United Community Banks, Inc. Reports Fourth Quarter 2022 Results

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United Community Banks, Inc. Reports Fourth Quarter 2022 Results

Jan 17, 2023

GAAP EPS of $0.74, Return on Assets of 1.33% and Loan Growth of 12%

GREENVILLE, S.C., Jan. 17, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2022 fourth quarter was $81.5 million and pre-tax, pre-provision income was $125.9 million. Diluted earnings per share of $0.74 for the quarter represented an increase of $0.19 or 35%, from the fourth quarter a year ago, and was flat from the third quarter of 2022. On an operating basis, United’s diluted earnings per share of $0.75 was up 17% from the year ago quarter. The primary drivers of the increased earnings in both periods were increased interest rates and organic loan growth, as well as the acquisition of Reliant Bancorp, Inc., which closed on January 1, 2022 and was not reflected in the year-ago quarter. United’s return on assets was 1.33%, or 1.35% on an operating basis. Return on equity was 10.9% and return on tangible common equity was 15.2%. On a pre-tax, pre-provision basis, operating return on assets was 2.09% for the quarter. Highlights for the quarter include strong annualized loan growth of 12%, 19 basis points of net interest margin expansion and further improvement in the efficiency ratio to 47.95%, or 47.35% on an operating basis, which excludes the effect of merger-related and other charges.

Chairman and CEO Lynn Harton stated, “We are pleased with our performance during this quarter and in 2022. In the quarter, our loan growth across all categories was strong and our net interest margin continued to benefit from increasing interest rates. As a result, we generated positive operating leverage, resulting in a new record efficiency ratio for us.” Harton continued, “On the strategic front, we continue to benefit from the acquisitions we have completed over the past few years. These new partnerships have expanded the company into exciting growth markets and have brought talented bankers to United. While not included in these quarterly results, we are excited that we have now completed the addition of Progress Financial Corporation to the United family on January 3, 2023. Progress has a talented team, exceptional leadership, and operates in great markets in Alabama and the Florida Panhandle. I am very glad to welcome them to our team.”

The net interest margin increased by 19 basis points to 3.76% from the third quarter, while the average yield on interest-earning assets was up 49 basis points to 4.32% and United’s cost of deposits increased by 30 basis points to 0.49%. Net charge-offs increased to $6.6 million or 0.17% of average loans during the quarter, mainly driven by one C&I loan, and NPAs were up slightly from prior quarters to 18 basis points relative to total assets.

Mr. Harton concluded, “2023 will be another great year for United despite some changes in the environment. Deposit competition will continue to increase as depositors seek higher returns for their excess liquidity. Well publicized recession fears may drive increasing provision costs for the industry. We believe we are well prepared to navigate these conditions due to the strength of our balance sheet, and more importantly, the strength of our teams. In 2022, we further strengthened our Board of Directors, added new market leaders, new commercial bankers and new line-of-business leaders. We also expanded our service capabilities with new locations across our footprint. In closing, I would note that we are all very proud that in October, United was named one of the “Best Banks to Work For” by American Banker for the sixth consecutive year. Everything begins with being a great place to work for great people. One of my goals for the year is to do an even better job of making sure we keep our company feeling small and connected as we continue to grow.”

2022 Financial Highlights:

Completed successful year with strong loan growth and historically high pre-credit profitability, and completed an acquisition in the high-growth Nashville, Tennessee MSA, which was a strategic priority
Full year EPS of $2.52, a decrease of 15% compared to 2021; full year operating EPS of $2.66, a decrease of 14% from 2021
Return on assets of 1.13%, or 1.19% on an operating basis
Pre-tax, pre-provision return on assets of 1.80% on an operating basis
Return on common equity of 9.5%
Return on tangible common equity of 14.0% on an operating basis
A provision for credit losses of $63.9 million compared to a release of provision of $37.6 million in 2021, with $18.3 million attributable to establishing an initial allowance for loans acquired in the first quarter in the Reliant acquisition
Strong loan growth of $3.6 billion or $1.3 billion excluding loans acquired from Reliant and PPP loans
Core transaction deposits were up $1.3 billion compared to 2021; excluding Reliant, 2022 core transaction deposits were down $819 million, or 5.7%, reflecting runoff following 2021’s pandemic-related deposit surge
Net interest margin of 3.38%, which was up 31 basis points from last year primarily due to increased interest rates
Noninterest income was down 12.7% primarily due to a decline in mortgage fees, as higher rates softened demand
The efficiency ratio of 52.3%, or 50.2% on an operating basis, was improved as the combination of higher rates and the achievement of merger-related efficiencies drove the ratio to record low levels
Net charge-offs remained low at just $9.7 million, or 0.07% of average total loans

Fourth Quarter 2022 Financial Highlights:

Net income of $81.5 million and pre-tax, pre-provision income of $125.9 million
EPS increased by 35% compared to fourth quarter 2021 on a GAAP basis and 17% on an operating basis; compared to third quarter 2022, EPS remained flat on a GAAP basis and on an operating basis
Return on assets of 1.33%, or 1.35% on an operating basis
Pre-tax, pre-provision return on assets of 2.09% on an operating basis
Return on common equity of 10.9%
Return on tangible common equity of 15.2% on an operating basis
A provision for credit losses of $19.8 million, which increased the allowance for loan losses to 1.04% of loans from 1.00% in the third quarter
Loan production of $1.5 billion, resulting in loan growth of 12%, annualized for the quarter
Core transaction deposits were down $915 million; or 22% annualized
Net interest margin of 3.76% was up 19 basis points from the third quarter, due to increased interest rates and loan growth
Mortgage closings of $253 million compared to $522 million a year ago; mortgage rate locks of $364 million compared to $695 million a year ago
Noninterest income was up $1.4 million on a linked quarter basis, primarily driven by positive marks on certain investments and offset by lower mortgage fees
Noninterest expenses increased by $4.6 million compared to the third quarter on a GAAP basis and by $4.9 million on an operating basis, mostly due to lower deferred costs from lower mortgage loan volume and higher FDIC deposit insurance costs
Efficiency ratio of 48.0%, or 47.4% on an operating basis
Net charge-offs of $6.6 million, or 17 basis points as a percent of average loans, up 14 basis points from the net charge-offs experienced in the third quarter
Nonperforming assets of 0.18% of total assets, up 3 basis points compared to September 30, 2022
Quarterly common shareholder dividend of $0.22 per share declared during the quarter, an increase of 10% year-over-year
After the end of the quarter, 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, January 18, 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/10174303/f57c53ab13. 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)
		2022												2021		Fourth Quarter 2022- 2021 Change		For the Twelve Months Ended December 31,						YTD 2022- 2021 Change
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Fourth Quarter 2022- 2021 Change			2022			2021		YTD 2022- 2021 Change
INCOME SUMMARY
Interest revenue	$	240,831		$	213,887		$	187,378		$	171,059		$	143,768				$	813,155		$	578,794
Interest expense		30,943			14,113			8,475			7,267			6,213					60,798			29,760
Net interest revenue		209,888			199,774			178,903			163,792			137,555		53	%		752,357			549,034		37	%
Provision for credit losses		19,831			15,392			5,604			23,086			(647	)				63,913			(37,550	)
Noninterest income		33,354			31,922			33,458			38,973			37,177		(10	)		137,707			157,818		(13	)
Total revenue		223,411			216,304			206,757			179,679			175,379		27			826,151			744,402		11
Noninterest expenses		117,329			112,755			120,790			119,275			109,156		7			470,149			396,639		19
Income before income tax expense		106,082			103,549			85,967			60,404			66,223					356,002			347,763
Income tax expense		24,632			22,388			19,125			12,385			14,204					78,530			77,962
Net income		81,450			81,161			66,842			48,019			52,019					277,472			269,801
Merger-related and other charges		1,470			1,746			7,143			9,016			9,912					19,375			13,970
Income tax benefit of merger-related and other charges		(323	)		(385	)		(1,575	)		(1,963	)		(2,265	)				(4,246	)		(3,174	)
Net income - operating⁽¹⁾	$	82,597		$	82,522		$	72,410		$	55,072		$	59,666		38		$	292,601		$	280,597		4

Pre-tax pre-provision income ⁽⁵⁾	$	125,913		$	118,941		$	91,571		$	83,490		$	65,576		92		$	419,915		$	310,213		35

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.74		$	0.74		$	0.61		$	0.43		$	0.55		35		$	2.52		$	2.97		(15	)
Diluted net income - operating ⁽¹⁾		0.75			0.75			0.66			0.50			0.64		17			2.66			3.09		(14	)
Common stock cash dividends declared		0.22			0.22			0.21			0.21			0.20		10			0.86			0.78		10
Book value		24.38			23.78			23.96			24.38			23.63		3			24.38			23.63		3
Tangible book value ⁽³⁾		17.13			16.52			16.68			17.08			18.42		(7	)		17.13			18.42		(7	)
Key performance ratios:
Return on common equity - GAAP ⁽²⁾⁽⁴⁾		10.86	%		11.02	%		9.31	%		6.80	%		9.32	%				9.54	%		13.14	%
Return on common equity - operating ^(1)(2)(4)		11.01			11.21			10.10			7.83			10.74					10.07			13.68
Return on tangible common equity - operating ^(1)(2)(3)(4)		15.20			15.60			14.20			11.00			13.93					14.04			17.33
Return on assets - GAAP ⁽⁴⁾		1.33			1.32			1.08			0.78			0.96					1.13			1.37
Return on assets - operating ⁽¹⁾⁽⁴⁾		1.35			1.34			1.17			0.89			1.10					1.19			1.42
Return on assets -pre-tax pre-provision⁽⁴⁾⁽⁵⁾		2.07			1.94			1.49			1.37			1.21					1.72			1.58
Return on assets -pre-tax pre-provision, excluding merger related and other charges^(1)(4)(5)		2.09			1.97			1.60			1.52			1.40					1.80			1.65
Net interest margin (fully taxable equivalent) ⁽⁴⁾		3.76			3.57			3.19			2.97			2.81					3.38			3.07
Efficiency ratio - GAAP		47.95			48.41			56.58			57.43			62.12					52.31			55.80
Efficiency ratio - operating ⁽¹⁾		47.35			47.66			53.23			53.09			56.48					50.16			53.83
Equity to total assets		11.25			11.12			10.95			11.06			10.61					11.25			10.61
Tangible common equity to tangible assets ⁽³⁾		7.88			7.70			7.59			7.72			8.09					7.88			8.09
ASSET QUALITY
Nonperforming assets (“NPAs”)	$	44,281		$	35,511		$	34,428		$	40,816		$	32,855		35		$	44,281		$	32,855		35
Allowance for credit losses - loans		159,357			148,502			136,925			132,805			102,532		55			159,357			102,532		55
Allowance for credit losses - total		180,520			167,300			153,042			146,369			113,524		59			180,520			113,524		59
Net charge-offs (recoveries)		6,611			1,134			(1,069	)		2,978			248					9,654			38
Allowance for credit losses - loans to loans		1.04	%		1.00	%		0.94	%		0.93	%		0.87	%				1.04	%		0.87	%
Allowance for credit losses - total to loans		1.18			1.12			1.05			1.02			0.97					1.18			0.97
Net charge-offs to average loans ⁽⁴⁾		0.17			0.03			(0.03	)		0.08			0.01					0.07			—
NPAs to total assets		0.18			0.15			0.14			0.17			0.16					0.18			0.16
AT PERIOD END ($ in millions)
Loans	$	15,335		$	14,882		$	14,541		$	14,316		$	11,760		30		$	15,335		$	11,760		30
Investment securities		6,228			6,539			6,683			6,410			5,653		10			6,228			5,653		10
Total assets		24,009			23,688			24,213			24,374			20,947		15			24,009			20,947		15
Deposits		19,877			20,321			20,873			21,056			18,241		9			19,877			18,241		9
Shareholders’ equity		2,701			2,635			2,651			2,695			2,222		22			2,701			2,222		22
Common shares outstanding (thousands)		106,223			106,163			106,034			106,025			89,350		19			106,223			89,350		19

⁽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)
		2022												2021		Twelve Months Ended December 31,
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter				2022			2021
Noninterest expense reconciliation
Noninterest expenses (GAAP)	$	117,329		$	112,755		$	120,790		$	119,275		$	109,156		$	470,149		$	396,639
Merger-related and other charges		(1,470	)		(1,746	)		(7,143	)		(9,016	)		(9,912	)		(19,375	)		(13,970	)
Expenses - operating	$	115,859		$	111,009		$	113,647		$	110,259		$	99,244		$	450,774		$	382,669

Net income to operating income reconciliation
Net income (GAAP)	$	81,450		$	81,161		$	66,842		$	48,019		$	52,019		$	277,472		$	269,801
Merger-related and other charges		1,470			1,746			7,143			9,016			9,912			19,375			13,970
Income tax benefit of merger-related and other charges		(323	)		(385	)		(1,575	)		(1,963	)		(2,265	)		(4,246	)		(3,174	)
Net income - operating	$	82,597		$	82,522		$	72,410		$	55,072		$	59,666		$	292,601		$	280,597

Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)	$	81,450		$	81,161		$	66,842		$	48,019		$	52,019		$	277,472		$	269,801
Income tax expense		24,632			22,388			19,125			12,385			14,204			78,530			77,962
Provision for credit losses		19,831			15,392			5,604			23,086			(647	)		63,913			(37,550	)
Pre-tax pre-provision income	$	125,913		$	118,941		$	91,571		$	83,490		$	65,576		$	419,915		$	310,213

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.74		$	0.74		$	0.61		$	0.43		$	0.55		$	2.52		$	2.97
Merger-related and other charges		0.01			0.01			0.05			0.07			0.09			0.14			0.12
Diluted income per common share - operating	$	0.75		$	0.75		$	0.66		$	0.50		$	0.64		$	2.66		$	3.09

Book value per common share reconciliation
Book value per common share (GAAP)	$	24.38		$	23.78		$	23.96		$	24.38		$	23.63		$	24.38		$	23.63
Effect of goodwill and other intangibles		(7.25	)		(7.26	)		(7.28	)		(7.30	)		(5.21	)		(7.25	)		(5.21	)
Tangible book value per common share	$	17.13		$	16.52		$	16.68		$	17.08		$	18.42		$	17.13		$	18.42

Return on tangible common equity reconciliation
Return on common equity (GAAP)		10.86	%		11.02	%		9.31	%		6.80	%		9.32	%		9.54	%		13.14	%
Merger-related and other charges		0.15			0.19			0.79			1.03			1.42			0.53			0.54
Return on common equity - operating		11.01			11.21			10.10			7.83			10.74			10.07			13.68
Effect of goodwill and other intangibles		4.19			4.39			4.10			3.17			3.19			3.97			3.65
Return on tangible common equity - operating		15.20	%		15.60	%		14.20	%		11.00	%		13.93	%		14.04	%		17.33	%

Return on assets reconciliation
Return on assets (GAAP)		1.33	%		1.32	%		1.08	%		0.78	%		0.96	%		1.13	%		1.37	%
Merger-related and other charges		0.02			0.02			0.09			0.11			0.14			0.06			0.05
Return on assets - operating		1.35	%		1.34	%		1.17	%		0.89	%		1.10	%		1.19	%		1.42	%

Return on assets to return on assets- pre-tax pre-provision reconciliation
Return on assets (GAAP)		1.33	%		1.32	%		1.08	%		0.78	%		0.96	%		1.13	%		1.37	%
Income tax expense		0.41			0.37			0.32			0.20			0.26			0.32			0.40
Provision for credit losses		0.33			0.25			0.09			0.39			(0.01	)		0.27			(0.19	)
Return on assets - pre-tax pre-provision		2.07			1.94			1.49			1.37			1.21			1.72			1.58
Merger-related and other charges		0.02			0.03			0.11			0.15			0.19			0.08			0.07
Return on assets - pre-tax pre-provision, excluding merger-related and other charges		2.09	%		1.97	%		1.60	%		1.52	%		1.40	%		1.80	%		1.65	%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		47.95	%		48.41	%		56.58	%		57.43	%		62.12	%		52.31	%		55.80	%
Merger-related and other charges		(0.60	)		(0.75	)		(3.35	)		(4.34	)		(5.64	)		(2.15	)		(1.97	)
Efficiency ratio - operating		47.35	%		47.66	%		53.23	%		53.09	%		56.48	%		50.16	%		53.83	%

Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)		11.25	%		11.12	%		10.95	%		11.06	%		10.61	%		11.25	%		10.61	%
Effect of goodwill and other intangibles		(2.97	)		(3.01	)		(2.96	)		(2.94	)		(2.06	)		(2.97	)		(2.06	)
Effect of preferred equity		(0.40	)		(0.41	)		(0.40	)		(0.40	)		(0.46	)		(0.40	)		(0.46	)
Tangible common equity to tangible assets		7.88	%		7.70	%		7.59	%		7.72	%		8.09	%		7.88	%		8.09	%


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
(in millions)
		2022								2021	Linked Quarter Change			Year over Year Change
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Linked Quarter Change			Year over Year Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	2,735	$	2,700	$	2,681	$	2,638	$	2,322	$	35		$	413
Income producing commercial RE		3,262		3,299		3,273		3,328		2,601		(37	)		661
Commercial & industrial		2,251		2,236		2,243		2,302		1,822		15			429
Paycheck protection program		1		2		10		34		88		(1	)		(87	)
Commercial construction		1,598		1,514		1,514		1,482		1,015		84			583
Equipment financing		1,374		1,281		1,211		1,148		1,083		93			291
Total commercial		11,221		11,032		10,932		10,932		8,931		189			2,290
Residential mortgage		2,355		2,149		1,997		1,826		1,638		206			717
Home equity lines of credit		850		832		801		778		694		18			156
Residential construction		443		423		381		368		359		20			84
Manufactured housing		317		301		287		269		—		16			317
Consumer		149		145		143		143		138		4			11
Total loans	$	15,335	$	14,882	$	14,541	$	14,316	$	11,760	$	453		$	3,575

LOANS BY STATE
Georgia	$	4,051	$	4,003	$	3,960	$	3,879	$	3,778	$	48		$	273
South Carolina		2,587		2,516		2,377		2,323		2,235		71			352
North Carolina		2,186		2,117		2,006		1,879		1,895		69			291
Tennessee		2,507		2,536		2,621		2,661		373		(29	)		2,134
Florida		1,308		1,259		1,235		1,208		1,148		49			160
Commercial Banking Solutions		2,696		2,451		2,342		2,366		2,331		245			365
Total loans	$	15,335	$	14,882	$	14,541	$	14,316	$	11,760	$	453		$	3,575


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions)
		2022		2021		2020		2019		2018
LOANS BY CATEGORY
Owner occupied commercial RE	$	2,735	$	2,322	$	2,090	$	1,720	$	1,648
Income producing commercial RE		3,262		2,601		2,541		2,008		1,812
Commercial & industrial		2,251		1,822		1,853		1,221		1,278
Paycheck protection program		1		88		646		—		—
Commercial construction		1,598		1,015		967		976		796
Equipment financing		1,374		1,083		864		745		565
Total commercial		11,221		8,931		8,961		6,670		6,099
Residential mortgage		2,355		1,638		1,285		1,118		1,049
Home equity lines of credit		850		694		697		661		694
Residential construction		443		359		281		236		211
Manufactured housing		317		—		—		—		—
Consumer		149		138		147		128		330
Total loans	$	15,335	$	11,760	$	11,371	$	8,813	$	8,383

LOANS BY STATE
Georgia	$	4,051	$	3,778	$	3,685	$	3,606	$	3,323
South Carolina		2,587		2,235		1,947		1,708		1,645
North Carolina		2,186		1,895		1,281		1,156		1,072
Tennessee		2,507		373		415		421		477
Florida		1,308		1,148		1,435		—		—
Commercial Banking Solutions		2,696		2,331		2,608		1,922		1,658
Indirect auto		—		—		—		—		208
Total loans	$	15,335	$	11,760	$	11,371	$	8,813	$	8,383


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
		2022
	Fourth Quarter		Third Quarter		Second Quarter
NONACCRUAL LOANS
Owner occupied RE	$	523	$	877	$	1,876
Income producing RE		3,885		2,663		7,074
Commercial & industrial		14,470		11,108		4,548
Commercial construction		133		150		208
Equipment financing		5,438		3,198		3,249
Total commercial		24,449		17,996		16,955
Residential mortgage		10,919		10,424		12,228
Home equity lines of credit		1,888		1,151		933
Residential construction		405		104		198
Manufactured housing		6,518		4,187		2,804
Consumer		53		17		25
Total nonaccrual loans held for investment		44,232		33,879		33,143
Nonaccrual loans HFS		—		316		317
OREO and repossessed assets		49		1,316		968
Total NPAs	$	44,281	$	35,511	$	34,428

		2022
	Fourth Quarter					Third Quarter					Second 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 BY CATEGORY
Owner occupied RE	$	(130	)	(0.02	)%	$	(90	)	(0.01	)%	$	(1,496	)	(0.23	)%
Income producing RE		(113	)	(0.01	)		176		0.02			(116	)	(0.01	)
Commercial & industrial		4,577		0.81			(744	)	(0.13	)		(302	)	(0.05	)
Commercial construction		(77	)	(0.02	)		10		—			(144	)	(0.04	)
Equipment financing		1,658		0.50			1,121		0.36			907		0.31
Total commercial		5,915		0.21			473		0.02			(1,151	)	(0.04	)
Residential mortgage		(33	)	(0.01	)		(66	)	(0.01	)		(51	)	(0.01	)
Home equity lines of credit		(89	)	(0.04	)		(102	)	(0.05	)		(346	)	(0.18	)
Residential construction		(23	)	(0.02	)		(109	)	(0.11	)		(76	)	(0.08	)
Manufactured housing		246		0.32			220		0.30			135		0.20
Consumer		595		1.61			718		1.98			420		1.18
Total	$	6,611		0.17		$	1,134		0.03		$	(1,069	)	(0.03	)

⁽¹⁾ Annualized.


UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data)

	December 31, 2022			December 31, 2021
ASSETS
Cash and due from banks	$	195,771		$	144,244
Interest-bearing deposits in banks		316,082			2,147,266
Federal funds and other short-term investments		135,000			27,000
Cash and cash equivalents		646,853			2,318,510
Debt securities available-for-sale		3,614,333			4,496,824
Debt securities held-to-maturity (fair value $2,191,073 and $1,148,804, respectively)		2,613,648			1,156,098
Loans held for sale at fair value		13,600			44,109
Loans and leases held for investment		15,334,627			11,760,346
Less allowance for credit losses - loans and leases		(159,357	)		(102,532	)
Loans and leases, net		15,175,270			11,657,814
Premises and equipment, net		298,456			245,296
Bank owned life insurance		299,297			217,713
Accrued interest receivable		72,807			42,999
Net deferred tax asset		129,313			41,322
Derivative financial instruments		50,636			42,480
Goodwill and other intangible assets, net		779,248			472,407
Other assets		315,423			211,199
Total assets	$	24,008,884		$	20,946,771
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	7,643,081		$	6,956,981
NOW and interest-bearing demand		4,350,878			4,252,209
Money market		4,510,680			4,183,354
Savings		1,456,337			1,215,779
Time		1,781,482			1,442,498
Brokered		134,049			190,358
Total deposits		19,876,507			18,241,179
Short-term borrowings		158,933			—
Federal Home Loan Bank advances		550,000			—
Long-term debt		324,663			247,360
Derivative financial instruments		99,543			25,145
Accrued expenses and other liabilities		298,564			210,842
Total liabilities		21,308,210			18,724,526
Shareholders' equity:
Preferred stock, $1 par value: 10,000,000 shares authorized; Series I, $25,000 per share liquidation preference; 4,000 shares issued and outstanding		96,422			96,422
Common stock, $1 par value; 200,000,000 shares authorized; 106,222,758 and 89,349,826 shares issued and outstanding, respectively		106,223			89,350
Common stock issuable; 607,128 and 595,705 shares, respectively		12,307			11,288
Capital surplus		2,306,366			1,721,007
Retained earnings		508,844			330,654
Accumulated other comprehensive loss		(329,488	)		(26,476	)
Total shareholders’ equity		2,700,674			2,222,245
Total liabilities and shareholders’ equity	$	24,008,884		$	20,946,771


UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited) (in thousands, except per share data)
	Three Months Ended December 31,						Twelve Months Ended December 31,
		2022			2021			2022			2021
Interest revenue:
Loans, including fees	$	197,330		$	123,473		$	673,402		$	505,734
Investment securities, including tax exempt of $2,561, 2,293, $10,323 and $8,978		40,781			19,442			131,824			70,972
Deposits in banks and short-term investments		2,720			853			7,929			2,088
Total interest revenue		240,831			143,768			813,155			578,794
Interest expense:
Deposits:
NOW and interest-bearing demand		9,688			1,310			17,312			5,468
Money market		11,244			1,102			18,274			5,380
Savings		356			60			693			217
Time		3,498			392			5,820			3,780
Deposits		24,786			2,864			42,099			14,845
Short-term borrowings		480			—			507			—
Federal Home Loan Bank advances		1,424			1			1,424			3
Long-term debt		4,253			3,348			16,768			14,912
Total interest expense		30,943			6,213			60,798			29,760
Net interest revenue		209,888			137,555			752,357			549,034
Provision for credit losses		19,831			(647	)		63,913			(37,550	)
Net interest revenue after provision for credit losses		190,057			138,202			688,444			586,584
Noninterest income:
Service charges and fees		9,519			8,613			38,163			33,868
Mortgage loan gains and related fees		3,104			10,910			32,524			58,446
Wealth management fees		5,835			6,117			23,594			18,998
Gains from other loan sales, net		1,504			3,761			10,730			11,267
Other lending and loan servicing fees		2,487			2,357			10,005			9,427
Securities (losses) gains, net		(184	)		42			(3,872	)		83
Other		11,089			5,377			26,563			25,729
Total noninterest income		33,354			37,177			137,707			157,818
Total revenue		223,411			175,379			826,151			744,402
Noninterest expenses:
Salaries and employee benefits		68,143			60,986			276,205			241,443
Occupancy		8,866			7,489			36,247			28,619
Communications and equipment		10,516			7,850			38,234			29,829
FDIC assessments and other regulatory charges		3,098			1,878			9,894			7,398
Professional fees		5,496			6,080			20,166			20,589
Lending and loan servicing expense		1,604			2,351			9,350			10,859
Outside services - electronic banking		3,954			2,670			12,583			9,481
Postage, printing and supplies		2,441			1,939			8,749			7,110
Advertising and public relations		2,052			1,760			8,384			5,910
Amortization of intangibles		1,619			1,103			6,826			4,045
Merger-related and other charges		1,470			9,912			19,375			13,970
Other		8,070			5,138			24,136			17,386
Total noninterest expenses		117,329			109,156			470,149			396,639
Net income before income taxes		106,082			66,223			356,002			347,763
Income tax expense		24,632			14,204			78,530			77,962
Net income	$	81,450		$	52,019		$	277,472		$	269,801
Preferred stock dividends		1,718			1,718			6,875			6,875
Earnings allocated to participating securities		461			317			1,462			1,657
Net income available to common shareholders	$	79,271		$	49,984		$	269,135		$	261,269
Net income per common share:
Basic	$	0.74		$	0.56		$	2.52		$	2.97
Diluted		0.74			0.55			2.52			2.97
Weighted average common shares outstanding:
Basic		106,795			89,916			106,661			87,940
Diluted		106,916			90,089			106,778			88,097


Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended December 31, (dollars in thousands, fully taxable equivalent (FTE))

		2022							2021
	Average Balance			Interest		Average Rate		Average Balance			Interest			Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	15,002,836		$	197,502	5.22	%	$	11,689,412		$	123,250		4.18	%
Taxable securities⁽³⁾		6,325,165			38,220	2.42			5,156,563			17,149		1.33
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		490,838			3,440	2.80			387,638			3,080		3.18
Federal funds sold and other interest-earning assets		453,090			2,912	2.55			2,308,241			1,322		0.23
Total interest-earning assets (FTE)		22,271,929			242,074	4.32			19,541,854			144,801		2.94

Noninterest-earning assets:
Allowance for loan losses		(152,551	)						(103,167	)
Cash and due from banks		217,873							141,967
Premises and equipment		297,523							245,869
Other assets ⁽³⁾		1,166,424							1,036,760
Total assets	$	23,801,198						$	20,863,283

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	4,385,916			9,688	0.88		$	4,080,621			1,310		0.13
Money market		4,628,585			11,244	0.96			4,323,851			1,102		0.10
Savings		1,480,908			356	0.10			1,187,134			60		0.02
Time		1,708,311			3,143	0.73			1,461,231			567		0.15
Brokered time deposits		51,258			355	2.75			65,556			(175	)	(1.06	)
Total interest-bearing deposits		12,254,978			24,786	0.80			11,118,393			2,864		0.10
Federal funds purchased and other borrowings		47,487			480	4.01			51			—		—
Federal Home Loan Bank advances		135,000			1,424	4.18			1,426			1		0.28
Long-term debt		324,590			4,253	5.20			247,251			3,348		5.37
Total borrowed funds		507,077			6,157	4.82			248,728			3,349		5.34
Total interest-bearing liabilities		12,762,055			30,943	0.96			11,367,121			6,213		0.22

Noninterest-bearing liabilities:
Noninterest-bearing deposits		7,993,816							6,918,279
Other liabilities		383,270							354,665
Total liabilities		21,139,141							18,640,065
Shareholders’ equity		2,662,057							2,223,218
Total liabilities and shareholders’ equity	$	23,801,198						$	20,863,283

Net interest revenue (FTE)				$	211,131						$	138,588
Net interest-rate spread (FTE)						3.36	%							2.72	%
Net interest margin (FTE) ⁽⁴⁾						3.76	%							2.81	%

⁽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, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $454 million in 2022 and $1.64 million in 2021 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.


Average Consolidated Balance Sheets and Net Interest Analysis For the Twelve Months Ended December 31, (dollars in thousands, fully taxable equivalent (FTE))

		2022							2021
	Average Balance			Interest		Average Rate		Average Balance			Interest		Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	14,571,746		$	673,491	4.62	%	$	11,485,876		$	504,015	4.39	%
Taxable securities ⁽³⁾		6,284,603			121,501	1.93			4,446,712			61,994	1.39
Tax-exempt securities (FTE)⁽¹⁾⁽³⁾		496,327			13,865	2.79			382,915			12,059	3.15
Federal funds sold and other interest-earning assets		1,065,057			9,104	0.85			1,680,151			4,784	0.28
Total interest-earning assets (FTE)		22,417,733			817,961	3.65			17,995,654			582,852	3.24

Non-interest-earning assets:
Allowance for loan losses		(135,144	)						(121,586	)
Cash and due from banks		204,852							139,728
Premises and equipment		288,044							230,276
Other assets ⁽³⁾		1,275,263							1,013,956
Total assets	$	24,050,748						$	19,258,028

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	4,486,263			17,312	0.39		$	3,610,601			5,468	0.15
Money market		4,900,667			18,274	0.37			3,972,358			5,380	0.14
Savings		1,482,599			693	0.05			1,095,071			217	0.02
Time		1,693,307			5,152	0.30			1,529,072			3,663	0.24
Brokered time deposits		61,636			668	1.08			67,230			117	0.17
Total interest-bearing deposits		12,624,472			42,099	0.33			10,274,332			14,845	0.14
Federal funds purchased and other borrowings		13,004			507	3.90			44			—	—
Federal Home Loan Bank advances		34,027			1,424	4.18			1,195			3	0.25
Long-term debt		323,102			16,768	5.19			276,492			14,912	5.39
Total borrowed funds		370,133			18,699	5.05			277,731			14,915	5.37
Total interest-bearing liabilities		12,994,605			60,798	0.47			10,552,063			29,760	0.28

Noninterest-bearing liabilities:
Noninterest-bearing deposits		7,967,321							6,276,094
Other liabilities		377,221							322,566
Total liabilities		21,339,147							17,150,723
Shareholders’ equity		2,711,601							2,107,305
Total liabilities and shareholders’ equity	$	24,050,748						$	19,258,028

Net interest revenue (FTE)				$	757,163						$	553,092
Net interest-rate spread (FTE)						3.18	%						2.96	%
Net interest margin (FTE) ⁽⁴⁾						3.38	%						3.07	%

⁽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, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $277 million in 2022 and pretax unrealized gains of $28.7 million in 2021 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) provides a full range of banking, wealth management and mortgage services for consumers and business owners. As of December 31, 2022, United had $24.0 billion in assets and 192 offices in Florida, Georgia, North Carolina, South Carolina, and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary. The company, known as "The Bank That SERVICE Built," has been recognized nationally for delivering award-winning service. In 2022, J.D. Power ranked United highest in customer satisfaction with consumer banking in the Southeast, marking eight out of the last nine years United has earned the coveted award. Forbes recognized United as one of the top ten World's Best Banks in 2022. Forbes also included United on its 2022 list of the 100 Best Banks in America for the ninth consecutive year. United also received ten Greenwich Excellence Awards in 2021 for excellence in Small Business Banking and Middle Market Banking, including national awards for Overall Satisfaction and Likelihood to Recommend. United was also named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year based on employee satisfaction. 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 Progress acquisition. 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 Progress 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 Progress acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Progress 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 Progress, (5) the risks relating to the integration of Progress’ 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 Progress 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, 2021, 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 Progress.

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

Press Release Details

United Community Banks, Inc. Reports Fourth Quarter 2022 Results

GAAP EPS of $0.74, Return on Assets of 1.33% and Loan Growth of 12%