	$	25,266		$	17,796	$	47,540		$	35,466

Earnings per common share:
Basic	$	.35		$	.28	$	.66		$	.57
Diluted		.35			.28		.66			.57
Weighted average common shares outstanding:
Basic		72,202			62,549		72,187			61,730
Diluted		72,207			62,553		72,191			61,734

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

	June 30,			December 31,
(in thousands, except share and per share data)		2016			2015

ASSETS
Cash and due from banks	$	107,606		$	86,912
Interest-bearing deposits in banks		100,036			153,451
Cash and cash equivalents		207,642			240,363
Securities available for sale		2,335,511			2,291,511
Securities held to maturity (fair value $356,740 and $371,658)		341,951			364,696
Mortgage loans held for sale		30,152			24,231
Loans, net of unearned income		6,286,527			5,995,441
Less allowance for loan losses		(64,253	)		(68,448	)
Loans, net		6,222,274			5,926,993
Premises and equipment, net		181,349			178,165
Bank owned life insurance		105,784			105,493
Accrued interest receivable		25,879			25,786
Net deferred tax asset		157,689			197,613
Derivative financial instruments		26,880			20,082
Goodwill and other intangible assets		146,124			147,420
Other assets		147,238			94,075
Total assets	$	9,928,473		$	9,616,428
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	2,386,857		$	2,204,755
NOW		1,730,313			1,975,884
Money market		1,641,980			1,599,637
Savings		502,134			471,129
Time		1,183,943			1,282,803
Brokered		412,267			338,985
Total deposits		7,857,494			7,873,193
Repurchase agreements		–			16,640
Federal Home Loan Bank advances		735,125			430,125
Long-term debt		164,066			163,836
Derivative financial instruments		34,930			28,825
Accrued expenses and other liabilities		77,121			85,524
Total liabilities		8,868,736			8,598,143
Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series H; $1,000 stated value; 0 and 9,992 shares issued and outstanding		–			9,992
Common stock, $1 par value; 150,000,000 shares authorized;
69,863,008 and 66,198,477 shares issued and outstanding		69,863			66,198
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
1,258,792 and 5,285,516 shares issued and outstanding		1,259			5,286
Common stock issuable; 486,753 and 458,953 shares		6,651			6,779
Capital surplus		1,279,383			1,286,361
Accumulated deficit		(293,424	)		(330,879	)
Accumulated other comprehensive loss		(3,995	)		(25,452	)
Total shareholders’ equity		1,059,737			1,018,285
Total liabilities and shareholders’ equity	$	9,928,473		$	9,616,428

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,

	2016							2015
(dollars in thousands, fully taxable equivalent (FTE))	Average Balance			Interest		Avg. Rate		Average Balance			Interest			Avg. Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	6,150,654		$	63,485	4.15	%	$	5,017,306		$	53,081		4.24	%
Taxable securities ⁽³⁾		2,720,061			16,684	2.45			2,235,561			11,856		2.12
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		27,434			244	3.56			25,685			296		4.61
Federal funds sold and other interest-earning assets		138,622			912	2.63			165,643			901		2.18

Total interest-earning assets (FTE)		9,036,771			81,325	3.62			7,444,195			66,134		3.56
Non-interest-earning assets:
Allowance for loan losses		(66,104	)						(71,006	)
Cash and due from banks		94,920							77,124
Premises and equipment		182,609							167,926
Other assets ⁽³⁾		560,357							398,356
Total assets	$	9,808,553						$	8,016,595

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,755,726			444	.10		$	1,419,142			348		.10
Money market		1,866,913			1,206	.26			1,607,665			806		.20
Savings		497,973			30	.02			335,093			26		.03
Time		1,205,066			675	.23			1,249,098			1,273		.41
Brokered time deposits		187,481			68	.15			276,073			(378	)	(.55	)
Total interest-bearing deposits		5,513,159			2,423	.18			4,887,071			2,075		.17

Federal funds purchased and other borrowings		11,000			93	3.40			47,698			82		.69
Federal Home Loan Bank advances		589,246			983	.67			289,707			454		.63
Long-term debt		164,020			2,665	6.53			113,901			2,206		7.77
Total borrowed funds		764,266			3,741	1.97			451,306			2,742		2.44

Total interest-bearing liabilities		6,277,425			6,164	.39			5,338,377			4,817		.36
Non-interest-bearing liabilities:
Non-interest-bearing deposits		2,383,894							1,782,405
Other liabilities		96,067							90,091
Total liabilities		8,757,386							7,210,873
Shareholders’ equity		1,051,167							805,722
Total liabilities and shareholders’ equity	$	9,808,553						$	8,016,595

Net interest revenue (FTE)				$	75,161						$	61,317
Net interest-rate spread (FTE)						3.23	%							3.20	%

Net interest margin (FTE) ⁽⁴⁾						3.35	%							3.30	%

⁽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 $12.3 million in 2016 and $18.9 million in 2015 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 Six Months Ended June 30,

	2016								2015
(dollars in thousands, fully taxable equivalent (FTE))	Average Balance			Interest			Avg. Rate		Average Balance			Interest			Avg. Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	6,077,111		$	127,529		4.22	%	$	4,872,112		$	102,946		4.26	%
Taxable securities ⁽³⁾		2,704,309			32,306		2.39			2,211,293			23,756		2.15
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		28,590			516		3.61			20,987			555		5.29
Federal funds sold and other interest-earning assets		146,192			1,965		2.69			153,597			1,786		2.33

Total interest-earning assets (FTE)		8,956,202			162,316		3.64			7,257,989			129,043		3.58
Non-interest-earning assets:
Allowance for loan losses		(67,289	)							(71,596	)
Cash and due from banks		90,278								78,069
Premises and equipment		181,350								163,737
Other assets ⁽³⁾		560,813								389,874
Total assets	$	9,721,354							$	7,818,073

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,821,100			929		.10		$	1,447,370			742		.10
Money market		1,853,749			2,314		.25			1,537,678			1,479		.19
Savings		489,106			59		.02			317,814			46		.03
Time		1,232,378			1,492		.24			1,240,450			2,661		.43
Brokered time deposits		210,347			(107	)	(.10	)		274,708			(657	)	(.48	)
Total interest-bearing deposits		5,606,680			4,687		.17			4,818,020			4,271		.18

Federal funds purchased and other borrowings		22,953			180		1.58			41,953			180		.87
Federal Home Loan Bank advances		467,708			1,716		.74			264,584			846		.64
Long-term debt		164,720			5,350		6.53			120,782			4,812		8.03
Total borrowed funds		655,381			7,246		2.22			427,319			5,838		2.76

Total interest-bearing liabilities		6,262,061			11,933		.38			5,245,339			10,109		.39
Non-interest-bearing liabilities:
Non-interest-bearing deposits		2,315,468								1,702,140
Other liabilities		101,694								92,138
Total liabilities		8,679,223								7,039,617
Shareholders’ equity		1,042,131								778,456
Total liabilities and shareholders’ equity	$	9,721,354							$	7,818,073

Net interest revenue (FTE)				$	150,383							$	118,934
Net interest-rate spread (FTE)							3.26	%							3.19	%

Net interest margin (FTE) ⁽⁴⁾							3.38	%							3.30	%

⁽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 $7.28 million in 2016 and $14.8 million in 2015 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.

CONTACT: For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
[email protected]