EX-99.1 2 tm2328576d1_ex99-1.htm EXHIBIT 99.1

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
Quarter

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.

 

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