United Community Banks, Inc. Reports Third Quarter Results

United Community Banks, Inc.
·16 min read

Strong Financial Performance and Continued Business Expansion

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

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

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

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

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

Thir d Quarter 2020 Financial Highlights:

  • EPS decreased by 13% compared to last year on both a GAAP and operating basis; compared to second quarter, EPS increased by 63% on a GAAP basis and 72% on an operating basis

  • Return on assets of 1.07%, or 1.14% excluding merger-related and other charges

  • Pre-tax, pre-provision return on assets of 1.86%, or 1.93% excluding merger-related and other charges

  • Return on common equity of 10.1%

  • Return on tangible common equity of 13.5%, excluding merger-related and other charges

  • A provision for credit losses of $21.8 million of which $10.7 million is attributable to establishing an allowance for credit losses for Seasides acquired loans

  • Loan production of $1.0 billion and loan growth of $1.7 billion with $1.4 billion attributable to loans acquired from Seaside and core loan growth at an annualized rate of 8% for the quarter

  • Core transaction deposits were up $1.7 billion with $1.3 billion attributable to Seaside and approximately $400 million in organic growth, which represents a 15% annualized growth rate for the quarter

  • Net interest margin of 3.27% was down 15 basis points from the second quarter, reflecting the low rate environment, the Seaside acquisition, and increasing balance sheet liquidity

  • Record mortgage rate locks of $910 million, which is $108 million or 13% higher than the previous record set in the second quarter; this compares to $508 million a year ago

  • Noninterest income was up $7.7 million on a linked quarter basis, excluding net securities gains; Seaside contributed nearly $2.5 million of the increase and mortgage loan and related fees were up $1.5 million, primarily driven by record mortgage rate locks and production

  • Efficiency ratio of 54.1%, or a record low 52.2% excluding merger-related and other charges

  • Net charge-offs of $2.5 million, or 9 basis points as a percent of average loans, down 16 basis points from in the second quarter

  • Nonperforming assets of 0.29% of total assets, which is down 3 basis points compared to June 30, 2020

  • Total deferrals of $365 million or 3% of the total loan portfolio compared to $1.9 billion or 16% in the second quarter

  • $500,000 of funding for the United Community Bank Foundation, adding to the initial $1 million contribution in the second quarter for charities and causes throughout the footprint

Conference Call

United will hold a conference call, Wednesday, October 21, 2020, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 7466997. The conference call also will be webcast and available for replay for 30 days by selecting Events & Presentations within the Investor Relations section of Uniteds website at www.ucbi.com .

UNITED COMMUNITY BANKS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

 

Third
Quarter 

 

For the Nine Months Ended September 30,

 

 

(in thousands, except per share data)

 

Third
Quarter

 

Second
Quarter

 

First
Quarter

 

Fourth
Quarter

 

Third
Quarter

 

2020 -
2019
Change

 

2020

 

2019

 

YTD
2020 -
2019
Change

INCOME SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest revenue

 

$

141,773

 

 

 

$

123,605

 

 

 

$

136,547

 

 

 

$

136,419

 

 

 

$

140,615

 

 

 

 

 

$

401,925

 

 

$

416,287

 

 

 

Interest expense

 

13,319

 

 

 

14,301

 

 

 

17,941

 

 

 

19,781

 

 

 

21,277

 

 

 

 

 

45,561

 

 

63,531

 

 

 

Net interest revenue

 

128,454

 

 

 

109,304

 

 

 

118,606

 

 

 

116,638

 

 

 

119,338

 

 

 

8

%

 

356,364

 

 

352,756

 

 

1

%

Provision for credit losses

 

21,793

 

 

 

33,543

 

 

 

22,191

 

 

 

3,500

 

 

 

3,100

 

 

 

 

 

77,527

 

 

9,650

 

 

 

Noninterest income

 

48,682

 

 

 

40,238

 

 

 

25,814

 

 

 

30,183

 

 

 

29,031

 

 

 

68

 

 

114,734

 

 

74,530

 

 

54

 

Total revenue

 

155,343

 

 

 

115,999

 

 

 

122,229

 

 

 

143,321

 

 

 

145,269

 

 

 

7

 

 

393,571

 

 

417,636

 

 

(6

Expenses

 

95,981

 

 

 

83,980

 

 

 

81,538

 

 

 

81,424

 

 

 

82,924

 

 

 

16

 

 

261,499

 

 

240,821

 

 

9

 

Income before income tax expense

 

59,362

 

 

 

32,019

 

 

 

40,691

 

 

 

61,897

 

 

 

62,345

 

 

 

(5

)

 

132,072

 

 

176,815

 

 

(25

Income tax expense

 

11,755

 

 

 

6,923

 

 

 

8,807

 

 

 

12,885

 

 

 

13,983

 

 

 

(16

)

 

27,485

 

 

40,106

 

 

(31

)

Net income

 

47,607

 

 

 

25,096

 

 

 

31,884

 

 

 

49,012

 

 

 

48,362

 

 

 

(2

)

 

104,587

 

 

136,709

 

 

(23

)

Merger-related and other charges

 

3,361

 

 

 

397

 

 

 

808

 

 

 

(74

)

 

 

2,605

 

 

 

 

 

4,566

 

 

7,431

 

 

 

Income tax benefit of merger-related and other charges

 

(519

)

 

 

(87

)

 

 

(182

)

 

 

17

 

 

 

(600

)

 

 

 

 

(788

)

 

(1,712

)

 

 

Net income - operating (1)

 

$

50,449

 

 

 

$

25,406

 

 

 

$

32,510

 

 

 

$

48,955

 

 

 

$

50,367

 

 

 

 

 

$

108,365

 

 

$

142,428

 

 

(24

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision income (5)

 

$

81,155

 

 

 

$

65,562

 

 

 

$

62,882

 

 

 

$

65,397

 

 

 

$

65,445

 

 

 

24

 

 

$

209,599

 

 

$

186,465

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE MEASURES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income - GAAP

 

$

0.52

 

 

 

$

0.32

 

 

 

$

0.40

 

 

 

$

0.61

 

 

 

$

0.60

 

 

 

(13

)

 

$

1.25

 

 

$

1.70

 

 

(26

)

Diluted net income - operating (1)

 

0.55

 

 

 

0.32

 

 

 

0.41

 

 

 

0.61

 

 

 

0.63

 

 

 

(13

)

 

1.29

 

 

1.77

 

 

(27

)

Cash dividends declared

 

0.18

 

 

 

0.18

 

 

 

0.18

 

 

 

0.18

 

 

 

0.17

 

 

 

6

 

 

0.54

 

 

0.50

 

 

8

 

Book value

 

21.45

 

 

 

21.22

 

 

 

20.80

 

 

 

20.53

 

 

 

20.16

 

 

 

6

 

 

21.45

 

 

20.16

 

 

6

 

Tangible book value (3)

 

17.09

 

 

 

16.95

 

 

 

16.52

 

 

 

16.28

 

 

 

15.90

 

 

 

7

 

 

17.09

 

 

15.90

 

 

7

 

Key performance ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on common equity - GAAP (2)(4)

 

10.06

 

%

 

6.17

 

%

 

7.85

 

%

 

12.07

 

%

 

12.16

 

%

 

 

 

8.11

%

 

11.83

%

 

 

Return on common equity - operating (1)(2)(4)

 

10.69

 

 

 

6.25

 

 

 

8.01

 

 

 

12.06

 

 

 

12.67

 

 

 

 

 

8.40

 

 

12.32

 

 

 

Return on tangible common equity - operating (1)(2)(3)(4)

 

13.52

 

 

 

8.09

 

 

 

10.57

 

 

 

15.49

 

 

 

16.38

 

 

 

 

 

10.76

 

 

15.92

 

 

 

Return on assets - GAAP (4)

 

1.07

 

 

 

0.71

 

 

 

0.99

 

 

 

1.50

 

 

 

1.51

 

 

 

 

 

0.93

 

 

1.45

 

 

 

Return on assets - operating (1)(4)

 

1.14

 

 

 

0.72

 

 

 

1.01

 

 

 

1.50

 

 

 

1.58

 

 

 

 

 

0.97

 

 

1.51

 

 

 

Return on assets - pre-tax pre-provision (4)(5)

 

1.86

 

 

 

1.86

 

 

 

1.95

 

 

 

2.00

 

 

 

2.05

 

 

 

 

 

 

1.89

 

 

1.98

 

 

 

Return on assets - pre-tax pre-provision, excluding merger-related and other charges (1)(4)(5)

 

1.93

 

 

 

1.87

 

 

 

1.98

 

 

 

2.00

 

 

 

2.13

 

 

 

 

 

 

1.93

 

 

2.06

 

 

 

 

Net interest margin (fully taxable equivalent) (4)

 

3.27

 

 

 

3.42

 

 

 

4.07

 

 

 

3.93

 

 

 

4.12

 

 

 

 

 

3.55

 

 

4.11

 

 

 

Efficiency ratio - GAAP

 

54.14

 

 

 

55.86

 

 

 

56.15

 

 

 

54.87

 

 

 

55.64

 

 

 

 

 

55.30

 

 

56.09

 

 

 

Efficiency ratio - operating (1)

 

52.24

 

 

 

55.59

 

 

 

55.59

 

 

 

54.92

 

 

 

53.90

 

 

 

 

 

54.34

 

 

54.36

 

 

 

Equity to total assets

 

11.47

 

 

 

11.81

 

 

 

12.54

 

 

 

12.66

 

 

 

12.53

 

 

 

 

 

11.47

 

 

12.53

 

 

 

Tangible common equity to tangible assets (3)

 

8.89

 

 

 

9.12

 

 

 

10.22

 

 

 

10.32

 

 

 

10.16

 

 

 

 

 

8.89

 

 

10.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

49,084

 

 

 

$

48,021

 

 

 

$

36,208

 

 

 

$

35,341

 

 

 

$

30,832

 

 

 

59

 

 

$

49,084

 

 

$

30,832

 

 

59

 

Foreclosed properties

 

953

 

 

 

477

 

 

 

475

 

 

 

476

 

 

 

102

 

 

 

 

 

953

 

 

102

 

 

 

Total nonperforming assets ("NPAs")

 

50,037

 

 

 

48,498

 

 

 

36,683

 

 

 

35,817

 

 

 

30,934

 

 

 

62

 

 

50,037

 

 

30,934

 

 

62

 

Allowance for credit losses - loans

 

134,256

 

 

 

103,669

 

 

 

81,905

 

 

 

62,089

 

 

 

62,514

 

 

 

115

 

 

134,256

 

 

62,514

 

 

115

 

Net charge-offs

 

2,538

 

 

 

6,149

 

 

 

8,114

 

 

 

3,925

 

 

 

2,723

 

 

 

(7

)

 

16,801

 

 

8,291

 

 

103

 

Allowance for credit losses - loans to loans

 

1.14

 

%

 

1.02

 

%

 

0.92

 

%

 

0.70

 

%

 

0.70

 

%

 

 

 

1.14

%

 

0.70

%

 

 

Net charge-offs to average loans (4)

 

0.09

 

 

 

0.25

 

 

 

0.37

 

 

 

0.18

 

 

 

0.12

 

 

 

 

 

0.22

 

 

0.13

 

 

 

NPAs to loans and foreclosed properties

 

0.42

 

 

 

0.48

 

 

 

0.41

 

 

 

0.41

 

 

 

0.35

 

 

 

 

 

0.42

 

 

0.35

 

 

 

NPAs to total assets

 

0.29

 

 

 

0.32

 

 

 

0.28

 

 

 

0.28

 

 

 

0.24

 

 

 

 

 

0.29

 

 

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES ($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

11,644

 

 

 

$

9,773

 

 

 

$

8,829

 

 

 

$

8,890

 

 

 

$

8,836

 

 

 

32

 

 

$

10,088

 

 

$

8,647

 

 

17

 

Investment securities

 

2,750

 

 

 

2,408

 

 

 

2,520

 

 

 

2,486

 

 

 

2,550

 

 

 

8

 

 

2,560

 

 

2,701

 

 

(5

Earning assets

 

15,715

 

 

 

12,958

 

 

 

11,798

 

 

 

11,832

 

 

 

11,568

 

 

 

36

 

 

13,498

 

 

11,534

 

 

17

 

Total assets

 

17,013

 

 

 

14,173

 

 

 

12,944

 

 

 

12,946

 

 

 

12,681

 

 

 

34

 

 

14,718

 

 

12,600

 

 

17

 

Deposits

 

14,460

 

 

 

12,071

 

 

 

10,915

 

 

 

10,924

 

 

 

10,531

 

 

 

37

 

 

12,490

 

 

10,462

 

 

19

 

Shareholders equity

 

1,948

 

 

 

1,686

 

 

 

1,653

 

 

 

1,623

 

 

 

1,588

 

 

 

23

 

 

1,763

 

 

1,533

 

 

15

 

Common shares - basic (thousands)

 

87,129

 

 

 

78,920

 

 

 

79,340

 

 

 

79,659

 

 

 

79,663

 

 

 

9

 

 

81,815

 

 

79,714

 

 

3

 

Common shares - diluted (thousands)

 

87,205

 

 

 

78,924

 

 

 

79,446

 

 

 

79,669

 

 

 

79,667

 

 

 

9

 

 

81,876

 

 

79,718

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AT PERIOD END ($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

11,799

 

 

 

$

10,133

 

 

 

$

8,935

 

 

 

$

8,813

 

 

 

$

8,903

 

 

 

33

 

 

$

11,799

 

 

$

8,903

 

 

33

 

Investment securities

 

3,089

 

 

 

2,432

 

 

 

2,540

 

 

 

2,559

 

 

 

2,515

 

 

 

23

 

 

3,089

 

 

2,515

 

 

23

 

Total assets

 

17,153

 

 

 

15,005

 

 

 

13,086

 

 

 

12,916

 

 

 

12,809

 

 

 

34

 

 

17,153

 

 

12,809

 

 

34

 

Deposits

 

14,603

 

 

 

12,702

 

 

 

11,035

 

 

 

10,897

 

 

 

10,757

 

 

 

36

 

 

14,603

 

 

10,757

 

 

36

 

Shareholders equity

 

1,967

 

 

 

1,772

 

 

 

1,641

 

 

 

1,636

 

 

 

1,605

 

 

 

23

 

 

1,967

 

 

1,605

 

 

23

 

Common shares outstanding (thousands)

 

86,611

 

 

 

78,335

 

 

 

78,284

 

 

 

79,014

 

 

 

78,974

 

 

 

10

 

 

86,611

 

 

78,974

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. (2) Net income divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.


UNITED COMMUNITY BANKS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Performance Measures Reconciliation

Selected Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

 

For the Nine Months Ended
September 30,

 

 

Third 

 

Second

 

First

 

Fourth 

 

Third 

 

 

 

 

(in thousands, except per share data)

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

2020 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses (GAAP)

 

$

95,981

 

 

 

$

83,980

 

 

 

$

81,538

 

 

 

$

81,424

 

 

 

$

82,924

 

 

 

$

261,499

 

 

 

$

240,821

 

 

Merger-related and other charges

 

(3,361

)

 

 

(397

)

 

 

(808

)

 

 

74

 

 

 

(2,605

)

 

 

(4,566

)

 

 

(7,431

)

 

Expenses - operating

 

$

92,620

 

 

 

$

83,583

 

 

 

$

80,730

 

 

 

$

81,498

 

 

 

$

80,319

 

 

 

$

256,933

 

 

 

$

233,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income to operating income reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

47,607

 

 

 

$

25,096

 

 

 

$

31,884

 

 

 

$

49,012

 

 

 

$

48,362

 

 

 

$

104,587

 

 

 

$

136,709

 

 

Merger-related and other charges

 

3,361

 

 

 

397

 

 

 

808

 

 

 

(74

)

 

 

2,605

 

 

 

4,566

 

 

 

7,431

 

 

Income tax benefit of merger-related and other charges

 

(519

)

 

 

(87

)

 

 

(182

)

 

 

17

 

 

 

(600

)

 

 

(788

)

 

 

(1,712

)

 

Net income - operating

 

$

50,449

 

 

 

$

25,406

 

 

 

$

32,510

 

 

 

$

48,955

 

 

 

$

50,367

 

 

 

$

108,365

 

 

 

$

142,428

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income to pre-tax pre-provision income reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

47,607

 

 

 

$

25,096

 

 

 

$

31,884

 

 

 

$

49,012

 

 

 

$

48,362

 

 

 

$

104,587

 

 

 

$

136,709

 

 

Income tax expense

 

11,755

 

 

 

6,923

 

 

 

8,807

 

 

 

12,885

 

 

 

13,983

 

 

 

27,485

 

 

 

40,106

 

 

Provision for credit losses

 

21,793

 

 

 

33,543

 

 

 

22,191

 

 

 

3,500

 

 

 

3,100

 

 

 

77,527

 

 

 

9,650

 

 

Pre-tax pre-provision income

 

$

81,155

 

 

 

$

65,562

 

 

 

$

62,882

 

 

 

$

65,397

 

 

 

$

65,445

 

 

 

$

209,599

 

 

 

$

186,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share (GAAP)

 

$

0.52

 

 

 

$

0.32

 

 

 

$

0.40

 

 

 

$

0.61

 

 

 

$

0.60

 

 

 

$

1.25

 

 

 

$

1.70

 

 

Merger-related and other charges, net of tax

 

0.03

 

 

 

 

 

 

0.01

 

 

 

 

 

 

0.03

 

 

 

0.04

 

 

 

0.07

 

 

Diluted income per common share - operating

 

$

0.55

 

 

 

$

0.32

 

 

 

$

0.41

 

 

 

$

0.61

 

 

 

$

0.63

 

 

 

$

1.29

 

 

 

$

1.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share (GAAP)

 

$

21.45

 

 

 

$

21.22

 

 

 

$

20.80

 

 

 

$

20.53

 

 

 

$

20.16

 

 

 

$

21.45

 

 

 

$

20.16

 

 

Effect of goodwill and other intangibles

 

(4.36

)

 

 

(4.27

)

 

 

(4.28

)

 

 

(4.25

)

 

 

(4.26

)

 

 

(4.36

)

 

 

(4.26

)

 

Tangible book value per common share

 

$

17.09

 

 

 

$

16.95

 

 

 

$

16.52

 

 

 

$

16.28

 

 

 

$

15.90

 

 

 

$

17.09

 

 

 

$

15.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on tangible common equity reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on common equity (GAAP)

 

10.06

 

%

 

6.17

 

%

 

7.85

 

%

 

12.07

 

%

 

12.16

 

%

 

8.11

 

%

 

11.83

 

%

Merger-related and other charges, net of tax

 

0.63

 

 

 

0.08

 

 

 

0.16

 

 

 

(0.01

)

 

 

0.51

 

 

 

0.29

 

 

 

0.49

 

 

Return on common equity - operating

 

10.69

 

 

 

6.25

 

 

 

8.01

 

 

 

12.06

 

 

 

12.67

 

 

 

8.40

 

 

 

12.32

 

 

Effect of goodwill and other intangibles

 

2.83

 

 

 

1.84

 

 

 

2.56

 

 

 

3.43

 

 

 

3.71

 

 

 

2.36

 

 

 

3.60

 

 

Return on tangible common equity - operating

 

13.52

 

%

 

8.09

 

%

 

10.57

 

%

 

15.49

 

%

 

16.38

 

%

 

10.76

 

%

 

15.92

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on assets reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on assets (GAAP)

 

1.07

 

%

 

0.71

 

%

 

0.99

 

%

 

1.50

 

%

 

1.51

 

%

 

0.93

 

%

 

1.45

 

%

Merger-related and other charges, net of tax

 

0.07

 

 

 

0.01

 

 

 

0.02

 

 

 

 

 

 

0.07

 

 

 

0.04

 

 

 

0.06

 

 

Return on assets - operating

 

1.14

 

%

 

0.72

 

%

 

1.01

 

%

 

1.50

 

%

 

1.58

 

%

 

0.97

 

%

 

1.51

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on assets to return on assets- pre-tax pre-provision reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on assets (GAAP)

 

1.07

 

%

 

0.71

 

%

 

0.99

 

%

 

1.50

 

%

 

1.51

 

%

 

0.93

 

%

 

1.45

 

%

Income tax expense

 

0.28

 

 

 

0.20

 

 

 

0.27

 

 

 

0.39

 

 

 

0.44

 

 

 

0.26

 

 

 

0.43

 

 

Provision for credit losses

 

0.51

 

 

 

0.95

 

 

 

0.69

 

 

 

0.11

 

 

 

0.10

 

 

 

0.70

 

 

 

0.10

 

 

Return on assets - pre-tax, pre-provision

 

1.86

 

 

 

1.86

 

 

 

1.95

 

 

 

2.00

 

 

 

2.05

 

 

 

1.89

 

 

 

1.98

 

 

Merger-related and other charges

 

0.07

 

 

 

0.01

 

 

 

0.03

 

 

 

 

 

 

0.08

 

 

 

0.04

 

 

 

0.08

 

 

Return on assets - pre-tax pre-provision, excluding merger-related and other charges

 

1.93

 

%

 

1.87

 

%

 

1.98

 

%

 

2.00

 

%

 

2.13

 

%

 

1.93

 

%

 

2.06

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (GAAP)

 

54.14

 

%

 

55.86

 

%

 

56.15

 

%

 

54.87

 

%

 

55.64

 

%

 

55.30

 

%

 

56.09

 

%

Merger-related and other charges

 

(1.90

)

 

 

(0.27

)

 

 

(0.56

)

 

 

0.05

 

 

 

(1.74

)

 

 

(0.96

)

 

 

(1.73

)

 

Efficiency ratio - operating

 

52.24

 

%

 

55.59

 

%

 

55.59

 

%

 

54.92

 

%

 

53.90

 

%

 

54.34

 

%

 

54.36

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to total assets (GAAP)

 

11.47

 

%

 

11.81

 

%

 

12.54

 

%

 

12.66

 

%

 

12.53

 

%

 

11.47

 

%

 

12.53

 

%

Effect of goodwill and other intangibles

 

(2.02

)

 

 

(2.05

)

 

 

(2.32

)

 

 

(2.34

)

 

 

(2.37

)

 

 

(2.02

)

 

 

(2.37

)

 

Effect of preferred equity

 

(0.56

)

 

 

(0.64

)

 

 

 

 

 

 

 

 

 

 

 

(0.56

)

 

 

 

 

Tangible common equity to tangible assets

 

8.89

 

%

 

9.12

 

%

 

10.22

 

%

 

10.32

 

%

 

10.16

 

%

 

8.89

 

%

 

10.16

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



UNITED COMMUNITY BANKS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio Composition at Period-End

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

 

Linked

 

Year over 

(in millions)

Third
Quarter

 

Second
Quarter

 

First
Quarter

 

Fourth
Quarter

 

Third
Quarter

 

Quarter
Change

 

Year
Change

LOANS BY CATEGORY

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner occupied commercial RE

$

2,009

 

 

$

1,759

 

 

$

1,703

 

 

$

1,720

 

 

$

1,692

 

 

$

250

 

 

 

$

317

 

 

Income producing commercial RE

2,493

 

 

2,178

 

 

2,065

 

 

2,008

 

 

1,934

 

 

315

 

 

 

559

 

 

Commercial & industrial

1,788

 

 

1,219

 

 

1,310

 

 

1,221

 

 

1,271

 

 

569

 

 

 

517

 

 

Paycheck protection program

1,317

 

 

1,095

 

 

 

 

 

 

 

 

222

 

 

 

1,317

 

 

Commercial construction

987

 

 

946

 

 

959

 

 

976

 

 

1,001

 

 

41

 

 

 

(14

)

 

Equipment financing

823

 

 

779

 

 

761

 

 

745

 

 

729

 

 

44

 

 

 

94

 

 

Total commercial

9,417

 

 

7,976

 

 

6,798

 

 

6,670

 

 

6,627

 

 

1,441

 

 

 

2,790

 

 

Residential mortgage

1,270

 

 

1,152

 

 

1,128

 

 

1,118

 

 

1,121

 

 

118

 

 

 

149

 

 

Home equity lines of credit

707

 

 

654

 

 

668

 

 

661

 

 

669

 

 

53

 

 

 

38

 

 

Residential construction

257

 

 

230

 

 

216

 

 

236

 

 

229

 

 

27

 

 

 

28

 

 

Consumer

148

 

 

121

 

 

125

 

 

128

 

 

257

 

 

27

 

 

 

(109

)

 

Total loans

$

11,799

 

 

$

10,133

 

 

$

8,935

 

 

$

8,813

 

 

$

8,903

 

 

$

1,666

 

 

 

$

2,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOANS BY MARKET North Georgia$945 $951 $958 $967 $1,002 $(6) $(57) Atlanta1,853 1,852 1,820 1,762 1,740 1 113 North Carolina1,246 1,171 1,124 1,156 1,117 75 129 Coastal Georgia614 618 604 631 611 (4) 3 Gainesville229 233 235 246 246 (4) (17) East Tennessee420 433 425 421 435 (13) (15) South Carolina1,870 1,778 1,774 1,708 1,705 92 165 Florida1,453 — — — — 1,453 1,453 Commercial Banking Solutions3,169 3,097 1,995 1,922 1,916 72 1,253 Indirect auto— — — — 131 — (131) Total loans$11,799 $10,133 $8,935 $8,813 $8,903 $1,666 $2,896

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality

2020

(in thousands)

Third
Quarter

Second
Quarter

First
Quarter

NONACCRUAL LOANS

Owner occupied RE

$

11,075

$

10,710

$

10,405

Income producing RE

12,230

11,274

2,235

Commercial & industrial

3,534

3,432

3,169

Commercial construction

1,863

2,290

1,724

Equipment financing

3,137

3,119

2,439

Total commercial

31,839

30,825

19,972

Residential mortgage

13,864

13,185

12,458

Home equity lines of credit

2,642

3,138

3,010

Residential construction

479

500

540

Consumer

260

373

228

Total

$

49,084

$

48,021

$

36,208

2020

Third Quarter

Second Quarter

First Quarter

(in thousands)

Net Charge-
Offs

Net Charge-
Offs to
Average Loans
(1)

Net Charge-
Offs

Net Charge-
Offs to
Average Loans
(1)

Net Charge-
Offs

Net Charge-
Offs to
Average Loans
(1)

NET CHARGE-OFFS BY CATEGORY

Owner occupied RE

$

(725

)

(0.14

)

%

$

(466

)

(0.11

)

%

$

(1,028

)

(0.24

)

%

Income producing RE

1,785

0.29

4,548

0.86

270

0.05

Commercial & industrial

(105

)

(0.01

)

(37

)

(0.01

)

7,185

2.30

Commercial construction

(171

)

(0.07

)

122

0.05

(141

)

(0.06

)

Equipment financing

1,993

0.93

1,665

0.87

1,507

0.81

Total commercial

2,777

0.12

5,832

0.31

7,793

0.47

Residential mortgage

(35

)

(0.01

)

(6

)

9

Home equity lines of credit

(125

)

(0.07

)

(98

)

(0.06

)

(83

)

(0.05

)

Residential construction

(5

)

(0.01

)

(12

)

(0.02

)

Consumer

(79

)

(0.22

)

426

1.39

407

1.30

Total

$

2,538

0.09

$

6,149

0.25

$

8,114

0.37

(1) Annualized.


UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)

September 30,
2020

December 31,
2019

ASSETS

Cash and due from banks

$

122,048

$

125,844

Interest-bearing deposits in banks

923,591

389,362

Cash and cash equivalents

1,045,639

515,206

Debt securities available-for-sale

2,690,448

2,274,581

Debt securities held-to-maturity (fair value $413,820 and $287,904)

398,373

283,533

Loans held for sale at fair value

128,587

58,484

Loans and leases held for investment

11,798,910

8,812,553

Less allowance for credit losses - loans and leases

(134,256

)

(62,089

)

Loans and leases, net

11,664,654

8,750,464

Premises and equipment, net

211,885

215,976

Bank owned life insurance

201,515

202,664

Accrued interest receivable

48,091

32,660

Net deferred tax asset

39,818

34,059

Derivative financial instruments

103,388

35,007

Goodwill and other intangible assets, net

384,074

342,247

Other assets

236,405

171,135

Total assets

$

17,152,877

$

12,916,016

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing demand

$

5,227,170

$

3,477,979

NOW and interest-bearing demand

2,989,455

2,461,895

Money market

3,399,793

2,230,628

Savings

891,147

706,467

Time

1,819,586

1,859,574

Brokered

276,225

160,701

Total deposits

14,603,376

10,897,244

Long-term debt

326,703

212,664

Derivative financial instruments

33,519

15,516

Accrued expenses and other liabilities

222,024

154,900

Total liabilities

15,185,622

11,280,324

Shareholders' equity:

Preferred stock; $1 par value; 10,000,000 shares authorized;
Series I, $25,000 per share liquidation preference; 4,000 shares issued and outstanding

96,422

Common stock, $1 par value; 150,000,000 shares authorized;
86,611,114 and 79,013,729 shares issued and outstanding

86,611

79,014

Common stock issuable; 590,521 and 664,640 shares

10,632

11,491

Capital surplus

1,637,467

1,496,641

Retained earnings

94,938

40,152

Accumulated other comprehensive income

41,185

8,394

Total shareholders' equity

1,967,255

1,635,692

Total liabilities and shareholders' equity

$

17,152,877

$

12,916,016


UNITED COMMUNITY BANKS, INC.

Consolidated Statements of Income (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands, except per share data)

2020

2019

2020

2019

Interest revenue:

Loans, including fees

$

126,936

$

122,645

$

352,861

$

357,575

Investment securities, including tax exempt of $1,895, $1,118, $4,988 and $3,409

14,558

17,744

47,567

57,638

Deposits in banks and short-term investments

279

226

1,497

1,074

Total interest revenue

141,773

140,615

401,925

416,287

Interest expense:

Deposits:

NOW and interest-bearing demand

1,634

3,214

6,240

10,283

Money market

3,017

5,126

10,969

14,100

Savings

47

41

121

115

Time

4,300

8,732

18,014

25,687

Deposits

8,998

17,113

35,344

50,185

Short-term borrowings

2

429

3

838

Federal Home Loan Bank advances

27

521

28

2,695

Long-term debt

4,292

3,214

10,186

9,813

Total interest expense

13,319

21,277

45,561

63,531

Net interest revenue

128,454

119,338

356,364

352,756

Provision for credit losses

21,793

3,100

77,527

9,650

Net interest revenue after provision for credit losses

106,661

116,238

278,837

343,106

Noninterest income:

Service charges and fees

8,260

9,916

23,893

27,429

Mortgage loan gains and other related fees

25,144

8,658

57,113

17,750

Brokerage and wealth management fees

3,055

1,699

6,019

4,624

Gains from sales of other loans, net

1,175

1,639

3,889

4,412

Securities gains (losses), net

746

746

(118

)

Other

10,302

7,119

23,074

20,433

Total noninterest income

48,682

29,031

114,734

74,530

Total revenue

155,343

145,269

393,571

417,636

Noninterest expenses:

Salaries and employee benefits

59,067

50,501

162,236

146,161

Communications and equipment

6,960

6,223

19,462

18,233

Occupancy

7,050

5,921

18,709

17,424

Advertising and public relations

1,778

1,374

5,312

4,256

Postage, printing and supplies

1,703

1,618

4,986

4,733

Professional fees

5,083

4,715

14,003

11,930

Lending and loan servicing expense

3,043

2,556

8,525

7,509

Outside services - electronic banking

1,888

1,934

5,516

5,101

FDIC assessments and other regulatory charges

1,346

314

4,388

3,571

Amortization of intangibles

1,099

1,210

3,126

3,845

Merger-related and other charges

3,361

2,541

4,566

6,981

Other

3,603

4,017

10,670

11,077

Total noninterest expenses

95,981

82,924

261,499

240,821

Net income before income taxes

59,362

62,345

132,072

176,815

Income tax expense

11,755

13,983

27,485

40,106

Net income

47,607

48,362

104,587

136,709

Preferred stock dividends

1,814

1,814

Dividends and undistributed earnings allocated to unvested shares

356

351

779

982

Net income available to common shareholders

$

45,437

$

48,011

$

101,994

$

135,727

Net income per common share:

Basic

$

0.52

$

0.60

$

1.25

$

1.70

Diluted

0.52

0.60

1.25

1.70

Weighted average common shares outstanding:

Basic

87,129

79,663

81,815

79,714

Diluted

87,205

79,667

81,876

79,718


Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended September 30,

2020

2019

(dollars in thousands, fully taxable equivalent (FTE))

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Assets:

Interest-earning assets:

Loans, net of unearned income (FTE) (1)(2)

$

11,644,202

$

126,342

4.32

%

$

8,835,585

$

122,526

5.50

%

Taxable securities (3)

2,499,649

12,663

2.03

2,379,927

16,626

2.79

Tax-exempt securities (FTE) (1)(3)

249,959

2,544

4.07

170,027

1,502

3.53

Federal funds sold and other interest-earning assets

1,321,445

1,132

0.34

182,935

616

1.35

Total interest-earning assets (FTE)

15,715,255

142,681

3.61

11,568,474

141,270

4.85

Noninterest-earning assets:

Allowance for credit losses

(128,581

)

(63,474

)

Cash and due from banks

135,949

116,922

Premises and equipment

216,326

221,930

Other assets (3)

1,074,529

836,951

Total assets

$

17,013,478

$

12,680,803

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Interest-bearing deposits:

NOW and interest-bearing demand

$

2,890,735

1,634

0.22

$

2,123,910

3,214

0.60

Money market

3,501,781

3,017

0.34

2,277,162

5,126

0.89

Savings

864,849

47

0.02

695,297

41

0.02

Time

1,933,764

4,127

0.85

1,879,801

8,053

1.70

Brokered time deposits

96,198

173

0.72

102,078

679

2.64

Total interest-bearing deposits

9,287,327

8,998

0.39

7,078,248

17,113

0.96

Federal funds purchased and other borrowings

4,405

2

0.18

73,733

429

2.31

Federal Home Loan Bank advances

2,818

27

3.81

88,261

521

2.34

Long-term debt

327,017

4,292

5.22

243,935

3,214

5.23

Total borrowed funds

334,240

4,321

5.14

405,929

4,164

4.07

Total interest-bearing liabilities

9,621,567

13,319

0.55

7,484,177

21,277

1.13

Noninterest-bearing liabilities:

Noninterest-bearing deposits

5,172,999

3,453,174

Other liabilities

270,451

155,107

Total liabilities

15,065,017

11,092,458

Shareholders' equity

1,948,461

1,588,345

Total liabilities and shareholders' equity

$

17,013,478

$

12,680,803

Net interest revenue (FTE)

$

129,362

$

119,993

Net interest-rate spread (FTE)

3.06

%

3.72

%

Net interest margin (FTE) (4)

3.27

%

4.12

%

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $77.0 million in 2020 and unrealized gains of $35.1 million in 2019 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets.


Average Consolidated Balance Sheets and Net Interest Analysis

For the Nine Months Ended September 30,

2020

2019

(dollars in thousands, fully taxable equivalent (FTE))

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Assets:

Interest-earning assets:

Loans, net of unearned income (FTE) (1)(2)

$

10,087,630

$

351,536

4.65

%

$

8,646,622

$

357,541

5.53

%

Taxable securities (3)

2,362,674

42,579

2.40

2,532,070

54,229

2.86

Tax-exempt securities (FTE) (1)(3)

197,231

6,699

4.53

168,787

4,579

3.62

Federal funds sold and other interest-earning assets

850,722

3,621

0.57

186,402

1,913

1.37

Total interest-earning assets (FTE)

13,498,257

404,435

4.00

11,533,881

418,262

4.85

Non-interest-earning assets:

Allowance for loan losses

(96,235

)

(62,664

)

Cash and due from banks

134,354

121,889

Premises and equipment

217,551

220,872

Other assets (3)

964,511

785,862

Total assets

$

14,718,438

$

12,599,840

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Interest-bearing deposits:

NOW and interest-bearing demand

$

2,583,911

6,240

0.32

$

2,199,607

10,283

0.63

Money market

2,797,350

10,969

0.52

2,187,822

14,100

0.86

Savings

788,681

121

0.02

685,167

115

0.02

Time

1,860,597

17,435

1.25

1,761,374

20,338

1.54

Brokered time deposits

102,502

579

0.75

292,835

5,349

2.44

Total interest-bearing deposits

8,133,041

35,344

0.58

7,126,805

50,185

0.94

Federal funds purchased and other borrowings

1,611

3

0.25

44,898

838

2.50

Federal Home Loan Bank advances

1,001

28

3.74

142,876

2,695

2.52

Long-term debt

256,218

10,186

5.31

252,686

9,813

5.19

Total borrowed funds

258,830

10,217

5.27

440,460

13,346

4.05

Total interest-bearing liabilities

8,391,871

45,561

0.73

7,567,265

63,531

1.12

Noninterest-bearing liabilities:

Noninterest-bearing deposits

4,356,484

3,335,450

Other liabilities

206,904

164,350

Total liabilities

12,955,259

11,067,065

Shareholders' equity

1,763,179

1,532,775

Total liabilities and shareholders' equity

$

14,718,438

$

12,599,840

Net interest revenue (FTE)

$

358,874

$

354,731

Net interest-rate spread (FTE)

3.27

%

3.73

%

Net interest margin (FTE) (4)

3.55

%

4.11

%

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $65.5 million in 2020 and unrealized gains of $4.94 million in 2019 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

About United Community Banks, Inc.

United Community Banks, Inc. (NASDAQ: UCBI) (United) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the largest full-service financial institutions in the Southeast, with $17.2 billion in assets, and 163 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee. United Community Bank, United’s wholly-owned bank subsidiary, specializes in personalized community banking services for individuals, small businesses and companies throughout its geographic footprint, including Florida under the brand Seaside Bank and Trust. Services include a full range of consumer and commercial banking products, including mortgage, advisory, treasury management, and wealth management. Respected national research firms consistently recognize United for outstanding customer service. In 2020, J.D. Power ranked United highest in customer satisfaction with retail banking in the Southeast, marking six out of the last seven years United earned the coveted award. Forbes included United in its inaugural list of the World’s Best Banks in 2019 and again in 2020. Forbes also recognized United on its 2020 list of the 100 Best Banks in America for the seventh consecutive year. United also received five Greenwich Excellence Awards in 2019 for excellence in Small Business Banking and Middle Market Banking, including a national award for Overall Satisfaction in Small Business Banking. Additional information about United can be found at www.ucbi.com.

Non-GAAP Financial Measures

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

For more information:

Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com