• United Community Banks, Inc. Reports Third Quarter Results

    Source: Nasdaq GlobeNewswire / 18 Oct 2023 07:00:01   America/New_York

    GREENVILLE, S.C., Oct. 18, 2023 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today announced net income for the third quarter of $47.9 million and pre-tax, pre-provision income of $90.1 million. Diluted earnings per share of $0.39 for the quarter represented a decrease of $0.14 or 26% from the second quarter of 2023 and a decrease of $0.35 or 47%, from the third quarter of 2022. On an operating basis, excluding merger-related and other charges, diluted earnings per share of $0.45 decreased $0.10 or 18% compared to last quarter. Customer deposits organically grew by 5.6% annualized and loans grew at a 5.4% annualized rate during the quarter. Net interest revenue increased $2.3 million as the addition of First National Bank of South Miami ("FNBSM") was partly offset by a contraction in the net interest margin, driven by continued deposit pricing competition. Noninterest income was down $4.4 million primarily due to the absence of the unusual second quarter gain on the sale of an insurance subsidiary and a one-time small business partnership investment gain. Noninterest expenses increased mainly due to closing the FNBSM acquisition.

    For the quarter, United’s return on assets was 0.68%, or 0.79% on an operating basis. Return on common equity was 5.3% and return on tangible common equity was 9.0%. On a pre-tax, pre-provision basis, operating return on assets was 1.44% for the quarter. At quarter-end, tangible common equity to tangible assets was 8.18%, down three basis points from the second quarter of 2023.

    Chairman and CEO Lynn Harton stated, “We continue to be pleased with the strength of our customer deposit franchise, driven by our service model. In the third quarter our customer deposits grew by 5.6% annualized, allowing us to decrease high cost brokered deposits and fund solid loan growth within our stated target range of mid-to-high single digits. Our cost of deposits continued to increase, leading to a modest decline in our net interest margin for the quarter. Increases in credit costs are concentrated in specific sectors that are under stress or specific companies that have been poorly managed. This is not unexpected given the speed at which borrowing rates have increased. We continue to expect broader credit performance to remain strong, but are appropriately cautious in our portfolio management given the potential for ongoing changes in the economic environment.”

    United’s net interest margin decreased by 13 basis points to 3.24% compared to the second quarter. The average yield on United’s interest-earning assets was up 20 basis points to 5.17%, but its cost of deposits increased by 39 basis points to 2.03%, leading to the reduction in the net interest margin. Net charge-offs were $26.6 million or 0.59% of average loans during the quarter, up 39 basis points compared to the second quarter of 2023, largely due to the $19 million charge-off from an 8.7% participation in a large, nationally syndicated credit disclosed during the quarter. NPAs were 34 basis points relative to total assets, down six basis points from the previous quarter.

    Mr. Harton concluded, “We continue to focus on our key mission of building our communities by serving our customers. Our teams are executing on that promise across our footprint, which we believe is one of the strongest in the Southeast. We have been fortunate to attract new teams, adding both new talent and additional exposure to high-growth metropolitan markets within our franchise. This quarter, we are very glad to welcome FNBSM officially into the United team, boosting our growth opportunities in Miami. FNBSM brings a very talented team and we look forward to growing together.”

    Third Quarter 2023 Financial Highlights:

    • Net income of $47.9 million and pre-tax, pre-provision income of $90.1 million
    • EPS decreased by 47% compared to last year on a GAAP basis and 40% on an operating basis; compared to second quarter 2023, EPS decreased 26% on a GAAP basis and decreased 18% on an operating basis
    • Return on assets of 0.68%, or 0.79% on an operating basis
    • Pre-tax, pre-provision return on assets of 1.31%, or 1.44% when excluding merger-related and other charges
    • Return on common equity of 5.3%
    • Return on tangible common equity of 9.0% on an operating basis
    • Loan production, excluding balances acquired from FNBSM, of $1.5 billion, resulting in organic loan growth of 5.4% annualized for the quarter
    • Customer deposits, excluding brokered deposits, acquired FNBSM balances, and those from the sale of two Tennessee branches that were sold during the quarter were up $314 million or 5.6% annualized from last quarter
    • Net interest margin of 3.24% was down 13 basis points from the second quarter due to increased deposit costs
    • Mortgage closings of $211 million compared to $317 million a year ago; mortgage rate locks of $304 million compared to $456 million a year ago
    • Noninterest income was down $4.4 million primarily due to the absence of unusual second quarter gain on the sale of an insurance subsidiary and a one-time small business partnership investment gain
    • Noninterest expenses increased $12.1 million compared to the second quarter on a GAAP basis and by $6.5 million on an operating basis, mostly due to increases in salaries and employee benefits expenses, occupancy, amortization of intangibles and higher merger-related and other charges related to closing the FNBSM acquisition
    • Efficiency ratio of 61.3%, or 57.4% on an operating basis, up from second quarter largely driven by net interest margin pressure
    • Net charge-offs of $26.6 million, or 59 basis points as a percent of average loans, up 39 basis points from the net charge-offs level experienced in the second quarter and mostly due to the $19 million charge-off from an 8.7% participation in a large, nationally syndicated credit disclosed during the quarter
    • Nonperforming assets of 0.34% of total assets, down six basis points compared to June 30, 2023
    • Quarterly common shareholder dividend of $0.23 per share declared during the quarter, an increase of 5% year-over-year

    Conference Call

    United will hold a conference call on Wednesday, October 18, 2023, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10183036/fa91904ab0. Those without internet access or who are unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and available for replay by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of United’s website at ucbi.com.

    UNITED COMMUNITY BANKS, INC.                  
    Selected Financial Information                  
    (in thousands, except per share data)                  
       2023   2022  Third 
    Quarter
    2023-
    		 For the Nine Months
    Ended September 30,    		 YTD 
    2023-
      Third
    Quarter    		 Second 
    Quarter    		 First
    Quarter    		 Fourth 
    Quarter    		 Third
    Quarter    		 2022
    Change    		  2023   2022  2022 
    Change
    INCOME SUMMARY                  
    Interest revenue $323,147  $295,775  $279,487  $240,831  $213,887    $898,409  $572,324   
    Interest expense  120,591   95,489   68,017   30,943   14,113     284,097   29,855   
    Net interest revenue  202,556   200,286   211,470   209,888   199,774  1%  614,312   542,469  13%
    Provision for credit losses  30,268   22,753   21,783   19,831   15,392     74,804   44,082   
    Noninterest income  31,977   36,387   30,209   33,354   31,922  —   98,573   104,353  (6)
    Total revenue  204,265   213,920   219,896   223,411   216,304  (6)  638,081   602,740  6 
    Noninterest expenses  144,474   132,407   139,805   117,329   112,755  28   416,686   352,820  18 
    Income before income tax expense  59,791   81,513   80,091   106,082   103,549  (42)  221,395   249,920  (11)
    Income tax expense  11,925   18,225   17,791   24,632   22,388  (47)  47,941   53,898  (11)
    Net income  47,866   63,288   62,300   81,450   81,161  (41)  173,454   196,022  (12)
    Merger-related and other charges  9,168   3,645   8,631   1,470   1,746     21,444   17,905   
    Income tax benefit of merger-related and other charges  (2,000)  (820)  (1,955)  (323)  (385)    (4,775)  (3,923)  
    Net income - operating (1) $        55,034  $        66,113  $        68,976  $        82,597  $        82,522          (33) $        190,123  $        210,004          (9)
    Pre-tax pre-provision income(5) $90,059  $104,266  $101,874  $125,913  $118,941  (24) $296,199  $294,002  1 
    PERFORMANCE MEASURES                  
    Per common share:                  
    Diluted net income - GAAP $0.39  $0.53  $0.52  $0.74  $0.74  (47) $1.44  $1.78  (19)
    Diluted net income - operating(1)  0.45   0.55   0.58   0.75   0.75  (40)  1.58   1.91  (17)
    Cash dividends declared  0.23   0.23   0.23   0.22   0.22  5   0.69   0.64  8 
    Book value  25.87   25.98   25.76   24.38   23.78  9   25.87   23.78  9 
    Tangible book value(3)  17.70   17.83   17.59   17.13   16.52  7   17.70   16.52  7 
    Key performance ratios:                  
    Return on common equity - GAAP(2)(4)  5.32%  7.47%  7.34%  10.86%  11.02%    6.69%  9.08%  
    Return on common equity - operating(1)(2)(4)  6.14   7.82   8.15   11.01   11.21     7.35   9.75   
    Return on tangible common equity - operating(1)(2)(3)(4)  9.03   11.35   11.63   15.20   15.60     10.65   13.64   
    Return on assets - GAAP(4)  0.68   0.95   0.95   1.33   1.32     0.86   1.06   
    Return on assets - operating(1)(4)  0.79   1.00   1.06   1.35   1.34     0.95   1.13   
    Return on assets - pre-tax pre-provision(4)(5)  1.31   1.59   1.58   2.07   1.94     1.49   1.60   
    Return on assets - pre-tax pre-provision, excluding merger- related and other charges(1)(4)(5)  1.44   1.65   1.71   2.09   1.97     1.60   1.70   
    Net interest margin (fully taxable equivalent)(4)  3.24   3.37   3.61   3.76   3.57     3.41   3.25   
    Efficiency ratio - GAAP  61.32   55.71   57.20   47.95   48.41     58.06   53.94   
    Efficiency ratio - operating(1)  57.43   54.17   53.67   47.35   47.66     55.07   51.20   
    Equity to total assets  11.85   11.89   11.90   11.25   11.12     11.85   11.12   
    Tangible common equity to tangible assets(3)  8.18   8.21   8.17   7.88   7.70     8.18   7.70   
    ASSET QUALITY                  
    Nonperforming assets ("NPAs") $90,883  $103,737  $73,403  $44,281  $35,511  156  $90,883  $35,511  156 
    Allowance for credit losses - loans  201,557   190,705   176,534   159,357   148,502  36   201,557   148,502  36 
    Allowance for credit losses - total  219,624   212,277   197,923   180,520   167,300  31   219,624   167,300  31 
    Net charge-offs (recoveries)  26,638   8,399   7,084   6,611   1,134     42,121   3,043   
    Allowance for credit losses - loans to loans  1.11%  1.10%  1.03%  1.04%  1.00%    1.11%  1.00%  
    Allowance for credit losses - total to loans  1.21   1.22   1.16   1.18   1.12     1.21   1.12   
    Net charge-offs to average loans(4)  0.59   0.20   0.17   0.17   0.03     0.32   0.03   
    NPAs to total assets  0.34   0.40   0.28   0.18   0.15     0.34   0.15   
    AT PERIOD END ($ in millions)                  
    Loans $18,203  $17,395  $17,125  $15,335  $14,882  22  $18,203  $14,882  22 
    Investment securities  5,701   5,914   5,915   6,228   6,539  (13)  5,701   6,539  (13)
    Total assets  26,869   26,120   25,872   24,009   23,688  13   26,869   23,688  13 
    Deposits  22,858   22,252   22,005   19,877   20,321  12   22,858   20,321  12 
    Shareholders’ equity  3,184   3,106   3,078   2,701   2,635  21   3,184   2,635  21 
    Common shares outstanding (thousands)  118,976   115,266   115,152   106,223   106,163  12   118,976   106,163  12 

    (1) Excludes merger-related and other charges. (2) Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized. (5) Excludes income tax expense and provision for credit losses.

    UNITED COMMUNITY BANKS, INC.              
    Non-GAAP Performance Measures Reconciliation
    Selected Financial Information              
    (in thousands, except per share data)              
       2023   2022  For the Nine Months Ended
    September 30,
      Third
    Quarter    		 Second
    Quarter    		 First
    Quarter    		 Fourth
    Quarter    		 Third
    Quarter    		  2023   2022 
                   
    Noninterest expense reconciliation              
    Noninterest expenses (GAAP) $144,474  $132,407  $139,805  $117,329  $112,755  $416,686  $352,820 
    Merger-related and other charges  (9,168)  (3,645)  (8,631)  (1,470)  (1,746)  (21,444)  (17,905)
    Noninterest expenses - operating $135,306  $128,762  $131,174  $115,859  $111,009  $395,242  $334,915 
                   
    Net income reconciliation              
    Net income (GAAP) $47,866  $63,288  $62,300  $81,450  $81,161  $173,454  $196,022 
    Merger-related and other charges  9,168   3,645   8,631   1,470   1,746   21,444   17,905 
    Income tax benefit of merger-related and other charges  (2,000)  (820)  (1,955)  (323)  (385)  (4,775)  (3,923)
    Net income - operating $55,034  $66,113  $68,976  $82,597  $82,522  $190,123  $210,004 
                   
    Net income to pre-tax pre-provision income reconciliation              
    Net income (GAAP) $47,866  $63,288  $62,300  $81,450  $81,161  $173,454  $196,022 
    Income tax expense  11,925   18,225   17,791   24,632   22,388   47,941   53,898 
    Provision for credit losses  30,268   22,753   21,783   19,831   15,392   74,804   44,082 
    Pre-tax pre-provision income $90,059  $104,266  $101,874  $125,913  $118,941  $296,199  $294,002 
                   
    Diluted income per common share reconciliation              
    Diluted income per common share (GAAP) $0.39  $0.53  $0.52  $0.74  $0.74  $1.44  $1.78 
    Merger-related and other charges, net of tax  0.06   0.02   0.06   0.01   0.01   0.14   0.13 
    Diluted income per common share - operating $0.45  $0.55  $0.58  $0.75  $0.75  $1.58  $1.91 
                   
    Book value per common share reconciliation              
    Book value per common share (GAAP) $25.87  $25.98  $25.76  $24.38  $23.78  $25.87  $23.78 
    Effect of goodwill and other intangibles  (8.17)  (8.15)  (8.17)  (7.25)  (7.26)  (8.17)  (7.26)
    Tangible book value per common share $17.70  $17.83  $17.59  $17.13  $16.52  $17.70  $16.52 
                   
    Return on tangible common equity reconciliation              
    Return on common equity (GAAP)  5.32%  7.47%  7.34%  10.86%  11.02%  6.69%  9.08%
    Merger-related and other charges, net of tax  0.82   0.35   0.81   0.15   0.19   0.66   0.67 
    Return on common equity - operating  6.14   7.82   8.15   11.01   11.21   7.35   9.75 
    Effect of goodwill and other intangibles  2.89   3.53   3.48   4.19   4.39   3.30   3.89 
    Return on tangible common equity - operating  9.03%  11.35%  11.63%  15.20%  15.60%  10.65%  13.64%
                   
    Return on assets reconciliation              
    Return on assets (GAAP)  0.68%  0.95%  0.95%  1.33%  1.32%  0.86%  1.06%
    Merger-related and other charges, net of tax  0.11   0.05   0.11   0.02   0.02   0.09   0.07 
    Return on assets - operating  0.79%  1.00%  1.06%  1.35%  1.34%  0.95%  1.13%
                   
    Return on assets to return on assets- pre-tax pre-provision reconciliation              
    Return on assets (GAAP)  0.68%  0.95%  0.95%  1.33%  1.32%  0.86%  1.06%
    Income tax expense  0.18   0.29   0.29   0.41   0.37   0.25   0.30 
    Provision for credit losses  0.45   0.35   0.34   0.33   0.25   0.38   0.24 
    Return on assets - pre-tax, pre-provision  1.31   1.59   1.58   2.07   1.94   1.49   1.60 
    Merger-related and other charges  0.13   0.06   0.13   0.02   0.03   0.11   0.10 
    Return on assets - pre-tax pre-provision, excluding merger-related and other charges  1.44%  1.65%  1.71%  2.09%  1.97%  1.60%  1.70%
                   
    Efficiency ratio reconciliation              
    Efficiency ratio (GAAP)  61.32%  55.71%  57.20%  47.95%  48.41%  58.06%  53.94%
    Merger-related and other charges  (3.89)  (1.54)  (3.53)  (0.60)  (0.75)  (2.99)  (2.74)
    Efficiency ratio - operating  57.43%  54.17%  53.67%  47.35%  47.66%  55.07%  51.20%
                   
    Tangible common equity to tangible assets reconciliation              
    Equity to total assets (GAAP)  11.85%  11.89%  11.90%  11.25%  11.12%  11.85%  11.12%
    Effect of goodwill and other intangibles  (3.33)  (3.31)  (3.36)  (2.97)  (3.01)  (3.33)  (3.01)
    Effect of preferred equity  (0.34)  (0.37)  (0.37)  (0.40)  (0.41)  (0.34)  (0.41)
    Tangible common equity to tangible assets  8.18%  8.21%  8.17%  7.88%  7.70%  8.18%  7.70%
                   


    UNITED COMMUNITY BANKS, INC.            
    Financial Highlights            
    Loan Portfolio Composition at Period-End            
      2023  2022 Linked 
    		 Year over 
    (in millions)Third 
    Quarter    		 Second 
    Quarter    		 First 
    Quarter    		 Fourth 
    Quarter    		 Third 
    Quarter    		 Quarter
    Change     		 Year
    Change 
    LOANS BY CATEGORY             
    Owner occupied commercial RE$3,279 $3,111 $3,141 $2,735 $2,700 $168  $579 
    Income producing commercial RE 4,130  3,670  3,611  3,262  3,299  460   831 
    Commercial & industrial 2,504  2,550  2,442  2,252  2,238  (46)  266 
    Commercial construction 1,850  1,739  1,806  1,598  1,514  111   336 
    Equipment financing 1,534  1,510  1,447  1,374  1,281  24   253 
    Total commercial 13,297  12,580  12,447  11,221  11,032  717   2,265 
    Residential mortgage 3,043  2,905  2,756  2,355  2,149  138   894 
    Home equity lines of credit 941  927  930  850  832  14   109 
    Residential construction 399  463  492  443  423  (64)  (24)
    Manufactured housing 343  340  326  317  301  3   42 
    Consumer 180  180  174  149  145  —   35 
    Total loans$18,203 $17,395 $17,125 $15,335 $14,882 $808  $3,321 
                  
    LOANS BY MARKET             
    Georgia$4,321 $4,281 $4,177 $4,051 $4,003 $40  $318 
    South Carolina 2,801  2,750  2,672  2,587  2,516  51   285 
    North Carolina 2,445  2,355  2,257  2,186  2,117  90   328 
    Tennessee 2,314  2,387  2,458  2,507  2,536  (73)  (222)
    Florida 2,318  1,708  1,745  1,308  1,259  610   1,059 
    Alabama 1,070  1,062  1,029  —  —  8   1,070 
    Commercial Banking Solutions 2,934  2,852  2,787  2,696  2,451  82   483 
    Total loans$18,203 $17,395 $17,125 $15,335 $14,882 $808  $3,321 


    UNITED COMMUNITY BANKS, INC.            
    Financial Highlights            
    Credit Quality            
    (in thousands)            
       2023      
      Third
    Quarter    		 Second
    Quarter    		 First
    Quarter    		      
    NONACCRUAL LOANS            
    Owner occupied RE $5,134 $3,471 $1,000      
    Income producing RE  30,255  32,542  10,603      
    Commercial & industrial  13,382  30,823  33,276      
    Commercial construction  1,065  115  475      
    Equipment financing  9,206  8,989  5,044      
    Total commercial  59,042  75,940  50,398      
    Residential mortgage  11,893  11,419  11,280      
    Home equity lines of credit  4,009  2,777  2,377      
    Residential construction  2,074  1,682  143      
    Manufactured housing  12,711  10,782  8,542      
    Consumer  89  19  55      
    Total nonaccrual loans  89,818  102,619  72,795      
    OREO and repossessed assets  1,065  1,118  608      
    Total NPAs $90,883 $103,737 $73,403      


       2023 
      Third 
    Quarter    		 Second 
    Quarter    		 First 
    Quarter
    (in thousands) Net Charge-
    Offs    		 Net Charge-
    Offs to
    Average
    Loans    (1)    		 Net Charge-
    Offs    		 Net Charge-
    Offs to
    Average
    Loans    (1)    		 Net Charge-
    Offs    		 Net Charge-
    Offs to
    Average
    Loans    (1)
    NET CHARGE-OFFS (RECOVERIES) BY CATEGORY            
    Owner occupied RE $582  0.07% $(205) (0.03)% $90  0.01%
    Income producing RE  3,011  0.30   1,184  0.13   2,306  0.26 
    Commercial & industrial  17,542  2.71   2,746  0.44   225  0.04 
    Commercial construction  (49) (0.01)  (105) (0.02)  (37) (0.01)
    Equipment financing  6,325  1.62   2,537  0.69   3,375  0.93 
    Total commercial  27,411  0.83   6,157  0.20   5,959  0.20 
    Residential mortgage  (129) (0.02)  (43) (0.01)  (87) (0.01)
    Home equity lines of credit  (2,784) (1.17)  (59) (0.03)  33  0.01 
    Residential construction  341  0.31   623  0.53   (15) (0.01)
    Manufactured housing  1,168  1.34   620  0.75   628  0.76 
    Consumer  631  1.37   1,101  2.51   566  1.37 
    Total $26,638  0.59  $8,399  0.20  $7,084  0.17 
                 
    (1)Annualized.            


    UNITED COMMUNITY BANKS, INC.
    Consolidated Balance Sheets (Unaudited)


    (in thousands, except share and per share data) September 30,
    2023    		 December 31,
    2022
    ASSETS    
    Cash and due from banks $192,726  $195,771 
    Interest-bearing deposits in banks  566,779   316,082 
    Federal funds and other short-term investments  —   135,000 
    Cash and cash equivalents  759,505   646,853 
    Debt securities available-for-sale  3,182,112   3,614,333 
    Debt securities held-to-maturity (fair value $1,992,364 and $2,191,073, respectively)  2,518,773   2,613,648 
    Loans held for sale  37,110   13,600 
    Loans and leases held for investment  18,202,807   15,334,627 
    Less allowance for credit losses - loans and leases  (201,557)  (159,357)
    Loans and leases, net  18,001,250   15,175,270 
    Premises and equipment, net  371,435   298,456 
    Bank owned life insurance  344,647   299,297 
    Goodwill and other intangible assets, net  994,142   779,248 
    Other assets  660,233   568,179 
    Total assets $26,869,207  $24,008,884 
    LIABILITIES AND SHAREHOLDERS' EQUITY    
    Liabilities:    
    Deposits:    
    Noninterest-bearing demand $6,782,031  $7,643,081 
    NOW and interest-bearing demand  5,349,335   4,350,878 
    Money market  5,691,480   4,510,680 
    Savings  1,265,548   1,456,337 
    Time  3,554,619   1,781,482 
    Brokered  214,855   134,049 
    Total deposits  22,857,868   19,876,507 
    Short-term borrowings  37,348   158,933 
    Federal Home Loan Bank advances  —   550,000 
    Long-term debt  324,786   324,663 
    Accrued expenses and other liabilities  465,381   398,107 
    Total liabilities  23,685,383   21,308,210 
    Shareholders' equity:    
    Preferred stock; $1 par value; 10,000,000 shares authorized; 3,745 and 4,000 shares Series I issued and
    outstanding, respectively, $25,000 per share liquidation preference    		  90,283   96,422 
    Common stock, $1 par value; 200,000,000 shares authorized,
    118,975,652 and 106,222,758 shares issued and outstanding, respectively    		  118,976   106,223 
    Common stock issuable; 608,646 and 607,128 shares, respectively  12,782   12,307 
    Capital surplus  2,697,671   2,306,366 
    Retained earnings  596,617   508,844 
    Accumulated other comprehensive loss  (332,505)  (329,488)
    Total shareholders' equity  3,183,824   2,700,674 
    Total liabilities and shareholders' equity $26,869,207  $24,008,884 


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


      Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    (in thousands, except per share data)  2023  2022  2023   2022 
    Interest revenue:        
    Loans, including fees $273,781 $174,065 $760,696  $476,072 
    Investment securities, including tax exempt of $1,722, $2,568, $5,563 and $7,762, respectively  44,729  36,953  125,775   91,043 
    Deposits in banks and short-term investments  4,637  2,869  11,938   5,209 
    Total interest revenue  323,147  213,887  898,409   572,324 
             
    Interest expense:        
    Deposits:        
    NOW and interest-bearing demand  35,613  3,992  80,809   7,624 
    Money market  46,884  4,503  105,430   7,030 
    Savings  868  178  2,108   337 
    Time  33,368  1,207  75,464   2,322 
    Deposits  116,733  9,880  263,811   17,313 
    Short-term borrowings  189  27  3,186   27 
    Federal Home Loan Bank advances  —  —  5,761   — 
    Long-term debt  3,669  4,206  11,339   12,515 
    Total interest expense  120,591  14,113  284,097   29,855 
    Net interest revenue  202,556  199,774  614,312   542,469 
    Provision for credit losses  30,268  15,392  74,804   44,082 
    Net interest revenue after provision for credit losses  172,288  184,382  539,508   498,387 
             
    Noninterest income:        
    Service charges and fees  10,315  9,569  28,791   28,644 
    Mortgage loan gains and other related fees  6,159  6,297  17,264   29,420 
    Wealth management fees  6,451  5,879  17,775   17,759 
    Gains from sales of other loans, net  2,688  2,228  6,909   9,226 
    Lending and loan servicing fees  2,985  2,946  9,979   7,518 
    Securities losses, net  —  —  (1,644)  (3,688)
    Other  3,379  5,003  19,499   15,474 
    Total noninterest income  31,977  31,922  98,573   104,353 
    Total revenue  204,265  216,304  638,081   602,740 
             
    Noninterest expenses:        
    Salaries and employee benefits  81,173  67,823  236,121   208,062 
    Communications and equipment  10,902  8,795  31,654   27,718 
    Occupancy  10,941  9,138  31,024   27,381 
    Advertising and public relations  2,251  2,544  6,914   6,332 
    Postage, printing and supplies  2,386  2,190  7,305   6,308 
    Professional fees  7,006  4,821  19,670   14,670 
    Lending and loan servicing expense  2,697  2,333  7,546   7,746 
    Outside services - electronic banking  2,561  3,159  8,646   8,629 
    FDIC assessments and other regulatory charges  4,314  2,356  12,457   6,796 
    Amortization of intangibles  4,171  1,678  11,120   5,207 
    Merger-related and other charges  9,168  1,746  21,444   17,905 
    Other  6,904  6,172  22,785   16,066 
    Total noninterest expenses  144,474  112,755  416,686   352,820 
    Income before income taxes  59,791  103,549  221,395   249,920 
    Income tax expense  11,925  22,388  47,941   53,898 
    Net income  47,866  81,161  173,454   196,022 
    Preferred stock dividends, net of discount on repurchases  832  1,719  4,270   5,157 
    Earnings allocated to participating securities  259  407  939   1,007 
    Net income available to common shareholders $46,775 $79,035 $168,245  $189,858 
             
    Net income per common share:        
    Basic $0.39 $0.74 $1.44  $1.78 
    Diluted  0.39  0.74  1.44   1.78 
    Weighted average common shares outstanding:        
    Basic  119,506  106,687  116,925   106,616 
    Diluted  119,624  106,800  117,084   106,732 


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


       2023   2022 
    (dollars in thousands, fully taxable equivalent (FTE)) Average
    Balance    		 Interest Average
    Rate    		 Average
    Balance    		 Interest Average
    Rate
    Assets:            
    Interest-earning assets:            
    Loans, net of unearned income (FTE)(1)(2) $18,055,402  $273,800 6.02% $14,658,397  $174,168 4.71%
    Taxable securities(3)  5,933,708   43,007 2.90   6,539,615   34,385 2.10 
    Tax-exempt securities (FTE)(1)(3)  368,148   2,313 2.51   493,115   3,449 2.80 
    Federal funds sold and other interest-earning assets  538,039   5,093 3.76   614,755   3,106 2.00 
    Total interest-earning assets (FTE)  24,895,297   324,213 5.17   22,305,882   215,108 3.83 
                 
    Noninterest-earning assets:            
    Allowance for credit losses  (209,472)      (138,907)    
    Cash and due from banks  225,831       231,376     
    Premises and equipment  367,217       290,768     
    Other assets(3)  1,568,824       1,261,236     
    Total assets $26,847,697      $23,950,355     
                 
    Liabilities and Shareholders' Equity:            
    Interest-bearing liabilities:            
    Interest-bearing deposits:            
    NOW and interest-bearing demand $5,285,513   35,613 2.67  $4,335,619   3,992 0.37 
    Money market  5,622,355   46,884 3.31   4,849,705   4,503 0.37 
    Savings  1,301,047   868 0.26   1,515,350   178 0.05 
    Time  3,473,191   31,072 3.55   1,635,580   984 0.24 
    Brokered time deposits  209,119   2,296 4.36   51,530   223 1.72 
    Total interest-bearing deposits  15,891,225   116,733 2.91   12,387,784   9,880 0.32 
    Federal funds purchased and other borrowings  44,164   189 1.70   3,442   27 3.11 
    Long-term debt  324,770   3,669 4.48   324,444   4,206 5.14 
    Total borrowed funds  368,934   3,858 4.15   327,886   4,233 5.12 
    Total interest-bearing liabilities  16,260,159   120,591 2.94   12,715,670   14,113 0.44 
                 
    Noninterest-bearing liabilities:            
    Noninterest-bearing deposits  6,916,272       8,176,987     
    Other liabilities  435,592       349,647     
    Total liabilities  23,612,023       21,242,304     
    Shareholders' equity  3,235,674       2,708,051     
    Total liabilities and shareholders' equity $26,847,697      $23,950,355     
                 
    Net interest revenue (FTE)   $203,622     $200,995  
    Net interest-rate spread (FTE)     2.23%     3.39%
    Net interest margin (FTE)(4)     3.24%     3.57%

    (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
    (2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
    (3) Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $430 million in 2023 and $318 million in 2022 are included in other assets for purposes of this presentation.
    (4) Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets.

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


       2023   2022 
    (dollars in thousands, fully taxable equivalent (FTE)) Average
    Balance    		 Interest Average
    Rate    		 Average
    Balance    		 Interest Average
    Rate
    Assets:            
    Interest-earning assets:            
    Loans, net of unearned income (FTE)(1)(2) $17,377,210  $760,802 5.85% $14,426,470  $475,989 4.41%
    Taxable securities(3)  5,982,615   120,212 2.68   6,274,230   83,281 1.77 
    Tax-exempt securities (FTE)(1)(3)  386,499   7,470 2.58   498,177   10,425 2.79 
    Federal funds sold and other interest-earning assets  490,703   13,103 3.57   1,271,287   6,192 0.65 
    Total interest-earning assets (FTE)  24,237,027   901,587 4.97   22,470,164   575,887 3.43 
                 
    Non-interest-earning assets:            
    Allowance for loan losses  (186,428)      (129,278)    
    Cash and due from banks  249,411       200,463     
    Premises and equipment  347,514       284,850     
    Other assets(3)  1,518,503       1,308,647     
    Total assets $26,166,027      $24,134,846     
                 
    Liabilities and Shareholders' Equity:            
    Interest-bearing liabilities:            
    Interest-bearing deposits:            
    NOW and interest-bearing demand $4,891,214   80,809 2.21  $4,520,079   7,624 0.23 
    Money market  5,349,265   105,430 2.64   4,992,357   7,030 0.19 
    Savings  1,341,033   2,108 0.21   1,483,169   337 0.03 
    Time  2,936,873   65,856 3.00   1,688,250   2,009 0.16 
    Brokered time deposits  280,293   9,608 4.58   65,133   313 0.64 
    Total interest-bearing deposits  14,798,678   263,811 2.38   12,748,988   17,313 0.18 
    Federal funds purchased and other borrowings  98,884   3,186 4.31   1,383   27 2.61 
    Federal Home Loan Bank advances  166,355   5,761 4.63   —   — — 
    Long-term debt  324,737   11,339 4.67   322,600   12,515 5.19 
    Total borrowed funds  589,976   20,286 4.60   323,983   12,542 5.18 
    Total interest-bearing liabilities  15,388,654   284,097 2.47   13,072,971   29,855 0.31 
                 
    Noninterest-bearing liabilities:            
    Noninterest-bearing deposits  7,226,096       7,958,392     
    Other liabilities  393,048       375,182     
    Total liabilities  23,007,798       21,406,545     
    Shareholders' equity  3,158,229       2,728,301     
    Total liabilities and shareholders' equity $26,166,027      $24,134,846     
                 
    Net interest revenue (FTE)   $617,490     $546,032  
    Net interest-rate spread (FTE)     2.50%     3.12%
    Net interest margin (FTE)(4)     3.41%     3.25%
                 

    (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
    (2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
    (3) Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $413 million in 2023 and $221 million in 2022 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 the financial holding company for United Community, a top 100 US financial institution that is committed to improving the financial health and well-being of its customers and ultimately the communities it serves. United Community provides a full range of banking, wealth management, and mortgage services. As of September 30, 2023, United Community has $26.9 billion in assets and 205 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment financing subsidiary. United Community has been recognized nationally as a leader in customer service, financial performance, and workplace environment. Among the accolades, United Community is a nine-time winner of the J.D. Power award that ranked the bank #1 in customer satisfaction with consumer banking in the Southeast and was recognized in 2023 by Forbes as one of the World’s Best Banks and one of America’s Best Banks. United Community was also recognized by Newsweek in 2023 as one of the Most Trusted Companies in America, is a multi-award recipient of the Greenwich Excellence Awards and was named by American Banker as one of the "Best Banks to Work For" in 2022 for the sixth consecutive year. Additional information about United Community can be found at ucbi.com.

    Non-GAAP Financial Measures

    This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “pre-tax, pre-provision income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “return on assets - pre-tax, pre-provision, excluding merger-related and other charges,” “return on assets - pre-tax, pre-provision,” “operating efficiency ratio,” and “tangible common equity to tangible assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

    Caution About Forward-Looking Statements

    This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to potential benefits of the First National Bank of South Miami merger, and the strength of our pipelines and their ability to support business growth across our markets and our belief that our high-quality balance sheet and business mix will support strong performance regardless of future economic conditions. Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.

    Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the First National Bank of South Miami acquisition and other acquisitions may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of these acquisitions, (3) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to these acquisitions, (4) the risks relating to the integration of First National Bank of South Miami’s and other acquired banks’ operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (5) the risks associated with United’s pursuit of future acquisitions, (6) the risk associated with expansion into new geographic or product markets, and (7) general competitive, economic, political, regulatory and market conditions. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2022, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).

    Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United.

    United qualifies all forward-looking statements by these cautionary statements.

    For more information:

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


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