United Community Banks, Inc. Reports Fourth Quarter

GREENVILLE, S.C., Jan. 24, 2024 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced net income for the fourth quarter of $14.1 million and pre-tax, pre-provision income of $25.8 million. Diluted earnings per share of $0.11 for the quarter represented a decrease of $0.28 or 72% from the third quarter of 2023 and a decrease of $0.63 or 85%, from the fourth quarter of 2022.

On an operating basis, diluted earnings per share of $0.53 increased $0.08 or 18% compared to last quarter. Non-operating items included merger charges, losses for the previously reported bond portfolio restructuring transaction and an FDIC special assessment. Deposits grew by 8% annualized and loans grew at a 2.5% annualized rate during the quarter. Net interest revenue increased modestly during the quarter due to growth in interest bearing assets which offset the effect of a lower margin.

For the quarter, United’s return on assets was 0.18% and 0.92% on an operating basis. Return on common equity was 1.44% and return on tangible common equity was 10.58% on an operating basis. On a pre-tax, pre-provision basis, operating return on assets was 1.33% for the quarter. At quarter-end, tangible common equity to tangible assets was 8.36%, up eighteen basis points from the third quarter of 2023.

Chairman and CEO Lynn Harton stated, “Our focus continues to be on both maintaining a strong balance sheet and investing in growth as we continue to build the company. This quarter, we entered into a bond portfolio restructuring transaction to reduce our exposure to interest rate volatility in this uncertain environment. This will have the additional advantage of increasing our earnings in 2024. In our core banking operations, we continue to be pleased with the ability of our teams to grow our book of business. In the fourth quarter, strong deposit growth allowed us to reduce high cost brokered deposits and more than fund loan growth. While the cost of deposits continued to drift upward, the pace of margin compression has slowed. Asset quality remained solid with net charge-offs for the bank, excluding Navitas, at low levels. Looking into 2024, we expect broader credit performance to remain strong, but are closely monitoring for potential changes in both the economic environment overall and specifically in our markets.”

United’s net interest margin decreased by 5 basis points to 3.19% compared to the third quarter. The average yield on United’s interest-earning assets was up 14 basis points to 5.31%, but funding costs increased by 22 basis points, leading to the modest reduction in the net interest margin. Net charge-offs were $10.1 million, or 0.22%, of average loans during the quarter, down 37 basis points compared to the third quarter of 2023. Excluding Navitas, net charge-offs were 0.05% of average loans. Nonperforming assets were 34 basis points relative to total assets, which is in line with the prior quarter.

Mr. Harton concluded, “We are excited and optimistic about 2024. Economic conditions remain strong in our markets, though we continue to be cautious in our underwriting and portfolio management given the inherent uncertainty in the environment. Our teams continue to be focused on leading our markets in customer service, knowing that it is our connections with our customers and communities that drive our success. In 2023, including recently in the fourth quarter, we added a new member to our Board of Directors, and added new market leaders, new commercial bankers and new line-of-business leaders. We also expanded our market reach and service capabilities with new locations across our footprint. In November, United was named one of the “Best Banks to Work For” by American Banker for the seventh consecutive year, an accolade that underscores our belief that we are a great place to work for great people. We are in the final phases of refreshing our corporate logo and brand across our franchise. Our commitment to investing in our people, technology and customers’ needs with a culture of caring will remain the same as we continue to grow.”

2023 Financial Highlights:

Completed a successful year with strong, high-quality loan and deposit growth and completed acquisitions in high-growth markets in Alabama, the Florida panhandle and Miami, which were all strategic priorities
The fourth quarter bond portfolio restructuring transaction resulted in a pre-tax loss of $52 million and the FDIC special assessment was $10 million, which reduced GAAP and operating EPS by approximately $0.39
Full-year EPS of $1.54, a decrease of 39% compared to 2022; full year operating EPS of $2.11, a decrease of 21% from 2022
Return on assets of 0.68%, or 0.94%, on an operating basis
Pre-tax, pre-provision return on assets of 1.53% on an operating basis
Return on common equity of 5.34%, or 7.33%, on an operating basis
Return on tangible common equity of 10.6% on an operating basis
A provision for credit losses of $89.4 million compared to a provision for credit losses of $63.9 million in 2022, with both periods including a provision establishing an initial allowance for acquired banks
Strong loan growth of $3.0 billion or $972 million, excluding loans acquired from acquired banks
Core transaction deposits were up $796 million compared to 2022; excluding acquired banks, 2023 core transaction deposits were down $984 million, or 6%
Net interest margin of 3.35% was down 3 basis points from last year primarily due to increased deposit costs
Noninterest income was down $62.2 million primarily due to the bond portfolio restructuring transaction
Excluding the bond portfolio restructuring transaction, noninterest income was down $4.8 million primarily due to a decline in mortgage fees, as higher rates led to lower demand and business volume
The efficiency ratio of 60.1%, or 56.2% on an operating basis, increased, primarily driven by higher deposit rates and a compressing NIM
Net charge-offs of $52.2 million, or 0.30% of average total loans, were up from the $9.65 million of net charge-offs in 2022

Fourth Quarter 2023 Financial Highlights:

Net income of $14.1 million and pre-tax, pre-provision income of $25.8 million; operating net income of $64.8 million
EPS decreased by 85% compared to last year on a GAAP basis and 29% on an operating basis; compared to third quarter 2023, EPS decreased 72% on a GAAP basis and increased 18% on an operating basis
The bond portfolio restructuring transaction and the FDIC special assessment reduced GAAP and operating EPS by approximately $0.38
Return on assets of 0.18%, and 0.92% on an operating basis
Pre-tax, pre-provision return on assets of 1.33% excluding non-operating items
Return on common equity of 1.4%, or 7.3% when excluding non-operating items
Return on tangible common equity of 10.6% on an operating basis
Loan production of $1.4 billion, resulting in loan growth of 2.5% annualized for the quarter
Total deposits, excluding brokered deposits, were up $504 million, or 8.9% annualized, from last quarter, driven by seasonal increases in public funds
Net interest margin of 3.19% was down 5 basis points from the third quarter due to increased deposit costs
Mortgage closings of $204 million compared to $253 million a year ago; mortgage rate locks of $223 million compared to $364 million a year ago
Noninterest income was down $55.1 million, primarily due to the pre-tax loss of $51.7 million resulting from the bond portfolio restructuring transaction
Excluding the bond portfolio restructuring transaction, noninterest income was down $3.4 million from third quarter primarily due to a seasonal decline in mortgage fees
Noninterest expenses increased $10.1 million compared to the third quarter mostly due to the FDIC special assessment of $10.0 million
Efficiency ratio of 66.3%, or 59.6% on an operating basis, up from third quarter largely driven by increased group medical insurance costs
Net charge-offs of $10.1 million, or 0.22% of average loans, down 37 basis points from the net charge-offs level experienced in the third quarter, which included a $19 million charge-off from an 8.7% participation in a large, nationally syndicated credit
Nonperforming assets of 0.34% of total assets, are in line with September 30, 2023
Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 5% year-over-year

Conference Call

United will hold a conference call on Wednesday, January 24, 2024, 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/10185556/fb5d089df4. 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 by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of United’s website at ucbi.com.

UNITED COMMUNITY BANKS, INC. Selected Financial Information (in thousands, except per share data)
	2023												2022			Fourth Quarter 2023-2022 Change		For the Twelve Months Ended December 31,						YTD 2023-2022 Change
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Fourth Quarter 2023-2022 Change			2023			2022		YTD 2023-2022 Change
INCOME SUMMARY
Interest revenue	$	338,698		$	323,147		$	295,775		$	279,487		$	240,831				$	1,237,107		$	813,155
Interest expense		135,245			120,591			95,489			68,017			30,943					419,342			60,798
Net interest revenue		203,453			202,556			200,286			211,470			209,888		(3	)%		817,765			752,357		9	%
Provision for credit losses		14,626			30,268			22,753			21,783			19,831		(26	)		89,430			63,913		40
Noninterest income		(23,090	)		31,977			36,387			30,209			33,354					75,483			137,707		(45	)
Total revenue		165,737			204,265			213,920			219,896			223,411		(26	)		803,818			826,151		(3	)
Noninterest expenses		154,587			144,474			132,407			139,805			117,329		32			571,273			470,149		22
Income before income tax expense		11,150			59,791			81,513			80,091			106,082					232,545			356,002
Income tax (benefit) expense		(2,940	)		11,925			18,225			17,791			24,632					45,001			78,530
Net income		14,090			47,866			63,288			62,300			81,450					187,544			277,472
Non-operating items		67,450			9,168			3,645			8,631			1,470					88,894			19,375
Income tax benefit of non-operating items		(16,714	)		(2,000	)		(820	)		(1,955	)		(323	)				(21,489	)		(4,246	)
Net income - operating⁽¹⁾	$	64,826		$	55,034		$	66,113		$	68,976		$	82,597		(22	)	$	254,949		$	292,601		(13	)

Pre-tax pre-provision income⁽⁵⁾	$	25,776		$	90,059		$	104,266		$	101,874		$	125,913		(80	)	$	321,975		$	419,915		(23	)

PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.11		$	0.39		$	0.53		$	0.52		$	0.74		(85	)	$	1.54		$	2.52		(39	)
Diluted net income - operating⁽¹⁾		0.53			0.45			0.55			0.58			0.75		(29	)		2.11			2.66		(21	)
Common stock cash dividends declared		0.23			0.23			0.23			0.23			0.22		5			0.92			0.86		7
Book value		26.52			25.87			25.98			25.76			24.38		9			26.52			24.38		9
Tangible book value⁽³⁾		18.39			17.70			17.83			17.59			17.13		7			18.39			17.13		7
Key performance ratios:
Return on common equity - GAAP⁽²⁾⁽⁴⁾		1.44	%		5.32	%		7.47	%		7.34	%		10.86	%				5.34	%		9.54	%
Return on common equity - operating^(1)(2)(4)		7.27			6.14			7.82			8.15			11.01					7.33			10.07
Return on tangible common equity - operating^(1)(2)(3)(4)		10.58			9.03			11.35			11.63			15.20					10.63			14.04
Return on assets - GAAP⁽⁴⁾		0.18			0.68			0.95			0.95			1.33					0.68			1.13
Return on assets - operating⁽¹⁾⁽⁴⁾		0.92			0.79			1.00			1.06			1.35					0.94			1.19
Return on assets -pre-tax pre-provision, excluding non-operating items^(1)(4)(5)		1.33			1.44			1.65			1.71			2.09					1.53			1.80
Net interest margin (fully taxable equivalent)⁽⁴⁾		3.19			3.24			3.37			3.61			3.76					3.35			3.38
Efficiency ratio - GAAP		66.33			61.32			55.71			57.20			47.95					60.09			52.31
Efficiency ratio - operating⁽¹⁾		59.57			57.43			54.17			53.67			47.35					56.17			50.16
Equity to total assets		11.95			11.85			11.89			11.90			11.25					11.95			11.25
Tangible common equity to tangible assets⁽³⁾		8.36			8.18			8.21			8.17			7.88					8.36			7.88
ASSET QUALITY
Nonperforming assets (“NPAs”)	$	92,877		$	90,883		$	103,737		$	73,403		$	44,281		110		$	92,877		$	44,281		110
Allowance for credit losses - loans		208,071			201,557			190,705			176,534			159,357		31			208,071			159,357		31
Allowance for credit losses - total		224,128			219,624			212,277			197,923			180,520		24			224,128			180,520		24
Net charge-offs (recoveries)		10,122			26,638			8,399			7,084			6,611					52,243			9,654
Allowance for credit losses - loans to loans		1.14	%		1.11	%		1.10	%		1.03	%		1.04	%				1.14	%		1.04	%
Allowance for credit losses - total to loans		1.22			1.21			1.22			1.16			1.18					1.22			1.18
Net charge-offs to average loans⁽⁴⁾		0.22			0.59			0.20			0.17			0.17					0.30			0.07
NPAs to total assets		0.34			0.34			0.40			0.28			0.18					0.34			0.18
AT PERIOD END ($ in millions)
Loans	$	18,319		$	18,203		$	17,395		$	17,125		$	15,335		19		$	18,319		$	15,335		19
Investment securities		5,822			5,701			5,914			5,915			6,228		(7	)		5,822			6,228		(7	)
Total assets		27,297			26,869			26,120			25,872			24,009		14			27,297			24,009		14
Deposits		23,311			22,858			22,252			22,005			19,877		17			23,311			19,877		17
Shareholders’ equity		3,262			3,184			3,106			3,078			2,701		21			3,262			2,701		21
Common shares outstanding (thousands)		119,010			118,976			115,266			115,152			106,223		12			119,010			106,223		12

⁽¹⁾	Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on next page.
⁽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)
	2023													2022		Twelve Months Ended December 31,
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			2023			2022
Net income to operating income reconciliation
Net income (GAAP)	$	14,090		$	47,866		$	63,288		$	62,300		$	81,450		$	187,544		$	277,472
Bond portfolio restructuring loss		51,689			—			—			—			—			51,689			—
FDIC special assessment		9,995			—			—			—			—			9,995			—
Merger-related and other charges		5,766			9,168			3,645			8,631			1,470			27,210			19,375
Income tax benefit of non-operating items		(16,714	)		(2,000	)		(820	)		(1,955	)		(323	)		(21,489	)		(4,246	)
Net income - operating	$	64,826		$	55,034		$	66,113		$	68,976		$	82,597		$	254,949		$	292,601

Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)	$	14,090		$	47,866		$	63,288		$	62,300		$	81,450		$	187,544		$	277,472
Income tax (benefit) expense		(2,940	)		11,925			18,225			17,791			24,632			45,001			78,530
Provision for credit losses		14,626			30,268			22,753			21,783			19,831			89,430			63,913
Pre-tax pre-provision income	$	25,776		$	90,059		$	104,266		$	101,874		$	125,913		$	321,975		$	419,915

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.11		$	0.39		$	0.53		$	0.52		$	0.74		$	1.54		$	2.52
Bond portfolio restructuring loss		0.32			—			—			—			—			0.33			—
FDIC special assessment		0.06			—			—			—			—			0.06			—
Merger-related and other charges		0.04			0.06			0.02			0.06			0.01			0.18			0.14
Diluted income per common share - operating	$	0.53		$	0.45		$	0.55		$	0.58		$	0.75		$	2.11		$	2.66

Book value per common share reconciliation
Book value per common share (GAAP)	$	26.52		$	25.87		$	25.98		$	25.76		$	24.38		$	26.52		$	24.38
Effect of goodwill and other intangibles		(8.13	)		(8.17	)		(8.15	)		(8.17	)		(7.25	)		(8.13	)		(7.25	)
Tangible book value per common share	$	18.39		$	17.70		$	17.83		$	17.59		$	17.13		$	18.39		$	17.13

Return on tangible common equity reconciliation
Return on common equity (GAAP)		1.44	%		5.32	%		7.47	%		7.34	%		10.86	%		5.34	%		9.54	%
Bond portfolio restructuring loss		4.47			—			—			—			—			1.15			—
FDIC special assessment		0.86			—			—			—			—			0.22			—
Merger-related and other charges		0.50			0.82			0.35			0.81			0.15			0.62			0.53
Return on common equity - operating		7.27			6.14			7.82			8.15			11.01			7.33			10.07
Effect of goodwill and other intangibles		3.31			2.89			3.53			3.48			4.19			3.30			3.97
Return on tangible common equity - operating		10.58	%		9.03	%		11.35	%		11.63	%		15.20	%		10.63	%		14.04	%

Return on assets reconciliation
Return on assets (GAAP)		0.18	%		0.68	%		0.95	%		0.95	%		1.33	%		0.68	%		1.13	%
Bond portfolio restructuring loss		0.57			—			—			—			—			0.15			—
FDIC special assessment		0.11			—			—			—			—			0.03			—
Merger-related and other charges		0.06			0.11			0.05			0.11			0.02			0.08			0.06
Return on assets - operating		0.92	%		0.79	%		1.00	%		1.06	%		1.35	%		0.94	%		1.19	%

Return on assets to return on assets- pre-tax pre-provision reconciliation
Return on assets (GAAP)		0.18	%		0.68	%		0.95	%		0.95	%		1.33	%		0.68	%		1.13	%
Income tax (benefit) expense		(0.04	)		0.18			0.29			0.29			0.41			0.17			0.32
Provision for credit losses		0.21			0.45			0.35			0.34			0.33			0.34			0.27
Bond portfolio restructuring loss		0.75			—			—			—			—			0.20			—
FDIC special assessment		0.15			—			—			—			—			0.04			—
Merger-related and other charges		0.08			0.13			0.06			0.13			0.02			0.10			0.08
Return on assets - pre-tax pre-provision, excluding non-operating items		1.33	%		1.44	%		1.65	%		1.71	%		2.09	%		1.53	%		1.80	%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		66.33	%		61.32	%		55.71	%		57.20	%		47.95	%		60.09	%		52.31	%
FDIC special assessment		(4.29	)		—			—			—			—			(1.05	)		—
Merger-related and other charges		(2.47	)		(3.89	)		(1.54	)		(3.53	)		(0.60	)		(2.87	)		(2.15	)
Efficiency ratio - operating		59.57	%		57.43	%		54.17	%		53.67	%		47.35	%		56.17	%		50.16	%

Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)		11.95	%		11.85	%		11.89	%		11.90	%		11.25	%		11.95	%		11.25	%
Effect of goodwill and other intangibles		(3.27	)		(3.33	)		(3.31	)		(3.36	)		(2.97	)		(3.27	)		(2.97	)
Effect of preferred equity		(0.32	)		(0.34	)		(0.37	)		(0.37	)		(0.40	)		(0.32	)		(0.40	)
Tangible common equity to tangible assets		8.36	%		8.18	%		8.21	%		8.17	%		7.88	%		8.36	%		7.88	%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
(in millions)
		2023								2022	Linked Quarter Change			Year over Year Change
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Linked Quarter Change			Year over Year Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	3,264	$	3,279	$	3,111	$	3,141	$	2,735	$	(15	)	$	529
Income producing commercial RE		4,264		4,130		3,670		3,611		3,262		134			1002
Commercial & industrial		2,411		2,504		2,550		2,442		2,252		(93	)		159
Commercial construction		1,860		1,850		1,739		1,806		1,598		10			262
Equipment financing		1,543		1,534		1,510		1,447		1,374		9			169
Total commercial		13,342		13,297		12,580		12,447		11,221		45			2,121
Residential mortgage		3,199		3,043		2,905		2,756		2,355		156			844
Home equity lines of credit		959		941		927		930		850		18			109
Residential construction		302		399		463		492		443		(97	)		(141	)
Manufactured housing		336		343		340		326		317		(7	)		19
Consumer		181		180		180		174		149		1			32
Total loans	$	18,319	$	18,203	$	17,395	$	17,125	$	15,335	$	116		$	2,984

LOANS BY STATE
Georgia	$	4,357	$	4,321	$	4,281	$	4,177	$	4,051	$	36		$	306
South Carolina		2,780		2,801		2,750		2,672		2,587		(21	)		193
North Carolina		2,492		2,445		2,355		2,257		2,186		47			306
Tennessee		2,244		2,314		2,387		2,458		2,507		(70	)		(263	)
Florida		2,442		2,318		1,708		1,745		1,308		124			1,134
Alabama		1,082		1,070		1,062		1,029		—		12			1,082
Commercial Banking Solutions		2,922		2,934		2,852		2,787		2,696		(12	)		226
Total loans	$	18,319	$	18,203	$	17,395	$	17,125	$	15,335	$	116		$	2,984

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions)
		2023		2022		2021		2020		2019
LOANS BY CATEGORY
Owner occupied commercial RE	$	3,264	$	2,735	$	2,322	$	2,090	$	1,720
Income producing commercial RE		4,264		3,262		2,601		2,541		2,008
Commercial & industrial		2,411		2,252		1,910		2,499		1,221
Commercial construction		1,860		1,598		1,015		967		976
Equipment financing		1,543		1,374		1,083		864		745
Total commercial		13,342		11,221		8,931		8,961		6,670
Residential mortgage		3,199		2,355		1,638		1,285		1,118
Home equity		959		850		694		697		661
Residential construction		302		443		359		281		236
Manufactured housing		336		317		—		—		—
Consumer		181		149		138		147		128
Total loans	$	18,319	$	15,335	$	11,760	$	11,371	$	8,813

LOANS BY STATE
Georgia	$	4,357	$	4,051	$	3,778	$	3,685	$	3,606
South Carolina		2,780		2,587		2,235		1,947		1,708
North Carolina		2,492		2,186		1,895		1,281		1,156
Tennessee		2,244		2,507		373		415		421
Florida		2,442		1,308		1,148		1,435		—
Alabama		1,082		—		—		—		—
Commercial Banking Solutions		2,922		2,696		2,331		2,608		1,922
Total loans	$	18,319	$	15,335	$	11,760	$	11,371	$	8,813

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
	2023
	Fourth Quarter			Third Quarter			Second Quarter
NONACCRUAL LOANS
Owner occupied RE	$	3,094		$	5,134		$	3,471
Income producing RE		30,128			30,255			32,542
Commercial & industrial		13,467			13,382			30,823
Commercial construction		1,878			1,065			115
Equipment financing		8,505			9,206			8,989
Total commercial		57,072			59,042			75,940
Residential mortgage		13,944			11,893			11,419
Home equity		3,772			4,009			2,777
Residential construction		944			2,074			1,682
Manufactured housing		15,861			12,711			10,782
Consumer		94			89			19
Total nonaccrual loans held for investment		91,687			89,818			102,619
OREO and repossessed assets		1,190			1,065			1,118
Total NPAs	$	92,877		$	90,883		$	103,737
	2023
	Fourth Quarter						Third Quarter					Second 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	$	35			—	%	$	582		0.07	%	$	(205	)	(0.03	)%
Income producing RE		(562	)		(0.05	)		3,011		0.30			1,184		0.13
Commercial & industrial		547			0.09			17,542		2.71			2,746		0.44
Commercial construction		33			0.01			(49	)	(0.01	)		(105	)	(0.02	)
Equipment financing		7,926			2.05			6,325		1.62			2,537		0.69
Total commercial		7,979			0.24			27,411		0.83			6,157		0.20
Residential mortgage		12			—			(129	)	(0.02	)		(43	)	(0.01	)
Home equity		(68	)		(0.03	)		(2,784	)	(1.17	)		(59	)	(0.03	)
Residential construction		(13	)		(0.01	)		341		0.31			623		0.53
Manufactured housing		1,444			1.69			1,168		1.34			620		0.75
Consumer		768			1.70			631		1.37			1,101		2.51
Total	$	10,122			0.22		$	26,638		0.59		$	8,399		0.20

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)
	December 31, 2023			December 31, 2022
ASSETS
Cash and due from banks	$	200,781		$	195,771
Interest-bearing deposits in banks		803,094			316,082
Federal funds and other short-term investments		—			135,000
Cash and cash equivalents		1,003,875			646,853
Debt securities available-for-sale		3,331,084			3,614,333
Debt securities held-to-maturity (fair value $2,095,620 and $2,191,073, respectively)		2,490,848			2,613,648
Loans held for sale at fair value		33,008			13,600
Loans and leases held for investment		18,318,755			15,334,627
Less allowance for credit losses - loans and leases		(208,071	)		(159,357	)
Loans and leases, net		18,110,684			15,175,270
Premises and equipment, net		378,421			298,456
Bank owned life insurance		345,371			299,297
Accrued interest receivable		87,782			72,807
Net deferred tax asset		113,214			129,313
Derivative financial instruments		50,352			50,636
Goodwill and other intangible assets, net		990,087			779,248
Other assets		362,525			315,423
Total assets	$	27,297,251		$	24,008,884
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	6,534,307		$	7,643,081
NOW and interest-bearing demand		6,155,193			4,350,878
Money market		5,600,587			4,510,680
Savings		1,207,807			1,456,337
Time		3,649,498			1,781,482
Brokered		163,219			134,049
Total deposits		23,310,611			19,876,507
Short-term borrowings		—			158,933
Federal Home Loan Bank advances		—			550,000
Long-term debt		324,823			324,663
Derivative financial instruments		84,811			99,543
Accrued expenses and other liabilities		315,481			298,564
Total liabilities		24,035,726			21,308,210
Shareholders' equity:
Preferred stock, $1 par value: 10,000,000 shares authorized; 3,662 and 4,000 shares Series I issued and outstanding, respectively; $25,000 per share liquidation preference		88,266			96,422
Common stock, $1 par value; 200,000,000 shares authorized; 119,010,319 and 106,222,758 shares issued and outstanding, respectively		119,010			106,223
Common stock issuable; 620,108 and 607,128 shares, respectively		13,110			12,307
Capital surplus		2,699,112			2,306,366
Retained earnings		581,219			508,844
Accumulated other comprehensive loss		(239,192	)		(329,488	)
Total shareholders’ equity		3,261,525			2,700,674
Total liabilities and shareholders’ equity	$	27,297,251		$	24,008,884

UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
	Three Months Ended December 31,						Twelve Months Ended December 31,
		2023			2022			2023			2022
Interest revenue:
Loans, including fees	$	281,909		$	197,330		$	1,042,605		$	673,402
Investment securities, including tax exempt of $1,732, 2,561, $7,295 and $10,323		44,025			40,781			169,800			131,824
Deposits in banks and short-term investments		12,764			2,720			24,702			7,929
Total interest revenue		338,698			240,831			1,237,107			813,155
Interest expense:
Deposits:
NOW and interest-bearing demand		44,527			9,688			125,336			17,312
Money market		50,967			11,244			156,397			18,274
Savings		758			356			2,866			693
Time		35,511			3,498			110,975			5,820
Deposits		131,763			24,786			395,574			42,099
Short-term borrowings		9			480			3,195			507
Federal Home Loan Bank advances		—			1,424			5,761			1,424
Long-term debt		3,473			4,253			14,812			16,768
Total interest expense		135,245			30,943			419,342			60,798
Net interest revenue		203,453			209,888			817,765			752,357
Provision for credit losses		14,626			19,831			89,430			63,913
Net interest revenue after provision for credit losses		188,827			190,057			728,335			688,444
Noninterest income:
Service charges and fees		9,621			9,519			38,412			38,163
Mortgage loan gains and related fees		1,956			3,104			19,220			32,524
Wealth management fees		5,965			5,835			23,740			23,594
Gains from other loan sales		2,237			1,504			9,146			10,730
Other lending and loan servicing fees		3,994			2,487			13,973			10,005
Securities losses, net		(51,689	)		(184	)		(53,333	)		(3,872	)
Other		4,826			11,089			24,325			26,563
Total noninterest income		(23,090	)		33,354			75,483			137,707
Total revenue		165,737			223,411			803,818			826,151
Noninterest expenses:
Salaries and employee benefits		82,343			68,143			318,464			276,205
Occupancy		11,616			8,866			42,640			36,247
Communications and equipment		11,610			10,516			43,264			38,234
FDIC assessments and other regulatory charges		14,992			3,098			27,449			9,894
Professional fees		7,062			5,496			26,732			20,166
Lending and loan servicing expense		2,176			1,604			9,722			9,350
Outside services - electronic banking		2,931			3,954			11,577			12,583
Postage, printing and supplies		2,162			2,441			9,467			8,749
Advertising and public relations		2,559			2,052			9,473			8,384
Amortization of intangibles		4,055			1,619			15,175			6,826
Merger-related and other charges		5,766			1,470			27,210			19,375
Other		7,315			8,070			30,100			24,136
Total noninterest expenses		154,587			117,329			571,273			470,149
Net income before income taxes		11,150			106,082			232,545			356,002
Income tax (benefit) expense		(2,940	)		24,632			45,001			78,530
Net income	$	14,090		$	81,450		$	187,544		$	277,472
Preferred stock dividends, net of discount on repurchases		1,395			1,718			5,665			6,875
Earnings allocated to participating securities		77			461			1,032			1,462
Net income available to common shareholders	$	12,618		$	79,271		$	180,847		$	269,135
Net income per common share:
Basic	$	0.11		$	0.74		$	1.54		$	2.52
Diluted		0.11			0.74			1.54			2.52
Weighted average common shares outstanding:
Basic		119,612			106,795			117,603			106,661
Diluted		119,713			106,916			117,745			106,778

Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
		2023							2022
	Average Balance			Interest		Average Rate		Average Balance			Interest		Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	18,167,572		$	281,776	6.15	%	$	15,002,836		$	197,502	5.22	%
Taxable securities⁽³⁾		5,772,630			42,293	2.93			6,325,165			38,220	2.42
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		367,585			2,326	2.53			490,838			3,440	2.80
Federal funds sold and other interest-earning assets		1,092,939			13,294	4.83			453,090			2,912	2.55
Total interest-earning assets (FTE)		25,400,726			339,689	5.31			22,271,929			242,074	4.32

Noninterest-earning assets:
Allowance for loan losses		(204,631	)						(152,551	)
Cash and due from banks		210,383							217,873
Premises and equipment		377,765							297,523
Other assets ⁽³⁾		1,516,268							1,166,424
Total assets	$	27,300,511						$	23,801,198

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	5,961,835			44,527	2.96		$	4,385,916			9,688	0.88
Money market		5,799,213			50,967	3.49			4,628,585			11,244	0.96
Savings		1,227,708			758	0.24			1,480,908			356	0.10
Time		3,611,790			35,117	3.86			1,708,311			3,143	0.73
Brokered time deposits		60,583			394	2.58			51,258			355	2.75
Total interest-bearing deposits		16,661,129			131,763	3.14			12,254,978			24,786	0.80
Federal funds purchased and other borrowings		7,958			9	0.45			47,487			480	4.01
Federal Home Loan Bank advances		—			—	—			135,000			1,424	4.18
Long-term debt		324,801			3,473	4.24			324,590			4,253	5.20
Total borrowed funds		332,759			3,482	4.15			507,077			6,157	4.82
Total interest-bearing liabilities		16,993,888			135,245	3.16			12,762,055			30,943	0.96

Noninterest-bearing liabilities:
Noninterest-bearing deposits		6,690,251							7,993,816
Other liabilities		410,067							383,270
Total liabilities		24,094,206							21,139,141
Shareholders’ equity		3,206,305							2,662,057
Total liabilities and shareholders’ equity	$	27,300,511						$	23,801,198

Net interest revenue (FTE)				$	204,444						$	211,131
Net interest-rate spread (FTE)						2.15	%						3.36	%
Net interest margin (FTE) ⁽⁴⁾						3.19	%						3.76	%

⁽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⁾	Unrealized gains and losses on AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $458 million in 2023 and $454 million in 2022 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.

Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,
(dollars in thousands, fully taxable equivalent (FTE))
		2023							2022
	Average Balance			Interest		Average Rate		Average Balance			Interest		Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾	$	17,576,424		$	1,042,578	5.93	%	$	14,571,746		$	673,491	4.62	%
Taxable securities ⁽³⁾		5,929,687			162,505	2.74			6,284,603			121,501	1.93
Tax-exempt securities (FTE)⁽¹⁾⁽³⁾		381,731			9,796	2.57			496,327			13,865	2.79
Federal funds sold and other interest-earning assets		642,499			26,397	4.11			1,065,057			9,104	0.85
Total interest-earning assets (FTE)		24,530,341			1,241,276	5.06			22,417,733			817,961	3.65

Non-interest-earning assets:
Allowance for loan losses		(191,016	)						(135,144	)
Cash and due from banks		239,574							204,852
Premises and equipment		355,139							288,044
Other assets ⁽³⁾		1,517,940							1,275,263
Total assets	$	26,451,978						$	24,050,748

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	5,161,071			125,336	2.43		$	4,486,263			17,312	0.39
Money market		5,462,677			156,397	2.86			4,900,667			18,274	0.37
Savings		1,312,469			2,866	0.22			1,482,599			693	0.05
Time		3,106,989			100,973	3.25			1,693,307			5,152	0.30
Brokered time deposits		224,914			10,002	4.45			61,636			668	1.08
Total interest-bearing deposits		15,268,120			395,574	2.59			12,624,472			42,099	0.33
Federal funds purchased and other borrowings		75,965			3,195	4.21			13,004			507	3.90
Federal Home Loan Bank advances		124,425			5,761	4.63			34,027			1,424	4.18
Long-term debt		324,753			14,812	4.56			323,102			16,768	5.19
Total borrowed funds		525,143			23,768	4.53			370,133			18,699	5.05
Total interest-bearing liabilities		15,793,263			419,342	2.66			12,994,605			60,798	0.47

Noninterest-bearing liabilities:
Noninterest-bearing deposits		7,091,034							7,967,321
Other liabilities		397,337							377,221
Total liabilities		23,281,634							21,339,147
Shareholders’ equity		3,170,344							2,711,601
Total liabilities and shareholders’ equity	$	26,451,978						$	24,050,748

Net interest revenue (FTE)				$	821,934						$	757,163
Net interest-rate spread (FTE)						2.40	%						3.18	%
Net interest margin (FTE) ⁽⁴⁾						3.35	%						3.38	%

⁽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⁾	Unrealized gains and losses on AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $424 million in 2023 and $277 million in 2022 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. (NASDAQ: UCBI) is the financial holding company for United Community, a top 100 US financial institution that is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. United Community provides a full range of banking, wealth management, and mortgage services. As of December 31, 2023, United Community has $27.2 billion in assets and 207 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment financing subsidiary. United Community has been recognized nationally as a leader in customer service, financial performance, and workplace environment. Among the accolades, United Community is a nine-time winner of the J.D. Power award that ranked the bank #1 in customer satisfaction with consumer banking in the Southeast and was recognized in 2023 by Forbes as one of the World's Best Banks and one of America's Best Banks. United Community was also recognized by Newsweek in 2023 as one of the Most Trusted Companies in America, is a multi-award recipient of the Greenwich Excellence Awards and was named by American Banker as one of the "Best Banks to Work For" in 2023 for the seventh consecutive year. Additional information about United Community can be found at 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 non-operating items,” “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. Further, United’s management uses these measures in managing and evaluating United’s business and intends to refer to them in discussions about United’s operations and performance. 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 strength of our pipelines and their ability to support business growth across our markets and our belief that our high-quality balance sheet and business mix will support strong performance regardless of future economic conditions. 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 acquisitions 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 these acquisitions, (3) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to these acquisitions, (4) the risks relating to the integration of acquired banks’ 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, (5) the risks associated with United’s pursuit of future acquisitions, (6) the risk associated with expansion into new geographic or product markets, and (7) general competitive, economic, political, regulatory and market conditions. 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, 2022, 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

United Community Banks, Inc. Reports Fourth Quarter Results

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