United Community Banks, Inc. Reports Fourth Quarter Results

Press Release Details

Jan 21, 2020

United Community Banks, Inc. Reports Fourth Quarter Results

EPS of $0.61, Return on Assets of 1.50% and Return on Equity of 12.07%

GREENVILLE, S.C., Jan. 21, 2020 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its fourth quarter financial results, including strong year-over-year loan and deposit growth, operating efficiency and asset quality. Diluted earnings per share were $0.61, an increase of $0.05 or 9% from a year ago. Excluding a nominal amount of merger-related and other charges, diluted operating earnings per share were also $0.61, up 7% over last year. United’s return on assets was 1.50% and its return on common equity was 12.1% for the quarter. On an operating basis, United’s return on assets was also 1.50% and its return on tangible common equity was 15.5%.

During the quarter, the company sold its remaining investment in its indirect auto portfolio, completing its exit from that business.  Excluding indirect auto, loans grew at a 2% annualized rate in the fourth quarter. United's net interest margin decreased as expected due to falling interest rates. Other items that impacted the net interest margin included seasonally higher average public deposits invested at lower yielding overnight rates and lower purchased loan accretion when compared to previous quarters. Core transaction deposits remained stable and total deposits grew by $140 million.

For the full year of 2019, United's return on assets increased 11 basis points to 1.46% and EPS increased by 12%. Operating return on assets increased 11 basis points to 1.51% and operating EPS increased 11%, as the company continued to execute on its plans to deliver top quartile performance.  2019 saw strong operating leverage, resulting in a company best efficiency ratio of 55.8% and an operating efficiency ratio of 54.5%.

“Our fourth quarter caps off what has been an outstanding year for United.  Our team continued delivering best in class customer service, which has led to the achievement of our top quartile performance goals,” said Lynn Harton, Chairman and CEO of United. “We are proud and honored that United was named one of the 'Best Banks to Work For' by American Banker for the third year in a row, as well as one of the 'World’s Best Banks in 2019' by Forbes.  These accolades are totally due to the passion and caring of our 2,341 employees and their efforts to build a great company where they can develop fulfilling careers, reach ambitious financial goals and serve United's customers and communities at the highest level.  We look forward to continued success in 2020.”

2019 Highlights:

  • 2019 earnings per diluted share were $2.31, a 12% increase over 2018
    -- Excluding merger-related and other charges, operating earnings per diluted share for 2019 were $2.38 compared to $2.14 in 2018, an increase of 11%
  • Return on assets was 1.46% in 2019, an increase of 11 basis points from 2018
    -- Excluding merger-related and other charges, operating return on assets was 1.51%, an increase of 11 basis points from 2018
  • Efficiency ratio of 55.8% in 2019 improved 154 basis points as compared to 2018
    -- Excluding merger-related and other charges, efficiency ratio of 54.5% improved 144 basis points as compared to 2018
  • End of period loans grew $430 million in 2019, up 5% over December 31, 2018
  • Common Equity Tier 1 ratio was 13.0% at December 31, 2019, compared to 12.2% at December 31, 2018
  • Dividends of $0.68 per share were declared in 2019, up 17% over 2018
  • United completed the acquisition of First Madison Bank & Trust on May 1, 2019
  • Share repurchases of 500,495 shares were accomplished during the year at an average price of $26.01

Fourth Quarter 2019 Financial Highlights:

  • EPS of $0.61, representing growth of 9% over last year, or 7% on an operating basis
  • Return on assets of 1.50%
  • Return on common equity of 12.1%
  • Operating return on tangible common equity of 15.5%, excluding merger-related and other charges
  • End of period total loans fell by $90 million, but excluding indirect auto, end of period loans grew at a 2% annualized pace
  • Loan production was strong at $854 million, but was offset by higher than usual paydowns
  • Despite weaker seasonality, our mortgage business remained strong with loan locks of $411 million, compared to $251 million a year ago due to a favorable rate environment and the impact of new hires
  • Net interest margin of 3.93% was down 19 basis points compared to the third quarter and down 4 basis points compared to a year ago
  • Efficiency ratio of 54.9%
  • Net charge-offs of 18 basis points, up six basis points from last quarter and remaining at historically low levels
  • Nonperforming assets of 0.28% of total assets, compared with 0.24% at September 30, 2019 and 0.20% at December 31, 2018
  • Unusual items in the quarter netted to a slight gain, with a $1.6 million bank owned life insurance gain offset by $0.9 million in securities losses.  Additionally, our indirect portfolio sales resulted in a $0.7 million loss offset by a $0.5 million indirect portfolio loan loss reserve release

Conference Call
United will hold a conference call, Wednesday, January 22, 2020, 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 7081477. 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.

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


UNITED COMMUNITY BANKS, INC.                                    
Financial Highlights                                    
Selected Financial Information                                    
    2019   2018   Fourth Quarter 2019 - 2018 Change   For the Twelve Months Ended December 31,   YTD 2019 - 2018 Change
(in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter     2019   2018  
INCOME SUMMARY                                    
Interest revenue   $ 136,419     $ 140,615     $ 139,156     $ 136,516     $ 133,854         $ 552,706     $ 500,080      
Interest expense   19,781     21,277     21,372     20,882     18,975         83,312     61,330      
Net interest revenue   116,638     119,338     117,784     115,634     114,879     2 %   469,394     438,750     7 %
Provision for credit losses   3,500     3,100     3,250     3,300     2,100         13,150     9,500      
Noninterest income   30,183     29,031     24,531     20,968     23,045     31     104,713     92,961     13  
Total revenue   143,321     145,269     139,065     133,302     135,824     6     560,957     522,211     7  
Expenses   81,424     82,924     81,813     76,084     78,242     4     322,245     306,285     5  
Income before income tax expense   61,897     62,345     57,252     57,218     57,582         238,712     215,926      
Income tax expense   12,885     13,983     13,167     12,956     12,445         52,991     49,815      
Net income   49,012     48,362     44,085     44,262     45,137         185,721     166,111      
Merger-related and other charges   (74 )   2,605     4,087     739     1,234         7,357     7,345      
Income tax benefit of merger-related and other charges   17     (600 )   (940 )   (172 )   (604 )       (1,695 )   (1,494 )    
Net income - operating (1)   $ 48,955     $ 50,367     $ 47,232     $ 44,829     $ 45,767     7     $ 191,383     $ 171,962     11  
                                     
PERFORMANCE MEASURES                                    
Per common share:                                    
Diluted net income - GAAP   $ 0.61     $ 0.60     $ 0.55     $ 0.55     $ 0.56     9     $ 2.31     $ 2.07     12  
Diluted net income - operating (1)   0.61     0.63     0.59     0.56     0.57     7     2.38     2.14     11  
Cash dividends declared   0.18     0.17     0.17     0.16     0.16     13     0.68     0.58     17  
Book value   20.53     20.16     19.65     18.93     18.24     13     20.53     18.24     13  
Tangible book value (3)   16.28     15.90     15.38     14.93     14.24     14     16.28     14.24     14  
Key performance ratios:                                    
Return on common equity - GAAP (2)(4)   12.07 %   12.16 %   11.45 %   11.85 %   12.08 %       11.89 %   11.60 %    
Return on common equity - operating (1)(2)(4)   12.06     12.67     12.27     12.00     12.25         12.25     12.01      
Return on tangible common equity - operating (1)(2)(3)(4)   15.49     16.38     15.88     15.46     15.88         15.81     15.69      
Return on assets - GAAP (4)   1.50     1.51     1.40     1.44     1.43         1.46     1.35      
Return on assets - operating (1)(4)   1.50     1.58     1.50     1.45     1.45         1.51     1.40      
Net interest margin (fully taxable equivalent) (4)   3.93     4.12     4.12     4.10     3.97         4.07     3.91      
Efficiency ratio - GAAP   54.87     55.64     57.28     55.32     56.73         55.77     57.31      
Efficiency ratio - operating (1)   54.92     53.90     54.42     54.78     55.83         54.50     55.94      
Equity to total assets   12.66     12.53     12.25     12.06     11.59         12.66     11.59      
Tangible common equity to tangible assets (3)   10.32     10.16     9.86     9.76     9.29         10.32     9.29      
                                     
ASSET QUALITY                                    
Nonperforming loans   $ 35,341     $ 30,832     $ 26,597     $ 23,624     $ 23,778     49     $ 35,341     $ 23,778     49  
Foreclosed properties   476     102     75     1,127     1,305     (64 )   476     1,305     (64 )
Total nonperforming assets ("NPAs")   35,817     30,934     26,672     24,751     25,083     43     35,817     25,083     43  
Allowance for loan losses   62,089     62,514     62,204     61,642     61,203     1     62,089     61,203     1  
Net charge-offs   3,925     2,723     2,438     3,130     1,787     120     12,216     6,113     100  
Allowance for loan losses to loans   0.70 %   0.70 %   0.70 %   0.73 %   0.73 %       0.70 %   0.73 %    
Net charge-offs to average loans (4)   0.18     0.12     0.11     0.15     0.09         0.14     0.07      
NPAs to loans and foreclosed properties   0.41     0.35     0.30     0.29     0.30         0.41     0.30      
NPAs to total assets   0.28     0.24     0.21     0.20     0.20         0.28     0.20      
                                     
AVERAGE BALANCES ($ in millions)                                    
Loans   $ 8,890     $ 8,836     $ 8,670     $ 8,430     $ 8,306     7     $ 8,708     $ 8,170     7  
Investment securities   2,486     2,550     2,674     2,883     3,004     (17 )   2,647     2,899     (9 )
Earning assets   11,832     11,568     11,534     11,498     11,534     3     11,609     11,282     3  
Total assets   12,946     12,681     12,608     12,509     12,505     4     12,687     12,284     3  
Deposits   10,924     10,531     10,493     10,361     10,306     6     10,579     10,000     6  
Shareholders’ equity   1,623     1,588     1,531     1,478     1,420     14     1,556     1,380     13  
Common shares - basic (thousands)   79,659     79,663     79,673     79,807     79,884         79,700     79,662      
Common shares - diluted (thousands)   79,669     79,667     79,678     79,813     79,890         79,708     79,671      
                                     
AT PERIOD END ($ in millions)                                    
Loans   $ 8,813     $ 8,903     $ 8,838     $ 8,493     $ 8,383     5     $ 8,813     $ 8,383     5  
Investment securities   2,559     2,515     2,620     2,720     2,903     (12 )   2,559     2,903     (12 )
Total assets   12,916     12,809     12,779     12,506     12,573     3     12,916     12,573     3  
Deposits   10,897     10,757     10,591     10,534     10,535     3     10,897     10,535     3  
Shareholders’ equity   1,636     1,605     1,566     1,508     1,458     12     1,636     1,458     12  
Common shares outstanding (thousands)   79,014     78,974     79,075     79,035     79,234         79,014     79,234      

(1) Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits.
(2) Net income 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.

UNITED COMMUNITY BANKS, INC.                    
Selected Financial Information                    
For the Years Ended December 31,                    
(in thousands, except per share data)   2019   2018   2017   2016   2015
INCOME SUMMARY                    
Interest revenue   $ 552,706     $ 500,080     $ 389,720     $ 335,020     $ 278,532  
Interest expense   83,312     61,330     33,735     25,236     21,109  
Net interest revenue   469,394     438,750     355,985     309,784     257,423  
Provision for credit losses   13,150     9,500     3,800     (800 )   3,700  
Noninterest income   104,713     92,961     88,260     93,697     72,529  
Total revenue   560,957     522,211     440,445     404,281     326,252  
Expenses   322,245     306,285     267,611     241,289     211,238  
Income before income tax expense   238,712     215,926     172,834     162,992     115,014  
Income tax expense   52,991     49,815     105,013     62,336     43,436  
Net income   185,721     166,111     67,821     100,656     71,578  
Merger-related and other charges   7,357     7,345     14,662     8,122     17,995  
Income tax benefit of merger-related and other charges   (1,695 )   (1,494 )   (3,745 )   (3,074 )   (6,388 )
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act           38,199          
Impairment of deferred tax asset on cancelled non-qualified stock options               976      
Release of disproportionate tax effects lodged in OCI           3,400          
Net income - operating (1)   $ 191,383     $ 171,962     $ 120,337     $ 106,680     $ 83,185  
PERFORMANCE MEASURES                    
Per common share:                    
Diluted net income - GAAP   $ 2.31     $ 2.07     $ 0.92     $ 1.40     $ 1.09  
Diluted net income - operating (1)   2.38     2.14     1.63     1.48     1.27  
Cash dividends declared   0.68     0.58     0.38     0.30     0.22  
Book value   20.53     18.24     16.67     15.06     14.02  
Tangible book value (3)   16.28     14.24     13.65     12.95     12.06  
Key performance ratios:                    
Return on common equity - GAAP (2)   11.89 %   11.60 %   5.67 %   9.41 %   8.15 %
Return on common equity - operating (1)(2)   12.25     12.01     10.07     9.98     9.48  
Return on tangible common equity - operating (1)(2)(3)   15.81     15.69     12.02     11.86     10.24  
Return on assets - GAAP   1.46     1.35     0.62     1.00     0.85  
Return on assets - operating (1)   1.51     1.40     1.09     1.06     0.98  
Net interest margin (fully taxable equivalent)   4.07     3.91     3.52     3.36     3.30  
Efficiency ratio - GAAP   55.77     57.31     59.95     59.80     63.96  
Efficiency ratio - operating (1)   54.50     55.94     56.67     57.78     58.51  
Equity to total assets   12.66     11.59     10.94     10.05     10.58  
Tangible common equity to tangible assets (3)   10.32     9.29     9.14     8.77     9.15  
                     
ASSET QUALITY                    
Nonperforming loans   $ 35,341     $ 23,778     $ 23,658     $ 21,539     $ 22,653  
Foreclosed properties   476     1,305     3,234     7,949     4,883  
Total nonperforming assets (NPAs)   35,817     25,083     26,892     29,488     27,536  
Allowance for loan losses   62,089     61,203     58,914     61,422     68,448  
Net charge-offs   12,216     6,113     5,998     6,766     6,259  
Allowance for loan losses to loans   0.70 %   0.73 %   0.76 %   0.89 %   1.14 %
Net charge-offs to average loans   0.14     0.07     0.08     0.11     0.12  
NPAs to loans and foreclosed properties   0.41     0.30     0.35     0.43     0.46  
NPAs to total assets   0.28     0.20     0.23     0.28     0.29  
AVERAGE BALANCES ($ in millions)                    
Loans   $ 8,708     $ 8,170     $ 7,150     $ 6,413     $ 5,298  
Investment securities   2,647     2,899     2,847     2,691     2,368  
Earning assets   11,609     11,282     10,162     9,257     7,834  
Total assets   12,687     12,284     11,015     10,054     8,462  
Deposits   10,579     10,000     8,950     8,177     7,055  
Shareholders’ equity   1,556     1,380     1,180     1,059     869  
Common shares - basic (thousands)   79,700     79,662     73,247     71,910     65,488  
Common shares - diluted (thousands)   79,708     79,671     73,259     71,915     65,492  
AT PERIOD END ($ in millions)                    
Loans   $ 8,813     $ 8,383     $ 7,736     $ 6,921     $ 5,995  
Investment securities   2,559     2,903     2,937     2,762     2,656  
Total assets   12,916     12,573     11,915     10,709     9,616  
Deposits   10,897     10,535     9,808     8,638     7,873  
Shareholders’ equity   1,636     1,458     1,303     1,076     1,018  
Common shares outstanding (thousands)   79,014     79,234     77,580     70,899     71,484  

(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the 2017 impact of remeasurement of United’s deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and 2015 impairment losses on surplus bank property.
(2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
(3) Excludes effect of acquisition related intangibles and associated amortization.


UNITED COMMUNITY BANKS, INC.                    
Non-GAAP Performance Measures Reconciliation                    
Selected Financial Information- Quarterly                    
    2019   2018
(in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First
 Quarter
  Fourth Quarter
                     
Expense reconciliation                    
Expenses (GAAP)   $ 81,424     $ 82,924     $ 81,813     $ 76,084     $ 78,242  
Merger-related and other charges   74     (2,605 )   (4,087 )   (739 )   (1,234 )
Expenses - operating   $ 81,498     $ 80,319     $ 77,726     $ 75,345     $ 77,008  
                     
Net income reconciliation                    
Net income (GAAP)   $ 49,012     $ 48,362     $ 44,085     $ 44,262     $ 45,137  
Merger-related and other charges   (74 )   2,605     4,087     739     1,234  
Income tax benefit of merger-related and other charges   17     (600 )   (940 )   (172 )   (604 )
Net income - operating   $ 48,955     $ 50,367     $ 47,232     $ 44,829     $ 45,767  
                     
Diluted income per common share reconciliation                    
Diluted income per common share (GAAP)   $ 0.61     $ 0.60     $ 0.55     $ 0.55     $ 0.56  
Merger-related and other charges       0.03     0.04     0.01     0.01  
Diluted income per common share - operating   $ 0.61     $ 0.63     $ 0.59     $ 0.56     $ 0.57  
                     
Book value per common share reconciliation                    
Book value per common share (GAAP)   $ 20.53     $ 20.16     $ 19.65     $ 18.93     $ 18.24  
Effect of goodwill and other intangibles   (4.25 )   (4.26 )   (4.27 )   (4.00 )   (4.00 )
Tangible book value per common share   $ 16.28     $ 15.90     $ 15.38     $ 14.93     $ 14.24  
                     
Return on tangible common equity reconciliation                    
Return on common equity (GAAP)   12.07 %   12.16 %   11.45 %   11.85 %   12.08 %
Merger-related and other charges   (0.01 )   0.51     0.82     0.15     0.17  
Return on common equity - operating   12.06     12.67     12.27     12.00     12.25  
Effect of goodwill and other intangibles   3.43     3.71     3.61     3.46     3.63  
Return on tangible common equity - operating   15.49 %   16.38 %   15.88 %   15.46 %   15.88 %
                     
Return on assets reconciliation                    
Return on assets (GAAP)   1.50 %   1.51 %   1.40 %   1.44 %   1.43 %
Merger-related and other charges       0.07     0.10     0.01     0.02  
Return on assets - operating   1.50 %   1.58 %   1.50 %   1.45 %   1.45 %
                     
Efficiency ratio reconciliation                    
Efficiency ratio (GAAP)   54.87 %   55.64 %   57.28 %   55.32 %   56.73 %
Merger-related and other charges   0.05     (1.74 )   (2.86 )   (0.54 )   (0.90 )
Efficiency ratio - operating   54.92 %   53.90 %   54.42 %   54.78 %   55.83 %
                     
Tangible common equity to tangible assets reconciliation                    
Equity to total assets (GAAP)   12.66 %   12.53 %   12.25 %   12.06 %   11.59 %
Effect of goodwill and other intangibles   (2.34 )   (2.37 )   (2.39 )   (2.30 )   (2.30 )
Tangible common equity to tangible assets   10.32 %   10.16 %   9.86 %   9.76 %   9.29 %


UNITED COMMUNITY BANKS, INC.                    
Non-GAAP Performance Measures Reconciliation                    
Selected Financial Information- Annual                    
    For the Twelve Months Ended December 31,
(in thousands, except per share data)   2019   2018   2017   2016   2015
Expense reconciliation                    
Expenses (GAAP)   $ 322,245     $ 306,285     $ 267,611     $ 241,289     $ 211,238  
Merger-related and other charges   (7,357 )   (7,345 )   (14,662 )   (8,122 )   (17,995 )
Expenses - operating   $ 314,888     $ 298,940     $ 252,949     $ 233,167     $ 193,243  
                     
Net income reconciliation                    
Net income (GAAP)   $ 185,721     $ 166,111     $ 67,821     $ 100,656     $ 71,578  
Merger-related and other charges   7,357     7,345     14,662     8,122     17,995  
Income tax benefit of merger-related and other charges   (1,695 )   (1,494 )   (3,745 )   (3,074 )   (6,388 )
Impact of tax reform on remeasurement of deferred tax asset           38,199          
Impairment of deferred tax asset on canceled non-qualified stock options               976      
Release of disproportionate tax effects lodged in OCI           3,400          
Net income - operating   $ 191,383     $ 171,962     $ 120,337     $ 106,680     $ 83,185  
                     
Diluted income per common share reconciliation                    
Diluted income per common share (GAAP)   $ 2.31     $ 2.07     $ 0.92     $ 1.40     $ 1.09  
Merger-related and other charges   0.07     0.07     0.14     0.07     0.18  
Impact of tax reform on remeasurement of deferred tax asset           0.52          
Impairment of deferred tax asset on canceled non-qualified stock options               0.01      
Release of disproportionate tax effects lodged in OCI           0.05          
Diluted income per common share - operating   $ 2.38     $ 2.14     $ 1.63     $ 1.48     $ 1.27  
                     
Book value per common share reconciliation                    
Book value per common share (GAAP)   $ 20.53     $ 18.24     $ 16.67     $ 15.06     $ 14.02  
Effect of goodwill and other intangibles   (4.25 )   (4.00 )   (3.02 )   (2.11 )   (1.96 )
Tangible book value per common share   $ 16.28     $ 14.24     $ 13.65     $ 12.95     $ 12.06  
                     
Return on tangible common equity reconciliation                    
Return on common equity (GAAP)   11.89 %   11.60 %   5.67 %   9.41 %   8.15 %
Merger-related and other charges   0.36     0.41     0.92     0.48     1.33  
Impact of tax reform on remeasurement of deferred tax asset           3.20          
Impairment of deferred tax asset on canceled non-qualified stock options               0.09      
Release of disproportionate tax effects lodged in OCI           0.28          
Return on common equity - operating   12.25     12.01     10.07     9.98     9.48  
Effect of goodwill and other intangibles   3.56     3.68     1.95     1.88     0.76  
Return on tangible common equity - operating   15.81 %   15.69 %   12.02 %   11.86 %   10.24 %
                     
Return on assets reconciliation                    
Return on assets (GAAP)   1.46 %   1.35 %   0.62 %   1.00 %   0.85 %
Merger-related and other charges   0.05     0.05     0.09     0.05     0.13  
Impact of tax reform on remeasurement of deferred tax asset           0.35          
Impairment of deferred tax asset on canceled non-qualified stock options               0.01      
Release of disproportionate tax effects lodged in OCI           0.03          
Return on assets - operating   1.51 %   1.40 %   1.09 %   1.06 %   0.98 %
                     
Efficiency ratio reconciliation                    
Efficiency ratio (GAAP)   55.77 %   57.31 %   59.95 %   59.80 %   63.96 %
Merger-related and other charges   (1.27 )   (1.37 )   (3.28 )   (2.02 )   (5.45 )
Efficiency ratio - operating   54.50 %   55.94 %   56.67 %   57.78 %   58.51 %
                     
Tangible common equity to tangible assets reconciliation                    
Equity to total assets (GAAP)   12.66 %   11.59 %   10.94 %   10.05 %   10.58 %
Effect of goodwill and other intangibles   (2.34 )   (2.30 )   (1.80 )   (1.28 )   (1.33 )
Effect of preferred equity                   (0.10 )
Tangible common equity to tangible assets   10.32 %   9.29 %   9.14 %   8.77 %   9.15 %



UNITED COMMUNITY BANKS, INC.                        
Financial Highlights                        
Loan Portfolio Composition at Period-End                        
  2019   2018   Linked Quarter Change   Year over Year Change
(in millions) Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter    
LOANS BY CATEGORY                          
Owner occupied commercial RE $ 1,720     $ 1,692     $ 1,658     $ 1,620     $ 1,648     $ 28     $ 72  
Income producing commercial RE 2,008     1,934     1,939     1,867     1,812     74     196  
Commercial & industrial 1,221     1,271     1,299     1,284     1,278     (50 )   (57 )
Commercial construction 976     1,001     983     866     796     (25 )   180  
Equipment financing 745     729     674     606     565     16     180  
  Total commercial 6,670     6,627     6,553     6,243     6,099     43     571  
Residential mortgage 1,118     1,121     1,108     1,064     1,049     (3 )   69  
Home equity lines of credit 661     669     675     684     694     (8 )   (33 )
Residential construction 236     229     219     200     211     7     25  
Consumer 128     257     283     302     330     (129 )   (202 )
  Total loans $ 8,813     $ 8,903     $ 8,838     $ 8,493     $ 8,383     $ (90 )   $ 430  
                           
LOANS BY MARKET                          
North Georgia $ 967     $ 1,002     $ 1,002     $ 970     $ 981     $ (35 )   $ (14 )
Atlanta 1,762     1,740     1,745     1,524     1,507     22     255  
North Carolina 1,156     1,117     1,084     1,074     1,072     39     84  
Coastal Georgia 631     611     604     603     588     20     43  
Gainesville 246     246     244     243     247         (1 )
East Tennessee 421     435     446     458     477     (14 )   (56 )
South Carolina 1,708     1,705     1,674     1,674     1,645     3     63  
Commercial Banking Solutions 1,922     1,916     1,884     1,766     1,658     6     264  
Indirect auto     131     155     181     208     (131 )   (208 )
  Total loans $ 8,813     $ 8,903     $ 8,838     $ 8,493     $ 8,383     $ (90 )   $ 430  


UNITED COMMUNITY BANKS, INC.                
Financial Highlights                
Loan Portfolio Composition at Year-End                
(in millions) 2019   2018   2017   2016   2015
LOANS BY CATEGORY                  
Owner occupied commercial RE $ 1,720     $ 1,648     $ 1,924     $ 1,650     $ 1,571  
Income producing commercial RE 2,008     1,812     1,595     1,282     1,021  
Commercial & industrial 1,221     1,278     1,131     1,070     785  
Commercial construction 976     796     712     634     518  
Equipment financing 745     565              
  Total commercial 6,670     6,099     5,362     4,636     3,895  
Residential mortgage 1,118     1,049     974     857     764  
Home equity lines of credit 661     694     731     655     589  
Residential construction 236     211     183     190     176  
Consumer 128     330     486     583     571  
  Total loans $ 8,813     $ 8,383     $ 7,736     $ 6,921     $ 5,995  
                   
LOANS BY MARKET                  
North Georgia $ 967     $ 981     $ 1,019     $ 1,097     $ 1,125  
Atlanta 1,762     1,507     1,510     1,399     1,259  
North Carolina 1,156     1,072     1,049     545     549  
Coastal Georgia 631     588     630     581     537  
Gainesville 246     247     248     248     254  
East Tennessee 421     477     475     504     504  
South Carolina 1,708     1,645     1,486     1,233     819  
Commercial Banking Solutions 1,922     1,658     961     855     492  
Indirect auto     208     358     459     456  
  Total loans $ 8,813     $ 8,383     $ 7,736     $ 6,921     $ 5,995  


UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Credit Quality            
    2019
(in thousands)   Fourth Quarter   Third Quarter   Second Quarter
NONACCRUAL LOANS            
Owner occupied RE   $ 10,544     $ 8,430     $ 8,177  
Income producing RE   1,996     2,030     1,331  
Commercial & industrial   2,545     2,625     2,366  
Commercial construction   2,277     1,894     1,650  
Equipment financing   3,141     1,974     2,047  
Total commercial   20,503     16,953     15,571  
Residential mortgage   10,567     9,475     8,012  
Home equity lines of credit   3,173     3,065     1,978  
Residential construction   939     597     494  
Consumer   159     742     542  
Total   $ 35,341     $ 30,832     $ 26,597  


    2019
    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   $ (208 )   (0.05 )%   $ (39 )   (0.01 )%   $ (58 )   (0.01 )%
Income producing RE   95     0.02     431     0.09     241     0.05  
Commercial & industrial   1,809     0.58     691     0.21     1,141     0.35  
Commercial construction   (140 )   (0.06 )   (247 )   (0.10 )   (162 )   (0.07 )
Equipment financing   1,550     0.84     1,174     0.67     890     0.56  
Total commercial   3,106     0.19     2,010     0.12     2,052     0.13  
Residential mortgage   89     0.03     158     0.06     (125 )   (0.05 )
Home equity lines of credit   198     0.12     83     0.05     (111 )   (0.07 )
Residential construction   (24 )   (0.04 )   (5 )   (0.01 )   199     0.38  
Consumer   556     0.90     477     0.70     423     0.58  
Total   $ 3,925     0.18     $ 2,723     0.12     $ 2,438     0.11  
                         
(1)  Annualized.                        


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)   December 31, 2019   December 31, 2018
ASSETS        
Cash and due from banks   $ 125,844     $ 126,083  
Interest-bearing deposits in banks   389,362     201,182  
Cash and cash equivalents   515,206     327,265  
Debt securities available-for-sale   2,274,581     2,628,467  
Debt securities held-to-maturity (fair value $287,904 and $268,803)   283,533     274,407  
Loans held for sale, at fair value   58,484     18,935  
Loans, net of unearned income   8,812,553     8,383,401  
Less allowance for loan losses   (62,089 )   (61,203 )
Loans, net   8,750,464     8,322,198  
Premises and equipment, net   215,976     206,140  
Bank owned life insurance   202,664     192,616  
Accrued interest receivable   32,660     35,413  
Net deferred tax asset   34,059     64,224  
Derivative financial instruments   35,007     24,705  
Goodwill and other intangible assets   342,247     324,072  
Other assets   171,135     154,750  
Total assets   $ 12,916,016     $ 12,573,192  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Deposits:        
Noninterest-bearing demand   $ 3,477,979     $ 3,210,220  
NOW and interest-bearing demand   2,461,895     2,369,631  
Money market   2,230,628     2,002,670  
Savings   706,467     669,886  
Time   1,859,574     1,598,391  
Brokered   160,701     683,715  
Total deposits   10,897,244     10,534,513  
Federal Home Loan Bank advances       160,000  
Long-term debt   212,664     267,189  
Derivative financial instruments   15,516     26,433  
Accrued expenses and other liabilities   154,900     127,503  
Total liabilities   11,280,324     11,115,638  
Shareholders' equity:        
Common stock, $1 par value; 150,000,000 shares authorized;
79,013,729 and 79,234,077 shares issued and outstanding
  79,014     79,234  
Common stock issuable; 664,640 and 674,499 shares   11,491     10,744  
Capital surplus   1,496,641     1,499,584  
Retained earnings (accumulated deficit)   40,152     (90,419 )
Accumulated other comprehensive income (loss)   8,394     (41,589 )
Total shareholders' equity   1,635,692     1,457,554  
Total liabilities and shareholders' equity   $ 12,916,016     $ 12,573,192  



UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
    Three Months Ended December 31,   Twelve Months Ended December 31,
(in thousands, except per share data)   2019   2018   2019   2018
Interest revenue:                
Loans, including fees   $ 118,464     $ 112,087     $ 476,039     $ 420,383  
Investment securities, including tax exempt of $1,155 and $1,140, and $4,564 and $4,189   16,846     21,237     74,484     77,685  
Deposits in banks and short-term investments   1,109     530     2,183     2,012  
Total interest revenue   136,419     133,854     552,706     500,080  
                 
Interest expense:                
Deposits:                
NOW and interest-bearing demand   3,382     3,166     13,665     7,649  
Money market   4,883     3,985     18,983     11,838  
Savings   34     33     149     150  
Time   8,372     7,006     34,059     19,906  
Deposits   16,671     14,190     66,856     39,543  
Short-term borrowings       340     838     1,112  
Federal Home Loan Bank advances   2     794     2,697     6,345  
Long-term debt   3,108     3,651     12,921     14,330  
Total interest expense   19,781     18,975     83,312     61,330  
Net interest revenue   116,638     114,879     469,394     438,750  
Provision for credit losses   3,500     2,100     13,150     9,500  
Net interest revenue after provision for credit losses   113,138     112,779     456,244     429,250  
                 
Noninterest income:                
Service charges and fees   9,368     9,166     36,797     35,997  
Mortgage loan gains and related fees   9,395     3,082     27,145     19,010  
Brokerage fees   1,526     1,593     6,150     5,191  
Gains from other loan sales, net   2,455     2,493     6,867     9,277  
Securities (losses) gains, net   (903 )   646     (1,021 )   (656 )
Other   8,342     6,065     28,775     24,142  
Total noninterest income   30,183     23,045     104,713     92,961  
Total revenue   143,321     135,824     560,957     522,211  
                 
Noninterest expenses:                
Salaries and employee benefits   50,279     45,631     196,440     181,015  
Occupancy   5,926     5,842     23,350     22,781  
Communications and equipment   6,380     6,206     24,613     21,277  
FDIC assessments and other regulatory charges   1,330     1,814     4,901     8,491  
Professional fees   5,098     4,105     17,028     15,540  
Postage, printing and supplies   1,637     1,520     6,370     6,416  
Advertising and public relations   1,914     1,650     6,170     5,991  
Amortization of intangibles   1,093     1,420     4,938     6,846  
Merger-related and other charges   (74 )   965     6,907     5,414  
Other   7,841     9,089     31,528     32,514  
Total noninterest expenses   81,424     78,242     322,245     306,285  
Net income before income taxes   61,897     57,582     238,712     215,926  
Income tax expense   12,885     12,445     52,991     49,815  
Net income   $ 49,012     $ 45,137     $ 185,721     $ 166,111  
                 
Net income available to common shareholders   $ 48,617     $ 44,801     $ 184,346     $ 164,927  
                 
Net income per common share:                
Basic   $ 0.61     $ 0.56     $ 2.31     $ 2.07  
Diluted   0.61     0.56     2.31     2.07  
Weighted average common shares outstanding:                
Basic   79,659     79,884     79,700     79,662  
Diluted   79,669     79,890     79,708     79,671  


Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
 
    2019   2018
(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)   $ 8,890,272     $ 118,262     5.28 %   $ 8,306,270     $ 112,020     5.35 %
Taxable securities (3)   2,306,065     15,691     2.72     2,843,085     20,097     2.83  
Tax-exempt securities (FTE) (1)(3)   179,744     1,551     3.45     161,284     1,535     3.81  
Federal funds sold and other interest-earning assets   456,055     1,586     1.39     222,931     845     1.52  
Total interest-earning assets (FTE)   11,832,136     137,090     4.60     11,533,570     134,497     4.63  
                         
Noninterest-earning assets:                        
Allowance for loan losses   (63,601 )           (61,992 )        
Cash and due from banks   120,936             125,066          
Premises and equipment   219,487             214,590          
Other assets (3)   836,586             694,215          
Total assets   $ 12,945,544             $ 12,505,449          
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 2,398,396     3,382     0.56     $ 2,134,828     3,166     0.59  
Money market   2,321,352     4,883     0.83     2,126,840     3,985     0.74  
Savings   704,454     34     0.02     675,265     33     0.02  
Time   1,880,174     7,975     1.68     1,584,011     4,297     1.08  
Brokered time deposits   85,781     397     1.84     490,748     2,709     2.19  
Total interest-bearing deposits   7,390,157     16,671     0.89     7,011,692     14,190     0.80  
Federal funds purchased and other borrowings               55,095     340     2.45  
Federal Home Loan Bank advances   435     2     1.82     140,869     794     2.24  
Long-term debt   232,726     3,108     5.30     272,313     3,651     5.32  
Total borrowed funds   233,161     3,110     5.29     468,277     4,785     4.05  
Total interest-bearing liabilities   7,623,318     19,781     1.03     7,479,969     18,975     1.01  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits   3,533,746             3,294,385          
Other liabilities   165,148             311,461          
Total liabilities   11,322,212             11,085,815          
Shareholders' equity   1,623,332             1,419,634          
Total liabilities and shareholders' equity   $ 12,945,544             $ 12,505,449          
                         
Net interest revenue (FTE)       $ 117,309             $ 115,522      
Net interest-rate spread (FTE)           3.57 %           3.62 %
Net interest margin (FTE) (4)           3.93 %           3.97 %

(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) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $36.0 million in 2019 and unrealized losses of $59.5 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.


Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
         
    2019   2018
(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)   $ 8,708,035     $ 475,803     5.46 %   $ 8,170,143     $ 420,001     5.14 %
Taxable securities (3)   2,475,102     69,920     2.82     2,745,715     73,496     2.68  
Tax-exempt securities (FTE) (1)(3)   171,549     6,130     3.57     152,855     5,641     3.69  
Federal funds sold and other interest-earning assets   254,370     3,499     1.38     213,137     2,968     1.39  
Total interest-earning assets (FTE)   11,609,056     555,352     4.78     11,281,850     502,106     4.45  
                         
Non-interest-earning assets:                        
Allowance for loan losses   (62,900 )           (61,443 )        
Cash and due from banks   121,649             135,345          
Premises and equipment   220,523             216,646          
Other assets (3)   798,649             711,671          
Total assets   $ 12,686,977             $ 12,284,069          
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 2,249,713     13,665     0.61     $ 2,107,831     7,649     0.36  
Money market   2,221,478     18,983     0.85     2,117,216     11,838     0.56  
Savings   690,028     149     0.02     672,735     150     0.02  
Time   1,791,319     28,313     1.58     1,547,221     12,585     0.81  
Brokered time deposits   240,646     5,746     2.39     347,072     7,321     2.11  
Total interest-bearing deposits   7,193,184     66,856     0.93     6,792,075     39,543     0.58  
Federal funds purchased and other borrowings   33,504     838     2.50     57,376     1,112     1.94  
Federal Home Loan Bank advances   106,973     2,697     2.52     328,871     6,345     1.93  
Long-term debt   247,732     12,921     5.22     290,004     14,330     4.94  
Total borrowed funds   388,209     16,456     4.24     676,251     21,787     3.22  
Total interest-bearing liabilities   7,581,393     83,312     1.10     7,468,326     61,330     0.82  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits   3,385,431             3,207,625          
Other liabilities   164,550             227,980          
Total liabilities   11,131,374             10,903,931          
Shareholders' equity   1,555,603             1,380,138          
Total liabilities and shareholders' equity   $ 12,686,977             $ 12,284,069          
                         
Net interest revenue (FTE)       $ 472,040             $ 440,776      
Net interest-rate spread (FTE)           3.68 %           3.63 %
Net interest margin (FTE) (4)           4.07 %           3.91 %

(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) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $12.8 million in 2019 and unrealized losses of $45.2 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. United is one of the southeast region’s largest full-service financial institutions with $12.9 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee. It operates principally through United Community Bank, its bank subsidiary, which specializes in personalized community banking services for individuals, small businesses and companies. 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 five of the past six 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 UCBI 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 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.

 

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Source: United Community Banks, Inc.