UCBI - United Community Banks Inc. reports Third Quarter Results

October, 22 2019 05:00 PM United Community Banks Inc.

GREENVILLE, S.C., Oct. 22, 2019 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported strong third quarter financial results, including solid year-over-year loan and deposit growth, record operating efficiency and strong asset quality. Diluted earnings per share were $0.60, an increase of $0.06 or 11% from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were $0.63, up 15% over last year. United’s return on assets (“ROA”) was 1.51% and its return on common equity was 12.2% for the quarter. On an operating basis, United’s ROA was 1.58% and its return on tangible common equity was 16.4%.

In the third quarter, loans grew at a 3% annualized rate, or at 4% annualized excluding the planned runoff of the discontinued indirect auto portfolio. With this loan growth and continued balance sheet remixing opportunities, United maintained its net interest margin during the quarter, despite declining interest rates. Core transaction deposits grew by $105 million, or 6% annualized, and total customer deposits increased by $197 million during the quarter. Finally, United’s combination of revenue growth and expense management resulted in a 55.64% efficiency ratio, or 53.90% on an operating basis, which represented a new Company best for the second consecutive quarter.

“We are pleased to report such a successful quarter, which is a testament to our team and their tireless dedication to providing outstanding customer service and to executing on our plans to deliver top quartile results,” said Lynn Harton, Chairman and CEO of United. “I am also tremendously proud that United was named one of the "Best Banks to Work For" by American Banker for the third year in a row. This honor is achieved through the focus and energy of our bankers to build a company where great people can find fulfillment in helping others reach their financial goals."

Third Quarter 2019 Financial Highlights:

EPS growth of 11% over last year, or 15% on an operating basis
Return on assets of 1.51%, or 1.58% excluding merger-related and other charges
Return on common equity of 12.2%
Return on tangible common equity of 16.4% excluding merger-related and other charges
Loan production of $896 million compared to $778 million in Q3 2018
Loan growth, excluding planned runoff of the indirect portfolio of 4% for the quarter and 7% year-to-date on an annualized basis, excluding the acquisition of First Madison on May 1, 2019
Loan growth of $89 million, excluding planned run off of the indirect portfolio, was more than funded by core transaction deposit growth of $105 million
Mortgage locks of $508 million, a company high, compared to $298 million a year ago
Stable net interest margin of 4.12% was flat compared to the second quarter and up 17 basis points from a year ago
Efficiency ratio of 55.64%, or 53.90%, excluding merger-related and other charges
Net charge-offs of 12 basis points, up one basis point from last quarter and remaining at historically low levels
Nonperforming assets of 0.24% of total assets, compared with 0.21% at June 30, 2019 and 0.19% at September 30, 2018
Repurchased approximately 195,000 shares at an average price of $26.51 in the quarter

Conference Call
United will hold a conference call, Wednesday, October 23, 2019, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 8899475. 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




















2019

2018

Third Quarter 2019 - 2018 Change

For the Nine Months Ended September 30,

YTD 2019 - 2018 Change
*(in thousands, except per share data)*

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter


2019

2018

INCOME SUMMARY


















Interest revenue

$
140,615


$
139,156


$
136,516


$
133,854


$
128,721




$
416,287


$
366,226



Interest expense

21,277


21,372


20,882


18,975


16,611




63,531


42,355



Net interest revenue

119,338


117,784


115,634


114,879


112,110


6
%

352,756


323,871


9
%
Provision for credit losses

3,100


3,250


3,300


2,100


1,800


72


9,650


7,400


30

Noninterest income

29,031


24,531


20,968


23,045


24,180


20


74,530


69,916


7

Total revenue

145,269


139,065


133,302


135,824


134,490


8


417,636


386,387


8

Expenses

82,924


81,813


76,084


78,242


77,718


7


240,821


228,043


6

Income before income tax expense

62,345


57,252


57,218


57,582


56,772


10


176,815


158,344


12

Income tax expense

13,983


13,167


12,956


12,445


13,090


7


40,106


37,370


7

Net income

48,362


44,085


44,262


45,137


43,682


11


136,709


120,974


13

Merger-related and other charges

2,605


4,087


739


1,234


592




7,431


6,111



Income tax benefit of merger-related and other charges

(600
)

(940
)

(172
)

(604
)

(141
)



(1,712
)

(890
)


Net income - operating ⁽¹⁾

$
50,367


$
47,232


$
44,829


$
45,767


$
44,133


14


$
142,428


$
126,195


13




















PERFORMANCE MEASURES


















Per common share:


















Diluted net income - GAAP

$
0.60


$
0.55


$
0.55


$
0.56


$
0.54


11


$
1.70


$
1.51


13

Diluted net income - operating ⁽¹⁾

0.63


0.59


0.56


0.57


0.55


15


1.77


1.57


13

Cash dividends declared

0.17


0.17


0.16


0.16


0.15


13


0.50


0.42


19

Book value

20.16


19.65


18.93


18.24


17.56


15


20.16


17.56


15

Tangible book value ⁽³⁾

15.90


15.38


14.93


14.24


13.54


17


15.90


13.54


17

Key performance ratios:


















Return on common equity - GAAP ⁽²⁾⁽⁴⁾

12.16
%

11.45
%

11.85
%

12.08
%

11.96
%



11.83
%

11.43
%


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

12.67


12.27


12.00


12.25


12.09




12.32


11.93



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

16.38


15.88


15.46


15.88


15.81




15.92


15.62



Return on assets - GAAP ⁽⁴⁾

1.51


1.40


1.44


1.43


1.41




1.45


1.32



Return on assets - operating ⁽¹⁾⁽⁴⁾

1.58


1.50


1.45


1.45


1.42




1.51


1.38



Net interest margin (fully taxable equivalent) ⁽⁴⁾

4.12


4.12


4.10


3.97


3.95




4.11


3.88



Efficiency ratio - GAAP

55.64


57.28


55.32


56.73


56.82




56.09


57.52



Efficiency ratio - operating ⁽¹⁾

53.90


54.42


54.78


55.83


56.39




54.36


55.98



Equity to total assets

12.53


12.25


12.06


11.60


11.30




12.53


11.30



Tangible common equity to tangible assets ⁽³⁾

10.16


9.86


9.76


9.29


8.95




10.16


8.95






















ASSET QUALITY


















Nonperforming loans

$
30,832


$
26,597


$
23,624


$
23,778


$
22,530


37


$
30,832


$
22,530


37

Foreclosed properties

102


75


1,127


1,305


1,336


(92
)

102


1,336


(92
)
Total nonperforming assets ("NPAs")

30,934


26,672


24,751


25,083


23,866


30


30,934


23,866


30

Allowance for loan losses

62,514


62,204


61,642


61,203


60,940


3


62,514


60,940


3

Net charge-offs

2,723


2,438


3,130


1,787


1,466


86


8,291


4,326


92

Allowance for loan losses to loans

0.70
%

0.70
%

0.73
%

0.73
%

0.74
%



0.70
%

0.74
%


Net charge-offs to average loans ⁽⁴⁾

0.12


0.11


0.15


0.09


0.07




0.13


0.07



NPAs to loans and foreclosed properties

0.35


0.30


0.29


0.30


0.29




0.35


0.29



NPAs to total assets

0.24


0.21


0.20


0.20


0.19




0.24


0.19






















AVERAGE BALANCES ($ in millions)


















Loans

$
8,836


$
8,670


$
8,430


$
8,306


$
8,200


8


$
8,647


$
8,124


6

Investment securities

2,550


2,674


2,883


3,004


2,916


(13
)

2,701


2,863


(6
)
Earning assets

11,568


11,534


11,498


11,534


11,320


2


11,534


11,197


3

Total assets

12,681


12,608


12,509


12,505


12,302


3


12,600


12,209


3

Deposits

10,531


10,493


10,361


10,306


9,950


6


10,462


9,896


6

Shareholders’ equity

1,588


1,531


1,478


1,420


1,394


14


1,533


1,367


12

Common shares - basic (thousands)

79,663


79,673


79,807


79,884


79,806


—


79,714


79,588


—

Common shares - diluted (thousands)

79,667


79,678


79,813


79,890


79,818


—


79,718


79,598


—




















AT PERIOD END ($ in millions)


















Loans

$
8,903


$
8,838


$
8,493


$
8,383


$
8,226


8


$
8,903


$
8,226


8

Investment securities

2,515


2,620


2,720


2,903


2,873


(12
)

2,515


2,873


(12
)
Total assets

12,809


12,779


12,506


12,573


12,405


3


12,809


12,405


3

Deposits

10,757


10,591


10,534


10,535


10,229


5


10,757


10,229


5

Shareholders’ equity

1,605


1,566


1,508


1,458


1,402


14


1,605


1,402


14

Common shares outstanding (thousands)

78,974


79,075


79,035


79,234


79,202


—


78,974


79,202


—

⁽¹⁾ Excludes merger-related and other charges which includes termination of pension plan in the third quarter of 2019, executive retirement charges in the second quarter of 2019 and amortization of certain executive change of control benefits. ⁽²⁾ Net income 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.

UNITED COMMUNITY BANKS, INC.














Non-GAAP Performance Measures Reconciliation
Selected Financial Information
















2019

2018

For the Nine Months Ended September 30,
(in thousands, except per share data)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

2019

2018















Expense reconciliation














Expenses (GAAP)

$
82,924


$
81,813


$
76,084


$
78,242


$
77,718


$
240,821


$
228,043

Merger-related and other charges

(2,605
)

(4,087
)

(739
)

(1,234
)

(592
)

(7,431
)

(6,111
)
Expenses - operating

$
80,319


$
77,726


$
75,345


$
77,008


$
77,126


$
233,390


$
221,932
















Net income reconciliation














Net income (GAAP)

$
48,362


$
44,085


$
44,262


$
45,137


$
43,682


$
136,709


$
120,974

Merger-related and other charges

2,605


4,087


739


1,234


592


7,431


6,111

Income tax benefit of merger-related and other charges

(600
)

(940
)

(172
)

(604
)

(141
)

(1,712
)

(890
)
Net income - operating

$
50,367


$
47,232


$
44,829


$
45,767


$
44,133


$
142,428


$
126,195
















Diluted income per common share reconciliation














Diluted income per common share (GAAP)

$
0.60


$
0.55


$
0.55


$
0.56


$
0.54


$
1.70


$
1.51

Merger-related and other charges

0.03


0.04


0.01


0.01


0.01


0.07


0.06

Diluted income per common share - operating

$
0.63


$
0.59


$
0.56


$
0.57


$
0.55


$
1.77


$
1.57
















Book value per common share reconciliation














Book value per common share (GAAP)

$
20.16


$
19.65


$
18.93


$
18.24


$
17.56


$
20.16


$
17.56

Effect of goodwill and other intangibles

(4.26
)

(4.27
)

(4.00
)

(4.00
)

(4.02
)

(4.26
)

(4.02
)
Tangible book value per common share

$
15.90


$
15.38


$
14.93


$
14.24


$
13.54


$
15.90


$
13.54
















Return on tangible common equity reconciliation














Return on common equity (GAAP)

12.16
%

11.45
%

11.85
%

12.08
%

11.96
%

11.83
%

11.43
%
Merger-related and other charges

0.51


0.82


0.15


0.17


0.13


0.49


0.50

Return on common equity - operating

12.67


12.27


12.00


12.25


12.09


12.32


11.93

Effect of goodwill and other intangibles

3.71


3.61


3.46


3.63


3.72


3.60


3.69

Return on tangible common equity - operating

16.38
%

15.88
%

15.46
%

15.88
%

15.81
%

15.92
%

15.62
%















Return on assets reconciliation














Return on assets (GAAP)

1.51
%

1.40
%

1.44
%

1.43
%

1.41
%

1.45
%

1.32
%
Merger-related and other charges

0.07


0.10


0.01


0.02


0.01


0.06


0.06

Return on assets - operating

1.58
%

1.50
%

1.45
%

1.45
%

1.42
%

1.51
%

1.38
%















Efficiency ratio reconciliation














Efficiency ratio (GAAP)

55.64
%

57.28
%

55.32
%

56.73
%

56.82
%

56.09
%

57.52
%
Merger-related and other charges

(1.74
)

(2.86
)

(0.54
)

(0.90
)

(0.43
)

(1.73
)

(1.54
)
Efficiency ratio - operating

53.90
%

54.42
%

54.78
%

55.83
%

56.39
%

54.36
%

55.98
%















Tangible common equity to tangible assets reconciliation














Equity to total assets (GAAP)

12.53
%

12.25
%

12.06
%

11.60
%

11.30
%

12.53
%

11.30
%
Effect of goodwill and other intangibles

(2.37
)

(2.39
)

(2.30
)

(2.31
)

(2.35
)

(2.37
)

(2.35
)
Tangible common equity to tangible assets

10.16
%

9.86
%

9.76
%

9.29
%

8.95
%

10.16
%

8.95
%

UNITED COMMUNITY BANKS, INC.












Financial Highlights












Loan Portfolio Composition at Period-End



























2019

2018

Linked Quarter Change

Year over Year Change
(in millions)
Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter


LOANS BY CATEGORY













Owner occupied commercial RE
$
1,692


$
1,658


$
1,620


$
1,648


$
1,673


$
34


$
19

Income producing commercial RE
1,934


1,939


1,867


1,812


1,788


(5
)

146

Commercial & industrial
1,271


1,299


1,284


1,278


1,194


(28
)

77

Commercial construction
1,001


983


866


796


761


18


240

Equipment financing
729


674


606


565


509


55


220

Total commercial
6,627


6,553


6,243


6,099


5,925


74


702

Residential mortgage
1,121


1,108


1,064


1,049


1,035


13


86

Home equity lines of credit
669


675


684


694


702


(6
)

(33
)
Residential construction
229


219


200


211


198


10


31

Consumer
257


283


302


330


366


(26
)

(109
)
Total loans
$
8,903


$
8,838


$
8,493


$
8,383


$
8,226


$
65


$
677















LOANS BY MARKET













North Georgia
$
1,002


$
1,002


$
970


$
981


$
992


—


10

Atlanta
1,740


1,745


1,524


1,507


1,493


(5
)

247

North Carolina
1,117


1,084


1,074


1,072


1,078


33


39

Coastal Georgia
611


604


603


588


610


7


1

Gainesville
246


244


243


247


235


2


11

East Tennessee
435


446


458


477


460


(11
)

(25
)
South Carolina
1,705


1,674


1,674


1,645


1,586


31


119

Commercial Banking Solutions
1,916


1,884


1,766


1,658


1,530


32


386

Indirect auto
131


155


181


208


242


(24
)

(111
)
Total loans
$
8,903


$
8,838


$
8,493


$
8,383


$
8,226


$
65


$
677

UNITED COMMUNITY BANKS, INC.







Financial Highlights







Credit Quality









2019

(in thousands)

Third Quarter

Second Quarter

First Quarter

NONACCRUAL LOANS







Owner occupied RE

$
8,430


$
8,177


$
7,030


Income producing RE

2,030


1,331


1,276


Commercial & industrial

2,625


2,366


1,666


Commercial construction

1,894


1,650


473


Equipment financing

1,974


2,047


1,813


Total commercial

16,953


15,571


12,258


Residential mortgage

9,475


8,012


8,281


Home equity lines of credit

3,065


1,978


2,233


Residential construction

597


494


347


Consumer

742


542


505


Total

$
30,832


$
26,597


$
23,624










NONACCRUAL LOANS ACTIVITY







Beginning Balance

$
26,597


$
23,624


$
23,778


Loans placed on non-accrual

8,722


8,316


6,759


Payments received

(2,107
)

(3,212
)

(3,520
)

Loan charge-offs

(2,278
)

(2,131
)

(2,714
)

Foreclosures

(102
)

—


(679
)

Ending Balance

$
30,832


$
26,597


$
23,624



2019


Third Quarter

Second Quarter

First 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

$
(39
)

(0.01
)%

$
(58
)

(0.01
)%

$
(64
)

(0.02
)%
Income producing RE

431


0.09


241


0.05


177


0.04

Commercial & industrial

691


0.21


1,141


0.35


1,356


0.43

Commercial construction

(247
)

(0.10
)

(162
)

(0.07
)

(325
)

(0.16
)
Equipment financing

1,174


0.67


890


0.56


1,281


0.89

Total commercial

2,010


0.12


2,052


0.13


2,425


0.16

Residential mortgage

158


0.06


(125
)

(0.05
)

13


—

Home equity lines of credit

83


0.05


(111
)

(0.07
)

215


0.13

Residential construction

(5
)

(0.01
)

199


0.38


(22
)

(0.04
)
Consumer

477


0.70


423


0.58


499


0.64

Total

$
2,723


0.12


$
2,438


0.11


$
3,130


0.15














⁽¹⁾ Annualized.

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

September 30, 2019

December 31, 2018
ASSETS




Cash and due from banks

$
108,389


$
126,083

Interest-bearing deposits in banks (includes restricted cash of $5,326 and $6,702)

252,670


201,182

Cash and cash equivalents

361,059


327,265

Debt securities available for sale

2,272,046


2,628,467

Debt securities held to maturity (fair value $248,546 and $268,803)

243,028


274,407

Loans held for sale at fair value

54,625


18,935

Loans and leases, net of unearned income

8,903,266


8,383,401

Less allowance for loan and lease losses

(62,514
)

(61,203
)
Loans and leases, net

8,840,752


8,322,198

Premises and equipment, net

215,435


206,140

Bank owned life insurance

201,955


192,616

Accrued interest receivable

33,233


35,413

Net deferred tax asset

34,591


64,224

Derivative financial instruments

43,755


24,705

Goodwill and other intangible assets

343,340


324,072

Other assets

165,667


154,750

Total assets

$
12,809,486


$
12,573,192

LIABILITIES AND SHAREHOLDERS' EQUITY




Liabilities:




Deposits:




Noninterest-bearing demand

$
3,527,815


$
3,210,220

NOW and interest-bearing demand

2,210,352


2,369,631

Money market

2,206,496


2,002,670

Savings

699,131


669,886

Time

1,890,431


1,598,391

Brokered

222,292


683,715

Total deposits

10,756,517


10,534,513

Federal Home Loan Bank advances

40,000


160,000

Long-term debt

240,245


267,189

Derivative financial instruments

16,244


26,433

Accrued expenses and other liabilities

151,055


127,503

Total liabilities

11,204,061


11,115,638

Shareholders' equity:




Common stock, $1 par value; 150,000,000 shares authorized; 78,974,199 and 79,234,077 shares issued and outstanding

78,974


79,234

Common stock issuable; 660,581 and 674,499 shares

11,327


10,744

Capital surplus

1,495,267


1,499,584

Retained earnings (accumulated deficit)

5,594


(90,419
)
Accumulated other comprehensive income (loss)

14,263


(41,589
)
Total shareholders' equity

1,605,425


1,457,554

Total liabilities and shareholders' equity

$
12,809,486


$
12,573,192

UNITED COMMUNITY BANKS, INC. Consolidated Statements of Income (Unaudited)


Three Months Ended September 30,

Nine Months Ended September 30,
(in thousands, except per share data)

2019

2018

2019

2018
Interest revenue:








Loans, including fees

$
122,645


$
108,335


$
357,575


$
308,296

Investment securities, including tax exempt of $1,118 and $1,052, and $3,409 and $3,049

17,744


19,899


57,638


56,448

Deposits in banks and short-term investments

226


487


1,074


1,482

Total interest revenue

140,615


128,721


416,287


366,226










Interest expense:








Deposits:








NOW and interest-bearing demand

3,214


1,985


10,283


4,483

Money market

5,126


3,177


14,100


7,853

Savings

41


33


115


117

Time

8,732


5,746


25,687


12,900

Total deposit interest expense

17,113


10,941


50,185


25,353

Short-term borrowings

429


274


838


772

Federal Home Loan Bank advances

521


1,791


2,695


5,551

Long-term debt

3,214


3,605


9,813


10,679

Total interest expense

21,277


16,611


63,531


42,355

Net interest revenue

119,338


112,110


352,756


323,871

Provision for credit losses

3,100


1,800


9,650


7,400

Net interest revenue after provision for credit losses

116,238


110,310


343,106


316,471










Noninterest income:








Service charges and fees

9,916


9,112


27,429


26,831

Mortgage loan and other related fees

8,658


5,262


17,750


15,928

Brokerage fees

1,699


1,525


4,624


3,598

Gains from sales of SBA/USDA loans

1,639


2,605


4,412


6,784

Securities gains (losses), net

—


2


(118
)

(1,302
)
Other

7,119


5,674


20,433


18,077

Total noninterest income

29,031


24,180


74,530


69,916

Total revenue

145,269


134,490


417,636


386,387










Noninterest expenses:








Salaries and employee benefits

50,501


47,146


146,161


135,384

Communications and equipment

6,223


5,590


18,233


15,071

Occupancy

5,921


5,779


17,424


16,939

Advertising and public relations

1,374


1,442


4,256


4,341

Postage, printing and supplies

1,618


1,574


4,733


4,896

Professional fees

4,715


3,927


11,930


11,435

FDIC assessments and other regulatory charges

314


2,228


3,571


6,677

Amortization of intangibles

1,210


1,681


3,845


5,426

Merger-related and other charges

2,541


115


6,981


4,449

Other

8,507


8,236


23,687


23,425

Total noninterest expenses

82,924


77,718


240,821


228,043

Net income before income taxes

62,345


56,772


176,815


158,344

Income tax expense

13,983


13,090


40,106


37,370

Net income

$
48,362


$
43,682


$
136,709


$
120,974










Net income available to common shareholders

$
48,011


$
43,381


$
135,727


$
120,124










Net income per common share:








Basic

$
0.60


$
0.54


$
1.70


$
1.51

Diluted

0.60


0.54


1.70


1.51

Weighted average common shares outstanding:








Basic

79,663


79,806


79,714


79,588

Diluted

79,667


79,818


79,718


79,598

Average Consolidated Balance Sheets and Net Interest Analysis For the Three Months Ended September 30,







2019

2018
*(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⁾

$
8,835,585


$
122,526


5.50
%

$
8,199,856


$
108,197


5.23
%
Taxable securities⁽³⁾

2,379,927


16,626


2.79


2,763,461


18,847


2.73

Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾

170,027


1,502


3.53


152,939


1,417


3.71

Federal funds sold and other interest-earning assets

182,935


616


1.35


203,707


751


1.47

Total interest-earning assets (FTE)

11,568,474


141,270


4.85


11,319,963


129,212


4.53














Noninterest-earning assets:












Allowance for loan losses

(63,474
)





(62,322
)




Cash and due from banks

116,922






123,290





Premises and equipment

221,930






216,775





Other assets ⁽³⁾

836,951






703,915





Total assets

$
12,680,803






$
12,301,621


















Liabilities and Shareholders' Equity:












Interest-bearing liabilities:












Interest-bearing deposits:












NOW and interest-bearing demand

$
2,123,910


3,214


0.60


$
1,963,312


1,985


0.40

Money market

2,277,162


5,126


0.89


2,078,116


3,177


0.61

Savings

695,297


41


0.02


680,640


33


0.02

Time

1,879,801


8,053


1.70


1,545,020


3,351


0.86

Brokered time deposits

102,078


679


2.64


434,182


2,395


2.19

Total interest-bearing deposits

7,078,248


17,113


0.96


6,701,270


10,941


0.65

Federal funds purchased and other borrowings

73,733


429


2.31


50,767


274


2.14

Federal Home Loan Bank advances

88,261


521


2.34


331,413


1,791


2.14

Long-term debt

243,935


3,214


5.23


296,366


3,605


4.83

Total borrowed funds

405,929


4,164


4.07


678,546


5,670


3.32

Total interest-bearing liabilities

7,484,177


21,277


1.13


7,379,816


16,611


0.89














Noninterest-bearing liabilities:












Noninterest-bearing deposits

3,453,174






3,249,218





Other liabilities

155,107






278,764





Total liabilities

11,092,458






10,907,798





Shareholders' equity

1,588,345






1,393,823





Total liabilities and shareholders' equity

$
12,680,803






$
12,301,621


















Net interest revenue (FTE)



$
119,993






$
112,601



Net interest-rate spread (FTE)





3.72
%





3.64
%
Net interest margin (FTE) ⁽⁴⁾





4.12
%





3.95
%

⁽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 gains of $35.1 million in 2019 and unrealized losses of $49.9 million in 2018 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 Nine Months Ended September 30,







2019

2018
*(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⁾

$
8,646,622


$
357,541


5.53
%

$
8,124,269


$
307,981


5.07
%
Taxable securities ⁽³⁾

2,532,070


54,229


2.86


2,712,900


53,399


2.62

Tax-exempt securities (FTE)⁽¹⁾⁽³⁾

168,787


4,579


3.62


150,014


4,106


3.65

Federal funds sold and other interest-earning assets

186,402


1,913


1.37


209,836


2,123


1.35

Total interest-earning assets (FTE)

11,533,881


418,262


4.85


11,197,019


367,609


4.39














Non-interest-earning assets:












Allowance for loan losses

(62,664
)





(61,259
)




Cash and due from banks

121,889






138,809





Premises and equipment

220,872






217,339





Other assets ⁽³⁾

785,862






717,555





Total assets

$
12,599,840






$
12,209,463


















Liabilities and Shareholders' Equity:












Interest-bearing liabilities:












Interest-bearing deposits:












NOW and interest-bearing demand

$
2,199,607


10,283


0.63


$
2,098,734


4,483


0.29

Money market

2,187,822


14,100


0.86


2,113,972


7,853


0.50

Savings

685,167


115


0.02


671,883


117


0.02

Time

1,761,374


20,338


1.54


1,534,823


8,288


0.72

Brokered time deposits

292,835


5,349


2.44


298,653


4,612


2.06

Total interest-bearing deposits

7,126,805


50,185


0.94


6,718,065


25,353


0.50

Federal funds purchased and other borrowings

44,898


838


2.50


58,144


772


1.78

Federal Home Loan Bank advances

142,876


2,695


2.52


392,227


5,551


1.89

Long-term debt

252,686


9,813


5.19


295,966


10,679


4.82

Total borrowed funds

440,460


13,346


4.05


746,337


17,002


3.05

Total interest-bearing liabilities

7,567,265


63,531


1.12


7,464,402


42,355


0.76














Noninterest-bearing liabilities:












Noninterest-bearing deposits

3,335,450






3,178,387





Other liabilities

164,350






199,848





Total liabilities

11,067,065






10,842,637





Shareholders' equity

1,532,775






1,366,826





Total liabilities and shareholders' equity

$
12,599,840






$
12,209,463


















Net interest revenue (FTE)



$
354,731






$
325,254



Net interest-rate spread (FTE)





3.73
%





3.63
%
Net interest margin (FTE) ⁽⁴⁾





4.11
%





3.88
%

⁽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 gains of $4.94 million in 2019 and unrealized losses of $40.4 million in 2018 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 a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the southeast region’s largest full-service financial institutions with $12.8 billion in assets, and 147 offices in Georgia, North Carolina, South Carolina and Tennessee. It operates principally through United Community Bank, its bank subsidiary, which specializes in personalized community banking services for individuals, small businesses and companies. Services include a full range of consumer and commercial banking products, including mortgage, advisory, and treasury management. Respected national research firms consistently recognize United Community Bank for outstanding customer service. For five of the past six years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2019, for the sixth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America, and for the first time included United on its list of The World’s Best Banks. Additional information about UCBI and the Bank 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,” “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,” “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.

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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