Exhibit 99.1
For Immediate Release
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
United Community Banks, Inc. reports EPS of $0.55 and ROA of 1.44% for Q1 2019
GREENVILLE, SC – April 23, 2019
United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced its first quarter financial results, including solid year-over-year loan and deposit growth, improved operating efficiency and continued strong asset quality. Reported diluted earnings per share were $0.55, an increase of $0.08 or 17% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.56, up 12% over last year. United’s return on assets (“ROA”) reached 1.44% with a return on equity of 11.9%. On an operating basis, United’s ROA was 1.45% with a return on tangible common equity of 15.5%.
During the quarter, United benefitted from continued net interest margin expansion. Higher loan yields and an intentional balance sheet deleveraging strategy, including a reduction of $183 million in securities and wholesale borrowings were primary factors in the net interest margin expansion. The company also achieved more than 5% annualized loan growth (7% excluding the planned runoff of the discontinued indirect auto portfolio). Core transaction deposits grew by $135 million, or 8% annualized, and total customer deposits increased by $125 million during the quarter. United’s expense management resulted in a 55.32% efficiency ratio or 54.78% on an operating basis—both results are historical lows for the company.
“Our first quarter performance begins what we believe will be an outstanding year,” said Lynn Harton, President and Chief Executive Officer of United. “We continue to invest in thoughtful growth and in hiring the right bankers in the right markets, while maintaining strong expense discipline. We are proud to have reported a second consecutive quarter with a 1.45% return on assets on an operating basis, a historically high level. This performance would simply not be possible without our outstanding team, which earned United the distinction this quarter of being named one of the “World’s Best Banks 2019” byForbes. In February, we announced that our team will be expanding with the acquisition of First Madison Bank & Trust in Athens, Georgia. We look forward to welcoming First Madison and to adding loyal customers and another attractive market to our footprint in the second quarter.”
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First Quarter 2019 Financial Highlights:
· | GAAP EPS growth of 17% versus last year, or 12% on an operating basis |
· | Return on assets of 1.44%, or 1.45%, excluding merger-related and other charges |
· | Return on common equity of 11.9% |
· | Return on tangible common equity of 15.5%, excluding merger-related and other charges |
· | Loan growth, excluding planned runoff of the indirect portfolio, of 7% on an annualized basis |
· | Loan production of $782 million, as compared to $666 million in Q1 2018 |
· | Loan growth of $110 million more than funded by core transaction deposit growth of $135 million |
· | Expansion of the net interest margin to 4.10%, up 13 basis points from the fourth quarter of 2018 and up 30 basis points from a year ago |
· | Efficiency ratio of 55.3%, or 54.8%, excluding merger-related and other charges |
· | Net charge-offs of fifteen basis points, up six basis points from last quarter, but remain at a historically low level |
· | Nonperforming assets of 0.20% of total assets, compared with 0.20% at December 31, 2018 and 0.24% at March 31, 2018 |
· | Repurchased 305,000 common shares in Q1, or $7.8 million as part of authorized $50 million repurchase program |
· | Intentional balance sheet deleveraging, resulting in securities decreasing by $183 million ($122 million average), offset by a reduction in wholesale borrowings |
Conference Call
United will hold a conference call, Wednesday, April 24, 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 9567597. 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 atwww.ucbi.com.
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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
First | ||||||||||||||||||||||||
2019 | 2018 | Quarter | ||||||||||||||||||||||
First | Fourth | Third | Second | First | 2019-2018 | |||||||||||||||||||
(in thousands, except per share data) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | ||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||
Interest revenue | $ | 136,516 | $ | 133,854 | $ | 128,721 | $ | 122,215 | $ | 115,290 | ||||||||||||||
Interest expense | 20,882 | 18,975 | 16,611 | 13,739 | 12,005 | |||||||||||||||||||
Net interest revenue | 115,634 | 114,879 | 112,110 | 108,476 | 103,285 | 12 | % | |||||||||||||||||
Provision for credit losses | 3,300 | 2,100 | 1,800 | 1,800 | 3,800 | (13 | ) | |||||||||||||||||
Noninterest income | 20,968 | 23,045 | 24,180 | 23,340 | 22,396 | (6 | ) | |||||||||||||||||
Total revenue | 133,302 | 135,824 | 134,490 | 130,016 | 121,881 | 9 | ||||||||||||||||||
Expenses | 76,084 | 78,242 | 77,718 | 76,850 | 73,475 | 4 | ||||||||||||||||||
Income before income tax expense | 57,218 | 57,582 | 56,772 | 53,166 | 48,406 | 18 | ||||||||||||||||||
Income tax expense | 12,956 | 12,445 | 13,090 | 13,532 | 10,748 | 21 | ||||||||||||||||||
Net income | 44,262 | 45,137 | 43,682 | 39,634 | 37,658 | 18 | ||||||||||||||||||
Merger-related and other charges | 739 | 1,234 | 592 | 2,873 | 2,646 | |||||||||||||||||||
Income tax benefit of merger-related and other charges | (172 | ) | (604 | ) | (141 | ) | (121 | ) | (628 | ) | ||||||||||||||
Net income - operating(1) | $ | 44,829 | $ | 45,767 | $ | 44,133 | $ | 42,386 | $ | 39,676 | 13 | |||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||
Diluted net income - GAAP | $ | 0.55 | $ | 0.56 | $ | 0.54 | $ | 0.49 | $ | 0.47 | 17 | |||||||||||||
Diluted net income - operating(1) | 0.56 | 0.57 | 0.55 | 0.53 | 0.50 | 12 | ||||||||||||||||||
Cash dividends declared | 0.16 | 0.16 | 0.15 | 0.15 | 0.12 | 33 | ||||||||||||||||||
Book value | 18.93 | 18.24 | 17.56 | 17.29 | 17.02 | 11 | ||||||||||||||||||
Tangible book value(3) | 14.93 | 14.24 | 13.54 | 13.25 | 12.96 | 15 | ||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||
Return on common equity - GAAP(2)(4) | 11.85 | % | 12.08 | % | 11.96 | % | 11.20 | % | 11.11 | % | ||||||||||||||
Return on common equity - operating(1)(2)(4) | 12.00 | 12.25 | 12.09 | 11.97 | 11.71 | |||||||||||||||||||
Return on tangible common equity - operating(1)(2)(3)(4) | 15.46 | 15.88 | 15.81 | 15.79 | 15.26 | |||||||||||||||||||
Return on assets - GAAP(4) | 1.44 | 1.43 | 1.41 | 1.30 | 1.26 | |||||||||||||||||||
Return on assets - operating(1)(4) | 1.45 | 1.45 | 1.42 | 1.39 | 1.33 | |||||||||||||||||||
Dividend payout ratio - GAAP | 29.09 | 28.57 | 27.78 | 30.61 | 25.53 | |||||||||||||||||||
Dividend payout ratio - operating(1) | 28.57 | 28.07 | 27.27 | 28.30 | 24.00 | |||||||||||||||||||
Net interest margin (fully taxable equivalent)(4) | 4.10 | 3.97 | 3.95 | 3.90 | 3.80 | |||||||||||||||||||
Efficiency ratio - GAAP | 55.32 | 56.73 | 56.82 | 57.94 | 57.83 | |||||||||||||||||||
Efficiency ratio - operating(1) | 54.78 | 55.83 | 56.39 | 55.77 | 55.75 | |||||||||||||||||||
Average equity to average assets | 11.82 | 11.35 | 11.33 | 11.21 | 11.03 | |||||||||||||||||||
Average tangible common equity to average assets(3) | 9.53 | 9.04 | 8.97 | 8.83 | 8.82 | |||||||||||||||||||
Tangible common equity to risk-weighted assets(3)(5) | 12.48 | 12.00 | 11.61 | 11.36 | 11.19 | |||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||
Nonperforming loans | $ | 23,624 | $ | 23,778 | $ | 22,530 | $ | 21,817 | $ | 26,240 | (10 | ) | ||||||||||||
Foreclosed properties | 1,127 | 1,305 | 1,336 | 2,597 | 2,714 | (58 | ) | |||||||||||||||||
Total nonperforming assets (NPAs) | 24,751 | 25,083 | 23,866 | 24,414 | 28,954 | (15 | ) | |||||||||||||||||
Allowance for loan losses | 61,642 | 61,203 | 60,940 | 61,071 | 61,085 | 1 | ||||||||||||||||||
Net charge-offs | 3,130 | 1,787 | 1,466 | 1,359 | 1,501 | 109 | ||||||||||||||||||
Allowance for loan losses to loans | 0.73 | % | 0.73 | % | 0.74 | % | 0.74 | % | 0.75 | % | ||||||||||||||
Net charge-offs to average loans(4) | 0.15 | 0.09 | 0.07 | 0.07 | 0.08 | |||||||||||||||||||
NPAs to loans and foreclosed properties | 0.29 | 0.30 | 0.29 | 0.30 | 0.35 | |||||||||||||||||||
NPAs to total assets | 0.20 | 0.20 | 0.19 | 0.20 | 0.24 | |||||||||||||||||||
AVERAGE BALANCES($ in millions) | ||||||||||||||||||||||||
Loans | $ | 8,430 | $ | 8,306 | $ | 8,200 | $ | 8,177 | $ | 7,993 | 5 | |||||||||||||
Investment securities | 2,883 | 3,004 | 2,916 | 2,802 | 2,870 | - | ||||||||||||||||||
Earning assets | 11,498 | 11,534 | 11,320 | 11,193 | 11,076 | 4 | ||||||||||||||||||
Total assets | 12,509 | 12,505 | 12,302 | 12,213 | 12,111 | 3 | ||||||||||||||||||
Deposits | 10,361 | 10,306 | 9,950 | 9,978 | 9,759 | 6 | ||||||||||||||||||
Shareholders’ equity | 1,478 | 1,420 | 1,394 | 1,370 | 1,336 | 11 | ||||||||||||||||||
Common shares - basic(thousands) | 79,807 | 79,884 | 79,806 | 79,753 | 79,205 | 1 | ||||||||||||||||||
Common shares - diluted(thousands) | 79,813 | 79,890 | 79,818 | 79,755 | 79,215 | 1 | ||||||||||||||||||
AT PERIOD END($ in millions) | ||||||||||||||||||||||||
Loans | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 8,220 | $ | 8,184 | 4 | |||||||||||||
Investment securities | 2,720 | 2,903 | 2,873 | 2,834 | 2,731 | - | ||||||||||||||||||
Total assets | 12,506 | 12,573 | 12,405 | 12,386 | 12,264 | 2 | ||||||||||||||||||
Deposits | 10,534 | 10,535 | 10,229 | 9,966 | 9,993 | 5 | ||||||||||||||||||
Shareholders’ equity | 1,508 | 1,458 | 1,402 | 1,379 | 1,357 | 11 | ||||||||||||||||||
Common shares outstanding(thousands) | 79,035 | 79,234 | 79,202 | 79,138 | 79,123 | - |
(1)Excludes merger-related and other charges which includes amortization of certain executive change of control benefits.
(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) First quarter 2019 ratio is preliminary.
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UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
2019 | 2018 | |||||||||||||||||||
First | Fourth | Third | Second | First | ||||||||||||||||
(in thousands, except per share data) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
Expense reconciliation | ||||||||||||||||||||
Expenses (GAAP) | $ | 76,084 | $ | 78,242 | $ | 77,718 | $ | 76,850 | $ | 73,475 | ||||||||||
Merger-related and other charges | (739 | ) | (1,234 | ) | (592 | ) | (2,873 | ) | (2,646 | ) | ||||||||||
Expenses - operating | $ | 75,345 | $ | 77,008 | $ | 77,126 | $ | 73,977 | $ | 70,829 | ||||||||||
Net income reconciliation | ||||||||||||||||||||
Net income (GAAP) | $ | 44,262 | $ | 45,137 | $ | 43,682 | $ | 39,634 | $ | 37,658 | ||||||||||
Merger-related and other charges | 739 | 1,234 | 592 | 2,873 | 2,646 | |||||||||||||||
Income tax benefit of merger-related and other charges | (172 | ) | (604 | ) | (141 | ) | (121 | ) | (628 | ) | ||||||||||
Net income - operating | $ | 44,829 | $ | 45,767 | $ | 44,133 | $ | 42,386 | $ | 39,676 | ||||||||||
Diluted income per common share reconciliation | ||||||||||||||||||||
Diluted income per common share (GAAP) | $ | 0.55 | $ | 0.56 | $ | 0.54 | $ | 0.49 | $ | 0.47 | ||||||||||
Merger-related and other charges | 0.01 | 0.01 | 0.01 | 0.04 | 0.03 | |||||||||||||||
Diluted income per common share - operating | $ | 0.56 | $ | 0.57 | $ | 0.55 | $ | 0.53 | $ | 0.50 | ||||||||||
Book value per common share reconciliation | ||||||||||||||||||||
Book value per common share (GAAP) | $ | 18.93 | $ | 18.24 | $ | 17.56 | $ | 17.29 | $ | 17.02 | ||||||||||
Effect of goodwill and other intangibles | (4.00 | ) | (4.00 | ) | (4.02 | ) | (4.04 | ) | (4.06 | ) | ||||||||||
Tangible book value per common share | $ | 14.93 | $ | 14.24 | $ | 13.54 | $ | 13.25 | $ | 12.96 | ||||||||||
Return on tangible common equity reconciliation | ||||||||||||||||||||
Return on common equity (GAAP) | 11.85 | % | 12.08 | % | 11.96 | % | 11.20 | % | 11.11 | % | ||||||||||
Merger-related and other charges | 0.15 | 0.17 | 0.13 | 0.77 | 0.60 | |||||||||||||||
Return on common equity - operating | 12.00 | 12.25 | 12.09 | 11.97 | 11.71 | |||||||||||||||
Effect of goodwill and other intangibles | 3.46 | 3.63 | 3.72 | 3.82 | 3.55 | |||||||||||||||
Return on tangible common equity - operating | 15.46 | % | 15.88 | % | 15.81 | % | 15.79 | % | 15.26 | % | ||||||||||
Return on assets reconciliation | ||||||||||||||||||||
Return on assets (GAAP) | 1.44 | % | 1.43 | % | 1.41 | % | 1.30 | % | 1.26 | % | ||||||||||
Merger-related and other charges | 0.01 | 0.02 | 0.01 | 0.09 | 0.07 | |||||||||||||||
Return on assets - operating | 1.45 | % | 1.45 | % | 1.42 | % | 1.39 | % | 1.33 | % | ||||||||||
Dividend payout ratio reconciliation | ||||||||||||||||||||
Dividend payout ratio (GAAP) | 29.09 | % | 28.57 | % | 27.78 | % | 30.61 | % | 25.53 | % | ||||||||||
Merger-related and other charges | (0.52 | ) | (0.50 | ) | (0.51 | ) | (2.31 | ) | (1.53 | ) | ||||||||||
Dividend payout ratio - operating | 28.57 | % | 28.07 | % | 27.27 | % | 28.30 | % | 24.00 | % | ||||||||||
Efficiency ratio reconciliation | ||||||||||||||||||||
Efficiency ratio (GAAP) | 55.32 | % | 56.73 | % | 56.82 | % | 57.94 | % | 57.83 | % | ||||||||||
Merger-related and other charges | (0.54 | ) | (0.90 | ) | (0.43 | ) | (2.17 | ) | (2.08 | ) | ||||||||||
Efficiency ratio - operating | 54.78 | % | 55.83 | % | 56.39 | % | 55.77 | % | 55.75 | % | ||||||||||
Average equity to average assets reconciliation | ||||||||||||||||||||
Average equity to assets (GAAP) | 11.82 | % | 11.35 | % | 11.33 | % | 11.21 | % | 11.03 | % | ||||||||||
Effect of goodwill and other intangibles | (2.29 | ) | (2.31 | ) | (2.36 | ) | (2.38 | ) | (2.21 | ) | ||||||||||
Average tangible common equity to average assets | 9.53 | % | 9.04 | % | 8.97 | % | 8.83 | % | 8.82 | % | ||||||||||
Tangible common equity to risk-weighted assets reconciliation(1) | ||||||||||||||||||||
Tier 1 capital ratio (Regulatory) | 12.69 | % | 12.42 | % | 12.25 | % | 11.94 | % | 11.61 | % | ||||||||||
Effect of other comprehensive income | (0.17 | ) | (0.44 | ) | (0.68 | ) | (0.57 | ) | (0.50 | ) | ||||||||||
Effect of deferred tax limitation | 0.22 | 0.28 | 0.30 | 0.33 | 0.42 | |||||||||||||||
Effect of trust preferred | (0.26 | ) | (0.26 | ) | (0.26 | ) | (0.34 | ) | (0.34 | ) | ||||||||||
Tangible common equity to risk-weighted assets | 12.48 | % | 12.00 | % | 11.61 | % | 11.36 | % | 11.19 | % |
(1)First quarter 2019 ratios are preliminary.
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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
2019 | 2018 | Linked | Year over | |||||||||||||||||||||||||
First | Fourth | Third | Second | First | Quarter | Year | ||||||||||||||||||||||
(in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Change | |||||||||||||||||||||
LOANS BY CATEGORY | ||||||||||||||||||||||||||||
Owner occupied commercial RE | $ | 1,620 | $ | 1,648 | $ | 1,673 | $ | 1,682 | $ | 1,898 | $ | (28 | ) | $ | (278 | ) | ||||||||||||
Income producing commercial RE | 1,867 | 1,812 | 1,788 | 1,821 | 1,677 | 55 | 190 | |||||||||||||||||||||
Commercial & industrial | 1,284 | 1,278 | 1,194 | 1,193 | 1,142 | 6 | 142 | |||||||||||||||||||||
Commercial construction | 866 | 796 | 761 | 735 | 691 | 70 | 175 | |||||||||||||||||||||
Equipment financing | 606 | 565 | 509 | 465 | 423 | 41 | 183 | |||||||||||||||||||||
Total commercial | 6,243 | 6,099 | 5,925 | 5,896 | 5,831 | 144 | 412 | |||||||||||||||||||||
Residential mortgage | 1,064 | 1,049 | 1,035 | 1,021 | 992 | 15 | 72 | |||||||||||||||||||||
Home equity lines of credit | 684 | 694 | 702 | 708 | 712 | (10 | ) | (28 | ) | |||||||||||||||||||
Residential construction | 200 | 211 | 198 | 195 | 190 | (11 | ) | 10 | ||||||||||||||||||||
Consumer | 302 | 330 | 366 | 400 | 459 | (28 | ) | (157 | ) | |||||||||||||||||||
Total loans | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 8,220 | $ | 8,184 | 110 | 309 | ||||||||||||||||
LOANS BY MARKET | ||||||||||||||||||||||||||||
North Georgia | $ | 970 | $ | 981 | $ | 992 | $ | 1,001 | $ | 1,004 | (11 | ) | (34 | ) | ||||||||||||||
Atlanta MSA | 1,524 | 1,507 | 1,493 | 1,533 | 1,513 | 17 | 11 | |||||||||||||||||||||
North Carolina | 1,074 | 1,072 | 1,078 | 1,067 | 1,037 | 2 | 37 | |||||||||||||||||||||
Coastal Georgia | 603 | 588 | 610 | 623 | 635 | 15 | (32 | ) | ||||||||||||||||||||
Gainesville MSA | 243 | 247 | 235 | 230 | 231 | (4 | ) | 12 | ||||||||||||||||||||
East Tennessee | 458 | 477 | 460 | 474 | 473 | (19 | ) | (15 | ) | |||||||||||||||||||
South Carolina | 1,674 | 1,645 | 1,586 | 1,571 | 1,537 | 29 | 137 | |||||||||||||||||||||
Commercial Banking Solutions | 1,766 | 1,658 | 1,530 | 1,444 | 1,438 | 108 | 328 | |||||||||||||||||||||
Indirect auto | 181 | 208 | 242 | 277 | 316 | (27 | ) | (135 | ) | |||||||||||||||||||
Total loans | $ | 8,493 | $ | 8,383 | $ | 8,226 | $ | 8,220 | $ | 8,184 | 110 | 309 |
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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
First Quarter 2019 | Fourth Quarter 2018 | Third Quarter 2018 | ||||||||||||||||||||||||||||||||||
Nonperforming | Foreclosed | Total | Nonperforming | Foreclosed | Total | Nonperforming | Foreclosed | Total | ||||||||||||||||||||||||||||
(in thousands) | Loans | Properties | NPAs | Loans | Properties | NPAs | Loans | Properties | NPAs | |||||||||||||||||||||||||||
NONPERFORMING ASSETS BY CATEGORY | ||||||||||||||||||||||||||||||||||||
Owner occupied CRE | $ | 7,030 | $ | 145 | $ | 7,175 | $ | 6,421 | $ | 170 | $ | 6,591 | $ | 4,884 | $ | 183 | $ | 5,067 | ||||||||||||||||||
Income producing CRE | 1,276 | - | 1,276 | 1,160 | - | 1,160 | 1,194 | 156 | 1,350 | |||||||||||||||||||||||||||
Commercial & industrial | 1,666 | - | 1,666 | 1,417 | - | 1,417 | 1,516 | - | 1,516 | |||||||||||||||||||||||||||
Commercial construction | 473 | 421 | 894 | 605 | 421 | 1,026 | 825 | 522 | 1,347 | |||||||||||||||||||||||||||
Equipment financing | 1,813 | - | 1,813 | 2,677 | - | 2,677 | 1,181 | - | 1,181 | |||||||||||||||||||||||||||
Total commercial | 12,258 | 566 | 12,824 | 12,280 | 591 | 12,871 | 9,600 | 861 | 10,461 | |||||||||||||||||||||||||||
Residential mortgage | 8,281 | 336 | 8,617 | 8,035 | 654 | 8,689 | 8,928 | 424 | 9,352 | |||||||||||||||||||||||||||
Home equity lines of credit | 2,233 | 185 | 2,418 | 2,360 | 60 | 2,420 | 2,814 | - | 2,814 | |||||||||||||||||||||||||||
Residential construction | 347 | 40 | 387 | 288 | - | 288 | 455 | 51 | 506 | |||||||||||||||||||||||||||
Consumer | 505 | - | 505 | 815 | - | 815 | 733 | - | 733 | |||||||||||||||||||||||||||
Total NPAs | $ | 23,624 | $ | 1,127 | $ | 24,751 | $ | 23,778 | $ | 1,305 | $ | 25,083 | $ | 22,530 | $ | 1,336 | $ | 23,866 | ||||||||||||||||||
NONPERFORMING ASSETS BY MARKET | ||||||||||||||||||||||||||||||||||||
North Georgia | $ | 5,848 | $ | 430 | $ | 6,278 | $ | 6,527 | $ | 286 | $ | 6,813 | $ | 7,170 | $ | 361 | $ | 7,531 | ||||||||||||||||||
Atlanta MSA | 1,951 | - | 1,951 | 1,578 | - | 1,578 | 1,778 | 132 | 1,910 | |||||||||||||||||||||||||||
North Carolina | 3,464 | 484 | 3,948 | 3,259 | 743 | 4,002 | 3,690 | 480 | 4,170 | |||||||||||||||||||||||||||
Coastal Georgia | 1,881 | - | 1,881 | 1,491 | - | 1,491 | 1,498 | - | 1,498 | |||||||||||||||||||||||||||
Gainesville MSA | 187 | - | 187 | 479 | - | 479 | 212 | - | 212 | |||||||||||||||||||||||||||
East Tennessee | 1,555 | - | 1,555 | 1,147 | - | 1,147 | 1,403 | 128 | 1,531 | |||||||||||||||||||||||||||
South Carolina | 4,476 | 213 | 4,689 | 4,123 | 276 | 4,399 | 3,280 | 235 | 3,515 | |||||||||||||||||||||||||||
Commercial Banking Solutions | 3,804 | - | 3,804 | 4,448 | - | 4,448 | 2,871 | - | 2,871 | |||||||||||||||||||||||||||
Indirect auto | 458 | - | 458 | 726 | - | 726 | 628 | - | 628 | |||||||||||||||||||||||||||
Total NPAs | $ | 23,624 | $ | 1,127 | $ | 24,751 | $ | 23,778 | $ | 1,305 | $ | 25,083 | $ | 22,530 | $ | 1,336 | $ | 23,866 | ||||||||||||||||||
NONPERFORMING ASSETS ACTIVITY | ||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | 23,778 | $ | 1,305 | $ | 25,083 | $ | 22,530 | $ | 1,336 | $ | 23,866 | $ | 21,817 | $ | 2,597 | $ | 24,414 | ||||||||||||||||||
Loans placed on non-accrual | 6,759 | - | 6,759 | 5,829 | - | 5,829 | 5,759 | - | 5,759 | |||||||||||||||||||||||||||
Payments received | (3,520 | ) | - | (3,520 | ) | (2,780 | ) | - | (2,780 | ) | (3,095 | ) | - | (3,095 | ) | |||||||||||||||||||||
Loan charge-offs | (2,714 | ) | - | (2,714 | ) | (933 | ) | - | (933 | ) | (1,588 | ) | - | (1,588 | ) | |||||||||||||||||||||
Foreclosures | (679 | ) | 751 | 72 | (868 | ) | 955 | 87 | (363 | ) | 454 | 91 | ||||||||||||||||||||||||
Property sales | - | (965 | ) | (965 | ) | - | (1,019 | ) | (1,019 | ) | - | (1,659 | ) | (1,659 | ) | |||||||||||||||||||||
Write downs | - | (6 | ) | (6 | ) | - | (112 | ) | (112 | ) | - | (166 | ) | (166 | ) | |||||||||||||||||||||
Net gains on sales | - | 42 | 42 | - | 145 | 145 | - | 110 | 110 | |||||||||||||||||||||||||||
Ending Balance | $ | 23,624 | $ | 1,127 | $ | 24,751 | $ | 23,778 | $ | 1,305 | $ | 25,083 | $ | 22,530 | $ | 1,336 | $ | 23,866 |
First Quarter 2019 | Fourth Quarter 2018 | Third Quarter 2018 | ||||||||||||||||||||||
(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 CRE | $ | (64 | ) | (0.02 | )% | $ | (52 | ) | (0.01 | )% | $ | (251 | ) | (0.06 | )% | |||||||||
Income producing CRE | 177 | 0.04 | 399 | 0.09 | 1 | - | ||||||||||||||||||
Commercial & industrial | 1,356 | 0.43 | (149 | ) | (0.05 | ) | 418 | 0.14 | ||||||||||||||||
Commercial construction | (325 | ) | (0.16 | ) | (230 | ) | (0.12 | ) | (43 | ) | (0.02 | ) | ||||||||||||
Equipment financing | 1,281 | 0.89 | 599 | 0.44 | 482 | 0.39 | ||||||||||||||||||
Total commercial | 2,425 | 0.16 | 567 | 0.04 | 607 | 0.04 | ||||||||||||||||||
Residential mortgage | 13 | - | 290 | 0.11 | 171 | 0.07 | ||||||||||||||||||
Home equity lines of credit | 215 | 0.13 | 382 | 0.22 | 279 | 0.16 | ||||||||||||||||||
Residential construction | (22 | ) | (0.04 | ) | (36 | ) | (0.07 | ) | (164 | ) | (0.33 | ) | ||||||||||||
Consumer | 499 | 0.64 | 584 | 0.67 | 573 | 0.60 | ||||||||||||||||||
Total | $ | 3,130 | 0.15 | $ | 1,787 | 0.09 | $ | 1,466 | 0.07 | |||||||||||||||
NET CHARGE-OFFS BY MARKET | ||||||||||||||||||||||||
North Georgia | $ | 263 | 0.11 | % | $ | 543 | 0.22 | % | $ | 483 | 0.19 | % | ||||||||||||
Atlanta MSA | 107 | 0.03 | (159 | ) | (0.04 | ) | 99 | 0.03 | ||||||||||||||||
North Carolina | 307 | 0.12 | 68 | 0.03 | (87 | ) | (0.03 | ) | ||||||||||||||||
Coastal Georgia | (4 | ) | - | (86 | ) | (0.06 | ) | 24 | 0.02 | |||||||||||||||
Gainesville MSA | (8 | ) | (0.01 | ) | 333 | 0.56 | (48 | ) | (0.08 | ) | ||||||||||||||
East Tennessee | 627 | 0.54 | (111 | ) | (0.09 | ) | (1 | ) | - | |||||||||||||||
South Carolina | 328 | 0.08 | 57 | 0.01 | 418 | 0.11 | ||||||||||||||||||
Commercial Banking Solutions | 1,351 | 0.32 | 948 | 0.23 | 403 | 0.11 | ||||||||||||||||||
Indirect auto | 159 | 0.33 | 194 | 0.34 | 175 | 0.27 | ||||||||||||||||||
Total | $ | 3,130 | 0.15 | $ | 1,787 | 0.09 | $ | 1,466 | 0.07 |
(1) | Annualized. |
6 |
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
(in thousands, except per share data) | 2019 | 2018 | ||||||
Interest revenue: | ||||||||
Loans, including fees | $ | 115,259 | $ | 96,469 | ||||
Investment securities, including tax exempt of $1,169 and $972 | 20,818 | 18,295 | ||||||
Deposits in banks and short-term investments | 439 | 526 | ||||||
Total interest revenue | 136,516 | 115,290 | ||||||
Interest expense: | ||||||||
Deposits: | ||||||||
NOW and interest-bearing demand | 3,536 | 1,113 | ||||||
Money market | 4,205 | 2,175 | ||||||
Savings | 32 | 49 | ||||||
Time | 8,184 | 2,956 | ||||||
Total deposit interest expense | 15,957 | 6,293 | ||||||
Short-term borrowings | 161 | 300 | ||||||
Federal Home Loan Bank advances | 1,422 | 2,124 | ||||||
Long-term debt | 3,342 | 3,288 | ||||||
Total interest expense | 20,882 | 12,005 | ||||||
Net interest revenue | 115,634 | 103,285 | ||||||
Provision for credit losses | 3,300 | 3,800 | ||||||
Net interest revenue after provision for credit losses | 112,334 | 99,485 | ||||||
Noninterest income: | ||||||||
Service charges and fees | 8,453 | 8,925 | ||||||
Mortgage loan and other related fees | 3,748 | 5,359 | ||||||
Brokerage fees | 1,337 | 872 | ||||||
Gains from sales of SBA/USDA loans | 1,303 | 1,778 | ||||||
Securities losses, net | (267 | ) | (940 | ) | ||||
Other | 6,394 | 6,402 | ||||||
Total noninterest income | 20,968 | 22,396 | ||||||
Total revenue | 133,302 | 121,881 | ||||||
Noninterest expenses: | ||||||||
Salaries and employee benefits | 47,503 | 42,875 | ||||||
Communications and equipment | 5,788 | 4,632 | ||||||
Occupancy | 5,584 | 5,613 | ||||||
Advertising and public relations | 1,286 | 1,515 | ||||||
Postage, printing and supplies | 1,586 | 1,637 | ||||||
Professional fees | 3,161 | 4,044 | ||||||
FDIC assessments and other regulatory charges | 1,710 | 2,476 | ||||||
Amortization of intangibles | 1,293 | 1,898 | ||||||
Merger-related and other charges | 546 | 2,054 | ||||||
Other | 7,627 | 6,731 | ||||||
Total noninterest expenses | 76,084 | 73,475 | ||||||
Net income before income taxes | 57,218 | 48,406 | ||||||
Income tax expense | 12,956 | 10,748 | ||||||
Net income | $ | 44,262 | $ | 37,658 | ||||
Net income available to common shareholders | $ | 43,947 | $ | 37,381 | ||||
Earnings per common share: | ||||||||
Basic | $ | 0.55 | $ | 0.47 | ||||
Diluted | 0.55 | 0.47 | ||||||
Weighted average common shares outstanding: | ||||||||
Basic | 79,807 | 79,205 | ||||||
Diluted | 79,813 | 79,215 |
7 |
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets(Unaudited)
March 31, | December 31, | |||||||
(in thousands, except share and per share data) | 2019 | 2018 | ||||||
ASSETS | ||||||||
Cash and due from banks | $ | 118,659 | $ | 126,083 | ||||
Interest-bearing deposits in banks | 206,836 | 201,182 | ||||||
Cash and cash equivalents | 325,495 | 327,265 | ||||||
Debt securities available for sale | 2,454,625 | 2,628,467 | ||||||
Debt securities held to maturity (fair value $265,117 and $268,803) | 265,329 | 274,407 | ||||||
Loans held for sale at fair value | 26,341 | 18,935 | ||||||
Loans and leases, net of unearned income | 8,493,254 | 8,383,401 | ||||||
Less allowance for loan and lease losses | (61,642 | ) | (61,203 | ) | ||||
Loans, net | 8,431,612 | 8,322,198 | ||||||
Premises and equipment, net | 214,022 | 206,140 | ||||||
Bank owned life insurance | 193,489 | 192,616 | ||||||
Accrued interest receivable | 35,126 | 35,413 | ||||||
Net deferred tax asset | 51,055 | 64,224 | ||||||
Derivative financial instruments | 25,924 | 24,705 | ||||||
Goodwill and other intangible assets | 322,779 | 324,072 | ||||||
Other assets | 160,030 | 154,750 | ||||||
Total assets | $ | 12,505,827 | $ | 12,573,192 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand | $ | 3,313,861 | $ | 3,210,220 | ||||
NOW and interest-bearing demand | 2,205,117 | 2,274,775 | ||||||
Money market | 2,106,045 | 2,097,526 | ||||||
Savings | 681,739 | 669,886 | ||||||
Time | 1,668,563 | 1,598,391 | ||||||
Brokered | 558,981 | 683,715 | ||||||
Total deposits | 10,534,306 | 10,534,513 | ||||||
Federal Home Loan Bank advances | 40,000 | 160,000 | ||||||
Long-term debt | 257,259 | 267,189 | ||||||
Derivative financial instruments | 18,789 | 26,433 | ||||||
Accrued expenses and other liabilities | 147,315 | 127,503 | ||||||
Total liabilities | 10,997,669 | 11,115,638 | ||||||
Shareholders' equity: | ||||||||
Common stock, $1 par value; 150,000,000 shares authorized; 79,035,459 and 79,234,077 shares issued and outstanding | 79,035 | 79,234 | ||||||
Common stock issuable; 621,491 and 674,499 shares | 10,291 | 10,744 | ||||||
Capital surplus | 1,494,400 | 1,499,584 | ||||||
Accumulated deficit | (59,573 | ) | (90,419 | ) | ||||
Accumulated other comprehensive loss | (15,995 | ) | (41,589 | ) | ||||
Total shareholders' equity | 1,508,158 | 1,457,554 | ||||||
Total liabilities and shareholders' equity | $ | 12,505,827 | $ | 12,573,192 |
8 |
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
2019 | 2018 | |||||||||||||||||||||||
Average | Avg. | Average | Avg. | |||||||||||||||||||||
(dollars in thousands, fully taxable equivalent (FTE)) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans, net of unearned income (FTE)(1)(2) | $ | 8,429,976 | $ | 115,347 | 5.55 | % | $ | 7,993,339 | $ | 96,389 | 4.89 | % | ||||||||||||
Taxable securities(3) | 2,712,995 | 19,649 | 2.90 | 2,722,977 | 17,323 | 2.54 | ||||||||||||||||||
Tax-exempt securities (FTE)(1)(3) | 169,702 | 1,570 | 3.70 | 146,531 | 1,309 | 3.57 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 185,623 | 618 | 1.33 | 213,055 | 698 | 1.31 | ||||||||||||||||||
Total interest-earning assets (FTE) | 11,498,296 | 137,184 | 4.83 | 11,075,902 | 115,719 | 4.23 | ||||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (61,784 | ) | (59,144 | ) | ||||||||||||||||||||
Cash and due from banks | 123,801 | 160,486 | ||||||||||||||||||||||
Premises and equipment | 216,611 | 216,723 | ||||||||||||||||||||||
Other assets(3) | 731,628 | 717,385 | ||||||||||||||||||||||
Total assets | $ | 12,508,552 | $ | 12,111,352 | ||||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW and interest-bearing demand | $ | 2,208,816 | 3,536 | 0.65 | $ | 2,083,703 | 1,113 | 0.22 | ||||||||||||||||
Money market | 2,175,855 | 4,205 | 0.78 | 2,230,620 | 2,175 | 0.40 | ||||||||||||||||||
Savings | 672,197 | 32 | 0.02 | 655,746 | 49 | 0.03 | ||||||||||||||||||
Time | 1,627,584 | 5,336 | 1.33 | 1,535,216 | 2,241 | 0.59 | ||||||||||||||||||
Brokered time deposits | 482,048 | 2,848 | 2.40 | 158,358 | 715 | 1.83 | ||||||||||||||||||
Total interest-bearing deposits | 7,166,500 | 15,957 | 0.90 | 6,663,643 | 6,293 | 0.38 | ||||||||||||||||||
Federal funds purchased and other borrowings | 21,549 | 161 | 3.03 | 78,732 | 300 | 1.55 | ||||||||||||||||||
Federal Home Loan Bank advances | 223,945 | 1,422 | 2.58 | 511,727 | 2,124 | 1.68 | ||||||||||||||||||
Long-term debt | 261,971 | 3,342 | 5.17 | 274,480 | 3,288 | 4.86 | ||||||||||||||||||
Total borrowed funds | 507,465 | 4,925 | 3.94 | 864,939 | 5,712 | 2.68 | ||||||||||||||||||
Total interest-bearing liabilities | 7,673,965 | 20,882 | 1.10 | 7,528,582 | 12,005 | 0.65 | ||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||
Noninterest-bearing deposits | 3,194,401 | 3,095,405 | ||||||||||||||||||||||
Other liabilities | 162,213 | 150,955 | ||||||||||||||||||||||
Total liabilities | 11,030,579 | 10,774,942 | ||||||||||||||||||||||
Shareholders' equity | 1,477,973 | 1,336,410 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 12,508,552 | $ | 12,111,352 | ||||||||||||||||||||
Net interest revenue (FTE) | $ | 116,302 | $ | 103,714 | ||||||||||||||||||||
Net interest-rate spread (FTE) | 3.73 | % | 3.58 | % | ||||||||||||||||||||
Net interest margin (FTE)(4) | 4.10 | % | 3.80 | % |
(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% in 2019 and 2018, 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 where 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 losses of $25.9 million in 2019 and $28.3 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. |
9 |
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. The company is one of the southeast region’s largest full-service financial institutions with $12.5 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee which operate as United Community Bank, the company’s bank subsidiary. The bank specializes in personalized community banking services for individuals, small businesses and corporations. 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 the last five 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 the company 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 dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted 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.
Caution About Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise and are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or words of similar meaning or other statements concerning opinions or judgments of United and its management about future events. Although United believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of United will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements; such statements are not guarantees of future performance. 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. Actual future results and trends may differ materially from historical results and or those anticipated depending on a variety of factors, including, but not limited to the factors and risk influences contained in the cautionary language included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in United’s Form 10-K for the year ended December 31, 2018 and other periodic reports subsequently filed by United with the SEC, available on the SEC website, www.sec.gov. For any forward-looking statements made in this press release, United claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
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