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United Community Banks, Inc. Announces Strong Second Quarter Results

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BLAIRSVILLE, Ga., July 24, 2018 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: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. 

 

                   
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     $   103,395 5.07 %   $   6,979,980     $   74,811   4.30 %    
  Taxable securities (3)     2,651,816         17,229 2.60         2,719,390         17,421   2.56      
  Tax-exempt securities (FTE) (1)(3)     150,503         1,380 3.67         55,992         584   4.17      
  Federal funds sold and other interest-earning assets     212,849         674 1.27         143,143         743   2.08      
                           
     Total interest-earning assets (FTE)     11,192,511         122,678 4.39         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     $   199,784 4.98 %   $   6,942,130     $   147,552   4.29 %  
  Taxable securities (3)     2,687,200         34,552 2.57         2,749,339         34,854   2.54    
  Tax-exempt securities (FTE) (1)(3)     148,528         2,689 3.62         49,125         1,041   4.24    
  Federal funds sold and other interest-earning assets     212,951         1,372 1.29         144,577         1,407   1.95    
                         
     Total interest-earning assets (FTE)     11,134,528         238,397 4.31         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. (NASDAQ: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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