UCBI - Earnings call transcript Q1 2020 | United Community Banks, Inc.

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Operator

Good morning. And welcome to United Community Banks First Quarter 2020 Earnings Call. Hosting our call today are Chairman and Chief Executive Officer, Lynn Harton; Chief Financial Officer, Jefferson Harralson; Chief Banking Officer, Rich Bradshaw; and Chief Risk Officer, Rob Edwards.

United’s presentation today includes references to operating earnings, pre-tax, pre-credit earnings and other non-GAAP financial information.

For these non-GAAP financial measures, United has provided a reconciliation to the corresponding GAAP financial measure in the Financial Highlights section of the earnings release, as well as at the end of the investor presentation. included website are ucbi.com. these of on at the Both

a and quarter’s were X-K Copies section call of and ucbi.com. Investor fourth website in release be with of investor available will SEC the Form of the Relations on earnings presentation the this night filed the at company’s replay last

uncertainties three Please be representatives call, its in United. its website. the forward-looking Any this and of of SEC well Form be light may XX-K, considered included page company with filings statements provided as aware forward-looking that described risks XXXX company’s other on the and in statements of by during by be on should as made the information

this at I the time, call Harton. And turn will over Lynn to

Lynn Harton

morning. Good

have speak other on the a going I don’t just let to themselves. for to tell so a call obviously time prefer and the bit earnings I some the numbers short am topics. spend this normally But quarter numbers story, know whole You more

bear So please with minutes. just few a me

post-crisis. comes those to will our and of of value the they for processes. we comprehensive to of viewing page our come management am opportunities governance. and support going our Risk management to with our ability long-term and on COVID customers areas the advantage take because and all And pandemic out our Board crisis drive what’s that’s deck three drivers Fundamentally, shape focusing of crisis. the from expect. plan customers the my on response to am our our risk I are employees, how the Employees because I start our I

as banks as make members, of we rest the Board, of major our knowledge and at actually an support continues four, who are Board through challenge whom crisis. management slide of have lived the additional got active last the on execs three we the strong the note to oversight senior team, provide right and Board balance three and during United our Their an crisis members, with along including I to extraordinarily As plans. U.S.

been thoroughness make at our owners the five, slide as place responsiveness to and need to I our have also continuity On dictates. of pleased plan quickly both adjustments put plan business that in and

focus XX%, working seven have through nine, have to remotely our support we on we to several teams. of we areas if have to and steps Turning our scale outline needed. slide our teams branch I the up Currently, XX% to that ability taken

safe they of describe taken valued, supported we the and time. I make are actions also during have understand to teams other this that some our

of of share initiatives we you to our slide is One and another teams encouragement with our customers. where on one share these our will see with encourage the good eight, program highlighted

Speaking payment we options. starting good how We of know we select know to on are underwriters. in We proactive customers deferral and being slide flexible XX, customers. are

So as possible them phase. of our recovery is goal to as many to support and bridge the

reason That’s PPP early the be with leader a one committed to we program.

team $XXX ran approval of funding. loans before million was to for X,XXX able the almost program than totaling Our out get more

of of other XX% for team entire portfolio. a involving all commercial the effort than tremendous people to going our This equals In support in hundreds the our United context, I existing and more this recognize to Bank each customers. loan want across was and

also stepped customer communication. have We up

and be career of banker. all times the one actually limits to bill. This Bank adjusting living of of be to service brand the most changing energizing that with class fees, are We a goal my promise and our supporting the our rewarding is

the see Our pay clearly ever they will how than difference. in long-term. teams are can more a This making off

banking rapidly up actually XX are media and well. engagement dividends is up, accounts at growing and substantially, across look the more site XX social deposit we digital open continue slides up And online mobile seeing connections as Board, pay to are you as traffic customers are we it today our users active and on online see as

As When unexpected on is no the a we are arrive look at crisis risk with. risk principles. major you to make There’s the three slide enter generally and are is a risk at you our XX, to crisis live going relying we on with time you really risk adjustments.

and avoiding tried as so addressing Bank, problems the we through culture realistically. taking approach with we only having the up have a we cycle So rewards manage that speaking not believe concentrations, bet to the to in understand risk and a mind,

for that questions. Speaking of just numbers and forward risk, some like then quick it after the a why come Jefferson don’t our And open for statistics for look to before you I’d of performance up portfolio quarter. we our cover back

Jefferson Harralson

Lynn. you, Thank

quarter loans am and making change starting This on with credit page and XX. I a

end the balance of from $XXX $XXX and XX/XX ending activity. had was been into million of the about Our million throughout came draw and stable X% or of loans the at draws $XX March stress the Of week. from up beginning April million came in middle annualized. at but the this These

from to with to commercial about ratio Our commitments withdraws. XX% year-end loans at XX% moved

loans As balance which QX commercial we about sheet, onto $XXX Lynn have represents mentioned, XX% of existing book. million coming of PPP our the

loans will funding we this and week. funded portion early as far the expect As be a goes next of significant week PPP

funding the some our be will In XX% initial that within to FHLB to forgiven borrower timing. liquidity expect months. six as PPP mix depending are of facility, a on cash, loans available we PPP the and well of planning, use estimating the perhaps, We

loan $XXX have comes million Of we deferrals in million side loan approximately as loan in million credit of $XXX Navitas. XX% $XXX about from the Friday about or book. On our deferrals booked the of

Navitas, are the some senior well and we you Seaside, as restaurant transparency our we deck, hotel have in as additional later portfolios give monitoring. information care that To some on carefully

separately total, million up are of execute our Navitas about sale X% or loans in the again, on and make Specifically, X% a our detail February hotel these loan exposures. makes we loans $XX Navitas a each at up and some of in X% in book back X.X% did about book restaurant gain. about our and of there more book

if credit to here like. is more Rob you Q&A talk about the in our

we are For philosophy we very believe better they credit and is will our the fare in choose customers than selective most. that

very size the are book size of exposures to on very the of disappointed on each individual our relative We capital. and selective also

page away The have was million have XX, the $X.X XX the equity and we testing in in quarter at look the $X.X the On failed. increase the million losses at was for running our net net driver the our loan This we charge credit The at loan it loan. points of leveraged of million about loan was in loss and a medical left. annualized higher It basis losses. company had behind money main single $XX $X.X in a than subsequently significant offs PE our quarter, book were business. pulmonary million struggled, company which on we but walked private been

page the our allowance the million. turn to losses on let’s Xst method. page CECL right, $XX.X of the we adopted loan go All incurred declined quarter, to opportunity credit last back on XX. loss We January to In for posted we provision first and on the

losses year January end. Our is from for Xst XX% up credit from and XX% up allowance

$XX up dollars, In up for $XX Xst million terms credit from January was of about million losses year-end. our allowance and from

correlations, little we the are that future based anyone to neither economic the want we the an as is you the believe we considered and public to ran scenarios so else bit our we out. thinking continue models a We with do health of unknowable assumptions, one. historical and and on but like how has course, share CECL. this and I nor are continues seen input play environment Throughout will many crisis to quarter and stress of about

XX, bit. page before about capital, talk to I about talk the Moving will for strategy I a numbers

increasingly stopped our began capital comfortable we buybacks plans As the liquidity and where reviewing our our models, on and contingency and are. pandemic with we rerunning we became stress feel apparent

points the in points quarter XX ratios basis capital Our year. to basis are up XX about last from and flat

to coming do XX, know into going going from this I is we Moving or we how a don’t how cycle position get. mention environment last of But again, this strength. believe will bad that to the to long is we are page that just

We are cycle more our to the capital peers. than coming with

cycle ROA by the measured into with XX% about as profitability pre-provision peers come QX. than also pre-tax, in We more

argue more loan are wholesale a than to of flexibility lot liquid ratio the no peers our we our with I XX% and with would on we sheet. almost deposit that balance funding have also in place,

in also the strong one Southeast. very core of basis in deposits we lowest We and DDA in have funding our quarter the with deposit cost the of XX% have first

income March affected that Moving end results. cuts rate our of quarter. basis interest in the net on of We points XXX to the had

March crisis numbers. would of we call a normal about impacting two-month So quarter started I our had and the what

This QX points. $X.X annualized Our last basis total. and points quarter, moved net accretion NIM increased the accretion amount unusual in contributed NIM increase of to XX the quarter the to and by from last basis X% an help added grew of $X.X to our had XX interest and versus basis million points the in quarter in income XX million income

expected often initial we now accrete resolution the was alone, to the which longer. the which the specifically contractual switch our had date versus The of CECL shortening of impact loan maturity we timeframe to agreed

We prepayments have basis $X.X million to we expecting or next on left XX are to $XX about quarter, and to the depending margin million accrete million $X points.

X% to X.XX% only down quarter. last NII and core versus last our was X was the versus NIM itself accretion, down Excluding point quarter basis

core that and X the of NIM portfolio sale the about helped run-off NIM quarter Our low our indirect benefited points. from by last yielding basis

growth funds than also points DDA XX million $XXX some quarter positive more than of had We side We that All down basis or funding moved in growth. million strong shrinkage loan the cost on $XXX remix our about funded CDs. core average to deposit points of XXX basis our points. in, last of more basis X with from growth had and

philosophy and here. little risk of our culture Let’s talk a on

from We securities for least. We about have XXXX. our sold a two million balance been at derisking let and run-off sheet as years $XXX in portfolio as CLOs high and peak our

a at our in off also that to We $XXX portfolio portfolio indirect auto around ran also million peaked zero, XXXX.

ratio. our loan deposit to with liquidity our maintained We XX% low

quarter. of years up this We low our FHLB also since XXXX, XX.X% freeing TCE as million The from took two in sheets also borrowings the combination and we to its capital liquidity, about things these delevered range off $XXX balance in ago X% peak ran XXXX. from our

quarter on income, first slower XX SBA to the mortgage. for weakest being income page for and quarter typically our fee and Moving seasonally both is fee

up was from also it year income quarter, $XX.X% at fee million. the but down last Our million was $X million from $X quarter ago

As sharp over previous million $XXX rates saw in the drop and significant set in the quarter, our above classes we illiquidity volume quarter asset markets the in a in was including throughout the certain in, lock crisis turmoil our record. well

our of servicing $X.X million our value With the shortened service loan asset quarter great the mortgage environment, had All refi life we a of said, to write-down dramatically. for as expected by was it mortgage.

there mentioned the know the million. I this of in you illiquidity As UC course, I sold loan as right the times aware, $X.X was at and quarter on volatility are affected that, credit and at markets gain

we Navitas we sold so $XX.X gain, in and because would quarter a in to about or see million usually sell the we pricing February, gains, of but us to $X preferred In them. SBA narrowed million hold you QX, at elected loans not a this X% with sale loan

we we market and of year, loan QX not For sales are but rest conditions. Navitas expecting the monitoring be the

total excluding merger expenses QX versus charges. were briefly expenses down $XXX,XXX Moving

prepared will I that, pass remarks. Lynn with conclude our back And to to it

Lynn Harton

caused I government for our Thank able to customer intervention base the next But the want you, remarks most point and and many will we stoppage the be long-term quarters. ramifications with serious the goals our we know my simply prepared shutdown accelerate we our execute this, has will of several don’t be. history of what ultimate with most this do Jefferson. in massive as close that believe I over the combined Clearly, lifetimes at economic to

results we even we The than imagined. in will made we can more business technology investments our we are how show and have quickly digitize already seeing

to rapidly system Our delivery well. more will be improved as able branch be

satisfaction and service late that how that truly finally, is brand out we M&A out years team received amazing believe that every seven partner found the Southeast this which as in by J.D. we will XXXX. for the Our of like likely just environment. past out highest the and brand for testament in the our day. post-crisis Power having honor, will sixth way, will for in time were recognized type strengthened, That’s our stand connection banking be the a increase And to they with. retail the by we live And yesterday service-oriented we banks opportunities we to have

before speaking M&A which we right have acquisition, I the crisis Seaside of on comments XX, And announced our began. few slide COVID a about

Seaside been progressed, reinforced. to we has partner decision our have As only

to are We of together. serving crisis We focused contact clients in believe better and prove time both both team the similarities be their that after on remain the and continues we and with that together constant our I cultures. our during will

And it to with questions. open that, I’d for up like

Operator

Brad line [Operator Instructions] And will question come Milsaps our of Sandler. Piper from first the from

may begin. You

Brad Milsaps

guys. morning, Good Hey.

Lynn Harton

Good morning.

Jefferson Harralson

morning. Good

Brad Milsaps

did Jefferson, nice hanging margin the light late everyday you job a onto interest quarter happened, happened March. net lot your in it guys of of this in

horizon? how rates Just and a quarter, curious of deposit trying to the kind had if be kind just of yields for maybe end get what costs spot of might loan you maybe pressure directionally the sense of at on the

Jefferson Harralson

Yeah.

about will you margin a on spot back get bit. but we talk rate, might little the I So the to

margin directionally we that down when accretion. will unusual think, had our be of I amount

you probably points, to basis -- I the maybe the is this think accretion probably points of XX So basis had down XX XX run it. quarter, basis you rate points piece have so closer from

has down cuts or The billion $X have on as it LIBOR without that -- rate irrationally so come fed funds LIBOR would and I even been moved expect within we to high with loans. or obviously. rate

We have high due prices. number of CDs a very coming significant at

a $XXX funds million should continuation million, you see at the of have cost We moving so $XXX of down.

the get inside, extraordinary at rates timing what it’s I ask are with moving the costs. not didn’t of yields back for So margin I for and to think you and spot the guidance. given But you parts can specific PPP so

Brad Milsaps

most you Okay. you brought a I your growth loan And PPP to of Great. helpful. of slide would think, up just That moment, in deck that the be though that kind program. for would of noted you be limited kind

or back the capital translate mid your single-digit guys from as you growth. seat better given guys to of net production kind there’s kind do strong is, the most if think But all again kind TPP being a of away you we growth your loan kind advantage lot of didn’t there, take out had you are opportunities, quarter, than as now, necessarily of where tremendous program can You liquidity this in excluding a banks? as would of

Rich Bradshaw

So, is Brad. This Rich.

You bring question. great a up

So are cautious number very and one, selective. we being

are strong take them the like There companies there are to a an that’s a of However opportunity really going see your and to point, their off for lot great we we do opportunity. out feel long-term eye big banks us.

COVID-XX companies look they is, supportive We and them future, on requests. be would will action for plan providing those their those do to we demonstrate the now so what of of that on impact the and could

Brad Milsaps

the You about hires quarter might as first you talk made in want the well…

Rich Bradshaw

Sure.

Brad Milsaps

…before?

Rich Bradshaw

SunTrust perspective because we have and Daudi say I We from lift also it’s Craig that, we and leader, a normally SunTrust. it with CRM’s, in on would world. Managers lifted leading put BB&T. team we So a of but one successful be four that, out things off We and And a Commercial different have in Atlanta. Relationship -- QX were couple extremely of out out in

to -- the through about in deals makeup and So this from came right and perspective, away, excited they on so in our bring March we that table. really came program, very all that excited PPP and they they was on they are have brought what that they on jumped also late and the deposits

Brad Milsaps

weighted you Okay. average final launch be one, would kind X% you fee Great. PPP around Jefferson, to expect Maybe one guys? the of on for

Jefferson Harralson

a in That’s ballpark.

Brad Milsaps

will I in Thank queue. back hop you. Great. Okay.

Lynn Harton

Okay.

Operator

Jennifer Demba the from And will SunTrust. come our line from next question of

You begin may

Brandon King

King per I were what industry Navitas you Brandon portfolio, but for portfolio? for broader the for rate was your rates that on wondering Jennifer. is This deferral the disclose Hey. the see I deferral

Rob Edwards

is So, this Rob.

deck back we deferral talk go you to the and if have So restaurants hotels. about broken the out of there’s rates, some

also we back senior have some package. of at listed So of then and those the cares the

Bank of is a start the I around So and then you is would kind XX%. overall out around to Navitas maybe place that’s probably X% good deferral and right for just at rate break

those kind a categories. probably within maybe it. that’s five think to So That’s about of way different good

Brandon King

much stood are How that any seeing? you there out? Were other Okay. sectors

Rob Edwards

ones we of watermarks. look you course, listed you top if a five page on course, And deck that of if the -- then, variety put No. those the when we we Navitas together the ones are we the that got but high XX, seemed to and separate, the rates there. have Navitas also different There’s of deferral of some be focused when, numbers, sector at that have specifically are for listed

Brandon King

Okay.

Rob Edwards

Yeah.

Brandon King

And then question, are those results, far the stress test you compared to seeing one how -- does your more reserve did as how test? losses loss your as loan now stress in internal

Rob Edwards

it’s so test stress run we stress have in asking. We specifically had many. for Thanks run our We the to stress of run I test. test last the run a question. we cycle. great a We CCAR Well, loss -- last mean, cycle. various

different, So know, we don’t stress capital have tests. run, I probably, XX

And but to feel capital comfortable that am but -- at our continuing capital feel reasonable capital results, test, run fine. any and we believe and Moody’s reasonable looking loss we that any our almost have -- stress for new where significant for is very like do scenario we is I we the

Brandon King

you Thank the very much All right. for color.

Operator

of Stephens. from next our from comes Stafford the Tyler And question line

begin. may You

Tyler Stafford

Hey guys. morning. Good

Lynn Harton

Good morning, Tyler.

Jefferson Harralson

Tyler. Hi,

Tyler Stafford

expect to get to wanted sale to on gain over SBA so, normal the guess, be? I Jefferson, start of you just I Hi. the revenue I the PPP, near-term beyond fees, what guess, the impact do distraction

Jefferson Harralson

Rich on… I might Yeah. over that pass to

Rich Bradshaw

little the about XXX are ranges a an buyers XXX are the come I the active effort that existing to has PPP. currently. is bit or quarter, in from say the now in obviously, right secondary some QX, of pipeline focused -- on half XX% gain will on had There market back sale we first Sure. into rolling

Jefferson Harralson

noticed, quarter that, had million of $XX sell you bit QX. so loans there’s backlog origination, do in And the probably, and not for a first we

Tyler Stafford

Okay.

loans, loans? So you sell would not SBA expect to Navitas but

Jefferson Harralson

Correct.

Tyler Stafford

not at Navitas this loans Okay. why sell point… And

Jefferson Harralson

I Just Navitas will loan. for don’t be know the what market

Let’s a sheet and loans good bid thing to. say, watch markets we just the about these flexibility watch see are going we we where want if hold on the credit That’s the market, that can might be. balance having to your

we plan loans be that in selling be to don’t gain. would gain it. the are year X% have We and if year continues this if going we consider now, that so and to early X% and I been may to X% late know them that for what we, and at gain now on range, holding last

it of loans another think now. Navitas Also have way, in of our we X.X% right

are to time. for going We short billion have least loans for some at $X of period PPP

add to going Seaside there are We in too.

percentage going that is X.X% come of a So down to amount. decent

have get to lot we well. a as room of to level XX% So that

are about. how We so we don’t our are gain. but not may we So sell, for to thinking -- we need XX% that’s

Rich Bradshaw

we -- add, And I we was performance another are expecting for going mortgage. to good

Jefferson Harralson

Right.

Lynn Harton

And what’s a about sheet. this natural looking quality balance back for to is, at either lot of are and said, credit going a Jefferson come their opportunity during condition on XX% as time. really Navitas of have up to There’s competitors, just on down anyway an volumes as they don’t their

any So we expect down volume way. to be

to originations. expect of be up, terms in the credit new We quality

that’s as So part it well. of

Tyler Stafford

that Navitas, much with idle is know sticking right Maybe now that equipment of versus helpful. actively portfolio That’s used? being today do Okay. how you

Lynn Harton

what seeing you activity, are and But would whether can’t expect, for short-haul that can best the as a and they so. of it would piece they landscapers, fair and -- whether in I deferral salons, you a there obviously the of the be amount still deferral operate probably there’s example, trucks. mean, would fitness be measure beauty segments, in see The

this operating equipment. and So are use need businesses there it’s equipment, essential and -- still is businesses

days, the hard side we first what we on time, got the is, portal -- to deferral deferral and it’s that then are and to clients payments. deferral So are are they what we but request during have touch up requesting is the the requesting an contacting for automated give XX doing set

kind wait to keep are just payment engaged small taking keep of client a and we just a see. the keep, contact, and with So, keep,

to be cases, back open our up, to mean, these get up. are in back to have they back government business, open obviously, I they to those them end allow in of because, expectation got is as bridging customers, at to many want And they but want probably it’s days, into touch just the XX deferred lot and those recovery. to of payments and honestly that will clients again the going we those we a the be will the back be increase

Tyler Stafford

a bit understand I am And your this little into went to what and guess, at think, your XX%, these some under other X%, all that It over at But sit to guys calculation breakdown as some XX% just and looks this you appreciate of I of If and portfolios just shifting up higher to basis than kind add comfortable hotels credits of points, hotbed Navitas restaurants Okay. reserve trying then, around But most X.X%, appreciate deck of I and maybe some -- recessionary X%, of my details. you am leverage that the in XX then far XX and better -- are in I you in environment type the senior imply deferment of back. And your not at syndicated your are you question, and basis the by that capital do hotels that like portfolio built you specially at the do to ratio peers guess, last kind that significantly least of type at at the the CECL then, recession relative back are And a restaurants you look just care entering gave Navitas why point? the I details I CRE peers. have points us built around I assumption. some trying out the least you I is somewhere feel so to position totally that portfolios guys know higher and of at, retail X%, reserves guys laid at around of X.X%, reserve. total and well, different with

Rob Edwards

Yeah.

and say you to I think Rob. Jefferson his it’s I of it comments, have things. couple So, and think, One appropriately. Tyler would I said in it a understand, do he is mentioned

So are of experience. off built correlations past the models from

you moments where you of at And situation so the as are there have just understand look disconnect. to we in that be a may models,

would are this also scenarios we set where economic also like usually now we one month I the and get say a get from -- Moody’s you But a we one for in of usually one use forecast, are situation a we are week.

And so to it’s past, to -- keep of built future. the the in future what a you going in for mind happened in is sure it of in challenge the off stimulus, happen happen and government really based CECL going what because know is of what and is and on element think to deferral the is it’s

-- feel kind with liquidity. We and strong XX% the some are a hotel we quarter about we looked in it, operators are end really at space, strong with at in We said, of good loan-to-value at it we that. but

outstanding cash of -- flow. if when on leveraged come are but less it at business, We based in a -- it and generally $XX not outstanding if based times are measure loan what leveraged -- flow debt to in is way leverage, call leverage and Most I true ours would the to would while way is we four which small on at than down million it’s that’s cash the commitments, in you outstandings. very

exposure. say, and have -- the we don’t portfolio I in that negligible feel have we then is $XX we have any don’t oil million, I so and So would gas

I that book the about good feel components that are some components having to also And we in So talk about at are then specific that of not really good mentioned. the other the all. folks

Tyler Stafford

just Maybe is? could That’s with new provide Navitas that, for CECL helpful. you portfolio Okay. the very reserve the more on one

Rob Edwards

So it’s $XX million.

Tyler Stafford

$XX million. it. guys. right. Perfect. Thanks All appreciate I

Lynn Harton

Thanks, Yeah. Tyler.

Operator

from question next of from come Kevin our Fitzsimmons the line D.A. Davidson. will And

may You begin.

Kevin Fitzsimmons

morning. Hey, Good guys.

Lynn Harton

Good morning.

Kevin Fitzsimmons

you Jefferson, occur kind you walk a So the the noise quarters. few expect just should of few the mentioned times, through we how could next PPP, to

it the have But because will the whether the have you loans. to those lot X% have because talked of about a then the come margin. a or on quarter, expenses, would dilutive occurs average in from suspect have just will through are it late I second if you banks that think you of having through, some it that? have will come would come income, with will margin which impact second of But some I talk So higher third quarter I of balances carry origination elevated fees loans, the the think through can occurs you quarter companies the

Jefferson Harralson

Yes.

come I the -- our think, margin. the earn we fees here that will through

I the well. you second very I it laid think, out think, for you -- quarter,

are not expecting over the are We loan. amortize to we any fee -- two expecting that the years of

will that fees will starting see come as of to the prepared think about kind mentioned some in. these remarks, are fourth forgiven of right And I these six you that within I in gets to quarter XX% the you months of be that end early third quarter

kind QX would how would would those thinking about between in QX split of I you it you roughly and of currently. That’s the So get that fees expect kind fee get XX% of X.X QX. of I am and

time expenses. we some over On probably expenses you run know

think it’s to meaningful. super don’t I be Now going

line do be expenses forward. the I to to flat expect On expense our down going

itself you the So PPP really think that are expense I don’t going that in to see by line. the

Kevin Fitzsimmons

I impact Okay. to I suspect on you said the clarify you world, delayed that on now been thought that? CECL would obviously so Great. I that -- you I loans with I been are point heard Tyler that said clarify you but in, wanted the acquisitions it it, so all that’s to one allowance to ratio, post thought it’s from at another just past And your because so the typically know know one want I just then you you -- adjusted. but I have guys just factor question, point that I adopted follow-up CECL, marked of

Lynn Harton

declined the delay we as We question another was on impact to far there No. and adopted, there CECL. as the

Kevin Fitzsimmons

versus Just we that there peer? on at based acquisitions to kind allowance or make of whether it points ratio, clarifying on when are past any caveat on was the looking

Lynn Harton

you that’s the the so think… QX back I to think if -- deck, I over I our bring -- of go

Kevin Fitzsimmons

Yeah.

Lynn Harton

from we that million over $X.X was number the in acquisition … the brought range.

So the its to you goes transition right, a and but Kevin. I million brought the purchase part purchase around on as loans incurred CECL, $X that’s been and it’s a now from of number hidden the credit it’s and loss was sort do away part of allowance effectively, you are discount from over All subtracted that of purchase over. was, the -- it’s impaired, from that think, it we the bring

Jefferson Harralson

a that the thinking were positive. on we through side that still I have accretion Yeah. that accretion $XX we are And purchase that million bit running little of maybe mentioned

Kevin Fitzsimmons

Right. it. Right. Got it. Got

That’s guys. Okay. I Thank all had. you,

Lynn Harton

Yeah.

Operator

next line comes Michael Rose from the James. our of Raymond And question from

You begin. may

Michael Rose

Hey, guys.

Sorry quarters. addressed update I Thanks. this as at a second kind the quarter? should on to what really but piece if an back expect the we where maybe mortgage was on move up impacts if MSR pipelines quarter, and from of today late, a are perspective Can just good both you and got this, volume you give you from mix

Rich Bradshaw

Michael, hi. is Rich. This

a mortgage, on the expect QX based strong continue have we to So to the pipelines.

FICO non-government, sizes. we cautious being our will put credit good tell are and and in the have that. on you feel books, So increasing we portfolio, tightened reducing loan that about I up our criteria, we terms what of we maximum scores

Michael Rose

opportunistic. brought Okay. to to be and expect And that up, you areas assume de-emphasize think, I risk expect you earlier in the call, of What at some team be as then follow another I maybe opportunistic, point. would be at this those would just on you you portfolios mentioned one

Thanks. you couple do look can size I next So, where and see if quarters it? you you the greatest of as maybe guess, opportunities, the out

Rich Bradshaw

Rich, is, interest this again. It’s It’s interesting. --

there’s it’s an take -- to given us So are going be opportunity. are PPP not answer, real you And I the going to not would opportunities. certainly say, thing unusual but a has

have So banks favorable, many banks rural big in the not don’t the come that PPP our of out have the all program. smaller areas

that have for and are So come we right feedback actually are we able better they serve. what accounts lot in not people and communities through we of feel a because just this moving program getting about now, been do to the feedback, just

Lynn Harton

really clearly these week. long-term and to this that we said real Because It’s are you affected seeing all C&I it’s opportunity a really pause companies we every I size it, as put of -- the Yeah. a we are kind hard mean, highly it it’s have up seeing but thing just really and on areas is with. core Michael,

Michael Rose

Got it.

So generally front. on the small business

Thanks Okay. That’s helpful. for my question, taking guys.

Lynn Harton

Thanks.

Operator

line Thank Mealor Catherine you. the our from next of And KBW. comes question from

begin. may You

Catherine Mealor

Thanks. Good morning.

Lynn Harton

Good morning.

Jefferson Harralson

morning. Good

Catherine Mealor

here? Navitas, a would you clarification volumes continue mentioned when on did Just originations Navitas back to that balances are to expect you you grow to think from that quick down,

Lynn Harton

with start applications for do will I I Navitas down. that. are Yeah.

selling would we so That we Navitas little originations. lower a said now not loans So adds expect are it bit.

bit are the anyway it planning little balance. selling on Navitas adds a We to loans so not

a year. I would throughout expect in balances So slight the growth positive Navitas

Catherine Mealor

that then Navitas also And think $XX the Great. is was mentioned you CECL what to Okay. year-end? reserve $XX million, that -- I compared

Rob Edwards

Yeah.

is this Catherine, up It XX%. XX.X% So from really was Rob. to

Catherine Mealor

Got it.

Okay.

were Okay. Great. Thank The answered. of my you. rest questions

Operator

from Marinac the comes line from Montgomery. Janney question Christopher And of our next

You may begin.

Christopher Marinac

in companywide. consider kind of on disclosures. Thanks and to as as of How if we $XXX it the of loans kind growth, here and the the call, in out as both Should comes you facto about detail that million how criticized those well the we thanks picture? number $XXX the kind the deferrals kind for do big curious de of and big down from get picture? number that you in go back think about Rob, or that with think a the million worked just

Rob Edwards

about the interesting to think on how were opened think think guy regulators his reservations their as make after lifted back beauty Georgia heard Georgia governor to in that numbers out wife, way and phone reached his a business businesses said that one guy some it life then have order salon talking I about get a you real think daughter, another for about way to the up. crank Atlanta I they a there’s said to that with the as back up So and and to the to and were about soon into day we was And all it. those they the their live there’s anecdotally it’s may there’s -- happened

want know ready be So are think you I evasive. mean, But out. to it’s I Chris, hard get people I to to say, don’t

in to Carolinas We Southeast people in and the to normal. a wave the of get are ready here sensing of back kind

pent are start demand to that it’s traveling not to back they going We say going that go these their again. sent get told hard that’s for they -- deferrals. them up everybody are cut, percentage people a out I these to to to so businesses going people you are some go know hair to eat, and of had clearly home And there’s and

hard so And element have it. predictability to really any it’s around of just

Lynn Harton

we it’s is my a bad I shutdown. of I run broad manager not is economic my a as all mean, Yeah. know, borrower specific. have am This a -- business. got a I I this clearly, can’t problem,

So not way. looking at in we deferrals the are normal

at we TDRs. I point mean, not as if -- we if these, are looking at this

to to their get supportive the back it what way other think as its are out they happens. got work see of all just these We payments. really to into have some things, I We the And back know data see clients business. that’s comes deferring want to we of where these reserve and

we again, not to a but more be environment. And normal definitive, just it’s would like

most If there. few you which exist start covers, benefits normally are mortgage see think -- about it they to stop unemployment is, and probably, deferrals, what seeing we making, XX% XX% like problems very rising people of for HELOC but to expect yet you would are would unemployment

point. them. means we are at with stay this obviously, assets viewing that clients, close we But are, them going understand these So to by we very to trying what’s as very so on any not special

Christopher Marinac

that forgiveness. that or Got the they from then fees now a helpful. in to possible it couple pertains take follow-up And a against of come likely as on a is particularly some they accrual to it even expense those start That’s just just appreciate I would months you of type very lot. PPP, as that you. as

legal curious sense? make Just or set reserve unanticipated to a would just aside expenses if on

Lynn Harton

some have in great in it’s come It year. aside in year. is will we should profession that’s anything, to is our a of a And in set second possibly add a question a there or a possibly reserve second profitability -- just legal the Chris, really and to half Yeah. nice the been room the thinking lot bit. is about earnings it short-term or -- that half the a way little of a a

So to that we haven’t third decided what to quarter there and do into in will and ability with quarter. we but so more do that look if the fourth it is anything,

Christopher Marinac

morning. for this Thanks great. all the Sounds time

Lynn Harton

Thank you.

Operator

showing time. am questions further I not this you. Thank at any

Lynn Harton

all Okay. We support, for Have thank again to you the questions will look appreciate Great. your joining we day. interest, talking soon. and great Well, call. your forward great a

Operator

conference participating. call. this for today’s disconnect. We you Ladies concludes Thank and now gentlemen,

United Community Banks (UCB) 22 Apr 202020 Q1 Earnings call transcript