Press Release Details

Continued Strong Performance and Strengthening of its Balance Sheet

GREENVILLE, S.C., July 21, 2020 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today reported second quarter financial results, with record year-over-year loan and deposit growth. United delivered net income of $25.1 million and pre-tax pre-provision income of $65.6 million and built its allowance for credit losses with a $33.5 million provision for credit losses. Due largely to the continued reserve build anticipating potential future loan losses driven by COVID-19 effects on the economy, diluted earnings per share of $0.32 represented a decrease of $0.23 or 42%, from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were also $0.32, also down 46% from last year. United’s return on assets (ROA) was 0.71% and its return on common equity was 6.2% for the quarter. On an operating basis, United’s ROA was 0.72% and its return on tangible common equity was 8.1%.

Chairman and CEO Lynn Harton stated, “As the nation continues to grapple with the uncertainties of the future economic environment, I am pleased with the financial strength of the company and the performance of our employees, who continue to deliver for our customers. In this new world of physical distancing, the investments we have made in our digital delivery channels are being put to the test and exceeding our expectations. Customer traffic patterns suggest that our customers have significantly increased their use of our digital platform to access our products and services, as well as to open and manage their accounts. Along with our enhanced mobile app, this platform has enabled us to maintain business volume, while keeping our employees and customers physically-distanced and safe while banking. We supported our small business clients by offering loan deferrals, as needed. Additionally, our SBA team, along with other United bankers across our markets, processed nearly 11,000 applications for the SBA’s Paycheck Protection Program (PPP) loans totaling $1.1 billion—providing funding for small businesses throughout our footprint. In addition to addressing the needs of our existing customers, we added approximately 4,000 new loan and deposit customers since the Program began, which has given us an even greater opportunity to serve our markets.”

This quarter saw record growth with total loans increasing by $1.2 billion—mainly from PPP loans—however, non-PPP loans also grew at a 5% annualized rate. Likewise, core transaction deposits were up a record $1.7 billion over first quarter with growth in noninterest bearing deposits of $1.1 billion being the primary driver. United’s cost of deposits decreased 18 bps to 0.38% as a result. Net interest margin decreased 65 bps from the first quarter. Of this decrease, 18 bps was due to lower purchased loan accretion, approximately 6 bps was due to lower-yielding PPP loans, and approximately 9 bps resulted from carrying an increased amount in low-yielding overnight investments due to the record amount of liquidity generated by bank deposit growth in the quarter.

Harton continued, “During the second quarter, we also completed a number of important strategic initiatives that position us well for the future. In June, we raised $200 million—$100 million in preferred stock with a 6.875% annual dividend rate and $100 million in senior notes with a 5.00% annual coupon. Our long-term goal is to continue to remain a top performer in our peer group, with top quartile results in key performance metrics including capital levels. These capital raises were done to provide us with substantial flexibility to be able to both focus on our customers’ current needs, and at the same time, be prepared to emerge from the health crisis in a very strong position. We believe that there will be meaningful strategic growth opportunities at that point.”

Immediately following quarter end, the bank announced the July 1^st closing of the previously announced merger with Three Shores Bancorporation, Inc. and its bank subsidiary Seaside National Bank & Trust, which will now be branded Seaside Bank and Trust. Harton noted, “We are pleased to welcome Seaside’s talented team of bankers and believe that our combined banks are better together. Gideon Haymaker is now United’s president for the State of Florida and additionally will lead our expansion of Seaside’s wealth management offering across United’s footprint.”  

Mr. Harton concluded, “Giving back to our communities is at the core of who we are as a community bank. In keeping with that long-standing tradition, I am also pleased to announce that we recently formed the United Community Bank Foundation, a tax-exempt private foundation which will expand our charitable endeavors throughout our footprint. In the second quarter, we made a $1 million initial contribution to the foundation, which will allow us to further support our communities that have been critical to our success over the years.”

Second Quarter 2020 Financial Highlights:

• EPS decreased by 42% compared to last year on a GAAP basis and 46% on an operating basis
• Return on assets of 0.71%, or 0.72% excluding merger-related and other charges
• Pre-tax, pre-provision return on assets of 1.86%, or 1.87% excluding merger-related and other charges
• Return on common equity of 6.2%
• Return on tangible common equity of 8.1%, excluding merger-related and other charges
• United adopted the Current Expected Credit Losses (CECL) model for determining the allowance for credit losses last quarter; the continued uncertain economic outlook necessitated a provision for credit losses of $33.5 million
• Record loan production of $2.0 billion, with $1.1 billion in PPP loans and $866 million in traditional (non-PPP) loans
• Loan growth of $1.2 billion, including traditional loan growth at an annualized rate of 5% for the quarter
• Core transaction deposits were up $1.7 billion or 22%, mainly driven by noninterest bearing demand deposit growth of $1.1 billion; a significant portion of United’s core transaction deposit growth was attributable to PPP-related deposits
• Net interest margin of 3.42%, which was down 65 bps from first quarter, reflecting the effect of lower interest rates, lower purchased loan accretion, the impact of the lower yielding PPP loans and a much higher level of low-yielding, highly-liquid assets
• Mortgage rate locks of $802 million, which is slightly higher than last quarter and again exceeds our previous quarterly record by 58%; this compares to $390 million a year ago
• Noninterest income was up $14.4 million on a linked quarter basis, primarily due to a $15.3 million increase in mortgage income as a result of record mortgage rate locks and production, as well as an improved market environment
• Efficiency ratio of 55.86%, or 55.59% excluding merger-related and other charges
• Net charge-offs of $6.1 million, or 25 basis points as a percent of average loans, down 12 basis points from last quarter and mainly attributable to two credits that have been substandard for more than a year
• Nonperforming assets of 0.32% of total assets, which is up 4 basis points compared to March 31, 2020
• Total deferrals of $1.8 billion or 17% of the total loan portfolio at June 30
• Funded the United Community Bank Foundation with an initial $1 million contribution for charities and causes throughout the footprint
• Completed a public offering of $100 million aggregate of 6.875% Non-Cumulative Perpetual Preferred Stock and $100 million aggregate principal amount of 5.000% Fixed-to-Floating Senior Notes due 2030
• Effective July 1, 2020, United completed its merger with Three Shores Bancorporation, Inc. and its bank subsidiary, Seaside National Bank & Trust

Conference Call

United will hold a conference call, Wednesday, July 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 4995436. 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.
Selected Financial Information
		2020										2019															Second Quarter				For the Six Months Ended June 30,
(in thousands, except per share data)		Second Quarter					First Quarter					Fourth Quarter					Third Quarter					Second Quarter					2020 - 2019 Change				2020					2019					YTD 2020  - 2019 Change
INCOME SUMMARY
Interest revenue		$	123,605				$	136,547				$	136,419				$	140,615				$	139,156								$	260,152				$	275,672
Interest expense		14,301					17,941					19,781					21,277					21,372									32,242					42,254
Net interest revenue		109,304					118,606					116,638					119,338					117,784					(7	)	%		227,910					233,418					(2	)	%
Provision for credit losses		33,543					22,191					3,500					3,100					3,250									55,734					6,550					751
Noninterest income		40,238					25,814					30,183					29,031					24,531					64				66,052					45,499					45
Total revenue		115,999					122,229					143,321					145,269					139,065					(17	)			238,228					272,367					(13	)
Expenses		83,980					81,538					81,424					82,924					81,813					3				165,518					157,897					5
Income before income tax expense		32,019					40,691					61,897					62,345					57,252					(44	)			72,710					114,470					(36	)
Income tax expense		6,923					8,807					12,885					13,983					13,167					(47	)			15,730					26,123					(40	)
Net income		25,096					31,884					49,012					48,362					44,085					(43	)			56,980					88,347					(36	)
Merger-related and other charges		397					808					(74		)			2,605					4,087									1,205					4,826
Income tax benefit of merger-related and other charges		(87		)			(182		)			17					(600		)			(940		)							(269		)			(1,112		)
Net income - operating (1)		$	25,406				$	32,510				$	48,955				$	50,367				$	47,232				(46	)			$	57,916				$	92,061				(37	)
Pre-tax pre-provision income (5)		$	65,562				$	62,882				$	65,397				$	65,445				$	60,502				8				$	128,444				$	121,020				6
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP		$	0.32				$	0.40				$	0.61				$	0.60				$	0.55				(42	)			$	0.71				$	1.10				(35	)
Diluted net income - operating (1)		0.32					0.41					0.61					0.63					0.59					(46	)			0.73					1.15					(37	)
Cash dividends declared		0.18					0.18					0.18					0.17					0.17					6				0.36					0.33					9
Book value		21.22					20.80					20.53					20.16					19.65					8				21.22					19.65					8
Tangible book value (3)		16.95					16.52					16.28					15.90					15.38					10				16.95					15.38					10
Key performance ratios:
Return on common equity - GAAP (2)(4)		6.17			%		7.85			%		12.07			%		12.16			%		11.45			%						7.01			%		11.65			%
Return on common equity - operating (1)(2)(4)		6.25					8.01					12.06					12.67					12.27									7.13					12.14
Return on tangible common equity - operating (1)(2)(3)(4)		8.09					10.57					15.49					16.38					15.88									9.20					15.67
Return on assets - GAAP (4)		0.71					0.99					1.50					1.51					1.40									0.85					1.42
Return on assets - operating (1)(4)		0.72					1.01					1.50					1.58					1.50									0.86					1.48
Return on assets - pre-tax pre-provision (4)(5)		1.86					1.95					2.00					2.05					1.92									1.91					1.94
Return on assets - pre-tax pre-provision, excluding merger-  related and other charges (1)(4)(5)		1.87					1.98					2.00					2.13					2.05									1.92					2.02
Net interest margin (fully taxable equivalent) (4)		3.42					4.07					3.93					4.12					4.12									3.73					4.11
Efficiency ratio - GAAP		55.86					56.15					54.87					55.64					57.28									56.00					56.32
Efficiency ratio - operating (1)		55.59					55.59					54.92					53.90					54.42									55.59					54.60
Equity to total assets		11.81					12.54					12.66					12.53					12.25									11.81					12.25
Tangible common equity to tangible assets (3)		9.12					10.22					10.32					10.16					9.86									9.12					9.86
ASSET QUALITY
Nonperforming loans		$	48,021				$	36,208				$	35,341				$	30,832				$	26,597				81				$	48,021				$	26,597				81
Foreclosed properties		477					475					476					102					75					536				477					75					536
Total nonperforming assets ("NPAs")		48,498					36,683					35,817					30,934					26,672					82				48,498					26,672					82
Allowance for credit losses - loans		103,669					81,905					62,089					62,514					62,204					67				103,669					62,204					67
Net charge-offs		6,149					8,114					3,925					2,723					2,438					152				14,263					5,568					156
Allowance for credit losses - loans to loans		1.02			%		0.92			%		0.70			%		0.70			%		0.70			%						1.02					0.70			%
Net charge-offs to average loans (4)		0.25					0.37					0.18					0.12					0.11									0.31					0.13
NPAs to loans and foreclosed properties		0.48					0.41					0.41					0.35					0.30									0.48					0.30
NPAs to total assets		0.32					0.28					0.28					0.24					0.21									0.32					0.21
AVERAGE BALANCES ($ in millions)
Loans		$	9,773				$	8,829				$	8,890				$	8,836				$	8,670				13				$	9,301				$	8,551				9
Investment securities		2,408					2,520					2,486					2,550					2,674					(10	)			2,464					2,778					(11	)
Earning assets		12,958					11,798					11,832					11,568					11,534					12				12,378					11,516					7
Total assets		14,173					12,944					12,946					12,681					12,608					12				13,558					12,559					8
Deposits		12,071					10,915					10,924					10,531					10,493					15				11,493					10,427					10
Shareholders’ equity		1,686					1,653					1,623					1,588					1,531					10				1,670					1,505					11
Common shares - basic (thousands)		78,920					79,340					79,659					79,663					79,673					(1	)			79,130					79,739					(1	)
Common shares - diluted (thousands)		78,924					79,446					79,669					79,667					79,678					(1	)			79,186					79,745					(1	)
AT PERIOD END ($ in millions)
Loans		$	10,133				$	8,935				$	8,813				$	8,903				$	8,838				15				$	10,133				$	8,838				15
Investment securities		2,432					2,540					2,559					2,515					2,620					(7	)			2,432					2,620					(7	)
Total assets		15,005					13,086					12,916					12,809					12,779					17				15,005					12,779					17
Deposits		12,702					11,035					10,897					10,757					10,591					20				12,702					10,591					20
Shareholders’ equity		1,772					1,641					1,636					1,605					1,566					13				1,772					1,566					13
Common shares outstanding (thousands)		78,335					78,284					79,014					78,974					79,075					(1	)			78,335					79,075					(1	)

⁽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. ⁽⁵⁾ Excludes income tax expense and provision for credit losses.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
		2020										2019															For the Six Months Ended June 30,
		Second					First					Fourth					Third					Second
(in thousands, except per share data)		Quarter					Quarter					Quarter					Quarter					Quarter					2020					2019
Expense reconciliation
Expenses (GAAP)		$	83,980				$	81,538				$	81,424				$	82,924				$	81,813				$	165,518				$	157,897
Merger-related and other charges		(397		)			(808		)			74					(2,605		)			(4,087		)			(1,205		)			(4,826		)
Expenses - operating		$	83,583				$	80,730				$	81,498				$	80,319				$	77,726				$	164,313				$	153,071
Net income to operating income reconciliation
Net income (GAAP)		$	25,096				$	31,884				$	49,012				$	48,362				$	44,085				$	56,980				$	88,347
Merger-related and other charges		397					808					(74		)			2,605					4,087					1,205					4,826
Income tax benefit of merger-related and other charges		(87		)			(182		)			17					(600		)			(940		)			(269		)			(1,112		)
Net income - operating		$	25,406				$	32,510				$	48,955				$	50,367				$	47,232				$	57,916				$	92,061
Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)		$	25,096				$	31,884				$	49,012				$	48,362				$	44,085				$	56,980				$	88,347
Income tax expense		6,923					8,807					12,885					13,983					13,167					15,730					26,123
Provision for credit losses		33,543					22,191					3,500					3,100					3,250					55,734					6,550
Pre-tax pre-provision income		$	65,562				$	62,882				$	65,397				$	65,445				$	60,502				$	128,444				$	121,020
Diluted income per common share reconciliation
Diluted income per common share (GAAP)		$	0.32				$	0.40				$	0.61				$	0.60				$	0.55				$	0.71				$	1.10
Merger-related and other charges, net of tax		—					0.01					—					0.03					0.04					0.02					0.05
Diluted income per common share - operating		$	0.32				$	0.41				$	0.61				$	0.63				$	0.59				$	0.73				$	1.15
Book value per common share reconciliation
Book value per common share (GAAP)		$	21.22				$	20.80				$	20.53				$	20.16				$	19.65				$	21.22				$	19.65
Effect of goodwill and other intangibles		(4.27		)			(4.28		)			(4.25		)			(4.26		)			(4.27		)			(4.27		)			(4.27		)
Tangible book value per common share		$	16.95				$	16.52				$	16.28				$	15.90				$	15.38				$	16.95				$	15.38
Return on tangible common equity reconciliation
Return on common equity (GAAP)		6.17			%		7.85			%		12.07			%		12.16			%		11.45			%		7.01			%		11.65			%
Merger-related and other charges, net of tax		0.08					0.16					(0.01		)			0.51					0.82					0.12					0.49
Return on common equity - operating		6.25					8.01					12.06					12.67					12.27					7.13					12.14
Effect of goodwill and other intangibles		1.84					2.56					3.43					3.71					3.61					2.07					3.53
Return on tangible common equity - operating		8.09			%		10.57			%		15.49			%		16.38			%		15.88			%		9.20			%		15.67			%
Return on assets reconciliation
Return on assets (GAAP)		0.71			%		0.99			%		1.50			%		1.51			%		1.40			%		0.85			%		1.42			%
Merger-related and other charges, net of tax		0.01					0.02					—					0.07					0.10					0.01					0.06
Return on assets - operating		0.72			%		1.01			%		1.50			%		1.58			%		1.50			%		0.86			%		1.48			%
Return on assets to return on assets- pre-tax pre-provision reconciliation
Return on assets (GAAP)		0.71			%		0.99			%		1.50			%		1.51			%		1.40			%		0.85			%		1.42			%
Income tax expense		0.20					0.27					0.39					0.44					0.42					0.23					0.41
Provision for credit losses		0.95					0.69					0.11					0.10					0.10					0.83					0.11
Return on assets - pre-tax, pre-provision		1.86					1.95					2.00					2.05					1.92					1.91					1.94
Merger-related and other charges		0.01					0.03					—					0.08					0.13					0.01					0.08
Return on assets - pre-tax pre-provision, excluding merger-related and other charges		1.87			%		1.98			%		2.00			%		2.13			%		2.05			%		1.92			%		2.02			%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)		55.86			%		56.15			%		54.87			%		55.64			%		57.28			%		56.00			%		56.32			%
Merger-related and other charges		(0.27		)			(0.56		)			0.05					(1.74		)			(2.86		)			(0.41		)			(1.72		)
Efficiency ratio - operating		55.59			%		55.59			%		54.92			%		53.90			%		54.42			%		55.59			%		54.60			%
Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)		11.81			%		12.54			%		12.66			%		12.53			%		12.25			%		11.81			%		12.25			%
Effect of goodwill and other intangibles		(2.05		)			(2.32		)			(2.34		)			(2.37		)			(2.39		)			(2.05		)			(2.39		)
Effect of preferred equity		(0.64		)			—					—					—					—					(0.64		)			—
Tangible common equity to tangible assets		9.12			%		10.22			%		10.32			%		10.16			%		9.86			%		9.12			%		9.86			%

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
	2020								2019												Linked				Year over
(in millions)	Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter				Quarter Change				Year Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,760			$	1,703			$	1,720			$	1,692			$	1,658			$	57			$	102
Income producing commercial RE	2,178				2,065				2,008				1,934				1,939				113				239
Commercial & industrial	1,219				1,310				1,221				1,271				1,299				(91		)		(80		)
Paycheck protection program	1,095				—				—				—				—				1,095				1,095
Commercial construction	946				959				976				1,001				983				(13		)		(37		)
Equipment financing	779				761				745				729				674				18				105
Total commercial	7,976				6,798				6,670				6,627				6,553				1,178				1,423
Residential mortgage	1,152				1,128				1,118				1,121				1,108				24				44
Home equity lines of credit	654				668				661				669				675				(14		)		(21		)
Residential construction	230				216				236				229				219				14				11
Consumer	121				125				128				257				283				(4		)		(162		)
Total loans	$	10,133			$	8,935			$	8,813			$	8,903			$	8,838			$	1,198			$	1,295
LOANS BY MARKET
North Georgia	$	951			$	958			$	967			$	1,002			$	1,002			(7		)		(51		)
Atlanta	1,852				1,820				1,762				1,740				1,745				32				107
North Carolina	1,171				1,124				1,156				1,117				1,084				47				87
Coastal Georgia	618				604				631				611				604				14				14
Gainesville	233				235				246				246				244				(2		)		(11		)
East Tennessee	433				425				421				435				446				8				(13		)
South Carolina	1,778				1,774				1,708				1,705				1,674				4				104
Commercial Banking Solutions	3,097				1,995				1,922				1,916				1,884				1,102				1,213
Indirect auto	—				—				—				131				155				—				(155		)
Total loans	$	10,133			$	8,935			$	8,813			$	8,903			$	8,838			$	1,198			$	1,295

 

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
		2020								2019
(in thousands)		Second Quarter				First Quarter				Fourth Quarter
NONACCRUAL LOANS
Owner occupied RE		$	10,710			$	10,405			$	10,544
Income producing RE		11,274				2,235				1,996
Commercial & industrial		3,432				3,169				2,545
Commercial construction		2,290				1,724				2,277
Equipment financing		3,119				2,439				3,141
Total commercial		30,825				19,972				20,503
Residential mortgage		13,185				12,458				10,567
Home equity lines of credit		3,138				3,010				3,173
Residential construction		500				540				939
Consumer		373				228				159
Total		$	48,021			$	36,208			$	35,341

 

		2020																2019
		Second Quarter								First Quarter								Fourth 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		$	(466	)		(0.11	)	%		$	(1,028	)		(0.24	)	%		$	(208	)		(0.05	)	%
Income producing RE		4,548				0.86				270				0.05				95				0.02
Commercial & industrial		(37		)		(0.01	)			7,185				2.30				1,809				0.58
Commercial construction		122				0.05				(141		)		(0.06	)			(140		)		(0.06	)
Equipment financing		1,665				0.87				1,507				0.81				1,550				0.84
Total commercial		5,832				0.31				7,793				0.47				3,106				0.19
Residential mortgage		(6		)		—				9				—				89				0.03
Home equity lines of credit		(98		)		(0.06	)			(83		)		(0.05	)			198				0.12
Residential construction		(5		)		(0.01	)			(12		)		(0.02	)			(24		)		(0.04	)
Consumer		426				1.39				407				1.30				556				0.90
Total		$	6,149			0.25				$	8,114			0.37				$	3,925			0.18
(1)  Annualized.

 

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)		June 30, 2020				December 31, 2019
ASSETS
Cash and due from banks		$	125,255			$	125,844
Interest-bearing deposits in banks		1,203,706				389,362
Cash and cash equivalents		1,328,961				515,206
Debt securities available-for-sale		2,125,209				2,274,581
Debt securities held-to-maturity (fair value $320,253 and $287,904)		306,638				283,533
Loans held for sale at fair value		99,477				58,484
Loans and leases held for investment		10,132,510				8,812,553
Less allowance for credit losses - loans and leases		(103,669		)		(62,089		)
Loans and leases, net		10,028,841				8,750,464
Premises and equipment, net		211,972				215,976
Bank owned life insurance		200,699				202,664
Accrued interest receivable		37,774				32,660
Net deferred tax asset		27,362				34,059
Derivative financial instruments		94,434				35,007
Goodwill and other intangible assets, net		340,220				342,247
Other assets		203,300				171,135
Total assets		$	15,004,887			$	12,916,016
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand		$	4,689,545			$	3,477,979
NOW and interest-bearing demand		2,582,831				2,461,895
Money market		2,621,158				2,230,628
Savings		832,529				706,467
Time		1,751,091				1,859,574
Brokered		224,931				160,701
Total deposits		12,702,085				10,897,244
Long-term debt		311,631				212,664
Derivative financial instruments		24,685				15,516
Accrued expenses and other liabilities		194,841				154,900
Total liabilities		13,233,242				11,280,324
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		96,660				—
Common stock, $1 par value; 150,000,000 shares authorized;   78,335,127 and 79,013,729 shares issued and outstanding		78,335				79,014
Common stock issuable; 596,785 and 664,640 shares		10,646				11,491
Capital surplus		1,480,464				1,496,641
Retained earnings		64,990				40,152
Accumulated other comprehensive income		40,550				8,394
Total shareholders' equity		1,771,645				1,635,692
Total liabilities and shareholders' equity		$	15,004,887			$	12,916,016

 

UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except per share data)		2020				2019				2020				2019
Interest revenue:
Loans, including fees		$	107,862			$	119,671			$	225,925			$	234,930
Investment securities, including tax exempt of $1,570, $1,122, $3,093 and $2,291		15,615				19,076				33,009				39,894
Deposits in banks and short-term investments		128				409				1,218				848
Total interest revenue		123,605				139,156				260,152				275,672
Interest expense:
Deposits:
NOW and interest-bearing demand		1,628				3,460				4,606				7,069
Money market		3,421				4,842				7,952				8,974
Savings		39				42				74				74
Time		6,183				8,771				13,714				16,955
Deposits		11,271				17,115				26,346				33,072
Short-term borrowings		—				248				1				409
Federal Home Loan Bank advances		—				752				1				2,174
Long-term debt		3,030				3,257				5,894				6,599
Total interest expense		14,301				21,372				32,242				42,254
Net interest revenue		109,304				117,784				227,910				233,418
Provision for credit losses		33,543				3,250				55,734				6,550
Net interest revenue after provision for credit losses		75,761				114,534				172,176				226,868
Noninterest income:
Service charges and fees		6,995				9,060				15,633				17,513
Mortgage loan gains and other related fees		23,659				5,344				31,969				9,092
Brokerage fees		1,324				1,588				2,964				2,925
Gains from sales of other loans, net		1,040				1,470				2,714				2,773
Securities gains (losses), net		—				149				—				(118		)
Other		7,220				6,920				12,772				13,314
Total noninterest income		40,238				24,531				66,052				45,499
Total revenue		115,999				139,065				238,228				272,367
Noninterest expenses:
Salaries and employee benefits		51,811				48,157				103,169				95,660
Communications and equipment		6,556				6,222				12,502				12,010
Occupancy		5,945				5,919				11,659				11,503
Advertising and public relations		2,260				1,596				3,534				2,882
Postage, printing and supplies		1,613				1,529				3,283				3,115
Professional fees		4,823				4,054				8,920				7,215
Lending and loan servicing expense		3,189				2,619				5,482				4,953
Outside services - electronic banking		1,796				1,558				3,628				3,167
FDIC assessments and other regulatory charges		1,558				1,547				3,042				3,257
Amortization of intangibles		987				1,342				2,027				2,635
Merger-related and other charges		397				3,894				1,205				4,440
Other		3,045				3,376				7,067				7,060
Total noninterest expenses		83,980				81,813				165,518				157,897
Net income before income taxes		32,019				57,252				72,710				114,470
Income tax expense		6,923				13,167				15,730				26,123
Net income		$	25,096			$	44,085			$	56,980			$	88,347
Net income available to common shareholders		$	24,913			$	43,769			$	56,554			$	87,716
Net income per common share:
Basic		$	0.32			$	0.55			$	0.71			$	1.10
Diluted		0.32				0.55				0.71				1.10
Weighted average common shares outstanding:
Basic		78,920				79,673				79,130				79,739
Diluted		78,924				79,678				79,186				79,745

 

Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
		2020											2019
(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)		$	9,772,703			$	107,398			4.42	%		$	8,669,847			$	119,668			5.54	%
Taxable securities (3)		2,229,371				14,045				2.52			2,506,942				17,954				2.86
Tax-exempt securities (FTE) (1)(3)		178,903				2,110				4.72			166,628				1,507				3.62
Federal funds sold and other interest-earning assets		776,776				857				0.44			190,678				679				1.42
Total interest-earning assets (FTE)		12,957,753				124,410				3.86			11,534,095				139,808				4.86
Noninterest-earning assets:
Allowance for credit losses		(89,992		)									(62,716		)
Cash and due from banks		138,842											125,021
Premises and equipment		217,096											224,018
Other assets (3)		949,201											787,859
Total assets		$	14,172,900										$	12,608,277
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand		$	2,444,895			1,628				0.27			$	2,190,080			3,460				0.63
Money market		2,541,805				3,421				0.54			2,186,282				4,842				0.89
Savings		788,247				39				0.02			687,753				42				0.02
Time		1,805,671				6,058				1.35			1,773,968				6,949				1.57
Brokered time deposits		130,556				125				0.39			298,553				1,822				2.45
Total interest-bearing deposits		7,711,174				11,271				0.59			7,136,636				17,115				0.96
Federal funds purchased and other borrowings		1				—				—			38,838				248				2.56
Federal Home Loan Bank advances		—				—				—			117,912				752				2.56
Long-term debt		228,096				3,030				5.34			252,351				3,257				5.18
Total borrowed funds		228,097				3,030				5.34			409,101				4,257				4.17
Total interest-bearing liabilities		7,939,271				14,301				0.72			7,545,737				21,372				1.14
Noninterest-bearing liabilities:
Noninterest-bearing deposits		4,360,095											3,355,930
Other liabilities		187,375											175,806
Total liabilities		12,486,741											11,077,473
Shareholders' equity		1,686,159											1,530,804
Total liabilities and shareholders' equity		$	14,172,900										$	12,608,277
Net interest revenue (FTE)						$	110,109										$	118,436
Net interest-rate spread (FTE)										3.14	%										3.72	%
Net interest margin (FTE) (4)										3.42	%										4.12	%

⁽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 $66.3 million in 2020 and unrealized gains of $5.00 million in 2019 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 Six Months Ended June 30,
		2020											2019
(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)		$	9,300,792			$	225,194			4.87	%		$	8,550,574			$	235,015			5.54	%
Taxable securities (3)		2,293,502				29,916				2.61			2,609,400				37,603				2.88
Tax-exempt securities (FTE) (1)(3)		170,578				4,155				4.87			168,156				3,077				3.66
Federal funds sold and other interest-earning assets		612,776				2,489				0.81			188,165				1,297				1.38
Total interest-earning assets (FTE)		12,377,648				261,754				4.25			11,516,295				276,992				4.84
Non-interest-earning assets:
Allowance for loan losses		(79,885		)									(62,253		)
Cash and due from banks		133,548											124,414
Premises and equipment		218,170											220,335
Other assets (3)		908,828											759,899
Total assets		$	13,558,309										$	12,558,690
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand		$	2,428,815			4,606				0.38			$	2,238,083			7,069				0.64
Money market		2,441,264				7,952				0.66			2,142,411				8,974				0.84
Savings		750,179				74				0.02			680,018				74				0.02
Time		1,823,612				13,308				1.47			1,701,181				12,285				1.46
Brokered time deposits		105,689				406				0.77			389,794				4,670				2.42
Total interest-bearing deposits		7,549,559				26,346				0.70			7,151,487				33,072				0.93
Federal funds purchased and other borrowings		199				1				1.01			30,241				409				2.73
Federal Home Loan Bank advances		83				1				2.42			170,636				2,174				2.57
Long-term debt		220,429				5,894				5.38			257,134				6,599				5.18
Total borrowed funds		220,711				5,896				5.37			458,011				9,182				4.04
Total interest-bearing liabilities		7,770,270				32,242				0.83			7,609,498				42,254				1.12
Noninterest-bearing liabilities:
Noninterest-bearing deposits		3,943,740											3,275,612
Other liabilities		174,781											169,048
Total liabilities		11,888,791											11,054,158
Shareholders' equity		1,669,518											1,504,532
Total liabilities and shareholders' equity		$	13,558,309										$	12,558,690
Net interest revenue (FTE)						$	229,512										$	234,738
Net interest-rate spread (FTE)										3.42	%										3.72	%
Net interest margin (FTE) (4)										3.73	%										4.11	%

⁽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 $59.6 million in 2020 and unrealized losses of $10.4 million in 2019 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) (United) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the largest full-service financial institutions in the Southeast, with $15.0 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee at June 30, 2020. Through its July 1^st acquisition of Three Shores Bancorporation and its wholly-owned banking subsidiary, Seaside National Bank & Trust, United added approximately $2.1 billion in assets and 14 banking offices in key metropolitan markets throughout Florida.  United Community Bank, United’s wholly-owned bank subsidiary, specializes in personalized community banking services for individuals, small businesses and companies throughout its geographic footprint, now including Florida under the brand Seaside Bank and Trust. Services include a full range of consumer and commercial banking products, including mortgage, advisory, treasury management, and now wealth management. Respected national research firms consistently recognize United for outstanding customer service. In 2020, J.D. Power ranked United highest in customer satisfaction with retail banking in the Southeast, marking six out of the last seven years United earned the coveted award.  Forbes included United in its inaugural list of the World’s Best Banks in 2019 and again in 2020. Forbes also recognized United on its 2020 list of the 100 Best Banks in America for the seventh consecutive year.  United also received five Greenwich Excellence Awards in 2019 for excellence in Small Business Banking and Middle Market Banking, including a national award for Overall Satisfaction in Small Business Banking. 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.

For more information:

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