United Community Banks, Inc. Announces Strong Second Quarter Results

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BLAIRSVILLE, Ga., July 24, 2018 (GLOBE NEWSWIRE) -- United Community Banks, Inc. UCBI ("United") showed strong second quarter results, with solid year-over-year loan and deposit growth, efficiency improvements and continued outstanding asset quality trends.  Reported earnings per share were $0.49, up 26 percent from a year ago.  Excluding merger-related and other charges, earnings per share were $0.53, up 29 percent from a year ago.  United also enhanced profitability with increases in return on assets and return on tangible equity.

Notable highlights for the quarter included strong performance from United's recently acquired equipment finance company, Navitas Credit Corporation, as well as meaningful margin expansion.  United also saw increased production in its mortgage, SBA, and brokerage units.  The quarter included a one-time increase in tax expense due to changes in the Georgia state tax law.

"I am pleased with our second quarter performance and am excited about the remainder of the year., said Lynn Harton, United's Chief Executive Officer.  "Our teams continue to deliver outstanding service to our clients, as evidenced by their recognition this quarter by J.D. Power as having the highest Retail Banking Satisfaction in the Southeast for the fifth consecutive year.  Our new markets and investments are doing very well and have strong expectations for the balance of the year.  We continue to make progress on our return on assets targets and are proud to have attained a 1.39% return on assets this quarter on an operating basis."

Second Quarter 2018 Financial Highlights:

  • Return on assets of 1.30 percent, or 1.39 percent, excluding merger-related and other charges
  • Return on common equity was 11.2 percent.  Excluding merger-related and other charges, return on tangible common equity was 15.8 percent
  • Loan growth, excluding planned runoff of the indirect portfolio, of 4% on an annualized basis
  • Record loan production of $812 million vs. $667 million in Q2 2017
  • Solid performance from Navitas with $42 million in Q2 loan and lease growth
  • Net interest margin of 3.90 percent, up 10 basis points from the first quarter of 2018 and up 43 basis points from a year ago
  • Efficiency ratio of 57.9 percent, or 55.8 percent, excluding merger-related and other charges
  • Net charge offs of seven basis points, compared with eight basis points last quarter
  • Nonperforming assets of 0.20 percent of total assets, compared with 0.24 percent at both March 31, 2018 and June 30, 2017.

Conference Call

United will hold a conference call, Wednesday, July 25, 2018, 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 5575248.  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.
Financial Highlights
Selected Financial Information
                          
                Second For the Six  
  2018   2017  Quarter Months Ended YTD
   Second    First    Fourth    Third    Second  2018-2017 June 30, 2018-2017
(in thousands, except per share data) Quarter  Quarter  Quarter  Quarter  Quarter  Change 2018   2017   Change
INCOME SUMMARY                         
Interest revenue$  122,215  $  115,290  $  106,757  $  98,839  $  93,166    $  237,505  $  184,124    
Interest expense   13,739     12,005     9,249     9,064     8,018       25,744     15,422    
  Net interest revenue   108,476     103,285     97,508     89,775     85,148    27 %   211,761     168,702    26 %
Provision for credit losses   1,800     3,800     1,200     1,000     800       5,600     1,600    
Noninterest income   23,340     22,396     21,928     20,573     23,685    (1)    45,736     45,759    -   
  Total revenue   130,016     121,881     118,236     109,348     108,033    20     251,897     212,861    18  
Expenses   76,850     73,475     75,882     65,674     63,229    22     150,325     126,055    19  
Income before income tax expense   53,166     48,406     42,354     43,674     44,804    19     101,572     86,806    17  
Income tax expense   13,532     10,748     54,270     15,728     16,537    (18)    24,280     35,015    (31) 
Net income   39,634     37,658     (11,916)    27,946     28,267    40     77,292     51,791    49  
Merger-related and other charges   2,873     2,646     7,358     3,420     1,830       5,519     3,884    
Income tax benefit of merger-related and other charges   (121)    (628)    (1,165)    (1,147)    (675)      (749)    (1,433)   
Impact of remeasurement of deferred tax asset resulting
  from 2017 Tax Cuts and Jobs Act
   -      -      38,199     -      -        -      -     
Release of disproportionate tax effects lodged in OCI   -      -      -      -      -        -      3,400    
  Net income - operating (1)$  42,386   $  39,676   $  32,476   $  30,219   $  29,422     44  $  82,062   $  57,642     42   
                          
PERFORMANCE MEASURES                         
  Per common share:                         
  Diluted net income - GAAP$  0.49  $  0.47  $  (0.16) $  0.38  $  0.39    26  $  0.97  $  0.72    35  
  Diluted net income - operating (1)   0.53     0.50     0.42     0.41     0.41    29     1.03     0.80    29  
  Cash dividends declared   0.15     0.12     0.10     0.10     0.09    67     0.27     0.18    50  
  Book value   17.29     17.02     16.67     16.50     15.83    9     17.29     15.83    9  
  Tangible book value (3)   13.25     12.96     13.65     14.11     13.74    (4)    13.25     13.74    (4) 
                          
  Key performance ratios:                         
  Return on common equity - GAAP (2)(4)   11.20 %  11.11 %  (3.57)%  9.22 %  9.98 %    11.15 %  9.27 % 
  Return on common equity - operating (1)(2)(4)   11.97     11.71     9.73     9.97     10.39       11.84     10.32    
  Return on tangible common equity - operating (1)(2)(3)(4)   15.79     15.26     11.93     11.93     12.19       15.53     12.15    
  Return on assets - GAAP (4)   1.30     1.26     (0.40)    1.01     1.06       1.28     0.98    
  Return on assets - operating (1)(4)   1.39     1.33     1.10     1.09     1.10       1.36     1.09    
  Dividend payout ratio - GAAP   30.61     25.53     (62.50)    26.32     23.08       27.84     25.00    
  Dividend payout ratio - operating (1)   28.30     24.00     23.81     24.39     21.95       26.21     22.50    
  Net interest margin (fully taxable equivalent) (4)   3.90     3.80     3.63     3.54     3.47       3.85     3.46    
  Efficiency ratio - GAAP   57.94     57.83     63.03     59.27     57.89       57.89     58.58    
  Efficiency ratio - operating  (1)   55.77     55.75     56.92     56.18     56.21       55.76     56.77    
  Average equity to average assets   11.21     11.03     11.21     10.86     10.49       11.13     10.36    
  Average tangible equity to average assets (3)   8.83     8.82     9.52     9.45     9.23       8.82     9.09    
  Average tangible common equity to average assets (3)   8.83     8.82     9.52     9.45     9.23       8.82     9.09    
  Tangible common equity to risk-weighted assets (3)(5)   11.40     11.19     12.05     12.80     12.44       11.40     12.44    
                     -        
ASSET QUALITY                         
  Nonperforming loans$  21,817  $  26,240   $   23,658   $   22,921   $   23,095    (6)  $   21,817   $   23,095    (6) 
  Foreclosed properties   2,597     2,714     3,234     2,736     2,739    (5)    2,597     2,739    (5) 
  Total nonperforming assets (NPAs)   24,414     28,954     26,892     25,657     25,834    (5)    24,414     25,834    (5) 
  Allowance for loan losses   61,071     61,085     58,914     58,605     59,500    3     61,071     59,500    3  
  Net charge-offs   1,359     1,501     1,061     1,635     1,623    (16)    2,860     3,302    (13) 
  Allowance for loan losses to loans   0.74 %  0.75 %  0.76 %  0.81 %  0.85  %      0.74  %    0.85  %   
  Net charge-offs to average loans (4)   0.07     0.08     0.06     0.09     0.09       0.07     0.10    
  NPAs to loans and foreclosed properties   0.30     0.35     0.35     0.36     0.37       0.30     0.37    
  NPAs to total assets   0.20     0.24     0.23     0.23     0.24       0.20     0.24    
                          
AVERAGE BALANCES ($ in millions)                         
  Loans$  8,177  $  7,993  $  7,560   $   7,149   $   6,980    17   $   8,086   $   6,942    16  
  Investment securities   2,802     2,870     2,991     2,800     2,775    1     2,836     2,798    1  
  Earning assets   11,193     11,076     10,735     10,133     9,899    13     11,135     9,885    13  
  Total assets   12,213     12,111     11,687     10,980     10,704    14     12,163     10,691    14  
  Deposits   9,978     9,759     9,624     8,913     8,659    15     9,869     8,626    14  
  Shareholders' equity   1,370     1,336     1,310     1,193     1,123    22     1,353     1,108    22  
  Common shares - basic (thousands)   79,753     79,205     76,768     73,151     71,810    11     79,477     71,798    11  
  Common shares - diluted (thousands)   79,755     79,215     76,768     73,162     71,820    11     79,487     71,809    11  
                          
AT PERIOD END ($ in millions)                         
  Loans$  8,220  $  8,184  $  7,736   $   7,203   $   7,041    17   $   8,220   $   7,041    17  
  Investment securities   2,834     2,731     2,937     2,847     2,787    2     2,834     2,787    2  
  Total assets   12,386     12,264     11,915     11,129     10,837    14     12,386     10,837    14  
  Deposits   9,966     9,993     9,808     9,127     8,736    14     9,966     8,736    14  
  Shareholders' equity   1,379     1,357     1,303     1,221     1,133    22     1,379     1,133    22  
  Common shares outstanding (thousands)   79,138     79,123     77,580     73,403     70,981    11     79,138     70,981    11  
                          
(1)  Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation and a first quarter 2017 release of disproportionate tax effects lodged in OCI.  (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)  Second quarter 2018 ratio is preliminary.
                          

 

                
UNITED COMMUNITY BANKS, INC.               
Non-GAAP Performance Measures Reconciliation              
Selected Financial Information               
                
                
  2018   2017   For the Six Months Ended
June 30, 
 
  Second   First   Fourth   Third   Second   
(in thousands, except per share data)Quarter Quarter Quarter Quarter Quarter  2018   2017   
                
Expense reconciliation               
Expenses (GAAP)$  76,850  $  73,475  $  75,882  $  65,674  $  63,229  $  150,325  $  126,055   
Merger-related and other charges   (2,873)    (2,646)    (7,358)    (3,420)    (1,830)    (5,519)    (3,884)  
  Expenses - operating$  73,977  $  70,829  $  68,524  $  62,254  $  61,399  $  144,806  $  122,171   
                
Net income reconciliation               
Net income (GAAP)$  39,634  $  37,658  $  (11,916) $  27,946  $  28,267  $  77,292  $  51,791   
Merger-related and other charges   2,873     2,646     7,358     3,420     1,830     5,519     3,884   
Income tax benefit of merger-related and other charges   (121)    (628)    (1,165)    (1,147)    (675)    (749)    (1,433)  
Impact of tax reform on remeasurement of deferred tax asset   -      -      38,199     -      -      -      -    
Release of disproportionate tax effects lodged in OCI   -      -      -      -      -      -      3,400   
  Net income - operating$  42,386  $  39,676  $  32,476  $  30,219  $  29,422  $  82,062  $  57,642   
Diluted income per common share reconciliation               
Diluted income per common share (GAAP)$  0.49  $  0.47  $  (0.16) $  0.38  $  0.39  $  0.97  $  0.72   
Merger-related and other charges   0.04     0.03     0.08     0.03     0.02     0.06     0.03   
Impact of tax reform on remeasurement of deferred tax asset   -      -      0.50     -      -      -      -    
Release of disproportionate tax effects lodged in OCI   -      -      -      -      -      -      0.05   
  Diluted income per common share - operating$  0.53  $  0.50  $  0.42  $  0.41  $  0.41  $  1.03  $  0.80   
                
Book value per common share reconciliation               
Book value per common share (GAAP)$  17.29  $  17.02  $  16.67  $  16.50  $  15.83  $  17.29  $  15.83   
Effect of goodwill and other intangibles   (4.04)    (4.06)    (3.02)    (2.39)    (2.09)    (4.04)    (2.09)  
  Tangible book value per common share$  13.25  $  12.96  $  13.65  $  14.11  $  13.74  $  13.25  $  13.74   
                
Return on tangible common equity reconciliation               
Return on common equity (GAAP)   11.20  %    11.11  %    (3.57) %    9.22  %    9.98  %    11.15  %    9.27 % 
Merger-related and other charges   0.77     0.60     1.86     0.75     0.41     0.69     0.44   
Impact of tax reform on remeasurement of deferred tax asset   -      -      11.44     -      -      -      -    
Release of disproportionate tax effects lodged in OCI   -      -      -      -      -      -      0.61   
Return on common equity - operating   11.97     11.71     9.73     9.97     10.39     11.84     10.32   
Effect of goodwill and other intangibles   3.82     3.55     2.20     1.96     1.80     3.69     1.83   
  Return on tangible common equity - operating   15.79  %    15.26  %    11.93  %    11.93  %    12.19  %    15.53  %    12.15 % 
                
Return on assets reconciliation               
Return on assets (GAAP)   1.30  %    1.26  %    (0.40) %    1.01  %    1.06  %    1.28  %    0.98 % 
Merger-related and other charges   0.09     0.07     0.20     0.08     0.04     0.08     0.05   
Impact of tax reform on remeasurement of deferred tax asset   -      -      1.30     -      -      -      -    
Release of disproportionate tax effects lodged in OCI   -      -      -      -      -      -      0.06   
  Return on assets - operating   1.39  %    1.33  %    1.10  %    1.09  %    1.10  %    1.36  %    1.09 % 
                
Dividend payout ratio reconciliation               
Dividend payout ratio (GAAP)   30.61  %    25.53  %    (62.50) %    26.32  %    23.08  %    27.84  %    25.00 % 
Merger-related and other charges   (2.31)    (1.53)    12.04     (1.93)    (1.13)    (1.63)    (1.00)  
Impact of tax reform on remeasurement of deferred tax asset   -      -      74.27     -      -      -      -    
Release of disproportionate tax effects lodged in OCI   -      -      -      -      -      -      (1.50)  
  Dividend payout ratio - operating   28.30  %    24.00  %    23.81  %    24.39  %    21.95  %    26.21  %    22.50 % 
                
Efficiency ratio reconciliation               
Efficiency ratio (GAAP)   57.94  %    57.83  %    63.03  %    59.27  %    57.89  %    57.89  %    58.58 % 
Merger-related and other charges   (2.17)    (2.08)    (6.11)    (3.09)    (1.68)    (2.13)    (1.81)  
  Efficiency ratio - operating   55.77  %    55.75  %    56.92  %    56.18  %    56.21  %    55.76  %    56.77 % 
                
Average equity to assets reconciliation               
Equity to assets (GAAP)   11.21  %    11.03  %    11.21  %    10.86  %    10.49  %    11.13  %    10.36 % 
Effect of goodwill and other intangibles   (2.38)    (2.21)    (1.69)    (1.41)    (1.26)    (2.31)    (1.27)  
  Tangible equity to assets   8.83     8.82     9.52     9.45     9.23     8.82     9.09   
Effect of preferred equity   -      -      -      -      -      -      -    
  Tangible common equity to assets   8.83  %    8.82  %    9.52  %    9.45  %    9.23  %    8.82  %    9.09 % 
                
Tangible common equity to risk-weighted assets reconciliation (1)              
Tier 1 capital ratio (Regulatory)   11.97 %   11.61 %   12.24 %   12.27 %   11.91 %   11.97 %   11.91 % 
Effect of other comprehensive income   (0.57)    (0.50)    (0.29)    (0.13)    (0.15)    (0.57)    (0.15)  
Effect of deferred tax limitation   0.34     0.42     0.51     0.94     0.95     0.34     0.95   
Effect of trust preferred   (0.34)    (0.34)    (0.36)    (0.24)    (0.25)    (0.34)    (0.25)  
Basel III intangibles transition adjustment   -      -      (0.05)    (0.04)    (0.02)    -      (0.02)  
  Tangible common equity to risk-weighted assets   11.40 %   11.19 %   12.05 %   12.80 %   12.44 %   11.40 %   12.44 % 
                
(1)  Second quarter 2018 ratios are preliminary.               
                

 

            
UNITED COMMUNITY BANKS, INC.           
Financial Highlights               
Loan Portfolio Composition at Period-End           
                
                
   2018  2017 Linked
Quarter
Change
 Year over
Year
Change
   Second   First   Fourth   Third   Second    
(in millions) Quarter Quarter Quarter Quarter Quarter   
LOANS BY CATEGORY               
Owner occupied commercial RE $  1,682 $  1,898 $  1,924 $  1,792 $  1,723  $  (216) $  (41)
Income producing commercial RE    1,821    1,677    1,595    1,413    1,342     144     479 
Commercial & industrial    1,193    1,142    1,131    1,084    1,088     51     105 
Commercial construction    735    691    712    583    587     44     148 
Equipment financing    465    423    -     -     -      42     465 
  Total commercial    5,896    5,831    5,362    4,872    4,740     65     1,156 
Residential mortgage    1,021    992    974    933    881     29     140 
Home equity lines of credit    708    712    731    689    665     (4)    43 
Residential construction    195    190    183    190    193     5     2 
Consumer    400    459    486    519    562     (59)    (162)
  Total loans $  8,220 $  8,184 $  7,736 $  7,203 $  7,041     36     1,179 
                
LOANS BY MARKET               
North Georgia $  1,001 $  1,004 $  1,019 $  1,047 $  1,065     (3)    (64)
Atlanta MSA    1,533    1,513    1,510    1,477    1,445     20     88 
North Carolina    1,067    1,037    1,049    542    541     30     526 
Coastal Georgia    623    635    630    634    623     (12)    -  
Gainesville MSA    230    231    248    242    246     (1)    (16)
East Tennessee    474    473    475    471    486     1     (12)
South Carolina    1,571    1,537    1,486    1,470    1,260     34     311 
Commercial Banking Solutions    1,444    1,438    961    920    926     6     518 
Indirect auto    277    316    358    400    449     (39)    (172)
  Total loans $  8,220 $  8,184 $  7,736 $  7,203 $  7,041     36     1,179 
                

 

UNITED COMMUNITY BANKS, INC.                          
Financial Highlights                            
Credit Quality                            
                             
                             
  Second Quarter 2018 First Quarter 2018 Fourth Quarter 2017 
   Nonperforming   Foreclosed   Total   Nonperforming   Foreclosed   Total   Nonperforming   Foreclosed   Total  
(in thousands) Loans Properties NPAs Loans Properties NPAs Loans Properties NPAs 
NONPERFORMING ASSETS BY CATEGORY                          
Owner occupied CRE $  5,772  $  812  $  6,584  $  6,757  $  1,121  $  7,878  $  4,923  $  1,955  $  6,878  
Income producing CRE    991     455     1,446     3,942     368     4,310     3,208     244     3,452  
Commercial & industrial    2,180     -      2,180     1,917     -      1,917     2,097     -      2,097  
Commercial construction    613     576     1,189     574     658     1,232     758     884     1,642  
Equipment financing    1,075     -      1,075     428     -      428     -      -      -   
  Total commercial    10,631     1,843     12,474     13,618     2,147     15,765     10,986     3,083     14,069  
Residential mortgage    7,918     184     8,102     8,724     232     8,956     8,776     136     8,912  
Home equity lines of credit    1,812     550     2,362     2,149     335     2,484     2,024     15     2,039  
Residential construction    637     20     657     378     -      378     192     -      192  
Consumer    819     -      819     1,371     -      1,371     1,680     -      1,680  
  Total NPAs $  21,817  $  2,597  $  24,414  $  26,240  $  2,714  $  28,954  $  23,658  $  3,234  $  26,892  
                             
NONPERFORMING ASSETS BY MARKET                          
North Georgia $  7,583  $  640  $  8,223  $  8,519  $  85  $  8,604  $  7,310  $  94  $  7,404  
Atlanta MSA    1,928     132     2,060     1,138     132     1,270     1,395     279     1,674  
North Carolina    3,029     750     3,779     5,006     1,271     6,277     4,543     1,213     5,756  
Coastal Georgia    943     -      943     1,887     -      1,887     2,044     20     2,064  
Gainesville MSA    186     -      186     574     163     737     739     -      739  
East Tennessee    1,473     143     1,616     1,511     10     1,521     1,462     -      1,462  
South Carolina    3,093     362     3,455     3,443     483     3,926     3,433     1,059     4,492  
Commercial Banking Solutions    2,831     570     3,401     2,937     570     3,507     1,095     569     1,664  
Indirect auto    751     -      751     1,225     -      1,225     1,637     -      1,637  
  Total NPAs $  21,817  $  2,597  $  24,414  $  26,240  $  2,714  $  28,954  $  23,658  $  3,234  $  26,892  
                             
NONPERFORMING ASSETS ACTIVITY                          
Beginning Balance $  26,240  $  2,714  $  28,954  $  23,658  $  3,234  $  26,892  $  22,921  $  2,736  $  25,657  
Acquisitions    -      -      -      428     -      428     -      659     659  
Loans placed on non-accrual    3,612     -      3,612     7,463     -      7,463     9,375     -      9,375  
Payments received    (5,314)    -      (5,314)    (3,534)    -      (3,534)    (5,495)    -      (5,495) 
Loan charge-offs    (2,065)    -      (2,065)    (1,150)    -      (1,150)    (1,747)    -      (1,747) 
Foreclosures    (656)    984     328     (625)    625     -      (1,396)    2,421     1,025  
Property sales    -      (1,029)    (1,029)    -      (957)    (957)    -      (2,458)    (2,458) 
Write downs    -      (106)    (106)    -      (72)    (72)    -      (117)    (117) 
Net gains (losses) on sales    -      34     34     -      (116)    (116)    -      (7)    (7) 
  Ending Balance $  21,817  $  2,597  $  24,414  $  26,240  $  2,714  $  28,954  $  23,658  $  3,234  $  26,892  
                             
  Second Quarter 2018 First Quarter 2018 Fourth Quarter 2017      
      Net Charge-      Net Charge-      Net Charge-          
      Offs to      Offs to      Offs to          
   Net   Average   Net   Average   Net   Average         
(in thousands) Charge-Offs Loans (1) Charge-Offs Loans (1) Charge-Offs Loans (1)        
NET CHARGE-OFFS BY CATEGORY                           
Owner occupied CRE $  (578)   (.13) %  $  (43)   (.01) %  $  (357)   (.08) %          
Income producing CRE    1,421    .33     422    .10     595    .16          
Commercial & industrial    16    .01     (3)    -      (242)   (.09)          
Commercial construction    (107)   (.06)     266    .15     148    .09          
Equipment financing    (49)   (.04)     40    .08     -      -           
  Total commercial    703    .05     682    .05     144    .01          
Residential mortgage    11     -      (52)   (.02)     290    .12          
Home equity lines of credit    21    .01     89    .05     137    .08          
Residential construction    (58)   (.12)     (64)   (.14)     (23)   (.05)          
Consumer     682    .64     846    .72     513    .40          
  Total $  1,359    .07  $  1,501    .08  $  1,061    .06          
                             
NET CHARGE-OFFS BY MARKET                            
North Georgia $  246    .10 %  $  772    .31 %  $  64    .02 %          
Atlanta MSA    103    .03     (109)   (.03)     26    .01          
North Carolina    1,268    .48     144    .06     127    .06          
Coastal Georgia    19    .01     137    .09     174    .11          
Gainesville MSA    (2)    -      (18)   (.03)     154    .25          
East Tennessee    76    .06     31    .03     61    .05          
South Carolina    (1,057)   (.27)     12     -      95    .03          
Commercial Banking Solutions    381    .11     176    .06     75    .03          
Indirect auto    325    .44     356    .41     285    .30          
  Total $  1,359    .07  $  1,501    .08  $  1,061    .06          
                           
(1)  Annualized. 

 

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UNITED COMMUNITY BANKS, INC.         
Consolidated Statements of Income (Unaudited)         
          
  Three Months Ended Six Months Ended 
  June 30, June 30, 
(in thousands, except per share data)  2018   2017  2018   2017 
          
Interest revenue:         
Loans, including fees $  103,492  $  74,825 $  199,961  $  147,552 
Investment securities, including tax exempt of $1,025, $357, $1,997, and $636     18,254     17,778    36,549     35,490 
Deposits in banks and short-term investments    469     563    995     1,082 
Total interest revenue    122,215     93,166    237,505     184,124 
          
Interest expense:         
Deposits:         
NOW    1,303     635    2,416     1,232 
Money market    2,583     1,559    4,758     2,985 
Savings    35     28    84     55 
Time    4,198     1,379    7,154     2,387 
Total deposit interest expense    8,119     3,601    14,412     6,659 
Short-term borrowings    198     101    498     141 
Federal Home Loan Bank advances    1,636     1,464    3,760     2,894 
Long-term debt    3,786     2,852    7,074     5,728 
Total interest expense    13,739     8,018    25,744     15,422 
Net interest revenue    108,476     85,148    211,761     168,702 
Provision for credit losses    1,800     800    5,600     1,600 
Net interest revenue after provision for credit losses    106,676     84,348    206,161     167,102 
          
Noninterest income:         
Service charges and fees    8,794     10,701    17,719     21,305 
Mortgage loan and other related fees    5,307     4,811    10,666     9,235 
Brokerage fees    1,201     1,146    2,073     2,556 
Gains from sales of SBA/USDA loans    2,401     2,626    4,179     4,585 
Securities gains (losses), net    (364)    4    (1,304)    2 
Other     6,001     4,397    12,403     8,076 
Total noninterest income    23,340     23,685    45,736     45,759 
Total revenue    130,016     108,033    251,897     212,861 
          
Noninterest expenses:         
Salaries and employee benefits    45,363     37,338    88,238     74,029 
Communications and equipment    4,849     4,978    9,481     9,896 
Occupancy    5,547     4,908    11,160     9,857 
Advertising and public relations    1,384     1,260    2,899     2,321 
Postage, printing and supplies    1,685     1,346    3,322     2,716 
Professional fees    3,464     2,371    7,508     5,415 
FDIC assessments and other regulatory charges    1,973     1,348    4,449     2,631 
Amortization of intangibles    1,847     900    3,745     1,873 
Merger-related and other charges    2,280     1,830    4,334     3,884 
Other     8,458     6,950    15,189     13,433 
Total noninterest expenses    76,850     63,229    150,325     126,055 
  Net income before income taxes    53,166     44,804    101,572     86,806 
Income tax expense    13,532     16,537    24,280     35,015 
Net income $  39,634  $  28,267 $  77,292  $  51,791 
          
Net income available to common shareholders $  39,359  $  28,267 $  76,740  $  51,791 
          
Earnings per common share:         
  Basic $  0.49  $  0.39 $  0.97  $  0.72 
  Diluted    0.49     0.39    0.97     0.72 
Weighted average common shares outstanding:         
  Basic    79,745     71,810    79,477     71,798 
  Diluted    79,755     71,820    79,487     71,809 
          

 

      
UNITED COMMUNITY BANKS, INC.     
Consolidated Balance Sheets (Unaudited)     
      
  June 30, December 31, 
(in thousands, except share and per share data)  2018   2017  
      
ASSETS     
  Cash and due from banks $  125,013  $  129,108  
  Interest-bearing deposits in banks    191,355     185,167  
       Cash and cash equivalents    316,368     314,275  
  Securities available for sale     2,536,294     2,615,850  
  Securities held to maturity (fair value $291,463 and $321,276)    297,569     321,094  
  Loans held for sale (includes $34,813 and $26,252 at fair value)    34,813     32,734  
  Loans and leases, net of unearned income    8,220,271     7,735,572  
       Less allowance for loan and lease losses    (61,071)    (58,914) 
            Loans, net    8,159,200     7,676,658  
  Premises and equipment, net    202,098     208,852  
  Bank owned life insurance    190,649     188,970  
  Accrued interest receivable    33,114     32,459  
  Net deferred tax asset    77,274     88,049  
  Derivative financial instruments    29,896     22,721  
  Goodwill and other intangible assets    327,174     244,397  
  Other assets    181,091     169,401  
     Total assets $  12,385,540  $  11,915,460  
LIABILITIES AND SHAREHOLDERS' EQUITY     
Liabilities:     
  Deposits:     
     Demand $  3,245,701  $  3,087,797  
     NOW    2,031,396     2,131,939  
     Money market    2,036,588     2,016,748  
     Savings    683,689     651,742  
     Time    1,524,635     1,548,460  
     Brokered    444,079     371,011  
            Total deposits    9,966,088     9,807,697  
  Short-term borrowings    9,325     50,000  
  Federal Home Loan Bank advances    560,000     504,651  
  Long-term debt    308,434     120,545  
  Derivative financial instruments    37,261     25,376  
  Accrued expenses and other liabilities    125,323     103,857  
     Total liabilities    11,006,431     10,612,126  
Shareholders' equity:     
   Common stock, $1 par value; 150,000,000 shares authorized;     
     79,137,810 and 77,579,561 shares issued and outstanding    79,138     77,580  
   Common stock issuable; 616,549 and 607,869 shares    9,509     9,083  
   Capital surplus    1,497,517     1,451,814  
   Accumulated deficit    (154,290)    (209,902) 
   Accumulated other comprehensive loss    (52,765)    (25,241) 
     Total shareholders' equity    1,379,109     1,303,334  
     Total liabilities and shareholders' equity $  12,385,540  $  11,915,460  
      

 

              
UNITED COMMUNITY BANKS, INC.             
Average Consolidated Balance Sheets and Net Interest Analysis          
For the Three Months Ended June 30,              
              
 2018  2017   
   Average   Avg.    Average   Avg.   
(dollars in thousands, fully taxable equivalent (FTE))  Balance    Interest Rate    Balance    Interest Rate   
Assets:             
Interest-earning assets:             
  Loans, net of unearned income (FTE) (1)(2)$  8,177,343  $  103,3955.07% $  6,979,980  $  74,811  4.30%  
  Taxable securities (3)   2,651,816     17,2292.60     2,719,390     17,421  2.56   
  Tax-exempt securities (FTE) (1)(3)   150,503     1,3803.67     55,992     584  4.17   
  Federal funds sold and other interest-earning assets   212,849     6741.27     143,143     743  2.08   
              
     Total interest-earning assets (FTE)   11,192,511     122,6784.39     9,898,505     93,559  3.79   
Non-interest-earning assets:             
  Allowance for loan losses   (62,275)        (61,163)      
  Cash and due from banks   133,060         104,812       
  Premises and equipment   218,517         192,906       
  Other assets (3)   731,514         569,435       
     Total assets$  12,213,327      $  10,704,495       
              
Liabilities and Shareholders' Equity:             
Interest-bearing liabilities:             
  Interest-bearing deposits:             
NOW$  2,071,289     1,303  0.25  $  1,901,890     635  0.13   
Money market   2,214,077     2,583  0.47     2,064,143     1,559  0.30   
Savings   678,988     35  0.02     575,960     28  0.02   
Time   1,524,124     2,696  0.71     1,274,009     1,136  0.36   
Brokered time deposits   300,389     1,502  2.01     111,983     243  0.87   
     Total interest-bearing deposits   6,788,867   -    8,119  0.48     5,927,985   -    3,601  0.24   
              
Federal funds purchased and other borrowings   45,241     198  1.76     37,317     101  1.09   
Federal Home Loan Bank advances   335,521     1,636  1.96     594,815     1,464  0.99   
Long-term debt   316,812     3,786  4.79     175,281     2,852  6.53   
     Total borrowed funds   697,574     5,620  3.23     807,413     4,417  2.19   
              
  Total interest-bearing liabilities   7,486,441     13,739  0.74     6,735,398     8,018  0.48   
Non-interest-bearing liabilities:             
  Non-interest-bearing deposits   3,188,847         2,731,217       
  Other liabilities   168,417         114,873       
     Total liabilities   10,843,705         9,581,488       
Shareholders' equity   1,369,622         1,123,007       
     Total liabilities and shareholders' equity$  12,213,327      $  10,704,495       
              
Net interest revenue (FTE)  $  108,939     $  85,541    
Net interest-rate spread (FTE)   3.65%    3.31%  
              
Net interest margin (FTE) (4)   3.90%    3.47%  
              
(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%  
      in 2018 and 39% in 2017, 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 where the accrual of interest has been discontinued and loans that are held for sale.   
(3)  Securities available for sale are shown at amortized cost.  Pretax unrealized losses of $42.9 million in 2018 and pretax unrealized gains of $6.58 million in 2017 
      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.        
              

 

             
UNITED COMMUNITY BANKS, INC.            
Average Consolidated Balance Sheets and Net Interest Analysis         
For the Six Months Ended June 30,            
             
 2018  2017  
  Average   Avg.   Average   Avg.  
(dollars in thousands, fully taxable equivalent (FTE)) Balance   Interest Rate   Balance   Interest Rate  
Assets:            
Interest-earning assets:            
  Loans, net of unearned income (FTE) (1)(2)$  8,085,849  $  199,7844.98% $  6,942,130  $  147,552  4.29% 
  Taxable securities (3)   2,687,200     34,5522.57     2,749,339     34,854  2.54  
  Tax-exempt securities (FTE) (1)(3)   148,528     2,6893.62     49,125     1,041  4.24  
  Federal funds sold and other interest-earning assets   212,951     1,3721.29     144,577     1,407  1.95  
             
     Total interest-earning assets (FTE)   11,134,528     238,3974.31     9,885,171     184,854  3.76  
Non-interest-earning assets:            
  Allowance for loan losses   (60,718)        (61,414)     
  Cash and due from banks   146,697         102,048      
  Premises and equipment   217,625         191,509      
  Other assets (3)   724,488         573,281      
     Total assets$  12,162,620      $  10,690,595      
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
  Interest-bearing deposits:            
NOW$  2,077,461     2,416  0.23  $  1,930,624     1,232  0.13  
Money market   2,222,304     4,758  0.43     2,064,792     2,985  0.29  
Savings   667,431     84  0.03     568,339     55  0.02  
Time   1,529,639     4,937  0.65     1,269,005     1,951  0.31  
Brokered time deposits   229,766     2,217  1.95     105,199     436  0.84  
     Total interest-bearing deposits   6,726,601     14,412  0.43     5,937,959     6,659  0.23  
             
Federal funds purchased and other borrowings   61,894     498  1.62     28,225     141  1.01  
Federal Home Loan Bank advances   423,137     3,760  1.79     637,728     2,894  0.92  
Long-term debt    295,763     7,074  4.82     175,212     5,728  6.59  
     Total borrowed funds   780,794     11,332  2.93     841,165     8,763  2.10  
             
     Total interest-bearing liabilities   7,507,395     25,744  0.69     6,779,124     15,422  0.46  
Non-interest-bearing liabilities:            
  Non-interest-bearing deposits   3,142,384         2,687,665      
  Other liabilities   159,734         115,808      
     Total liabilities   10,809,513         9,582,597      
Shareholders' equity   1,353,107         1,107,998      
     Total liabilities and shareholders' equity$  12,162,620      $  10,690,595      
             
Net interest revenue (FTE)  $  212,653     $  169,432   
Net interest-rate spread (FTE)   3.62%    3.30% 
             
Net interest margin (FTE) (4)   3.85%    3.46% 
             
(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% 
      in 2018 and 39% in 2017, 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 where the accrual of interest has been discontinued and loans that are held for sale.  
(3)  Securities available for sale are shown at amortized cost.  Pretax unrealized losses of $35.6 million in 2018 and pretax unrealized gains of $638 thousand in 
      2017 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. UCBI is a bank holding company based in Blairsville, Georgia with $12.4 billion in assets.  The company's banking subsidiary, United Community Bank, is one of the southeast region's largest full-service banks, operating 150 offices in Georgia, North Carolina, South Carolina and Tennessee.  The bank specializes in personalized community banking services for individuals, small businesses and corporations.  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 the last five years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast.  In 2018, for the fifth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America.  Additional information about the company and the bank's full range of products and services 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 dividend payout ratio," "operating efficiency ratio," "average tangible equity to average assets," "average tangible common equity to average assets" and "tangible common equity to risk-weighted 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

Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise and are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or words of similar meaning or other statements concerning opinions or judgments of United and its management about future events. Although United believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of United will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements; such statements are not guarantees of future performance. 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. Actual future results and trends may differ materially from historical results and or those anticipated depending on a variety of factors, including, but not limited to the factors and risk influences contained in the cautionary language included under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in United's Form 10-K for the year ended December 31, 2017 and other periodic reports subsequently filed by United with the SEC, available on the SEC website, www.sec.gov. For any forward-looking statements made in this press release, United claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com

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