United Community Banks (UCBI) in Blairsville, Ga., beat its third-quarter earnings estimates as costs from bad loans fell.

The $7.2 billion-asset company earned $15.5 million in the quarter, up 47% from the same period a year earlier, it announced Thursday. Earnings per share were 21 cents, 2 cents above the average expectation of analysts polled by Bloomberg.

United Community's net interest income fell 5%, to $54.3 million, due to a decline in net interest margin of 34 basis points, to 3.26%. The bank's loan book grew by 3%, to $4.3 million.

United Community's costs associated with soured assets dropped, as it lowered its loan-loss provision by 81% from a year earlier, to $3 million. Net chargeoffs were $4.5 million, down from $20.6 million a year ago. United Community cleaned bad loans off its balance sheet in the second quarter, after claiming a large tax allowance.

United Community's fee revenue grew by 3% in the third quarter compared to a year earlier, to $14.1 million, as service charges ticked up. Its operating expenses fell by 10%, to $40.1 million, as costs related to foreclosed property fell to $194,000, from $3.7 million. FDIC assessment charges also fell.

In August, United Community raised $35 million by issuing debt.

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