GREENVILLE, S.C., April 21, 2020 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported first quarter financial results, with solid year-over-year loan and deposit growth. United delivered net income of $31.9 million, pre-tax pre-provision income of $62.9 million, and built its allowance for credit losses with a $22.2 million provision for credit losses given the uncertain environment. Diluted earnings per share were $0.40, a decrease of $0.15 or 27% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.41, also down 27% from last year. United’s return on assets (“ROA”) was 0.99% and its return on common equity was 7.9% for the quarter. On an operating basis, United’s ROA was 1.01% and its return on tangible common equity was 10.6%.
Chairman and CEO Lynn Harton stated, “While I am pleased to report a solid quarter in a difficult environment, I am most proud of how our employees are delivering for our customers during this public health crisis. We consider ourselves ‘Financial First Responders’ and feel privileged to take care of our customers in this time of significant stress. Among other things, we were able to help support our small business clients who have experienced financial hardship due to COVID-19 by offering loan deferrals as needed, and by participating in the Small Business Administration’s Paycheck Protection Program (“PPP”). As one of the largest Preferred SBA lenders in the Southeast, we mobilized our existing SBA team, as well as hundreds of additional United bankers to process applications as quickly as possible. As a result, our team was able to successfully process applications totaling more than $960 million and reserve funding for 6,918 small businesses as of April 16, 2020.
Harton continued, “We are focused on the safety of employees and customers, with 54% of our non-branch employees working from home, and all branches operating a drive-through only model with lobbies available by appointment. The investments we have made in our digital delivery channels are paying off with increased online account openings as well as increased web traffic, and digital and social engagement. Looking forward, based on much of what we are learning now, we have the potential to be even stronger with greater innovation and business growth opportunities.”
This quarter saw record core transaction growth with loans growing at a 6% annualized rate and total deposits up by 5% on an annualized basis. Increased purchased loan accretion drove United’s net interest margin 14 basis points higher in the quarter. Excluding purchased loan accretion, the net interest margin was down just 1 basis point. Total deposits were up $138 million over last quarter, with core transaction deposits up $238 million, or 13% annualized. This was mainly driven by demand deposit growth of $165 million.
Mr. Harton concluded, “I am also tremendously proud that for 2020, Forbes recognized United for the seventh consecutive year on its list of the 100 Best Banks in America. Additionally, this quarter United received the 2019 Greenwich Excellence Award for overall satisfaction in Middle Market Banking in the South, and Small Business Banking Excellence Awards for both overall satisfaction and cash management in the South. These honors are remarkable and are only achieved through the dedication of our bankers to build a company where great people can build fulfilling careers through helping our customers reach their financial goals.”
First Quarter 2020 Financial Highlights:
- EPS decreased by 27% as compared to last year on both a GAAP and operating basis
- Return on assets of 0.99%, or 1.01% excluding merger-related and other charges
- Pre-tax pre-provision return on assets of 1.95%, or 1.98%, excluding merger-related charges
- Return on common equity of 7.9%
- Return on tangible common equity of 10.6%, excluding merger-related and other charges
- United adopted the CECL model in 1Q; the uncertain economic outlook necessitated a provision for credit losses of $22.2 million
- Loan production of $919 million compared to $782 million in Q1 2019
- Loan growth of 6% for the quarter on an annualized basis
- Core transaction deposits were up $238 million or 13% annualized, mainly driven by demand deposit growth of $165 million during the quarter
- Net interest margin of 4.07% was up 14 basis points compared to the fourth quarter, and down 3 basis points from a year ago
- Mortgage rate locks of $801 million, exceeding our previous quarterly record by 58%, and compared to $312 million a year ago
- Noninterest income was down $4.4 million on a linked quarter basis, as record mortgage rate locks and production were more than offset by a larger negative mortgage servicing rights mark-to-market
- Efficiency ratio of 56.15%, or 55.59% excluding merger-related and other charges
- Net charge-offs of $8.1 million, or 37 basis points as a percent of average loans, up 19 basis points from last quarter mainly due to a single commercial loan default totaling $6.4 million
- Nonperforming assets of 0.28% of total assets, which is flat compared to December 31, 2019
- Repurchased 826,482 shares at an average price of $25.14 in the quarter
Conference Call
United will hold a conference call, Wednesday, April 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 1559838. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||
| Selected Financial Information | |||||||||||||||||||||||
| 2020 | 2019 | First Quarter 2020 - 2019 Change | |||||||||||||||||||||
| (in thousands, except per share data) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||||
| INCOME SUMMARY | |||||||||||||||||||||||
| Interest revenue | $ | 136,547 | $ | 136,419 | $ | 140,615 | $ | 139,156 | $ | 136,516 | |||||||||||||
| Interest expense | 17,941 | 19,781 | 21,277 | 21,372 | 20,882 | ||||||||||||||||||
| Net interest revenue | 118,606 | 116,638 | 119,338 | 117,784 | 115,634 | 3 | % | ||||||||||||||||
| Provision for credit losses | 22,191 | 3,500 | 3,100 | 3,250 | 3,300 | ||||||||||||||||||
| Noninterest income | 25,814 | 30,183 | 29,031 | 24,531 | 20,968 | 23 | |||||||||||||||||
| Total revenue | 122,229 | 143,321 | 145,269 | 139,065 | 133,302 | (8 | ) | ||||||||||||||||
| Expenses | 81,538 | 81,424 | 82,924 | 81,813 | 76,084 | 7 | |||||||||||||||||
| Income before income tax expense | 40,691 | 61,897 | 62,345 | 57,252 | 57,218 | (29 | ) | ||||||||||||||||
| Income tax expense | 8,807 | 12,885 | 13,983 | 13,167 | 12,956 | (32 | ) | ||||||||||||||||
| Net income | 31,884 | 49,012 | 48,362 | 44,085 | 44,262 | (28 | ) | ||||||||||||||||
| Merger-related and other charges | 808 | (74 | ) | 2,605 | 4,087 | 739 | |||||||||||||||||
| Income tax benefit of merger-related and other charges | (182 | ) | 17 | (600 | ) | (940 | ) | (172 | ) | ||||||||||||||
| Net income - operating (1) | $ | 32,510 | $ | 48,955 | $ | 50,367 | $ | 47,232 | $ | 44,829 | (27 | ) | |||||||||||
| Pre-tax pre-provision income (5) | $ | 62,882 | $ | 65,397 | $ | 65,445 | $ | 60,502 | $ | 60,518 | 4 | ||||||||||||
| PERFORMANCE MEASURES | |||||||||||||||||||||||
| Per common share: | |||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.40 | $ | 0.61 | $ | 0.60 | $ | 0.55 | $ | 0.55 | (27 | ) | |||||||||||
| Diluted net income - operating (1) | 0.41 | 0.61 | 0.63 | 0.59 | 0.56 | (27 | ) | ||||||||||||||||
| Cash dividends declared | 0.18 | 0.18 | 0.17 | 0.17 | 0.16 | 13 | |||||||||||||||||
| Book value | 20.80 | 20.53 | 20.16 | 19.65 | 18.93 | 10 | |||||||||||||||||
| Tangible book value (3) | 16.52 | 16.28 | 15.90 | 15.38 | 14.93 | 11 | |||||||||||||||||
| Key performance ratios: | |||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 7.85 | % | 12.07 | % | 12.16 | % | 11.45 | % | 11.85 | % | |||||||||||||
| Return on common equity - operating (1)(2)(4) | 8.01 | 12.06 | 12.67 | 12.27 | 12.00 | ||||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 10.57 | 15.49 | 16.38 | 15.88 | 15.46 | ||||||||||||||||||
| Return on assets - GAAP (4) | 0.99 | 1.50 | 1.51 | 1.40 | 1.44 | ||||||||||||||||||
| Return on assets - operating (1)(4) | 1.01 | 1.50 | 1.58 | 1.50 | 1.45 | ||||||||||||||||||
| Return on assets - pre-tax pre-provision (4)(5) | 1.95 | 2.00 | 2.05 | 1.92 | 1.96 | ||||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges (1)(4)(5) | 1.98 | 2.00 | 2.13 | 2.05 | 1.99 | ||||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 4.07 | 3.93 | 4.12 | 4.12 | 4.10 | ||||||||||||||||||
| Efficiency ratio - GAAP | 56.15 | 54.87 | 55.64 | 57.28 | 55.32 | ||||||||||||||||||
| Efficiency ratio - operating (1) | 55.59 | 54.92 | 53.90 | 54.42 | 54.78 | ||||||||||||||||||
| Equity to total assets | 12.54 | 12.66 | 12.53 | 12.25 | 12.06 | ||||||||||||||||||
| Tangible common equity to tangible assets (3) | 10.22 | 10.32 | 10.16 | 9.86 | 9.76 | ||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||||
| Nonperforming loans | $ | 36,208 | $ | 35,341 | $ | 30,832 | $ | 26,597 | $ | 23,624 | 53 | ||||||||||||
| Foreclosed properties | 475 | 476 | 102 | 75 | 1,127 | (58 | ) | ||||||||||||||||
| Total nonperforming assets ("NPAs") | 36,683 | 35,817 | 30,934 | 26,672 | 24,751 | 48 | |||||||||||||||||
| Allowance for credit losses - loans | 81,905 | 62,089 | 62,514 | 62,204 | 61,642 | 33 | |||||||||||||||||
| Net charge-offs | 8,114 | 3,925 | 2,723 | 2,438 | 3,130 | 159 | |||||||||||||||||
| Allowance for credit losses to loans | 0.92 | % | 0.70 | % | 0.70 | % | 0.70 | % | 0.73 | % | |||||||||||||
| Net charge-offs to average loans (4) | 0.37 | 0.18 | 0.12 | 0.11 | 0.15 | ||||||||||||||||||
| NPAs to loans and foreclosed properties | 0.41 | 0.41 | 0.35 | 0.30 | 0.29 | ||||||||||||||||||
| NPAs to total assets | 0.28 | 0.28 | 0.24 | 0.21 | 0.20 | ||||||||||||||||||
| AVERAGE BALANCES ($ in millions) | |||||||||||||||||||||||
| Loans | $ | 8,829 | $ | 8,890 | $ | 8,836 | $ | 8,670 | $ | 8,430 | 5 | ||||||||||||
| Investment securities | 2,520 | 2,486 | 2,550 | 2,674 | 2,883 | (13 | ) | ||||||||||||||||
| Earning assets | 11,798 | 11,832 | 11,568 | 11,534 | 11,498 | 3 | |||||||||||||||||
| Total assets | 12,944 | 12,946 | 12,681 | 12,608 | 12,509 | 3 | |||||||||||||||||
| Deposits | 10,915 | 10,924 | 10,531 | 10,493 | 10,361 | 5 | |||||||||||||||||
| Shareholders’ equity | 1,653 | 1,623 | 1,588 | 1,531 | 1,478 | 12 | |||||||||||||||||
| Common shares - basic (thousands) | 79,340 | 79,659 | 79,663 | 79,673 | 79,807 | (1 | ) | ||||||||||||||||
| Common shares - diluted (thousands) | 79,446 | 79,669 | 79,667 | 79,678 | 79,813 | — | |||||||||||||||||
| AT PERIOD END ($ in millions) | |||||||||||||||||||||||
| Loans | $ | 8,935 | $ | 8,813 | $ | 8,903 | $ | 8,838 | $ | 8,493 | 5 | ||||||||||||
| Investment securities | 2,540 | 2,559 | 2,515 | 2,620 | 2,720 | (7 | ) | ||||||||||||||||
| Total assets | 13,086 | 12,916 | 12,809 | 12,779 | 12,506 | 5 | |||||||||||||||||
| Deposits | 11,035 | 10,897 | 10,757 | 10,591 | 10,534 | 5 | |||||||||||||||||
| Shareholders’ equity | 1,641 | 1,636 | 1,605 | 1,566 | 1,508 | 9 | |||||||||||||||||
| Common shares outstanding (thousands) | 78,284 | 79,014 | 78,974 | 79,075 | 79,035 | (1 | ) | ||||||||||||||||
(1) Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. (2) Net income divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||
| Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||
| (in thousands, except per share data) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||
| Expense reconciliation | ||||||||||||||||||||
| Expenses (GAAP) | $ | 81,538 | $ | 81,424 | $ | 82,924 | $ | 81,813 | $ | 76,084 | ||||||||||
| Merger-related and other charges | (808 | ) | 74 | (2,605 | ) | (4,087 | ) | (739 | ) | |||||||||||
| Expenses - operating | $ | 80,730 | $ | 81,498 | $ | 80,319 | $ | 77,726 | $ | 75,345 | ||||||||||
| Net income to operating income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 31,884 | $ | 49,012 | $ | 48,362 | $ | 44,085 | $ | 44,262 | ||||||||||
| Merger-related and other charges | 808 | (74 | ) | 2,605 | 4,087 | 739 | ||||||||||||||
| Income tax benefit of merger-related and other charges | (182 | ) | 17 | (600 | ) | (940 | ) | (172 | ) | |||||||||||
| Net income - operating | $ | 32,510 | $ | 48,955 | $ | 50,367 | $ | 47,232 | $ | 44,829 | ||||||||||
| Net income to pre-tax pre-provision income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 31,884 | $ | 49,012 | $ | 48,362 | $ | 44,085 | $ | 44,262 | ||||||||||
| Income tax expense | 8,807 | 12,885 | 13,983 | 13,167 | 12,956 | |||||||||||||||
| Provision for credit losses | 22,191 | 3,500 | 3,100 | 3,250 | 3,300 | |||||||||||||||
| Pre-tax pre-provision income | $ | 62,882 | $ | 65,397 | $ | 65,445 | $ | 60,502 | $ | 60,518 | ||||||||||
| Diluted income per common share reconciliation | ||||||||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.40 | $ | 0.61 | $ | 0.60 | $ | 0.55 | $ | 0.55 | ||||||||||
| Merger-related and other charges, net of tax | 0.01 | — | 0.03 | 0.04 | 0.01 | |||||||||||||||
| Diluted income per common share - operating | $ | 0.41 | $ | 0.61 | $ | 0.63 | $ | 0.59 | $ | 0.56 | ||||||||||
| Book value per common share reconciliation | ||||||||||||||||||||
| Book value per common share (GAAP) | $ | 20.80 | $ | 20.53 | $ | 20.16 | $ | 19.65 | $ | 18.93 | ||||||||||
| Effect of goodwill and other intangibles | (4.28 | ) | (4.25 | ) | (4.26 | ) | (4.27 | ) | (4.00 | ) | ||||||||||
| Tangible book value per common share | $ | 16.52 | $ | 16.28 | $ | 15.90 | $ | 15.38 | $ | 14.93 | ||||||||||
| Return on tangible common equity reconciliation | ||||||||||||||||||||
| Return on common equity (GAAP) | 7.85 | % | 12.07 | % | 12.16 | % | 11.45 | % | 11.85 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.16 | (0.01 | ) | 0.51 | 0.82 | 0.15 | ||||||||||||||
| Return on common equity - operating | 8.01 | 12.06 | 12.67 | 12.27 | 12.00 | |||||||||||||||
| Effect of goodwill and other intangibles | 2.56 | 3.43 | 3.71 | 3.61 | 3.46 | |||||||||||||||
| Return on tangible common equity - operating | 10.57 | % | 15.49 | % | 16.38 | % | 15.88 | % | 15.46 | % | ||||||||||
| Return on assets reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.99 | % | 1.50 | % | 1.51 | % | 1.40 | % | 1.44 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.02 | — | 0.07 | 0.10 | 0.01 | |||||||||||||||
| Return on assets - operating | 1.01 | % | 1.50 | % | 1.58 | % | 1.50 | % | 1.45 | % | ||||||||||
| Return on assets to return on assets- pre-tax pre-provision reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.99 | % | 1.50 | % | 1.51 | % | 1.40 | % | 1.44 | % | ||||||||||
| Income tax expense | 0.27 | 0.39 | 0.44 | 0.42 | 0.41 | |||||||||||||||
| Provision for credit losses | 0.69 | 0.11 | 0.10 | 0.10 | 0.11 | |||||||||||||||
| Return on assets - pre-tax, pre-provision | 1.95 | 2.00 | 2.05 | 1.92 | 1.96 | |||||||||||||||
| Merger-related and other charges | 0.03 | — | 0.08 | 0.13 | 0.03 | |||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges | 1.98 | % | 2.00 | % | 2.13 | % | 2.05 | % | 1.99 | % | ||||||||||
| Efficiency ratio reconciliation | ||||||||||||||||||||
| Efficiency ratio (GAAP) | 56.15 | % | 54.87 | % | 55.64 | % | 57.28 | % | 55.32 | % | ||||||||||
| Merger-related and other charges | (0.56 | ) | 0.05 | (1.74 | ) | (2.86 | ) | (0.54 | ) | |||||||||||
| Efficiency ratio - operating | 55.59 | % | 54.92 | % | 53.90 | % | 54.42 | % | 54.78 | % | ||||||||||
| Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||
| Equity to total assets (GAAP) | 12.54 | % | 12.66 | % | 12.53 | % | 12.25 | % | 12.06 | % | ||||||||||
| Effect of goodwill and other intangibles | (2.32 | ) | (2.34 | ) | (2.37 | ) | (2.39 | ) | (2.30 | ) | ||||||||||
| Tangible common equity to tangible assets | 10.22 | % | 10.32 | % | 10.16 | % | 9.86 | % | 9.76 | % | ||||||||||
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||||||
| Financial Highlights | |||||||||||||||||||||||||||
| Loan Portfolio Composition at Period-End | |||||||||||||||||||||||||||
| 2020 | 2019 | Linked Quarter Change | Year over Year Change | ||||||||||||||||||||||||
| (in millions) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||||||||
| LOANS BY CATEGORY | |||||||||||||||||||||||||||
| Owner occupied commercial RE | $ | 1,703 | $ | 1,720 | $ | 1,692 | $ | 1,658 | $ | 1,620 | $ | (17 | ) | $ | 83 | ||||||||||||
| Income producing commercial RE | 2,065 | 2,008 | 1,934 | 1,939 | 1,867 | 57 | 198 | ||||||||||||||||||||
| Commercial & industrial | 1,310 | 1,221 | 1,271 | 1,299 | 1,284 | 89 | 26 | ||||||||||||||||||||
| Commercial construction | 959 | 976 | 1,001 | 983 | 866 | (17 | ) | 93 | |||||||||||||||||||
| Equipment financing | 761 | 745 | 729 | 674 | 606 | 16 | 155 | ||||||||||||||||||||
| Total commercial | 6,798 | 6,670 | 6,627 | 6,553 | 6,243 | 128 | 555 | ||||||||||||||||||||
| Residential mortgage | 1,128 | 1,118 | 1,121 | 1,108 | 1,064 | 10 | 64 | ||||||||||||||||||||
| Home equity lines of credit | 668 | 661 | 669 | 675 | 684 | 7 | (16 | ) | |||||||||||||||||||
| Residential construction | 216 | 236 | 229 | 219 | 200 | (20 | ) | 16 | |||||||||||||||||||
| Consumer | 125 | 128 | 257 | 283 | 302 | (3 | ) | (177 | ) | ||||||||||||||||||
| Total loans | $ | 8,935 | $ | 8,813 | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 122 | $ | 442 | |||||||||||||
| LOANS BY MARKET | |||||||||||||||||||||||||||
| North Georgia | $ | 958 | $ | 967 | $ | 1,002 | $ | 1,002 | $ | 970 | (9 | ) | (12 | ) | |||||||||||||
| Atlanta | 1,820 | 1,762 | 1,740 | 1,745 | 1,524 | 58 | 296 | ||||||||||||||||||||
| North Carolina | 1,124 | 1,156 | 1,117 | 1,084 | 1,074 | (32 | ) | 50 | |||||||||||||||||||
| Coastal Georgia | 604 | 631 | 611 | 604 | 603 | (27 | ) | 1 | |||||||||||||||||||
| Gainesville | 235 | 246 | 246 | 244 | 243 | (11 | ) | (8 | ) | ||||||||||||||||||
| East Tennessee | 425 | 421 | 435 | 446 | 458 | 4 | (33 | ) | |||||||||||||||||||
| South Carolina | 1,774 | 1,708 | 1,705 | 1,674 | 1,674 | 66 | 100 | ||||||||||||||||||||
| Commercial Banking Solutions | 1,995 | 1,922 | 1,916 | 1,884 | 1,766 | 73 | 229 | ||||||||||||||||||||
| Indirect auto | — | — | 131 | 155 | 181 | — | (181 | ) | |||||||||||||||||||
| Total loans | $ | 8,935 | $ | 8,813 | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 122 | $ | 442 | |||||||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||
| Financial Highlights | ||||||||||||||||||
| Credit Quality | ||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||
| (in thousands) | First Quarter | Fourth Quarter | Third Quarter | |||||||||||||||
| NONACCRUAL LOANS | ||||||||||||||||||
| Owner occupied RE | $ | 10,405 | $ | 10,544 | $ | 8,430 | ||||||||||||
| Income producing RE | 2,235 | 1,996 | 2,030 | |||||||||||||||
| Commercial & industrial | 3,169 | 2,545 | 2,625 | |||||||||||||||
| Commercial construction | 1,724 | 2,277 | 1,894 | |||||||||||||||
| Equipment financing | 2,439 | 3,141 | 1,974 | |||||||||||||||
| Total commercial | 19,972 | 20,503 | 16,953 | |||||||||||||||
| Residential mortgage | 12,458 | 10,567 | 9,475 | |||||||||||||||
| Home equity lines of credit | 3,010 | 3,173 | 3,065 | |||||||||||||||
| Residential construction | 540 | 939 | 597 | |||||||||||||||
| Consumer | 228 | 159 | 742 | |||||||||||||||
| Total | $ | 36,208 | $ | 35,341 | $ | 30,832 | ||||||||||||
| 2020 | 2019 | ||||||||||||||||||||
| First Quarter | Fourth Quarter | Third 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 | $ | (1,028 | ) | (0.24 | )% | $ | (208 | ) | (0.05 | )% | $ | (39 | ) | (0.01 | )% | ||||||
| Income producing RE | 270 | 0.05 | 95 | 0.02 | 431 | 0.09 | |||||||||||||||
| Commercial & industrial | 7,185 | 2.30 | 1,809 | 0.58 | 691 | 0.21 | |||||||||||||||
| Commercial construction | (141 | ) | (0.06 | ) | (140 | ) | (0.06 | ) | (247 | ) | (0.10 | ) | |||||||||
| Equipment financing | 1,507 | 0.81 | 1,550 | 0.84 | 1,174 | 0.67 | |||||||||||||||
| Total commercial | 7,793 | 0.47 | 3,106 | 0.19 | 2,010 | 0.12 | |||||||||||||||
| Residential mortgage | 9 | — | 89 | 0.03 | 158 | 0.06 | |||||||||||||||
| Home equity lines of credit | (83 | ) | (0.05 | ) | 198 | 0.12 | 83 | 0.05 | |||||||||||||
| Residential construction | (12 | ) | (0.02 | ) | (24 | ) | (0.04 | ) | (5 | ) | (0.01 | ) | |||||||||
| Consumer | 407 | 1.30 | 556 | 0.90 | 477 | 0.70 | |||||||||||||||
| Total | $ | 8,114 | 0.37 | $ | 3,925 | 0.18 | $ | 2,723 | 0.12 | ||||||||||||
| (1) Annualized. | |||||||||||||||||||||
| UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) | ||||||||
| (in thousands, except share and per share data) | March 31, 2020 | December 31, 2019 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 155,008 | $ | 125,844 | ||||
| Interest-bearing deposits in banks | 365,494 | 389,362 | ||||||
| Cash and cash equivalents | 520,502 | 515,206 | ||||||
| Debt securities available for sale | 2,249,876 | 2,274,581 | ||||||
| Debt securities held to maturity (fair value $301,595 and $287,904) | 290,404 | 283,533 | ||||||
| Loans held for sale at fair value | 89,959 | 58,484 | ||||||
| Loans and leases held for investment | 8,935,424 | 8,812,553 | ||||||
| Less allowance for credit losses - loans and leases | (81,905 | ) | (62,089 | ) | ||||
| Loans and leases, net | 8,853,519 | 8,750,464 | ||||||
| Premises and equipment, net | 214,744 | 215,976 | ||||||
| Bank owned life insurance | 200,778 | 202,664 | ||||||
| Accrued interest receivable | 31,570 | 32,660 | ||||||
| Net deferred tax asset | 30,715 | 34,059 | ||||||
| Derivative financial instruments | 82,668 | 35,007 | ||||||
| Goodwill and other intangible assets, net | 341,207 | 342,247 | ||||||
| Other assets | 179,924 | 171,135 | ||||||
| Total assets | $ | 13,085,866 | $ | 12,916,016 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 3,624,806 | $ | 3,477,979 | ||||
| NOW and interest-bearing demand | 2,391,976 | 2,461,895 | ||||||
| Money market | 2,277,052 | 2,230,628 | ||||||
| Savings | 732,209 | 706,467 | ||||||
| Time | 1,840,767 | 1,859,574 | ||||||
| Brokered | 168,116 | 160,701 | ||||||
| Total deposits | 11,034,926 | 10,897,244 | ||||||
| Long-term debt | 212,849 | 212,664 | ||||||
| Derivative financial instruments | 27,349 | 15,516 | ||||||
| Accrued expenses and other liabilities | 170,130 | 154,900 | ||||||
| Total liabilities | 11,445,254 | 11,280,324 | ||||||
| Shareholders' equity: | ||||||||
| Common stock, $1 par value; 150,000,000 shares authorized; 78,283,544 and 79,013,729 shares issued and outstanding | 78,284 | 79,014 | ||||||
| Common stock issuable; 591,053 and 664,640 shares | 10,534 | 11,491 | ||||||
| Capital surplus | 1,478,719 | 1,496,641 | ||||||
| Retained earnings | 54,206 | 40,152 | ||||||
| Accumulated other comprehensive income | 18,869 | 8,394 | ||||||
| Total shareholders' equity | 1,640,612 | 1,635,692 | ||||||
| Total liabilities and shareholders' equity | $ | 13,085,866 | $ | 12,916,016 | ||||
| UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| (in thousands, except per share data) | 2020 | 2019 | ||||||
| Interest revenue: | ||||||||
| Loans, including fees | $ | 118,063 | $ | 115,259 | ||||
| Investment securities, including tax exempt of $1,523 and $1,169 | 17,394 | 20,818 | ||||||
| Deposits in banks and short-term investments | 1,090 | 439 | ||||||
| Total interest revenue | 136,547 | 136,516 | ||||||
| Interest expense: | ||||||||
| Deposits: | ||||||||
| NOW and interest-bearing demand | 2,978 | 3,609 | ||||||
| Money market | 4,531 | 4,132 | ||||||
| Savings | 35 | 32 | ||||||
| Time | 7,531 | 8,184 | ||||||
| Deposits | 15,075 | 15,957 | ||||||
| Short-term borrowings | 1 | 161 | ||||||
| Federal Home Loan Bank advances | 1 | 1,422 | ||||||
| Long-term debt | 2,864 | 3,342 | ||||||
| Total interest expense | 17,941 | 20,882 | ||||||
| Net interest revenue | 118,606 | 115,634 | ||||||
| Provision for credit losses | 22,191 | 3,300 | ||||||
| Net interest revenue after provision for credit losses | 96,415 | 112,334 | ||||||
| Noninterest income: | ||||||||
| Service charges and fees | 8,638 | 8,453 | ||||||
| Mortgage loan gains and other related fees | 8,310 | 3,748 | ||||||
| Brokerage fees | 1,640 | 1,337 | ||||||
| Gains from sales of other loans, net | 1,674 | 1,303 | ||||||
| Securities losses, net | — | (267 | ) | |||||
| Other | 5,552 | 6,394 | ||||||
| Total noninterest income | 25,814 | 20,968 | ||||||
| Total revenue | 122,229 | 133,302 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 51,358 | 47,503 | ||||||
| Communications and equipment | 5,946 | 5,788 | ||||||
| Occupancy | 5,714 | 5,584 | ||||||
| Advertising and public relations | 1,274 | 1,286 | ||||||
| Postage, printing and supplies | 1,670 | 1,586 | ||||||
| Professional fees | 4,097 | 3,161 | ||||||
| Lending and loan servicing expense | 2,293 | 2,334 | ||||||
| Outside services - electronic banking | 1,832 | 1,609 | ||||||
| FDIC assessments and other regulatory charges | 1,484 | 1,710 | ||||||
| Amortization of intangibles | 1,040 | 1,293 | ||||||
| Merger-related and other charges | 808 | 546 | ||||||
| Other | 4,022 | 3,684 | ||||||
| Total noninterest expenses | 81,538 | 76,084 | ||||||
| Net income before income taxes | 40,691 | 57,218 | ||||||
| Income tax expense | 8,807 | 12,956 | ||||||
| Net income | $ | 31,884 | $ | 44,262 | ||||
| Net income available to common shareholders | $ | 31,641 | $ | 43,947 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.40 | $ | 0.55 | ||||
| Diluted | 0.40 | 0.55 | ||||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 79,340 | 79,807 | ||||||
| Diluted | 79,446 | 79,813 | ||||||
| Average Consolidated Balance Sheets and Net Interest Analysis |
| For the Three Months Ended March 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) | $ | 8,828,880 | $ | 117,796 | 5.37 | % | $ | 8,429,976 | $ | 115,347 | 5.55 | % | ||||||||||
| Taxable securities (3) | 2,357,635 | 15,871 | 2.69 | 2,712,995 | 19,649 | 2.90 | ||||||||||||||||
| Tax-exempt securities (FTE) (1)(3) | 162,253 | 2,045 | 5.04 | 169,702 | 1,570 | 3.70 | ||||||||||||||||
| Federal funds sold and other interest-earning assets | 448,775 | 1,632 | 1.46 | 185,623 | 618 | 1.33 | ||||||||||||||||
| Total interest-earning assets (FTE) | 11,797,543 | 137,344 | 4.68 | 11,498,296 | 137,184 | 4.83 | ||||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||
| Allowance for credit losses | (69,777 | ) | (61,784 | ) | ||||||||||||||||||
| Cash and due from banks | 128,254 | 123,801 | ||||||||||||||||||||
| Premises and equipment | 219,243 | 216,611 | ||||||||||||||||||||
| Other assets (3) | 868,452 | 731,628 | ||||||||||||||||||||
| Total assets | $ | 12,943,715 | $ | 12,508,552 | ||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||
| NOW and interest-bearing demand | $ | 2,412,733 | 2,978 | 0.50 | $ | 2,286,619 | 3,609 | 0.64 | ||||||||||||||
| Money market | 2,340,723 | 4,531 | 0.78 | 2,098,052 | 4,132 | 0.80 | ||||||||||||||||
| Savings | 712,110 | 35 | 0.02 | 672,197 | 32 | 0.02 | ||||||||||||||||
| Time | 1,841,552 | 7,250 | 1.58 | 1,627,584 | 5,336 | 1.33 | ||||||||||||||||
| Brokered time deposits | 80,821 | 281 | 1.40 | 482,048 | 2,848 | 2.40 | ||||||||||||||||
| Total interest-bearing deposits | 7,387,939 | 15,075 | 0.82 | 7,166,500 | 15,957 | 0.90 | ||||||||||||||||
| Federal funds purchased and other borrowings | 396 | 1 | 1.02 | 21,549 | 161 | 3.03 | ||||||||||||||||
| Federal Home Loan Bank advances | 165 | 1 | 2.44 | 223,945 | 1,422 | 2.58 | ||||||||||||||||
| Long-term debt | 212,762 | 2,864 | 5.41 | 261,971 | 3,342 | 5.17 | ||||||||||||||||
| Total borrowed funds | 213,323 | 2,866 | 5.40 | 507,465 | 4,925 | 3.94 | ||||||||||||||||
| Total interest-bearing liabilities | 7,601,262 | 17,941 | 0.95 | 7,673,965 | 20,882 | 1.10 | ||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||
| Noninterest-bearing deposits | 3,527,385 | 3,194,401 | ||||||||||||||||||||
| Other liabilities | 162,187 | 162,213 | ||||||||||||||||||||
| Total liabilities | 11,290,834 | 11,030,579 | ||||||||||||||||||||
| Shareholders' equity | 1,652,881 | 1,477,973 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 12,943,715 | $ | 12,508,552 | ||||||||||||||||||
| Net interest revenue (FTE) | $ | 119,403 | $ | 116,302 | ||||||||||||||||||
| Net interest-rate spread (FTE) | 3.73 | % | 3.73 | % | ||||||||||||||||||
| Net interest margin (FTE) (4) | 4.07 | % | 4.10 | % | ||||||||||||||||||
(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 $52.9 million in 2020 and unrealized losses of $25.9 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) 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 $13.1 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, Forbes magazine included United in its inaugural list of the World’s Best Banks, and in 2020, recognized United for the seventh consecutive year on its list of the 100 Best Banks in America. United Community Bank also received the 2019 Greenwich Excellence Award for overall satisfaction in Middle Market Banking in the South and Small Business Banking Excellence Awards for both overall satisfaction and cash management in the South. 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,” “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