2014
ANNUAL
REPORT
FINANCIAL HIGHLIGHTS
(in millions, except per share data)
CORE EARNINGS SUMMARY
Net interest revenue
Core fee revenue
Core operating expenses
Core earnings (pre-tax, pre-credit)
Provision for loan losses
Foreclosed property costs
Gain on bank owned life insurance
Severance costs
Securities gains, net
Loss from prepayment of borrowings
Partial reversal of provision for litigation settlement
Gain on sale of low income housing tax credits
Return of overclaimed interest on loss sharing agreement
Income tax benefit (expense)
Net income
Preferred dividends and discount accretion
2014
2013
$ 224.4
$ 219.6
54.9
162.1
117.2
(8.5)
(.6)
-
(.6)
4.8
(4.4)
1.2
-
(.5)
(41.0)
67.6
(.4)
53.9
163.5
110.0
(65.5)
(7.9)
1.5
(2.3)
.2
-
-
.5
-
236.7
273.2
(12.1)
Net income available to common shareholders
$ 67.2
$ 261.1
PER COMMON SHARE
Diluted earnings
Cash dividends declared
Book value
Tangible book value
PERFORMANCE MEASURES
Net interest margin
Return on assets
Return on common equity
Allowance for loan losses to loans
Tier I common risk-based capital ratio
Tier I risk-based capital ratio
AS OF YEAR-END
Loans
Investment securities
Total assets
Deposits
Shareholders’ equity
Common shares outstanding (thousands)
Beneficial owners
Employees
Banking offices
2 | U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T
$ 1.11
$ 4.44
.11
12.20
12.15
-
11.30
11.26
3.26 %
3.30 %
.91
9.17
1.53
11.06
12.06
3.86
46.72
1.77
9.31
12.74
$ 4,672
$ 4,329
2,198
7,567
6,327
740
60,259
15,450
1,536
103
2,312
7,425
6,202
796
59,432
16,650
1,506
102
LETTER TO SHAREHOLDERS
2014: MOVING FORWARD TO BUILD UNITED’S VALUE
In my last annual report letter to you, I described 2013 as a transformative year
for United. We had restored credit quality and eliminated restrictions that were
inhibiting both our growth and the value of your investment in United. The
exceptional work of our bankers during that year set the stage for United to
move forward.
And move forward we did. In 2014, we invested strategically in markets, talent,
and products that, combined with our existing strengths, drove meaningful
improvement in United’s financial performance and in our strategic positioning
of the franchise to grow its value. Net income for the year totaled $67.6 million.
We improved operating efficiency to 57.5 percent, and we achieved positive
operating leverage, meaning that we grew revenue at a faster pace than our
expenses. United now moves forward with strong capital ratios; we improved
all credit measures and concluded 2014 with a return on assets close to our 1
percent goal. The board of directors restored cash dividends to our shareholders
in the second quarter and increased it in the fourth quarter.
We grew total loans by 8 percent during 2014—a tribute to
solid work across our community banks. Loan production
reached $1.5 billion with net growth of $343 million. This
essentially means that loan pay-offs and competitive pressures
required that we lend more than four dollars to grow the
portfolio by one dollar. United bankers achieved substantial
growth in a still-challenging economy while simultaneously
diversifying our portfolio. Long-standing relationships that
our bankers have maintained and strengthened, and the new
relationships that they add each day, continually reinforce our
reputation for outstanding service. That is what sets us apart
and drives the value of our franchise.
In 2014, we invested
strategically in talent,
markets, and products
that, combined with
our existing strengths,
drove meaningful
improvement in revenues
and profitability.
U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T | 3
A notable contributor to loan growth has been specialty lending, an area in which we have strategically
invested over the past two years. In 2013, we rolled out health care, corporate and commercial real
estate specialties, and in 2014, we added small business administration (SBA) and asset-based lending.
Last April, we welcomed Rich Bradshaw as President of Specialized Lending. Rich is a 20-year specialized
lending veteran who, among his many accomplishments, has increased SBA origination volume
substantially for a number of the country’s largest lenders. In May, we added three more proven SBA
leaders with a combined 51 years of experience. And in June, we acquired Business Carolina, Inc., a
specialist in small business lending in Georgia, North Carolina, South Carolina, and Tennessee. The
acquisition included approximately $25 million in loans, $6 million in other assets and a highly skilled
team in this area of expertise.
SBA lending appeals to small businesses because
it provides access to more affordable credit due to
backing from the Small Business Administration.
For United, given our markets, it is an attractive
loan growth source that diversifies the portfolio,
produces fee revenue, and increases our value to
local businesses and economies. Our pipeline of
opportunities in this area is strong; in fact, we
expect to be among the top 10 SBA lenders in
the country in the foreseeable future.
Total loans grew by 8 percent
during 2014—a tribute to solid
work across our community
banks. Loan production was
$1.5 billion with net growth
of $343 million.
Solid production from our community banks and the successful roll-out of specialized lending
underscored our loan growth for 2014. Moving forward, we are excited about the long-term prospects
of this strategically powerful combination of legacy and new platforms.
I also want to recognize our bankers for something they continue to do extremely well; growing core
deposits. These core deposits—checking, savings, and money market accounts—increased 7 percent,
or $252 million, during 2014. Represented in this total are thousands of new United depositors, as well as
increased business with existing customers. These dollars provide the foundation to fund loan growth,
and are further testimony to the real relationship banking that our bankers practice every day.
MARKETS
In January 2015, we announced a plan to enhance our presence in the growing east Tennessee market
through the acquisition of MoneyTree Corp. and its wholly-owned bank subsidiary First National Bank
(FNB). FNB is an attractive franchise with a high-quality balance sheet and a service-oriented culture,
similar to United’s. Its $425 million in assets and 10 branches will boost our share and presence in
Knoxville, Cleveland, and other attractive markets along the Interstate-75 corridor. The synergies
4 | U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T
between our banks provide for loan growth opportunities, cost savings, and higher earnings as we offer
our expanded product line to FNB customers.
In February 2015, we opened our first banking office in Greenville, South Carolina; another attractive
market where Lynn Harton, our president and chief operating officer, has longstanding ties. We also
added a loan production office in Midtown Atlanta to capitalize on opportunities as growth returns and
accelerates in the city and region.
TALENT
We invested in back office functions, an important area in today’s more complex regulatory
environment. In this regard, and upon David Shearrow’s retirement as chief risk officer at the end of
January 2015, we separated responsibilities for our risk and credit management disciplines into two
positions: chief risk officer and chief credit officer. This structure is consistent with those of other
growth-oriented banks. Brad Miller became our chief risk officer, reporting to me, in tandem with
his ongoing role as general counsel. We hired veteran credit manager Rob Edwards as chief credit
officer, who reports to Lynn Harton. Rob has 25 years of experience in credit management including
commercial credit approval, credit risk analytics, and credit policy.
2014-2015 ACCOLADES
J.D. Power ranked
United Community Bank first
in customer satisfaction in the
southeastern United States.
Overall customer satisfaction
was ranked best in the country
among banks with five billion
dollars or more in assets,
according to national research
firm Customer Service Profiles.
Forbes magazine ranked United
Community Bank one of America’s
best performing banks.
I want to give special recognition to our
colleague David Shearrow. David has been
an outstanding member of our management
team. He has decided to devote his full
attention to the pastorate of a local church
body and also participation in other mission
activities. We admire his dedication to a calling
that we know he will serve extremely well,
just as he has served United.
On the subject of talented bankers, I am so
very proud of the outstanding team we have
throughout our four-state footprint. In 2014, J.D.
Power ranked United Community Bank first in
customer satisfaction in the southeastern United
States. And, for the eighth consecutive year, our
overall customer satisfaction was ranked best in
the country among banks with five billion dollars
or more in assets, according to national research
firm Customer Service Profiles. In January of 2015,
U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T | 5
Forbes magazine ranked us one of America’s best performing banks—and we know that it is service that
drives performance.
United bankers have a passion to serve under our Golden Rule of Banking: Treat customers the way we
want to be treated. I was reminded of our bankers when I heard a firm call itself “a customer service
company that just happened to be in the travel industry.” That is a great line and I will borrow it here to
say that I am convinced that our bankers see United as a customer service company that just happens to
be in banking.
BUILDING VALUE AS UNITED MOVES FORWARD
United has strategic, operating, and performance momentum. Our investments in our company
are sound and beginning to pay attractive returns to our shareholders. We are well-positioned to
continue to seek strategic opportunities to expand the balance sheet and produce diversified revenue
streams. We are dedicated to further enhancing our service capabilities, including technologies that
make banking with us easier. And we are focused on capitalizing on merger opportunities which
provide United with further attractive ways to expand our footprint and customer base into diverse
and growing markets.
The industry at present is not without headwinds, including the regulatory environment and the
associated rules and costs that particularly impact banks at the $10 billion asset threshold. Loan growth
for the foreseeable future will continue to be challenging, with lower yields for higher quality loans and
low interest rates negatively impacting our margins. The general view is that rates will increase in time.
When they do, we will realize benefits from the strong, low-cost core deposit base that our bankers have
diligently built.
EXECUTIVE TEAM
I am pleased that we have aligned and enhanced our executive management team by promoting Lynn
Harton to president of United, in addition to his continuing as chief operating officer. Lynn also has
joined our board of directors. He is a key leader and strategist for growing our business and franchise
value. We are fortunate to have Lynn on our team.
Also, W.C. Nelson, who has been a board member since 1988 and our chairman since 2012, has become
our lead independent director. It is my sincere privilege to succeed W.C. as chair, as we continue to work
together to govern, strengthen, and build this great company.
6 | U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T
2015 AND BEYOND
I am very excited about how United Community Banks is
moving forward and building value. We have exceptionally
experienced and highly respected local leadership across
the franchise, funding strength in our legacy markets,
a strong culture committed to customer service, and
unmatched customer satisfaction.
We are moving forward with selected investments in
people, products, services, technology,
and markets that enhance our ability to earn and maintain
the privilege of serving new and existing customers.
We are well-positioned to be the community and regional
bank of choice; the one where customers enjoy banking,
We are well-positioned to
be the regional bank of
choice; the one where
customers enjoy banking,
where people enjoy working,
and that communities
know as a caring and
dependable neighbor.
where people enjoy working, and that communities know as a caring and dependable neighbor.
We are committed to growing United’s shareholder value. You can be 100 percent assured that everything
we do, and every decision we make, is designed to earn your confidence, loyalty, and support.
Sincerely,
Jimmy Tallent
U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T | 7
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
INTEREST REVENUE
Loans, including fees
Investment securities:
Taxable
Tax exempt
Deposits in banks and short-term investments
Total interest revenue
INTEREST EXPENSE
Deposits:
NOW
Money market
Savings
Time
Total deposit interest expense
Short-term borrowings
Federal Home Loan Bank advances
Long-term debt
Total interest expense
Net interest revenue
Provision for credit losses
Net interest revenue after provision for credit losses
FEE REVENUE
Service charges and fees
Mortgage loan and other related fees
Brokerage fees
Securities gains, net
Losses from prepayment of borrowings
Other
Total fee revenue
Total revenue
OPERATING EXPENSES
Salaries and employee benefits
Occupancy
Communications and equipment
FDIC assessments and other regulatory charges
Professional fees
Postage, printing, and supplies
Advertising and public relations
Amortization of intangibles
Foreclosed property
Other
Total operating expenses
Income before income taxes
Income tax expense (benefit)
Net income
Preferred stock dividends
2014
2013
2012
$ 196,279
$ 200,893
$ 217,378
47,755
738
3,660
248,432
1,651
3,060
81
7,133
11,925
2,160
912
10,554
25,551
222,881
8,500
214,381
33,073
7,520
4,807
4,871
(4,446)
9,729
55,554
269,935
100,941
13,513
12,523
4,792
7,907
3,542
3,461
1,348
634
14,204
162,865
107,070
39,450
67,620
439
40,331
827
3,789
245,840
1,759
2,210
133
10,464
14,566
2,071
68
10,977
27,682
218,158
65,500
152,658
31,997
9,925
4,465
186
-
10,025
56,598
209,256
96,233
13,930
13,233
9,219
9,617
3,283
3,718
2,031
7,869
15,171
174,304
34,952
(238,188)
273,140
12,078
43,657
956
3,986
265,977
2,049
2,518
150
19,097
23,814
2,987
907
10,201
37,909
228,068
62,500
165,568
31,670
10,483
3,082
7,078
(6,681)
10,480
56,112
221,680
96,026
14,304
12,940
10,097
8,792
3,899
3,855
2,917
13,993
19,951
186,774
34,906
1,050
33,856
12,148
Net income available to common shareholders
$ 67,181
$261,062
$ 21,708
Income per common share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
$ 1.11
1.11
$ 4.44
4.44
$ .38
.38
60,588
60,590
58,787
58,845
57,857
57,857
8 | U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)
ASSETS
Cash and due from banks
Interest-bearing deposits in banks
Short-term investments
Cash and cash equivalents
Securities available-for-sale
Securities held-to-maturity (fair value $425,233 and $485,585)
Mortgage loans held for sale
Loans, net of unearned income
Less allowance for loan losses
Loans, net
Premises and equipment, net
Bank owned life insurance
Accrued interest receivable
Net deferred tax asset
Derivative financial instruments
Other assets
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand
NOW
Money market
Savings
Time:
Less than $100,000
Greater than $100,000
Brokered
Total deposits
Repurchase agreements
Federal Home Loan Bank advances
Long-term debt
Derivative financial instruments
Accrued expenses and other liabilities
Total liabilities
Commitments and contingencies
Shareholders’ equity
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series B, $1,000 stated value; 105,000 shares issued and outstanding
Series D, $1,000 stated value; 16,613 shares issued and outstanding
Common stock, $1 par value; 100,000,000 shares authorized;
50,178,605 and 46,243,345 shares issued and outstanding
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
10,080,787 and 13,188,206 shares issued and outstanding
Common stock issuable; 357,983 and 241,832 shares
Capital surplus
Accumulated deficit
Accumulated other comprehensive loss
Total shareholders’ equity
Total liabilities and shareholders’ equity
2014
2013
$ 77,180
89,074
26,401
192,655
1,782,734
415,267
13,737
4,672,119
(71,619)
4,600,500
159,390
81,294
20,103
215,503
20,599
65,204
$ 7,566,986
$ 71,230
119,669
37,999
228,898
1,832,217
479,742
10,319
4,329,266
(76,762)
4,252,504
163,589
80,670
19,598
258,518
23,833
75,531
$7,425,419
$ 1,574,317
1,504,887
1,273,283
292,308
$ 1,388,512
1,427,939
1,227,575
251,125
748,478
508,228
425,011
6,326,512
6,000
270,125
129,865
31,997
62,910
6,827,409
892,961
588,689
424,704
6,201,505
53,241
120,125
129,865
46,232
78,736
6,629,704
-
-
105,000
16,613
50,178
46,243
10,081
5,168
1,080,508
(387,568)
(18,790)
739,577
$7,566,986
13,188
3,930
1,078,676
(448,091)
(19,844)
795,715
$7,425,419
U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T | 9
SELECTED DATA—QUARTERLY SUMMARY
(in millions, except per share data; taxable equivalent)
2014
Q4
Q3
Q2
Q1
CORE EARNINGS SUMMARY
Net interest revenue
Core fee revenue (1)
Core revenue (1)
Core operating expenses (2)
Core earnings (pre-tax, pre-credit) (1)(2)
Provision for loan losses
Foreclosed property costs
Severance costs
Securities gains, net
Loss from prepayment of borrowings
Partial reversal of provision for litigation settlement
Return of overclaimed interest on loss sharing agreement
Income tax expense
Net income
Preferred dividends and discount accretion
Net income available to common shareholders
$ 58.3
14.6
72.9
42.1
30.8
(1.8)
(.1)
(.3)
.2
-
1.2
(.5)
(11.3)
18.2
-
$ 18.2
$ 57.0
14.4
71.4
41.1
30.3
(2.0)
(.2)
-
-
-
-
-
(10.5)
17.6
-
$ 17.6
$ 54.9
14.0
68.9
40.1
28.8
(2.2)
(.1)
(.1)
4.4
(4.4)
-
-
(10.0)
16.4
-
$ 16.4
$ 54.2
11.9
66.1
38.8
27.3
(2.5)
(.2)
(.2)
.2
-
-
-
(9.2)
15.4
(.4)
$15.0
PERFORMANCE MEASURES
Per common share:
Diluted earnings
Cash dividends declared
Book value
Tangible book value (3)
Key performance ratios:
Net interest margin (4)
Return on assets (4)
Return on common equity (4)(5)
Tier 1 common risk-based capital ratio
Tier I risk-based capital ratio
ASSET QUALITY *
Non-performing loans
Foreclosed properties
Total non-performing assets (NPAs)
Allowance for loan losses
Net charge-offs
Allowance for loan losses to loans
Net charge-offs to average loans (4)
NPAs to loans and foreclosed properties
NPAs to total assets
AT PERIOD END
Loans *
Investment securities
Total assets
Deposits
Shareholders’ equity
$ .30
.05
12.20
12.15
$ .29
.03
12.15
12.10
$ .27
.03
11.94
11.91
$ .25
-
11.66
11.63
3.31 %
.96
9.60
11.06
12.06
3.32 %
.95
9.41
11.04
12.07
3.21 %
.88
8.99
10.71
11.75
3.21 %
.85
8.64
10.07
11.10
$ 17.9
1.7
19.6
71.6
2.5
1.53 %
.22
.42
.26
$ 18.7
3.2
21.9
71.9
3.2
1.57 %
.28
.48
.29
$ 20.7
3.0
23.7
73.2
4.2
1.66 %
.38
.54
.32
$ 25.2
5.6
30.8
75.2
4.0
1.73 %
.38
.71
.42
$ 4,672
2,198
7,567
6,327
740
$ 4,569
2,222
7,526
6,241
736
$ 4,410
2,190
7,352
6,164
722
$ 4,356
2,302
7,398
6,248
704
2013
Q4
$ 55.9
13.2
69.1
41.2
27.9
(3.0)
(.2)
-
.1
-
-
-
(8.9)
15.9
( 2.9)
$ 13.0
$ .22
-
11.30
11.26
3.26 %
.86
7.52
9.31
12.74
$ 26.8
4.2
31.0
76.8
4.4
1.77 %
.41
.72
.42
$ 4,329
2,312
7,425
6,202
796
Common shares outstanding
60.3
60.2
60.1
60.1
59.4
1 Excludes net securities gains and losses from the prepayment of borrowings. 2 Excludes foreclosed property costs, severance costs, the partial reversal of an earlier
provision for litigation settlement and the return of overclaimed interest on United’s loss sharing agreement. 3 Excluded the effect of acquisition related intangible assets.
4 Annualized. 5 Net income available to common shareholders, which is net of preferred dividends, divided by average realized common equity, which excludes
accumulated other comprehensive income (loss). * Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.
10 | U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T
CORPORATE INFORMATION
FINANCIAL INFORMATION
Analysts and investors seeking financial
information should contact:
Rex S. Schuette
Executive Vice President and CFO
706-781-2265
rex_schuette@ucbi.com
This Annual Report contains forward
looking statements that involve risk and
uncertainty and actual results could
differ materially from the anticipated
results or other expectations expressed
in the forward-looking statements. A
discussion of factors that could cause
actual results to differ materially from
those expressed in the forward-looking
statements is included in the Annual
Report on Form 10-K filed with the
Securities and Exchange Commission.
This Annual Report also contains
financial measures that were prepared
on a basis different from accounting
principles generally accepted in the
United States (“GAAP”). References to
operating earnings, pre-tax, pre-credit
earnings and core earnings are non-
GAAP financial measures. Management
has included such non-GAAP financial
measures because such non-GAAP
measures exclude certain non-
recurring revenue and expense items
and therefore provide a meaningful
basis for analyzing financial trends.
A reconciliation of these measures to
financial measures determined using
GAAP is included in the Annual Report
on Form 10-K filed with the Securities
and Exchange Commission.
BOARD OF DIRECTORS
W.C. Nelson, Jr.
Lead Director
Co-Owner and Operator
Nelson Tractor Co.
Jimmy C. Tallent
Chairman
Chief Executive Officer
Robert H. Blalock
Chief Executive Officer
Blalock Insurance Agency, Inc.
Clifford V. Brokaw
Managing Director
Corsair Capital
L. Cathy Cox
President
Young Harris College
STOCK PRICE
Quarter
High
Low
Close
Average Daily
Volume
2013
4th
$ 18.56
$ 14.82
$ 17.75
421,948
2014
1st
2nd
3rd
4th
$ 20.28
$ 15.74
$ 19.41
19.87
18.42
19.50
14.86
15.42
15.16
16.37
16.46
18.94
494,205
308,486
331,109
262,598
INVESTOR INFORMATION
Investor information including this
report, Form 10-K, quarterly financial
results, press releases and various other
reports are available at ir.ucbi.com.
Alternatively, shareholders may contact
Investor Relations at 866-270-5900 or
investor_relations@ucbi.com.
STOCK EXCHANGE
United Community Banks, Inc. (Ticker:
UCBI) common stock is listed for trading on
the NASDAQ Global Select Market.
INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP, Atlanta, GA
LEGAL COUNSEL
Troutman Sanders LLP, Atlanta, GA
REGISTRAR TRANSFER AGENT
Continental Stock Transfer & Trust Co.
17 Battery Park, 8th Floor
New York, NY 10004
212-509-4000 | continentalstock.com
EQUAL OPPORTUNITY
EMPLOYER
United Community Banks is an equal
opportunity employer. All matters
regarding recruiting, hiring, training,
compensation, benefits, promotions,
transfers and other personnel policies will
remain free from discriminatory practices.
United Community Banks, Inc. ©2015
Steven J. Goldstein
Retired Chief Financial Officer
Federal Home Loan Bank of Atlanta
H. Lynn Harton
President
Chief Operating Officer
Thomas A. Richlovsky
Retired Chief Financial Officer
and Treasurer
National City Corporation
Tim R. Wallis
Owner and President
Wallis Printing Company
Robert L. Head, Jr.
Director Emeritus
Owner
Head Westgate
EXECUTIVE OFFICERS
Jimmy C. Tallent
Chairman, Chief Executive Officer
H. Lynn Harton
President, Chief Operating Officer
Rex S. Schuette
Executive Vice President,
Chief Financial Officer
Bradley J. Miller
Executive Vice President, Chief
Risk Officer and General Counsel
Bill M. Gilbert
President, Community Banking
Robert A. Edwards
Executive Vice President,
Chief Credit Officer
Richard W. Bradshaw
President, Specialized Lending
U N I T E D C O M M U N I T Y B A N K S , I N C . 2014 A N N UA L R E P O R T | 11
United Community Banks, Inc.
125 Highway 515 East | Blairsville, Georgia 30512
706-781-2265 | 866-270-7200
ucbi.com