UCBI - Earnings call transcript Q3 2021 | United Community Banks, Inc.

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Operator

Good morning. And welcome to United Community Banks Quarterly Earnings Call. Hosting the call today are Chairman and Chief Executive Officer, Lynn Harton; Chief Financial Officer, Jefferson Harralson; President and 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. the ucbi.com. on included are website at Both be Copies were X-K filed quarter's the earnings company's call with section ucbi.com. Investor investor presentation release and will this last of SEC, website a of in of and the Relations the the replay available night at on Form United. this Please during statements be call, be aware made may forward-looking that by representatives of XX-K, on the considered with Any light on of in Form described should company's uncertainties of six be company in website. well its information pages statements the other and forward-looking and five the included as provided as XXXX risks SEC by and filings its call At this the Lynn Harton. over turn time, I'll to

Lynn Harton

United, $X.XX an our average annualized, On an Good growth. return company continue equating all today. growth, was share point X.X% joining morning. have to and basis on performance. has call teams the strong by for driven thank to Loan their sheet our ex-PPP basis, our for equity. overall strong return quarter common for you start to XX.X% by I throughout was and want growth quarter the congratulating XXX and balance we been assets per earnings And for operating deposit on tangible This another great

reserve Our at charge-offs net of points basis only of deposits results cost stands million. also of points $XX excellent with only a dropped and X and Credit now release by X basis are basis points. X

is the Our ratio operating best we XX.X%, efficiency have reported. to among improved which

possible. that congratulations the teams results these thanks make kind and again, of once to so And United

July. FinTrust completion continue following Capital also well, Partners initiatives the strategic of our Our perform acquisition of in to

opportunities this as and in of we business, to our Earlier completed relationships offering. acquisition stronger wealth solid this We customer month, continue Aquesta. well see a performance with deepen the of to management expand line as

Aquesta in the continue brought very and Wilmington November conversion to potential that of excited markets We Charlotte organic the and growth re-branding be to expect us. and about

transaction January. Our an Bank impressed teams early to leadership the in and forward with be continues track I look the of also Reliant the with to joining on I'm United. and with Reliant at of partnership that anticipated closing them quality

seen, last see, where I you they XX.X%, did You common reported night, of X.XX%, hope may on return for loan of of release tangible demonstrated the XX%. equity by earnings record Reliant's fact, growth ex-PPP in results a have on assets and annualized return a quarter,

in a welcome will like in Board. mentioned I'd to Board continue Jefferson new Bazante, also more to Chief and our release, to our glad these to we Humana Chief to will to I Her as very branding, As in expertise quarter. earnings we're and Jennifer our marketing digital Officer of the on press transformation details Marketing tremendously over areas. Marketing be invest for turn Officer our And it great complement to now add

Jefferson Harralson

has in the Lynn. is dollars, going net annualized loan year rounds a to combination, over loan-to-deposit of growth, SBA also out loans, our of million but loans book comments you, take more XX% Navitas of PPP over to totaled which the quarter closer our in the in lot become excluding [ph] consistent am and And we a our just we growth more an providing we $XXX had and number loan million of sale of and frame. relatively us growth loan nine. to over and similar On XX, loans mix growth, X.X% I that The on deposit invest strong chart at quarter. Thank are page opportunity last this our shows highlights it also strong to start $XX over the have liquid page us loan liquid, moved look last a time. same XX% our and ratio making ago, time a year from to my

XX, details deposit page which to growth. our Moving

had are deposit down able we move had but growth, of page I the $XXX million another loan we basis rate. points of points. Deposit touch quarter costs near While cost growth, to million a bottom, On briefly X the which $XXX were this to capital. will we also basis XX% annualizes growth XX, X at on

are did the capital Our flat partly in last raise we million year. were because of levels, relatively ratios preferred and quarter above $XXX a peer

raise expect and on ratios we levels With that we capital basis. the to pro work, Aquesta at peer our that are transactions, Reliant will a putting be and forma

ways. bought quarter, back two QX. One, we margin. capital we the of $XX did addition and income July use for our X, we this talk On FinTrust on XX, shares about million page In purchased in cash spread dividend to we and in

Excluding annualized fees in our and a spread PPP income grew loan pace at accretion, QX. X%

QX quarter coming it That liquidity, Our of $XXX,XXX increased million that Navitas on in continued XX core significant the flow loan fee rate lock from margin X. million. a Like driven was That to We sold. in and sales. highlighted $X.X Page points, down quarter. loans deposit write-down to up loan we by compared a July have I came last acquisition significant sales expect Besides X% had be last was closed $X talk QX flat we SBA Xst. $X.X write-down last quarter. and million good $X.X of normal was MSR $X.X growth income of quarter. with book, PPP $X.X by about a On continue excluding We good we had expenses XX, PPP million recognize to due forgiveness. $X results. XX still FinTrust, a a strong had to million XX, expect fee million details slightly left income, new PPP in FinTrust mortgage growth expenses the basis loans Navitas of shows quite $XXX,XXX recognized closed relatively were The driven volume of Page quarter, from by from QX. which said, and our to sales million in fees amount quarter last and higher said, to QX, page on FinTrust cash excluding $XX.X expenses growth to on in strong combination would expenses, the increase our of with $XX.X addition that of loan in the down was Aquesta comparable impact loans. expect in million $XXX million on mainly and forgiven QX in mortgage gains our which October operating increased in the million some

were just annualized X subject. and on substandard third to loans, accruing improving and Moving special will basis low here, credit Rob mention Q&A we Net here is very with XX, at points charge-offs Page briefly for talk Edwards our on releasing I and had mention Page $XX saw XX and quarter we look, a to, decreased substandard $XX saw well. reserve million, release three in lend and gives improvements we in improvements the by closer as we quarters special billion. you NPAs and businesses this in the that

XX, for pass shows reserve, to it our to Looking loans, it losses of walkforward PPP wellness that, moved QX. from credit to Lynn excluding back the closing X% With comments. I'll for the X.XX% QX page in in

Lynn Harton

and build our like highest again, the customers this the I'd appreciate Score continues Net in This I one set And and which the J.D. support bankers and both interest number and United. join Power it open to thank floor to number has according Once questions. continuing according service, for Promoter Power J.D. also in of I in in great all focus second trust great to Southeast bankers to customer is company. in country. United the one to to your deliver to for want to service Their ability satisfaction apart, on attracts and staff us. now

Operator

Securities. Demba from first question Thank Truist And you. [Operator with Instructions] our comes Jennifer

open. Your is line

Jennifer Demba

morning. good Hi,

Lynn Harton

Hi, Jenny.

Jefferson Harralson

Good morning.

Jennifer Demba

questions. Two

The you wondering [Technical several just for is quarters, I'm you for [Technical Difficulty]. particularly think how one first quarter. the Rob. Difficulty] that last wondering long this Rob,

the just The deploying wondered how is [Technical buy security Difficulty]? excess second much liquidity, expect to quarter versus for you for the regarding the it question

Lynn Harton

and question zero basically on how year-to-date, about a that think any I just is, problem I can numbers bit quality. We I'm low the say, how are we're some going good just losses - at long the for at And are. see would long or do things. is at reason, long and of continue we're zero? a the they've we do feel fairly been big to really little where low, for Jenny, having what how a the have looming So so optimistic think while. they think repeat here, about And year, because this so we we're don't any We moment,

feel we're strong And charge-offs. relatively quality about low asset continued so and positive and strong

Rob Edwards

the next one, Jenny. take I'll And

plan and was excess I is the think say timing heard what maybe liquidity. I you use to the

had we quarter, book You saw growth. this our that securities loan grew strong

of We and we our continue know expect down. what is continue expect our next our excess budget. I to with expect slow we're I you pretty grow of year, liquidity I up pace, have grow used to to strong year, have portfolio. all the that happen loan to of don't balance this sheet. liquidity if we'll still next significant growth But and growth, securities on bucket deposit our that we'll then too. we coming amount to believe, the - to you securities will get the roughly and I a And end that see you use

Jennifer Demba

Thanks.

Operator

Thank you.

KBW. Our Catherine Mealor next with question is from

line Your is open.

Catherine Mealor

Hey, good morning.

me. [Technical on hear Just one follow-up Difficulty] can

a on targeting percentage follow-up above, are average of the one - that there of earning Jefferson? securities assets maybe you for book, is or Just not grow that the

Jefferson Harralson

on there is Catherine, going won't there And really that depends to go is work. And there's put percentage the above. cash on thing a really in loan-to-deposit ratio. that, It question. we're we if Great to excess one not

invest XX% the we'll as in. ratio the incrementally it larger, securities we higher, gets from take even less risk or moves with As

the So we'll reduce we just as a portfolio sheet. work. incrementally to But risk, need put gets to size the we balance as this of the believe bigger cash

Catherine Mealor

Difficulty] or as be Difficulty] in you to securities [Technical as their that sheet with or anything the liquidity? there borrowings balance Is deposits your restructure pay aware all book Reliant the of excess you [Technical

Jefferson Harralson

Another great Thanks, question. Catherine.

- relatively say their securities would there book I is small. So is

sheet its like. are loans. helps heavy relatively they They in So - securities have - our that have things it all we balance municipal towards equal, the bonds mix

approach securities debt that but We can are prepaid significant the borrowings prepay, there's term. near barbell have our right a not now to investing. some in in be There

ton it's liability on not a So side. the

significant their their on improvement had their saw in they very cost you own. funds of If quarter,

so over doing what together. liquidity an liquidity our and more And they so to you when put work that of time. to they opportunity - But that with could blend enhance we're be

Catherine Mealor

maybe into And do is growing kind pace. is loans And core rate? think at an double-digit improve year current next given a where that a there growth it then of fair you just your your should growth upside to UCBI rate mid-digit assume from Reliant on is perspective, to

Rich Bradshaw

Rich. is this Yeah, Catherine, good morning.

about Aquesta, are we next on good about layering what and those year yes, and our with feel So markets doing. of they're Reliant already on very verticals and top

other to the So pipelines, incrementally we're it feeling your QX, about QX the about that very better really than strong And we've in feel address, excited into in QX. in senior really we going good activity question, just will seen credit We're a that. what October, be with think committee.

we feel we've of got now. tailwinds lot So a right like

Catherine Mealor

Thank much. you so

Operator

Please Our Davidson. ahead. A. next question is from Kevin Fitzsimmons D. with go

Kevin Fitzsimmons

hear I officers curious can new Charlotte hope you're about Aquesta that teams or on metro with new deal getting inbounds very any in me. Difficulty]? I [Technical early you you whether the or to that opportunities know the to just the bolt-on it's teams hires in from platform, you see closed, Aquesta

Rich Bradshaw

This is very Yes, about Hi. excited again. this. Rich we're

already will next large Aquesta I'm to just is commercial a what commercial you First large are loans clarify, pleased of have very either all, existing banking really a close But QX team in our a Charlotte, as core we number for year. or approved And that verticals including also existing we located we there in have tell two well. of to have customers team. QX

so help. And and off started think always we the I victories right foot on

off And with very large approvals, we're and so you're two good, working. starting that feels

existing a is portfolio. of X and hired from we part ago, leader of us about Aquesta, that managed XX% this other he for years The

possibility. we feel about good so And the

on worry We going inside. hold. acquisition, always feel good very much our You to an how you're about

We I have are just And inside some aligning on a big these really everything wins and lot. is two to well baseball first help from credit going culture one. said this a

Kevin Fitzsimmons

been worker quick Great. and disruption lot of Thanks, on Rich. There's one supply follow-up. And chain shortages. attention a

a Just your view, Difficulty] growth? is more purely it potential on as constraints Thanks? wondering, in that, is Or [Technical credit emerging

Rich Bradshaw

supply do I at chain about This and maybe we here think two is and Rich, as well. concerns the to are I'll our that can we this. Rob take a things Certainly, answer labor. customers, stab the talk as

So feel worse, as get providing we think about those do optimistic. next still not year, real we

we but of about and a seen - impact, haven't that. let I'll lot talk so Rob And

Rob Edwards

we are an impact asset as the can issues. you quality seeing, from On really side, tell, not those

as way looking the next about which am issues the are is at expansion it And concerned raised. so you to people I do that because they hesitant kind propose, is the of are you

more see at it limiter loan asset really quality I as So an growth element this point. than a

Kevin Fitzsimmons

everyone. Okay, great. Thanks,

Operator

is open. line ahead, is Brody from Incorporated. Go your next question Our with Preston Stephens

Brody Preston

Hey. Good morning, everyone.

Lynn Harton

Brody. Morning,

Jefferson Harralson

Brody. Hey,

Brody Preston

the I wanted to Difficulty] loan by lag about this start maybe [ph] quarter-on-quarter. discussion down on growth X% quarter [Technical

And so was there I ask, there? wanted anything over to specific

Rich Bradshaw

to This special Brody. to We be wanted was exit, happened it that we yes. a million. did mention is Rich. answer Florida morning, credit. C&I also is The Good It $XX have credit

throughout addition In I hired development lot of officer additional to lenders great just that the growth. those in and QX, wanted feel lift-out a So footprint. base very with that We about our business loan about had And success - in that not we loan exiting and tell teams down very asset feel we banker. they're of is and road. thing One a other lift-outs. officer they're having a we're commercial the What think private be but talk I we can about the hired future, we an serious would really five prolific SBA to good I couple discussions had we've happened, haven't way finalized, you with that.

that. feel we about And so very excited

Brody Preston

at looking production Difficulty]. quarterly [Technical Difficulty] guess up quarters. topic two quarter into I XX% down [Technical just it's on the was but And year-over-year, this the the Okay. is last I we're what

and And six be so banks over seeing, it been I to wanted mortgages the know, of months, you anything a slower? Or to levels higher ask, of is production there holding what last is labor been it's bit have typical driving borrowers liquidity? other

Rob Edwards

really and bit. labor of facing increase, don't the that played very summed certainly, it a kind providing things you end going little And - with that. up those the the of think in I a But chain optimistic. forward there at market. certainly lot liquidity of all kind we're supply has again, we're There's into

Brody Preston

held I the yields, thought And it. core fairly up last on Got quarter. Okay. well the then loan yields that loan

look And the back like? a yield like that so rolling you me and for maybe what the could production I currently kind was hoping that's sense looks give new of off what yields book

Rich Bradshaw

Great Thank question, you. Brody.

coming you look in. the at if loan yields So incremental

points existing If XX coming you at what the than and look is. only the yield leave out, the Navitas bank they're probably in to lower loan XX - basis

little so if And loan at yield yield look down that loan continue a going think to would is to say, well, I you bit. come itself, you by

yields. coming of you you higher if Navitas, if month, any are mix higher Now have a look some then at higher of these months in given at existing at

little it's So I you're it depends bit. come think loan a a yield down - net-net, mix. to little bit But going see the on our

or time, it that same we minus of help I not going a think asset long the But some I I'd flat portfolio into yield the did to a can with significant going side. change is relatively in loan cash to think, - X on us happen. mix margin strong this It go we plus going the the the offsetting to have quarter. you're way that's points, Net-net, compression the I see helped moved Now that and basis growth amount at help mix change a think say. think securities loan

Brody Preston

putting new understood. on yields in portfolio? are that securities the And Okay, what the you're Jefferson,

Jefferson Harralson

XXX-ish.

Brody Preston

Okay.

slow from [Technical fourth I maybe outlook income, selling you Navitas second the And portfolio. SBA of relatively were had the quarter then than Okay. consider on that guys fee quarter, think if those down stronger more Difficulty] the intimated last the the would you they than the just the sales, But on more the the for third, did quarter quarter? you loans in SBA and

Rob Edwards

Quarter four in here SBA minute, a one our step strongest just seasonally loans. in may too. Rich for is

it sales. higher. trying a loan expect Navitas loan be little small would we in also a we're a We of Again, sales. lot about So could balance combination cash. because of with to think I have amount naturally, Navitas it

a some we We've already. put have been want We momentum of having - to strong work. to fundamental this

some too, we And assets the keep these to strong, so but market and really it's gain-on-sale if we quarter. also seasonally of want is strongest can, [ph] our

if So I a would expect have we and is seasonally opportunity we similar to this sell quarter, to. but more stronger it to quarter, would the want

Rich Bradshaw

in down, leave we expect in more this that say last SBA bit little would to we bit we'll to this. little have And probably would of a quarter expect sell because be versus I I mortgage a quarter. mortgage,

Brody Preston

Got it.

Okay. ones could Difficulty]. [Technical [Technical to significant what Jefferson, last just Difficulty]? two maybe I have speak the And you drove

Jefferson Harralson

Yeah.

might question Rich. So on the quarter drove pass heard the increase gain-on-sale what significant was, margin the I I this this to What last? versus

Rich Bradshaw

Yeah.

two have one-time as points and market for allowed adverse Fannie with do also fee. investment second known to Freddie the did the we home properties, So XX events. and that had basis One

allowed one-time bigger private when but of stock And they And when able - the Fannie to they gain sell that preferred market, - in strategy and purchase to strategy. not so that take us $XXX,XXX quarter. sell last that happened, in We we to gain. Freddie excuse were and were then discontinued the a agreement, a get approximately me, able

that so And gain. one-time the other was

Brody Preston

Seaside on Understood. was then wealth and front And FinTrust. one between the my last

more Difficulty] kind one one offering maybe they're a it [Technical than higher effectively until then the significantly. of than Difficulty] here You've [Technical under I businesses if bolstered ask long those target think early operating [Technical How that even to And of under you are brand brand? Difficulty] couple is? wealth questions. wanted can the you operating

Rich Bradshaw

again. is This Rich hi. Sure,

have FinTrust Gideon on the all year. gone Seaside through we'll team working we've is thought this. of And strategy So that be looking and the at really led And team the one Haymaker team the the as operating the by been start in yes, - we're stuff.

part is just first Now on looking other looks based probably lot seeing one-offs in that also and take FinTrust hires. the talent portfolios bringing very we're excited kind bring we're that it new Carolina market where there at. like like identifying of Carolina, we this. will on to that we're And second, South we're there's the to North a is And also go talent. of available of identify first But in some in. first. be those where are we're to opportunities to out about companies FAs And their But going

So we're those starting at a it all next off. continuum. that year things and all be we're see will when really thinking looking kick you kind of But about

Brody Preston

Great. Thank you very much.

Lynn Harton

Thanks. Edwards,

Operator

our comes ahead. with question And Janney next Marinac from Please go Montgomery. Christopher

Christopher Marinac

how on seeing kind I Good for of to kind Rob are Lynn put to balancing about in the competitive sort Thanks. morning. the mean the And loans. Question also just are normal put you managing the even need for to or front? anything but new for Rich, out, or space unusual the more risk? cash than of of money either race work you

Lynn Harton

Yeah.

to take Rob? this, You want

Rob Edwards

Yeah, I'd Okay. be glad to.

and So a we good think culture. we strong our are guess how I underwrite I having of in credit are consistent very - people disciplined - and credit. the have they approach And fortune

the we've are do where market the some as staying some not there true And see that not so at one-offs. - successful to approach been say we at and isolated That's culture situations today. day to And ruling our and it's how competitors of so or we credit. far,

to over to time. able we've we're true so who been And stay

Lynn Harton

lending on the markets. compete Certainly, pressure on this have great We're is at seeing been to with margin, don't still blessed you're structure. spread structure. more credit we What the on point appetite

on So primarily. - spread seeing credit side, the you but it are

Christopher Marinac

for today. Great. the color Thanks all additional and background the

Operator

- Michael And our James. Rose Please come next with will ahead. question with Raymond go from

Michael Rose

Hey, good morning. Thanks for taking my questions.

pro expect a And to add have then could now you get all Reliant? sense, of you what sense the Jefferson accretion the with to both what's if layer recognized, and total wanted be you'll margin we with And recognizing adjustments? you as forma if - what Aquesta and Aquesta Reliant. talk you're what for the a and Just would to in amount what Thanks. for left maybe

Jefferson Harralson

great a it's Yeah, question.

has on Let our at accretion us. $X million me X% assets. Aquesta million there. start now. $XX past come earning new with We're expect to of to Aquesta deals than million a higher from I average total in. They're of margin about $X only

Aquesta I is They Reliant now. with by question a nominally think better itself. XXX just margin. harder right did So a

higher complications a if add range I've and putting The some accretion, So but in new us, margin it. last we're we're pretty seen our their taking new accretion. estimates those together you here two blend two there a around it's had because wide it, in also out on the accretion for

you from But seen so - of the seen because on come to expect later wide on more because give - can't a I've estimates mark. could to ranges we there - pretty a I been give And you Reliant, higher depending least because at time it it's had think I back XX the two there maybe I've number last estimates But I different. accretion have would basis it's the be at our points - there. estimate

Michael Rose

had. very That’s all helpful. Thanks. That’s I

Operator

And no we more have questions.

Lynn Harton

Well, once your again, United. great. in right, thank you interest just for All

talk before. that quality to you But if not anyway, we next and apologies audio here Our will for sorry quarter, happened. the

So so thank you much.

United Community Banks (UCB) 20 Oct 212021 Q3 Earnings call transcript