GREENVILLE, S.C., July 23, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its second quarter financial results, including solid year-over-year loan and deposit growth, improved operating efficiency and strong asset quality. Diluted earnings per share were $0.55, an increase of $0.06 or 12% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.59, up 11% over last year. United’s return on assets (“ROA”) was 1.40% and its return on common equity was 11.5% for the quarter. On an operating basis, United’s ROA was 1.50% and its return on tangible common equity was 15.9%.
In the second quarter, loans grew at a 7% annualized rate, or at 9% annualized excluding the planned runoff of the discontinued indirect auto portfolio. With this loan growth and continued balance sheet remixing opportunities, United also benefitted from net interest margin expansion during the quarter. Core transaction deposits grew by $167 million, or 9% annualized, and total customer deposits increased by $129 million during the quarter. All loan and deposit growth results noted above exclude the acquisition of First Madison Bank & Trust, which closed on May 1. Finally, United’s combination of revenue growth and expense management resulted in a 57.28% efficiency ratio, or 54.42% on an operating basis, which represented a new Company best.
“Our United bankers continue to execute on our plans and deliver outstanding results,” said Lynn Harton, Chairman and CEO of United. “I couldn’t be more proud of what they are doing to deliver both world class customer service and top quartile financial performance. I am also pleased that First Madison Bank & Trust in Athens, Georgia is now officially part of the United team. We look forward to growing our business together in the attractive Athens, Georgia market.”
Second Quarter 2019 Financial Highlights:
- EPS growth of 12% versus last year, or 11% on an operating basis
- Return on assets of 1.40%, or 1.50%, excluding merger-related and other charges
- Return on common equity of 11.5%
- Return on tangible common equity of 15.9%, excluding merger-related and other charges
- Loan growth, excluding planned runoff of the indirect portfolio and the acquisition of First Madison Bank & Trust, of 9% on an annualized basis
- Loan growth of $153 million which was more than funded by core transaction deposit growth of $167 million
- Expansion of the net interest margin to 4.12%, up 2 basis points from the first quarter of 2019 and up 22 basis points from a year ago
- Efficiency ratio of 57.3%, or 54.4%, excluding merger-related and other charges
- Net charge-offs of 11 basis points, improved four basis points from last quarter and at historically low levels.
- Nonperforming assets of 0.21% of total assets, compared with 0.20% at March 31, 2019 and 0.20% at June 30, 2018
Conference Call
United will hold a conference call, Wednesday, July 24, 2019, 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 8388603. 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 | ||||||||||||||||||||||||||||||||||||
| Second | For the Six | |||||||||||||||||||||||||||||||||||
| 2019 | 2018 | Quarter | Months Ended | YTD | ||||||||||||||||||||||||||||||||
| Second | First | Fourth | Third | Second | 2019-2018 | June 30, | 2019-2018 | |||||||||||||||||||||||||||||
| (in thousands, except per share data) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2019 | 2018 | Change | |||||||||||||||||||||||||||
| INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
| Interest revenue | $ | 139,156 | $ | 136,516 | $ | 133,854 | $ | 128,721 | $ | 122,215 | $ | 275,672 | $ | 237,505 | ||||||||||||||||||||||
| Interest expense | 21,372 | 20,882 | 18,975 | 16,611 | 13,739 | 42,254 | 25,744 | |||||||||||||||||||||||||||||
| Net interest revenue | 117,784 | 115,634 | 114,879 | 112,110 | 108,476 | 9 | % | 233,418 | 211,761 | 10 | % | |||||||||||||||||||||||||
| Provision for credit losses | 3,250 | 3,300 | 2,100 | 1,800 | 1,800 | 81 | 6,550 | 5,600 | 17 | |||||||||||||||||||||||||||
| Noninterest income | 24,531 | 20,968 | 23,045 | 24,180 | 23,340 | 5 | 45,499 | 45,736 | (1 | ) | ||||||||||||||||||||||||||
| Total revenue | 139,065 | 133,302 | 135,824 | 134,490 | 130,016 | 7 | 272,367 | 251,897 | 8 | |||||||||||||||||||||||||||
| Expenses | 81,813 | 76,084 | 78,242 | 77,718 | 76,850 | 6 | 157,897 | 150,325 | 5 | |||||||||||||||||||||||||||
| Income before income tax expense | 57,252 | 57,218 | 57,582 | 56,772 | 53,166 | 8 | 114,470 | 101,572 | 13 | |||||||||||||||||||||||||||
| Income tax expense | 13,167 | 12,956 | 12,445 | 13,090 | 13,532 | (3 | ) | 26,123 | 24,280 | 8 | ||||||||||||||||||||||||||
| Net income | 44,085 | 44,262 | 45,137 | 43,682 | 39,634 | 11 | 88,347 | 77,292 | 14 | |||||||||||||||||||||||||||
| Merger-related and other charges | 4,087 | 739 | 1,234 | 592 | 2,873 | 4,826 | 5,519 | |||||||||||||||||||||||||||||
| Income tax benefit of merger-related and other charges | (940 | ) | (172 | ) | (604 | ) | (141 | ) | (121 | ) | (1,112 | ) | (749 | ) | ||||||||||||||||||||||
| Net income - operating (1) | $ | 47,232 | $ | 44,829 | $ | 45,767 | $ | 44,133 | $ | 42,386 | 11 | $ | 92,061 | $ | 82,062 | 12 | ||||||||||||||||||||
| PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.55 | $ | 0.55 | $ | 0.56 | $ | 0.54 | $ | 0.49 | 12 | $ | 1.10 | $ | 0.97 | 13 | ||||||||||||||||||||
| Diluted net income - operating (1) | 0.59 | 0.56 | 0.57 | 0.55 | 0.53 | 11 | 1.15 | 1.03 | 12 | |||||||||||||||||||||||||||
| Cash dividends declared | 0.17 | 0.16 | 0.16 | 0.15 | 0.15 | 13 | 0.33 | 0.27 | 22 | |||||||||||||||||||||||||||
| Book value | 19.65 | 18.93 | 18.24 | 17.56 | 17.29 | 14 | 19.65 | 17.29 | 14 | |||||||||||||||||||||||||||
| Tangible book value (3) | 15.38 | 14.93 | 14.24 | 13.54 | 13.25 | 16 | 15.38 | 13.25 | 16 | |||||||||||||||||||||||||||
| Key performance ratios: | ||||||||||||||||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 11.45 | % | 11.85 | % | 12.08 | % | 11.96 | % | 11.20 | % | 11.65 | % | 11.15 | % | ||||||||||||||||||||||
| Return on common equity - operating (1)(2)(4) | 12.27 | 12.00 | 12.25 | 12.09 | 11.97 | 12.14 | 11.84 | |||||||||||||||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 15.88 | 15.46 | 15.88 | 15.81 | 15.79 | 15.67 | 15.53 | |||||||||||||||||||||||||||||
| Return on assets - GAAP (4) | 1.40 | 1.44 | 1.43 | 1.41 | 1.30 | 1.42 | 1.28 | |||||||||||||||||||||||||||||
| Return on assets - operating (1)(4) | 1.50 | 1.45 | 1.45 | 1.42 | 1.39 | 1.48 | 1.36 | |||||||||||||||||||||||||||||
| Dividend payout ratio - GAAP | 30.91 | 29.09 | 28.57 | 27.78 | 30.61 | 30.00 | 27.84 | |||||||||||||||||||||||||||||
| Dividend payout ratio - operating (1) | 28.81 | 28.57 | 28.07 | 27.27 | 28.30 | 28.70 | 26.21 | |||||||||||||||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 4.12 | 4.10 | 3.97 | 3.95 | 3.90 | 4.11 | 3.85 | |||||||||||||||||||||||||||||
| Efficiency ratio - GAAP | 57.28 | 55.32 | 56.73 | 56.82 | 57.94 | 56.32 | 57.89 | |||||||||||||||||||||||||||||
| Efficiency ratio - operating (1) | 54.42 | 54.78 | 55.83 | 56.39 | 55.77 | 54.60 | 55.76 | |||||||||||||||||||||||||||||
| Average equity to average assets | 12.14 | 11.82 | 11.35 | 11.33 | 11.21 | 11.98 | 11.13 | |||||||||||||||||||||||||||||
| Average tangible common equity to average assets (3) | 9.79 | 9.53 | 9.04 | 8.97 | 8.83 | 9.66 | 8.82 | |||||||||||||||||||||||||||||
| Tangible common equity to risk-weighted assets (3)(5) | 12.36 | 12.48 | 12.00 | 11.61 | 11.36 | 12.36 | 11.36 | |||||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||||||||||||||||||
| Nonperforming loans | $ | 26,597 | $ | 23,624 | $ | 23,778 | $ | 22,530 | $ | 21,817 | 22 | $ | 26,597 | $ | 21,817 | 22 | ||||||||||||||||||||
| Foreclosed properties | 75 | 1,127 | 1,305 | 1,336 | 2,597 | (97 | ) | 75 | 2,597 | (97 | ) | |||||||||||||||||||||||||
| Total nonperforming assets (NPAs) | 26,672 | 24,751 | 25,083 | 23,866 | 24,414 | 9 | 26,672 | 24,414 | 9 | |||||||||||||||||||||||||||
| Allowance for loan losses | 62,204 | 61,642 | 61,203 | 60,940 | 61,071 | 2 | 62,204 | 61,071 | 2 | |||||||||||||||||||||||||||
| Net charge-offs | 2,438 | 3,130 | 1,787 | 1,466 | 1,359 | 79 | 5,568 | 2,860 | 95 | |||||||||||||||||||||||||||
| Allowance for loan losses to loans | 0.70 | % | 0.73 | % | 0.73 | % | 0.74 | % | 0.74 | % | 0.70 | % | 0.74 | % | ||||||||||||||||||||||
| Net charge-offs to average loans (4) | 0.11 | 0.15 | 0.09 | 0.07 | 0.07 | 0.13 | 0.07 | |||||||||||||||||||||||||||||
| NPAs to loans and foreclosed properties | 0.30 | 0.29 | 0.30 | 0.29 | 0.30 | 0.30 | 0.30 | |||||||||||||||||||||||||||||
| NPAs to total assets | 0.21 | 0.20 | 0.20 | 0.19 | 0.20 | 0.21 | 0.20 | |||||||||||||||||||||||||||||
| AVERAGE BALANCES ($ in millions) | ||||||||||||||||||||||||||||||||||||
| Loans | $ | 8,670 | $ | 8,430 | $ | 8,306 | $ | 8,200 | $ | 8,177 | 6 | $ | 8,551 | $ | 8,086 | 6 | ||||||||||||||||||||
| Investment securities | 2,674 | 2,883 | 3,004 | 2,916 | 2,802 | (5 | ) | 2,778 | 2,836 | (2 | ) | |||||||||||||||||||||||||
| Earning assets | 11,534 | 11,498 | 11,534 | 11,320 | 11,193 | 3 | 11,516 | 11,135 | 3 | |||||||||||||||||||||||||||
| Total assets | 12,608 | 12,509 | 12,505 | 12,302 | 12,213 | 3 | 12,559 | 12,163 | 3 | |||||||||||||||||||||||||||
| Deposits | 10,493 | 10,361 | 10,306 | 9,950 | 9,978 | 5 | 10,427 | 9,869 | 6 | |||||||||||||||||||||||||||
| Shareholders’ equity | 1,531 | 1,478 | 1,420 | 1,394 | 1,370 | 12 | 1,505 | 1,353 | 11 | |||||||||||||||||||||||||||
| Common shares - basic (thousands) | 79,673 | 79,807 | 79,884 | 79,806 | 79,753 | - | 79,739 | 79,477 | - | |||||||||||||||||||||||||||
| Common shares - diluted (thousands) | 79,678 | 79,813 | 79,890 | 79,818 | 79,755 | - | 79,745 | 79,487 | - | |||||||||||||||||||||||||||
| AT PERIOD END ($ in millions) | ||||||||||||||||||||||||||||||||||||
| Loans | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 8,220 | 8 | $ | 8,838 | $ | 8,220 | 8 | ||||||||||||||||||||
| Investment securities | 2,620 | 2,720 | 2,903 | 2,873 | 2,834 | (8 | ) | 2,620 | 2,834 | (8 | ) | |||||||||||||||||||||||||
| Total assets | 12,779 | 12,506 | 12,573 | 12,405 | 12,386 | 3 | 12,779 | 12,386 | 3 | |||||||||||||||||||||||||||
| Deposits | 10,591 | 10,534 | 10,535 | 10,229 | 9,966 | 6 | 10,591 | 9,966 | 6 | |||||||||||||||||||||||||||
| Shareholders’ equity | 1,566 | 1,508 | 1,458 | 1,402 | 1,379 | 14 | 1,566 | 1,379 | 14 | |||||||||||||||||||||||||||
| Common shares outstanding (thousands) | 79,075 | 79,035 | 79,234 | 79,202 | 79,138 | - | 79,075 | 79,138 | - | |||||||||||||||||||||||||||
| (1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits. (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) Second quarter 2019 ratio is preliminary. | ||||||||||||||||||||||||||||||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||||||||
| Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||||||||||
| 2019 | 2018 | For the Six Months Ended | ||||||||||||||||||||||||||
| Second | First | Fourth | Third | Second | June 30, | |||||||||||||||||||||||
| (in thousands, except per share data) | Quarter | Quarter | Quarter | Quarter | Quarter | 2019 | 2018 | |||||||||||||||||||||
| Expense reconciliation | ||||||||||||||||||||||||||||
| Expenses (GAAP) | $ | 81,813 | $ | 76,084 | $ | 78,242 | $ | 77,718 | $ | 76,850 | $ | 157,897 | $ | 150,325 | ||||||||||||||
| Merger-related and other charges | (4,087 | ) | (739 | ) | (1,234 | ) | (592 | ) | (2,873 | ) | (4,826 | ) | (5,519 | ) | ||||||||||||||
| Expenses - operating | $ | 77,726 | $ | 75,345 | $ | 77,008 | $ | 77,126 | $ | 73,977 | $ | 153,071 | $ | 144,806 | ||||||||||||||
| Net income reconciliation | ||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 44,085 | $ | 44,262 | $ | 45,137 | $ | 43,682 | $ | 39,634 | $ | 88,347 | $ | 77,292 | ||||||||||||||
| Merger-related and other charges | 4,087 | 739 | 1,234 | 592 | 2,873 | 4,826 | 5,519 | |||||||||||||||||||||
| Income tax benefit of merger-related and other charges | (940 | ) | (172 | ) | (604 | ) | (141 | ) | (121 | ) | (1,112 | ) | (749 | ) | ||||||||||||||
| Net income - operating | $ | 47,232 | $ | 44,829 | $ | 45,767 | $ | 44,133 | $ | 42,386 | $ | 92,061 | $ | 82,062 | ||||||||||||||
| Diluted income per common share reconciliation | ||||||||||||||||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.55 | $ | 0.55 | $ | 0.56 | $ | 0.54 | $ | 0.49 | $ | 1.10 | $ | 0.97 | ||||||||||||||
| Merger-related and other charges | 0.04 | 0.01 | 0.01 | 0.01 | 0.04 | 0.05 | 0.06 | |||||||||||||||||||||
| Diluted income per common share - operating | $ | 0.59 | $ | 0.56 | $ | 0.57 | $ | 0.55 | $ | 0.53 | $ | 1.15 | $ | 1.03 | ||||||||||||||
| Book value per common share reconciliation | ||||||||||||||||||||||||||||
| Book value per common share (GAAP) | $ | 19.65 | $ | 18.93 | $ | 18.24 | $ | 17.56 | $ | 17.29 | $ | 19.65 | $ | 17.29 | ||||||||||||||
| Effect of goodwill and other intangibles | (4.27 | ) | (4.00 | ) | (4.00 | ) | (4.02 | ) | (4.04 | ) | (4.27 | ) | (4.04 | ) | ||||||||||||||
| Tangible book value per common share | $ | 15.38 | $ | 14.93 | $ | 14.24 | $ | 13.54 | $ | 13.25 | $ | 15.38 | $ | 13.25 | ||||||||||||||
| Return on tangible common equity reconciliation | ||||||||||||||||||||||||||||
| Return on common equity (GAAP) | 11.45 | % | 11.85 | % | 12.08 | % | 11.96 | % | 11.20 | % | 11.65 | % | 11.15 | % | ||||||||||||||
| Merger-related and other charges | 0.82 | 0.15 | 0.17 | 0.13 | 0.77 | 0.49 | 0.69 | |||||||||||||||||||||
| Return on common equity - operating | 12.27 | 12.00 | 12.25 | 12.09 | 11.97 | 12.14 | 11.84 | |||||||||||||||||||||
| Effect of goodwill and other intangibles | 3.61 | 3.46 | 3.63 | 3.72 | 3.82 | 3.53 | 3.69 | |||||||||||||||||||||
| Return on tangible common equity - operating | 15.88 | % | 15.46 | % | 15.88 | % | 15.81 | % | 15.79 | % | 15.67 | % | 15.53 | % | ||||||||||||||
| Return on assets reconciliation | ||||||||||||||||||||||||||||
| Return on assets (GAAP) | 1.40 | % | 1.44 | % | 1.43 | % | 1.41 | % | 1.30 | % | 1.42 | % | 1.28 | % | ||||||||||||||
| Merger-related and other charges | 0.10 | 0.01 | 0.02 | 0.01 | 0.09 | 0.06 | 0.08 | |||||||||||||||||||||
| Return on assets - operating | 1.50 | % | 1.45 | % | 1.45 | % | 1.42 | % | 1.39 | % | 1.48 | % | 1.36 | % | ||||||||||||||
| Dividend payout ratio reconciliation | ||||||||||||||||||||||||||||
| Dividend payout ratio (GAAP) | 30.91 | % | 29.09 | % | 28.57 | % | 27.78 | % | 30.61 | % | 30.00 | % | 27.84 | % | ||||||||||||||
| Merger-related and other charges | (2.10 | ) | (0.52 | ) | (0.50 | ) | (0.51 | ) | (2.31 | ) | (1.30 | ) | (1.63 | ) | ||||||||||||||
| Dividend payout ratio - operating | 28.81 | % | 28.57 | % | 28.07 | % | 27.27 | % | 28.30 | % | 28.70 | % | 26.21 | % | ||||||||||||||
| Efficiency ratio reconciliation | ||||||||||||||||||||||||||||
| Efficiency ratio (GAAP) | 57.28 | % | 55.32 | % | 56.73 | % | 56.82 | % | 57.94 | % | 56.32 | % | 57.89 | % | ||||||||||||||
| Merger-related and other charges | (2.86 | ) | (0.54 | ) | (0.90 | ) | (0.43 | ) | (2.17 | ) | (1.72 | ) | (2.13 | ) | ||||||||||||||
| Efficiency ratio - operating | 54.42 | % | 54.78 | % | 55.83 | % | 56.39 | % | 55.77 | % | 54.60 | % | 55.76 | % | ||||||||||||||
| Average equity to average assets reconciliation | ||||||||||||||||||||||||||||
| Average equity to assets (GAAP) | 12.14 | % | 11.82 | % | 11.35 | % | 11.33 | % | 11.21 | % | 11.98 | % | 11.13 | % | ||||||||||||||
| Effect of goodwill and other intangibles | (2.35 | ) | (2.29 | ) | (2.31 | ) | (2.36 | ) | (2.38 | ) | (2.32 | ) | (2.31 | ) | ||||||||||||||
| Average tangible common equity to average assets | 9.79 | % | 9.53 | % | 9.04 | % | 8.97 | % | 8.83 | % | 9.66 | % | 8.82 | % | ||||||||||||||
| Tangible common equity to risk-weighted assets reconciliation (1) | ||||||||||||||||||||||||||||
| Tier 1 capital ratio (Regulatory) | 12.36 | % | 12.69 | % | 12.42 | % | 12.25 | % | 11.94 | % | 12.36 | % | 11.94 | % | ||||||||||||||
| Effect of other comprehensive income | 0.07 | (0.17 | ) | (0.44 | ) | (0.68 | ) | (0.57 | ) | 0.07 | (0.57 | ) | ||||||||||||||||
| Effect of deferred tax limitation | 0.18 | 0.22 | 0.28 | 0.30 | 0.33 | 0.18 | 0.33 | |||||||||||||||||||||
| Effect of trust preferred | (0.25 | ) | (0.26 | ) | (0.26 | ) | (0.26 | ) | (0.34 | ) | (0.25 | ) | (0.34 | ) | ||||||||||||||
| Tangible common equity to risk-weighted assets | 12.36 | % | 12.48 | % | 12.00 | % | 11.61 | % | 11.36 | % | 12.36 | % | 11.36 | % | ||||||||||||||
| (1) Second quarter 2019 ratios are preliminary. | ||||||||||||||||||||||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| Loan Portfolio Composition at Period-End | ||||||||||||||||||||||
| Year | ||||||||||||||||||||||
| 2019 | 2018 | Linked | over | |||||||||||||||||||
| Second | First | Fourth | Third | Second | Quarter | Year | ||||||||||||||||
| (in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Change | |||||||||||||||
| LOANS BY CATEGORY | ||||||||||||||||||||||
| Owner occupied commercial RE | $ | 1,658 | $ | 1,620 | $ | 1,648 | $ | 1,673 | $ | 1,682 | $ | 38 | $ | (24 | ) | |||||||
| Income producing commercial RE | 1,939 | 1,867 | 1,812 | 1,788 | 1,821 | 72 | 118 | |||||||||||||||
| Commercial & industrial | 1,299 | 1,284 | 1,278 | 1,194 | 1,193 | 15 | 106 | |||||||||||||||
| Commercial construction | 983 | 866 | 796 | 761 | 735 | 117 | 248 | |||||||||||||||
| Equipment financing | 674 | 606 | 565 | 509 | 465 | 68 | 209 | |||||||||||||||
| Total commercial | 6,553 | 6,243 | 6,099 | 5,925 | 5,896 | 310 | 657 | |||||||||||||||
| Residential mortgage | 1,108 | 1,064 | 1,049 | 1,035 | 1,021 | 44 | 87 | |||||||||||||||
| Home equity lines of credit | 675 | 684 | 694 | 702 | 708 | (9 | ) | (33 | ) | |||||||||||||
| Residential construction | 219 | 200 | 211 | 198 | 195 | 19 | 24 | |||||||||||||||
| Consumer | 283 | 302 | 330 | 366 | 400 | (19 | ) | (117 | ) | |||||||||||||
| Total loans | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 8,220 | 345 | 618 | ||||||||||
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||
| Financial Highlights | |||||||||||||||||||||||
| Credit Quality | |||||||||||||||||||||||
| (in thousands) | Second Quarter 2019 | First Quarter 2019 | Fourth Quarter 2018 | ||||||||||||||||||||
| NONACCRUAL LOANS BY CATEGORY | |||||||||||||||||||||||
| Owner occupied CRE | $ | 8,177 | $ | 7,030 | $ | 6,421 | |||||||||||||||||
| Income producing CRE | 1,331 | 1,276 | 1,160 | ||||||||||||||||||||
| Commercial & industrial | 2,366 | 1,666 | 1,417 | ||||||||||||||||||||
| Commercial construction | 1,650 | 473 | 605 | ||||||||||||||||||||
| Equipment financing | 2,047 | 1,813 | 2,677 | ||||||||||||||||||||
| Total commercial | 15,571 | 12,258 | 12,280 | ||||||||||||||||||||
| Residential mortgage | 8,012 | 8,281 | 8,035 | ||||||||||||||||||||
| Home equity lines of credit | 1,978 | 2,233 | 2,360 | ||||||||||||||||||||
| Residential construction | 494 | 347 | 288 | ||||||||||||||||||||
| Consumer | 542 | 505 | 815 | ||||||||||||||||||||
| Total NPAs | $ | 26,597 | $ | 23,624 | $ | 23,778 | |||||||||||||||||
| NONACCRUAL LOANS ACTIVITY | |||||||||||||||||||||||
| Beginning Balance | $ | 23,624 | $ | 23,778 | $ | 22,530 | |||||||||||||||||
| Loans placed on non-accrual | 8,316 | 6,759 | 5,829 | ||||||||||||||||||||
| Payments received | (3,212 | ) | (3,520 | ) | (2,780 | ) | |||||||||||||||||
| Loan charge-offs | (2,131 | ) | (2,714 | ) | (933 | ) | |||||||||||||||||
| Foreclosures | - | (679 | ) | (868 | ) | ||||||||||||||||||
| Ending Balance | $ | 26,597 | $ | 23,624 | $ | 23,778 | |||||||||||||||||
| Second Quarter 2019 | First Quarter 2019 | Fourth Quarter 2018 | |||||||||||||||||||||
| (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 CRE | $ | (58 | ) | (0.01 | ) | % | $ | (64 | ) | (0.02 | ) | % | $ | (52 | ) | (0.01 | ) | % | |||||
| Income producing CRE | 241 | 0.05 | 177 | 0.04 | 399 | 0.09 | |||||||||||||||||
| Commercial & industrial | 1,141 | 0.35 | 1,356 | 0.43 | (149 | ) | (0.05 | ) | |||||||||||||||
| Commercial construction | (162 | ) | (0.07 | ) | (325 | ) | (0.16 | ) | (230 | ) | (0.12 | ) | |||||||||||
| Equipment financing | 890 | 0.56 | 1,281 | 0.89 | 599 | 0.44 | |||||||||||||||||
| Total commercial | 2,052 | 0.13 | 2,425 | 0.16 | 567 | 0.04 | |||||||||||||||||
| Residential mortgage | (125 | ) | (0.05 | ) | 13 | - | 290 | 0.11 | |||||||||||||||
| Home equity lines of credit | (111 | ) | (0.07 | ) | 215 | 0.13 | 382 | 0.22 | |||||||||||||||
| Residential construction | 199 | 0.38 | (22 | ) | (0.04 | ) | (36 | ) | (0.07 | ) | |||||||||||||
| Consumer | 423 | 0.58 | 499 | 0.64 | 584 | 0.67 | |||||||||||||||||
| Total | $ | 2,438 | 0.11 | $ | 3,130 | 0.15 | $ | 1,787 | 0.09 | ||||||||||||||
| (1) Annualized. | |||||||||||||||||||||||
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||
| Consolidated Statements of Income (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| (in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Interest revenue: | |||||||||||||||
| Loans, including fees | $ | 119,671 | $ | 103,492 | $ | 234,930 | $ | 199,961 | |||||||
| Investment securities, including tax exempt of $1,122, $1,025, $2,291 and $1,997 | 19,076 | 18,254 | 39,894 | 36,549 | |||||||||||
| Deposits in banks and short-term investments | 409 | 469 | 848 | 995 | |||||||||||
| Total interest revenue | 139,156 | 122,215 | 275,672 | 237,505 | |||||||||||
| Interest expense: | |||||||||||||||
| Deposits: | |||||||||||||||
| NOW and interest-bearing demand | 3,377 | 1,303 | 6,913 | 2,416 | |||||||||||
| Money market | 4,925 | 2,583 | 9,130 | 4,758 | |||||||||||
| Savings | 42 | 35 | 74 | 84 | |||||||||||
| Time | 8,771 | 4,198 | 16,955 | 7,154 | |||||||||||
| Total deposit interest expense | 17,115 | 8,119 | 33,072 | 14,412 | |||||||||||
| Short-term borrowings | 248 | 198 | 409 | 498 | |||||||||||
| Federal Home Loan Bank advances | 752 | 1,636 | 2,174 | 3,760 | |||||||||||
| Long-term debt | 3,257 | 3,786 | 6,599 | 7,074 | |||||||||||
| Total interest expense | 21,372 | 13,739 | 42,254 | 25,744 | |||||||||||
| Net interest revenue | 117,784 | 108,476 | 233,418 | 211,761 | |||||||||||
| Provision for credit losses | 3,250 | 1,800 | 6,550 | 5,600 | |||||||||||
| Net interest revenue after provision for credit losses | 114,534 | 106,676 | 226,868 | 206,161 | |||||||||||
| Noninterest income: | |||||||||||||||
| Service charges and fees | 9,060 | 8,794 | 17,513 | 17,719 | |||||||||||
| Mortgage loan and other related fees | 5,344 | 5,307 | 9,092 | 10,666 | |||||||||||
| Brokerage fees | 1,588 | 1,201 | 2,925 | 2,073 | |||||||||||
| Gains from sales of SBA/USDA loans | 1,470 | 2,401 | 2,773 | 4,179 | |||||||||||
| Securities gains (losses), net | 149 | (364 | ) | (118 | ) | (1,304 | ) | ||||||||
| Other | 6,920 | 6,001 | 13,314 | 12,403 | |||||||||||
| Total noninterest income | 24,531 | 23,340 | 45,499 | 45,736 | |||||||||||
| Total revenue | 139,065 | 130,016 | 272,367 | 251,897 | |||||||||||
| Noninterest expenses: | |||||||||||||||
| Salaries and employee benefits | 48,157 | 45,363 | 95,660 | 88,238 | |||||||||||
| Communications and equipment | 6,222 | 4,849 | 12,010 | 9,481 | |||||||||||
| Occupancy | 5,919 | 5,547 | 11,503 | 11,160 | |||||||||||
| Advertising and public relations | 1,596 | 1,384 | 2,882 | 2,899 | |||||||||||
| Postage, printing and supplies | 1,529 | 1,685 | 3,115 | 3,322 | |||||||||||
| Professional fees | 4,054 | 3,464 | 7,215 | 7,508 | |||||||||||
| FDIC assessments and other regulatory charges | 1,547 | 1,973 | 3,257 | 4,449 | |||||||||||
| Amortization of intangibles | 1,342 | 1,847 | 2,635 | 3,745 | |||||||||||
| Merger-related and other charges | 3,894 | 2,280 | 4,440 | 4,334 | |||||||||||
| Other | 7,553 | 8,458 | 15,180 | 15,189 | |||||||||||
| Total noninterest expenses | 81,813 | 76,850 | 157,897 | 150,325 | |||||||||||
| Net income before income taxes | 57,252 | 53,166 | 114,470 | 101,572 | |||||||||||
| Income tax expense | 13,167 | 13,532 | 26,123 | 24,280 | |||||||||||
| Net income | $ | 44,085 | $ | 39,634 | $ | 88,347 | $ | 77,292 | |||||||
| Net income available to common shareholders | $ | 43,769 | $ | 39,359 | $ | 87,716 | $ | 76,740 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic | $ | 0.55 | $ | 0.49 | 1.10 | $ | 0.97 | ||||||||
| Diluted | 0.55 | 0.49 | 1.10 | 0.97 | |||||||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 79,673 | 79,745 | 79,739 | 79,477 | |||||||||||
| Diluted | 79,678 | 79,755 | 79,745 | 79,487 | |||||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| (in thousands, except share and per share data) | 2019 | 2018 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 118,361 | $ | 126,083 | ||||
| Interest-bearing deposits in banks | 157,418 | 201,182 | ||||||
| Cash and cash equivalents | 275,779 | 327,265 | ||||||
| Debt securities available for sale | 2,366,502 | 2,628,467 | ||||||
| Debt securities held to maturity (fair value $256,975 and $268,803) | 253,398 | 274,407 | ||||||
| Loans held for sale at fair value | 46,285 | 18,935 | ||||||
| Loans and leases, net of unearned income | 8,838,218 | 8,383,401 | ||||||
| Less allowance for loan and lease losses | (62,204 | ) | (61,203 | ) | ||||
| Loans, net | 8,776,014 | 8,322,198 | ||||||
| Premises and equipment, net | 217,086 | 206,140 | ||||||
| Bank owned life insurance | 200,993 | 192,616 | ||||||
| Accrued interest receivable | 35,439 | 35,413 | ||||||
| Net deferred tax asset | 40,870 | 64,224 | ||||||
| Derivative financial instruments | 35,209 | 24,705 | ||||||
| Goodwill and other intangible assets | 344,550 | 324,072 | ||||||
| Other assets | 187,313 | 154,750 | ||||||
| Total assets | $ | 12,779,438 | $ | 12,573,192 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 3,461,584 | $ | 3,210,220 | ||||
| NOW and interest-bearing demand | 2,059,694 | 2,274,775 | ||||||
| Money market | 2,281,818 | 2,097,526 | ||||||
| Savings | 693,961 | 669,886 | ||||||
| Time | 1,840,271 | 1,598,391 | ||||||
| Brokered | 253,942 | 683,715 | ||||||
| Total deposits | 10,591,270 | 10,534,513 | ||||||
| Short-term borrowings | 40,000 | - | ||||||
| Federal Home Loan Bank advances | 160,000 | 160,000 | ||||||
| Long-term debt | 247,952 | 267,189 | ||||||
| Derivative financial instruments | 16,769 | 26,433 | ||||||
| Accrued expenses and other liabilities | 157,113 | 127,503 | ||||||
| Total liabilities | 11,213,104 | 11,115,638 | ||||||
| Shareholders' equity: | ||||||||
| Common stock, $1 par value; 150,000,000 shares authorized; | ||||||||
| 79,075,219 and 79,234,077 shares issued and outstanding | 79,075 | 79,234 | ||||||
| Common stock issuable; 641,725 and 674,499 shares | 10,858 | 10,744 | ||||||
| Capital surplus | 1,498,740 | 1,499,584 | ||||||
| Accumulated deficit | (29,116 | ) | (90,419 | ) | ||||
| Accumulated other comprehensive income (loss) | 6,777 | (41,589 | ) | |||||
| Total shareholders' equity | 1,566,334 | 1,457,554 | ||||||
| Total liabilities and shareholders' equity | $ | 12,779,438 | $ | 12,573,192 | ||||
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||
| Average Consolidated Balance Sheets and Net Interest Analysis | |||||||||||||||||
| For the Three Months Ended June 30, | |||||||||||||||||
| 2019 | 2018 | ||||||||||||||||
| Average | Avg. | Average | Avg. | ||||||||||||||
| (dollars in thousands, fully taxable equivalent (FTE)) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||
| Assets: | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Loans, net of unearned income (FTE) (1)(2) | $ | 8,669,847 | $ | 119,668 | 5.54 | % | $ | 8,177,343 | $ | 103,395 | 5.07 | % | |||||
| Taxable securities (3) | 2,506,942 | 17,954 | 2.86 | 2,651,816 | 17,229 | 2.60 | |||||||||||
| Tax-exempt securities (FTE) (1)(3) | 166,628 | 1,507 | 3.62 | 150,503 | 1,380 | 3.67 | |||||||||||
| Federal funds sold and other interest-earning assets | 190,678 | 679 | 1.42 | 212,849 | 674 | 1.27 | |||||||||||
| Total interest-earning assets (FTE) | 11,534,095 | 139,808 | 4.86 | 11,192,511 | 122,678 | 4.39 | |||||||||||
| Noninterest-earning assets: | |||||||||||||||||
| Allowance for loan losses | (62,716 | ) | (62,275 | ) | |||||||||||||
| Cash and due from banks | 125,021 | 133,060 | |||||||||||||||
| Premises and equipment | 224,018 | 218,517 | |||||||||||||||
| Other assets (3) | 787,859 | 731,514 | |||||||||||||||
| Total assets | $ | 12,608,277 | $ | 12,213,327 | |||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||
| NOW and interest-bearing demand | $ | 2,107,041 | 3,377 | 0.64 | $ | 2,071,289 | 1,303 | 0.25 | |||||||||
| Money market | 2,269,321 | 4,925 | 0.87 | 2,214,077 | 2,583 | 0.47 | |||||||||||
| Savings | 687,753 | 42 | 0.02 | 678,988 | 35 | 0.02 | |||||||||||
| Time | 1,773,968 | 6,949 | 1.57 | 1,524,124 | 2,696 | 0.71 | |||||||||||
| Brokered time deposits | 298,553 | 1,822 | 2.45 | 300,389 | 1,502 | 2.01 | |||||||||||
| Total interest-bearing deposits | 7,136,636 | - | 17,115 | 0.96 | 6,788,867 | - | 8,119 | 0.48 | |||||||||
| Federal funds purchased and other borrowings | 38,838 | 248 | 2.56 | 45,241 | 198 | 1.76 | |||||||||||
| Federal Home Loan Bank advances | 117,912 | 752 | 2.56 | 335,521 | 1,636 | 1.96 | |||||||||||
| Long-term debt | 252,351 | 3,257 | 5.18 | 316,812 | 3,786 | 4.79 | |||||||||||
| Total borrowed funds | 409,101 | 4,257 | 4.17 | 697,574 | 5,620 | 3.23 | |||||||||||
| Total interest-bearing liabilities | 7,545,737 | 21,372 | 1.14 | 7,486,441 | 13,739 | 0.74 | |||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||
| Noninterest-bearing deposits | 3,355,930 | 3,188,847 | |||||||||||||||
| Other liabilities | 175,806 | 168,417 | |||||||||||||||
| Total liabilities | 11,077,473 | 10,843,705 | |||||||||||||||
| Shareholders' equity | 1,530,804 | 1,369,622 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 12,608,277 | $ | 12,213,327 | |||||||||||||
| Net interest revenue (FTE) | $ | 118,436 | $ | 108,939 | |||||||||||||
| Net interest-rate spread (FTE) | 3.72 | % | 3.65 | % | |||||||||||||
| Net interest margin (FTE) (4) | 4.12 | % | 3.90 | % | |||||||||||||
| (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 where 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 $5.00 million in 2019 and pretax unrealized losses of $42.9 million in | |||||||||||||||||
| 2018 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. | |||||||||||||||||
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||
| Average Consolidated Balance Sheets and Net Interest Analysis | |||||||||||||||||
| For the Six Months Ended June 30, | |||||||||||||||||
| 2019 | 2018 | ||||||||||||||||
| Average | Avg. | Average | Avg. | ||||||||||||||
| (dollars in thousands, fully taxable equivalent (FTE)) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||
| Assets: | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Loans, net of unearned income (FTE) (1)(2) | $ | 8,550,574 | $ | 235,015 | 5.54 | % | $ | 8,085,849 | $ | 199,784 | 4.98 | % | |||||
| Taxable securities (3) | 2,609,400 | 37,603 | 2.88 | 2,687,200 | 34,552 | 2.57 | |||||||||||
| Tax-exempt securities (FTE) (1)(3) | 168,156 | 3,077 | 3.66 | 148,528 | 2,689 | 3.62 | |||||||||||
| Federal funds sold and other interest-earning assets | 188,165 | 1,297 | 1.38 | 212,951 | 1,372 | 1.29 | |||||||||||
| Total interest-earning assets (FTE) | 11,516,295 | 276,992 | 4.84 | 11,134,528 | 238,397 | 4.31 | |||||||||||
| Noninterest-earning assets: | |||||||||||||||||
| Allowance for loan losses | (62,253 | ) | (60,718 | ) | |||||||||||||
| Cash and due from banks | 124,414 | 146,697 | |||||||||||||||
| Premises and equipment | 220,335 | 217,625 | |||||||||||||||
| Other assets (3) | 759,899 | 724,488 | |||||||||||||||
| Total assets | $ | 12,558,690 | $ | 12,162,620 | |||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||
| NOW and interest-bearing demand | $ | 2,157,648 | 6,913 | 0.65 | $ | 2,077,461 | 2,416 | 0.23 | |||||||||
| Money market | 2,222,846 | 9,130 | 0.83 | 2,222,304 | 4,758 | 0.43 | |||||||||||
| Savings | 680,018 | 74 | 0.02 | 667,431 | 84 | 0.03 | |||||||||||
| Time | 1,701,181 | 12,285 | 1.46 | 1,529,639 | 4,937 | 0.65 | |||||||||||
| Brokered time deposits | 389,794 | 4,670 | 2.42 | 229,766 | 2,217 | 1.95 | |||||||||||
| Total interest-bearing deposits | 7,151,487 | 33,072 | 0.93 | 6,726,601 | 14,412 | 0.43 | |||||||||||
| Federal funds purchased and other borrowings | 30,241 | 409 | 2.73 | 61,894 | 498 | 1.62 | |||||||||||
| Federal Home Loan Bank advances | 170,636 | 2,174 | 2.57 | 423,137 | 3,760 | 1.79 | |||||||||||
| Long-term debt | 257,134 | 6,599 | 5.18 | 295,763 | 7,074 | 4.82 | |||||||||||
| Total borrowed funds | 458,011 | 9,182 | 4.04 | 780,794 | 11,332 | 2.93 | |||||||||||
| Total interest-bearing liabilities | 7,609,498 | 42,254 | 1.12 | 7,507,395 | 25,744 | 0.69 | |||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||
| Noninterest-bearing deposits | 3,275,612 | 3,142,384 | |||||||||||||||
| Other liabilities | 169,048 | 159,734 | |||||||||||||||
| Total liabilities | 11,054,158 | 10,809,513 | |||||||||||||||
| Shareholders' equity | 1,504,532 | 1,353,107 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 12,558,690 | $ | 12,162,620 | |||||||||||||
| Net interest revenue (FTE) | $ | 234,738 | $ | 212,653 | |||||||||||||
| Net interest-rate spread (FTE) | 3.72 | % | 3.62 | % | |||||||||||||
| Net interest margin (FTE) (4) | 4.11 | % | 3.85 | % | |||||||||||||
| (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 where 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 losses of $10.4 million in 2019 and pretax unrealized losses of $35.6 million in | |||||||||||||||||
| 2018 are included in other assets for purposes of this presentation. | |||||||||||||||||
| (4) Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets. | |||||||||||||||||
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ: UCBI) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the southeast region’s largest full-service financial institutions with $12.8 billion in assets, and 147 offices in Georgia, North Carolina, South Carolina and Tennessee. It operates principally through United Community Bank, its bank subsidiary, which specializes in personalized community banking services for individuals, small businesses and companies. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. Respected national research firms consistently recognize United Community Bank for outstanding customer service. For five of the past six years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2019, for the sixth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America, and for the first time included United on its list of The World’s Best Banks. Additional information about UCBI and the Bank 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,” “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,” “operating dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted 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