United Community Banks in Blairsville, Ga., reported little change in its fourth-quarter profit, as costs from its acquisition of Palmetto Bancshares ate into lending revenue and fee income.

The $9.6 billion-asset company's net income was little changed from a year earlier, at $18.2 million. Adjusted earnings per share, which exclude merger-related charges, rose 10% to 33 cents, meeting the average estimate of analysts polled by Bloomberg.

Noninterest expense rose 56% to $65.5 million, largely due to $9.1 million in merger-related costs. Salary and commission expenses also rose as United hired lenders and support staff for specialized lending and it gave higher commissions for growth in Small Business Administration loans, mortgages, commercial loans and core deposits. The efficiency ratio worsened by more than 1,000 basis points to 68.97%.

Net interest income after the provision for credit losses rose 31% to $73.5 million. The provision fell from $1.8 million to $300,000. The net interest margin widened by 3 basis points to 3.34%.

Fee income rose 44% to $21.3 million, on higher deposit service charges, mortgage income and gains from the sale of SBA loans.

United's results this year included three quarters of results from its acquisition of Palmetto, compared with one quarter of results in last year's quarter. United closed its purchase of the Greenville, S.C., company in August.

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