UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ___________ to __________
Commission file number 0-21656
UNITED COMMUNITY BANKS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-180-7304
- ------------------------ ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
P.O. Box 398, 59 Highway 515
Blairsville, Georgia 30512
- ------------------------------ ----------
(Address of principal executive (Zip Code)
offices)
(404) 745-2151
------------------
(Telephone number)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES XX NO
Common stock, par value $1 per share: 6,260,280 shares
outstanding as of October 31, 1996
<PAGE>
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
INDEX
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1996
and December 31, 1995 3
Consolidated Statements of Earnings for the Three
Months and Nine Months Ended September 30, 1996
and 1995 4
Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security
Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
-2-
<PAGE>
<TABLE>
<CAPTION>
UNITED COMMUNITY BANKS, INC. & SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
1996 1995
------------- ------------
ASSETS (In Thousands)
<S> <C> <C>
Cash and due from banks $ 26,467 20,758
Federal funds sold 12,855 11,230
---------- ---------
Cash and cash equivalents 39,322 31,988
---------- ---------
Securities held to maturity (estimated fair value of
$74,346 and $79,650) 74,626 78,821
Securities available for sale 70,012 65,046
Mortgage loans held for sale 6,360 12,048
Loans 558,325 444,092
Less: Allowance for loan losses (7,369) (6,545)
---------- ---------
Loans, net 550,956 437,547
Premises and equipment 17,615 15,997
Accrued interest receivable 7,667 6,462
Other assets 13,007 11,760
---------- ---------
$ 779,565 659,669
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $ 73,553 62,753
Interest-bearing demand 170,284 114,825
Savings 40,068 38,947
Time 396,432 374,131
---------- ---------
Total deposits 680,337 590,656
Repurchase agreements 2,000 -
Accrued expenses and other liabilities 5,588 3,676
Federal Home Loan Bank advances 31,138 9,001
Long-term debt 10,736 11,309
Convertible subordinated debentures 1,000 1,000
---------- ---------
Total liabilities 730,799 615,642
---------- ---------
Stockholders' equity:
Preferred Stock - -
Common stock, $1 par value; 10,000,000 shares authorized;
6,260,280 shares issued and outstanding 6,260 6,260
Capital surplus 14,520 14,520
Net unrealized gain (loss) on investment securities available
for sale, net of tax (485) 251
Retained earnings 28,471 22,996
---------- ---------
Total stockholders' equity 48,766 44,027
---------- ---------
$ 779,565 659,669
========== =========
</TABLE>
See accompanying notes to consolidated financial statements. -3-<PAGE>
<TABLE>
<CAPTION>
UNITED COMMUNITY BANKS, INC. & SUBSIDIARIES
Consolidated Statements of Earnings
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
(In Thousands Except Per Share Data)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 13,856 10,525 38,786 29,520
Interest on deposits with other banks 13 14 47 37
Interest on federal funds sold 243 340 660 837
Interest on investment securities:
U.S. Treasury and U.S. Government agencies 1,499 1,158 4,588 3,128
State, county and municipal 480 458 1,413 1,375
--------- --------- --------- ---------
Total interest income 16,091 12,495 45,495 34,897
--------- --------- --------- ---------
INTEREST EXPENSE:
Interest on deposits:
Demand 1,629 859 3,647 2,587
Savings 263 241 783 740
Time 5,647 5,243 17,214 13,856
--------- --------- --------- ---------
7,539 6,343 21,644 17,183
--------- --------- --------- ---------
Long-term debt, subordinated debentures and
federal funds purchased 493 446 1,218 1,439
--------- --------- --------- ---------
Total interest expense 8,032 6,789 21,644 18,622
--------- --------- --------- ---------
Net interest income 8,059 5,706 22,633 16,275
--------- --------- --------- ---------
Provision for loan losses 348 326 915 746
--------- --------- --------- ---------
Net interest income after provision for
loan losses 7,711 5,380 21,718 15,529
--------- --------- --------- ---------
NONINTEREST INCOME:
Service charges and fees 667 481 1,940 1,381
Securities gains, net 2 (1) 17 2
Mortgage loan and related fees 361 475 1,218 1,104
Other noninterest income 215 212 565 611
--------- --------- --------- ---------
Total noninterest income 1,245 1,167 3,740 3,098
--------- --------- --------- ---------
NONINTEREST EXPENSE:
Salaries and employee benefits 3,279 2,434 9,380 7,042
Occupancy 775 677 2,402 1,956
Deposit insurance premiums 3 (36) 20 453
Other noninterest expense 1,732 1,244 5,001 3,160
--------- --------- --------- ---------
Total noninterest expense 5,789 4,319 16,803 12,611
--------- --------- --------- ---------
Earnings before income taxes 3,167 2,228 8,655 6,015
Income taxes 1,013 704 2,930 1,857
--------- --------- --------- ---------
NET EARNINGS $ 2,154 1,524 5,725 4,158
========= ========= ========= =========
Net earnings per common share $ 0.34 0.26 0.91 0.73
Weighted average shares outstanding 6,260 280 5,815,430 6,260,280 5,665,545
</TABLE>
See accompanying notes to consolidated financial statements. -4-<PAGE>
<TABLE>
<CAPTION>
UNITED COMMUNITY BANKS, INC. & SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
September 30,
--------------------------
1996 1995
---- ----
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 5,725 4,158
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation, amortization and accretion 1,636 1,280
Provision for loan losses 915 746
Gain on sale of investment securities (17) (2)
Change in assets and liabilities:
Interest receivable (1,205) (1,170)
Interest payable (174) 611
Other assets (163) (719)
Accrued expenses and other liabilities 1,513 (114)
Change in mortgage loans held for sale 5,688 (119)
-------- -------
Net cash provided by operating activities 13,918 4,671
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired from acquisitions 2,685 8,508
Proceeds from maturities and calls of securities held to maturity 12,531 5,900
Purchases of securities held to maturity (8,413) (13,175)
Proceeds from sales of securities available for sale 12,185 9,800
Proceeds from maturities and calls of securities available for sale 21,038 6,776
Purchases of securities available for sale (39,486) (45,340)
Net change in interest-bearing deposits with other banks - 299
Net increase in loans (95,136) (52,792)
Proceeds from sales of other real estate 54 69
Purchase of bank premises and equipment (1,562) (1,981)
-------- -------
Net cash used in investing activities (96,104) (81,936)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand and savings deposits 57,368 19,231
Net change in time deposits 8,838 78,336
Net increase in federal funds purchased and repurchase agreements 2,000 (8,300)
Proceeds from long-term debt - 539
Repayments of long-term debt (573) 7,346
Proceeds from FHLB advances 22,375 (630)
Repayments of FHLB advances (238) (7,571)
Proceeds from sale of common stock, net of costs 2434
Dividends paid (250) (279)
-------- -------
Net cash provided by financing activities 89,520 91,106
-------- -------
Net increase in cash and cash equivalents 7,334 13,841
Cash and cash equivalents at beginning of period 31,988 14,570
-------- -------
Cash and cash equivalents at end of period $ 39,322 28,411
======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 23,036 18,011
Income taxes $ 2,750 1,645
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Change in dividends payable $ - 110
Transfers of loans to other real estate owned $ 388 195
Change in unrealized gain (loss) on securities available for sale $ (1,162) 302
</TABLE>
See accompanying notes to consolidted financial statements. -5-
<PAGE>
UNITED COMMUNITY BANKS, INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
The accompanying consolidated financial statements have not
been audited. The results of operations are not necessarily
indicative of the results of operations for the full year or any
other interim periods.
The accounting principals followed by United Community Banks,
Inc. ("United") and its bank subsidiaries and the methods of
applying these principals conform with generally accepted
accounting principals and with general practices within the
banking industry. Certain principals which significantly affect
the determination of financial position, results of operation and
cash flows are summarized below and in United's annual report on
Form 10-K for the year ended December 31, 1995.
(1) Basis of Presentation
----------------------
The consolidated financial statements include the accounts of
United and its wholly-owned subsidiaries, Union County Bank
(UCB), Citizens Bank (Citizens), Peoples Bank (Peoples), Towns
County Bank (Towns) and White County Bank (White) . All
significant intercompany accounts and transactions have been
eliminated in consolidation. Certain items in prior period's
financial statements have been reclassified to conform with the
current financial statement presentation.
The consolidated financial information furnished herein
reflects all adjustments which are, in the opinion of management,
necessary to present a fair statement of the results of
operations and financial position for the periods covered herein
and are normal and recurring in nature. For further information,
refer to the consolidated financial statements and footnotes
included in United's annual report on Form 10-K for the year
ended December 31, 1995.
(2) Earnings Per Share
------------------
Net earnings per common share are based on the weighted
average number of common shares outstanding during each period.
The assumed conversion of the convertible subordinated debentures
and exercise of stock options do not result in material dilution.
All share and per share data have been adjusted to reflect the
October 1995, five-for-one split, effected in the form of a stock
dividend, paid on November 6, 1995.
(3) Acquisition of Branch Offices
-----------------------------
On May 25, 1995, United executed a Purchase and Assumption
Agreement to acquire certain assets and deposit liabilities of
the Franklin and Waynesville, North Carolina branch offices of
Nations Bank, N.A. These branch offices had total assets of $14.8
million, total loans of $11.1 million and total deposits of $26.1
million as of October 19, 1995, the date of closing.
-6-<PAGE>
On June 6, 1996, United executed a Purchase and Assumption
Agreement to acquire certain assets and deposit liabilities of
the Cornelia, Georgia branch office of the First National Bank of
Commerce. This branch office had total assets of $36 million,
total loans of $31 million and total deposits of $24 million as of
September 30, 1996, the date of closing.
(4) Recently Issued Accounting Standards
------------------------------------
During 1995, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123, "Accounting for Stock-Based Compensation."
This new standard became effective January 1, 1996, and will
require United to disclose the fair value of employee stock
options granted in 1995 and subsequent years. Since United will
not be required to record the options at fair market value,
management does not expect this new standard to have a material
impact on the consolidated financial statements.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
OVERVIEW
Net earnings for the nine months ended September 30, 1996
increased to $5.7 million or 38 percent over net earnings for the
first nine months of 1995. Net earnings per common share for the
first nine months also increased 25 percent from the same period
in 1995 to $.91. Net interest income increased 39 percent for
the nine months ended September 30, 1996 over the same period of
1995 to $23.6 million. For the first half of 1996, the provision
for loan losses increased 23 percent to $915.000 for the nine
month period. Noninterest income and expense rose 21 percent and
33 percent respectively over the first three quarters of 1995.
NET INTEREST INCOME
Net interest income for the nine months ended September 30, 1996
increased $6.4 million over the first three quarters of 1995.
This increase was the result of a $10.6 million, or 30 percent
increase in interest income, offset by a $4.2 million increase
in interest expense. The increase in interest income was
primarily due to an increase in average earning assets
of $146 million.
Interest expense for the nine months ended September 30, 1996,
increased $4.2 million, or 23 percent from the prior year, due
primarily to a 29% increase in average core deposits, offset
slightly by a decrease in the average yield on source of funds
from 4.93% to 4.68%.
NET INTEREST MARGIN
The difference between the overall interest income on earning
assets and the interest expense paid on all funding sources,
including noninterest bearing deposits, is referred to as the net
interest margin. For the first three quarters of 1996 the net
interest margin was 4.64 percent compared to 4.32 percent for the
same period in 1995. This 32 basis point increase resulted from
a stable rate environment as well as a favorable change in the
core deposit mix.
-7-<PAGE>
NONINTEREST INCOME AND EXPENSE
Noninterest income for the first nine months of 1996 increased
$642 thousand, or 21 percent over the same period in 1995.
Service charges on deposits increased over $559 thousand, or 40
percent during the first nine months, principally as a result of
an increased number of deposit accounts being serviced. This
increase is a result of continued growth and the White County and
the Citizens' branch banking acquisitions. Mortgage loan and
related fees increased $114 thousand, or 10% as a result of
declining rate environment for a majority of the first nine
months of 1996. Gains on investment securities sold during the
first three quarter of 1996 were not material.
Noninterest expenses increased $4.2 million during the first
nine months of 1996 over the same period in 1995. Salaries and
employee benefits increased $2.3 million, or 33 percent, for the
first three quarters. The increase in salaries and benefits was
the result of an additional 72 employees compared to the same
period in 1995. The number of employees increased primarily as a
result of the White County acquisition as well as the branch
banking facilities acquired by Citizens as discussed earlier.
Net occupancy expense increased $446 thousand due primarily to an
increase in the depreciation and other occupancy expenses
associated with the increased number of banking facilities. FDIC
deposit insurance premiums decreased $433 thousand as a result of
the recalculated FDIC assessment. Other noninterest expense,
including stationary and supplies and advertising , increased
$1.8 million during the first three quarters of 1996.
INCOME TAXES
Income tax expense increased during the first three quarters of
1996 compared to the same period in 1995 by $1.1 million. The
effective tax rates for the nine months ended September 30, 1996
and 1995 were 35 percent and 30 percent, respectively. The
increases are due primarily to the combined efforts of increased
levels of pretax income, and a lower mix of tax-exempt
securities held in the investment portfolio. Management expects
the trend of an increasing effective tax rate to continue.
PROVISION AND ALLOWANCE FOR POSSIBLE LOAN LOSSES
The provision for loan losses for the nine months ended September
30, 1996 increased 23 percent to $915 thousand from the $746
thousand reported for the same period in 1995. Management
considers the size and character of the loan portfolio, changes
in nonperforming and past due loans, historical loan loss
experience, the existing risk of individual loans, concentrations
of loans to specific borrowers and existing and prospective
economic conditions when determining the adequacy of the
allowance for loan losses. The allowance for loan losses at
September 30, 1996 was $7.4 million compared to $6.5 million at
December 31, 1995. The ratio of the allowance for loan losses to
loans outstanding at September 30, 1996 was 1.32 percent
compared to 1.48 percent at December 31, 1995. The reduction in
the ratio reflects the improvement in the quality of United's
loan portfolio. It is management's belief that the allowance for
loan losses is adequate to absorb probable loss in the portfolio.
-8-<PAGE>
NONPERFORMING ASSETS AND PAST DUE LOANS
Nonperforming assets, comprised of nonaccrual loans, other real
estate owned and loans for which payments are more than 90 days
past due, decrease $1.3 million to $ 850 thousand at September
30, 1996 from $2.2 million at December 31, 1995. In addition,
Nonperforming assets as a percentage of total loans and other
real estate owned improved to .15 percent at September 30, 1996
from .48 percent at December 31, 1995.
United regularly monitors selected accruing loans for which
general economic conditions or changes within a particular
industry could cause the borrowers financial difficulties. This
continuous monitoring of the loan portfolio and the related
identification of loans with a high degree of credit risk are
essential parts of United's credit management. Management
continues to emphasize maintaining a low level of nonperforming
assets and returning current nonperfroming assets to an earning
status.
At September 30, 1996, management was unaware of any known
trends, events or uncertainties that will have or that are
reasonably likely to have a material effect on United's
liquidity, capital resources or operations.
Financial Condition
OVERVIEW
Total assets at September 30, 1996 were $780 million representing
a $120 million or a 18 percent increase from December 31, 1995
and a $158 million or a 25 percent increase from September 30,
1995. The growth from prior year is primarily attributed to an
increase in market share of approximately $109 million and $49
from acquisitions.
ASSETS AND FUNDING
At September 30, 1996, earning assets totaled $722 million, an
increase of $111 million from December 31, 1995. The earning
assets mix improved slightly in the first nine months with loans
representing 77% of the total earning assets as compared to 73%
percent at December 31, 1995.
Interest bearing deposits at September 30, 1996 increased $79
million from December 31, 1995, while non-interest bearing
deposits increased over $11 million since December 31, 1995. At
September 30, 1996, deposits accounted for 87 percent of United's
funding, from 90 percent at December 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $14 million for
the nine months ended September 30, 1996. For the three quarters
of 1996, net cash used from investing activities of $96 million
consisted of proceeds from maturities of investments securities
of $34 million, proceeds from sales of investment securities of
$12 million, cash acquired from acquisitions of $3 million and
offset by cash outflows of $47 million in investment securities
purchases, a $95 million increase in loans outstanding and purchase
-9-<PAGE>
of bank premises and equipment of $1.5 million. Net cash provided
by financing activities consisted largely of $66 million increase
in deposit and time accounts, $22 million from additional FHLB
advances, and were offset slightly by payments of $811 thousand
on United's long-term debt and FHLB repayments.
Total stockholders' equity at September 30, 1996, was 6.26
percent of total assets compared to 6.67 percent at December 31,
1995. The slight decrease since year end 1995 reflects the asset
growth of $120 million and the change of $736 thousand in the
unrealized loss in United's available for sale investment
portfolio offset by retained earnings from the first nine months
of 1996.
-10-<PAGE>
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
-----------------
Item 2. Changes in Securities - None
---------------------
Item 3. Defaults Upon Senior Securities - None
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders - None
---------------------------------------------------
Item 5. Other Information - None
-----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits - Exhibit 4 - Restated Articles of Incorporation, as
filed on November 8, 1996
Exhibit 27 - Financial Data Schedule
(for SEC use only)
(b) Reports on Form 8-K - None.
-11-
<PAGE>
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
UNITED COMMUNITY BANKS, INC.
By: /s/ Jimmy C. Tallent
Jimmy C. Tallent, President
(Principal Executive Officer)
Date: November 8, 1996
By: /s/ Christopher J. Bledsoe
Christopher J. Bledsoe
Chief Financial Officer
(Principal Financial Officer)
Date: November 8, 1996
Exhibit 4
RESTATED ARTICLES OF INCORPORATION
OF
UNITED COMMUNITY BANKS, INC.
I.
The name of the corporation is United Community Banks, Inc.
II.
The corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
III.
The corporation shall have perpetual duration.
IV.
The corporation is a corporation for profit and is organized
for the following general purposes: to be a bank holding company; to
carry on any lawful businesses or activities relating thereto; and to
engage in any lawful act or activity for which corporations may be
organized under the Georgia Business Corporation Code.
V.
The corporation shall have authority to issue 10,000,000 shares
of common stock, $1.00 par value (the "Common Stock") and 10,000,000
shares of preferred stock, $1.00 par value (the "Preferred Stock").
Subject to the provisions of any applicable law or the Bylaws of the
corporation (as from time to time amended) with respect to fixing the
record date for the determination of shareholders entitled to vote, and
except as otherwise provided by any applicable law or the by the
resolution or resolutions of the Board of Directors providing for the
issue of any series of Preferred Stock, the holders of the Common Stock
shall have and possess exclusive voting power and rights for the election
of directors and for all other purposes, with each share being entitled
to one vote.
<PAGE>
The Board of Directors is hereby expressly authorized to issue,
at any time and from time to time, shares of Preferred Stock in one or
more series. The number of shares within such series shall be designated
by the Board of Directors in one or more resolutions, and the shares of
each series so designated shall have such preferences with respect to
Common Stock and other series of Preferred Stock, and such other rights,
restrictions or limitations with respect to voting, dividends,
conversion, exchange, redemption and any other matters, as may be set
forth in one or more resolutions adopted by the Board of Directors. To
the extent required by law, Articles of Amendment setting forth any such
designations, preferences, rights, restrictions or limitations shall be
filed with the Georgia Secretary of State prior to the issuance of any
shares of such series.
The authority of the Board of Directors with respect to the
establishment of each series of Preferred Stock shall include, without
limiting the generality of the foregoing, determination of the following
matters which may vary between series:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates, and
the relative rights of priority, if any, of payments of dividends on
shares of that series;
(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and if so, the terms of such voting
rights;
(d) Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including provisions
for adjustment of the conversion rate in such events as the Board of
Directors shall determine;
(e) Whether the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the
date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary
under different conditions;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and if so, the terms and
amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding-up of the
corporation, and the relative rights of priority, if any, of payment of
shares of that series; and
(h) Any other relative preferences, rights, restrictions or
limitations of that series, including but not limited to any obligations
of the corporation to repurchase shares of that series upon the
occurrence of specified events.
<PAGE>
VI.
No holder of any of the shares of any class of the corporation
shall be entitled as of right to subscribe for, purchase, or otherwise
acquire any shares of any class of the corporation which the corporation
proposes to issue or any rights or options which the corporation proposes
to grant for the purchase of shares of any class of the corporation or
for the purchase of any shares, bonds, securities, or obligations of the
corporation which are convertible into or exchangeable for, or which
carry any rights, to subscribe for, purchase, or otherwise acquire shares
of any class of the corporation and any and all of such shares, bonds,
securities, or obligations of the corporation, whether now or hereafter
authorized or created, may be issued, or may be reissued if the same have
been reacquired and if their reissue is not prohibited, and any and all
of such rights and options may be granted by the Board of Directors to
such individuals and entities, and for such lawful consideration, and on
such terms, as the Board of Directors in its discretion may determine,
without first offering the same, or any thereof, to any said holder.
VII.
The corporation shall not commence business until it shall have
received at least $500.00 in payment for the issuance of shares of its
stock.
VIII.
In addition to, but not in limitation of, the general powers
conferred by law, the corporation shall have the power to make
distributions to its shareholders out of its capital surplus, to purchase
its own shares out of its unreserved and unrestricted capital surplus
available therefor, and to carry on any lawful business.
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000857855
<NAME> UNITED COMMUNITY BANKS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 26,467
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 12,855
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 70,012
<INVESTMENTS-CARRYING> 74,626
<INVESTMENTS-MARKET> 74,346
<LOANS> 558,325
<ALLOWANCE> 7,369
<TOTAL-ASSETS> 779,565
<DEPOSITS> 680,337
<SHORT-TERM> 33,138
<LIABILITIES-OTHER> 6,588
<LONG-TERM> 10,736
0
0
<COMMON> 6,260
<OTHER-SE> 42,506
<TOTAL-LIABILITIES-AND-EQUITY> 779,565
<INTEREST-LOAN> 38,786
<INTEREST-INVEST> 6,709
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 45,495
<INTEREST-DEPOSIT> 21,644
<INTEREST-EXPENSE> 22,862
<INTEREST-INCOME-NET> 22,633
<LOAN-LOSSES> 915
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 17
<INCOME-PRETAX> 5,001
<INCOME-PRE-EXTRAORDINARY> 8,655
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,725
<EPS-PRIMARY> .91
<EPS-DILUTED> .91
<YIELD-ACTUAL> 4.76
<LOANS-NON> 728
<LOANS-PAST> 81
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,545
<CHARGE-OFFS> 364
<RECOVERIES> 274
<ALLOWANCE-CLOSE> 7,370
<ALLOWANCE-DOMESTIC> 7,370
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 7,370
</TABLE>
