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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 10-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997
/ / 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 or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
59 Highway 515, P.O. Box 398,
Blairsville, Georgia 30512
-------------------------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (706) 745-2151
Securities registered pursuant to Section 12(b) of the Act: None
Name of exchange on which registered: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value
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 /X/ No / /
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
Aggregate market value of the voting stock held by non-
affiliates (which for purposes hereof are all holders other than
executive officers and directors) of the Registrant as of March
17, 1998: $153,602,490 (based on 5,120,083 shares at $30 per
share, the last sale price known to the Registrant for the Common
Stock, for which there is no established public trading market.
As of March 17, 1998, 7,646,209 shares of Common Stock were
issued and outstanding, par value $1.00 per share, including
140,000 shares deemed outstanding pursuant to 2006 Debentures and
presently exercisable options to acquire 121,604 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's annual report to shareholders for
the fiscal year ended December 31, 1997, contained in Appendix A
to the Registrant's definitive Proxy Statement for the 1998
Annual Meeting of Shareholders, to be filed with the Commission,
are incorporated by reference into Parts I and II. Portions of
the Registrant's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders, to be filed with the Commission, are
incorporated into Part III.
PART I
ITEM 1. BUSINESS.
GENERAL
United Community Banks, Inc. ("United") was incorporated
under the laws of Georgia in 1987 and commenced operations in
1988 by acquiring 100% of the outstanding shares of Union County
Bank, now known as United Community Bank ("UCB"). United is a
registered bank holding company. All of United's activities are
currently conducted by its wholly-owned subsidiaries, UCB, which
was organized as a Georgia banking corporation in 1950, Carolina
Community Bank, Murphy, North Carolina ("Carolina"), which United
acquired in 1990, Peoples Bank, Blue Ridge, Georgia ("Peoples"),
which United acquired in 1992, Towns County Bank, Hiawassee,
Georgia ("Towns"), which United also acquired in 1992, White
County Bank, Cleveland, Georgia ("White"), which United acquired
in 1995, and First Clayton Bancshares, Inc. ("First Clayton"),
which United acquired in 1997. (UCB, Carolina, Peoples, Towns,
White and First Clayton are collectively referred to as "Banks").
United also operates a finance company United Family Finance Co.
("UFFC").
RECENT DEVELOPMENTS
On January 30, 1998, United acquired certain assets and
deposit liabilities of the Ellijay office of The Bank of North
Georgia, which had total loans of $3 million, and total deposits
of $23 million.
On September 12, 1997, United completed the acquisition of
First Clayton, Rabun County, Georgia with the issuance of 646,247
shares of United Common Stock and approximately $7,000 paid for
fractional shares. At the date of closing, First Clayton had
assets of $74 million and equity of $6 million. First Clayton is
a full-service commercial bank located in Clayton, Georgia.
First Clayton provides customary types of banking services such
as checking accounts, savings accounts and time deposits. It
also engages in commercial and consumer lending, makes secured
and unsecured loans and provides other financial services.
In May 1997, United completed a public offering of 300,000
shares of United Common Stock, pursuant to which $6.5 million in
additional capital was raised. United used the net proceeds of
that offering to invest additional capital in UCB, Carolina and
Towns and for general corporate purposes.
FORWARD LOOKING STATEMENTS
Certain statements included or incorporated by reference in
this Form 10-K are forward-looking (as such term is defined in
the Securities Exchange Act of 1934, as amended). Such
statements may relate to United's operations, performance and
financial condition. These statements are based upon a number of
assumptions and estimates that are inherently subject to
significant uncertainties, many of which are beyond the control
of United. Actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially include, but
are not limited to, those set forth below.
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YEAR 2000 COMPLIANCE. The "year 2000 issue" arises from the
widespread use of computer programs that rely on two-digit codes
to perform computations or decision-making functions. Many of
these programs may fail due to an inability to properly interpret
date codes beginning January 1, 2000. For example, such programs
may misinterpret "00" as the year 1900 rather than 2000. In
addition, some equipment, being controlled by microprocessor
chips, may not deal appropriately with the year "00". United and
the Banks are evaluating their computer systems to determine
which modifications and expenditures will be necessary to make
their systems compatible with year 2000 requirements. United and
the Banks believe that their systems will be year 2000-compliant
upon implementation of such modifications.
Although United and the Banks have not yet completed a
review of their systems to determine modifications necessary to
make them year 2000 compliant, United currently estimates that the
total cost of such modifications will not be material to its
consolidated results of operations. However, there can be no
assurance that all necessary modifications will be identified and
corrected or that unforeseen difficulties or costs will not
arise. In addition, there can be no assurance that the systems
of other companies on which United and the Banks depend will be
modified on a timely basis, or that the failure by another
company to properly modify its systems will not negatively impact
the systems or operations of United and the Banks.
DEPENDENCE ON KEY PERSONNEL. The success of United is
dependent upon the continued services of its key personnel
including Mr. Jimmy C. Tallent, who is United's President and
Chief Executive Officer. Although United employs many skilled
executives and employees, the loss of Mr. Tallent's services
could have a material adverse effect on the business of United.
MONETARY POLICY AND ECONOMIC CONDITIONS. The operating
income and net income of the Banks depend to a substantial extent
on the difference between income the Banks receive from their
loans, investments and other earning assets, and the interest the
Banks pay on their deposits and other liabilities. These rates
are highly sensitive to many factors which are beyond the control
of the Banks, including national and international economic
conditions and the monetary policies of various governmental and
regulatory authorities.
SERVICES
The Banks are community-oriented, with an emphasis on retail
banking, and offer such customary banking services as customer
and commercial checking accounts, NOW accounts, savings accounts,
certificates of deposit, lines of credit, Mastercard and VISA
accounts, money transfers and trust services. The Banks finance
commercial and consumer transactions, make secured and unsecured
loans, including residential mortgage loans, and provide a
variety of other banking services. UCB also offers travel agency
services for the Banks' customers.
The Mortgage People Company ("MPC"), a division of UCB, is a
full-service mortgage lending operation approved as a
seller/servicer for Federal National Mortgage Association and
Federal Home Mortgage Corporation. MPC was organized to provide
fixed and adjustable-rate mortgages. UFFC is a traditional
consumer finance company which is based in Blue Ridge, Georgia
and also has been granted a license to conduct business in
Hiawassee, Georgia and Murphy, North Carolina.
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MARKETS
United conducts banking activities primarily through UCB,
Towns, White and First Clayton in northern Georgia, Peoples in
Northern Georgia and Polk County, Tennessee and surrounding
counties, and through Carolina in western North Carolina. MPC
primarily makes mortgage loans inside the Banks' market areas and
outside this market areas through affiliations with UCB,
Carolina, Peoples, Towns, White and First Clayton. Customers of
the Banks are primarily consumers and small businesses.
DEPOSITS
The Banks offer a full range of depository accounts and
services to both consumers and businesses. At December 31, 1997,
United's deposit base, totaling approximately $977,079,000,
consisted of approximately $109,210,000 in non-interest-bearing
demand deposits (11% of total deposits), approximately
$189,280,000 in interest-bearing demand deposits (including money
market accounts) (19% of total deposits), approximately
$45,280,000 in savings deposits (5% of total deposits),
approximately $476,506,000 in time deposits in amounts less than
$100,000 (49% of total deposits), and approximately $156,803,000
in time deposits of $100,000 or more (16% of total deposits).
Certificates of deposit in excess of $100,000 may be more
volatile than other deposits since those deposits, to the extent
that they exceed $100,000, are not insured by the FDIC.
Management of United is of the opinion that its time deposits of
$100,000 or more are customer-relationship oriented and represent
a reasonably stable source of funds.
LOANS
The Banks make both secured and unsecured loans to
individuals, firms and corporations. Secured loans include first
and second real estate mortgage loans. The Banks also make
direct installment loans to consumers on both a secured and
unsecured basis. At December 31, 1997, consumer, real estate
construction, real estate mortgage and commercial loans
represented approximately 13%, 10%, 63% and 13%, respectively, of
United's total loan portfolio.
Specific risk elements associated with each of the Banks'
lending categories are as follows:
Commercial, financial and Industry concentrations,
agricultural inability to monitor the
condition of collateral
(inventory, accounts
receivable and vehicles), lack
of borrower management
expertise, increased
competition, and specialized
or obsolete equipment as
collateral
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Real estate - construction Inadequate collateral and
long-term financing agreements
Real estate - mortgage Changes in local economy and
rate limits on variable rate
loans
Installment loans to Loss of borrower's employment,
individuals changes in local economy, the
inability to monitor
collateral (vehicle, boats and
mobile homes)
Effective March 19, 1993, inter-agency guidelines adopted by
federal bank regulators mandated that financial institutions
establish real estate lending policies with maximum allowable
real estate loan-to-value guidelines, subject to an allowable
amount of non-conforming loans. The Banks had similar guidelines
in place and adopted the federal guidelines as their maximum
allowable limits, but had in the past and now have in place loan
policies that are, in some cases, more conservative than the
federal guidelines. The federal guidelines establish maximum
allowable loan-to-value ratios for various types of real estate
loans as set forth below:
Maximum Allowable
Loan Category Loan-To-Value Percent
------------- ---------------------
Land 65%
Land development 75
Construction:
Commercial, multi-family and other 80
nonresidential
One-to-four family residential 85
Improved property 85
Owner-occupied one-to-four family and home equity
___________________________________
[FN]
Multi-family construction includes condominiums and cooperatives.
A loan-to-value limit has not been established for permanent
mortgage or home equity loans on owner-occupied, one-to-four
family residential property. However, for any such loan with a
loan-to-value ratio that equals or exceeds 90% at origination,
appropriate credit enhancement in the form of either mortgage
insurance or readily marketable collateral is required.
LENDING POLICY
The current lending strategy of the Banks is to make loans
primarily to persons who reside, work or own property in their
primary trade areas, except that United makes mortgage loans in
the trade areas of the community banks in which United has
affiliations or in the areas in which United has a loan
origination office. See "Markets." Unsecured loans normally
are made only to persons who maintain depository relationships
with the Banks. Secured loans are made to persons who are well
established and have net worth, collateral and cash flow to
support the loan.
5
The Banks provide each lending officer with written
guidelines for lending activities. Lending authority is
delegated by the Boards of Directors of the Banks to loan
officers, each of whom is limited in the amount of secured and
unsecured loans which he or she can make to a single borrower or
related group of borrowers. All unsecured loans in excess of
$50,000 must have the approval of the President or a Senior Vice
President of the appropriate Bank prior to being committed.
Generally, secured loans above $400,000 and unsecured loans over
$50,000 require Board approval.
LOAN REVIEW AND NONPERFORMING ASSETS
The loan review officer of United reviews each of the Banks'
loan portfolios to determine any deficiencies and corrective
action to be taken. The results of the reviews by the loan
review officers are presented to the Presidents of each of the
Banks, the President and the Chief Credit Officer of United and
the Boards of Directors of each of the Banks and United. On at
least a semi-annual basis, reviews are conducted at Towns and
White for all loans over $350,000; at Carolina and First Clayton
for all loans over $200,000; at Peoples for all loans over
$400,000; and at UCB for all loans over $500,000. Past due loans
are reviewed at least weekly by lending officers of the Bank
involved and by the Chief Credit Officer of United, and a summary
report is reviewed monthly by the Boards of Directors of each
Bank. The Boards of Directors of the relevant Bank review all
loans over $50,000, whether current or past due, at least once
annually.
ASSET/LIABILITY MANAGEMENT
Committees composed of officers of each of the Banks and the
Chief Financial Officer and Controller of United are charged with
managing the assets and liabilities of the Banks. The committees
attempt to manage asset growth, liquidity and capital in order to
maximize income and reduce interest rate risk. The committees
direct each Bank's overall acquisition and allocation of funds.
At monthly meetings, the committees review the monthly asset and
liability funds budget in relation to the actual flow of funds,
as well as peer group comparisons; the ratio of the amount of
rate sensitive assets to the amount of rate sensitive
liabilities; the ratio of allowance for loan losses to
outstanding and non-performing loans; and other variables, such
as expected loan demand, investment opportunities, core deposit
growth within specified categories, regulatory changes, monetary
policy adjustments and the overall state of the economy.
INVESTMENT POLICY
The Banks' investment portfolio policy is to maximize income
consistent with liquidity, asset quality and regulatory
constraints. The policy is reviewed from time to time by the
Boards of Directors. Individual transactions, portfolio
composition and performance are reviewed and approved monthly by
the Boards of Directors or a committee thereof. The Chief
Financial Officer of United and the President of each of the
Banks implement the policy and report information to the full
Board of Directors of each of the Banks on a monthly basis
concerning sales, purchases, maturities and calls, resultant
gains or losses, average maturity, federal taxable equivalent
yields and appreciation or depreciation by investment categories.
6
EMPLOYEES
As of December 31, 1997, the Banks had an aggregate of 553
full-time equivalent employees, and United had 16 employees.
Neither United nor any of the Banks is a party to any collective
bargaining agreement, and the Banks believe that their employee
relations are good. None of the Banks' executive officers is
employed pursuant to an employment contract.
COMPETITION
The banking business is highly competitive. UCB competes
with one other depository institution in Union County, Georgia,
and three other depository institutions in each of Lumpkin and
Habersham Counties. Carolina competes with six other depository
institutions in Graham, Cherokee, Macon, Haywood and Clay
Counties, North Carolina, the majority of which are branches of
regional or North Carolina state-wide institutions. Peoples
competes with two other depository institutions in Fannin County,
Georgia. Towns competes with one depository institution in Towns
County, Georgia. White competes with two other depository
institutions in White County, Georgia. First Clayton competes
with two other depository institutions in Rabun County. The
Banks also compete with other financial service organizations,
including savings and loan associations, finance companies,
credit unions and certain governmental agencies. To the extent
that banks must maintain non-interest-earning reserves against
deposits, they may be at a competitive disadvantage when compared
with other financial service organizations that are not required
to maintain reserves against substantially equivalent sources of
funds.
SUPERVISION AND REGULATION
GENERAL. United is a registered bank holding company
subject to regulation by the Board of Governors of the Federal
Reserve System (the "Federal Reserve") under the Bank Holding
Company Act of 1956, as amended (the "Act"). United is required
to file financial information with the Federal Reserve
periodically and is subject to periodic examination by the
Federal Reserve.
The Act requires every bank holding company to obtain the
prior approval of the Federal Reserve before (i) it may acquire
direct or indirect ownership or control of more than 5% of the
voting shares of any bank that it does not already control; (ii)
it or any of its subsidiaries, other than a bank, may acquire all
or substantially all of the assets of a bank; and (iii) it may
merge or consolidate with any other bank holding company. In
addition, a bank holding company is generally prohibited from
engaging in, or acquiring, direct or indirect control of the
voting shares of any company engaged in non-banking activities.
This prohibition does not apply to activities found by the
Federal Reserve, by order or regulation, to be so closely related
to banking or managing or controlling banks as to be a proper
incident thereto. Some of the activities that the Federal
Reserve has determined by regulation or order to be closely
related to banking are: making or servicing loans and certain
types of leases; performing certain data processing services;
acting as fiduciary or investment or financial advisor; providing
discount brokerage services; underwriting bank eligible
securities; underwriting debt and equity securities on a limited
7
basis through separately capitalized subsidiaries; and making
investments in corporations or projects designed primarily to
promote community welfare.
United must also register with the DBF and file periodic
information with the DBF. As part of such registration, the DBF
requires information with respect to the financial condition,
operations, management and intercompany relationships of United
and the Banks and related matters. The DBF may also require such
other information as is necessary to keep itself informed as to
whether the provisions of Georgia law and the regulations and
orders issued thereunder by the DBF have been complied with, and
the DBF may examine United and each of the Banks.
The North Carolina Banking Commission ("NCBC"), which has
the statutory authority to regulate non-banking affiliates of
North Carolina banks, in 1992 began using this authority to
examine and regulate the activities of North Carolina-based
holding companies owning North Carolina-based banks. Although
the NCBC has not exercised its authority to date to examine and
regulate holding companies outside of North Carolina that own
North Carolina banks, it is likely the NCBC may do so in the
future.
United is an "affiliate" of the Banks under the Federal
Reserve Act, which imposes certain restrictions on (i) loans by
the Banks to United, (ii) investments in the stock or securities
of United by the Banks, (iii) the Banks' taking the stock or
securities of an "affiliate" as collateral for loans by the Bank
to a borrower, and (iv) the purchase of assets from United by the
Banks. Further, a bank holding company and its subsidiaries are
prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit, lease or sale of
property or furnishing of services.
Each of United's subsidiaries is regularly examined by the
Federal Deposit Insurance Corporation (the "FDIC"). UCB,
Peoples, White, Towns and First Clayton, as state banking
associations organized under Georgia law, are subject to the
supervision of, and are regularly examined by, the DBF. Carolina
is subject to the supervision of, and is regularly examined by,
the NCBC and the FDIC. Both the FDIC and the DBF must grant
prior approval of any merger, consolidation or other corporation
reorganization involving UCB, Peoples, White, Towns or First
Clayton, and the FDIC and the NCBC must grant prior approval of
any merger, consolidation or other corporate reorganization of
Carolina. A bank can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC in connection
with the default of a commonly-controlled institution.
PAYMENT OF DIVIDENDS. United is a legal entity separate and
distinct from the Banks. Most of the revenues of United result
from dividends paid to it by the Banks. There are statutory and
regulatory requirements applicable to the payment of dividends by
the Banks, as well as by United to its shareholders.
UCB, Peoples, Towns, White and First Clayton are each state
chartered banks regulated by the DBF and the FDIC. Under the
regulations of the DBF, dividends may not be declared out of the
retained earnings of a state bank without first obtaining the
written permission of the DBF unless such bank meets all the
following requirements:
8
(a) total classified assets as of the most recent
examination of the bank do not exceed 80% of equity
capital (as defined by regulation);
(b) the aggregate amount of dividends declared or
anticipated to be declared in the calendar year does
not exceed 50% of the net profits after taxes but
before dividends for the previous calendar year; and
(c) the ratio of equity capital to adjusted assets is not
less than 6%.
Under North Carolina law, the Board of Directors of Carolina
may declare a dividend for as much of the undivided profits of
Carolina as it deems appropriate, so long as Carolina's surplus
is greater than 50% of its capital.
The payment of dividends by United and the Banks may also be
affected or limited by other factors, such as the requirement to
maintain adequate capital above regulatory guidelines. In
addition, if, in the opinion of the applicable regulatory
authority, a bank under its jurisdiction is engaged in or is
about to engage in an unsafe or unsound practice (which,
depending upon the financial condition of the bank, could include
the payment of dividends), such authority may require, after
notice and hearing, that such bank cease and desist from such
practice. The FDIC has issued a policy statement providing that
insured banks should generally only pay dividends out of current
operating earnings. In addition to the formal statutes and
regulations, regulatory authorities consider the adequacy of each
of the Bank's total capital in relation to its assets, deposits
and other such items. Capital adequacy considerations could
further limit the availability of dividends to the Banks. At
December 31, 1997, net assets available from the Banks to pay
dividends without prior approval from regulatory authorities
totaled approximately $13 million. For 1997, United's cash
dividend payout to stockholders was 6.5% of net income.
MONETARY POLICY. The results of operations of the Banks are
affected by credit policies of monetary authorities, particularly
the Federal Reserve. The instruments of monetary policy employed
by the Federal Reserve include open market operations in U.S.
government securities, changes in the discount rate on bank
borrowings and changes in reserve requirements against bank
deposits. In view of changing conditions in the national economy
and in the money markets, as well as the effect of actions by
monetary and fiscal authorities, including the Federal Reserve,
no prediction can be made as to possible future changes in
interest rates, deposit levels, loan demand or the business and
earnings of the Banks.
CAPITAL ADEQUACY. The Federal Reserve and the FDIC have
implemented substantially identical risk-based rules for
assessing bank and bank holding company capital adequacy. These
regulations establish minimum capital standards in relation to
assets and off-balance sheet exposures as adjusted for credit
risk. Banks and bank holding companies are required to have (1)
a minimum level of total capital (as defined) to risk-weighted
assets of eight percent (8%); (2) a minimum Tier One Capital (as
defined) to risk-weighted assets of four percent (4%); and (3) a
minimum stockholders' equity to risk-weighted assets of four
percent (4%). In addition, the Federal Reserve and the FDIC have
9
established a minimum three percent (3%) leverage ratio of Tier
One Capital to total assets for the most highly-rated banks and
bank holding companies. "Tier One Capital" generally consists of
common equity not including unrecognized gains and losses on
securities, minority interests in equity accounts of consolidated
subsidiaries and certain perpetual preferred stock less certain
intangibles. The Federal Reserve and the FDIC will require a
bank holding company and a bank, respectively, to maintain a
leverage ratio greater than three percent (3%) if either is
experiencing or anticipating significant growth or is operating
with less than well-diversified risks in the opinion of the
Federal Reserve. The Federal Reserve and the FDIC use the
leverage ratio in tandem with the risk-based ratio to assess the
capital adequacy of banks and bank holding companies. The FDIC,
the Office of the Comptroller of the Currency (the "OCC") and the
Federal Reserve have amended, effective January 1, 1997, the
capital adequacy standards to provide for the consideration of
interest rate risk in the overall determination of a bank's
capital ratio, requiring banks with greater interest rate risk to
maintain adequate capital for the risk. The revised standards
have not had a significant effect on United's capital
requirements.
In addition, effective December 19, 1992, a new Section 38
to the Federal Deposit Insurance Act implemented the prompt
corrective action provisions that Congress enacted as a part of
the Federal Deposit Insurance Corporation Improvement Act of 1991
(the "1991 Act"). The "prompt corrective action" provisions set
forth five regulatory zones in which all banks are placed largely
based on their capital positions. Regulators are permitted to
take increasingly harsh action as a bank's financial condition
declines. Regulators are also empowered to place in receivership
or require the sale of a bank to another depository institution
when a bank's capital leverage ratio reaches 2%. Better
capitalized institutions are generally subject to less onerous
regulation and supervision than banks with lesser amounts of
capital.
The FDIC has adopted regulations implementing the prompt
corrective action provisions of the 1991 Act, which place
financial institutions in the following five categories based
upon capitalization ratios: (1) a "well capitalized" institution
has a total risk-based capital ratio of at least 10%, a Tier One
risk-based ratio of at least 6% and a leverage ratio of at least
5%; (2) an "adequately capitalized" institution has a total risk-
based capital ratio of at least 8%, a Tier One risk-based ratio
of at least 4% and a leverage ratio of at least 4%; (3) an
"undercapitalized" institution has a total risk-based capital
ratio of under 8%, a Tier One risk-based ratio of under 4% or a
leverage ratio of under 4%; (4) a "significantly
undercapitalized" institution has a total risk-based capital
ratio of under 6%, a Tier One risk-based ratio of under 3% or a
leverage ratio of under 3%; and (5) a "critically
undercapitalized" institution has a leverage ratio of 2% or less.
Institutions in any of the three undercapitalized categories
would be prohibited from declaring dividends or making capital
distributions. The FDIC regulations also establish procedures
for "downgrading" an institution to a lower capital category
based on supervisory factors other than capital. Under the
FDIC's regulations, all of the Banks were "well capitalized"
institutions at December 31, 1996 and December 31, 1997.
10
Set forth below are pertinent capital ratios for each of the
Banks as of December 31, 1997:
Minimum Capital Requirement UCB Carolina Peoples Towns White First Clayton
- --------------------------- --- -------- ------- ----- ----- -------------
Tier One Capital to 9.75% 9.56% 9.86% 10.67% 10.83% 12.27%
Risk Based
Assets: 4%
Total Capital to 10.92% 10.81% 11.11% 11.92% 12.09% 13.53%
Risk Based
Assets: 8%
Leverage Ratio (Tier One 7.67% 6.34% 6.96% 7.25% 7.93% 7.43%
Capital to Average Total
Assets): 3%
__________________________
Minimum required ratio for "well capitalized" banks is 6%
Minimum required ratio for "well capitalized" banks is 10%
Minimum required ratio for "well capitalized" banks is 5%
Recent Legislative and Regulatory Action. On April 19,
1995, the four federal bank regulatory agencies adopted revisions
to the regulations promulgated pursuant to the Community
Reinvestment Act (the "CRA"), which are intended to set distinct
assessment standards for financial institutions. The revised
regulation contains three evaluation tests: (i) a lending test,
which will compare an institution's market share of loans in low-
and moderate-income areas to its market share of loans in its
entire service area and the percentage of a bank's outstanding
loans to low and moderate-income areas or individuals, (ii) a
services test, which will evaluate the provisions of services
that promote the availability of credit to low- and moderate-
income areas, and (iii) an investment test, which will evaluate
an institution's record of investments in organizations designed
to foster community development, small and minority-owned
businesses and affordable housing lending, including state and
local government housing or revenue bonds. The regulations are
designed to reduce some paperwork requirements of the current
regulations and provide regulators, institutions and community
groups with a more objective and predictable manner with which to
evaluate the CRA performance of financial institutions. The rule
became effective on January 1, 1996, at which time evaluation
under streamlined procedures began for institutions with assets
of less than $250 million that are owned by a holding company
with total assets of less than $1 billion. It is not expected
that these regulations will have any appreciable impact upon
United and the Banks.
Congress and various federal agencies (including, in
addition to the bank regulatory agencies, the Department of
Housing and Urban Development, the Federal Trade Commission and
the Department of Justice) (collectively the "Federal Agencies")
responsible for implementing the nation's fair lending laws have
been increasingly concerned that prospective home buyers and
other borrowers are experiencing discrimination in their efforts
to obtain loans. In recent years, the Department of Justice has
filed suit against financial institutions, which it determined
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had discriminated, seeking fines and restitution for borrowers
who allegedly suffered from discriminatory practices. Most, if
not all, of these suits have been settled (some for substantial
sums) without a full adjudication on the merits.
On March 8, 1994, the Federal Agencies, in an effort to
clarify what constitutes lending discrimination and specify the
factors the agencies will consider in determining if lending
discrimination exists, announced a joint policy statement
detailing specific discriminatory practices prohibited under the
Equal Opportunity Act and the Fair Housing Act. In the policy
statement, three methods of proving lending discrimination were
identified: (1) overt evidence of discrimination, when a lender
blatantly discriminates on a prohibited basis, (2) evidence of
disparate treatment, when a lender treats applicants differently
based on a prohibited factor even where there is no showing that
the treatment was motivated by prejudice or a conscious intention
to discriminate against a person, and (3) evidence of disparate
impact, when a lender applies a practice uniformly to all
applicants, but the practice has a discriminatory effect, even
where such practices are neutral on their face and are applied
equally, unless the practice can be justified on the basis of
business necessity.
On September 23, 1994, President Clinton signed the Reigle
Community Development and Regulatory Improvement Act of 1994 (the
"Regulatory Improvement Act"). The Regulatory Improvement Act
contains funding for community development projects through banks
and community development financial institutions and also
numerous regulatory relief provisions designed to eliminate
certain duplicative regulations and paperwork requirements.
On September 29, 1994, President Clinton signed the Reigle-
Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Federal Interstate Bill") which amends federal law to permit
bank holding companies to acquire existing banks in any state
effective September 29, 1995. Further, any interstate bank
holding company is permitted to merge its various bank
subsidiaries into a single bank with interstate branches after
May 31, 1997. States have the authority to authorize interstate
branching before June 1, 1997, or, alternatively, to opt out of
interstate branching prior to that date. The Georgia Financial
Institutions Code was amended in 1994 to permit the acquisition
of a Georgia bank or bank holding company by out-of-state bank
holding companies beginning July 1, 1995. On September 29, 1995,
the interstate banking provisions of the Georgia Financial
Institutions Code were superseded by the Federal Interstate Bill.
On January 26, 1996, the Georgia legislature adopted a bill
(the "Georgia Intrastate Bill") to permit, effective July 1,
1996, any Georgia bank or group of affiliated banks under one
holding company to establish up to an aggregate of three new or
additional branch banks anywhere within the State of Georgia,
excluding any branches established by a bank in a county in which
it is already located. After July 1, 1998, all restrictions on
state-wide branching are removed. Before adoption of the Georgia
Intrastate Bill, Georgia only permitted branching via merger or
consolidation with an existing bank or in certain other limited
circumstances.
FDIC INSURANCE AND FICO ASSESSMENTS FOR THE BANKS. The
Banks are subject to FDIC deposit insurance assessments for the
12
Bank Insurance Fund (the "BIF"). In the first six months of
1995, the Banks were assessed $.23 per $100 of deposits based
upon a risk-based system whereby banks are assessed on a sliding
scale depending upon their placement in nine separate supervisory
categories, from $.23 per $100 of deposits for the healthiest
banks (those with the highest capital, best management and best
overall condition) to as much as $.31 per $100 of deposits for
the less-healthy institutions, for an average $.259 per $100 of
deposits.
On August 8, 1995, the FDIC lowered the BIF premium for
healthy banks 83% from $.23 per $100 in deposits to $.04 per $100
in deposits, while retaining the $.31 level for the riskiest
banks. The average assessment rate was therefore reduced from
$.232 to $.044 per $100 of deposits. The new rate took effect on
September 29, 1995. On September 15, 1995, the FDIC refunded
$564,000 to the Banks for premium overpayments in the second and
third quarter of 1995. On November 14, 1995, the FDIC again
lowered the BIF premium for healthy banks from $.04 per $100 of
deposits to zero for the highest rated institutions (94% of the
industry). As a result, the Banks paid no premium for deposit
insurance in 1997 and FICO bond assessments of $100,000. It is
not estimated that the Banks will pay any premium for deposit
insurance in 1998 and will pay FICO bond assessments of
$120,000.
EXECUTIVE OFFICERS OF UNITED
Executive officers of United are elected by the Board of
Directors annually in January and hold office until the following
January unless they sooner resign or are removed from office by
the Board of Directors.
The executive officers of United, and their ages,
positions with United and the Banks and terms of office as of
December 31, 1997, are as follows:
Name (age) Principal Position Officer of United Since
- ---------------- ------------------------- -----------------------
Jimmy C. Tallent President and Director of 1984
(45) UCB and United; Director
of Carolina, White,
Peoples, First Clayton and
UFFC; Chairman of the Board
of Towns and White.
Billy M. Decker Senior Vice President of 1988
(54) United; President and
Director of Carolina;
Director of Carolina,
United and UCB; Secretary
of United.
Stephen L. Cockerham Senior Vice President and 1990
(36) Chief Credit Officer of
UCB and United. From 1985
through 1990, Mr. Cockerham
was a Bank Liquidation Specialist
with the Federal Deposit
Insurance Corporation.
13
Name (age) Principal Position Officer of United Since
- ---------------- ------------------------- -----------------------
Guy Freeman Senior Vice President of 1995
(62) United since March, 1995,
Executive Vice President
of Carolina since July
1996; President and CEO of
Carolina since 1997; and
Director of Carolina since
December 1996. Mr. Freeman
served as President and Chief
Executive Officer of White
from 1993 until February
1995. Since February
1995, Mr. Freeman has been
Chairman of the Board of
White, of which he has
been a member since
January 1993. Mr. Freeman
also served as Chairman of
the Board of WC Holding
Company from February 1995
until its acquisition by
United. From 1992 until
1993, Mr. Freeman served
as President and Chief
Executive Officer of East
Side Bank, Snellville,
Georgia, and from 1987 to
1992, he served in the
same capacity at First
American Bank, Atlanta,
Georgia.
Thomas C. Gilliland President and Chief 1993
(49) Executive Officer of
Peoples; Vice Chairman of
the Peoples Board;
Executive Vice President
and Director of United;
Executive Vice President
of United since April
1994. Chairman of the
Board of UFFC since 1997.
Eugene B. White President and Director of 1995
(53) White and Vice President
of United since March,
1995. Mr. White served as
Executive Vice President
of First National Bank of
Habersham, Cornelia,
Georgia from 1982 to 1995.
14
Name (age) Principal Position Officer of United Since
- ---------------- ------------------------- -----------------------
Richard E. Martin, Jr. Vice President of United 1992
(49) since 1993; President and
Director of Towns. From
1989 through 1992, Mr.
Martin was Senior Vice
President of First Colony
Bank, Alpharetta, Georgia.
L. Gene Sprayberry Executive Vice President 1973
(52) of UCB; Assistant
Secretary of United.
Christopher J. Bledsoe Senior Vice President and 1993
Chief Financial Officer of
UCB and United; Director of
UFFC since 1997. A certified
public accountant, from 1988
through 1993, Mr. Bledsoe
was a Supervisor at Evans,
Porter, Bryan & Co., an
accounting firm in
Atlanta, Georgia.
Robert L. Cochran Assistant Vice President 1995
(33) and Controller of UCB;
Controller of United since
1996. A certified public
accountant, from 1989
through 1995, Mr. Cochran
was an accounting manager
with PNC Bank in
Cincinnati, Ohio.
ITEM 2. PROPERTIES.
The executive offices of United and the main banking office
of UCB are located in adjacent buildings, the former a 17,000
square-foot facility at 59 Highway 515, Blairsville, Georgia and
the latter a 19,000 square-foot operations center located
adjacent to its executive offices and main banking office. Both
the building and the land, which includes parking and four drive-
in teller stations, are owned by UCB. UCB also has a branch at
an Ingles supermarket in Blairsville. The Ingles branch
property, consisting of 350 square feet, is leased. UCB's branch
office in Cornelia, which it owns, is 5,000 square feet. UCB
also maintains a branch office in Dahlonega, which consists of
9,500-square feet and two drive-in teller stations, which are
owned by UCB and a 1,020-square foot building leased by UCB.
The main banking office of Carolina is located at 300
Peachtree Street, Murphy, North Carolina, and contains 12,000
square feet. Both the building and the land, which includes
parking and drive-in teller stations, are owned by Carolina.
Carolina has 10 North Carolina branches: Hayesville (one full
service branch and one supermarket branch); Robbinsville;
Andrews; Waynesville; Franklin; Sylva; Asheville; Bryson City;
and Cashiers. Over half of Carolina's branches are in locations
where both the land and the building is owned by United.
Carolina's branches aggregate approximately 20,000 square feet.
15
Peoples owns its main banking office located at 4000
Appalachian Highway, Blue Ridge, Georgia. The office contains
19,000 square feet and four drive-in teller stations. Peoples
owns a branch at West Tennessee Avenue and Blue Ridge Drive in
McCaysville, Georgia, which contains 2,800 square feet and has
three drive-in teller stations. Peoples also leases a 335 square
foot branch at an Ingles supermarket on Appalachian Highway in
Blue Ridge, Georgia.
Towns owns its banking facility, containing 3,594 square
feet and two drive-in teller stations. The facility is located
at 214 North Main Street, Hiawassee, Georgia.
The main banking office of White is located at 153 East
Kytle Street, Cleveland, Georgia and contains approximately
14,000 square feet and four drive-in teller stations. White also
has a branch office located on Highway 75 North in Helen, Georgia
which contains approximately 2,200 square feet. White owns both
its main and branch office.
First Clayton owns its banking facilities, containing 11,500
square feet and four drive-in teller stations. The facility is
located at U.S. 441 and Duval in the Village Center, Clayton,
Georgia.
UFFC leases property in Hiawassee and Blue Ridge, Georgia
and Murphy, North Carolina. The Hiawassee, Blue Ridge and Murphy
properties consist of 1,800, 2,800 and 1,000 square feet,
respectively.
None of the properties owned by United or the Banks is
subject to encumbrances.
ITEM 3. LEGAL PROCEEDINGS.
United is not aware of any material pending legal
proceedings to which United or any of its subsidiaries is a party
or to which any of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the security holders
of United during the fourth quarter of its fiscal year.
ITEM 5. MARKET FOR UNITED'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
STOCK. There is no established public trading market for
United's Common Stock. At December 31, 1997, there were 2,534
holders of record of Common Stock.
DIVIDENDS. United paid cash dividends of $.10 per share of
Common Stock to shareholders of record in 1997 and 1996. United
intends to pay cash dividends on a quarterly basis. However, the
amount and frequency of dividends will be determined by United's
Board of Directors in light of the earnings, capital requirements
and the financial condition of United, and no assurance can be
given that dividends will be paid in the future.
16
PUBLIC OFFERING. United completed a public offering of
300,000 shares of Common Stock of United to Georgia and North
Carolina residents at an aggregate offering price of $6,600,000
pursuant to a Registration Statement on Form S-1, effective March
7, 1997, Registration Number 333-20887 and 24085. The offering
commenced on March 7, 1998 and was terminated after all of the
shares offered had been sold.
From the effective date of the registration statement to its
termination, the amount of expenses incurred by United in
connection with the issuance and distribution of the securities
registered was approximately $123,000. The net proceeds
received by United from the sale of the shares of Common Stock
were approximately $6.5 million, after deduction of the offering
expenses payable by United. In the State of Georgia, the Common
Stock was sold by certain executive officers of United, and no
commissions were paid on such sales. In order to comply with the
securities requirements of North Carolina, United engaged The
Carson Medlin Company ("Carson Medlin") to act as a broker-dealer
for the account of United in effecting offers and sales of the
Common Stock to investors in North Carolina. Carson Medlin
received a fee of $30,000 for these services. United used the
proceeds of the offering to invest additional capital in UCB,
Carolina and Towns, and for working capital because of asset
growth that these banks are experiencing.
RECENT SALES OF UNREGISTERED SECURITIES. On December 31,
1996, debentures due December 31, 2006, in the aggregate amount
of $3,500,000 were sold to 26 accredited investors in the States
of Georgia and North Carolina for cash in a transaction not
involving a public offering within the meaning of Section 4(2) of
the Securities Act of 1933 and in compliance with exemptions
contained in Rule 506 of Regulation D promulgated thereunder.
All of the purchasers were either existing shareholders, current
officers or directors of United.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for each of the five years ended
December 31, 1997 appears under the caption "Selected Financial
Data" on page A-3 of United's Annual Report to Shareholders
which is included as the appendix to the Proxy Statement used in
connection with the solicitation of proxies for United's Annual
Meeting of Shareholders to be held on April 16, 1998, to be filed
with the SEC (the "Proxy Statement") and is incorporated herein
by reference.
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
Management's discussion and analysis of financial condition
and results of operation appears under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operation" on pages A-4 through A-19 of United's Annual Report
to Shareholders, which is included as the appendix to the Proxy
Statement, is incorporated herein by reference.
17
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Information concerning quantitative and qualitative
disclosures about market risk appears under the caption
"Quantitative and Qualitative Disclosures about Market Risk" on
page A-20 of United's Annual Report to Shareholders, which is
included as the appendix to the Proxy Statement, is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Report of Independent Certified Public Accountants, the
Consolidated Financial Statements and Notes to the Consolidated
Financial Statements appear on pages A-22 through A-47 of
United's Annual Report to Shareholders, which is included as the
appendix to the Proxy Statement, is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
During United's two most recent fiscal years, United did not
change accountants and had no disagreement with its accountants
on any matters of accounting principles or practices or financial
statement disclosure.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF UNITED.
The information contained under the heading "Information
About Nominees for Director" in the Proxy Statement is
incorporated herein by reference. Pursuant to instruction 3 to
paragraph (b) of Item 401 of Regulation S-K, information relating
to the executive officers of United is included in Item 1 of this
Report.
ITEM 11. EXECUTIVE COMPENSATION.
The information contained under the heading "Executive
Compensation" in the Proxy Statement is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information contained under the heading "Voting
Securities and Principal Holders," share ownership information of
nominees for directors contained under the heading "Information
about Nominees for Director" and share ownership of Mr. Freeman
and Mr. Bledsoe contained in the footnotes (4) and (5) to the first
chart under "Executive Compensation" in the Proxy Statement is
incorporated herein by reference. For purposes of determining the
aggregate market value of United's voting stock held by nonaffiliates,
shares held by all directors and executive officers of United have
been excluded. The exclusion of such shares is not intended to,
and shall not, constitute a determination as to which persons
or entities may be "Affiliates" of United as defined by the
Commission.
18
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information contained under the heading "Compensation
Committee Interlocks and Insider Participation" in the Proxy
Statement is incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) 1. Financial Statements.
--------------------
The following financial statements and notes thereto of
United are incorporated herein by reference:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets - December 31, 1997 and 1996
Consolidated Statements of Earnings for the Years ended
December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Stockholders' Equity
for the Years ended December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows for the Years ended
December 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
2. Financial Statement Schedules.
-----------------------------
No financial statement schedules are required to be filed as
part of this Report on Form 10-K.
3. Exhibits.
--------
The following exhibits are required to be filed with this
Report on Form 10-K by Item 601 of Regulation S-K:
3.1 - Amended and Restated Bylaws of United, dated
September 12, 1997.
3.2. - Articles of Incorporation of United, as amended
(included as Exhibit 3.1 to United's Registration
Statement on Form S-4, Commission File No. 33-93286,
previously filed with the Commission and incorporated
herein by reference.)
4.1(a) - Form of Floating Rate Convertible
Subordinated Payable In Kind Debenture due December
31, 2006 (included as Exhibit 4.2 to United's
Registration Statement on Form S-1, Commission File
Number 33-93278, previously filed with the Commission
and incorporated herein by reference).
4.1(b) - Form of Subscription Agreement (included as
Exhibit A to United's Form S-1, Commission File
Number 333-20887, previously filed with the
Commission and incorporated by reference).
19
4.2 - See exhibits 3.1 and 3.2 for provisions of
Articles of Incorporation and By-laws, as amended,
which define the rights of the holders of Common
Stock of United.
10.1 - Agreement, dated May 3, 1984, by and between
Cornelia Bank and Union County Bank (included as
Exhibit 10.8 to United's Registration Statement on
Form S-18, Commission File No. 33-32205-A, previously
filed with the Commission and incorporated herein by
reference).
10.2 - United Community Banks, Inc. Key Employee Stock
Option Plan (included as Exhibit 10.3 to United's
Annual Report on Form 10-K for the year ended
December 31, 1994, previously filed with the
Commission and incorporated herein by reference).*
10.3 - Loan Agreement dated April 26, 1995 by and between
the Bankers Bank and United, together with the
related Promissory Note in the principal amount of
$12,000,000 and Stock Pledge Agreement (included as
Exhibit 10.17 to United's Registration Statement on
Form S-1, Commission File Number 33-93278, previously
filed with the Commission and incorporated herein by
reference.)
10.4 - Split-Dollar Agreement between United and Jimmy C.
Tallent dated June 1, 1994 (included as Exhibit
10.11 to United's Annual Report on Form 10-K for the
year ended December 31, 1994, previously filed with
the Commission and incorporated herein by
reference).*
10.5 - Agreement and Plan of Reorganization by and among
White County Bancshares, Inc., White County Bank and
United, dated as of April 11, 1995 (included as
Exhibit 2.1 to United's Registration Statement on
Form S-4, Commission File Number 33-93286, previously
filed with the Commission and incorporated herein by
reference).
10.6 - Agreement and Plan of Merger by and between
Registrant and White County Bancshares, Inc., dated
as of April 11, 1995 (included as Exhibit 2.2 to
United's Registration Statement on Form S-4,
Commission File Number 33-93286, previously filed
with the Commission and incorporated herein by
reference).
10.7 - Agreement and Plan of Merger by and between White
County Bank and White Interim Bank, dated as of June
12, 1995 (included as Exhibit 2.3 to United's
Registration Statement on Form S-4, Commission File
No. 33-93286, previously filed with the Commission
and incorporated herein by reference).
20
10.8 - Purchase and Assumption Agreement by and between
Carolina Bank and NationsBank, N.A. (Carolinas) dated
May 25, 1995 (included as Exhibit 10.16 to United's
Registration Statement on Form S-1, Commission File
Number 33-93278, previously filed with the Commission
and incorporated herein by reference).
10.9 - Broker Dealer Agreement between the Registrant and
The Carson Medlin Company dated January 28, 1997
(included as Exhibit 10.10 to United's Registration
Statement on Form S-1, Commission File Number 333-
20887, previously filed with the Commission and
incorporated herein by reference).
10.10 - Amendment to Broker Dealer Agreement between the
Registrant and The Carson Medlin Company dated March 3,
1997 (included as Exhibit 10.11 to United's
Registration Statement on Form S-1, Commission File
Number 333-20887, previously filed with the
Commission and incorporated herein by reference).
10.11 - Agreement and Plan of Merger, dated June 12, 1997,
by and between United and First Clayton Bancshares,
Inc. (included as Appendix A to United's Registration
Statement on Form S-4, Commission File Number 333-
31997, previously filed with the Commission and
incorporated herein by reference).
21 - Subsidiaries of United.
23 - Consent of Porter Keadle Moore, LLP.
27 - Financial Data Schedule.
99 - Notice of Annual Meeting and Proxy Statement of
United, including the Annual Report to Shareholders
attached as Appendix A.
________________________
* Management contract or compensatory plan or arrangement
required to be filed as an Exhibit to this Annual Report
on Form 10-K pursuant to Item 14(c) of Form 10-K.
(b) United did not file any reports on Form 8-K during the
fourth quarter of 1997.
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, United has duly caused this Report on Form 10-K to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Blairsville, State of Georgia, on the
24th of March, 1998.
UNITED COMMUNITY BANKS, INC.
(Registrant)
By: /s/ Jimmy C. Tallent
Title: President
POWER OF ATTORNEY AND SIGNATURES
Know all men by these presents, that each person whose
signature appears below constitutes and appoints Jimmy C. Tallent
or Robert L. Head, or either of them, as attorney-in-fact, with
each having the power of substitution, for him in any and all
capacities, to sign any amendments to this Report on Form 10-K
and to file the same, with exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of United in the capacities set forth and on
the 24th of March, 1998.
Signature Title
/s/ Jimmy C. Tallent
Jimmy C. Tallent President and Director
(Principal Executive Officer)
/s/ Robert L. Head, Jr.
Robert L. Head, Jr. Chairman of the Board of
Directors
/s/ Billy M. Decker
Billy M. Decker Director
/s/ Thomas C. Gilliland
Thomas C. Gilliland Director
/s/ Charles Hill
Charles Hill Director
/s/ Hoyt O. Holloway
Hoyt O. Holloway Director
/s/ P. Deral Horne
P. Deral Horne Director
/s/ John R. Martin Director
John R. Martin
/s/ Clarence William Mason, Sr. Director
Clarence William Mason, Sr.
/s/ W. C. Nelson, Jr.
W. C. Nelson, Jr. Director
/s/ Charles E. Parks
Charles E. Parks Director
/s/ Christopher J. Bledsoe
Christopher J. Bledsoe Chief Financial Officer
(Principal Accounting and
Financial Officer)
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3 Amended and Restated Bylaws, dated September 12, 1997.
21 Subsidiaries of United.
23 Consent of Porter Keadle Moore, LLP.
27 Financial Data Schedule (for SEC use only)
99 Notice of Annual Meeting and Proxy Statement of United,
including the Annual Report to Shareholders as Appendix
A.