UCBI - United Community Banks Inc. Reports Fourth Quarter 2022 Results

January, 17 2023 04:30 PM United Community Banks Inc.

GREENVILLE, S.C., Jan. 17, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2022 fourth quarter was $81.5 million and pre-tax, pre-provision income was $125.9 million. Diluted earnings per share of $0.74 for the quarter represented an increase of $0.19 or 35%, from the fourth quarter a year ago, and was flat from the third quarter of 2022. On an operating basis, United’s diluted earnings per share of $0.75 was up 17% from the year ago quarter. The primary drivers of the increased earnings in both periods were increased interest rates and organic loan growth, as well as the acquisition of Reliant Bancorp, Inc., which closed on January 1, 2022 and was not reflected in the year-ago quarter. United’s return on assets was 1.33%, or 1.35% on an operating basis. Return on equity was 10.9% and return on tangible common equity was 15.2%. On a pre-tax, pre-provision basis, operating return on assets was 2.09% for the quarter. Highlights for the quarter include strong annualized loan growth of 12%, 19 basis points of net interest margin expansion and further improvement in the efficiency ratio to 47.95%, or 47.35% on an operating basis, which excludes the effect of merger-related and other charges.

Chairman and CEO Lynn Harton stated, “We are pleased with our performance during this quarter and in 2022. In the quarter, our loan growth across all categories was strong and our net interest margin continued to benefit from increasing interest rates. As a result, we generated positive operating leverage, resulting in a new record efficiency ratio for us.” Harton continued, “On the strategic front, we continue to benefit from the acquisitions we have completed over the past few years. These new partnerships have expanded the company into exciting growth markets and have brought talented bankers to United. While not included in these quarterly results, we are excited that we have now completed the addition of Progress Financial Corporation to the United family on January 3, 2023. Progress has a talented team, exceptional leadership, and operates in great markets in Alabama and the Florida Panhandle. I am very glad to welcome them to our team.”

The net interest margin increased by 19 basis points to 3.76% from the third quarter, while the average yield on interest-earning assets was up 49 basis points to 4.32% and United’s cost of deposits increased by 30 basis points to 0.49%. Net charge-offs increased to $6.6 million or 0.17% of average loans during the quarter, mainly driven by one C&I loan, and NPAs were up slightly from prior quarters to 18 basis points relative to total assets.

Mr. Harton concluded, “2023 will be another great year for United despite some changes in the environment. Deposit competition will continue to increase as depositors seek higher returns for their excess liquidity. Well publicized recession fears may drive increasing provision costs for the industry. We believe we are well prepared to navigate these conditions due to the strength of our balance sheet, and more importantly, the strength of our teams. In 2022, we further strengthened our Board of Directors, added new market leaders, new commercial bankers and new line-of-business leaders. We also expanded our service capabilities with new locations across our footprint. In closing, I would note that we are all very proud that in October, United was named one of the “Best Banks to Work For” by American Banker for the sixth consecutive year. Everything begins with being a great place to work for great people. One of my goals for the year is to do an even better job of making sure we keep our company feeling small and connected as we continue to grow.”

2022 Financial Highlights:

Completed successful year with strong loan growth and historically high pre-credit profitability, and completed an acquisition in the high-growth Nashville, Tennessee MSA, which was a strategic priority
Full year EPS of $2.52, a decrease of 15% compared to 2021; full year operating EPS of $2.66, a decrease of 14% from 2021
Return on assets of 1.13%, or 1.19% on an operating basis
Pre-tax, pre-provision return on assets of 1.80% on an operating basis
Return on common equity of 9.5%
Return on tangible common equity of 14.0% on an operating basis
A provision for credit losses of $63.9 million compared to a release of provision of $37.6 million in 2021, with $18.3 million attributable to establishing an initial allowance for loans acquired in the first quarter in the Reliant acquisition
Strong loan growth of $3.6 billion or $1.3 billion excluding loans acquired from Reliant and PPP loans
Core transaction deposits were up $1.3 billion compared to 2021; excluding Reliant, 2022 core transaction deposits were down $819 million, or 5.7%, reflecting runoff following 2021’s pandemic-related deposit surge
Net interest margin of 3.38%, which was up 31 basis points from last year primarily due to increased interest rates
Noninterest income was down 12.7% primarily due to a decline in mortgage fees, as higher rates softened demand
The efficiency ratio of 52.3%, or 50.2% on an operating basis, was improved as the combination of higher rates and the achievement of merger-related efficiencies drove the ratio to record low levels
Net charge-offs remained low at just $9.7 million, or 0.07% of average total loans

Fourth Quarter 2022 Financial Highlights:

Net income of $81.5 million and pre-tax, pre-provision income of $125.9 million
EPS increased by 35% compared to fourth quarter 2021 on a GAAP basis and 17% on an operating basis; compared to third quarter 2022, EPS remained flat on a GAAP basis and on an operating basis
Return on assets of 1.33%, or 1.35% on an operating basis
Pre-tax, pre-provision return on assets of 2.09% on an operating basis
Return on common equity of 10.9%
Return on tangible common equity of 15.2% on an operating basis
A provision for credit losses of $19.8 million, which increased the allowance for loan losses to 1.04% of loans from 1.00% in the third quarter
Loan production of $1.5 billion, resulting in loan growth of 12%, annualized for the quarter
Core transaction deposits were down $915 million; or 22% annualized
Net interest margin of 3.76% was up 19 basis points from the third quarter, due to increased interest rates and loan growth
Mortgage closings of $253 million compared to $522 million a year ago; mortgage rate locks of $364 million compared to $695 million a year ago
Noninterest income was up $1.4 million on a linked quarter basis, primarily driven by positive marks on certain investments and offset by lower mortgage fees
Noninterest expenses increased by $4.6 million compared to the third quarter on a GAAP basis and by $4.9 million on an operating basis, mostly due to lower deferred costs from lower mortgage loan volume and higher FDIC deposit insurance costs
Efficiency ratio of 48.0%, or 47.4% on an operating basis
Net charge-offs of $6.6 million, or 17 basis points as a percent of average loans, up 14 basis points from the net charge-offs experienced in the third quarter
Nonperforming assets of 0.18% of total assets, up 3 basis points compared to September 30, 2022
Quarterly common shareholder dividend of $0.22 per share declared during the quarter, an increase of 10% year-over-year
After the end of the quarter, we completed the acquisition of Progress Financial Corporation and its banking subsidiary Progress Bank and Trust with $1.8 billion in assets on January 3, 2023; financial returns are expected to be within our desired thresholds

Conference Call

United will hold a conference call on Wednesday, January 18, 2023, 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/10174303/f57c53ab13 . Those without internet access or 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 can be accessed by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of the company's website, www.ucbi.com .


UNITED COMMUNITY BANKS, INC. Selected Financial Information (in thousands, except per share data)



2022



2021


Fourth Quarter 2022 - 2021 Change

For the Twelve Months Ended December 31,

YTD 2022 - 2021 Change


Fourth Quarter

Third Quarter

Second Quarter

First Quarter

Fourth Quarter



2022



2021


INCOME SUMMARY


















Interest revenue

$
240,831


$
213,887


$
187,378


$
171,059


$
143,768




$
813,155


$
578,794



Interest expense


30,943



14,113



8,475



7,267



6,213





60,798



29,760



Net interest revenue


209,888



199,774



178,903



163,792



137,555


53
%


752,357



549,034


37
%
Provision for credit losses


19,831



15,392



5,604



23,086



(647
)




63,913



(37,550
)


Noninterest income


33,354



31,922



33,458



38,973



37,177


(10
)


137,707



157,818


(13
)
Total revenue


223,411



216,304



206,757



179,679



175,379


27



826,151



744,402


11

Noninterest expenses


117,329



112,755



120,790



119,275



109,156


7



470,149



396,639


19

Income before income tax expense


106,082



103,549



85,967



60,404



66,223





356,002



347,763



Income tax expense


24,632



22,388



19,125



12,385



14,204





78,530



77,962



Net income


81,450



81,161



66,842



48,019



52,019





277,472



269,801



Merger-related and other charges


1,470



1,746



7,143



9,016



9,912





19,375



13,970



Income tax benefit of merger-related and other charges


(323
)


(385
)


(1,575
)


(1,963
)


(2,265
)




(4,246
)


(3,174
)


Net income - operating ⁽¹⁾

$
82,597


$
82,522


$
72,410


$
55,072


$
59,666


38


$
292,601


$
280,597


4




















Pre-tax pre-provision income ⁽⁵⁾

$
125,913


$
118,941


$
91,571


$
83,490


$
65,576


92


$
419,915


$
310,213


35




















PERFORMANCE MEASURES


















Per common share:


















Diluted net income - GAAP

$
0.74


$
0.74


$
0.61


$
0.43


$
0.55


35


$
2.52


$
2.97


(15
)
Diluted net income - operating ⁽¹⁾


0.75



0.75



0.66



0.50



0.64


17



2.66



3.09


(14
)
Common stock cash dividends declared


0.22



0.22



0.21



0.21



0.20


10



0.86



0.78


10

Book value


24.38



23.78



23.96



24.38



23.63


3



24.38



23.63


3

Tangible book value ⁽³⁾


17.13



16.52



16.68



17.08



18.42


(7
)


17.13



18.42


(7
)
Key performance ratios:


















Return on common equity - GAAP ⁽²⁾⁽⁴⁾


10.86
%


11.02
%


9.31
%


6.80
%


9.32
%




9.54
%


13.14
%


Return on common equity - operating ^(1)(2)(4)


11.01



11.21



10.10



7.83



10.74





10.07



13.68



Return on tangible common equity - operating ^(1)(2)(3)(4)


15.20



15.60



14.20



11.00



13.93





14.04



17.33



Return on assets - GAAP ⁽⁴⁾


1.33



1.32



1.08



0.78



0.96





1.13



1.37



Return on assets - operating ⁽¹⁾⁽⁴⁾


1.35



1.34



1.17



0.89



1.10





1.19



1.42



Return on assets -pre-tax pre-provision ⁽⁴⁾⁽⁵⁾


2.07



1.94



1.49



1.37



1.21





1.72



1.58



Return on assets -pre-tax pre-provision, excluding merger related and other charges ^(1)(4)(5)


2.09



1.97



1.60



1.52



1.40





1.80



1.65



Net interest margin (fully taxable equivalent) ⁽⁴⁾


3.76



3.57



3.19



2.97



2.81





3.38



3.07



Efficiency ratio - GAAP


47.95



48.41



56.58



57.43



62.12





52.31



55.80



Efficiency ratio - operating ⁽¹⁾


47.35



47.66



53.23



53.09



56.48





50.16



53.83



Equity to total assets


11.25



11.12



10.95



11.06



10.61





11.25



10.61



Tangible common equity to tangible assets ⁽³⁾


7.88



7.70



7.59



7.72



8.09





7.88



8.09



ASSET QUALITY


















Nonperforming assets (“NPAs”)

$
44,281


$
35,511


$
34,428


$
40,816


$
32,855


35


$
44,281


$
32,855


35

Allowance for credit losses - loans


159,357



148,502



136,925



132,805



102,532


55



159,357



102,532


55

Allowance for credit losses - total


180,520



167,300



153,042



146,369



113,524


59



180,520



113,524


59

Net charge-offs (recoveries)


6,611



1,134



(1,069
)


2,978



248





9,654



38



Allowance for credit losses - loans to loans


1.04
%


1.00
%


0.94
%


0.93
%


0.87
%




1.04
%


0.87
%


Allowance for credit losses - total to loans


1.18



1.12



1.05



1.02



0.97





1.18



0.97



Net charge-offs to average loans ⁽⁴⁾


0.17



0.03



(0.03
)


0.08



0.01





0.07



—



NPAs to total assets


0.18



0.15



0.14



0.17



0.16





0.18



0.16



AT PERIOD END ($ in millions)


















Loans

$
15,335


$
14,882


$
14,541


$
14,316


$
11,760


30


$
15,335


$
11,760


30

Investment securities


6,228



6,539



6,683



6,410



5,653


10



6,228



5,653


10

Total assets


24,009



23,688



24,213



24,374



20,947


15



24,009



20,947


15

Deposits


19,877



20,321



20,873



21,056



18,241


9



19,877



18,241


9

Shareholders’ equity


2,701



2,635



2,651



2,695



2,222


22



2,701



2,222


22

Common shares outstanding (thousands)


106,223



106,163



106,034



106,025



89,350


19



106,223



89,350


19

⁽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 Informatio n (in thousands, except per share data)



2022



2021


Twelve Months Ended December 31,


Fourth Quarter

Third Quarter

Second Quarter

First Quarter

Fourth Quarter


2022



2021

Noninterest expense reconciliation














Noninterest expenses (GAAP)

$
117,329


$
112,755


$
120,790


$
119,275


$
109,156


$
470,149


$
396,639

Merger-related and other charges


(1,470
)


(1,746
)


(7,143
)


(9,016
)


(9,912
)


(19,375
)


(13,970
)
Expenses - operating

$
115,859


$
111,009


$
113,647


$
110,259


$
99,244


$
450,774


$
382,669
















Net income to operating income reconciliation














Net income (GAAP)

$
81,450


$
81,161


$
66,842


$
48,019


$
52,019


$
277,472


$
269,801

Merger-related and other charges


1,470



1,746



7,143



9,016



9,912



19,375



13,970

Income tax benefit of merger-related and other charges


(323
)


(385
)


(1,575
)


(1,963
)


(2,265
)


(4,246
)


(3,174
)
Net income - operating

$
82,597


$
82,522


$
72,410


$
55,072


$
59,666


$
292,601


$
280,597
















Net income to pre-tax pre-provision income reconciliation














Net income (GAAP)

$
81,450


$
81,161


$
66,842


$
48,019


$
52,019


$
277,472


$
269,801

Income tax expense


24,632



22,388



19,125



12,385



14,204



78,530



77,962

Provision for credit losses


19,831



15,392



5,604



23,086



(647
)


63,913



(37,550
)
Pre-tax pre-provision income

$
125,913


$
118,941


$
91,571


$
83,490


$
65,576


$
419,915


$
310,213
















Diluted income per common share reconciliation














Diluted income per common share (GAAP)

$
0.74


$
0.74


$
0.61


$
0.43


$
0.55


$
2.52


$
2.97

Merger-related and other charges


0.01



0.01



0.05



0.07



0.09



0.14



0.12

Diluted income per common share - operating

$
0.75


$
0.75


$
0.66


$
0.50


$
0.64


$
2.66


$
3.09
















Book value per common share reconciliation














Book value per common share (GAAP)

$
24.38


$
23.78


$
23.96


$
24.38


$
23.63


$
24.38


$
23.63

Effect of goodwill and other intangibles


(7.25
)


(7.26
)


(7.28
)


(7.30
)


(5.21
)


(7.25
)


(5.21
)
Tangible book value per common share

$
17.13


$
16.52


$
16.68


$
17.08


$
18.42


$
17.13


$
18.42
















Return on tangible common equity reconciliation














Return on common equity (GAAP)


10.86
%


11.02
%


9.31
%


6.80
%


9.32
%


9.54
%


13.14
%
Merger-related and other charges


0.15



0.19



0.79



1.03



1.42



0.53



0.54

Return on common equity - operating


11.01



11.21



10.10



7.83



10.74



10.07



13.68

Effect of goodwill and other intangibles


4.19



4.39



4.10



3.17



3.19



3.97



3.65

Return on tangible common equity - operating


15.20
%


15.60
%


14.20
%


11.00
%


13.93
%


14.04
%


17.33
%















Return on assets reconciliation














Return on assets (GAAP)


1.33
%


1.32
%


1.08
%


0.78
%


0.96
%


1.13
%


1.37
%
Merger-related and other charges


0.02



0.02



0.09



0.11



0.14



0.06



0.05

Return on assets - operating


1.35
%


1.34
%


1.17
%


0.89
%


1.10
%


1.19
%


1.42
%















Return on assets to return on assets- pre-tax pre-provision reconciliation














Return on assets (GAAP)


1.33
%


1.32
%


1.08
%


0.78
%


0.96
%


1.13
%


1.37
%
Income tax expense


0.41



0.37



0.32



0.20



0.26



0.32



0.40

Provision for credit losses


0.33



0.25



0.09



0.39



(0.01
)


0.27



(0.19
)
Return on assets - pre-tax pre-provision


2.07



1.94



1.49



1.37



1.21



1.72



1.58

Merger-related and other charges


0.02



0.03



0.11



0.15



0.19



0.08



0.07

Return on assets - pre-tax pre-provision, excluding merger-related and other charges


2.09
%


1.97
%


1.60
%


1.52
%


1.40
%


1.80
%


1.65
%















Efficiency ratio reconciliation














Efficiency ratio (GAAP)


47.95
%


48.41
%


56.58
%


57.43
%


62.12
%


52.31
%


55.80
%
Merger-related and other charges


(0.60
)


(0.75
)


(3.35
)


(4.34
)


(5.64
)


(2.15
)


(1.97
)
Efficiency ratio - operating


47.35
%


47.66
%


53.23
%


53.09
%


56.48
%


50.16
%


53.83
%















Tangible common equity to tangible assets reconciliation














Equity to total assets (GAAP)


11.25
%


11.12
%


10.95
%


11.06
%


10.61
%


11.25
%


10.61
%
Effect of goodwill and other intangibles


(2.97
)


(3.01
)


(2.96
)


(2.94
)


(2.06
)


(2.97
)


(2.06
)
Effect of preferred equity


(0.40
)


(0.41
)


(0.40
)


(0.40
)


(0.46
)


(0.40
)


(0.46
)
Tangible common equity to tangible assets


7.88
%


7.70
%


7.59
%


7.72
%


8.09
%


7.88
%


8.09
%


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
(in millions)


2022


2021

Linked Quarter Change

Year over Year Change

Fourth Quarter

Third Quarter

Second Quarter

First Quarter

Fourth Quarter


LOANS BY CATEGORY













Owner occupied commercial RE
$
2,735

$
2,700

$
2,681

$
2,638

$
2,322

$
35


$
413

Income producing commercial RE

3,262


3,299


3,273


3,328


2,601


(37
)


661

Commercial & industrial

2,251


2,236


2,243


2,302


1,822


15



429

Paycheck protection program

1


2


10


34


88


(1
)


(87
)
Commercial construction

1,598


1,514


1,514


1,482


1,015


84



583

Equipment financing

1,374


1,281


1,211


1,148


1,083


93



291

Total commercial

11,221


11,032


10,932


10,932


8,931


189



2,290

Residential mortgage

2,355


2,149


1,997


1,826


1,638


206



717

Home equity lines of credit

850


832


801


778


694


18



156

Residential construction

443


423


381


368


359


20



84

Manufactured housing

317


301


287


269


—


16



317

Consumer

149


145


143


143


138


4



11

Total loans
$
15,335

$
14,882

$
14,541

$
14,316

$
11,760

$
453


$
3,575















LOANS BY STATE













Georgia
$
4,051

$
4,003

$
3,960

$
3,879

$
3,778

$
48


$
273

South Carolina

2,587


2,516


2,377


2,323


2,235


71



352

North Carolina

2,186


2,117


2,006


1,879


1,895


69



291

Tennessee

2,507


2,536


2,621


2,661


373


(29
)


2,134

Florida

1,308


1,259


1,235


1,208


1,148


49



160

Commercial Banking Solutions

2,696


2,451


2,342


2,366


2,331


245



365

Total loans
$
15,335

$
14,882

$
14,541

$
14,316

$
11,760

$
453


$
3,575










UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions)


2022


2021


2020


2019


2018
LOANS BY CATEGORY









Owner occupied commercial RE
$
2,735

$
2,322

$
2,090

$
1,720

$
1,648
Income producing commercial RE

3,262


2,601


2,541


2,008


1,812
Commercial & industrial

2,251


1,822


1,853


1,221


1,278
Paycheck protection program

1


88


646


—


—
Commercial construction

1,598


1,015


967


976


796
Equipment financing

1,374


1,083


864


745


565
Total commercial

11,221


8,931


8,961


6,670


6,099
Residential mortgage

2,355


1,638


1,285


1,118


1,049
Home equity lines of credit

850


694


697


661


694
Residential construction

443


359


281


236


211
Manufactured housing

317


—


—


—


—
Consumer

149


138


147


128


330
Total loans
$
15,335

$
11,760

$
11,371

$
8,813

$
8,383










LOANS BY STATE









Georgia
$
4,051

$
3,778

$
3,685

$
3,606

$
3,323
South Carolina

2,587


2,235


1,947


1,708


1,645
North Carolina

2,186


1,895


1,281


1,156


1,072
Tennessee

2,507


373


415


421


477
Florida

1,308


1,148


1,435


—


—
Commercial Banking Solutions

2,696


2,331


2,608


1,922


1,658
Indirect auto

—


—


—


—


208
Total loans
$
15,335

$
11,760

$
11,371

$
8,813

$
8,383








UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality






(in thousands)









2022


Fourth Quarter

Third Quarter

Second Quarter
NONACCRUAL LOANS






Owner occupied RE

$
523

$
877

$
1,876
Income producing RE


3,885


2,663


7,074
Commercial & industrial


14,470


11,108


4,548
Commercial construction


133


150


208
Equipment financing


5,438


3,198


3,249
Total commercial


24,449


17,996


16,955
Residential mortgage


10,919


10,424


12,228
Home equity lines of credit


1,888


1,151


933
Residential construction


405


104


198
Manufactured housing


6,518


4,187


2,804
Consumer


53


17


25
Total nonaccrual loans held for investment


44,232


33,879


33,143
Nonaccrual loans HFS


—


316


317
OREO and repossessed assets


49


1,316


968
Total NPAs

$
44,281

$
35,511

$
34,428




2022



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

$
(130
)

(0.02
)%

$
(90
)

(0.01
)%

$
(1,496
)

(0.23
)%
Income producing RE


(113
)

(0.01
)


176


0.02



(116
)

(0.01
)
Commercial & industrial


4,577


0.81



(744
)

(0.13
)


(302
)

(0.05
)
Commercial construction


(77
)

(0.02
)


10


—



(144
)

(0.04
)
Equipment financing


1,658


0.50



1,121


0.36



907


0.31

Total commercial


5,915


0.21



473


0.02



(1,151
)

(0.04
)
Residential mortgage


(33
)

(0.01
)


(66
)

(0.01
)


(51
)

(0.01
)
Home equity lines of credit


(89
)

(0.04
)


(102
)

(0.05
)


(346
)

(0.18
)
Residential construction


(23
)

(0.02
)


(109
)

(0.11
)


(76
)

(0.08
)
Manufactured housing


246


0.32



220


0.30



135


0.20

Consumer


595


1.61



718


1.98



420


1.18

Total

$
6,611


0.17


$
1,134


0.03


$
(1,069
)

(0.03
)













⁽¹⁾ Annualized.


UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data)







December 31, 2022

December 31, 2021
ASSETS




Cash and due from banks

$
195,771


$
144,244

Interest-bearing deposits in banks


316,082



2,147,266

Federal funds and other short-term investments


135,000



27,000

Cash and cash equivalents


646,853



2,318,510

Debt securities available-for-sale


3,614,333



4,496,824

Debt securities held-to-maturity (fair value $2,191,073 and $1,148,804, respectively)


2,613,648



1,156,098

Loans held for sale at fair value


13,600



44,109

Loans and leases held for investment


15,334,627



11,760,346

Less allowance for credit losses - loans and leases


(159,357
)


(102,532
)
Loans and leases, net


15,175,270



11,657,814

Premises and equipment, net


298,456



245,296

Bank owned life insurance


299,297



217,713

Accrued interest receivable


72,807



42,999

Net deferred tax asset


129,313



41,322

Derivative financial instruments


50,636



42,480

Goodwill and other intangible assets, net


779,248



472,407

Other assets


315,423



211,199

Total assets

$
24,008,884


$
20,946,771

LIABILITIES AND SHAREHOLDERS’ EQUITY




Liabilities:




Deposits:




Noninterest-bearing demand

$
7,643,081


$
6,956,981

NOW and interest-bearing demand


4,350,878



4,252,209

Money market


4,510,680



4,183,354

Savings


1,456,337



1,215,779

Time


1,781,482



1,442,498

Brokered


134,049



190,358

Total deposits


19,876,507



18,241,179

Short-term borrowings


158,933



—

Federal Home Loan Bank advances


550,000



—

Long-term debt


324,663



247,360

Derivative financial instruments


99,543



25,145

Accrued expenses and other liabilities


298,564



210,842

Total liabilities


21,308,210



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; 106,222,758 and 89,349,826 shares issued and outstanding, respectively


106,223



89,350

Common stock issuable; 607,128 and 595,705 shares, respectively


12,307



11,288

Capital surplus


2,306,366



1,721,007

Retained earnings


508,844



330,654

Accumulated other comprehensive loss


(329,488
)


(26,476
)
Total shareholders’ equity


2,700,674



2,222,245

Total liabilities and shareholders’ equity

$
24,008,884


$
20,946,771


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,



2022



2021



2022



2021

Interest revenue:








Loans, including fees

$
197,330


$
123,473


$
673,402


$
505,734

Investment securities, including tax exempt of $2,561, 2,293, $10,323 and $8,978


40,781



19,442



131,824



70,972

Deposits in banks and short-term investments


2,720



853



7,929



2,088

Total interest revenue


240,831



143,768



813,155



578,794

Interest expense:








Deposits:








NOW and interest-bearing demand


9,688



1,310



17,312



5,468

Money market


11,244



1,102



18,274



5,380

Savings


356



60



693



217

Time


3,498



392



5,820



3,780

Deposits


24,786



2,864



42,099



14,845

Short-term borrowings


480



—



507



—

Federal Home Loan Bank advances


1,424



1



1,424



3

Long-term debt


4,253



3,348



16,768



14,912

Total interest expense


30,943



6,213



60,798



29,760

Net interest revenue


209,888



137,555



752,357



549,034

Provision for credit losses


19,831



(647
)


63,913



(37,550
)
Net interest revenue after provision for credit losses


190,057



138,202



688,444



586,584

Noninterest income:








Service charges and fees


9,519



8,613



38,163



33,868

Mortgage loan gains and related fees


3,104



10,910



32,524



58,446

Wealth management fees


5,835



6,117



23,594



18,998

Gains from other loan sales, net


1,504



3,761



10,730



11,267

Other lending and loan servicing fees


2,487



2,357



10,005



9,427

Securities (losses) gains, net


(184
)


42



(3,872
)


83

Other


11,089



5,377



26,563



25,729

Total noninterest income


33,354



37,177



137,707



157,818

Total revenue


223,411



175,379



826,151



744,402

Noninterest expenses:








Salaries and employee benefits


68,143



60,986



276,205



241,443

Occupancy


8,866



7,489



36,247



28,619

Communications and equipment


10,516



7,850



38,234



29,829

FDIC assessments and other regulatory charges


3,098



1,878



9,894



7,398

Professional fees


5,496



6,080



20,166



20,589

Lending and loan servicing expense


1,604



2,351



9,350



10,859

Outside services - electronic banking


3,954



2,670



12,583



9,481

Postage, printing and supplies


2,441



1,939



8,749



7,110

Advertising and public relations


2,052



1,760



8,384



5,910

Amortization of intangibles


1,619



1,103



6,826



4,045

Merger-related and other charges


1,470



9,912



19,375



13,970

Other


8,070



5,138



24,136



17,386

Total noninterest expenses


117,329



109,156



470,149



396,639

Net income before income taxes


106,082



66,223



356,002



347,763

Income tax expense


24,632



14,204



78,530



77,962

Net income

$
81,450


$
52,019


$
277,472


$
269,801

Preferred stock dividends


1,718



1,718



6,875



6,875

Earnings allocated to participating securities


461



317



1,462



1,657

Net income available to common shareholders

$
79,271


$
49,984


$
269,135


$
261,269

Net income per common share:








Basic

$
0.74


$
0.56


$
2.52


$
2.97

Diluted


0.74



0.55



2.52



2.97

Weighted average common shares outstanding:








Basic


106,795



89,916



106,661



87,940

Diluted


106,916



90,089



106,778



88,097


Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended December 31, (dollars in thousands, fully taxable equivalent (FTE))




2022



2021



Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate
Assets:












Interest-earning assets:












Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾

$
15,002,836


$
197,502

5.22
%

$
11,689,412


$
123,250


4.18
%
Taxable securities ⁽³⁾


6,325,165



38,220

2.42



5,156,563



17,149


1.33

Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾


490,838



3,440

2.80



387,638



3,080


3.18

Federal funds sold and other interest-earning assets


453,090



2,912

2.55



2,308,241



1,322


0.23

Total interest-earning assets (FTE)


22,271,929



242,074

4.32



19,541,854



144,801


2.94














Noninterest-earning assets:












Allowance for loan losses


(152,551
)






(103,167
)




Cash and due from banks


217,873







141,967





Premises and equipment


297,523







245,869





Other assets ⁽³⁾


1,166,424







1,036,760





Total assets

$
23,801,198






$
20,863,283


















Liabilities and Shareholders’ Equity:












Interest-bearing liabilities:












Interest-bearing deposits:












NOW and interest-bearing demand

$
4,385,916



9,688

0.88


$
4,080,621



1,310


0.13

Money market


4,628,585



11,244

0.96



4,323,851



1,102


0.10

Savings


1,480,908



356

0.10



1,187,134



60


0.02

Time


1,708,311



3,143

0.73



1,461,231



567


0.15

Brokered time deposits


51,258



355

2.75



65,556



(175
)

(1.06
)
Total interest-bearing deposits


12,254,978



24,786

0.80



11,118,393



2,864


0.10

Federal funds purchased and other borrowings


47,487



480

4.01



51



—


—

Federal Home Loan Bank advances


135,000



1,424

4.18



1,426



1


0.28

Long-term debt


324,590



4,253

5.20



247,251



3,348


5.37

Total borrowed funds


507,077



6,157

4.82



248,728



3,349


5.34

Total interest-bearing liabilities


12,762,055



30,943

0.96



11,367,121



6,213


0.22














Noninterest-bearing liabilities:












Noninterest-bearing deposits


7,993,816







6,918,279





Other liabilities


383,270







354,665





Total liabilities


21,139,141







18,640,065





Shareholders’ equity


2,662,057







2,223,218





Total liabilities and shareholders’ equity

$
23,801,198






$
20,863,283


















Net interest revenue (FTE)



$
211,131





$
138,588



Net interest-rate spread (FTE)





3.36
%





2.72
%
Net interest margin (FTE) ⁽⁴⁾





3.76
%





2.81
%

⁽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, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $454 million in 2022 and $1.64 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.


Average Consolidated Balance Sheets and Net Interest Analysis For the Twelve Months Ended December 31, (dollars in thousands, fully taxable equivalent (FTE))




2022



2021



Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate
Assets:












Interest-earning assets:












Loans, net of unearned income (FTE) ⁽¹⁾⁽²⁾

$
14,571,746


$
673,491

4.62
%

$
11,485,876


$
504,015

4.39
%
Taxable securities ⁽³⁾


6,284,603



121,501

1.93



4,446,712



61,994

1.39

Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾


496,327



13,865

2.79



382,915



12,059

3.15

Federal funds sold and other interest-earning assets


1,065,057



9,104

0.85



1,680,151



4,784

0.28

Total interest-earning assets (FTE)


22,417,733



817,961

3.65



17,995,654



582,852

3.24














Non-interest-earning assets:












Allowance for loan losses


(135,144
)






(121,586
)




Cash and due from banks


204,852







139,728





Premises and equipment


288,044







230,276





Other assets ⁽³⁾


1,275,263







1,013,956





Total assets

$
24,050,748






$
19,258,028


















Liabilities and Shareholders’ Equity:












Interest-bearing liabilities:












Interest-bearing deposits:












NOW and interest-bearing demand

$
4,486,263



17,312

0.39


$
3,610,601



5,468

0.15

Money market


4,900,667



18,274

0.37



3,972,358



5,380

0.14

Savings


1,482,599



693

0.05



1,095,071



217

0.02

Time


1,693,307



5,152

0.30



1,529,072



3,663

0.24

Brokered time deposits


61,636



668

1.08



67,230



117

0.17

Total interest-bearing deposits


12,624,472



42,099

0.33



10,274,332



14,845

0.14

Federal funds purchased and other borrowings


13,004



507

3.90



44



—

—

Federal Home Loan Bank advances


34,027



1,424

4.18



1,195



3

0.25

Long-term debt


323,102



16,768

5.19



276,492



14,912

5.39

Total borrowed funds


370,133



18,699

5.05



277,731



14,915

5.37

Total interest-bearing liabilities


12,994,605



60,798

0.47



10,552,063



29,760

0.28














Noninterest-bearing liabilities:












Noninterest-bearing deposits


7,967,321







6,276,094





Other liabilities


377,221







322,566





Total liabilities


21,339,147







17,150,723





Shareholders’ equity


2,711,601







2,107,305





Total liabilities and shareholders’ equity

$
24,050,748






$
19,258,028


















Net interest revenue (FTE)



$
757,163





$
553,092


Net interest-rate spread (FTE)





3.18
%





2.96
%
Net interest margin (FTE) ⁽⁴⁾





3.38
%





3.07
%

⁽¹⁾

⁽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, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $277 million in 2022 and pretax unrealized gains of $28.7 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. (NASDAQ: UCBI) provides a full range of banking, wealth management and mortgage services for consumers and business owners. As of December 31, 2022, United had $24.0 billion in assets and 192 offices in Florida, Georgia, North Carolina, South Carolina, and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary. The company, known as "The Bank That SERVICE Built," has been recognized nationally for delivering award-winning service. 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 has earned the coveted award. 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 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. United was also named one of the "Best Banks to Work For" by American Banker in 2022 for the sixth consecutive year based on employee satisfaction. 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 expected financial returns of the Progress acquisition. 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 Progress 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 Progress acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Progress 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 Progress, (5) the risks relating to the integration of Progress’ 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 risks associated with United’s pursuit of future acquisitions, (7) the risk of expansion into new geographic or product markets, (8) the dilution caused by United’s issuance of additional shares of its common stock in the Progress acquisition, and (9) general competitive, economic, political 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, 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 or Progress.

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

Company Name:	United Community Banks Inc.
Stock Symbol:	UCBI
Market:	NASDAQ
Website:	ucbi.com

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