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United Community Banks, Inc. Reports First Quarter Results

Apr 18, 2023
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Customer Deposit Growth of 10%, Organic Loan Growth of 8%, Asset Quality and Capital Levels Remained Strong

GREENVILLE, S.C., April 18, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2023 first quarter was $62.3 million and pre-tax, pre-provision income was $101.9 million. Diluted earnings per share of $0.52 for the quarter represented an increase of $0.09 or 21%, from the first quarter a year ago and a decrease of $0.22 or 30% from the fourth quarter of 2022. On an operating basis, United’s diluted earnings per share of $0.58 was up 16% from the year-ago quarter. The primary drivers of the increased earnings per share year-over-year were increased interest rates and organic loan growth. The linked-quarter decrease in earnings per share was primarily driven by higher deposit and borrowed funds interest cost as well as changes in deposit composition toward more expensive time deposits during the quarter. United’s return on assets was 0.95%, or 1.06% on an operating basis. Return on equity was 7.3% and return on tangible common equity was 11.6%. On a pre-tax, pre-provision basis, operating return on assets was 1.71% for the quarter. At quarter end, tangible common equity to tangible assets was 8.2%, up 29 basis points from the fourth quarter of 2022.

Chairman and CEO Lynn Harton stated, “This was another solid quarter for United. Deposit growth reflected the strength of our customer franchise, and our loan growth was within our stated target range of mid to high single digits. While our net interest margin did contract from the previous quarter due to higher deposit costs, we continued to generate strong returns and strengthen our balance sheet.” Harton continued, “On the strategic front, we continue to expand the company into exciting growth markets that we know and where we can partner with organizations that align with our values and culture. We are very glad to welcome Progress officially into the United team, adding to our growth opportunities in Alabama and the Florida Panhandle. Our recently announced partnership with First National Bank of South Miami will also bring great opportunities and a talented team to the company. I couldn’t be more excited to welcome them to our team.”

United’s net interest margin decreased by 15 basis points to 3.61% from the fourth quarter. The average yield on United’s interest-earning assets was up 44 basis points to 4.76%, but its cost of deposits increased by 61 basis points to 1.10%, leading to the reduction in the net interest margin. Net charge-offs were $7.1 million or 0.17% of average loans during the quarter, flat compared to the fourth quarter of 2022, and NPAs were 28 basis points relative to total assets, up 10 basis points from the previous quarter.

Mr. Harton concluded, “We continue to believe that 2023 will be a great year for United, despite the uncertainty in the economic environment. We remain focused on being a great partner for our clients and communities; growing our business and being prepared to manage through any challenges that lie ahead. We continue to strengthen our teams, recruiting great bankers and adding new locations, most recently in Atlanta and Charleston, South Carolina. Consistent with building for our future, we also recently announced a refresh of our brand with a new logo to be rolled out to our markets through 2024. While the brand will present itself as more modern and forward-looking, it also continues to symbolize our commitment to service and to community that has been our focus for more than 70 years.”

First Quarter 2023 Financial Highlights:

  • Net income of $62.3 million and pre-tax, pre-provision income of $101.9 million
  • EPS increased by 21% compared to first quarter 2022 on a GAAP basis and 16% on an operating basis; compared to fourth quarter 2022, EPS decreased 30% on a GAAP basis and 23% on an operating basis
  • Return on assets of 0.95%, or 1.06% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.71% on an operating basis
  • Return on common equity of 7.3%
  • Return on tangible common equity of 11.6% on an operating basis
  • A provision for credit losses of $21.8 million, which decreased the allowance for loan losses to 1.03% of loans from 1.04% in the fourth quarter. The first quarter provision included $10.4 million to establish an initial allowance on loans acquired in the Progress transaction.
  • Loan production of $1.4 billion, resulting in organic loan growth, excluding acquired Progress balances, of 8% annualized for the quarter
  • Customer deposits were up $525 million, or 10% annualized, excluding acquired Progress balances
  • Total deposits are estimated to be 76% insured or collateralized
  • Net interest margin of 3.61% was down 15 basis points from the fourth quarter due to increased deposit costs
  • Mortgage closings of $225 million compared to $462 million a year ago; mortgage rate locks of $335 million compared to $757 million a year ago
  • Noninterest income was down $3.1 million on a linked quarter basis, primarily driven by lower positive marks on certain equity and limited partnership investments, lower services charges and fees and securities losses, partially offset by higher mortgage fees
  • Noninterest expenses increased by $22.5 million compared to the fourth quarter on a GAAP basis and by $15.3 million on an operating basis, mostly due to closing the Progress acquisition on January 3, 2023
  • Efficiency ratio of 57.2%, or 53.7% on an operating basis
  • Net charge-offs of $7.1 million, or 17 basis points as a percent of average loans, flat from the net charge-offs level experienced in the fourth quarter
  • Nonperforming assets of 0.28% of total assets, up 10 basis points compared to December 31, 2022
  • Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 10% year-over-year
  • We completed the acquisition of Progress Financial Corporation and its banking subsidiary Progress Bank and Trust with $1.8 billion in assets on January 3, 2023; financial returns are expected to be within our desired thresholds

Conference Call

United will hold a conference call on Wednesday, April 19, 2023, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10177198/f8dc6d5780. Those without internet access or unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and can be accessed by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of the company's website, www.ucbi.com.


UNITED COMMUNITY BANKS, INC.      
Selected Financial Information      
(in thousands, except per share data)      
   2023   2022  First Quarter
2023 - 2022
Change
  First
Quarter		 Fourth Quarter Third
Quarter		 Second Quarter First
Quarter		 
INCOME SUMMARY            
Interest revenue $279,487  $240,831  $213,887  $187,378  $171,059   
Interest expense  68,017   30,943   14,113   8,475   7,267   
Net interest revenue  211,470   209,888   199,774   178,903   163,792  29%
Provision for credit losses  21,783   19,831   15,392   5,604   23,086   
Noninterest income  30,209   33,354   31,922   33,458   38,973  (22)
Total revenue  219,896   223,411   216,304   206,757   179,679  22 
Noninterest expenses  139,805   117,329   112,755   120,790   119,275  17 
Income before income tax expense  80,091   106,082   103,549   85,967   60,404  33 
Income tax expense  17,791   24,632   22,388   19,125   12,385  44 
Net income  62,300   81,450   81,161   66,842   48,019  30 
Merger-related and other charges  8,631   1,470   1,746   7,143   9,016   
Income tax benefit of merger-related and other charges  (1,955)  (323)  (385)  (1,575)  (1,963)  
Net income - operating (1) $68,976  $82,597  $82,522  $72,410  $55,072  25 
Pre-tax pre-provision income (5) $101,874  $125,913  $118,941  $91,571  $83,490  22 
PERFORMANCE MEASURES            
Per common share:            
Diluted net income - GAAP $0.52  $0.74  $0.74  $0.61  $0.43  21 
Diluted net income - operating (1)  0.58   0.75   0.75   0.66   0.50  16 
Cash dividends declared  0.23   0.22   0.22   0.21   0.21  10 
Book value  25.76   24.38   23.78   23.96   24.38  6 
Tangible book value (3)  17.59   17.13   16.52   16.68   17.08  3 
Key performance ratios:            
Return on common equity - GAAP (2)(4)  7.34%  10.86%  11.02%  9.31%  6.80%  
Return on common equity - operating (1)(2)(4)  8.15   11.01   11.21   10.10   7.83   
Return on tangible common equity - operating (1)(2)(3)(4)  11.63   15.20   15.60   14.20   11.00   
Return on assets - GAAP (4)  0.95   1.33   1.32   1.08   0.78   
Return on assets - operating (1)(4)  1.06   1.35   1.34   1.17   0.89   
Return on assets - pre-tax pre-provision (4)(5)  1.58   2.07   1.94   1.49   1.37   
Return on assets - pre-tax pre-provision, excluding merger- related and other charges (1)(4)(5)  1.71   2.09   1.97   1.60   1.52   
Net interest margin (fully taxable equivalent) (4)  3.61   3.76   3.57   3.19   2.97   
Efficiency ratio - GAAP  57.20   47.95   48.41   56.58   57.43   
Efficiency ratio - operating (1)  53.67   47.35   47.66   53.23   53.09   
Equity to total assets  11.90   11.25   11.12   10.95   11.06   
Tangible common equity to tangible assets (3)  8.17   7.88   7.70   7.59   7.72   
ASSET QUALITY            
Nonperforming assets ("NPAs") $73,403  $44,281  $35,511  $34,428  $40,816  80 
Allowance for credit losses - loans  176,534   159,357   148,502   136,925   132,805  33 
Allowance for credit losses - total  197,923   180,520   167,300   153,042   146,369  35 
Net charge-offs (recoveries)  7,084   6,611   1,134   (1,069)  2,978   
Allowance for credit losses - loans to loans  1.03%  1.04%  1.00%  0.94%  0.93%  
Allowance for credit losses - total to loans  1.16   1.18   1.12   1.05   1.02   
Net charge-offs to average loans (4)  0.17   0.17   0.03   (0.03)  0.08   
NPAs to total assets  0.28   0.18   0.15   0.14   0.17   
AT PERIOD END ($ in millions)            
Loans $17,125  $15,335  $14,882  $14,541  $14,316  20 
Investment securities  5,915   6,228   6,539   6,683   6,410  (8)
Total assets  25,872   24,009   23,688   24,213   24,374  6 
Deposits  22,005   19,877   20,321   20,873   21,056  5 
Shareholders’ equity  3,078   2,701   2,635   2,651   2,695  14 
Common shares outstanding (thousands)  115,152   106,223   106,163   106,034   106,025  9 

(1) Excludes merger-related and other charges. (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) Excludes income tax expense and provision for credit losses.


UNITED COMMUNITY BANKS, INC.          
Non-GAAP Performance Measures Reconciliation
Selected Financial Information          
(in thousands, except per share data)          
   2023   2022 
  First
Quarter		 Fourth
Quarter		 Third
Quarter		 Second
Quarter		 First
Quarter
           
Noninterest expense reconciliation          
Noninterest expenses (GAAP) $139,805  $117,329  $112,755  $120,790  $119,275 
Merger-related and other charges  (8,631)  (1,470)  (1,746)  (7,143)  (9,016)
Noninterest expenses - operating $131,174  $115,859  $111,009  $113,647  $110,259 
           
Net income reconciliation          
Net income (GAAP) $62,300  $81,450  $81,161  $66,842  $48,019 
Merger-related and other charges  8,631   1,470   1,746   7,143   9,016 
Income tax benefit of merger-related and other charges  (1,955)  (323)  (385)  (1,575)  (1,963)
Net income - operating $68,976  $82,597  $82,522  $72,410  $55,072 
           
Net income to pre-tax pre-provision income reconciliation          
Net income (GAAP) $62,300  $81,450  $81,161  $66,842  $48,019 
Income tax expense  17,791   24,632   22,388   19,125   12,385 
Provision for credit losses  21,783   19,831   15,392   5,604   23,086 
Pre-tax pre-provision income $101,874  $125,913  $118,941  $91,571  $83,490 
           
Diluted income per common share reconciliation          
Diluted income per common share (GAAP) $0.52  $0.74  $0.74  $0.61  $0.43 
Merger-related and other charges, net of tax  0.06   0.01   0.01   0.05   0.07 
Diluted income per common share - operating $0.58  $0.75  $0.75  $0.66  $0.50 
           
Book value per common share reconciliation          
Book value per common share (GAAP) $25.76  $24.38  $23.78  $23.96  $24.38 
Effect of goodwill and other intangibles  (8.17)  (7.25)  (7.26)  (7.28)  (7.30)
Tangible book value per common share $17.59  $17.13  $16.52  $16.68  $17.08 
           
Return on tangible common equity reconciliation          
Return on common equity (GAAP)  7.34%  10.86%  11.02%  9.31%  6.80%
Merger-related and other charges, net of tax  0.81   0.15   0.19   0.79   1.03 
Return on common equity - operating  8.15   11.01   11.21   10.10   7.83 
Effect of goodwill and other intangibles  3.48   4.19   4.39   4.10   3.17 
Return on tangible common equity - operating  11.63%  15.20%  15.60%  14.20%  11.00%
           
Return on assets reconciliation          
Return on assets (GAAP)  0.95%  1.33%  1.32%  1.08%  0.78%
Merger-related and other charges, net of tax  0.11   0.02   0.02   0.09   0.11 
Return on assets - operating  1.06%  1.35%  1.34%  1.17%  0.89%
           
Return on assets to return on assets- pre-tax pre-provision reconciliation          
Return on assets (GAAP)  0.95%  1.33%  1.32%  1.08%  0.78%
Income tax expense  0.29   0.41   0.37   0.32   0.20 
(Release of) provision for credit losses  0.34   0.33   0.25   0.09   0.39 
Return on assets - pre-tax, pre-provision  1.58   2.07   1.94   1.49   1.37 
Merger-related and other charges  0.13   0.02   0.03   0.11   0.15 
Return on assets - pre-tax pre-provision, excluding merger-related and other charges  1.71%  2.09%  1.97%  1.60%  1.52%
           
Efficiency ratio reconciliation          
Efficiency ratio (GAAP)  57.20%  47.95%  48.41%  56.58%  57.43%
Merger-related and other charges  (3.53)  (0.60)  (0.75)  (3.35)  (4.34)
Efficiency ratio - operating  53.67%  47.35%  47.66%  53.23%  53.09%
           
Tangible common equity to tangible assets reconciliation          
Equity to total assets (GAAP)  11.90%  11.25%  11.12%  10.95%  11.06%
Effect of goodwill and other intangibles  (3.36)  (2.97)  (3.01)  (2.96)  (2.94)
Effect of preferred equity  (0.37)  (0.40)  (0.41)  (0.40)  (0.40)
Tangible common equity to tangible assets  8.17%  7.88%  7.70%  7.59%  7.72%
           


UNITED COMMUNITY BANKS, INC.            
Financial Highlights           
Loan Portfolio Composition at Period-End            
  2023  2022 Linked Quarter Change
 Year over Year Change
(in millions)First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter  
LOANS BY CATEGORY             
Owner occupied commercial RE$3,141 $2,735 $2,700 $2,681 $2,638 $406  $503 
Income producing commercial RE 3,611  3,262  3,299  3,273  3,328  349   283 
Commercial & industrial 2,442  2,252  2,238  2,253  2,336  190   106 
Commercial construction 1,806  1,598  1,514  1,514  1,482  208   324 
Equipment financing 1,447  1,374  1,281  1,211  1,148  73   299 
Total commercial 12,447  11,221  11,032  10,932  10,932  1,226   1,515 
Residential mortgage 2,756  2,355  2,149  1,997  1,826  401   930 
Home equity lines of credit 930  850  832  801  778  80   152 
Residential construction 492  443  423  381  368  49   124 
Manufactured housing 326  317  301  287  269  9   57 
Consumer 174  149  145  143  143  25   31 
Total loans$17,125 $15,335 $14,882 $14,541 $14,316 $1,790  $2,809 
              
LOANS BY MARKET             
Georgia$4,177 $4,051 $4,003 $3,960 $3,879 $126  $298 
South Carolina 2,672  2,587  2,516  2,377  2,323  85   349 
North Carolina 2,257  2,186  2,117  2,006  1,879  71   378 
Tennessee 2,458  2,507  2,536  2,621  2,661  (49)  (203)
Florida 1,745  1,308  1,259  1,235  1,208  437   537 
Alabama 1,029  —  —  —  —  1,029   1,029 
Commercial Banking Solutions 2,787  2,696  2,451  2,342  2,366  91   421 
Total loans$17,125 $15,335 $14,882 $14,541 $14,316 $1,790  $2,809 


UNITED COMMUNITY BANKS, INC.       
Financial Highlights       
Credit Quality       
(in thousands)       
   2023  2022 
  First
Quarter		 Fourth
Quarter		 Third
Quarter		 
NONACCRUAL LOANS       
Owner occupied RE $1,000 $523 $877 
Income producing RE  10,603  3,885  2,663 
Commercial & industrial  33,276  14,470  11,108 
Commercial construction  475  133  150 
Equipment financing  5,044  5,438  3,198 
Total commercial  50,398  24,449  17,996 
Residential mortgage  11,280  10,919  10,424 
Home equity lines of credit  2,377  1,888  1,151 
Residential construction  143  405  104 
Manufactured housing  8,542  6,518  4,187 
Consumer  55  53  17 
Total nonaccrual loans held for investment  72,795  44,232  33,879 
Nonaccrual loans held for sale  —  —  316 
OREO and repossessed assets  608  49  1,316 
Total NPAs $73,403 $44,281 $35,511 


   2023   2022 
  First Quarter Fourth Quarter Third Quarter
(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 (RECOVERIES) BY CATEGORY            
Owner occupied RE $90  0.01% $(130) (0.02)% $(90) (0.01)%
Income producing RE  2,306  0.26   (113) (0.01)  176  0.02 
Commercial & industrial  225  0.04   4,577  0.81   (744) (0.13)
Commercial construction  (37) (0.01)  (77) (0.02)  10  — 
Equipment financing  3,375  0.93   1,658  0.50   1,121  0.36 
Total commercial  5,959  0.20   5,915  0.21   473  0.02 
Residential mortgage  (87) (0.01)  (33) (0.01)  (66) (0.01)
Home equity lines of credit  33  0.01   (89) (0.04)  (102) (0.05)
Residential construction  (15) (0.01)  (23) (0.02)  (109) (0.11)
Manufactured housing  628  0.76   246  0.32   220  0.30 
Consumer  566  1.37   595  1.61   718  1.98 
Total $7,084  0.17  $6,611  0.17  $1,134  0.03 
             
(1) Annualized.            


 
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)		    
(in thousands, except share and per share data) March 31,
2023		 December 31,
2022
ASSETS    
Cash and due from banks $275,962  $195,771 
Interest-bearing deposits in banks  501,719   316,082 
Federal funds and other short-term investments  —   135,000 
Cash and cash equivalents  777,681   646,853 
Debt securities available-for-sale  3,331,139   3,614,333 
Debt securities held-to-maturity (fair value $2,206,874 and $2,191,073, respectively)  2,584,081   2,613,648 
Loans held for sale  20,390   13,600 
Loans and leases held for investment  17,124,703   15,334,627 
Less allowance for credit losses - loans and leases  (176,534)  (159,357)
Loans and leases, net  16,948,169   15,175,270 
Premises and equipment, net  336,617   298,456 
Bank owned life insurance  341,285   299,297 
Goodwill and other intangible assets, net  961,244   779,248 
Other assets  571,244   568,179 
Total assets $25,871,850  $24,008,884 
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $7,540,265  $7,643,081 
NOW and interest-bearing demand  4,769,663   4,350,878 
Money market  5,140,902   4,510,680 
Savings  1,362,520   1,456,337 
Time  2,703,568   1,781,482 
Brokered  487,756   134,049 
Total deposits  22,004,674   19,876,507 
Short-term borrowings  7,219   158,933 
Federal Home Loan Bank advances  30,000   550,000 
Long-term debt  324,729   324,663 
Accrued expenses and other liabilities  427,105   398,107 
Total liabilities  22,793,727   21,308,210 
Shareholders' equity:    
Preferred stock; $1 par value; 10,000,000 shares authorized;
   4,000 shares Series I issued and outstanding, $25,000 per share liquidation preference		  96,422   96,422 
Common stock, $1 par value; 200,000,000 shares authorized,
  115,151,566 and 106,222,758 shares issued and outstanding, respectively		  115,152   106,223 
Common stock issuable; 579,835 and 607,128 shares, respectively  11,977   12,307 
Capital surplus  2,606,403   2,306,366 
Retained earnings  542,606   508,844 
Accumulated other comprehensive loss  (294,437)  (329,488)
Total shareholders' equity  3,078,123   2,700,674 
Total liabilities and shareholders' equity $25,871,850  $24,008,884 


   
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)		  
  Three Months Ended
March 31,
(in thousands, except per share data)  2023   2022 
Interest revenue:    
Loans, including fees $236,431  $146,741 
Investment securities, including tax exempt of $2,110 and $2,655, respectively  39,986   23,665 
Deposits in banks and short-term investments  3,070   653 
Total interest revenue  279,487   171,059 
     
Interest expense:    
Deposits:    
NOW and interest-bearing demand  17,599   1,469 
Money market  25,066   1,012 
Savings  538   72 
Time  14,658   578 
Deposits  57,861   3,131 
Short-term borrowings  1,148   — 
Federal Home Loan Bank advances  5,112   — 
Long-term debt  3,896   4,136 
Total interest expense  68,017   7,267 
Net interest revenue  211,470   163,792 
Provision for credit losses  21,783   23,086 
Net interest revenue after provision for credit losses  189,687   140,706 
     
Noninterest income:    
Service charges and fees  8,699   9,070 
Mortgage loan gains and other related fees  4,521   16,152 
Wealth management fees  5,724   5,895 
Gains from sales of other loans, net  1,916   3,198 
Lending and loan servicing fees  4,016   2,986 
Securities losses, net  (1,644)  (3,734)
Other  6,977   5,406 
Total noninterest income  30,209   38,973 
Total revenue  219,896   179,679 
     
Noninterest expenses:    
Salaries and employee benefits  78,698   71,006 
Communications and equipment  10,008   9,248 
Occupancy  9,889   9,378 
Advertising and public relations  2,349   1,488 
Postage, printing and supplies  2,537   2,119 
Professional fees  6,072   4,447 
Lending and loan servicing expense  2,319   2,366 
Outside services - electronic banking  3,425   2,523 
FDIC assessments and other regulatory charges  4,001   2,173 
Amortization of intangibles  3,528   1,793 
Merger-related and other charges  8,631   9,016 
Other  8,348   3,718 
Total noninterest expenses  139,805   119,275 
Income before income taxes  80,091   60,404 
Income tax expense  17,791   12,385 
Net income  62,300   48,019 
Preferred stock dividends  1,719   1,719 
Earnings allocated to participating securities  339   238 
Net income available to common shareholders $60,242  $46,062 
     
Net income per common share:    
Basic $0.52  $0.43 
Diluted  0.52   0.43 
Weighted average common shares outstanding:    
Basic  115,451   106,550 
Diluted  115,715   106,677 
         


Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,		    
   2023   2022 
(dollars in thousands, fully taxable equivalent (FTE)) Average Balance Interest Average Rate Average Balance Interest Average Rate
Assets:            
Interest-earning assets:            
Loans, net of unearned income (FTE) (1)(2) $16,897,372  $236,530 5.68% $14,234,026  $146,637 4.18%
Taxable securities (3)  6,059,323   37,876 2.50   5,848,976   21,010 1.44 
Tax-exempt securities (FTE) (1)(3)  422,583   2,834 2.68   510,954   3,566 2.79 
Federal funds sold and other interest-earning assets  472,325   3,352 2.88   1,910,411   1,020 0.22 
Total interest-earning assets (FTE)  23,851,603   280,592 4.76   22,504,367   172,233 3.10 
             
Noninterest-earning assets:            
Allowance for credit losses  (167,584)      (113,254)    
Cash and due from banks  271,210       166,005     
Premises and equipment  329,135       277,216     
Other assets (3)  1,484,936       1,369,301     
Total assets $25,769,300      $24,203,635     
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $4,499,907   17,599 1.59  $4,667,098   1,469 0.13 
Money market  5,223,267   25,066 1.95   5,110,817   1,012 0.08 
Savings  1,416,931   538 0.15   1,436,881   72 0.02 
Time  2,348,588   12,313 2.13   1,758,895   534 0.12 
Brokered time deposits  208,215   2,345 4.57   79,092   44 0.23 
Total interest-bearing deposits  13,696,908   57,861 1.71   13,052,783   3,131 0.10 
Federal funds purchased and other borrowings  107,955   1,148 4.31   611   — — 
Federal Home Loan Bank advances  453,056   5,112 4.58   —   — — 
Long-term debt  324,701   3,896 4.87   318,995   4,136 5.26 
Total borrowed funds  885,712   10,156 4.65   319,606   4,136 5.25 
Total interest-bearing liabilities  14,582,620   68,017 1.89   13,372,389   7,267 0.22 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  7,697,844       7,666,635     
Other liabilities  357,367       378,327     
Total liabilities  22,637,831       21,417,351     
Shareholders' equity  3,131,469       2,786,284     
Total liabilities and shareholders' equity $25,769,300      $24,203,635     
             
Net interest revenue (FTE)   $212,575     $164,966  
Net interest-rate spread (FTE)     2.87%     2.88%
Net interest margin (FTE) (4)     3.61%     2.97%


(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%, 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 on which the accrual of interest has been discontinued and loans that are held for sale.
(3)Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $419 million in 2023 and $81.2 million in 2022 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 top 100 U.S. financial institution with $25.9 billion in assets, and through its subsidiaries, provides a full range of banking, wealth management and mortgage services. UCBI is the financial holding company for United Community Bank (“United Community”) which has 207 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment lending subsidiary. United Community is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. Among other awards, United Community is a nine-time winner of the J.D. Power award that ranked the bank #1 in customer satisfaction with consumer banking in the Southeast and was recognized in 2023 by Forbes as one of the World’s Best Banks and one of America’s Best Banks. The bank is also a multi-award recipient of the Greenwich Excellence Awards, including the 2022 awards for Small Business Banking-Likelihood to Recommend (South) and Overall Satisfaction (South), and was named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year. Additional information about United 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,” “pre-tax, pre-provision 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,” “return on assets - pre-tax, pre-provision, excluding merger-related and other charges,” “return on assets - pre-tax, pre-provision,” “operating efficiency ratio,” and “tangible common equity to tangible 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

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential,” or the negative of these terms or other comparable terminology, and include statements related to the expected financial returns of the acquisition of First Miami Bancorp, Inc. (“FMIA”). Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. 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.

Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the FMIA acquisition may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of the FMIA acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of FMIA may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisition of FMIA, (5) the risks relating to the integration of FMIA’s operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risks associated with United’s pursuit of future acquisitions, (7) the risk of expansion into new geographic or product markets, (8) the dilution caused by United’s issuance of additional shares of its common stock in the FMIA acquisition, and (9) general competitive, economic, political and market conditions. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2022, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).

Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United or FMIA.

United qualifies all forward-looking statements by these cautionary statements.

For more information:

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