GREENVILLE, S.C., April 18, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2023 first quarter was $62.3 million and pre-tax, pre-provision income was $101.9 million. Diluted earnings per share of $0.52 for the quarter represented an increase of $0.09 or 21%, from the first quarter a year ago and a decrease of $0.22 or 30% from the fourth quarter of 2022. On an operating basis, United's diluted earnings per share of $0.58 was up 16% from the year-ago quarter. The primary drivers of the increased earnings per share year-over-year were increased interest rates and organic loan growth. The linked-quarter decrease in earnings per share was primarily driven by higher deposit and borrowed funds interest cost as well as changes in deposit composition toward more expensive time deposits during the quarter. United's return on assets was 0.95%, or 1.06% on an operating basis. Return on equity was 7.3% and return on tangible common equity was 11.6%. On a pre-tax, pre-provision basis, operating return on assets was 1.71% for the quarter. At quarter end, tangible common equity to tangible assets was 8.2%, up 29 basis points from the fourth quarter of 2022.
Chairman and CEO Lynn Harton stated, "This was another solid quarter for United. Deposit growth reflected the strength of our customer franchise, and our loan growth was within our stated target range of mid to high single digits. While our net interest margin did contract from the previous quarter due to higher deposit costs, we continued to generate strong returns and strengthen our balance sheet." Harton continued, "On the strategic front, we continue to expand the company into exciting growth markets that we know and where we can partner with organizations that align with our values and culture. We are very glad to welcome Progress officially into the United team, adding to our growth opportunities in Alabama and the Florida Panhandle. Our recently announced partnership with First National Bank of South Miami will also bring great opportunities and a talented team to the company. I couldn't be more excited to welcome them to our team."
United's net interest margin decreased by 15 basis points to 3.61% from the fourth quarter. The average yield on United's interest-earning assets was up 44 basis points to 4.76%, but its cost of deposits increased by 61 basis points to 1.10%, leading to the reduction in the net interest margin. Net charge-offs were $7.1 million or 0.17% of average loans during the quarter, flat compared to the fourth quarter of 2022, and NPAs were 28 basis points relative to total assets, up 10 basis points from the previous quarter.
Mr. Harton concluded, "We continue to believe that 2023 will be a great year for United, despite the uncertainty in the economic environment. We remain focused on being a great partner for our clients and communities; growing our business and being prepared to manage through any challenges that lie ahead. We continue to strengthen our teams, recruiting great bankers and adding new locations, most recently in Atlanta and Charleston, South Carolina. Consistent with building for our future, we also recently announced a refresh of our brand with a new logo to be rolled out to our markets through 2024. While the brand will present itself as more modern and forward-looking, it also continues to symbolize our commitment to service and to community that has been our focus for more than 70 years."
First Quarter 2023 Financial Highlights:
- Net income of $62.3 million and pre-tax, pre-provision income of $101.9 million
- EPS increased by 21% compared to first quarter 2022 on a GAAP basis and 16% on an operating basis; compared to fourth quarter 2022, EPS decreased 30% on a GAAP basis and 23% on an operating basis
- Return on assets of 0.95%, or 1.06% on an operating basis
- Pre-tax, pre-provision return on assets of 1.71% on an operating basis
- Return on common equity of 7.3%
- Return on tangible common equity of 11.6% on an operating basis
- A provision for credit losses of $21.8 million, which decreased the allowance for loan losses to 1.03% of loans from 1.04% in the fourth quarter. The first quarter provision included $10.4 million to establish an initial allowance on loans acquired in the Progress transaction.
- Loan production of $1.4 billion, resulting in organic loan growth, excluding acquired Progress balances, of 8% annualized for the quarter
- Customer deposits were up $525 million, or 10% annualized, excluding acquired Progress balances
- Total deposits are estimated to be 76% insured or collateralized
- Net interest margin of 3.61% was down 15 basis points from the fourth quarter due to increased deposit costs
- Mortgage closings of $225 million compared to $462 million a year ago; mortgage rate locks of $335 million compared to $757 million a year ago
- Noninterest income was down $3.1 million on a linked quarter basis, primarily driven by lower positive marks on certain equity and limited partnership investments, lower services charges and fees and securities losses, partially offset by higher mortgage fees
- Noninterest expenses increased by $22.5 million compared to the fourth quarter on a GAAP basis and by $15.3 million on an operating basis, mostly due to closing the Progress acquisition on January 3, 2023
- Efficiency ratio of 57.2%, or 53.7% on an operating basis
- Net charge-offs of $7.1 million, or 17 basis points as a percent of average loans, flat from the net charge-offs level experienced in the fourth quarter
- Nonperforming assets of 0.28% of total assets, up 10 basis points compared to December 31, 2022
- Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 10% year-over-year
- We completed the acquisition of Progress Financial Corporation and its banking subsidiary Progress Bank and Trust with $1.8 billion in assets on January 3, 2023; financial returns are expected to be within our desired thresholds
Conference Call
United will hold a conference call on Wednesday, April 19, 2023, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10177198/f8dc6d5780. Those without internet access or unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and can be accessed by selecting "Events and Presentations" under "News and Events" within the Investor Relations section of the company's website, www.ucbi.com.
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||
| Selected Financial Information | |||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| 2023 | 2022 | First Quarter 2023 - 2022 Change | |||||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||
| INCOME SUMMARY | |||||||||||||||||||||||
| Interest revenue | $ | 279,487 | $ | 240,831 | $ | 213,887 | $ | 187,378 | $ | 171,059 | |||||||||||||
| Interest expense | 68,017 | 30,943 | 14,113 | 8,475 | 7,267 | ||||||||||||||||||
| Net interest revenue | 211,470 | 209,888 | 199,774 | 178,903 | 163,792 | 29 | % | ||||||||||||||||
| Provision for credit losses | 21,783 | 19,831 | 15,392 | 5,604 | 23,086 | ||||||||||||||||||
| Noninterest income | 30,209 | 33,354 | 31,922 | 33,458 | 38,973 | (22 | ) | ||||||||||||||||
| Total revenue | 219,896 | 223,411 | 216,304 | 206,757 | 179,679 | 22 | |||||||||||||||||
| Noninterest expenses | 139,805 | 117,329 | 112,755 | 120,790 | 119,275 | 17 | |||||||||||||||||
| Income before income tax expense | 80,091 | 106,082 | 103,549 | 85,967 | 60,404 | 33 | |||||||||||||||||
| Income tax expense | 17,791 | 24,632 | 22,388 | 19,125 | 12,385 | 44 | |||||||||||||||||
| Net income | 62,300 | 81,450 | 81,161 | 66,842 | 48,019 | 30 | |||||||||||||||||
| Merger-related and other charges | 8,631 | 1,470 | 1,746 | 7,143 | 9,016 | ||||||||||||||||||
| Income tax benefit of merger-related and other charges | (1,955 | ) | (323 | ) | (385 | ) | (1,575 | ) | (1,963 | ) | |||||||||||||
| Net income - operating (1) | $ | 68,976 | $ | 82,597 | $ | 82,522 | $ | 72,410 | $ | 55,072 | 25 | ||||||||||||
| Pre-tax pre-provision income (5) | $ | 101,874 | $ | 125,913 | $ | 118,941 | $ | 91,571 | $ | 83,490 | 22 | ||||||||||||
| PERFORMANCE MEASURES | |||||||||||||||||||||||
| Per common share: | |||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.52 | $ | 0.74 | $ | 0.74 | $ | 0.61 | $ | 0.43 | 21 | ||||||||||||
| Diluted net income - operating (1) | 0.58 | 0.75 | 0.75 | 0.66 | 0.50 | 16 | |||||||||||||||||
| Cash dividends declared | 0.23 | 0.22 | 0.22 | 0.21 | 0.21 | 10 | |||||||||||||||||
| Book value | 25.76 | 24.38 | 23.78 | 23.96 | 24.38 | 6 | |||||||||||||||||
| Tangible book value (3) | 17.59 | 17.13 | 16.52 | 16.68 | 17.08 | 3 | |||||||||||||||||
| Key performance ratios: | |||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 7.34 | % | 10.86 | % | 11.02 | % | 9.31 | % | 6.80 | % | |||||||||||||
| Return on common equity - operating (1)(2)(4) | 8.15 | 11.01 | 11.21 | 10.10 | 7.83 | ||||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 11.63 | 15.20 | 15.60 | 14.20 | 11.00 | ||||||||||||||||||
| Return on assets - GAAP (4) | 0.95 | 1.33 | 1.32 | 1.08 | 0.78 | ||||||||||||||||||
| Return on assets - operating (1)(4) | 1.06 | 1.35 | 1.34 | 1.17 | 0.89 | ||||||||||||||||||
| Return on assets - pre-tax pre-provision (4)(5) | 1.58 | 2.07 | 1.94 | 1.49 | 1.37 | ||||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger- related and other charges (1)(4)(5) | 1.71 | 2.09 | 1.97 | 1.60 | 1.52 | ||||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 3.61 | 3.76 | 3.57 | 3.19 | 2.97 | ||||||||||||||||||
| Efficiency ratio - GAAP | 57.20 | 47.95 | 48.41 | 56.58 | 57.43 | ||||||||||||||||||
| Efficiency ratio - operating (1) | 53.67 | 47.35 | 47.66 | 53.23 | 53.09 | ||||||||||||||||||
| Equity to total assets | 11.90 | 11.25 | 11.12 | 10.95 | 11.06 | ||||||||||||||||||
| Tangible common equity to tangible assets (3) | 8.17 | 7.88 | 7.70 | 7.59 | 7.72 | ||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||||
| Nonperforming assets ("NPAs") | $ | 73,403 | $ | 44,281 | $ | 35,511 | $ | 34,428 | $ | 40,816 | 80 | ||||||||||||
| Allowance for credit losses - loans | 176,534 | 159,357 | 148,502 | 136,925 | 132,805 | 33 | |||||||||||||||||
| Allowance for credit losses - total | 197,923 | 180,520 | 167,300 | 153,042 | 146,369 | 35 | |||||||||||||||||
| Net charge-offs (recoveries) | 7,084 | 6,611 | 1,134 | (1,069 | ) | 2,978 | |||||||||||||||||
| Allowance for credit losses - loans to loans | 1.03 | % | 1.04 | % | 1.00 | % | 0.94 | % | 0.93 | % | |||||||||||||
| Allowance for credit losses - total to loans | 1.16 | 1.18 | 1.12 | 1.05 | 1.02 | ||||||||||||||||||
| Net charge-offs to average loans (4) | 0.17 | 0.17 | 0.03 | (0.03 | ) | 0.08 | |||||||||||||||||
| NPAs to total assets | 0.28 | 0.18 | 0.15 | 0.14 | 0.17 | ||||||||||||||||||
| AT PERIOD END ($ in millions) | |||||||||||||||||||||||
| Loans | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 14,541 | $ | 14,316 | 20 | ||||||||||||
| Investment securities | 5,915 | 6,228 | 6,539 | 6,683 | 6,410 | (8 | ) | ||||||||||||||||
| Total assets | 25,872 | 24,009 | 23,688 | 24,213 | 24,374 | 6 | |||||||||||||||||
| Deposits | 22,005 | 19,877 | 20,321 | 20,873 | 21,056 | 5 | |||||||||||||||||
| Shareholders' equity | 3,078 | 2,701 | 2,635 | 2,651 | 2,695 | 14 | |||||||||||||||||
| Common shares outstanding (thousands) | 115,152 | 106,223 | 106,163 | 106,034 | 106,025 | 9 | |||||||||||||||||
(1) Excludes merger-related and other charges. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||
| Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||
| Noninterest expense reconciliation | ||||||||||||||||||||
| Noninterest expenses (GAAP) | $ | 139,805 | $ | 117,329 | $ | 112,755 | $ | 120,790 | $ | 119,275 | ||||||||||
| Merger-related and other charges | (8,631 | ) | (1,470 | ) | (1,746 | ) | (7,143 | ) | (9,016 | ) | ||||||||||
| Noninterest expenses - operating | $ | 131,174 | $ | 115,859 | $ | 111,009 | $ | 113,647 | $ | 110,259 | ||||||||||
| Net income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 62,300 | $ | 81,450 | $ | 81,161 | $ | 66,842 | $ | 48,019 | ||||||||||
| Merger-related and other charges | 8,631 | 1,470 | 1,746 | 7,143 | 9,016 | |||||||||||||||
| Income tax benefit of merger-related and other charges | (1,955 | ) | (323 | ) | (385 | ) | (1,575 | ) | (1,963 | ) | ||||||||||
| Net income - operating | $ | 68,976 | $ | 82,597 | $ | 82,522 | $ | 72,410 | $ | 55,072 | ||||||||||
| Net income to pre-tax pre-provision income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 62,300 | $ | 81,450 | $ | 81,161 | $ | 66,842 | $ | 48,019 | ||||||||||
| Income tax expense | 17,791 | 24,632 | 22,388 | 19,125 | 12,385 | |||||||||||||||
| Provision for credit losses | 21,783 | 19,831 | 15,392 | 5,604 | 23,086 | |||||||||||||||
| Pre-tax pre-provision income | $ | 101,874 | $ | 125,913 | $ | 118,941 | $ | 91,571 | $ | 83,490 | ||||||||||
| Diluted income per common share reconciliation | ||||||||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.52 | $ | 0.74 | $ | 0.74 | $ | 0.61 | $ | 0.43 | ||||||||||
| Merger-related and other charges, net of tax | 0.06 | 0.01 | 0.01 | 0.05 | 0.07 | |||||||||||||||
| Diluted income per common share - operating | $ | 0.58 | $ | 0.75 | $ | 0.75 | $ | 0.66 | $ | 0.50 | ||||||||||
| Book value per common share reconciliation | ||||||||||||||||||||
| Book value per common share (GAAP) | $ | 25.76 | $ | 24.38 | $ | 23.78 | $ | 23.96 | $ | 24.38 | ||||||||||
| Effect of goodwill and other intangibles | (8.17 | ) | (7.25 | ) | (7.26 | ) | (7.28 | ) | (7.30 | ) | ||||||||||
| Tangible book value per common share | $ | 17.59 | $ | 17.13 | $ | 16.52 | $ | 16.68 | $ | 17.08 | ||||||||||
| Return on tangible common equity reconciliation | ||||||||||||||||||||
| Return on common equity (GAAP) | 7.34 | % | 10.86 | % | 11.02 | % | 9.31 | % | 6.80 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.81 | 0.15 | 0.19 | 0.79 | 1.03 | |||||||||||||||
| Return on common equity - operating | 8.15 | 11.01 | 11.21 | 10.10 | 7.83 | |||||||||||||||
| Effect of goodwill and other intangibles | 3.48 | 4.19 | 4.39 | 4.10 | 3.17 | |||||||||||||||
| Return on tangible common equity - operating | 11.63 | % | 15.20 | % | 15.60 | % | 14.20 | % | 11.00 | % | ||||||||||
| Return on assets reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.95 | % | 1.33 | % | 1.32 | % | 1.08 | % | 0.78 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.11 | 0.02 | 0.02 | 0.09 | 0.11 | |||||||||||||||
| Return on assets - operating | 1.06 | % | 1.35 | % | 1.34 | % | 1.17 | % | 0.89 | % | ||||||||||
| Return on assets to return on assets- pre-tax pre-provision reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.95 | % | 1.33 | % | 1.32 | % | 1.08 | % | 0.78 | % | ||||||||||
| Income tax expense | 0.29 | 0.41 | 0.37 | 0.32 | 0.20 | |||||||||||||||
| (Release of) provision for credit losses | 0.34 | 0.33 | 0.25 | 0.09 | 0.39 | |||||||||||||||
| Return on assets - pre-tax, pre-provision | 1.58 | 2.07 | 1.94 | 1.49 | 1.37 | |||||||||||||||
| Merger-related and other charges | 0.13 | 0.02 | 0.03 | 0.11 | 0.15 | |||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges | 1.71 | % | 2.09 | % | 1.97 | % | 1.60 | % | 1.52 | % | ||||||||||
| Efficiency ratio reconciliation | ||||||||||||||||||||
| Efficiency ratio (GAAP) | 57.20 | % | 47.95 | % | 48.41 | % | 56.58 | % | 57.43 | % | ||||||||||
| Merger-related and other charges | (3.53 | ) | (0.60 | ) | (0.75 | ) | (3.35 | ) | (4.34 | ) | ||||||||||
| Efficiency ratio - operating | 53.67 | % | 47.35 | % | 47.66 | % | 53.23 | % | 53.09 | % | ||||||||||
| Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||
| Equity to total assets (GAAP) | 11.90 | % | 11.25 | % | 11.12 | % | 10.95 | % | 11.06 | % | ||||||||||
| Effect of goodwill and other intangibles | (3.36 | ) | (2.97 | ) | (3.01 | ) | (2.96 | ) | (2.94 | ) | ||||||||||
| Effect of preferred equity | (0.37 | ) | (0.40 | ) | (0.41 | ) | (0.40 | ) | (0.40 | ) | ||||||||||
| Tangible common equity to tangible assets | 8.17 | % | 7.88 | % | 7.70 | % | 7.59 | % | 7.72 | % | ||||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| Loan Portfolio Composition at Period-End | ||||||||||||||||||||||
| 2023 | 2022 | Linked Quarter Change | Year over Year Change | |||||||||||||||||||
| (in millions) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||
| LOANS BY CATEGORY | ||||||||||||||||||||||
| Owner occupied commercial RE | $ | 3,141 | $ | 2,735 | $ | 2,700 | $ | 2,681 | $ | 2,638 | $ | 406 | $ | 503 | ||||||||
| Income producing commercial RE | 3,611 | 3,262 | 3,299 | 3,273 | 3,328 | 349 | 283 | |||||||||||||||
| Commercial & industrial | 2,442 | 2,252 | 2,238 | 2,253 | 2,336 | 190 | 106 | |||||||||||||||
| Commercial construction | 1,806 | 1,598 | 1,514 | 1,514 | 1,482 | 208 | 324 | |||||||||||||||
| Equipment financing | 1,447 | 1,374 | 1,281 | 1,211 | 1,148 | 73 | 299 | |||||||||||||||
| Total commercial | 12,447 | 11,221 | 11,032 | 10,932 | 10,932 | 1,226 | 1,515 | |||||||||||||||
| Residential mortgage | 2,756 | 2,355 | 2,149 | 1,997 | 1,826 | 401 | 930 | |||||||||||||||
| Home equity lines of credit | 930 | 850 | 832 | 801 | 778 | 80 | 152 | |||||||||||||||
| Residential construction | 492 | 443 | 423 | 381 | 368 | 49 | 124 | |||||||||||||||
| Manufactured housing | 326 | 317 | 301 | 287 | 269 | 9 | 57 | |||||||||||||||
| Consumer | 174 | 149 | 145 | 143 | 143 | 25 | 31 | |||||||||||||||
| Total loans | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 14,541 | $ | 14,316 | $ | 1,790 | $ | 2,809 | ||||||||
| LOANS BY MARKET | ||||||||||||||||||||||
| Georgia | $ | 4,177 | $ | 4,051 | $ | 4,003 | $ | 3,960 | $ | 3,879 | $ | 126 | $ | 298 | ||||||||
| South Carolina | 2,672 | 2,587 | 2,516 | 2,377 | 2,323 | 85 | 349 | |||||||||||||||
| North Carolina | 2,257 | 2,186 | 2,117 | 2,006 | 1,879 | 71 | 378 | |||||||||||||||
| Tennessee | 2,458 | 2,507 | 2,536 | 2,621 | 2,661 | (49 | ) | (203 | ) | |||||||||||||
| Florida | 1,745 | 1,308 | 1,259 | 1,235 | 1,208 | 437 | 537 | |||||||||||||||
| Alabama | 1,029 | - | - | - | - | 1,029 | 1,029 | |||||||||||||||
| Commercial Banking Solutions | 2,787 | 2,696 | 2,451 | 2,342 | 2,366 | 91 | 421 | |||||||||||||||
| Total loans | $ | 17,125 | $ | 15,335 | $ | 14,882 | $ | 14,541 | $ | 14,316 | $ | 1,790 | $ | 2,809 | ||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||||
| Financial Highlights | ||||||||||
| Credit Quality | ||||||||||
| (in thousands) | ||||||||||
| 2023 | 2022 | |||||||||
| First Quarter | Fourth Quarter | Third Quarter | ||||||||
| NONACCRUAL LOANS | ||||||||||
| Owner occupied RE | $ | 1,000 | $ | 523 | $ | 877 | ||||
| Income producing RE | 10,603 | 3,885 | 2,663 | |||||||
| Commercial & industrial | 33,276 | 14,470 | 11,108 | |||||||
| Commercial construction | 475 | 133 | 150 | |||||||
| Equipment financing | 5,044 | 5,438 | 3,198 | |||||||
| Total commercial | 50,398 | 24,449 | 17,996 | |||||||
| Residential mortgage | 11,280 | 10,919 | 10,424 | |||||||
| Home equity lines of credit | 2,377 | 1,888 | 1,151 | |||||||
| Residential construction | 143 | 405 | 104 | |||||||
| Manufactured housing | 8,542 | 6,518 | 4,187 | |||||||
| Consumer | 55 | 53 | 17 | |||||||
| Total nonaccrual loans held for investment | 72,795 | 44,232 | 33,879 | |||||||
| Nonaccrual loans held for sale | - | - | 316 | |||||||
| OREO and repossessed assets | 608 | 49 | 1,316 | |||||||
| Total NPAs | $ | 73,403 | $ | 44,281 | $ | 35,511 | ||||
| 2023 | 2022 | ||||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | |||||||||||||||||||
| (in thousands) | Net Charge-Offs | Net Charge-Offs to Average Loans (1) | Net Charge-Offs | Net Charge-Offs to Average Loans (1) | Net Charge-Offs | Net Charge-Offs to Average Loans (1) | |||||||||||||||
| NET CHARGE-OFFS (RECOVERIES) BY CATEGORY | |||||||||||||||||||||
| Owner occupied RE | $ | 90 | 0.01 | % | $ | (130 | ) | (0.02 | )% | $ | (90 | ) | (0.01 | )% | |||||||
| Income producing RE | 2,306 | 0.26 | (113 | ) | (0.01 | ) | 176 | 0.02 | |||||||||||||
| Commercial & industrial | 225 | 0.04 | 4,577 | 0.81 | (744 | ) | (0.13 | ) | |||||||||||||
| Commercial construction | (37 | ) | (0.01 | ) | (77 | ) | (0.02 | ) | 10 | - | |||||||||||
| Equipment financing | 3,375 | 0.93 | 1,658 | 0.50 | 1,121 | 0.36 | |||||||||||||||
| Total commercial | 5,959 | 0.20 | 5,915 | 0.21 | 473 | 0.02 | |||||||||||||||
| Residential mortgage | (87 | ) | (0.01 | ) | (33 | ) | (0.01 | ) | (66 | ) | (0.01 | ) | |||||||||
| Home equity lines of credit | 33 | 0.01 | (89 | ) | (0.04 | ) | (102 | ) | (0.05 | ) | |||||||||||
| Residential construction | (15 | ) | (0.01 | ) | (23 | ) | (0.02 | ) | (109 | ) | (0.11 | ) | |||||||||
| Manufactured housing | 628 | 0.76 | 246 | 0.32 | 220 | 0.30 | |||||||||||||||
| Consumer | 566 | 1.37 | 595 | 1.61 | 718 | 1.98 | |||||||||||||||
| Total | $ | 7,084 | 0.17 | $ | 6,611 | 0.17 | $ | 1,134 | 0.03 | ||||||||||||
| (1) Annualized. | |||||||||||||||||||||
| UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) | ||||||||
| (in thousands, except share and per share data) | March 31, 2023 | December 31, 2022 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 275,962 | $ | 195,771 | ||||
| Interest-bearing deposits in banks | 501,719 | 316,082 | ||||||
| Federal funds and other short-term investments | - | 135,000 | ||||||
| Cash and cash equivalents | 777,681 | 646,853 | ||||||
| Debt securities available-for-sale | 3,331,139 | 3,614,333 | ||||||
| Debt securities held-to-maturity (fair value $2,206,874 and $2,191,073, respectively) | 2,584,081 | 2,613,648 | ||||||
| Loans held for sale | 20,390 | 13,600 | ||||||
| Loans and leases held for investment | 17,124,703 | 15,334,627 | ||||||
| Less allowance for credit losses - loans and leases | (176,534 | ) | (159,357 | ) | ||||
| Loans and leases, net | 16,948,169 | 15,175,270 | ||||||
| Premises and equipment, net | 336,617 | 298,456 | ||||||
| Bank owned life insurance | 341,285 | 299,297 | ||||||
| Goodwill and other intangible assets, net | 961,244 | 779,248 | ||||||
| Other assets | 571,244 | 568,179 | ||||||
| Total assets | $ | 25,871,850 | $ | 24,008,884 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 7,540,265 | $ | 7,643,081 | ||||
| NOW and interest-bearing demand | 4,769,663 | 4,350,878 | ||||||
| Money market | 5,140,902 | 4,510,680 | ||||||
| Savings | 1,362,520 | 1,456,337 | ||||||
| Time | 2,703,568 | 1,781,482 | ||||||
| Brokered | 487,756 | 134,049 | ||||||
| Total deposits | 22,004,674 | 19,876,507 | ||||||
| Short-term borrowings | 7,219 | 158,933 | ||||||
| Federal Home Loan Bank advances | 30,000 | 550,000 | ||||||
| Long-term debt | 324,729 | 324,663 | ||||||
| Accrued expenses and other liabilities | 427,105 | 398,107 | ||||||
| Total liabilities | 22,793,727 | 21,308,210 | ||||||
| Shareholders' equity: | ||||||||
| Preferred stock; $1 par value; 10,000,000 shares authorized; 4,000 shares Series I issued and outstanding, $25,000 per share liquidation preference | 96,422 | 96,422 | ||||||
| Common stock, $1 par value; 200,000,000 shares authorized, 115,151,566 and 106,222,758 shares issued and outstanding, respectively | 115,152 | 106,223 | ||||||
| Common stock issuable; 579,835 and 607,128 shares, respectively | 11,977 | 12,307 | ||||||
| Capital surplus | 2,606,403 | 2,306,366 | ||||||
| Retained earnings | 542,606 | 508,844 | ||||||
| Accumulated other comprehensive loss | (294,437 | ) | (329,488 | ) | ||||
| Total shareholders' equity | 3,078,123 | 2,700,674 | ||||||
| Total liabilities and shareholders' equity | $ | 25,871,850 | $ | 24,008,884 | ||||
| UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| (in thousands, except per share data) | 2023 | 2022 | ||||||
| Interest revenue: | ||||||||
| Loans, including fees | $ | 236,431 | $ | 146,741 | ||||
| Investment securities, including tax exempt of $2,110 and $2,655, respectively | 39,986 | 23,665 | ||||||
| Deposits in banks and short-term investments | 3,070 | 653 | ||||||
| Total interest revenue | 279,487 | 171,059 | ||||||
| Interest expense: | ||||||||
| Deposits: | ||||||||
| NOW and interest-bearing demand | 17,599 | 1,469 | ||||||
| Money market | 25,066 | 1,012 | ||||||
| Savings | 538 | 72 | ||||||
| Time | 14,658 | 578 | ||||||
| Deposits | 57,861 | 3,131 | ||||||
| Short-term borrowings | 1,148 | - | ||||||
| Federal Home Loan Bank advances | 5,112 | - | ||||||
| Long-term debt | 3,896 | 4,136 | ||||||
| Total interest expense | 68,017 | 7,267 | ||||||
| Net interest revenue | 211,470 | 163,792 | ||||||
| Provision for credit losses | 21,783 | 23,086 | ||||||
| Net interest revenue after provision for credit losses | 189,687 | 140,706 | ||||||
| Noninterest income: | ||||||||
| Service charges and fees | 8,699 | 9,070 | ||||||
| Mortgage loan gains and other related fees | 4,521 | 16,152 | ||||||
| Wealth management fees | 5,724 | 5,895 | ||||||
| Gains from sales of other loans, net | 1,916 | 3,198 | ||||||
| Lending and loan servicing fees | 4,016 | 2,986 | ||||||
| Securities losses, net | (1,644 | ) | (3,734 | ) | ||||
| Other | 6,977 | 5,406 | ||||||
| Total noninterest income | 30,209 | 38,973 | ||||||
| Total revenue | 219,896 | 179,679 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 78,698 | 71,006 | ||||||
| Communications and equipment | 10,008 | 9,248 | ||||||
| Occupancy | 9,889 | 9,378 | ||||||
| Advertising and public relations | 2,349 | 1,488 | ||||||
| Postage, printing and supplies | 2,537 | 2,119 | ||||||
| Professional fees | 6,072 | 4,447 | ||||||
| Lending and loan servicing expense | 2,319 | 2,366 | ||||||
| Outside services - electronic banking | 3,425 | 2,523 | ||||||
| FDIC assessments and other regulatory charges | 4,001 | 2,173 | ||||||
| Amortization of intangibles | 3,528 | 1,793 | ||||||
| Merger-related and other charges | 8,631 | 9,016 | ||||||
| Other | 8,348 | 3,718 | ||||||
| Total noninterest expenses | 139,805 | 119,275 | ||||||
| Income before income taxes | 80,091 | 60,404 | ||||||
| Income tax expense | 17,791 | 12,385 | ||||||
| Net income | 62,300 | 48,019 | ||||||
| Preferred stock dividends | 1,719 | 1,719 | ||||||
| Earnings allocated to participating securities | 339 | 238 | ||||||
| Net income available to common shareholders | $ | 60,242 | $ | 46,062 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.52 | $ | 0.43 | ||||
| Diluted | 0.52 | 0.43 | ||||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 115,451 | 106,550 | ||||||
| Diluted | 115,715 | 106,677 | ||||||
| Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||
| (dollars in thousands, fully taxable equivalent (FTE)) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||
| Assets: | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans, net of unearned income (FTE) (1)(2) | $ | 16,897,372 | $ | 236,530 | 5.68 | % | $ | 14,234,026 | $ | 146,637 | 4.18 | % | ||||||||
| Taxable securities (3) | 6,059,323 | 37,876 | 2.50 | 5,848,976 | 21,010 | 1.44 | ||||||||||||||
| Tax-exempt securities (FTE) (1)(3) | 422,583 | 2,834 | 2.68 | 510,954 | 3,566 | 2.79 | ||||||||||||||
| Federal funds sold and other interest-earning assets | 472,325 | 3,352 | 2.88 | 1,910,411 | 1,020 | 0.22 | ||||||||||||||
| Total interest-earning assets (FTE) | 23,851,603 | 280,592 | 4.76 | 22,504,367 | 172,233 | 3.10 | ||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||
| Allowance for credit losses | (167,584 | ) | (113,254 | ) | ||||||||||||||||
| Cash and due from banks | 271,210 | 166,005 | ||||||||||||||||||
| Premises and equipment | 329,135 | 277,216 | ||||||||||||||||||
| Other assets (3) | 1,484,936 | 1,369,301 | ||||||||||||||||||
| Total assets | $ | 25,769,300 | $ | 24,203,635 | ||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||
| NOW and interest-bearing demand | $ | 4,499,907 | 17,599 | 1.59 | $ | 4,667,098 | 1,469 | 0.13 | ||||||||||||
| Money market | 5,223,267 | 25,066 | 1.95 | 5,110,817 | 1,012 | 0.08 | ||||||||||||||
| Savings | 1,416,931 | 538 | 0.15 | 1,436,881 | 72 | 0.02 | ||||||||||||||
| Time | 2,348,588 | 12,313 | 2.13 | 1,758,895 | 534 | 0.12 | ||||||||||||||
| Brokered time deposits | 208,215 | 2,345 | 4.57 | 79,092 | 44 | 0.23 | ||||||||||||||
| Total interest-bearing deposits | 13,696,908 | 57,861 | 1.71 | 13,052,783 | 3,131 | 0.10 | ||||||||||||||
| Federal funds purchased and other borrowings | 107,955 | 1,148 | 4.31 | 611 | - | - | ||||||||||||||
| Federal Home Loan Bank advances | 453,056 | 5,112 | 4.58 | - | - | - | ||||||||||||||
| Long-term debt | 324,701 | 3,896 | 4.87 | 318,995 | 4,136 | 5.26 | ||||||||||||||
| Total borrowed funds | 885,712 | 10,156 | 4.65 | 319,606 | 4,136 | 5.25 | ||||||||||||||
| Total interest-bearing liabilities | 14,582,620 | 68,017 | 1.89 | 13,372,389 | 7,267 | 0.22 | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 7,697,844 | 7,666,635 | ||||||||||||||||||
| Other liabilities | 357,367 | 378,327 | ||||||||||||||||||
| Total liabilities | 22,637,831 | 21,417,351 | ||||||||||||||||||
| Shareholders' equity | 3,131,469 | 2,786,284 | ||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 25,769,300 | $ | 24,203,635 | ||||||||||||||||
| Net interest revenue (FTE) | $ | 212,575 | $ | 164,966 | ||||||||||||||||
| Net interest-rate spread (FTE) | 2.87 | % | 2.88 | % | ||||||||||||||||
| Net interest margin (FTE) (4) | 3.61 | % | 2.97 | % | ||||||||||||||||
| (1) | Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. |
| (2) | Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale. |
| (3) | Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $419 million in 2023 and $81.2 million in 2022 are included in other assets for purposes of this presentation. |
| (4) | Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets. |
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ: UCBI) is a top 100 U.S. financial institution with $25.9 billion in assets, and through its subsidiaries, provides a full range of banking, wealth management and mortgage services. UCBI is the financial holding company for United Community Bank ("United Community") which has 207 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment lending subsidiary. United Community is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. Among other awards, United Community is a nine-time winner of the J.D. Power award that ranked the bank #1 in customer satisfaction with consumer banking in the Southeast and was recognized in 2023 by Forbes as one of the World's Best Banks and one of America's Best Banks. The bank is also a multi-award recipient of the Greenwich Excellence Awards, including the 2022 awards for Small Business Banking-Likelihood to Recommend (South) and Overall Satisfaction (South), and was named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year. Additional information about United can be found at www.ucbi.com.
Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as "operating net income," "pre-tax, pre-provision income," "operating net income per diluted common share," "operating earnings per share," "tangible book value per common share," "operating return on common equity," "operating return on tangible common equity," "operating return on assets," "return on assets - pre-tax, pre-provision, excluding merger-related and other charges," "return on assets - pre-tax, pre-provision," "operating efficiency ratio," and "tangible common equity to tangible assets." These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United's underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.
Caution About Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential," or the negative of these terms or other comparable terminology, and include statements related to the expected financial returns of the acquisition of First Miami Bancorp, Inc. ("FMIA"). Forward-looking statements are not historical facts and represent management's beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.
Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the FMIA acquisition may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of the FMIA acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of FMIA may be greater than anticipated, (4) reputational risk and the reaction of the companies' customers, suppliers, employees or other business partners to the acquisition of FMIA, (5) the risks relating to the integration of FMIA's operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risks associated with United's pursuit of future acquisitions, (7) the risk of expansion into new geographic or product markets, (8) the dilution caused by United's issuance of additional shares of its common stock in the FMIA acquisition, and (9) general competitive, economic, political and market conditions. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in United's Annual Report on Form 10-K for the year ended December 31, 2022, and other documents subsequently filed by United with the United States Securities and Exchange Commission ("SEC").
Many of these factors are beyond United's ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United or FMIA.
United qualifies all forward-looking statements by these cautionary statements.
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
