GREENVILLE, S.C., April 19, 2022 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the first quarter was $48.0 million and pre-tax, pre-provision income was $83.5 million. Diluted earnings per share of $0.43 for the quarter represented a decrease of $0.39 or 48%, from the first quarter of 2021, and represented a decrease of $0.12 or 22% from the fourth quarter of 2021. The quarter was highlighted by strong 9% annualized core loan growth, 7% annualized deposit growth, 16 basis points of net interest margin expansion, a reserve build to 1.02% of loans and an improvement in the efficiency ratio to 57.4%, or 53.1% on an operating basis, which excludes the effect of merger-related and other charges.
A primary driver of the reduced earnings on a GAAP basis relative to prior quarters was a higher credit loss provision, as the acquisition of Reliant in the current quarter necessitated the establishment of an allowance for credit losses, often referred to as a “double dip” under CECL, as well as the wind down of the PPP program that resulted in significantly less fee accretion, which was down $8.7 million year over year. Excluding these items, our operating trends continue to improve with strong pre-tax, pre-provision income for the quarter of $83.5 million which was $17.9 million, or 27% higher, than the fourth quarter of 2021, and $1.9 million, or 2% greater, than the first quarter of 2021.
United’s first quarter return on assets (ROA) was 0.78% and return on common equity was 6.80%. On an operating basis, United’s ROA was 0.89% and its return on tangible common equity was 11.0%. On a pre-tax, pre-provision basis, operating ROA was 1.52% for the quarter.
Total loans increased by $2.6 billion during the quarter including $2.3 billion of loans acquired in the Reliant acquisition. Excluding the effect of PPP and the acquired Reliant loans, core organic loan growth was 9% annualized. Excluding deposits received from the Reliant acquisition, deposits grew by 7% annualized. United’s cost of deposits was flat at 0.06%.
Chairman and CEO Lynn Harton stated, “Core performance measures continue to be strong for the company. Organic loan and deposit growth were excellent. Mortgage production remained strong and comparable to fourth quarter levels and our SBA business also performed well in the quarter.” Harton continued, “From a strategic perspective, we are excited to have completed the acquisition of Reliant on January 1 and are proud to welcome their outstanding team of great bankers to the United franchise. Nashville is a dynamic market and we look forward to the growth and opportunities it will bring for years to come.”
Mr. Harton continued “We have a very positive outlook for 2022 for United, supported by strong business growth across our markets and a balance sheet that is well-positioned for increasing interest rates. Additionally, we believe we have a balanced business mix with a focus on credit quality and risk management that will sustain our performance through economic and business cycles.”
Harton concluded “We are proud to announce we have once again ranked Highest in Customer Satisfaction in Retail Banking in the Southeast in 2022 according to J.D. Power. Our customers have given us this recognition for eight of the last nine years, and the third consecutive year. Service is at the core of our culture and the main focus and mission of our outstanding employees. Congratulations to each of them for this outstanding recognition!”
First Quarter 2022 Financial Highlights:
- Net income of $48.0 million and pre-tax, pre-provision income of $83.5 million
- EPS decreased by 48% compared to last year on a GAAP basis and 40% on an operating basis; compared to fourth quarter 2021, EPS decreased by 22% on both a GAAP and an operating basis
- Return on assets of 0.78%, or 0.89% on an operating basis
- Pre-tax, pre-provision return on assets of 1.37%, or 1.52% on an operating basis
- Return on common equity of 6.80%
- Return on tangible common equity of 11.00% on an operating basis
- A provision for credit losses of $23.1 million, $18.3 million of which was attributable to the establishment of an initial allowance for credit losses for acquired Reliant loans, increased the allowance for credit losses to 1.02% of loans from 0.97% in the fourth quarter
- Net charge-offs of $2.98 million, or 8 basis points as a percentage of average loans, up 7 basis points from the fourth quarter
- Loan production of $1.3 billion, resulting in annualized core loan growth of 9%, for the quarter, excluding the sale of $45.6 million in Reliant loans classified as held for sale on the acquisition date
- Core transaction deposits, excluding Reliant, were up $478 million, which represents a 13% annualized growth rate for the quarter
- Net interest margin of 2.97% was up 16 basis points from the fourth quarter, mainly due to the impact of the Reliant acquisition and the deployment of cash into securities
- Mortgage closings of $462 million and mortgage rate locks of $757 million, compared to $666 million and $993 million, respectively, a year ago
- Noninterest income was up $1.8 million on a linked quarter basis, primarily driven by a $6.4 million increase in the MSR valuation in the first quarter compared with a $775,000 increase in the fourth quarter
- Noninterest expenses increased by $10.1 million compared to the fourth quarter, mostly due to an increase in salaries and employee benefits related to the acquisition of Reliant
- Efficiency ratio of 57.4%, or 53.1% on an operating basis
- Nonperforming assets of 0.17% of total assets, an increase of 0.01% from December 31, 2021
- Quarterly common shareholder dividend of $0.21 per share declared during the quarter, an increase of 11% year-over-year
Conference Call
United will hold a conference call on Wednesday, April 20, 2022, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10165183/f22437931b. Those without internet access or who are unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||||||||||
| Selected Financial Information | |||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| 2022 | 2021 | First Quarter 2022 - 2021 Change | |||||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||
| INCOME SUMMARY | |||||||||||||||||||||||
| Interest revenue | $ | 171,059 | $ | 143,768 | $ | 147,675 | $ | 145,809 | $ | 141,542 | |||||||||||||
| Interest expense | 7,267 | 6,213 | 6,636 | 7,433 | 9,478 | ||||||||||||||||||
| Net interest revenue | 163,792 | 137,555 | 141,039 | 138,376 | 132,064 | 24 | % | ||||||||||||||||
| Provision for (release of) credit losses | 23,086 | (647 | ) | (11,034 | ) | (13,588 | ) | (12,281 | ) | ||||||||||||||
| Noninterest income | 38,973 | 37,177 | 40,095 | 35,841 | 44,705 | (13 | ) | ||||||||||||||||
| Total revenue | 179,679 | 175,379 | 192,168 | 187,805 | 189,050 | (5 | ) | ||||||||||||||||
| Noninterest expenses | 119,275 | 109,156 | 96,749 | 95,540 | 95,194 | 25 | |||||||||||||||||
| Income before income tax expense | 60,404 | 66,223 | 95,419 | 92,265 | 93,856 | (36 | ) | ||||||||||||||||
| Income tax expense | 12,385 | 14,204 | 21,603 | 22,005 | 20,150 | (39 | ) | ||||||||||||||||
| Net income | 48,019 | 52,019 | 73,816 | 70,260 | 73,706 | (35 | ) | ||||||||||||||||
| Merger-related and other charges | 9,016 | 9,912 | 1,437 | 1,078 | 1,543 | ||||||||||||||||||
| Income tax benefit of merger-related and other charges | (1,963 | ) | (2,265 | ) | (328 | ) | (246 | ) | (335 | ) | |||||||||||||
| Net income - operating (1) | $ | 55,072 | $ | 59,666 | $ | 74,925 | $ | 71,092 | $ | 74,914 | (26 | ) | |||||||||||
| Pre-tax pre-provision income (5) | $ | 83,490 | $ | 65,576 | $ | 84,385 | $ | 78,677 | $ | 81,575 | 2 | ||||||||||||
| PERFORMANCE MEASURES | |||||||||||||||||||||||
| Per common share: | |||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.43 | $ | 0.55 | $ | 0.82 | $ | 0.78 | $ | 0.82 | (48 | ) | |||||||||||
| Diluted net income - operating (1) | 0.50 | 0.64 | 0.83 | 0.79 | 0.83 | (40 | ) | ||||||||||||||||
| Cash dividends declared | 0.21 | 0.20 | 0.20 | 0.19 | 0.19 | 11 | |||||||||||||||||
| Book value | 24.38 | 23.63 | 23.25 | 22.81 | 22.15 | 10 | |||||||||||||||||
| Tangible book value (3) | 17.08 | 18.42 | 18.68 | 18.49 | 17.83 | (4 | ) | ||||||||||||||||
| Key performance ratios: | |||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 6.80 | % | 9.32 | % | 14.26 | % | 14.08 | % | 15.37 | % | |||||||||||||
| Return on common equity - operating (1)(2)(4) | 7.83 | 10.74 | 14.48 | 14.25 | 15.63 | ||||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 11.00 | 13.93 | 18.23 | 17.81 | 19.68 | ||||||||||||||||||
| Return on assets - GAAP (4) | 0.78 | 0.96 | 1.48 | 1.46 | 1.62 | ||||||||||||||||||
| Return on assets - operating (1)(4) | 0.89 | 1.10 | 1.50 | 1.48 | 1.65 | ||||||||||||||||||
| Return on assets - pre-tax pre-provision (4)(5) | 1.37 | 1.21 | 1.70 | 1.64 | 1.80 | ||||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger- related and other charges (1)(4)(5) | 1.52 | 1.40 | 1.73 | 1.67 | 1.83 | ||||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 2.97 | 2.81 | 3.12 | 3.19 | 3.22 | ||||||||||||||||||
| Efficiency ratio - GAAP | 57.43 | 62.12 | 53.11 | 54.53 | 53.55 | ||||||||||||||||||
| Efficiency ratio - operating (1) | 53.09 | 56.48 | 52.33 | 53.92 | 52.68 | ||||||||||||||||||
| Equity to total assets | 11.06 | 10.61 | 10.89 | 11.04 | 10.95 | ||||||||||||||||||
| Tangible common equity to tangible assets (3) | 7.72 | 8.09 | 8.53 | 8.71 | 8.57 | ||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||||
| Nonperforming assets ("NPAs") | 40,816 | 32,855 | 45,335 | 46,347 | 56,496 | (28 | ) | ||||||||||||||||
| Allowance for credit losses - loans | 132,805 | 102,532 | 99,620 | 111,616 | 126,866 | 5 | |||||||||||||||||
| Allowance for credit losses - total | 146,369 | 113,524 | 110,875 | 122,460 | 135,592 | ||||||||||||||||||
| Net charge-offs | 2,978 | 248 | 551 | (456 | ) | (305 | ) | ||||||||||||||||
| Allowance for credit losses - loans to loans | 0.93 | % | 0.87 | % | 0.89 | % | 0.98 | % | 1.09 | % | |||||||||||||
| Allowance for credit losses - total to loans | 1.02 | 0.97 | 0.99 | 1.08 | 1.16 | ||||||||||||||||||
| Net charge-offs to average loans (4) | 0.08 | 0.01 | 0.02 | (0.02 | ) | (0.01 | ) | ||||||||||||||||
| NPAs to total assets | 0.17 | 0.16 | 0.23 | 0.25 | 0.30 | ||||||||||||||||||
| AT PERIOD END ($ in millions) | |||||||||||||||||||||||
| Loans | $ | 14,316 | $ | 11,760 | $ | 11,191 | $ | 11,391 | $ | 11,679 | 23 | ||||||||||||
| Investment securities | 6,410 | 5,653 | 5,335 | 4,928 | 4,332 | 48 | |||||||||||||||||
| Total assets | 24,374 | 20,947 | 19,481 | 18,896 | 18,557 | 31 | |||||||||||||||||
| Deposits | 21,056 | 18,241 | 16,865 | 16,328 | 15,993 | 32 | |||||||||||||||||
| Shareholders’ equity | 2,695 | 2,222 | 2,122 | 2,086 | 2,031 | 33 | |||||||||||||||||
| Common shares outstanding (thousands) | 106,025 | 89,350 | 86,559 | 86,665 | 86,777 | 22 | |||||||||||||||||
(1) Excludes merger-related and other charges. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||
| Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||
| Noninterest expense reconciliation | ||||||||||||||||||||
| Noninterest expenses (GAAP) | $ | 119,275 | $ | 109,156 | $ | 96,749 | $ | 95,540 | $ | 95,194 | ||||||||||
| Merger-related and other charges | (9,016 | ) | (9,912 | ) | (1,437 | ) | (1,078 | ) | (1,543 | ) | ||||||||||
| Noninterest expenses - operating | $ | 110,259 | $ | 99,244 | $ | 95,312 | $ | 94,462 | $ | 93,651 | ||||||||||
| Net income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 48,019 | $ | 52,019 | $ | 73,816 | $ | 70,260 | $ | 73,706 | ||||||||||
| Merger-related and other charges | 9,016 | 9,912 | 1,437 | 1,078 | 1,543 | |||||||||||||||
| Income tax benefit of merger-related and other charges | (1,963 | ) | (2,265 | ) | (328 | ) | (246 | ) | (335 | ) | ||||||||||
| Net income - operating | $ | 55,072 | $ | 59,666 | $ | 74,925 | $ | 71,092 | $ | 74,914 | ||||||||||
| Net income to pre-tax pre-provision income reconciliation | ||||||||||||||||||||
| Net income (GAAP) | $ | 48,019 | $ | 52,019 | $ | 73,816 | $ | 70,260 | $ | 73,706 | ||||||||||
| Income tax expense | 12,385 | 14,204 | 21,603 | 22,005 | 20,150 | |||||||||||||||
| Provision for (release of) credit losses | 23,086 | (647 | ) | (11,034 | ) | (13,588 | ) | (12,281 | ) | |||||||||||
| Pre-tax pre-provision income | $ | 83,490 | $ | 65,576 | $ | 84,385 | $ | 78,677 | $ | 81,575 | ||||||||||
| Diluted income per common share reconciliation | ||||||||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.43 | $ | 0.55 | $ | 0.82 | $ | 0.78 | $ | 0.82 | ||||||||||
| Merger-related and other charges, net of tax | 0.07 | 0.09 | 0.01 | 0.01 | 0.01 | |||||||||||||||
| Diluted income per common share - operating | $ | 0.50 | $ | 0.64 | $ | 0.83 | $ | 0.79 | $ | 0.83 | ||||||||||
| Book value per common share reconciliation | ||||||||||||||||||||
| Book value per common share (GAAP) | $ | 24.38 | $ | 23.63 | $ | 23.25 | $ | 22.81 | $ | 22.15 | ||||||||||
| Effect of goodwill and other intangibles | (7.30 | ) | (5.21 | ) | (4.57 | ) | (4.32 | ) | (4.32 | ) | ||||||||||
| Tangible book value per common share | $ | 17.08 | $ | 18.42 | $ | 18.68 | $ | 18.49 | $ | 17.83 | ||||||||||
| Return on tangible common equity reconciliation | ||||||||||||||||||||
| Return on common equity (GAAP) | 6.80 | % | 9.32 | % | 14.26 | % | 14.08 | % | 15.37 | % | ||||||||||
| Merger-related and other charges, net of tax | 1.03 | 1.42 | 0.22 | 0.17 | 0.26 | |||||||||||||||
| Return on common equity - operating | 7.83 | 10.74 | 14.48 | 14.25 | 15.63 | |||||||||||||||
| Effect of goodwill and other intangibles | 3.17 | 3.19 | 3.75 | 3.56 | 4.05 | |||||||||||||||
| Return on tangible common equity - operating | 11.00 | % | 13.93 | % | 18.23 | % | 17.81 | % | 19.68 | % | ||||||||||
| Return on assets reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.78 | % | 0.96 | % | 1.48 | % | 1.46 | % | 1.62 | % | ||||||||||
| Merger-related and other charges, net of tax | 0.11 | 0.14 | 0.02 | 0.02 | 0.03 | |||||||||||||||
| Return on assets - operating | 0.89 | % | 1.10 | % | 1.50 | % | 1.48 | % | 1.65 | % | ||||||||||
| Return on assets to return on assets- pre-tax pre-provision reconciliation | ||||||||||||||||||||
| Return on assets (GAAP) | 0.78 | % | 0.96 | % | 1.48 | % | 1.46 | % | 1.62 | % | ||||||||||
| Income tax expense | 0.20 | 0.26 | 0.45 | 0.47 | 0.46 | |||||||||||||||
| (Release of) provision for credit losses | 0.39 | (0.01 | ) | (0.23 | ) | (0.29 | ) | (0.28 | ) | |||||||||||
| Return on assets - pre-tax, pre-provision | 1.37 | 1.21 | 1.70 | 1.64 | 1.80 | |||||||||||||||
| Merger-related and other charges | 0.15 | 0.19 | 0.03 | 0.03 | 0.03 | |||||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges | 1.52 | % | 1.40 | % | 1.73 | % | 1.67 | % | 1.83 | % | ||||||||||
| Efficiency ratio reconciliation | ||||||||||||||||||||
| Efficiency ratio (GAAP) | 57.43 | % | 62.12 | % | 53.11 | % | 54.53 | % | 53.55 | % | ||||||||||
| Merger-related and other charges | (4.34 | ) | (5.64 | ) | (0.78 | ) | (0.61 | ) | (0.87 | ) | ||||||||||
| Efficiency ratio - operating | 53.09 | % | 56.48 | % | 52.33 | % | 53.92 | % | 52.68 | % | ||||||||||
| Tangible common equity to tangible assets reconciliation | ||||||||||||||||||||
| Equity to total assets (GAAP) | 11.06 | % | 10.61 | % | 10.89 | % | 11.04 | % | 10.95 | % | ||||||||||
| Effect of goodwill and other intangibles | (2.94 | ) | (2.06 | ) | (1.87 | ) | (1.82 | ) | (1.86 | ) | ||||||||||
| Effect of preferred equity | (0.40 | ) | (0.46 | ) | (0.49 | ) | (0.51 | ) | (0.52 | ) | ||||||||||
| Tangible common equity to tangible assets | 7.72 | % | 8.09 | % | 8.53 | % | 8.71 | % | 8.57 | % | ||||||||||
| Allowance for credit losses - loans to loans reconciliation | ||||||||||||||||||||
| Allowance for credit losses - loans to loans (GAAP) | 1.02 | % | 0.97 | % | 0.99 | % | 1.08 | % | 1.16 | % | ||||||||||
| Effect of PPP loans | — | — | 0.01 | 0.04 | 0.10 | |||||||||||||||
| Allowance for credit losses - loans to loans, excluding PPP loans | 1.02 | % | 0.97 | % | 1.00 | % | 1.12 | % | 1.26 | % | ||||||||||
| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| Loan Portfolio Composition at Period-End | ||||||||||||||||||||||
| 2022 | 2021 | Linked Quarter Change | Year over Year Change | |||||||||||||||||||
| (in millions) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||
| LOANS BY CATEGORY | ||||||||||||||||||||||
| Owner occupied commercial RE | $ | 2,638 | $ | 2,322 | $ | 2,149 | $ | 2,149 | $ | 2,107 | $ | 316 | $ | 531 | ||||||||
| Income producing commercial RE | 3,328 | 2,601 | 2,542 | 2,550 | 2,599 | 727 | 729 | |||||||||||||||
| Commercial & industrial | 2,302 | 1,822 | 1,729 | 1,762 | 1,760 | 480 | 542 | |||||||||||||||
| Paycheck protection program | 34 | 88 | 150 | 472 | 883 | (54 | ) | (849 | ) | |||||||||||||
| Commercial construction | 1,482 | 1,015 | 947 | 927 | 960 | 467 | 522 | |||||||||||||||
| Equipment financing | 1,148 | 1,083 | 1,017 | 969 | 913 | 65 | 235 | |||||||||||||||
| Total commercial | 10,932 | 8,931 | 8,534 | 8,829 | 9,222 | 2,001 | 1,710 | |||||||||||||||
| Residential mortgage | 1,826 | 1,638 | 1,533 | 1,473 | 1,362 | 188 | 464 | |||||||||||||||
| Home equity lines of credit | 778 | 694 | 661 | 661 | 679 | 84 | 99 | |||||||||||||||
| Residential construction | 368 | 359 | 321 | 289 | 272 | 9 | 96 | |||||||||||||||
| Manufactured housing | 269 | — | — | — | — | 269 | 269 | |||||||||||||||
| Consumer | 143 | 138 | 142 | 139 | 144 | 5 | (1 | ) | ||||||||||||||
| Total loans | $ | 14,316 | $ | 11,760 | $ | 11,191 | $ | 11,391 | $ | 11,679 | $ | 2,556 | $ | 2,637 | ||||||||
| LOANS BY MARKET | ||||||||||||||||||||||
| Georgia | $ | 3,879 | $ | 3,778 | $ | 3,732 | $ | 3,729 | $ | 3,754 | $ | 101 | $ | 125 | ||||||||
| South Carolina | 2,323 | 2,235 | 2,145 | 2,107 | 1,997 | 88 | 326 | |||||||||||||||
| North Carolina | 1,879 | 1,895 | 1,427 | 1,374 | 1,326 | (16 | ) | 553 | ||||||||||||||
| Tennessee | 2,661 | 373 | 383 | 394 | 398 | 2,288 | 2,263 | |||||||||||||||
| Florida | 1,208 | 1,148 | 1,113 | 1,141 | 1,160 | 60 | 48 | |||||||||||||||
| Commercial Banking Solutions | 2,366 | 2,331 | 2,391 | 2,646 | 3,044 | 35 | (678 | ) | ||||||||||||||
| Total loans | $ | 14,316 | $ | 11,760 | $ | 11,191 | $ | 11,391 | $ | 11,679 | $ | 2,556 | $ | 2,637 | ||||||||
| UNITED COMMUNITY BANKS, INC. | |||||||||||||||
| Financial Highlights | |||||||||||||||
| Credit Quality | |||||||||||||||
| (in thousands) | |||||||||||||||
| 2022 | 2021 | ||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | |||||||||||||
| NONACCRUAL LOANS | |||||||||||||||
| Owner occupied RE | $ | 4,590 | $ | 2,714 | $ | 4,945 | |||||||||
| Income producing RE | 7,220 | 7,588 | 13,462 | ||||||||||||
| Commercial & industrial | 6,227 | 5,429 | 8,507 | ||||||||||||
| Commercial construction | 401 | 343 | 1,202 | ||||||||||||
| Equipment financing | 2,540 | 1,741 | 1,845 | ||||||||||||
| Total commercial | 20,978 | 17,815 | 29,961 | ||||||||||||
| Residential mortgage | 13,024 | 13,313 | 13,222 | ||||||||||||
| Home equity lines of credit | 1,183 | 1,212 | 1,364 | ||||||||||||
| Residential construction | 212 | 420 | 260 | ||||||||||||
| Manufactured housing | 2,507 | — | — | ||||||||||||
| Consumer | 40 | 52 | 116 | ||||||||||||
| Total nonaccrual loans held for investment | 37,944 | 32,812 | 44,923 | ||||||||||||
| Nonaccrual loans held for sale | 2,033 | — | — | ||||||||||||
| OREO and repossessed assets | 839 | 43 | 412 | ||||||||||||
| Total NPAs | $ | 40,816 | $ | 32,855 | $ | 45,335 | |||||||||
| 2022 | 2021 | ||||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | |||||||||||||||||||
| (in thousands) | Net Charge- Offs | Net Charge- Offs to Average Loans (1) | Net Charge- Offs | Net Charge- Offs to Average Loans (1) | Net Charge- Offs | Net Charge- Offs to Average Loans (1) | |||||||||||||||
| NET CHARGE-OFFS BY CATEGORY | |||||||||||||||||||||
| Owner occupied RE | $ | (45 | ) | (0.01)% | $ | (255 | ) | (0.04)% | $ | (93 | ) | (0.02)% | |||||||||
| Income producing RE | (290 | ) | (0.04 | ) | (98 | ) | (0.01 | ) | 45 | 0.01 | |||||||||||
| Commercial & industrial | 2,929 | 0.51 | 339 | 0.07 | (91 | ) | (0.02 | ) | |||||||||||||
| Commercial construction | (373 | ) | (0.10 | ) | (354 | ) | (0.14 | ) | (123 | ) | (0.05 | ) | |||||||||
| Equipment financing | 267 | 0.10 | 781 | 0.29 | 512 | 0.21 | |||||||||||||||
| Total commercial | 2,488 | 0.09 | 413 | 0.02 | 250 | 0.01 | |||||||||||||||
| Residential mortgage | (97 | ) | (0.02 | ) | (169 | ) | (0.04 | ) | 51 | 0.01 | |||||||||||
| Home equity lines of credit | (81 | ) | (0.04 | ) | (118 | ) | (0.07 | ) | (102 | ) | (0.06 | ) | |||||||||
| Residential construction | (23 | ) | (0.03 | ) | (17 | ) | (0.02 | ) | (37 | ) | (0.05 | ) | |||||||||
| Manufactured housing | 164 | 0.25 | — | — | — | — | |||||||||||||||
| Consumer | 527 | 1.48 | 139 | 0.39 | 389 | 1.11 | |||||||||||||||
| Total | $ | 2,978 | 0.08 | $ | 248 | 0.01 | $ | 551 | 0.02 | ||||||||||||
| (1) Annualized. | |||||||||||||||||||||
| UNITED COMMUNITY BANKS, INC. |
| Consolidated Balance Sheets (Unaudited) |
| (in thousands, except share and per share data) | March 31, 2022 | December 31, 2021 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 175,175 | $ | 144,244 | ||||
| Interest-bearing deposits in banks | 1,729,607 | 2,147,266 | ||||||
| Federal funds and other short-term investments | 1,882 | 27,000 | ||||||
| Cash and cash equivalents | 1,906,664 | 2,318,510 | ||||||
| Debt securities available-for-sale | 3,909,114 | 4,496,824 | ||||||
| Debt securities held-to-maturity (fair value $2,351,873 and $1,148,804) | 2,500,983 | 1,156,098 | ||||||
| Loans held for sale (includes $39,118 and $44,109 at fair value) | 75,191 | 44,109 | ||||||
| Loans and leases held for investment | 14,316,205 | 11,760,346 | ||||||
| Less allowance for credit losses - loans and leases | (132,805 | ) | (102,532 | ) | ||||
| Loans and leases, net | 14,183,400 | 11,657,814 | ||||||
| Premises and equipment, net | 283,561 | 245,296 | ||||||
| Bank owned life insurance | 297,220 | 217,713 | ||||||
| Goodwill and other intangible assets, net | 784,280 | 472,407 | ||||||
| Other assets | 433,787 | 338,000 | ||||||
| Total assets | $ | 24,374,200 | $ | 20,946,771 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 7,946,049 | $ | 6,956,981 | ||||
| NOW and interest-bearing demand | 4,650,997 | 4,252,209 | ||||||
| Money market | 5,075,525 | 4,183,354 | ||||||
| Savings | 1,479,833 | 1,215,779 | ||||||
| Time | 1,704,657 | 1,442,498 | ||||||
| Brokered | 199,092 | 190,358 | ||||||
| Total deposits | 21,056,153 | 18,241,179 | ||||||
| Long-term debt | 324,230 | 247,360 | ||||||
| Accrued expenses and other liabilities | 298,802 | 235,987 | ||||||
| Total liabilities | 21,679,185 | 18,724,526 | ||||||
| Shareholders' equity: | ||||||||
| Preferred stock; $1 par value; 10,000,000 shares authorized; Series I, $25,000 per share liquidation preference; 4,000 shares issued and outstanding | 96,422 | 96,422 | ||||||
| Common stock, $1 par value; 200,000,000 shares authorized, 106,025,210 and 89,349,826 shares issued and outstanding, respectively | 106,025 | 89,350 | ||||||
| Common stock issuable; 574,139 and 595,705 shares | 11,311 | 11,288 | ||||||
| Capital surplus | 2,302,189 | 1,721,007 | ||||||
| Retained earnings | 354,409 | 330,654 | ||||||
| Accumulated other comprehensive loss | (175,341 | ) | (26,476 | ) | ||||
| Total shareholders' equity | 2,695,015 | 2,222,245 | ||||||
| Total liabilities and shareholders' equity | $ | 24,374,200 | $ | 20,946,771 | ||||
| UNITED COMMUNITY BANKS, INC. |
| Consolidated Statements of Income (Unaudited) |
| Three Months Ended March 31, | ||||||||
| (in thousands, except per share data) | 2022 | 2021 | ||||||
| Interest revenue: | ||||||||
| Loans, including fees | $ | 146,741 | $ | 125,726 | ||||
| Investment securities, including tax exempt of $2,655 and $2,150, respectively | 23,665 | 15,448 | ||||||
| Deposits in banks and short-term investments | 653 | 368 | ||||||
| Total interest revenue | 171,059 | 141,542 | ||||||
| Interest expense: | ||||||||
| Deposits: | ||||||||
| NOW and interest-bearing demand | 1,469 | 1,486 | ||||||
| Money market | 1,012 | 1,804 | ||||||
| Savings | 72 | 49 | ||||||
| Time | 578 | 1,880 | ||||||
| Deposits | 3,131 | 5,219 | ||||||
| Short-term borrowings | — | 2 | ||||||
| Long-term debt | 4,136 | 4,257 | ||||||
| Total interest expense | 7,267 | 9,478 | ||||||
| Net interest revenue | 163,792 | 132,064 | ||||||
| Provision for (release of) credit losses | 23,086 | (12,281 | ) | |||||
| Net interest revenue after provision for credit losses | 140,706 | 144,345 | ||||||
| Noninterest income: | ||||||||
| Service charges and fees | 9,070 | 7,570 | ||||||
| Mortgage loan gains and other related fees | 16,152 | 22,572 | ||||||
| Wealth management fees | 5,895 | 3,505 | ||||||
| Gains from sales of other loans, net | 3,198 | 1,030 | ||||||
| Lending and loan servicing fees | 2,986 | 2,160 | ||||||
| Securities losses, net | (3,734 | ) | — | |||||
| Other | 5,406 | 7,868 | ||||||
| Total noninterest income | 38,973 | 44,705 | ||||||
| Total revenue | 179,679 | 189,050 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 71,006 | 60,585 | ||||||
| Communications and equipment | 9,248 | 7,203 | ||||||
| Occupancy | 9,378 | 6,956 | ||||||
| Advertising and public relations | 1,488 | 1,199 | ||||||
| Postage, printing and supplies | 2,119 | 1,822 | ||||||
| Professional fees | 4,447 | 4,234 | ||||||
| Lending and loan servicing expense | 2,366 | 2,877 | ||||||
| Outside services - electronic banking | 2,523 | 2,218 | ||||||
| FDIC assessments and other regulatory charges | 2,173 | 1,896 | ||||||
| Amortization of intangibles | 1,793 | 985 | ||||||
| Merger-related and other charges | 9,016 | 1,543 | ||||||
| Other | 3,718 | 3,676 | ||||||
| Total noninterest expenses | 119,275 | 95,194 | ||||||
| Income before income taxes | 60,404 | 93,856 | ||||||
| Income tax expense | 12,385 | 20,150 | ||||||
| Net income | 48,019 | 73,706 | ||||||
| Preferred stock dividends | 1,719 | 1,719 | ||||||
| Earnings allocated to participating securities | 238 | 462 | ||||||
| Net income available to common shareholders | $ | 46,062 | $ | 71,525 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.43 | $ | 0.82 | ||||
| Diluted | 0.43 | 0.82 | ||||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 106,550 | 87,322 | ||||||
| Diluted | 106,677 | 87,466 | ||||||
| Average Consolidated Balance Sheets and Net Interest Analysis |
| For the Three Months Ended March 31, |
| 2022 | 2021 | |||||||||||||||||||
| (dollars in thousands, fully taxable equivalent (FTE)) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||
| Assets: | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans, net of unearned income (FTE) (1)(2) | $ | 14,234,026 | $ | 146,637 | 4.18 | % | $ | 11,432,908 | $ | 125,122 | 4.44 | % | ||||||||
| Taxable securities (3) | 5,848,976 | 21,010 | 1.44 | 3,686,405 | 13,298 | 1.44 | ||||||||||||||
| Tax-exempt securities (FTE) (1)(3) | 510,954 | 3,566 | 2.79 | 304,983 | 2,888 | 3.79 | ||||||||||||||
| Federal funds sold and other interest-earning assets | 1,910,411 | 1,020 | 0.22 | 1,357,890 | 1,222 | 0.36 | ||||||||||||||
| Total interest-earning assets (FTE) | 22,504,367 | 172,233 | 3.10 | 16,782,186 | 142,530 | 3.44 | ||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||
| Allowance for credit losses | (113,254 | ) | (143,703 | ) | ||||||||||||||||
| Cash and due from banks | 166,005 | 140,292 | ||||||||||||||||||
| Premises and equipment | 277,216 | 221,411 | ||||||||||||||||||
| Other assets (3) | 1,369,301 | 1,023,275 | ||||||||||||||||||
| Total assets | $ | 24,203,635 | $ | 18,023,461 | ||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||
| NOW and interest-bearing demand | $ | 4,667,098 | 1,469 | 0.13 | $ | 3,331,043 | 1,486 | 0.18 | ||||||||||||
| Money market | 5,110,817 | 1,012 | 0.08 | 3,732,988 | 1,804 | 0.20 | ||||||||||||||
| Savings | 1,436,881 | 72 | 0.02 | 989,584 | 49 | 0.02 | ||||||||||||||
| Time | 1,758,895 | 534 | 0.12 | 1,642,423 | 1,588 | 0.39 | ||||||||||||||
| Brokered time deposits | 79,092 | 44 | 0.23 | 75,259 | 292 | 1.57 | ||||||||||||||
| Total interest-bearing deposits | 13,052,783 | 3,131 | 0.10 | 9,771,297 | 5,219 | 0.22 | ||||||||||||||
| Federal funds purchased and other borrowings | 611 | — | — | 12 | — | — | ||||||||||||||
| Federal Home Loan Bank advances | — | — | — | 3,333 | 2 | 0.24 | ||||||||||||||
| Long-term debt | 318,995 | 4,136 | 5.26 | 317,172 | 4,257 | 5.44 | ||||||||||||||
| Total borrowed funds | 319,606 | 4,136 | 5.25 | 320,517 | 4,259 | 5.39 | ||||||||||||||
| Total interest-bearing liabilities | 13,372,389 | 7,267 | 0.22 | 10,091,814 | 9,478 | 0.38 | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 7,666,635 | 5,594,394 | ||||||||||||||||||
| Other liabilities | 378,327 | 312,610 | ||||||||||||||||||
| Total liabilities | 21,417,351 | 15,998,818 | ||||||||||||||||||
| Shareholders' equity | 2,786,284 | 2,024,643 | ||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 24,203,635 | $ | 18,023,461 | ||||||||||||||||
| Net interest revenue (FTE) | $ | 164,966 | $ | 133,052 | ||||||||||||||||
| Net interest-rate spread (FTE) | 2.88 | % | 3.06 | % | ||||||||||||||||
| Net interest margin (FTE) (4) | 2.97 | % | 3.22 | % | ||||||||||||||||
(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized losses of $81.2 million in 2022 and pretax unrealized gains of $58.3 million in 2021 are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets.
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQGS: UCBI) provides a full range of banking, wealth management and mortgage services for relationship-oriented consumers and business owners. The company, known as “The Bank That SERVICE Built,” has been recognized nationally for delivering award-winning service. At March 31, 2022, United had $24.4 billion in assets and 198 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary. In 2022, J.D. Power ranked United highest in customer satisfaction with consumer banking in the Southeast, marking eight out of the last nine years United earned the coveted award. United was also named one of the "Best Banks to Work For" by American Banker in 2021 for the fifth consecutive year based on employee satisfaction. Forbes recognized United as one of the top ten World’s Best Banks in 2022. Forbes also included United on its 2022 list of the 100 Best Banks in America for the ninth consecutive year. United also received ten (10) Greenwich Excellence Awards in 2021 for excellence in Small Business Banking and Middle Market Banking, including national awards for Overall Satisfaction and Likelihood to Recommend. Additional information about United can be found at www.ucbi.com.
Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “pre-tax, pre-provision income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “return on assets - pre-tax, pre-provision, excluding merger-related and other charges,” “return on assets - pre-tax, pre-provision,” “operating efficiency ratio,” and “tangible common equity to tangible assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.
Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the accretive value of each of the Reliant acquisition to United’s earnings. Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.
Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the Reliant acquisition may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of the Reliant acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Reliant may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisition of Reliant, (5) the risks relating to the integration of Reliant’s operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risk of potential litigation or regulatory action related to the acquisition of Reliant. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2021, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).
Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United.
United qualifies all forward-looking statements by these cautionary statements.
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
