United Community Banks, Inc. Reports Fourth Quarter Results

GREENVILLE, S.C., Jan. 18, 2023 (GLOBE NEWSWIRE) — United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the fourth quarter was $52.0 million and pre-tax, pre-provision income was $65.6 million. Diluted earnings per share of $0.55 for the quarter represented a decrease of $0.11 or 17%, from the fourth quarter a year ago, and represented a decrease of $0.27 or 33% from the third quarter of 2023. On an operating basis, United’s diluted earnings per share of $0.64 was down 6% from the year ago quarter. The primary driver of the reduced earnings in both periods is lower levels of accretion from PPP loans, as those loans have continued to decline due to success in executing the forgiveness process. Additionally, in the third quarter, charges associated with the Aquesta acquisition, such as merger charges and a $3.27 million provision to establish an initial allowance for credit losses for acquired Aquesta loans, reduced GAAP earnings by approximately $9 million or ten cents per share. On an operating basis, United’s ROA was 1.10% and its return on tangible common equity was 13.9%. On a pre-tax, pre-provision basis, operating return on assets was 1.40% for the quarter. Highlights for the quarter include strong annualized organic loan growth (excluding PPP and loans received through the Aquesta acquisition) of 7% and 17% annualized organic deposit growth.

Chairman and CEO Lynn Harton stated, “We are very pleased by United’s performance this quarter and in 2023. In the quarter, both loan and deposit growth were strong and noninterest income benefited from strong, but seasonally lower, mortgage production and a great SBA quarter.” Harton continued, “On the strategic front, we completed the acquisition of Aquesta Financial Holdings, Inc. and Aquesta Bank on October 1, boosting our Charlotte presence and adding the Wilmington, North Carolina market, both of which are growth markets that fit well with our footprint and culture. We also completed the operational conversion of Aquesta in mid-November, bringing the United brand to these great markets. We are proud that this outstanding team of bankers has joined us and we believe that they are a great fit for United.  Finally, while not included in the quarterly results, on January 1 we completed the acquisition of Reliant Bancorp, Inc., expanding our Tennessee presence into the fast-growing Nashville MSA with a very high performance organization.”

Total loans increased by $569 million during the quarter—impacted by $501 million of loans from the Aquesta acquisition. Excluding the effect of PPP loans and loans received from the Aquesta acquisition, core organic loan growth was 7% annualized. Core transaction deposits grew by $948 million during the quarter, or 28% annualized. Excluding deposits received from the Aquesta acquisition, core transaction deposits grew by 10% annualized. United’s cost of deposits decreased by 1 basis point to 0.06%. The net interest margin decreased by 31 basis points from the third quarter due mainly to lower PPP loan fee accretion and an increase in liquid assets due to the continued deposit growth.

Mr. Harton concluded, “I believe 2023 will be another great year for United. We enter the year with strong business momentum, led by an outstanding team of engaged bankers throughout the company. I am very proud that in October, and for the fifth consecutive year, United was named one of the Best Banks to Work for in 2023 across the nation by American Banker. One of our most important measures of success for us is to “Be a Great Place to Work for Great People”. Banking is a service and experience business and success begins with creating an organization where the best people can be fulfilled and build a career.”

2023 Financial Highlights:

  • Full year EPS of $2.97, an increase of 55% compared to 2020; full year operating EPS of $3.09, an increase of 56% from 2020
  • Return on assets of 1.37%, or 1.42% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.65% on an operating basis
  • Return on common equity of 13.1%
  • Return on tangible common equity of 17.3% on an operating basis
  • Completed the mergers with FinTrust on July 1 and Aquesta Financial Corporation and its bank subsidiary Aquesta Bank on October 1
  • A release of provision for credit losses of $37.6 million compared to a provision of $80.4 million in 2020, mostly due to the improved economic forecasts
  • Loan growth of $389 million or $346 million excluding loans acquired from Aquesta and PPP payoffs
  • Core transaction deposits were up $2.8 billion compared to 2020; excluding Aquesta, 2023 core transaction deposits were up $2.2 billion, or 19.2%
  • Net interest margin of 3.07%, which was down 48 basis points from last year due to a number of factors, including lower PPP fee accretion, the low rate environment, and increasing balance sheet liquidity
  • Continued strong mortgage rate locks of $3.1 billion compared to a record of $3.3 billion a year ago
  • Noninterest income was up $1.7 million or 1% as an increase in wealth management fees and gains from loan sales offset the $17.6 million decline in mortgage fees
  • Efficiency ratio of 55.8%, or 53.8% on an operating basis
  • Net charge-offs of $38,000

Fourth Quarter 2023 Financial Highlights:

  • Net income of $52.0 million and pre-tax, pre-provision income of $65.6 million
  • EPS decreased by 17% compared to fourth quarter 2020 on a GAAP basis and 6% on an operating basis; compared to third quarter 2023, EPS decreased by 33% on a GAAP basis and 23% on an operating basis due to lower PPP accretion and a smaller provision release in the fourth quarter
  • Return on assets of 0.96%, or 1.10% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.40% on an operating basis
  • Return on common equity of 9.3%
  • Return on tangible common equity of 13.9% on an operating basis
  • A release of provision for credit losses of $647,000 which reduced the allowance for loan losses to 0.87% of loans from 0.89% in the third quarter
  • Loan production of $1.3 billion, resulting in core loan growth of 7%, annualized for the quarter, excluding the impact of $122 million in PPP loans being forgiven and the addition of $501 million in loans from Aquesta
  • Core transaction deposits were up $948 million; excluding Aquesta, fourth quarter core transaction deposits grew $333 million or 10% annualized
  • Net interest margin of 2.81% was down 31 basis points from the third quarter, due to lower PPP fee accretion, continued strong deposit growth and an earning asset mix change toward cash and securities
  • Mortgage closings of $522 million compared to $609 million a year ago; mortgage rate locks of $695 million compared to $792 million a year ago
  • Noninterest income was down $2.9 million on a linked quarter basis, primarily driven by lower mortgage fees
  • Noninterest expenses increased by $12.4 million compared to the third quarter on a GAAP basis and by $3.9 million on an operating basis, mostly due to adding the operating expenses of Aquesta which was acquired on October 1
  • Efficiency ratio of 62.1%, or 56.5% on an operating basis
  • Net charge-offs of $248,000 or 1 basis point as a percent of average loans, down 1 basis point from the net charge-offs experienced in the third quarter
  • Nonperforming assets of 0.16% of total assets, down 7 basis points compared to September 30, 2023
  • Quarterly common shareholder dividend of $0.20 per share declared during the quarter, an increase of 11% year-over-year
  • Completed the acquisition of Aquesta Financial Holdings, Inc. (“Aquesta”) with $756 million in assets on October 1, 2023; this acquisition is expected to add $0.08 in EPS accretion in 2023 with cost savings fully phased in
  • Completed the acquisition of Reliant Bancorp, Inc. (“Reliant”) with $3.0 billion in assets on January 1, 2023; this acquisition is expected to add $0.15 in EPS accretion in 2023 and $0.22 in 2023 with cost savings fully phased in

Conference Call

United will hold a conference call on Wednesday, January 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/10162699/f0590f1c98. 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 available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

                                     
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
(in thousands, except per share data)
    2021   2020   Fourth
Quarter
2021- 2020
Change

  For the Twelve Months Ended December 31,   YTD
2021- 2020
Change

    Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
    2021   2020  
INCOME SUMMARY                                    
Interest revenue   $ 143,768     $ 147,675     $ 145,809     $ 141,542     $ 156,071         $ 578,794     $ 557,996      
Interest expense     6,213       6,636       7,433       9,478       10,676           29,760       56,237      
Net interest revenue     137,555       141,039       138,376       132,064       145,395     (5 )%     549,034       501,759     9 %
(Release of) provision for credit losses     (647 )     (11,034 )     (13,588 )     (12,281 )     2,907           (37,550 )     80,434      
Noninterest income     37,177       40,095       35,841       44,705       41,375     (10 )     157,818       156,109     1  
Total revenue     175,379       192,168       187,805       189,050       183,863     (5 )     744,402       577,434     29  
Expenses     109,156       96,749       95,540       95,194       106,490     3       396,639       367,989     8  
Income before income tax expense     66,223       95,419       92,265       93,856       77,373           347,763       209,445      
Income tax expense     14,204       21,603       22,005       20,150       17,871           77,962       45,356      
Net income     52,019       73,816       70,260       73,706       59,502           269,801       164,089      
Merger-related and other charges     9,912       1,437       1,078       1,543       2,452           13,970       7,018      
Income tax benefit of merger-related and other charges     (2,265 )     (328 )     (246 )     (335 )     (552 )         (3,174 )     (1,340 )    
Net income – operating (1)   $ 59,666     $ 74,925     $ 71,092     $ 74,914     $ 61,402     (3 )   $ 280,597     $ 169,767     65  
                                     
Pre-tax pre-provision income (5)   $ 65,576     $ 84,385     $ 78,677     $ 81,575     $ 80,280     (18 )   $ 310,213     $ 289,879     7  
                                     
PERFORMANCE MEASURES                                    
Per common share:                                    
Diluted net income – GAAP   $ 0.55     $ 0.82     $ 0.78     $ 0.82     $ 0.66     (17 )   $ 2.97     $ 1.91     55  
Diluted net income – operating (1)     0.64       0.83       0.79       0.83       0.68     (6 )     3.09       1.98     56  
Common stock cash dividends declared     0.20       0.20       0.19       0.19       0.18     11       0.78       0.72     8  
Book value     23.63       23.25       22.81       22.15       21.90     8       23.63       21.90     8  
Tangible book value (3)     18.42       18.68       18.49       17.83       17.56     5       18.42       17.56     5  
Key performance ratios:                                    
Return on common equity – GAAP (2)(4)     9.32 %     14.26 %     14.08 %     15.37 %     12.36 %         13.14 %     9.25 %    
Return on common equity – operating (1)(2)(4)     10.74       14.48       14.25       15.63       12.77           13.68       9.58      
Return on tangible common equity – operating (1)(2)(3)(4)     13.93       18.23       17.81       19.68       16.23           17.33       12.24      
Return on assets – GAAP (4)     0.96       1.48       1.46       1.62       1.30           1.37       1.04      
Return on assets – operating (1)(4)     1.10       1.50       1.48       1.65       1.34           1.42       1.07      
Return on assets -pre-tax pre-provision (4)(5)     1.21       1.70       1.64       1.80       1.77           1.58       1.85      
Return on assets -pre-tax pre-provision, excluding
merger related and other charges (1)(4)(5)
    1.40       1.73       1.67       1.83       1.82           1.65       1.90      
Net interest margin (fully taxable equivalent) (4)     2.81       3.12       3.19       3.22       3.55           3.07       3.55      
Efficiency ratio – GAAP     62.12       53.11       54.53       53.55       56.73           55.80       55.71      
Efficiency ratio – operating (1)     56.48       52.33       53.92       52.68       55.42           53.83       54.64      
Equity to total assets     10.61       10.89       11.04       10.95       11.29           10.61       11.29      
Tangible common equity to tangible assets (3)     8.09       8.53       8.71       8.57       8.81           8.09       8.81      
ASSET QUALITY                                    
Nonperforming loans   $ 32,812     $ 44,923     $ 46,123     $ 55,900     $ 61,599     (47 )   $ 32,812     $ 61,599     (47 )
Foreclosed properties     43       412       224       596       647     (93 )     43       647     (93 )
Total nonperforming assets (“NPAs”)     32,855       45,335       46,347       56,496       62,246     (47 )     32,855       62,246     (47 )
Allowance for credit losses – loans and leases     102,532       99,620       111,616       126,866       137,010     (25 )     102,532       137,010     (25 )
Allowance for credit losses – total     113,524       110,875       122,460       135,592       147,568     (23 )     113,524       147,568     (23 )
Net charge-offs     248       551       (456 )     (305 )     1,515     (84 )     38       18,316     (100 )
Allowance for credit losses – loans and leases to loans     0.87 %     0.89 %     0.98 %     1.09 %     1.20 %         0.87 %     1.20 %    
Allowance for credit losses – total to loans     0.97       0.99       1.08       1.16       1.30           0.97       1.30      
Net charge-offs to average loans (4)     0.01       0.02       (0.02 )     (0.01 )     0.05                 0.17      
NPAs to loans and foreclosed properties     0.28       0.41       0.41       0.48       0.55           0.28       0.55      
NPAs to total assets     0.16       0.23       0.25       0.30       0.35           0.16       0.35      
AVERAGE BALANCES ($ in millions)                                    
Loans   $ 11,689     $ 11,205     $ 11,617     $ 11,433     $ 11,595     1     $ 11,486     $ 10,467     10  
Investment securities     5,544       5,122       4,631       3,991       3,326     67       4,830       2,752     76  
Earning assets     19,542       18,078       17,540       16,782       16,394     19       17,996       14,226     27  
Total assets     20,863       19,322       18,792       18,023       17,698     18       19,258       15,467     25  
Deposits     18,037       16,637       16,132       15,366       15,057     20       16,550       13,135     26  
Shareholders’ equity     2,223       2,119       2,060       2,025       1,994     11       2,107       1,821     16  
Common shares – basic (thousands)     89,916       87,211       87,289       87,322       87,258     3       87,940       83,184     6  
Common shares – diluted (thousands)     90,089       87,355       87,421       87,466       87,333     3       88,097       83,248     6  
AT PERIOD END ($ in millions)                                    
Loans   $ 11,760     $ 11,191     $ 11,391     $ 11,679     $ 11,371     3     $ 11,760     $ 11,371     3  
Investment securities     5,653       5,335       4,928       4,332       3,645     55       5,653       3,645     55  
Total assets     20,947       19,481       18,896       18,557       17,794     18       20,947       17,794     18  
Deposits     18,241       16,865       16,328       15,993       15,232     20       18,241       15,232     20  
Shareholders’ equity     2,222       2,122       2,086       2,031       2,008     11       2,222       2,008     11  
Common shares outstanding (thousands)     89,350       86,559       86,665       86,777       86,675     3       89,350       86,675     3  

(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)
    2021   2020   Twelve Months Ended
December 31,
    Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  2021   2020
Expense reconciliation                            
Expenses (GAAP)   $ 109,156     $ 96,749     $ 95,540     $ 95,194     $ 106,490     $ 396,639     $ 367,989  
Merger-related and other charges     (9,912 )     (1,437 )     (1,078 )     (1,543 )     (2,452 )     (13,970 )     (7,018 )
Expenses – operating   $ 99,244     $ 95,312     $ 94,462     $ 93,651     $ 104,038     $ 382,669     $ 360,971  
                             
Net income to operating income reconciliation                            
Net income (GAAP)   $ 52,019     $ 73,816     $ 70,260     $ 73,706     $ 59,502     $ 269,801     $ 164,089  
Merger-related and other charges     9,912       1,437       1,078       1,543       2,452       13,970       7,018  
Income tax benefit of merger-related and other charges     (2,265 )     (328 )     (246 )     (335 )     (552 )     (3,174 )     (1,340 )
Net income – operating   $ 59,666     $ 74,925     $ 71,092     $ 74,914     $ 61,402     $ 280,597     $ 169,767  
                             
Net income to pre-tax pre-provision income reconciliation                            
Net income (GAAP)   $ 52,019     $ 73,816     $ 70,260     $ 73,706     $ 59,502     $ 269,801     $ 164,089  
Income tax expense     14,204       21,603       22,005       20,150       17,871       77,962       45,356  
(Release of) provision for credit losses     (647 )     (11,034 )     (13,588 )     (12,281 )     2,907       (37,550 )     80,434  
Pre-tax pre-provision income   $ 65,576     $ 84,385     $ 78,677     $ 81,575     $ 80,280     $ 310,213     $ 289,879  
                             
Diluted income per common share reconciliation                            
Diluted income per common share (GAAP)   $ 0.55     $ 0.82     $ 0.78     $ 0.82     $ 0.66     $ 2.97     $ 1.91  
Merger-related and other charges     0.09       0.01       0.01       0.01       0.02       0.12       0.07  
Diluted income per common share – operating   $ 0.64     $ 0.83     $ 0.79     $ 0.83     $ 0.68     $ 3.09     $ 1.98  
                             
Book value per common share reconciliation                            
Book value per common share (GAAP)   $ 23.63     $ 23.25     $ 22.81     $ 22.15     $ 21.90     $ 23.63     $ 21.90  
Effect of goodwill and other intangibles     (5.21 )     (4.57 )     (4.32 )     (4.32 )     (4.34 )     (5.21 )     (4.34 )
Tangible book value per common share   $ 18.42     $ 18.68     $ 18.49     $ 17.83     $ 17.56     $ 18.42     $ 17.56  
                             
Return on tangible common equity reconciliation                            
Return on common equity (GAAP)     9.32 %     14.26 %     14.08 %     15.37 %     12.36 %     13.14 %     9.25 %
Merger-related and other charges     1.42       0.22       0.17       0.26       0.41       0.54       0.33  
Return on common equity – operating     10.74       14.48       14.25       15.63       12.77       13.68       9.58  
Effect of goodwill and other intangibles     3.19       3.75       3.56       4.05       3.46       3.65       2.66  
Return on tangible common equity – operating     13.93 %     18.23 %     17.81 %     19.68 %     16.23 %     17.33 %     12.24 %
                             
Return on assets reconciliation                            
Return on assets (GAAP)     0.96 %     1.48 %     1.46 %     1.62 %     1.30 %     1.37 %     1.04 %
Merger-related and other charges     0.14       0.02       0.02       0.03       0.04       0.05       0.03  
Return on assets – operating     1.10 %     1.50 %     1.48 %     1.65 %     1.34 %     1.42 %     1.07 %
                             
Return on assets to return on assets- pre-tax pre-provision reconciliation                            
Return on assets (GAAP)     0.96 %     1.48 %     1.46 %     1.62 %     1.30 %     1.37 %     1.04 %
Income tax expense     0.26       0.45       0.47       0.46       0.40       0.40       0.29  
(Release of) provision for credit losses     (0.01 )     (0.23 )     (0.29 )     (0.28 )     0.07       (0.19 )     0.52  
Return on assets – pre-tax pre-provision     1.21       1.70       1.64       1.80       1.77       1.58       1.85  
Merger-related and other charges     0.19       0.03       0.03       0.03       0.05       0.07       0.05  
Return on assets – pre-tax pre-provision, excluding merger-related and other charges     1.40 %     1.73 %     1.67 %     1.83 %     1.82 %     1.65 %     1.90 %
                             
Efficiency ratio reconciliation                            
Efficiency ratio (GAAP)     62.12 %     53.11 %     54.53 %     53.55 %     56.73 %     55.80 %     55.71 %
Merger-related and other charges     (5.64 )     (0.78 )     (0.61 )     (0.87 )     (1.31 )     (1.97 )     (1.07 )
Efficiency ratio – operating     56.48 %     52.33 %     53.92 %     52.68 %     55.42 %     53.83 %     54.64 %
                             
Tangible common equity to tangible assets reconciliation                            
Equity to total assets (GAAP)     10.61 %     10.89 %     11.04 %     10.95 %     11.29 %     10.61 %     11.29 %
Effect of goodwill and other intangibles     (2.06 )     (1.87 )     (1.82 )     (1.86 )     (1.94 )     (2.06 )     (1.94 )
Effect of preferred equity     (0.46 )     (0.49 )     (0.51 )     (0.52 )     (0.54 )     (0.46 )     (0.54 )
Tangible common equity to tangible assets     8.09 %     8.53 %     8.71 %     8.57 %     8.81 %     8.09 %     8.81 %
                             
Allowance for credit losses – loans to loans reconciliation                            
Allowance for credit losses – loans to loans (GAAP)     0.87 %     0.89 %     0.98 %     1.09 %     1.20 %     0.87 %     1.20 %
Effect of PPP loans     0.01       0.01       0.04       0.09       0.08       0.01       0.08  
Allowance for credit losses – loans to loans, excluding PPP loans     0.88 %     0.90 %     1.02 %     1.18 %     1.28 %     0.88 %     1.28 %
                                                         
                         
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
(in millions)
  2021
  2020
  Linked
Quarter
Change

  Year over
Year
Change

  Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
   
LOANS BY CATEGORY                          
Owner occupied commercial RE $ 2,322     $ 2,149     $ 2,149     $ 2,107     $ 2,090     $ 173     $ 232  
Income producing commercial RE   2,601       2,542       2,550       2,599       2,541       59       60  
Commercial & industrial   1,822       1,729       1,762       1,760       1,853       93       (31 )
Paycheck protection program   88       150       472       883       646       (62 )     (558 )
Commercial construction   1,015       947       927       960       967       68       48  
Equipment financing   1,083       1,017       969       913       864       66       219  
Total commercial   8,931       8,534       8,829       9,222       8,961       397       (30 )
Residential mortgage   1,638       1,533       1,473       1,362       1,285       105       353  
Home equity lines of credit   694       661       661       679       697       33       (3 )
Residential construction   359       321       289       272       281       38       78  
Consumer   138       142       139       144       147       (4 )     (9 )
Total loans $ 11,760     $ 11,191     $ 11,391     $ 11,679     $ 11,371     $ 569     $ 389  
                           
LOANS BY MARKET (1)                          
North Georgia $ 944     $ 961     $ 962     $ 982     $ 955     $ (17 )   $ (11 )
Atlanta   2,030       1,930       1,938       1,953       1,889       100       141  
North Carolina   1,895       1,427       1,374       1,326       1,281       468       614  
Coastal Georgia   588       621       605       597       617       (33 )     (29 )
Gainesville   216       220       224       222       224       (4 )     (8 )
East Tennessee   373       383       394       398       415       (10 )     (42 )
South Carolina   2,235       2,145       2,107       1,997       1,947       90       288  
Florida   1,148       1,113       1,141       1,160       1,435       35       (287 )
Commercial Banking Solutions   2,331       2,391       2,646       3,044       2,608       (60 )     (277 )
Total loans $ 11,760     $ 11,191     $ 11,391     $ 11,679     $ 11,371     $ 569     $ 389  
                                                       
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions)
  2021
  2020
  2019
  2018
  2017
LOANS BY CATEGORY                  
Owner occupied commercial RE $ 2,322     $ 2,090     $ 1,720     $ 1,648     $ 1,924  
Income producing commercial RE   2,601       2,541       2,008       1,812       1,595  
Commercial & industrial   1,822       1,853       1,221       1,278       1,131  
Paycheck protection program   88       646                    
Commercial construction   1,015       967       976       796       712  
Equipment financing   1,083       864       745       565        
Total commercial   8,931       8,961       6,670       6,099       5,362  
Residential mortgage   1,638       1,285       1,118       1,049       974  
Home equity lines of credit   694       697       661       694       731  
Residential construction   359       281       236       211       183  
Consumer   138       147       128       330       486  
Total loans $ 11,760     $ 11,371     $ 8,813     $ 8,383     $ 7,736  
                   
LOANS BY MARKET                  
North Georgia $ 944     $ 955     $ 967     $ 981     $ 1,019  
Atlanta   2,030       1,889       1,762       1,507       1,510  
North Carolina   1,895       1,281       1,156       1,072       1,049  
Coastal Georgia   588       617       631       588       630  
Gainesville   216       224       246       247       248  
East Tennessee   373       415       421       477       475  
South Carolina   2,235       1,947       1,708       1,645       1,486  
Florida   1,148       1,435                    
Commercial Banking Solutions   2,331       2,608       1,922       1,658       961  
Indirect auto                     208       358  
Total loans $ 11,760     $ 11,371     $ 8,813     $ 8,383     $ 7,736  
                                       
 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
    2021
    Fourth
Quarter
  Third
Quarter
  Second
Quarter
NONACCRUAL LOANS            
Owner occupied RE   $ 2,714     $ 4,945     $ 6,128  
Income producing RE     7,588       13,462       13,100  
Commercial & industrial     5,429       8,507       8,563  
Commercial construction     343       1,202       1,229  
Equipment financing     1,741       1,845       1,771  
Total commercial     17,815       29,961       30,791  
Residential mortgage     13,313       13,222       13,485  
Home equity lines of credit     1,212       1,364       1,433  
Residential construction     420       260       307  
Consumer     52       116       107  
Total   $ 32,812     $ 44,923     $ 46,123  
                         
    2021
    Fourth Quarter   Third Quarter   Second Quarter
(in thousands)   Net Charge-Offs   Net Charge-Offs to Average Loans (1)   Net Charge-Offs   Net Charge-Offs to Average Loans (1)   Net Charge-Offs   Net Charge-Offs to Average Loans (1)
NET CHARGE-OFFS BY CATEGORY                        
Owner occupied RE   $ (255 )   (0.04 )%   $ (93 )   (0.02 )%   $ (103 )   (0.02 )%
Income producing RE     (98 )   (0.01 )     45     0.01       (213 )   (0.03 )
Commercial & industrial     339     0.07       (91 )   (0.02 )     60     0.01  
Commercial construction     (354 )   (0.14 )     (123 )   (0.05 )     (293 )   (0.12 )
Equipment financing     781     0.29       512     0.21       301     0.13  
Total commercial     413     0.02       250     0.01       (248 )   (0.01 )
Residential mortgage     (169 )   (0.04 )     51     0.01       (194 )   (0.05 )
Home equity lines of credit     (118 )   (0.07 )     (102 )   (0.06 )     (112 )   (0.07 )
Residential construction     (17 )   (0.02 )     (37 )   (0.05 )     (33 )   (0.05 )
Consumer     139     0.39       389     1.11       131     0.37  
Total   $ 248     0.01     $ 551     0.02     $ (456 )   (0.02 )
                         
(1) Annualized.
 
 
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)
    December 31, 2023   December 31, 2020
ASSETS        
Cash and due from banks   $ 144,244     $ 148,896  
Interest-bearing deposits in banks     2,147,266       1,459,723  
Federal funds and other short-term investments     27,000        
Cash and cash equivalents     2,318,510       1,608,619  
Debt securities available-for-sale     4,496,824       3,224,721  
Debt securities held-to-maturity (fair value $1,148,804 and $437,193, respectively)     1,156,098       420,361  
Loans held for sale at fair value     44,109       105,433  
Loans and leases held for investment     11,760,346       11,370,815  
Less allowance for credit losses – loans and leases     (102,532 )     (137,010 )
Loans and leases, net     11,657,814       11,233,805  
Premises and equipment, net     245,296       218,489  
Bank owned life insurance     217,713       201,969  
Accrued interest receivable     42,999       47,672  
Net deferred tax asset     41,322       38,411  
Derivative financial instruments     42,480       86,666  
Goodwill and other intangible assets, net     472,407       381,823  
Other assets     211,199       226,405  
Total assets   $ 20,946,771     $ 17,794,374  
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Liabilities:        
Deposits:        
Noninterest-bearing demand   $ 6,956,981     $ 5,390,291  
NOW and interest-bearing demand     4,252,209       3,346,490  
Money market     4,183,354       3,550,335  
Savings     1,215,779       950,854  
Time     1,442,498       1,704,290  
Brokered     190,358       290,098  
Total deposits     18,241,179       15,232,358  
Long-term debt     247,360       326,956  
Derivative financial instruments     25,145       29,003  
Accrued expenses and other liabilities     210,842       198,527  
Total liabilities     18,724,526       15,786,844  
Shareholders’ equity:        
Preferred stock, $1 par value: 10,000,000 shares authorized; Series I, $25,000 per share liquidation
preference; 4,000 shares issued and outstanding
    96,422       96,422  
Common stock, $1 par value; 200,000,000 and 150,000,000 shares authorized, respectively;
89,349,826 and 86,675,279 shares issued and outstanding, respectively
    89,350       86,675  
Common stock issuable; 595,705 and 600,834 shares, respectively     11,288       10,855  
Capital surplus     1,721,007       1,638,999  
Retained earnings     330,654       136,869  
Accumulated other comprehensive (loss) income     (26,476 )     37,710  
Total shareholders’ equity     2,222,245       2,007,530  
Total liabilities and shareholders’ equity   $ 20,946,771     $ 17,794,374  
                 
 
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
    Three Months Ended December 31,   Twelve Months Ended December 31,
    2021   2020
  2021   2020
Interest revenue:                
Loans, including fees   $ 123,473     $ 141,351     $ 505,734     $ 494,212  
Investment securities, including tax exempt of $2,293, $2,055, $8,978 and $7,043     19,442       14,507       70,972       62,074  
Deposits in banks and short-term investments     853       213       2,088       1,710  
Total interest revenue     143,768       156,071       578,794       557,996  
Interest expense:                
Deposits:                
NOW and interest-bearing demand     1,310       1,495       5,468       7,735  
Money market     1,102       2,196       5,380       13,165  
Savings     60       48       217       169  
Time     392       2,689       3,780       20,703  
Deposits     2,864       6,428       14,845       41,772  
Short-term borrowings                       3  
Federal Home Loan Bank advances     1             3       28  
Long-term debt     3,348       4,248       14,912       14,434  
Total interest expense     6,213       10,676       29,760       56,237  
Net interest revenue     137,555       145,395       549,034       501,759  
Provision for credit losses     (647 )     2,907       (37,550 )     80,434  
Net interest revenue after provision for credit losses     138,202       142,488       586,584       421,325  
Noninterest income:                
Service charges and fees     8,613       8,508       33,868       32,401  
Mortgage loan gains and related fees     10,910       18,974       58,446       76,087  
Wealth management fees     6,117       3,221       18,998       9,240  
Gains from other loan sales, net     3,761       1,531       11,267       5,420  
Securities gains, net     42       2       83       748  
Other     7,734       9,139       35,156       32,213  
Total noninterest income     37,177       41,375       157,818       156,109  
Total revenue     175,379       183,863       744,402       577,434  
Noninterest expenses:                
Salaries and employee benefits     60,986       61,824       241,443       224,060  
Occupancy     7,489       7,082       28,619       25,791  
Communications and equipment     7,850       7,687       29,829       27,149  
FDIC assessments and other regulatory charges     1,878       1,594       7,398       5,982  
Professional fees     6,080       4,029       20,589       18,032  
Lending and loan servicing expense     2,351       2,468       10,859       10,993  
Outside services – electronic banking     2,670       1,997       9,481       7,513  
Postage, printing and supplies     1,939       1,793       7,110       6,779  
Advertising and public relations     1,760       9,891       5,910       15,203  
Amortization of intangibles     1,103       1,042       4,045       4,168  
Merger-related and other charges     9,912       2,452       13,970       7,018  
Other     5,138       4,631       17,386       15,301  
Total noninterest expenses     109,156       106,490       396,639       367,989  
Net income before income taxes     66,223       77,373       347,763       209,445  
Income tax expense     14,204       17,871       77,962       45,356  
Net income   $ 52,019     $ 59,502     $ 269,801     $ 164,089  
Preferred stock dividends     1,718       1,719       6,875       3,533  
Earnings allocated to participating securities     317       532       1,657       1,287  
Net income available to common shareholders   $ 49,984     $ 57,251     $ 261,269     $ 159,269  
                 
Net income per common share:                
Basic   $ 0.56     $ 0.66     $ 2.97     $ 1.91  
Diluted     0.55       0.66       2.97       1.91  
Weighted average common shares outstanding:                
Basic     89,916       87,258       87,940       83,184  
Diluted     90,089       87,333       88,097       83,248  
                                 
 
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
    2021   2020
    Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
Assets:                        
Interest-earning assets:                        
Loans, net of unearned income (FTE) (1)(2)   $ 11,689,412     $ 123,250     4.18 %   $ 11,595,484     $ 140,687     4.83 %
Taxable securities (3)     5,156,563       17,149     1.33       3,039,275       12,452     1.64  
Tax-exempt securities (FTE) (1)(3)     387,638       3,080     3.18       286,490       2,759     3.85  
Federal funds sold and other interest-earning assets     2,308,241       1,322     0.23       1,472,668       1,132     0.31  
Total interest-earning assets (FTE)     19,541,854       144,801     2.94       16,393,917       157,030     3.81  
                         
Noninterest-earning assets:                        
Allowance for loan losses     (103,167 )             (138,313 )        
Cash and due from banks     141,967               143,694          
Premises and equipment     245,869               218,349          
Other assets (3)     1,036,760               1,080,180          
Total assets   $ 20,863,283             $ 17,697,827          
                         
Liabilities and Shareholders’ Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 4,080,621       1,310     0.13     $ 3,281,984       1,495     0.18  
Money market     4,323,851       1,102     0.10       3,698,734       2,196     0.24  
Savings     1,187,134       60     0.02       918,623       48     0.02  
Time     1,461,231       567     0.15       1,748,099       2,711     0.62  
Brokered time deposits     65,556       (175 )   (1.06 )     83,750       (22 )   (0.10 )
Total interest-bearing deposits     11,118,393       2,864     0.10       9,731,190       6,428     0.26  
Federal funds purchased and other borrowings     51                 54            
Federal Home Loan Bank advances     1,426       1     0.28                  
Long-term debt     247,251       3,348     5.37       327,236       4,248     5.16  
Total borrowed funds     248,728       3,349     5.34       327,290       4,248     5.16  
Total interest-bearing liabilities     11,367,121       6,213     0.22       10,058,480       10,676     0.42  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits     6,918,279               5,325,858          
Other liabilities     354,665               319,158          
Total liabilities     18,640,065               15,703,496          
Shareholders’ equity     2,223,218               1,994,331          
Total liabilities and shareholders’ equity   $ 20,863,283             $ 17,697,827          
                         
Net interest revenue (FTE)       $ 138,588             $ 146,354      
Net interest-rate spread (FTE)           2.72 %           3.39 %
Net interest margin (FTE) (4)           2.81 %           3.55 %

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized losses of $1.64 million in 2023 and pretax unrealized gains of $72.6 million in 2020 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.

 
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
    2021
  2020
    Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
Assets:                        
Interest-earning assets:                        
Loans, net of unearned income (FTE) (1)(2)   $ 11,485,876     $ 504,015     4.39 %   $ 10,466,653     $ 492,223     4.70 %
Taxable securities (3)     4,446,712       61,994     1.39       2,532,750       55,031     2.17  
Tax-exempt securities (FTE) (1)(3)     382,915       12,059     3.15       219,668       9,458     4.31  
Federal funds sold and other interest-earning assets     1,680,151       4,784     0.28       1,007,059       4,753     0.47  
Total interest-earning assets (FTE)     17,995,654       582,852     3.24       14,226,130       561,465     3.95  
                         
Non-interest-earning assets:                        
Allowance for loan losses     (121,586 )             (106,812 )        
Cash and due from banks     139,728               136,702          
Premises and equipment     230,276               217,751          
Other assets (3)     1,013,956               993,584          
Total assets   $ 19,258,028             $ 15,467,355          
                         
Liabilities and Shareholders’ Equity:                        
Interest-bearing liabilities:                        
Interest-bearing deposits:                        
NOW and interest-bearing demand   $ 3,610,601       5,468     0.15     $ 2,759,383       7,735     0.28  
Money market     3,972,358       5,380     0.14       3,023,928       13,165     0.44  
Savings     1,095,071       217     0.02       821,344       169     0.02  
Time     1,529,072       3,663     0.24       1,832,319       20,146     1.10  
Brokered time deposits     67,230       117     0.17       97,788       557     0.57  
Total interest-bearing deposits     10,274,332       14,845     0.14       8,534,762       41,772     0.49  
Federal funds purchased and other borrowings     44                 1,220       3     0.25  
Federal Home Loan Bank advances     1,195       3     0.25       749       28     3.74  
Long-term debt     276,492       14,912     5.39       274,069       14,434     5.27  
Total borrowed funds     277,731       14,915     5.37       276,038       14,465     5.24  
Total interest-bearing liabilities     10,552,063       29,760     0.28       8,810,800       56,237     0.64  
                         
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits     6,276,094               4,600,152          
Other liabilities     322,566               235,120          
Total liabilities     17,150,723               13,646,072          
Shareholders’ equity     2,107,305               1,821,283          
Total liabilities and shareholders’ equity   $ 19,258,028             $ 15,467,355          
                         
Net interest revenue (FTE)       $ 553,092             $ 505,228      
Net interest-rate spread (FTE)           2.96 %           3.31 %
Net interest margin (FTE) (4)           3.07 %           3.55 %

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $28.7 million in 2023 and $67.3 million in 2020 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

About United Community Banks, Inc.

United Community Banks, Inc. (NASDAQGS: UCBI) provides a full range of banking, wealth management and mortgage services for relationship-oriented consumers and business owners. The company, known as “The Bank That SERVICE Built,” has been recognized nationally for delivering award-winning service. At December 31, 2023, United had $20.9 billion in assets and 171 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee along with a national SBA lending franchise and a national equipment lending subsidiary. Through its January 1, 2023 acquisition of Reliant Bancorp and its wholly-owned banking subsidiary, Reliant Bank, United added $3 billion in assets and 25 banking offices in high growth markets in Tennessee. In 2023, J.D. Power ranked United highest in customer satisfaction with retail banking in the Southeast, marking seven out of the last eight years United earned the coveted award. United was also named one of the “Best Banks to Work For” by American Banker in 2023 for the fifth consecutive year based on employee satisfaction. Forbes included United in its inaugural list of the World’s Best Banks in 2019 and again in 2020. Forbes also recognized United on its 2023 list of the 100 Best Banks in America for the eighth consecutive year. United also received five Greenwich Excellence Awards in 2020 for excellence in Small Business Banking, including a national award for Overall Satisfaction. Additional information about United can be found at www.ucbi.com.

Non-GAAP Financial Measures

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

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 accretive value of each of the Aquesta and Reliant acquisitions to United’s earnings. 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 Aquesta and Reliant 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 the Aquesta and Reliant acquisitions, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Reliant may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisitions of Aquesta and Reliant, (5) the risks relating to the integration of Reliant’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 the acquisitions of Aquesta and Reliant, (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 the acquisitions of Aquesta and Reliant, and (10) 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, 2020, 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 Reliant.

United qualifies all forward-looking statements by these cautionary statements.

For more information:

Jefferson Harralson
Chief Financial Officer
(864) 240-6208
[email protected]

 

United Community Banks Inc