United Community Banks, Inc. Reports Second Quarter Results

Press Release Details

Jul 20, 2021

United Community Banks, Inc. Reports Second Quarter Results

EPS of $0.78, Return on Assets of 1.46% and Return on Common Equity of 14.1%

GREENVILLE, S.C., July 20, 2021 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the second quarter was $70.3 million and pre-tax, pre-provision income was $78.7 million. Diluted earnings per share of $0.78 for the quarter represented an increase of $0.46 or 144%, from the second quarter a year ago, and represented a decrease of $0.04 or 5% from the first quarter of 2021. On an operating basis, United’s diluted earnings per share of $0.79 was up 147% over the year ago quarter. United’s GAAP return on assets (ROA) was 1.46% and its return on common equity was 14.1% for the quarter. On an operating basis, United’s ROA was 1.48% and its return on tangible common equity was 17.8%. On a pre-tax, pre-provision basis, operating return on assets was 1.67% for the quarter. The quarter benefited from an allowance release of $13.6 million, reflecting continued improvement in economic conditions and forecasts in United’s markets.

Chairman and CEO Lynn Harton stated, “This has been an outstanding quarter for United. Our team once again was recognized by JD Power as having the Best Retail Customer Satisfaction in the Southeast. On July 6, we closed on the acquisition of FinTrust, accelerating our wealth management strategy. We announced expansion into two of the strongest markets in the Southeast, Charlotte and Nashville, via agreements to acquire outstanding community banks in those markets. In addition to these strategic accomplishments, our bankers continued to deliver strong performance results. Core loan growth, excluding PPP loans, was solid and we continue to be optimistic about the remainder of the year, given the momentum in our markets. Core deposit growth remains very strong. Credit results were excellent as well. I couldn’t be more proud of the United team and I congratulate them for delivering these tremendous results.”

Total loans decreased by $288 million during the quarter—impacted by $411 million of Paycheck Protection Program (PPP) loan forgiveness. Excluding the effect of PPP loans, core organic loan growth was 5% annualized. Core transaction deposits grew by $432 million during the quarter, or 14% annualized, and United’s cost of deposits decreased by 5 basis points to 0.09%. The net interest margin decreased by 3 basis points from the first quarter due mainly to a change in the earning asset mix.

Second Quarter 2021 Financial Highlights:

  • Net income of $70.3 million and pre-tax, pre-provision income of $78.7 million
  • EPS increased by 144% compared to second quarter 2020 on a GAAP basis and 147% on an operating basis; compared to first quarter 2021, EPS decreased by 5% on both a GAAP and operating basis
  • Return on assets of 1.46%, or 1.48% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.64%, or 1.67% on an operating basis
  • Return on common equity of 14.1%
  • Return on tangible common equity of 17.8% on an operating basis
  • A release of provision for credit losses of $13.6 million, which reduced the allowance for loan losses to 0.98% of loans (1.02%, excluding PPP loans) from 1.09% in the first quarter
  • Loan production of $1.3 billion, resulting in core loan growth of 5%, annualized for the quarter, excluding the impact of $411 million in PPP loans being forgiven
  • Core transaction deposits were up $432 million, which represents a 14% annualized growth rate for the quarter
  • Net interest margin of 3.19% was down 3 basis points from the first quarter, due to continued strong deposit growth and an earning asset mix change toward securities
  • Record mortgage closings of $680 million compared to $563 million a year ago; mortgage rate locks of $702 million compared to $802 million a year ago
  • Noninterest income was down $8.9 million on a linked quarter basis, primarily driven by slowing mortgage rate lock activity
  • Noninterest expenses increased by $346,000 compared to the first quarter on a GAAP basis and by $811,000 on an operating basis mostly due to increased professional fees and mortgage commissions
  • Efficiency ratio of 54.5%, or 53.9% on an operating basis
  • Net recoveries of $456,000 or 2 basis points as a percent of average loans, down 1 basis point from the first quarter
  • Nonperforming assets of 0.25% of total assets, down 5 basis points compared to March 31, 2021
  • Total loan deferrals of $18 million or 0.2% of the total loan portfolio compared to $48 million or 0.4% in the first quarter
  • Quarterly common shareholder dividend of $0.19 per share declared during the quarter, an increase of 6% year-over-year
  • Announced the acquisition of FinTrust Capital Partners, LLC, a registered investment adviser, which closed on July 6, 2021; it added $2.1 billion in assets under management and is expected to add $0.02 in EPS accretion in 2022
  • Announced the acquisition of Aquesta Financial Holdings, Inc. with $752 million in assets on May 27; it is expected to close in the fourth quarter of 2021 and add $0.08 in EPS accretion in 2022 with cost savings fully phased in
  • Announced the acquisition of Reliant Bancorp, Inc. with $3.1 billion in assets on July 14; it is expected to close in the first quarter of 2022 and add $0.15 in EPS accretion in 2022 and $0.22 in 2023 with cost savings fully phased in

Conference Call

United will hold a conference call on Wednesday, July 21, 2021, 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 9585551. 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                                    
    2021   2020   Second Quarter   For the Six Months Ended
June 30,
  YTD 2021 -
(in thousands, except per share data)   Second
Quarter
  First
Quarter
  Fourth
Quarter
  Third
Quarter
  Second
Quarter
  2021 - 2020
Change
  2021   2020   2020
Change
INCOME SUMMARY                                    
Interest revenue   $ 145,809       $ 141,542       $ 156,071       $ 141,773       $ 123,605           $ 287,351       $ 260,152        
Interest expense   7,433       9,478       10,676       13,319       14,301           16,911       32,242        
Net interest revenue   138,376       132,064       145,395       128,454       109,304       27   %   270,440       227,910       19   %
(Release of) provision for credit losses   (13,588 )     (12,281 )     2,907       21,793       33,543           (25,869 )     55,734        
Noninterest income   35,841       44,705       41,375       48,682       40,238       (11 )     80,546       66,052       22    
Total revenue   187,805       189,050       183,863       155,343       115,999       62       376,855       238,228       58    
Expenses   95,540       95,194       106,490       95,981       83,980       14       190,734       165,518       15    
Income before income tax expense   92,265       93,856       77,373       59,362       32,019       188       186,121       72,710       156    
Income tax expense   22,005       20,150       17,871       11,755       6,923       218       42,155       15,730       168    
Net income   70,260       73,706       59,502       47,607       25,096       180       143,966       56,980       153    
Merger-related and other charges   1,078       1,543       2,452       3,361       397           2,621       1,205        
Income tax benefit of merger-related and other charges   (246 )     (335 )     (552 )     (519 )     (87 )         (581 )     (269 )      
Net income - operating (1)   $ 71,092        $ 74,914        $ 61,402        $ 50,449        $ 25,406        180       $ 146,006        $ 57,916        152    
                                     
Pre-tax pre-provision income (5)   $ 78,677       $ 81,575       $ 80,280       $ 81,155       $ 65,562       20       $ 160,252       $ 128,444       25    
                                     
PERFORMANCE MEASURES                                    
Per common share:                                    
Diluted net income - GAAP   $ 0.78       $ 0.82       $ 0.66       $ 0.52       $ 0.32       144       $ 1.60       $ 0.71       125    
Diluted net income - operating (1)   0.79       0.83       0.68       0.55       0.32       147       1.62       0.73       122    
Cash dividends declared   0.19       0.19       0.18       0.18       0.18       6       0.38       0.36       6    
Book value   22.81       22.15       21.90       21.45       21.22       7       22.81       21.22       7    
Tangible book value (3)   18.49       17.83       17.56       17.09       16.95       9       18.49       16.95       9    
Key performance ratios:                                    
Return on common equity - GAAP (2)(4)   14.08   %   15.37   %   12.36   %   10.06   %   6.17   %       14.71   %   7.01   %    
Return on common equity - operating (1)(2)(4)   14.25       15.63       12.77       10.69       6.25           14.92       7.13        
Return on tangible common equity - operating (1)(2)(3)(4)   17.81       19.68       16.23       13.52       8.09           18.72       9.20        
Return on assets - GAAP (4)   1.46       1.62       1.30       1.07       0.71           1.54       0.85        
Return on assets - operating (1)(4)   1.48       1.65       1.34       1.14       0.72           1.56       0.86        
Return on assets - pre-tax pre-provision (4)(5)   1.64       1.80       1.77       1.86       1.86           1.72       1.91        
Return on assets - pre-tax pre-provision, excluding
merger- related and other charges (1)(4)(5)
  1.67       1.83       1.82       1.93       1.87           1.75       1.92        
Net interest margin (fully taxable equivalent) (4)   3.19       3.22       3.55       3.27       3.42           3.20       3.73        
Efficiency ratio - GAAP   54.53       53.55       56.73       54.14       55.86           54.04       56.00        
Efficiency ratio - operating (1)   53.92       52.68       55.42       52.24       55.59           53.30       55.59        
Equity to total assets   11.04       10.95       11.29       11.47       11.81           11.04       11.81        
Tangible common equity to tangible assets (3)   8.71       8.57       8.81       8.89       9.12           8.71       9.12        
                                     
ASSET QUALITY                                    
Nonperforming loans   $ 46,123       $ 55,900       $ 61,599       $ 49,084       $ 48,021       (4 )     $ 46,123       $ 48,021       (4 )  
Foreclosed properties   224       596       647       953       477           224       477        
Total nonperforming assets ("NPAs")   46,347       56,496       62,246       50,037       48,498       (4 )     46,347       48,498       (4 )  
Allowance for credit losses - loans   111,616       126,866       137,010       134,256       103,669       8       111,616       103,669       8    
Net charge-offs   (456 )     (305 )     1,515       2,538       6,149           (761 )     14,263       (105 )  
Allowance for credit losses - loans to loans   0.98   %   1.09   %   1.20   %   1.14   %   1.02   %       0.98   %   1.02   %    
Net charge-offs to average loans (4)   (0.02 )     (0.01 )     0.05       0.09       0.25           (0.01 )     0.31        
NPAs to loans and foreclosed properties   0.41       0.48       0.55       0.42       0.48           0.41       0.48        
NPAs to total assets   0.25       0.30       0.35       0.29       0.32           0.25       0.32        
                                     
AVERAGE BALANCES ($ in millions)                                    
Loans   $ 11,617       $ 11,433       $ 11,595       $ 11,644       $ 9,773       19       $ 11,525       $ 9,301       24    
Investment securities   4,631       3,991       3,326       2,750       2,408       92       4,313       2,464       75    
Earning assets   17,540       16,782       16,394       15,715       12,958       35       17,163       12,378       39    
Total assets   18,792       18,023       17,698       17,013       14,173       33       18,410       13,558       36    
Deposits   16,132       15,366       15,057       14,460       12,071       34       15,751       11,493       37    
Shareholders’ equity   2,060       2,025       1,994       1,948       1,686       22       2,042       1,670       22    
Common shares - basic (thousands)   87,289       87,322       87,258       87,129       78,920       11       87,306       79,130       10    
Common shares - diluted (thousands)   87,421       87,466       87,333       87,205       78,924       11       87,443       79,186       10    
                                     
AT PERIOD END ($ in millions)                                    
Loans   $ 11,391       $ 11,679       $ 11,371       $ 11,799       $ 10,133       12       $ 11,391       $ 10,133       12    
Investment securities   4,928       4,332       3,645       3,089       2,432       103       4,928       2,432       103    
Total assets   18,896       18,557       17,794       17,153       15,005       26       18,896       15,005       26    
Deposits   16,328       15,993       15,232       14,603       12,702       29       16,328       12,702       29    
Shareholders’ equity   2,086       2,031       2,008       1,967       1,772       18       2,086       1,772       18    
Common shares outstanding (thousands)   86,665       86,777       86,675       86,611       78,335       11       86,665       78,335       11    

(1) Excludes merger-related and other charges. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.

UNITED COMMUNITY BANKS, INC.                            
Non-GAAP Performance Measures Reconciliation
Selected Financial Information                            
    2021   2020   For the Six Months Ended June 30,
(in thousands, except per share data)   Second
Quarter
  First
Quarter
  Fourth
Quarter
  Third
Quarter
  Second
Quarter
  2021   2020
                             
Expense reconciliation                            
Expenses (GAAP)   $ 95,540       $ 95,194       $ 106,490       $ 95,981       $ 83,980       $ 190,734       $ 165,518    
Merger-related and other charges   (1,078 )     (1,543 )     (2,452 )     (3,361 )     (397 )     (2,621 )     (1,205 )  
Expenses - operating   $ 94,462       $ 93,651       $ 104,038       $ 92,620       $ 83,583       $ 188,113       $ 164,313    
                             
Net income reconciliation                            
Net income (GAAP)   $ 70,260       $ 73,706       $ 59,502       $ 47,607       $ 25,096       $ 143,966       $ 56,980    
Merger-related and other charges   1,078       1,543       2,452       3,361       397       2,621       1,205    
Income tax benefit of merger-related and other charges   (246 )     (335 )     (552 )     (519 )     (87 )     (581 )     (269 )  
Net income - operating   $ 71,092       $ 74,914       $ 61,402       $ 50,449       $ 25,406       $ 146,006       $ 57,916    
                             
Net income to pre-tax pre-provision income reconciliation                            
Net income (GAAP)   $ 70,260       $ 73,706       $ 59,502       $ 47,607       $ 25,096       $ 143,966       $ 56,980    
Income tax expense   22,005       20,150       17,871       11,755       6,923       42,155       15,730    
(Release of) provision for credit losses   (13,588 )     (12,281 )     2,907       21,793       33,543       (25,869 )     55,734    
Pre-tax pre-provision income   $ 78,677       $ 81,575       $ 80,280       $ 81,155       $ 65,562       $ 160,252       $ 128,444    
                             
Diluted income per common share reconciliation                            
Diluted income per common share (GAAP)   $ 0.78       $ 0.82       $ 0.66       $ 0.52       $ 0.32       $ 1.60       $ 0.71    
Merger-related and other charges, net of tax   0.01       0.01       0.02       0.03             0.02       0.02    
Diluted income per common share - operating   $ 0.79       $ 0.83       $ 0.68       $ 0.55       $ 0.32       $ 1.62       $ 0.73    
                             
Book value per common share reconciliation                            
Book value per common share (GAAP)   $ 22.81       $ 22.15       $ 21.90       $ 21.45       $ 21.22       $ 22.81       $ 21.22    
Effect of goodwill and other intangibles   (4.32 )     (4.32 )     (4.34 )     (4.36 )     (4.27 )     (4.32 )     (4.27 )  
Tangible book value per common share   $ 18.49       $ 17.83       $ 17.56       $ 17.09       $ 16.95       $ 18.49       $ 16.95    
                             
Return on tangible common equity reconciliation                            
Return on common equity (GAAP)   14.08   %   15.37   %   12.36   %   10.06   %   6.17   %   14.71   %   7.01   %
Merger-related and other charges, net of tax   0.17       0.26       0.41       0.63       0.08       0.21       0.12    
Return on common equity - operating   14.25       15.63       12.77       10.69       6.25       14.92       7.13    
Effect of goodwill and other intangibles   3.56       4.05       3.46       2.83       1.84       3.80       2.07    
Return on tangible common equity - operating   17.81   %   19.68   %   16.23   %   13.52   %   8.09   %   18.72   %   9.20   %
                             
Return on assets reconciliation                            
Return on assets (GAAP)   1.46   %   1.62   %   1.30   %   1.07   %   0.71   %   1.54   %   0.85   %
Merger-related and other charges, net of tax   0.02       0.03       0.04       0.07       0.01       0.02       0.01    
Return on assets - operating   1.48   %   1.65   %   1.34   %   1.14   %   0.72   %   1.56   %   0.86   %
                             
Return on assets to return on assets- pre-tax pre-provision reconciliation                            
Return on assets (GAAP)   1.46   %   1.62   %   1.30   %   1.07   %   0.71   %   1.54   %   0.85   %
Income tax expense   0.47       0.46       0.40       0.28       0.20       0.46       0.23    
(Release of) provision for credit losses   (0.29 )     (0.28 )     0.07       0.51       0.95       (0.28 )     0.83    
Return on assets - pre-tax, pre-provision   1.64       1.80       1.77       1.86       1.86       1.72       1.91    
Merger-related and other charges   0.03       0.03       0.05       0.07       0.01       0.03       0.01    
Return on assets - pre-tax pre-provision, excluding merger-related and other charges   1.67   %   1.83   %   1.82   %   1.93   %   1.87   %   1.75   %   1.92   %
                             
Efficiency ratio reconciliation                            
Efficiency ratio (GAAP)   54.53   %   53.55   %   56.73   %   54.14   %   55.86   %   54.04   %   56.00   %
Merger-related and other charges   (0.61 )     (0.87 )     (1.31 )     (1.90 )     (0.27 )     (0.74 )     (0.41 )  
Efficiency ratio - operating   53.92   %   52.68   %   55.42   %   52.24   %   55.59   %   53.30   %   55.59   %
                             
Tangible common equity to tangible assets reconciliation                            
Equity to total assets (GAAP)   11.04   %   10.95   %   11.29   %   11.47   %   11.81   %   11.04   %   11.81   %
Effect of goodwill and other intangibles   (1.82 )     (1.86 )     (1.94 )     (2.02 )     (2.05 )     (1.82 )     (2.05 )  
Effect of preferred equity   (0.51 )     (0.52 )     (0.54 )     (0.56 )     (0.64 )     (0.51 )     (0.64 )  
Tangible common equity to tangible assets   8.71   %   8.57   %   8.81   %   8.89   %   9.12   %   8.71   %   9.12   %
                             
Allowance for credit losses - loans to loans reconciliation                            
Allowance for credit losses - loans to loans (GAAP)   0.98   %   1.09   %   1.20   %   1.14   %   1.02   %   0.98   %   1.02   %
Effect of PPP loans   0.04       0.09       0.08       0.14       0.13       0.04       0.13    
Allowance for credit losses - loans to loans, excluding PPP loans   1.02   %   1.18   %   1.28   %   1.28   %   1.15   %   1.02   %   1.15   %
                                                         

 

UNITED COMMUNITY BANKS, INC.                        
Financial Highlights                        
Loan Portfolio Composition at Period-End                        
  2021   2020   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 $ 2,149     $ 2,107     $ 2,090     $ 2,009     $ 1,759     $ 42     $ 390  
Income producing commercial RE 2,550     2,599     2,541     2,493     2,178     (49 )   372  
Commercial & industrial 1,762     1,760     1,853     1,788     1,219     2     543  
Paycheck protection program 472     883     646     1,317     1,095     (411 )   (623 )
Commercial construction 927     960     967     987     946     (33 )   (19 )
Equipment financing 969     913     864     823     779     56     190  
Total commercial 8,829     9,222     8,961     9,417     7,976     (393 )   853  
Residential mortgage 1,473     1,362     1,285     1,270     1,152     111     321  
Home equity lines of credit 661     679     697     707     654     (18 )   7  
Residential construction 289     272     281     257     230     17     59  
Consumer 139     144     147     148     121     (5 )   18  
Total loans $ 11,391     $ 11,679     $ 11,371     $ 11,799     $ 10,133     $ (288 )   $ 1,258  
                           
LOANS BY MARKET (1)                          
North Georgia $ 962     $ 982     $ 955     $ 945     $ 951     $ (20 )   $ 11  
Atlanta 1,938     1,953     1,889     1,853     1,852     (15 )   86  
North Carolina 1,374     1,326     1,281     1,246     1,171     48     203  
Coastal Georgia 605     597     617     614     618     8     (13 )
Gainesville 224     222     224     229     233     2     (9 )
East Tennessee 394     398     415     420     433     (4 )   (39 )
South Carolina 2,107     1,997     1,947     1,870     1,778     110     329  
Florida 1,141     1,160     1,435     1,453         (19 )   1,141  
Commercial Banking Solutions 2,646     3,044     2,608     3,169     3,097     (398 )   (451 )
Total loans $ 11,391     $ 11,679     $ 11,371     $ 11,799     $ 10,133     $ (288 )   $ 1,258  
                                                       

(1) Certain loans previously included in the Florida geographic market were reclassified to Commercial Banking Solutions following Seaside’s core systems conversion in the first quarter of 2021.

UNITED COMMUNITY BANKS, INC.                        
Financial Highlights                        
Credit Quality                        
    2021   2020            
(in thousands)   Second
Quarter
  First
Quarter
  Fourth
Quarter
           
NONACCRUAL LOANS                        
Owner occupied RE   $ 6,128     $ 7,908     $ 8,582              
Income producing RE   13,100     13,740     15,149              
Commercial & industrial   8,563     13,864     16,634              
Commercial construction   1,229     1,984     1,745              
Equipment financing   1,771     2,171     3,405              
Total commercial   30,791     39,667     45,515              
Residential mortgage   13,485     14,050     12,858              
Home equity lines of credit   1,433     1,707     2,487              
Residential construction   307     322     514              
Consumer   107     154     225              
Total   $ 46,123     $ 55,900     $ 61,599              

 

    2021   2020
    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   $ (155 )   (0.03 ) %   $ (240 )   (0.05 ) %   $ (277 )   (0.05 ) %
Income producing RE   (161 )   (0.02 )     991     0.16       (1,718 )   (0.27 )  
Commercial & industrial   60     0.01       (2,753 )   (0.44 )     2,294     0.33    
Commercial construction   (293 )   (0.12 )     22     0.01       (129 )   (0.05 )  
Equipment financing   301     0.13       1,511     0.70       1,595     0.75    
Total commercial   (248 )   (0.01 )     (469 )   (0.02 )     1,765     0.08    
Residential mortgage   (194 )   (0.05 )     92     0.03       (25 )   (0.01 )  
Home equity lines of credit   (112 )   (0.07 )     (73 )   (0.04 )     (151 )   (0.09 )  
Residential construction   (33 )   (0.05 )     (60 )   (0.09 )     (47 )   (0.07 )  
Consumer   131     0.37       205     0.58       (27 )   (0.07 )  
Total   $ (456 )   (0.02 )     $ (305 )   (0.01 )     $ 1,515     0.05    
                         
(1) Annualized.                        

 

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

 

(in thousands, except share and per share data)   June 30,
2021
  December 31,
2020
ASSETS        
Cash and due from banks   $ 121,589     $ 148,896  
Interest-bearing deposits in banks   1,297,808     1,459,723  
Cash and cash equivalents   1,419,397     1,608,619  
Debt securities available-for-sale   4,075,781     3,224,721  
Debt securities held-to-maturity (fair value $861,488 and $437,193)   852,404     420,361  
Loans held for sale at fair value   98,194     105,433  
Loans and leases held for investment   11,390,746     11,370,815  
Less allowance for credit losses - loans and leases   (111,616 )   (137,010 )
Loans and leases, net   11,279,130     11,233,805  
Premises and equipment, net   224,980     218,489  
Bank owned life insurance   203,449     201,969  
Accrued interest receivable   43,521     47,672  
Net deferred tax asset   32,918     38,411  
Derivative financial instruments   58,489     86,666  
Goodwill and other intangible assets, net   379,909     381,823  
Other assets   227,551     226,405  
Total assets   $ 18,895,723     $ 17,794,374  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Deposits:        
Noninterest-bearing demand   $ 6,260,756     $ 5,390,291  
NOW and interest-bearing demand   3,518,686     3,346,490  
Money market   3,766,645     3,550,335  
Savings   1,097,663     950,854  
Time   1,500,049     1,704,290  
Brokered   183,968     290,098  
Total deposits   16,327,767     15,232,358  
Long-term debt   261,919     326,956  
Derivative financial instruments   27,089     29,003  
Accrued expenses and other liabilities   192,662     198,527  
Total liabilities   16,809,437     15,786,844  
Shareholders' equity:        
Preferred stock; $1 par value; 10,000,000 shares authorized;
Series I, $25,000 per share liquidation preference; 4,000 shares issued and outstanding
  96,422     96,422  
Common stock, $1 par value; 200,000,000 shares authorized;
86,664,894 and 86,675,279 shares issued and outstanding
  86,665     86,675  
Common stock issuable; 571,580 and 600,834 shares   10,650     10,855  
Capital surplus   1,636,875     1,638,999  
Retained earnings   244,006     136,869  
Accumulated other comprehensive income   11,668     37,710  
Total shareholders' equity   2,086,286     2,007,530  
Total liabilities and shareholders' equity   $ 18,895,723     $ 17,794,374  
                 

 

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)   2021   2020   2021   2020
Interest revenue:                
Loans, including fees   $ 128,058     $ 107,862     $ 253,784     $ 225,925  
Investment securities, including tax exempt of $2,255 and $1,570 and $4,405 and $3,093, respectively   17,542     15,615     32,990     33,009  
Deposits in banks and short-term investments   209     128     577     1,218  
Total interest revenue   145,809     123,605     287,351     260,152  
                 
Interest expense:                
Deposits:                
NOW and interest-bearing demand   1,382     1,628     2,868     4,606  
Money market   1,355     3,421     3,159     7,952  
Savings   53     39     102     74  
Time   830     6,183     2,710     13,714  
Deposits   3,620     11,271     8,839     26,346  
Short-term borrowings               1  
Federal Home Loan Bank advances           2     1  
Long-term debt   3,813     3,030     8,070     5,894  
Total interest expense   7,433     14,301     16,911     32,242  
Net interest revenue   138,376     109,304     270,440     227,910  
(Release of) provision for credit losses   (13,588 )   33,543     (25,869 )   55,734  
Net interest revenue after provision for credit losses   151,964     75,761     296,309     172,176  
                 
Noninterest income:                
Service charges and fees   8,335     6,995     15,905     15,633  
Mortgage loan gains and other related fees   11,136     23,659     33,708     31,969  
Wealth management fees   3,822     1,324     7,327     2,964  
Gains from sales of other loans, net   4,123     1,040     5,153     2,714  
Securities gains, net   41         41      
Other   8,384     7,220     18,412     12,772  
Total noninterest income   35,841     40,238     80,546     66,052  
Total revenue   187,805     115,999     376,855     238,228  
                 
Noninterest expenses:                
Salaries and employee benefits   59,414     51,811     119,999     103,169  
Communications and equipment   7,408     6,556     14,611     12,502  
Occupancy   7,078     5,945     14,034     11,659  
Advertising and public relations   1,493     2,260     2,692     3,534  
Postage, printing and supplies   1,618     1,613     3,440     3,283  
Professional fees   4,928     4,823     9,162     8,920  
Lending and loan servicing expense   3,181     3,189     6,058     5,482  
Outside services - electronic banking   2,285     1,796     4,503     3,628  
FDIC assessments and other regulatory charges   1,901     1,558     3,797     3,042  
Amortization of intangibles   929     987     1,914     2,027  
Merger-related and other charges   1,078     397     2,621     1,205  
Other   4,227     3,045     7,903     7,067  
Total noninterest expenses   95,540     83,980     190,734     165,518  
Net income before income taxes   92,265     32,019     186,121     72,710  
Income tax expense   22,005     6,923     42,155     15,730  
Net income   70,260     25,096     143,966     56,980  
Preferred stock dividends   1,719         3,438      
Undistributed earnings allocated to participating securities   432     183     894     426  
Net income available to common shareholders   $ 68,109     $ 24,913     $ 139,634     $ 56,554  
                 
Net income per common share:                
Basic   $ 0.78     $ 0.32     $ 1.60     $ 0.71  
Diluted   0.78     0.32     1.60     0.71  
Weighted average common shares outstanding:                
Basic   87,289     78,920     87,306     79,130  
Diluted   87,421     78,924     87,443     79,186  

 

Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,

 

    2021   2020
(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)   $ 11,616,802     $ 127,458     4.40   %   $ 9,772,703     $ 107,398     4.42 %
Taxable securities (3)   4,242,297     15,287     1.44       2,229,371     14,045     2.52  
Tax-exempt securities (FTE) (1)(3)   388,609     3,030     3.12       178,903     2,110     4.72  
Federal funds sold and other interest-earning assets   1,292,026     1,055     0.33       776,776     857     0.44  
Total interest-earning assets (FTE)   17,539,734     146,830     3.36       12,957,753     124,410     3.86  
                         
Noninterest-earning assets:                        
Allowance for credit losses   (128,073 )           (89,992 )        
Cash and due from banks   152,443             138,842          
Premises and equipment   225,017             217,096          
Other assets (3)   1,002,634             949,201          
Total assets   $ 18,791,755             $ 14,172,900          
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 3,428,009     1,382     0.16       $ 2,444,895     1,628     0.27  
Money market   3,814,960     1,355     0.14       2,541,805     3,421     0.54  
Savings   1,080,267     53     0.02       788,247     39     0.02  
Time   1,548,487     899     0.23       1,805,671     6,058     1.35  
Brokered time deposits   64,332     (69 )   (0.43 )     130,556     125     0.39  
Total interest-bearing deposits   9,936,055     3,620     0.15       7,711,174     11,271     0.59  
Federal funds purchased and other borrowings   111               1          
Federal Home Loan Bank advances                          
Long-term debt   285,389     3,813     5.36       228,096     3,030     5.34  
Total borrowed funds   285,500     3,813     5.36       228,097     3,030     5.34  
Total interest-bearing liabilities   10,221,555     7,433     0.29       7,939,271     14,301     0.72  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits   6,196,045             4,360,095          
Other liabilities   314,130             187,375          
Total liabilities   16,731,730             12,486,741          
Shareholders' equity   2,060,025             1,686,159          
Total liabilities and shareholders' equity   $ 18,791,755             $ 14,172,900          
                         
Net interest revenue (FTE)       $ 139,397             $ 110,109      
Net interest-rate spread (FTE)           3.07   %           3.14 %
Net interest margin (FTE) (4)           3.19   %           3.42 %
                               

(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 $28.6 million and $66.3 million in 2021 and 2020, respectively, 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,

 

    2021   2020
(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)   $ 11,525,363     $ 252,580     4.42 %   $ 9,300,792     $ 225,194     4.87 %
Taxable securities (3)   3,932,545     28,585     1.45     2,293,502     29,916     2.61  
Tax-exempt securities (FTE) (1)(3)   380,370     5,918     3.11     170,578     4,155     4.87  
Federal funds sold and other interest-earning assets   1,324,776     2,277     0.34     612,776     2,489     0.81  
Total interest-earning assets (FTE)   17,163,054     289,360     3.40     12,377,648     261,754     4.25  
                         
Non-interest-earning assets:                        
Allowance for loan losses   (135,845 )           (79,885 )        
Cash and due from banks   146,401             133,548          
Premises and equipment   223,224             218,170          
Other assets (3)   1,012,896             908,828          
Total assets   $ 18,409,730             $ 13,558,309          
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 3,379,794     2,868     0.17     $ 2,428,815     4,606     0.38  
Money market   3,774,201     3,159     0.17     2,441,264     7,952     0.66  
Savings   1,035,176     102     0.02     750,179     74     0.02  
Time   1,595,196     2,487     0.31     1,823,612     13,308     1.47  
Brokered time deposits   69,765     223     0.64     105,689     406     0.77  
Total interest-bearing deposits   9,854,132     8,839     0.18     7,549,559     26,346     0.70  
Federal funds purchased and other borrowings   62             199     1     1.01  
Federal Home Loan Bank advances   1,657     2     0.24     83     1     2.42  
Long-term debt   301,193     8,070     5.40     220,429     5,894     5.38  
Total borrowed funds   302,912     8,072     5.37     220,711     5,896     5.37  
Total interest-bearing liabilities   10,157,044     16,911     0.34     7,770,270     32,242     0.83  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits   5,896,882             3,943,740          
Other liabilities   313,374             174,781          
Total liabilities   16,367,300             11,888,791          
Shareholders' equity   2,042,430             1,669,518          
Total liabilities and shareholders' equity   $ 18,409,730             $ 13,558,309          
                         
Net interest revenue (FTE)       $ 272,449             $ 229,512      
Net interest-rate spread (FTE)           3.06 %           3.42 %
Net interest margin (FTE) (4)           3.20 %           3.73 %
                         

(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 $43.4 million and $59.6 million in 2021 and 2020, respectively, 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. (NASDAQGS: UCBI) provides a full range of banking, wealth management and mortgage services for relationship-oriented consumers and business owners. The company, known as “The Bank That SERVICE Built,” has been recognized nationally for delivering award-winning service. United has $18.9 billion in assets and 162 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee along with a national SBA lending franchise and a national equipment lending subsidiary. In 2021, J.D. Power ranked United highest in customer satisfaction with retail banking in the Southeast, marking seven out of the last eight years United earned the coveted award. United was also named one of the "Best Banks to Work For" by American Banker in 2020 for the fourth year in a row based on employee satisfaction. 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 2021 list of the 100 Best Banks in America for the eighth consecutive year. United also received five Greenwich Excellence Awards in 2020 for excellence in Small Business Banking, including a national award for Overall Satisfaction. Additional information about United can be found at www.ucbi.com.

Non-GAAP Financial Measures

This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “pre-tax, pre-provision income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “return on assets - pre-tax, pre-provision, excluding merger-related and other charges,” “return on assets - pre-tax, pre-provision,” “operating efficiency ratio,” and “tangible common equity to tangible assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

For more information:

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

 

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