United Community Banks, Inc. Reports Third Quarter Results

Press Release Details

Oct 20, 2020

United Community Banks, Inc. Reports Third Quarter Results

Strong Financial Performance and Continued Business Expansion

GREENVILLE, S.C., Oct. 20, 2020 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today reported third quarter financial results, including solid year-over-year loan and deposit growth and record operating efficiency. United delivered net income of $47.6 million and pre-tax pre-provision income of $81.2 million. Diluted earnings per share of $0.52 for the quarter represented a decrease of $0.08 or 13%, from a year ago. This decline is largely due to an increase in credit loss provisioning associated with loan growth and the acquisition of Seaside National Bank & Trust (Seaside) along with net interest margin declines largely driven by declines in market interest rates. Compared to the second quarter, diluted earnings per share were up by $0.20 or 63%. Excluding merger-related and other charges, diluted operating earnings per share were $0.55, also down 13% from last year, but up $0.23 per share or 72% compared to second quarter. United’s GAAP return on assets (ROA) was 1.07% and its return on common equity was 10.1% for the quarter. On an operating basis, United’s ROA was 1.14% and its return on tangible common equity was 13.5%. On a pre-tax, pre-provision basis, and excluding merger-related and other charges, ROA was 1.93%.

Chairman and CEO Lynn Harton stated, “While the future economic and operating environment remains uncertain, I am pleased with the financial strength and resilience of the company and the dedication of our employees who consistently provide outstanding customer service. Our markets continue to recover from the economic effects of the pandemic and I am pleased to report that loan payment deferrals have declined from a peak of $1.9 billion, or 15.9% of the total loan portfolio at June 30, 2020 to $365 million, or 3.1% of the total loan portfolio at September 30, 2020.”

Harton continued, “Our acquisition of Seaside, which closed on July 1st, positions us well in attractive Florida markets and we are pleased with the talent of the Seaside team and the deep relationships they have built with their clients. We plan to pilot Seaside’s high net worth offering of asset management and trust services in select markets of United’s footprint in the late fourth quarter. Additionally, we have made solid progress on the business integration and are already moving forward with additional products, including mortgage, middle market, commercial real estate, SBA, asset-based and non-profit lending, to compliment Seaside’s product offerings. We are proud to welcome Seaside to the United team.”

Total loans increased by $1.7 billion during the quarter—primarily driven by the acquisition of Seaside. Excluding the effects of the acquisition, core organic loan growth was 8% annualized. Core transaction deposits grew by $1.7 billion during the quarter, with $1.3 billion resulting from the Seaside acquisition, supplemented by approximately $400 million in organic growth. United’s cost of deposits decreased by 13 basis points to 0.25%. The net interest margin decreased 15 basis points from the second quarter due to a combination of factors, including lower overall market rates.

Mr. Harton concluded, “We are focused on our long-term goal of remaining a top performer in our peer group. While this is a difficult environment in which to forecast future economic conditions, we are encouraged by increasing business activity in our markets and stable credit performance in our portfolio to date. Our strong balance sheet position gives us the ability to continue to support our customers and communities, and we believe we will be well positioned to be able to take advantage of expansion opportunities in the future.”

Third Quarter 2020 Financial Highlights:

  • EPS decreased by 13% compared to last year on both a GAAP and operating basis; compared to second quarter, EPS increased by 63% on a GAAP basis and 72% on an operating basis
  • Return on assets of 1.07%, or 1.14% excluding merger-related and other charges
  • Pre-tax, pre-provision return on assets of 1.86%, or 1.93% excluding merger-related and other charges
  • Return on common equity of 10.1%
  • Return on tangible common equity of 13.5%, excluding merger-related and other charges
  • A provision for credit losses of $21.8 million of which $10.7 million is attributable to establishing an allowance for credit losses for Seaside’s acquired loans
  • Loan production of $1.0 billion and loan growth of $1.7 billion with $1.4 billion attributable to loans acquired from Seaside and core loan growth at an annualized rate of 8% for the quarter
  • Core transaction deposits were up $1.7 billion with $1.3 billion attributable to Seaside and approximately $400 million in organic growth, which represents a 15% annualized growth rate for the quarter
  • Net interest margin of 3.27% was down 15 basis points from the second quarter, reflecting the low rate environment, the Seaside acquisition, and increasing balance sheet liquidity
  • Record mortgage rate locks of $910 million, which is $108 million or 13% higher than the previous record set in the second quarter; this compares to $508 million a year ago
  • Noninterest income was up $7.7 million on a linked quarter basis, excluding net securities gains; Seaside contributed nearly $2.5 million of the increase and mortgage loan and related fees were up $1.5 million, primarily driven by record mortgage rate locks and production
  • Efficiency ratio of 54.1%, or a record low 52.2% excluding merger-related and other charges
  • Net charge-offs of $2.5 million, or 9 basis points as a percent of average loans, down 16 basis points from in the second quarter
  • Nonperforming assets of 0.29% of total assets, which is down 3 basis points compared to June 30, 2020
  • Total deferrals of $365 million or 3% of the total loan portfolio compared to $1.9 billion or 16% in the second quarter
  • $500,000 of funding for the United Community Bank Foundation, adding to the initial $1 million contribution in the second quarter for charities and causes throughout the footprint

Conference Call

United will hold a conference call, Wednesday, October 21, 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 7466997. 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   Third
Quarter 
  For the Nine Months Ended September 30,    
(in thousands, except per share data)   Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  Third
Quarter
  2020 -
2019
Change
  2020   2019   YTD
2020 -
2019
Change
INCOME SUMMARY                                    
Interest revenue   $ 141,773       $ 123,605       $ 136,547       $ 136,419       $ 140,615           $ 401,925     $ 416,287      
Interest expense   13,319       14,301       17,941       19,781       21,277           45,561     63,531      
Net interest revenue   128,454       109,304       118,606       116,638       119,338       8 %   356,364     352,756     1 %
Provision for credit losses   21,793       33,543       22,191       3,500       3,100           77,527     9,650      
Noninterest income   48,682       40,238       25,814       30,183       29,031       68     114,734     74,530     54  
Total revenue   155,343       115,999       122,229       143,321       145,269       7     393,571     417,636     (6
Expenses   95,981       83,980       81,538       81,424       82,924       16     261,499     240,821     9  
Income before income tax expense   59,362       32,019       40,691       61,897       62,345       (5 )   132,072     176,815     (25
Income tax expense   11,755       6,923       8,807       12,885       13,983       (16 )   27,485     40,106     (31 )
Net income   47,607       25,096       31,884       49,012       48,362       (2 )   104,587     136,709     (23 )
Merger-related and other charges   3,361       397       808       (74 )     2,605           4,566     7,431      
Income tax benefit of merger-related and other charges   (519 )     (87 )     (182 )     17       (600 )         (788 )   (1,712 )    
Net income - operating (1)   $ 50,449       $ 25,406       $ 32,510       $ 48,955       $ 50,367           $ 108,365     $ 142,428     (24 )
                                     
Pre-tax pre-provision income (5)   $ 81,155       $ 65,562       $ 62,882       $ 65,397       $ 65,445       24     $ 209,599     $ 186,465     12  
                                     
PERFORMANCE MEASURES                                    
Per common share:                                    
Diluted net income - GAAP   $ 0.52       $ 0.32       $ 0.40       $ 0.61       $ 0.60       (13 )   $ 1.25     $ 1.70     (26 )
Diluted net income - operating (1)   0.55       0.32       0.41       0.61       0.63       (13 )   1.29     1.77     (27 )
Cash dividends declared   0.18       0.18       0.18       0.18       0.17       6     0.54     0.50     8  
Book value   21.45       21.22       20.80       20.53       20.16       6     21.45     20.16     6  
Tangible book value (3)   17.09       16.95       16.52       16.28       15.90       7     17.09     15.90     7  
Key performance ratios:                                    
Return on common equity - GAAP (2)(4)   10.06   %   6.17   %   7.85   %   12.07   %   12.16   %       8.11 %   11.83 %    
Return on common equity - operating (1)(2)(4)   10.69       6.25       8.01       12.06       12.67           8.40     12.32      
Return on tangible common equity - operating (1)(2)(3)(4)   13.52       8.09       10.57       15.49       16.38           10.76     15.92      
Return on assets - GAAP (4)   1.07       0.71       0.99       1.50       1.51           0.93     1.45      
Return on assets - operating (1)(4)   1.14       0.72       1.01       1.50       1.58           0.97     1.51      
Return on assets - pre-tax pre-provision (4)(5)   1.86       1.86       1.95       2.00       2.05             1.89     1.98      
Return on assets - pre-tax pre-provision, excluding merger-related and other charges (1)(4)(5)   1.93       1.87       1.98       2.00       2.13             1.93     2.06        
Net interest margin (fully taxable equivalent) (4)   3.27       3.42       4.07       3.93       4.12           3.55     4.11      
Efficiency ratio - GAAP   54.14       55.86       56.15       54.87       55.64           55.30     56.09      
Efficiency ratio - operating (1)   52.24       55.59       55.59       54.92       53.90           54.34     54.36      
Equity to total assets   11.47       11.81       12.54       12.66       12.53           11.47     12.53      
Tangible common equity to tangible assets (3)   8.89       9.12       10.22       10.32       10.16           8.89     10.16      
                                     
ASSET QUALITY                                    
Nonperforming loans   $ 49,084       $ 48,021       $ 36,208       $ 35,341       $ 30,832       59     $ 49,084     $ 30,832     59  
Foreclosed properties   953       477       475       476       102           953     102      
Total nonperforming assets ("NPAs")   50,037       48,498       36,683       35,817       30,934       62     50,037     30,934     62  
Allowance for credit losses - loans   134,256       103,669       81,905       62,089       62,514       115     134,256     62,514     115  
Net charge-offs   2,538       6,149       8,114       3,925       2,723       (7 )   16,801     8,291     103  
Allowance for credit losses - loans to loans   1.14   %   1.02   %   0.92   %   0.70   %   0.70   %       1.14 %   0.70 %    
Net charge-offs to average loans (4)   0.09       0.25       0.37       0.18       0.12           0.22     0.13      
NPAs to loans and foreclosed properties   0.42       0.48       0.41       0.41       0.35           0.42     0.35      
NPAs to total assets   0.29       0.32       0.28       0.28       0.24           0.29     0.24      
                                     
AVERAGE BALANCES ($ in millions)                                    
Loans   $ 11,644       $ 9,773       $ 8,829       $ 8,890       $ 8,836       32     $ 10,088     $ 8,647     17  
Investment securities   2,750       2,408       2,520       2,486       2,550       8     2,560     2,701     (5
Earning assets   15,715       12,958       11,798       11,832       11,568       36     13,498     11,534     17  
Total assets   17,013       14,173       12,944       12,946       12,681       34     14,718     12,600     17  
Deposits   14,460       12,071       10,915       10,924       10,531       37     12,490     10,462     19  
Shareholders’ equity   1,948       1,686       1,653       1,623       1,588       23     1,763     1,533     15  
Common shares - basic (thousands)   87,129       78,920       79,340       79,659       79,663       9     81,815     79,714     3  
Common shares - diluted (thousands)   87,205       78,924       79,446       79,669       79,667       9     81,876     79,718     3  
                                     
AT PERIOD END ($ in millions)                                    
Loans   $ 11,799       $ 10,133       $ 8,935       $ 8,813       $ 8,903       33     $ 11,799     $ 8,903     33  
Investment securities   3,089       2,432       2,540       2,559       2,515       23     3,089     2,515     23  
Total assets   17,153       15,005       13,086       12,916       12,809       34     17,153     12,809     34  
Deposits   14,603       12,702       11,035       10,897       10,757       36     14,603     10,757     36  
Shareholders’ equity   1,967       1,772       1,641       1,636       1,605       23     1,967     1,605     23  
Common shares outstanding (thousands)   86,611       78,335       78,284       79,014       78,974       10     86,611     78,974     10  
                                                                   
(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 Nine Months Ended
September 30,
    Third    Second   First   Fourth    Third         
(in thousands, except per share data)   Quarter   Quarter   Quarter   Quarter   Quarter   2020    2019
                             
Expense reconciliation                            
Expenses (GAAP)   $ 95,981       $ 83,980       $ 81,538       $ 81,424       $ 82,924       $ 261,499       $ 240,821    
Merger-related and other charges   (3,361 )     (397 )     (808 )     74       (2,605 )     (4,566 )     (7,431 )  
Expenses - operating   $ 92,620       $ 83,583       $ 80,730       $ 81,498       $ 80,319       $ 256,933       $ 233,390    
                             
Net income to operating income reconciliation                            
Net income (GAAP)   $ 47,607       $ 25,096       $ 31,884       $ 49,012       $ 48,362       $ 104,587       $ 136,709    
Merger-related and other charges   3,361       397       808       (74 )     2,605       4,566       7,431    
Income tax benefit of merger-related and other charges   (519 )     (87 )     (182 )     17       (600 )     (788 )     (1,712 )  
Net income - operating   $ 50,449       $ 25,406       $ 32,510       $ 48,955       $ 50,367       $ 108,365       $ 142,428    
                             
Net income to pre-tax pre-provision income reconciliation                            
Net income (GAAP)   $ 47,607       $ 25,096       $ 31,884       $ 49,012       $ 48,362       $ 104,587       $ 136,709    
Income tax expense   11,755       6,923       8,807       12,885       13,983       27,485       40,106    
Provision for credit losses   21,793       33,543       22,191       3,500       3,100       77,527       9,650    
Pre-tax pre-provision income   $ 81,155       $ 65,562       $ 62,882       $ 65,397       $ 65,445       $ 209,599       $ 186,465    
                             
Diluted income per common share reconciliation                            
Diluted income per common share (GAAP)   $ 0.52       $ 0.32       $ 0.40       $ 0.61       $ 0.60       $ 1.25       $ 1.70    
Merger-related and other charges, net of tax   0.03             0.01             0.03       0.04       0.07    
Diluted income per common share - operating   $ 0.55       $ 0.32       $ 0.41       $ 0.61       $ 0.63       $ 1.29       $ 1.77    
                             
Book value per common share reconciliation                            
Book value per common share (GAAP)   $ 21.45       $ 21.22       $ 20.80       $ 20.53       $ 20.16       $ 21.45       $ 20.16    
Effect of goodwill and other intangibles   (4.36 )     (4.27 )     (4.28 )     (4.25 )     (4.26 )     (4.36 )     (4.26 )  
Tangible book value per common share   $ 17.09       $ 16.95       $ 16.52       $ 16.28       $ 15.90       $ 17.09       $ 15.90    
                             
Return on tangible common equity reconciliation                            
Return on common equity (GAAP)   10.06   %   6.17   %   7.85   %   12.07   %   12.16   %   8.11   %   11.83   %
Merger-related and other charges, net of tax   0.63       0.08       0.16       (0.01 )     0.51       0.29       0.49    
Return on common equity - operating   10.69       6.25       8.01       12.06       12.67       8.40       12.32    
Effect of goodwill and other intangibles   2.83       1.84       2.56       3.43       3.71       2.36       3.60    
Return on tangible common equity - operating   13.52   %   8.09   %   10.57   %   15.49   %   16.38   %   10.76   %   15.92   %
                             
Return on assets reconciliation                            
Return on assets (GAAP)   1.07   %   0.71   %   0.99   %   1.50   %   1.51   %   0.93   %   1.45   %
Merger-related and other charges, net of tax   0.07       0.01       0.02             0.07       0.04       0.06    
Return on assets - operating   1.14   %   0.72   %   1.01   %   1.50   %   1.58   %   0.97   %   1.51   %
                             
Return on assets to return on assets- pre-tax pre-provision reconciliation                            
Return on assets (GAAP)   1.07   %   0.71   %   0.99   %   1.50   %   1.51   %   0.93   %   1.45   %
Income tax expense   0.28       0.20       0.27       0.39       0.44       0.26       0.43    
Provision for credit losses   0.51       0.95       0.69       0.11       0.10       0.70       0.10    
Return on assets - pre-tax, pre-provision   1.86       1.86       1.95       2.00       2.05       1.89       1.98    
Merger-related and other charges   0.07       0.01       0.03             0.08       0.04       0.08    
Return on assets - pre-tax pre-provision, excluding merger-related and other charges   1.93   %   1.87   %   1.98   %   2.00   %   2.13   %   1.93   %   2.06   %
                             
Efficiency ratio reconciliation                            
Efficiency ratio (GAAP)   54.14   %   55.86   %   56.15   %   54.87   %   55.64   %   55.30   %   56.09   %
Merger-related and other charges   (1.90 )     (0.27 )     (0.56 )     0.05       (1.74 )     (0.96 )     (1.73 )  
Efficiency ratio - operating   52.24   %   55.59   %   55.59   %   54.92   %   53.90   %   54.34   %   54.36   %
                             
Tangible common equity to tangible assets reconciliation                            
Equity to total assets (GAAP)   11.47   %   11.81   %   12.54   %   12.66   %   12.53   %   11.47   %   12.53   %
Effect of goodwill and other intangibles   (2.02 )     (2.05 )     (2.32 )     (2.34 )     (2.37 )     (2.02 )     (2.37 )  
Effect of preferred equity   (0.56 )     (0.64 )                       (0.56 )        
Tangible common equity to tangible assets   8.89   %   9.12   %   10.22   %   10.32   %   10.16   %   8.89   %   10.16   %
                                                         


 

UNITED COMMUNITY BANKS, INC.                        
Financial Highlights                        
Loan Portfolio Composition at Period-End                        
                           
  2020   2019   Linked   Year over 
(in millions) Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  Third
Quarter
  Quarter
Change
  Year
Change
LOANS BY CATEGORY                          
Owner occupied commercial RE $ 2,009     $ 1,759     $ 1,703     $ 1,720     $ 1,692     $ 250       $ 317    
Income producing commercial RE 2,493     2,178     2,065     2,008     1,934     315       559    
Commercial & industrial 1,788     1,219     1,310     1,221     1,271     569       517    
Paycheck protection program 1,317     1,095                 222       1,317    
Commercial construction 987     946     959     976     1,001     41       (14 )  
Equipment financing 823     779     761     745     729     44       94    
Total commercial 9,417     7,976     6,798     6,670     6,627     1,441       2,790    
Residential mortgage 1,270     1,152     1,128     1,118     1,121     118       149    
Home equity lines of credit 707     654     668     661     669     53       38    
Residential construction 257     230     216     236     229     27       28    
Consumer 148     121     125     128     257     27       (109 )  
Total loans $ 11,799     $ 10,133     $ 8,935     $ 8,813     $ 8,903     $ 1,666       $ 2,896    
                           
LOANS BY MARKET                          
North Georgia $ 945     $ 951     $ 958     $ 967     $ 1,002     $ (6 )     $ (57 )  
Atlanta 1,853     1,852     1,820     1,762     1,740     1       113    
North Carolina 1,246     1,171     1,124     1,156     1,117     75       129    
Coastal Georgia 614     618     604     631     611     (4 )     3    
Gainesville 229     233     235     246     246     (4 )     (17 )  
East Tennessee 420     433     425     421     435     (13 )     (15 )  
South Carolina 1,870     1,778     1,774     1,708     1,705     92       165    
Florida 1,453                     1,453       1,453    
Commercial Banking Solutions 3,169     3,097     1,995     1,922     1,916     72       1,253    
Indirect auto                 131           (131 )  
Total loans $ 11,799     $ 10,133     $ 8,935     $ 8,813     $ 8,903     $ 1,666       $ 2,896    
                                                       

 

UNITED COMMUNITY BANKS, INC.                          
Financial Highlights                          
Credit Quality                          
    2020              
(in thousands)   Third
Quarter
  Second
Quarter
  First
Quarter
             
NONACCRUAL LOANS                          
Owner occupied RE   $ 11,075       $ 10,710       $ 10,405                
Income producing RE   12,230       11,274       2,235                
Commercial & industrial   3,534       3,432       3,169                
Commercial construction   1,863       2,290       1,724                
Equipment financing   3,137       3,119       2,439                
Total commercial   31,839       30,825       19,972                
Residential mortgage   13,864       13,185       12,458                
Home equity lines of credit   2,642       3,138       3,010                
Residential construction   479       500       540                
Consumer   260       373       228                
Total   $ 49,084       $ 48,021       $ 36,208                
     
    2020
    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   $ (725 )     (0.14 ) %   $ (466 )     (0.11 ) %   $ (1,028 )     (0.24 ) %
Income producing RE   1,785       0.29       4,548       0.86       270       0.05    
Commercial & industrial   (105 )     (0.01 )     (37 )     (0.01 )     7,185       2.30    
Commercial construction   (171 )     (0.07 )     122       0.05       (141 )     (0.06 )  
Equipment financing   1,993       0.93       1,665       0.87       1,507       0.81    
Total commercial   2,777       0.12       5,832       0.31       7,793       0.47    
Residential mortgage   (35 )     (0.01 )     (6 )           9          
Home equity lines of credit   (125 )     (0.07 )     (98 )     (0.06 )     (83 )     (0.05 )  
Residential construction               (5 )     (0.01 )     (12 )     (0.02 )  
Consumer   (79 )     (0.22 )     426       1.39       407       1.30    
Total   $ 2,538       0.09       $ 6,149       0.25       $ 8,114       0.37    
                         
(1)  Annualized.                        

 

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)   September 30,
2020
  December 31,
2019
ASSETS        
Cash and due from banks   $ 122,048     $ 125,844  
Interest-bearing deposits in banks   923,591     389,362  
Cash and cash equivalents   1,045,639     515,206  
Debt securities available-for-sale   2,690,448     2,274,581  
Debt securities held-to-maturity (fair value $413,820 and $287,904)   398,373     283,533  
Loans held for sale at fair value   128,587     58,484  
Loans and leases held for investment   11,798,910     8,812,553  
Less allowance for credit losses - loans and leases   (134,256 )   (62,089 )
Loans and leases, net   11,664,654     8,750,464  
Premises and equipment, net   211,885     215,976  
Bank owned life insurance   201,515     202,664  
Accrued interest receivable   48,091     32,660  
Net deferred tax asset   39,818     34,059  
Derivative financial instruments   103,388     35,007  
Goodwill and other intangible assets, net   384,074     342,247  
Other assets   236,405     171,135  
Total assets   $ 17,152,877     $ 12,916,016  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Deposits:        
Noninterest-bearing demand   $ 5,227,170     $ 3,477,979  
NOW and interest-bearing demand   2,989,455     2,461,895  
Money market   3,399,793     2,230,628  
Savings   891,147     706,467  
Time   1,819,586     1,859,574  
Brokered   276,225     160,701  
Total deposits   14,603,376     10,897,244  
Long-term debt   326,703     212,664  
Derivative financial instruments   33,519     15,516  
Accrued expenses and other liabilities   222,024     154,900  
Total liabilities   15,185,622     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
  96,422      
Common stock, $1 par value; 150,000,000 shares authorized;
  86,611,114 and 79,013,729 shares issued and outstanding
  86,611     79,014  
Common stock issuable; 590,521 and 664,640 shares   10,632     11,491  
Capital surplus   1,637,467     1,496,641  
Retained earnings   94,938     40,152  
Accumulated other comprehensive income   41,185     8,394  
Total shareholders' equity   1,967,255     1,635,692  
Total liabilities and shareholders' equity   $ 17,152,877     $ 12,916,016  
                 

 

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)   2020   2019   2020   2019  
Interest revenue:                  
Loans, including fees   $ 126,936     $ 122,645     $ 352,861     $ 357,575    
Investment securities, including tax exempt of $1,895, $1,118, $4,988 and $3,409   14,558     17,744     47,567     57,638    
Deposits in banks and short-term investments   279     226     1,497     1,074    
Total interest revenue   141,773     140,615     401,925     416,287    
                   
Interest expense:                  
Deposits:                  
NOW and interest-bearing demand   1,634     3,214     6,240     10,283    
Money market   3,017     5,126     10,969     14,100    
Savings   47     41     121     115    
Time   4,300     8,732     18,014     25,687    
Deposits   8,998     17,113     35,344     50,185    
Short-term borrowings   2     429     3     838    
Federal Home Loan Bank advances   27     521     28     2,695    
Long-term debt   4,292     3,214     10,186     9,813    
Total interest expense   13,319     21,277     45,561     63,531    
Net interest revenue   128,454     119,338     356,364     352,756    
Provision for credit losses   21,793     3,100     77,527     9,650    
Net interest revenue after provision for credit losses   106,661     116,238     278,837     343,106    
                   
Noninterest income:                  
Service charges and fees   8,260     9,916     23,893     27,429    
Mortgage loan gains and other related fees   25,144     8,658     57,113     17,750    
Brokerage and wealth management fees   3,055     1,699     6,019     4,624    
Gains from sales of other loans, net   1,175     1,639     3,889     4,412    
Securities gains (losses), net   746         746     (118 )  
Other   10,302     7,119     23,074     20,433    
Total noninterest income   48,682     29,031     114,734     74,530    
Total revenue   155,343     145,269     393,571     417,636    
                   
Noninterest expenses:                  
Salaries and employee benefits   59,067     50,501     162,236     146,161    
Communications and equipment   6,960     6,223     19,462     18,233    
Occupancy   7,050     5,921     18,709     17,424    
Advertising and public relations   1,778     1,374     5,312     4,256    
Postage, printing and supplies   1,703     1,618     4,986     4,733    
Professional fees   5,083     4,715     14,003     11,930    
Lending and loan servicing expense   3,043     2,556     8,525     7,509    
Outside services - electronic banking   1,888     1,934     5,516     5,101    
FDIC assessments and other regulatory charges   1,346     314     4,388     3,571    
Amortization of intangibles   1,099     1,210     3,126     3,845    
Merger-related and other charges   3,361     2,541     4,566     6,981    
Other   3,603     4,017     10,670     11,077    
Total noninterest expenses   95,981     82,924     261,499     240,821    
Net income before income taxes   59,362     62,345     132,072     176,815    
Income tax expense   11,755     13,983     27,485     40,106    
Net income   47,607     48,362     104,587     136,709    
Preferred stock dividends   1,814         1,814        
Dividends and undistributed earnings allocated to unvested shares   356     351     779     982    
Net income available to common shareholders   $ 45,437     $ 48,011     $ 101,994     $ 135,727    
                   
Net income per common share:                  
Basic   $ 0.52     $ 0.60     $ 1.25     $ 1.70    
Diluted   0.52     0.60     1.25     1.70    
Weighted average common shares outstanding:                  
Basic   87,129     79,663     81,815     79,714    
Diluted   87,205     79,667     81,876     79,718    

 

Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 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)   $ 11,644,202     $ 126,342     4.32 %   $ 8,835,585     $ 122,526     5.50 %  
Taxable securities (3)   2,499,649     12,663     2.03     2,379,927     16,626     2.79    
Tax-exempt securities (FTE) (1)(3)   249,959     2,544     4.07     170,027     1,502     3.53    
Federal funds sold and other interest-earning assets   1,321,445     1,132     0.34     182,935     616     1.35    
Total interest-earning assets (FTE)   15,715,255     142,681     3.61     11,568,474     141,270     4.85    
                           
Noninterest-earning assets:                          
Allowance for credit losses   (128,581 )           (63,474 )          
Cash and due from banks   135,949             116,922            
Premises and equipment   216,326             221,930            
Other assets (3)   1,074,529             836,951            
Total assets   $ 17,013,478             $ 12,680,803            
                           
Liabilities and Shareholders' Equity:                          
Interest-bearing liabilities:                          
Interest-bearing deposits:                          
NOW and interest-bearing demand   $ 2,890,735     1,634     0.22     $ 2,123,910     3,214     0.60    
Money market   3,501,781     3,017     0.34     2,277,162     5,126     0.89    
Savings   864,849     47     0.02     695,297     41     0.02    
Time   1,933,764     4,127     0.85     1,879,801     8,053     1.70    
Brokered time deposits   96,198     173     0.72     102,078     679     2.64    
Total interest-bearing deposits   9,287,327     8,998     0.39     7,078,248     17,113     0.96    
Federal funds purchased and other borrowings   4,405     2     0.18     73,733     429     2.31    
Federal Home Loan Bank advances   2,818     27     3.81     88,261     521     2.34    
Long-term debt   327,017     4,292     5.22     243,935     3,214     5.23    
Total borrowed funds   334,240     4,321     5.14     405,929     4,164     4.07    
Total interest-bearing liabilities   9,621,567     13,319     0.55     7,484,177     21,277     1.13    
                           
Noninterest-bearing liabilities:                          
Noninterest-bearing deposits   5,172,999             3,453,174            
Other liabilities   270,451             155,107            
Total liabilities   15,065,017             11,092,458            
Shareholders' equity   1,948,461             1,588,345            
Total liabilities and shareholders' equity   $ 17,013,478             $ 12,680,803            
                           
Net interest revenue (FTE)       $ 129,362             $ 119,993        
Net interest-rate spread (FTE)           3.06 %           3.72 %  
Net interest margin (FTE) (4)           3.27 %           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 $77.0 million in 2020 and unrealized gains of $35.1 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 Nine Months Ended September 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)   $ 10,087,630     $ 351,536     4.65 %   $ 8,646,622     $ 357,541     5.53 %  
Taxable securities (3)   2,362,674     42,579     2.40     2,532,070     54,229     2.86    
Tax-exempt securities (FTE) (1)(3)   197,231     6,699     4.53     168,787     4,579     3.62    
Federal funds sold and other interest-earning assets   850,722     3,621     0.57     186,402     1,913     1.37    
Total interest-earning assets (FTE)   13,498,257     404,435     4.00     11,533,881     418,262     4.85    
                           
Non-interest-earning assets:                          
Allowance for loan losses   (96,235 )           (62,664 )          
Cash and due from banks   134,354             121,889            
Premises and equipment   217,551             220,872            
Other assets (3)   964,511             785,862            
Total assets   $ 14,718,438             $ 12,599,840            
                           
Liabilities and Shareholders' Equity:                          
Interest-bearing liabilities:                          
Interest-bearing deposits:                          
NOW and interest-bearing demand   $ 2,583,911     6,240     0.32     $ 2,199,607     10,283     0.63    
Money market   2,797,350     10,969     0.52     2,187,822     14,100     0.86    
Savings   788,681     121     0.02     685,167     115     0.02    
Time   1,860,597     17,435     1.25     1,761,374     20,338     1.54    
Brokered time deposits   102,502     579     0.75     292,835     5,349     2.44    
Total interest-bearing deposits   8,133,041     35,344     0.58     7,126,805     50,185     0.94    
Federal funds purchased and other borrowings   1,611     3     0.25     44,898     838     2.50    
Federal Home Loan Bank advances   1,001     28     3.74     142,876     2,695     2.52    
Long-term debt   256,218     10,186     5.31     252,686     9,813     5.19    
Total borrowed funds   258,830     10,217     5.27     440,460     13,346     4.05    
Total interest-bearing liabilities   8,391,871     45,561     0.73     7,567,265     63,531     1.12    
                           
Noninterest-bearing liabilities:                          
Noninterest-bearing deposits   4,356,484             3,335,450            
Other liabilities   206,904             164,350            
Total liabilities   12,955,259             11,067,065            
Shareholders' equity   1,763,179             1,532,775            
Total liabilities and shareholders' equity   $ 14,718,438             $ 12,599,840            
                           
Net interest revenue (FTE)       $ 358,874             $ 354,731        
Net interest-rate spread (FTE)           3.27 %           3.73 %  
Net interest margin (FTE) (4)           3.55 %           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 $65.5 million in 2020 and unrealized gains of $4.94 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 $17.2 billion in assets, and 163 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee. 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, 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 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 

 

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