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
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| Item 2.02 | Results of Operations and Financial Condition. |
|
On October 18, 2023, United Community Banks, Inc. (“United”) issued a press release announcing financial results for its third fiscal quarter of 2023. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act. | |
| Item 7.01 | Regulation FD Disclosure. |
|
On October 18, 2023, United will hold an earnings conference call and webcast at 11:00 a.m. (Eastern Time) to discuss financial results for its third fiscal 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.
The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act. | |
| Item 9.01 | Financial Statements and Exhibits. |
| (d) Exhibits |
EXHIBIT INDEX
| Exhibit No. | Description |
| 99.1 | United Community Banks, Inc. Press Release, dated October 18, 2023. |
| 99.2 | Slide presentation to be used during October 18, 2023 earnings call. |
| 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: October 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 Third Quarter Results
Strengthened Customer Deposit Base with 5.6% Annualized Growth; Loan Growth of 5.4% Annualized
GREENVILLE, SC – October 18, 2023 - United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced net income for the third quarter of $47.9 million and pre-tax, pre-provision income of $90.1 million. Diluted earnings per share of $0.39 for the quarter represented a decrease of $0.14 or 26% from the second quarter of 2023 and a decrease of $0.35 or 47%, from the third quarter of 2022. On an operating basis, excluding merger-related and other charges, diluted earnings per share of $0.45 decreased $0.10 or 18% compared to last quarter. Customer deposits organically grew by 5.6% annualized and loans grew at a 5.4% annualized rate during the quarter. Net interest revenue increased $2.3 million as the addition of First National Bank of South Miami (“FNBSM”) was partly offset by a contraction in the net interest margin, driven by continued deposit pricing competition. Noninterest income was down $4.4 million primarily due to the absence of the unusual second quarter gain on the sale of an insurance subsidiary and a one-time small business partnership investment gain. Noninterest expenses increased mainly due to closing the FNBSM acquisition.
For the quarter, United’s return on assets was 0.68%, or 0.79% on an operating basis. Return on common equity was 5.3% and return on tangible common equity was 9.0%. On a pre-tax, pre-provision basis, operating return on assets was 1.44% for the quarter. At quarter-end, tangible common equity to tangible assets was 8.18%, down three basis points from the second quarter of 2023.
Chairman and CEO Lynn Harton stated, “We continue to be pleased with the strength of our customer deposit franchise, driven by our service model. In the third quarter our customer deposits grew by 5.6% annualized, allowing us to decrease high cost brokered deposits and fund solid loan growth within our stated target range of mid-to-high single digits. Our cost of deposits continued to increase, leading to a modest decline in our net interest margin for the quarter. Increases in credit costs are concentrated in specific sectors that are under stress or specific companies that have been poorly managed. This is not unexpected given the speed at which borrowing rates have increased. We continue to expect broader credit performance to remain strong, but are appropriately cautious in our portfolio management given the potential for ongoing changes in the economic environment.”
United’s net interest margin decreased by 13 basis points to 3.24% compared to the second quarter. The average yield on United’s interest-earning assets was up 20 basis points to 5.17%, but its cost of deposits increased by 39 basis points to 2.03%, leading to the reduction in the net interest margin. Net charge-offs were $26.6 million or 0.59% of average loans during the quarter, up 39 basis points compared to the second quarter of 2023, largely due to the $19 million charge-off from an 8.7% participation in a large, nationally syndicated credit disclosed during the quarter. NPAs were 34 basis points relative to total assets, down six basis points from the previous quarter.
Mr. Harton concluded, “We continue to focus on our key mission of building our communities by serving our customers. Our teams are executing on that promise across our footprint, which we believe is one of the strongest in the Southeast. We have been fortunate to attract new teams, adding both new talent and additional exposure to high-growth metropolitan markets within our franchise. This quarter, we are very glad to welcome FNBSM officially into the United team, boosting our growth opportunities in Miami. FNBSM brings a very talented team and we look forward to growing together.”
Third Quarter 2023 Financial Highlights:
| · | Net income of $47.9 million and pre-tax, pre-provision income of $90.1 million |
| · | EPS decreased by 47% compared to last year on a GAAP basis and 40% on an operating basis; compared to second quarter 2023, EPS decreased 26% on a GAAP basis and decreased 18% on an operating basis |
| · | Return on assets of 0.68%, or 0.79% on an operating basis |
| · | Pre-tax, pre-provision return on assets of 1.31%, or 1.44% when excluding merger-related and other charges |
| · | Return on common equity of 5.3% |
| · | Return on tangible common equity of 9.0% on an operating basis |
| · | Loan production, excluding balances acquired from FNBSM, of $1.5 billion, resulting in organic loan growth of 5.4% annualized for the quarter |
| · | Customer deposits, excluding brokered deposits, acquired FNBSM balances, and those from the sale of two Tennessee branches that were sold during the quarter were up $314 million or 5.6% annualized from last quarter |
| · | Net interest margin of 3.24% was down 13 basis points from the second quarter due to increased deposit costs |
| · | Mortgage closings of $211 million compared to $317 million a year ago; mortgage rate locks of $304 million compared to $456 million a year ago |
| · | Noninterest income was down $4.4 million primarily due to the absence of unusual second quarter gain on the sale of an insurance subsidiary and a one-time small business partnership investment gain |
| · | Noninterest expenses increased $12.1 million compared to the second quarter on a GAAP basis and by $6.5 million on an operating basis, mostly due to increases in salaries and employee benefits expenses, occupancy, amortization of intangibles and higher merger-related and other charges related to closing the FNBSM acquisition |
| · | Efficiency ratio of 61.3%, or 57.4% on an operating basis, up from second quarter largely driven by net interest margin pressure |
| · | Net charge-offs of $26.6 million, or 59 basis points as a percent of average loans, up 39 basis points from the net charge-offs level experienced in the second quarter and mostly due to the $19 million charge-off from an 8.7% participation in a large, nationally syndicated credit disclosed during the quarter |
| · | Nonperforming assets of 0.34% of total assets, down six basis points compared to June 30, 2023 |
| · | Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 5% year-over-year |
Conference Call
United will hold a conference call on Wednesday, October 18, 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/10183036/fa91904ab0. Those without internet access or who are 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 available for replay by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of United’s website at ucbi.com.
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
(in thousands, except per share data)
| 2023 | 2022 | Third
2023 - | For
the Nine Months Ended September 30, | YTD
2023 - | ||||||||||||||||||||||||||||||||
Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2022 Change | 2023 | 2022 | 2022
Change | ||||||||||||||||||||||||||||
| INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
| Interest revenue | $ | 323,147 | $ | 295,775 | $ | 279,487 | $ | 240,831 | $ | 213,887 | $ | 898,409 | $ | 572,324 | ||||||||||||||||||||||
| Interest expense | 120,591 | 95,489 | 68,017 | 30,943 | 14,113 | 284,097 | 29,855 | |||||||||||||||||||||||||||||
| Net interest revenue | 202,556 | 200,286 | 211,470 | 209,888 | 199,774 | 1 | % | 614,312 | 542,469 | 13 | % | |||||||||||||||||||||||||
| Provision for credit losses | 30,268 | 22,753 | 21,783 | 19,831 | 15,392 | 74,804 | 44,082 | |||||||||||||||||||||||||||||
| Noninterest income | 31,977 | 36,387 | 30,209 | 33,354 | 31,922 | — | 98,573 | 104,353 | (6 | ) | ||||||||||||||||||||||||||
| Total revenue | 204,265 | 213,920 | 219,896 | 223,411 | 216,304 | (6 | ) | 638,081 | 602,740 | 6 | ||||||||||||||||||||||||||
| Noninterest expenses | 144,474 | 132,407 | 139,805 | 117,329 | 112,755 | 28 | 416,686 | 352,820 | 18 | |||||||||||||||||||||||||||
| Income before income tax expense | 59,791 | 81,513 | 80,091 | 106,082 | 103,549 | (42 | ) | 221,395 | 249,920 | (11 | ) | |||||||||||||||||||||||||
| Income tax expense | 11,925 | 18,225 | 17,791 | 24,632 | 22,388 | (47 | ) | 47,941 | 53,898 | (11 | ) | |||||||||||||||||||||||||
| Net income | 47,866 | 63,288 | 62,300 | 81,450 | 81,161 | (41 | ) | 173,454 | 196,022 | (12 | ) | |||||||||||||||||||||||||
| Merger-related and other charges | 9,168 | 3,645 | 8,631 | 1,470 | 1,746 | 21,444 | 17,905 | |||||||||||||||||||||||||||||
| Income tax benefit of merger-related and other charges | (2,000 | ) | (820 | ) | (1,955 | ) | (323 | ) | (385 | ) | (4,775 | ) | (3,923 | ) | ||||||||||||||||||||||
| Net income - operating (1) | $ | 55,034 | $ | 66,113 | $ | 68,976 | $ | 82,597 | $ | 82,522 | (33 | ) | $ | 190,123 | $ | 210,004 | (9 | ) | ||||||||||||||||||
| Pre-tax pre-provision income (5) | $ | 90,059 | $ | 104,266 | $ | 101,874 | $ | 125,913 | $ | 118,941 | (24 | ) | $ | 296,199 | $ | 294,002 | 1 | |||||||||||||||||||
| PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.39 | $ | 0.53 | $ | 0.52 | $ | 0.74 | $ | 0.74 | (47 | ) | $ | 1.44 | $ | 1.78 | (19 | ) | ||||||||||||||||||
| Diluted net income - operating (1) | 0.45 | 0.55 | 0.58 | 0.75 | 0.75 | (40 | ) | 1.58 | 1.91 | (17 | ) | |||||||||||||||||||||||||
| Cash dividends declared | 0.23 | 0.23 | 0.23 | 0.22 | 0.22 | 5 | 0.69 | 0.64 | 8 | |||||||||||||||||||||||||||
| Book value | 25.87 | 25.98 | 25.76 | 24.38 | 23.78 | 9 | 25.87 | 23.78 | 9 | |||||||||||||||||||||||||||
| Tangible book value (3) | 17.70 | 17.83 | 17.59 | 17.13 | 16.52 | 7 | 17.70 | 16.52 | 7 | |||||||||||||||||||||||||||
| Key performance ratios: | ||||||||||||||||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 5.32 | % | 7.47 | % | 7.34 | % | 10.86 | % | 11.02 | % | 6.69 | % | 9.08 | % | ||||||||||||||||||||||
| Return on common equity - operating (1)(2)(4) | 6.14 | 7.82 | 8.15 | 11.01 | 11.21 | 7.35 | 9.75 | |||||||||||||||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 9.03 | 11.35 | 11.63 | 15.20 | 15.60 | 10.65 | 13.64 | |||||||||||||||||||||||||||||
| Return on assets - GAAP (4) | 0.68 | 0.95 | 0.95 | 1.33 | 1.32 | 0.86 | 1.06 | |||||||||||||||||||||||||||||
| Return on assets - operating (1)(4) | 0.79 | 1.00 | 1.06 | 1.35 | 1.34 | 0.95 | 1.13 | |||||||||||||||||||||||||||||
| Return on assets - pre-tax pre-provision (4)(5) | 1.31 | 1.59 | 1.58 | 2.07 | 1.94 | 1.49 | 1.60 | |||||||||||||||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger- related and other charges (1)(4)(5) | 1.44 | 1.65 | 1.71 | 2.09 | 1.97 | 1.60 | 1.70 | |||||||||||||||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 3.24 | 3.37 | 3.61 | 3.76 | 3.57 | 3.41 | 3.25 | |||||||||||||||||||||||||||||
| Efficiency ratio - GAAP | 61.32 | 55.71 | 57.20 | 47.95 | 48.41 | 58.06 | 53.94 | |||||||||||||||||||||||||||||
| Efficiency ratio - operating (1) | 57.43 | 54.17 | 53.67 | 47.35 | 47.66 | 55.07 | 51.20 | |||||||||||||||||||||||||||||
| Equity to total assets | 11.85 | 11.89 | 11.90 | 11.25 | 11.12 | 11.85 | 11.12 | |||||||||||||||||||||||||||||
| Tangible common equity to tangible assets (3) | 8.18 | 8.21 | 8.17 | 7.88 | 7.70 | 8.18 | 7.70 | |||||||||||||||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||||||||||||||||||
| Nonperforming assets ("NPAs") | $ | 90,883 | $ | 103,737 | $ | 73,403 | $ | 44,281 | $ | 35,511 | 156 | $ | 90,883 | $ | 35,511 | 156 | ||||||||||||||||||||
| Allowance for credit losses - loans | 201,557 | 190,705 | 176,534 | 159,357 | 148,502 | 36 | 201,557 | 148,502 | 36 | |||||||||||||||||||||||||||
| Allowance for credit losses - total | 219,624 | 212,277 | 197,923 | 180,520 | 167,300 | 31 | 219,624 | 167,300 | 31 | |||||||||||||||||||||||||||
| Net charge-offs (recoveries) | 26,638 | 8,399 | 7,084 | 6,611 | 1,134 | 42,121 | 3,043 | |||||||||||||||||||||||||||||
| Allowance for credit losses - loans to loans | 1.11 | % | 1.10 | % | 1.03 | % | 1.04 | % | 1.00 | % | 1.11 | % | 1.00 | % | ||||||||||||||||||||||
| Allowance for credit losses - total to loans | 1.21 | 1.22 | 1.16 | 1.18 | 1.12 | 1.21 | 1.12 | |||||||||||||||||||||||||||||
| Net charge-offs to average loans (4) | 0.59 | 0.20 | 0.17 | 0.17 | 0.03 | 0.32 | 0.03 | |||||||||||||||||||||||||||||
| NPAs to total assets | 0.34 | 0.40 | 0.28 | 0.18 | 0.15 | 0.34 | 0.15 | |||||||||||||||||||||||||||||
| AT PERIOD END ($ in millions) | ||||||||||||||||||||||||||||||||||||
| Loans | $ | 18,203 | $ | 17,395 | $ | 17,125 | $ | 15,335 | $ | 14,882 | 22 | $ | 18,203 | $ | 14,882 | 22 | ||||||||||||||||||||
| Investment securities | 5,701 | 5,914 | 5,915 | 6,228 | 6,539 | (13 | ) | 5,701 | 6,539 | (13 | ) | |||||||||||||||||||||||||
| Total assets | 26,869 | 26,120 | 25,872 | 24,009 | 23,688 | 13 | 26,869 | 23,688 | 13 | |||||||||||||||||||||||||||
| Deposits | 22,858 | 22,252 | 22,005 | 19,877 | 20,321 | 12 | 22,858 | 20,321 | 12 | |||||||||||||||||||||||||||
| Shareholders’ equity | 3,184 | 3,106 | 3,078 | 2,701 | 2,635 | 21 | 3,184 | 2,635 | 21 | |||||||||||||||||||||||||||
| Common shares outstanding (thousands) | 118,976 | 115,266 | 115,152 | 106,223 | 106,163 | 12 | 118,976 | 106,163 | 12 | |||||||||||||||||||||||||||
(1) Excludes merger-related and other charges. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.
UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
(in thousands, except per share data)
| 2023 | 2022 | For
the Nine Months Ended September 30, | ||||||||||||||||||||||||||
Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2023 | 2022 | ||||||||||||||||||||||
| Noninterest expense reconciliation | ||||||||||||||||||||||||||||
| Noninterest expenses (GAAP) | $ | 144,474 | $ | 132,407 | $ | 139,805 | $ | 117,329 | $ | 112,755 | $ | 416,686 | $ | 352,820 | ||||||||||||||
| Merger-related and other charges | (9,168 | ) | (3,645 | ) | (8,631 | ) | (1,470 | ) | (1,746 | ) | (21,444 | ) | (17,905 | ) | ||||||||||||||
| Noninterest expenses - operating | $ | 135,306 | $ | 128,762 | $ | 131,174 | $ | 115,859 | $ | 111,009 | $ | 395,242 | $ | 334,915 | ||||||||||||||
| Net income reconciliation | ||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 47,866 | $ | 63,288 | $ | 62,300 | $ | 81,450 | $ | 81,161 | $ | 173,454 | $ | 196,022 | ||||||||||||||
| Merger-related and other charges | 9,168 | 3,645 | 8,631 | 1,470 | 1,746 | 21,444 | 17,905 | |||||||||||||||||||||
| Income tax benefit of merger-related and other charges | (2,000 | ) | (820 | ) | (1,955 | ) | (323 | ) | (385 | ) | (4,775 | ) | (3,923 | ) | ||||||||||||||
| Net income - operating | $ | 55,034 | $ | 66,113 | $ | 68,976 | $ | 82,597 | $ | 82,522 | $ | 190,123 | $ | 210,004 | ||||||||||||||
| Net income to pre-tax pre-provision income reconciliation | ||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 47,866 | $ | 63,288 | $ | 62,300 | $ | 81,450 | $ | 81,161 | $ | 173,454 | $ | 196,022 | ||||||||||||||
| Income tax expense | 11,925 | 18,225 | 17,791 | 24,632 | 22,388 | 47,941 | 53,898 | |||||||||||||||||||||
| Provision for credit losses | 30,268 | 22,753 | 21,783 | 19,831 | 15,392 | 74,804 | 44,082 | |||||||||||||||||||||
| Pre-tax pre-provision income | $ | 90,059 | $ | 104,266 | $ | 101,874 | $ | 125,913 | $ | 118,941 | $ | 296,199 | $ | 294,002 | ||||||||||||||
| Diluted income per common share reconciliation | ||||||||||||||||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.39 | $ | 0.53 | $ | 0.52 | $ | 0.74 | $ | 0.74 | $ | 1.44 | $ | 1.78 | ||||||||||||||
| Merger-related and other charges, net of tax | 0.06 | 0.02 | 0.06 | 0.01 | 0.01 | 0.14 | 0.13 | |||||||||||||||||||||
| Diluted income per common share - operating | $ | 0.45 | $ | 0.55 | $ | 0.58 | $ | 0.75 | $ | 0.75 | $ | 1.58 | $ | 1.91 | ||||||||||||||
| Book value per common share reconciliation | ||||||||||||||||||||||||||||
| Book value per common share (GAAP) | $ | 25.87 | $ | 25.98 | $ | 25.76 | $ | 24.38 | $ | 23.78 | $ | 25.87 | $ | 23.78 | ||||||||||||||
| Effect of goodwill and other intangibles | (8.17 | ) | (8.15 | ) | (8.17 | ) | (7.25 | ) | (7.26 | ) | (8.17 | ) | (7.26 | ) | ||||||||||||||
| Tangible book value per common share | $ | 17.70 | $ | 17.83 | $ | 17.59 | $ | 17.13 | $ | 16.52 | $ | 17.70 | $ | 16.52 | ||||||||||||||
| Return on tangible common equity reconciliation | ||||||||||||||||||||||||||||
| Return on common equity (GAAP) | 5.32 | % | 7.47 | % | 7.34 | % | 10.86 | % | 11.02 | % | 6.69 | % | 9.08 | % | ||||||||||||||
| Merger-related and other charges, net of tax | 0.82 | 0.35 | 0.81 | 0.15 | 0.19 | 0.66 | 0.67 | |||||||||||||||||||||
| Return on common equity - operating | 6.14 | 7.82 | 8.15 | 11.01 | 11.21 | 7.35 | 9.75 | |||||||||||||||||||||
| Effect of goodwill and other intangibles | 2.89 | 3.53 | 3.48 | 4.19 | 4.39 | 3.30 | 3.89 | |||||||||||||||||||||
| Return on tangible common equity - operating | 9.03 | % | 11.35 | % | 11.63 | % | 15.20 | % | 15.60 | % | 10.65 | % | 13.64 | % | ||||||||||||||
| Return on assets reconciliation | ||||||||||||||||||||||||||||
| Return on assets (GAAP) | 0.68 | % | 0.95 | % | 0.95 | % | 1.33 | % | 1.32 | % | 0.86 | % | 1.06 | % | ||||||||||||||
| Merger-related and other charges, net of tax | 0.11 | 0.05 | 0.11 | 0.02 | 0.02 | 0.09 | 0.07 | |||||||||||||||||||||
| Return on assets - operating | 0.79 | % | 1.00 | % | 1.06 | % | 1.35 | % | 1.34 | % | 0.95 | % | 1.13 | % | ||||||||||||||
| Return on assets to return on assets- pre-tax pre-provision reconciliation | ||||||||||||||||||||||||||||
| Return on assets (GAAP) | 0.68 | % | 0.95 | % | 0.95 | % | 1.33 | % | 1.32 | % | 0.86 | % | 1.06 | % | ||||||||||||||
| Income tax expense | 0.18 | 0.29 | 0.29 | 0.41 | 0.37 | 0.25 | 0.30 | |||||||||||||||||||||
| Provision for credit losses | 0.45 | 0.35 | 0.34 | 0.33 | 0.25 | 0.38 | 0.24 | |||||||||||||||||||||
| Return on assets - pre-tax, pre-provision | 1.31 | 1.59 | 1.58 | 2.07 | 1.94 | 1.49 | 1.60 | |||||||||||||||||||||
| Merger-related and other charges | 0.13 | 0.06 | 0.13 | 0.02 | 0.03 | 0.11 | 0.10 | |||||||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges | 1.44 | % | 1.65 | % | 1.71 | % | 2.09 | % | 1.97 | % | 1.60 | % | 1.70 | % | ||||||||||||||
| Efficiency ratio reconciliation | ||||||||||||||||||||||||||||
| Efficiency ratio (GAAP) | 61.32 | % | 55.71 | % | 57.20 | % | 47.95 | % | 48.41 | % | 58.06 | % | 53.94 | % | ||||||||||||||
| Merger-related and other charges | (3.89 | ) | (1.54 | ) | (3.53 | ) | (0.60 | ) | (0.75 | ) | (2.99 | ) | (2.74 | ) | ||||||||||||||
| Efficiency ratio - operating | 57.43 | % | 54.17 | % | 53.67 | % | 47.35 | % | 47.66 | % | 55.07 | % | 51.20 | % | ||||||||||||||
| Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||||||||||
| Equity to total assets (GAAP) | 11.85 | % | 11.89 | % | 11.90 | % | 11.25 | % | 11.12 | % | 11.85 | % | 11.12 | % | ||||||||||||||
| Effect of goodwill and other intangibles | (3.33 | ) | (3.31 | ) | (3.36 | ) | (2.97 | ) | (3.01 | ) | (3.33 | ) | (3.01 | ) | ||||||||||||||
| Effect of preferred equity | (0.34 | ) | (0.37 | ) | (0.37 | ) | (0.40 | ) | (0.41 | ) | (0.34 | ) | (0.41 | ) | ||||||||||||||
| Tangible common equity to tangible assets | 8.18 | % | 8.21 | % | 8.17 | % | 7.88 | % | 7.70 | % | 8.18 | % | 7.70 | % | ||||||||||||||
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
| 2023 | 2022 | 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 | $ | 3,279 | $ | 3,111 | $ | 3,141 | $ | 2,735 | $ | 2,700 | $ | 168 | $ | 579 | ||||||||||||||
| Income producing commercial RE | 4,130 | 3,670 | 3,611 | 3,262 | 3,299 | 460 | 831 | |||||||||||||||||||||
| Commercial & industrial | 2,504 | 2,550 | 2,442 | 2,252 | 2,238 | (46 | ) | 266 | ||||||||||||||||||||
| Commercial construction | 1,850 | 1,739 | 1,806 | 1,598 | 1,514 | 111 | 336 | |||||||||||||||||||||
| Equipment financing | 1,534 | 1,510 | 1,447 | 1,374 | 1,281 | 24 | 253 | |||||||||||||||||||||
| Total commercial | 13,297 | 12,580 | 12,447 | 11,221 | 11,032 | 717 | 2,265 | |||||||||||||||||||||
| Residential mortgage | 3,043 | 2,905 | 2,756 | 2,355 | 2,149 | 138 | 894 | |||||||||||||||||||||
| Home equity lines of credit | 941 | 927 | 930 | 850 | 832 | 14 | 109 | |||||||||||||||||||||
| Residential construction | 399 | 463 | 492 | 443 | 423 | (64 | ) | (24 | ) | |||||||||||||||||||
| Manufactured housing | 343 | 340 | 326 | 317 | 301 | 3 | 42 | |||||||||||||||||||||
| Consumer | 180 | 180 | 174 | 149 | 145 | — | 35 | |||||||||||||||||||||
| Total loans | $ | 18,203 | $ | 17,395 | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 808 | $ | 3,321 | ||||||||||||||
| LOANS BY MARKET | ||||||||||||||||||||||||||||
| Georgia | $ | 4,321 | $ | 4,281 | $ | 4,177 | $ | 4,051 | $ | 4,003 | $ | 40 | $ | 318 | ||||||||||||||
| South Carolina | 2,801 | 2,750 | 2,672 | 2,587 | 2,516 | 51 | 285 | |||||||||||||||||||||
| North Carolina | 2,445 | 2,355 | 2,257 | 2,186 | 2,117 | 90 | 328 | |||||||||||||||||||||
| Tennessee | 2,314 | 2,387 | 2,458 | 2,507 | 2,536 | (73 | ) | (222 | ) | |||||||||||||||||||
| Florida | 2,318 | 1,708 | 1,745 | 1,308 | 1,259 | 610 | 1,059 | |||||||||||||||||||||
| Alabama | 1,070 | 1,062 | 1,029 | — | — | 8 | 1,070 | |||||||||||||||||||||
| Commercial Banking Solutions | 2,934 | 2,852 | 2,787 | 2,696 | 2,451 | 82 | 483 | |||||||||||||||||||||
| Total loans | $ | 18,203 | $ | 17,395 | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 808 | $ | 3,321 | ||||||||||||||
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
| 2023 | ||||||||||||
Third Quarter | Second Quarter | First Quarter | ||||||||||
| NONACCRUAL LOANS | ||||||||||||
| Owner occupied RE | $ | 5,134 | $ | 3,471 | $ | 1,000 | ||||||
| Income producing RE | 30,255 | 32,542 | 10,603 | |||||||||
| Commercial & industrial | 13,382 | 30,823 | 33,276 | |||||||||
| Commercial construction | 1,065 | 115 | 475 | |||||||||
| Equipment financing | 9,206 | 8,989 | 5,044 | |||||||||
| Total commercial | 59,042 | 75,940 | 50,398 | |||||||||
| Residential mortgage | 11,893 | 11,419 | 11,280 | |||||||||
| Home equity lines of credit | 4,009 | 2,777 | 2,377 | |||||||||
| Residential construction | 2,074 | 1,682 | 143 | |||||||||
| Manufactured housing | 12,711 | 10,782 | 8,542 | |||||||||
| Consumer | 89 | 19 | 55 | |||||||||
| Total nonaccrual loans | 89,818 | 102,619 | 72,795 | |||||||||
| OREO and repossessed assets | 1,065 | 1,118 | 608 | |||||||||
| Total NPAs | $ | 90,883 | $ | 103,737 | $ | 73,403 | ||||||
| 2023 | ||||||||||||||||||||||||
| 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 (RECOVERIES) BY CATEGORY | ||||||||||||||||||||||||
| Owner occupied RE | $ | 582 | 0.07 | % | $ | (205 | ) | (0.03 | )% | $ | 90 | 0.01 | % | |||||||||||
| Income producing RE | 3,011 | 0.30 | 1,184 | 0.13 | 2,306 | 0.26 | ||||||||||||||||||
| Commercial & industrial | 17,542 | 2.71 | 2,746 | 0.44 | 225 | 0.04 | ||||||||||||||||||
| Commercial construction | (49 | ) | (0.01 | ) | (105 | ) | (0.02 | ) | (37 | ) | (0.01 | ) | ||||||||||||
| Equipment financing | 6,325 | 1.62 | 2,537 | 0.69 | 3,375 | 0.93 | ||||||||||||||||||
| Total commercial | 27,411 | 0.83 | 6,157 | 0.20 | 5,959 | 0.20 | ||||||||||||||||||
| Residential mortgage | (129 | ) | (0.02 | ) | (43 | ) | (0.01 | ) | (87 | ) | (0.01 | ) | ||||||||||||
| Home equity lines of credit | (2,784 | ) | (1.17 | ) | (59 | ) | (0.03 | ) | 33 | 0.01 | ||||||||||||||
| Residential construction | 341 | 0.31 | 623 | 0.53 | (15 | ) | (0.01 | ) | ||||||||||||||||
| Manufactured housing | 1,168 | 1.34 | 620 | 0.75 | 628 | 0.76 | ||||||||||||||||||
| Consumer | 631 | 1.37 | 1,101 | 2.51 | 566 | 1.37 | ||||||||||||||||||
| Total | $ | 26,638 | 0.59 | $ | 8,399 | 0.20 | $ | 7,084 | 0.17 | |||||||||||||||
(1) Annualized.
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
| (in thousands, except share and per share data) | September 30, 2023 | December 31, 2022 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 192,726 | $ | 195,771 | ||||
| Interest-bearing deposits in banks | 566,779 | 316,082 | ||||||
| Federal funds and other short-term investments | — | 135,000 | ||||||
| Cash and cash equivalents | 759,505 | 646,853 | ||||||
| Debt securities available-for-sale | 3,182,112 | 3,614,333 | ||||||
| Debt securities held-to-maturity (fair value $1,992,364 and $2,191,073, respectively) | 2,518,773 | 2,613,648 | ||||||
| Loans held for sale | 37,110 | 13,600 | ||||||
| Loans and leases held for investment | 18,202,807 | 15,334,627 | ||||||
| Less allowance for credit losses - loans and leases | (201,557 | ) | (159,357 | ) | ||||
| Loans and leases, net | 18,001,250 | 15,175,270 | ||||||
| Premises and equipment, net | 371,435 | 298,456 | ||||||
| Bank owned life insurance | 344,647 | 299,297 | ||||||
| Goodwill and other intangible assets, net | 994,142 | 779,248 | ||||||
| Other assets | 660,233 | 568,179 | ||||||
| Total assets | $ | 26,869,207 | $ | 24,008,884 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 6,782,031 | $ | 7,643,081 | ||||
| NOW and interest-bearing demand | 5,349,335 | 4,350,878 | ||||||
| Money market | 5,691,480 | 4,510,680 | ||||||
| Savings | 1,265,548 | 1,456,337 | ||||||
| Time | 3,554,619 | 1,781,482 | ||||||
| Brokered | 214,855 | 134,049 | ||||||
| Total deposits | 22,857,868 | 19,876,507 | ||||||
| Short-term borrowings | 37,348 | 158,933 | ||||||
| Federal Home Loan Bank advances | — | 550,000 | ||||||
| Long-term debt | 324,786 | 324,663 | ||||||
| Accrued expenses and other liabilities | 465,381 | 398,107 | ||||||
| Total liabilities | 23,685,383 | 21,308,210 | ||||||
| Shareholders' equity: | ||||||||
| Preferred stock; $1 par value; 10,000,000 shares authorized; 3,745 and 4,000 shares Series I issued and outstanding, respectively, $25,000 per share liquidation preference | 90,283 | 96,422 | ||||||
| Common stock, $1 par value; 200,000,000 shares authorized, 118,975,652 and 106,222,758 shares issued and outstanding, respectively | 118,976 | 106,223 | ||||||
| Common stock issuable; 608,646 and 607,128 shares, respectively | 12,782 | 12,307 | ||||||
| Capital surplus | 2,697,671 | 2,306,366 | ||||||
| Retained earnings | 596,617 | 508,844 | ||||||
| Accumulated other comprehensive loss | (332,505 | ) | (329,488 | ) | ||||
| Total shareholders' equity | 3,183,824 | 2,700,674 | ||||||
| Total liabilities and shareholders' equity | $ | 26,869,207 | $ | 24,008,884 | ||||
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) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Interest revenue: | ||||||||||||||||
| Loans, including fees | $ | 273,781 | $ | 174,065 | $ | 760,696 | $ | 476,072 | ||||||||
| Investment securities, including tax exempt of $1,722, $2,568, $5,563 and $7,762, respectively | 44,729 | 36,953 | 125,775 | 91,043 | ||||||||||||
| Deposits in banks and short-term investments | 4,637 | 2,869 | 11,938 | 5,209 | ||||||||||||
| Total interest revenue | 323,147 | 213,887 | 898,409 | 572,324 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits: | ||||||||||||||||
| NOW and interest-bearing demand | 35,613 | 3,992 | 80,809 | 7,624 | ||||||||||||
| Money market | 46,884 | 4,503 | 105,430 | 7,030 | ||||||||||||
| Savings | 868 | 178 | 2,108 | 337 | ||||||||||||
| Time | 33,368 | 1,207 | 75,464 | 2,322 | ||||||||||||
| Deposits | 116,733 | 9,880 | 263,811 | 17,313 | ||||||||||||
| Short-term borrowings | 189 | 27 | 3,186 | 27 | ||||||||||||
| Federal Home Loan Bank advances | — | — | 5,761 | — | ||||||||||||
| Long-term debt | 3,669 | 4,206 | 11,339 | 12,515 | ||||||||||||
| Total interest expense | 120,591 | 14,113 | 284,097 | 29,855 | ||||||||||||
| Net interest revenue | 202,556 | 199,774 | 614,312 | 542,469 | ||||||||||||
| Provision for credit losses | 30,268 | 15,392 | 74,804 | 44,082 | ||||||||||||
| Net interest revenue after provision for credit losses | 172,288 | 184,382 | 539,508 | 498,387 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Service charges and fees | 10,315 | 9,569 | 28,791 | 28,644 | ||||||||||||
| Mortgage loan gains and other related fees | 6,159 | 6,297 | 17,264 | 29,420 | ||||||||||||
| Wealth management fees | 6,451 | 5,879 | 17,775 | 17,759 | ||||||||||||
| Gains from sales of other loans, net | 2,688 | 2,228 | 6,909 | 9,226 | ||||||||||||
| Lending and loan servicing fees | 2,985 | 2,946 | 9,979 | 7,518 | ||||||||||||
| Securities losses, net | — | — | (1,644 | ) | (3,688 | ) | ||||||||||
| Other | 3,379 | 5,003 | 19,499 | 15,474 | ||||||||||||
| Total noninterest income | 31,977 | 31,922 | 98,573 | 104,353 | ||||||||||||
| Total revenue | 204,265 | 216,304 | 638,081 | 602,740 | ||||||||||||
| Noninterest expenses: | ||||||||||||||||
| Salaries and employee benefits | 81,173 | 67,823 | 236,121 | 208,062 | ||||||||||||
| Communications and equipment | 10,902 | 8,795 | 31,654 | 27,718 | ||||||||||||
| Occupancy | 10,941 | 9,138 | 31,024 | 27,381 | ||||||||||||
| Advertising and public relations | 2,251 | 2,544 | 6,914 | 6,332 | ||||||||||||
| Postage, printing and supplies | 2,386 | 2,190 | 7,305 | 6,308 | ||||||||||||
| Professional fees | 7,006 | 4,821 | 19,670 | 14,670 | ||||||||||||
| Lending and loan servicing expense | 2,697 | 2,333 | 7,546 | 7,746 | ||||||||||||
| Outside services - electronic banking | 2,561 | 3,159 | 8,646 | 8,629 | ||||||||||||
| FDIC assessments and other regulatory charges | 4,314 | 2,356 | 12,457 | 6,796 | ||||||||||||
| Amortization of intangibles | 4,171 | 1,678 | 11,120 | 5,207 | ||||||||||||
| Merger-related and other charges | 9,168 | 1,746 | 21,444 | 17,905 | ||||||||||||
| Other | 6,904 | 6,172 | 22,785 | 16,066 | ||||||||||||
| Total noninterest expenses | 144,474 | 112,755 | 416,686 | 352,820 | ||||||||||||
| Income before income taxes | 59,791 | 103,549 | 221,395 | 249,920 | ||||||||||||
| Income tax expense | 11,925 | 22,388 | 47,941 | 53,898 | ||||||||||||
| Net income | 47,866 | 81,161 | 173,454 | 196,022 | ||||||||||||
| Preferred stock dividends, net of discount on repurchases | 832 | 1,719 | 4,270 | 5,157 | ||||||||||||
| Earnings allocated to participating securities | 259 | 407 | 939 | 1,007 | ||||||||||||
| Net income available to common shareholders | $ | 46,775 | $ | 79,035 | $ | 168,245 | $ | 189,858 | ||||||||
| Net income per common share: | ||||||||||||||||
| Basic | $ | 0.39 | $ | 0.74 | $ | 1.44 | $ | 1.78 | ||||||||
| Diluted | 0.39 | 0.74 | 1.44 | 1.78 | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 119,506 | 106,687 | 116,925 | 106,616 | ||||||||||||
| Diluted | 119,624 | 106,800 | 117,084 | 106,732 | ||||||||||||
| Average Consolidated Balance Sheets and Net Interest Analysis |
| For the Three Months Ended September 30, |
| 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) | $ | 18,055,402 | $ | 273,800 | 6.02 | % | $ | 14,658,397 | $ | 174,168 | 4.71 | % | ||||||||||||
| Taxable securities (3) | 5,933,708 | 43,007 | 2.90 | 6,539,615 | 34,385 | 2.10 | ||||||||||||||||||
| Tax-exempt securities (FTE) (1)(3) | 368,148 | 2,313 | 2.51 | 493,115 | 3,449 | 2.80 | ||||||||||||||||||
| Federal funds sold and other interest-earning assets | 538,039 | 5,093 | 3.76 | 614,755 | 3,106 | 2.00 | ||||||||||||||||||
| Total interest-earning assets (FTE) | 24,895,297 | 324,213 | 5.17 | 22,305,882 | 215,108 | 3.83 | ||||||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||||
| Allowance for credit losses | (209,472 | ) | (138,907 | ) | ||||||||||||||||||||
| Cash and due from banks | 225,831 | 231,376 | ||||||||||||||||||||||
| Premises and equipment | 367,217 | 290,768 | ||||||||||||||||||||||
| Other assets (3) | 1,568,824 | 1,261,236 | ||||||||||||||||||||||
| Total assets | $ | 26,847,697 | $ | 23,950,355 | ||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| NOW and interest-bearing demand | $ | 5,285,513 | 35,613 | 2.67 | $ | 4,335,619 | 3,992 | 0.37 | ||||||||||||||||
| Money market | 5,622,355 | 46,884 | 3.31 | 4,849,705 | 4,503 | 0.37 | ||||||||||||||||||
| Savings | 1,301,047 | 868 | 0.26 | 1,515,350 | 178 | 0.05 | ||||||||||||||||||
| Time | 3,473,191 | 31,072 | 3.55 | 1,635,580 | 984 | 0.24 | ||||||||||||||||||
| Brokered time deposits | 209,119 | 2,296 | 4.36 | 51,530 | 223 | 1.72 | ||||||||||||||||||
| Total interest-bearing deposits | 15,891,225 | 116,733 | 2.91 | 12,387,784 | 9,880 | 0.32 | ||||||||||||||||||
| Federal funds purchased and other borrowings | 44,164 | 189 | 1.70 | 3,442 | 27 | 3.11 | ||||||||||||||||||
| Long-term debt | 324,770 | 3,669 | 4.48 | 324,444 | 4,206 | 5.14 | ||||||||||||||||||
| Total borrowed funds | 368,934 | 3,858 | 4.15 | 327,886 | 4,233 | 5.12 | ||||||||||||||||||
| Total interest-bearing liabilities | 16,260,159 | 120,591 | 2.94 | 12,715,670 | 14,113 | 0.44 | ||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||
| Noninterest-bearing deposits | 6,916,272 | 8,176,987 | ||||||||||||||||||||||
| Other liabilities | 435,592 | 349,647 | ||||||||||||||||||||||
| Total liabilities | 23,612,023 | 21,242,304 | ||||||||||||||||||||||
| Shareholders' equity | 3,235,674 | 2,708,051 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 26,847,697 | $ | 23,950,355 | ||||||||||||||||||||
| Net interest revenue (FTE) | $ | 203,622 | $ | 200,995 | ||||||||||||||||||||
| Net interest-rate spread (FTE) | 2.23 | % | 3.39 | % | ||||||||||||||||||||
| Net interest margin (FTE) (4) | 3.24 | % | 3.57 | % | ||||||||||||||||||||
| (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 $430 million in 2023 and $318 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. |
| Average Consolidated Balance Sheets and Net Interest Analysis |
| For the Nine Months Ended September 30, |
| 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) | $ | 17,377,210 | $ | 760,802 | 5.85 | % | $ | 14,426,470 | $ | 475,989 | 4.41 | % | ||||||||||||
| Taxable securities (3) | 5,982,615 | 120,212 | 2.68 | 6,274,230 | 83,281 | 1.77 | ||||||||||||||||||
| Tax-exempt securities (FTE) (1)(3) | 386,499 | 7,470 | 2.58 | 498,177 | 10,425 | 2.79 | ||||||||||||||||||
| Federal funds sold and other interest-earning assets | 490,703 | 13,103 | 3.57 | 1,271,287 | 6,192 | 0.65 | ||||||||||||||||||
| Total interest-earning assets (FTE) | 24,237,027 | 901,587 | 4.97 | 22,470,164 | 575,887 | 3.43 | ||||||||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||||||
| Allowance for loan losses | (186,428 | ) | (129,278 | ) | ||||||||||||||||||||
| Cash and due from banks | 249,411 | 200,463 | ||||||||||||||||||||||
| Premises and equipment | 347,514 | 284,850 | ||||||||||||||||||||||
| Other assets (3) | 1,518,503 | 1,308,647 | ||||||||||||||||||||||
| Total assets | $ | 26,166,027 | $ | 24,134,846 | ||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| NOW and interest-bearing demand | $ | 4,891,214 | 80,809 | 2.21 | $ | 4,520,079 | 7,624 | 0.23 | ||||||||||||||||
| Money market | 5,349,265 | 105,430 | 2.64 | 4,992,357 | 7,030 | 0.19 | ||||||||||||||||||
| Savings | 1,341,033 | 2,108 | 0.21 | 1,483,169 | 337 | 0.03 | ||||||||||||||||||
| Time | 2,936,873 | 65,856 | 3.00 | 1,688,250 | 2,009 | 0.16 | ||||||||||||||||||
| Brokered time deposits | 280,293 | 9,608 | 4.58 | 65,133 | 313 | 0.64 | ||||||||||||||||||
| Total interest-bearing deposits | 14,798,678 | 263,811 | 2.38 | 12,748,988 | 17,313 | 0.18 | ||||||||||||||||||
| Federal funds purchased and other borrowings | 98,884 | 3,186 | 4.31 | 1,383 | 27 | 2.61 | ||||||||||||||||||
| Federal Home Loan Bank advances | 166,355 | 5,761 | 4.63 | — | — | — | ||||||||||||||||||
| Long-term debt | 324,737 | 11,339 | 4.67 | 322,600 | 12,515 | 5.19 | ||||||||||||||||||
| Total borrowed funds | 589,976 | 20,286 | 4.60 | 323,983 | 12,542 | 5.18 | ||||||||||||||||||
| Total interest-bearing liabilities | 15,388,654 | 284,097 | 2.47 | 13,072,971 | 29,855 | 0.31 | ||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||
| Noninterest-bearing deposits | 7,226,096 | 7,958,392 | ||||||||||||||||||||||
| Other liabilities | 393,048 | 375,182 | ||||||||||||||||||||||
| Total liabilities | 23,007,798 | 21,406,545 | ||||||||||||||||||||||
| Shareholders' equity | 3,158,229 | 2,728,301 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 26,166,027 | $ | 24,134,846 | ||||||||||||||||||||
| Net interest revenue (FTE) | $ | 617,490 | $ | 546,032 | ||||||||||||||||||||
| Net interest-rate spread (FTE) | 2.50 | % | 3.12 | % | ||||||||||||||||||||
| Net interest margin (FTE) (4) | 3.41 | % | 3.25 | % | ||||||||||||||||||||
| (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 $413 million in 2023 and $221 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. |
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ: UCBI) is the financial holding company for United Community, a top 100 US financial institution that is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. United Community provides a full range of banking, wealth management, and mortgage services. As of September 30, 2023, United Community has $26.9 billion in assets and 205 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment financing subsidiary. United Community has been recognized nationally as a leader in customer service, financial performance, and workplace environment. Among the accolades, 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. United Community was also recognized by Newsweek in 2023 as one of the Most Trusted Companies in America, is a multi-award recipient of the Greenwich Excellence Awards and was named by American Banker as one of the "Best Banks to Work For" in 2022 for the sixth consecutive year. Additional information about United Community can be found at 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 potential benefits of the First National Bank of South Miami merger, and the strength of our pipelines and their ability to support business growth across our markets and our belief that our high-quality balance sheet and business mix will support strong performance regardless of future economic conditions. 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 and any revenue synergies from the First National Bank of South Miami acquisition and other acquisitions 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 these acquisitions, (3) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to these acquisitions, (4) the risks relating to the integration of First National Bank of South Miami’s and other acquired banks’ 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, (5) the risks associated with United’s pursuit of future acquisitions, (6) the risk associated with expansion into new geographic or product markets, and (7) general competitive, economic, political, regulatory 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.
United qualifies all forward-looking statements by these cautionary statements.
# # #
Exhibit 99.2
Member FDIC. © 2023 United Community Bank | ucbi.com 3Q23 Investor Presentation October 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 potential benefits of the First National Bank of South Miami merger, and the strength of our pipelines and their ability to support business growth across our markets and our belief that our high - quality balance sheet and business mix will support strong performance regardless of future economic conditions . 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 and any revenue synergies from the First National Bank of South Miami acquisition and other acquisitions 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 these acquisitions, ( 3 ) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to these acquisitions, ( 4 ) the risks relating to the integration of First National Bank of South Miami’s and other acquired banks’ 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, ( 5 ) the risks associated with United’s pursuit of future acquisitions, ( 6 ) the risk associated with expansion into new geographic or product markets, and ( 7 ) general competitive, economic, political, regulatory 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 . 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 United’s 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 .
$26.9 BILLION IN TOTAL ASSETS Note: See glossary located at the end of this presentation for reference on certain acronyms United Community Banks, Inc. 205 BANKING OFFICES ACROSS THE SOUTHEAST Nine - time winner of the J.D. Power award that ranked us #1 IN CUSTOMER SATISFACTION with Consumer Banking in the Southeast AMERICA’S MOST TRUSTWORTHY COMPANIES in 2023 and #2 in the banking industry - Newsweek $0.23 QUARTERLY DIVIDEND – UP 5% YOY WORLD’S BEST BANKS in 2023 for four of the last five years – Forbes $5.1 BILLION IN AUA 12.6% TIER 1 RBC $22.9 BILLION IN TOTAL DEPOSITS BEST BANKS TO WORK FOR in 2022 for the sixth consecutive year – American Banker 4 Premier Southeast Regional Bank – Committed to Service Since 1950 x Metro - focused branch network with locations in the fastest - growing MSAs in the Southeast x 197 branches, 8 LPOs, and 3 MLOs across six Southeast states; Top 10 market share in GA and SC Extended Navitas and SBA Markets $18.2 BILLION IN TOTAL LOANS Company Overview AMERICA’S BEST BANKS in 2023 for the ninth consecutive year – Forbes 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 Regional Full - Service Branch Network National Navitas and SBA Markets
$23.78 $25.98 $25.87 $16.52 $17.83 $17.70 3Q22 2Q23 3Q23 Book Value Per Share GAAP Tangible 5.6% Annualized 3Q EOP deposit growth, excluding FNBSM, TN branches sale & brokered deposits 5.32% Return on common equity – GAAP 9.03% Return on tangible common equity – operating (1) Other 3Q notable items: $2.3 mm unrealized loss on equity investments $1.1 mm MSR write - up $0.39 Diluted earnings per share – GAAP $0.45 Diluted earnings per share – operating (1) 0.68% Return on average assets – GAAP 0.79% Return on average assets – operating (1) 1.44% PTPP return on average assets – operating (1) 2.03% Cost of deposits 30% DDA / Total Deposits 3Q23 Highlights (1) See non - GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP performance $0.74 $0.53 $0.39 $0.75 $0.55 $0.45 3Q22 2Q23 3Q23 Diluted Earnings Per Share GAAP Operating (1) 1.32% 0.95% 0.68% 1.34% 1.00% 0.79% 3Q22 2Q23 3Q23 Return on Average Assets GAAP Operating 1.94% 1.59% 1.31% 1.97% 1.65% 1.44% 3Q22 2Q23 3Q23 PTPP Return on Average Assets PTPP Operating PTPP (1) (1) 5.4% Annualized 3Q EOP core loan growth, excluding First National Bank of South Miami (“FNBSM”) & TN branches sale 61.3% Efficiency ratio – GAAP 57.4% Efficiency ratio – operating (1) 5 (1)
(1) Includes MSAs with a population greater than 1,000,000 (2) Includes MSAs with a population between 500,000 and 1,000,000 Footprint Focused on High - Growth MSAs in Southeast 6 21.9% 8.8% 5.4% 5.3% 3.7% 3.2% 2.8% 2.3% 2.1% 2.0% Atlanta, GA Greenville, SC Nashville, TN Miami, FL Raleigh, NC Gainesville, GA Knoxville, TN Orlando, FL Charlotte, NC Myrtle Beach, SC Top 10 MSAs - % of Total Deposits UCBI's % of Total Deposits ’23 – ’28 Proj. Pop. Growth % ’23 – ’28 Proj. HHI. Growth % 1) Raleigh, NC 3.73% 7.40 11.77 2) Jacksonville, FL 0.52% 6.89 14.35 3) Orlando, FL 2.31% 6.35 10.63 4) Nashville, TN 5.43% 6.12 12.44 5) Charlotte, NC 2.07% 5.80 14.66 6) Tampa, FL 0.12% 5.19 11.68 7) Atlanta, GA 21.85% 4.68 14.16 8) Richmond, VA -- 3.88 12.78 9) Washington, DC -- 2.72 11.66 10) Virginia Beach, VA -- 2.25 14.75 11) Miami, FL 5.30% 1.95 10.76 12) Birmingham, AL 0.73% 1.60 10.87 Fastest Growing Major Southeast MSAs (1) UCBI's % of Total Deposits ’23 – ’28 Proj. Pop. Growth % ’23 – ’28 Proj. HHI. Growth % 1) Myrtle Beach, SC 2.04% 9.38 12.44 2) Winter Haven, FL -- 9.37 9.14 3) Fort Myers, FL -- 8.93 11.31 4) Sarasota, Fl 0.18% 7.73 12.11 5) Port St. Lucie, FL 0.12% 7.53 11.74 6) Fayetteville, AR -- 6.99 10.18 7) Daytona Beach, FL -- 6.56 10.27 8) Charleston, SC 1.10% 6.32 14.65 9) Huntsville, AL 1.71% 5.93 16.50 10) Melbourne, FL 0.11% 5.29 11.06 11) Greenville, SC 8.81% 4.74 12.63 12) Pensacola, FL -- 4.62 9.92 13) Durham, NC -- 4.52 13.77 14) Knoxville, TN 2.75% 4.10 11.62 15) Columbia, SC 0.21% 3.59 13.59 Fastest Growing Mid-Sized Southeast MSAs (2) UCBI MSA Presence
Strong Customer Deposit Growth x Total deposits were up $606 million in 3Q23 from 2Q23 x Excluding FNBSM ($829 million), the TN branches sale ($110 million) and brokered deposits (paid down $427 million), total deposits were up $314 million, or 5.6% annualized from 2Q23 Competitive Market Pricing Drove Funding Costs Higher x 38% cumulative deposit beta since 4Q21, as cost of deposits moved to 2.03% from 1.64% in 2Q23 x DDA% moved to 30% of total deposits from 31% last quarter, as customers moved funds to MMDA and CDs • MMDA increased to 25% of total deposits from 23% last quarter 30% 23% 25% 6% 16% DDA MMDA Savings Time NOW Outstanding Deposit Franchise 3Q23 Total Deposits $22.9 billion Total Deposit Beta 6% 12% 23% 32% 38% 10% 17% 23% 29% 0.19% 0.49% 1.10% 1.64% 2.03% -0.45% 0.05% 0.55% 1.05% 1.55% 2.05% 0% 5% 10% 15% 20% 25% 30% 35% 40% 3Q22 4Q22 1Q23 2Q23 3Q23 UCBI Cumulative Deposit Beta KRX Peer Average Cumulative Deposit Beta UCBI Cost of Deposits 7
$20.3 $19.9 $20.7 $22.3 $22.1 $1.3 $0.8 3Q22 4Q22 1Q23 2Q23 3Q23 UCBI Acquisitions $ in billions Deposit Trends x Paid down brokered funding of $427 million and sold two TN branches with $110 million in deposits in 3Q23 x Deposits are granular with a $33 thousand average account size and are diverse by industry and geography x Business deposits of $8.5 billion and personal deposits of $11.0 billion in 3Q23 3Q23 Total Deposits $22.9 billion Deposit Mix Shift Customer Deposit Granularity $19,888 $19,677 $19,417 $19,613 $19,956 $76,084 $69,749 $72,650 $75,033 $75,865 3Q22 4Q22 1Q23 2Q23 3Q23 Personal Deposits Avg. Acct Size Business Deposits Avg. Acct Size 40% 38% 34% 31% 30% 60% 62% 66% 69% 70% 3Q22 4Q22 1Q23 2Q23 3Q23 Non Interest Bearing Deposits Interest Bearing Deposits 8 $ actual
41% 10% 21% 1% 17% 5% 3% 2% Residential Mortgage Manufactured Housing 3Q23 Total Loans $18.2 billion Well - Diversified Loan Portfolio Quarter Highlights x Loans increased $241 million, or 5.4% annualized, excluding FNBSM and the TN branches sale x Construction & CRE ratio as a percentage of total RBC = 78% / 210% x Top 25 relationships totaled $742 million, or 4.1% of total loans x SNCs outstanding of $309 million, or 1.7% of total loans x Project lending limit of $32 million x Conservative relationship lending limits driven by risk grades C&I Commercial Construction CRE Other Consumer Home Equity Residential Construction 34% 45% 21% Commercial & Industrial Owner Occupied CRE Equipment Financing $ in billions 9
x Substantial balance sheet liquidity and above - peer capital ratios x Customer deposit growth and the sale of FNBSM’s securities portfolio provided funding for loan growth and to pay down brokered funding x $5.7 billion securities portfolio offers significant near - and medium - term cash flow opportunities x FHLB borrowings remained at zero in 3Q23 7.7% 7.6% 7.7% 7.9% 8.2% 8.2% 8.2% 7.3% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 UCBI KRX Peer Median Loans / Deposits % Tangible Common Equity / Tangible Assets % Common Equity Tier 1 RBC %* 68% 70% 73% 77% 78% 78% 80% 86% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 UCBI KRX Peer Median 11.9% 12.0% 12.1% 12.3% 12.1% 12.2% 12.1% 11.3% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 UCBI KRX Peer Median Balance Sheet Strength – Liquidity and Capital 10 *3Q23 regulatory capital ratios are preliminary
Risk - Based Capital Ratios Tangible Book Value Per Share x 3Q23 regulatory risk - based capital ratios decreased an average of 9 bps from 2Q23 due to the closing of FNBSM x The leverage ratio increased 10 bps to 9.69%, as compared to 2Q23 x Quarterly dividend of $0.23 per share, an increase of 5% YOY x Repurchased 244,012 preferred shares at an average price of $20.83 during 3Q23 x Net unrealized securities losses in AOCI increased by $27 million to $346 million in 3Q23 • AFS securities portfolio of $3.2 billion with a 2.7 - year duration x TCE% of 8.18% decreased 3 bps from 2Q23 12.0% 12.1% 12.3% 12.1% 12.2% 11.3% 12.1% 0.6% 0.5% 0.5% 0.5% 0.5% 0.6% 0.5% 1.9% 1.9% 2.0% 1.8% 1.9% 1.7% 1.9% 14.5% 14.6% 14.8% 14.4% 14.6% 13.5% 14.4% 2Q22 3Q22 4Q22 1Q23 2Q23 2Q23 KRX Peer Median 3Q23* CET1 Non-common Tier 1 Tier 2 Total Capital $17.70 $17.83 ( $0.10 ) $0.44 ( $0.06 ) ( $0.24 ) ( $0.22 ) $0.05 2Q23 TBV FNBSM Acquisition Operating Earnings Merger Charges Dividends Change in OCI Other 3Q23 TBV 11 *3Q23 regulatory capital ratios are preliminary
$199.8 $200.3 $202.6 3.57% 3.37% 3.24% 3.53% 3.30% 3.15% $50.0 $70.0 $90.0 $110.0 $130.0 $150.0 $170.0 $190.0 $210.0 2.00% 2.50% 3.00% 3.50% 4.00% 3Q22 2Q23 3Q23 Net Interest Revenue Net Interest Margin Core Net Interest Margin 3.24% 3.37% ( 0.01% ) ( 0.14% ) 0.02% 2Q23 NIM Mix Change Higher Interest Rates Loan Accretion 3Q23 NIM Net Interest Revenue & Net Interest Margin 3Q23 NIM Compression x Net interest revenue increased $2.3 million from 2Q23 x Net interest margin decreased 13 bps from 2Q23, primarily driven by increased deposit costs x Core net interest margin of 3.15%, which excludes purchased loan accretion x Purchased loan accretion totaled $5.6 million and contributed 9 bps to the margin, up from 7 bps in 2Q23 x Excluding FNBSM, approximately $5.6 billion or 32% of total loans are floating rate with another $2.4 billion that will adjust beyond one year Net Interest Revenue / Margin (1) Yields & Costs $ in millions 4.71% 5.22% 5.68% 5.85% 6.02% 3.57% 3.76% 3.61% 3.37% 3.24% 2.15% 2.44% 2.51% 2.63% 2.88% 0.44% 0.96% 1.89% 2.50% 2.94% 3Q22 4Q22 1Q23 2Q23 3Q23 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 purchased loan accretion (2) (1) 12
$9.6 $9.5 $8.7 $9.8 $10.3 $6.3 $3.1 $4.5 $6.6 $6.2 $5.9 $5.8 $5.7 $5.6 $6.5 $2.2 $1.5 $1.9 $2.3 $2.7 $7.9 $13.5 $9.4 $12.1 $6.3 3Q22 4Q22 1Q23 2Q23 3Q23 Service Charges Mortgage Brokerage / Wealth Mgmt Loan sale gains Other $32.0 $30.2 $36.4 Linked Quarter x Noninterest income was down $4.4 million • 3Q23 decrease mainly due to the absence of a one - time gain on the sales of assets in 2Q23 • Excluding FNBSM, service charges increased 3.7% from 2Q23 • Brokerage and wealth management fees increased 4.1% from 2Q23, excluding FNBSM • $425,000 decrease in mortgage fees; MSR gain virtually flat at $1.1 million • $383,000 increase in gains on SBA and Navitas loan sales • $1.5 million in 3Q gains on $26.4 million of SBA loans sold • $1.1 million in 3Q gains on $37.7 million of equipment finance loan sales Year - over - Year x Noninterest income was up marginally • Mortgage rate locks of $304 million in 3Q23 compared to $456 million in 3Q22 $33.4 $31.9 13 Noninterest Income $ in millions
$112.8 $117.3 $139.8 $132.4 $144.5 $111.0 $115.9 $131.2 $128.8 $135.3 3Q22 4Q22 1Q23 2Q23 3Q23 GAAP Operating Disciplined Expense Management $ in millions x The GAAP efficiency ratio increased compared to last quarter x On an operating basis, the efficiency ratio increased as solid expense control, adjusted for FNBSM, was more than offset by the impact of NIM pressure Efficiency Ratio % Noninterest Expense $ 48.4% 48.0% 57.2% 55.7% 61.3% 47.7% 47.4% 53.7% 54.2% 57.4% 55.3% 3Q22 4Q22 1Q23 2Q23 3Q23 GAAP Operating KRX Peer Median x Total operating expenses increased by $6.5 million, or 5.1%, quarter over quarter, mostly due to the operating expenses of FNBSM, which closed on July 1 14
x 3Q23 net charge - offs of $26.6 million, or 0.59% of average loans, annualized • The previously disclosed loss of $19 million on the 8.7% participation in a $218.5 million nationally syndicated credit was attributable to 0.42% of the 0.59% NCOs x Non - performing assets improved $12.9 million during the quarter and were 0.50% of total loans, an improvement of 10 bps from 2Q23, driven primarily by the charge - off of the nationally syndicated loan x Higher risk loans, defined as special mention plus substandard accruing, increased 0.2% from 2Q23 to 2.9% but were down 0.3% YOY Credit Quality Net Charge - Offs as % of Average Loans Non - Performing Assets & Past Due Loans as a % of Total Loans 0.55% 0.28% 0.29% 0.23% 0.24% 0.29% 0.43% 0.60% 0.50% 0.18% 0.06% 0.09% 0.10% 0.14% 0.18% 0.31% 0.18% 0.21% 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 NPAs (%) Past Dues (%) 2.6% 2.6% 2.1% 2.0% 2.1% 1.6% 1.4% 1.2% 1.4% 1.5% 1.4% 1.2% 1.2% 1.1% 1.3% 1.6% 1.5% 1.5% 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Special Mention (%) Substandard Accruing(%) Special Mention & Substandard Accruing Loans as a % of Total Loans 15 0.17% 0.00% 0.08% - 0.03% 0.03% 0.17% 0.17% 0.20% 0.59% 0.12% - 0.03% 0.08% - 0.06% 0.00% 0.14% 0.10% 0.15% 0.49% 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 UCBI UCBI Excl. Navitas
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk - Forward Allowance for Credit Losses (ACL) Note: ACL includes the reserve for unfunded commitments x The 3Q23 reserve increase of $7.3 million was primarily due to the addition of FNBSM x ACL reserve levels remain strong at 1.21% of loans, up from 1.12% in 3Q22 $167 $181 $198 $212 $220 1.12% 1.18% 1.16% 1.22% 1.21% 0.65% 0.75% 0.85% 0.95% 1.05% 1.15% 1.25% 1.35% 1.45% 1.55% $30 $50 $70 $90 $110 $130 $150 $170 $190 $210 3Q22 4Q22 1Q23 2Q23 3Q23 ACL - Allowance for Credit Losses $ ACL - Allowance for Credit Losses % $212,277 $219,624 $2,236 ( $26,638 ) $1,455 $22,571 $3,718 $4,005 2Q23 ACL Loan Growth NCOs Specific Reserve Model Impact First Miami Day 1 PCD Credit Allowance First Miami Day 2 Non-PCD Double Dip 3Q23 ACL ($000) 16
3Q23 INVESTOR PRESENTATION Exhibits
Navitas Portfolio Net Charge - Offs & Weighted Average FICO Scores x Navitas represents 8% of total loans x Navitas 3Q23 NCOs of 1.62%, or $6.3 million x Navitas ACL / Loans of 1.98% x Navitas’ $56.7 million Long Haul trucking segment is experiencing stress with $3.2 million in 3Q23 losses x We discontinued lending in the Long Haul Trucking segment several quarter ago as slower economic activity drove softness in the space x Excluding Long Haul Trucking losses, Navitas’ losses were 0.88% of total Navitas loans x We are seeing normal trends in the greater portfolio, but are expecting higher Long Haul Trucking losses in the near term as the book runs off Navitas Performance $ in millions $969 $1,017 $1,083 $1,148 $1,211 $1,281 $1,374 $1,447 $1,510 $1,534 9.08% 9.01% 8.89% 8.85% 8.80% 8.79% 8.88% 8.99% 9.12% 9.25% 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 $1,800 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Navitas Loans $ Portfolio Yield % 18 0.74% 0.85% 0.70% 0.13% 0.21% 0.29% 0.10% 0.31% 0.36% 0.50% 0.93% 1.62% 745 748 749 749 750 750 750 751 751 752 752 754 755 1 101 201 301 401 501 601 701 801 0.00% 0.50% 1.00% 1.50% 2.00% 2019 2020 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 NCOs % - Navitas Weighted Average FICO - Total Portfolio 0.69%
$14.2 $16.1 $18.8 $20.1 $21.5 $22.1 $22.3 $23.2 $23.3 $25.4 $27.7 $29.3 $29.3 $34.0 $38.6 $40.5 $41.1 $45.4 $50.8 $53.3 $56.5 $62.9 $141.0 $266.7 $273.0 LAWN / LANDSCAPE WIDE FORMAT PRINTER HAIR OR NAIL SALON EQUIPMENT WOODWORKING MEDICAL EQUIPMENT FURNITURE FORKLIFTS CLOSED CIRUIT SECURITY SYSTEMS LIFTS MACHINE TOOLS EXCAVATORS TELEPHONES SLEEPER TRUCKS LEASEHOLD IMPROVEMENTS GAS PUMPS LOADERS AUDIO / VISUAL EQUIPMENT RESTAURANT EQUIPMENT INDUSTRIAL EQUIPMENT CONSTRUCTION SOFTWARE GYM/PLAYGROUND EQUIPMENT MEDICAL LASER/AESTHETICS TITLED EQUIPMENT FRANCHISE Top 25 Industries - $1.0 billion x Top 25 equipment types represent $1.4 billion, or 83.8% of the total Navitas portfolio Navitas Portfolio $ in millions 19 Top 25 Equipment Types - $1.4 billion $13.3 $13.5 $14.2 $15.7 $16.9 $17.0 $17.2 $19.0 $19.6 $19.6 $23.4 $25.4 $25.5 $28.8 $31.9 $32.3 $32.6 $33.2 $40.6 $56.7 $61.1 $74.6 $77.9 $109.0 $195.3 CHIROPRACTOR OFFICES & CLINICS MICELLANEOUS RETAIL STORES REFUSE SYSTEMS RETAIL BAKERIES LAWN/GARDEN SERVICES RELIGIOUS ORGANIZATIONS GENERAL AUTOMOTIVE REPAIR SHOPS LANDSCAPE COUNSELING & PLANNING EXCAVATION WORK NONCLASSIFIED ESTABLISHMENTS EQUIPMENT RENTAL & LEASING BUSINESS SERVICES ORNAMENTAL SHRUB & TREE SERVICES HEALTH & ALLIED SERVICES MEDSPAS TRANSPORTATION SERVICES SPECIAL TRADE CONTRACTORS GENERAL CONTRS-SINGLE FAMILY HOUSES GASOLINE SERVICE STATIONS LONG HAUL TRUCKING LOCAL TRUCKING WITHOUT STORAGE BEAUTY SHOPS OFFICES OF DOCTORS OF MEDICINE PHYSICAL FITNESS FACILITIES EATING PLACES x Top 25 industries represent $1.0 billion, or 60.8% of the total Navitas portfolio
Top 10 Industries - $185 million $ in millions 20 Solar Electric Power Generation (3) Marinas (1) Lessors of Miniwarehouses and Self - Storage Units (1) Boat Dealers (1) New Car Dealers (1) Consumer Lending (1) Software Publishers (1) Recreational Vehicle Dealers (2) Metal Window and Door Manufacturing (1) Residential Remodelers (1) x SNC’s outstanding total $309 million, or 1.7% of total loans x Top 10 industries represent $185 million, or 60% of the total SNC portfolio outstanding x Leveraged loans outstanding of $282 million, of which $112 million are SNCs $31.6 $25.0 $23.0 $20.2 $16.3 $15.5 $15.1 $13.4 $13.0 $12.3 Shared National Credits Portfolio Note: Number of relationships in parentheses
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 with a significant portion 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 $494,000 as of 3Q23 x Office portfolio outstanding totaled $711 million as of 3Q23, or 3.9% of total loans x Top 10 Office commitments total $121 million x Medical office buildings outstanding account for $149 million of the top 100 office loans as of 3Q23, or 32% of the top 100 office loans x As of September 30, $1.4 million Office loans were nonaccruing x As of September 30, $7.5 million, or 1.1% of Office loans outstanding were special mention and $2.7 million, or 0.4% of Office loans outstanding were substandard accruing 1% 20% 25% 49% 6% Selected Segments – Office $ in millions $531 $541 $666 $683 $664 $661 $710 $722 $711 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Investment CRE – Office Outstanding $ Note: Reliant acquisition contributed $138 million of the increase in office loans outstanding from 4Q21 to 1Q22; Progress ac qui sition contributed $74 million of the increase in office loans outstanding from 4Q22 to 1Q23 21
x Senior Care portfolio outstanding totaled $388 million as of 3Q23, or 2.1% of total loans x As of September 30, $28.7 million of Senior Care loans were nonaccruing , a decrease of $3.1 million from 2Q23 (included in substandard) x As of September 30, $102.5 million of Senior Care loans were special mention and $73.5 million were substandard accruing x Senior care loans account for approximately 39% of special mention and substandard loans 1% 20% 25% 49% 6% Selected Segments – Senior Care $ in millions $80 $80 $73 $65 $60 $79 $106 $106 $102 $170 $169 $144 $135 $124 $111 $91 $108 $102 $549 $520 $518 $465 $442 $408 $410 $394 $388 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Substandard $ Special Mention $ Pass $ 22
x Rate locks were $304 million compared to $305 million in 2Q23 x 34% of locked loans were variable rate mortgages in 3Q23, up from 22% in 2Q23 x Sold $108 million loans in 3Q23, down $23 million from $131 million sold in 2Q23 x Purchase / Refi mix shifted from 71% / 29% in 3Q22 to 87% / 13% in 3Q23 Mortgage Locks & Sales Mortgage Locks - Purchase vs. Refinance Mortgage Activity Trends $456 $364 $335 $305 $304 $93 $68 $79 $131 $108 3.1% 2.7% 2.9% 2.8% 2.9% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 3Q22 4Q22 1Q23 2Q23 3Q23 Mortgage locks $ Loans sold $ Gain on sale % 71% 62% 87% 86% 87% 29% 38% 13% 14% 13% 3Q22 4Q22 1Q23 2Q23 3Q23 Purchase Refinance $ in millions 23
Non - GAAP Reconciliation Tables $ in thousands, except per share data 3Q22 4Q22 1Q23 2Q23 3Q23 Expenses Expenses - GAAP 112,755$ 117,329$ 139,805$ 132,407$ 144,474$ Merger-related and other charges (1,746) (1,470) (8,631) (3,645) (9,168) Expenses - Operating 111,009$ 115,859$ 131,174$ 128,762$ 135,306$ Diluted Earnings per share Diluted earnings per share - GAAP 0.74$ 0.74$ 0.52$ 0.53$ 0.39$ Merger-related and other charges 0.01 0.01 0.06 0.02 0.06 Diluted earnings per share - Operating 0.75 0.75 0.58 0.55 0.45 Book Value per share Book Value per share - GAAP 23.78$ 24.38$ 25.76$ 25.98$ 25.87$ Effect of goodwill and other intangibles (7.26) (7.25) (8.17) (8.15) (8.17) Tangible book value per share 16.52$ 17.13$ 17.59$ 17.83$ 17.70$ Return on Tangible Common Equity Return on common equity - GAAP 11.02 % 10.86 % 7.34 % 7.47 % 5.32 % Effect of merger-related and other charges 0.19 0.15 0.81 0.35 0.82 Return on common equity - Operating 11.21 11.01 8.15 7.82 6.14 Effect of goodwill and intangibles 4.39 4.19 3.48 3.53 2.89 Return on tangible common equity - Operating 15.60 % 15.20 % 11.63 % 11.35 % 9.03 % Return on Assets Return on assets - GAAP 1.32 % 1.33 % 0.95 % 0.95 % 0.68 % Merger-related and other charges 0.02 0.02 0.11 0.05 0.11 Return on assets - Operating 1.34 % 1.35 % 1.06 % 1.00 % 0.79 % 24
Non - GAAP Reconciliation Tables $ in thousands, except per share data 3Q22 4Q22 1Q23 2Q23 3Q23 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 1.32 % 1.33 % 0.95 % 0.95 % 0.68 % Income tax expense 0.37 0.41 0.29 0.29 0.18 (Release of) provision for credit losses 0.25 0.33 0.34 0.35 0.45 Return on assets - pre-tax, pre-provision 1.94 2.07 1.58 1.59 1.31 Merger-related and other charges 0.03 0.02 0.13 0.06 0.13 Return on assets - pre-tax, pre-provision, excluding merger-related and other charges 1.97 % 2.09 % 1.71 % 1.65 % 1.44 % Efficiency Ratio Efficiency Ratio - GAAP 48.41 % 47.95 % 57.20 % 55.71 % 61.32 % Merger-related and other charges (0.75) (0.60) (3.53) (1.54) (3.89) Efficiency Ratio - Operating, excluding PPP fees and MSR marks 47.66 % 47.35 % 53.67 % 54.17 % 57.43 % Tangible common equity to tangible assets Equity to assets ratio - GAAP 11.12 % 11.25 % 11.90 % 11.89 % 11.85 % Effect of goodwill and other intangibles (3.01) (2.97) (3.36) (3.31) (3.33) Effect of preferred equity (0.41) (0.40) (0.37) (0.37) (0.34) Tangible common equity to tangible assets ratio 7.70 % 7.88 % 8.17 % 8.21 % 8.18 % 25
Glossary ACL – Allowance for Credit Losses MLO – Mortgage Loan Office 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 26