UCBI - Earnings call transcript Q1 2022 | United Community Banks, Inc.

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Operator

Good morning, and welcome to United Community Bank's First Quarter 2022 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, pretax, precredit 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. Both are included on the website at ucbi.com. will quarter's on and SEC, the Form replay this first filed presentation and company's the the of night in last X-K call website of at earnings section investor release were a Investor ucbi.com. Copies Relations available of be with the may be Please statements that representatives by this during made aware of forward-looking call, be United. well considered and as and uncertainties Form pages X X Any the the its risks XX-K, information company forward-looking on described filings SEC other of website. as statements provided by with in light should and XXXX of be its company's in on included the At this Harton. Lynn time, to will I call over the turn

Lynn Harton

Good morning, our joining you call for and today. thank all

from a macro was quarter more great first United a one and for perspective. The interesting one certainly an

have and the deck. return our merger normal performance for to present. in impacted loan of has XX.X%. exposure noted our common Tennessee, operating Dip return to solid reported the been recognized part us and as as the our would this reminder a results charges, we're them Absent Both have presentation And Reliant provides Middle best fortunate in and of release in several small include X.X%, in results on would loss quarter excited to Double team Reliant MSA. the with been Our billion have been Nashville our this provision as other ongoing Tennessee Reliant, numbers and provision for $X bank we're our consecutive acquisition as years. performing the acquisition story. primarily The Reliant and equity assets proud on tangible

growth. was impact X% best and organic strong an PPP. basis, annualized, annualized almost deposit despite over the long the experienced see flat X% growth, of again, to our Deposit continue excluding at impact of quarters growth loan excluding Reliant We on organic and Reliant. one of deposit We cost

and markets of for merger advantage ongoing continue disruption of to our expect the the take to foreseeable large We strength future. bank

bring a back to the has the levels, increases up upon scale rates healthy I'm quarter, continue increases challenges southeast opportunities increases. and enough withstand now for economy Beyond predicting. the outperforming pace reminded the believe dependent term. in type long and is a also country I been should amounts both the in the is of currently real growth and those be whole. the as actually the be optimistic. market that to Increasing markets very it's are rate strong rate above And of pre-pandemic Yes, is I concern. our and strong economy But inflation interest very GDP

of continuously develops. regardless of we are scanning the the management have weakness and credit not date, approach and underwriting stress, to seen for concentration are first confident signs any our in While we environment to how

and continue to for about Conference, Finally, XXX culture Annual be about company our two as future. you we and I excited the Last as have them. of Spring group Leadership day industry connected our event the bringing future our the leaders across focusing mission. excited And is of seen can and our I completed week, a we together ever tell that own as on

and quarter your view on don't why appreciate There our will outlook. And detail more now give audience us than our the parts moving more know quarter. you are Jefferson I this on So performance normal.

Jefferson Harralson

deposits. transaction at deposits the basis at comments in the The is by deposit of annualized the of what we points about cost the non-time and deposits to X one being page on Thank Plus is XX% We're million quarter. franchise. with XX% of we the company, talk I and X am start of that's mix you, core keeping believe pace, DDA, strengths my and attractive [ph] it's XX% total core Lynn. a also while $XXX grew the going

the Another assets. key the year. But in our loan and was quarter, medium saw Adjusted to of really prospects XX And is a long strong our growth loan sale, expansion have The we X.X% this on the nice our about seen strongest a we look remix piece driven about the and opportunity C&I C&I for by some X loan portfolio had with be Reliant we our which we will commercial annualized. are talk rest deal loan some related optimistic and construction. at the granular. margin can growth and next page time The in portfolio. pages. for very page Reliant culture heavy, nice term strategy to the of we On at very diversified growth

in with And QX pass help this some came Reliant. from some to of

ratio expected Our to ratio On as XX, page from deal deposit to the with of came and from along moved to wellness capital a to group. from peer are should asset riding XX% time. help loan to in our over to XX% close ratios XX%. the beginning moved our And all ratio X% our our trend now as assets with XX%, our we moved XX%, Reliant that profitability cash

tangible per a were decrease share Our down corresponding book the sharply in OCI. with and environment and higher TCE rate

our There to specifically, of Given quarter, we billion maturity XX%. to a do million a moved to buybacks ratio, place. the maturity authorization flexibility dollars a $XX from securities and have to quarter, the to held were our we to deposit balance no loan but held sheet securities portfolio in XX% with of total this the moved the in classification low about

net spread Moving interest to page XX, margin quarter. we this story our have and a good in income

too Our fees do came points from about to net basis rates. but basis the into higher the other and significantly could Of numbers, core was sensitivity margin in PPP points. mix cash Reliant and XX but and improvements, interest higher excess net asset of from came excluding we X with XX the points, putting We up the margin up accretion, higher expansion, along margin our rates. in change basis XX from Q&A, basis XX interest blending another loan core margin work was points talk benefit

hikes, expected hard our well believe deposit high of loan the and rate are we and With quality we But as of as anyone higher our the low cash, estimate speed ratio, our it's and of base, deposit to given level positioned deposit rates. size the to energy for betas.

the by was the take page gain fee million closer numbers that a On page, XX, $X.X MSR next quarter-to-quarter. income, in And $X.X $X.X we and offset million was a losses. look was and million coming at by Reliant up securities in benefited

as increased as gain both offset million was X% percentage mortgage gain Excluding volume, Reliant, decrease quarters $X.X the we pre-pandemic million moved up a $XXX lock QX. locks And a back by MSR moved had in sale this on down levels. in in to and the on to quarter, gains even in sale, was

purchase Our to mix refi was purchase, XX% XX% refi.

was from November. in our fourth was quarter, down estimate, service with income the about which Reliant, in charge $X when our schedules line put fee in we million Excluding new

story, absolute to time. XX, is the we Reliant on efficiency good first a Next the operating came for hard in improved as page the quarter expenses numbers into It's our which to XX%. exactly. of course to components basis being getting impact expenses benefited out of tease an versus But Aquesta UCBI on the to QX down savings. the due million, from the full partially cost by legacy about $X we

ago, X us little to is quarter $X savings, net we of which credit is which happening the million month. of million, good this with about Page XX, quality, another cost or the basis a We also more had regards charge-off annualized. million to $X $X.X half leaves of conversion loans as later got with with points Reliant

Of $XX On economic of Dip, PCD improving remained have $XX.X due charge-offs, from provision, While we our had about Accruing $XX.X going million. finally, loan trends Mention increased to Loans, We Reliant in is in marks million worse by higher. the NPA model. on with $X a good page, XX, had XX. million came just see credit page XXXX. and next a the into page of slightly million we along our $XX Substandard optimistic forecast provision, mostly loss million we And generally remaining was net and reserves $X.X you Double and this the Reliant the Special but CECL

the said, encouraged are we XX improvement moved and that of from pass in and and the it You charge-offs. and forward provisioning was All reserve of Reliant X.XX% can the efficiency with core the look see XXXX. benefit that net to by the of rest the expansion of movement back Lynn. margin loans in strong that, loan excess to points basis growth I'll to with our And

Lynn Harton

In Jefferson. in for two closing, team this recognize customer you, received we I'd to Thank awards the that United outstanding listening satisfaction is quarter. like

Power. J.D. from is first The

the now to of overall and an year J.D. for This satisfaction were last in in Power is and time once retail which study, banking. named winner trust, customers people, years, southeast we and and marks complaints. they annual want, accomplishment. bank as measure how saving or This factors, resolving when across eight account channels, quarter, the money, customer redesigned digital satisfaction problems seven offerings, nine This quite again their allowing the

for this Our all of customer couldn't And set delivering to manner. for the satisfaction teams across continue the I measures. be in bar proud these team more

in across ranked the XX based were customer This banks, top Of data a Forbes. and the the United list, compiled firm, third, a is by south-eastern the the This satisfaction according with ranked research world's Statista, to US, regional top we in banks was XX on presence. also quarter, globe. bank of in largely best which countries market ranked the banks

and For long one important of business business success, value. any most the is term of customer satisfaction drivers shareholder

living for many making a to and now for difference like team to our our I'd line the So open our for thanks vision United questions. customers.

Operator

you. Thank

Demba [Operator go comes now from Please begin the question. session. from We Jennifer first question-and-answer your question our And today Truist. Instructions] with ahead will

Jennifer Demba

morning. I questions. two Good you. have Thank

markets margin of were go? hikes the easier First, the wondering expecting much think significant question what net conference? you is, year, major Thanks. am kind discussion interest topics a Jefferson, and of rate leadership And where the given I this at the focus could

Jefferson Harralson

the haven't that, that hikes that really here first basis you, first points time a all. All for moved have of beta so [ph] part in sensitivity if X one, non-deposit showed And rate and I it's XX we in the from deck, mean, this the for rates analysis - our XXXX. - believe maturity of – right, it it's our first some so I I'll at The [ph] H with shows we XX% beta. you it experience in in take

margin So what is And forecast get good basis than what $XX up I - expansion have, helps prepared that's also of X think – I million. And can it's - of in But first one. looks that's beta. pretty - plus a XXX more the and like, the what it's as from like $XX I think we - XXX mentioned again, points up a we what remarks, there deposit by easy us not looks million. to forecast then

Lynn Harton

So take thing… you may the leadership

Jefferson Harralson

Yes…

Lynn Harton

It yeah, better it I So, off to know, wanted and great become leadership make you to about so question. with - it's a how kicked really it leader.

world is people think needed We talk thinking the interact fintech We the had a people also interested the about come thinks of Tom We in led board, at to come what and we in focus fintech. both talk knowing service. of things if the board down better. leaders what going How time, What's What then difference, how So and we felt had think better. get in sustain away about? great - I to industry banking in TTV come with [ph] find better in companies J.D. do lot about economic United on. do, a understand And to one Tom our we with Chick-fil-A it's future the satisfaction by lot with does walked views we We our we will what's had the QX Fed, culture up board in finished on to so Obviously had how that studies everybody what what a to we Barkin need on what like that. always about and the had the of break Richmond the be industry. Power fintech? about, about then an CEO panel to a to needle, they make world they United, do. that to about [ph] Fed a We be best should banks? moves had His and talk and panel a are come at Brown

Jefferson Harralson

get the up. happen very seem year, in that only my Everybody the fired I'll partial numbers middle this want impacts. Those rate hikes just And And annual throw extent last amount the Yeah. year. the into of you question. to are of

not next course. are those impacts So XX of month quarterly,

Jennifer Demba

you. Thank Right.

Operator

Sandler. question Please Brad Milsaps from your question. Piper of proceed with next comes Our

Brad Milsaps

morning. good Hey,

Lynn Harton

to you. morning Good

Brad Milsaps

Obviously, lot to parts. were X.X% you with $X want expenses. control at had maths some - the start great at maybe in that's number of the standalone, only were know, if UCBI a XXXX, it given to expenses year-over-year. Jefferson, balance over moving want $X that of out sustainable my means million invest. guys guys Do you the right, there, you up that's seems million expenses, down quarter, expense If a maybe pressure think inflationary you way

together. your about, at a was Just know, mortgage target? the I rate? of you save get sense how thinking kind combined how of know, didn't the run the up. out wanted I help And expense hopefully, But I how expense those part there wonder have those to then segment numbers you sort showed I guess of netted numbers can you're they it secondly, RBNC bit? can - now, – me are in of maybe see a little just you quite maybe in you

Jefferson Harralson

is That a great question.

start Reliant Rich well. I'll mortgage that. and can that maybe the with chip on And can in as So go with I

We a XXX basis. out bad start battling on is There off to that run of core is not growth case-by-case a the expect rate. rate pressures we're do So inflationary run that there with.

going to QX. So we quarterly we I that do mentioned Again, $X.X of in of be prepared savings that to million $X as million is in cost off it fully [ph] have – expect will that get the remarks, number.

the is conversion. weekend have We coming up this

if this partially get quarter we So a of that. will big piece through

rate. because on So if offsets core the growth have for the in think maybe nice that some that we XXX, a I XXX and term quarter XXX, put low growth you're growth the you off cost we savings at near have second the right because some of

JV talk are the the X% of So it's in JV, owner expenses. The - of would JV. with that's I about as the start how as it's I'll wind mode. down XX, now we February and

net gives are Now, the opportunity numbers to are I us. to know zero the not still that if the our they have you that they add what And Rich or But more numbers. on in on income. And significant. don't net

Rich Bradshaw

they opportunity, production. Sure. million that are mortgage added opportunity the Well, better. to programs we excited we're And and to We to very little we that's Nashville. bit our so expecting excited grow about about as they $XX MLOs. a understand do, a mortgage retail XX offer we're month that add we'll now a little about than more bit - adding the And in that. And We're continue look to in right that.

Brad Milsaps

bonds? the very Jefferson, you and you. question as And about maybe XXXX just your any in to then for you excess of between plan how changes the you final great. Thank through can loans Okay, That's move deploy, of talk me. know, remainder helpful. you pace maybe liquidity

Jefferson Harralson

you. Thank a is too. That question, great

first I purchases been you see see to with We in that see now growth seeing continue second the I this acceleration you're accelerated have quarter. in have going to securities do quarter, an we higher, slowdown we rates think the to that in - with are higher going - remix. our rates and deposit in this expect we've would

that I think to securities see I So this we've year. higher you're little And margin a for happen asset bit going remix the going the waiting this at pace think, you're or push at - higher. and to a purchases throughout see been

Brad Milsaps

you, guys. Thank Great.

Operator

Our with KBW. comes question. go your from Catherine next question of Please Mealor ahead

Catherine Mealor

[indiscernible] in X XX include the conversation. just that that the or Jefferson that's Thanks. type, sheet? balance balance Good that sheet basis more of is A follow per is the looking remix morning. points at kind margin the up on does

Jefferson Harralson

[ph] Right. rates That is only.

some million million. $XX where through there from we're at this was not also coming Reliant off we put you $XX million - But is accretions added remix to of rolling had $XX my quarter expect We been. low, accretion accretion. if amount than $X now that. remix. So unusually mind million which base, in an end I in last we've would or improvement quarter loan of core. the The higher of particularly expect had our was anyway a the

think that has little as I to bit margin a the well. probably So [ph] GAAP

to answer change, the we as expect rate the - more change is your more the simply for mix So question succinctly, four well.

Catherine Mealor

last as said yield well? mean, that million you about that should case accretable was that's think quarter million be I $X.X still to Reliant quarter. the Is just I that $X a –

Jefferson Harralson

Reliant, but expect forecast That would at that couple that higher the least. be excluding - be I in that upcoming Reliant quarters to believe

Catherine Mealor

it. Got

Okay. Got it.

Reliant yield loan mostly on then Obviously, the acquisition. loan the was increase And a Okay. from yield. in

quickly then And fixed average question that in you on how - grow as so where – have one of you've forward, that is, [indiscernible] and pressure about what portfolios, is as is I to loans relative that level the maybe downward Navitas. I've we – about got kind new new production so housing your are thought growth with loan some that in repricing? where guess, of to the or question yielding coming moves moving loan think is, is one on still that rate always thing higher two And like some opportunity kind

as much how through plays well? in yielding into of do half millennials of portfolios the upside the your [ph] you of And so think back growth the higher year

Jefferson Harralson

start right, far maybe All question going I we're don't this loan don't in they've with on? up? you Rich you're coming if And know I'm what as moved question. Do share great bit. little to at as committee here. to looking a seeing? how yields I new know want

Rich Bradshaw

way are our they clients flattening. looking certainly, rate. moved would what I answer you That would know that's be I would say but we're fixed hear - more to they starting And, say Sure. expect to And for and feel. the be that. wouldn't. I'd they haven't we up,

Jefferson Harralson

So with point benefit, the XX hikes of hike the those. are rate XX%. then get portfolio, in basis that three now, four we point XX% moves XX% that hikes floating existing three up rate a so And we rate we'll to on see basis loans variable get full if have XX four then our and to you'll that to [ph]

where by moved yet, a has yields is, agree that you've moved, would haven't you general But will a spreads seen you time, rates just what I loan say treasury Would see over to have I to increase given pricing think, curves. good curve loan in that? the their just banks would I So happen up the expect over increasing. lot with

Rich Bradshaw

I agree that Jefferson. with

Catherine Mealor

into then And that… higher yielding is remix loans,

Rich Bradshaw

So step Rob might in here.

Rob Edwards

Well, I've in change But just also of also grow. we've did is Navitas. said, then us. there's And growth, from new that this And expected quarter, great to first loan had no housing, manufactured they growth. loan course, in

both just higher those of help they so loan as you yields. And portfolios, would expect have –

that. And we benefit from so would

Rich Bradshaw

is teaming professionals how that do this the see the But the and to scale in opportunity. And conservative of we in one do already are doing can do we're midst see we we're Catherine, manner. going and we risk, some with Rich, manufactured it housing right our putting And things of together a up non- Navitas that's now. of or to is what

Rob Edwards

we one [ph] here, ALCO basis just more And and yield key from to up was points Catherine, February. new XX into saw renewed the just and looked March our deck as that we add status

Catherine Mealor

Appreciate for Thanks Great, all it. okay. color. Awesome. the

Operator

with next comes question. Raymond your James. Michael go Rose ahead Our from Please question of

Michael Rose

guys. morning, Good Hey.

circle growth. to to long back wanted Just

PPP, if Reliant quarter, annualized, I looks last year. about this think for it And X% you growth it exclude its like this expectations line know, have X.X. quarter, So and about still said extra you I guys

expect puts and you're and looks at rate a tracking of kind we year? higher So to the outlook of of that above What like that. kind the the should are versus takes growth that end it of Thanks,

Rich Bradshaw

Yeah, is expecting QX Hi, Michael. like Rich. I'm This to look really QX.

pipelines So balanced. a saw quarter. very, little be This more The past going geographies quarter very strong bit the growth. our similar we into

until actually top and Sometimes position two we head-to-head last the competing lumpy, quarter. the of three it's had geographies weeks for

C&I solid hiring and we side. - So we this mentioned some on the earlier too, quarter. was saw performance And as it are

on area, we've last are seen having middle good market pickup some that's the We the in months. where significant really discussions and XX

In out franchise team addition, a well. on SBA the would to build at loan we this the C&I and you we've and just be side, do so sizes as know, than leader Navitas greater conventional that's hired

in excited be see, So we to markets. about we're continue we what great

Michael Rose

selling looks Great. quarter, then guys a last you was million million loans, about XX. like Navitas about $XX talked you it $XX little over to it And know, quarter, a

You know, XX higher bit little should to quarter we about good? Is XX bulk the how that should through that? year, this think about a the we range move think Or a of range? we still of as

Rich Bradshaw

Thanks question. for that

minus think million, plus or the $XX I target. is five - is our

be as could it So as low XX.

there likely most around right XX. is I think

Michael Rose

Okay, great. taking Thanks for my questions.

Rich Bradshaw

you. Thank

Operator

comes question Inc. of next question. your from with Stephens Brody proceed Our Please Preston

Brody Preston

everyone. Hey. Good morning,

Lynn Harton

Hey, Brody.

Brody Preston

Hey, just a wanted to I'm I on maybe going – questions guess the for few to I you. on Navitas. the piggyback

pretty I for a gain up nicely. margin came Navitas bit use margin while little on the held SBA think this in the quarter, the sale

And help on should for so, you know, on those papers forward? we of those - of could margins us know, each you maybe about, think each expect going you what

Lynn Harton

the comment Yeah. Navitas with question. I'll Great SBA part on the and Rich start will part.

moving decline X.X% those the quarter. in fixed the to Navitas with Navitas gain of loans, a rate X.X% higher, rates are loans, and from saw loans think sale you of last So they on

year. You how see this if - we the if around we're are it'll towards rates, X.X. pushing increased move up And rest some think we we're successful X.X%. successful, stick through through But are we we of seeing are the I we'll back that go not, can as

X.X, to SBA expect the but Rich I'll it So between for or the for move I next slowly to the comment. in higher two, to quarter pass and somewhere the X.X would

Rich Bradshaw

Sure.

based remember, XXX mortgage. market above QX. with SBA. on I And XXX about secondary you just the on of split year. had the the has from little see bit a we come On our the in feel you XXX gain sale to the We the SBA, down anything on actually we inventory, typical say can remainder results will good good that - a

So off historical you - material It's know that's - highs. not still coming are those change.

still we good the So we And feel feel about pretty our pipeline. about XXX. good

So so SBA the the USDA we good some on we about fine the for feel We rest be products year. solar think we'll USDA and on of do and that.

Lynn Harton

more the seasonality quarter just year. we throughout Typically little a bit with every sell

be So our slowest is sale this - this will SBA our seasonal loan generally. quarter

Brody Preston

Got to switch were? that. you sale related did loans C&I on net was Maybe million a of understand it. all? you Wanted the charges also saw you did you just Thank and why that the sold. for have I Reliant question $XX.X that to in they uptick And and the that at what

Rob Edwards

Okay. it's Hey, Brody, Rob.

typical Just what sale, which market these on at loans we Navitas out the kind not of loans, that see loan of is identified… we were for

Lynn Harton

Reliant…

Rob Edwards

Reliant, the diligence process. we in For due identified sorry, that

decided a in right early so after to And ahead quarter, it was go time study we exit further the those the and credits.

So was that. that

acquisition, on business. basically the On unwinding of of was Out principal credit. the CNI the side, other, a passed in that and the - our it was - away, Seaside charge-offs, created challenge for us the net your on on one what the of the business

Brody Preston

be sorry, earlier Got you it. I down, venture done to that is it. give - of when done Reliant the that mortgage a with? for Understood. timeline if Jefferson, But winding joint the expect if you process you missed in mentioned I'm

Rob Edwards

I go ahead. can,

Jefferson Harralson

we're and be Yeah, for agreement should pass so they should done our done, by February, in part - be six that own, continuing the fund so them their to we that, August. on are months signed so operating

up As piece the Rich came that's part the we, XX the where of joint picked of that mentioned that venture, in. MLO's we retail

establishing so that's our in retail presence then in And that because mortgage interest really both really is expand was - Nashville. and

Brody Preston

it. Got

on the Okay. And just quick. real banking maybe mortgage

we're you So banking. cycle, know, in the down guess, mortgage of phase the - I

you the guess of you cycle sense during I house sort I for all, at did levels could XXXX a so during that you how you, change in And the producers us the up you did, phase had want of And from the percentage you the XXXX? if know, number through of ask give employment basis? to on fluctuate -

Jefferson Harralson

we're attrition. we flexing the answer did through and the now can down I currently you are we tell yes, Right as changed. that is that market uptick doing

still volume application remains Our strong.

balancing I weekly that our monthly And weekly we're it conversations with of those Mike a So Davies, have or and basis. Head Mortgage. on sometimes managing

Brody Preston

Got just two ones had it. And last for you then I real quick.

And, AFS quarter. securities, you you some the all know, book of you the HCM the [ph] bit. into on this help grown moved have a maturity Just quite

You I to run know, around term, book? paid you like to bond mean, credit get know, longer is you bond as how guess, do as with want what know, your just thinking obviously, the you guys, I book. a

improvements a do the once and liquidity going know, as you up So, cash look you driving in dried forward? potential source the side at excess - ROA at look once on of that further funding the the bond book, the and cash has loan growth, you know,

Jefferson Harralson

it about this. like think Definitely, so,

depends or cash zero asset about of start kind a securities, portfolio but to lot sheet in you're $X.X and of bit see quarter to to and ROA. book to and that change, helpful deposit the is shrink, X% to of see the little there, on range, in balance the and and a securities going of securities, to growth mix, So, deposit lot which the be securities end. be see so we you're growth, billion of you're going see that you're margin cash would I loans growth should to going not replace end, X.X From and would it think into now, right year our [ph] by dollars have as move billion going

for way, has time so it invested, on after rapid then continued a So, stables you as deposit I think that of cash in a but replace the to as loan depends growth it until filler as portfolio a a growth, should see securities. securities period of down a

Brody Preston

on Got M&A it. Lynn, And front. the just for maybe then

flywheel XX philosophy and hood know, growth, of want all you I of that months - I you under of? let spin, looking as profitability? is forward translate tangible value to differently, operating You you can of thought that going guess, the So to outside the ask so or understand profitability think book kind I the the see all there into operate have drive the given of sort franchise the type of GAAP investors in any their the you're for capable is terms but analysts I and you we letting think But know, institution for.

Lynn Harton

kind a we letter quality offset trying and we markets fulcrum this certainly annual think the that balance interested of handful to want that that the and is, so only to are I mentioned banks of of in about the that be Brody, is in in. that to shareholders, the that, as Yeah, we're my to really in, we're there's the

in but once mean, M&A gone, we're look the add morning are don't I'm don't we'd companies, I three the it. fine in the November and thinking since so way we've they're in about at interested the to example. for sake mean, they move franchise what like they - to are of invited this term, been needle of terms just Rich's those to And that not companies I M&A the markets would it just do and they're I'll for that just borrow –

not want my the in they're want, and choices we though be otherwise. go execute when to ahead of so market, one those to because that quality we And on the that are going there

the really would sellers these quality what But I their markets sales do. out I I'm processes. so right pace And love absolutely to sellers in decide would. to slaved to high the for

Brody Preston

similar the XQ I similar now for the have is you in basis more I question I Rich. do Rich, be? that. a mentioned basis? in you're based line, loan one XQ guess you - it on percentage $X Thank And a to it. growth right that activity to on seeing guess or to expect you Got for

Rich Bradshaw

basis. to It X% expect I percentage would a around range. be on that still it be

Brody Preston

Awesome. Thank much taking everyone. for you very really questions, it. appreciate I my

Lynn Harton

Thanks, Brody.

Operator

Our next comes Davidson. with question of go D. question. Kevin ahead A. from Fitzsimmons Please your

Kevin Fitzsimmons

been up everyone, credit. just asked my Hey, of already, questions I had most on one follow have

Double Dip was to quarter. Dip, up. the take it a know Double the lumpy reserve I So you CECL quarter chosen And this hitting guys with

you and Jefferson, just be to questions Is now. more Let's really more? prudent, And So X% was can forecast. a X% of reserves. expand? taking given Thanks. ACL how forecast have secondly, look one, just more a model? you build going Number should forward? worse might that environment stay mentioned in here into the choice expect kind to And even on ratio economic that putting something that uncertainty the that. like, that that down then two Or think or right of Was it on grind I the little the would bit that at the we Or subjective?

Rob Edwards

it's Rob. Kevin, hey, So

Moody's the in economic model the Just February. on do Russian the if forecast, did And question the you first start war forecast. we for the late remember, use around

model. So March we from a February different was ended up and the play role using forecast economic did which the model,

And was future. with to a fears model. It bigger inflation so switch of I consumers - in kind Jefferson of of impact consumer expectation his that was spending, think what did combined of of sort the that's in sort referencing on comments a the consumer have

model. the in was there a shift think I So

basically se. that terms the per know, don't we year, have you going low last you In as year. were of a at had forward, zero we have, basis know, XXX, do have points this X target, charge-offs, But we

expect would continued role. we - low play charge-off a So year, which environment this low charge

two other So the in forecast be loan in change the the and model another would items the growth.

Kevin Fitzsimmons

That's just Rob. Thanks, And quick, Okay. quick a up. helpful. follow

loan the road any at looking potentially there out know, the given potential know, of you're the you other closer. environment, - concerns down - inflationary portfolio there segments of are recession, portfolio, much You your

loss a have to tends everything time, know, very but I over Navitas, heard. from well doing know, rate that's we've You higher

parts curious, eye keeping you're the I'm of a closer So really on? any just portfolio

Rob Edwards

parts two So of I'll portfolio. as the just identify terms of things, changing in it - just to

losses Navitas in basis So and unusual X points of at that's the first quarter, unexpected. right, for you're came I think

So in off on rate, of our had rate. first year the the in had year and in XXXX, XXXX, first in full they high they points charge basis XX basis point XXs the Navitas

points. to So don't we X basis stay it would that to We don't expect expect begin. it, at expect I

year. to the be And XX portfolio normalize range in do expect more would basis to we something normal. point So XX this much that

The positive feeling about and segment watching closely Care other the actually book. we're portfolio Senior now that more is

XXX positive and there's piece senior it. classified care some loans, is like portfolio come begin You mention out mention know, our special feels million and that portion and classified We've of XXX - of momentum. of the down and kind special seen of million that the they've to

- the quarter an great But The had upgrade. some we not our across improvement for first had overall a see is quarter numbers also in a typically did them. we industry and payoff, there had

were And portfolio. positive on that expecting news continued so we

Kevin Fitzsimmons

Okay, great. Thanks much. very

Rob Edwards

Yeah.

Operator

David Bishop Group. Hovde with your question. Our next Please of question proceed from comes

Lynn Harton

David. Hello,

David Bishop

you? are how Hey, gentlemen. morning, Good

Lynn Harton

Good.

David Bishop

not closer, you just turned the some imply that pandemic, terms of of, in maybe and Hey, cushion, - dead expected entered double that quick liquidity cash, doing a to the numbers, [ph] bit excess beat that on liquidity sort of question, right, a does my would you see that of like to cash, know, that that depending $X.X the where I've like got million me year, is happened what's that if environment, maybe it of rate little bit Jefferson term horse. just short back outlook? give imply a to the [indiscernible] cash given sure and sounds level, the keeping I'm to billion up deposit end that about and of $XXX a and excess trend little just securities with this, make But you you

Jefferson Harralson

growth a it. it That's that to higher. growth deposit exactly of billion where than how deposit be the the on comes could at depends end or growth want It we the little by $X.X target growth, $X.X also the suddenly, the does thinking – might a to imply way end up in the we're see about higher all in reinvestment cash billion. But you And heavier, deposit not year. I'm comes securities that be what

about right. So you're thinking exactly it

David Bishop

then Got you to relative I trends? commercial quarter, quarter terms update this. the inch know usage line any last maybe I I saw just heard terms in pipeline it. don't terms of and in a of if in of what And [ph] mean, out commercial it's

Lynn Harton

the Yes, expecting percentage are last X% how we're David, be you? same fall the as [ph] quarter range. commercial volume in to

really line a terms of didn't no see In change. on material change, usage the side,

David Bishop

Got I That's all it. had.

Operator

turn our conference closing the question-and-answer to Harton now session. for to remarks. would over This any concludes Lynn back like I

Lynn Harton

questions call you again, follow-up interest talking thank Well, the us for joining company. to all the call. your once with and Feel to any in forward you. We additional Great. look you we'll free to appreciate soon. Thank

Operator

Thank has concluded. attending thank And conference you. presentation. The you now for today's

now disconnect. You may

United Community Banks (UCB) 20 Apr 222022 Q1 Earnings call transcript