U.S. Markets close in 2 hrs 14 mins
  • S&P 500

    4,445.57
    -37.16 (-0.83%)
     
  • Dow 30

    34,573.90
    -141.49 (-0.41%)
     
  • Nasdaq

    13,974.60
    -179.42 (-1.27%)
     
  • Russell 2000

    2,010.03
    -14.00 (-0.69%)
     
  • Crude Oil

    84.88
    -0.67 (-0.78%)
     
  • Gold

    1,830.90
    -11.70 (-0.63%)
     
  • Silver

    24.31
    -0.41 (-1.64%)
     
  • EUR/USD

    1.1353
    +0.0036 (+0.3179%)
     
  • 10-Yr Bond

    1.7580
    -0.0750 (-4.09%)
     
  • Vix

    27.22
    +1.63 (+6.37%)
     
  • GBP/USD

    1.3560
    -0.0040 (-0.2970%)
     
  • USD/JPY

    113.6500
    -0.4500 (-0.3944%)
     
  • BTC-USD

    38,452.39
    -4,563.34 (-10.61%)
     
  • CMC Crypto 200

    904.68
    +662.00 (+272.79%)
     
  • FTSE 100

    7,494.13
    -90.88 (-1.20%)
     
  • Nikkei 225

    27,522.26
    -250.64 (-0.90%)
     

United Community Banks, Inc. Reports Third Quarter Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·16 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • HUM
  • UCBI
  • UCBIO

EPS of $0.82, Return on Assets of 1.48% and Return on Common Equity of 14.3%

GREENVILLE, S.C., Oct. 19, 2021 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the third quarter was $73.8 million and pre-tax, pre-provision income was $84.4 million. Diluted earnings per share of $0.82 for the quarter represented an increase of $0.30 or 58%, from the third quarter a year ago, and represented an increase of $0.04 or 5% from the second quarter of 2021. On an operating basis, United’s diluted earnings per share of $0.83 was up 51% over the year ago quarter. United’s GAAP return on assets (ROA) was 1.48% and its return on common equity was 14.3% for the quarter. On an operating basis, United’s ROA was 1.50% and its return on tangible common equity was 18.2%. On a pre-tax, pre-provision basis, operating return on assets was 1.73% for the quarter. The quarter benefited from an allowance release of $11.0 million, reflecting continued improvement in economic conditions and forecasts.

Chairman and CEO Lynn Harton stated, “This has been another strong quarter for United as our economies continued to strengthen even in the face of the Delta variant, increasing prices on many goods, and supply chain delays. Both loan and deposit growth were strong and noninterest income benefited from both another excellent mortgage quarter as well as contributions from our expanded wealth management business.” Harton continued, “On the strategic front, on October 1, we completed the acquisition of Aquesta Financial Holdings, Inc. and Aquesta Bank, accelerating our expansion in Charlotte, and adding the Wilmington, North Carolina market, two of the strongest markets in the Southeast. We are proud that this outstanding team of bankers has joined us and we believe that they are a great fit for United. We also continued to strengthen our Board of Directors with the appointment of Jennifer Bazante, Chief Marketing Officer of Humana Inc. We believe that digital transformation is supported and enabled by strong branding and marketing and we specifically wanted to bring that experience and thought leadership to our board. We are excited to have Jennifer join United as we continue to grow and build the company.”

Total loans decreased by $200 million during the quarter—impacted by $322 million of Paycheck Protection Program (PPP) loan forgiveness. Excluding the effect of PPP loans, core organic loan growth was 4.5% annualized. Core transaction deposits grew by $490 million during the quarter, or 15.3% annualized, and United’s cost of deposits decreased by 2 basis points to 0.07%. The net interest margin decreased by 7 basis points from the second quarter due mainly to a change in the earning asset mix towards liquid assets.

Third Quarter 2021 Financial Highlights:

  • Net income of $73.8 million and pre-tax, pre-provision income of $84.4 million

  • EPS increased by 58% compared to third quarter 2020 on a GAAP basis and 51% on an operating basis; compared to second quarter 2021, EPS increased by 5% on both a GAAP and operating basis

  • Return on assets of 1.48%, or 1.50% on an operating basis

  • Pre-tax, pre-provision return on assets of 1.70%, or 1.73% on an operating basis

  • Return on common equity of 14.3%

  • Return on tangible common equity of 18.2% on an operating basis

  • A release of provision for credit losses of $11.0 million, which reduced the allowance for loan losses to 0.89% of loans from 0.98% in the second quarter

  • Loan production of $1.2 billion, resulting in core loan growth of 4.5%, annualized for the quarter, excluding the impact of $322 million in PPP loans being forgiven

  • Core transaction deposits were up $490 million, which represents a 15.3% annualized growth rate for the quarter

  • Net interest margin of 3.12% was down 7 basis points from the second quarter, due to continued strong deposit growth and an earning asset mix change toward securities

  • Mortgage closings of $568 million compared to $576 million a year ago; mortgage rate locks of $731 million compared to $910 million a year ago

  • Noninterest income was up $4.3 million on a linked quarter basis, primarily driven by strong mortgage volume and the lack of a significant MSR write-down; it also benefitted from $2.0 million in fees generated by our newly acquired FinTrust wealth manager that closed on July 6

  • Noninterest expenses increased by $1.2 million compared to the second quarter on a GAAP basis and by $850,000 on an operating basis; excluding the FinTrust transaction, operating noninterest expenses improved by $1 million compared to the second quarter

  • Efficiency ratio at historically low levels of 53.1%, or 52.3% on an operating basis

  • Net charge-offs of $551,000 or 2 basis points as a percent of average loans, up 4 basis points from the net recoveries experienced in the second quarter

  • Nonperforming assets of 0.23% of total assets, down 2 basis points compared to June 30, 2021

  • Total loan deferrals of $9 million or 0.1% of the total loan portfolio compared to $18 million or 0.2% in the second quarter

  • Quarterly common shareholder dividend of $0.20 per share declared during the quarter, an increase of 11% year-over-year

  • Completed the acquisition of FinTrust Capital Partners, LLC and its affiliates and subsidiaries with $2.1 billion in assets under management on July 6, 2021

  • Completed the acquisition of Aquesta Financial Holdings, Inc. (“Aquesta”) with $754 million in assets on October 1, 2021; this acquisition is expected to add $0.08 in EPS accretion in 2022 with cost savings fully phased in

  • Announced the proposed acquisition of Reliant Bancorp, Inc. (“Reliant”) with $3.1 billion in assets on July 14, 2021; this acquisition is expected to close in the first quarter of 2022 and add $0.15 in EPS accretion in 2022 and $0.22 in 2023 with cost savings fully phased in

Conference Call

United will hold a conference call on Wednesday, October 20, 2021, 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 1388708. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

UNITED COMMUNITY BANKS, INC.

Selected Financial Information

2021

2020

Third Quarter
2021 - 2020
Change

For the Nine Months Ended September 30,

YTD 2021 - 2020 Change

(in thousands, except per share data)

Third
Quarter

Second Quarter

First
Quarter

Fourth Quarter

Third
Quarter

2021

2020

INCOME SUMMARY

Interest revenue

$

147,675

$

145,809

$

141,542

$

156,071

$

141,773

$

435,026

$

401,925

Interest expense

6,636

7,433

9,478

10,676

13,319

23,547

45,561

Net interest revenue

141,039

138,376

132,064

145,395

128,454

10

%

411,479

356,364

15

%

(Release of) provision for credit losses

(11,034

)

(13,588

)

(12,281

)

2,907

21,793

(36,903

)

77,527

Noninterest income

40,095

35,841

44,705

41,375

48,682

(18

)

120,641

114,734

5

Total revenue

192,168

187,805

189,050

183,863

155,343

24

569,023

393,571

45

Expenses

96,749

95,540

95,194

106,490

95,981

1

287,483

261,499

10

Income before income tax expense

95,419

92,265

93,856

77,373

59,362

61

281,540

132,072

113

Income tax expense

21,603

22,005

20,150

17,871

11,755

84

63,758

27,485

132

Net income

73,816

70,260

73,706

59,502

47,607

55

217,782

104,587

108

Merger-related and other charges

1,437

1,078

1,543

2,452

3,361

4,058

4,566

Income tax benefit of merger-related and other charges

(328

)

(246

)

(335

)

(552

)

(519

)

(909

)

(788

)

Net income - operating (1)

$

74,925

$

71,092

$

74,914

$

61,402

$

50,449

49

$

220,931

$

108,365

104

Pre-tax pre-provision income (5)

$

84,385

$

78,677

$

81,575

$

80,280

$

81,155

4

$

244,637

$

209,599

17

PERFORMANCE MEASURES

Per common share:

Diluted net income - GAAP

$

0.82

$

0.78

$

0.82

$

0.66

$

0.52

58

$

2.42

$

1.25

94

Diluted net income - operating (1)

0.83

0.79

0.83

0.68

0.55

51

2.45

1.29

90

Cash dividends declared

0.20

0.19

0.19

0.18

0.18

11

0.58

0.54

7

Book value

23.25

22.81

22.15

21.90

21.45

8

23.25

21.45

8

Tangible book value (3)

18.68

18.49

17.83

17.56

17.09

9

18.68

17.09

9

Key performance ratios:

Return on common equity - GAAP (2)(4)

14.26

%

14.08

%

15.37

%

12.36

%

10.06

%

14.55

%

8.11

%

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

14.48

14.25

15.63

12.77

10.69

14.77

8.40

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

18.23

17.81

19.68

16.23

13.52

18.55

10.76

Return on assets - GAAP (4)

1.48

1.46

1.62

1.30

1.07

1.52

0.93

Return on assets - operating (1)(4)

1.50

1.48

1.65

1.34

1.14

1.54

0.97

Return on assets - pre-tax pre-provision (4)(5)

1.70

1.64

1.80

1.77

1.86

1.71

1.89

Return on assets - pre-tax pre-provision, excluding
merger- related and other charges (1)(4)(5)

1.73

1.67

1.83

1.82

1.93

1.74

1.93

Net interest margin (fully taxable equivalent) (4)

3.12

3.19

3.22

3.55

3.27

3.17

3.55

Efficiency ratio - GAAP

53.11

54.53

53.55

56.73

54.14

53.72

55.30

Efficiency ratio - operating (1)

52.33

53.92

52.68

55.42

52.24

52.97

54.34

Equity to total assets

10.89

11.04

10.95

11.29

11.47

10.89

11.47

Tangible common equity to tangible assets (3)

8.53

8.71

8.57

8.81

8.89

8.53

8.89

ASSET QUALITY

Nonperforming loans

$

44,923

$

46,123

$

55,900

$

61,599

$

49,084

(8

)

$

44,923

$

49,084

(8

)

Foreclosed properties

412

224

596

647

953

412

953

Total nonperforming assets ("NPAs")

45,335

46,347

56,496

62,246

50,037

(9

)

45,335

50,037

(9

)

Allowance for credit losses - loans

99,620

111,616

126,866

137,010

134,256

(26

)

99,620

134,256

(26

)

Net charge-offs

551

(456

)

(305

)

1,515

2,538

(210

)

16,801

Allowance for credit losses - loans to loans

0.89

%

0.98

%

1.09

%

1.20

%

1.14

%

0.89

%

1.14

%

Net charge-offs to average loans (4)

0.02

(0.02

)

(0.01

)

0.05

0.09

0.22

NPAs to loans and foreclosed properties

0.41

0.41

0.48

0.55

0.42

0.41

0.42

NPAs to total assets

0.23

0.25

0.30

0.35

0.29

0.23

0.29

AVERAGE BALANCES ($ in millions)

Loans

$

11,205

$

11,617

$

11,433

$

11,595

$

11,644

(4

)

$

11,417

$

10,088

13

Investment securities

5,122

4,631

3,991

3,326

2,750

86

4,587

2,560

79

Earning assets

18,078

17,540

16,782

16,394

15,715

15

17,473

13,498

29

Total assets

19,322

18,792

18,023

17,698

17,013

14

18,717

14,718

27

Deposits

16,637

16,132

15,366

15,057

14,460

15

16,050

12,490

29

Shareholders’ equity

2,119

2,060

2,025

1,994

1,948

9

2,068

1,763

17

Common shares - basic (thousands)

87,211

87,289

87,322

87,258

87,129

87,274

81,815

7

Common shares - diluted (thousands)

87,355

87,421

87,466

87,333

87,205

87,413

81,876

7

AT PERIOD END ($ in millions)

Loans

$

11,191

$

11,391

$

11,679

$

11,371

$

11,799

(5

)

$

11,191

$

11,799

(5

)

Investment securities

5,335

4,928

4,332

3,645

3,089

73

5,335

3,089

73

Total assets

19,481

18,896

18,557

17,794

17,153

14

19,481

17,153

14

Deposits

16,865

16,328

15,993

15,232

14,603

15

16,865

14,603

15

Shareholders’ equity

2,122

2,086

2,031

2,008

1,967

8

2,122

1,967

8

Common shares outstanding (thousands)

86,559

86,665

86,777

86,675

86,611

86,559

86,611

(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

2021

2020

For the Nine Months Ended September 30,

(in thousands, except per share data)

Third
Quarter

Second Quarter

First
Quarter

Fourth Quarter

Third
Quarter

2021

2020

Expense reconciliation

Expenses (GAAP)

$

96,749

$

95,540

$

95,194

$

106,490

$

95,981

$

287,483

$

261,499

Merger-related and other charges

(1,437

)

(1,078

)

(1,543

)

(2,452

)

(3,361

)

(4,058

)

(4,566

)

Expenses - operating

$

95,312

$

94,462

$

93,651

$

104,038

$

92,620

$

283,425

$

256,933

Net income reconciliation

Net income (GAAP)

$

73,816

$

70,260

$

73,706

$

59,502

$

47,607

$

217,782

$

104,587

Merger-related and other charges

1,437

1,078

1,543

2,452

3,361

4,058

4,566

Income tax benefit of merger-related and other charges

(328

)

(246

)

(335

)

(552

)

(519

)

(909

)

(788

)

Net income - operating

$

74,925

$

71,092

$

74,914

$

61,402

$

50,449

$

220,931

$

108,365

Net income to pre-tax pre-provision income reconciliation

Net income (GAAP)

$

73,816

$

70,260

$

73,706

$

59,502

$

47,607

$

217,782

$

104,587

Income tax expense

21,603

22,005

20,150

17,871

11,755

63,758

27,485

(Release of) provision for credit losses

(11,034

)

(13,588

)

(12,281

)

2,907

21,793

(36,903

)

77,527

Pre-tax pre-provision income

$

84,385

$

78,677

$

81,575

$

80,280

$

81,155

$

244,637

$

209,599

Diluted income per common share reconciliation

Diluted income per common share (GAAP)

$

0.82

$

0.78

$

0.82

$

0.66

$

0.52

$

2.42

$

1.25

Merger-related and other charges, net of tax

0.01

0.01

0.01

0.02

0.03

0.03

0.04

Diluted income per common share - operating

$

0.83

$

0.79

$

0.83

$

0.68

$

0.55

$

2.45

$

1.29

Book value per common share reconciliation

Book value per common share (GAAP)

$

23.25

$

22.81

$

22.15

$

21.90

$

21.45

$

23.25

$

21.45

Effect of goodwill and other intangibles

(4.57

)

(4.32

)

(4.32

)

(4.34

)

(4.36

)

(4.57

)

(4.36

)

Tangible book value per common share

$

18.68

$

18.49

$

17.83

$

17.56

$

17.09

$

18.68

$

17.09

Return on tangible common equity reconciliation

Return on common equity (GAAP)

14.26

%

14.08

%

15.37

%

12.36

%

10.06

%

14.55

%

8.11

%

Merger-related and other charges, net of tax

0.22

0.17

0.26

0.41

0.63

0.22

0.29

Return on common equity - operating

14.48

14.25

15.63

12.77

10.69

14.77

8.40

Effect of goodwill and other intangibles

3.75

3.56

4.05

3.46

2.83

3.78

2.36

Return on tangible common equity - operating

18.23

%

17.81

%

19.68

%

16.23

%

13.52

%

18.55

%

10.76

%

Return on assets reconciliation

Return on assets (GAAP)

1.48

%

1.46

%

1.62

%

1.30

%

1.07

%

1.52

%

0.93

%

Merger-related and other charges, net of tax

0.02

0.02

0.03

0.04

0.07

0.02

0.04

Return on assets - operating

1.50

%

1.48

%

1.65

%

1.34

%

1.14

%

1.54

%

0.97

%

Return on assets to return on assets- pre-tax pre-provision reconciliation

Return on assets (GAAP)

1.48

%

1.46

%

1.62

%

1.30

%

1.07

%

1.52

%

0.93

%

Income tax expense

0.45

0.47

0.46

0.40

0.28

0.45

0.26

(Release of) provision for credit losses

(0.23

)

(0.29

)

(0.28

)

0.07

0.51

(0.26

)

0.70

Return on assets - pre-tax, pre-provision

1.70

1.64

1.80

1.77

1.86

1.71

1.89

Merger-related and other charges

0.03

0.03

0.03

0.05

0.07

0.03

0.04

Return on assets - pre-tax pre-provision, excluding merger-related and other charges

1.73

%

1.67

%

1.83

%

1.82

%

1.93

%

1.74

%

1.93

%

Efficiency ratio reconciliation

Efficiency ratio (GAAP)

53.11

%

54.53

%

53.55

%

56.73

%

54.14

%

53.72

%

55.30

%

Merger-related and other charges

(0.78

)

(0.61

)

(0.87

)

(1.31

)

(1.90

)

(0.75

)

(0.96

)

Efficiency ratio - operating

52.33

%

53.92

%

52.68

%

55.42

%

52.24

%

52.97

%

54.34

%

Tangible common equity to tangible assets reconciliation

Equity to total assets (GAAP)

10.89

%

11.04

%

10.95

%

11.29

%

11.47

%

10.89

%

11.47

%

Effect of goodwill and other intangibles

(1.87

)

(1.82

)

(1.86

)

(1.94

)

(2.02

)

(1.87

)

(2.02

)

Effect of preferred equity

(0.49

)

(0.51

)

(0.52

)

(0.54

)

(0.56

)

(0.49

)

(0.56

)

Tangible common equity to tangible assets

8.53

%

8.71

%

8.57

%

8.81

%

8.89

%

8.53

%

8.89

%

Allowance for credit losses - loans to loans reconciliation

Allowance for credit losses - loans to loans (GAAP)

0.89

%

0.98

%

1.09

%

1.20

%

1.14

%

0.89

%

1.14

%

Effect of PPP loans

0.01

0.04

0.09

0.08

0.14

0.01

0.14

Allowance for credit losses - loans to loans, excluding PPP loans

0.90

%

1.02

%

1.18

%

1.28

%

1.28

%

0.90

%

1.28

%


UNITED COMMUNITY BANKS, INC.

Financial Highlights

Loan Portfolio Composition at Period-End

2021

2020

Linked Quarter Change

Year over Year Change

(in millions)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

LOANS BY CATEGORY

Owner occupied commercial RE

$

2,149

$

2,149

$

2,107

$

2,090

$

2,009

$

$

140

Income producing commercial RE

2,542

2,550

2,599

2,541

2,493

(8

)

49

Commercial & industrial

1,729

1,762

1,760

1,853

1,788

(33

)

(59

)

Paycheck protection program

150

472

883

646

1,317