United Community Banks, Inc. reports EPS of $0.55 and ROA of 1.44% for Q1 2019

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United Community Banks, Inc. reports EPS of $0.55 and ROA of 1.44% for Q1 2019

Apr 23, 2019

GREENVILLE, S,C., April 23, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its first quarter financial results, including solid year-over-year loan and deposit growth, improved operating efficiency and continued strong asset quality. Reported diluted earnings per share were $0.55, an increase of $0.08 or 17% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.56, up 12% over last year. United’s return on assets (“ROA”) reached 1.44% with a return on equity of 11.9%. On an operating basis, United’s ROA was 1.45% with a return on tangible common equity of 15.5%.

During the quarter, United benefitted from continued net interest margin expansion. Higher loan yields and an intentional balance sheet deleveraging strategy, including a reduction of $183 million in securities and wholesale borrowings were primary factors in the net interest margin expansion. The company also achieved more than 5% annualized loan growth (7% excluding the planned runoff of the discontinued indirect auto portfolio). Core transaction deposits grew by $135 million, or 8% annualized, and total customer deposits increased by $125 million during the quarter. United’s expense management resulted in a 55.32% efficiency ratio or 54.78% on an operating basis—both results are historical lows for the company.

“Our first quarter performance begins what we believe will be an outstanding year,” said Lynn Harton, President and Chief Executive Officer of United. “We continue to invest in thoughtful growth and in hiring the right bankers in the right markets, while maintaining strong expense discipline. We are proud to have reported a second consecutive quarter with a 1.45% return on assets on an operating basis, a historically high level. This performance would simply not be possible without our outstanding team, which earned United the distinction this quarter of being named one of the “World’s Best Banks 2019” by Forbes. In February, we announced that our team will be expanding with the acquisition of First Madison Bank & Trust in Athens, Georgia. We look forward to welcoming First Madison and to adding loyal customers and another attractive market to our footprint in the second quarter.”

First Quarter 2019 Financial Highlights:

GAAP EPS growth of 17% versus last year, or 12% on an operating basis
Return on assets of 1.44%, or 1.45%, excluding merger-related and other charges
Return on common equity of 11.9%
Return on tangible common equity of 15.5%, excluding merger-related and other charges
Loan growth, excluding planned runoff of the indirect portfolio, of 7% on an annualized basis
Loan production of $782 million, as compared to $666 million in Q1 2018
Loan growth of $110 million more than funded by core transaction deposit growth of $135 million
Expansion of the net interest margin to 4.10%, up 13 basis points from the fourth quarter of 2018 and up 30 basis points from a year ago
Efficiency ratio of 55.3%, or 54.8%, excluding merger-related and other charges
Net charge-offs of fifteen basis points, up six basis points from last quarter, but remain at a historically low level
Nonperforming assets of 0.20% of total assets, compared with 0.20% at December 31, 2018 and 0.24% at March 31, 2018
Repurchased 305,000 common shares in Q1, or $7.8 million as part of authorized $50 million repurchase program
Intentional balance sheet deleveraging, resulting in securities decreasing by $183 million ($122 million average), offset by a reduction in wholesale borrowings

Conference Call

United will hold a conference call, Wednesday, April 24, 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 9567597. 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

																					First
		2019				2018															Quarter
		First				Fourth				Third				Second				First			2019-2018
(in thousands, except per share data)		Quarter				Quarter				Quarter				Quarter				Quarter			Change
INCOME SUMMARY
Interest revenue	$	136,516			$	133,854			$	128,721			$	122,215			$	115,290
Interest expense		20,882				18,975				16,611				13,739				12,005
Net interest revenue		115,634				114,879				112,110				108,476				103,285			12		%
Provision for credit losses		3,300				2,100				1,800				1,800				3,800			(13	)
Noninterest income		20,968				23,045				24,180				23,340				22,396			(6	)
Total revenue		133,302				135,824				134,490				130,016				121,881			9
Expenses		76,084				78,242				77,718				76,850				73,475			4
Income before income tax expense		57,218				57,582				56,772				53,166				48,406			18
Income tax expense		12,956				12,445				13,090				13,532				10,748			21
Net income		44,262				45,137				43,682				39,634				37,658			18
Merger-related and other charges		739				1,234				592				2,873				2,646
Income tax benefit of merger-related and other charges		(172	)			(604	)			(141	)			(121	)			(628	)
Net income - operating ⁽¹⁾	$	44,829			$	45,767			$	44,133			$	42,386			$	39,676			13

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.55			$	0.56			$	0.54			$	0.49			$	0.47			17
Diluted net income - operating ⁽¹⁾		0.56				0.57				0.55				0.53				0.50			12
Cash dividends declared		0.16				0.16				0.15				0.15				0.12			33
Book value		18.93				18.24				17.56				17.29				17.02			11
Tangible book value⁽³⁾		14.93				14.24				13.54				13.25				12.96			15

Key performance ratios:
Return on common equity - GAAP⁽²⁾⁽⁴⁾		11.85		%		12.08		%		11.96		%		11.20		%		11.11		%
Return on common equity - operating^(1)(2)(4)		12.00				12.25				12.09				11.97				11.71
Return on tangible common equity - operating^(1)(2)(3)(4)		15.46				15.88				15.81				15.79				15.26
Return on assets - GAAP⁽⁴⁾		1.44				1.43				1.41				1.30				1.26
Return on assets - operating⁽¹⁾⁽⁴⁾		1.45				1.45				1.42				1.39				1.33
Dividend payout ratio - GAAP		29.09				28.57				27.78				30.61				25.53
Dividend payout ratio - operating ⁽¹⁾		28.57				28.07				27.27				28.30				24.00
Net interest margin (fully taxable equivalent)⁽⁴⁾		4.10				3.97				3.95				3.90				3.80
Efficiency ratio - GAAP		55.32				56.73				56.82				57.94				57.83
Efficiency ratio - operating ⁽¹⁾		54.78				55.83				56.39				55.77				55.75
Average equity to average assets		11.82				11.35				11.33				11.21				11.03
Average tangible common equity to average assets⁽³⁾		9.53				9.04				8.97				8.83				8.82
Tangible common equity to risk-weighted assets⁽³⁾⁽⁵⁾		12.48				12.00				11.61				11.36				11.19

ASSET QUALITY
Nonperforming loans	$	23,624			$	23,778			$	22,530			$	21,817			$	26,240			(10	)
Foreclosed properties		1,127				1,305				1,336				2,597				2,714			(58	)
Total nonperforming assets (NPAs)		24,751				25,083				23,866				24,414				28,954			(15	)
Allowance for loan losses		61,642				61,203				60,940				61,071				61,085			1
Net charge-offs		3,130				1,787				1,466				1,359				1,501			109
Allowance for loan losses to loans		0.73		%		0.73		%		0.74		%		0.74		%		0.75		%
Net charge-offs to average loans⁽⁴⁾		0.15				0.09				0.07				0.07				0.08
NPAs to loans and foreclosed properties		0.29				0.30				0.29				0.30				0.35
NPAs to total assets		0.20				0.20				0.19				0.20				0.24

AVERAGE BALANCES ($ in millions)
Loans	$	8,430			$	8,306			$	8,200			$	8,177			$	7,993			5
Investment securities		2,883				3,004				2,916				2,802				2,870			-
Earning assets		11,498				11,534				11,320				11,193				11,076			4
Total assets		12,509				12,505				12,302				12,213				12,111			3
Deposits		10,361				10,306				9,950				9,978				9,759			6
Shareholders’ equity		1,478				1,420				1,394				1,370				1,336			11
Common shares - basic (thousands)		79,807				79,884				79,806				79,753				79,205			1
Common shares - diluted (thousands)		79,813				79,890				79,818				79,755				79,215			1

AT PERIOD END ($ in millions)
Loans	$	8,493			$	8,383			$	8,226			$	8,220			$	8,184			4
Investment securities		2,720				2,903				2,873				2,834				2,731			-
Total assets		12,506				12,573				12,405				12,386				12,264			2
Deposits		10,534				10,535				10,229				9,966				9,993			5
Shareholders’ equity		1,508				1,458				1,402				1,379				1,357			11
Common shares outstanding (thousands)		79,035				79,234				79,202				79,138				79,123			-

⁽¹⁾ Excludes merger-related and other charges which includes amortization of certain executive change of control benefits. ⁽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 2019 ratio is preliminary.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information


	2019					2018
	First				Fourth				Third				Second				First
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter

Expense reconciliation
Expenses (GAAP)	$	76,084			$	78,242			$	77,718			$	76,850			$	73,475
Merger-related and other charges		(739	)			(1,234	)			(592	)			(2,873	)			(2,646	)
Expenses - operating	$	75,345			$	77,008			$	77,126			$	73,977			$	70,829

Net income reconciliation
Net income (GAAP)	$	44,262			$	45,137			$	43,682			$	39,634			$	37,658
Merger-related and other charges		739				1,234				592				2,873				2,646
Income tax benefit of merger-related and other charges		(172	)			(604	)			(141	)			(121	)			(628	)
Net income - operating	$	44,829			$	45,767			$	44,133			$	42,386			$	39,676
Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.55			$	0.56			$	0.54			$	0.49			$	0.47
Merger-related and other charges		0.01				0.01				0.01				0.04				0.03
Diluted income per common share - operating	$	0.56			$	0.57			$	0.55			$	0.53			$	0.50

Book value per common share reconciliation
Book value per common share (GAAP)	$	18.93			$	18.24			$	17.56			$	17.29			$	17.02
Effect of goodwill and other intangibles		(4.00	)			(4.00	)			(4.02	)			(4.04	)			(4.06	)
Tangible book value per common share	$	14.93			$	14.24			$	13.54			$	13.25			$	12.96

Return on tangible common equity reconciliation
Return on common equity (GAAP)		11.85		%		12.08		%		11.96		%		11.20		%		11.11		%
Merger-related and other charges		0.15				0.17				0.13				0.77				0.60
Return on common equity - operating		12.00				12.25				12.09				11.97				11.71
Effect of goodwill and other intangibles		3.46				3.63				3.72				3.82				3.55
Return on tangible common equity - operating		15.46		%		15.88		%		15.81		%		15.79		%		15.26		%

Return on assets reconciliation
Return on assets (GAAP)		1.44		%		1.43		%		1.41		%		1.30		%		1.26		%
Merger-related and other charges		0.01				0.02				0.01				0.09				0.07
Return on assets - operating		1.45		%		1.45		%		1.42		%		1.39		%		1.33		%

Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		29.09		%		28.57		%		27.78		%		30.61		%		25.53		%
Merger-related and other charges		(0.52	)			(0.50	)			(0.51	)			(2.31	)			(1.53	)
Dividend payout ratio - operating		28.57		%		28.07		%		27.27		%		28.30		%		24.00		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		55.32		%		56.73		%		56.82		%		57.94		%		57.83		%
Merger-related and other charges		(0.54	)			(0.90	)			(0.43	)			(2.17	)			(2.08	)
Efficiency ratio - operating		54.78		%		55.83		%		56.39		%		55.77		%		55.75		%

Average equity to average assets reconciliation
Average equity to assets (GAAP)		11.82		%		11.35		%		11.33		%		11.21		%		11.03		%
Effect of goodwill and other intangibles		(2.29	)			(2.31	)			(2.36	)			(2.38	)			(2.21	)
Average tangible common equity to average assets		9.53		%		9.04		%		8.97		%		8.83		%		8.82		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tier 1 capital ratio (Regulatory)		12.69		%		12.42		%		12.25		%		11.94		%		11.61		%
Effect of other comprehensive income		(0.17	)			(0.44	)			(0.68	)			(0.57	)			(0.50	)
Effect of deferred tax limitation		0.22				0.28				0.30				0.33				0.42
Effect of trust preferred		(0.26	)			(0.26	)			(0.26	)			(0.34	)			(0.34	)
Tangible common equity to risk-weighted assets		12.48		%		12.00		%		11.61		%		11.36		%		11.19		%

⁽¹⁾ First quarter 2019 ratios are preliminary.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End


	2019			2018								Linked			Year over
	First		Fourth		Third		Second		First			Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter			*Change*			Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,620	$	1,648	$	1,673	$	1,682	$	1,898	$	(28	)	$	(278	)
Income producing commercial RE		1,867		1,812		1,788		1,821		1,677		55			190
Commercial & industrial		1,284		1,278		1,194		1,193		1,142		6			142
Commercial construction		866		796		761		735		691		70			175
Equipment financing		606		565		509		465		423		41			183
Total commercial		6,243		6,099		5,925		5,896		5,831		144			412
Residential mortgage		1,064		1,049		1,035		1,021		992		15			72
Home equity lines of credit		684		694		702		708		712		(10	)		(28	)
Residential construction		200		211		198		195		190		(11	)		10
Consumer		302		330		366		400		459		(28	)		(157	)
Total loans	$	8,493	$	8,383	$	8,226	$	8,220	$	8,184		110			309

LOANS BY MARKET
North Georgia	$	970	$	981	$	992	$	1,001	$	1,004		(11	)		(34	)
Atlanta MSA		1,524		1,507		1,493		1,533		1,513		17			11
North Carolina		1,074		1,072		1,078		1,067		1,037		2			37
Coastal Georgia		603		588		610		623		635		15			(32	)
Gainesville MSA		243		247		235		230		231		(4	)		12
East Tennessee		458		477		460		474		473		(19	)		(15	)
South Carolina		1,674		1,645		1,586		1,571		1,537		29			137
Commercial Banking Solutions		1,766		1,658		1,530		1,444		1,438		108			328
Indirect auto		181		208		242		277		316		(27	)		(135	)
Total loans	$	8,493	$	8,383	$	8,226	$	8,220	$	8,184		110			309

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


	First Quarter 2019										Fourth Quarter 2018											Third 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	$	7,030		$	145			$	7,175		$	6,421			$	170		$	6,591			$	4,884		$	183		$	5,067
Income producing CRE		1,276			-				1,276			1,160				-			1,160				1,194			156			1,350
Commercial & industrial		1,666			-				1,666			1,417				-			1,417				1,516			-			1,516
Commercial construction		473			421				894			605				421			1,026				825			522			1,347
Equipment financing		1,813			-				1,813			2,677				-			2,677				1,181			-			1,181
Total commercial		12,258			566				12,824			12,280				591			12,871				9,600			861			10,461
Residential mortgage		8,281			336				8,617			8,035				654			8,689				8,928			424			9,352
Home equity lines of credit		2,233			185				2,418			2,360				60			2,420				2,814			-			2,814
Residential construction		347			40				387			288				-			288				455			51			506
Consumer		505			-				505			815				-			815				733			-			733
Total NPAs	$	23,624		$	1,127			$	24,751		$	23,778			$	1,305		$	25,083			$	22,530		$	1,336		$	23,866

NONPERFORMING ASSETS BY MARKET
North Georgia	$	5,848		$	430			$	6,278		$	6,527			$	286		$	6,813			$	7,170		$	361		$	7,531
Atlanta MSA		1,951			-				1,951			1,578				-			1,578				1,778			132			1,910
North Carolina		3,464			484				3,948			3,259				743			4,002				3,690			480			4,170
Coastal Georgia		1,881			-				1,881			1,491				-			1,491				1,498			-			1,498
Gainesville MSA		187			-				187			479				-			479				212			-			212
East Tennessee		1,555			-				1,555			1,147				-			1,147				1,403			128			1,531
South Carolina		4,476			213				4,689			4,123				276			4,399				3,280			235			3,515
Commercial Banking Solutions		3,804			-				3,804			4,448				-			4,448				2,871			-			2,871
Indirect auto		458			-				458			726				-			726				628			-			628
Total NPAs	$	23,624		$	1,127			$	24,751		$	23,778			$	1,305		$	25,083			$	22,530		$	1,336		$	23,866

NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	23,778		$	1,305			$	25,083		$	22,530			$	1,336		$	23,866			$	21,817		$	2,597		$	24,414
Loans placed on non-accrual		6,759			-				6,759			5,829				-			5,829				5,759			-			5,759
Payments received		(3,520	)		-				(3,520	)		(2,780	)			-			(2,780	)			(3,095	)		-			(3,095	)
Loan charge-offs		(2,714	)		-				(2,714	)		(933	)			-			(933	)			(1,588	)		-			(1,588	)
Foreclosures		(679	)		751				72			(868	)			955			87				(363	)		454			91
Property sales		-			(965	)			(965	)		-				(1,019	)		(1,019	)			-			(1,659	)		(1,659	)
Write downs		-			(6	)			(6	)		-				(112	)		(112	)			-			(166	)		(166	)
Net gains on sales		-			42				42			-				145			145				-			110			110
Ending Balance	$	23,624		$	1,127			$	24,751		$	23,778			$	1,305		$	25,083			$	22,530		$	1,336		$	23,866

	First Quarter 2019							Fourth Quarter 2018							Third Quarter 2018
(in thousands)	Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾				Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾				Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾

NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE	$	(64	)		(0.02	)	%	$	(52	)		(0.01	)	%	$	(251	)		(0.06	)	%
Income producing CRE		177			0.04				399			0.09				1			-
Commercial & industrial		1,356			0.43				(149	)		(0.05	)			418			0.14
Commercial construction		(325	)		(0.16	)			(230	)		(0.12	)			(43	)		(0.02	)
Equipment financing		1,281			0.89				599			0.44				482			0.39
Total commercial		2,425			0.16				567			0.04				607			0.04
Residential mortgage		13			-				290			0.11				171			0.07
Home equity lines of credit		215			0.13				382			0.22				279			0.16
Residential construction		(22	)		(0.04	)			(36	)		(0.07	)			(164	)		(0.33	)
Consumer		499			0.64				584			0.67				573			0.60
Total	$	3,130			0.15			$	1,787			0.09			$	1,466			0.07

NET CHARGE-OFFS BY MARKET
North Georgia	$	263			0.11		%	$	543			0.22		%	$	483			0.19		%
Atlanta MSA		107			0.03				(159	)		(0.04	)			99			0.03
North Carolina		307			0.12				68			0.03				(87	)		(0.03	)
Coastal Georgia		(4	)		-				(86	)		(0.06	)			24			0.02
Gainesville MSA		(8	)		(0.01	)			333			0.56				(48	)		(0.08	)
East Tennessee		627			0.54				(111	)		(0.09	)			(1	)		-
South Carolina		328			0.08				57			0.01				418			0.11
Commercial Banking Solutions		1,351			0.32				948			0.23				403			0.11
Indirect auto		159			0.33				194			0.34				175			0.27
Total	$	3,130			0.15			$	1,787			0.09			$	1,466			0.07

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)

	Three Months Ended
	March 31,
(in thousands, except per share data)		2019			2018

Interest revenue:
Loans, including fees	$	115,259		$	96,469
Investment securities, including tax exempt of $1,169 and $972		20,818			18,295
Deposits in banks and short-term investments		439			526
Total interest revenue		136,516			115,290

Interest expense:
Deposits:
NOW and interest-bearing demand		3,536			1,113
Money market		4,205			2,175
Savings		32			49
Time		8,184			2,956
Total deposit interest expense		15,957			6,293
Short-term borrowings		161			300
Federal Home Loan Bank advances		1,422			2,124
Long-term debt		3,342			3,288
Total interest expense		20,882			12,005
Net interest revenue		115,634			103,285
Provision for credit losses		3,300			3,800
Net interest revenue after provision for credit losses		112,334			99,485

Noninterest income:
Service charges and fees		8,453			8,925
Mortgage loan and other related fees		3,748			5,359
Brokerage fees		1,337			872
Gains from sales of SBA/USDA loans		1,303			1,778
Securities losses, net		(267	)		(940	)
Other		6,394			6,402
Total noninterest income		20,968			22,396
Total revenue		133,302			121,881

Noninterest expenses:
Salaries and employee benefits		47,503			42,875
Communications and equipment		5,788			4,632
Occupancy		5,584			5,613
Advertising and public relations		1,286			1,515
Postage, printing and supplies		1,586			1,637
Professional fees		3,161			4,044
FDIC assessments and other regulatory charges		1,710			2,476
Amortization of intangibles		1,293			1,898
Merger-related and other charges		546			2,054
Other		7,627			6,731
Total noninterest expenses		76,084			73,475
Net income before income taxes		57,218			48,406
Income tax expense		12,956			10,748
Net income	$	44,262		$	37,658

Net income available to common shareholders	$	43,947		$	37,381

Earnings per common share:
Basic	$	0.55		$	0.47
Diluted		0.55			0.47
Weighted average common shares outstanding:
Basic		79,807			79,205
Diluted		79,813			79,215

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)

	March 31,			December 31,
(in thousands, except share and per share data)	2019			2018

ASSETS
Cash and due from banks	$	118,659		$	126,083
Interest-bearing deposits in banks		206,836			201,182
Cash and cash equivalents		325,495			327,265
Debt securities available for sale		2,454,625			2,628,467
Debt securities held to maturity (fair value $265,117 and $268,803)		265,329			274,407
Loans held for sale at fair value		26,341			18,935
Loans and leases, net of unearned income		8,493,254			8,383,401
Less allowance for loan and lease losses		(61,642	)		(61,203	)
Loans, net		8,431,612			8,322,198
Premises and equipment, net		214,022			206,140
Bank owned life insurance		193,489			192,616
Accrued interest receivable		35,126			35,413
Net deferred tax asset		51,055			64,224
Derivative financial instruments		25,924			24,705
Goodwill and other intangible assets		322,779			324,072
Other assets		160,030			154,750
Total assets	$	12,505,827		$	12,573,192
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	3,313,861		$	3,210,220
NOW and interest-bearing demand		2,205,117			2,274,775
Money market		2,106,045			2,097,526
Savings		681,739			669,886
Time		1,668,563			1,598,391
Brokered		558,981			683,715
Total deposits		10,534,306			10,534,513
Federal Home Loan Bank advances		40,000			160,000
Long-term debt		257,259			267,189
Derivative financial instruments		18,789			26,433
Accrued expenses and other liabilities		147,315			127,503
Total liabilities		10,997,669			11,115,638
Shareholders' equity:
Common stock, $1 par value; 150,000,000 shares authorized;
79,035,459 and 79,234,077 shares issued and outstanding		79,035			79,234
Common stock issuable; 621,491 and 674,499 shares		10,291			10,744
Capital surplus		1,494,400			1,499,584
Accumulated deficit		(59,573	)		(90,419	)
Accumulated other comprehensive loss		(15,995	)		(41,589	)
Total shareholders' equity		1,508,158			1,457,554
Total liabilities and shareholders' equity	$	12,505,827		$	12,573,192

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,

	2019								2018
	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⁾	$	8,429,976			$	115,347	5.55	%	$	7,993,339			$	96,389	4.89	%
Taxable securities ⁽³⁾		2,712,995				19,649	2.90			2,722,977				17,323	2.54
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		169,702				1,570	3.70			146,531				1,309	3.57
Federal funds sold and other interest-earning assets		185,623				618	1.33			213,055				698	1.31

Total interest-earning assets (FTE)		11,498,296				137,184	4.83			11,075,902				115,719	4.23
Noninterest-earning assets:
Allowance for loan losses		(61,784	)							(59,144	)
Cash and due from banks		123,801								160,486
Premises and equipment		216,611								216,723
Other assets ⁽³⁾		731,628								717,385
Total assets	$	12,508,552							$	12,111,352

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	2,208,816				3,536	0.65		$	2,083,703				1,113	0.22
Money market		2,175,855				4,205	0.78			2,230,620				2,175	0.40
Savings		672,197				32	0.02			655,746				49	0.03
Time		1,627,584				5,336	1.33			1,535,216				2,241	0.59
Brokered time deposits		482,048				2,848	2.40			158,358				715	1.83
Total interest-bearing deposits		7,166,500		-		15,957	0.90			6,663,643		-		6,293	0.38

Federal funds purchased and other borrowings		21,549				161	3.03			78,732				300	1.55
Federal Home Loan Bank advances		223,945				1,422	2.58			511,727				2,124	1.68
Long-term debt		261,971				3,342	5.17			274,480				3,288	4.86
Total borrowed funds		507,465				4,925	3.94			864,939				5,712	2.68

Total interest-bearing liabilities		7,673,965				20,882	1.10			7,528,582				12,005	0.65
Noninterest-bearing liabilities:
Noninterest-bearing deposits		3,194,401								3,095,405
Other liabilities		162,213								150,955
Total liabilities		11,030,579								10,774,942
Shareholders' equity		1,477,973								1,336,410
Total liabilities and shareholders' equity	$	12,508,552							$	12,111,352

Net interest revenue (FTE)					$	116,302							$	103,714
Net interest-rate spread (FTE)							3.73	%							3.58	%

Net interest margin (FTE) ⁽⁴⁾							4.10	%							3.80	%

⁽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 26% in 2019 and 2018, 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 $25.9 million in 2019 and $28.3 million in 2018 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.

About United Community Banks, Inc.

United Community Banks, Inc. (NASDAQ: UCBI) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. The company is one of the southeast region’s largest full-service financial institutions with $12.5 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee which operate as United Community Bank, the company’s bank subsidiary. 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 five years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2019, for the sixth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America, and for the first time included United on its list of The World’s Best Banks. Additional information about the company and the bank 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 common share,” “operating earnings per 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, 2018 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

Source: United Community Banks, Inc.

Press Release Details

United Community Banks, Inc. reports EPS of $0.55 and ROA of 1.44% for Q1 2019