Earnings call transcript Q2 2023

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Operator

Good morning and welcome to the United Community Banks Second Quarter 2023 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, both are included on the website at ucbi.com.

Copies of the second quarter's earnings release and investor presentation were filed last night on Form 8-K with the SEC, and a replay of this call will be available in the Investor Relations section of the company's website at ucbi.com.

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

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

Lynn Harton

Good call thank today. morning you our and joining for

per $X.XX share, slightly Our operating were earnings quarter. this per $X.XX last down share quarter from

Our the points operating points, pre-tax was X% return down on assets quarter. basis last quarter pre-provision was for XXX basis operating and our XXX modestly from ROA

results. rates particularly of As expected, of level the the and current influencing rate interest our pace increases is

deposit non-interest bearing into While the deposit with for continued see were quarter, accounts from changes did pleased as move mix our growth higher-yielding products. customers we we

basis last X.XX% by from basis yields, cost quarter. to up our earning at net XXX of leaving offset partially the points, was asset our points XXX interest basis a increase This in margin increased deposits for point Our XX quarter.

advances. overall Our continues strong bank be no borrowings position or loan home to short-term federal with liquidity

to Our at providing loan-to-deposit continue borrowing XX%, ratio clients' to ample remained our liquidity serve steady needs.

an continue expand at our team rate to grew lending opportunities opportunities. annualized the are we for to seeing Loans new be of the quarter and X.X% we excited about with hiring

in all top perform with the both well of to for average rates continue economically nationally in XX national the states markets ranking our below Our unemployment states and migration. having

on the economic given the at X.XX% markets, we the economy. our Changes stands caused cautious the loans. now inverted Fed's to forecasting which strength our us model credit and our the build allowance quarter, about with of of Even in yield curve slowing in focus are

past by we've our loans allowance to XX%. the relative Over increased year,

flat dues weakening. of believe increase currently is have our to signs coverage, credit we substandard seeing and loans mentioned several our we widespread special been been not quarters. Past in are for essentially While low prudent reserve have

identified as become and their weaker we seeing rates ability credits inflationary those However, are are and as hurting to recover be costs substandard upgraded. interest

loans non-accrual non-accrual. care already our as substandard, relationships, in identified the one as placed senior this of was Our quarter increased the

On our Bank the the great front, went United brand. we're team an Progress the operating well to franchise. strategic with very be momentum and conversion been addition and under to have outstanding They have excited that

is On deal this National on of Miami, we July having February October with integrated and their South we forward look of XXth year. First scheduled Bank Conversion closed company. Xst, team announced the for on a we fully fantastic to

a We first in be United and brand. Community. to When our represents under our the operating our complete, using it we future franchise and This looks begin branding Seaside month we and our way. think be was will also have of partner one all new banking history excited new to Progress converted both logo. rebranding great positive will as

that, for to our on Jefferson with detail And performance. it turn more I'll

Jefferson Harralson

going I'm to on start and deposits. to eight more you, Lynn go some comments on everyone. and Thank good morning page into my details

annualized. million up As $XXX And our million. and grew or growth $XXX deposits quarter public Lynn we Year-to-date, broker by funds, deposits deposits are the mentioned, customer deposit in excluding up $XXX we X.X% had million or X.X% annualized.

XX% fourth since of see drove our XX did the competition up of quarter beta took to total our second deposits X.XX% points to in that the quarter cumulative deposit price cost We XXXX. increased basis and

some market liquid and dollars also our higher continued reasonably deposit We mix as money CDs in yielding change customers are the saw second accounts. quarter into moving

On moved to another DDA XX% note, XX% percentage graph from XX%. from to percentage and by the deposit represented a of of our conversely the lower This the right. have as base on deposits moved we very CDs granular quarter deposits a as of XX%

portfolio on which quarter. annualized grew grew the the to We similar by our dollars We page loans and turn this XX. we $XXX loan to deposits which million, at in second is X.X% quarter

page XX, loan estate generally also very On our as real we to portfolio layout heavy is commercial less that and diversified compared peers.

Finally page the slice see XX, on at can also housing you our X%. pie of manufactured

with in that transaction recall the will You this XXXX. business Reliance early came

time After of we have originating new that down fit will some the our we time into it, the we loans and after would the said take to we decided it looking have and had and deal, doesn't evaluate business wind business. stopped at model we some

existing over off continue will runs the We servicing time. book while it

to will sheet. of strength XX balance we some where highlight the our page Turning of

loans in ratio deposit was dollars XX% quarter. in flat loan-to-deposit our at similar with First, and growth, the

bottom quarter CETX capital peers. are remain the charts two of they our flat our this and On ratios, XXX and were of our ratios, basis points than TCE higher about

waterfall look value book capital show we deeper at On a page a XX, and we chart. take tangible

ratios increased regulatory Our slightly compared to quarter. peers last above generally as remain and

but points the points on margin XX fell margin XX, the to Moving from quarter. on last basis year-over-year, XX increased page basis

Our higher basis environment cost loan on total up was but are yield put to Xs, rate and deposits the increased new XX points of loans being XX our basis points as high in the X.XX%.

environment increase of XX decrease in came margin deposit points total of the a higher. the deposits moving form basis tougher rates. us cost the the of of rates higher driver main competitive from The was of impact

costs, higher higher cost similar change rates, higher to away five continuation points DDA quarter. of CDs a run which that to from had rate last the this of to we is another markets mix and quarter contributed the money of addition deposit In basis

change change yields by of side offset and on a loan asset more was moving negative than So, the a that benefits deposit and have in positive higher cost we higher deposits. mix mix

Navitas income driven in and loan quarter. SBA up last charges, higher was greater $X.X increase was and gains On sales. page mortgage our service compared an million XX, from fee The by to increase income

of insurance and a commercial did gain the notable corporate We two items sale and business small $X.X million benefits a this quarter. non-recurring also had including have from we a gain $X.X MSR million

$X.X million, The the from improvement came down drivers Expenses at page. on on quarter. the million page XX listed are of $XXX.X last in main

page to the a charge of million we offs credit, million and million Moving cover for the of provision. credit built $XX.X index, forecast XX aside the a $X.X main CRE driver and the the which to was allowance the $X increase in in in decrease loans. increase set to net drove A topic on losses price X.XX% for of

movement basis into loan senior single NPAs XX points increased of in non-accrual. quarter, to a mainly care the due to the

and in XX to or then we typical said, For expect points. third up XX the basis in the and the offs full point to quarter quarter, losses net Navitas Navitas had just That moderate XX basis higher in million than be charge range year. the end fourth for to $X.X in the

back Lynn. pass that, With it to I'll

Lynn Harton

many floor Thank drive to your I'd heart the team United questions. customers. focus you, for And perform thanks and to open now your and Jefferson tremendous to like the and for our

Operator

will session. [Operator begin now the We Instructions] question-and-answer

question Catherine ahead. first Go Our comes from Mealor KBW. of

Catherine Mealor

Thanks. Good morning.

Lynn Harton

morning Good Catherine.

Catherine Mealor

see we'll start the you through on half walk some the I with back us this further over still see margin. for margin just compression do could Thanks. Do Jefferson, think you the of some the your you outlook year? thoughts after thought I'd Or quarter's stabilization? just decline?

Jefferson Harralson

Thanks Catherine.

think my a quarter down five from there. see I with model for modeling or the at near I bottom third the and think for increases you we're margin

Some drivers a seeing the there mix of into through change, change the mix are and little main July. we're June less

hard to it's like stabilizing. So, predict, feels but it

a hard to something there been has tailwind bit First us out pricing request rate that's helps Bank that better little We've less getting with we're again closing that well. National for hike neutral the exception feels got to we're now. Miami, so a as Miami pretty get too, little First as South although But again, The model. of some there,

the the then are mentioned side Xs change we loan new mix asset And get in on earlier I the well. and high as yields that coming

think or there. from bottom I increasing we're So, at near and

Catherine Mealor

Okay, I senior X% a know we've It's a little not the of lot just care a years. couple that been It's past a about loans. can book big over you bit talk on great. the And but book, about book? then only of talked credit,

we deterioration then in the one of And that of well? outlook maybe terms credit credits signs book book your Any other quarter? -- the maybe and trends within broader kind just showing overall of as that are that just book this saw within that like CRE seeing you're Thanks.

Rob Edwards

Yes. Thanks Catherine.

accruing interesting, mentioned been So, that credit on book, that period in relationship some care of had the for did the senior time. non-accrual it's substandard or into move the was

in to And so one the slide, on that's then million the basically We relationship if now $XXX second that showing non-accrual million as you in QX and non-accrual. that's substandard QX. in $XX at look

facilities $XX And non-accrual in that three now million. totaling so there's

of the lot a inflow seeing We're not category. substandard into

at criticized if at two on look down million ago, million So, at or go you to you chart, we're we've the bucket, been now. -- whole you're two $XXX classified $XXX back years million if $XXX years and that

feel not been dozen So, wrestling change, half there's that in the of non-accrual substandard ton and a with relationships there's a we're like space.

that's I think And happen. likely to

$XXX accruing, through are non-accrual those. and work those substandard of to we'll have going you million If of fall into some over

on like corner we a and see we some and and have feel improvement. haven't kind payoff turned see We've portfolio that's properly and identified the the upgrade had So, that an if think the we you some you're a of we the where about process. just just depends coming of lot I what else is that And it are in online market. in asking industry, just

a of across to that one somebody we're kind have but is property, hospital build We the substandard property a street. decided has

that's think we favorable. So,

lucky. you Sometimes get

gain generally, traction. but -- so are traction slower And seeing some some gain and show properties and improvement we're to

So, really and that's three that's our driver portfolio. the senior in the care

around now consistent is question space. performance and general the we're that across favorable portfolio the than seeing second your right So, in care really other senior CRE

Catherine Mealor

you. Thank Great.

CECL of that's to increase would that you kind say reserve, or the directly So, general of this qualitative just tied in kind portfolio factors?

Rob Edwards

yes, -- relates price degree, the driver and are forecasted really business and decline to charge quarter then growth it to it's were for drivers same economic forecast so in degree, forecast the lesser the not loan offs, economic the the in a a -- CECL, CRE investment. as to index but and Well, the the

And and categories. the some the forecast dramatic price investment allowance so index, up of C&I also CRE some in the a the mentioned business what drove expected the Jefferson was change finance equipment of to lesser degree, but

Catherine Mealor

Got it.

color. the for Thank you Great. Okay.

Operator

Companies. Our of Sandler from next Piper comes Stephen ahead. question Go Scouten

Stephen Scouten

Hey, you you bearing the guidance if dig a know as I good deposits cumulative more. on time. everyone. a thinking points think deposit full guess, of might bit basis could five go maybe about down said how I quarter, Jefferson thoughts cycle I but could you little on of back for percentage? and where that non-interest the you're give kind updated floor kind beta the maybe morning, Appreciate the margin into next

Jefferson Harralson

Yes. questions. Great Thanks Stephen.

mentioned, kind On the I of move million that's can what what we're to $XX about. -- currently $XX total beta, into deposit is the think I modeling. we're The thinking range that million

you Now, on the too think going a that is that the -- get asset will continuation beta what's offset that. I of

next So, into continuing rest of you both year. the to and this have year increase

I The DDA that percentage move -- to continue to are down. is modeling think we for

it since we think more there ago, years a down know lower changed I could XXX in be lot DDA XX the I basis basis that with points. much XXX mix then But our points, bank in C&I were I maybe think has much another percentage. then. kind since of

think historically. back to where we were way So, back we're I going don't

close. think you're I getting So,

when it that stabilize. I start that's I rates higher, see percentage stabilize. that to we've to moving going already like you really think to seen you're once DDA feel see start stop

I XXXX it's to back or it's So, think moving XXXX levels modeling it We're I to down, but don't down. going think levels. move

Stephen Scouten

then think could fixed NIM the side, Jefferson. And of that. quarter? makes lot the the bottom in repricing you Yes, that on rate asset a loans, that that the dynamic kind of here third sense, of just is makes conversely Appreciate kind is of the

you do have reprice in numbers any maybe how you? XXXX, And that have will for of fourth sort much of or what book quarter

Jefferson Harralson

in on I but get but is I to it's off how actually off that, X%. much have the have so that, have like but with X.X% off and might coming is around do at of driver coming that a But and look to line coming it. We --

push a putting to In now. variable trying addition, towards on more little we're

Xs on in of is fix the Navitas low So, now. high the the on is mix variable coming and just XXs coming now.

off X. in combination, to I thinking at on certainly can it's fix the was coming by more I and look but going itself. So, X.XX we know at close

Stephen Scouten

plans, continued but a average. hiring over on that's last you probably the term? more of is look out than guys some maybe kind me, next the capital like And thoughts Okay, maybe great. in can as or thing two just for you peers little year longer hold sounds bit me It on you capital the give priorities just

Jefferson Harralson

Yes.

be So, is a kind organic would number a growth with always number been. buybacks. organic It two and one. has be M&A can will there. will the Dividends be of [ph] third distant growth

capital. now. like think So, We serves in that having more like we times us

are a but trading less less amount opportunity get than We bought TCE. and We modest to level than back a buying $XXX,XXX you continuing we're preferred -- on the this we with being because gain back little a our back preferred. of just $XX the put quarter, small $XX and buy it's preferred below that like

that? about there on Rich the part how and the on with you The growth, we other about Should hiring and thinking -- go we're talk hiring. mentioned

Rich Bradshaw

-- to East And since six call, Tennessee. on out Key very about we in and Sure. years the at earnings as brought Nashville. that. it's have a another our last that our This people. is Tennessee super-regional lift leader was did a He XX note in that We're in we President had here State in commercial Rich Kelly important excited

yeses East in gotten out and hiring, have have XX started. commercial XX side lift and other the Tennessee on the between And we

lift So, first our very in excited two we're addition to in outs the quarter.

very actively going moment anything on we're going the selective Don’t at forward. have So, this.

want opportunity we're to Tennessee. but we about think this I excited and real very extremely get right, excited in the

Stephen Scouten

Great. for appreciate color. Really all much Thanks so it. the

Lynn Harton

Thank you, Stephen.

Operator

King question ahead. comes call Brandon of next -- Our our Go Truist. next from

Brandon King

morning. Hey, good

Lynn Harton

morning. Good

Brandon King

I and trend next I quarter wanted and lower Navitas like expected then higher in expecting this about fourth just guidance. -- the seems It that talk were appreciate losses to that So, towards the as this to quarter, moderate and what context year? but to moderate end year? cadence losses the gives the losses could of will that give some what confidence of the us you And -- kind for of quarter

Rob Edwards

is Brandon, this Hey Rob.

of relates time XXXX rate. and that in Just to we you anticipated back, go as it loss a X% if sort Navitas, Navitas purchased we at

in Following that, And they improved had their economic customer two sort things favorability. think happened. upscale moved I One is selection. course, we of some of

improved, last believe one they over years their the just We segment portfolio selection experienced that the XX over continue of experienced four has but last a customer transportation months. half small that and really to they've the in

the haul also those come have a tractor/trailer that When $XX million they business, shipping of look have the revenues identified back -- have they've come on come book cost in where about time loans values long down down and down.

higher pool they've of And -- normal year during so second identified half year. the a that they're going stress the during have than to the in

of really It's being why really and but back they've the small that's the will it size in latter so year. a the And losses contained, portfolio of up anticipated that what's driving it is we really drive half waning small that.

Jefferson Harralson

in add So, and but lower fourth. to the the point just like quarter higher we in XX year, I'll the in for range that it's that going XX be to just third basis

Brandon King

Okay, okay.

with So, going next a of subset and into loans of is normalized this small the rate kind just of kind year? come

Jefferson Harralson

Yes.

Brandon King

on third run what First coming rate then kind And expenses, the online and of back Miami with the quarter of Okay. half expectations year? your are in Jefferson, for

Jefferson Harralson

we able Right. We And of to to be good the expenses, quarter for the down. expenses natural Thanks. were pretty question. that they on the know rate Great had I you are quarter. increases so were us. a pleased saw merit run run rate this offset this

have and XX% growth We've in the think our on expenses have July. be expenses close, I branch mean, thinking years, branches where XX So, the lot network that. close been are First and Miami it. plus or of over a to set are closed to to with number this a we've small end expenses you about that are going we last the about at We're on I of five three people. reviewing rate

of a branches just bit producers, trying What the I a think despite freeze people have quite types to as in bit. not are today and about talk and in more look of mentioned always here now I things successfully we a what management little a Rich where have we're hire expenses we selective up think because people It's chill. or but again. there being we're these it's get at coming than We or going hiring happening we to a hiring XX% great together lot complete bank productivity we'll a a this what call great is and about of enact mentioned elsewhere chills. successfully really hiring the

new less coming see You'll hires through.

come mortgage the we've their rates. On with have side, higher cuts as multiple had there volumes down

we're flattish I are how jump how those of like. growth thinking then But kind And about rate think of they the we're if there we're in with small expenses. others is So, it. types about things thinking can a

as higher. But ratio I'll margin is thing down, efficiency one has our there come efficiency -- mention that our more gone our has

our be to we this of keep that. able Rich efficiency as that range, like grow the growth, going expenses talked in is Being can hires So, mid-single-digit as to the plants move this loans the some some improve about. down of ratio and flat

Brandon King

it. one from month Got June? then Jefferson, me, in the do to the of last you And NIM happen have

Jefferson Harralson

we put non-recurring put June have don't of I run you I it, I sense. annualize try doesn't do it are close rate run now. -- if of very lot so I just but I think you be But it'd where just we're have many times the make rate So, a things these and XX on a that it's margin, mean, -- if on to that. to

close. margin out very bottomed is our think I

Brandon King

Okay. Got it.

Jefferson Harralson

feel for these get It's and in what hard XX that to that and some real take multiply out things is. go really a of times

Brandon King

for Yes. questions. taking Totally Thanks my understand.

Jefferson Harralson

Thanks. right. All

Operator

comes of ahead. Rose Our next Michael Go from Raymond James. question

Michael Rose

is go I back for guys. questions. the of kind to sense with closed. couple base? of you amount run margin yield to expect Thanks Jefferson, total maybe First Can First of Miami you know the out what a accretion what accretable quarters and morning then scheduled on would to my briefly, give the a us good Thanks. just next just for the just now taking Hey Miami over

Jefferson Harralson

to great a That's going question marks final do because we're now.

change numbers mark. final we do you the the could giving I'm So, as

we So, have accretion to of without go Miami, First million through. $XX

expectation marks add First million $XX were of Our going that of another to initial Miami on top the that. was

Miami. third the First mark. have don't the $X through So, of for although that modeling million -- final we again million, that's had that's we before come accretion Currently $X quarter

So, but haven't it's much First really $XX mark in there. it's Miami, tough, -- we announced million that rates that the changed so since stays maybe

But what $XX I'm as change mark. right the to subject million, using for now we to but that is my get forecast is it final

now $XX month in we'll for two. final probably we're likely, the mark or at here So, most I'm currently million get using a that but then

Michael Rose

a perfect. trough. very Okay, of kind the said That's I think margin helpful. nearing And you that was

I core of five I said or quarter. for or you down that's clarify? on third expectation points think want was is basis in, about accretable yield it the without basis correct just the to impact assume all so your a

Jefferson Harralson

for because using close third addition quarter very they're the the So, million. I'm is $X

So, of with, I'm at was for expecting those huge the third numbers $X I the increase million it difference about isn't are but close, but very quarter. thinking super

Michael Rose

just Maybe perfect. it. little Okay, bit. gears Appreciate a switching

$X of is been you with targeted. size the what of $X guys years. you've, target of I kind over kind know active very have billion to is your kind So, billion M&A kind of,

are get at it chatter credit, wanted lot guys there. There's for, a for currency. guys out to anybody are you rate mark's about just actively with pretty but it still prohibitive, as this Obviously, M&A point? are relates loan engaged have interest marks to you Thanks. business do sense M&A a people open You can't but many of and good

Lynn Harton

is So, yes, Michael, this Lynn.

to actively like I feel engaged talking considering we're in selection to terms we So, continuing people would are building of the of say be those people, in selling. I relationships. set

we're So, actual perspective, terms that of in from transactions. active

over are you prices reasons next for happens sellers marks, several is expectation what is really, the are expecting. difficult, much the some quarters, mentioned. My not math The not

see announced, the but that chatter So, hear something year that. personally that deals middle up I part I I maybe don't think about know. next until like getting of would we pick do or don't

Michael Rose

Okay.

an maybe post--. has hiring just So, M&A fill fill like a

Lynn Harton

a is path technology of of our of Yes, been about. excited doing, I'm that's right. quicker to things projects this we've team the which drive lot that. those little on kind opportunity We've the a great we're for than telling some got

Michael Rose

finally hard predict, just Maybe it's to a gains for me. know Navitas SBA Perfect. but up were I the bit. little

of kind loan describe to next quarters? the we what in the in Just be can couple and expect Thanks. environment of sales of terms able here you might

Lynn Harton

Rich about pass talk SBA the I'll and I'll on to the that. So, ones. follow-up we'll on gains Navitas

Rich Bradshaw

loans market timely it's because yesterday. say the little would sold we SBA, And SBA bit The a I Sure. up. was

product. a order staffed one feel I It's that looking because mention good this today of in always wanted people. is call there's of I in the So, fully rare a of lot about countercyclical that. things demand at all, kind first and to And is for of that product which that

up anticipating for will product be But we that about are XX% year. this us that

So, it's really excited about and for us that. we're good been

Lynn Harton

in is a add little seasonally second I'll usually quarter stronger gains. for And SBA bit third that than

I greater regards because to loan production be and So, on flat up with will too the the for would stable. it side. Navitas be No, I SBA XX% seem our the up know, maybe inventory higher to think market don't

relatively that expect to would be I So, flat.

category quarter, fourth I together to third be in seeing. higher would just that So, slightly the seasonality following the we're expect and volumes and

Michael Rose

guys. Thanks for questions my taking

Lynn Harton

you. Thank

Operator

Kevin comes Davidson. from of question Fitzsimmons next D.A. Our

Lynn Harton

Hi, Kevin.

Kevin Fitzsimmons

Hey, housing, start you your good it just comments line something see whether -- that manufactured the that out just curious thinking, everyone. out morning, about is just Maybe of on I'm right in now, a is of or the economy just of combination -- fit or the there would a it thanks. perfect or terms environment be the not economy if in was

Lynn Harton

really of to a enough can that start these size that can it we say and want difference. then of makes for in. Rich Jefferson us be be first, that me meaningful I let any I'll Kevin, jump -- And something and the we with -- and with businesses, would start

they're looked of to but at what they it's which we risk regular and our we doing, consumer-based, competitive. It's team, subprime, know that as like inside market. adds very business, it's it's the time And over

So, million wasn't to want one to billion. said this we want thing, do $X but take really from take this we it from look, any we to $XXX

those it's that, reasons, better I want do probably But just drivers. efforts then to don't were put we don't For -- just to we to you it want if and those else. don't if down know wind that and somewhere so Jefferson, was me the really our to add.

Jefferson Harralson

Well, I'll just very line reasoning MH. the add similar used overlap business, corporate insurance insurance same It customers with into that's we benefits existing healthcare the business. the little of to sell to had our

million In revenue, even $X very, less -- lot it small, a very this was of clients. -- and overlap than not existing was case, so with it of

reasoning to that that look well. use at a smaller similar So, lens. as we'll especially continue our for our business we businesses, And businesses with

really So, an question. to it we saw, problems specific, strategy the it's business just portfolio overall wasn't yes, any or anything

Kevin Fitzsimmons

Reliant, imperative a guys just was you were from that And business it and in correct? was

Lynn Harton

correct. That's

Kevin Fitzsimmons

And so trying you sell just I if will out there's do loans -- a mature actively go stop market? to them? then you do or the don't you know let originating

Jefferson Harralson

plan sell let and or them can to you you but a down. and the of the with the think run there is higher, accelerate mature just down market them is idea let our it currently maybe the moving think just rates then If business, without service a time. over I loss, if I loans rates move to is better exit

Kevin Fitzsimmons

selling very at just that follow-up then some of down some obviously on quick that a debt? rates underwater And of been securities at or you discussion capital great. There's redeploying strong some and paying look Okay, have higher banks could -- guys their

would radar their Is portfolio? Miami that's or dealing you thinking First for really that curious the that of how from I coming acquisition imagine some Just you're that securities in just with the there? on you with all like something every in, get

Jefferson Harralson

Yes.

that do swap looked to we quarter have So, restructuring this half a floating. securities our that rates. and the TCE a that. a duration. to years the at AFS are duration half higher a our and We of such event not and in decision $XXX did and from portfolio idea million of fixed to make book protect And a main to took as was we from We of do going to three years of capital two

anyway did our do AFS and little floating benefit initially we basis shorter benefit a curve. to which it, floating the wasn't moving about from portfolio the end took We by but reason you get get XX% of XX% we XXX points to the

part next So, benefit rates margin $X.XX securities in should do. on the depending yield the of change what this range be is that the with quarter

hike, environment. But mainly a If it and you -- you losses get rates get a rate benefit get and allocation rate risk more you for little did works down, protecting you. rising you TCE from get this if it against we unrealized and a in

Kevin Fitzsimmons

great. Okay, Thanks.

Jefferson Harralson

you. All right. Thank

Operator

Hovde Group. question of Go David from ahead. Bishop The comes next Our

Jefferson Harralson

Hey David.

David Bishop

loan still I the Hey, year? if terms inflationary in back maybe appreciate the with the your have Tennessee Jefferson. of result color impact will mid-single-digit in growth I missed Eastern this. hires outlook? outlook market But there. comfortable you the I that in -- with an know growth the the year, Are that half Does expected this that on Hey, don't of

Rich Bradshaw

both as this think of David, QX tightened is I kind answer move we've Hi, we and looking are To we're like mortgage we your the But I this Rich. clearly, growth. in and look commercial deposit for to -- growth. forward thinking same I QX credit mean, that world. expect criteria question, loan still both mid-single-digit about at loan

I'm just these hoping that realize but go, started. have people can

So, within the last XX days.

Xst on we're results. thinking So, about hitting to that. see But to be it's what going all this to take excited really is for a them going really we're some and is even -- cylinders quarter January

David Bishop

debt does in service But from higher know it, appreciate versions like ability handle And and segment. come rates the base the out, from any these of perspective, pressure understood. from to for color driving. it in mature? as the But maybe on terms look prospects loans surface, office borrower any or as up a your you to look credit change portfolio Got quarter-on-quarter the renewal -- then there's I I

Rob Edwards

Yes. Edwards. Thanks is Rob this David,

analysis We've So, top we've re-amortized through of of and of those on at stress a at actually rates test CRE. special we're several and gone top the at the both XX done of looked some products focuses right house sort variety that at another and CRE new now. one of doing rate sort test fixed

ongoing to these when as an that in of seen payments. change, identifies and so sort make the be people of we're we stress. haven't different from portfolio aren't rates anything The So, angles far to sort going really

test rate are Really looked in time we you the go one analysis, sort think borrowers already after the rates XX borrower was their well most, back but maturing at months as but mention special would the out of turns to rated they have and like we special had we in the I first going fixed because mention. rated were next change it that

we any anything just or downgrading. forecast didn't So, see change need a for a that

David Bishop

it. Got I color. appreciate the

Operator

Our Gunther question next Go comes ahead. from of Stephens. Russell

Russell Gunther

Hey, good guys. morning

couple at point. Just quick follow-ups a of this

could Do a appreciate office topic, I recent the On maturity schedule guys share that for have sector? you you remarks. the that

Lynn Harton

We could create one.

to or get a was we'd a different to back the thinking We on in have Q maturity to maturities ways. -- have the back have maybe. I that, of looked couple I you get was the to K, at Russell. you

Russell Gunther

of just Miami? of progress in side, First any And Okay, guys terms you no color deposit the on can out then in share worries. retention last one,

Lynn Harton

because to a closed, we Rich have a really talk about there. don't this First lot question, Miami So, it's I'll But but so progress. hard pass just

Rich Bradshaw

Sure.

had challenge progress that the the all I we and had this beginning with we a pressure that is at conversion. think

he President news with David positive State and feels conversion this great is very our And so Nast, on the is behind us quarter. there, the talking

strong, had forecasting logo. and anticipating growth we growth so was behind he our conversion the we'll we only quarter, some this is pricing Not new loan to fact have loan that as but he last the us, get the new is quarter first that also -- And and the is have well. strategies with the

there some So, there's excitement as well.

Jefferson Harralson

progress have I what bought been more on detail, give deposits for there exact in numbers since you And that. we can

Russell Gunther

you. asked guys. was Everything it and helpful. Thank That's I else answered. appreciate

Operator

Marinac Christopher ahead. Go from comes Janney. question of last Our

Christopher Marinac

Jefferson, that year the customers relationships? life new north to and expanded? Thanks. kind this just it you of come more, that? have Good than kind value I kind look the morning. of customers is and want for doing of the years? as of it what in existing at deposits Is as franchise Is organization three something recast longer you've of those just average

Jefferson Harralson

that's Wow, thinking that. lot great been a question. We've about a

our [ph] later -- have Alco today think that durations going seen about shortened. we've because we think liability rates what talking have expanded durations asset is have that our have our to risen, I be as that we're and We

usually right? Now, a them, change your the which assume to what is CDs, a stated you you're have from that as seeing duration of product would duration mix towards product DDA longest

competition, mathematical you're then it's mix So, seeing price affecting also you're -- duration, but seeing customers some move change around. the

think still we're half years, four, four duration. on I So, and liability a longer than four our years

each on to as but calculate new -- we the change doing we're durations $X and and And watching on have we're surge math, to we're mix calculate the DDA. we're individual product billion, trying trying

all-in think longer So, talk a to the years, but than are around off-site and going of changes of going on. we a we're our that's that call is think require which different longer assets, to all -- half four about I kind

the doing But deep coming -- our life, up in in sessions that strategic August. planning in in we actually we total, actual customer terms hop into a of in are dive

have don't the share to I with you So, now. numbers

purchased, you look the it's that deposit if base. But at very a stable organizations we've

including years over XXX of I were think here. three bought our we Palmetto organizations old,

bank XX XX years National Miami is is in First Our years old. old,

would look look good the We just so. on way really at got I expect outstanding it it is side. or as customer on a to I -- It's we here focus try deposit to number that -- in those an the month service franchise.

were So, the we XX first quarterly wave, were disappointed this wave, outstanding. lead to say will by J.D. the past waves, pretty Power in points, a do the is they year. in four lose I we Southeast which

this. to employees listening job great So, are to the that

confident with our deposit will. very we're that how base expect I So,

Lynn Harton

But And customers year-over-year our one the ratios I rule we're that about every new of we well look I'll market it. at ahead lose. add lens net of thinking new month our thing new look of every and that customers are at more and net change with how and our

usually some our they've And then just shrinkage that deposits moved you when continuing within into existing other is existing growth non-bank things. that customers. money or are to or maybe It's see the customers treasuries as

adding customer and hasn't a long we're and from very So, changed life customers. standpoint, it's of new a lot

Christopher Marinac

the Good which to and between a just are maybe road? a there Rich, had is you senior question care the senior delineate joint and both I opportunities stuff. of and housing housing Rob Thank senior for follow-up in that down It's just background. kind difference really for quick still helpful.

Rob Edwards

separate think senior we have housing. So, category I for don't a

You're talking Chris? plus, XX about

Christopher Marinac

Exactly, Yes. yes.

Rob Edwards

in think put and I that. category have We have not of a our housing reporting breakout in I'm -- I we two senior the multifamily multifamily sure would

So, and would would listed have in memory -- a the senior care. in Investor include living, as it assisted-living, way care deck we independent

Christopher Marinac

Got it.

Rich Bradshaw

those XX, over limited for product, but probably started to the to on And a it's have see we handful. that

Rob Edwards

say would Yes, less I five. than

Rich Bradshaw

footprint. whole the In

are in interested we So, it, but cautiously.

Rob Edwards

that's Yes, good.

Christopher Marinac

Good Great. it. Thanks stuff. Got again.

Rich Bradshaw

Chris. you, Thank

Operator

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

Lynn Harton

once Well, glad your on give for to call. Be you give rest thanks a a us call Thank that the with great hope us many you have and of anything you. questions. Great being need, day. just follow-up again,

Operator

today's The conference now you is Thank for attending concluded. presentation.

now disconnect. may You

United Community Banks (UCB) 19 Jul 232023 Q2 Earnings call transcript