United Community Banks, Inc. Reports Fourth Quarter Results


GREENVILLE, S.C., Jan. 24, 2024 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced net income for the fourth quarter of $14.1 million and pre-tax, pre-provision income of $25.8 million. Diluted earnings per share of $0.11 for the quarter represented a decrease of $0.28 or 72% from the third quarter of 2023 and a decrease of $0.63 or 85%, from the fourth quarter of 2022.

On an operating basis, diluted earnings per share of $0.53 increased $0.08 or 18% compared to last quarter. Non-operating items included merger charges, losses for the previously reported bond portfolio restructuring transaction and an FDIC special assessment. Deposits grew by 8% annualized and loans grew at a 2.5% annualized rate during the quarter. Net interest revenue increased modestly during the quarter due to growth in interest bearing assets which offset the effect of a lower margin.

For the quarter, United’s return on assets was 0.18% and 0.92% on an operating basis. Return on common equity was 1.44% and return on tangible common equity was 10.58% on an operating basis. On a pre-tax, pre-provision basis, operating return on assets was 1.33% for the quarter. At quarter-end, tangible common equity to tangible assets was 8.36%, up eighteen basis points from the third quarter of 2023.

Chairman and CEO Lynn Harton stated, “Our focus continues to be on both maintaining a strong balance sheet and investing in growth as we continue to build the company. This quarter, we entered into a bond portfolio restructuring transaction to reduce our exposure to interest rate volatility in this uncertain environment. This will have the additional advantage of increasing our earnings in 2024. In our core banking operations, we continue to be pleased with the ability of our teams to grow our book of business. In the fourth quarter, strong deposit growth allowed us to reduce high cost brokered deposits and more than fund loan growth. While the cost of deposits continued to drift upward, the pace of margin compression has slowed. Asset quality remained solid with net charge-offs for the bank, excluding Navitas, at low levels. Looking into 2024, we expect broader credit performance to remain strong, but are closely monitoring for potential changes in both the economic environment overall and specifically in our markets.”

United’s net interest margin decreased by 5 basis points to 3.19% compared to the third quarter. The average yield on United’s interest-earning assets was up 14 basis points to 5.31%, but funding costs increased by 22 basis points, leading to the modest reduction in the net interest margin. Net charge-offs were $10.1 million, or 0.22%, of average loans during the quarter, down 37 basis points compared to the third quarter of 2023. Excluding Navitas, net charge-offs were 0.05% of average loans. Nonperforming assets were 34 basis points relative to total assets, which is in line with the prior quarter.

Mr. Harton concluded, “We are excited and optimistic about 2024. Economic conditions remain strong in our markets, though we continue to be cautious in our underwriting and portfolio management given the inherent uncertainty in the environment. Our teams continue to be focused on leading our markets in customer service, knowing that it is our connections with our customers and communities that drive our success. In 2023, including recently in the fourth quarter, we added a new member to our Board of Directors, and added new market leaders, new commercial bankers and new line-of-business leaders. We also expanded our market reach and service capabilities with new locations across our footprint. In November, United was named one of the “Best Banks to Work For” by American Banker for the seventh consecutive year, an accolade that underscores our belief that we are a great place to work for great people. We are in the final phases of refreshing our corporate logo and brand across our franchise. Our commitment to investing in our people, technology and customers’ needs with a culture of caring will remain the same as we continue to grow.”

2023 Financial Highlights:

  • Completed a successful year with strong, high-quality loan and deposit growth and completed acquisitions in high-growth markets in Alabama, the Florida panhandle and Miami, which were all strategic priorities
  • The fourth quarter bond portfolio restructuring transaction resulted in a pre-tax loss of $52 million and the FDIC special assessment was $10 million, which reduced GAAP and operating EPS by approximately $0.39
  • Full-year EPS of $1.54, a decrease of 39% compared to 2022; full year operating EPS of $2.11, a decrease of 21% from 2022
  • Return on assets of 0.68%, or 0.94%, on an operating basis
  • Pre-tax, pre-provision return on assets of 1.53% on an operating basis
  • Return on common equity of 5.34%, or 7.33%, on an operating basis
  • Return on tangible common equity of 10.6% on an operating basis
  • A provision for credit losses of $89.4 million compared to a provision for credit losses of $63.9 million in 2022, with both periods including a provision establishing an initial allowance for acquired banks
  • Strong loan growth of $3.0 billion or $972 million, excluding loans acquired from acquired banks
  • Core transaction deposits were up $796 million compared to 2022; excluding acquired banks, 2023 core transaction deposits were down $984 million, or 6%
  • Net interest margin of 3.35% was down 3 basis points from last year primarily due to increased deposit costs
  • Noninterest income was down $62.2 million primarily due to the bond portfolio restructuring transaction
  • Excluding the bond portfolio restructuring transaction, noninterest income was down $4.8 million primarily due to a decline in mortgage fees, as higher rates led to lower demand and business volume
  • The efficiency ratio of 60.1%, or 56.2% on an operating basis, increased, primarily driven by higher deposit rates and a compressing NIM
  • Net charge-offs of $52.2 million, or 0.30% of average total loans, were up from the $9.65 million of net charge-offs in 2022

Fourth Quarter 2023 Financial Highlights:

  • Net income of $14.1 million and pre-tax, pre-provision income of $25.8 million; operating net income of $64.8 million
  • EPS decreased by 85% compared to last year on a GAAP basis and 29% on an operating basis; compared to third quarter 2023, EPS decreased 72% on a GAAP basis and increased 18% on an operating basis
  • The bond portfolio restructuring transaction and the FDIC special assessment reduced GAAP and operating EPS by approximately $0.38
  • Return on assets of 0.18%, and 0.92% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.33% excluding non-operating items
  • Return on common equity of 1.4%, or 7.3% when excluding non-operating items
  • Return on tangible common equity of 10.6% on an operating basis
  • Loan production of $1.4 billion, resulting in loan growth of 2.5% annualized for the quarter
  • Total deposits, excluding brokered deposits, were up $504 million, or 8.9% annualized, from last quarter, driven by seasonal increases in public funds
  • Net interest margin of 3.19% was down 5 basis points from the third quarter due to increased deposit costs
  • Mortgage closings of $204 million compared to $253 million a year ago; mortgage rate locks of $223 million compared to $364 million a year ago
  • Noninterest income was down $55.1 million, primarily due to the pre-tax loss of $51.7 million resulting from the bond portfolio restructuring transaction
  • Excluding the bond portfolio restructuring transaction, noninterest income was down $3.4 million from third quarter primarily due to a seasonal decline in mortgage fees
  • Noninterest expenses increased $10.1 million compared to the third quarter mostly due to the FDIC special assessment of $10.0 million
  • Efficiency ratio of 66.3%, or 59.6% on an operating basis, up from third quarter largely driven by increased group medical insurance costs
  • Net charge-offs of $10.1 million, or 0.22% of average loans, down 37 basis points from the net charge-offs level experienced in the third quarter, which included a $19 million charge-off from an 8.7% participation in a large, nationally syndicated credit
  • Nonperforming assets of 0.34% of total assets, are in line with September 30, 2023
  • Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 5% year-over-year

Conference Call

United will hold a conference call on Wednesday, January 24, 2024, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10185556/fb5d089df4. Those without internet access or who are unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and available for replay by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of United’s website at ucbi.com.

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
(in thousands, except per share data)
  2023
 2022 Fourth
Quarter
2023-2022
Change
 For the Twelve Months Ended December 31, YTD
2023-2022
Change
  Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
   2023   2022  
INCOME SUMMARY                  
Interest revenue $338,698  $323,147  $295,775  $279,487  $240,831    $1,237,107  $813,155   
Interest expense  135,245   120,591   95,489   68,017   30,943     419,342   60,798   
Net interest revenue  203,453   202,556   200,286   211,470   209,888  (3)%  817,765   752,357  9%
Provision for credit losses  14,626   30,268   22,753   21,783   19,831  (26)  89,430   63,913  40 
Noninterest income  (23,090)  31,977   36,387   30,209   33,354     75,483   137,707  (45)
Total revenue  165,737   204,265   213,920   219,896   223,411  (26)  803,818   826,151  (3)
Noninterest expenses  154,587   144,474   132,407   139,805   117,329  32   571,273   470,149  22 
Income before income tax expense  11,150   59,791   81,513   80,091   106,082     232,545   356,002   
Income tax (benefit) expense  (2,940)  11,925   18,225   17,791   24,632     45,001   78,530   
Net income  14,090   47,866   63,288   62,300   81,450     187,544   277,472   
Non-operating items  67,450   9,168   3,645   8,631   1,470     88,894   19,375   
Income tax benefit of non-operating items  (16,714)  (2,000)  (820)  (1,955)  (323)    (21,489)  (4,246)  
Net income - operating(1) $64,826  $55,034  $66,113  $68,976  $82,597  (22) $254,949  $292,601  (13)
                   
Pre-tax pre-provision income(5) $25,776  $90,059  $104,266  $101,874  $125,913  (80) $321,975  $419,915  (23)
                   
PERFORMANCE MEASURES                  
Per common share:                  
Diluted net income - GAAP $0.11  $0.39  $0.53  $0.52  $0.74  (85) $1.54  $2.52  (39)
Diluted net income - operating(1)  0.53   0.45   0.55   0.58   0.75  (29)  2.11   2.66  (21)
Common stock cash dividends declared  0.23   0.23   0.23   0.23   0.22  5   0.92   0.86  7 
Book value  26.52   25.87   25.98   25.76   24.38  9   26.52   24.38  9 
Tangible book value(3)  18.39   17.70   17.83   17.59   17.13  7   18.39   17.13  7 
Key performance ratios:                  
Return on common equity - GAAP(2)(4)  1.44%  5.32%  7.47%  7.34%  10.86%    5.34%  9.54%  
Return on common equity - operating(1)(2)(4)  7.27   6.14   7.82   8.15   11.01     7.33   10.07   
Return on tangible common equity - operating(1)(2)(3)(4)  10.58   9.03   11.35   11.63   15.20     10.63   14.04   
Return on assets - GAAP(4)  0.18   0.68   0.95   0.95   1.33     0.68   1.13   
Return on assets - operating(1)(4)  0.92   0.79   1.00   1.06   1.35     0.94   1.19   
Return on assets -pre-tax pre-provision, excluding non-operating items(1)(4)(5)  1.33   1.44   1.65   1.71   2.09     1.53   1.80   
Net interest margin (fully taxable equivalent)(4)  3.19   3.24   3.37   3.61   3.76     3.35   3.38   
Efficiency ratio - GAAP  66.33   61.32   55.71   57.20   47.95     60.09   52.31   
Efficiency ratio - operating(1)  59.57   57.43   54.17   53.67   47.35     56.17   50.16   
Equity to total assets  11.95   11.85   11.89   11.90   11.25     11.95   11.25   
Tangible common equity to tangible assets(3)  8.36   8.18   8.21   8.17   7.88     8.36   7.88   
ASSET QUALITY                  
Nonperforming assets (“NPAs”) $92,877  $90,883  $103,737  $73,403  $44,281  110  $92,877  $44,281  110 
Allowance for credit losses - loans  208,071   201,557   190,705   176,534   159,357  31   208,071   159,357  31 
Allowance for credit losses - total  224,128   219,624   212,277   197,923   180,520  24   224,128   180,520  24 
Net charge-offs (recoveries)  10,122   26,638   8,399   7,084   6,611     52,243   9,654   
Allowance for credit losses - loans to loans  1.14%  1.11%  1.10%  1.03%  1.04%    1.14%  1.04%  
Allowance for credit losses - total to loans  1.22   1.21   1.22   1.16   1.18     1.22   1.18   
Net charge-offs to average loans(4)  0.22   0.59   0.20   0.17   0.17     0.30   0.07   
NPAs to total assets  0.34   0.34   0.40   0.28   0.18     0.34   0.18   
AT PERIOD END ($ in millions)                  
Loans $18,319  $18,203  $17,395  $17,125  $15,335  19  $18,319  $15,335  19 
Investment securities  5,822   5,701   5,914   5,915   6,228  (7)  5,822   6,228  (7)
Total assets  27,297   26,869   26,120   25,872   24,009  14   27,297   24,009  14 
Deposits  23,311   22,858   22,252   22,005   19,877  17   23,311   19,877  17 
Shareholders’ equity  3,262   3,184   3,106   3,078   2,701  21   3,262   2,701  21 
Common shares outstanding (thousands)  119,010   118,976   115,266   115,152   106,223  12   119,010   106,223  12 


(1)Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on next page.
(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)Excludes income tax expense and provision for credit losses.



UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
(in thousands, except per share data)
  2023
  2022  Twelve Months Ended
December 31,
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
  2023   2022 
Net income to operating income reconciliation
             
Net income (GAAP) $14,090  $47,866  $63,288  $62,300  $81,450  $187,544  $277,472 
Bond portfolio restructuring loss  51,689               51,689    
FDIC special assessment  9,995               9,995    
Merger-related and other charges  5,766   9,168   3,645   8,631   1,470   27,210   19,375 
Income tax benefit of non-operating items  (16,714)  (2,000)  (820)  (1,955)  (323)  (21,489)  (4,246)
Net income - operating $64,826  $55,034  $66,113  $68,976  $82,597  $254,949  $292,601 
                            
Net income to pre-tax pre-provision income reconciliation
             
Net income (GAAP) $14,090  $47,866  $63,288  $62,300  $81,450  $187,544  $277,472 
Income tax (benefit) expense  (2,940)  11,925   18,225   17,791   24,632   45,001   78,530 
Provision for credit losses  14,626   30,268   22,753   21,783   19,831   89,430   63,913 
Pre-tax pre-provision income $25,776  $90,059  $104,266  $101,874  $125,913  $321,975  $419,915 
              
Diluted income per common share reconciliation
             
Diluted income per common share (GAAP) $0.11  $0.39  $0.53  $0.52  $0.74  $1.54  $2.52 
Bond portfolio restructuring loss  0.32               0.33    
FDIC special assessment  0.06               0.06    
Merger-related and other charges  0.04   0.06   0.02   0.06   0.01   0.18   0.14 
Diluted income per common share - operating $0.53  $0.45  $0.55  $0.58  $0.75  $2.11  $2.66 
              
Book value per common share reconciliation
             
Book value per common share (GAAP) $26.52  $25.87  $25.98  $25.76  $24.38  $26.52  $24.38 
Effect of goodwill and other intangibles  (8.13)  (8.17)  (8.15)  (8.17)  (7.25)  (8.13)  (7.25)
Tangible book value per common share $18.39  $17.70  $17.83  $17.59  $17.13  $18.39  $17.13 
              
Return on tangible common equity reconciliation
             
Return on common equity (GAAP)  1.44%  5.32%  7.47%  7.34%  10.86%  5.34%  9.54%
Bond portfolio restructuring loss  4.47               1.15    
FDIC special assessment  0.86               0.22    
Merger-related and other charges  0.50   0.82   0.35   0.81   0.15   0.62   0.53 
Return on common equity - operating  7.27   6.14   7.82   8.15   11.01   7.33   10.07 
Effect of goodwill and other intangibles  3.31   2.89   3.53   3.48   4.19   3.30   3.97 
Return on tangible common equity - operating  10.58%  9.03%  11.35%  11.63%  15.20%  10.63%  14.04%
              
Return on assets reconciliation
             
Return on assets (GAAP)  0.18%  0.68%  0.95%  0.95%  1.33%  0.68%  1.13%
Bond portfolio restructuring loss  0.57               0.15    
FDIC special assessment  0.11               0.03    
Merger-related and other charges  0.06   0.11   0.05   0.11   0.02   0.08   0.06 
Return on assets - operating  0.92%  0.79%  1.00%  1.06%  1.35%  0.94%  1.19%
              
Return on assets to return on assets- pre-tax pre-provision reconciliation
             
Return on assets (GAAP)  0.18%  0.68%  0.95%  0.95%  1.33%  0.68%  1.13%
Income tax (benefit) expense  (0.04)  0.18   0.29   0.29   0.41   0.17   0.32 
Provision for credit losses  0.21   0.45   0.35   0.34   0.33   0.34   0.27 
Bond portfolio restructuring loss  0.75               0.20    
FDIC special assessment  0.15               0.04    
Merger-related and other charges  0.08   0.13   0.06   0.13   0.02   0.10   0.08 
Return on assets - pre-tax pre-provision, excluding non-operating items  1.33%  1.44%  1.65%  1.71%  2.09%  1.53%  1.80%
              
Efficiency ratio reconciliation
             
Efficiency ratio (GAAP)  66.33%  61.32%  55.71%  57.20%  47.95%  60.09%  52.31%
FDIC special assessment  (4.29)              (1.05)   
Merger-related and other charges  (2.47)  (3.89)  (1.54)  (3.53)  (0.60)  (2.87)  (2.15)
Efficiency ratio - operating  59.57%  57.43%  54.17%  53.67%  47.35%  56.17%  50.16%
              
Tangible common equity to tangible assets reconciliation
             
Equity to total assets (GAAP)  11.95%  11.85%  11.89%  11.90%  11.25%  11.95%  11.25%
Effect of goodwill and other intangibles  (3.27)  (3.33)  (3.31)  (3.36)  (2.97)  (3.27)  (2.97)
Effect of preferred equity  (0.32)  (0.34)  (0.37)  (0.37)  (0.40)  (0.32)  (0.40)
Tangible common equity to tangible assets  8.36%  8.18%  8.21%  8.17%  7.88%  8.36%  7.88%



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
(in millions)             
  2023  2022 Linked
Quarter
Change

 Year over Year
Change

 Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
  
LOANS BY CATEGORY             
Owner occupied commercial RE$3,264 $3,279 $3,111 $3,141 $2,735 $(15) $529 
Income producing commercial RE 4,264  4,130  3,670  3,611  3,262  134   1002 
Commercial & industrial 2,411  2,504  2,550  2,442  2,252  (93)  159 
Commercial construction 1,860  1,850  1,739  1,806  1,598  10   262 
Equipment financing 1,543  1,534  1,510  1,447  1,374  9   169 
Total commercial 13,342  13,297  12,580  12,447  11,221  45   2,121 
Residential mortgage 3,199  3,043  2,905  2,756  2,355  156   844 
Home equity lines of credit 959  941  927  930  850  18   109 
Residential construction 302  399  463  492  443  (97)  (141)
Manufactured housing 336  343  340  326  317  (7)  19 
Consumer 181  180  180  174  149  1   32 
Total loans$18,319 $18,203 $17,395 $17,125 $15,335 $116  $2,984 
              
LOANS BY STATE             
Georgia$4,357 $4,321 $4,281 $4,177 $4,051 $36  $306 
South Carolina 2,780  2,801  2,750  2,672  2,587  (21)  193 
North Carolina 2,492  2,445  2,355  2,257  2,186  47   306 
Tennessee 2,244  2,314  2,387  2,458  2,507  (70)  (263)
Florida 2,442  2,318  1,708  1,745  1,308  124   1,134 
Alabama 1,082  1,070  1,062  1,029    12   1,082 
Commercial Banking Solutions 2,922  2,934  2,852  2,787  2,696  (12)  226 
Total loans$18,319 $18,203 $17,395 $17,125 $15,335 $116  $2,984 



UNITED COMMUNITY BANKS, INC.        
Financial Highlights        
Loan Portfolio Composition at Year-End        
(in millions)         
  2023   2022   2021   2020   2019 
LOANS BY CATEGORY         
Owner occupied commercial RE$3,264  $2,735  $2,322  $2,090  $1,720 
Income producing commercial RE 4,264   3,262   2,601   2,541   2,008 
Commercial & industrial 2,411   2,252   1,910   2,499   1,221 
Commercial construction 1,860   1,598   1,015   967   976 
Equipment financing 1,543   1,374   1,083   864   745 
Total commercial 13,342   11,221   8,931   8,961   6,670 
Residential mortgage 3,199   2,355   1,638   1,285   1,118 
Home equity 959   850   694   697   661 
Residential construction 302   443   359   281   236 
Manufactured housing 336   317          
Consumer 181   149   138   147   128 
Total loans$18,319  $15,335  $11,760  $11,371  $8,813 
          
LOANS BY STATE         
Georgia$4,357  $4,051  $3,778  $3,685  $3,606 
South Carolina 2,780   2,587   2,235   1,947   1,708 
North Carolina 2,492   2,186   1,895   1,281   1,156 
Tennessee 2,244   2,507   373   415   421 
Florida 2,442   1,308   1,148   1,435    
Alabama 1,082             
Commercial Banking Solutions 2,922   2,696   2,331   2,608   1,922 
Total loans$18,319  $15,335  $11,760  $11,371  $8,813 



UNITED COMMUNITY BANKS, INC.           
Financial Highlights           
Credit Quality           
(in thousands)           
   2023
      
  Fourth
Quarter

 Third
Quarter

   Second
Quarter 
      
NONACCRUAL LOANS                
Owner occupied RE $3,094  $5,134  $3,471        
Income producing RE 30,128   30,255   32,542        
Commercial & industrial 13,467   13,382   30,823        
Commercial construction 1,878   1,065   115        
Equipment financing 8,505   9,206   8,989        
Total commercial 57,072   59,042   75,940        
Residential mortgage 13,944   11,893   11,419        
Home equity 3,772   4,009   2,777        
Residential construction 944   2,074   1,682        
Manufactured housing 15,861   12,711   10,782        
Consumer 94   89   19        
Total nonaccrual loans held for investment 91,687   89,818   102,619        
OREO and repossessed assets 1,190   1,065   1,118        
Total NPAs92,877  $90,883  $103,737        
  2023 
 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$35   % $582  0.07% $(205) (0.03)% 
Income producing RE (562)  (0.05)  3,011  0.30   1,184  0.13 
Commercial & industrial 547   0.09   17,542  2.71   2,746  0.44 
Commercial construction 33   0.01   (49) (0.01)  (105) (0.02)
Equipment financing 7,926   2.05   6,325  1.62   2,537  0.69 
Total commercial 7,979   0.24   27,411  0.83   6,157  0.20 
Residential mortgage 12      (129) (0.02)  (43) (0.01)
Home equity (68)  (0.03)  (2,784) (1.17)  (59) (0.03)
Residential construction (13)  (0.01)  341  0.31   623  0.53 
Manufactured housing 1,444   1.69   1,168  1.34   620  0.75 
Consumer 768   1.70   631  1.37   1,101  2.51 
Total$10,122   0.22  $26,638  0.59  $8,399  0.20 
                    
(1) Annualized.                   



UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)
  December 31,
2023
 December 31,
2022
ASSETS    
Cash and due from banks $200,781  $195,771 
Interest-bearing deposits in banks  803,094   316,082 
Federal funds and other short-term investments     135,000 
Cash and cash equivalents  1,003,875   646,853 
Debt securities available-for-sale  3,331,084   3,614,333 
Debt securities held-to-maturity (fair value $2,095,620 and $2,191,073, respectively)  2,490,848   2,613,648 
Loans held for sale at fair value  33,008   13,600 
Loans and leases held for investment  18,318,755   15,334,627 
Less allowance for credit losses - loans and leases  (208,071)  (159,357)
Loans and leases, net  18,110,684   15,175,270 
Premises and equipment, net  378,421   298,456 
Bank owned life insurance  345,371   299,297 
Accrued interest receivable  87,782   72,807 
Net deferred tax asset  113,214   129,313 
Derivative financial instruments  50,352   50,636 
Goodwill and other intangible assets, net  990,087   779,248 
Other assets  362,525   315,423 
Total assets $27,297,251  $24,008,884 
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $6,534,307  $7,643,081 
NOW and interest-bearing demand  6,155,193   4,350,878 
Money market  5,600,587   4,510,680 
Savings  1,207,807   1,456,337 
Time  3,649,498   1,781,482 
Brokered  163,219   134,049 
Total deposits  23,310,611   19,876,507 
Short-term borrowings     158,933 
Federal Home Loan Bank advances     550,000 
Long-term debt  324,823   324,663 
Derivative financial instruments  84,811   99,543 
Accrued expenses and other liabilities  315,481   298,564 
Total liabilities  24,035,726   21,308,210 
Shareholders' equity:    
Preferred stock, $1 par value: 10,000,000 shares authorized; 3,662 and 4,000 shares Series I issued and outstanding, respectively; $25,000 per share liquidation preference  88,266   96,422 
Common stock, $1 par value; 200,000,000 shares authorized; 119,010,319 and 106,222,758 shares issued and outstanding, respectively  119,010   106,223 
Common stock issuable; 620,108 and 607,128 shares, respectively  13,110   12,307 
Capital surplus  2,699,112   2,306,366 
Retained earnings  581,219   508,844 
Accumulated other comprehensive loss  (239,192)  (329,488)
Total shareholders’ equity  3,261,525   2,700,674 
Total liabilities and shareholders’ equity $27,297,251  $24,008,884 



UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
   2023   2022   2023   2022 
Interest revenue:        
Loans, including fees $281,909  $197,330  $1,042,605  $673,402 
Investment securities, including tax exempt of $1,732, 2,561, $7,295 and $10,323  44,025   40,781   169,800   131,824 
Deposits in banks and short-term investments  12,764   2,720   24,702   7,929 
Total interest revenue  338,698   240,831   1,237,107   813,155 
Interest expense:        
Deposits:        
NOW and interest-bearing demand  44,527   9,688   125,336   17,312 
Money market  50,967   11,244   156,397   18,274 
Savings  758   356   2,866   693 
Time  35,511   3,498   110,975   5,820 
Deposits  131,763   24,786   395,574   42,099 
Short-term borrowings  9   480   3,195   507 
Federal Home Loan Bank advances     1,424   5,761   1,424 
Long-term debt  3,473   4,253   14,812   16,768 
Total interest expense  135,245   30,943   419,342   60,798 
Net interest revenue  203,453   209,888   817,765   752,357 
Provision for credit losses  14,626   19,831   89,430   63,913 
Net interest revenue after provision for credit losses  188,827   190,057   728,335   688,444 
Noninterest income:        
Service charges and fees  9,621   9,519   38,412   38,163 
Mortgage loan gains and related fees  1,956   3,104   19,220   32,524 
Wealth management fees  5,965   5,835   23,740   23,594 
Gains from other loan sales  2,237   1,504   9,146   10,730 
Other lending and loan servicing fees  3,994   2,487   13,973   10,005 
Securities losses, net  (51,689)  (184)  (53,333)  (3,872)
Other  4,826   11,089   24,325   26,563 
Total noninterest income  (23,090)  33,354   75,483   137,707 
Total revenue  165,737   223,411   803,818   826,151 
Noninterest expenses:        
Salaries and employee benefits  82,343   68,143   318,464   276,205 
Occupancy  11,616   8,866   42,640   36,247 
Communications and equipment  11,610   10,516   43,264   38,234 
FDIC assessments and other regulatory charges  14,992   3,098   27,449   9,894 
Professional fees  7,062   5,496   26,732   20,166 
Lending and loan servicing expense  2,176   1,604   9,722   9,350 
Outside services - electronic banking  2,931   3,954   11,577   12,583 
Postage, printing and supplies  2,162   2,441   9,467   8,749 
Advertising and public relations  2,559   2,052   9,473   8,384 
Amortization of intangibles  4,055   1,619   15,175   6,826 
Merger-related and other charges  5,766   1,470   27,210   19,375 
Other  7,315   8,070   30,100   24,136 
Total noninterest expenses  154,587   117,329   571,273   470,149 
Net income before income taxes  11,150   106,082   232,545   356,002 
Income tax (benefit) expense  (2,940)  24,632   45,001   78,530 
Net income $14,090  $81,450  $187,544  $277,472 
Preferred stock dividends, net of discount on repurchases  1,395   1,718   5,665   6,875 
Earnings allocated to participating securities  77   461   1,032   1,462 
Net income available to common shareholders $12,618  $79,271  $180,847  $269,135 
Net income per common share:        
Basic $0.11  $0.74  $1.54  $2.52 
Diluted  0.11   0.74   1.54   2.52 
Weighted average common shares outstanding:        
Basic  119,612   106,795   117,603   106,661 
Diluted  119,713   106,916   117,745   106,778 



Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
   2023   2022 
  Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
Assets:            
Interest-earning assets:            
Loans, net of unearned income (FTE) (1)(2) $18,167,572  $281,776  6.15% $15,002,836  $197,502  5.22%
Taxable securities (3)  5,772,630   42,293  2.93   6,325,165   38,220  2.42 
Tax-exempt securities (FTE) (1)(3)  367,585   2,326  2.53   490,838   3,440  2.80 
Federal funds sold and other interest-earning assets  1,092,939   13,294  4.83   453,090   2,912  2.55 
Total interest-earning assets (FTE)  25,400,726   339,689  5.31   22,271,929   242,074  4.32 
             
Noninterest-earning assets:            
Allowance for loan losses  (204,631)      (152,551)    
Cash and due from banks  210,383       217,873     
Premises and equipment  377,765       297,523     
Other assets (3)  1,516,268       1,166,424     
Total assets $27,300,511      $23,801,198     
             
Liabilities and Shareholders’ Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $5,961,835   44,527  2.96  $4,385,916   9,688  0.88 
Money market  5,799,213   50,967  3.49   4,628,585   11,244  0.96 
Savings  1,227,708   758  0.24   1,480,908   356  0.10 
Time  3,611,790   35,117  3.86   1,708,311   3,143  0.73 
Brokered time deposits  60,583   394  2.58   51,258   355  2.75 
Total interest-bearing deposits  16,661,129   131,763  3.14   12,254,978   24,786  0.80 
Federal funds purchased and other borrowings  7,958   9  0.45   47,487   480  4.01 
Federal Home Loan Bank advances          135,000   1,424  4.18 
Long-term debt  324,801   3,473  4.24   324,590   4,253  5.20 
Total borrowed funds  332,759   3,482  4.15   507,077   6,157  4.82 
Total interest-bearing liabilities  16,993,888   135,245  3.16   12,762,055   30,943  0.96 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  6,690,251       7,993,816     
Other liabilities  410,067       383,270     
Total liabilities  24,094,206       21,139,141     
Shareholders’ equity  3,206,305       2,662,057     
Total liabilities and shareholders’ equity $27,300,511      $23,801,198     
             
Net interest revenue (FTE)   $204,444      $211,131   
Net interest-rate spread (FTE)     2.15%     3.36%
Net interest margin (FTE) (4)     3.19%     3.76%


(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)Unrealized gains and losses on AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $458 million in 2023 and $454 million in 2022 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,
(dollars in thousands, fully taxable equivalent (FTE))
   2023   2022 
  Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
Assets:            
Interest-earning assets:            
Loans, net of unearned income (FTE) (1)(2) $17,576,424  $1,042,578  5.93% $14,571,746  $673,491  4.62%
Taxable securities (3)  5,929,687   162,505  2.74   6,284,603   121,501  1.93 
Tax-exempt securities (FTE) (1)(3)  381,731   9,796  2.57   496,327   13,865  2.79 
Federal funds sold and other interest-earning assets  642,499   26,397  4.11   1,065,057   9,104  0.85 
Total interest-earning assets (FTE)  24,530,341   1,241,276  5.06   22,417,733   817,961  3.65 
             
Non-interest-earning assets:            
Allowance for loan losses  (191,016)      (135,144)    
Cash and due from banks  239,574       204,852     
Premises and equipment  355,139       288,044     
Other assets (3)  1,517,940       1,275,263     
Total assets $26,451,978      $24,050,748     
             
Liabilities and Shareholders’ Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $5,161,071   125,336  2.43  $4,486,263   17,312  0.39 
Money market  5,462,677   156,397  2.86   4,900,667   18,274  0.37 
Savings  1,312,469   2,866  0.22   1,482,599   693  0.05 
Time  3,106,989   100,973  3.25   1,693,307   5,152  0.30 
Brokered time deposits  224,914   10,002  4.45   61,636   668  1.08 
Total interest-bearing deposits  15,268,120   395,574  2.59   12,624,472   42,099  0.33 
Federal funds purchased and other borrowings  75,965   3,195  4.21   13,004   507  3.90 
Federal Home Loan Bank advances  124,425   5,761  4.63   34,027   1,424  4.18 
Long-term debt  324,753   14,812  4.56   323,102   16,768  5.19 
Total borrowed funds  525,143   23,768  4.53   370,133   18,699  5.05 
Total interest-bearing liabilities  15,793,263   419,342  2.66   12,994,605   60,798  0.47 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  7,091,034       7,967,321     
Other liabilities  397,337       377,221     
Total liabilities  23,281,634       21,339,147     
Shareholders’ equity  3,170,344       2,711,601     
Total liabilities and shareholders’ equity $26,451,978      $24,050,748     
             
Net interest revenue (FTE)   $821,934      $757,163   
Net interest-rate spread (FTE)     2.40%     3.18%
Net interest margin (FTE) (4)     3.35%     3.38%

 

(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)Unrealized gains and losses on AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $424 million in 2023 and $277 million in 2022 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 the financial holding company for United Community, a top 100 US financial institution that is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. United Community provides a full range of banking, wealth management, and mortgage services. As of December 31, 2023, United Community has $27.2 billion in assets and 207 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment financing subsidiary. United Community has been recognized nationally as a leader in customer service, financial performance, and workplace environment. Among the accolades, United Community is a nine-time winner of the J.D. Power award that ranked the bank #1 in customer satisfaction with consumer banking in the Southeast and was recognized in 2023 by Forbes as one of the World's Best Banks and one of America's Best Banks. United Community was also recognized by Newsweek in 2023 as one of the Most Trusted Companies in America, is a multi-award recipient of the Greenwich Excellence Awards and was named by American Banker as one of the "Best Banks to Work For" in 2023 for the seventh consecutive year. Additional information about United Community can be found at 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 non-operating items,” “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. Further, United’s management uses these measures in managing and evaluating United’s business and intends to refer to them in discussions about United’s operations and performance. 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.

Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the strength of our pipelines and their ability to support business growth across our markets and our belief that our high-quality balance sheet and business mix will support strong performance regardless of future economic conditions. Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.

Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from acquisitions may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of these acquisitions, (3) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to these acquisitions, (4) the risks relating to the integration of acquired banks’ operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (5) the risks associated with United’s pursuit of future acquisitions, (6) the risk associated with expansion into new geographic or product markets, and (7) general competitive, economic, political, regulatory and market conditions. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2022, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).

Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United.

United qualifies all forward-looking statements by these cautionary statements.

For more information:

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