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For Immediate Release
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
United Community Banks, Inc. reports Third Quarter Results
EPS of $0.60 and ROA of 1.51%; Operating ROA reaches 1.58%
GREENVILLE, SC - October 22, 2019
United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported strong third quarter financial results, including solid year-over-year loan and deposit growth, record operating efficiency and strong asset quality. Diluted earnings per share were $0.60, an increase of $0.06 or 11% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.63, up 15% over last year. United’s return on assets (“ROA”) was 1.51% and its return on common equity was 12.2% for the quarter. On an operating basis, United’s ROA was 1.58% and its return on tangible common equity was 16.4%.
In the third quarter, loans grew at a 3% annualized rate, or at 4% annualized excluding the planned runoff of the discontinued indirect auto portfolio. With this loan growth and continued balance sheet remixing opportunities, United maintained its net interest margin during the quarter, despite declining interest rates. Core transaction deposits grew by $105 million, or 6% annualized, and total customer deposits increased by $197 million during the quarter. Finally, United’s combination of revenue growth and expense management resulted in a 55.64% efficiency ratio, or 53.90% on an operating basis, which represented a new Company best for the second consecutive quarter.
“We are pleased to report such a successful quarter, which is a testament to our team and their tireless dedication to providing outstanding customer service and to executing on our plans to deliver top quartile results,” said Lynn Harton, Chairman and CEO of United. “I am also tremendously proud that United was named one of the "Best Banks to Work For" by American Banker for the third year in a row. This honor is achieved through the focus and
energy of our bankers to build a company where great people can find fulfillment in helping others reach their financial goals."
Third Quarter 2019 Financial Highlights:
• | EPS growth of 11% over last year, or 15% on an operating basis |
• | Return on assets of 1.51%, or 1.58% excluding merger-related and other charges |
• | Return on common equity of 12.2% |
• | Return on tangible common equity of 16.4% excluding merger-related and other charges |
• | Loan production of $896 million compared to $778 million in Q3 2018 |
• | Loan growth, excluding planned runoff of the indirect portfolio of 4% for the quarter and 7% year-to-date on an annualized basis, excluding the acquisition of First Madison on May 1, 2019 |
• | Loan growth of $89 million, excluding planned run off of the indirect portfolio, was more than funded by core transaction deposit growth of $105 million |
• | Mortgage locks of $508 million, a company high, compared to $298 million a year ago |
• | Stable net interest margin of 4.12% was flat compared to the second quarter and up 17 basis points from a year ago |
• | Efficiency ratio of 55.64%, or 53.90%, excluding merger-related and other charges |
• | Net charge-offs of 12 basis points, up one basis point from last quarter and remaining at historically low levels |
• | Nonperforming assets of 0.24% of total assets, compared with 0.21% at June 30, 2019 and 0.19% at September 30, 2018 |
• | Repurchased approximately 195,000 shares at an average price of $26.51 in the quarter |
Conference Call
United will hold a conference call, Wednesday, October 23, 2019, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 8899475. 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 | ||||||||||||||||||||||||||||||||||
2019 | 2018 | Third Quarter 2019 - 2018 Change | For the Nine Months Ended September 30, | YTD 2019 - 2018 Change | ||||||||||||||||||||||||||||||
(in thousands, except per share data) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2019 | 2018 | |||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||
Interest revenue | $ | 140,615 | $ | 139,156 | $ | 136,516 | $ | 133,854 | $ | 128,721 | $ | 416,287 | $ | 366,226 | ||||||||||||||||||||
Interest expense | 21,277 | 21,372 | 20,882 | 18,975 | 16,611 | 63,531 | 42,355 | |||||||||||||||||||||||||||
Net interest revenue | 119,338 | 117,784 | 115,634 | 114,879 | 112,110 | 6 | % | 352,756 | 323,871 | 9 | % | |||||||||||||||||||||||
Provision for credit losses | 3,100 | 3,250 | 3,300 | 2,100 | 1,800 | 72 | 9,650 | 7,400 | 30 | |||||||||||||||||||||||||
Noninterest income | 29,031 | 24,531 | 20,968 | 23,045 | 24,180 | 20 | 74,530 | 69,916 | 7 | |||||||||||||||||||||||||
Total revenue | 145,269 | 139,065 | 133,302 | 135,824 | 134,490 | 8 | 417,636 | 386,387 | 8 | |||||||||||||||||||||||||
Expenses | 82,924 | 81,813 | 76,084 | 78,242 | 77,718 | 7 | 240,821 | 228,043 | 6 | |||||||||||||||||||||||||
Income before income tax expense | 62,345 | 57,252 | 57,218 | 57,582 | 56,772 | 10 | 176,815 | 158,344 | 12 | |||||||||||||||||||||||||
Income tax expense | 13,983 | 13,167 | 12,956 | 12,445 | 13,090 | 7 | 40,106 | 37,370 | 7 | |||||||||||||||||||||||||
Net income | 48,362 | 44,085 | 44,262 | 45,137 | 43,682 | 11 | 136,709 | 120,974 | 13 | |||||||||||||||||||||||||
Merger-related and other charges | 2,605 | 4,087 | 739 | 1,234 | 592 | 7,431 | 6,111 | |||||||||||||||||||||||||||
Income tax benefit of merger-related and other charges | (600 | ) | (940 | ) | (172 | ) | (604 | ) | (141 | ) | (1,712 | ) | (890 | ) | ||||||||||||||||||||
Net income - operating (1) | $ | 50,367 | $ | 47,232 | $ | 44,829 | $ | 45,767 | $ | 44,133 | 14 | $ | 142,428 | $ | 126,195 | 13 | ||||||||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||
Diluted net income - GAAP | $ | 0.60 | $ | 0.55 | $ | 0.55 | $ | 0.56 | $ | 0.54 | 11 | $ | 1.70 | $ | 1.51 | 13 | ||||||||||||||||||
Diluted net income - operating (1) | 0.63 | 0.59 | 0.56 | 0.57 | 0.55 | 15 | 1.77 | 1.57 | 13 | |||||||||||||||||||||||||
Cash dividends declared | 0.17 | 0.17 | 0.16 | 0.16 | 0.15 | 13 | 0.50 | 0.42 | 19 | |||||||||||||||||||||||||
Book value | 20.16 | 19.65 | 18.93 | 18.24 | 17.56 | 15 | 20.16 | 17.56 | 15 | |||||||||||||||||||||||||
Tangible book value (3) | 15.90 | 15.38 | 14.93 | 14.24 | 13.54 | 17 | 15.90 | 13.54 | 17 | |||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||
Return on common equity - GAAP (2)(4) | 12.16 | % | 11.45 | % | 11.85 | % | 12.08 | % | 11.96 | % | 11.83 | % | 11.43 | % | ||||||||||||||||||||
Return on common equity - operating (1)(2)(4) | 12.67 | 12.27 | 12.00 | 12.25 | 12.09 | 12.32 | 11.93 | |||||||||||||||||||||||||||
Return on tangible common equity - operating (1)(2)(3)(4) | 16.38 | 15.88 | 15.46 | 15.88 | 15.81 | 15.92 | 15.62 | |||||||||||||||||||||||||||
Return on assets - GAAP (4) | 1.51 | 1.40 | 1.44 | 1.43 | 1.41 | 1.45 | 1.32 | |||||||||||||||||||||||||||
Return on assets - operating (1)(4) | 1.58 | 1.50 | 1.45 | 1.45 | 1.42 | 1.51 | 1.38 | |||||||||||||||||||||||||||
Net interest margin (fully taxable equivalent) (4) | 4.12 | 4.12 | 4.10 | 3.97 | 3.95 | 4.11 | 3.88 | |||||||||||||||||||||||||||
Efficiency ratio - GAAP | 55.64 | 57.28 | 55.32 | 56.73 | 56.82 | 56.09 | 57.52 | |||||||||||||||||||||||||||
Efficiency ratio - operating (1) | 53.90 | 54.42 | 54.78 | 55.83 | 56.39 | 54.36 | 55.98 | |||||||||||||||||||||||||||
Equity to total assets | 12.53 | 12.25 | 12.06 | 11.60 | 11.30 | 12.53 | 11.30 | |||||||||||||||||||||||||||
Tangible common equity to tangible assets (3) | 10.16 | 9.86 | 9.76 | 9.29 | 8.95 | 10.16 | 8.95 | |||||||||||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||||||||||||
Nonperforming loans | $ | 30,832 | $ | 26,597 | $ | 23,624 | $ | 23,778 | $ | 22,530 | 37 | $ | 30,832 | $ | 22,530 | 37 | ||||||||||||||||||
Foreclosed properties | 102 | 75 | 1,127 | 1,305 | 1,336 | (92 | ) | 102 | 1,336 | (92 | ) | |||||||||||||||||||||||
Total nonperforming assets ("NPAs") | 30,934 | 26,672 | 24,751 | 25,083 | 23,866 | 30 | 30,934 | 23,866 | 30 | |||||||||||||||||||||||||
Allowance for loan losses | 62,514 | 62,204 | 61,642 | 61,203 | 60,940 | 3 | 62,514 | 60,940 | 3 | |||||||||||||||||||||||||
Net charge-offs | 2,723 | 2,438 | 3,130 | 1,787 | 1,466 | 86 | 8,291 | 4,326 | 92 | |||||||||||||||||||||||||
Allowance for loan losses to loans | 0.70 | % | 0.70 | % | 0.73 | % | 0.73 | % | 0.74 | % | 0.70 | % | 0.74 | % | ||||||||||||||||||||
Net charge-offs to average loans (4) | 0.12 | 0.11 | 0.15 | 0.09 | 0.07 | 0.13 | 0.07 | |||||||||||||||||||||||||||
NPAs to loans and foreclosed properties | 0.35 | 0.30 | 0.29 | 0.30 | 0.29 | 0.35 | 0.29 | |||||||||||||||||||||||||||
NPAs to total assets | 0.24 | 0.21 | 0.20 | 0.20 | 0.19 | 0.24 | 0.19 | |||||||||||||||||||||||||||
AVERAGE BALANCES ($ in millions) | ||||||||||||||||||||||||||||||||||
Loans | $ | 8,836 | $ | 8,670 | $ | 8,430 | $ | 8,306 | $ | 8,200 | 8 | $ | 8,647 | $ | 8,124 | 6 | ||||||||||||||||||
Investment securities | 2,550 | 2,674 | 2,883 | 3,004 | 2,916 | (13 | ) | 2,701 | 2,863 | (6 | ) | |||||||||||||||||||||||
Earning assets | 11,568 | 11,534 | 11,498 | 11,534 | 11,320 | 2 | 11,534 | 11,197 | 3 | |||||||||||||||||||||||||
Total assets | 12,681 | 12,608 | 12,509 | 12,505 | 12,302 | 3 | 12,600 | 12,209 | 3 | |||||||||||||||||||||||||
Deposits | 10,531 | 10,493 | 10,361 | 10,306 | 9,950 | 6 | 10,462 | 9,896 | 6 | |||||||||||||||||||||||||
Shareholders’ equity | 1,588 | 1,531 | 1,478 | 1,420 | 1,394 | 14 | 1,533 | 1,367 | 12 | |||||||||||||||||||||||||
Common shares - basic (thousands) | 79,663 | 79,673 | 79,807 | 79,884 | 79,806 | — | 79,714 | 79,588 | — | |||||||||||||||||||||||||
Common shares - diluted (thousands) | 79,667 | 79,678 | 79,813 | 79,890 | 79,818 | — | 79,718 | 79,598 | — | |||||||||||||||||||||||||
AT PERIOD END ($ in millions) | ||||||||||||||||||||||||||||||||||
Loans | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | 8,226 | 8 | $ | 8,903 | $ | 8,226 | 8 | ||||||||||||||||||
Investment securities | 2,515 | 2,620 | 2,720 | 2,903 | 2,873 | (12 | ) | 2,515 | 2,873 | (12 | ) | |||||||||||||||||||||||
Total assets | 12,809 | 12,779 | 12,506 | 12,573 | 12,405 | 3 | 12,809 | 12,405 | 3 | |||||||||||||||||||||||||
Deposits | 10,757 | 10,591 | 10,534 | 10,535 | 10,229 | 5 | 10,757 | 10,229 | 5 | |||||||||||||||||||||||||
Shareholders’ equity | 1,605 | 1,566 | 1,508 | 1,458 | 1,402 | 14 | 1,605 | 1,402 | 14 | |||||||||||||||||||||||||
Common shares outstanding (thousands) | 78,974 | 79,075 | 79,035 | 79,234 | 79,202 | — | 78,974 | 79,202 | — |
((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. | ||||||||||||||||||||||||||||
Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||||||||||
Selected Financial Information | ||||||||||||||||||||||||||||
2019 | 2018 | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||
Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2019 | 2018 | ||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||
Expense reconciliation | ||||||||||||||||||||||||||||
Expenses (GAAP) | $ | 82,924 | $ | 81,813 | $ | 76,084 | $ | 78,242 | $ | 77,718 | $ | 240,821 | $ | 228,043 | ||||||||||||||
Merger-related and other charges | (2,605 | ) | (4,087 | ) | (739 | ) | (1,234 | ) | (592 | ) | (7,431 | ) | (6,111 | ) | ||||||||||||||
Expenses - operating | $ | 80,319 | $ | 77,726 | $ | 75,345 | $ | 77,008 | $ | 77,126 | $ | 233,390 | $ | 221,932 | ||||||||||||||
Net income reconciliation | ||||||||||||||||||||||||||||
Net income (GAAP) | $ | 48,362 | $ | 44,085 | $ | 44,262 | $ | 45,137 | $ | 43,682 | $ | 136,709 | $ | 120,974 | ||||||||||||||
Merger-related and other charges | 2,605 | 4,087 | 739 | 1,234 | 592 | 7,431 | 6,111 | |||||||||||||||||||||
Income tax benefit of merger-related and other charges | (600 | ) | (940 | ) | (172 | ) | (604 | ) | (141 | ) | (1,712 | ) | (890 | ) | ||||||||||||||
Net income - operating | $ | 50,367 | $ | 47,232 | $ | 44,829 | $ | 45,767 | $ | 44,133 | $ | 142,428 | $ | 126,195 | ||||||||||||||
Diluted income per common share reconciliation | ||||||||||||||||||||||||||||
Diluted income per common share (GAAP) | $ | 0.60 | $ | 0.55 | $ | 0.55 | $ | 0.56 | $ | 0.54 | $ | 1.70 | $ | 1.51 | ||||||||||||||
Merger-related and other charges | 0.03 | 0.04 | 0.01 | 0.01 | 0.01 | 0.07 | 0.06 | |||||||||||||||||||||
Diluted income per common share - operating | $ | 0.63 | $ | 0.59 | $ | 0.56 | $ | 0.57 | $ | 0.55 | $ | 1.77 | $ | 1.57 | ||||||||||||||
Book value per common share reconciliation | ||||||||||||||||||||||||||||
Book value per common share (GAAP) | $ | 20.16 | $ | 19.65 | $ | 18.93 | $ | 18.24 | $ | 17.56 | $ | 20.16 | $ | 17.56 | ||||||||||||||
Effect of goodwill and other intangibles | (4.26 | ) | (4.27 | ) | (4.00 | ) | (4.00 | ) | (4.02 | ) | (4.26 | ) | (4.02 | ) | ||||||||||||||
Tangible book value per common share | $ | 15.90 | $ | 15.38 | $ | 14.93 | $ | 14.24 | $ | 13.54 | $ | 15.90 | $ | 13.54 | ||||||||||||||
Return on tangible common equity reconciliation | ||||||||||||||||||||||||||||
Return on common equity (GAAP) | 12.16 | % | 11.45 | % | 11.85 | % | 12.08 | % | 11.96 | % | 11.83 | % | 11.43 | % | ||||||||||||||
Merger-related and other charges | 0.51 | 0.82 | 0.15 | 0.17 | 0.13 | 0.49 | 0.50 | |||||||||||||||||||||
Return on common equity - operating | 12.67 | 12.27 | 12.00 | 12.25 | 12.09 | 12.32 | 11.93 | |||||||||||||||||||||
Effect of goodwill and other intangibles | 3.71 | 3.61 | 3.46 | 3.63 | 3.72 | 3.60 | 3.69 | |||||||||||||||||||||
Return on tangible common equity - operating | 16.38 | % | 15.88 | % | 15.46 | % | 15.88 | % | 15.81 | % | 15.92 | % | 15.62 | % | ||||||||||||||
Return on assets reconciliation | ||||||||||||||||||||||||||||
Return on assets (GAAP) | 1.51 | % | 1.40 | % | 1.44 | % | 1.43 | % | 1.41 | % | 1.45 | % | 1.32 | % | ||||||||||||||
Merger-related and other charges | 0.07 | 0.10 | 0.01 | 0.02 | 0.01 | 0.06 | 0.06 | |||||||||||||||||||||
Return on assets - operating | 1.58 | % | 1.50 | % | 1.45 | % | 1.45 | % | 1.42 | % | 1.51 | % | 1.38 | % | ||||||||||||||
Efficiency ratio reconciliation | ||||||||||||||||||||||||||||
Efficiency ratio (GAAP) | 55.64 | % | 57.28 | % | 55.32 | % | 56.73 | % | 56.82 | % | 56.09 | % | 57.52 | % | ||||||||||||||
Merger-related and other charges | (1.74 | ) | (2.86 | ) | (0.54 | ) | (0.90 | ) | (0.43 | ) | (1.73 | ) | (1.54 | ) | ||||||||||||||
Efficiency ratio - operating | 53.90 | % | 54.42 | % | 54.78 | % | 55.83 | % | 56.39 | % | 54.36 | % | 55.98 | % | ||||||||||||||
Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||||||||||
Equity to total assets (GAAP) | 12.53 | % | 12.25 | % | 12.06 | % | 11.60 | % | 11.30 | % | 12.53 | % | 11.30 | % | ||||||||||||||
Effect of goodwill and other intangibles | (2.37 | ) | (2.39 | ) | (2.30 | ) | (2.31 | ) | (2.35 | ) | (2.37 | ) | (2.35 | ) | ||||||||||||||
Tangible common equity to tangible assets | 10.16 | % | 9.86 | % | 9.76 | % | 9.29 | % | 8.95 | % | 10.16 | % | 8.95 | % |
UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||||||
Financial Highlights | |||||||||||||||||||||||||||
Loan Portfolio Composition at Period-End | |||||||||||||||||||||||||||
2019 | 2018 | Linked Quarter Change | Year over Year Change | ||||||||||||||||||||||||
(in millions) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | ||||||||||||||||||||||
LOANS BY CATEGORY | |||||||||||||||||||||||||||
Owner occupied commercial RE | $ | 1,692 | $ | 1,658 | $ | 1,620 | $ | 1,648 | $ | 1,673 | $ | 34 | $ | 19 | |||||||||||||
Income producing commercial RE | 1,934 | 1,939 | 1,867 | 1,812 | 1,788 | (5 | ) | 146 | |||||||||||||||||||
Commercial & industrial | 1,271 | 1,299 | 1,284 | 1,278 | 1,194 | (28 | ) | 77 | |||||||||||||||||||
Commercial construction | 1,001 | 983 | 866 | 796 | 761 | 18 | 240 | ||||||||||||||||||||
Equipment financing | 729 | 674 | 606 | 565 | 509 | 55 | 220 | ||||||||||||||||||||
Total commercial | 6,627 | 6,553 | 6,243 | 6,099 | 5,925 | 74 | 702 | ||||||||||||||||||||
Residential mortgage | 1,121 | 1,108 | 1,064 | 1,049 | 1,035 | 13 | 86 | ||||||||||||||||||||
Home equity lines of credit | 669 | 675 | 684 | 694 | 702 | (6 | ) | (33 | ) | ||||||||||||||||||
Residential construction | 229 | 219 | 200 | 211 | 198 | 10 | 31 | ||||||||||||||||||||
Consumer | 257 | 283 | 302 | 330 | 366 | (26 | ) | (109 | ) | ||||||||||||||||||
Total loans | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 65 | $ | 677 | |||||||||||||
LOANS BY MARKET | |||||||||||||||||||||||||||
North Georgia | $ | 1,002 | $ | 1,002 | $ | 970 | $ | 981 | $ | 992 | — | 10 | |||||||||||||||
Atlanta | 1,740 | 1,745 | 1,524 | 1,507 | 1,493 | (5 | ) | 247 | |||||||||||||||||||
North Carolina | 1,117 | 1,084 | 1,074 | 1,072 | 1,078 | 33 | 39 | ||||||||||||||||||||
Coastal Georgia | 611 | 604 | 603 | 588 | 610 | 7 | 1 | ||||||||||||||||||||
Gainesville | 246 | 244 | 243 | 247 | 235 | 2 | 11 | ||||||||||||||||||||
East Tennessee | 435 | 446 | 458 | 477 | 460 | (11 | ) | (25 | ) | ||||||||||||||||||
South Carolina | 1,705 | 1,674 | 1,674 | 1,645 | 1,586 | 31 | 119 | ||||||||||||||||||||
Commercial Banking Solutions | 1,916 | 1,884 | 1,766 | 1,658 | 1,530 | 32 | 386 | ||||||||||||||||||||
Indirect auto | 131 | 155 | 181 | 208 | 242 | (24 | ) | (111 | ) | ||||||||||||||||||
Total loans | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 65 | $ | 677 |
UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||
Financial Highlights | ||||||||||||||||||
Credit Quality | ||||||||||||||||||
2019 | ||||||||||||||||||
(in thousands) | Third Quarter | Second Quarter | First Quarter | |||||||||||||||
NONACCRUAL LOANS | ||||||||||||||||||
Owner occupied RE | $ | 8,430 | $ | 8,177 | $ | 7,030 | ||||||||||||
Income producing RE | 2,030 | 1,331 | 1,276 | |||||||||||||||
Commercial & industrial | 2,625 | 2,366 | 1,666 | |||||||||||||||
Commercial construction | 1,894 | 1,650 | 473 | |||||||||||||||
Equipment financing | 1,974 | 2,047 | 1,813 | |||||||||||||||
Total commercial | 16,953 | 15,571 | 12,258 | |||||||||||||||
Residential mortgage | 9,475 | 8,012 | 8,281 | |||||||||||||||
Home equity lines of credit | 3,065 | 1,978 | 2,233 | |||||||||||||||
Residential construction | 597 | 494 | 347 | |||||||||||||||
Consumer | 742 | 542 | 505 | |||||||||||||||
Total | $ | 30,832 | $ | 26,597 | $ | 23,624 | ||||||||||||
NONACCRUAL LOANS ACTIVITY | ||||||||||||||||||
Beginning Balance | $ | 26,597 | $ | 23,624 | $ | 23,778 | ||||||||||||
Loans placed on non-accrual | 8,722 | 8,316 | 6,759 | |||||||||||||||
Payments received | (2,107 | ) | (3,212 | ) | (3,520 | ) | ||||||||||||
Loan charge-offs | (2,278 | ) | (2,131 | ) | (2,714 | ) | ||||||||||||
Foreclosures | (102 | ) | — | (679 | ) | |||||||||||||
Ending Balance | $ | 30,832 | $ | 26,597 | $ | 23,624 |
2019 | |||||||||||||||||||||
Third Quarter | Second Quarter | First 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 | $ | (39 | ) | (0.01 | )% | $ | (58 | ) | (0.01 | )% | $ | (64 | ) | (0.02 | )% | ||||||
Income producing RE | 431 | 0.09 | 241 | 0.05 | 177 | 0.04 | |||||||||||||||
Commercial & industrial | 691 | 0.21 | 1,141 | 0.35 | 1,356 | 0.43 | |||||||||||||||
Commercial construction | (247 | ) | (0.10 | ) | (162 | ) | (0.07 | ) | (325 | ) | (0.16 | ) | |||||||||
Equipment financing | 1,174 | 0.67 | 890 | 0.56 | 1,281 | 0.89 | |||||||||||||||
Total commercial | 2,010 | 0.12 | 2,052 | 0.13 | 2,425 | 0.16 | |||||||||||||||
Residential mortgage | 158 | 0.06 | (125 | ) | (0.05 | ) | 13 | — | |||||||||||||
Home equity lines of credit | 83 | 0.05 | (111 | ) | (0.07 | ) | 215 | 0.13 | |||||||||||||
Residential construction | (5 | ) | (0.01 | ) | 199 | 0.38 | (22 | ) | (0.04 | ) | |||||||||||
Consumer | 477 | 0.70 | 423 | 0.58 | 499 | 0.64 | |||||||||||||||
Total | $ | 2,723 | 0.12 | $ | 2,438 | 0.11 | $ | 3,130 | 0.15 | ||||||||||||
(1) Annualized. |
UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) | ||||||||
(in thousands, except share and per share data) | September 30, 2019 | December 31, 2018 | ||||||
ASSETS | ||||||||
Cash and due from banks | $ | 108,389 | $ | 126,083 | ||||
Interest-bearing deposits in banks (includes restricted cash of $5,326 and $6,702) | 252,670 | 201,182 | ||||||
Cash and cash equivalents | 361,059 | 327,265 | ||||||
Debt securities available for sale | 2,272,046 | 2,628,467 | ||||||
Debt securities held to maturity (fair value $248,546 and $268,803) | 243,028 | 274,407 | ||||||
Loans held for sale at fair value | 54,625 | 18,935 | ||||||
Loans and leases, net of unearned income | 8,903,266 | 8,383,401 | ||||||
Less allowance for loan and lease losses | (62,514 | ) | (61,203 | ) | ||||
Loans and leases, net | 8,840,752 | 8,322,198 | ||||||
Premises and equipment, net | 215,435 | 206,140 | ||||||
Bank owned life insurance | 201,955 | 192,616 | ||||||
Accrued interest receivable | 33,233 | 35,413 | ||||||
Net deferred tax asset | 34,591 | 64,224 | ||||||
Derivative financial instruments | 43,755 | 24,705 | ||||||
Goodwill and other intangible assets | 343,340 | 324,072 | ||||||
Other assets | 165,667 | 154,750 | ||||||
Total assets | $ | 12,809,486 | $ | 12,573,192 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand | $ | 3,527,815 | $ | 3,210,220 | ||||
NOW and interest-bearing demand | 2,210,352 | 2,369,631 | ||||||
Money market | 2,206,496 | 2,002,670 | ||||||
Savings | 699,131 | 669,886 | ||||||
Time | 1,890,431 | 1,598,391 | ||||||
Brokered | 222,292 | 683,715 | ||||||
Total deposits | 10,756,517 | 10,534,513 | ||||||
Federal Home Loan Bank advances | 40,000 | 160,000 | ||||||
Long-term debt | 240,245 | 267,189 | ||||||
Derivative financial instruments | 16,244 | 26,433 | ||||||
Accrued expenses and other liabilities | 151,055 | 127,503 | ||||||
Total liabilities | 11,204,061 | 11,115,638 | ||||||
Shareholders' equity: | ||||||||
Common stock, $1 par value; 150,000,000 shares authorized; 78,974,199 and 79,234,077 shares issued and outstanding | 78,974 | 79,234 | ||||||
Common stock issuable; 660,581 and 674,499 shares | 11,327 | 10,744 | ||||||
Capital surplus | 1,495,267 | 1,499,584 | ||||||
Retained earnings (accumulated deficit) | 5,594 | (90,419 | ) | |||||
Accumulated other comprehensive income (loss) | 14,263 | (41,589 | ) | |||||
Total shareholders' equity | 1,605,425 | 1,457,554 | ||||||
Total liabilities and shareholders' equity | $ | 12,809,486 | $ | 12,573,192 |
UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 122,645 | $ | 108,335 | $ | 357,575 | $ | 308,296 | ||||||||
Investment securities, including tax exempt of $1,118 and $1,052, and $3,409 and $3,049 | 17,744 | 19,899 | 57,638 | 56,448 | ||||||||||||
Deposits in banks and short-term investments | 226 | 487 | 1,074 | 1,482 | ||||||||||||
Total interest revenue | 140,615 | 128,721 | 416,287 | 366,226 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW and interest-bearing demand | 3,214 | 1,985 | 10,283 | 4,483 | ||||||||||||
Money market | 5,126 | 3,177 | 14,100 | 7,853 | ||||||||||||
Savings | 41 | 33 | 115 | 117 | ||||||||||||
Time | 8,732 | 5,746 | 25,687 | 12,900 | ||||||||||||
Total deposit interest expense | 17,113 | 10,941 | 50,185 | 25,353 | ||||||||||||
Short-term borrowings | 429 | 274 | 838 | 772 | ||||||||||||
Federal Home Loan Bank advances | 521 | 1,791 | 2,695 | 5,551 | ||||||||||||
Long-term debt | 3,214 | 3,605 | 9,813 | 10,679 | ||||||||||||
Total interest expense | 21,277 | 16,611 | 63,531 | 42,355 | ||||||||||||
Net interest revenue | 119,338 | 112,110 | 352,756 | 323,871 | ||||||||||||
Provision for credit losses | 3,100 | 1,800 | 9,650 | 7,400 | ||||||||||||
Net interest revenue after provision for credit losses | 116,238 | 110,310 | 343,106 | 316,471 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges and fees | 9,916 | 9,112 | 27,429 | 26,831 | ||||||||||||
Mortgage loan and other related fees | 8,658 | 5,262 | 17,750 | 15,928 | ||||||||||||
Brokerage fees | 1,699 | 1,525 | 4,624 | 3,598 | ||||||||||||
Gains from sales of SBA/USDA loans | 1,639 | 2,605 | 4,412 | 6,784 | ||||||||||||
Securities gains (losses), net | — | 2 | (118 | ) | (1,302 | ) | ||||||||||
Other | 7,119 | 5,674 | 20,433 | 18,077 | ||||||||||||
Total noninterest income | 29,031 | 24,180 | 74,530 | 69,916 | ||||||||||||
Total revenue | 145,269 | 134,490 | 417,636 | 386,387 | ||||||||||||
Noninterest expenses: | ||||||||||||||||
Salaries and employee benefits | 50,501 | 47,146 | 146,161 | 135,384 | ||||||||||||
Communications and equipment | 6,223 | 5,590 | 18,233 | 15,071 | ||||||||||||
Occupancy | 5,921 | 5,779 | 17,424 | 16,939 | ||||||||||||
Advertising and public relations | 1,374 | 1,442 | 4,256 | 4,341 | ||||||||||||
Postage, printing and supplies | 1,618 | 1,574 | 4,733 | 4,896 | ||||||||||||
Professional fees | 4,715 | 3,927 | 11,930 | 11,435 | ||||||||||||
FDIC assessments and other regulatory charges | 314 | 2,228 | 3,571 | 6,677 | ||||||||||||
Amortization of intangibles | 1,210 | 1,681 | 3,845 | 5,426 | ||||||||||||
Merger-related and other charges | 2,541 | 115 | 6,981 | 4,449 | ||||||||||||
Other | 8,507 | 8,236 | 23,687 | 23,425 | ||||||||||||
Total noninterest expenses | 82,924 | 77,718 | 240,821 | 228,043 | ||||||||||||
Net income before income taxes | 62,345 | 56,772 | 176,815 | 158,344 | ||||||||||||
Income tax expense | 13,983 | 13,090 | 40,106 | 37,370 | ||||||||||||
Net income | $ | 48,362 | $ | 43,682 | $ | 136,709 | $ | 120,974 | ||||||||
Net income available to common shareholders | $ | 48,011 | $ | 43,381 | $ | 135,727 | $ | 120,124 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.60 | $ | 0.54 | $ | 1.70 | $ | 1.51 | ||||||||
Diluted | 0.60 | 0.54 | 1.70 | 1.51 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 79,663 | 79,806 | 79,714 | 79,588 | ||||||||||||
Diluted | 79,667 | 79,818 | 79,718 | 79,598 |
Average Consolidated Balance Sheets and Net Interest Analysis |
For the Three Months Ended September 30, |
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) | $ | 8,835,585 | $ | 122,526 | 5.50 | % | $ | 8,199,856 | $ | 108,197 | 5.23 | % | ||||||||||
Taxable securities (3) | 2,379,927 | 16,626 | 2.79 | 2,763,461 | 18,847 | 2.73 | ||||||||||||||||
Tax-exempt securities (FTE) (1)(3) | 170,027 | 1,502 | 3.53 | 152,939 | 1,417 | 3.71 | ||||||||||||||||
Federal funds sold and other interest-earning assets | 182,935 | 616 | 1.35 | 203,707 | 751 | 1.47 | ||||||||||||||||
Total interest-earning assets (FTE) | 11,568,474 | 141,270 | 4.85 | 11,319,963 | 129,212 | 4.53 | ||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||
Allowance for loan losses | (63,474 | ) | (62,322 | ) | ||||||||||||||||||
Cash and due from banks | 116,922 | 123,290 | ||||||||||||||||||||
Premises and equipment | 221,930 | 216,775 | ||||||||||||||||||||
Other assets (3) | 836,951 | 703,915 | ||||||||||||||||||||
Total assets | $ | 12,680,803 | $ | 12,301,621 | ||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||
NOW and interest-bearing demand | $ | 2,123,910 | 3,214 | 0.60 | $ | 1,963,312 | 1,985 | 0.40 | ||||||||||||||
Money market | 2,277,162 | 5,126 | 0.89 | 2,078,116 | 3,177 | 0.61 | ||||||||||||||||
Savings | 695,297 | 41 | 0.02 | 680,640 | 33 | 0.02 | ||||||||||||||||
Time | 1,879,801 | 8,053 | 1.70 | 1,545,020 | 3,351 | 0.86 | ||||||||||||||||
Brokered time deposits | 102,078 | 679 | 2.64 | 434,182 | 2,395 | 2.19 | ||||||||||||||||
Total interest-bearing deposits | 7,078,248 | 17,113 | 0.96 | 6,701,270 | 10,941 | 0.65 | ||||||||||||||||
Federal funds purchased and other borrowings | 73,733 | 429 | 2.31 | 50,767 | 274 | 2.14 | ||||||||||||||||
Federal Home Loan Bank advances | 88,261 | 521 | 2.34 | 331,413 | 1,791 | 2.14 | ||||||||||||||||
Long-term debt | 243,935 | 3,214 | 5.23 | 296,366 | 3,605 | 4.83 | ||||||||||||||||
Total borrowed funds | 405,929 | 4,164 | 4.07 | 678,546 | 5,670 | 3.32 | ||||||||||||||||
Total interest-bearing liabilities | 7,484,177 | 21,277 | 1.13 | 7,379,816 | 16,611 | 0.89 | ||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing deposits | 3,453,174 | 3,249,218 | ||||||||||||||||||||
Other liabilities | 155,107 | 278,764 | ||||||||||||||||||||
Total liabilities | 11,092,458 | 10,907,798 | ||||||||||||||||||||
Shareholders' equity | 1,588,345 | 1,393,823 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 12,680,803 | $ | 12,301,621 | ||||||||||||||||||
Net interest revenue (FTE) | $ | 119,993 | $ | 112,601 | ||||||||||||||||||
Net interest-rate spread (FTE) | 3.72 | % | 3.64 | % | ||||||||||||||||||
Net interest margin (FTE) (4) | 4.12 | % | 3.95 | % |
(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 $35.1 million in 2019 and unrealized losses of $49.9 million in 2018 are included in other assets for purposes of this presentation. |
(4) | Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets. |
Average Consolidated Balance Sheets and Net Interest Analysis |
For the Nine Months Ended September 30, |
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) | $ | 8,646,622 | $ | 357,541 | 5.53 | % | $ | 8,124,269 | $ | 307,981 | 5.07 | % | ||||||||||
Taxable securities (3) | 2,532,070 | 54,229 | 2.86 | 2,712,900 | 53,399 | 2.62 | ||||||||||||||||
Tax-exempt securities (FTE) (1)(3) | 168,787 | 4,579 | 3.62 | 150,014 | 4,106 | 3.65 | ||||||||||||||||
Federal funds sold and other interest-earning assets | 186,402 | 1,913 | 1.37 | 209,836 | 2,123 | 1.35 | ||||||||||||||||
Total interest-earning assets (FTE) | 11,533,881 | 418,262 | 4.85 | 11,197,019 | 367,609 | 4.39 | ||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||
Allowance for loan losses | (62,664 | ) | (61,259 | ) | ||||||||||||||||||
Cash and due from banks | 121,889 | 138,809 | ||||||||||||||||||||
Premises and equipment | 220,872 | 217,339 | ||||||||||||||||||||
Other assets (3) | 785,862 | 717,555 | ||||||||||||||||||||
Total assets | $ | 12,599,840 | $ | 12,209,463 | ||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||
NOW and interest-bearing demand | $ | 2,199,607 | 10,283 | 0.63 | $ | 2,098,734 | 4,483 | 0.29 | ||||||||||||||
Money market | 2,187,822 | 14,100 | 0.86 | 2,113,972 | 7,853 | 0.50 | ||||||||||||||||
Savings | 685,167 | 115 | 0.02 | 671,883 | 117 | 0.02 | ||||||||||||||||
Time | 1,761,374 | 20,338 | 1.54 | 1,534,823 | 8,288 | 0.72 | ||||||||||||||||
Brokered time deposits | 292,835 | 5,349 | 2.44 | 298,653 | 4,612 | 2.06 | ||||||||||||||||
Total interest-bearing deposits | 7,126,805 | 50,185 | 0.94 | 6,718,065 | 25,353 | 0.50 | ||||||||||||||||
Federal funds purchased and other borrowings | 44,898 | 838 | 2.50 | 58,144 | 772 | 1.78 | ||||||||||||||||
Federal Home Loan Bank advances | 142,876 | 2,695 | 2.52 | 392,227 | 5,551 | 1.89 | ||||||||||||||||
Long-term debt | 252,686 | 9,813 | 5.19 | 295,966 | 10,679 | 4.82 | ||||||||||||||||
Total borrowed funds | 440,460 | 13,346 | 4.05 | 746,337 | 17,002 | 3.05 | ||||||||||||||||
Total interest-bearing liabilities | 7,567,265 | 63,531 | 1.12 | 7,464,402 | 42,355 | 0.76 | ||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing deposits | 3,335,450 | 3,178,387 | ||||||||||||||||||||
Other liabilities | 164,350 | 199,848 | ||||||||||||||||||||
Total liabilities | 11,067,065 | 10,842,637 | ||||||||||||||||||||
Shareholders' equity | 1,532,775 | 1,366,826 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 12,599,840 | $ | 12,209,463 | ||||||||||||||||||
Net interest revenue (FTE) | $ | 354,731 | $ | 325,254 | ||||||||||||||||||
Net interest-rate spread (FTE) | 3.73 | % | 3.63 | % | ||||||||||||||||||
Net interest margin (FTE) (4) | 4.11 | % | 3.88 | % |
(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 $4.94 million in 2019 and unrealized losses of $40.4 million in 2018 are included in other assets for purposes of this presentation. |
(4) | Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets. |
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ: UCBI) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the southeast region’s largest full-service financial institutions with $12.8 billion in assets, and 147 offices in Georgia, North Carolina, South Carolina and Tennessee. It operates principally through United Community Bank, its bank subsidiary, which specializes in personalized community banking services for individuals, small businesses and companies. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. Respected national research firms consistently recognize United Community Bank for outstanding customer service. For five of the past six years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2019, for the sixth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America, and for the first time included United on its list of The World’s Best Banks. Additional information about UCBI and the Bank can be found at www.ucbi.com.
Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating 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.
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