UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| |
| |
| (State or other jurisdiction of incorporation) | (Commission file number) | (IRS Employer Identification No.) |
(Address of principal executive offices)
Registrant's telephone number,
including area code:
(
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
| On April 18, 2023, United Community Banks, Inc. (“United”) issued a press release announcing financial results for the first quarter of 2023. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. | |
| Item 7.01 | Regulation FD Disclosure. |
| On April 19, 2023, United will hold an earnings conference call and webcast at 11:00 a.m. (Eastern Time) to discuss financial results for the first quarter of 2023. The press release referenced above in Item 2.02 contains information about how to access the conference call and webcast. A copy of the slide presentation to be used during the earnings call and webcast is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The slide presentation also will be available on our website, www.ucbi.com, under the “Investor Relations – Events and Presentations” section. | |
| Item 9.01 | Financial Statements and Exhibits. |
| (d) Exhibits | The following exhibit index lists the exhibits that are either filed or furnished with the Current Report on Form 8-K. |
| EXHIBIT INDEX |
| Exhibit No. | Description |
| 99.1 | United Community Banks, Inc. Press Release, dated April 18, 2023 (furnished only). |
| 99.2 | Slide presentation to be used during April 19, 2023 earnings call (furnished only). |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNITED COMMUNITY BANKS, INC. | ||
| By: | /s/ Jefferson L. Harralson | |
| Jefferson L. Harralson | ||
| Executive Vice President and | ||
| Chief Financial Officer | ||
| Date: April 18, 2023 | ||
Exhibit 99.1
For Immediate Release
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
United Community Banks, Inc. Reports First Quarter Results
Customer Deposit Growth of 10%, Organic Loan Growth of 8%, Asset Quality and Capital Levels Remained Strong
GREENVILLE, SC – April 18, 2023 - United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2023 first quarter was $62.3 million and pre-tax, pre-provision income was $101.9 million. Diluted earnings per share of $0.52 for the quarter represented an increase of $0.09 or 21%, from the first quarter a year ago and a decrease of $0.22 or 30% from the fourth quarter of 2022. On an operating basis, United’s diluted earnings per share of $0.58 was up 16% from the year-ago quarter. The primary drivers of the increased earnings per share year-over-year were increased interest rates and organic loan growth. The linked-quarter decrease in earnings per share was primarily driven by higher deposit and borrowed funds interest cost as well as changes in deposit composition toward more expensive time deposits during the quarter. United’s return on assets was 0.95%, or 1.06% on an operating basis. Return on equity was 7.3% and return on tangible common equity was 11.6%. On a pre-tax, pre-provision basis, operating return on assets was 1.71% for the quarter. At quarter end, tangible common equity to tangible assets was 8.2%, up 29 basis points from the fourth quarter of 2022.
Chairman and CEO Lynn Harton stated, “This was another solid quarter for United. Deposit growth reflected the strength of our customer franchise, and our loan growth was within our stated target range of mid to high single digits. While our net interest margin did contract from the previous quarter due to higher deposit costs, we continued to generate strong returns and strengthen our balance sheet.” Harton continued, “On the strategic front, we continue to expand the company into exciting growth markets that we know and where we can partner with organizations that align with our values and culture. We are very glad to welcome Progress officially into the United team, adding to our growth opportunities in Alabama and the Florida Panhandle. Our recently announced partnership with First National Bank of South Miami will also bring great opportunities and a talented team to the company. I couldn’t be more excited to welcome them to our team.”
United’s net interest margin decreased by 15 basis points to 3.61% from the fourth quarter. The average yield on United’s interest-earning assets was up 44 basis points to 4.76%, but its cost of deposits increased by 61 basis points to 1.10%, leading to the reduction in the net interest margin. Net charge-offs were $7.1 million or 0.17% of average loans during the quarter, flat compared to the fourth quarter of 2022, and NPAs were 28 basis points relative to total assets, up 10 basis points from the previous quarter.
| 1 |
Mr. Harton concluded, “We continue to believe that 2023 will be a great year for United, despite the uncertainty in the economic environment. We remain focused on being a great partner for our clients and communities; growing our business and being prepared to manage through any challenges that lie ahead. We continue to strengthen our teams, recruiting great bankers and adding new locations, most recently in Atlanta and Charleston, South Carolina. Consistent with building for our future, we also recently announced a refresh of our brand with a new logo to be rolled out to our markets through 2024. While the brand will present itself as more modern and forward-looking, it also continues to symbolize our commitment to service and to community that has been our focus for more than 70 years.”
First Quarter 2023 Financial Highlights:
| · | Net income of $62.3 million and pre-tax, pre-provision income of $101.9 million |
| · | EPS increased by 21% compared to first quarter 2022 on a GAAP basis and 16% on an operating basis; compared to fourth quarter 2022, EPS decreased 30% on a GAAP basis and 23% on an operating basis |
| · | Return on assets of 0.95%, or 1.06% on an operating basis |
| · | Pre-tax, pre-provision return on assets of 1.71% on an operating basis |
| · | Return on common equity of 7.3% |
| · | Return on tangible common equity of 11.6% on an operating basis |
| · | A provision for credit losses of $21.8 million, which decreased the allowance for loan losses to 1.03% of loans from 1.04% in the fourth quarter. The first quarter provision included $10.4 million to establish an initial allowance on loans acquired in the Progress transaction. |
| · | Loan production of $1.4 billion, resulting in organic loan growth, excluding acquired Progress balances, of 8% annualized for the quarter |
| · | Customer deposits were up $525 million, or 10% annualized, excluding acquired Progress balances |
| · | Total deposits are estimated to be 76% insured or collateralized |
| · | Net interest margin of 3.61% was down 15 basis points from the fourth quarter due to increased deposit costs |
| · | Mortgage closings of $225 million compared to $462 million a year ago; mortgage rate locks of $335 million compared to $757 million a year ago |
| · | Noninterest income was down $3.1 million on a linked quarter basis, primarily driven by lower positive marks on certain equity and limited partnership investments, lower services charges and fees and securities losses, partially offset by higher mortgage fees |
| · | Noninterest expenses increased by $22.5 million compared to the fourth quarter on a GAAP basis and by $15.3 million on an operating basis, mostly due to closing the Progress acquisition on January 3, 2023 |
| · | Efficiency ratio of 57.2%, or 53.7% on an operating basis |
| · | Net charge-offs of $7.1 million, or 17 basis points as a percent of average loans, flat from the net charge-offs level experienced in the fourth quarter |
| · | Nonperforming assets of 0.28% of total assets, up 10 basis points compared to December 31, 2022 |
| 2 |
| · | Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 10% year-over-year |
| · | We completed the acquisition of Progress Financial Corporation and its banking subsidiary Progress Bank and Trust with $1.8 billion in assets on January 3, 2023; financial returns are expected to be within our desired thresholds |
Conference Call
United will hold a conference call on Wednesday, April 19, 2023, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10177198/f8dc6d5780. Those without internet access or unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and can be accessed by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of the company's website, www.ucbi.com.
| 3 |
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
(in thousands, except per share data)
2023 | 2022 | First Quarter | ||||||||||||||||||||||
First | Fourth | Third | Second | First | 2023 - 2022 Change | |||||||||||||||||||
| INCOME SUMMARY | ||||||||||||||||||||||||
| Interest revenue | $ | 279,487 | $ | 240,831 | $ | 213,887 | $ | 187,378 | $ | 171,059 | ||||||||||||||
| Interest expense | 68,017 | 30,943 | 14,113 | 8,475 | 7,267 | |||||||||||||||||||
| Net interest revenue | 211,470 | 209,888 | 199,774 | 178,903 | 163,792 | 29 | % | |||||||||||||||||
| Provision for credit losses | 21,783 | 19,831 | 15,392 | 5,604 | 23,086 | |||||||||||||||||||
| Noninterest income | 30,209 | 33,354 | 31,922 | 33,458 | 38,973 | (22 | ) | |||||||||||||||||
| Total revenue | 219,896 | 223,411 | 216,304 | 206,757 | 179,679 | 22 | ||||||||||||||||||
| Noninterest expenses | 139,805 | 117,329 | 112,755 | 120,790 | 119,275 | 17 | ||||||||||||||||||
| Income before income tax expense | 80,091 | 106,082 | 103,549 | 85,967 | 60,404 | 33 | ||||||||||||||||||
| Income tax expense | 17,791 | 24,632 | 22,388 | 19,125 | 12,385 | 44 | ||||||||||||||||||
| Net income | 62,300 | 81,450 | 81,161 | 66,842 | 48,019 | 30 | ||||||||||||||||||
| Merger-related and other charges | 8,631 | 1,470 | 1,746 | 7,143 | 9,016 | |||||||||||||||||||
| Income tax benefit of merger-related and other charges | (1,955 | ) | (323 | ) | (385 | ) | (1,575 | ) | (1,963 | ) | ||||||||||||||
| Net income - operating (1) | $ | 68,976 | $ | 82,597 | $ | 82,522 | $ | 72,410 | $ | 55,072 | 25 | |||||||||||||
| Pre-tax pre-provision income (5) | $ | 101,874 | $ | 125,913 | $ | 118,941 | $ | 91,571 | $ | 83,490 | 22 | |||||||||||||
| PERFORMANCE MEASURES | ||||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.52 | $ | 0.74 | $ | 0.74 | $ | 0.61 | $ | 0.43 | 21 | |||||||||||||
| Diluted net income - operating (1) | 0.58 | 0.75 | 0.75 | 0.66 | 0.50 | 16 | ||||||||||||||||||
| Cash dividends declared | 0.23 | 0.22 | 0.22 | 0.21 | 0.21 | 10 | ||||||||||||||||||
| Book value | 25.76 | 24.38 | 23.78 | 23.96 | 24.38 | 6 | ||||||||||||||||||
| Tangible book value (3) | 17.59 | 17.13 | 16.52 | 16.68 | 17.08 | 3 | ||||||||||||||||||
| Key performance ratios: | ||||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 7.34 | % | 10.86 | % | 11.02 | % | 9.31 | % | 6.80 | % | ||||||||||||||
| Return on common equity - operating (1)(2)(4) | 8.15 | 11.01 | 11.21 | 10.10 | 7.83 | |||||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 11.63 | 15.20 | 15.60 | 14.20 | 11.00 | |||||||||||||||||||
| Return on assets - GAAP (4) | 0.95 | 1.33 | 1.32 | 1.08 | 0.78 | |||||||||||||||||||
| Return on assets - operating (1)(4) | 1.06 | 1.35 | 1.34 | 1.17 | 0.89 | |||||||||||||||||||
| Return on assets - pre-tax pre-provision (4)(5) | 1.58 | 2.07 | 1.94 | 1.49 | 1.37 | |||||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger- related and other charges (1)(4)(5) | 1.71 | 2.09 | 1.97 | 1.60 | 1.52 | |||||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 3.61 | 3.76 | 3.57 | 3.19 | 2.97 | |||||||||||||||||||
| Efficiency ratio - GAAP | 57.20 | 47.95 | 48.41 | 56.58 | 57.43 | |||||||||||||||||||
| Efficiency ratio - operating (1) | 53.67 | 47.35 | 47.66 | 53.23 | 53.09 | |||||||||||||||||||
| Equity to total assets | 11.90 | 11.25 | 11.12 | 10.95 | 11.06 | |||||||||||||||||||
| Tangible common equity to tangible assets (3) | 8.17 | 7.88 | 7.70 | 7.59 | 7.72 | |||||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||||||
| Nonperforming assets ("NPAs") | $ | 73,403 | $ | 44,281 | $ | 35,511 | $ | 34,428 | $ | 40,816 | 80 | |||||||||||||
| Allowance for credit losses - loans | 176,534 | 159,357 | 148,502 | 136,925 | 132,805 | 33 | ||||||||||||||||||
| Allowance for credit losses - total | 197,923 | 180,520 | 167,300 | 153,042 | 146,369 | 35 | ||||||||||||||||||
| Net charge-offs (recoveries) | 7,084 | 6,611 | 1,134 | (1,069 | ) | 2,978 | ||||||||||||||||||
| Allowance for credit losses - loans to loans | 1.03 | % | 1.04 | % | 1.00 | % | 0.94 | % | 0.93 | % | ||||||||||||||
| Allowance for credit losses - total to loans | 1.16 | 1.18 | 1.12 | 1.05 | 1.02 | |||||||||||||||||||
| Net charge-offs to average loans (4) | 0.17 | 0.17 | 0.03 | (0.03 | ) | 0.08 | ||||||||||||||||||
| NPAs to total assets | 0.28 | 0.18 | 0.15 | 0.14 | 0.17 | |||||||||||||||||||
| AT PERIOD END ($ in millions) | ||||||||||||||||||||||||
| Loans | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 14,541 | $ | 14,316 | 20 | |||||||||||||
| Investment securities | 5,915 | 6,228 | 6,539 | 6,683 | 6,410 | (8 | ) | |||||||||||||||||
| Total assets | 25,872 | 24,009 | 23,688 | 24,213 | 24,374 | 6 | ||||||||||||||||||
| Deposits | 22,005 | 19,877 | 20,321 | 20,873 | 21,056 | 5 | ||||||||||||||||||
| Shareholders’ equity | 3,078 | 2,701 | 2,635 | 2,651 | 2,695 | 14 | ||||||||||||||||||
| Common shares outstanding (thousands) | 115,152 | 106,223 | 106,163 | 106,034 | 106,025 | 9 | ||||||||||||||||||
(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.
| 4 |
UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
(in thousands, except per share data)
| 2023 | 2022 | |||||||||||||||||||
First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||
| Noninterest expense reconciliation | ||||||||||||||||||||
| Noninterest expenses (GAAP) | $ | 139,805 | $ | 117,329 | $ | 112,755 | $ | 120,790 | $ | 119,275 | ||||||||||
| Merger-related and other charges | (8,631 | ) | (1,470 | ) | (1,746 | ) | (7,143 | ) | (9,016 | ) | ||||||||||
| Noninterest expenses - operating | $ | 131,174 | $ | 115,859 | $ | 111,009 | $ | 113,647 | $ | 110,259 | ||||||||||
| Net income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 62,300 | $ | 81,450 | $ | 81,161 | $ | 66,842 | $ | 48,019 | ||||||||||
| Merger-related and other charges | 8,631 | 1,470 | 1,746 | 7,143 | 9,016 | |||||||||||||||
| Income tax benefit of merger-related and other charges | (1,955 | ) | (323 | ) | (385 | ) | (1,575 | ) | (1,963 | ) | ||||||||||
| Net income - operating | $ | 68,976 | $ | 82,597 | $ | 82,522 | $ | 72,410 | $ | 55,072 | ||||||||||
| Net income to pre-tax pre-provision income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 62,300 | $ | 81,450 | $ | 81,161 | $ | 66,842 | $ | 48,019 | ||||||||||
| Income tax expense | 17,791 | 24,632 | 22,388 | 19,125 | 12,385 | |||||||||||||||
| Provision for credit losses | 21,783 | 19,831 | 15,392 | 5,604 | 23,086 | |||||||||||||||
| Pre-tax pre-provision income | $ | 101,874 | $ | 125,913 | $ | 118,941 | $ | 91,571 | $ | 83,490 | ||||||||||
| Diluted income per common share reconciliation | ||||||||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.52 | $ | 0.74 | $ | 0.74 | $ | 0.61 | $ | 0.43 | ||||||||||
| Merger-related and other charges, net of tax | 0.06 | 0.01 | 0.01 | 0.05 | 0.07 | |||||||||||||||
| Diluted income per common share - operating | $ | 0.58 | $ | 0.75 | $ | 0.75 | $ | 0.66 | $ | 0.50 | ||||||||||
| Book value per common share reconciliation | ||||||||||||||||||||
| Book value per common share (GAAP) | $ | 25.76 | $ | 24.38 | $ | 23.78 | $ | 23.96 | $ | 24.38 | ||||||||||
| Effect of goodwill and other intangibles | (8.17 | ) | (7.25 | ) | (7.26 | ) | (7.28 | ) | (7.30 | ) | ||||||||||
| Tangible book value per common share | $ | 17.59 | $ | 17.13 | $ | 16.52 | $ | 16.68 | $ | 17.08 | ||||||||||
| Return on tangible common equity reconciliation | ||||||||||||||||||||
| Return on common equity (GAAP) | 7.34 | % | 10.86 | % | 11.02 | % | 9.31 | % | 6.80 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.81 | 0.15 | 0.19 | 0.79 | 1.03 | |||||||||||||||
| Return on common equity - operating | 8.15 | 11.01 | 11.21 | 10.10 | 7.83 | |||||||||||||||
| Effect of goodwill and other intangibles | 3.48 | 4.19 | 4.39 | 4.10 | 3.17 | |||||||||||||||
| Return on tangible common equity - operating | 11.63 | % | 15.20 | % | 15.60 | % | 14.20 | % | 11.00 | % | ||||||||||
| Return on assets reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.95 | % | 1.33 | % | 1.32 | % | 1.08 | % | 0.78 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.11 | 0.02 | 0.02 | 0.09 | 0.11 | |||||||||||||||
| Return on assets - operating | 1.06 | % | 1.35 | % | 1.34 | % | 1.17 | % | 0.89 | % | ||||||||||
| Return on assets to return on assets- pre-tax pre-provision reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.95 | % | 1.33 | % | 1.32 | % | 1.08 | % | 0.78 | % | ||||||||||
| Income tax expense | 0.29 | 0.41 | 0.37 | 0.32 | 0.20 | |||||||||||||||
| (Release of) provision for credit losses | 0.34 | 0.33 | 0.25 | 0.09 | 0.39 | |||||||||||||||
| Return on assets - pre-tax, pre-provision | 1.58 | 2.07 | 1.94 | 1.49 | 1.37 | |||||||||||||||
| Merger-related and other charges | 0.13 | 0.02 | 0.03 | 0.11 | 0.15 | |||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges | 1.71 | % | 2.09 | % | 1.97 | % | 1.60 | % | 1.52 | % | ||||||||||
| Efficiency ratio reconciliation | ||||||||||||||||||||
| Efficiency ratio (GAAP) | 57.20 | % | 47.95 | % | 48.41 | % | 56.58 | % | 57.43 | % | ||||||||||
| Merger-related and other charges | (3.53 | ) | (0.60 | ) | (0.75 | ) | (3.35 | ) | (4.34 | ) | ||||||||||
| Efficiency ratio - operating | 53.67 | % | 47.35 | % | 47.66 | % | 53.23 | % | 53.09 | % | ||||||||||
| Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||
| Equity to total assets (GAAP) | 11.90 | % | 11.25 | % | 11.12 | % | 10.95 | % | 11.06 | % | ||||||||||
| Effect of goodwill and other intangibles | (3.36 | ) | (2.97 | ) | (3.01 | ) | (2.96 | ) | (2.94 | ) | ||||||||||
| Effect of preferred equity | (0.37 | ) | (0.40 | ) | (0.41 | ) | (0.40 | ) | (0.40 | ) | ||||||||||
| Tangible common equity to tangible assets | 8.17 | % | 7.88 | % | 7.70 | % | 7.59 | % | 7.72 | % | ||||||||||
| 5 |
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
| 2023 | 2022 | Linked | Year over | |||||||||||||||||||||||||
| (in millions) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Quarter Change | Year Change | |||||||||||||||||||||
| LOANS BY CATEGORY | ||||||||||||||||||||||||||||
| Owner occupied commercial RE | $ | 3,141 | $ | 2,735 | $ | 2,700 | $ | 2,681 | $ | 2,638 | $ | 406 | $ | 503 | ||||||||||||||
| Income producing commercial RE | 3,611 | 3,262 | 3,299 | 3,273 | 3,328 | 349 | 283 | |||||||||||||||||||||
| Commercial & industrial | 2,442 | 2,252 | 2,238 | 2,253 | 2,336 | 190 | 106 | |||||||||||||||||||||
| Commercial construction | 1,806 | 1,598 | 1,514 | 1,514 | 1,482 | 208 | 324 | |||||||||||||||||||||
| Equipment financing | 1,447 | 1,374 | 1,281 | 1,211 | 1,148 | 73 | 299 | |||||||||||||||||||||
| Total commercial | 12,447 | 11,221 | 11,032 | 10,932 | 10,932 | 1,226 | 1,515 | |||||||||||||||||||||
| Residential mortgage | 2,756 | 2,355 | 2,149 | 1,997 | 1,826 | 401 | 930 | |||||||||||||||||||||
| Home equity lines of credit | 930 | 850 | 832 | 801 | 778 | 80 | 152 | |||||||||||||||||||||
| Residential construction | 492 | 443 | 423 | 381 | 368 | 49 | 124 | |||||||||||||||||||||
| Manufactured housing | 326 | 317 | 301 | 287 | 269 | 9 | 57 | |||||||||||||||||||||
| Consumer | 174 | 149 | 145 | 143 | 143 | 25 | 31 | |||||||||||||||||||||
| Total loans | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 14,541 | $ | 14,316 | $ | 1,790 | $ | 2,809 | ||||||||||||||
| LOANS BY MARKET | ||||||||||||||||||||||||||||
| Georgia | $ | 4,177 | $ | 4,051 | $ | 4,003 | $ | 3,960 | $ | 3,879 | $ | 126 | $ | 298 | ||||||||||||||
| South Carolina | 2,672 | 2,587 | 2,516 | 2,377 | 2,323 | 85 | 349 | |||||||||||||||||||||
| North Carolina | 2,257 | 2,186 | 2,117 | 2,006 | 1,879 | 71 | 378 | |||||||||||||||||||||
| Tennessee | 2,458 | 2,507 | 2,536 | 2,621 | 2,661 | (49 | ) | (203 | ) | |||||||||||||||||||
| Florida | 1,745 | 1,308 | 1,259 | 1,235 | 1,208 | 437 | 537 | |||||||||||||||||||||
| Alabama | 1,029 | — | — | — | — | 1,029 | 1,029 | |||||||||||||||||||||
| Commercial Banking Solutions | 2,787 | 2,696 | 2,451 | 2,342 | 2,366 | 91 | 421 | |||||||||||||||||||||
| Total loans | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 14,541 | $ | 14,316 | $ | 1,790 | $ | 2,809 | ||||||||||||||
| 6 |
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
| 2023 | 2022 | |||||||||||
First Quarter | Fourth Quarter | Third Quarter | ||||||||||
| NONACCRUAL LOANS | ||||||||||||
| Owner occupied RE | $ | 1,000 | $ | 523 | $ | 877 | ||||||
| Income producing RE | 10,603 | 3,885 | 2,663 | |||||||||
| Commercial & industrial | 33,276 | 14,470 | 11,108 | |||||||||
| Commercial construction | 475 | 133 | 150 | |||||||||
| Equipment financing | 5,044 | 5,438 | 3,198 | |||||||||
| Total commercial | 50,398 | 24,449 | 17,996 | |||||||||
| Residential mortgage | 11,280 | 10,919 | 10,424 | |||||||||
| Home equity lines of credit | 2,377 | 1,888 | 1,151 | |||||||||
| Residential construction | 143 | 405 | 104 | |||||||||
| Manufactured housing | 8,542 | 6,518 | 4,187 | |||||||||
| Consumer | 55 | 53 | 17 | |||||||||
| Total nonaccrual loans held for investment | 72,795 | 44,232 | 33,879 | |||||||||
| Nonaccrual loans held for sale | — | — | 316 | |||||||||
| OREO and repossessed assets | 608 | 49 | 1,316 | |||||||||
| Total NPAs | $ | 73,403 | $ | 44,281 | $ | 35,511 | ||||||
| 2023 | 2022 | |||||||||||||||||||||||
| First Quarter | Fourth Quarter | Third 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 (RECOVERIES) BY CATEGORY | ||||||||||||||||||||||||
| Owner occupied RE | $ | 90 | 0.01 | % | $ | (130 | ) | (0.02 | )% | $ | (90 | ) | (0.01 | )% | ||||||||||
| Income producing RE | 2,306 | 0.26 | (113 | ) | (0.01 | ) | 176 | 0.02 | ||||||||||||||||
| Commercial & industrial | 225 | 0.04 | 4,577 | 0.81 | (744 | ) | (0.13 | ) | ||||||||||||||||
| Commercial construction | (37 | ) | (0.01 | ) | (77 | ) | (0.02 | ) | 10 | — | ||||||||||||||
| Equipment financing | 3,375 | 0.93 | 1,658 | 0.50 | 1,121 | 0.36 | ||||||||||||||||||
| Total commercial | 5,959 | 0.20 | 5,915 | 0.21 | 473 | 0.02 | ||||||||||||||||||
| Residential mortgage | (87 | ) | (0.01 | ) | (33 | ) | (0.01 | ) | (66 | ) | (0.01 | ) | ||||||||||||
| Home equity lines of credit | 33 | 0.01 | (89 | ) | (0.04 | ) | (102 | ) | (0.05 | ) | ||||||||||||||
| Residential construction | (15 | ) | (0.01 | ) | (23 | ) | (0.02 | ) | (109 | ) | (0.11 | ) | ||||||||||||
| Manufactured housing | 628 | 0.76 | 246 | 0.32 | 220 | 0.30 | ||||||||||||||||||
| Consumer | 566 | 1.37 | 595 | 1.61 | 718 | 1.98 | ||||||||||||||||||
| Total | $ | 7,084 | 0.17 | $ | 6,611 | 0.17 | $ | 1,134 | 0.03 | |||||||||||||||
(1) Annualized.
| 7 |
| UNITED COMMUNITY BANKS, INC. |
| Consolidated Balance Sheets (Unaudited) |
| (in thousands, except share and per share data) | March 31, 2023 | December 31, 2022 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 275,962 | $ | 195,771 | ||||
| Interest-bearing deposits in banks | 501,719 | 316,082 | ||||||
| Federal funds and other short-term investments | — | 135,000 | ||||||
| Cash and cash equivalents | 777,681 | 646,853 | ||||||
| Debt securities available-for-sale | 3,331,139 | 3,614,333 | ||||||
| Debt securities held-to-maturity (fair value $2,206,874 and $2,191,073, respectively) | 2,584,081 | 2,613,648 | ||||||
| Loans held for sale | 20,390 | 13,600 | ||||||
| Loans and leases held for investment | 17,124,703 | 15,334,627 | ||||||
| Less allowance for credit losses - loans and leases | (176,534 | ) | (159,357 | ) | ||||
| Loans and leases, net | 16,948,169 | 15,175,270 | ||||||
| Premises and equipment, net | 336,617 | 298,456 | ||||||
| Bank owned life insurance | 341,285 | 299,297 | ||||||
| Goodwill and other intangible assets, net | 961,244 | 779,248 | ||||||
| Other assets | 571,244 | 568,179 | ||||||
| Total assets | $ | 25,871,850 | $ | 24,008,884 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 7,540,265 | $ | 7,643,081 | ||||
| NOW and interest-bearing demand | 4,769,663 | 4,350,878 | ||||||
| Money market | 5,140,902 | 4,510,680 | ||||||
| Savings | 1,362,520 | 1,456,337 | ||||||
| Time | 2,703,568 | 1,781,482 | ||||||
| Brokered | 487,756 | 134,049 | ||||||
| Total deposits | 22,004,674 | 19,876,507 | ||||||
| Short-term borrowings | 7,219 | 158,933 | ||||||
| Federal Home Loan Bank advances | 30,000 | 550,000 | ||||||
| Long-term debt | 324,729 | 324,663 | ||||||
| Accrued expenses and other liabilities | 427,105 | 398,107 | ||||||
| Total liabilities | 22,793,727 | 21,308,210 | ||||||
| Shareholders' equity: | ||||||||
| Preferred stock; $1 par value; 10,000,000 shares authorized; 4,000 shares Series I issued and outstanding, $25,000 per share liquidation preference | 96,422 | 96,422 | ||||||
| Common stock, $1 par value; 200,000,000 shares authorized, 115,151,566 and 106,222,758 shares issued and outstanding, respectively | 115,152 | 106,223 | ||||||
| Common stock issuable; 579,835 and 607,128 shares, respectively | 11,977 | 12,307 | ||||||
| Capital surplus | 2,606,403 | 2,306,366 | ||||||
| Retained earnings | 542,606 | 508,844 | ||||||
| Accumulated other comprehensive loss | (294,437 | ) | (329,488 | ) | ||||
| Total shareholders' equity | 3,078,123 | 2,700,674 | ||||||
| Total liabilities and shareholders' equity | $ | 25,871,850 | $ | 24,008,884 | ||||
| 8 |
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, | ||||||||
| (in thousands, except per share data) | 2023 | 2022 | ||||||
| Interest revenue: | ||||||||
| Loans, including fees | $ | 236,431 | $ | 146,741 | ||||
| Investment securities, including tax exempt of $2,110 and $2,655, respectively | 39,986 | 23,665 | ||||||
| Deposits in banks and short-term investments | 3,070 | 653 | ||||||
| Total interest revenue | 279,487 | 171,059 | ||||||
| Interest expense: | ||||||||
| Deposits: | ||||||||
| NOW and interest-bearing demand | 17,599 | 1,469 | ||||||
| Money market | 25,066 | 1,012 | ||||||
| Savings | 538 | 72 | ||||||
| Time | 14,658 | 578 | ||||||
| Deposits | 57,861 | 3,131 | ||||||
| Short-term borrowings | 1,148 | — | ||||||
| Federal Home Loan Bank advances | 5,112 | — | ||||||
| Long-term debt | 3,896 | 4,136 | ||||||
| Total interest expense | 68,017 | 7,267 | ||||||
| Net interest revenue | 211,470 | 163,792 | ||||||
| Provision for credit losses | 21,783 | 23,086 | ||||||
| Net interest revenue after provision for credit losses | 189,687 | 140,706 | ||||||
| Noninterest income: | ||||||||
| Service charges and fees | 8,699 | 9,070 | ||||||
| Mortgage loan gains and other related fees | 4,521 | 16,152 | ||||||
| Wealth management fees | 5,724 | 5,895 | ||||||
| Gains from sales of other loans, net | 1,916 | 3,198 | ||||||
| Lending and loan servicing fees | 4,016 | 2,986 | ||||||
| Securities losses, net | (1,644 | ) | (3,734 | ) | ||||
| Other | 6,977 | 5,406 | ||||||
| Total noninterest income | 30,209 | 38,973 | ||||||
| Total revenue | 219,896 | 179,679 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 78,698 | 71,006 | ||||||
| Communications and equipment | 10,008 | 9,248 | ||||||
| Occupancy | 9,889 | 9,378 | ||||||
| Advertising and public relations | 2,349 | 1,488 | ||||||
| Postage, printing and supplies | 2,537 | 2,119 | ||||||
| Professional fees | 6,072 | 4,447 | ||||||
| Lending and loan servicing expense | 2,319 | 2,366 | ||||||
| Outside services - electronic banking | 3,425 | 2,523 | ||||||
| FDIC assessments and other regulatory charges | 4,001 | 2,173 | ||||||
| Amortization of intangibles | 3,528 | 1,793 | ||||||
| Merger-related and other charges | 8,631 | 9,016 | ||||||
| Other | 8,348 | 3,718 | ||||||
| Total noninterest expenses | 139,805 | 119,275 | ||||||
| Income before income taxes | 80,091 | 60,404 | ||||||
| Income tax expense | 17,791 | 12,385 | ||||||
| Net income | 62,300 | 48,019 | ||||||
| Preferred stock dividends | 1,719 | 1,719 | ||||||
| Earnings allocated to participating securities | 339 | 238 | ||||||
| Net income available to common shareholders | $ | 60,242 | $ | 46,062 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.52 | $ | 0.43 | ||||
| Diluted | 0.52 | 0.43 | ||||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 115,451 | 106,550 | ||||||
| Diluted | 115,715 | 106,677 | ||||||
| 9 |
| Average Consolidated Balance Sheets and Net Interest Analysis |
| For the Three Months Ended March 31, |
| 2023 | 2022 | |||||||||||||||||||||||
| (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) | $ | 16,897,372 | $ | 236,530 | 5.68 | % | $ | 14,234,026 | $ | 146,637 | 4.18 | % | ||||||||||||
| Taxable securities (3) | 6,059,323 | 37,876 | 2.50 | 5,848,976 | 21,010 | 1.44 | ||||||||||||||||||
| Tax-exempt securities (FTE) (1)(3) | 422,583 | 2,834 | 2.68 | 510,954 | 3,566 | 2.79 | ||||||||||||||||||
| Federal funds sold and other interest-earning assets | 472,325 | 3,352 | 2.88 | 1,910,411 | 1,020 | 0.22 | ||||||||||||||||||
| Total interest-earning assets (FTE) | 23,851,603 | 280,592 | 4.76 | 22,504,367 | 172,233 | 3.10 | ||||||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||||
| Allowance for credit losses | (167,584 | ) | (113,254 | ) | ||||||||||||||||||||
| Cash and due from banks | 271,210 | 166,005 | ||||||||||||||||||||||
| Premises and equipment | 329,135 | 277,216 | ||||||||||||||||||||||
| Other assets (3) | 1,484,936 | 1,369,301 | ||||||||||||||||||||||
| Total assets | $ | 25,769,300 | $ | 24,203,635 | ||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| NOW and interest-bearing demand | $ | 4,499,907 | 17,599 | 1.59 | $ | 4,667,098 | 1,469 | 0.13 | ||||||||||||||||
| Money market | 5,223,267 | 25,066 | 1.95 | 5,110,817 | 1,012 | 0.08 | ||||||||||||||||||
| Savings | 1,416,931 | 538 | 0.15 | 1,436,881 | 72 | 0.02 | ||||||||||||||||||
| Time | 2,348,588 | 12,313 | 2.13 | 1,758,895 | 534 | 0.12 | ||||||||||||||||||
| Brokered time deposits | 208,215 | 2,345 | 4.57 | 79,092 | 44 | 0.23 | ||||||||||||||||||
| Total interest-bearing deposits | 13,696,908 | 57,861 | 1.71 | 13,052,783 | 3,131 | 0.10 | ||||||||||||||||||
| Federal funds purchased and other borrowings | 107,955 | 1,148 | 4.31 | 611 | — | — | ||||||||||||||||||
| Federal Home Loan Bank advances | 453,056 | 5,112 | 4.58 | — | — | — | ||||||||||||||||||
| Long-term debt | 324,701 | 3,896 | 4.87 | 318,995 | 4,136 | 5.26 | ||||||||||||||||||
| Total borrowed funds | 885,712 | 10,156 | 4.65 | 319,606 | 4,136 | 5.25 | ||||||||||||||||||
| Total interest-bearing liabilities | 14,582,620 | 68,017 | 1.89 | 13,372,389 | 7,267 | 0.22 | ||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||
| Noninterest-bearing deposits | 7,697,844 | 7,666,635 | ||||||||||||||||||||||
| Other liabilities | 357,367 | 378,327 | ||||||||||||||||||||||
| Total liabilities | 22,637,831 | 21,417,351 | ||||||||||||||||||||||
| Shareholders' equity | 3,131,469 | 2,786,284 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 25,769,300 | $ | 24,203,635 | ||||||||||||||||||||
| Net interest revenue (FTE) | $ | 212,575 | $ | 164,966 | ||||||||||||||||||||
| Net interest-rate spread (FTE) | 2.87 | % | 2.88 | % | ||||||||||||||||||||
| Net interest margin (FTE) (4) | 3.61 | % | 2.97 | % | ||||||||||||||||||||
| (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) | Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $419 million in 2023 and $81.2 million in 2022 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. |
| 10 |
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ: UCBI) is a top 100 U.S. financial institution with $25.9 billion in assets, and through its subsidiaries, provides a full range of banking, wealth management and mortgage services. UCBI is the financial holding company for United Community Bank (“United Community”) which has 207 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment lending subsidiary. United Community is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. Among other awards, United Community is a nine-time winner of the J.D. Power award that ranked the bank #1 in customer satisfaction with consumer banking in the Southeast and was recognized in 2023 by Forbes as one of the World’s Best Banks and one of America’s Best Banks. The bank is also a multi-award recipient of the Greenwich Excellence Awards, including the 2022 awards for Small Business Banking-Likelihood to Recommend (South) and Overall Satisfaction (South), and was named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year. 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.
Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential,” or the negative of these terms or other comparable terminology, and include statements related to the expected financial returns of the acquisition of First Miami Bancorp, Inc. (“FMIA”). Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.
| 11 |
Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the FMIA acquisition may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of the FMIA acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of FMIA may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisition of FMIA, (5) the risks relating to the integration of FMIA’s operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risks associated with United’s pursuit of future acquisitions, (7) the risk of expansion into new geographic or product markets, (8) the dilution caused by United’s issuance of additional shares of its common stock in the FMIA acquisition, and (9) general competitive, economic, political and market conditions. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2022, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).
Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United or FMIA.
United qualifies all forward-looking statements by these cautionary statements.
# # #
| 12 |
Exhibit 99.2
Member FDIC. © 2023 United Community Bank | ucbi.com 1Q23 Investor Presentation April 18, 2023
Disclosures 2 CAUTIONARY STATEMENT This communication contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . In general, forward - looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the expected returns and other benefits of the merger (the “merger”) with First Miami Bancorp, Inc . (“FMIA”), expected improvement in operating efficiency resulting from the merger, estimated expense reductions resulting from the transaction and the timing of achievement of such reductions, the impact on and timing of the recovery of the impact on tangible book value, and the effect of the merger on United’s capital ratios . Forward - looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance . Actual results may prove to be materially different from the results expressed or implied by the forward - looking statements . Forward - looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements . Factors that could cause or contribute to such differences include, but are not limited to ( 1 ) the risk that the cost savings from the merger may not be realized or take longer than anticipated to be realized, ( 2 ) disruption from the merger with customer, supplier, employee or other business partner relationships, ( 3 ) the possibility that the costs, fees, expenses and charges related to the merger may be greater than anticipated, ( 4 ) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the merger, ( 5 ) the risks relating to the integration of FMIA’s operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, ( 6 ) the risk of potential litigation or regulatory action related to mergers, ( 7 ) the risks associated with United’s pursuit of future acquisitions, ( 8 ) the risk of expansion into new geographic or product markets, ( 9 ) the dilution caused by United’s issuance of additional shares of its common stock in mergers, and ( 10 ) general competitive, economic, political and market conditions . Further information regarding additional factors which could affect the forward - looking statements can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward - Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10 - K for the year ended December 31 , 2022 , and other documents subsequently filed by United with the SEC . Many of these factors are beyond United’s ability to control or predict . If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward - looking statements . Accordingly, shareholders and investors should not place undue reliance on any such forward - looking statements . Any forward - looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward - looking statements, whether as a result of new information, future events or otherwise, except as required by law . New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United . United qualifies all forward - looking statements by these cautionary statements .
Disclosures 3 NON - GAAP MEASURES This Investor Presentation includes financial information determined by methods other than in accordance with generally accepted accounting principles (“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 measures include : “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating,” “Return on assets – pre - tax pre - provision, excluding merger - related and other charges,” “Efficiency ratio – operating,” “Expenses – operating,” and “Tangible common equity to tangible assets . ” Management has included these non - GAAP measures because it believes these measures may provide useful supplemental information for evaluating United’s underlying performance trends . Further, management uses these measures in managing and evaluating United’s business and intends to refer to them in discussions about our operations and performance . Operating performance 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 GAAP measures can be found in the ‘Non - GAAP Reconciliation Tables’ included in the exhibits to this Presentation .
207 BANKING OFFICES ACROSS THE SOUTHEAST #1 IN CUSTOMER SATISFACTION in 2022 with Retail Banking in the Southeast – J.D. Power TOP 10 WORLD’S BEST BANKS and #3 in the United States – Forbes $0.23 QUARTERLY DIVIDEND – UP 10% YOY #2 Highest Net Promoter Score among all banks nationwide in 2021 – J.D. Power United Community Banks, Inc. $25.9 BILLION IN TOTAL ASSETS $4.4 BILLION IN AUA $22.0 BILLION IN TOTAL DEPOSITS BEST BANKS TO WORK FOR in 2022 for the sixth consecutive year – American Banker 4 Premier Southeast Regional Bank x Metro - focused branch network with locations in the fastest - growing MSAs in the Southeast x 198 branches, 9 LPOs, and 5 MLOs across six Southeast states x Top 10 market share in GA and SC x Proven ability to integrate – 13 acquisitions completed over the past 10 years Committed to Service Since 1950 Extended Navitas and SBA Markets $17.1 BILLION IN TOTAL LOANS Company Overview 12.6% TIER 1 RBC 100 BEST BANKS IN AMERICA in 2022 f or the ninth consecutive year – Forbes x Offered nationwide x Navitas subsidiary is a technology - enabled, small - ticket, essential - use commercial equipment finance provider x SBA business has both in - footprint and national business (4 specific verticals) UCBI Banking Offices Note: See glossary located at the end of this presentation for reference on certain acronyms Regional Full Service Branch Network National Navitas and SBA Markets
$24.38 $24.38 $25.76 $17.08 $17.13 $17.59 1Q22 4Q22 1Q23 Book Value Per Share GAAP Tangible 10.0% Annualized 1Q EOP core deposit growth 7.34% Return on common equity – GAAP 11.63% Return on tangible common equity – operating (1) Other 1Q notable items: $1.6mm securities losses $10.4mm Progress - related double dip provision $0.52 Diluted earnings per share – GAAP $0.58 Diluted earnings per share – operating (1) 0.95% Return on average assets – GAAP 1.06% Return on average assets – operating (1) 1.71% PTPP return on average assets – operating (1) 1.10% Cost of deposits 34% DDA / Total Deposits 1Q23 Highlights (1) See non - GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP performance $0.43 $0.74 $0.52 $0.50 $0.75 $0.58 1Q22 4Q22 1Q23 Diluted Earnings Per Share GAAP Operating (1) 0.78% 1.33% 0.95% 0.89% 1.35% 1.06% 1Q22 4Q22 1Q23 Return on Average Assets GAAP Operating 1.37% 2.07% 1.58% 1.52% 2.09% 1.71% 1Q22 4Q22 1Q23 PTPP Return on Average Assets PTPP Operating PTPP (1) (1) 8.2% Annualized 1Q EOP core loan growth 57.2% Efficiency ratio – GAAP 53.7% Efficiency ratio – operating (1) 5 (1)
6 (1) See non - GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP performa nce (2) UCBI 1Q23 includes the impact of the $10.4 million initial provision to establish the reserve for Progress loans and unfunded co mmitments, which reduced ROA – Operating by 13 bps and reduced ROTCE – Operating by 135 bps Long - Term Financial Performance & Shareholder Return 1.00% 0.62% 1.35% 1.46% 1.04% 1.37% 1.13% 0.95% 1.06% 1.09% 1.40% 1.51% 1.07% 1.42% 1.19% 1.06% 2016 2017 2018 2019 2020 2021 2022 1Q23 ROA (1)(2) UCBI - GAAP UCBI - Operating KRX Peer Median 9.41% 5.67% 11.60% 11.89% 9.25% 13.14% 9.54% 7.34% 11.86% 12.02% 15.69% 15.81% 12.24% 17.33% 14.04% 11.63% 2016 2017 2018 2019 2020 2021 2022 1Q23 ROTCE (1)(2) UCBI - GAAP ROE UCBI - Operating KRX Peer Median $304 $177 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total Shareholder Return $ UCBI Outperformance Performance for the period ended April 14, 2023 United Community Banks, Inc. KBW Nasdaq Regional Bank Index (KRX) 1 - YEAR - 11% - 20% 3 - YEAR 51% 37% 5 - YEAR - 4% - 10% 10 - YEAR 214% 80%
4.7% 2.1% 12.7% 13.4% 1 2 Fastest Growing UCBI (3) ’23 – ’28 ’23 – ’28 ’22 Total Major Southeast Market (%) of Total Proj. Pop. Proj. HHI. Deposits MSAs (1) Rank Deposits Growth % Growth % ($M) 1) Raleigh, NC 11 3.67% 7.40% 11.77% 54,911 2) Jacksonville, FL 22 0.43% 6.89% 14.35% 103,192 3) Orlando, FL 14 3.46% 6.35% 10.63% 75,966 4) Nashville, TN 12 6.50% 6.12% 12.44% 92,625 5) Charlotte, NC 14 2.48% 5.80% 14.66% 336,500 6) Tampa, FL 42 0.17% 5.19% 11.68% 92,275 7) Atlanta, GA 9 21.56% 4.68% 14.16% 237,455 8) Richmond, VA -- -- 3.88% 12.78% 142,812 9) Washington DC -- -- 2.72% 11.66% 297,120 10) Virginia Beach, VA -- -- 2.25% 14.75% 35,868 11) Miami, FL 48 1.58% 1.95% 10.76% 352,009 Fastest Growing UCBI (3) ’23 – ’28 ’23 – ’28 ’22 Total Mid-Size Southeast Market (%) of Total Proj. Pop. Proj. HHI. Deposits MSAs (2) Rank Deposits Growth % Growth % ($M) 1) Myrtle Beach, SC 12 2.09% 9.38% 12.44% 13,698 2) Winter Haven, FL -- -- 9.37% 9.14% 11,738 3) Fort Myers, FL -- -- 8.93% 11.31% 23,119 4) Daphne, AL 24 0.06% 8.00% 8.53% 6,795 5) Sarasota, FL 32 0.27% 7.73% 12.11% 31,735 6) Port St. Lucie, FL 14 0.11% 7.53% 11.74% 13,322 7) Fayetteville, AR -- -- 6.99% 10.18% 17,477 8) Naples, FL 30 0.07% 6.83% 8.60% 22,814 9) Daytona Beach, FL -- -- 6.56% 10.27% 15,311 10) Hilton Head Island, SC 17 0.17% 6.33% 15.75% 7,121 11) Charleston, SC 15 1.23% 6.32% 14.65% 22,732 12) Destin, FL 12 1.04% 6.21% 13.20% 8,749 13) Clarksville, TN 7 1.57% 6.16% 10.22% 5,576 14) Ocala, FL -- -- 6.06% 16.04% 8,024 15) Spartanburg, SC 6 1.36% 6.01% 12.32% 6,180 16) Huntsville, AL 8 2.98% 5.93% 16.50% 11,727 17) Melbourne, FL 17 0.03% 5.29% 11.06% 13,211 18) Gainesville, GA 3 3.18% 5.20% 20.84% 6,040 19) Savannah, GA 8 1.36% 5.16% 9.66% 10,221 20) Wilmington, NC 17 0.24% 5.02% 12.29% 17,215 UCBI MSA Presence 7 (1) Includes MSAs with a population greater than 1,000,000 (2) Includes MSAs with a population between 200,000 and 1,000,000 (3) Market Rank and (%) of Total Deposits pro forma for recently completed acquisition of Progress Financial Corporation Projected Population Growth (3) (2023 - 2028) Projected Household Income Growth (3) (2023 - 2028) National Avg. National Avg. Footprint Focused on High - Growth MSAs in Southeast
34% 22% 24% 6% 14% DDA MMDA Savings Time NOW Outstanding Deposit Franchise 8 1Q23 Total Deposits $22.0 billion 1Q23 Customer Deposits by State Cost of Deposits Trend North Carolina 0.14% 0.09% 0.07% 0.06% 0.06% 0.08% 0.19% 0.49% 1.10% 0.15% 0.13% 0.11% 0.10% 0.08% 0.13% 0.31% 0.64% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 UCBI KRX Peer Median Avg. FedFunds % 1Q23 Avg. Fed Funds of 4.52% Strong Deposit Growth x Total deposits were up $790 million in 1Q23, or 14.9% annualized from 4Q22 (excluding Progress) x Total customer deposits were up $525 million in 1Q23, or 10.0% annualized from 4Q22 (excluding Progress and brokered deposits) Deposit Costs Below Peers, But Increased Due to Rates and Mix x 23% cumulative deposit beta since 4Q21, as cost of deposits moved to 1.10% from 0.49% in 4Q22 x DDA% moved to 34% of total deposits from 38% last quarter, as customers moved funds to CDs, which increased to 14% of total deposits from 9% last quarter 44% 12% 16% 11% 6% 12% Georgia South Carolina Tennessee Alabama Florida
Deposit Trends Excluding Progress Acquisition 9 x Deposits are granular with a $32 thousand average account size and are diverse by industry and geography x Business deposits increased 6%, or $426 million from 4Q22 • The growth came in the interest - bearing line items as DDA accounts were relatively flat x Personal deposits increased 1%, or $100 million, from 4Q22 • The growth was accompanied by a mix change towards interest - bearing deposits and away from DDA accounts 3Q22 4Q22 1Q23 EOP Balance ($ in millions) Avg. Customer Balance EOP Balance ($ in millions) Avg. Customer Balance EOP Balance ($ in millions) Avg. Customer Balance Business - DDA $5,310 $60,184 $4,778 $54,028 $4,766 $53,467 Business - All Other $2,371 $186,344 $2,281 $178,636 $2,719 $195,813 Personal - DDA $3,912 $12,129 $3,771 $11,629 $3,466 $10,607 Personal - All Other $6,380 $32,723 $6,437 $33,094 $6,842 $33,524 Public $2,129 $729,473 $2,440 $848,230 $2,515 $876,117 Brokered & Other $220 N/A $169 N/A $359 N/A Total $20,321 $32,704 $19,877 $31,911 $20,667 $31,893
Uninsured Deposits Excluding Progress Acquisition 10 x We estimate that 76% of our deposits were either insured or collateralized as of March 31, 2023 x Our uninsured deposits have significant diversity with respect to industry type and geography x Our sweep accounts include ICS deposits, which increased approximately $281 million in 1Q23 $ in billions Deposit Type Total Deposits $ Insured Deposits $ Collateralized Deposits $ Uninsured & Uncollateralized $ Uninsured & Uncollateralized % Retail $10.8 $9.1 - $1.7 16% Business $6.5 $3.1 - $3.4 52% Public $ 2.5 $0.1 $2.4 $0.0 0% Sweep $0.5 $0.5 - $0.0 0% Brokered $0.4 $0.4 - $0.0 0% Total $20.7 $13.2 $2.4 $5.1 24%
11 1Q23 Total Loans $17.1 billion Well - Diversified Loan Portfolio Quarter Highlights x Excluding Progress, loans increased $345 million, or 8.2% annualized x Construction & CRE ratio as a percentage of total RBC = 83% / 205% x Top 25 relationships totaled $741 million, or 4.3% of total loans x SNCs outstanding of $351 million, or 2.1% of total loans x Project lending limit of $32 million x Conservative relationship lending limits driven by risk grades 41% 11% 21% 1% 16% 5% 3% 2% Residential Mortgage Manufactured Housing C&I Commercial Construction CRE Other Consumer Home Equity Residential Construction $2.4 $3.1 $1.4 Commercial & Industrial Owner Occupied CRE Equipment Financing $ in billions
x Substantial balance sheet liquidity and above - peer capital ratios x $5.9 billion securities portfolio offers significant near - and medium - term cash flow opportunities x FHLB borrowings declined to $30 million in 1Q23 from $550 million at year - end due to strong deposit growth 8.5% 8.1% 7.7% 7.6% 7.7% 7.9% 8.2% 7.1% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 UCBI KRX Peer Median 12 Loans / Deposits % Tangible Common Equity / Tangible Assets % Common Equity Tier 1 RBC %* 66% 64% 68% 70% 73% 77% 78% 85% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 UCBI KRX Peer Median 12.6% 12.5% 11.9% 12.0% 12.1% 12.3% 12.1% 11.4% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 UCBI KRX Peer Median Balance Sheet Strength – Liquidity and Capital *1Q23 regulatory capital ratios are preliminary
13 Risk - Based Capital Ratios* Tangible Book Value Per Share x 1Q23 regulatory capital ratios decreased slightly due to closing the Progress acquisition x The leverage ratio decreased 4 bps to 9.65%, as compared to 4Q22 x Quarterly dividend of $0.23 per share, an increase of 10% YOY x There were no share repurchases during 1Q23 x Net unrealized securities losses in AOCI improved by $37 million to $305 million in 1Q23 • AFS securities portfolio of $3.3 billion with a 3.5 - year duration x TCE % of 8.17% increased 29 bps from 4Q22 • 1Q23 adjusted TCE %, including unrealized securities losses on HTM securities, of 7.09% 12.5% 11.9% 12.0% 12.1% 12.3% 11.4% 12.1% 0.7% 0.6% 0.6% 0.6% 0.5% 0.3% 0.5% 1.5% 1.9% 1.9% 1.9% 2.0% 1.9% 1.9% 14.7% 14.3% 14.5% 14.6% 14.8% 13.6% 14.5% 4Q21 1Q22 2Q22 3Q22 4Q22 4Q22 KRX Peer Median 1Q23* CET1 Non-common Tier 1 Tier 2 Total Capital *1Q23 regulatory capital ratios are preliminary $17.59 $17.13 ( $0.17 ) $0.60 ( $0.06 ) ( $0.24 ) $0.30 $0.03 4Q22 TBV Progress Acquisition Operating Earnings Merger Charges Dividends Change in OCI Other 1Q23 TBV
3.61% 3.76% ( 0.05% ) ( 0.16% ) 0.06% 4Q22 NIM Mix Change Higher Deposit Rates Loan Accretion 1Q23 NIM 14 Net Interest Revenue & Net Interest Margin 1Q23 NIM Compression x Net interest revenue increased $1.6 million from 4Q22 x Net interest margin increased 64 bps compared to 1Q22, but decreased 15 bps from 4Q22, primarily driven by increased deposit costs x Core net interest margin of 3.53%, which excluded purchased loan accretion x Purchased loan accretion totaled $4.8 million and contributed 8 bps to the margin, up 6 bps from 4Q22 x Excluding Progress, approximately $5.3 billion or 34% of total loans are floating rate with another $1.9 billion that will adjust beyond one year Net Interest Revenue / Margin (1) Yields & Costs $ in millions 4.18% 4.33% 4.71% 5.22% 5.68% 2.97% 3.19% 3.57% 3.76% 3.61% 1.55% 1.81% 2.15% 2.44% 2.51% 0.22% 0.26% 0.44% 0.96% 1.89% 1Q22 2Q22 3Q22 4Q22 1Q23 Loan Yield NIM Securities Yield Cost of IBL (1) Net interest margin is calculated on a fully - taxable equivalent basis (2) Core net interest margin excludes PPP fees and purchased loan accretion (2) (1) $163.8 $209.9 $211.5 2.97% 3.76% 3.61% 2.90% 3.74% 3.53% $- $50.0 $100.0 $150.0 $200.0 2.00% 2.50% 3.00% 3.50% 4.00% 1Q22 4Q22 1Q23 Net Interest Revenue Net Interest Margin Core Net Interest Margin
Noninterest Income $ in millions $9.1 $10.0 $9.6 $9.5 $8.7 $16.1 $7.0 $6.3 $3.1 $4.5 $5.9 $6.0 $5.9 $5.8 $5.7 $3.2 $3.8 $2.2 $1.5 $1.9 $4.7 $6.7 $7.9 $13.5 $9.4 1Q22 2Q22 3Q22 4Q22 1Q23 Service Charges Mortgage Brokerage / Wealth Mgmt Loan sale gains Other $39.0 $33.4 $30.2 Linked Quarter x Fees were down $3.2 million • Other income was down $4.1 million due to $3.5 million less in positive equity gains and $1.6 million in 1Q securities losses • A $1.4 million increase in mortgage fees was driven by $1.3 million in higher gains on mortgage sales • MSR write - down of $310,000 in 1Q23 • $1.5 million in 1Q gains on $21.8 million of SBA loans sold compared to $982,000 in gains on $16.9 million loans sold in 4Q22 • SBA / USDA loan originations seasonally decreased $10.1 million to $36.6 million • Gain on sale of equipment finance loans was $394,000 on $18.7 million of loan sales compared to $522,000 in gains on $24.3 million of loan sales in 4Q22 Year - over - Year x Fees were down $8.8 million • Mortgage rate locks of $335 million in 1Q23 compared to $757 million in 1Q22 • Other noninterest income increased $4.7 million due to: • $2.1 million less losses on security sales • $1.0 million increase in loan fees 15 $31.9 $33.5
$119.3 $120.8 $112.8 $117.3 $139.8 $110.3 $113.6 $111.0 $115.9 $131.2 1Q22 2Q22 3Q22 4Q22 1Q23 GAAP Operating Disciplined Expense Management $ in millions x The efficiency ratio increased compared to last quarter due to the 15 bps decrease in our margin and seasonal increase in expenses 16 Efficiency Ratio % Noninterest Expense $ 57.4% 56.6% 48.4% 48.0% 57.2% 53.1% 53.2% 47.7% 47.4% 53.7% 50.86% 1Q22 2Q22 3Q22 4Q22 1Q23 GAAP Operating KRX Peer Median x Total operating expenses increased by $15.3 million quarter over quarter; notable items include: • The Progress acquisition, including $1.9 million in higher intangible amortization, contributed the majority of the quarter’s expense increase • In addition, $2.2 million of seasonally higher payroll taxes compared to 4Q22 • FDIC insurance costs were $0.9 million higher due to a 2 bp increase in the deposit insurance assessment rate
x 1Q23 net charge - offs of $7.1 million, or 0.17% of average loans, annualized • Navitas 1Q23 NCOs of 0.93%, annualized, or $3.4 million x Non - performing assets increased $29.1 million during the quarter and were 0.43% of total loans, an increase of 14 bps from both 4Q22 and 1Q22 x Past Due loans increased $26 million in 1Q23, primarily driven by two senior care loans x Special mention loans improved from $247 million in 4Q22 to $239 million in 1Q23 x Higher risk loans, defined as special mention plus substandard accruing, increased slightly from 4Q22 to 3.0% and were down 0.30% from the 3.3% of loans in 1Q22 Credit Quality Net Charge - Offs as % of Average Loans Non - Performing Assets & Past Due Loans as a % of Total Loans 17 0.55% 0.28% 0.29% 0.23% 0.24% 0.29% 0.43% 0.18% 0.06% 0.09% 0.10% 0.14% 0.18% 0.31% 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23 NPAs (%) Past Dues (%) 2.6% 2.6% 2.1% 2.0% 2.1% 1.6% 1.4% 1.5% 1.4% 1.2% 1.2% 1.1% 1.3% 1.6% 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23 Special Mention (%) Substandard Accruing(%) Special Mention & Substandard Accruing Loans as a % of Total Loans 0.17% 0.00% 0.08% - 0.03% 0.03% 0.17% 0.17% 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk - Forward Allowance for Credit Losses (ACL) 18 Note: ACL includes the reserve for unfunded commitments x The provision for credit losses was $21.8 million in 1Q23 x Loan growth accounted for $4.2 million of the provision increase x NCOs drove $7.1 million in reserve build for the quarter x The Progress Day 2 Non - PCD Double Dip contributed another $10.4 million to the reserve build in 1Q23 x ACL reserve levels remain strong at 1.16% of loans, up from 1.02% in 1Q22 $146 $153 $167 $181 $198 1.02% 1.05% 1.12% 1.18% 1.16% 0.00% 0.50% 1.00% 1.50% 2.00% $30 $50 $70 $90 $110 $130 $150 $170 $190 1Q22 2Q22 3Q22 4Q22 1Q23 ACL - Allowance for Credit Losses $ ACL - Allowance for Credit Losses % $180,520 $197,923 $4,186 ( $7,084 ) ( $240 ) $7,390 $2,704 $10,447 4Q22 ACL Loan Growth NCOs Specific Reserve Model / Forecast Changes Progress Day 1 PCD Credit Allowance Progress Day 2 Non-PCD Double Dip 1Q23 ACL ($000)
Member FDIC. © 2023 United Community Bank | ucbi.com 1Q23 INVESTOR PRESENTATION Exhibits
Navitas Portfolio Net Charge - Offs 20 x Navitas represents 8% of total loans x Navitas 1Q23 NCOs of 0.93%, or $3.4 million x Navitas ACL / Loans of 1.81% x We expect 2023 NCOs to be within their normal 0.85% - 0.95% range Navitas Performance $ in millions $864 $913 $969 $1,017 $1,083 $1,148 $1,211 $1,281 $1,374 $1,447 9.12% 9.08% 9.08% 9.01% 8.89% 8.85% 8.80% 8.79% 8.88% 8.99% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Navitas Loans $ Portfolio Yield % 0.72% 0.83% 0.70% 0.13% 0.21% 0.29% 0.10% 0.31% 0.36% 0.50% 0.93% 2019 2020 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
x Rate locks were $335 million compared to $364 million in 4Q22 x 27% of locked loans were variable rate mortgages in 1Q23, down from 60% in 4Q22 x Sold $79 million loans in 1Q23, up $11 million from $68 million sold in 4Q22 x Gain on sale % increased in 1Q23 driven by an increase in FHA, VA and USDA loans x Purchase / Refi mix shifted from 66% / 34% in 1Q22 to 87% / 13% in 1Q23 21 Mortgage Locks & Sales Mortgage Locks - Purchase vs. Refinance Mortgage Activity Shift to Purchase & Adj. Rate Loans $757 $597 $456 $364 $335 $207 $160 $93 $68 $79 3.6% 3.7% 3.1% 2.7% 2.9% -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 5.5% $0 $100 $200 $300 $400 $500 $600 $700 $800 1Q22 2Q22 3Q22 4Q22 1Q23 Mortgage locks $ Loans sold $ Gain on sale % 66% 73% 71% 62% 87% 34% 27% 29% 38% 13% 1Q22 2Q22 3Q22 4Q22 1Q23 Purchase Refinance $ in millions
22 x Senior Care lending team are dedicated specialists with significant experience in the space x Senior Care portfolio outstanding totaled $410 million as of 1Q23, or 2.4% of total loans x As of March 31, $10.5 million of Senior Care loans were nonaccruing x As of March 31, $90.7 million of Senior Care loans were special mention and $95.2 million were substandard accruing 1% 20% 25% 49% 6% Selected Segments – Senior Care $ in millions $53 $71 $80 $80 $73 $65 $60 $79 $106 $172 $170 $170 $169 $144 $135 $124 $111 $91 $535 $537 $549 $520 $518 $465 $442 $408 $410 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Substandard $ Special Mention $ Pass $
23 x Office portfolio is distributed across our Southeastern primary and secondary markets, with very few loans in central business districts x Office portfolio exposure has a small suburban business focus and a large amount of well - located medical office buildings x Granular portfolio with an average office loan size of $1.3 million and a median loan size of $477,184 as of 1Q23 x Office portfolio outstanding totaled $710 million as of 1Q23, or 4.2% of total loans x Top 10 Office commitments total $132 million x As of March 31, no Office loans were nonaccruing x As of March 31, $8.5 million of Office loans were special mention and $322,000 were substandard accruing 1% 20% 25% 49% 6% Selected Segments – Office $ in millions $573 $538 $531 $541 $666 $683 $664 $661 $710 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Investment CRE – Office Exposure Outstanding $ Note: Reliant acquisition contributed $138 million of the increase in office loans outstanding from 4Q21 to 1Q22; Progress acquisition contributed $74 million of the increase in office loans outstanding from 4Q22 to 1Q23
Noninterest - Bearing 25.8% Interest - Bearing 66.7% Retail Time 3.2% Jumbo Time 4.4% C&D 1.2% 1 - 4 Family 17.5% Multifamily 4.7% OO CRE 15.2% NOO CRE 58.2% C&I 2.8% Other 0.4% (1) Consolidated financial data as of December 31, 2022 (2) Bank - level Call Report data as of December 31, 2022 (3) Nonperforming assets defined as nonaccrual loans and leases and real estate owned (4) Deposit data as of December 31, 2022 Note: Dollar values in millions. UCBI branch count includes eight loan production offices Source: S&P Global Market Intelligence, FDIC, Company Documents. Florida First Miami Bancorp, Inc. (3) United Community Banks, Inc. (206) Deposits 2 Loans 2 Acquisition Highlights 4.71% Yield 1.00% Cost Tampa Miami Palm Beach Orlando Sarasota Naples Stuart Melbourne Fort Lauderdale Pro Forma UCBI Miami MSA Presence 8 Branches $1.2B deposits 4 4 th largest MSA based on Pro Forma Deposits Pending Acquisition of First Miami Bancorp, Inc. 24 x $1.0 billion community bank operating in attractive Miami market x 70 - year - old community bank with deep presence and strong relationships in the Miami MSA x Adds greater scale to our wealth management platform by adding approximately $310 million of AUM x EPS accretion in 2024 of ~3%, or $0.09 x Low loan / deposit ratio of 69%; more than $801 million in core deposits x Adds bankers with market expertise and business model centered on delivering excellent customer service x Commitment to credit quality and overall customer service
Non - GAAP Reconciliation Tables $ in thousands, except per share data 25 1Q22 2Q22 3Q22 4Q22 1Q23 Expenses Expenses - GAAP 119,275$ 120,790$ 112,755$ 117,329$ 139,805$ Merger-related and other charges (9,016) (7,143) (1,746) (1,470) (8,631) Expenses - Operating 110,259$ 113,647$ 111,009$ 115,859$ 131,174$ Diluted Earnings per share Diluted earnings per share - GAAP 0.43$ 0.61$ 0.74$ 0.74$ 0.52$ Merger-related and other charges 0.07 0.05 0.01 0.01 0.06 Diluted earnings per share - Operating 0.50 0.66 0.75 0.75 0.58 Book Value per share Book Value per share - GAAP 24.38$ 23.96$ 23.78$ 24.38$ 25.76$ Effect of goodwill and other intangibles (7.30) (7.28) (7.26) (7.25) (8.17) Tangible book value per share 17.08$ 16.68$ 16.52$ 17.13$ 17.59$ Return on Tangible Common Equity Return on common equity - GAAP 6.80 % 9.31 % 11.02 % 10.86 % 7.34 % Effect of merger-related and other charges 1.03 0.79 0.19 0.15 0.81 Return on common equity - Operating 7.83 10.10 11.21 11.01 8.15 Effect of goodwill and intangibles 3.17 4.10 4.39 4.19 3.48 Return on tangible common equity - Operating 11.00 % 14.20 % 15.60 % 15.20 % 11.63 % Return on Assets Return on assets - GAAP 0.78 % 1.08 % 1.32 % 1.33 % 0.95 % Merger-related and other charges 0.11 0.09 0.02 0.02 0.11 Return on assets - Operating 0.89 % 1.17 % 1.34 % 1.35 % 1.06 %
Non - GAAP Reconciliation Tables $ in thousands, except per share data 26 1Q22 2Q22 3Q22 4Q22 1Q23 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 0.78 % 1.08 % 1.32 % 1.33 % 0.95 % Income tax expense 0.20 0.32 0.37 0.41 0.29 (Release of) provision for credit losses 0.39 0.09 0.25 0.33 0.34 Return on assets - pre-tax, pre-provision 1.37 1.49 1.94 2.07 1.58 Merger-related and other charges 0.15 0.11 0.03 0.02 0.13 Return on assets - pre-tax, pre-provision, excluding merger-related and other charges 1.52 % 1.60 % 1.97 % 2.09 % 1.71 % Efficiency Ratio Efficiency Ratio - GAAP 57.43 % 56.58 % 48.41 % 47.95 % 57.20 % Merger-related and other charges (4.34) (3.35) (0.75) (0.60) (3.53) Efficiency Ratio - Operating, excluding PPP fees and MSR marks 53.09 % 53.23 % 47.66 % 47.35 % 53.67 % Tangible common equity to tangible assets Equity to assets ratio - GAAP 11.06 % 10.95 % 11.12 % 11.25 % 11.90 % Effect of goodwill and other intangibles (2.94) (2.96) (3.01) (2.97) (3.36) Effect of preferred equity (0.40) (0.40) (0.41) (0.40) (0.37) Tangible common equity to tangible assets ratio 7.72 % 7.59 % 7.70 % 7.88 % 8.17 %
Glossary 27 ACL – Allowance for Credit Losses MLO – Mortgage Loan Officer ALLL – Allowance for Loan Losses MMDA – Money Market Deposit Account AOCI – Accumulated Other Comprehensive Income (Loss) MTM – Marked-to-market AUA – Assets Under Administration MSA – Metropolitan Statistical Area BPS – Basis Points MSR – Mortgage Servicing Rights Asset C&I – Commercial and Industrial NCO – Net Charge-Offs C&D – Construction and Development NIM – Net Interest Margin CECL – Current Expected Credit Losses NOW – Negotiable Order of Withdrawal CET1 – Common Equity Tier 1 Capital NPA – Non-Performing Asset CRE – Commercial Real Estate NSF – Non-sufficient Funds CSP – Customer Service Profiles OO RE – Owner Occupied Commercial Real Estate DDA – Demand Deposit Account PCD – Loans Purchased with Credit Deterioration EOP – End of Period PPP – Paycheck Protection Program EPS – Earnings Per Share PTPP – Pre-Tax, Pre-Provision Earnings FHA – Federal Housing Administration RBC – Risk Based Capital FTE – Fully-taxable equivalent ROA – Return on Assets GAAP – Accounting Principles Generally Accepted in the USA SBA – United States Small Business Administration IBL – Interest-bearing liabilities TCE – Tangible Common Equity ICS – Insured Cash Sweep USDA – United States Department of Agriculture KRX – KBW Nasdaq Regional Banking Index VA – Veterans Affairs LPO – Loan Production Office YOY – Year over Year