United Community Banks, Inc. reports Third Quarter Results

Press Release Details

Oct 22, 2019

United Community Banks, Inc. reports Third Quarter Results

EPS of $0.60 and ROA of 1.51%; Operating ROA reaches 1.58%

GREENVILLE, S.C., Oct. 22, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported strong third quarter financial results, including solid year-over-year loan and deposit growth, record operating efficiency and strong asset quality. Diluted earnings per share were $0.60, an increase of $0.06 or 11% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.63, up 15% over last year. United’s return on assets (“ROA”) was 1.51% and its return on common equity was 12.2% for the quarter. On an operating basis, United’s ROA was 1.58% and its return on tangible common equity was 16.4%.

In the third quarter, loans grew at a 3% annualized rate, or at 4% annualized excluding the planned runoff of the discontinued indirect auto portfolio. With this loan growth and continued balance sheet remixing opportunities, United maintained its net interest margin during the quarter, despite declining interest rates. Core transaction deposits grew by $105 million, or 6% annualized, and total customer deposits increased by $197 million during the quarter. Finally, United’s combination of revenue growth and expense management resulted in a 55.64% efficiency ratio, or 53.90% on an operating basis, which represented a new Company best for the second consecutive quarter.

“We are pleased to report such a successful quarter, which is a testament to our team and their tireless dedication to providing outstanding customer service and to executing on our plans to deliver top quartile results,” said Lynn Harton, Chairman and CEO of United. “I am also tremendously proud that United was named one of the "Best Banks to Work For" by American Banker for the third year in a row.  This honor is achieved through the focus and energy of our bankers to build a company where great people can find fulfillment in helping others reach their financial goals."

Third Quarter 2019 Financial Highlights:

  • EPS growth of 11% over last year, or 15% on an operating basis
  • Return on assets of 1.51%, or 1.58% excluding merger-related and other charges
  • Return on common equity of 12.2%
  • Return on tangible common equity of 16.4% excluding merger-related and other charges
  • Loan production of $896 million compared to $778 million in Q3 2018
  • Loan growth, excluding planned runoff of the indirect portfolio of 4% for the quarter and 7% year-to-date on an annualized basis, excluding the acquisition of First Madison on May 1, 2019
  • Loan growth of $89 million, excluding planned run off of the indirect portfolio, was more than funded by core transaction deposit growth of $105 million
  • Mortgage locks of $508 million, a company high, compared to $298 million a year ago
  • Stable net interest margin of 4.12% was flat compared to the second quarter and up 17 basis points from a year ago
  • Efficiency ratio of 55.64%, or 53.90%, excluding merger-related and other charges
  • Net charge-offs of 12 basis points, up one basis point from last quarter and remaining at historically low levels
  • Nonperforming assets of 0.24% of total assets, compared with 0.21% at June 30, 2019 and 0.19% at September 30, 2018
  • Repurchased approximately 195,000 shares at an average price of $26.51 in the quarter

Conference Call
United will hold a conference call, Wednesday, October 23, 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 8899475. 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                                    
    2019   2018   Third Quarter 2019 - 2018 Change   For the Nine Months Ended September 30,   YTD 2019 - 2018 Change
(in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter     2019   2018  
INCOME SUMMARY                                    
Interest revenue   $ 140,615     $ 139,156     $ 136,516     $ 133,854     $ 128,721         $ 416,287     $ 366,226      
Interest expense   21,277     21,372     20,882     18,975     16,611         63,531     42,355      
Net interest revenue   119,338     117,784     115,634     114,879     112,110     6 %   352,756     323,871     9 %
Provision for credit losses   3,100     3,250     3,300     2,100     1,800     72     9,650     7,400     30  
Noninterest income   29,031     24,531     20,968     23,045     24,180     20     74,530     69,916     7  
Total revenue   145,269     139,065     133,302     135,824     134,490     8     417,636     386,387     8  
Expenses   82,924     81,813     76,084     78,242     77,718     7     240,821     228,043     6  
Income before income tax expense   62,345     57,252     57,218     57,582     56,772     10     176,815     158,344     12  
Income tax expense   13,983     13,167     12,956     12,445     13,090     7     40,106     37,370     7  
Net income   48,362     44,085     44,262     45,137     43,682     11     136,709     120,974     13  
Merger-related and other charges   2,605     4,087     739     1,234     592         7,431     6,111      
Income tax benefit of merger-related and other charges   (600 )   (940 )   (172 )   (604 )   (141 )       (1,712 )   (890 )    
Net income - operating (1)   $ 50,367     $ 47,232     $ 44,829     $ 45,767     $ 44,133     14     $ 142,428     $ 126,195     13  
                                     
PERFORMANCE MEASURES                                    
Per common share:                                    
Diluted net income - GAAP   $ 0.60     $ 0.55     $ 0.55     $ 0.56     $ 0.54     11     $ 1.70     $ 1.51     13  
Diluted net income - operating (1)   0.63     0.59     0.56     0.57     0.55     15     1.77     1.57     13  
Cash dividends declared   0.17     0.17     0.16     0.16     0.15     13     0.50     0.42     19  
Book value   20.16     19.65     18.93     18.24     17.56     15     20.16     17.56     15  
Tangible book value (3)   15.90     15.38     14.93     14.24     13.54     17     15.90     13.54     17  
Key performance ratios:                                    
Return on common equity - GAAP (2)(4)   12.16 %   11.45 %   11.85 %   12.08 %   11.96 %       11.83 %   11.43 %    
Return on common equity - operating (1)(2)(4)   12.67     12.27     12.00     12.25     12.09         12.32     11.93      
Return on tangible common equity - operating (1)(2)(3)(4)   16.38     15.88     15.46     15.88     15.81         15.92     15.62      
Return on assets - GAAP (4)   1.51     1.40     1.44     1.43     1.41         1.45     1.32      
Return on assets - operating (1)(4)   1.58     1.50     1.45     1.45     1.42         1.51     1.38      
Net interest margin (fully taxable equivalent) (4)   4.12     4.12     4.10     3.97     3.95         4.11     3.88      
Efficiency ratio - GAAP   55.64     57.28     55.32     56.73     56.82         56.09     57.52      
Efficiency ratio - operating (1)   53.90     54.42     54.78     55.83     56.39         54.36     55.98      
Equity to total assets   12.53     12.25     12.06     11.60     11.30         12.53     11.30      
Tangible common equity to tangible assets (3)   10.16     9.86     9.76     9.29     8.95         10.16     8.95      
                                     
ASSET QUALITY                                    
Nonperforming loans   $ 30,832     $ 26,597     $ 23,624     $ 23,778     $ 22,530     37     $ 30,832     $ 22,530     37  
Foreclosed properties   102     75     1,127     1,305     1,336     (92 )   102     1,336     (92 )
Total nonperforming assets ("NPAs")   30,934     26,672     24,751     25,083     23,866     30     30,934     23,866     30  
Allowance for loan losses   62,514     62,204     61,642     61,203     60,940     3     62,514     60,940     3  
Net charge-offs   2,723     2,438     3,130     1,787     1,466     86     8,291     4,326     92  
Allowance for loan losses to loans   0.70 %   0.70 %   0.73 %   0.73 %   0.74 %       0.70 %   0.74 %    
Net charge-offs to average loans (4)   0.12     0.11     0.15     0.09     0.07         0.13     0.07      
NPAs to loans and foreclosed properties   0.35     0.30     0.29     0.30     0.29         0.35     0.29      
NPAs to total assets   0.24     0.21     0.20     0.20     0.19         0.24     0.19      
                                     
AVERAGE BALANCES ($ in millions)                                    
Loans   $ 8,836     $ 8,670     $ 8,430     $ 8,306     $ 8,200     8     $ 8,647     $ 8,124     6  
Investment securities   2,550     2,674     2,883     3,004     2,916     (13 )   2,701     2,863     (6 )
Earning assets   11,568     11,534     11,498     11,534     11,320     2     11,534     11,197     3  
Total assets   12,681     12,608     12,509     12,505     12,302     3     12,600     12,209     3  
Deposits   10,531     10,493     10,361     10,306     9,950     6     10,462     9,896     6  
Shareholders’ equity   1,588     1,531     1,478     1,420     1,394     14     1,533     1,367     12  
Common shares - basic (thousands)   79,663     79,673     79,807     79,884     79,806         79,714     79,588      
Common shares - diluted (thousands)   79,667     79,678     79,813     79,890     79,818         79,718     79,598      
                                     
AT PERIOD END ($ in millions)                                    
Loans   $ 8,903     $ 8,838     $ 8,493     $ 8,383     $ 8,226     8     $ 8,903     $ 8,226     8  
Investment securities   2,515     2,620     2,720     2,903     2,873     (12 )   2,515     2,873     (12 )
Total assets   12,809     12,779     12,506     12,573     12,405     3     12,809     12,405     3  
Deposits   10,757     10,591     10,534     10,535     10,229     5     10,757     10,229     5  
Shareholders’ equity   1,605     1,566     1,508     1,458     1,402     14     1,605     1,402     14  
Common shares outstanding (thousands)   78,974     79,075     79,035     79,234     79,202         78,974     79,202      
                                                       

(1) Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. (2) Net income divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized.

UNITED COMMUNITY BANKS, INC.                            
Non-GAAP Performance Measures Reconciliation
Selected Financial Information                            
    2019   2018   For the Nine Months Ended September 30,
(in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   2019   2018
                             
Expense reconciliation                            
Expenses (GAAP)   $ 82,924     $ 81,813     $ 76,084     $ 78,242     $ 77,718     $ 240,821     $ 228,043  
Merger-related and other charges   (2,605 )   (4,087 )   (739 )   (1,234 )   (592 )   (7,431 )   (6,111 )
Expenses - operating   $ 80,319     $ 77,726     $ 75,345     $ 77,008     $ 77,126     $ 233,390     $ 221,932  
                             
Net income reconciliation                            
Net income (GAAP)   $ 48,362     $ 44,085     $ 44,262     $ 45,137     $ 43,682     $ 136,709     $ 120,974  
Merger-related and other charges   2,605     4,087     739     1,234     592     7,431     6,111  
Income tax benefit of merger-related and other charges   (600 )   (940 )   (172 )   (604 )   (141 )   (1,712 )   (890 )
Net income - operating   $ 50,367     $ 47,232     $ 44,829     $ 45,767     $ 44,133     $ 142,428     $ 126,195  
                             
Diluted income per common share reconciliation                            
Diluted income per common share (GAAP)   $ 0.60     $ 0.55     $ 0.55     $ 0.56     $ 0.54     $ 1.70     $ 1.51  
Merger-related and other charges   0.03     0.04     0.01     0.01     0.01     0.07     0.06  
Diluted income per common share - operating   $ 0.63     $ 0.59     $ 0.56     $ 0.57     $ 0.55     $ 1.77     $ 1.57  
                             
Book value per common share reconciliation                            
Book value per common share (GAAP)   $ 20.16     $ 19.65     $ 18.93     $ 18.24     $ 17.56     $ 20.16     $ 17.56  
Effect of goodwill and other intangibles   (4.26 )   (4.27 )   (4.00 )   (4.00 )   (4.02 )   (4.26 )   (4.02 )
Tangible book value per common share   $ 15.90     $ 15.38     $ 14.93     $ 14.24     $ 13.54     $ 15.90     $ 13.54  
                             
Return on tangible common equity reconciliation                            
Return on common equity (GAAP)   12.16 %   11.45 %   11.85 %   12.08 %   11.96 %   11.83 %   11.43 %
Merger-related and other charges   0.51     0.82     0.15     0.17     0.13     0.49     0.50  
Return on common equity - operating   12.67     12.27     12.00     12.25     12.09     12.32     11.93  
Effect of goodwill and other intangibles   3.71     3.61     3.46     3.63     3.72     3.60     3.69  
Return on tangible common equity - operating   16.38 %   15.88 %   15.46 %   15.88 %   15.81 %   15.92 %   15.62 %
                             
Return on assets reconciliation                            
Return on assets (GAAP)   1.51 %   1.40 %   1.44 %   1.43 %   1.41 %   1.45 %   1.32 %
Merger-related and other charges   0.07     0.10     0.01     0.02     0.01     0.06     0.06  
Return on assets - operating   1.58 %   1.50 %   1.45 %   1.45 %   1.42 %   1.51 %   1.38 %
                             
Efficiency ratio reconciliation                            
Efficiency ratio (GAAP)   55.64 %   57.28 %   55.32 %   56.73 %   56.82 %   56.09 %   57.52 %
Merger-related and other charges   (1.74 )   (2.86 )   (0.54 )   (0.90 )   (0.43 )   (1.73 )   (1.54 )
Efficiency ratio - operating   53.90 %   54.42 %   54.78 %   55.83 %   56.39 %   54.36 %   55.98 %
                             
Tangible common equity to tangible assets reconciliation                            
Equity to total assets (GAAP)   12.53 %   12.25 %   12.06 %   11.60 %   11.30 %   12.53 %   11.30 %
Effect of goodwill and other intangibles   (2.37 )   (2.39 )   (2.30 )   (2.31 )   (2.35 )   (2.37 )   (2.35 )
Tangible common equity to tangible assets   10.16 %   9.86 %   9.76 %   9.29 %   8.95 %   10.16 %   8.95 %
                                           


UNITED COMMUNITY BANKS, INC.                        
Financial Highlights                        
Loan Portfolio Composition at Period-End                        
                           
  2019   2018   Linked Quarter Change   Year over Year Change
(in millions) Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter    
LOANS BY CATEGORY                          
Owner occupied commercial RE $ 1,692     $ 1,658     $ 1,620     $ 1,648     $ 1,673     $ 34     $ 19  
Income producing commercial RE 1,934     1,939     1,867     1,812     1,788     (5 )   146  
Commercial & industrial 1,271     1,299     1,284     1,278     1,194     (28 )   77  
Commercial construction 1,001     983     866     796     761     18     240  
Equipment financing 729     674     606     565     509     55     220  
Total commercial 6,627     6,553     6,243     6,099     5,925     74     702  
Residential mortgage 1,121     1,108     1,064     1,049     1,035     13     86  
Home equity lines of credit 669     675     684     694     702     (6 )   (33 )
Residential construction 229     219     200     211     198     10     31  
Consumer 257     283     302     330     366     (26 )   (109 )
Total loans $ 8,903     $ 8,838     $ 8,493     $ 8,383     $ 8,226     $ 65     $ 677  
                           
LOANS BY MARKET                          
North Georgia $ 1,002     $ 1,002     $ 970     $ 981     $ 992         10  
Atlanta 1,740     1,745     1,524     1,507     1,493     (5 )   247  
North Carolina 1,117     1,084     1,074     1,072     1,078     33     39  
Coastal Georgia 611     604     603     588     610     7     1  
Gainesville 246     244     243     247     235     2     11  
East Tennessee 435     446     458     477     460     (11 )   (25 )
South Carolina 1,705     1,674     1,674     1,645     1,586     31     119  
Commercial Banking Solutions 1,916     1,884     1,766     1,658     1,530     32     386  
Indirect auto 131     155     181     208     242     (24 )   (111 )
Total loans $ 8,903     $ 8,838     $ 8,493     $ 8,383     $ 8,226     $ 65     $ 677  
                                                       


UNITED COMMUNITY BANKS, INC.              
Financial Highlights              
Credit Quality              
    2019  
(in thousands)   Third Quarter   Second Quarter   First Quarter  
NONACCRUAL LOANS              
Owner occupied RE   $ 8,430     $ 8,177     $ 7,030    
Income producing RE   2,030     1,331     1,276    
Commercial & industrial   2,625     2,366     1,666    
Commercial construction   1,894     1,650     473    
Equipment financing   1,974     2,047     1,813    
Total commercial   16,953     15,571     12,258    
Residential mortgage   9,475     8,012     8,281    
Home equity lines of credit   3,065     1,978     2,233    
Residential construction   597     494     347    
Consumer   742     542     505    
Total   $ 30,832     $ 26,597     $ 23,624    
               
NONACCRUAL LOANS ACTIVITY              
Beginning Balance   $ 26,597     $ 23,624     $ 23,778    
Loans placed on non-accrual   8,722     8,316     6,759    
Payments received   (2,107 )   (3,212 )   (3,520 )  
Loan charge-offs   (2,278 )   (2,131 )   (2,714 )  
Foreclosures   (102 )       (679 )  
Ending Balance   $ 30,832     $ 26,597     $ 23,624    


    2019
    Third Quarter   Second Quarter   First 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   $ (39 )   (0.01 )%   $ (58 )   (0.01 )%   $ (64 )   (0.02 )%
Income producing RE   431     0.09     241     0.05     177     0.04  
Commercial & industrial   691     0.21     1,141     0.35     1,356     0.43  
Commercial construction   (247 )   (0.10 )   (162 )   (0.07 )   (325 )   (0.16 )
Equipment financing   1,174     0.67     890     0.56     1,281     0.89  
Total commercial   2,010     0.12     2,052     0.13     2,425     0.16  
Residential mortgage   158     0.06     (125 )   (0.05 )   13      
Home equity lines of credit   83     0.05     (111 )   (0.07 )   215     0.13  
Residential construction   (5 )   (0.01 )   199     0.38     (22 )   (0.04 )
Consumer   477     0.70     423     0.58     499     0.64  
Total   $ 2,723     0.12     $ 2,438     0.11     $ 3,130     0.15  
                         
(1)  Annualized.                        
                         


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)   September 30, 2019   December 31, 2018
ASSETS        
Cash and due from banks   $ 108,389     $ 126,083  
Interest-bearing deposits in banks (includes restricted cash of $5,326 and $6,702)   252,670     201,182  
Cash and cash equivalents   361,059     327,265  
Debt securities available for sale   2,272,046     2,628,467  
Debt securities held to maturity (fair value $248,546 and $268,803)   243,028     274,407  
Loans held for sale at fair value   54,625     18,935  
Loans and leases, net of unearned income   8,903,266     8,383,401  
Less allowance for loan and lease losses   (62,514 )   (61,203 )
Loans and leases, net   8,840,752     8,322,198  
Premises and equipment, net   215,435     206,140  
Bank owned life insurance   201,955     192,616  
Accrued interest receivable   33,233     35,413  
Net deferred tax asset   34,591     64,224  
Derivative financial instruments   43,755     24,705  
Goodwill and other intangible assets   343,340     324,072  
Other assets   165,667     154,750  
Total assets   $ 12,809,486     $ 12,573,192  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Deposits:        
Noninterest-bearing demand   $ 3,527,815     $ 3,210,220  
NOW and interest-bearing demand   2,210,352     2,369,631  
Money market   2,206,496     2,002,670  
Savings   699,131     669,886  
Time   1,890,431     1,598,391  
Brokered   222,292     683,715  
Total deposits   10,756,517     10,534,513  
Federal Home Loan Bank advances   40,000     160,000  
Long-term debt   240,245     267,189  
Derivative financial instruments   16,244     26,433  
Accrued expenses and other liabilities   151,055     127,503  
Total liabilities   11,204,061     11,115,638  
Shareholders' equity:        
Common stock, $1 par value; 150,000,000 shares authorized; 78,974,199 and 79,234,077  shares issued and outstanding   78,974     79,234  
Common stock issuable; 660,581 and 674,499 shares   11,327     10,744  
Capital surplus   1,495,267     1,499,584  
Retained earnings (accumulated deficit)   5,594     (90,419 )
Accumulated other comprehensive income (loss)   14,263     (41,589 )
Total shareholders' equity   1,605,425     1,457,554  
Total liabilities and shareholders' equity   $ 12,809,486     $ 12,573,192  
                 


UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
    Three Months Ended September 30,   Nine Months Ended September 30,
(in thousands, except per share data)   2019   2018   2019   2018
Interest revenue:                
Loans, including fees   $ 122,645     $ 108,335     $ 357,575     $ 308,296  
Investment securities, including tax exempt of $1,118 and $1,052, and $3,409 and $3,049   17,744     19,899     57,638     56,448  
Deposits in banks and short-term investments   226     487     1,074     1,482  
Total interest revenue   140,615     128,721     416,287     366,226  
                 
Interest expense:                
Deposits:                
NOW and interest-bearing demand   3,214     1,985     10,283     4,483  
Money market   5,126     3,177     14,100     7,853  
Savings   41     33     115     117  
Time   8,732     5,746     25,687     12,900  
Total deposit interest expense   17,113     10,941     50,185     25,353  
Short-term borrowings   429     274     838     772  
Federal Home Loan Bank advances   521     1,791     2,695     5,551  
Long-term debt   3,214     3,605     9,813     10,679  
Total interest expense   21,277     16,611     63,531     42,355  
Net interest revenue   119,338     112,110     352,756     323,871  
Provision for credit losses   3,100     1,800     9,650     7,400  
Net interest revenue after provision for credit losses   116,238     110,310     343,106     316,471  
                 
Noninterest income:                
Service charges and fees   9,916     9,112     27,429     26,831  
Mortgage loan and other related fees   8,658     5,262     17,750     15,928  
Brokerage fees   1,699     1,525     4,624     3,598  
Gains from sales of SBA/USDA loans   1,639     2,605     4,412     6,784  
Securities gains (losses), net       2     (118 )   (1,302 )
Other   7,119     5,674     20,433     18,077  
Total noninterest income   29,031     24,180     74,530     69,916  
Total revenue   145,269     134,490     417,636     386,387  
                 
Noninterest expenses:                
Salaries and employee benefits   50,501     47,146     146,161     135,384  
Communications and equipment   6,223     5,590     18,233     15,071  
Occupancy   5,921     5,779     17,424     16,939  
Advertising and public relations   1,374     1,442     4,256     4,341  
Postage, printing and supplies   1,618     1,574     4,733     4,896  
Professional fees   4,715     3,927     11,930     11,435  
FDIC assessments and other regulatory charges   314     2,228     3,571     6,677  
Amortization of intangibles   1,210     1,681     3,845     5,426  
Merger-related and other charges   2,541     115     6,981     4,449  
Other   8,507     8,236     23,687     23,425  
Total noninterest expenses   82,924     77,718     240,821     228,043  
Net income before income taxes   62,345     56,772     176,815     158,344  
Income tax expense   13,983     13,090     40,106     37,370  
Net income   $ 48,362     $ 43,682     $ 136,709     $ 120,974  
                 
Net income available to common shareholders   $ 48,011     $ 43,381     $ 135,727     $ 120,124  
                 
Net income per common share:                
Basic   $ 0.60     $ 0.54     $ 1.70     $ 1.51  
Diluted   0.60     0.54     1.70     1.51  
Weighted average common shares outstanding:                
Basic   79,663     79,806     79,714     79,588  
Diluted   79,667     79,818     79,718     79,598  
                         


Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
         
    2019   2018
(dollars in thousands, fully taxable equivalent (FTE))   Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate
Assets:                        
Interest-earning assets:                        
Loans, net of unearned income (FTE) (1)(2)   $ 8,835,585     $ 122,526     5.50 %   $ 8,199,856     $ 108,197     5.23 %
Taxable securities (3)   2,379,927     16,626     2.79     2,763,461     18,847     2.73  
Tax-exempt securities (FTE) (1)(3)   170,027     1,502     3.53     152,939     1,417     3.71  
Federal funds sold and other interest-earning assets   182,935     616     1.35     203,707     751     1.47  
Total interest-earning assets (FTE)   11,568,474     141,270     4.85     11,319,963     129,212     4.53  
                         
Noninterest-earning assets:                        
Allowance for loan losses   (63,474 )           (62,322 )        
Cash and due from banks   116,922             123,290          
Premises and equipment   221,930             216,775          
Other assets (3)   836,951             703,915          
Total assets   $ 12,680,803             $ 12,301,621          
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 2,123,910     3,214     0.60     $ 1,963,312     1,985     0.40  
Money market   2,277,162     5,126     0.89     2,078,116     3,177     0.61  
Savings   695,297     41     0.02     680,640     33     0.02  
Time   1,879,801     8,053     1.70     1,545,020     3,351     0.86  
Brokered time deposits   102,078     679     2.64     434,182     2,395     2.19  
Total interest-bearing deposits   7,078,248     17,113     0.96     6,701,270     10,941     0.65  
Federal funds purchased and other borrowings   73,733     429     2.31     50,767     274     2.14  
Federal Home Loan Bank advances   88,261     521     2.34     331,413     1,791     2.14  
Long-term debt   243,935     3,214     5.23     296,366     3,605     4.83  
Total borrowed funds   405,929     4,164     4.07     678,546     5,670     3.32  
Total interest-bearing liabilities   7,484,177     21,277     1.13     7,379,816     16,611     0.89  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits   3,453,174             3,249,218          
Other liabilities   155,107             278,764          
Total liabilities   11,092,458             10,907,798          
Shareholders' equity   1,588,345             1,393,823          
Total liabilities and shareholders' equity   $ 12,680,803             $ 12,301,621          
                         
Net interest revenue (FTE)       $ 119,993             $ 112,601      
Net interest-rate spread (FTE)           3.72 %           3.64 %
Net interest margin (FTE) (4)           4.12 %           3.95 %
                             

(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 $35.1 million in 2019 and unrealized losses of $49.9 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.

Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
         
    2019   2018
(dollars in thousands, fully taxable equivalent (FTE))   Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate
Assets:                        
Interest-earning assets:                        
Loans, net of unearned income (FTE) (1)(2)   $ 8,646,622     $ 357,541     5.53 %   $ 8,124,269     $ 307,981     5.07 %
Taxable securities (3)   2,532,070     54,229     2.86     2,712,900     53,399     2.62  
Tax-exempt securities (FTE) (1)(3)   168,787     4,579     3.62     150,014     4,106     3.65  
Federal funds sold and other interest-earning assets   186,402     1,913     1.37     209,836     2,123     1.35  
Total interest-earning assets (FTE)   11,533,881     418,262     4.85     11,197,019     367,609     4.39  
                         
Non-interest-earning assets:                        
Allowance for loan losses   (62,664 )           (61,259 )        
Cash and due from banks   121,889             138,809          
Premises and equipment   220,872             217,339          
Other assets (3)   785,862             717,555          
Total assets   $ 12,599,840             $ 12,209,463          
                         
Liabilities and Shareholders' Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 2,199,607     10,283     0.63     $ 2,098,734     4,483     0.29  
Money market   2,187,822     14,100     0.86     2,113,972     7,853     0.50  
Savings   685,167     115     0.02     671,883     117     0.02  
Time   1,761,374     20,338     1.54     1,534,823     8,288     0.72  
Brokered time deposits   292,835     5,349     2.44     298,653     4,612     2.06  
Total interest-bearing deposits   7,126,805     50,185     0.94     6,718,065     25,353     0.50  
Federal funds purchased and other borrowings   44,898     838     2.50     58,144     772     1.78  
Federal Home Loan Bank advances   142,876     2,695     2.52     392,227     5,551     1.89  
Long-term debt   252,686     9,813     5.19     295,966     10,679     4.82  
Total borrowed funds   440,460     13,346     4.05     746,337     17,002     3.05  
Total interest-bearing liabilities   7,567,265     63,531     1.12     7,464,402     42,355     0.76  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits   3,335,450             3,178,387          
Other liabilities   164,350             199,848          
Total liabilities   11,067,065             10,842,637          
Shareholders' equity   1,532,775             1,366,826          
Total liabilities and shareholders' equity   $ 12,599,840             $ 12,209,463          
                         
Net interest revenue (FTE)       $ 354,731             $ 325,254      
Net interest-rate spread (FTE)           3.73 %           3.63 %
Net interest margin (FTE) (4)           4.11 %           3.88 %
                             

(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 $4.94 million in 2019 and unrealized losses of $40.4 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 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

UCBI Logo 2014__Inch.jpg

Source: United Community Banks, Inc.