EX-99.1 2 tm2313046d1_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 First Quarter Results 

Customer Deposit Growth of 10%, Organic Loan Growth of 8%, Asset Quality and Capital Levels Remained Strong

 

GREENVILLE, SC – April 18, 2023 - 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.

 

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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

 

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·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.

 

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UNITED COMMUNITY BANKS, INC.

Selected Financial Information

(in thousands, except per share data)

 

    

2023

  

2022

    

First Quarter

 
  

First
Quarter

  

Fourth
Quarter

  

Third
Quarter

  

Second
Quarter

  

First
Quarter

  

2023 - 2022

Change

 
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.

 

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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%

 

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UNITED COMMUNITY BANKS, INC.

Financial Highlights

Loan Portfolio Composition at Period-End

  

    2023   2022   Linked   Year over 
(in millions)  First
Quarter		   Fourth
Quarter		   Third
Quarter		   Second
Quarter		   First
Quarter		   Quarter
Change		   Year
Change		 
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 

 

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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.

 

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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 

 

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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 

 

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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.

 

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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.

 

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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.

 

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