GREENVILLE, S.C., Jan. 19, 2021 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today reported fourth quarter financial results, including solid year-over-year loan and core deposit growth and strong profitability. For the quarter, United’s net income was $59.5 million and pre-tax pre-provision income was $80.3 million. Diluted earnings per share of $0.66 for the quarter represented an increase of $0.05 or 8%, from a year ago. Compared to the third quarter, diluted earnings per share were up by $0.14 or 27%. On an operating basis, which excludes merger-related and other charges, diluted earnings per share were $0.68, up $0.07 or 11% from last year and $0.13 per share or 24% compared to the third quarter. United’s GAAP return on assets (ROA) was 1.30% and its return on common equity was 12.4% for the quarter. On an operating basis, United’s ROA was 1.34% and its return on tangible common equity was 16.2%. On a pre-tax, pre-provision basis, and excluding merger-related and other charges, ROA was 1.82%.  

Included in the quarter’s results was a discretionary $8.5 million contribution to the United Community Bank Foundation. This contribution lowered operating EPS by $0.07 and operating ROA by 15 basis points.

Chairman and CEO Lynn Harton stated, “While our markets continue to be impacted by the pandemic, I am proud of the ongoing commitment to service by our employees and am encouraged by the resilience of our customers. The strength of our balance sheet and the diversity of our business model enabled us to continue to post solid financial results in a challenging environment. Most importantly, our teams continued to exhibit outstanding leadership. During the year, we have been able to add new teams of bankers, expand our footprint into new, fast-growing markets, and increase our product offerings. Focused efforts by our teams have led to meaningful high-quality growth in loans, deposits, and fee income despite economic headwinds.”

Total loans decreased by $428 million during the quarter—primarily driven by the forgiveness of $671 million in SBA Paycheck Protection Program (PPP) loans. Excluding the effect of PPP loans, core organic loan growth was 8% annualized. Core transaction deposits grew by $369 million during the quarter, or 13% annualized, and United’s cost of deposits decreased by 8 basis points to 0.17%. The net interest margin increased 28 basis points from the third quarter due mainly to the accelerated recognition of PPP fees, as well as purchased loan accretion. Excluding these items, the net interest margin decreased by approximately 10 basis points from the third quarter due to a combination of factors, including lower overall market rates and increased liquidity.

Mr. Harton concluded, “I am pleased by our performance both this quarter and this past year despite the challenging circumstances. I am optimistic going into 2021 knowing that we are well positioned to take advantage of new business opportunities. In October, and for the fourth consecutive year, United was again named one of the Best Banks to Work for in 2020 by American Banker. This honor demonstrates our commitment to employee development and to fostering a strong culture. Our employees continue to lead in supporting our customers and communities, which is directly reflected in our performance and success.”

2020 Financial Highlights:

  • Full year EPS of $1.91, a decrease of 17% compared to last year on both a GAAP and operating basis
  • Return on assets of 1.04%, or 1.07% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.85%, or 1.90% on an operating basis
  • Return on common equity of 9.3%
  • Return on tangible common equity of 12.2% on an operating basis
  • Completed the merger with Three Shores Bancorporation and its bank subsidiary Seaside National Bank & Trust (Seaside) on July 1
  • A provision for credit losses of $80.4 million compared to $13.2 million in 2019, partly due to the adoption of the Current Expected Credit Losses (CECL) model in the first quarter
  • Processed nearly 11,000 PPP applications, totaling $1.3 billion in new loans
  • Loan growth of $2.6 billion with $1.4 billion attributable to loans acquired from Seaside and core loan growth (excluding PPP loans) of 8% for the year
  • Core transaction deposits were up $4.0 billion with $1.3 billion attributable to Seaside and remainder in organic growth, which represents a 36% core growth rate for the year
  • Net interest margin of 3.55%, which was down 52 basis points from last year due to a number of factors, including the low rate environment, the Seaside acquisition, and increasing balance sheet liquidity
  • Record mortgage rate locks of $3.3 billion compared to $1.6 billion a year ago
  • Noninterest income was up $49.6 million or 47%, excluding net securities gains; Seaside contributed nearly $4.7 million of the increase and mortgage loan gains and related fees were up $48.9 million, primarily driven by record mortgage rate locks and production
  • Efficiency ratio of 55.7%, or 54.6% on an operating basis
  • Net charge-offs of $18.3 million, or 17 basis points as a percent of average loans, up 3 basis points from 2019
  • Completed a public offering of $100 million aggregate of 6.875% Non-Cumulative Perpetual Preferred Stock and $100 million aggregate principal amount of 5.000% Fixed-to-Floating Senior Notes due 2030
  • Established the United Community Bank Foundation with $10.0 million

Fourth Quarter 2020 Financial Highlights:

  • Net income of $59.5 million and pre-tax pre-provision income of $80.3 million
  • EPS increased by 8% compared to last year on a GAAP basis and 11% on an operating basis; compared to third quarter, EPS increased by 27% on a GAAP basis and 24% on an operating basis
  • Return on assets of 1.30%, or 1.34% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.77%, or 1.82% on an operating basis
  • Return on common equity of 12.4%
  • Return on tangible common equity of 16.2% on an operating basis
  • A provision for credit losses of $2.9 million, which increased the allowance for loan losses to 1.20% (1.28%, excluding PPP loans) from 1.14% in the third quarter
  • Loan production of $1.1 billion, resulting in core loan growth of 8%, annualized for the quarter, excluding the impact of $671 million in PPP loans being forgiven
  • Core transaction deposits were up $369 million, which represents a 13% annualized growth rate for the quarter
  • Net interest margin of 3.55% was up 28 basis points from the third quarter, mainly due to the impact of accelerated PPP fees during the quarter
  • Record mortgage closings of $609 million and mortgage rate locks of $792 million, compared to $333 million and $411 million, respectively, a year ago
  • Noninterest income was down $6.6 million on a linked quarter basis, excluding net securities gains, primarily driven by lower mortgage loan gains and related fees
  • Noninterest expenses increased by $10.5 million compared to the third quarter mostly due to funding for the United Community Bank Foundation of $8.5 million
  • Efficiency ratio of 56.7%, or 55.4% on an operating basis
  • Net charge-offs of $1.5 million, or 5 basis points as a percent of average loans, down 4 basis points from the third quarter
  • Nonperforming assets of 0.35% of total assets, up 6 basis points compared to September 30, 2020
  • Total loan deferrals of $71 million or 0.6% of the total loan portfolio compared to $365 million or 3% in the third quarter
  • $8.5 million of funding for the United Community Bank Foundation for charities and causes throughout the footprint, adding to a $0.5 million contribution in the third quarter
  • Plan for operational conversion of Seaside in the first quarter of 2021

Conference Call

United will hold a conference call, Wednesday, January 20, 2021, 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 5083638. 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.                  
Financial Highlights                  
Selected Financial Information                  
  2020 2019 Fourth
Quarter 
  
 For the Twelve Months Ended
December 31,
 YTD 2020-  
(in thousands, except per share data) Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
 2020- 2019
Change
  
 2020 2019 2019
Change
  
INCOME SUMMARY                  
Interest revenue $156,071   $141,773   $123,605   $136,547   $136,419     $557,996   $552,706    
Interest expense 10,676   13,319   14,301   17,941   19,781     56,237   83,312    
Net interest revenue 145,395   128,454   109,304   118,606   116,638   25 % 501,759   469,394   7 %
Provision for credit losses 2,907   21,793   33,543   22,191   3,500     80,434   13,150    
Noninterest income 41,375   48,682   40,238   25,814   30,183   37   156,109   104,713   49  
Total revenue 183,863   155,343   115,999   122,229   143,321   28   577,434   560,957   3  
Expenses 106,490   95,981   83,980   81,538   81,424   31   367,989   322,245   14  
Income before income tax expense 77,373   59,362   32,019   40,691   61,897     209,445   238,712    
Income tax expense 17,871   11,755   6,923   8,807   12,885     45,356   52,991    
Net income 59,502   47,607   25,096   31,884   49,012     164,089   185,721    
Merger-related and other charges 2,452   3,361   397   808   (74)    7,018   7,357    
Income tax benefit of merger-related and other charges (552)  (519)  (87)  (182)  17     (1,340)  (1,695)   
Net income - operating (1) $61,402    $50,449    $25,406    $32,510    $48,955    25   $169,767    $191,383    (11) 
                   
Pre-tax pre-provision income (5) $80,280   $81,155   $65,562   $62,882   $65,397   23   $289,879   $251,862   15  
                   
PERFORMANCE MEASURES                  
Per common share:                  
Diluted net income - GAAP $0.66   $0.52   $0.32   $0.40   $0.61   8   $1.91   $2.31   (17) 
Diluted net income - operating (1) 0.68   0.55   0.32   0.41   0.61   11   1.98   2.38   (17) 
Common stock cash dividends declared 0.18   0.18   0.18   0.18   0.18      0.72   0.68   6  
Book value 21.90   21.45   21.22   20.80   20.53   7   21.90   20.53   7  
Tangible book value (3) 17.56   17.09   16.95   16.52   16.28   8   17.56   16.28   8  
Key performance ratios:                  
Return on common equity - GAAP (2)(4) 12.36 % 10.06 % 6.17 % 7.85 % 12.07 %   9.25 % 11.89 %  
Return on common equity - operating (1)(2)(4) 12.77   10.69   6.25   8.01   12.06     9.58   12.25    
Return on tangible common equity - operating (1)(2)(3)(4) 16.23   13.52   8.09   10.57   15.49     12.24   15.81    
Return on assets - GAAP (4) 1.30   1.07   0.71   0.99   1.50     1.04   1.46    
Return on assets - operating (1)(4) 1.34   1.14   0.72   1.01   1.50     1.07   1.51    
Return on assets -pre-tax pre-provision (4)(5) 1.77   1.86   1.86   1.95   2.00     1.85   1.99    
Return on assets -pre-tax pre-provision, excluding
merger related and other charges (1)(4)(5)
 1.82   1.93   1.87   1.98   2.00     1.90   2.04    
Net interest margin (fully taxable equivalent) (4) 3.55   3.27   3.42   4.07   3.93     3.55   4.07    
Efficiency ratio - GAAP 56.73   54.14   55.86   56.15   54.87     55.71   55.77    
Efficiency ratio - operating (1) 55.42   52.24   55.59   55.59   54.92     54.64   54.50    
Equity to total assets 11.29   11.47   11.81   12.54   12.66     11.29   12.66    
Tangible common equity to tangible assets (3) 8.81   8.89   9.12   10.22   10.32     8.81   10.32    
ASSET QUALITY                  
Nonperforming loans $61,599   $49,084   $48,021   $36,208   $35,341   74   $61,599   $35,341   74  
Foreclosed properties 647   953   477   475   476   36   647   476   36  
Total nonperforming assets (“NPAs”) 62,246   50,037   48,498   36,683   35,817   74   62,246   35,817   74  
Allowance for credit losses – loans and leases 137,010   134,256   103,669   81,905   62,089   121   137,010   62,089   121  
Net charge-offs 1,515   2,538   6,149   8,114   3,925   (61)  18,316   12,216   50  
Allowance for credit losses – loans and leases to loans 1.20 % 1.14 % 1.02 % 0.92 % 0.70 %   1.20 % 0.70 %  
Net charge-offs to average loans (4) 0.05   0.09   0.25   0.37   0.18     0.17   0.14    
NPAs to loans and foreclosed properties 0.55   0.42   0.48   0.41   0.41     0.55   0.41    
NPAs to total assets 0.35   0.29   0.32   0.28   0.28     0.35   0.28    
AVERAGE BALANCES ($ in millions)                  
Loans $11,595   $11,644   $9,773   $8,829   $8,890   30   $10,467   $8,708   20  
Investment securities 3,326   2,750   2,408   2,520   2,486   34   2,752   2,647   4  
Earning assets 16,394   15,715   12,958   11,798   11,832   39   14,226   11,609   23  
Total assets 17,698   17,013   14,173   12,944   12,946   37   15,467   12,687   22  
Deposits 15,057   14,460   12,071   10,915   10,924   38   13,135   10,579   24  
Shareholders’ equity 1,994   1,948   1,686   1,653   1,623   23   1,821   1,556   17  
Common shares - basic (thousands) 87,258   87,129   78,920   79,340   79,659   10   83,184   79,700   4  
Common shares - diluted (thousands) 87,333   87,205   78,924   79,446   79,669   10   83,248   79,708   4  
AT PERIOD END ($ in millions)                  
Loans $11,371   $11,799   $10,133   $8,935   $8,813   29   $11,371   $8,813   29  
Investment securities 3,645   3,089   2,432   2,540   2,559   42   3,645   2,559   42  
Total assets 17,794   17,153   15,005   13,086   12,916   38   17,794   12,916   38  
Deposits 15,232   14,603   12,702   11,035   10,897   40   15,232   10,897   40  
Shareholders’ equity 2,008   1,967   1,772   1,641   1,636   23   2,008   1,636   23  
Common shares outstanding (thousands) 86,675   86,611   78,335   78,284   79,014   10   86,675   79,014   10  

(1) Excludes merger-related and other charges. (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.          
Selected Financial Information          
For the Years Ended December 31,          
(in thousands, except per share data) 2020 2019 2018 2017 2016
INCOME SUMMARY          
Interest revenue $557,996   $552,706   $500,080   $389,720   $335,020  
Interest expense 56,237   83,312   61,330   33,735   25,236  
Net interest revenue 501,759   469,394   438,750   355,985   309,784  
Provision for credit losses 80,434   13,150   9,500   3,800   (800) 
Noninterest income 156,109   104,713   92,961   88,260   93,697  
Total revenue 577,434   560,957   522,211   440,445   404,281  
Expenses 367,989   322,245   306,285   267,611   241,289  
Income before income tax expense 209,445   238,712   215,926   172,834   162,992  
Income tax expense 45,356   52,991   49,815   105,013   62,336  
Net income 164,089   185,721   166,111   67,821   100,656  
Merger-related and other charges 7,018   7,357   7,345   14,662   8,122  
Income tax benefit of merger-related and other charges (1,340)  (1,695)  (1,494)  (3,745)  (3,074) 
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act          38,199     
Impairment of deferred tax asset on cancelled non-qualified stock options             976  
Release of disproportionate tax effects lodged in OCI          3,400     
Net income - operating (1) $169,767    $191,383    $171,962    $120,337    $106,680   
           
Pre-tax pre-provision income (4) $289,879   $251,862   $225,426   $176,634   $162,192  
           
PERFORMANCE MEASURES          
Per common share:          
Diluted net income - GAAP $1.91   $2.31   $2.07   $0.92   $1.40  
Diluted net income - operating (1) 1.98   2.38   2.14   1.63   1.48  
Common stock cash dividends declared 0.72   0.68   0.58   0.38   0.30  
Book value 21.90   20.53   18.24   16.67   15.06  
Tangible book value (3) 17.56   16.28   14.24   13.65   12.95  
Key performance ratios:          
Return on common equity - GAAP (2) 9.25 % 11.89 % 11.60 % 5.67 % 9.41 %
Return on common equity - operating (1)(2) 9.58   12.25   12.01   10.07   9.98  
Return on tangible common equity - operating (1)(2)(3) 12.24   15.81   15.69   12.02   11.86  
Return on assets - GAAP 1.04   1.46   1.35   0.62   1.00  
Return on assets - operating (1) 1.07   1.51   1.40   1.09   1.06  
Return on assets -pre-tax pre-provision (4) 1.85   1.99   1.84   1.60   1.61  
Return on assets -pre-tax pre-provision, excluding merger related and other charges (1)(5) 1.90   2.04   1.89   1.74   1.69  
Net interest margin (fully taxable equivalent) 3.55   4.07   3.91   3.52   3.36  
Efficiency ratio - GAAP 55.71   55.77   57.31   59.95   59.80  
Efficiency ratio - operating (1) 54.64   54.50   55.94   56.67   57.78  
Equity to total assets 11.29   12.66   11.59   10.94   10.05  
Tangible common equity to tangible assets (3) 8.81   10.32   9.29   9.14   8.77  
ASSET QUALITY          
Nonperforming loans $61,599   $35,341   $23,778   $23,658   $21,539  
Foreclosed properties 647   476   1,305   3,234   7,949  
Total nonperforming assets (NPAs) 62,246   35,817   25,083   26,892   29,488  
Allowance for credit losses – loans and leases 137,010   62,089   61,203   58,914   61,422  
Net charge-offs 18,316   12,216   6,113   5,998   6,766  
Allowance for credit losses – loans and leases to loans 1.20 % 0.70 % 0.73 % 0.76 % 0.89 %
Net charge-offs to average loans 0.17   0.14   0.07   0.08   0.11  
NPAs to loans and foreclosed properties 0.55   0.41   0.30   0.35   0.43  
NPAs to total assets 0.35   0.28   0.20   0.23   0.28  
AVERAGE BALANCES ($ in millions)          
Loans $10,467   $8,708   $8,170   $7,150   $6,413  
Investment securities 2,752   2,647   2,899   2,847   2,691  
Earning assets 14,226   11,609   11,282   10,162   9,257  
Total assets 15,467   12,687   12,284   11,015   10,054  
Deposits 13,135   10,579   10,000   8,950   8,177  
Shareholders’ equity 1,821   1,556   1,380   1,180   1,059  
Common shares - basic (thousands) 83,184   79,700   79,662   73,247   71,910  
Common shares - diluted (thousands) 83,248   79,708   79,671   73,259   71,915  
AT PERIOD END ($ in millions)          
Loans $11,371   $8,813   $8,383   $7,736   $6,921  
Investment securities 3,645   2,559   2,903   2,937   2,762  
Total assets 17,794   12,916   12,573   11,915   10,709  
Deposits 15,232   10,897   10,535   9,808   8,638  
Shareholders’ equity 2,008   1,636   1,458   1,303   1,076  
Common shares outstanding (thousands) 86,675   79,014   79,234   77,580   70,899  

(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, 2019 executive retirement charges and termination of pension plan, the 2017 impact of remeasurement of United’s deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, and a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options. (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) Excludes income tax expense and provision for credit losses.

           
UNITED COMMUNITY BANKS, INC.          
Non-GAAP Performance Measures Reconciliation          
Selected Financial Information- Quarterly 2020 2019
(in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter
Expense reconciliation          
Expenses (GAAP) $106,490   $95,981   $83,980   $81,538   $81,424  
Merger-related and other charges (2,452)  (3,361)  (397)  (808)  74  
Expenses - operating $104,038   $92,620   $83,583   $80,730   $81,498  
           
Net income to operating income reconciliation          
Net income (GAAP) $59,502   $47,607   $25,096   $31,884   $49,012  
Merger-related and other charges 2,452   3,361   397   808   (74) 
Income tax benefit of merger-related and other charges (552)  (519)  (87)  (182)  17  
Net income - operating $61,402   $50,449   $25,406   $32,510   $48,955  
           
Net income to pre-tax pre-provision income reconciliation          
Net income (GAAP) 59,502   47,607   25,096   31,884   49,012  
Income tax expense 17,871   11,755   6,923   8,807   12,885  
Provision for credit losses 2,907   21,793   33,543   22,191   3,500  
Pre-tax pre-provision income $80,280   $81,155   $65,562   $62,882   $65,397  
           
Diluted income per common share reconciliation          
Diluted income per common share (GAAP) $0.66   $0.52   $0.32   $0.40   $0.61  
Merger-related and other charges 0.02   0.03      0.01     
Diluted income per common share - operating $0.68   $0.55   $0.32   $0.41   $0.61  
           
Book value per common share reconciliation          
Book value per common share (GAAP) $21.90   $21.45   $21.22   $20.80   $20.53  
Effect of goodwill and other intangibles (4.34)  (4.36)  (4.27)  (4.28)  (4.25) 
Tangible book value per common share $17.56   $17.09   $16.95   $16.52   $16.28  
           
Return on tangible common equity reconciliation          
Return on common equity (GAAP) 12.36 % 10.06 % 6.17 % 7.85 % 12.07 %
Merger-related and other charges 0.41   0.63   0.08   0.16   (0.01) 
Return on common equity - operating 12.77   10.69   6.25   8.01   12.06  
Effect of goodwill and other intangibles 3.46   2.83   1.84   2.56   3.43  
Return on tangible common equity - operating 16.23 % 13.52 % 8.09 % 10.57 % 15.49 %
           
Return on assets reconciliation          
Return on assets (GAAP) 1.30 % 1.07 % 0.71 % 0.99 % 1.50 %
Merger-related and other charges 0.04   0.07   0.01   0.02     
Return on assets - operating 1.34 % 1.14 % 0.72 % 1.01 % 1.50 %
           
Return on assets to return on assets- pre-tax pre-provision reconciliation          
Return on assets (GAAP) 1.30 % 1.07 % 0.71 % 0.99 % 1.50 %
Income tax expense 0.40   0.28   0.20   0.27   0.39  
Provision for credit losses 0.07   0.51   0.95   0.69   0.11  
Return on assets - pre-tax pre-provision 1.77   1.86   1.86   1.95   2.00  
Merger-related and other charges 0.05   0.07   0.01   0.03     
Return on assets - pre-tax pre-provision, excluding merger-related and other charges 1.82 % 1.93 % 1.87 % 1.98 % 2.00 %
           
Efficiency ratio reconciliation          
Efficiency ratio (GAAP) 56.73 % 54.14 % 55.86 % 56.15 % 54.87 %
Merger-related and other charges (1.31)  (1.90)  (0.27)  (0.56)  0.05  
Efficiency ratio - operating 55.42 % 52.24 % 55.59 % 55.59 % 54.92 %
           
Tangible common equity to tangible assets reconciliation          
Equity to total assets (GAAP) 11.29 % 11.47 % 11.81 % 12.54 % 12.66 %
Effect of goodwill and other intangibles (1.94)  (2.02)  (2.05)  (2.32)  (2.34) 
Effect of preferred equity (0.54)  (0.56)  (0.64)       
Tangible common equity to tangible assets 8.81 % 8.89 % 9.12 % 10.22 % 10.32 %


UNITED COMMUNITY BANKS, INC.          
Non-GAAP Performance Measures Reconciliation          
Selected Financial Information- Annual For the Twelve Months Ended December 31,
(in thousands, except per share data) 2020 2019 2018 2017 2016
Expense reconciliation          
Expenses (GAAP) $367,989   $322,245   $306,285   $267,611   $241,289  
Merger-related and other charges (7,018)  (7,357)  (7,345)  (14,662)  (8,122) 
Expenses - operating $360,971   $314,888   $298,940   $252,949   $233,167  
           
Net income reconciliation          
Net income (GAAP) $164,089   $185,721   $166,111   $67,821   $100,656  
Merger-related and other charges 7,018   7,357   7,345   14,662   8,122  
Income tax benefit of merger-related and other charges (1,340)  (1,695)  (1,494)  (3,745)  (3,074) 
Impact of tax reform on remeasurement of deferred tax asset          38,199     
Impairment of deferred tax asset on canceled non-qualified stock options             976  
Release of disproportionate tax effects lodged in OCI          3,400     
Net income - operating $169,767   $191,383   $171,962   $120,337   $106,680  
           
Net income to pre-tax pre-provision income reconciliation          
Net income (GAAP) $164,089   $185,721   $166,111   $67,821   $100,656  
Income tax expense 45,356   52,991   49,815   105,013   62,336  
Provision for credit losses 80,434   13,150   9,500   3,800   (800) 
Pre-tax pre-provision income $289,879   $251,862   $225,426   $176,634   $162,192  
           
Diluted income per common share reconciliation          
Diluted income per common share (GAAP) $1.91   $2.31   $2.07   $0.92   $1.40  
Merger-related and other charges 0.07   0.07   0.07   0.14   0.07  
Impact of tax reform on remeasurement of deferred tax asset          0.52     
Impairment of deferred tax asset on canceled non-qualified stock options             0.01  
Release of disproportionate tax effects lodged in OCI          0.05     
Diluted income per common share - operating $1.98   $2.38   $2.14   $1.63   $1.48  
           
Book value per common share reconciliation          
Book value per common share (GAAP) $21.90   $20.53   $18.24   $16.67   $15.06  
Effect of goodwill and other intangibles (4.34)  (4.25)  (4.00)  (3.02)  (2.11) 
Tangible book value per common share $17.56   $16.28   $14.24   $13.65   $12.95  
           
Return on tangible common equity reconciliation          
Return on common equity (GAAP) 9.25 % 11.89 % 11.60 % 5.67 % 9.41 %
Merger-related and other charges 0.33   0.36   0.41   0.92   0.48  
Impact of tax reform on remeasurement of deferred tax asset          3.20     
Impairment of deferred tax asset on canceled non-qualified stock options             0.09  
Release of disproportionate tax effects lodged in OCI          0.28     
Return on common equity - operating 9.58   12.25   12.01   10.07   9.98  
Effect of goodwill and other intangibles 2.66   3.56   3.68   1.95   1.88  
Return on tangible common equity - operating 12.24 % 15.81 % 15.69 % 12.02 % 11.86 %
           
Return on assets reconciliation          
Return on assets (GAAP) 1.04 % 1.46 % 1.35 % 0.62 % 1.00 %
Merger-related and other charges 0.03   0.05   0.05   0.09   0.05  
Impact of tax reform on remeasurement of deferred tax asset          0.35     
Impairment of deferred tax asset on canceled non-qualified stock options             0.01  
Release of disproportionate tax effects lodged in OCI          0.03     
Return on assets - operating 1.07 % 1.51 % 1.40 % 1.09 % 1.06 %
           
Return on assets to return on assets - pre-tax pre-provision reconciliation          
Return on assets (GAAP) 1.04 % 1.46 % 1.35 % 0.62 % 1.00 %
Income tax expense 0.29   0.43   0.41   0.95   0.62  
Provision for credit losses 0.52   0.10   0.08   0.03   (0.01) 
Return on assets - pre-tax pre-provision 1.85   1.99   1.84   1.60   1.61  
Merger-related and other charges 0.05   0.05   0.05   0.14   0.08  
Return on assets - pre-tax pre-provision 1.90 % 2.04 % 1.89 % 1.74 % 1.69 %
           
Efficiency ratio reconciliation          
Efficiency ratio (GAAP) 55.71 % 55.77 % 57.31 % 59.95 % 59.80 %
Merger-related and other charges (1.07)  (1.27)  (1.37)  (3.28)  (2.02) 
Efficiency ratio - operating 54.64 % 54.50 % 55.94 % 56.67 % 57.78 %
           
Tangible common equity to tangible assets reconciliation          
Equity to assets (GAAP) 11.29 % 12.66 % 11.59 % 10.94 % 10.05 %
Effect of goodwill and other intangibles (1.94)  (2.34)  (2.30)  (1.80)  (1.28) 
Effect of preferred equity (0.54)             
Tangible common equity to assets 8.81 % 10.32 % 9.29 % 9.14 % 8.77 %


UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Loan Portfolio Composition at Period-End                  
 2020 2019 Linked
 Year over
(in millions)Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
 Quarter 
Change
 Year
Change
LOANS BY CATEGORY             
Owner occupied commercial RE$2,090  $2,009  $1,759  $1,703  $1,720  $81   $370  
Income producing commercial RE2,541  2,493  2,178  2,065  2,008  48   533  
Commercial & industrial1,853  1,788  1,219  1,310  1,221  65   632  
Paycheck protection program646  1,317  1,095      (671)  646  
Commercial construction967  987  946  959  976  (20)  (9) 
Equipment financing864  823  779  761  745  41   119  
Total commercial8,961  9,417  7,976  6,798  6,670  (456)  2,291  
Residential mortgage1,285  1,270  1,152  1,128  1,118  15   167  
Home equity lines of credit697  707  654  668  661  (10)  36  
Residential construction281  257  230  216  236  24   45  
Consumer147  148  121  125  128  (1)  19  
Total loans$11,371  $11,799  $10,133  $8,935  $8,813  $(428)  $2,558  
              
LOANS BY MARKET             
North Georgia$955  $945  $951  $958  $967  $10   $(12) 
Atlanta1,889  1,853  1,852  1,820  1,762  36   127  
North Carolina1,281  1,246  1,171  1,124  1,156  35   125  
Coastal Georgia617  614  618  604  631  3   (14) 
Gainesville224  229  233  235  246  (5)  (22) 
East Tennessee415  420  433  425  421  (5)  (6) 
South Carolina1,947  1,870  1,778  1,774  1,708  77   239  
Florida1,435  1,453        (18)  1,435  
Commercial Banking Solutions2,608  3,169  3,097  1,995  1,922  (561)  686  
Total loans$11,371  $11,799  $10,133  $8,935  $8,813  $(428)  $2,558  
                              


UNITED COMMUNITY BANKS, INC.        
Financial Highlights        
Loan Portfolio Composition at Year-End        
(in millions)2020 2019 2018 2017 2016
LOANS BY CATEGORY         
Owner occupied commercial RE$2,090  $1,720  $1,648  $1,924  $1,650 
Income producing commercial RE2,541  2,008  1,812  1,595  1,282 
Commercial & industrial1,853  1,221  1,278  1,131  1,070 
Paycheck protection program646         
Commercial construction967  976  796  712  634 
Equipment financing864  745  565     
Total commercial8,961  6,670  6,099  5,362  4,636 
Residential mortgage1,285  1,118  1,049  974  857 
Home equity lines of credit697  661  694  731  655 
Residential construction281  236  211  183  190 
Consumer146  128  330  486  583 
Total loans$11,371  $8,813  $8,383  $7,736  $6,921 
          
LOANS BY MARKET         
North Georgia$955  $967  $981  $1,019  $1,097 
Atlanta1,889  1,762  1,507  1,510  1,399 
North Carolina1,281  1,156  1,072  1,049  545 
Coastal Georgia617  631  588  630  581 
Gainesville224  246  247  248  248 
East Tennessee415  421  477  475  504 
South Carolina1,947  1,708  1,645  1,486  1,233 
Florida1,435         
Commercial Banking Solutions2,608  1,922  1,658  961  855 
Indirect auto    208  358  459 
Total loans$11,371  $8,813  $8,383  $7,736  $6,921 
                    


UNITED COMMUNITY BANKS, INC.      
Financial Highlights      
Credit Quality      
  2020
(in thousands) Fourth
Quarter
 Third
Quarter
 Second
Quarter
NONACCRUAL LOANS      
Owner occupied RE $8,582  $11,075  $10,710 
Income producing RE 15,149  12,230  11,274 
Commercial & industrial 16,634  3,534  3,432 
Commercial construction 1,745  1,863  2,290 
Equipment financing 3,405  3,137  3,119 
Total commercial 45,515  31,839  30,825 
Residential mortgage 12,858  13,864  13,185 
Home equity lines of credit 2,487  2,642  3,138 
Residential construction 514  479  500 
Consumer 225  260  373 
Total $61,599  $49,084  $48,021 
             


  2020
  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 $(277)  (0.05)% $(725)  (0.14)% $(466)  (0.11)%
Income producing RE (1,718)  (0.27)  1,785   0.29   4,548   0.86  
Commercial & industrial 2,294   0.33   (105)  (0.01)  (37)  (0.01) 
Commercial construction (129)  (0.05)  (171)  (0.07)  122   0.05  
Equipment financing 1,595   0.75   1,993   0.93   1,665   0.87  
Total commercial 1,765   0.08   2,777   0.12   5,832   0.31  
Residential mortgage (25)  (0.01)  (35)  (0.01)  (6)    
Home equity lines of credit (151)  (0.09)  (125)  (0.07)  (98)  (0.06) 
Residential construction (47)  (0.07)        (5)  (0.01) 
Consumer (27)  (0.07)  (79)  (0.22)  426   1.39  
Total $1,515   0.05   $2,538   0.09   $6,149   0.25  
             
(1) Annualized.            
             


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)


(in thousands, except share and per share data) December 31,
2020
 December 31,
2019
ASSETS    
Cash and due from banks $148,896  $125,844 
Interest-bearing deposits in banks 1,459,723  389,362 
Cash and cash equivalents 1,608,619  515,206 
Debt securities available-for-sale 3,224,721  2,274,581 
Debt securities held-to-maturity (fair value $437,193 and $287,904, respectively) 420,361  283,533 
Loans held for sale at fair value 105,433  58,484 
Loans and leases held for investment 11,370,815  8,812,553 
Less allowance for credit losses - loans and leases (137,010) (62,089)
Loans and leases, net 11,233,805  8,750,464 
Premises and equipment, net 218,489  215,976 
Bank owned life insurance 201,969  202,664 
Accrued interest receivable 47,672  32,660 
Net deferred tax asset 38,411  34,059 
Derivative financial instruments 86,666  35,007 
Goodwill and other intangible assets, net 381,823  342,247 
Other assets 226,405  171,135 
Total assets $17,794,374  $12,916,016 
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $5,390,291  $3,477,979 
NOW and interest-bearing demand 3,346,490  2,461,895 
Money market 3,550,335  2,230,628 
Savings 950,854  706,467 
Time 1,704,290  1,859,574 
Brokered 290,098  160,701 
Total deposits 15,232,358  10,897,244 
Long-term debt 326,956  212,664 
Derivative financial instruments 29,003  15,516 
Accrued expenses and other liabilities 198,527  154,900 
Total liabilities 15,786,844  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 and no shares issued and outstanding, respectively
 96,422   
Common stock, $1 par value; 150,000,000 shares authorized;
86,675,279 and 79,013,729 shares issued and outstanding, respectively
 86,675  79,014 
Common stock issuable; 600,834 and 664,640 shares, respectively 10,855  11,491 
Capital surplus 1,638,999  1,496,641 
Retained earnings 136,869  40,152 
Accumulated other comprehensive income 37,710  8,394 
Total shareholders’ equity 2,007,530  1,635,692 
Total liabilities and shareholders’ equity $17,794,374  $12,916,016 
         
         


UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)


  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
(in thousands, except per share data) 2020 2019 2020 2019
Interest revenue:        
Loans, including fees $141,351  $118,464  $494,212  $476,039 
Investment securities, including tax exempt of $2,055 and $1,155, and $7,043 and $4,564 14,507  16,846  62,074  74,484 
Deposits in banks and short-term investments 213  1,109  1,710  2,183 
Total interest revenue 156,071  136,419  557,996  552,706 
Interest expense:        
Deposits:        
NOW and interest-bearing demand 1,495  3,382  7,735  13,665 
Money market 2,196  4,883  13,165  18,983 
Savings 48  34  169  149 
Time 2,689  8,372  20,703  34,059 
Deposits 6,428  16,671  41,772  66,856 
Short-term borrowings     3  838 
Federal Home Loan Bank advances   2  28  2,697 
Long-term debt 4,248  3,108  14,434  12,921 
Total interest expense 10,676  19,781  56,237  83,312 
Net interest revenue 145,395  116,638  501,759  469,394 
Provision for credit losses 2,907  3,500  80,434  13,150 
Net interest revenue after provision for credit losses 142,488  113,138  421,325  456,244 
Noninterest income:        
Service charges and fees 8,508  9,368  32,401  36,797 
Mortgage loan gains and related fees 18,974  9,395  76,087  27,145 
Brokerage fees and wealth management fees 3,221  1,526  9,240  6,150 
Gains from other loan sales, net 1,531  2,455  5,420  6,867 
Securities gains (losses), net 2  (903) 748  (1,021)
Other 9,139  8,342  32,213  28,775 
Total noninterest income 41,375  30,183  156,109  104,713 
Total revenue 183,863  143,321  577,434  560,957 
Noninterest expenses:        
Salaries and employee benefits 61,824  50,279  224,060  196,440 
Occupancy 7,082  5,926  25,791  23,350 
Communications and equipment 7,687  6,380  27,149  24,613 
FDIC assessments and other regulatory charges 1,594  1,330  5,982  4,901 
Professional fees 4,029  5,098  18,032  17,028 
Lending and loan servicing expense 2,468  1,907  10,993  9,416 
Outside services - electronic banking 1,997  1,919  7,513  7,020 
Postage, printing and supplies 1,793  1,637  6,779  6,370 
Advertising and public relations 9,891  1,914  15,203  6,170 
Amortization of intangibles 1,042  1,093  4,168  4,938 
Merger-related and other charges 2,452  (74) 7,018  6,907 
Other 4,631  4,015  15,301  15,092 
Total noninterest expenses 106,490  81,424  367,989  322,245 
Net income before income taxes 77,373  61,897  209,445  238,712 
Income tax expense 17,871  12,885  45,356  52,991 
Net income $59,502  $49,012  $164,089  $185,721 
Preferred stock dividends 1,719    3,533   
Undistributed earnings allocated to unvested shares 532  395  1,287  1,375 
Net income available to common shareholders $57,251  $48,617  $159,269  $184,346 
         
Net income per common share:        
Basic $0.66  $0.61  $1.91  $2.31 
Diluted 0.66  0.61  1.91  2.31 
Weighted average common shares outstanding:        
Basic 87,258  79,659  83,184  79,700 
Diluted 87,333  79,669  83,248  79,708 


Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,


  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) $11,595,484  $140,687  4.83 % $8,890,272  $118,262  5.28%
Taxable securities (3) 3,039,275  12,452  1.64   2,306,065  15,691  2.72 
Tax-exempt securities (FTE) (1)(3) 286,490  2,759  3.85   179,744  1,551  3.45 
Federal funds sold and other interest-earning assets 1,472,668  1,132  0.31   456,055  1,586  1.39 
Total interest-earning assets (FTE) 16,393,917  157,030  3.81   11,832,136  137,090  4.60 
             
Noninterest-earning assets:            
Allowance for loan losses (138,313)     (63,601)    
Cash and due from banks 143,694      120,936     
Premises and equipment 218,349      219,487     
Other assets (3) 1,080,180      836,586     
Total assets $17,697,827      $12,945,544     
             
Liabilities and Shareholders’ Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $3,281,984  1,495  0.18   $2,398,396  3,382  0.56 
Money market 3,698,734  2,196  0.24   2,321,352  4,883  0.83 
Savings 918,623  48  0.02   704,454  34  0.02 
Time 1,748,099  2,711  0.62   1,880,174  7,975  1.68 
Brokered time deposits 83,750  (22) (0.10)  85,781  397  1.84 
Total interest-bearing deposits 9,731,190  6,428  0.26   7,390,157  16,671  0.89 
Federal funds purchased and other borrowings 54            
Federal Home Loan Bank advances        435  2  1.82 
Long-term debt 327,236  4,248  5.16   232,726  3,108  5.30 
Total borrowed funds 327,290  4,248  5.16   233,161  3,110  5.29 
Total interest-bearing liabilities 10,058,480  10,676  0.42   7,623,318  19,781  1.03 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits 5,325,858      3,533,746     
Other liabilities 319,158      165,148     
Total liabilities 15,703,496      11,322,212     
Shareholders’ equity 1,994,331      1,623,332     
Total liabilities and shareholders’ equity $17,697,827      $12,945,544     
             
Net interest revenue (FTE)   $146,354      $117,309   
Net interest-rate spread (FTE)     3.39 %     3.57%
Net interest margin (FTE) (4)     3.55 %     3.93%
                

(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 $72.6 million in 2020 and $36.0 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 Twelve Months Ended December 31,


  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) $10,466,653  $492,223  4.70% $8,708,035  $475,803  5.46%
Taxable securities (3) 2,532,750  55,031  2.17  2,475,102  69,920  2.82 
Tax-exempt securities (FTE) (1)(3) 219,668  9,458  4.31  171,549  6,130  3.57 
Federal funds sold and other interest-earning assets 1,007,059  4,753  0.47  254,370  3,499  1.38 
Total interest-earning assets (FTE) 14,226,130  561,465  3.95  11,609,056  555,352  4.78 
             
Non-interest-earning assets:            
Allowance for loan losses (106,812)     (62,900)    
Cash and due from banks 136,702      121,649     
Premises and equipment 217,751      220,523     
Other assets (3) 993,584      798,649     
Total assets $15,467,355      $12,686,977     
             
Liabilities and Shareholders’ Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $2,759,383  7,735  0.28  $2,249,713  13,665  0.61 
Money market 3,023,928  13,165  0.44  2,221,478  18,983  0.85 
Savings 821,344  169  0.02  690,028  149  0.02 
Time 1,832,319  20,146  1.10  1,791,319  28,313  1.58 
Brokered time deposits 97,788  557  0.57  240,646  5,746  2.39 
Total interest-bearing deposits 8,534,762  41,772  0.49  7,193,184  66,856  0.93 
Federal funds purchased and other borrowings 1,220  3  0.25  33,504  838  2.50 
Federal Home Loan Bank advances 749  28  3.74  106,973  2,697  2.52 
Long-term debt 274,069  14,434  5.27  247,732  12,921  5.22 
Total borrowed funds 276,038  14,465  5.24  388,209  16,456  4.24 
Total interest-bearing liabilities 8,810,800  56,237  0.64  7,581,393  83,312  1.10 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits 4,600,152      3,385,431     
Other liabilities 235,120      164,550     
Total liabilities 13,646,072      11,131,374     
Shareholders’ equity 1,821,283      1,555,603     
Total liabilities and shareholders’ equity $15,467,355      $12,686,977     
             
Net interest revenue (FTE)   $505,228      $472,040   
Net interest-rate spread (FTE)     3.31%     3.68%
Net interest margin (FTE) (4)     3.55%     4.07%

(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)   Securities available for sale are shown at amortized cost. Pretax unrealized gains of $67.3 million in 2020 and $12.8 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 $17.8 billion in assets, and 160 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. United was also named "Best Banks to Work For" by American Banker in 2020 for the fourth year in a row based on employee satisfaction. 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