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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 Fourth Quarter Results
EPS of $0.61, Return on Assets of 1.50% and Return on Equity of 12.07%
GREENVILLE, SC - January 21, 2020
United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its fourth quarter financial results, including strong year-over-year loan and deposit growth, operating efficiency and asset quality. Diluted earnings per share were $0.61, an increase of $0.05 or 9% from a year ago. Excluding a nominal amount of merger-related and other charges, diluted operating earnings per share were also $0.61, up 7% over last year. United’s return on assets was 1.50% and its return on common equity was 12.1% for the quarter. On an operating basis, United’s return on assets was also 1.50% and its return on tangible common equity was 15.5%.
During the quarter, the company sold its remaining investment in its indirect auto portfolio, completing its exit from that business. Excluding indirect auto, loans grew at a 2% annualized rate in the fourth quarter. United's net interest margin decreased as expected due to falling interest rates. Other items that impacted the net interest margin included seasonally higher average public deposits invested at lower yielding overnight rates and lower purchased loan accretion when compared to previous quarters. Core transaction deposits remained stable and total deposits grew by $140 million.
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For the full year of 2019, United's return on assets increased 11 basis points to 1.46% and EPS increased by 12%. Operating return on assets increased 11 basis points to 1.51% and operating EPS increased 11%, as the company continued to execute on its plans to deliver top quartile performance. 2019 saw strong operating leverage, resulting in a company best efficiency ratio of 55.8% and an operating efficiency ratio of 54.5%.
“Our fourth quarter caps off what has been an outstanding year for United. Our team continued delivering best in class customer service, which has led to the achievement of our top quartile performance goals,” said Lynn Harton, Chairman and CEO of United. “We are proud and honored that United was named one of the ‘Best Banks to Work For’ by American Banker for the third year in a row, as well as one of the ‘World’s Best Banks in 2019’ by Forbes. These accolades are totally due to the passion and caring of our 2,341 employees and their efforts to build a great company where they can develop fulfilling careers, reach ambitious financial goals and serve United's customers and communities at the highest level. We look forward to continued success in 2020.”
2019 Highlights:
• | 2019 earnings per diluted share were $2.31, a 12% increase over 2018 |
• | Excluding merger-related and other charges, operating earnings per diluted share for 2019 were $2.38 compared to $2.14 in 2018, an increase of 11% |
• | Return on assets was 1.46% in 2019, an increase of 11 basis points from 2018 |
• | Excluding merger-related and other charges, operating return on assets was 1.51%, an increase of 11 basis points from 2018 |
• | Efficiency ratio of 55.8% in 2019 improved 154 basis points as compared to 2018 |
• | Excluding merger-related and other charges, efficiency ratio of 54.5% improved 144 basis points as compared to 2018 |
• | End of period loans grew $430 million in 2019, up 5% over December 31, 2018 |
• | Common Equity Tier 1 ratio was 13.0% at December 31, 2019, compared to 12.2% at December 31, 2018 |
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• | Dividends of $0.68 per share were declared in 2019, up 17% over 2018 |
• | United completed the acquisition of First Madison Bank & Trust on May 1, 2019 |
• | Share repurchases of 500,495 shares were accomplished during the year at an average price of $26.01 |
Fourth Quarter 2019 Financial Highlights:
• | EPS of $0.61, representing growth of 9% over last year, or 7% on an operating basis |
• | Return on assets of 1.50% |
• | Return on common equity of 12.1% |
• | Operating return on tangible common equity of 15.5%, excluding merger-related and other charges |
• | End of period total loans fell by $90 million, but excluding indirect auto, end of period loans grew at a 2% annualized pace |
• | Loan production was strong at $854 million, but was offset by higher than usual paydowns |
• | Despite weaker seasonality, our mortgage business remained strong with loan locks of $411 million, compared to $251 million a year ago due to a favorable rate environment and the impact of new hires |
• | Net interest margin of 3.93% was down 19 basis points compared to the third quarter and down 4 basis points compared to a year ago |
• | Efficiency ratio of 54.9% |
• | Net charge-offs of 18 basis points, up six basis points from last quarter and remaining at historically low levels |
• | Nonperforming assets of 0.28% of total assets, compared with 0.24% at September 30, 2019 and 0.20% at December 31, 2018 |
• | Unusual items in the quarter netted to a slight gain, with a $1.6 million bank owned life insurance gain offset by $0.9 million in securities losses. Additionally, our indirect portfolio sales resulted in a $0.7 million loss offset by a $0.5 million indirect portfolio loan loss reserve release |
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Conference Call
United will hold a conference call, Wednesday, January 22, 2020, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 7081477. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.
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UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||||||||||||||||
Selected Financial Information | ||||||||||||||||||||||||||||||||||
2019 | 2018 | Fourth Quarter 2019 - 2018 Change | For the Twelve Months Ended December 31, | YTD 2019 - 2018 Change | ||||||||||||||||||||||||||||||
(in thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | 2019 | 2018 | |||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||
Interest revenue | $ | 136,419 | $ | 140,615 | $ | 139,156 | $ | 136,516 | $ | 133,854 | $ | 552,706 | $ | 500,080 | ||||||||||||||||||||
Interest expense | 19,781 | 21,277 | 21,372 | 20,882 | 18,975 | 83,312 | 61,330 | |||||||||||||||||||||||||||
Net interest revenue | 116,638 | 119,338 | 117,784 | 115,634 | 114,879 | 2 | % | 469,394 | 438,750 | 7 | % | |||||||||||||||||||||||
Provision for credit losses | 3,500 | 3,100 | 3,250 | 3,300 | 2,100 | 13,150 | 9,500 | |||||||||||||||||||||||||||
Noninterest income | 30,183 | 29,031 | 24,531 | 20,968 | 23,045 | 31 | 104,713 | 92,961 | 13 | |||||||||||||||||||||||||
Total revenue | 143,321 | 145,269 | 139,065 | 133,302 | 135,824 | 6 | 560,957 | 522,211 | 7 | |||||||||||||||||||||||||
Expenses | 81,424 | 82,924 | 81,813 | 76,084 | 78,242 | 4 | 322,245 | 306,285 | 5 | |||||||||||||||||||||||||
Income before income tax expense | 61,897 | 62,345 | 57,252 | 57,218 | 57,582 | 238,712 | 215,926 | |||||||||||||||||||||||||||
Income tax expense | 12,885 | 13,983 | 13,167 | 12,956 | 12,445 | 52,991 | 49,815 | |||||||||||||||||||||||||||
Net income | 49,012 | 48,362 | 44,085 | 44,262 | 45,137 | 185,721 | 166,111 | |||||||||||||||||||||||||||
Merger-related and other charges | (74 | ) | 2,605 | 4,087 | 739 | 1,234 | 7,357 | 7,345 | ||||||||||||||||||||||||||
Income tax benefit of merger-related and other charges | 17 | (600 | ) | (940 | ) | (172 | ) | (604 | ) | (1,695 | ) | (1,494 | ) | |||||||||||||||||||||
Net income - operating (1) | $ | 48,955 | $ | 50,367 | $ | 47,232 | $ | 44,829 | $ | 45,767 | 7 | $ | 191,383 | $ | 171,962 | 11 | ||||||||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||
Diluted net income - GAAP | $ | 0.61 | $ | 0.60 | $ | 0.55 | $ | 0.55 | $ | 0.56 | 9 | $ | 2.31 | $ | 2.07 | 12 | ||||||||||||||||||
Diluted net income - operating (1) | 0.61 | 0.63 | 0.59 | 0.56 | 0.57 | 7 | 2.38 | 2.14 | 11 | |||||||||||||||||||||||||
Cash dividends declared | 0.18 | 0.17 | 0.17 | 0.16 | 0.16 | 13 | 0.68 | 0.58 | 17 | |||||||||||||||||||||||||
Book value | 20.53 | 20.16 | 19.65 | 18.93 | 18.24 | 13 | 20.53 | 18.24 | 13 | |||||||||||||||||||||||||
Tangible book value (3) | 16.28 | 15.90 | 15.38 | 14.93 | 14.24 | 14 | 16.28 | 14.24 | 14 | |||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||
Return on common equity - GAAP (2)(4) | 12.07 | % | 12.16 | % | 11.45 | % | 11.85 | % | 12.08 | % | 11.89 | % | 11.60 | % | ||||||||||||||||||||
Return on common equity - operating (1)(2)(4) | 12.06 | 12.67 | 12.27 | 12.00 | 12.25 | 12.25 | 12.01 | |||||||||||||||||||||||||||
Return on tangible common equity - operating (1)(2)(3)(4) | 15.49 | 16.38 | 15.88 | 15.46 | 15.88 | 15.81 | 15.69 | |||||||||||||||||||||||||||
Return on assets - GAAP (4) | 1.50 | 1.51 | 1.40 | 1.44 | 1.43 | 1.46 | 1.35 | |||||||||||||||||||||||||||
Return on assets - operating (1)(4) | 1.50 | 1.58 | 1.50 | 1.45 | 1.45 | 1.51 | 1.40 | |||||||||||||||||||||||||||
Net interest margin (fully taxable equivalent) (4) | 3.93 | 4.12 | 4.12 | 4.10 | 3.97 | 4.07 | 3.91 | |||||||||||||||||||||||||||
Efficiency ratio - GAAP | 54.87 | 55.64 | 57.28 | 55.32 | 56.73 | 55.77 | 57.31 | |||||||||||||||||||||||||||
Efficiency ratio - operating (1) | 54.92 | 53.90 | 54.42 | 54.78 | 55.83 | 54.50 | 55.94 | |||||||||||||||||||||||||||
Equity to total assets | 12.66 | 12.53 | 12.25 | 12.06 | 11.59 | 12.66 | 11.59 | |||||||||||||||||||||||||||
Tangible common equity to tangible assets (3) | 10.32 | 10.16 | 9.86 | 9.76 | 9.29 | 10.32 | 9.29 | |||||||||||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||||||||||||
Nonperforming loans | $ | 35,341 | $ | 30,832 | $ | 26,597 | $ | 23,624 | $ | 23,778 | 49 | $ | 35,341 | $ | 23,778 | 49 | ||||||||||||||||||
Foreclosed properties | 476 | 102 | 75 | 1,127 | 1,305 | (64 | ) | 476 | 1,305 | (64 | ) | |||||||||||||||||||||||
Total nonperforming assets (“NPAs”) | 35,817 | 30,934 | 26,672 | 24,751 | 25,083 | 43 | 35,817 | 25,083 | 43 | |||||||||||||||||||||||||
Allowance for loan losses | 62,089 | 62,514 | 62,204 | 61,642 | 61,203 | 1 | 62,089 | 61,203 | 1 | |||||||||||||||||||||||||
Net charge-offs | 3,925 | 2,723 | 2,438 | 3,130 | 1,787 | 120 | 12,216 | 6,113 | 100 | |||||||||||||||||||||||||
Allowance for loan losses to loans | 0.70 | % | 0.70 | % | 0.70 | % | 0.73 | % | 0.73 | % | 0.70 | % | 0.73 | % | ||||||||||||||||||||
Net charge-offs to average loans (4) | 0.18 | 0.12 | 0.11 | 0.15 | 0.09 | 0.14 | 0.07 | |||||||||||||||||||||||||||
NPAs to loans and foreclosed properties | 0.41 | 0.35 | 0.30 | 0.29 | 0.30 | 0.41 | 0.30 | |||||||||||||||||||||||||||
NPAs to total assets | 0.28 | 0.24 | 0.21 | 0.20 | 0.20 | 0.28 | 0.20 | |||||||||||||||||||||||||||
AVERAGE BALANCES ($ in millions) | ||||||||||||||||||||||||||||||||||
Loans | $ | 8,890 | $ | 8,836 | $ | 8,670 | $ | 8,430 | $ | 8,306 | 7 | $ | 8,708 | $ | 8,170 | 7 | ||||||||||||||||||
Investment securities | 2,486 | 2,550 | 2,674 | 2,883 | 3,004 | (17 | ) | 2,647 | 2,899 | (9 | ) | |||||||||||||||||||||||
Earning assets | 11,832 | 11,568 | 11,534 | 11,498 | 11,534 | 3 | 11,609 | 11,282 | 3 | |||||||||||||||||||||||||
Total assets | 12,946 | 12,681 | 12,608 | 12,509 | 12,505 | 4 | 12,687 | 12,284 | 3 | |||||||||||||||||||||||||
Deposits | 10,924 | 10,531 | 10,493 | 10,361 | 10,306 | 6 | 10,579 | 10,000 | 6 | |||||||||||||||||||||||||
Shareholders’ equity | 1,623 | 1,588 | 1,531 | 1,478 | 1,420 | 14 | 1,556 | 1,380 | 13 | |||||||||||||||||||||||||
Common shares - basic (thousands) | 79,659 | 79,663 | 79,673 | 79,807 | 79,884 | — | 79,700 | 79,662 | — | |||||||||||||||||||||||||
Common shares - diluted (thousands) | 79,669 | 79,667 | 79,678 | 79,813 | 79,890 | — | 79,708 | 79,671 | — | |||||||||||||||||||||||||
AT PERIOD END ($ in millions) | ||||||||||||||||||||||||||||||||||
Loans | $ | 8,813 | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 8,383 | 5 | $ | 8,813 | $ | 8,383 | 5 | ||||||||||||||||||
Investment securities | 2,559 | 2,515 | 2,620 | 2,720 | 2,903 | (12 | ) | 2,559 | 2,903 | (12 | ) | |||||||||||||||||||||||
Total assets | 12,916 | 12,809 | 12,779 | 12,506 | 12,573 | 3 | 12,916 | 12,573 | 3 | |||||||||||||||||||||||||
Deposits | 10,897 | 10,757 | 10,591 | 10,534 | 10,535 | 3 | 10,897 | 10,535 | 3 | |||||||||||||||||||||||||
Shareholders’ equity | 1,636 | 1,605 | 1,566 | 1,508 | 1,458 | 12 | 1,636 | 1,458 | 12 | |||||||||||||||||||||||||
Common shares outstanding (thousands) | 79,014 | 78,974 | 79,075 | 79,035 | 79,234 | — | 79,014 | 79,234 | — |
(1) Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. (2) Net income divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized.
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UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||
Selected Financial Information | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||
Interest revenue | $ | 552,706 | $ | 500,080 | $ | 389,720 | $ | 335,020 | $ | 278,532 | ||||||||||
Interest expense | 83,312 | 61,330 | 33,735 | 25,236 | 21,109 | |||||||||||||||
Net interest revenue | 469,394 | 438,750 | 355,985 | 309,784 | 257,423 | |||||||||||||||
Provision for credit losses | 13,150 | 9,500 | 3,800 | (800 | ) | 3,700 | ||||||||||||||
Noninterest income | 104,713 | 92,961 | 88,260 | 93,697 | 72,529 | |||||||||||||||
Total revenue | 560,957 | 522,211 | 440,445 | 404,281 | 326,252 | |||||||||||||||
Expenses | 322,245 | 306,285 | 267,611 | 241,289 | 211,238 | |||||||||||||||
Income before income tax expense | 238,712 | 215,926 | 172,834 | 162,992 | 115,014 | |||||||||||||||
Income tax expense | 52,991 | 49,815 | 105,013 | 62,336 | 43,436 | |||||||||||||||
Net income | 185,721 | 166,111 | 67,821 | 100,656 | 71,578 | |||||||||||||||
Merger-related and other charges | 7,357 | 7,345 | 14,662 | 8,122 | 17,995 | |||||||||||||||
Income tax benefit of merger-related and other charges | (1,695 | ) | (1,494 | ) | (3,745 | ) | (3,074 | ) | (6,388 | ) | ||||||||||
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act | — | — | 38,199 | — | — | |||||||||||||||
Impairment of deferred tax asset on cancelled non-qualified stock options | — | — | — | 976 | — | |||||||||||||||
Release of disproportionate tax effects lodged in OCI | — | — | 3,400 | — | — | |||||||||||||||
Net income - operating (1) | $ | 191,383 | $ | 171,962 | $ | 120,337 | $ | 106,680 | $ | 83,185 | ||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||
Per common share: | ||||||||||||||||||||
Diluted net income - GAAP | $ | 2.31 | $ | 2.07 | $ | 0.92 | $ | 1.40 | $ | 1.09 | ||||||||||
Diluted net income - operating (1) | 2.38 | 2.14 | 1.63 | 1.48 | 1.27 | |||||||||||||||
Cash dividends declared | 0.68 | 0.58 | 0.38 | 0.30 | 0.22 | |||||||||||||||
Book value | 20.53 | 18.24 | 16.67 | 15.06 | 14.02 | |||||||||||||||
Tangible book value (3) | 16.28 | 14.24 | 13.65 | 12.95 | 12.06 | |||||||||||||||
Key performance ratios: | ||||||||||||||||||||
Return on common equity - GAAP (2) | 11.89 | % | 11.60 | % | 5.67 | % | 9.41 | % | 8.15 | % | ||||||||||
Return on common equity - operating (1)(2) | 12.25 | 12.01 | 10.07 | 9.98 | 9.48 | |||||||||||||||
Return on tangible common equity - operating (1)(2)(3) | 15.81 | 15.69 | 12.02 | 11.86 | 10.24 | |||||||||||||||
Return on assets - GAAP | 1.46 | 1.35 | 0.62 | 1.00 | 0.85 | |||||||||||||||
Return on assets - operating (1) | 1.51 | 1.40 | 1.09 | 1.06 | 0.98 | |||||||||||||||
Net interest margin (fully taxable equivalent) | 4.07 | 3.91 | 3.52 | 3.36 | 3.30 | |||||||||||||||
Efficiency ratio - GAAP | 55.77 | 57.31 | 59.95 | 59.80 | 63.96 | |||||||||||||||
Efficiency ratio - operating (1) | 54.50 | 55.94 | 56.67 | 57.78 | 58.51 | |||||||||||||||
Equity to total assets | 12.66 | 11.59 | 10.94 | 10.05 | 10.58 | |||||||||||||||
Tangible common equity to tangible assets (3) | 10.32 | 9.29 | 9.14 | 8.77 | 9.15 | |||||||||||||||
ASSET QUALITY | ||||||||||||||||||||
Nonperforming loans | $ | 35,341 | $ | 23,778 | $ | 23,658 | $ | 21,539 | $ | 22,653 | ||||||||||
Foreclosed properties | 476 | 1,305 | 3,234 | 7,949 | 4,883 | |||||||||||||||
Total nonperforming assets (NPAs) | 35,817 | 25,083 | 26,892 | 29,488 | 27,536 | |||||||||||||||
Allowance for loan losses | 62,089 | 61,203 | 58,914 | 61,422 | 68,448 | |||||||||||||||
Net charge-offs | 12,216 | 6,113 | 5,998 | 6,766 | 6,259 | |||||||||||||||
Allowance for loan losses to loans | 0.70 | % | 0.73 | % | 0.76 | % | 0.89 | % | 1.14 | % | ||||||||||
Net charge-offs to average loans | 0.14 | 0.07 | 0.08 | 0.11 | 0.12 | |||||||||||||||
NPAs to loans and foreclosed properties | 0.41 | 0.30 | 0.35 | 0.43 | 0.46 | |||||||||||||||
NPAs to total assets | 0.28 | 0.20 | 0.23 | 0.28 | 0.29 | |||||||||||||||
AVERAGE BALANCES ($ in millions) | ||||||||||||||||||||
Loans | $ | 8,708 | $ | 8,170 | $ | 7,150 | $ | 6,413 | $ | 5,298 | ||||||||||
Investment securities | 2,647 | 2,899 | 2,847 | 2,691 | 2,368 | |||||||||||||||
Earning assets | 11,609 | 11,282 | 10,162 | 9,257 | 7,834 | |||||||||||||||
Total assets | 12,687 | 12,284 | 11,015 | 10,054 | 8,462 | |||||||||||||||
Deposits | 10,579 | 10,000 | 8,950 | 8,177 | 7,055 | |||||||||||||||
Shareholders’ equity | 1,556 | 1,380 | 1,180 | 1,059 | 869 | |||||||||||||||
Common shares - basic (thousands) | 79,700 | 79,662 | 73,247 | 71,910 | 65,488 | |||||||||||||||
Common shares - diluted (thousands) | 79,708 | 79,671 | 73,259 | 71,915 | 65,492 | |||||||||||||||
AT PERIOD END ($ in millions) | ||||||||||||||||||||
Loans | $ | 8,813 | $ | 8,383 | $ | 7,736 | $ | 6,921 | $ | 5,995 | ||||||||||
Investment securities | 2,559 | 2,903 | 2,937 | 2,762 | 2,656 | |||||||||||||||
Total assets | 12,916 | 12,573 | 11,915 | 10,709 | 9,616 | |||||||||||||||
Deposits | 10,897 | 10,535 | 9,808 | 8,638 | 7,873 | |||||||||||||||
Shareholders’ equity | 1,636 | 1,458 | 1,303 | 1,076 | 1,018 | |||||||||||||||
Common shares outstanding (thousands) | 79,014 | 79,234 | 77,580 | 70,899 | 71,484 |
(1) Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the 2017 impact of remeasurement of United’s deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options and 2015 impairment losses on surplus bank property. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization.
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UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||
Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||
Selected Financial Information- Quarterly | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
(in thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | |||||||||||||||
Expense reconciliation | ||||||||||||||||||||
Expenses (GAAP) | $ | 81,424 | $ | 82,924 | $ | 81,813 | $ | 76,084 | $ | 78,242 | ||||||||||
Merger-related and other charges | 74 | (2,605 | ) | (4,087 | ) | (739 | ) | (1,234 | ) | |||||||||||
Expenses - operating | $ | 81,498 | $ | 80,319 | $ | 77,726 | $ | 75,345 | $ | 77,008 | ||||||||||
Net income reconciliation | ||||||||||||||||||||
Net income (GAAP) | $ | 49,012 | $ | 48,362 | $ | 44,085 | $ | 44,262 | $ | 45,137 | ||||||||||
Merger-related and other charges | (74 | ) | 2,605 | 4,087 | 739 | 1,234 | ||||||||||||||
Income tax benefit of merger-related and other charges | 17 | (600 | ) | (940 | ) | (172 | ) | (604 | ) | |||||||||||
Net income - operating | $ | 48,955 | $ | 50,367 | $ | 47,232 | $ | 44,829 | $ | 45,767 | ||||||||||
Diluted income per common share reconciliation | ||||||||||||||||||||
Diluted income per common share (GAAP) | $ | 0.61 | $ | 0.60 | $ | 0.55 | $ | 0.55 | $ | 0.56 | ||||||||||
Merger-related and other charges | — | 0.03 | 0.04 | 0.01 | 0.01 | |||||||||||||||
Diluted income per common share - operating | $ | 0.61 | $ | 0.63 | $ | 0.59 | $ | 0.56 | $ | 0.57 | ||||||||||
Book value per common share reconciliation | ||||||||||||||||||||
Book value per common share (GAAP) | $ | 20.53 | $ | 20.16 | $ | 19.65 | $ | 18.93 | $ | 18.24 | ||||||||||
Effect of goodwill and other intangibles | (4.25 | ) | (4.26 | ) | (4.27 | ) | (4.00 | ) | (4.00 | ) | ||||||||||
Tangible book value per common share | $ | 16.28 | $ | 15.90 | $ | 15.38 | $ | 14.93 | $ | 14.24 | ||||||||||
Return on tangible common equity reconciliation | ||||||||||||||||||||
Return on common equity (GAAP) | 12.07 | % | 12.16 | % | 11.45 | % | 11.85 | % | 12.08 | % | ||||||||||
Merger-related and other charges | (0.01 | ) | 0.51 | 0.82 | 0.15 | 0.17 | ||||||||||||||
Return on common equity - operating | 12.06 | 12.67 | 12.27 | 12.00 | 12.25 | |||||||||||||||
Effect of goodwill and other intangibles | 3.43 | 3.71 | 3.61 | 3.46 | 3.63 | |||||||||||||||
Return on tangible common equity - operating | 15.49 | % | 16.38 | % | 15.88 | % | 15.46 | % | 15.88 | % | ||||||||||
Return on assets reconciliation | ||||||||||||||||||||
Return on assets (GAAP) | 1.50 | % | 1.51 | % | 1.40 | % | 1.44 | % | 1.43 | % | ||||||||||
Merger-related and other charges | — | 0.07 | 0.10 | 0.01 | 0.02 | |||||||||||||||
Return on assets - operating | 1.50 | % | 1.58 | % | 1.50 | % | 1.45 | % | 1.45 | % | ||||||||||
Efficiency ratio reconciliation | ||||||||||||||||||||
Efficiency ratio (GAAP) | 54.87 | % | 55.64 | % | 57.28 | % | 55.32 | % | 56.73 | % | ||||||||||
Merger-related and other charges | 0.05 | (1.74 | ) | (2.86 | ) | (0.54 | ) | (0.90 | ) | |||||||||||
Efficiency ratio - operating | 54.92 | % | 53.90 | % | 54.42 | % | 54.78 | % | 55.83 | % | ||||||||||
Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||
Equity to total assets (GAAP) | 12.66 | % | 12.53 | % | 12.25 | % | 12.06 | % | 11.59 | % | ||||||||||
Effect of goodwill and other intangibles | (2.34 | ) | (2.37 | ) | (2.39 | ) | (2.30 | ) | (2.30 | ) | ||||||||||
Tangible common equity to tangible assets | 10.32 | % | 10.16 | % | 9.86 | % | 9.76 | % | 9.29 | % |
7
UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||
Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||
Selected Financial Information- Annual | ||||||||||||||||||||
For the Twelve Months Ended December 31, | ||||||||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Expense reconciliation | ||||||||||||||||||||
Expenses (GAAP) | $ | 322,245 | $ | 306,285 | $ | 267,611 | $ | 241,289 | $ | 211,238 | ||||||||||
Merger-related and other charges | (7,357 | ) | (7,345 | ) | (14,662 | ) | (8,122 | ) | (17,995 | ) | ||||||||||
Expenses - operating | $ | 314,888 | $ | 298,940 | $ | 252,949 | $ | 233,167 | $ | 193,243 | ||||||||||
Net income reconciliation | ||||||||||||||||||||
Net income (GAAP) | $ | 185,721 | $ | 166,111 | $ | 67,821 | $ | 100,656 | $ | 71,578 | ||||||||||
Merger-related and other charges | 7,357 | 7,345 | 14,662 | 8,122 | 17,995 | |||||||||||||||
Income tax benefit of merger-related and other charges | (1,695 | ) | (1,494 | ) | (3,745 | ) | (3,074 | ) | (6,388 | ) | ||||||||||
Impact of tax reform on remeasurement of deferred tax asset | — | — | 38,199 | — | — | |||||||||||||||
Impairment of deferred tax asset on canceled non-qualified stock options | — | — | — | 976 | — | |||||||||||||||
Release of disproportionate tax effects lodged in OCI | — | — | 3,400 | — | — | |||||||||||||||
Net income - operating | $ | 191,383 | $ | 171,962 | $ | 120,337 | $ | 106,680 | $ | 83,185 | ||||||||||
Diluted income per common share reconciliation | ||||||||||||||||||||
Diluted income per common share (GAAP) | $ | 2.31 | $ | 2.07 | $ | 0.92 | $ | 1.40 | $ | 1.09 | ||||||||||
Merger-related and other charges | 0.07 | 0.07 | 0.14 | 0.07 | 0.18 | |||||||||||||||
Impact of tax reform on remeasurement of deferred tax asset | — | — | 0.52 | — | — | |||||||||||||||
Impairment of deferred tax asset on canceled non-qualified stock options | — | — | — | 0.01 | — | |||||||||||||||
Release of disproportionate tax effects lodged in OCI | — | — | 0.05 | — | — | |||||||||||||||
Diluted income per common share - operating | $ | 2.38 | $ | 2.14 | $ | 1.63 | $ | 1.48 | $ | 1.27 | ||||||||||
Book value per common share reconciliation | ||||||||||||||||||||
Book value per common share (GAAP) | $ | 20.53 | $ | 18.24 | $ | 16.67 | $ | 15.06 | $ | 14.02 | ||||||||||
Effect of goodwill and other intangibles | (4.25 | ) | (4.00 | ) | (3.02 | ) | (2.11 | ) | (1.96 | ) | ||||||||||
Tangible book value per common share | $ | 16.28 | $ | 14.24 | $ | 13.65 | $ | 12.95 | $ | 12.06 | ||||||||||
Return on tangible common equity reconciliation | ||||||||||||||||||||
Return on common equity (GAAP) | 11.89 | % | 11.60 | % | 5.67 | % | 9.41 | % | 8.15 | % | ||||||||||
Merger-related and other charges | 0.36 | 0.41 | 0.92 | 0.48 | 1.33 | |||||||||||||||
Impact of tax reform on remeasurement of deferred tax asset | — | — | 3.20 | — | — | |||||||||||||||
Impairment of deferred tax asset on canceled non-qualified stock options | — | — | — | 0.09 | — | |||||||||||||||
Release of disproportionate tax effects lodged in OCI | — | — | 0.28 | — | — | |||||||||||||||
Return on common equity - operating | 12.25 | 12.01 | 10.07 | 9.98 | 9.48 | |||||||||||||||
Effect of goodwill and other intangibles | 3.56 | 3.68 | 1.95 | 1.88 | 0.76 | |||||||||||||||
Return on tangible common equity - operating | 15.81 | % | 15.69 | % | 12.02 | % | 11.86 | % | 10.24 | % | ||||||||||
Return on assets reconciliation | ||||||||||||||||||||
Return on assets (GAAP) | 1.46 | % | 1.35 | % | 0.62 | % | 1.00 | % | 0.85 | % | ||||||||||
Merger-related and other charges | 0.05 | 0.05 | 0.09 | 0.05 | 0.13 | |||||||||||||||
Impact of tax reform on remeasurement of deferred tax asset | — | — | 0.35 | — | — | |||||||||||||||
Impairment of deferred tax asset on canceled non-qualified stock options | — | — | — | 0.01 | — | |||||||||||||||
Release of disproportionate tax effects lodged in OCI | — | — | 0.03 | — | — | |||||||||||||||
Return on assets - operating | 1.51 | % | 1.40 | % | 1.09 | % | 1.06 | % | �� | 0.98 | % | |||||||||
Efficiency ratio reconciliation | ||||||||||||||||||||
Efficiency ratio (GAAP) | 55.77 | % | 57.31 | % | 59.95 | % | 59.80 | % | 63.96 | % | ||||||||||
Merger-related and other charges | (1.27 | ) | (1.37 | ) | (3.28 | ) | (2.02 | ) | (5.45 | ) | ||||||||||
Efficiency ratio - operating | 54.50 | % | 55.94 | % | 56.67 | % | 57.78 | % | 58.51 | % | ||||||||||
Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||
Equity to total assets (GAAP) | 12.66 | % | 11.59 | % | 10.94 | % | 10.05 | % | 10.58 | % | ||||||||||
Effect of goodwill and other intangibles | (2.34 | ) | (2.30 | ) | (1.80 | ) | (1.28 | ) | (1.33 | ) | ||||||||||
Effect of preferred equity | — | — | — | — | (0.10 | ) | ||||||||||||||
Tangible common equity to tangible assets | 10.32 | % | 9.29 | % | 9.14 | % | 8.77 | % | 9.15 | % |
8
UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||||||
Financial Highlights | |||||||||||||||||||||||||||
Loan Portfolio Composition at Period-End | |||||||||||||||||||||||||||
2019 | 2018 | Linked Quarter Change | Year over Year Change | ||||||||||||||||||||||||
(in millions) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | ||||||||||||||||||||||
LOANS BY CATEGORY | |||||||||||||||||||||||||||
Owner occupied commercial RE | $ | 1,720 | $ | 1,692 | $ | 1,658 | $ | 1,620 | $ | 1,648 | $ | 28 | $ | 72 | |||||||||||||
Income producing commercial RE | 2,008 | 1,934 | 1,939 | 1,867 | 1,812 | 74 | 196 | ||||||||||||||||||||
Commercial & industrial | 1,221 | 1,271 | 1,299 | 1,284 | 1,278 | (50 | ) | (57 | ) | ||||||||||||||||||
Commercial construction | 976 | 1,001 | 983 | 866 | 796 | (25 | ) | 180 | |||||||||||||||||||
Equipment financing | 745 | 729 | 674 | 606 | 565 | 16 | 180 | ||||||||||||||||||||
Total commercial | 6,670 | 6,627 | 6,553 | 6,243 | 6,099 | 43 | 571 | ||||||||||||||||||||
Residential mortgage | 1,118 | 1,121 | 1,108 | 1,064 | 1,049 | (3 | ) | 69 | |||||||||||||||||||
Home equity lines of credit | 661 | 669 | 675 | 684 | 694 | (8 | ) | (33 | ) | ||||||||||||||||||
Residential construction | 236 | 229 | 219 | 200 | 211 | 7 | 25 | ||||||||||||||||||||
Consumer | 128 | 257 | 283 | 302 | 330 | (129 | ) | (202 | ) | ||||||||||||||||||
Total loans | $ | 8,813 | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | (90 | ) | $ | 430 | ||||||||||||
LOANS BY MARKET | |||||||||||||||||||||||||||
North Georgia | $ | 967 | $ | 1,002 | $ | 1,002 | $ | 970 | $ | 981 | $ | (35 | ) | $ | (14 | ) | |||||||||||
Atlanta | 1,762 | 1,740 | 1,745 | 1,524 | 1,507 | 22 | 255 | ||||||||||||||||||||
North Carolina | 1,156 | 1,117 | 1,084 | 1,074 | 1,072 | 39 | 84 | ||||||||||||||||||||
Coastal Georgia | 631 | 611 | 604 | 603 | 588 | 20 | 43 | ||||||||||||||||||||
Gainesville | 246 | 246 | 244 | 243 | 247 | — | (1 | ) | |||||||||||||||||||
East Tennessee | 421 | 435 | 446 | 458 | 477 | (14 | ) | (56 | ) | ||||||||||||||||||
South Carolina | 1,708 | 1,705 | 1,674 | 1,674 | 1,645 | 3 | 63 | ||||||||||||||||||||
Commercial Banking Solutions | 1,922 | 1,916 | 1,884 | 1,766 | 1,658 | 6 | 264 | ||||||||||||||||||||
Indirect auto | — | 131 | 155 | 181 | 208 | (131 | ) | (208 | ) | ||||||||||||||||||
Total loans | $ | 8,813 | $ | 8,903 | $ | 8,838 | $ | 8,493 | $ | 8,383 | $ | (90 | ) | $ | 430 |
9
UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||
Financial Highlights | |||||||||||||||||||
Loan Portfolio Composition at Year-End | |||||||||||||||||||
(in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
LOANS BY CATEGORY | |||||||||||||||||||
Owner occupied commercial RE | $ | 1,720 | $ | 1,648 | $ | 1,924 | $ | 1,650 | $ | 1,571 | |||||||||
Income producing commercial RE | 2,008 | 1,812 | 1,595 | 1,282 | 1,021 | ||||||||||||||
Commercial & industrial | 1,221 | 1,278 | 1,131 | 1,070 | 785 | ||||||||||||||
Commercial construction | 976 | 796 | 712 | 634 | 518 | ||||||||||||||
Equipment financing | 745 | 565 | — | — | — | ||||||||||||||
Total commercial | 6,670 | 6,099 | 5,362 | 4,636 | 3,895 | ||||||||||||||
Residential mortgage | 1,118 | 1,049 | 974 | 857 | 764 | ||||||||||||||
Home equity lines of credit | 661 | 694 | 731 | 655 | 589 | ||||||||||||||
Residential construction | 236 | 211 | 183 | 190 | 176 | ||||||||||||||
Consumer | 128 | 330 | 486 | 583 | 571 | ||||||||||||||
Total loans | $ | 8,813 | $ | 8,383 | $ | 7,736 | $ | 6,921 | $ | 5,995 | |||||||||
LOANS BY MARKET | |||||||||||||||||||
North Georgia | $ | 967 | $ | 981 | $ | 1,019 | $ | 1,097 | $ | 1,125 | |||||||||
Atlanta | 1,762 | 1,507 | 1,510 | 1,399 | 1,259 | ||||||||||||||
North Carolina | 1,156 | 1,072 | 1,049 | 545 | 549 | ||||||||||||||
Coastal Georgia | 631 | 588 | 630 | 581 | 537 | ||||||||||||||
Gainesville | 246 | 247 | 248 | 248 | 254 | ||||||||||||||
East Tennessee | 421 | 477 | 475 | 504 | 504 | ||||||||||||||
South Carolina | 1,708 | 1,645 | 1,486 | 1,233 | 819 | ||||||||||||||
Commercial Banking Solutions | 1,922 | 1,658 | 961 | 855 | 492 | ||||||||||||||
Indirect auto | — | 208 | 358 | 459 | 456 | ||||||||||||||
Total loans | $ | 8,813 | $ | 8,383 | $ | 7,736 | $ | 6,921 | $ | 5,995 |
10
UNITED COMMUNITY BANKS, INC. | ||||||||||||
Financial Highlights | ||||||||||||
Credit Quality | ||||||||||||
2019 | ||||||||||||
(in thousands) | Fourth Quarter | Third Quarter | Second Quarter | |||||||||
NONACCRUAL LOANS | ||||||||||||
Owner occupied RE | $ | 10,544 | $ | 8,430 | $ | 8,177 | ||||||
Income producing RE | 1,996 | 2,030 | 1,331 | |||||||||
Commercial & industrial | 2,545 | 2,625 | 2,366 | |||||||||
Commercial construction | 2,277 | 1,894 | 1,650 | |||||||||
Equipment financing | 3,141 | 1,974 | 2,047 | |||||||||
Total commercial | 20,503 | 16,953 | 15,571 | |||||||||
Residential mortgage | 10,567 | 9,475 | 8,012 | |||||||||
Home equity lines of credit | 3,173 | 3,065 | 1,978 | |||||||||
Residential construction | 939 | 597 | 494 | |||||||||
Consumer | 159 | 742 | 542 | |||||||||
Total | $ | 35,341 | $ | 30,832 | $ | 26,597 |
2019 | |||||||||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | |||||||||||||||||||
(in thousands) | Net Charge-Offs | Net Charge-Offs to Average Loans (1) | Net Charge-Offs | Net Charge-Offs to Average Loans (1) | Net Charge-Offs | Net Charge-Offs to Average Loans (1) | |||||||||||||||
NET CHARGE-OFFS BY CATEGORY | |||||||||||||||||||||
Owner occupied RE | $ | (208 | ) | (0.05 | )% | $ | (39 | ) | (0.01 | )% | $ | (58 | ) | (0.01 | )% | ||||||
Income producing RE | 95 | 0.02 | 431 | 0.09 | 241 | 0.05 | |||||||||||||||
Commercial & industrial | 1,809 | 0.58 | 691 | 0.21 | 1,141 | 0.35 | |||||||||||||||
Commercial construction | (140 | ) | (0.06 | ) | (247 | ) | (0.10 | ) | (162 | ) | (0.07 | ) | |||||||||
Equipment financing | 1,550 | 0.84 | 1,174 | 0.67 | 890 | 0.56 | |||||||||||||||
Total commercial | 3,106 | 0.19 | 2,010 | 0.12 | 2,052 | 0.13 | |||||||||||||||
Residential mortgage | 89 | 0.03 | 158 | 0.06 | (125 | ) | (0.05 | ) | |||||||||||||
Home equity lines of credit | 198 | 0.12 | 83 | 0.05 | (111 | ) | (0.07 | ) | |||||||||||||
Residential construction | (24 | ) | (0.04 | ) | (5 | ) | (0.01 | ) | 199 | 0.38 | |||||||||||
Consumer | 556 | 0.90 | 477 | 0.70 | 423 | 0.58 | |||||||||||||||
Total | $ | 3,925 | 0.18 | $ | 2,723 | 0.12 | $ | 2,438 | 0.11 | ||||||||||||
(1) Annualized. |
11
UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) | ||||||||
(in thousands, except share and per share data) | December 31, 2019 | December 31, 2018 | ||||||
ASSETS | ||||||||
Cash and due from banks | $ | 125,844 | $ | 126,083 | ||||
Interest-bearing deposits in banks | 389,362 | 201,182 | ||||||
Cash and cash equivalents | 515,206 | 327,265 | ||||||
Debt securities available-for-sale | 2,274,581 | 2,628,467 | ||||||
Debt securities held-to-maturity (fair value $287,904 and $268,803) | 283,533 | 274,407 | ||||||
Loans held for sale, at fair value | 58,484 | 18,935 | ||||||
Loans, net of unearned income | 8,812,553 | 8,383,401 | ||||||
Less allowance for loan losses | (62,089 | ) | (61,203 | ) | ||||
Loans, net | 8,750,464 | 8,322,198 | ||||||
Premises and equipment, net | 215,976 | 206,140 | ||||||
Bank owned life insurance | 202,664 | 192,616 | ||||||
Accrued interest receivable | 32,660 | 35,413 | ||||||
Net deferred tax asset | 34,059 | 64,224 | ||||||
Derivative financial instruments | 35,007 | 24,705 | ||||||
Goodwill and other intangible assets | 342,247 | 324,072 | ||||||
Other assets | 171,135 | 154,750 | ||||||
Total assets | $ | 12,916,016 | $ | 12,573,192 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand | $ | 3,477,979 | $ | 3,210,220 | ||||
NOW and interest-bearing demand | 2,461,895 | 2,369,631 | ||||||
Money market | 2,230,628 | 2,002,670 | ||||||
Savings | 706,467 | 669,886 | ||||||
Time | 1,859,574 | 1,598,391 | ||||||
Brokered | 160,701 | 683,715 | ||||||
Total deposits | 10,897,244 | 10,534,513 | ||||||
Federal Home Loan Bank advances | — | 160,000 | ||||||
Long-term debt | 212,664 | 267,189 | ||||||
Derivative financial instruments | 15,516 | 26,433 | ||||||
Accrued expenses and other liabilities | 154,900 | 127,503 | ||||||
Total liabilities | 11,280,324 | 11,115,638 | ||||||
Shareholders' equity: | ||||||||
Common stock, $1 par value; 150,000,000 shares authorized; 79,013,729 and 79,234,077 shares issued and outstanding | 79,014 | 79,234 | ||||||
Common stock issuable; 664,640 and 674,499 shares | 11,491 | 10,744 | ||||||
Capital surplus | 1,496,641 | 1,499,584 | ||||||
Retained earnings (accumulated deficit) | 40,152 | (90,419 | ) | |||||
Accumulated other comprehensive income (loss) | 8,394 | (41,589 | ) | |||||
Total shareholders’ equity | 1,635,692 | 1,457,554 | ||||||
Total liabilities and shareholders’ equity | $ | 12,916,016 | $ | 12,573,192 |
12
UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited) | ||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 118,464 | $ | 112,087 | $ | 476,039 | $ | 420,383 | ||||||||
Investment securities, including tax exempt of $1,155 and $1,140, and $4,564 and $4,189 | 16,846 | 21,237 | 74,484 | 77,685 | ||||||||||||
Deposits in banks and short-term investments | 1,109 | 530 | 2,183 | 2,012 | ||||||||||||
Total interest revenue | 136,419 | 133,854 | 552,706 | 500,080 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW and interest-bearing demand | 3,382 | 3,166 | 13,665 | 7,649 | ||||||||||||
Money market | 4,883 | 3,985 | 18,983 | 11,838 | ||||||||||||
Savings | 34 | 33 | 149 | 150 | ||||||||||||
Time | 8,372 | 7,006 | 34,059 | 19,906 | ||||||||||||
Deposits | 16,671 | 14,190 | 66,856 | 39,543 | ||||||||||||
Short-term borrowings | — | 340 | 838 | 1,112 | ||||||||||||
Federal Home Loan Bank advances | 2 | 794 | 2,697 | 6,345 | ||||||||||||
Long-term debt | 3,108 | 3,651 | 12,921 | 14,330 | ||||||||||||
Total interest expense | 19,781 | 18,975 | 83,312 | 61,330 | ||||||||||||
Net interest revenue | 116,638 | 114,879 | 469,394 | 438,750 | ||||||||||||
Provision for credit losses | 3,500 | 2,100 | 13,150 | 9,500 | ||||||||||||
Net interest revenue after provision for credit losses | 113,138 | 112,779 | 456,244 | 429,250 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges and fees | 9,368 | 9,166 | 36,797 | 35,997 | ||||||||||||
Mortgage loan gains and related fees | 9,395 | 3,082 | 27,145 | 19,010 | ||||||||||||
Brokerage fees | 1,526 | 1,593 | 6,150 | 5,191 | ||||||||||||
Gains from other loan sales, net | 2,455 | 2,493 | 6,867 | 9,277 | ||||||||||||
Securities (losses) gains, net | (903 | ) | 646 | (1,021 | ) | (656 | ) | |||||||||
Other | 8,342 | 6,065 | 28,775 | 24,142 | ||||||||||||
Total noninterest income | 30,183 | 23,045 | 104,713 | 92,961 | ||||||||||||
Total revenue | 143,321 | 135,824 | 560,957 | 522,211 | ||||||||||||
Noninterest expenses: | ||||||||||||||||
Salaries and employee benefits | 50,279 | 45,631 | 196,440 | 181,015 | ||||||||||||
Occupancy | 5,926 | 5,842 | 23,350 | 22,781 | ||||||||||||
Communications and equipment | 6,380 | 6,206 | 24,613 | 21,277 | ||||||||||||
FDIC assessments and other regulatory charges | 1,330 | 1,814 | 4,901 | 8,491 | ||||||||||||
Professional fees | 5,098 | 4,105 | 17,028 | 15,540 | ||||||||||||
Postage, printing and supplies | 1,637 | 1,520 | 6,370 | 6,416 | ||||||||||||
Advertising and public relations | 1,914 | 1,650 | 6,170 | 5,991 | ||||||||||||
Amortization of intangibles | 1,093 | 1,420 | 4,938 | 6,846 | ||||||||||||
Merger-related and other charges | (74 | ) | 965 | 6,907 | 5,414 | |||||||||||
Other | 7,841 | 9,089 | 31,528 | 32,514 | ||||||||||||
Total noninterest expenses | 81,424 | 78,242 | 322,245 | 306,285 | ||||||||||||
Net income before income taxes | 61,897 | 57,582 | 238,712 | 215,926 | ||||||||||||
Income tax expense | 12,885 | 12,445 | 52,991 | 49,815 | ||||||||||||
Net income | $ | 49,012 | $ | 45,137 | $ | 185,721 | $ | 166,111 | ||||||||
Net income available to common shareholders | $ | 48,617 | $ | 44,801 | $ | 184,346 | $ | 164,927 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.61 | $ | 0.56 | $ | 2.31 | $ | 2.07 | ||||||||
Diluted | 0.61 | 0.56 | 2.31 | 2.07 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 79,659 | 79,884 | 79,700 | 79,662 | ||||||||||||
Diluted | 79,669 | 79,890 | 79,708 | 79,671 |
13
Average Consolidated Balance Sheets and Net Interest Analysis |
For the Three Months Ended December 31, |
2019 | 2018 | |||||||||||||||||||||
(dollars in thousands, fully taxable equivalent (FTE)) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||||
Assets: | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans, net of unearned income (FTE) (1)(2) | $ | 8,890,272 | $ | 118,262 | 5.28 | % | $ | 8,306,270 | $ | 112,020 | 5.35 | % | ||||||||||
Taxable securities (3) | 2,306,065 | 15,691 | 2.72 | 2,843,085 | 20,097 | 2.83 | ||||||||||||||||
Tax-exempt securities (FTE) (1)(3) | 179,744 | 1,551 | 3.45 | 161,284 | 1,535 | 3.81 | ||||||||||||||||
Federal funds sold and other interest-earning assets | 456,055 | 1,586 | 1.39 | 222,931 | 845 | 1.52 | ||||||||||||||||
Total interest-earning assets (FTE) | 11,832,136 | 137,090 | 4.60 | 11,533,570 | 134,497 | 4.63 | ||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||
Allowance for loan losses | (63,601 | ) | (61,992 | ) | ||||||||||||||||||
Cash and due from banks | 120,936 | 125,066 | ||||||||||||||||||||
Premises and equipment | 219,487 | 214,590 | ||||||||||||||||||||
Other assets (3) | 836,586 | 694,215 | ||||||||||||||||||||
Total assets | $ | 12,945,544 | $ | 12,505,449 | ||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||
NOW and interest-bearing demand | $ | 2,398,396 | 3,382 | 0.56 | $ | 2,134,828 | 3,166 | 0.59 | ||||||||||||||
Money market | 2,321,352 | 4,883 | 0.83 | 2,126,840 | 3,985 | 0.74 | ||||||||||||||||
Savings | 704,454 | 34 | 0.02 | 675,265 | 33 | 0.02 | ||||||||||||||||
Time | 1,880,174 | 7,975 | 1.68 | 1,584,011 | 4,297 | 1.08 | ||||||||||||||||
Brokered time deposits | 85,781 | 397 | 1.84 | 490,748 | 2,709 | 2.19 | ||||||||||||||||
Total interest-bearing deposits | 7,390,157 | 16,671 | 0.89 | 7,011,692 | 14,190 | 0.80 | ||||||||||||||||
Federal funds purchased and other borrowings | — | — | — | 55,095 | 340 | 2.45 | ||||||||||||||||
Federal Home Loan Bank advances | 435 | 2 | 1.82 | 140,869 | 794 | 2.24 | ||||||||||||||||
Long-term debt | 232,726 | 3,108 | 5.30 | 272,313 | 3,651 | 5.32 | ||||||||||||||||
Total borrowed funds | 233,161 | 3,110 | 5.29 | 468,277 | 4,785 | 4.05 | ||||||||||||||||
Total interest-bearing liabilities | 7,623,318 | 19,781 | 1.03 | 7,479,969 | 18,975 | 1.01 | ||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing deposits | 3,533,746 | 3,294,385 | ||||||||||||||||||||
Other liabilities | 165,148 | 311,461 | ||||||||||||||||||||
Total liabilities | 11,322,212 | 11,085,815 | ||||||||||||||||||||
Shareholders’ equity | 1,623,332 | 1,419,634 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 12,945,544 | $ | 12,505,449 | ||||||||||||||||||
Net interest revenue (FTE) | $ | 117,309 | $ | 115,522 | ||||||||||||||||||
Net interest-rate spread (FTE) | 3.57 | % | 3.62 | % | ||||||||||||||||||
Net interest margin (FTE) (4) | 3.93 | % | 3.97 | % |
(1) | Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. |
(2) | Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale. |
(3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains of $36.0 million in 2019 and unrealized losses of $59.5 million in 2018 are included in other assets for purposes of this presentation. |
(4) | Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets. |
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Average Consolidated Balance Sheets and Net Interest Analysis |
For the Twelve Months Ended December 31, |
2019 | 2018 | |||||||||||||||||||||
(dollars in thousands, fully taxable equivalent (FTE)) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||||
Assets: | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans, net of unearned income (FTE) (1)(2) | $ | 8,708,035 | $ | 475,803 | 5.46 | % | $ | 8,170,143 | $ | 420,001 | 5.14 | % | ||||||||||
Taxable securities (3) | 2,475,102 | 69,920 | 2.82 | 2,745,715 | 73,496 | 2.68 | ||||||||||||||||
Tax-exempt securities (FTE) (1)(3) | 171,549 | 6,130 | 3.57 | 152,855 | 5,641 | 3.69 | ||||||||||||||||
Federal funds sold and other interest-earning assets | 254,370 | 3,499 | 1.38 | 213,137 | 2,968 | 1.39 | ||||||||||||||||
Total interest-earning assets (FTE) | 11,609,056 | 555,352 | 4.78 | 11,281,850 | 502,106 | 4.45 | ||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||
Allowance for loan losses | (62,900 | ) | (61,443 | ) | ||||||||||||||||||
Cash and due from banks | 121,649 | 135,345 | ||||||||||||||||||||
Premises and equipment | 220,523 | 216,646 | ||||||||||||||||||||
Other assets (3) | 798,649 | 711,671 | ||||||||||||||||||||
Total assets | $ | 12,686,977 | $ | 12,284,069 | ||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||
NOW and interest-bearing demand | $ | 2,249,713 | 13,665 | 0.61 | $ | 2,107,831 | 7,649 | 0.36 | ||||||||||||||
Money market | 2,221,478 | 18,983 | 0.85 | 2,117,216 | 11,838 | 0.56 | ||||||||||||||||
Savings | 690,028 | 149 | 0.02 | 672,735 | 150 | 0.02 | ||||||||||||||||
Time | 1,791,319 | 28,313 | 1.58 | 1,547,221 | 12,585 | 0.81 | ||||||||||||||||
Brokered time deposits | 240,646 | 5,746 | 2.39 | 347,072 | 7,321 | 2.11 | ||||||||||||||||
Total interest-bearing deposits | 7,193,184 | 66,856 | 0.93 | 6,792,075 | 39,543 | 0.58 | ||||||||||||||||
Federal funds purchased and other borrowings | 33,504 | 838 | 2.50 | 57,376 | 1,112 | 1.94 | ||||||||||||||||
Federal Home Loan Bank advances | 106,973 | 2,697 | 2.52 | 328,871 | 6,345 | 1.93 | ||||||||||||||||
Long-term debt | 247,732 | 12,921 | 5.22 | 290,004 | 14,330 | 4.94 | ||||||||||||||||
Total borrowed funds | 388,209 | 16,456 | 4.24 | 676,251 | 21,787 | 3.22 | ||||||||||||||||
Total interest-bearing liabilities | 7,581,393 | 83,312 | 1.10 | 7,468,326 | 61,330 | 0.82 | ||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing deposits | 3,385,431 | 3,207,625 | ||||||||||||||||||||
Other liabilities | 164,550 | 227,980 | ||||||||||||||||||||
Total liabilities | 11,131,374 | 10,903,931 | ||||||||||||||||||||
Shareholders’ equity | 1,555,603 | 1,380,138 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 12,686,977 | $ | 12,284,069 | ||||||||||||||||||
Net interest revenue (FTE) | $ | 472,040 | $ | 440,776 | ||||||||||||||||||
Net interest-rate spread (FTE) | 3.68 | % | 3.63 | % | ||||||||||||||||||
Net interest margin (FTE) (4) | 4.07 | % | 3.91 | % |
(1) | Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate. |
(2) | Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale. |
(3) | Securities available for sale are shown at amortized cost. Pretax unrealized gains of $12.8 million in 2019 and unrealized losses of $45.2 million in 2018 are included in other assets for purposes of this presentation. |
(4) | Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets. |
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About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQ: UCBI) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the southeast region’s largest full-service financial institutions with $12.9 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee. It operates principally through United Community Bank, its bank subsidiary, which specializes in personalized community banking services for individuals, small businesses and companies. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. Respected national research firms consistently recognize United Community Bank for outstanding customer service. For five of the past six years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2019, for the sixth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America, and for the first time included United on its list of The World’s Best Banks. Additional information about UCBI and the Bank can be found at www.ucbi.com.
Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating efficiency ratio,” and “tangible common equity to tangible assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.
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