United Community Banks, Inc. Reports Fourth Quarter 2022 Results

GAAP EPS of $0.74, Return on Assets of 1.33% and Loan Growth of 12%


GREENVILLE, S.C., Jan. 17, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2022 fourth quarter was $81.5 million and pre-tax, pre-provision income was $125.9 million. Diluted earnings per share of $0.74 for the quarter represented an increase of $0.19 or 35%, from the fourth quarter a year ago, and was flat from the third quarter of 2022. On an operating basis, United’s diluted earnings per share of $0.75 was up 17% from the year ago quarter. The primary drivers of the increased earnings in both periods were increased interest rates and organic loan growth, as well as the acquisition of Reliant Bancorp, Inc., which closed on January 1, 2022 and was not reflected in the year-ago quarter. United’s return on assets was 1.33%, or 1.35% on an operating basis. Return on equity was 10.9% and return on tangible common equity was 15.2%. On a pre-tax, pre-provision basis, operating return on assets was 2.09% for the quarter. Highlights for the quarter include strong annualized loan growth of 12%, 19 basis points of net interest margin expansion and further improvement in the efficiency ratio to 47.95%, or 47.35% on an operating basis, which excludes the effect of merger-related and other charges.

Chairman and CEO Lynn Harton stated, “We are pleased with our performance during this quarter and in 2022. In the quarter, our loan growth across all categories was strong and our net interest margin continued to benefit from increasing interest rates. As a result, we generated positive operating leverage, resulting in a new record efficiency ratio for us.” Harton continued, “On the strategic front, we continue to benefit from the acquisitions we have completed over the past few years. These new partnerships have expanded the company into exciting growth markets and have brought talented bankers to United. While not included in these quarterly results, we are excited that we have now completed the addition of Progress Financial Corporation to the United family on January 3, 2023. Progress has a talented team, exceptional leadership, and operates in great markets in Alabama and the Florida Panhandle. I am very glad to welcome them to our team.”

The net interest margin increased by 19 basis points to 3.76% from the third quarter, while the average yield on interest-earning assets was up 49 basis points to 4.32% and United’s cost of deposits increased by 30 basis points to 0.49%. Net charge-offs increased to $6.6 million or 0.17% of average loans during the quarter, mainly driven by one C&I loan, and NPAs were up slightly from prior quarters to 18 basis points relative to total assets.

Mr. Harton concluded, “2023 will be another great year for United despite some changes in the environment. Deposit competition will continue to increase as depositors seek higher returns for their excess liquidity. Well publicized recession fears may drive increasing provision costs for the industry. We believe we are well prepared to navigate these conditions due to the strength of our balance sheet, and more importantly, the strength of our teams. In 2022, we further strengthened our Board of Directors, added new market leaders, new commercial bankers and new line-of-business leaders. We also expanded our service capabilities with new locations across our footprint. In closing, I would note that we are all very proud that in October, United was named one of the “Best Banks to Work For” by American Banker for the sixth consecutive year. Everything begins with being a great place to work for great people. One of my goals for the year is to do an even better job of making sure we keep our company feeling small and connected as we continue to grow.”

2022 Financial Highlights:

  • Completed successful year with strong loan growth and historically high pre-credit profitability, and completed an acquisition in the high-growth Nashville, Tennessee MSA, which was a strategic priority
  • Full year EPS of $2.52, a decrease of 15% compared to 2021; full year operating EPS of $2.66, a decrease of 14% from 2021
  • Return on assets of 1.13%, or 1.19% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.80% on an operating basis
  • Return on common equity of 9.5%
  • Return on tangible common equity of 14.0% on an operating basis
  • A provision for credit losses of $63.9 million compared to a release of provision of $37.6 million in 2021, with $18.3 million attributable to establishing an initial allowance for loans acquired in the first quarter in the Reliant acquisition
  • Strong loan growth of $3.6 billion or $1.3 billion excluding loans acquired from Reliant and PPP loans
  • Core transaction deposits were up $1.3 billion compared to 2021; excluding Reliant, 2022 core transaction deposits were down $819 million, or 5.7%, reflecting runoff following 2021’s pandemic-related deposit surge
  • Net interest margin of 3.38%, which was up 31 basis points from last year primarily due to increased interest rates
  • Noninterest income was down 12.7% primarily due to a decline in mortgage fees, as higher rates softened demand
  • The efficiency ratio of 52.3%, or 50.2% on an operating basis, was improved as the combination of higher rates and the achievement of merger-related efficiencies drove the ratio to record low levels
  • Net charge-offs remained low at just $9.7 million, or 0.07% of average total loans

Fourth Quarter 2022 Financial Highlights:

  • Net income of $81.5 million and pre-tax, pre-provision income of $125.9 million
  • EPS increased by 35% compared to fourth quarter 2021 on a GAAP basis and 17% on an operating basis; compared to third quarter 2022, EPS remained flat on a GAAP basis and on an operating basis
  • Return on assets of 1.33%, or 1.35% on an operating basis
  • Pre-tax, pre-provision return on assets of 2.09% on an operating basis
  • Return on common equity of 10.9%
  • Return on tangible common equity of 15.2% on an operating basis
  • A provision for credit losses of $19.8 million, which increased the allowance for loan losses to 1.04% of loans from 1.00% in the third quarter
  • Loan production of $1.5 billion, resulting in loan growth of 12%, annualized for the quarter
  • Core transaction deposits were down $915 million; or 22% annualized
  • Net interest margin of 3.76% was up 19 basis points from the third quarter, due to increased interest rates and loan growth
  • Mortgage closings of $253 million compared to $522 million a year ago; mortgage rate locks of $364 million compared to $695 million a year ago
  • Noninterest income was up $1.4 million on a linked quarter basis, primarily driven by positive marks on certain investments and offset by lower mortgage fees
  • Noninterest expenses increased by $4.6 million compared to the third quarter on a GAAP basis and by $4.9 million on an operating basis, mostly due to lower deferred costs from lower mortgage loan volume and higher FDIC deposit insurance costs
  • Efficiency ratio of 48.0%, or 47.4% on an operating basis
  • Net charge-offs of $6.6 million, or 17 basis points as a percent of average loans, up 14 basis points from the net charge-offs experienced in the third quarter
  • Nonperforming assets of 0.18% of total assets, up 3 basis points compared to September 30, 2022
  • Quarterly common shareholder dividend of $0.22 per share declared during the quarter, an increase of 10% year-over-year
  • After the end of the quarter, 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, January 18, 2023, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10174303/f57c53ab13. 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)
   2022   2021  Fourth
Quarter
2022-
2021
Change
 For the Twelve Months
Ended December 31,
 YTD
2022-
2021
Change
  Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
   2022   2021  
INCOME SUMMARY                  
Interest revenue $240,831  $213,887  $187,378  $171,059  $143,768    $813,155  $578,794   
Interest expense  30,943   14,113   8,475   7,267   6,213     60,798   29,760   
Net interest revenue  209,888   199,774   178,903   163,792   137,555  53%  752,357   549,034  37%
Provision for credit losses  19,831   15,392   5,604   23,086   (647)    63,913   (37,550)  
Noninterest income  33,354   31,922   33,458   38,973   37,177  (10)  137,707   157,818  (13)
Total revenue  223,411   216,304   206,757   179,679   175,379  27   826,151   744,402  11 
Noninterest expenses  117,329   112,755   120,790   119,275   109,156  7   470,149   396,639  19 
Income before income tax expense  106,082   103,549   85,967   60,404   66,223     356,002   347,763   
Income tax expense  24,632   22,388   19,125   12,385   14,204     78,530   77,962   
Net income  81,450   81,161   66,842   48,019   52,019     277,472   269,801   
Merger-related and other charges  1,470   1,746   7,143   9,016   9,912     19,375   13,970   
Income tax benefit of merger-related and other charges  (323)  (385)  (1,575)  (1,963)  (2,265)    (4,246)  (3,174)  
Net income - operating (1) $82,597  $82,522  $72,410  $55,072  $59,666  38  $292,601  $280,597  4 
                   
Pre-tax pre-provision income (5) $125,913  $118,941  $91,571  $83,490  $65,576  92  $419,915  $310,213  35 
                   
PERFORMANCE MEASURES                  
Per common share:                  
Diluted net income - GAAP $0.74  $0.74  $0.61  $0.43  $0.55  35  $2.52  $2.97  (15)
Diluted net income - operating (1)  0.75   0.75   0.66   0.50   0.64  17   2.66   3.09  (14)
Common stock cash dividends declared  0.22   0.22   0.21   0.21   0.20  10   0.86   0.78  10 
Book value  24.38   23.78   23.96   24.38   23.63  3   24.38   23.63  3 
Tangible book value (3)  17.13   16.52   16.68   17.08   18.42  (7)  17.13   18.42  (7)
Key performance ratios:                  
Return on common equity - GAAP (2)(4)  10.86%  11.02%  9.31%  6.80%  9.32%    9.54%  13.14%  
Return on common equity - operating (1)(2)(4)  11.01   11.21   10.10   7.83   10.74     10.07   13.68   
Return on tangible common equity - operating (1)(2)(3)(4)  15.20   15.60   14.20   11.00   13.93     14.04   17.33   
Return on assets - GAAP (4)  1.33   1.32   1.08   0.78   0.96     1.13   1.37   
Return on assets - operating (1)(4)  1.35   1.34   1.17   0.89   1.10     1.19   1.42   
Return on assets -pre-tax pre-provision (4)(5)  2.07   1.94   1.49   1.37   1.21     1.72   1.58   
Return on assets -pre-tax pre-provision, excluding merger related and other charges (1)(4)(5)  2.09   1.97   1.60   1.52   1.40     1.80   1.65   
Net interest margin (fully taxable equivalent) (4)  3.76   3.57   3.19   2.97   2.81     3.38   3.07   
Efficiency ratio - GAAP  47.95   48.41   56.58   57.43   62.12     52.31   55.80   
Efficiency ratio - operating (1)  47.35   47.66   53.23   53.09   56.48     50.16   53.83   
Equity to total assets  11.25   11.12   10.95   11.06   10.61     11.25   10.61   
Tangible common equity to tangible assets (3)  7.88   7.70   7.59   7.72   8.09     7.88   8.09   
ASSET QUALITY                  
Nonperforming assets (“NPAs”) $44,281  $35,511  $34,428  $40,816  $32,855  35  $44,281  $32,855  35 
Allowance for credit losses - loans  159,357   148,502   136,925   132,805   102,532  55   159,357   102,532  55 
Allowance for credit losses - total  180,520   167,300   153,042   146,369   113,524  59   180,520   113,524  59 
Net charge-offs (recoveries)  6,611   1,134   (1,069)  2,978   248     9,654   38   
Allowance for credit losses - loans to loans  1.04%  1.00%  0.94%  0.93%  0.87%    1.04%  0.87%  
Allowance for credit losses - total to loans  1.18   1.12   1.05   1.02   0.97     1.18   0.97   
Net charge-offs to average loans (4)  0.17   0.03   (0.03)  0.08   0.01     0.07      
NPAs to total assets  0.18   0.15   0.14   0.17   0.16     0.18   0.16   
AT PERIOD END ($ in millions)                  
Loans $15,335  $14,882  $14,541  $14,316  $11,760  30  $15,335  $11,760  30 
Investment securities  6,228   6,539   6,683   6,410   5,653  10   6,228   5,653  10 
Total assets  24,009   23,688   24,213   24,374   20,947  15   24,009   20,947  15 
Deposits  19,877   20,321   20,873   21,056   18,241  9   19,877   18,241  9 
Shareholders’ equity  2,701   2,635   2,651   2,695   2,222  22   2,701   2,222  22 
Common shares outstanding (thousands)  106,223   106,163   106,034   106,025   89,350  19   106,223   89,350  19 

(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)
   2022   2021  Twelve Months Ended
December 31,
  Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
  2022   2021 
Noninterest expense reconciliation              
Noninterest expenses (GAAP) $117,329  $112,755  $120,790  $119,275  $109,156  $470,149  $396,639 
Merger-related and other charges  (1,470)  (1,746)  (7,143)  (9,016)  (9,912)  (19,375)  (13,970)
Expenses - operating $115,859  $111,009  $113,647  $110,259  $99,244  $450,774  $382,669 
               
Net income to operating income reconciliation              
Net income (GAAP) $81,450  $81,161  $66,842  $48,019  $52,019  $277,472  $269,801 
Merger-related and other charges  1,470   1,746   7,143   9,016   9,912   19,375   13,970 
Income tax benefit of merger-related and other charges  (323)  (385)  (1,575)  (1,963)  (2,265)  (4,246)  (3,174)
Net income - operating $82,597  $82,522  $72,410  $55,072  $59,666  $292,601  $280,597 
               
Net income to pre-tax pre-provision income reconciliation              
Net income (GAAP) $81,450  $81,161  $66,842  $48,019  $52,019  $277,472  $269,801 
Income tax expense  24,632   22,388   19,125   12,385   14,204   78,530   77,962 
Provision for credit losses  19,831   15,392   5,604   23,086   (647)  63,913   (37,550)
Pre-tax pre-provision income $125,913  $118,941  $91,571  $83,490  $65,576  $419,915  $310,213 
               
Diluted income per common share reconciliation              
Diluted income per common share (GAAP) $0.74  $0.74  $0.61  $0.43  $0.55  $2.52  $2.97 
Merger-related and other charges  0.01   0.01   0.05   0.07   0.09   0.14   0.12 
Diluted income per common share - operating $0.75  $0.75  $0.66  $0.50  $0.64  $2.66  $3.09 
               
Book value per common share reconciliation              
Book value per common share (GAAP) $24.38  $23.78  $23.96  $24.38  $23.63  $24.38  $23.63 
Effect of goodwill and other intangibles  (7.25)  (7.26)  (7.28)  (7.30)  (5.21)  (7.25)  (5.21)
Tangible book value per common share $17.13  $16.52  $16.68  $17.08  $18.42  $17.13  $18.42 
               
Return on tangible common equity reconciliation              
Return on common equity (GAAP)  10.86%  11.02%  9.31%  6.80%  9.32%  9.54%  13.14%
Merger-related and other charges  0.15   0.19   0.79   1.03   1.42   0.53   0.54 
Return on common equity - operating  11.01   11.21   10.10   7.83   10.74   10.07   13.68 
Effect of goodwill and other intangibles  4.19   4.39   4.10   3.17   3.19   3.97   3.65 
Return on tangible common equity - operating  15.20%  15.60%  14.20%  11.00%  13.93%  14.04%  17.33%
               
Return on assets reconciliation              
Return on assets (GAAP)  1.33%  1.32%  1.08%  0.78%  0.96%  1.13%  1.37%
Merger-related and other charges  0.02   0.02   0.09   0.11   0.14   0.06   0.05 
Return on assets - operating  1.35%  1.34%  1.17%  0.89%  1.10%  1.19%  1.42%
               
Return on assets to return on assets- pre-tax pre-provision reconciliation              
Return on assets (GAAP)  1.33%  1.32%  1.08%  0.78%  0.96%  1.13%  1.37%
Income tax expense  0.41   0.37   0.32   0.20   0.26   0.32   0.40 
Provision for credit losses  0.33   0.25   0.09   0.39   (0.01)  0.27   (0.19)
Return on assets - pre-tax pre-provision  2.07   1.94   1.49   1.37   1.21   1.72   1.58 
Merger-related and other charges  0.02   0.03   0.11   0.15   0.19   0.08   0.07 
Return on assets - pre-tax pre-provision, excluding merger-related and other charges  2.09%  1.97%  1.60%  1.52%  1.40%  1.80%  1.65%
               
Efficiency ratio reconciliation              
Efficiency ratio (GAAP)  47.95%  48.41%  56.58%  57.43%  62.12%  52.31%  55.80%
Merger-related and other charges  (0.60)  (0.75)  (3.35)  (4.34)  (5.64)  (2.15)  (1.97)
Efficiency ratio - operating  47.35%  47.66%  53.23%  53.09%  56.48%  50.16%  53.83%
               
Tangible common equity to tangible assets reconciliation              
Equity to total assets (GAAP)  11.25%  11.12%  10.95%  11.06%  10.61%  11.25%  10.61%
Effect of goodwill and other intangibles  (2.97)  (3.01)  (2.96)  (2.94)  (2.06)  (2.97)  (2.06)
Effect of preferred equity  (0.40)  (0.41)  (0.40)  (0.40)  (0.46)  (0.40)  (0.46)
Tangible common equity to tangible assets  7.88%  7.70%  7.59%  7.72%  8.09%  7.88%  8.09%


 
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
(in millions)
  2022  2021 Linked
Quarter
Change

 Year over
Year
Change

 Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
  
LOANS BY CATEGORY             
Owner occupied commercial RE$2,735 $2,700 $2,681 $2,638 $2,322 $35  $413 
Income producing commercial RE 3,262  3,299  3,273  3,328  2,601  (37)  661 
Commercial & industrial 2,251  2,236  2,243  2,302  1,822  15   429 
Paycheck protection program 1  2  10  34  88  (1)  (87)
Commercial construction 1,598  1,514  1,514  1,482  1,015  84   583 
Equipment financing 1,374  1,281  1,211  1,148  1,083  93   291 
Total commercial 11,221  11,032  10,932  10,932  8,931  189   2,290 
Residential mortgage 2,355  2,149  1,997  1,826  1,638  206   717 
Home equity lines of credit 850  832  801  778  694  18   156 
Residential construction 443  423  381  368  359  20   84 
Manufactured housing 317  301  287  269    16   317 
Consumer 149  145  143  143  138  4   11 
Total loans$15,335 $14,882 $14,541 $14,316 $11,760 $453  $3,575 
              
LOANS BY STATE             
Georgia$4,051 $4,003 $3,960 $3,879 $3,778 $48  $273 
South Carolina 2,587  2,516  2,377  2,323  2,235  71   352 
North Carolina 2,186  2,117  2,006  1,879  1,895  69   291 
Tennessee 2,507  2,536  2,621  2,661  373  (29)  2,134 
Florida 1,308  1,259  1,235  1,208  1,148  49   160 
Commercial Banking Solutions 2,696  2,451  2,342  2,366  2,331  245   365 
Total loans$15,335 $14,882 $14,541 $14,316 $11,760 $453  $3,575 


         
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions)
  2022  2021  2020  2019  2018
LOANS BY CATEGORY         
Owner occupied commercial RE$2,735 $2,322 $2,090 $1,720 $1,648
Income producing commercial RE 3,262  2,601  2,541  2,008  1,812
Commercial & industrial 2,251  1,822  1,853  1,221  1,278
Paycheck protection program 1  88  646    
Commercial construction 1,598  1,015  967  976  796
Equipment financing 1,374  1,083  864  745  565
Total commercial 11,221  8,931  8,961  6,670  6,099
Residential mortgage 2,355  1,638  1,285  1,118  1,049
Home equity lines of credit 850  694  697  661  694
Residential construction 443  359  281  236  211
Manufactured housing 317        
Consumer 149  138  147  128  330
Total loans$15,335 $11,760 $11,371 $8,813 $8,383
          
LOANS BY STATE         
Georgia$4,051 $3,778 $3,685 $3,606 $3,323
South Carolina 2,587  2,235  1,947  1,708  1,645
North Carolina 2,186  1,895  1,281  1,156  1,072
Tennessee 2,507  373  415  421  477
Florida 1,308  1,148  1,435    
Commercial Banking Solutions 2,696  2,331  2,608  1,922  1,658
Indirect auto         208
Total loans$15,335 $11,760 $11,371 $8,813 $8,383


       
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality      
(in thousands)      
   2022
  Fourth Quarter Third Quarter Second Quarter
NONACCRUAL LOANS      
Owner occupied RE $523 $877 $1,876
Income producing RE  3,885  2,663  7,074
Commercial & industrial  14,470  11,108  4,548
Commercial construction  133  150  208
Equipment financing  5,438  3,198  3,249
Total commercial  24,449  17,996  16,955
Residential mortgage  10,919  10,424  12,228
Home equity lines of credit  1,888  1,151  933
Residential construction  405  104  198
Manufactured housing  6,518  4,187  2,804
Consumer  53  17  25
Total nonaccrual loans held for investment  44,232  33,879  33,143
Nonaccrual loans HFS    316  317
OREO and repossessed assets  49  1,316  968
Total NPAs $44,281 $35,511 $34,428


   2022 
  Fourth Quarter Third Quarter Second Quarter
(in thousands) Net Charge-
Offs
 Net Charge-
Offs to
Average Loans
(1)
 Net Charge-
Offs
 Net Charge-
Offs to
Average Loans
(1)
 Net Charge-
Offs
 Net Charge-
Offs to
Average Loans
(1)
NET CHARGE-OFFS BY CATEGORY            
Owner occupied RE $(130) (0.02)% $(90) (0.01)% $(1,496) (0.23)%
Income producing RE  (113) (0.01)  176  0.02   (116) (0.01)
Commercial & industrial  4,577  0.81   (744) (0.13)  (302) (0.05)
Commercial construction  (77) (0.02)  10     (144) (0.04)
Equipment financing  1,658  0.50   1,121  0.36   907  0.31 
Total commercial  5,915  0.21   473  0.02   (1,151) (0.04)
Residential mortgage  (33) (0.01)  (66) (0.01)  (51) (0.01)
Home equity lines of credit  (89) (0.04)  (102) (0.05)  (346) (0.18)
Residential construction  (23) (0.02)  (109) (0.11)  (76) (0.08)
Manufactured housing  246  0.32   220  0.30   135  0.20 
Consumer  595  1.61   718  1.98   420  1.18 
Total $6,611  0.17  $1,134  0.03  $(1,069) (0.03)
             
(1) Annualized.            


 
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)
     
  December 31,
2022
 December 31,
2021
ASSETS    
Cash and due from banks $195,771  $144,244 
Interest-bearing deposits in banks  316,082   2,147,266 
Federal funds and other short-term investments  135,000   27,000 
Cash and cash equivalents  646,853   2,318,510 
Debt securities available-for-sale  3,614,333   4,496,824 
Debt securities held-to-maturity (fair value $2,191,073 and $1,148,804, respectively)  2,613,648   1,156,098 
Loans held for sale at fair value  13,600   44,109 
Loans and leases held for investment  15,334,627   11,760,346 
Less allowance for credit losses - loans and leases  (159,357)  (102,532)
Loans and leases, net  15,175,270   11,657,814 
Premises and equipment, net  298,456   245,296 
Bank owned life insurance  299,297   217,713 
Accrued interest receivable  72,807   42,999 
Net deferred tax asset  129,313   41,322 
Derivative financial instruments  50,636   42,480 
Goodwill and other intangible assets, net  779,248   472,407 
Other assets  315,423   211,199 
Total assets $24,008,884  $20,946,771 
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $7,643,081  $6,956,981 
NOW and interest-bearing demand  4,350,878   4,252,209 
Money market  4,510,680   4,183,354 
Savings  1,456,337   1,215,779 
Time  1,781,482   1,442,498 
Brokered  134,049   190,358 
Total deposits  19,876,507   18,241,179 
Short-term borrowings  158,933    
Federal Home Loan Bank advances  550,000    
Long-term debt  324,663   247,360 
Derivative financial instruments  99,543   25,145 
Accrued expenses and other liabilities                298,564                 210,842 
Total liabilities           21,308,210            18,724,526 
Shareholders' equity:    
Preferred stock, $1 par value: 10,000,000 shares authorized; Series I, $25,000 per share liquidation
  preference; 4,000 shares issued and outstanding
                   96,422                    96,422 
Common stock, $1 par value; 200,000,000 shares authorized; 106,222,758 and 89,349,826 shares issued and outstanding, respectively                106,223                    89,350 
Common stock issuable; 607,128 and 595,705 shares, respectively                   12,307                    11,288 
Capital surplus             2,306,366              1,721,007 
Retained earnings                508,844                 330,654 
Accumulated other comprehensive loss               (329,488)                 (26,476)
Total shareholders’ equity             2,700,674              2,222,245 
Total liabilities and shareholders’ equity $       24,008,884  $       20,946,771 


 
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
   2022   2021   2022   2021 
Interest revenue:        
Loans, including fees $197,330  $123,473  $673,402  $505,734 
Investment securities, including tax exempt of $2,561, 2,293, $10,323 and $8,978  40,781   19,442   131,824   70,972 
Deposits in banks and short-term investments  2,720   853   7,929   2,088 
Total interest revenue  240,831   143,768   813,155   578,794 
Interest expense:        
Deposits:        
NOW and interest-bearing demand  9,688   1,310   17,312   5,468 
Money market  11,244   1,102   18,274   5,380 
Savings  356   60   693   217 
Time  3,498   392   5,820   3,780 
Deposits  24,786   2,864   42,099   14,845 
Short-term borrowings  480      507    
Federal Home Loan Bank advances  1,424   1   1,424   3 
Long-term debt  4,253   3,348   16,768   14,912 
Total interest expense  30,943   6,213   60,798   29,760 
Net interest revenue  209,888   137,555   752,357   549,034 
Provision for credit losses  19,831   (647)  63,913   (37,550)
Net interest revenue after provision for credit losses  190,057   138,202   688,444   586,584 
Noninterest income:        
Service charges and fees  9,519   8,613   38,163   33,868 
Mortgage loan gains and related fees  3,104   10,910   32,524   58,446 
Wealth management fees  5,835   6,117   23,594   18,998 
Gains from other loan sales, net  1,504   3,761   10,730   11,267 
Other lending and loan servicing fees  2,487   2,357   10,005   9,427 
Securities (losses) gains, net  (184)  42   (3,872)  83 
Other  11,089   5,377   26,563   25,729 
Total noninterest income  33,354   37,177   137,707   157,818 
Total revenue  223,411   175,379   826,151   744,402 
Noninterest expenses:        
Salaries and employee benefits  68,143   60,986   276,205   241,443 
Occupancy  8,866   7,489   36,247   28,619 
Communications and equipment  10,516   7,850   38,234   29,829 
FDIC assessments and other regulatory charges  3,098   1,878   9,894   7,398 
Professional fees  5,496   6,080   20,166   20,589 
Lending and loan servicing expense  1,604   2,351   9,350   10,859 
Outside services - electronic banking  3,954   2,670   12,583   9,481 
Postage, printing and supplies  2,441   1,939   8,749   7,110 
Advertising and public relations  2,052   1,760   8,384   5,910 
Amortization of intangibles  1,619   1,103   6,826   4,045 
Merger-related and other charges  1,470   9,912   19,375   13,970 
Other  8,070   5,138   24,136   17,386 
Total noninterest expenses  117,329   109,156   470,149   396,639 
Net income before income taxes  106,082   66,223   356,002   347,763 
Income tax expense  24,632   14,204   78,530   77,962 
Net income $81,450  $52,019  $277,472  $269,801 
Preferred stock dividends  1,718   1,718   6,875   6,875 
Earnings allocated to participating securities  461   317   1,462   1,657 
Net income available to common shareholders $79,271  $49,984  $269,135  $261,269 
Net income per common share:        
Basic $0.74  $0.56  $2.52  $2.97 
Diluted  0.74   0.55   2.52   2.97 
Weighted average common shares outstanding:        
Basic  106,795   89,916   106,661   87,940 
Diluted  106,916   90,089   106,778   88,097 


 
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
 
   2022   2021 
  Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
Assets:            
Interest-earning assets:            
Loans, net of unearned income (FTE) (1)(2) $15,002,836  $197,502 5.22% $11,689,412  $123,250  4.18%
Taxable securities (3)  6,325,165   38,220 2.42   5,156,563   17,149  1.33 
Tax-exempt securities (FTE) (1)(3)  490,838   3,440 2.80   387,638   3,080  3.18 
Federal funds sold and other interest-earning assets  453,090   2,912 2.55   2,308,241   1,322  0.23 
Total interest-earning assets (FTE)  22,271,929   242,074 4.32   19,541,854   144,801  2.94 
             
Noninterest-earning assets:            
Allowance for loan losses  (152,551)      (103,167)    
Cash and due from banks  217,873       141,967     
Premises and equipment  297,523       245,869     
Other assets (3)  1,166,424       1,036,760     
Total assets $23,801,198      $20,863,283     
             
Liabilities and Shareholders’ Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $4,385,916   9,688 0.88  $4,080,621   1,310  0.13 
Money market  4,628,585   11,244 0.96   4,323,851   1,102  0.10 
Savings  1,480,908   356 0.10   1,187,134   60  0.02 
Time  1,708,311   3,143 0.73   1,461,231   567  0.15 
Brokered time deposits  51,258   355 2.75   65,556   (175) (1.06)
Total interest-bearing deposits  12,254,978   24,786 0.80   11,118,393   2,864  0.10 
Federal funds purchased and other borrowings  47,487   480 4.01   51      
Federal Home Loan Bank advances  135,000   1,424 4.18   1,426   1  0.28 
Long-term debt  324,590   4,253 5.20   247,251   3,348  5.37 
Total borrowed funds  507,077   6,157 4.82   248,728   3,349  5.34 
Total interest-bearing liabilities  12,762,055   30,943 0.96   11,367,121   6,213  0.22 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  7,993,816       6,918,279     
Other liabilities  383,270       354,665     
Total liabilities  21,139,141       18,640,065     
Shareholders’ equity  2,662,057       2,223,218     
Total liabilities and shareholders’ equity $23,801,198      $20,863,283     
             
Net interest revenue (FTE)   $211,131     $138,588   
Net interest-rate spread (FTE)     3.36%     2.72%
Net interest margin (FTE) (4)     3.76%     2.81%


(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, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $454 million in 2022 and $1.64 million in 2021 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 Twelve Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
 
   2022   2021 
  Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
Assets:            
Interest-earning assets:            
Loans, net of unearned income (FTE) (1)(2) $14,571,746  $673,491 4.62% $11,485,876  $504,015 4.39%
Taxable securities (3)  6,284,603   121,501 1.93   4,446,712   61,994 1.39 
Tax-exempt securities (FTE) (1)(3)  496,327   13,865 2.79   382,915   12,059 3.15 
Federal funds sold and other interest-earning assets  1,065,057   9,104 0.85   1,680,151   4,784 0.28 
Total interest-earning assets (FTE)  22,417,733   817,961 3.65   17,995,654   582,852 3.24 
             
Non-interest-earning assets:            
Allowance for loan losses  (135,144)      (121,586)    
Cash and due from banks  204,852       139,728     
Premises and equipment  288,044       230,276     
Other assets (3)  1,275,263       1,013,956     
Total assets $24,050,748      $19,258,028     
             
Liabilities and Shareholders’ Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $4,486,263   17,312 0.39  $3,610,601   5,468 0.15 
Money market  4,900,667   18,274 0.37   3,972,358   5,380 0.14 
Savings  1,482,599   693 0.05   1,095,071   217 0.02 
Time  1,693,307   5,152 0.30   1,529,072   3,663 0.24 
Brokered time deposits  61,636   668 1.08   67,230   117 0.17 
Total interest-bearing deposits  12,624,472   42,099 0.33   10,274,332   14,845 0.14 
Federal funds purchased and other borrowings  13,004   507 3.90   44     
Federal Home Loan Bank advances  34,027   1,424 4.18   1,195   3 0.25 
Long-term debt  323,102   16,768 5.19   276,492   14,912 5.39 
Total borrowed funds  370,133   18,699 5.05   277,731   14,915 5.37 
Total interest-bearing liabilities  12,994,605   60,798 0.47   10,552,063   29,760 0.28 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  7,967,321       6,276,094     
Other liabilities  377,221       322,566     
Total liabilities  21,339,147       17,150,723     
Shareholders’ equity  2,711,601       2,107,305     
Total liabilities and shareholders’ equity $24,050,748      $19,258,028     
             
Net interest revenue (FTE)   $757,163     $553,092  
Net interest-rate spread (FTE)     3.18%     2.96%
Net interest margin (FTE) (4)     3.38%     3.07%

 

(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, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $277 million in 2022 and pretax unrealized gains of $28.7 million in 2021 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) provides a full range of banking, wealth management and mortgage services for consumers and business owners. As of December 31, 2022, United had $24.0 billion in assets and 192 offices in Florida, Georgia, North Carolina, South Carolina, and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary.  The company, known as "The Bank That SERVICE Built," has been recognized nationally for delivering award-winning service. In 2022, J.D. Power ranked United highest in customer satisfaction with consumer banking in the Southeast, marking eight out of the last nine years United has earned the coveted award. Forbes recognized United as one of the top ten World's Best Banks in 2022. Forbes also included United on its 2022 list of the 100 Best Banks in America for the ninth consecutive year. United also received ten Greenwich Excellence Awards in 2021 for excellence in Small Business Banking and Middle Market Banking, including national awards for Overall Satisfaction and Likelihood to Recommend. United was also named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year based on employee satisfaction. Additional information about United can be found at www.ucbi.com.

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

Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the expected financial returns of the Progress acquisition. 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 Progress 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 Progress acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Progress 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 Progress, (5) the risks relating to the integration of Progress’ 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 Progress 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, 2021, 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 Progress.

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