Exhibit 99.1
For Immediate Release
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
United Community Banks, Inc. Reports Fourth Quarter 2022 Results
GAAP EPS of $0.74, Return on Assets of 1.33% and Loan Growth of 12%
GREENVILLE, SC – January 17, 2023 - 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.
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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% |
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| · | 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.
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UNITED COMMUNITY BANKS, INC. Selected Financial Information (in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | Fourth Quarter | For the Twelve Months Ended December 31, | YTD 2022- | ||||||||||||||||||||||||||||||||
| Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | 2022- 2021 Change | 2022 | 2021 | 2021 Change | ||||||||||||||||||||||||||||
| 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.
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| UNITED COMMUNITY BANKS,
INC. Non-GAAP Performance Measures Reconciliation Selected Financial Information (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 | % | ||||||||||||||
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| UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||||||||
| Loan Portfolio Composition at Period-End | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||
| 2022 | 2021 | Linked | Year over | |||||||||||||||||||||||||
| Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Quarter Change | Year Change | ||||||||||||||||||||||
| 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 | ||||||||||||||
6
| 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 | ||||||||||
7
| 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. | ||||||||||||||||||||||||
8
| 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 | ||||
9
| 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 | ||||||||||||
10
| 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. |
11
| 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) | 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 $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. |
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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.
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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.
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