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

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

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

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

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

Third Quarter 2020 Financial Highlights:

  • EPS decreased by 13% compared to last year on both a GAAP and operating basis; compared to second quarter, EPS increased by 63% on a GAAP basis and 72% on an operating basis
  • Return on assets of 1.07%, or 1.14% excluding merger-related and other charges
  • Pre-tax, pre-provision return on assets of 1.86%, or 1.93% excluding merger-related and other charges
  • Return on common equity of 10.1%
  • Return on tangible common equity of 13.5%, excluding merger-related and other charges
  • A provision for credit losses of $21.8 million of which $10.7 million is attributable to establishing an allowance for credit losses for Seaside’s acquired loans
  • Loan production of $1.0 billion and loan growth of $1.7 billion with $1.4 billion attributable to loans acquired from Seaside and core loan growth at an annualized rate of 8% for the quarter
  • Core transaction deposits were up $1.7 billion with $1.3 billion attributable to Seaside and approximately $400 million in organic growth, which represents a 15% annualized growth rate for the quarter
  • Net interest margin of 3.27% was down 15 basis points from the second quarter, reflecting the low rate environment, the Seaside acquisition, and increasing balance sheet liquidity
  • Record mortgage rate locks of $910 million, which is $108 million or 13% higher than the previous record set in the second quarter; this compares to $508 million a year ago
  • Noninterest income was up $7.7 million on a linked quarter basis, excluding net securities gains; Seaside contributed nearly $2.5 million of the increase and mortgage loan and related fees were up $1.5 million, primarily driven by record mortgage rate locks and production
  • Efficiency ratio of 54.1%, or a record low 52.2% excluding merger-related and other charges
  • Net charge-offs of $2.5 million, or 9 basis points as a percent of average loans, down 16 basis points from in the second quarter
  • Nonperforming assets of 0.29% of total assets, which is down 3 basis points compared to June 30, 2020
  • Total deferrals of $365 million or 3% of the total loan portfolio compared to $1.9 billion or 16% in the second quarter
  • $500,000 of funding for the United Community Bank Foundation, adding to the initial $1 million contribution in the second quarter for charities and causes throughout the footprint

Conference Call

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

UNITED COMMUNITY BANKS, INC.                  
Selected Financial Information                  
  2020 2019 Third
Quarter 

 For the Nine Months Ended September 30,  
(in thousands, except per share data) Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 2020 -
2019
Change
 2020 2019 YTD
2020 -
2019
Change
INCOME SUMMARY                  
Interest revenue $141,773   $123,605   $136,547   $136,419   $140,615     $401,925  $416,287   
Interest expense 13,319   14,301   17,941   19,781   21,277     45,561  63,531   
Net interest revenue 128,454   109,304   118,606   116,638   119,338   8% 356,364  352,756  1%
Provision for credit losses 21,793   33,543   22,191   3,500   3,100     77,527  9,650   
Noninterest income 48,682   40,238   25,814   30,183   29,031   68  114,734  74,530  54 
Total revenue 155,343   115,999   122,229   143,321   145,269   7  393,571  417,636  (6
Expenses 95,981   83,980   81,538   81,424   82,924   16  261,499  240,821  9 
Income before income tax expense 59,362   32,019   40,691   61,897   62,345   (5) 132,072  176,815  (25
Income tax expense 11,755   6,923   8,807   12,885   13,983   (16) 27,485  40,106  (31)
Net income 47,607   25,096   31,884   49,012   48,362   (2) 104,587  136,709  (23)
Merger-related and other charges 3,361   397   808   (74)  2,605     4,566  7,431   
Income tax benefit of merger-related and other charges (519)  (87)  (182)  17   (600)    (788) (1,712)  
Net income - operating (1) $50,449   $25,406   $32,510   $48,955   $50,367     $108,365  $142,428  (24)
                   
Pre-tax pre-provision income (5) $81,155   $65,562   $62,882   $65,397   $65,445   24  $209,599  $186,465  12 
                   
PERFORMANCE MEASURES                  
Per common share:                  
Diluted net income - GAAP $0.52   $0.32   $0.40   $0.61   $0.60   (13) $1.25  $1.70  (26)
Diluted net income - operating (1) 0.55   0.32   0.41   0.61   0.63   (13) 1.29  1.77  (27)
Cash dividends declared 0.18   0.18   0.18   0.18   0.17   6  0.54  0.50  8 
Book value 21.45   21.22   20.80   20.53   20.16   6  21.45  20.16  6 
Tangible book value (3) 17.09   16.95   16.52   16.28   15.90   7  17.09  15.90  7 
Key performance ratios:                  
Return on common equity - GAAP (2)(4) 10.06 % 6.17 % 7.85 % 12.07 % 12.16 %   8.11% 11.83%  
Return on common equity - operating (1)(2)(4) 10.69   6.25   8.01   12.06   12.67     8.40  12.32   
Return on tangible common equity - operating (1)(2)(3)(4) 13.52   8.09   10.57   15.49   16.38     10.76  15.92   
Return on assets - GAAP (4) 1.07   0.71   0.99   1.50   1.51     0.93  1.45   
Return on assets - operating (1)(4) 1.14   0.72   1.01   1.50   1.58     0.97  1.51   
Return on assets - pre-tax pre-provision (4)(5) 1.86   1.86   1.95   2.00   2.05      1.89  1.98   
Return on assets - pre-tax pre-provision, excluding merger-related and other charges (1)(4)(5) 1.93   1.87   1.98   2.00   2.13      1.93  2.06    
Net interest margin (fully taxable equivalent) (4) 3.27   3.42   4.07   3.93   4.12     3.55  4.11   
Efficiency ratio - GAAP 54.14   55.86   56.15   54.87   55.64     55.30  56.09   
Efficiency ratio - operating (1) 52.24   55.59   55.59   54.92   53.90     54.34  54.36   
Equity to total assets 11.47   11.81   12.54   12.66   12.53     11.47  12.53   
Tangible common equity to tangible assets (3) 8.89   9.12   10.22   10.32   10.16     8.89  10.16   
                   
ASSET QUALITY                  
Nonperforming loans $49,084   $48,021   $36,208   $35,341   $30,832   59  $49,084  $30,832  59 
Foreclosed properties 953   477   475   476   102     953  102   
Total nonperforming assets ("NPAs") 50,037   48,498   36,683   35,817   30,934   62  50,037  30,934  62 
Allowance for credit losses - loans 134,256   103,669   81,905   62,089   62,514   115  134,256  62,514  115 
Net charge-offs 2,538   6,149   8,114   3,925   2,723   (7) 16,801  8,291  103 
Allowance for credit losses - loans to loans 1.14 % 1.02 % 0.92 % 0.70 % 0.70 %   1.14% 0.70%  
Net charge-offs to average loans (4) 0.09   0.25   0.37   0.18   0.12     0.22  0.13   
NPAs to loans and foreclosed properties 0.42   0.48   0.41   0.41   0.35     0.42  0.35   
NPAs to total assets 0.29   0.32   0.28   0.28   0.24     0.29  0.24   
                   
AVERAGE BALANCES ($ in millions)                  
Loans $11,644   $9,773   $8,829   $8,890   $8,836   32  $10,088  $8,647  17 
Investment securities 2,750   2,408   2,520   2,486   2,550   8  2,560  2,701  (5
Earning assets 15,715   12,958   11,798   11,832   11,568   36  13,498  11,534  17 
Total assets 17,013   14,173   12,944   12,946   12,681   34  14,718  12,600  17 
Deposits 14,460   12,071   10,915   10,924   10,531   37  12,490  10,462  19 
Shareholders’ equity 1,948   1,686   1,653   1,623   1,588   23  1,763  1,533  15 
Common shares - basic (thousands) 87,129   78,920   79,340   79,659   79,663   9  81,815  79,714  3 
Common shares - diluted (thousands) 87,205   78,924   79,446   79,669   79,667   9  81,876  79,718  3 
                   
AT PERIOD END ($ in millions)                  
Loans $11,799   $10,133   $8,935   $8,813   $8,903   33  $11,799  $8,903  33 
Investment securities 3,089   2,432   2,540   2,559   2,515   23  3,089  2,515  23 
Total assets 17,153   15,005   13,086   12,916   12,809   34  17,153  12,809  34 
Deposits 14,603   12,702   11,035   10,897   10,757   36  14,603  10,757  36 
Shareholders’ equity 1,967   1,772   1,641   1,636   1,605   23  1,967  1,605  23 
Common shares outstanding (thousands) 86,611   78,335   78,284   79,014   78,974   10  86,611  78,974  10 
                                  
(1) Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. (2) Net income divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.


UNITED COMMUNITY BANKS, INC.              
Non-GAAP Performance Measures Reconciliation
Selected Financial Information              
  2020 2019 For the Nine Months Ended
September 30,
  Third 
 Second  First  Fourth 
 Third     
(in thousands, except per share data) Quarter Quarter Quarter Quarter Quarter 2020  2019
               
Expense reconciliation              
Expenses (GAAP) $95,981   $83,980   $81,538   $81,424   $82,924   $261,499   $240,821  
Merger-related and other charges (3,361)  (397)  (808)  74   (2,605)  (4,566)  (7,431) 
Expenses - operating $92,620   $83,583   $80,730   $81,498   $80,319   $256,933   $233,390  
               
Net income to operating income reconciliation              
Net income (GAAP) $47,607   $25,096   $31,884   $49,012   $48,362   $104,587   $136,709  
Merger-related and other charges 3,361   397   808   (74)  2,605   4,566   7,431  
Income tax benefit of merger-related and other charges (519)  (87)  (182)  17   (600)  (788)  (1,712) 
Net income - operating $50,449   $25,406   $32,510   $48,955   $50,367   $108,365   $142,428  
               
Net income to pre-tax pre-provision income reconciliation              
Net income (GAAP) $47,607   $25,096   $31,884   $49,012   $48,362   $104,587   $136,709  
Income tax expense 11,755   6,923   8,807   12,885   13,983   27,485   40,106  
Provision for credit losses 21,793   33,543   22,191   3,500   3,100   77,527   9,650  
Pre-tax pre-provision income $81,155   $65,562   $62,882   $65,397   $65,445   $209,599   $186,465  
               
Diluted income per common share reconciliation              
Diluted income per common share (GAAP) $0.52   $0.32   $0.40   $0.61   $0.60   $1.25   $1.70  
Merger-related and other charges, net of tax 0.03      0.01      0.03   0.04   0.07  
Diluted income per common share - operating $0.55   $0.32   $0.41   $0.61   $0.63   $1.29   $1.77  
               
Book value per common share reconciliation              
Book value per common share (GAAP) $21.45   $21.22   $20.80   $20.53   $20.16   $21.45   $20.16  
Effect of goodwill and other intangibles (4.36)  (4.27)  (4.28)  (4.25)  (4.26)  (4.36)  (4.26) 
Tangible book value per common share $17.09   $16.95   $16.52   $16.28   $15.90   $17.09   $15.90  
               
Return on tangible common equity reconciliation              
Return on common equity (GAAP) 10.06 % 6.17 % 7.85 % 12.07 % 12.16 % 8.11 % 11.83 %
Merger-related and other charges, net of tax 0.63   0.08   0.16   (0.01)  0.51   0.29   0.49  
Return on common equity - operating 10.69   6.25   8.01   12.06   12.67   8.40   12.32  
Effect of goodwill and other intangibles 2.83   1.84   2.56   3.43   3.71   2.36   3.60  
Return on tangible common equity - operating 13.52 % 8.09 % 10.57 % 15.49 % 16.38 % 10.76 % 15.92 %
               
Return on assets reconciliation              
Return on assets (GAAP) 1.07 % 0.71 % 0.99 % 1.50 % 1.51 % 0.93 % 1.45 %
Merger-related and other charges, net of tax 0.07   0.01   0.02      0.07   0.04   0.06  
Return on assets - operating 1.14 % 0.72 % 1.01 % 1.50 % 1.58 % 0.97 % 1.51 %
               
Return on assets to return on assets- pre-tax pre-provision reconciliation              
Return on assets (GAAP) 1.07 % 0.71 % 0.99 % 1.50 % 1.51 % 0.93 % 1.45 %
Income tax expense 0.28   0.20   0.27   0.39   0.44   0.26   0.43  
Provision for credit losses 0.51   0.95   0.69   0.11   0.10   0.70   0.10  
Return on assets - pre-tax, pre-provision 1.86   1.86   1.95   2.00   2.05   1.89   1.98  
Merger-related and other charges 0.07   0.01   0.03      0.08   0.04   0.08  
Return on assets - pre-tax pre-provision, excluding merger-related and other charges 1.93 % 1.87 % 1.98 % 2.00 % 2.13 % 1.93 % 2.06 %
               
Efficiency ratio reconciliation              
Efficiency ratio (GAAP) 54.14 % 55.86 % 56.15 % 54.87 % 55.64 % 55.30 % 56.09 %
Merger-related and other charges (1.90)  (0.27)  (0.56)  0.05   (1.74)  (0.96)  (1.73) 
Efficiency ratio - operating 52.24 % 55.59 % 55.59 % 54.92 % 53.90 % 54.34 % 54.36 %
               
Tangible common equity to tangible assets reconciliation              
Equity to total assets (GAAP) 11.47 % 11.81 % 12.54 % 12.66 % 12.53 % 11.47 % 12.53 %
Effect of goodwill and other intangibles (2.02)  (2.05)  (2.32)  (2.34)  (2.37)  (2.02)  (2.37) 
Effect of preferred equity (0.56)  (0.64)           (0.56)    
Tangible common equity to tangible assets 8.89 % 9.12 % 10.22 % 10.32 % 10.16 % 8.89 % 10.16 %
                             



UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Loan Portfolio Composition at Period-End            
              
 2020 2019 Linked  Year over 
(in millions)Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 Quarter
Change
 Year
Change
LOANS BY CATEGORY             
Owner occupied commercial RE$2,009  $1,759  $1,703  $1,720  $1,692  $250   $317  
Income producing commercial RE2,493  2,178  2,065  2,008  1,934  315   559  
Commercial & industrial1,788  1,219  1,310  1,221  1,271  569   517  
Paycheck protection program1,317  1,095        222   1,317  
Commercial construction987  946  959  976  1,001  41   (14) 
Equipment financing823  779  761  745  729  44   94  
Total commercial9,417  7,976  6,798  6,670  6,627  1,441   2,790  
Residential mortgage1,270  1,152  1,128  1,118  1,121  118   149  
Home equity lines of credit707  654  668  661  669  53   38  
Residential construction257  230  216  236  229  27   28  
Consumer148  121  125  128  257  27   (109) 
Total loans$11,799  $10,133  $8,935  $8,813  $8,903  $1,666   $2,896  
              
LOANS BY MARKET             
North Georgia$945  $951  $958  $967  $1,002  $(6)  $(57) 
Atlanta1,853  1,852  1,820  1,762  1,740  1   113  
North Carolina1,246  1,171  1,124  1,156  1,117  75   129  
Coastal Georgia614  618  604  631  611  (4)  3  
Gainesville229  233  235  246  246  (4)  (17) 
East Tennessee420  433  425  421  435  (13)  (15) 
South Carolina1,870  1,778  1,774  1,708  1,705  92   165  
Florida1,453          1,453   1,453  
Commercial Banking Solutions3,169  3,097  1,995  1,922  1,916  72   1,253  
Indirect auto        131     (131) 
Total loans$11,799  $10,133  $8,935  $8,813  $8,903  $1,666   $2,896  
                            

 

UNITED COMMUNITY BANKS, INC.             
Financial Highlights             
Credit Quality             
  2020       
(in thousands) Third
Quarter
 Second
Quarter
 First
Quarter
       
NONACCRUAL LOANS             
Owner occupied RE $11,075   $10,710   $10,405        
Income producing RE 12,230   11,274   2,235        
Commercial & industrial 3,534   3,432   3,169        
Commercial construction 1,863   2,290   1,724        
Equipment financing 3,137   3,119   2,439        
Total commercial 31,839   30,825   19,972        
Residential mortgage 13,864   13,185   12,458        
Home equity lines of credit 2,642   3,138   3,010        
Residential construction 479   500   540        
Consumer 260   373   228        
Total $49,084   $48,021   $36,208        
   
  2020
  Third Quarter Second Quarter First Quarter
(in thousands) Net Charge-
Offs
 Net Charge-
Offs to
Average Loans
(1)
 Net Charge-
Offs
 Net Charge-
Offs to
Average Loans
(1)
 Net Charge-
Offs
 Net Charge-
Offs to
Average Loans
(1)
NET CHARGE-OFFS BY CATEGORY            
Owner occupied RE $(725)  (0.14)% $(466)  (0.11)% $(1,028)  (0.24)%
Income producing RE 1,785   0.29   4,548   0.86   270   0.05  
Commercial & industrial (105)  (0.01)  (37)  (0.01)  7,185   2.30  
Commercial construction (171)  (0.07)  122   0.05   (141)  (0.06) 
Equipment financing 1,993   0.93   1,665   0.87   1,507   0.81  
Total commercial 2,777   0.12   5,832   0.31   7,793   0.47  
Residential mortgage (35)  (0.01)  (6)     9     
Home equity lines of credit (125)  (0.07)  (98)  (0.06)  (83)  (0.05) 
Residential construction       (5)  (0.01)  (12)  (0.02) 
Consumer (79)  (0.22)  426   1.39   407   1.30  
Total $2,538   0.09   $6,149   0.25   $8,114   0.37  
             
(1)  Annualized.            


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data) September 30,
2020
 December 31,
2019
ASSETS    
Cash and due from banks $122,048  $125,844 
Interest-bearing deposits in banks 923,591  389,362 
Cash and cash equivalents 1,045,639  515,206 
Debt securities available-for-sale 2,690,448  2,274,581 
Debt securities held-to-maturity (fair value $413,820 and $287,904) 398,373  283,533 
Loans held for sale at fair value 128,587  58,484 
Loans and leases held for investment 11,798,910  8,812,553 
Less allowance for credit losses - loans and leases (134,256) (62,089)
Loans and leases, net 11,664,654  8,750,464 
Premises and equipment, net 211,885  215,976 
Bank owned life insurance 201,515  202,664 
Accrued interest receivable 48,091  32,660 
Net deferred tax asset 39,818  34,059 
Derivative financial instruments 103,388  35,007 
Goodwill and other intangible assets, net 384,074  342,247 
Other assets 236,405  171,135 
Total assets $17,152,877  $12,916,016 
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $5,227,170  $3,477,979 
NOW and interest-bearing demand 2,989,455  2,461,895 
Money market 3,399,793  2,230,628 
Savings 891,147  706,467 
Time 1,819,586  1,859,574 
Brokered 276,225  160,701 
Total deposits 14,603,376  10,897,244 
Long-term debt 326,703  212,664 
Derivative financial instruments 33,519  15,516 
Accrued expenses and other liabilities 222,024  154,900 
Total liabilities 15,185,622  11,280,324 
Shareholders' equity:    
Preferred stock; $1 par value; 10,000,000 shares authorized;
  Series I, $25,000 per share liquidation preference; 4,000 shares issued and outstanding
 96,422   
Common stock, $1 par value; 150,000,000 shares authorized;
  86,611,114 and 79,013,729 shares issued and outstanding
 86,611  79,014 
Common stock issuable; 590,521 and 664,640 shares 10,632  11,491 
Capital surplus 1,637,467  1,496,641 
Retained earnings 94,938  40,152 
Accumulated other comprehensive income 41,185  8,394 
Total shareholders' equity 1,967,255  1,635,692 
Total liabilities and shareholders' equity $17,152,877  $12,916,016 
         


UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
 
(in thousands, except per share data) 2020 2019 2020 2019 
Interest revenue:         
Loans, including fees $126,936  $122,645  $352,861  $357,575  
Investment securities, including tax exempt of $1,895, $1,118, $4,988 and $3,409 14,558  17,744  47,567  57,638  
Deposits in banks and short-term investments 279  226  1,497  1,074  
Total interest revenue 141,773  140,615  401,925  416,287  
          
Interest expense:         
Deposits:         
NOW and interest-bearing demand 1,634  3,214  6,240  10,283  
Money market 3,017  5,126  10,969  14,100  
Savings 47  41  121  115  
Time 4,300  8,732  18,014  25,687  
Deposits 8,998  17,113  35,344  50,185  
Short-term borrowings 2  429  3  838  
Federal Home Loan Bank advances 27  521  28  2,695  
Long-term debt 4,292  3,214  10,186  9,813  
Total interest expense 13,319  21,277  45,561  63,531  
Net interest revenue 128,454  119,338  356,364  352,756  
Provision for credit losses 21,793  3,100  77,527  9,650  
Net interest revenue after provision for credit losses 106,661  116,238  278,837  343,106  
          
Noninterest income:         
Service charges and fees 8,260  9,916  23,893  27,429  
Mortgage loan gains and other related fees 25,144  8,658  57,113  17,750  
Brokerage and wealth management fees 3,055  1,699  6,019  4,624  
Gains from sales of other loans, net 1,175  1,639  3,889  4,412  
Securities gains (losses), net 746    746  (118) 
Other 10,302  7,119  23,074  20,433  
Total noninterest income 48,682  29,031  114,734  74,530  
Total revenue 155,343  145,269  393,571  417,636  
          
Noninterest expenses:         
Salaries and employee benefits 59,067  50,501  162,236  146,161  
Communications and equipment 6,960  6,223  19,462  18,233  
Occupancy 7,050  5,921  18,709  17,424  
Advertising and public relations 1,778  1,374  5,312  4,256  
Postage, printing and supplies 1,703  1,618  4,986  4,733  
Professional fees 5,083  4,715  14,003  11,930  
Lending and loan servicing expense 3,043  2,556  8,525  7,509  
Outside services - electronic banking 1,888  1,934  5,516  5,101  
FDIC assessments and other regulatory charges 1,346  314  4,388  3,571  
Amortization of intangibles 1,099  1,210  3,126  3,845  
Merger-related and other charges 3,361  2,541  4,566  6,981  
Other 3,603  4,017  10,670  11,077  
Total noninterest expenses 95,981  82,924  261,499  240,821  
Net income before income taxes 59,362  62,345  132,072  176,815  
Income tax expense 11,755  13,983  27,485  40,106  
Net income 47,607  48,362  104,587  136,709  
Preferred stock dividends 1,814    1,814    
Dividends and undistributed earnings allocated to unvested shares 356  351  779  982  
Net income available to common shareholders $45,437  $48,011  $101,994  $135,727  
          
Net income per common share:         
Basic $0.52  $0.60  $1.25  $1.70  
Diluted 0.52  0.60  1.25  1.70  
Weighted average common shares outstanding:         
Basic 87,129  79,663  81,815  79,714  
Diluted 87,205  79,667  81,876  79,718  


Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
  2020 2019 
(dollars in thousands, fully taxable equivalent (FTE)) Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
 
Assets:             
Interest-earning assets:             
Loans, net of unearned income (FTE) (1)(2) $11,644,202  $126,342  4.32% $8,835,585  $122,526  5.50% 
Taxable securities (3) 2,499,649  12,663  2.03  2,379,927  16,626  2.79  
Tax-exempt securities (FTE) (1)(3) 249,959  2,544  4.07  170,027  1,502  3.53  
Federal funds sold and other interest-earning assets 1,321,445  1,132  0.34  182,935  616  1.35  
Total interest-earning assets (FTE) 15,715,255  142,681  3.61  11,568,474  141,270  4.85  
              
Noninterest-earning assets:             
Allowance for credit losses (128,581)     (63,474)     
Cash and due from banks 135,949      116,922      
Premises and equipment 216,326      221,930      
Other assets (3) 1,074,529      836,951      
Total assets $17,013,478      $12,680,803      
              
Liabilities and Shareholders' Equity:             
Interest-bearing liabilities:             
Interest-bearing deposits:             
NOW and interest-bearing demand $2,890,735  1,634  0.22  $2,123,910  3,214  0.60  
Money market 3,501,781  3,017  0.34  2,277,162  5,126  0.89  
Savings 864,849  47  0.02  695,297  41  0.02  
Time 1,933,764  4,127  0.85  1,879,801  8,053  1.70  
Brokered time deposits 96,198  173  0.72  102,078  679  2.64  
Total interest-bearing deposits 9,287,327  8,998  0.39  7,078,248  17,113  0.96  
Federal funds purchased and other borrowings 4,405  2  0.18  73,733  429  2.31  
Federal Home Loan Bank advances 2,818  27  3.81  88,261  521  2.34  
Long-term debt 327,017  4,292  5.22  243,935  3,214  5.23  
Total borrowed funds 334,240  4,321  5.14  405,929  4,164  4.07  
Total interest-bearing liabilities 9,621,567  13,319  0.55  7,484,177  21,277  1.13  
              
Noninterest-bearing liabilities:             
Noninterest-bearing deposits 5,172,999      3,453,174      
Other liabilities 270,451      155,107      
Total liabilities 15,065,017      11,092,458      
Shareholders' equity 1,948,461      1,588,345      
Total liabilities and shareholders' equity $17,013,478      $12,680,803      
              
Net interest revenue (FTE)   $129,362      $119,993    
Net interest-rate spread (FTE)     3.06%     3.72% 
Net interest margin (FTE) (4)     3.27%     4.12% 

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


Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
  2020 2019 
(dollars in thousands, fully taxable equivalent (FTE)) Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
 
Assets:             
Interest-earning assets:             
Loans, net of unearned income (FTE) (1)(2) $10,087,630  $351,536  4.65% $8,646,622  $357,541  5.53% 
Taxable securities (3) 2,362,674  42,579  2.40  2,532,070  54,229  2.86  
Tax-exempt securities (FTE) (1)(3) 197,231  6,699  4.53  168,787  4,579  3.62  
Federal funds sold and other interest-earning assets 850,722  3,621  0.57  186,402  1,913  1.37  
Total interest-earning assets (FTE) 13,498,257  404,435  4.00  11,533,881  418,262  4.85  
              
Non-interest-earning assets:             
Allowance for loan losses (96,235)     (62,664)     
Cash and due from banks 134,354      121,889      
Premises and equipment 217,551      220,872      
Other assets (3) 964,511      785,862      
Total assets $14,718,438      $12,599,840      
              
Liabilities and Shareholders' Equity:             
Interest-bearing liabilities:             
Interest-bearing deposits:             
NOW and interest-bearing demand $2,583,911  6,240  0.32  $2,199,607  10,283  0.63  
Money market 2,797,350  10,969  0.52  2,187,822  14,100  0.86  
Savings 788,681  121  0.02  685,167  115  0.02  
Time 1,860,597  17,435  1.25  1,761,374  20,338  1.54  
Brokered time deposits 102,502  579  0.75  292,835  5,349  2.44  
Total interest-bearing deposits 8,133,041  35,344  0.58  7,126,805  50,185  0.94  
Federal funds purchased and other borrowings 1,611  3  0.25  44,898  838  2.50  
Federal Home Loan Bank advances 1,001  28  3.74  142,876  2,695  2.52  
Long-term debt 256,218  10,186  5.31  252,686  9,813  5.19  
Total borrowed funds 258,830  10,217  5.27  440,460  13,346  4.05  
Total interest-bearing liabilities 8,391,871  45,561  0.73  7,567,265  63,531  1.12  
              
Noninterest-bearing liabilities:             
Noninterest-bearing deposits 4,356,484      3,335,450      
Other liabilities 206,904      164,350      
Total liabilities 12,955,259      11,067,065      
Shareholders' equity 1,763,179      1,532,775      
Total liabilities and shareholders' equity $14,718,438      $12,599,840      
              
Net interest revenue (FTE)   $358,874      $354,731    
Net interest-rate spread (FTE)     3.27%     3.73% 
Net interest margin (FTE) (4)     3.55%     4.11% 

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

About United Community Banks, Inc.

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

Non-GAAP Financial Measures

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

For more information:

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