United Community Banks, Inc. Announces Fourth Quarter Results

Press Release Details

Jan 22, 2019

United Community Banks, Inc. Announces Fourth Quarter Results

Return on Assets of 1.43% and Return on Common Equity of 12.08%

GREENVILLE, S.C., Jan. 22, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its fourth quarter financial results, which reflected solid year-over-year loan and deposit growth, improving operating efficiency and continued strong asset quality. For the quarter, diluted earnings per share was $0.56 compared with a net loss of $0.16 per diluted share a year ago due to the impact of tax reform. Operating diluted earnings per share, which exclude merger-related and other charges, was $0.57, an increase of 36% over the previous year. Profitability ratios continued to be strong – United ended the year with a 1.43% return on assets and a 12.08% return on common equity. On an operating basis, return on assets was 1.45% and return on tangible common equity was 15.88%.

Other key banking metrics were strong. The fourth quarter saw continued net interest margin expansion and 8% annualized loan growth, the strongest growth quarter in 2018. Deposit growth reflected the strength of United’s community banking franchise – total customer deposits increased $173 million for the fourth quarter and $414 million for the year. Mortgage production grew by nearly 4% compared to the fourth quarter last year and increased 20% for the full year compared to 2017. United’s SBA business also had a strong year, with production up 12% over 2017.

“The fourth quarter was a strong finish to an outstanding year,” said Lynn Harton, Chief Executive Officer. “Our full year return on assets was up 31 basis points on an operating basis and our operating earnings per share was up 31% over 2017. These impressive results do not come easily and are attributed to the hard work of our bankers, who continue to deliver the best service in the business. We are very pleased that their efforts are being recognized. Forbes included United on their list of the top 100 Best Banks in America for the fifth consecutive year. Additionally, for the fifth straight year, we earned the top ranking for overall customer satisfaction by JD Power; our service was ranked as highest in the Southeast. We were also honored by our recognition in the 'Best Banks to Work For' program by American Banker for the second year in a row. This is a measure of employee satisfaction for all banks in the country, and we could not be more pleased by our team’s show of support for United. The strength of our culture and the strong momentum we see in the business gives me confidence that we will continue our strong performance into 2019 and continue to build long-term shareholder value.”

2018 Highlights:

  • 2018 earnings per diluted share was $2.07, a 125% increase over 2017, which included the impact of tax reform
    • Excluding merger-related and other charges and the 2017 impact of tax reform, earnings per diluted share for 2018 was $2.14 compared to $1.63 in 2017, an increase of 31%
  • Return on average assets was 1.35% in 2018, an increase of 73 basis points from 2017
    • Excluding merger-related and other charges and the 2017 impact of tax reform, return on average assets was 1.40%, an increase of 31 basis points from 2017
  • Efficiency ratio of 57.31% in 2018 improved 264 basis points as compared to 2017
    • Excluding merger-related and other charges, efficiency ratio of 55.94% improved 73 basis points as compared to 2017
  • End of period loans grew $647 million in 2018, up 8% over December 31, 2017
  • Common Equity Tier 1 ratio was 12.2% at December 31, 2018, compared to 12.0% at December 31, 2017
  • Declared $0.58 per share in common dividends in 2018, up 53% over 2017
  • Completed the acquisition of Navitas Credit Corporation on February 1, 2018
  • Issued $100 million in subordinated debt in the first quarter and redeemed $7.4 million in high rate Trust Preferred securities in the fourth quarter
  • Completed our CEO transition plan, elevating H. Lynn Harton into the role as Jimmy Tallent retired into the Executive Chairman position
  • Added two new Board members, Jennifer Mann and Lance F. Drummond, adding significant experience and expertise to our oversight function

Fourth Quarter 2018 Financial Highlights:

  • Return on assets of 1.43%, or 1.45% excluding merger-related and other charges
  • Return on common equity of 12.1% or return on tangible common equity of 15.9%, which excludes merger-related and other charges
  • Loan growth, excluding planned runoff of the indirect portfolio, of 10% on an annualized basis
  • Loan production of $868 million, as compared to $644 million in the fourth quarter of 2017
  • Expansion of the net interest margin to 3.97%, up two basis points from the third quarter of 2018 and up 34 basis points from a year ago
  • Efficiency ratio of 56.73%, or 55.83% excluding merger-related and other charges
  • Net charge offs of nine basis points, consistent with last quarter’s result of seven basis points
  • Nonperforming assets of 0.20% of total assets, compared to 0.19% at September 30, 2018 and 0.23% at December 31, 2017

Conference Call

United will hold a conference call, Wednesday, January 23, 2019, 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 9381368.  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.


UNITED COMMUNITY BANKS, INC.                                                      
Financial Highlights                                                      
Selected Financial Information                                                      
                                                       
                                  Fourth
    For the Twelve      
    2018
    2017     Quarter
    Months Ended   YTD  
    Fourth     Third     Second     First     Fourth     2018-2017
    December 31,   2018-2017  
(in thousands, except per share data)   Quarter     Quarter     Quarter     Quarter     Quarter      Change
    2018     2017    Change  
INCOME SUMMARY                                                      
Interest revenue $ 133,854     $ 128,721     $ 122,215     $ 115,290     $ 106,757           $ 500,080     $ 389,720          
Interest expense   18,975       16,611       13,739       12,005       9,249             61,330       33,735          
Net interest revenue   114,879       112,110       108,476       103,285       97,508       18   % 438,750       355,985     23   %  
Provision for credit losses   2,100       1,800       1,800       3,800       1,200             9,500       3,800          
Noninterest income   23,045       24,180       23,340       22,396       21,928       5       92,961       88,260     5      
Total revenue   135,824       134,490       130,016       121,881       118,236       15       522,211       440,445     19      
Expenses   78,242       77,718       76,850       73,475       75,882       3       306,285       267,611     14      
Income before income tax expense   57,582       56,772       53,166       48,406       42,354       36       215,926       172,834     25      
Income tax expense   12,445       13,090       13,532       10,748       54,270             49,815       105,013          
Net income (loss)   45,137       43,682       39,634       37,658       (11,916 )           166,111       67,821          
Merger-related and other charges   1,234       592       2,873       2,646       7,358             7,345       14,662          
Income tax benefit of merger-related and other charges   (604 )     (141 )     (121 )     (628 )     (1,165 )           (1,494 )     (3,745 )        
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act   -       -       -       -       38,199             -       38,199          
Release of disproportionate tax effects lodged in OCI   -       -       -       -       -             -       3,400          
Net income - operating (1) $   45,767     $   44,133     $   42,386     $   39,676     $   32,476       41     $   171,962     $   120,337       43      
                                                       
PERFORMANCE MEASURES                                                      
Per common share:                                                      
Diluted net income (loss) - GAAP $ 0.56     $ 0.54     $ 0.49     $ 0.47     $ (0.16 )         $ 2.07     $ 0.92          
Diluted net income - operating  (1)   0.57       0.55       0.53       0.50       0.42       36       2.14       1.63     31      
Cash dividends declared   0.16       0.15       0.15       0.12       0.10       60       0.58       0.38     53      
Book value   18.24       17.56       17.29       17.02       16.67       9       18.24       16.67     9      
Tangible book value (3)   14.24       13.54       13.25       12.96       13.65       4       14.24       13.65     4      
                                                       
Key performance ratios:                                                      
Return on common equity - GAAP (2)(4)   12.08   % 11.96   % 11.20   % 11.11   % (3.57 ) %       11.60   %   5.67   %    
Return on common equity - operating (1)(2)(4)   12.25       12.09       11.97       11.71       9.73             12.01       10.07          
Return on tangible common equity - operating (1)(2)(3)(4)   15.88       15.81       15.79       15.26       11.93             15.69       12.02          
Return on assets - GAAP (4)   1.43       1.41       1.30       1.26       (0.40 )           1.35       0.62          
Return on assets - operating (1)(4)   1.45       1.42       1.39       1.33       1.10             1.40       1.09          
Dividend payout ratio - GAAP   28.57       27.78       30.61       25.53       (62.50 )           28.02       41.30          
Dividend payout ratio - operating (1)   28.07       27.27       28.30       24.00       23.81             27.10       23.31          
Net interest margin (fully taxable equivalent) (4)   3.97       3.95       3.90       3.80       3.63             3.91       3.52          
Efficiency ratio - GAAP   56.73       56.82       57.94       57.83       63.03             57.31       59.95          
Efficiency ratio - operating  (1)   55.83       56.39       55.77       55.75       56.92             55.94       56.67          
Average equity to average assets   11.35       11.33       11.21       11.03       11.21             11.24       10.71          
Average tangible equity to average assets (3)   9.04       8.97       8.83       8.82       9.52             8.92       9.29          
Average tangible common equity to average assets (3)   9.04       8.97       8.83       8.82       9.52             8.92       9.29          
Tangible common equity to risk-weighted assets (3)(5)   11.99       11.61       11.36       11.19       12.05             11.99       12.05          
                                        -                
ASSET QUALITY                                                      
Nonperforming loans $ 23,778     $ 22,530     $ 21,817     $ 26,240     $ 23,658       1     $ 23,778     $ 23,658     1      
Foreclosed properties   1,305       1,336       2,597       2,714       3,234       (60 )     1,305       3,234     (60 )    
Total nonperforming assets (NPAs)   25,083       23,866       24,414       28,954       26,892       (7 )     25,083       26,892     (7 )    
Allowance for loan losses   61,203       60,940       61,071       61,085       58,914       4       61,203       58,914     4      
Net charge-offs   1,787       1,466       1,359       1,501       1,061       68       6,113       5,998     2      
Allowance for loan losses to loans   0.73   % 0.74   % 0.74   % 0.75   % 0.76   %       0.73   %   0.76   %      
Net charge-offs to average loans (4)   0.09       0.07       0.07       0.08       0.06             0.07       0.08          
NPAs to loans and foreclosed properties   0.30       0.29       0.30       0.35       0.35             0.30       0.35          
NPAs to total assets   0.20       0.19       0.20       0.24       0.23             0.20       0.23          
                                                       
AVERAGE BALANCES ($ in millions)                                                      
Loans $ 8,306     $ 8,200     $ 8,177     $ 7,993     $ 7,560       10     $ 8,170     $ 7,150     14      
Investment securities   3,004       2,916       2,802       2,870       2,991       -       2,899       2,847     2      
Earning assets   11,534       11,320       11,193       11,076       10,735       7       11,282       10,162     11      
Total assets   12,505       12,302       12,213       12,111       11,687       7       12,284       11,015     12      
Deposits   10,306       9,950       9,978       9,759       9,624       7       10,000       8,950     12      
Shareholders’ equity   1,420       1,394       1,370       1,336       1,310       8       1,380       1,180     17      
Common shares - basic (thousands)   79,884       79,806       79,753       79,205       76,768       4       79,662       73,247     9      
Common shares - diluted (thousands)   79,890       79,818       79,755       79,215       76,768       4       79,671       73,259     9      
                                                       
AT PERIOD END ($ in millions)                                                      
Loans $ 8,383     $ 8,226     $ 8,220     $ 8,184     $ 7,736       8     $ 8,383     $ 7,736     8      
Investment securities   2,903       2,873       2,834       2,731       2,937       (1 )     2,903       2,937     (1 )    
Total assets   12,573       12,405       12,386       12,264       11,915       6       12,573       11,915     6      
Deposits   10,535       10,229       9,966       9,993       9,808       7       10,535       9,808     7      
Shareholders’ equity   1,458       1,402       1,379       1,357       1,303       12       1,458       1,303     12      
Common shares outstanding (thousands)   79,234       79,202       79,138       79,123       77,580       2       79,234       77,580     2      
                                                       
(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)  Fourth quarter 2018 ratio is preliminary.  
                                                       

 



UNITED COMMUNITY BANKS, INC.                      
Selected Financial Information                      
For the Years Ended December 31,                      
                       
(in thousands, except per share data)   2018   2017   2016   2015   2014  
INCOME SUMMARY                      
Interest revenue   $ 500,080     $ 389,720     $ 335,020     $ 278,532     $ 248,432  
Interest expense     61,330       33,735       25,236       21,109       25,551  
Net interest revenue     438,750       355,985       309,784       257,423       222,881  
Provision for credit losses     9,500       3,800       (800 )     3,700       8,500  
Noninterest income     92,961       88,260       93,697       72,529       55,554  
Total revenue     522,211       440,445       404,281       326,252       269,935  
Expenses     306,285       267,611       241,289       211,238       162,865  
Income before income tax expense     215,926       172,834       162,992       115,014       107,070  
Income tax expense (benefit)     49,815       105,013       62,336       43,436       39,450  
Net income     166,111       67,821       100,656       71,578       67,620  
Merger-related and other charges     7,345       14,662       8,122       17,995       -  
Income tax benefit of merger-related and other charges     (1,494 )     (3,745 )     (3,074 )     (6,388 )     -  
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act     -       38,199       -       -       -  
Impairment of deferred tax asset on cancelled non-qualified stock options     -       -       976       -       -  
Release of disproportionate tax effects lodged in OCI     -       3,400       -       -       -  
Net income - operating (1)   $   171,962     $   120,337     $   106,680     $   83,185     $   67,620  
                       
PERFORMANCE MEASURES                      
Per common share:                      
Diluted net income - GAAP   $ 2.07     $ 0.92     $ 1.40     $ 1.09     $ 1.11  
Diluted net income - operating  (1)     2.14       1.63       1.48       1.27       1.11  
Cash dividends declared     0.58       0.38       0.30       0.22       0.11  
Book value     18.24       16.67       15.06       14.02       12.20  
Tangible book value (3)     14.24       13.65       12.95       12.06       12.15  
                       
Key performance ratios:                      
Return on common equity - GAAP (2)     11.60   %   5.67   %   9.41   %   8.15   %   9.17 %
Return on common equity - operating (1)(2)     12.01       10.07       9.98       9.48       9.17  
Return on tangible common equity - operating (1)(2)(3)     15.69       12.02       11.86       10.24       9.32  
Return on assets - GAAP     1.35       0.62       1.00       0.85       0.91  
Return on assets - operating (1)     1.40       1.09       1.06       0.98       0.91  
Dividend payout ratio - GAAP     28.02       41.30       21.43       20.18       9.91  
Dividend payout ratio - operating (1)     27.10       23.31       20.27       17.32       9.91  
Net interest margin (fully taxable equivalent)     3.91       3.52       3.36       3.30       3.26  
Efficiency ratio - GAAP     57.31       59.95       59.80       63.96       58.26  
Efficiency ratio - operating  (1)     55.94       56.67       57.78       58.51       58.26  
Average equity to average assets     11.24       10.71       10.54       10.27       9.69  
Average tangible equity to average assets (3)     8.92       9.29       9.21       9.74       9.67  
Average tangible common equity to average assets (3)     8.92       9.29       9.19       9.66       9.60  
Tangible common equity to risk-weighted assets (3)(4)     11.99       12.05       11.84       12.82       13.82  
                       
ASSET QUALITY                      
Nonperforming loans   $ 23,778     $ 23,658     $ 21,539     $ 22,653     $ 17,881  
Foreclosed properties     1,305       3,234       7,949       4,883       1,726  
Total nonperforming assets (NPAs)     25,083       26,892       29,488       27,536       19,607  
Allowance for loan losses     61,203       58,914       61,422       68,448       71,619  
Net charge-offs     6,113       5,998       6,766       6,259       13,879  
Allowance for loan losses to loans     0.73   %   0.76   %   0.89   %   1.14   %   1.53 %
Net charge-offs to average loans     0.07       0.08       0.11       0.12       0.31  
NPAs to loans and foreclosed properties     0.30       0.35       0.43       0.46       0.42  
NPAs to total assets     0.20       0.23       0.28       0.29       0.26  
                       
AVERAGE BALANCES ($ in millions)                      
Loans   $ 8,170     $ 7,150     $ 6,413     $ 5,298     $ 4,450  
Investment securities     2,899       2,847       2,691       2,368       2,274  
Earning assets     11,282       10,162       9,257       7,834       6,880  
Total assets     12,284       11,015       10,054       8,462       7,436  
Deposits     10,000       8,950       8,177       7,055       6,228  
Shareholders’ equity     1,380       1,180       1,059       869       720  
Common shares - basic (thousands)     79,662       73,247       71,910       65,488       60,588  
Common shares - diluted (thousands)     79,671       73,259       71,915       65,492       60,590  
                       
AT PERIOD END ($ in millions)                      
Loans   $ 8,383     $ 7,736     $ 6,921     $ 5,995     $ 4,672  
Investment securities     2,903       2,937       2,762       2,656       2,198  
Total assets     12,573       11,915       10,709       9,616       7,558  
Deposits     10,535       9,808       8,638       7,873       6,335  
Shareholders’ equity     1,458       1,303       1,076       1,018       740  
Common shares outstanding (thousands)     79,234       77,580       70,899       71,484       60,259  
                       
(1)  Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options  and 2015 impairment losses on surplus bank property.  (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)  2018 ratio is preliminary.  
                       

 


UNITED COMMUNITY BANKS, INC.                                        
Non-GAAP Performance Measures Reconciliation                                      
Selected Financial Information                                        
                                         
                                         
  2018
  2017    For the Twelve Months Ended
December 31,
 
  Fourth   Third   Second   First   Fourth    
(in thousands, except per share data) Quarter   Quarter   Quarter   Quarter   Quarter   2018   2017   2016   2015   2014  
                                         
Expense reconciliation                                        
Expenses (GAAP) $ 78,242     $ 77,718     $ 76,850     $ 73,475     $ 75,882     $ 306,285     $ 267,611     $ 241,289     $ 211,238     $ 162,865    
Merger-related and other charges   (1,234 )     (592 )     (2,873 )     (2,646 )     (7,358 )     (7,345 )     (14,662 )     (8,122 )     (17,995 )     -    
Expenses - operating $ 77,008     $ 77,126     $ 73,977     $ 70,829     $ 68,524     $ 298,940     $ 252,949     $ 233,167     $ 193,243     $ 162,865    
                                         
Net income reconciliation                                        
Net income (loss) (GAAP) $ 45,137     $ 43,682     $ 39,634     $ 37,658     $ (11,916 )   $ 166,111     $ 67,821     $ 100,656     $ 71,578     $ 67,620    
Merger-related and other charges   1,234       592       2,873       2,646       7,358       7,345       14,662       8,122       17,995       -    
Income tax benefit of merger-related and other charges   (604 )     (141 )     (121 )     (628 )     (1,165 )     (1,494 )     (3,745 )     (3,074 )     (6,388 )     -    
Impact of tax reform on remeasurement of deferred tax asset   -       -       -       -       38,199       -       38,199       -       -       -    
Impairment of deferred tax asset on canceled non-qualified stock options   -       -       -       -       -       -       -       976       -       -    
Release of disproportionate tax effects lodged in OCI   -       -       -       -       -       -       3,400       -       -       -    
Net income - operating $ 45,767     $ 44,133     $ 42,386     $ 39,676     $ 32,476     $ 171,962     $ 120,337     $ 106,680     $ 83,185     $ 67,620    
                                         
Diluted income per common share reconciliation                                        
Diluted income (loss) per common share (GAAP) $ 0.56     $ 0.54     $ 0.49     $ 0.47     $ (0.16 )   $ 2.07     $ 0.92     $ 1.40     $ 1.09     $ 1.11    
Merger-related and other charges   0.01       0.01       0.04       0.03       0.08       0.07       0.14       0.07       0.18       -    
Impact of tax reform on remeasurement of deferred tax asset   -       -       -       -       0.50       -       0.52       -       -       -    
Impairment of deferred tax asset on canceled non-qualified stock options   -       -       -       -       -       -       -       0.01       -       -    
Release of disproportionate tax effects lodged in OCI   -       -       -       -       -       -       0.05       -       -       -    
Diluted income per common share - operating $ 0.57     $ 0.55     $ 0.53     $ 0.50     $ 0.42     $ 2.14     $ 1.63     $ 1.48     $ 1.27     $ 1.11    
                                         
Book value per common share reconciliation                                        
Book value per common share (GAAP) $ 18.24     $ 17.56     $ 17.29     $ 17.02     $ 16.67     $ 18.24     $ 16.67     $ 15.06     $ 14.02     $ 12.20    
Effect of goodwill and other intangibles   (4.00 )     (4.02 )     (4.04 )     (4.06 )     (3.02 )     (4.00 )     (3.02 )     (2.11 )     (1.96 )     (0.05 )  
Tangible book value per common share $ 14.24     $ 13.54     $ 13.25     $ 12.96     $ 13.65     $ 14.24     $ 13.65     $ 12.95     $ 12.06     $ 12.15    
                                         
Return on tangible common equity reconciliation                                        
Return on common equity (GAAP)   12.08   %   11.96   %   11.20   %   11.11   %   (3.57 ) %   11.60   %   5.67   %   9.41   %   8.15   %   9.17   %
Merger-related and other charges   0.17       0.13       0.77       0.60       1.86       0.41       0.92       0.48       1.33       -    
Impact of tax reform on remeasurement of deferred tax asset   -       -       -       -       11.44       -       3.20       -       -       -    
Impairment of deferred tax asset on canceled non-qualified stock options   -       -       -       -       -       -       -       0.09       -       -    
Release of disproportionate tax effects lodged in OCI   -       -       -       -       -       -       0.28       -       -       -    
Return on common equity - operating   12.25       12.09       11.97       11.71       9.73       12.01       10.07       9.98       9.48       9.17    
Effect of goodwill and other intangibles   3.63       3.72       3.82       3.55       2.20       3.68       1.95       1.88       0.76       0.15    
Return on tangible common equity - operating   15.88   %   15.81   %   15.79   %   15.26   %   11.93   %   15.69   %   12.02   %   11.86   %   10.24   %   9.32   %
                                         
Return on assets reconciliation                                        
Return on assets (GAAP)   1.43   %   1.41   %   1.30   %   1.26   %   (0.40 ) %   1.35   %   0.62   %   1.00   %   0.85   %   0.91   %
Merger-related and other charges   0.02       0.01       0.09       0.07       0.20       0.05       0.09       0.05       0.13       -    
Impact of tax reform on remeasurement of deferred tax asset   -       -       -       -       1.30       -       0.35       -       -       -    
Impairment of deferred tax asset on canceled non-qualified stock options   -       -       -       -       -       -       -       0.01       -       -    
Release of disproportionate tax effects lodged in OCI   -       -       -       -       -       -       0.03       -       -       -    
Return on assets - operating   1.45   %   1.42   %   1.39   %   1.33   %   1.10   %   1.40   %   1.09   %   1.06   %   0.98   %   0.91   %
                                         
Dividend payout ratio reconciliation                                        
Dividend payout ratio (GAAP)   28.57   %   27.78   %   30.61   %   25.53   %   (62.50 ) %   28.02   %   41.30   %   21.43   %   20.18   %   9.91   %
Merger-related and other charges   (0.50 )     (0.51 )     (2.31 )     (1.53 )     12.04       (0.92 )     (5.65 )     (1.02 )     (2.86 )     -    
Impact of tax reform on remeasurement of deferred tax asset   -       -       -       -       74.27       -       (11.61 )     -       -       -    
Impairment of deferred tax asset on canceled non-qualified stock options   -       -       -       -       -       -       -       (0.14 )     -       -    
Release of disproportionate tax effects lodged in OCI   -       -       -       -       -       -       (0.73 )     -       -       -    
Dividend payout ratio - operating   28.07   %   27.27   %   28.30   %   24.00   %   23.81   %   27.10   %   23.31   %   20.27   %   17.32   %   9.91   %
                                         
Efficiency ratio reconciliation                                        
Efficiency ratio (GAAP)   56.73   %   56.82   %   57.94   %   57.83   %   63.03   %   57.31   %   59.95   %   59.80   %   63.96   %   58.26   %
Merger-related and other charges   (0.90 )     (0.43 )     (2.17 )     (2.08 )     (6.11 )     (1.37 )     (3.28 )     (2.02 )     (5.45 )     -    
Efficiency ratio - operating   55.83   %   56.39   %   55.77   %   55.75   %   56.92   %   55.94   %   56.67   %   57.78   %   58.51   %   58.26   %
                                         
Average equity to average assets reconciliation                                        
Average equity to assets (GAAP)   11.35   %   11.33   %   11.21   %   11.03   %   11.21   %   11.24   %   10.71   %   10.54   %   10.27   %   9.69   %
Effect of goodwill and other intangibles   (2.31 )     (2.36 )     (2.38 )     (2.21 )     (1.69 )     (2.32 )     (1.42 )     (1.33 )     (0.53 )     (0.02 )  
Average tangible equity to average assets   9.04       8.97       8.83       8.82       9.52       8.92       9.29       9.21       9.74       9.67    
Effect of preferred equity   -       -       -       -       -       -       -       (0.02 )     (0.08 )     (0.07 )  
Average tangible common equity to average assets   9.04   %   8.97   %   8.83   %   8.82   %   9.52   %   8.92   %   9.29   %   9.19   %   9.66   %   9.60   %
                                         
Tangible common equity to risk-weighted assets reconciliation (1)                                      
Tier 1 capital ratio (Regulatory)   12.41   %   12.25   %   11.94   %   11.61   %   12.24   %   12.41   %   12.24   %   11.23   %   11.45   %   12.06   %
Effect of other comprehensive income   (0.44 )     (0.68 )     (0.57 )     (0.50 )     (0.29 )     (0.44 )     (0.29 )     (0.34 )     (0.38 )     (0.35 )  
Effect of deferred tax limitation   0.28       0.30       0.33       0.42       0.51       0.28       0.51       1.26       2.05       3.11    
Effect of trust preferred   (0.26 )     (0.26 )     (0.34 )     (0.34 )     (0.36 )     (0.26 )     (0.36 )     (0.25 )     (0.08 )     (1.00 )  
Effect of preferred equity   -       -       -       -       -       -       -       -       (0.15 )     -    
Basel III intangibles transition adjustment   -       -       -       -       (0.05 )     -       (0.05 )     (0.06 )     (0.10 )     -    
Basel III disallowed investments   -       -       -       -       -       -       -       -       0.03       -    
Tangible common equity to risk-weighted assets   11.99   %   11.61   %   11.36   %   11.19   %   12.05   %   11.99   %   12.05   %   11.84   %   12.82   %   13.82   %
                                         
(1)  Fourth quarter 2018 ratios are preliminary.                                        

 


UNITED COMMUNITY BANKS, INC.                    
Financial Highlights                          
Loan Portfolio Composition at Period-End                    
                           
                           
  2018
  2017   Linked
Quarter
Change
  Year over
Year
Change
   Fourth    Third    Second    First    Fourth    
(in millions) Quarter   Quarter   Quarter   Quarter   Quarter    
LOANS BY CATEGORY                          
Owner occupied commercial RE $ 1,648   $ 1,673   $ 1,682   $ 1,898   $ 1,924   $ (25 )   $ (276 )
Income producing commercial RE   1,812     1,788     1,821     1,677     1,595     24       217  
Commercial & industrial   1,278     1,194     1,193     1,142     1,131     84       147  
Commercial construction   796     761     735     691     712     35       84  
Equipment financing   565     509     465     423     -     56       565  
Total commercial   6,099     5,925     5,896     5,831     5,362     174       737  
Residential mortgage   1,049     1,035     1,021     992     974     14       75  
Home equity lines of credit   694     702     708     712     731     (8 )     (37 )
Residential construction   211     198     195     190     183     13       28  
Consumer   330     366     400     459     486     (36 )     (156 )
Total loans $ 8,383   $ 8,226   $ 8,220   $ 8,184   $ 7,736     157       647  
                           
LOANS BY MARKET                          
North Georgia $ 981   $ 992   $ 1,001   $ 1,004   $ 1,019     (11 )     (38 )
Atlanta MSA   1,507     1,493     1,533     1,513     1,510     14       (3 )
North Carolina   1,072     1,078     1,067     1,037     1,049     (6 )     23  
Coastal Georgia   588     610     623     635     630     (22 )     (42 )
Gainesville MSA   247     235     230     231     248     12       (1 )
East Tennessee   477     460     474     473     475     17       2  
South Carolina   1,645     1,586     1,571     1,537     1,486     59       159  
Commercial Banking Solutions   1,658     1,530     1,444     1,438     961     128       697  
Indirect auto   208     242     277     316     358     (34 )     (150 )
Total loans $ 8,383   $ 8,226   $ 8,220   $ 8,184   $ 7,736     157       647  
                           


 

UNITED COMMUNITY BANKS, INC.                
Financial Highlights                    
Loan Portfolio Composition at Year-End                
                     
                     
(in millions)   2018   2017   2016   2015   2014
LOANS BY CATEGORY                    
Owner occupied commercial RE   $ 1,648   $ 1,924   $ 1,650   $ 1,571   $ 1,257
Income producing commercial RE     1,812     1,595     1,282     1,021     767
Commercial & industrial     1,278     1,131     1,070     785     710
Commercial construction     796     712     634     518     364
Equipment financing     565     -     -     -     -
Total commercial     6,099     5,362     4,636     3,895     3,098
Residential mortgage     1,049     974     857     764     614
Home equity lines of credit     694     731     655     589     456
Residential construction     211     183     190     176     131
Consumer installment     330     486     583     571     373
Total loans   $ 8,383   $ 7,736   $ 6,921   $ 5,995   $ 4,672
                     
                     
LOANS BY MARKET                    
North Georgia   $ 981   $ 1,019   $ 1,097   $ 1,125   $ 1,163
Atlanta MSA     1,507     1,510     1,399     1,259     1,243
North Carolina     1,072     1,049     545     549     553
Coastal Georgia     588     630     581     537     456
Gainesville MSA     247     248     248     254     257
East Tennessee     477     475     504     504     280
South Carolina     1,645     1,486     1,233     819     30
Commercial Banking Solutions     1,658     961     855     492     421
Indirect auto     208     358     459     456     269
Total loans   $ 8,383   $ 7,736   $ 6,921   $ 5,995   $ 4,672
                     


UNITED COMMUNITY BANKS, INC.                                                  
Financial Highlights                                                        
Credit Quality                                                        
                                                         
                                                         
    Fourth Quarter 2018
    Third Quarter 2018
    Second Quarter 2018
   
    Nonperforming
    Foreclosed
  Total     Nonperforming
    Foreclosed
  Total     Nonperforming
    Foreclosed
  Total    
(in thousands)   Loans     Properties   NPAs     Loans     Properties   NPAs     Loans     Properties   NPAs    
                                                   
NONPERFORMING ASSETS BY CATEGORY                                              
Owner occupied CRE   $ 6,421       $ 170       $ 6,591       $ 4,884       $ 183       $ 5,067       $ 5,772       $ 812       $ 6,584      
Income producing CRE     1,160         -         1,160         1,194         156         1,350         991         455         1,446      
Commercial & industrial     1,417         -         1,417         1,516         -         1,516         2,180         -         2,180      
Commercial construction     605         421         1,026         825         522         1,347         613         576         1,189      
Equipment financing     2,677         -         2,677         1,181         -         1,181         1,075         -         1,075      
Total commercial     12,280         591         12,871         9,600         861         10,461         10,631         1,843         12,474      
Residential mortgage     8,035         654         8,689         8,928         424         9,352         7,918         184         8,102      
Home equity lines of credit     2,360         60         2,420         2,814         -         2,814         1,812         550         2,362      
Residential construction     288         -         288         455         51         506         637         20         657      
Consumer     815         -         815         733         -         733         819         -         819      
Total NPAs   $ 23,778       $ 1,305       $ 25,083       $ 22,530       $ 1,336       $ 23,866       $ 21,817       $ 2,597       $ 24,414      
                                                         
NONPERFORMING ASSETS BY MARKET                                              
North Georgia   $ 6,527       $ 286       $ 6,813       $ 7,170       $ 361       $ 7,531       $ 7,583       $ 640       $ 8,223      
Atlanta MSA     1,578         -         1,578         1,778         132         1,910         1,928         132         2,060      
North Carolina     3,259         743         4,002         3,690         480         4,170         3,029         750         3,779      
Coastal Georgia     1,491         -         1,491         1,498         -         1,498         943         -         943      
Gainesville MSA     479         -         479         212         -         212         186         -         186      
East Tennessee     1,147         -         1,147         1,403         128         1,531         1,473         143         1,616      
South Carolina     4,123         276         4,399         3,280         235         3,515         3,093         362         3,455      
Commercial Banking Solutions   4,448         -         4,448         2,871         -         2,871         2,831         570         3,401      
Indirect auto     726         -         726         628         -         628         751         -         751      
Total NPAs   $ 23,778       $ 1,305       $ 25,083       $ 22,530       $ 1,336       $ 23,866       $ 21,817       $ 2,597       $ 24,414      
                                                         
NONPERFORMING ASSETS ACTIVITY                                                  
Beginning Balance   $ 22,530       $ 1,336       $ 23,866       $ 21,817       $ 2,597       $ 24,414       $ 26,240       $ 2,714       $ 28,954      
Acquisitions     -         -         -         -         -         -         -         -         -      
Loans placed on non-accrual   5,829         -         5,829         5,759         -         5,759         3,612         -         3,612      
Payments received     (2,780 )       -         (2,780 )       (3,095 )       -         (3,095 )       (5,314 )       -         (5,314 )    
Loan charge-offs     (933 )       -         (933 )       (1,588 )       -         (1,588 )       (2,065 )       -         (2,065 )    
Foreclosures     (868 )       955         87         (363 )       454         91         (656 )       984         328      
Property sales     -         (1,019 )       (1,019 )       -         (1,659 )       (1,659 )       -         (1,029 )       (1,029 )    
Write downs     -         (112 )       (112 )       -         (166 )       (166 )       -         (106 )       (106 )    
Net gains on sales     -         145         145         -         110         110         -         34         34      
Ending Balance   $ 23,778       $ 1,305       $ 25,083       $ 22,530       $ 1,336       $ 23,866       $ 21,817       $ 2,597       $ 24,414      
                                                         
    Fourth Quarter 2018     Third Quarter 2018     Second Quarter 2018                      
           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   $ (52 )       (0.01 ) %   $ (251 )       (0.06 ) %   $ (578 )       (0.13 ) %                    
Income producing CRE     399         0.09         1         -         1,421         0.33                        
Commercial & industrial     (149 )       (0.05 )       418         0.14         16         0.01                        
Commercial construction     (230 )       (0.12 )       (43 )       (0.02 )       (107 )       (0.06 )                      
Equipment financing     599         0.44         482         0.39         (49 )       (0.04 )                      
Total commercial     567         0.04         607         0.04         703         0.05                        
Residential mortgage     290         0.11         171         0.07         11         -                        
Home equity lines of credit     382         0.22         279         0.16         21         0.01                        
Residential construction     (36 )       (0.07 )       (164 )       (0.33 )       (58 )       (0.12 )                      
Consumer     584         0.67         573         0.60         682         0.64                        
Total   $ 1,787         0.09       $ 1,466         0.07       $ 1,359         0.07                        
                                                         
NET CHARGE-OFFS BY MARKET                                                    
North Georgia   $ 543         0.22   %   $ 483         0.19   %   $ 246         0.10   %                    
Atlanta MSA     (159 )       (0.04 )       99         0.03         103         0.03                        
North Carolina     68         0.03         (87 )       (0.03 )       1,268         0.48                        
Coastal Georgia     (86 )       (0.06 )       24         0.02         19         0.01                        
Gainesville MSA     333         0.56         (48 )       (0.08 )       (2 )       -                        
East Tennessee     (111 )       (0.09 )       (1 )       -         76         0.06                        
South Carolina     57         0.01         418         0.11         (1,057 )       (0.27 )                      
Commercial Banking Solutions   948         0.23         403         0.11         381         0.11                        
Indirect auto     194         0.34         175         0.27         325         0.44                        
Total   $ 1,787         0.09       $ 1,466         0.07       $ 1,359         0.07                        
                                                         
(1)  Annualized.                                                        



UNITED COMMUNITY BANKS, INC.                
Consolidated Statements of Income (Unaudited)                
                 
    Three Months Ended   Twelve Months Ended
    December 31,
  December 31, 
(in thousands, except per share data)   2018   2017
  2018
  2017
                 
Interest revenue:                
Loans, including fees   $ 112,087   $ 87,234     $ 420,383     $ 315,050
Investment securities, including tax exempt of $1,140, $909, $4,189, and $2,216     21,237     19,023       77,685       72,388
Deposits in banks and short-term investments     530     500       2,012       2,282
Total interest revenue     133,854     106,757       500,080       389,720
                 
Interest expense:                
Deposits:                
NOW and interest-bearing demand     3,073     1,433       7,390       3,365
Money market     4,078     2,095       12,097       7,033
Savings     33     46       150       135
Time     7,006     2,272       19,906       6,529
Total deposit interest expense     14,190     5,846       39,543       17,062
Short-term borrowings     340     175       1,112       352
Federal Home Loan Bank advances     794     1,492       6,345       6,095
Long-term debt     3,651     1,736       14,330       10,226
Total interest expense     18,975     9,249       61,330       33,735
Net interest revenue     114,879     97,508       438,750       355,985
Provision for credit losses     2,100     1,200       9,500       3,800
Net interest revenue after provision for credit losses     112,779     96,308       429,250       352,185
                 
Noninterest income:                
Service charges and fees     9,166     8,770       35,997       38,295
Mortgage loan and other related fees     3,082     4,885       19,010       18,320
Brokerage fees     1,593     1,068       5,191       4,633
Gains from sales of SBA/USDA loans     2,493     3,102       9,277       10,493
Securities gains (losses), net     646     (148 )     (656 )     42
Other     6,065     4,251       24,142       16,477
Total noninterest income     23,045     21,928       92,961       88,260
Total revenue     135,824     118,236       522,211       440,445
                 
Noninterest expenses:                
Salaries and employee benefits     45,631     41,042       181,015       153,098
Communications and equipment     6,206     5,217       21,277       19,660
Occupancy     5,842     5,542       22,781       20,344
Advertising and public relations     1,650     895       5,991       4,242
Postage, printing and supplies     1,520     1,825       6,416       5,952
Professional fees     4,105     3,683       15,540       12,074
FDIC assessments and other regulatory charges     1,814     1,776       8,491       6,534
Amortization of intangibles     1,420     1,760       6,846       4,845
Merger-related and other charges     965     6,841       5,414       13,901
Other     9,089     7,301       32,514       26,961
Total noninterest expenses     78,242     75,882       306,285