United Community Banks, Inc. Reports Fourth Quarter Results

| Source: United Community Banks, Inc. United Community Banks, Inc.

EPS of $0.61, Return on Assets of 1.50% and Return on Equity of 12.07%

GREENVILLE, S.C., Jan. 21, 2020 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its fourth quarter financial results, including strong year-over-year loan and deposit growth, operating efficiency and asset quality. Diluted earnings per share were $0.61, an increase of $0.05 or 9% from a year ago. Excluding a nominal amount of merger-related and other charges, diluted operating earnings per share were also $0.61, up 7% over last year. United’s return on assets was 1.50% and its return on common equity was 12.1% for the quarter. On an operating basis, United’s return on assets was also 1.50% and its return on tangible common equity was 15.5%.

During the quarter, the company sold its remaining investment in its indirect auto portfolio, completing its exit from that business.  Excluding indirect auto, loans grew at a 2% annualized rate in the fourth quarter. United's net interest margin decreased as expected due to falling interest rates. Other items that impacted the net interest margin included seasonally higher average public deposits invested at lower yielding overnight rates and lower purchased loan accretion when compared to previous quarters. Core transaction deposits remained stable and total deposits grew by $140 million.

For the full year of 2019, United's return on assets increased 11 basis points to 1.46% and EPS increased by 12%. Operating return on assets increased 11 basis points to 1.51% and operating EPS increased 11%, as the company continued to execute on its plans to deliver top quartile performance.  2019 saw strong operating leverage, resulting in a company best efficiency ratio of 55.8% and an operating efficiency ratio of 54.5%.

“Our fourth quarter caps off what has been an outstanding year for United.  Our team continued delivering best in class customer service, which has led to the achievement of our top quartile performance goals,” said Lynn Harton, Chairman and CEO of United. “We are proud and honored that United was named one of the 'Best Banks to Work For' by American Banker for the third year in a row, as well as one of the 'World’s Best Banks in 2019' by Forbes.  These accolades are totally due to the passion and caring of our 2,341 employees and their efforts to build a great company where they can develop fulfilling careers, reach ambitious financial goals and serve United's customers and communities at the highest level.  We look forward to continued success in 2020.”

2019 Highlights:

  • 2019 earnings per diluted share were $2.31, a 12% increase over 2018
    -- Excluding merger-related and other charges, operating earnings per diluted share for 2019 were $2.38 compared to $2.14 in 2018, an increase of 11%
  • Return on assets was 1.46% in 2019, an increase of 11 basis points from 2018
    -- Excluding merger-related and other charges, operating return on assets was 1.51%, an increase of 11 basis points from 2018
  • Efficiency ratio of 55.8% in 2019 improved 154 basis points as compared to 2018
    -- Excluding merger-related and other charges, efficiency ratio of 54.5% improved 144 basis points as compared to 2018
  • End of period loans grew $430 million in 2019, up 5% over December 31, 2018
  • Common Equity Tier 1 ratio was 13.0% at December 31, 2019, compared to 12.2% at December 31, 2018
  • Dividends of $0.68 per share were declared in 2019, up 17% over 2018
  • United completed the acquisition of First Madison Bank & Trust on May 1, 2019
  • Share repurchases of 500,495 shares were accomplished during the year at an average price of $26.01

Fourth Quarter 2019 Financial Highlights:

  • EPS of $0.61, representing growth of 9% over last year, or 7% on an operating basis
  • Return on assets of 1.50%
  • Return on common equity of 12.1%
  • Operating return on tangible common equity of 15.5%, excluding merger-related and other charges
  • End of period total loans fell by $90 million, but excluding indirect auto, end of period loans grew at a 2% annualized pace
  • Loan production was strong at $854 million, but was offset by higher than usual paydowns
  • Despite weaker seasonality, our mortgage business remained strong with loan locks of $411 million, compared to $251 million a year ago due to a favorable rate environment and the impact of new hires
  • Net interest margin of 3.93% was down 19 basis points compared to the third quarter and down 4 basis points compared to a year ago
  • Efficiency ratio of 54.9%
  • Net charge-offs of 18 basis points, up six basis points from last quarter and remaining at historically low levels
  • Nonperforming assets of 0.28% of total assets, compared with 0.24% at September 30, 2019 and 0.20% at December 31, 2018
  • Unusual items in the quarter netted to a slight gain, with a $1.6 million bank owned life insurance gain offset by $0.9 million in securities losses.  Additionally, our indirect portfolio sales resulted in a $0.7 million loss offset by a $0.5 million indirect portfolio loan loss reserve release

Conference Call
United will hold a conference call, Wednesday, January 22, 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 7081477. 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.

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


UNITED COMMUNITY BANKS, INC.                  
Financial Highlights                  
Selected Financial Information                  
  2019 2018 Fourth Quarter 2019 - 2018 Change For the Twelve Months Ended December 31, YTD 2019 - 2018 Change
(in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter  2019 2018 
INCOME SUMMARY                  
Interest revenue $136,419  $140,615  $139,156  $136,516  $133,854    $552,706  $500,080   
Interest expense 19,781  21,277  21,372  20,882  18,975    83,312  61,330   
Net interest revenue 116,638  119,338  117,784  115,634  114,879  2% 469,394  438,750  7%
Provision for credit losses 3,500  3,100  3,250  3,300  2,100    13,150  9,500   
Noninterest income 30,183  29,031  24,531  20,968  23,045  31  104,713  92,961  13 
Total revenue 143,321  145,269  139,065  133,302  135,824  6  560,957  522,211  7 
Expenses 81,424  82,924  81,813  76,084  78,242  4  322,245  306,285  5 
Income before income tax expense 61,897  62,345  57,252  57,218  57,582    238,712  215,926   
Income tax expense 12,885  13,983  13,167  12,956  12,445    52,991  49,815   
Net income 49,012  48,362  44,085  44,262  45,137    185,721  166,111   
Merger-related and other charges (74) 2,605  4,087  739  1,234    7,357  7,345   
Income tax benefit of merger-related and other charges 17  (600) (940) (172) (604)   (1,695) (1,494)  
Net income - operating (1) $48,955  $50,367  $47,232  $44,829  $45,767  7  $191,383  $171,962  11 
                   
PERFORMANCE MEASURES                  
Per common share:                  
Diluted net income - GAAP $0.61  $0.60  $0.55  $0.55  $0.56  9  $2.31  $2.07  12 
Diluted net income - operating (1) 0.61  0.63  0.59  0.56  0.57  7  2.38  2.14  11 
Cash dividends declared 0.18  0.17  0.17  0.16  0.16  13  0.68  0.58  17 
Book value 20.53  20.16  19.65  18.93  18.24  13  20.53  18.24  13 
Tangible book value (3) 16.28  15.90  15.38  14.93  14.24  14  16.28  14.24  14 
Key performance ratios:                  
Return on common equity - GAAP (2)(4) 12.07% 12.16% 11.45% 11.85% 12.08%   11.89% 11.60%  
Return on common equity - operating (1)(2)(4) 12.06  12.67  12.27  12.00  12.25    12.25  12.01   
Return on tangible common equity - operating (1)(2)(3)(4) 15.49  16.38  15.88  15.46  15.88    15.81  15.69   
Return on assets - GAAP (4) 1.50  1.51  1.40  1.44  1.43    1.46  1.35   
Return on assets - operating (1)(4) 1.50  1.58  1.50  1.45  1.45    1.51  1.40   
Net interest margin (fully taxable equivalent) (4) 3.93  4.12  4.12  4.10  3.97    4.07  3.91   
Efficiency ratio - GAAP 54.87  55.64  57.28  55.32  56.73    55.77  57.31   
Efficiency ratio - operating (1) 54.92  53.90  54.42  54.78  55.83    54.50  55.94   
Equity to total assets 12.66  12.53  12.25  12.06  11.59    12.66  11.59   
Tangible common equity to tangible assets (3) 10.32  10.16  9.86  9.76  9.29    10.32  9.29   
                   
ASSET QUALITY                  
Nonperforming loans $35,341  $30,832  $26,597  $23,624  $23,778  49  $35,341  $23,778  49 
Foreclosed properties 476  102  75  1,127  1,305  (64) 476  1,305  (64)
Total nonperforming assets ("NPAs") 35,817  30,934  26,672  24,751  25,083  43  35,817  25,083  43 
Allowance for loan losses 62,089  62,514  62,204  61,642  61,203  1  62,089  61,203  1 
Net charge-offs 3,925  2,723  2,438  3,130  1,787  120  12,216  6,113  100 
Allowance for loan losses to loans 0.70% 0.70% 0.70% 0.73% 0.73%   0.70% 0.73%  
Net charge-offs to average loans (4) 0.18  0.12  0.11  0.15  0.09    0.14  0.07   
NPAs to loans and foreclosed properties 0.41  0.35  0.30  0.29  0.30    0.41  0.30   
NPAs to total assets 0.28  0.24  0.21  0.20  0.20    0.28  0.20   
                   
AVERAGE BALANCES ($ in millions)                  
Loans $8,890  $8,836  $8,670  $8,430  $8,306  7  $8,708  $8,170  7 
Investment securities 2,486  2,550  2,674  2,883  3,004  (17) 2,647  2,899  (9)
Earning assets 11,832  11,568  11,534  11,498  11,534  3  11,609  11,282  3 
Total assets 12,946  12,681  12,608  12,509  12,505  4  12,687  12,284  3 
Deposits 10,924  10,531  10,493  10,361  10,306  6  10,579  10,000  6 
Shareholders’ equity 1,623  1,588  1,531  1,478  1,420  14  1,556  1,380  13 
Common shares - basic (thousands) 79,659  79,663  79,673  79,807  79,884  —  79,700  79,662  — 
Common shares - diluted (thousands) 79,669  79,667  79,678  79,813  79,890  —  79,708  79,671  — 
                   
AT PERIOD END ($ in millions)                  
Loans $8,813  $8,903  $8,838  $8,493  $8,383  5  $8,813  $8,383  5 
Investment securities 2,559  2,515  2,620  2,720  2,903  (12) 2,559  2,903  (12)
Total assets 12,916  12,809  12,779  12,506  12,573  3  12,916  12,573  3 
Deposits 10,897  10,757  10,591  10,534  10,535  3  10,897  10,535  3 
Shareholders’ equity 1,636  1,605  1,566  1,508  1,458  12  1,636  1,458  12 
Common shares outstanding (thousands) 79,014  78,974  79,075  79,035  79,234  —  79,014  79,234  — 

(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.

UNITED COMMUNITY BANKS, INC.          
Selected Financial Information          
For the Years Ended December 31,          
(in thousands, except per share data) 2019 2018 2017 2016 2015
INCOME SUMMARY          
Interest revenue $552,706  $500,080  $389,720  $335,020  $278,532 
Interest expense 83,312  61,330  33,735  25,236  21,109 
Net interest revenue 469,394  438,750  355,985  309,784  257,423 
Provision for credit losses 13,150  9,500  3,800  (800) 3,700 
Noninterest income 104,713  92,961  88,260  93,697  72,529 
Total revenue 560,957  522,211  440,445  404,281  326,252 
Expenses 322,245  306,285  267,611  241,289  211,238 
Income before income tax expense 238,712  215,926  172,834  162,992  115,014 
Income tax expense 52,991  49,815  105,013  62,336  43,436 
Net income 185,721  166,111  67,821  100,656  71,578 
Merger-related and other charges 7,357  7,345  14,662  8,122  17,995 
Income tax benefit of merger-related and other charges (1,695) (1,494) (3,745) (3,074) (6,388)
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) $191,383  $171,962  $120,337  $106,680  $83,185 
PERFORMANCE MEASURES          
Per common share:          
Diluted net income - GAAP $2.31  $2.07  $0.92  $1.40  $1.09 
Diluted net income - operating (1) 2.38  2.14  1.63  1.48  1.27 
Cash dividends declared 0.68  0.58  0.38  0.30  0.22 
Book value 20.53  18.24  16.67  15.06  14.02 
Tangible book value (3) 16.28  14.24  13.65  12.95  12.06 
Key performance ratios:          
Return on common equity - GAAP (2) 11.89% 11.60% 5.67% 9.41% 8.15%
Return on common equity - operating (1)(2) 12.25  12.01  10.07  9.98  9.48 
Return on tangible common equity - operating (1)(2)(3) 15.81  15.69  12.02  11.86  10.24 
Return on assets - GAAP 1.46  1.35  0.62  1.00  0.85 
Return on assets - operating (1) 1.51  1.40  1.09  1.06  0.98 
Net interest margin (fully taxable equivalent) 4.07  3.91  3.52  3.36  3.30 
Efficiency ratio - GAAP 55.77  57.31  59.95  59.80  63.96 
Efficiency ratio - operating (1) 54.50  55.94  56.67  57.78  58.51 
Equity to total assets 12.66  11.59  10.94  10.05  10.58 
Tangible common equity to tangible assets (3) 10.32  9.29  9.14  8.77  9.15 
           
ASSET QUALITY          
Nonperforming loans $35,341  $23,778  $23,658  $21,539  $22,653 
Foreclosed properties 476  1,305  3,234  7,949  4,883 
Total nonperforming assets (NPAs) 35,817  25,083  26,892  29,488  27,536 
Allowance for loan losses 62,089  61,203  58,914  61,422  68,448 
Net charge-offs 12,216  6,113  5,998  6,766  6,259 
Allowance for loan losses to loans 0.70% 0.73% 0.76% 0.89% 1.14%
Net charge-offs to average loans 0.14  0.07  0.08  0.11  0.12 
NPAs to loans and foreclosed properties 0.41  0.30  0.35  0.43  0.46 
NPAs to total assets 0.28  0.20  0.23  0.28  0.29 
AVERAGE BALANCES ($ in millions)          
Loans $8,708  $8,170  $7,150  $6,413  $5,298 
Investment securities 2,647  2,899  2,847  2,691  2,368 
Earning assets 11,609  11,282  10,162  9,257  7,834 
Total assets 12,687  12,284  11,015  10,054  8,462 
Deposits 10,579  10,000  8,950  8,177  7,055 
Shareholders’ equity 1,556  1,380  1,180  1,059  869 
Common shares - basic (thousands) 79,700  79,662  73,247  71,910  65,488 
Common shares - diluted (thousands) 79,708  79,671  73,259  71,915  65,492 
AT PERIOD END ($ in millions)          
Loans $8,813  $8,383  $7,736  $6,921  $5,995 
Investment securities 2,559  2,903  2,937  2,762  2,656 
Total assets 12,916  12,573  11,915  10,709  9,616 
Deposits 10,897  10,535  9,808  8,638  7,873 
Shareholders’ equity 1,636  1,458  1,303  1,076  1,018 
Common shares outstanding (thousands) 79,014  79,234  77,580  70,899  71,484 

(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, 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, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and 2015 impairment losses on surplus bank property.
(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.


UNITED COMMUNITY BANKS, INC.          
Non-GAAP Performance Measures Reconciliation          
Selected Financial Information- Quarterly          
  2019 2018
(in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First
 Quarter		 Fourth Quarter
           
Expense reconciliation          
Expenses (GAAP) $81,424  $82,924  $81,813  $76,084  $78,242 
Merger-related and other charges 74  (2,605) (4,087) (739) (1,234)
Expenses - operating $81,498  $80,319  $77,726  $75,345  $77,008 
           
Net income reconciliation          
Net income (GAAP) $49,012  $48,362  $44,085  $44,262  $45,137 
Merger-related and other charges (74) 2,605  4,087  739  1,234 
Income tax benefit of merger-related and other charges 17  (600) (940) (172) (604)
Net income - operating $48,955  $50,367  $47,232  $44,829  $45,767 
           
Diluted income per common share reconciliation          
Diluted income per common share (GAAP) $0.61  $0.60  $0.55  $0.55  $0.56 
Merger-related and other charges —  0.03  0.04  0.01  0.01 
Diluted income per common share - operating $0.61  $0.63  $0.59  $0.56  $0.57 
           
Book value per common share reconciliation          
Book value per common share (GAAP) $20.53  $20.16  $19.65  $18.93  $18.24 
Effect of goodwill and other intangibles (4.25) (4.26) (4.27) (4.00) (4.00)
Tangible book value per common share $16.28  $15.90  $15.38  $14.93  $14.24 
           
Return on tangible common equity reconciliation          
Return on common equity (GAAP) 12.07% 12.16% 11.45% 11.85% 12.08%
Merger-related and other charges (0.01) 0.51  0.82  0.15  0.17 
Return on common equity - operating 12.06  12.67  12.27  12.00  12.25 
Effect of goodwill and other intangibles 3.43  3.71  3.61  3.46  3.63 
Return on tangible common equity - operating 15.49% 16.38% 15.88% 15.46% 15.88%
           
Return on assets reconciliation          
Return on assets (GAAP) 1.50% 1.51% 1.40% 1.44% 1.43%
Merger-related and other charges —  0.07  0.10  0.01  0.02 
Return on assets - operating 1.50% 1.58% 1.50% 1.45% 1.45%
           
Efficiency ratio reconciliation          
Efficiency ratio (GAAP) 54.87% 55.64% 57.28% 55.32% 56.73%
Merger-related and other charges 0.05  (1.74) (2.86) (0.54) (0.90)
Efficiency ratio - operating 54.92% 53.90% 54.42% 54.78% 55.83%
           
Tangible common equity to tangible assets reconciliation          
Equity to total assets (GAAP) 12.66% 12.53% 12.25% 12.06% 11.59%
Effect of goodwill and other intangibles (2.34) (2.37) (2.39) (2.30) (2.30)
Tangible common equity to tangible assets 10.32% 10.16% 9.86% 9.76% 9.29%


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) 2019 2018 2017 2016 2015
Expense reconciliation          
Expenses (GAAP) $322,245  $306,285  $267,611  $241,289  $211,238 
Merger-related and other charges (7,357) (7,345) (14,662) (8,122) (17,995)
Expenses - operating $314,888  $298,940  $252,949  $233,167  $193,243 
           
Net income reconciliation          
Net income (GAAP) $185,721  $166,111  $67,821  $100,656  $71,578 
Merger-related and other charges 7,357  7,345  14,662  8,122  17,995 
Income tax benefit of merger-related and other charges (1,695) (1,494) (3,745) (3,074) (6,388)
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 $191,383  $171,962  $120,337  $106,680  $83,185 
           
Diluted income per common share reconciliation          
Diluted income per common share (GAAP) $2.31  $2.07  $0.92  $1.40  $1.09 
Merger-related and other charges 0.07  0.07  0.14  0.07  0.18 
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 $2.38  $2.14  $1.63  $1.48  $1.27 
           
Book value per common share reconciliation          
Book value per common share (GAAP) $20.53  $18.24  $16.67  $15.06  $14.02 
Effect of goodwill and other intangibles (4.25) (4.00) (3.02) (2.11) (1.96)
Tangible book value per common share $16.28  $14.24  $13.65  $12.95  $12.06 
           
Return on tangible common equity reconciliation          
Return on common equity (GAAP) 11.89% 11.60% 5.67% 9.41% 8.15%
Merger-related and other charges 0.36  0.41  0.92  0.48  1.33 
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 12.25  12.01  10.07  9.98  9.48 
Effect of goodwill and other intangibles 3.56  3.68  1.95  1.88  0.76 
Return on tangible common equity - operating 15.81% 15.69% 12.02% 11.86% 10.24%
           
Return on assets reconciliation          
Return on assets (GAAP) 1.46% 1.35% 0.62% 1.00% 0.85%
Merger-related and other charges 0.05  0.05  0.09  0.05  0.13 
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 1.51% 1.40% 1.09% 1.06% 0.98%
           
Efficiency ratio reconciliation          
Efficiency ratio (GAAP) 55.77% 57.31% 59.95% 59.80% 63.96%
Merger-related and other charges (1.27) (1.37) (3.28) (2.02) (5.45)
Efficiency ratio - operating 54.50% 55.94% 56.67% 57.78% 58.51%
           
Tangible common equity to tangible assets reconciliation          
Equity to total assets (GAAP) 12.66% 11.59% 10.94% 10.05% 10.58%
Effect of goodwill and other intangibles (2.34) (2.30) (1.80) (1.28) (1.33)
Effect of preferred equity —  —  —  —  (0.10)
Tangible common equity to tangible assets 10.32% 9.29% 9.14% 8.77% 9.15%



UNITED COMMUNITY BANKS, INC.            
Financial Highlights            
Loan Portfolio Composition at Period-End            
 2019 2018 Linked Quarter Change Year over Year Change
(in millions)Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter  
LOANS BY CATEGORY             
Owner occupied commercial RE$1,720  $1,692  $1,658  $1,620  $1,648  $28  $72 
Income producing commercial RE2,008  1,934  1,939  1,867  1,812  74  196 
Commercial & industrial1,221  1,271  1,299  1,284  1,278  (50) (57)
Commercial construction976  1,001  983  866  796  (25) 180 
Equipment financing745  729  674  606  565  16  180 
  Total commercial6,670  6,627  6,553  6,243  6,099  43  571 
Residential mortgage1,118  1,121  1,108  1,064  1,049  (3) 69 
Home equity lines of credit661  669  675  684  694  (8) (33)
Residential construction236  229  219  200  211  7  25 
Consumer128  257  283  302  330  (129) (202)
  Total loans$8,813  $8,903  $8,838  $8,493  $8,383  $(90) $430 
              
LOANS BY MARKET             
North Georgia$967  $1,002  $1,002  $970  $981  $(35) $(14)
Atlanta1,762  1,740  1,745  1,524  1,507  22  255 
North Carolina1,156  1,117  1,084  1,074  1,072  39  84 
Coastal Georgia631  611  604  603  588  20  43 
Gainesville246  246  244  243  247  —  (1)
East Tennessee421  435  446  458  477  (14) (56)
South Carolina1,708  1,705  1,674  1,674  1,645  3  63 
Commercial Banking Solutions1,922  1,916  1,884  1,766  1,658  6  264 
Indirect auto—  131  155  181  208  (131) (208)
  Total loans$8,813  $8,903  $8,838  $8,493  $8,383  $(90) $430 


UNITED COMMUNITY BANKS, INC.        
Financial Highlights        
Loan Portfolio Composition at Year-End        
(in millions)2019 2018 2017 2016 2015
LOANS BY CATEGORY         
Owner occupied commercial RE$1,720  $1,648  $1,924  $1,650  $1,571 
Income producing commercial RE2,008  1,812  1,595  1,282  1,021 
Commercial & industrial1,221  1,278  1,131  1,070  785 
Commercial construction976  796  712  634  518 
Equipment financing745  565  —  —  — 
  Total commercial6,670  6,099  5,362  4,636  3,895 
Residential mortgage1,118  1,049  974  857  764 
Home equity lines of credit661  694  731  655  589 
Residential construction236  211  183  190  176 
Consumer128  330  486  583  571 
  Total loans$8,813  $8,383  $7,736  $6,921  $5,995 
          
LOANS BY MARKET         
North Georgia$967  $981  $1,019  $1,097  $1,125 
Atlanta1,762  1,507  1,510  1,399  1,259 
North Carolina1,156  1,072  1,049  545  549 
Coastal Georgia631  588  630  581  537 
Gainesville246  247  248  248  254 
East Tennessee421  477  475  504  504 
South Carolina1,708  1,645  1,486  1,233  819 
Commercial Banking Solutions1,922  1,658  961  855  492 
Indirect auto—  208  358  459  456 
  Total loans$8,813  $8,383  $7,736  $6,921  $5,995 


UNITED COMMUNITY BANKS, INC.      
Financial Highlights      
Credit Quality      
  2019
(in thousands) Fourth Quarter Third Quarter Second Quarter
NONACCRUAL LOANS      
Owner occupied RE $10,544  $8,430  $8,177 
Income producing RE 1,996  2,030  1,331 
Commercial & industrial 2,545  2,625  2,366 
Commercial construction 2,277  1,894  1,650 
Equipment financing 3,141  1,974  2,047 
Total commercial 20,503  16,953  15,571 
Residential mortgage 10,567  9,475  8,012 
Home equity lines of credit 3,173  3,065  1,978 
Residential construction 939  597  494 
Consumer 159  742  542 
Total $35,341  $30,832  $26,597 


  2019
  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 $(208) (0.05)% $(39) (0.01)% $(58) (0.01)%
Income producing RE 95  0.02  431  0.09  241  0.05 
Commercial & industrial 1,809  0.58  691  0.21  1,141  0.35 
Commercial construction (140) (0.06) (247) (0.10) (162) (0.07)
Equipment financing 1,550  0.84  1,174  0.67  890  0.56 
Total commercial 3,106  0.19  2,010  0.12  2,052  0.13 
Residential mortgage 89  0.03  158  0.06  (125) (0.05)
Home equity lines of credit 198  0.12  83  0.05  (111) (0.07)
Residential construction (24) (0.04) (5) (0.01) 199  0.38 
Consumer 556  0.90  477  0.70  423  0.58 
Total $3,925  0.18  $2,723  0.12  $2,438  0.11 
             
(1)  Annualized.            


UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data) December 31, 2019 December 31, 2018
ASSETS    
Cash and due from banks $125,844  $126,083 
Interest-bearing deposits in banks 389,362  201,182 
Cash and cash equivalents 515,206  327,265 
Debt securities available-for-sale 2,274,581  2,628,467 
Debt securities held-to-maturity (fair value $287,904 and $268,803) 283,533  274,407 
Loans held for sale, at fair value 58,484  18,935 
Loans, net of unearned income 8,812,553  8,383,401 
Less allowance for loan losses (62,089) (61,203)
Loans, net 8,750,464  8,322,198 
Premises and equipment, net 215,976  206,140 
Bank owned life insurance 202,664  192,616 
Accrued interest receivable 32,660  35,413 
Net deferred tax asset 34,059  64,224 
Derivative financial instruments 35,007  24,705 
Goodwill and other intangible assets 342,247  324,072 
Other assets 171,135  154,750 
Total assets $12,916,016  $12,573,192 
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $3,477,979  $3,210,220 
NOW and interest-bearing demand 2,461,895  2,369,631 
Money market 2,230,628  2,002,670 
Savings 706,467  669,886 
Time 1,859,574  1,598,391 
Brokered 160,701  683,715 
Total deposits 10,897,244  10,534,513 
Federal Home Loan Bank advances —  160,000 
Long-term debt 212,664  267,189 
Derivative financial instruments 15,516  26,433 
Accrued expenses and other liabilities 154,900  127,503 
Total liabilities 11,280,324  11,115,638 
Shareholders' equity:    
Common stock, $1 par value; 150,000,000 shares authorized;
79,013,729 and 79,234,077 shares issued and outstanding		 79,014  79,234 
Common stock issuable; 664,640 and 674,499 shares 11,491  10,744 
Capital surplus 1,496,641  1,499,584 
Retained earnings (accumulated deficit) 40,152  (90,419)
Accumulated other comprehensive income (loss) 8,394  (41,589)
Total shareholders' equity 1,635,692  1,457,554 
Total liabilities and shareholders' equity $12,916,016  $12,573,192 



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) 2019 2018 2019 2018
Interest revenue:        
Loans, including fees $118,464  $112,087  $476,039  $420,383 
Investment securities, including tax exempt of $1,155 and $1,140, and $4,564 and $4,189 16,846  21,237  74,484  77,685 
Deposits in banks and short-term investments 1,109  530  2,183  2,012 
Total interest revenue 136,419  133,854  552,706  500,080 
         
Interest expense:        
Deposits:        
NOW and interest-bearing demand 3,382  3,166  13,665  7,649 
Money market 4,883  3,985  18,983  11,838 
Savings 34  33  149  150 
Time 8,372  7,006  34,059  19,906 
Deposits 16,671  14,190  66,856  39,543 
Short-term borrowings —  340  838  1,112 
Federal Home Loan Bank advances 2  794  2,697  6,345 
Long-term debt 3,108  3,651  12,921  14,330 
Total interest expense 19,781  18,975  83,312  61,330 
Net interest revenue 116,638  114,879  469,394  438,750 
Provision for credit losses 3,500  2,100  13,150  9,500 
Net interest revenue after provision for credit losses 113,138  112,779  456,244  429,250 
         
Noninterest income:        
Service charges and fees 9,368  9,166  36,797  35,997 
Mortgage loan gains and related fees 9,395  3,082  27,145  19,010 
Brokerage fees 1,526  1,593  6,150  5,191 
Gains from other loan sales, net 2,455  2,493  6,867  9,277 
Securities (losses) gains, net (903) 646  (1,021) (656)
Other 8,342  6,065  28,775  24,142 
Total noninterest income 30,183  23,045  104,713  92,961 
Total revenue 143,321  135,824  560,957  522,211 
         
Noninterest expenses:        
Salaries and employee benefits 50,279  45,631  196,440  181,015 
Occupancy 5,926  5,842  23,350  22,781 
Communications and equipment 6,380  6,206  24,613  21,277 
FDIC assessments and other regulatory charges 1,330  1,814  4,901  8,491 
Professional fees 5,098  4,105  17,028  15,540 
Postage, printing and supplies 1,637  1,520  6,370  6,416 
Advertising and public relations 1,914  1,650  6,170  5,991 
Amortization of intangibles 1,093  1,420  4,938  6,846 
Merger-related and other charges (74) 965  6,907  5,414 
Other 7,841  9,089  31,528  32,514 
Total noninterest expenses 81,424  78,242  322,245  306,285 
Net income before income taxes 61,897  57,582  238,712  215,926 
Income tax expense 12,885  12,445  52,991  49,815 
Net income $49,012  $45,137  $185,721  $166,111 
         
Net income available to common shareholders $48,617  $44,801  $184,346  $164,927 
         
Net income per common share:        
Basic $0.61  $0.56  $2.31  $2.07 
Diluted 0.61  0.56  2.31  2.07 
Weighted average common shares outstanding:        
Basic 79,659  79,884  79,700  79,662 
Diluted 79,669  79,890  79,708  79,671 


Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
 
  2019 2018
(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) $8,890,272  $118,262  5.28% $8,306,270  $112,020  5.35%
Taxable securities (3) 2,306,065  15,691  2.72  2,843,085  20,097  2.83 
Tax-exempt securities (FTE) (1)(3) 179,744  1,551  3.45  161,284  1,535  3.81 
Federal funds sold and other interest-earning assets 456,055  1,586  1.39  222,931  845  1.52 
Total interest-earning assets (FTE) 11,832,136  137,090  4.60  11,533,570  134,497  4.63 
             
Noninterest-earning assets:            
Allowance for loan losses (63,601)     (61,992)    
Cash and due from banks 120,936      125,066     
Premises and equipment 219,487      214,590     
Other assets (3) 836,586      694,215     
Total assets $12,945,544      $12,505,449     
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $2,398,396  3,382  0.56  $2,134,828  3,166  0.59 
Money market 2,321,352  4,883  0.83  2,126,840  3,985  0.74 
Savings 704,454  34  0.02  675,265  33  0.02 
Time 1,880,174  7,975  1.68  1,584,011  4,297  1.08 
Brokered time deposits 85,781  397  1.84  490,748  2,709  2.19 
Total interest-bearing deposits 7,390,157  16,671  0.89  7,011,692  14,190  0.80 
Federal funds purchased and other borrowings —  —  —  55,095  340  2.45 
Federal Home Loan Bank advances 435  2  1.82  140,869  794  2.24 
Long-term debt 232,726  3,108  5.30  272,313  3,651  5.32 
Total borrowed funds 233,161  3,110  5.29  468,277  4,785  4.05 
Total interest-bearing liabilities 7,623,318  19,781  1.03  7,479,969  18,975  1.01 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits 3,533,746      3,294,385     
Other liabilities 165,148      311,461     
Total liabilities 11,322,212      11,085,815     
Shareholders' equity 1,623,332      1,419,634     
Total liabilities and shareholders' equity $12,945,544      $12,505,449     
             
Net interest revenue (FTE)   $117,309      $115,522   
Net interest-rate spread (FTE)     3.57%     3.62%
Net interest margin (FTE) (4)     3.93%     3.97%

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $36.0 million in 2019 and unrealized losses of $59.5 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.


Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
     
  2019 2018
(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) $8,708,035  $475,803  5.46% $8,170,143  $420,001  5.14%
Taxable securities (3) 2,475,102  69,920  2.82  2,745,715  73,496  2.68 
Tax-exempt securities (FTE) (1)(3) 171,549  6,130  3.57  152,855  5,641  3.69 
Federal funds sold and other interest-earning assets 254,370  3,499  1.38  213,137  2,968  1.39 
Total interest-earning assets (FTE) 11,609,056  555,352  4.78  11,281,850  502,106  4.45 
             
Non-interest-earning assets:            
Allowance for loan losses (62,900)     (61,443)    
Cash and due from banks 121,649      135,345     
Premises and equipment 220,523      216,646     
Other assets (3) 798,649      711,671     
Total assets $12,686,977      $12,284,069     
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $2,249,713  13,665  0.61  $2,107,831  7,649  0.36 
Money market 2,221,478  18,983  0.85  2,117,216  11,838  0.56 
Savings 690,028  149  0.02  672,735  150  0.02 
Time 1,791,319  28,313  1.58  1,547,221  12,585  0.81 
Brokered time deposits 240,646  5,746  2.39  347,072  7,321  2.11 
Total interest-bearing deposits 7,193,184  66,856  0.93  6,792,075  39,543  0.58 
Federal funds purchased and other borrowings 33,504  838  2.50  57,376  1,112  1.94 
Federal Home Loan Bank advances 106,973  2,697  2.52  328,871  6,345  1.93 
Long-term debt 247,732  12,921  5.22  290,004  14,330  4.94 
Total borrowed funds 388,209  16,456  4.24  676,251  21,787  3.22 
Total interest-bearing liabilities 7,581,393  83,312  1.10  7,468,326  61,330  0.82 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits 3,385,431      3,207,625     
Other liabilities 164,550      227,980     
Total liabilities 11,131,374      10,903,931     
Shareholders' equity 1,555,603      1,380,138     
Total liabilities and shareholders' equity $12,686,977      $12,284,069     
             
Net interest revenue (FTE)   $472,040      $440,776   
Net interest-rate spread (FTE)     3.68%     3.63%
Net interest margin (FTE) (4)     4.07%     3.91%

(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 $12.8 million in 2019 and unrealized losses of $45.2 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 $12.9 billion in assets, and 149 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 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.

 

Mot-clé

UCBI EARNINGS EARNINGS CALL FINANCIAL Best Banks United Community Banks Inc. Lynn Harton Greenville SC Blairsville GA Harralson