United Community Banks, Inc. Reports Second Quarter Results

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United Community Banks, Inc. Reports Second Quarter Results

Jul 23, 2019

EPS of $0.55 and ROA of 1.40%; Operating ROA reaches 1.50%

GREENVILLE, S.C., July 23, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its second quarter financial results, including solid year-over-year loan and deposit growth, improved operating efficiency and strong asset quality. Diluted earnings per share were $0.55, an increase of $0.06 or 12% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.59, up 11% over last year. United’s return on assets (“ROA”) was 1.40% and its return on common equity was 11.5% for the quarter. On an operating basis, United’s ROA was 1.50% and its return on tangible common equity was 15.9%.

In the second quarter, loans grew at a 7% annualized rate, or at 9% annualized excluding the planned runoff of the discontinued indirect auto portfolio. With this loan growth and continued balance sheet remixing opportunities, United also benefitted from net interest margin expansion during the quarter. Core transaction deposits grew by $167 million, or 9% annualized, and total customer deposits increased by $129 million during the quarter. All loan and deposit growth results noted above exclude the acquisition of First Madison Bank & Trust, which closed on May 1. Finally, United’s combination of revenue growth and expense management resulted in a 57.28% efficiency ratio, or 54.42% on an operating basis, which represented a new Company best.

“Our United bankers continue to execute on our plans and deliver outstanding results,” said Lynn Harton, Chairman and CEO of United. “I couldn’t be more proud of what they are doing to deliver both world class customer service and top quartile financial performance. I am also pleased that First Madison Bank & Trust in Athens, Georgia is now officially part of the United team. We look forward to growing our business together in the attractive Athens, Georgia market.”

Second Quarter 2019 Financial Highlights:

EPS growth of 12% versus last year, or 11% on an operating basis
Return on assets of 1.40%, or 1.50%, excluding merger-related and other charges
Return on common equity of 11.5%
Return on tangible common equity of 15.9%, excluding merger-related and other charges
Loan growth, excluding planned runoff of the indirect portfolio and the acquisition of First Madison Bank & Trust, of 9% on an annualized basis
Loan growth of $153 million which was more than funded by core transaction deposit growth of $167 million
Expansion of the net interest margin to 4.12%, up 2 basis points from the first quarter of 2019 and up 22 basis points from a year ago
Efficiency ratio of 57.3%, or 54.4%, excluding merger-related and other charges
Net charge-offs of 11 basis points, improved four basis points from last quarter and at historically low levels.
Nonperforming assets of 0.21% of total assets, compared with 0.20% at March 31, 2019 and 0.20% at June 30, 2018

Conference Call
United will hold a conference call, Wednesday, July 24, 2019, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 8388603. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																					Second				For the Six
		2019								2018											Quarter				Months Ended							YTD
		Second				First				Fourth				Third				Second			2019-2018				June 30,							2019-2018
(in thousands, except per share data)		Quarter				Quarter				Quarter				Quarter				Quarter			Change				2019				2018			Change
INCOME SUMMARY
Interest revenue	$	139,156			$	136,516			$	133,854			$	128,721			$	122,215						$	275,672			$	237,505
Interest expense		21,372				20,882				18,975				16,611				13,739							42,254				25,744
Net interest revenue		117,784				115,634				114,879				112,110				108,476			9		%		233,418				211,761			10		%
Provision for credit losses		3,250				3,300				2,100				1,800				1,800			81				6,550				5,600			17
Noninterest income		24,531				20,968				23,045				24,180				23,340			5				45,499				45,736			(1	)
Total revenue		139,065				133,302				135,824				134,490				130,016			7				272,367				251,897			8
Expenses		81,813				76,084				78,242				77,718				76,850			6				157,897				150,325			5
Income before income tax expense		57,252				57,218				57,582				56,772				53,166			8				114,470				101,572			13
Income tax expense		13,167				12,956				12,445				13,090				13,532			(3	)			26,123				24,280			8
Net income		44,085				44,262				45,137				43,682				39,634			11				88,347				77,292			14
Merger-related and other charges		4,087				739				1,234				592				2,873							4,826				5,519
Income tax benefit of merger-related and other charges		(940	)			(172	)			(604	)			(141	)			(121	)						(1,112	)			(749	)
Net income - operating ⁽¹⁾	$	47,232			$	44,829			$	45,767			$	44,133			$	42,386			11			$	92,061			$	82,062			12

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.55			$	0.55			$	0.56			$	0.54			$	0.49			12			$	1.10			$	0.97			13
Diluted net income - operating ⁽¹⁾		0.59				0.56				0.57				0.55				0.53			11				1.15				1.03			12
Cash dividends declared		0.17				0.16				0.16				0.15				0.15			13				0.33				0.27			22
Book value		19.65				18.93				18.24				17.56				17.29			14				19.65				17.29			14
Tangible book value⁽³⁾		15.38				14.93				14.24				13.54				13.25			16				15.38				13.25			16

Key performance ratios:
Return on common equity - GAAP⁽²⁾⁽⁴⁾		11.45		%		11.85		%		12.08		%		11.96		%		11.20		%					11.65		%		11.15		%
Return on common equity - operating^(1)(2)(4)		12.27				12.00				12.25				12.09				11.97							12.14				11.84
Return on tangible common equity - operating^(1)(2)(3)(4)		15.88				15.46				15.88				15.81				15.79							15.67				15.53
Return on assets - GAAP⁽⁴⁾		1.40				1.44				1.43				1.41				1.30							1.42				1.28
Return on assets - operating⁽¹⁾⁽⁴⁾		1.50				1.45				1.45				1.42				1.39							1.48				1.36
Dividend payout ratio - GAAP		30.91				29.09				28.57				27.78				30.61							30.00				27.84
Dividend payout ratio - operating ⁽¹⁾		28.81				28.57				28.07				27.27				28.30							28.70				26.21
Net interest margin (fully taxable equivalent)⁽⁴⁾		4.12				4.10				3.97				3.95				3.90							4.11				3.85
Efficiency ratio - GAAP		57.28				55.32				56.73				56.82				57.94							56.32				57.89
Efficiency ratio - operating ⁽¹⁾		54.42				54.78				55.83				56.39				55.77							54.60				55.76
Average equity to average assets		12.14				11.82				11.35				11.33				11.21							11.98				11.13
Average tangible common equity to average assets⁽³⁾		9.79				9.53				9.04				8.97				8.83							9.66				8.82
Tangible common equity to risk-weighted assets⁽³⁾⁽⁵⁾		12.36				12.48				12.00				11.61				11.36							12.36				11.36
																									-
ASSET QUALITY
Nonperforming loans	$	26,597			$	23,624			$	23,778			$	22,530			$	21,817			22			$	26,597			$	21,817			22
Foreclosed properties		75				1,127				1,305				1,336				2,597			(97	)			75				2,597			(97	)
Total nonperforming assets (NPAs)		26,672				24,751				25,083				23,866				24,414			9				26,672				24,414			9
Allowance for loan losses		62,204				61,642				61,203				60,940				61,071			2				62,204				61,071			2
Net charge-offs		2,438				3,130				1,787				1,466				1,359			79				5,568				2,860			95
Allowance for loan losses to loans		0.70		%		0.73		%		0.73		%		0.74		%		0.74		%					0.70		%		0.74		%
Net charge-offs to average loans⁽⁴⁾		0.11				0.15				0.09				0.07				0.07							0.13				0.07
NPAs to loans and foreclosed properties		0.30				0.29				0.30				0.29				0.30							0.30				0.30
NPAs to total assets		0.21				0.20				0.20				0.19				0.20							0.21				0.20

AVERAGE BALANCES ($ in millions)
Loans	$	8,670			$	8,430			$	8,306			$	8,200			$	8,177			6			$	8,551			$	8,086			6
Investment securities		2,674				2,883				3,004				2,916				2,802			(5	)			2,778				2,836			(2	)
Earning assets		11,534				11,498				11,534				11,320				11,193			3				11,516				11,135			3
Total assets		12,608				12,509				12,505				12,302				12,213			3				12,559				12,163			3
Deposits		10,493				10,361				10,306				9,950				9,978			5				10,427				9,869			6
Shareholders’ equity		1,531				1,478				1,420				1,394				1,370			12				1,505				1,353			11
Common shares - basic (thousands)		79,673				79,807				79,884				79,806				79,753			-				79,739				79,477			-
Common shares - diluted (thousands)		79,678				79,813				79,890				79,818				79,755			-				79,745				79,487			-

AT PERIOD END ($ in millions)
Loans	$	8,838			$	8,493			$	8,383			$	8,226			$	8,220			8			$	8,838			$	8,220			8
Investment securities		2,620				2,720				2,903				2,873				2,834			(8	)			2,620				2,834			(8	)
Total assets		12,779				12,506				12,573				12,405				12,386			3				12,779				12,386			3
Deposits		10,591				10,534				10,535				10,229				9,966			6				10,591				9,966			6
Shareholders’ equity		1,566				1,508				1,458				1,402				1,379			14				1,566				1,379			14
Common shares outstanding (thousands)		79,075				79,035				79,234				79,202				79,138			-				79,075				79,138			-

⁽¹⁾ Excludes merger-related and other charges which includes amortization of certain executive change of control benefits. ⁽²⁾ Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). ⁽³⁾ Excludes effect of acquisition related intangibles and associated amortization. ⁽⁴⁾ Annualized. ⁽⁵⁾ Second quarter 2019 ratio is preliminary.

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


		2019								2018											For the Six Months Ended
	Second				First				Fourth				Third				Second				June 30,
(in thousands, except per share data)	Quarter				Quarter				Quarter				Quarter				Quarter					2019				2018

Expense reconciliation
Expenses (GAAP)	$	81,813			$	76,084			$	78,242			$	77,718			$	76,850			$	157,897			$	150,325
Merger-related and other charges		(4,087	)			(739	)			(1,234	)			(592	)			(2,873	)			(4,826	)			(5,519	)
Expenses - operating	$	77,726			$	75,345			$	77,008			$	77,126			$	73,977			$	153,071			$	144,806

Net income reconciliation
Net income (GAAP)	$	44,085			$	44,262			$	45,137			$	43,682			$	39,634			$	88,347			$	77,292
Merger-related and other charges		4,087				739				1,234				592				2,873				4,826				5,519
Income tax benefit of merger-related and other charges		(940	)			(172	)			(604	)			(141	)			(121	)			(1,112	)			(749	)
Net income - operating	$	47,232			$	44,829			$	45,767			$	44,133			$	42,386			$	92,061			$	82,062

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.55			$	0.55			$	0.56			$	0.54			$	0.49			$	1.10			$	0.97
Merger-related and other charges		0.04				0.01				0.01				0.01				0.04				0.05				0.06
Diluted income per common share - operating	$	0.59			$	0.56			$	0.57			$	0.55			$	0.53			$	1.15			$	1.03

Book value per common share reconciliation
Book value per common share (GAAP)	$	19.65			$	18.93			$	18.24			$	17.56			$	17.29			$	19.65			$	17.29
Effect of goodwill and other intangibles		(4.27	)			(4.00	)			(4.00	)			(4.02	)			(4.04	)			(4.27	)			(4.04	)
Tangible book value per common share	$	15.38			$	14.93			$	14.24			$	13.54			$	13.25			$	15.38			$	13.25

Return on tangible common equity reconciliation
Return on common equity (GAAP)		11.45		%		11.85		%		12.08		%		11.96		%		11.20		%		11.65		%		11.15		%
Merger-related and other charges		0.82				0.15				0.17				0.13				0.77				0.49				0.69
Return on common equity - operating		12.27				12.00				12.25				12.09				11.97				12.14				11.84
Effect of goodwill and other intangibles		3.61				3.46				3.63				3.72				3.82				3.53				3.69
Return on tangible common equity - operating		15.88		%		15.46		%		15.88		%		15.81		%		15.79		%		15.67		%		15.53		%

Return on assets reconciliation
Return on assets (GAAP)		1.40		%		1.44		%		1.43		%		1.41		%		1.30		%		1.42		%		1.28		%
Merger-related and other charges		0.10				0.01				0.02				0.01				0.09				0.06				0.08
Return on assets - operating		1.50		%		1.45		%		1.45		%		1.42		%		1.39		%		1.48		%		1.36		%

Dividend payout ratio reconciliation
Dividend payout ratio (GAAP)		30.91		%		29.09		%		28.57		%		27.78		%		30.61		%		30.00		%		27.84		%
Merger-related and other charges		(2.10	)			(0.52	)			(0.50	)			(0.51	)			(2.31	)			(1.30	)			(1.63	)
Dividend payout ratio - operating		28.81		%		28.57		%		28.07		%		27.27		%		28.30		%		28.70		%		26.21		%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		57.28		%		55.32		%		56.73		%		56.82		%		57.94		%		56.32		%		57.89		%
Merger-related and other charges		(2.86	)			(0.54	)			(0.90	)			(0.43	)			(2.17	)			(1.72	)			(2.13	)
Efficiency ratio - operating		54.42		%		54.78		%		55.83		%		56.39		%		55.77		%		54.60		%		55.76		%

Average equity to average assets reconciliation
Average equity to assets (GAAP)		12.14		%		11.82		%		11.35		%		11.33		%		11.21		%		11.98		%		11.13		%
Effect of goodwill and other intangibles		(2.35	)			(2.29	)			(2.31	)			(2.36	)			(2.38	)			(2.32	)			(2.31	)
Average tangible common equity to average assets		9.79		%		9.53		%		9.04		%		8.97		%		8.83		%		9.66		%		8.82		%

Tangible common equity to risk-weighted assets reconciliation ⁽¹⁾
Tier 1 capital ratio (Regulatory)		12.36		%		12.69		%		12.42		%		12.25		%		11.94		%		12.36		%		11.94		%
Effect of other comprehensive income		0.07				(0.17	)			(0.44	)			(0.68	)			(0.57	)			0.07				(0.57	)
Effect of deferred tax limitation		0.18				0.22				0.28				0.30				0.33				0.18				0.33
Effect of trust preferred		(0.25	)			(0.26	)			(0.26	)			(0.26	)			(0.34	)			(0.25	)			(0.34	)
Tangible common equity to risk-weighted assets		12.36		%		12.48		%		12.00		%		11.61		%		11.36		%		12.36		%		11.36		%

⁽¹⁾ Second quarter 2019 ratios are preliminary.

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

														Year
		2019				2018					Linked			over
	Second		First		Fourth		Third		Second		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change			Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,658	$	1,620	$	1,648	$	1,673	$	1,682	$	38		$	(24	)
Income producing commercial RE		1,939		1,867		1,812		1,788		1,821		72			118
Commercial & industrial		1,299		1,284		1,278		1,194		1,193		15			106
Commercial construction		983		866		796		761		735		117			248
Equipment financing		674		606		565		509		465		68			209
Total commercial		6,553		6,243		6,099		5,925		5,896		310			657
Residential mortgage		1,108		1,064		1,049		1,035		1,021		44			87
Home equity lines of credit		675		684		694		702		708		(9	)		(33	)
Residential construction		219		200		211		198		195		19			24
Consumer		283		302		330		366		400		(19	)		(117	)
Total loans	$	8,838	$	8,493	$	8,383	$	8,226	$	8,220		345			618

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality


(in thousands)	Second Quarter 2019			First Quarter 2019				Fourth Quarter 2018

NONACCRUAL LOANS BY CATEGORY
Owner occupied CRE	$	8,177		$	7,030			$	6,421
Income producing CRE		1,331			1,276				1,160
Commercial & industrial		2,366			1,666				1,417
Commercial construction		1,650			473				605
Equipment financing		2,047			1,813				2,677
Total commercial		15,571			12,258				12,280
Residential mortgage		8,012			8,281				8,035
Home equity lines of credit		1,978			2,233				2,360
Residential construction		494			347				288
Consumer		542			505				815
Total NPAs	$	26,597		$	23,624			$	23,778

NONACCRUAL LOANS ACTIVITY
Beginning Balance	$	23,624		$	23,778			$	22,530
Loans placed on non-accrual		8,316			6,759				5,829
Payments received		(3,212	)		(3,520	)			(2,780	)
Loan charge-offs		(2,131	)		(2,714	)			(933	)
Foreclosures		-			(679	)			(868	)
Ending Balance	$	26,597		$	23,624			$	23,778

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

NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE	$	(58	)		(0.01	)	%	$	(64	)	(0.02	)	%	$	(52	)	(0.01	)	%
Income producing CRE		241			0.05				177		0.04				399		0.09
Commercial & industrial		1,141			0.35				1,356		0.43				(149	)	(0.05	)
Commercial construction		(162	)		(0.07	)			(325	)	(0.16	)			(230	)	(0.12	)
Equipment financing		890			0.56				1,281		0.89				599		0.44
Total commercial		2,052			0.13				2,425		0.16				567		0.04
Residential mortgage		(125	)		(0.05	)			13		-				290		0.11
Home equity lines of credit		(111	)		(0.07	)			215		0.13				382		0.22
Residential construction		199			0.38				(22	)	(0.04	)			(36	)	(0.07	)
Consumer		423			0.58				499		0.64				584		0.67
Total	$	2,438			0.11			$	3,130		0.15			$	1,787		0.09

⁽¹⁾ Annualized.

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in thousands, except per share data)		2019		2018			2019			2018

Interest revenue:
Loans, including fees	$	119,671	$	103,492		$	234,930		$	199,961
Investment securities, including tax exempt of $1,122, $1,025, $2,291 and $1,997		19,076		18,254			39,894			36,549
Deposits in banks and short-term investments		409		469			848			995
Total interest revenue		139,156		122,215			275,672			237,505

Interest expense:
Deposits:
NOW and interest-bearing demand		3,377		1,303			6,913			2,416
Money market		4,925		2,583			9,130			4,758
Savings		42		35			74			84
Time		8,771		4,198			16,955			7,154
Total deposit interest expense		17,115		8,119			33,072			14,412
Short-term borrowings		248		198			409			498
Federal Home Loan Bank advances		752		1,636			2,174			3,760
Long-term debt		3,257		3,786			6,599			7,074
Total interest expense		21,372		13,739			42,254			25,744
Net interest revenue		117,784		108,476			233,418			211,761
Provision for credit losses		3,250		1,800			6,550			5,600
Net interest revenue after provision for credit losses		114,534		106,676			226,868			206,161

Noninterest income:
Service charges and fees		9,060		8,794			17,513			17,719
Mortgage loan and other related fees		5,344		5,307			9,092			10,666
Brokerage fees		1,588		1,201			2,925			2,073
Gains from sales of SBA/USDA loans		1,470		2,401			2,773			4,179
Securities gains (losses), net		149		(364	)		(118	)		(1,304	)
Other		6,920		6,001			13,314			12,403
Total noninterest income		24,531		23,340			45,499			45,736
Total revenue		139,065		130,016			272,367			251,897

Noninterest expenses:
Salaries and employee benefits		48,157		45,363			95,660			88,238
Communications and equipment		6,222		4,849			12,010			9,481
Occupancy		5,919		5,547			11,503			11,160
Advertising and public relations		1,596		1,384			2,882			2,899
Postage, printing and supplies		1,529		1,685			3,115			3,322
Professional fees		4,054		3,464			7,215			7,508
FDIC assessments and other regulatory charges		1,547		1,973			3,257			4,449
Amortization of intangibles		1,342		1,847			2,635			3,745
Merger-related and other charges		3,894		2,280			4,440			4,334
Other		7,553		8,458			15,180			15,189
Total noninterest expenses		81,813		76,850			157,897			150,325
Net income before income taxes		57,252		53,166			114,470			101,572
Income tax expense		13,167		13,532			26,123			24,280
Net income	$	44,085	$	39,634		$	88,347		$	77,292

Net income available to common shareholders	$	43,769	$	39,359		$	87,716		$	76,740

Earnings per common share:
Basic	$	0.55	$	0.49			1.10		$	0.97
Diluted		0.55		0.49			1.10			0.97
Weighted average common shares outstanding:
Basic		79,673		79,745			79,739			79,477
Diluted		79,678		79,755			79,745			79,487

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

	June 30,			December 31,
(in thousands, except share and per share data)		2019			2018

ASSETS
Cash and due from banks	$	118,361		$	126,083
Interest-bearing deposits in banks		157,418			201,182
Cash and cash equivalents		275,779			327,265
Debt securities available for sale		2,366,502			2,628,467
Debt securities held to maturity (fair value $256,975 and $268,803)		253,398			274,407
Loans held for sale at fair value		46,285			18,935
Loans and leases, net of unearned income		8,838,218			8,383,401
Less allowance for loan and lease losses		(62,204	)		(61,203	)
Loans, net		8,776,014			8,322,198
Premises and equipment, net		217,086			206,140
Bank owned life insurance		200,993			192,616
Accrued interest receivable		35,439			35,413
Net deferred tax asset		40,870			64,224
Derivative financial instruments		35,209			24,705
Goodwill and other intangible assets		344,550			324,072
Other assets		187,313			154,750
Total assets	$	12,779,438		$	12,573,192
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	3,461,584		$	3,210,220
NOW and interest-bearing demand		2,059,694			2,274,775
Money market		2,281,818			2,097,526
Savings		693,961			669,886
Time		1,840,271			1,598,391
Brokered		253,942			683,715
Total deposits		10,591,270			10,534,513
Short-term borrowings		40,000			-
Federal Home Loan Bank advances		160,000			160,000
Long-term debt		247,952			267,189
Derivative financial instruments		16,769			26,433
Accrued expenses and other liabilities		157,113			127,503
Total liabilities		11,213,104			11,115,638
Shareholders' equity:
Common stock, $1 par value; 150,000,000 shares authorized;
79,075,219 and 79,234,077 shares issued and outstanding		79,075			79,234
Common stock issuable; 641,725 and 674,499 shares		10,858			10,744
Capital surplus		1,498,740			1,499,584
Accumulated deficit		(29,116	)		(90,419	)
Accumulated other comprehensive income (loss)		6,777			(41,589	)
Total shareholders' equity		1,566,334			1,457,554
Total liabilities and shareholders' equity	$	12,779,438		$	12,573,192

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,

	2019								2018
	Average						Avg.		Average						Avg.
(dollars in thousands, fully taxable equivalent (FTE))	Balance				Interest		Rate		Balance				Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	8,669,847			$	119,668	5.54	%	$	8,177,343			$	103,395	5.07	%
Taxable securities ⁽³⁾		2,506,942				17,954	2.86			2,651,816				17,229	2.60
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		166,628				1,507	3.62			150,503				1,380	3.67
Federal funds sold and other interest-earning assets		190,678				679	1.42			212,849				674	1.27

Total interest-earning assets (FTE)		11,534,095				139,808	4.86			11,192,511				122,678	4.39
Noninterest-earning assets:
Allowance for loan losses		(62,716	)							(62,275	)
Cash and due from banks		125,021								133,060
Premises and equipment		224,018								218,517
Other assets ⁽³⁾		787,859								731,514
Total assets	$	12,608,277							$	12,213,327

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	2,107,041				3,377	0.64		$	2,071,289				1,303	0.25
Money market		2,269,321				4,925	0.87			2,214,077				2,583	0.47
Savings		687,753				42	0.02			678,988				35	0.02
Time		1,773,968				6,949	1.57			1,524,124				2,696	0.71
Brokered time deposits		298,553				1,822	2.45			300,389				1,502	2.01
Total interest-bearing deposits		7,136,636		-		17,115	0.96			6,788,867		-		8,119	0.48

Federal funds purchased and other borrowings		38,838				248	2.56			45,241				198	1.76
Federal Home Loan Bank advances		117,912				752	2.56			335,521				1,636	1.96
Long-term debt		252,351				3,257	5.18			316,812				3,786	4.79
Total borrowed funds		409,101				4,257	4.17			697,574				5,620	3.23

Total interest-bearing liabilities		7,545,737				21,372	1.14			7,486,441				13,739	0.74
Noninterest-bearing liabilities:
Noninterest-bearing deposits		3,355,930								3,188,847
Other liabilities		175,806								168,417
Total liabilities		11,077,473								10,843,705
Shareholders' equity		1,530,804								1,369,622
Total liabilities and shareholders' equity	$	12,608,277							$	12,213,327

Net interest revenue (FTE)					$	118,436							$	108,939
Net interest-rate spread (FTE)							3.72	%							3.65	%

Net interest margin (FTE) ⁽⁴⁾							4.12	%							3.90	%

⁽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 where the accrual of interest has been discontinued and loans that are held for sale.
⁽³⁾ Securities available for sale are shown at amortized cost. Pretax unrealized gains of $5.00 million in 2019 and pretax unrealized losses of $42.9 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.

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,

					2019							2018
	Average					Avg.		Average					Avg.
(dollars in thousands, fully taxable equivalent (FTE))	Balance			Interest		Rate		Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	8,550,574		$	235,015	5.54	%	$	8,085,849		$	199,784	4.98	%
Taxable securities ⁽³⁾		2,609,400			37,603	2.88			2,687,200			34,552	2.57
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		168,156			3,077	3.66			148,528			2,689	3.62
Federal funds sold and other interest-earning assets		188,165			1,297	1.38			212,951			1,372	1.29

Total interest-earning assets (FTE)		11,516,295			276,992	4.84			11,134,528			238,397	4.31
Noninterest-earning assets:
Allowance for loan losses		(62,253	)						(60,718	)
Cash and due from banks		124,414							146,697
Premises and equipment		220,335							217,625
Other assets ⁽³⁾		759,899							724,488
Total assets	$	12,558,690						$	12,162,620

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	2,157,648			6,913	0.65		$	2,077,461			2,416	0.23
Money market		2,222,846			9,130	0.83			2,222,304			4,758	0.43
Savings		680,018			74	0.02			667,431			84	0.03
Time		1,701,181			12,285	1.46			1,529,639			4,937	0.65
Brokered time deposits		389,794			4,670	2.42			229,766			2,217	1.95
Total interest-bearing deposits		7,151,487			33,072	0.93			6,726,601			14,412	0.43

Federal funds purchased and other borrowings		30,241			409	2.73			61,894			498	1.62
Federal Home Loan Bank advances		170,636			2,174	2.57			423,137			3,760	1.79
Long-term debt		257,134			6,599	5.18			295,763			7,074	4.82
Total borrowed funds		458,011			9,182	4.04			780,794			11,332	2.93

Total interest-bearing liabilities		7,609,498			42,254	1.12			7,507,395			25,744	0.69
Noninterest-bearing liabilities:
Noninterest-bearing deposits		3,275,612							3,142,384
Other liabilities		169,048							159,734
Total liabilities		11,054,158							10,809,513
Shareholders' equity		1,504,532							1,353,107
Total liabilities and shareholders' equity	$	12,558,690						$	12,162,620

Net interest revenue (FTE)				$	234,738						$	212,653
Net interest-rate spread (FTE)						3.72	%						3.62	%

Net interest margin (FTE) ⁽⁴⁾						4.11	%						3.85	%

⁽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 where the accrual of interest has been discontinued and loans that are held for sale.
⁽³⁾ Securities available for sale are shown at amortized cost. Pretax unrealized losses of $10.4 million in 2019 and pretax unrealized losses of $35.6 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 $12.8 billion in assets, and 147 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 dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

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

Source: United Community Banks, Inc.

Press Release Details

United Community Banks, Inc. Reports Second Quarter Results