United Community Banks, Inc.
Apr 24, 2018

United Community Banks, Inc. Announces First Quarter Earnings

Earnings per diluted share up 42 percent to 47 cents from first quarter 2017
Excluding merger-related and other non-operating charges,
diluted operating earnings per share up 28 percent, to 50 cents

BLAIRSVILLE, Ga., April 24, 2018 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ:UCBI) ("United") today announced its first quarter 2018 financial results reflecting solid margin improvement, effective and disciplined expense management, an acceleration of loan growth and the continuation of sound credit quality.  Net income was $37.7 million, or 47 cents per diluted share, compared with $23.5 million, or 33 cents per diluted share, for the first quarter of 2017.

On an operating basis, net income rose to $39.7 million for the first quarter of 2018 compared with $28.2 million for the first quarter of 2017.  First quarter 2018 operating net income excludes pre-tax merger-related charges totaling $2.50 million and pre-tax charges related to branch closures completed during the quarter of $147,000.  The income tax benefit from these non-operating charges was $628,000.  First quarter 2017 operating net income excludes pre-tax merger-related charges of $1.17 million and pre-tax charges related to branch closures of $831,000.  The income tax benefit associated with the charges was $758,000.  Also excluded from first quarter 2017 operating earnings is a non-cash tax charge of $3.4 million related to the cancellation of interest rate swaps that were designated as cash flow hedges.  The non-cash tax charge was previously included in other comprehensive income until the swaps matured or were canceled.

At March 31, 2018, preliminary regulatory capital ratios were as follows: Tier 1 Risk-Based of 11.7 percent; Total Risk-Based of 13.6 percent; Common Equity Tier 1 Risk-Based of 11.3 percent, and Tier 1 Leverage of 9.1 percent.

"Our first quarter earnings are a strong start to what we expect will be another exceptional year for United Community Banks, Inc.," said Jimmy Tallent, chairman and chief executive officer.  "Our bankers excelled in nearly every financial measure, reporting solid improvement in return on assets, return on tangible common equity, operating efficiency and more.  Operating return on assets was 1.33% for the first quarter, up 23 basis points from fourth quarter and only seven basis points from our goal of 1.40%.  Our operating efficiency ratio was 55.7%, our best ever, which is a credit to our bankers who work hard to provide the best customer service in an efficient and cost-effective manner."

Tallent continued, "In the first quarter, we not only announced a merger with NLFC Holdings Corp. and its wholly-owned subsidiary, Navitas Credit Corp., but we completed the merger on February 1.  With headquarters in Ponte Vedra, Florida, Navitas is a premier specialty lender providing equipment finance services to small and medium-sized businesses nationwide that will continue to operate under the Navitas name.  This fast-growing company is a solid strategic addition to our existing specialty and commercial lending businesses and enables us to further expand our client offerings. This partnership brings exceptional growth and a significant profitability enhancement to United and is a solid win for both of us.  I am excited to welcome this talented team of industry veterans to United Community Bank.

"First quarter loan production was $665.8 million with $427 million originating from our community banks and $238 million from our Commercial Banking Solutions group, which now includes our newly acquired Navitas subsidiary," Tallent added.  "Linked-quarter loans were up $448 million, mostly reflecting the $379 million in net loans received through our acquisition of Navitas.  Our indirect auto loan portfolio was down $42.3 million from fourth quarter, reflecting our decision to suspend indirect auto loan purchases.  Excluding the reduction in indirect auto loans and the loans acquired through the Navitas acquisition, loan growth was up at an annualized rate of approximately 6 percent from the fourth quarter."

First quarter net interest revenue totaled $103.3 million, up $19.7 million from the first quarter of 2017 and up $5.78 million from the fourth quarter of 2017.  The increases from both periods reflect acquisitions, business growth and net interest margin expansions of 35 basis points from a year ago and 17 basis points from the fourth quarter of 2017.  Rising short-term interest rates and the acquisitions of Four Oaks Bank & Trust Company on November 1, 2017, and Navitas on February 1, 2018 contributed to the linked quarter net interest margin expansion as well as the increase in net interest revenue.  The acquisition of Horry County State Bank on July 31, 2017 also contributed to the increase from a year ago.  Acquired company results are included in United's financial results beginning on their respective acquisition dates.

The first quarter provision for credit losses was $3.8 million compared to net charge-offs of $1.5 million.  Included in the first quarter provision for credit losses was $2.3 million resulting from including Navitas' loans and leases in our allowance for loan and lease losses model.  Because Navitas' loans and leases were recorded at a net premium of approximately $5.62 million, the allowance for loan and lease losses model required us to establish an allowance sufficient to cover credit losses inherent in the Navitas portfolio.  This additional provision related to the Navitas loans and leases is in addition to $3.9 million of non-accretable discount included in the fair value mark on Navitas' acquired loans and leases providing a conservative $6.2 million of loss absorbing capacity on the acquired Navitas portfolio.

As mentioned, first quarter net charge-offs totaled $1.5 million, down from $1.7 million in the first quarter of 2017 and up $440,000 from the fourth quarter of 2017.  Contributing to the low level of net charge-offs were continued strong recoveries of previously charged-off loans.  Nonperforming assets were 0.24 percent of total assets at March 31, 2018, compared with 0.23 percent at both December 31, 2017 and March 31, 2017.

"Credit quality remains strong and steady as indicated by the low level of net charge-offs," Tallent commented.  "Our credit quality indicators show no indication of credit deterioration and our outlook is for that to continue.  Although our first quarter provision was elevated due to the acquisition of Navitas, we expect our provision levels to return to the range of our more recent quarterly experience with gradual increases each quarter due to loan growth.  We expect our allowance and the related ratio to total loans may continue to decline slightly."

First quarter fee revenue totaled $22.4 million, up $322,000 from a year ago and $468,000 from the fourth quarter of 2017.  Included in first quarter 2018 fee revenue are $940,000 in losses from securities sales.  The securities losses were part of a larger balance sheet management strategy that included the cancellation of $289 million notional in interest rate caps as well as the partial cancellation of other hedging instruments.  The derivative cancellations resulted in gains of $1.16 million, which are included in other fee revenue.  The securities losses and gains from derivative activities are mostly offsetting.

Mortgage fees were up $935,000 from a year ago and $474,000 from the fourth quarter of 2017, reflecting strong origination and rate lock activity as well as a favorable mark on our mortgage servicing asset.  In the first quarter we closed 799 loans totaling $191 million compared with 795 loans totaling $197 million in the fourth quarter and 697 loans totaling $151 million in the first quarter of 2017.

Operating expenses were $73.5 million for the first quarter, compared with $62.8 million for the first quarter of 2017 and $75.9 million for the fourth quarter.  Included in the first quarter's operating expenses are $2.65 million in merger-related and branch closure expenses.  We also had merger-related and branch closure charges of $2.05 million in the first quarter of 2017, and $7.36 million in merger-related expenses in the fourth quarter of 2017.  Excluding these charges, first quarter operating expenses were $70.8 million compared with $68.5 million for the fourth quarter and $60.8 million a year ago.  The increases from a year ago and from the fourth quarter of 2017 primarily result from the acquisitions of Navitas on February 1, 2018, Four Oaks Bank & Trust Company on November 1, 2017 and Horry County State Bank on July 31, 2017.  Operating expenses of acquired companies are included in United's consolidated operating expenses beginning on their respective acquisition dates.

Tallent concluded, "As our first quarter financial results demonstrate, we are off to a great start for 2018.  United Community Banks operates in some of the most attractive markets in the United States, has an extraordinarily talented management team and the best bankers in the business.  I could not be more confident in the future of this company and I eagerly anticipate the successes that will be achieved in the quarters ahead.  Every day our bankers demonstrate their passion and commitment which drive our performance and ensure our success.  This is a legacy I take great pride in."

Conference Call

United will hold a conference call, Wednesday, April 25, 2018, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 8494547.  The conference call also will be webcast and available for replay for 30 days by selecting "Events & Presentations" within the Investor Relations section of United's website at www.ucbi.com

About United Community Banks, Inc.

United Community Banks, Inc. (NASDAQ:UCBI) is a bank holding company based in Blairsville, Georgia with $12.3 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the southeast region's largest full-service banks, operating 151 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in personalized community banking services for individuals, small businesses and corporations.  Services include a full range of consumer and commercial banking products including mortgage, advisory, and treasury management.  Respected national research firms consistently recognize United Community Bank for outstanding customer service.  For the last four years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast.  In 2018, for the fifth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America.  Additional information about the company and the bank's full range of products and services can be found at www.ucbi.com

Non-GAAP Financial Measures

This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP.  This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as "operating net income," "operating net income per diluted share," "operating earnings per diluted share," "tangible book value per common share," "operating return on common equity," "operating return on tangible common equity," "operating return on assets," "operating dividend payout ratio," "operating efficiency ratio," "average tangible equity to average assets," "average tangible common equity to average assets" and "tangible common equity to risk-weighted assets."  These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United's underlying performance trends.  These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies.  To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

Caution About Forward-Looking Statements

Certain Statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise and are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or words of similar meaning or other statements concerning opinions or judgments of United and its management about future events. Although United believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of United will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements; such statements are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. Actual future results and trends may differ materially from historical results and or those anticipated depending on a variety of factors, including, but not limited to the factors and risk influences contained in the cautionary language included under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in United's Form 10-K for the year ended December 31, 2017 and other periodic reports subsequently filed by United with the SEC, available on the SEC website, www.sec.gov. For any forward-looking statements made in this press release, United claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com 

 

             
             
UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Selected Financial Information            
             
           First
 2018
 2017
Quarter
  First   Fourth   Third   Second   First  2018-2017
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter  Change
INCOME SUMMARY            
Interest revenue$115,290  $106,757  $98,839  $93,166  $90,958     
Interest expense 12,005   9,249   9,064   8,018    7,404     
Net interest revenue 103,285    97,508   89,775   85,148   83,554  24 %
Provision for credit losses 3,800   1,200   1,000   800   800     
Fee revenue 22,396   21,928   20,573   23,685   22,074  1  
Total revenue 121,881   118,236   109,348   108,033   104,828  16  
Expenses 73,475   75,882   65,674   63,229   62,826  17  
Income before income tax expense 48,406   42,354   43,674   44,804   42,002  15  
Income tax expense 10,748   54,270   15,728   16,537   18,478  (42) 
Net income 37,658   (11,916)  27,946   28,267   23,524  60  
Merger-related and other charges 2,646   7,358   3,420   1,830   2,054     
Income tax benefit of merger-related and other charges (628)  (1,165)  (1,147)  (675)  (758)    
Impact of remeasurement of deferred tax asset resulting
 from 2017 Tax Cuts and Jobs Act
 -   38,199   -    -   -     
Release of disproportionate tax effects lodged in OCI -   -   -   -    3,400     
Net income - operating (1)$   39,676   $   32,476   $   30,219   $   29,422   $   28,220   41  
                        
PERFORMANCE MEASURES                       
Per common share:                       
Diluted net income - GAAP$.47  $(.16)  .38  $.39   .33  42   
Diluted net income - operating  (1) .50   .42   .41   .41   .39  28  
Cash dividends declared .12   .10   .10   .09   .09  33  
Book value 17.02   16.67   16.50   15.83   15.40  11  
Tangible book value (3) 12.96   13.65   14.11   13.74   13.30   (3) 
                        
Key performance ratios:                       
Return on common equity - GAAP (2)(4) 11.11 % (3.57)% 9.22 % 9.98 %  8.54 %   
Return on common equity - operating (1)(2)(4) 11.71   9.73   9.97   10.39   10.25     
Return on tangible common equity - operating (1)(2)(3)(4) 15.26   11.93   11.93   12.19   12.10     
Return on assets - GAAP (4) 1.26   (.40)  1.01   1.06   .89     
Return on assets - operating (1)(4) 1.33   1.10   1.09   1.10    1.07     
Dividend payout ratio - GAAP 25.53   (62.50)  26.32   23.08   27.27     
Dividend payout ratio - operating (1) 24.00   23.81   24.39   21.95   23.08     
Net interest margin (fully taxable equivalent) (4) 3.80   3.63   3.54   3.47    3.45     
Efficiency ratio - GAAP 57.83   63.03   59.27   57.89   59.29     
Efficiency ratio - operating  (1)  55.75   56.92   56.18   56.21   57.35     
Average equity to average assets 11.03   11.21   10.86   10.49   10.24     
Average tangible equity to average assets (3) 8.82   9.52   9.45   9.23    8.96     
Average tangible common equity to average assets (3) 8.82   9.52   9.45   9.23   8.96     
Tangible common equity to risk-weighted assets (3)(5) 11.26   12.05   12.80   12.44   12.07     
                         
ASSET QUALITY                        
Nonperforming loans$26,240  $23,658   $22,921  $23,095  $19,812  32  
Foreclosed properties 2,714   3,234   2,736   2,739   5,060  (46) 
Total nonperforming assets (NPAs) 28,954   26,892   25,657   25,834   24,872  16  
Allowance for loan losses 61,085   58,914   58,605   59,500   60,543  1  
Net charge-offs 1,501   1,061    1,635   1,623   1,679  (11) 
Allowance for loan losses to loans .75 % .76 % .81 % .85 % .87 %   
Net charge-offs to average loans (4) .08   .06   .09   .09   .10     
NPAs to loans and foreclosed properties .35   .35   .36   .37   .36     
NPAs to total assets .24   .23   .23   .24   .23     
                        
AVERAGE BALANCES ($ in millions)                       
Loans$7,993  $7,560  $7,149  $6,980  $6,904   16  
Investment securities 2,870   2,991    2,800   2,775   2,822  2  
Earning assets 11,076   10,735   10,133   9,899   9,872  12  
Total assets 12,111   11,687   10,980   10,704   10,677  13  
Deposits 9,759   9,624   8,913   8,659   8,592  14  
Shareholders' equity 1,336   1,310   1,193   1,123   1,093  22   
Common shares - basic (thousands) 79,205   76,768   73,151   71,810   71,700  10  
Common shares - diluted (thousands) 79,215   76,768   73,162   71,820   71,708  10  
                        
AT PERIOD END ($ in millions)                       
Loans$8,184  $7,736  $7,203  $7,041  $6,965  18  
Investment securities 2,731   2,937   2,847   2,787   2,767  (1) 
Total assets 12,264   11,915   11,129   10,837   10,732  14  
Deposits 9,993   9,808   9,127   8,736   8,752  14  
Shareholders' equity 1,357   1,303   1,221   1,133    1,102  23  
Common shares outstanding (thousands) 79,123   77,580   73,403    70,981   70,973  11  
                         
(1)  Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation and a first quarter 2017 release of disproportionate tax effects lodged in OCI.  (2)  Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).  (3)  Excludes effect of acquisition related intangibles and associated amortization.  (4)  Annualized.  (5)  First quarter 2018 ratio is preliminary.
             
             

 

UNITED COMMUNITY BANKS, INC.          
Non-GAAP Performance Measures Reconciliation          
Selected Financial Information          
           
           
  2018   2017  
  First   Fourth   Third   Second   First  
(in thousands, except per share data)Quarter Quarter Quarter Quarter  Quarter 
            
Expense reconciliation          
Expenses (GAAP)$73,475  $75,882  $65,674  $63,229  $62,826  
Merger-related and other charges (2,646)  (7,358)  (3,420)  (1,830)  (2,054) 
Expenses - operating$70,829  $68,524  $62,254  $61,399  $60,772  
           
Net income reconciliation          
Net income (GAAP)$37,658  $(11,916) $27,946  $28,267  $23,524  
Merger-related and other charges  2,646   7,358   3,420   1,830   2,054  
Income tax benefit of merger-related and other charges (628)  (1,165)  (1,147)  (675)  (758) 
Impact of tax reform on remeasurement of deferred tax asset -   38,199   -   -   -  
Release of disproportionate tax effects lodged in OCI -   -   -   -   3,400  
Net income - operating$39,676  $32,476  $30,219  $29,422  $28,220  
                     
Diluted income per common share reconciliation                    
Diluted income per common share (GAAP)$.47  (.16) $ .38  $.39  $ .33  
Merger-related and other charges .03   .08   .03   .02   .01  
Impact of tax reform on remeasurement of deferred tax asset -   .50   -   -    -  
Release of disproportionate tax effects lodged in OCI -   -   -   -    .05  
Diluted income per common share - operating$  .50  $.42  $ .41  $  .41  $ .39  
                     
Book value per common share reconciliation                    
Book value per common share (GAAP)$17.02  $16.67  $16.50  $15.83  $15.40  
Effect of goodwill and other intangibles (4.06)  (3.02)  (2.39)  (2.09)  (2.10) 
Tangible book value per common share$12.96  $13.65  $14.11  $13.74  $13.30  
                     
Return on tangible common equity reconciliation                    
Return on common equity (GAAP) 11.11  % (3.57)% 9.22 % 9.98 % 8.54 %
Merger-related and other charges  .60   1.86    .75    .41    .47  
Impact of tax reform on remeasurement of deferred tax asset -   11.44   -   -    -  
Release of disproportionate tax effects lodged in OCI -    -   -   -   1.24  
Return on common equity - operating 11.71   9.73   9.97   10.39   10.25  
Effect of goodwill and other intangibles 3.55   2.20   1.96   1.80    1.85  
Return on tangible common equity - operating 15.26 % 11.93 % 11.93 % 12.19 % 12.10 %
                     
Return on assets reconciliation                     
Return on assets (GAAP) 1.26 %  (.40) % 1.01 % 1.06 %  .89 %
Merger-related and other charges  .07    .20    .08    .04    .05  
Impact of tax reform on remeasurement of deferred tax asset -   1.30   -   -   -  
Release of disproportionate tax effects lodged in OCI -   -   -   -     .13  
Return on assets - operating 1.33 % 1.10 % 1.09 % 1.10 % 1.07 %
                      
Dividend payout ratio reconciliation                    
Dividend payout ratio (GAAP) 25.53 %  (62.50)% 26.32 % 23.08 % 27.27 %
Merger-related and other charges (1.53)   12.04   (1.93)  (1.13)   (.98 
Impact of tax reform on remeasurement of deferred tax asset -   74.27   -   -   -  
Release of disproportionate tax effects lodged in OCI -   -   -   -   (3.21) 
Dividend payout ratio - operating 24.00 % 23.81 % 24.39 % 21.95 % 23.08 %
                     
Efficiency ratio reconciliation                    
Efficiency ratio (GAAP) 57.83 % 63.03 % 59.27 % 57.89 % 59.29 %
Merger-related and other charges (2.08)  (6.11)  (3.09)   (1.68)  (1.94) 
Efficiency ratio - operating 55.75 % 56.92 % 56.18 % 56.21 % 57.35 %
                     
Average equity to assets reconciliation                     
Equity to assets (GAAP) 11.03 % 11.21 % 10.86 % 10.49 % 10.24 %
Effect of goodwill and other intangibles (2.21)  (1.69)  (1.41 )  (1.26)  (1.28) 
Tangible equity to assets 8.82   9.52   9.45   9.23   8.96  
Effect of preferred equity -   -   -   -   -  
Tangible common equity to assets  8.82 % 9.52 % 9.45 % 9.23 % 8.96 %
                     
Tangible common equity to risk-weighted assets reconciliation (1)                    
Tier 1 capital ratio (Regulatory) 11.68 % 12.24 % 12.27 % 11.91 % 11.46 %
Effect of other comprehensive income  (.51)    (.29)    (.13)    (.15)    (.24)  
Effect of deferred tax limitation  .43     .51    .94    .95    1.13  
Effect of trust preferred  (.34)    (.36)    (.24)    (.25)    (.25)  
Basel III intangibles transition adjustment -    (.05)    (.04)    (.02)    (.03)  
Tangible common equity to risk-weighted assets 11.26 % 12.05 % 12.80 % 12.44 % 12.07  %
                     
(1)  First quarter 2018 ratios are preliminary.                     
                     
                     

 

UNITED COMMUNITY BANKS, INC.      
Financial Highlights          
Loan Portfolio Composition at Period-End      
           
           
  2018 2017
   First   Fourth   Third   Second   First 
(in millions) Quarter Quarter Quarter Quarter Quarter
LOANS BY CATEGORY          
Owner occupied commercial RE $ 1,898 $1,924 $1,792 $1,723 $1,633
Income producing commercial RE  1,677  1,595  1,413  1,342  1,297
Commercial & industrial  1,142  1,131  1,084  1,088  1,080
Commercial construction  691  712  583  587  667
Equipment financing  423  -  -  -  -
Total commercial  5,831  5,362  4,872  4,740  4,677
Residential mortgage  992  974  933  881  860
Home equity lines of credit  712  731  689  665  659
Residential construction  190  183  190  193  197
Consumer direct  459  486  519  562  572
Total loans $8,184 $7,736 $7,203 $7,041 $6,965
            
LOANS BY MARKET          
North Georgia $1,004 $1,019 $1,047 $1,065 $1,076
Atlanta MSA  1,513  1,510  1,477  1,445  1,408
North Carolina  1,037  1,049   542  541  541
Coastal Georgia  635  630  634  623  591
Gainesville MSA  231  248  242  246  252
East Tennessee  473   475  471  486  483
South Carolina  1,537  1,486  1,470  1,260  1,243
Commercial Banking Solutions  1,438  961  920  926  911
Indirect auto  316  358  400  449  460
Total loans $8,184 $7,736 $7,203 $7,041 $6,965
           
           

 

UNITED COMMUNITY BANKS, INC.      
Financial Highlights          
Loan Portfolio Composition at Period-End      
            
           
  2018 2017
 Linked
Quarter
Change
 Year over
Year
Change
   First   Fourth    First   
(in millions) Quarter Quarter Quarter  
LOANS BY CATEGORY          
Owner occupied commercial RE $1,898 $1,924 $ 1,633 $(26) $265 
Income producing commercial RE  1,677  1,595  1,297   82   380 
Commercial & industrial  1,142  1,131  1,080  11    62 
Commercial construction  691  712  667  (21)  24 
Equipment financing  423  -  -  423    423 
Total commercial  5,831  5,362  4,677  469    1,154 
Residential mortgage  992  974  860  18   132 
Home equity lines of credit  712  731  659  (19)   53 
Residential construction  190  183  197  7   (7)
Consumer direct  459  486  572  (27)  (113)
Total loans $8,184 $7,736 $6,965  448   1,219 
                  
LOANS BY MARKET                 
North Georgia $1,004 $1,019 $1,076  (15)  (72)
Atlanta MSA  1,513  1,510  1,408  3   105 
North Carolina  1,037  1,049   541  (12)  496 
Coastal Georgia  635  630  591  5   44 
Gainesville MSA  231   248  252  (17)  (21)
East Tennessee  473  475  483   (2)  (10)
South Carolina   1,537  1,486  1,243  51   294 
Commercial Banking Solutions  1,438  961  911  477   527  
Indirect auto  316  358  460   (42)  (144)
Total loans $8,184 $7,736 $6,965  448   1,219 
                  
                   

 

UNITED COMMUNITY BANKS, INC.       
Financial Highlights          
Credit Quality         
          
          
  First Quarter 2018
   Nonperforming   Foreclosed   Total 
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY       
Owner occupied CRE $6,757  $1,121  $7,878 
Income producing CRE  3,942   368   4,310 
Commercial & industrial  1,917   -   1,917 
Commercial construction  574    658   1,232 
Equipment financing  428   -   428 
Total commercial  13,618   2,147   15,765 
Residential mortgage  8,724   232   8,956 
Home equity lines of credit  2,149   335   2,484 
Residential construction  378   -   378 
Consumer direct  1,371   -   1,371 
Total NPAs $26,240  $2,714  $28,954 
          
NONPERFORMING ASSETS BY MARKET       
North Georgia $ 8,519  $85  $8,604 
Atlanta MSA  1,138   132   1,270 
North Carolina  5,006    1,271   6,277 
Coastal Georgia  1,887   -   1,887 
Gainesville MSA  574   163   737 
East Tennessee  1,511   10   1,521 
South Carolina  3,443   483   3,926 
Commercial Banking Solutions  2,937   570   3,507 
Indirect auto  1,225   -    1,225 
Total NPAs $26,240  $2,714  $28,954 
          
NONPERFORMING ASSETS ACTIVITY
               
Beginning Balance $23,658  $3,234  $26,892 
Acquisitions  428   -   428 
Loans placed on non-accrual  7,463   -   7,463 
Payments received  (3,534)  -    (3,534)
Loan charge-offs  (1,150)  -   (1,150)
Foreclosures  (625)  625   - 
Property sales   -   (957)  (957)
Write downs  -   (72)  (72)
Net gains (losses) on sales  -   (116)  (116)
Ending Balance $26,240  $2,714   $28,954 
           
          

 

UNITED COMMUNITY BANKS, INC.        
Financial Highlights          
Credit Quality           
           
           
  Fourth Quarter 2017 
   Nonperforming   Foreclosed   Total  
(in thousands) Loans Properties  NPAs 
NONPERFORMING ASSETS BY CATEGORY        
Owner occupied CRE $4,923  $1,955  $6,878  
Income producing CRE  3,208   244   3,452  
Commercial & industrial  2,097   -   2,097  
Commercial construction  758   884   1,642  
Equipment financing  -   -   -  
Total commercial  10,986   3,083   14,069  
Residential mortgage  8,776   136   8,912  
Home equity lines of credit  2,024   15   2,039  
Residential construction  192   -   192  
Consumer direct  1,680   -   1,680  
Total NPAs $23,658  $3,234  $26,892  
           
NONPERFORMING ASSETS BY MARKET        
North Georgia $7,310  $94  $7,404  
Atlanta MSA  1,395   279   1,674  
North Carolina  4,543   1,213   5,756  
Coastal Georgia  2,044   20   2,064  
Gainesville MSA  739   -   739  
East Tennessee  1,462   -   1,462  
South Carolina  3,433   1,059   4,492  
Commercial Banking Solutions  1,095   569   1,664  
Indirect auto  1,637   -   1,637  
Total NPAs $23,658  $3,234  $26,892  
           
NONPERFORMING ASSETS ACTIVITY        
Beginning Balance $22,921  $2,736  $25,657  
Acquisitions    659   659  
Loans placed on non-accrual  9,375   -   9,375  
Payments received  (5,495)  -   (5,495) 
Loan charge-offs  (1,747)  -   (1,747) 
Foreclosures  (1,396)  2,421   1,025  
Property sales  -   (2,458)  (2,458) 
Write downs  -   (117)  (117) 
Net gains (losses) on sales  -   (7)  (7) 
Ending Balance $23,658  $3,234  $26,892  
           
           

 

UNITED COMMUNITY BANKS, INC.       
Financial Highlights          
Credit Quality         
          
          
  Third Quarter 2017
   Nonperforming    Foreclosed   Total 
(in thousands) Loans Properties NPAs
NONPERFORMING ASSETS BY CATEGORY       
Owner occupied CRE $5,027  $764   $5,791 
Income producing CRE  2,042   121   2,163 
Commercial & industrial  2,378   -   2,378 
Commercial construction  1,376   923   2,299 
Equipment financing  -   -   - 
Total commercial  10,823   1,808   12,631 
Residential mortgage  8,559   392   8,951 
Home equity lines of credit  1,898   195   2,093 
Residential construction  178   341   519 
Consumer direct  1,463   -   1,463 
Total NPAs $22,921  $2,736  $25,657 
          
NONPERFORMING ASSETS BY MARKET       
North Georgia $6,707  $404  $7,111 
Atlanta MSA  1,098   338   1,436 
North Carolina  4,376   318   4,694 
Coastal Georgia  2,532   -   2,532 
Gainesville MSA  763   -   763 
East Tennessee  1,734   67   1,801 
South Carolina  1,903    1,609   3,512 
Commercial Banking Solutions  2,429   -   2,429 
Indirect auto  1,379   -   1,379 
Total NPAs $22,921  $2,736  $25,657 
          
NONPERFORMING ASSETS ACTIVITY       
Beginning Balance $23,095  $2,739  $25,834 
Acquisitions  20   805   825 
Loans placed on non-accrual  7,964   -   7,964 
Payments received  (5,192)  -   (5,192)
Loan charge-offs  (2,159)  -   (2,159)
Foreclosures   (807)  683   (124)
Property sales  -   (1,295)  (1,295)
Write downs  -    (236)  (236)
Net gains (losses) on sales  -   40   40 
Ending Balance $22,921  $2,736  $25,657 
          
          

 

UNITED COMMUNITY BANKS, INC.                
Financial Highlights                   
Credit Quality                  
                   
                    
  First Quarter 2018 Fourth Quarter 2017 Third Quarter 2017
      Net Charge-      Net Charge-      Net Charge- 
      Offs to      Offs to      Offs to 
   Net   Average   Net    Average   Net   Average 
(in thousands)  Charge-Offs Loans (1) Charge-Offs Loans (1) Charge-Offs Loans (1)
NET CHARGE-OFFS BY CATEGORY                 
Owner occupied CRE $  (43)   (.01) %  $  (357)   (.08) %  $  (44)   (.01) % 
Income producing CRE    422    .10     595    .16     1,159    .33 
Commercial & industrial    (3)   -      (242)   (.09)     (200)   (.08) 
Commercial construction    266    .15     148    .09     (114)   (.07) 
Equipment financing    40    .08     -     -      -     -  
Total commercial    682    .05      144    .01     801    .07 
Residential mortgage    (52)   (.02)      290    .12     313    .14 
Home equity lines of credit    89    .05     137    .08     56    .03 
Residential construction    (64)   (.14)     (23)   (.05)     36    .07 
Consumer direct    846    .72     513    .40     429    .31 
Total $  1,501    .08  $  1,061    .06  $  1,635    .09 
                   
NET CHARGE-OFFS BY MARKET                   
North Georgia $  772    .31 %  $  64    .02 %  $  516    .19 % 
Atlanta MSA     (109)   (.03)     26    .01     150    .04 
North Carolina    144    .06     127    .06     221    .16 
Coastal Georgia    137    .09     174    .11     (39)   (.02) 
Gainesville MSA    (18)   (.03)     154    .25     (50)   (.08) 
East Tennessee    31    .03      61    .05     55    .05 
South Carolina    12    -      95    .03     528     .15 
Commercial Banking Solutions    176    .06     75    .03     (7)   -  
Indirect auto    356    .41     285    .30     261    .24 
Total $  1,501    .08  $  1,061    .06  $  1,635    .09 
                  
(1)  Annualized. 

 

UNITED COMMUNITY BANKS, INC.     
Consolidated Statements of Income (Unaudited)     
       
  Three Months Ended 
  March 31, 
(in thousands, except per share data)  2018   2017  
          
Interest revenue:         
Loans, including fees $96,469  $72,727  
Investment securities, including tax exempt of $972 and $279  18,295   17,712  
Deposits in banks and short-term investments  526   519  
Total interest revenue  115,290   90,958  
           
Interest expense:          
Deposits:         
NOW   1,113   597  
Money market  2,175   1,426  
Savings  49   27  
Time  2,956   1,008  
Total deposit interest expense  6,293    3,058  
Short-term borrowings  300   40  
Federal Home Loan Bank advances  2,124   1,430  
Long-term debt  3,288   2,876  
Total interest expense  12,005   7,404  
Net interest revenue  103,285   83,554  
Provision for credit losses  3,800    800  
Net interest revenue after provision for credit losses  99,485   82,754  
          
Fee revenue:         
Service charges and fees  8,925   10,604  
Mortgage loan and other related fees  5,359   4,424  
Brokerage fees   872   1,410  
Gains from sales of SBA/USDA loans  1,778   1,959  
Securities gains (losses), net  (940)  (2) 
Other  6,402   3,679  
Total fee revenue  22,396   22,074  
Total revenue  121,881   104,828  
          
Operating expenses:         
Salaries and employee benefits  42,875   36,691  
Communications and equipment  4,632   4,918  
Occupancy   5,613   4,949  
Advertising and public relations  1,515   1,061  
Postage, printing and supplies  1,637   1,370  
Professional fees  4,044   3,044  
FDIC assessments and other regulatory charges  2,476   1,283  
Amortization of intangibles  1,898   973  
Merger-related and other charges  2,054   2,054  
Other  6,731    6,483  
Total operating expenses  73,475   62,826  
Net income before income taxes  48,406   42,002  
Income tax expense  10,748   18,478  
Net income $37,658  $23,524  
Net income available to common shareholders $37,381  $23,524  
          
Earnings per common share:          
Basic $.47  $.33  
Diluted  .47   .33  
Weighted average common shares outstanding:  
      
Basic  79,205   71,700  
Diluted  79,215   71,708  
          
          

 

UNITED COMMUNITY BANKS, INC.    
Consolidated Balance Sheets (Unaudited)    
     
  March 31, December 31,
(in thousands, except share and per share data)  2018   2017 
     
ASSETS    
Cash and due from banks $136,201  $129,108 
Interest-bearing deposits in banks  216,052   185,167 
Cash and cash equivalents  352,253   314,275 
Securities available for sale  2,419,049   2,615,850 
Securities held to maturity (fair value $308,007 and $321,276)  312,080   321,094 
Loans held for sale (includes $26,493 and $26,252 at fair value)  26,493   32,734 
Loans and leases, net of unearned income  8,184,249   7,735,572 
Less allowance for loan and lease losses  (61,085)  (58,914)
Loans, net  8,123,164   7,676,658 
Premises and equipment, net  208,243   208,852 
Bank owned life insurance  189,759   188,970 
Accrued interest receivable  31,349   32,459 
Net deferred tax asset  86,520   88,049 
Derivative financial instruments  27,202   22,721 
Goodwill and other intangible assets  328,328   244,397 
Other assets  159,815   169,401 
Total assets $12,264,255  $11,915,460 
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Deposits:        
Demand $3,226,111  $3,087,797 
NOW  2,106,145   2,131,939 
Money market  2,052,486    2,016,748 
Savings  677,020   651,742 
Time  1,520,931   1,548,460 
Brokered  410,747   371,011 
Total deposits  9,993,440   9,807,697 
Short-term borrowings  -   50,000 
Federal Home Loan Bank advances  434,574   504,651 
Long-term debt  325,955   120,545 
Derivative financial instruments  33,236   25,376 
Accrued expenses and other liabilities  120,295   103,857 
Total liabilities  10,907,500   10,612,126 
Shareholders' equity:         
Common stock, $1 par value; 150,000,000 shares authorized;        
79,122,620 and 77,579,561 shares issued and outstanding  79,123   77,580 
Common stock issuable; 612,831 and 607,869 shares  9,392   9,083 
Capital surplus  1,496,307   1,451,814 
Accumulated deficit  (181,877)  (209,902)
Accumulated other comprehensive loss  (46,190)  (25,241)
Total shareholders' equity  1,356,755   1,303,334 
Total liabilities and shareholders' equity $12,264,255  $11,915,460 
          
         

 

UNITED COMMUNITY BANKS, INC.           
Average Consolidated Balance Sheets and Net Interest Analysis         
For the Three Months Ended March 31,           
            
 2018
 2017 
   Average    Avg.    Average   Avg. 
(dollars in thousands, fully taxable equivalent (FTE))  Balance     Interest Rate    Balance    Interest Rate 
Assets:           
Interest-earning assets:           
Loans, net of unearned income (FTE) (1)(2)$7,993,339  $96,3894.89% $6,903,860  $72,7414.27%
Taxable securities (3) 2,722,977   17,3232.54   2,779,625   17,4332.51 
Tax-exempt securities (FTE) (1)(3) 146,531   1,3093.57   42,180   4574.33 
Federal funds sold and other interest-earning assets 213,055   6981.31   146,027   6641.82 
Total interest-earning assets (FTE) 11,075,902   115,7194.23   9,871,692   91,2953.74 
Non-interest-earning assets:           
Allowance for loan losses (59,144)      (61,668)    
Cash and due from banks 160,486       99,253     
Premises and equipment  216,723       190,096     
Other assets (3) 717,385       577,168     
Total assets$12,111,352      $10,676,541     
            
Liabilities and Shareholders' Equity:           
Interest-bearing liabilities:           
Interest-bearing deposits:           
NOW$2,083,703   1,113.22   $1,959,678   597.12 
Money market 2,230,620   2,175.40   2,065,449    1,426.28 
Savings 655,746   49.03   560,634   27.02 
Time 1,535,216   2,241.59   1,263,946   815.26 
Brokered time deposits 158,358   7151.83   98,340   193.80 
Total interest-bearing deposits 6,663,643 - 6,293.38   5,948,047 - 3,058.21 
            
Federal funds purchased and other borrowings 78,732   3001.55   19,031   40.85 
Federal Home Loan Bank advances 511,727   2,1241.68    681,117   1,430.85 
Long-term debt 274,480   3,2884.86   175,142   2,8766.66 
Total borrowed funds 864,939    5,7122.68   875,290   4,3462.01 
            
Total interest-bearing liabilities 7,528,582   12,005.65   6,823,337   7,404.44 
Non-interest-bearing liabilities:           
Non-interest-bearing deposits 3,095,405       2,643,630     
Other liabilities 150,955       116,752     
Total liabilities 10,774,942       9,583,719      
Shareholders' equity 1,336,410       1,092,822     
Total liabilities and shareholders' equity$12,111,352      $10,676,541     
            
Net interest revenue (FTE)  $103,714     $83,891  
Net interest-rate spread (FTE)   3.58%    3.30%
            
Net interest margin (FTE) (4)   3.80%     3.45%
            
(1)  Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans.  The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.  
(2)  Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale. 
(3)  Securities available for sale are shown at amortized cost.  Pretax unrealized losses of $28.3 million in 2018 and $5.38 million in 2017 are included in other assets for purposes of this presentation.  
(4)  Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.      
            

 

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Source: United Community Banks, Inc.

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