United Community Banks, Inc. Reports Second Quarter Results

United Community Banks, Inc.
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In this article:

EPS of $0.78, Return on Assets of 1.46% and Return on Common Equity of 14.1%

GREENVILLE, S.C., July 20, 2021 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the second quarter was $70.3 million and pre-tax, pre-provision income was $78.7 million. Diluted earnings per share of $0.78 for the quarter represented an increase of $0.46 or 144%, from the second quarter a year ago, and represented a decrease of $0.04 or 5% from the first quarter of 2021. On an operating basis, United’s diluted earnings per share of $0.79 was up 147% over the year ago quarter. United’s GAAP return on assets (ROA) was 1.46% and its return on common equity was 14.1% for the quarter. On an operating basis, United’s ROA was 1.48% and its return on tangible common equity was 17.8%. On a pre-tax, pre-provision basis, operating return on assets was 1.67% for the quarter. The quarter benefited from an allowance release of $13.6 million, reflecting continued improvement in economic conditions and forecasts in United’s markets.

Chairman and CEO Lynn Harton stated, “This has been an outstanding quarter for United. Our team once again was recognized by JD Power as having the Best Retail Customer Satisfaction in the Southeast. On July 6, we closed on the acquisition of FinTrust, accelerating our wealth management strategy. We announced expansion into two of the strongest markets in the Southeast, Charlotte and Nashville, via agreements to acquire outstanding community banks in those markets. In addition to these strategic accomplishments, our bankers continued to deliver strong performance results. Core loan growth, excluding PPP loans, was solid and we continue to be optimistic about the remainder of the year, given the momentum in our markets. Core deposit growth remains very strong. Credit results were excellent as well. I couldn’t be more proud of the United team and I congratulate them for delivering these tremendous results.”

Total loans decreased by $288 million during the quarter—impacted by $411 million of Paycheck Protection Program (PPP) loan forgiveness. Excluding the effect of PPP loans, core organic loan growth was 5% annualized. Core transaction deposits grew by $432 million during the quarter, or 14% annualized, and United’s cost of deposits decreased by 5 basis points to 0.09%. The net interest margin decreased by 3 basis points from the first quarter due mainly to a change in the earning asset mix.

Second Quarter 2021 Financial Highlights:

  • Net income of $70.3 million and pre-tax, pre-provision income of $78.7 million

  • EPS increased by 144% compared to second quarter 2020 on a GAAP basis and 147% on an operating basis; compared to first quarter 2021, EPS decreased by 5% on both a GAAP and operating basis

  • Return on assets of 1.46%, or 1.48% on an operating basis

  • Pre-tax, pre-provision return on assets of 1.64%, or 1.67% on an operating basis

  • Return on common equity of 14.1%

  • Return on tangible common equity of 17.8% on an operating basis

  • A release of provision for credit losses of $13.6 million, which reduced the allowance for loan losses to 0.98% of loans (1.02%, excluding PPP loans) from 1.09% in the first quarter

  • Loan production of $1.3 billion, resulting in core loan growth of 5%, annualized for the quarter, excluding the impact of $411 million in PPP loans being forgiven

  • Core transaction deposits were up $432 million, which represents a 14% annualized growth rate for the quarter

  • Net interest margin of 3.19% was down 3 basis points from the first quarter, due to continued strong deposit growth and an earning asset mix change toward securities

  • Record mortgage closings of $680 million compared to $563 million a year ago; mortgage rate locks of $702 million compared to $802 million a year ago

  • Noninterest income was down $8.9 million on a linked quarter basis, primarily driven by slowing mortgage rate lock activity

  • Noninterest expenses increased by $346,000 compared to the first quarter on a GAAP basis and by $811,000 on an operating basis mostly due to increased professional fees and mortgage commissions

  • Efficiency ratio of 54.5%, or 53.9% on an operating basis

  • Net recoveries of $456,000 or 2 basis points as a percent of average loans, down 1 basis point from the first quarter

  • Nonperforming assets of 0.25% of total assets, down 5 basis points compared to March 31, 2021

  • Total loan deferrals of $18 million or 0.2% of the total loan portfolio compared to $48 million or 0.4% in the first quarter

  • Quarterly common shareholder dividend of $0.19 per share declared during the quarter, an increase of 6% year-over-year

  • Announced the acquisition of FinTrust Capital Partners, LLC, a registered investment adviser, which closed on July 6, 2021; it added $2.1 billion in assets under management and is expected to add $0.02 in EPS accretion in 2022

  • Announced the acquisition of Aquesta Financial Holdings, Inc. with $752 million in assets on May 27; it is expected to close in the fourth quarter of 2021 and add $0.08 in EPS accretion in 2022 with cost savings fully phased in

  • Announced the acquisition of Reliant Bancorp, Inc. with $3.1 billion in assets on July 14; it 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, July 21, 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 9585551. 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

Second Quarter

For the Six Months Ended
June 30,

YTD 2021 -

(in thousands, except per share data)

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

2021 - 2020
Change

2021

2020

2020
Change

INCOME SUMMARY

Interest revenue

$

145,809

$

141,542

$

156,071

$

141,773

$

123,605

$

287,351

$

260,152

Interest expense

7,433

9,478

10,676

13,319

14,301

16,911

32,242

Net interest revenue

138,376

132,064

145,395

128,454

109,304

27

%

270,440

227,910

19

%

(Release of) provision for credit losses

(13,588

)

(12,281

)

2,907

21,793

33,543

(25,869

)

55,734

Noninterest income

35,841

44,705

41,375

48,682

40,238

(11

)

80,546

66,052

22

Total revenue

187,805

189,050

183,863

155,343

115,999

62

376,855

238,228

58

Expenses

95,540

95,194

106,490

95,981

83,980

14

190,734

165,518

15

Income before income tax expense

92,265

93,856

77,373

59,362

32,019

188

186,121

72,710

156

Income tax expense

22,005

20,150

17,871

11,755

6,923

218

42,155

15,730

168

Net income

70,260

73,706

59,502

47,607

25,096

180

143,966

56,980

153

Merger-related and other charges

1,078

1,543

2,452

3,361

397

2,621

1,205

Income tax benefit of merger-related and other charges

(246

)

(335

)

(552

)

(519

)

(87

)

(581

)

(269

)

Net income - operating (1)

$

71,092

$

74,914

$

61,402

$

50,449

$

25,406

180

$

146,006

$

57,916

152

Pre-tax pre-provision income (5)

$

78,677

$

81,575

$

80,280

$

81,155

$

65,562

20

$

160,252

$

128,444

25

PERFORMANCE MEASURES

Per common share:

Diluted net income - GAAP

$

0.78

$

0.82

$

0.66

$

0.52

$

0.32

144

$

1.60

$

0.71

125

Diluted net income - operating (1)

0.79

0.83

0.68

0.55

0.32

147

1.62

0.73

122

Cash dividends declared

0.19

0.19

0.18

0.18

0.18

6

0.38

0.36

6

Book value

22.81

22.15

21.90

21.45

21.22

7

22.81

21.22

7

Tangible book value (3)

18.49

17.83

17.56

17.09

16.95

9

18.49

16.95

9

Key performance ratios:

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

14.08

%

15.37

%

12.36

%

10.06

%

6.17

%

14.71

%

7.01

%

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

14.25

15.63

12.77

10.69

6.25

14.92

7.13

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

17.81

19.68

16.23

13.52

8.09

18.72

9.20

Return on assets - GAAP (4)

1.46

1.62

1.30

1.07

0.71

1.54

0.85

Return on assets - operating (1)(4)

1.48

1.65

1.34

1.14

0.72

1.56

0.86

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

1.64

1.80

1.77

1.86

1.86

1.72

1.91

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

1.67

1.83

1.82

1.93

1.87

1.75

1.92

Net interest margin (fully taxable equivalent) (4)

3.19

3.22

3.55

3.27

3.42

3.20

3.73

Efficiency ratio - GAAP

54.53

53.55

56.73

54.14

55.86

54.04

56.00

Efficiency ratio - operating (1)

53.92

52.68

55.42

52.24

55.59

53.30

55.59

Equity to total assets

11.04

10.95

11.29

11.47

11.81

11.04

11.81

Tangible common equity to tangible assets (3)

8.71

8.57

8.81

8.89

9.12

8.71

9.12

ASSET QUALITY

Nonperforming loans

$

46,123

$

55,900

$

61,599

$

49,084

$

48,021

(4

)

$

46,123

$

48,021

(4

)

Foreclosed properties

224

596

647

953

477

224

477

Total nonperforming assets ("NPAs")

46,347

56,496

62,246

50,037

48,498

(4

)

46,347

48,498

(4

)

Allowance for credit losses - loans

111,616

126,866

137,010

134,256

103,669

8

111,616

103,669

8

Net charge-offs

(456

)

(305

)

1,515

2,538

6,149

(761

)

14,263

(105

)

Allowance for credit losses - loans to loans

0.98

%

1.09

%

1.20

%

1.14

%

1.02

%

0.98

%

1.02

%

Net charge-offs to average loans (4)

(0.02

)

(0.01

)

0.05

0.09

0.25

(0.01

)

0.31

NPAs to loans and foreclosed properties

0.41

0.48

0.55

0.42

0.48

0.41

0.48

NPAs to total assets

0.25

0.30

0.35

0.29

0.32

0.25

0.32

AVERAGE BALANCES ($ in millions)

Loans

$

11,617

$

11,433

$

11,595

$

11,644

$

9,773

19

$

11,525

$

9,301

24

Investment securities

4,631

3,991

3,326

2,750

2,408

92

4,313

2,464

75

Earning assets

17,540

16,782

16,394

15,715

12,958

35

17,163

12,378

39

Total assets

18,792

18,023

17,698

17,013

14,173

33

18,410

13,558

36

Deposits

16,132

15,366

15,057

14,460

12,071

34

15,751

11,493

37

Shareholders’ equity

2,060

2,025

1,994

1,948

1,686

22

2,042

1,670

22

Common shares - basic (thousands)

87,289

87,322

87,258

87,129

78,920

11

87,306

79,130

10

Common shares - diluted (thousands)

87,421

87,466

87,333

87,205

78,924

11

87,443

79,186

10

AT PERIOD END ($ in millions)

Loans

$

11,391

$

11,679

$

11,371

$

11,799

$

10,133

12

$

11,391

$

10,133

12

Investment securities

4,928

4,332

3,645

3,089

2,432

103

4,928

2,432

103

Total assets

18,896

18,557

17,794

17,153

15,005

26

18,896

15,005

26

Deposits

16,328

15,993

15,232

14,603

12,702

29

16,328

12,702

29

Shareholders’ equity

2,086

2,031

2,008

1,967

1,772

18

2,086

1,772

18

Common shares outstanding (thousands)

86,665

86,777

86,675

86,611

78,335

11

86,665

78,335

11

(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 Six Months Ended June 30,

(in thousands, except per share data)

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

2021

2020

Expense reconciliation

Expenses (GAAP)

$

95,540

$

95,194

$

106,490

$

95,981

$

83,980

$

190,734

$

165,518

Merger-related and other charges

(1,078

)

(1,543

)

(2,452

)

(3,361

)

(397

)

(2,621

)

(1,205

)

Expenses - operating

$

94,462

$

93,651

$

104,038

$

92,620

$

83,583

$

188,113

$

164,313

Net income reconciliation

Net income (GAAP)

$

70,260

$

73,706

$

59,502

$

47,607

$

25,096

$

143,966

$

56,980

Merger-related and other charges

1,078

1,543

2,452

3,361

397

2,621

1,205

Income tax benefit of merger-related and other charges

(246

)

(335

)

(552

)

(519

)

(87

)

(581

)

(269

)

Net income - operating

$

71,092

$

74,914

$

61,402

$

50,449

$

25,406

$

146,006

$

57,916

Net income to pre-tax pre-provision income reconciliation

Net income (GAAP)

$

70,260

$

73,706

$

59,502

$

47,607

$

25,096

$

143,966

$

56,980

Income tax expense

22,005

20,150

17,871

11,755

6,923

42,155

15,730

(Release of) provision for credit losses

(13,588

)

(12,281

)

2,907

21,793

33,543

(25,869

)

55,734

Pre-tax pre-provision income

$

78,677

$

81,575

$

80,280

$

81,155

$

65,562

$

160,252

$

128,444

Diluted income per common share reconciliation

Diluted income per common share (GAAP)

$

0.78

$

0.82

$

0.66

$

0.52

$

0.32

$

1.60

$

0.71

Merger-related and other charges, net of tax

0.01

0.01

0.02

0.03

—

0.02

0.02

Diluted income per common share - operating

$

0.79

$

0.83

$

0.68

$

0.55

$

0.32

$

1.62

$

0.73

Book value per common share reconciliation

Book value per common share (GAAP)

$

22.81

$

22.15

$

21.90

$

21.45

$

21.22

$

22.81

$

21.22

Effect of goodwill and other intangibles

(4.32

)

(4.32

)

(4.34

)

(4.36

)

(4.27

)

(4.32

)

(4.27

)

Tangible book value per common share

$

18.49

$

17.83

$

17.56

$

17.09

$

16.95

$

18.49

$

16.95

Return on tangible common equity reconciliation

Return on common equity (GAAP)

14.08

%

15.37

%

12.36

%

10.06

%

6.17

%

14.71

%

7.01

%

Merger-related and other charges, net of tax

0.17

0.26

0.41

0.63

0.08

0.21

0.12

Return on common equity - operating

14.25

15.63

12.77

10.69

6.25

14.92

7.13

Effect of goodwill and other intangibles

3.56

4.05

3.46

2.83

1.84

3.80

2.07

Return on tangible common equity - operating

17.81

%

19.68

%

16.23

%

13.52

%

8.09

%

18.72

%

9.20

%

Return on assets reconciliation

Return on assets (GAAP)

1.46

%

1.62

%

1.30

%

1.07

%

0.71

%

1.54

%

0.85

%

Merger-related and other charges, net of tax

0.02

0.03

0.04

0.07

0.01

0.02

0.01

Return on assets - operating

1.48

%

1.65

%

1.34

%

1.14

%

0.72

%

1.56

%

0.86

%

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

Return on assets (GAAP)

1.46

%

1.62

%

1.30

%

1.07

%

0.71

%

1.54

%

0.85

%

Income tax expense

0.47

0.46

0.40

0.28

0.20

0.46

0.23

(Release of) provision for credit losses

(0.29

)

(0.28

)

0.07

0.51

0.95

(0.28

)

0.83

Return on assets - pre-tax, pre-provision

1.64

1.80

1.77

1.86

1.86

1.72

1.91

Merger-related and other charges

0.03

0.03

0.05

0.07

0.01

0.03

0.01

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

1.67

%

1.83

%

1.82

%

1.93

%

1.87

%

1.75

%

1.92

%

Efficiency ratio reconciliation

Efficiency ratio (GAAP)

54.53

%

53.55

%

56.73

%

54.14

%

55.86

%

54.04

%

56.00

%

Merger-related and other charges

(0.61

)

(0.87

)

(1.31

)

(1.90

)

(0.27

)

(0.74

)

(0.41

)

Efficiency ratio - operating

53.92

%

52.68

%

55.42

%

52.24

%

55.59

%

53.30

%

55.59

%

Tangible common equity to tangible assets reconciliation

Equity to total assets (GAAP)

11.04

%

10.95

%

11.29

%

11.47

%

11.81

%

11.04

%

11.81

%

Effect of goodwill and other intangibles

(1.82

)

(1.86

)

(1.94

)

(2.02

)

(2.05

)

(1.82

)

(2.05

)

Effect of preferred equity

(0.51

)

(0.52

(0.54

)

(0.56

)

(0.64

)

(0.51

)

(0.64

)

Tangible common equity to tangible assets

8.71

%

8.57

%

8.81

%

8.89

%

9.12

%

8.71

%

9.12

%

Allowance for credit losses - loans to loans reconciliation

Allowance for credit losses - loans to loans (GAAP)

0.98

%

1.09

%

1.20

%

1.14

%

1.02

%

0.98

%

1.02

%

Effect of PPP loans

0.04

0.09

0.08

0.14

0.13

0.04

0.13

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

1.02

%

1.18

%

1.28

%

1.28

%

1.15

%

1.02

%

1.15

%


UNITED COMMUNITY BANKS, INC.

Financial Highlights

Loan Portfolio Composition at Period-End

2021

2020

Linked

Year over

(in millions)

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

Quarter
Change

Year
Change

LOANS BY CATEGORY

Owner occupied commercial RE

$

2,149

$

2,107

$

2,090

$

2,009

$

1,759

$

42

$

390

Income producing commercial RE

2,550

2,599

2,541

2,493

2,178

(49

)

372

Commercial & industrial

1,762

1,760

1,853

1,788

1,219

2

543

Paycheck protection program

472

883

646

1,317

1,095

(411

)

(623

)

Commercial construction

927

960

967

987

946

(33

)

(19

)

Equipment financing

969

913

864

823

779

56

190

Total commercial

8,829

9,222

8,961

9,417

7,976

(393

)

853

Residential mortgage

1,473

1,362

1,285

1,270

1,152

111

321

Home equity lines of credit

661

679

697

707

654

(18

)

7

Residential construction

289

272

281

257

230

17

59

Consumer

139

144

147

148

121

(5

)

18

Total loans

$

11,391

$

11,679

$

11,371

$

11,799

$

10,133

$

(288

)

$

1,258

LOANS BY MARKET (1)

North Georgia

$

962

$

982

$

955

$

945

$

951

$

(20

)

$

11

Atlanta

1,938

1,953

1,889

1,853

1,852

(15

)

86

North Carolina

1,374

1,326

1,281

1,246

1,171

48

203

Coastal Georgia

605

597

617

614

618

8

(13

)

Gainesville

224

222

224

229

233

2

(9

)

East Tennessee

394

398

415

420

433

(4

)

(39

)

South Carolina

2,107

1,997

1,947

1,870

1,778

110

329

Florida

1,141

1,160

1,435

1,453

—

(19

)

1,141

Commercial Banking Solutions

2,646

3,044

2,608

3,169

3,097

(398

)

(451

)

Total loans

$

11,391

$

11,679

$

11,371

$

11,799

$

10,133

$

(288

)

$

1,258

(1) Certain loans previously included in the Florida geographic market were reclassified to Commercial Banking Solutions following Seaside’s core systems conversion in the first quarter of 2021.

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality

2021

2020

(in thousands)

Second
Quarter

First
Quarter

Fourth
Quarter

NONACCRUAL LOANS

Owner occupied RE

$

6,128

$

7,908

$

8,582

Income producing RE

13,100

13,740

15,149

Commercial & industrial

8,563

13,864

16,634

Commercial construction

1,229

1,984

1,745

Equipment financing

1,771

2,171

3,405

Total commercial

30,791

39,667

45,515

Residential mortgage

13,485

14,050

12,858

Home equity lines of credit

1,433

1,707

2,487

Residential construction

307

322

514

Consumer

107

154

225

Total

$

46,123

$

55,900

$

61,599


2021

2020

Second Quarter

First Quarter

Fourth Quarter

(in thousands)

Net Charge-
Offs

Net Charge-
Offs to
Average
Loans (1)

Net Charge-
Offs

Net Charge-
Offs to
Average
Loans (1)

Net Charge-
Offs

Net Charge-
Offs to
Average
Loans (1)

NET CHARGE-OFFS BY CATEGORY

Owner occupied RE

$

(155

)

(0.03

)

%

$

(240

)

(0.05

)

%

$

(277

)

(0.05

)

%

Income producing RE

(161

)

(0.02

)

991

0.16

(1,718

)

(0.27

)

Commercial & industrial

60

0.01

(2,753

)

(0.44

)

2,294

0.33

Commercial construction

(293

)

(0.12

)

22

0.01

(129

)

(0.05

)

Equipment financing

301

0.13

1,511

0.70

1,595

0.75

Total commercial

(248

)

(0.01

)

(469

)

(0.02

)

1,765

0.08

Residential mortgage

(194

)

(0.05

)

92

0.03

(25

)

(0.01

)

Home equity lines of credit

(112

)

(0.07

)

(73

)

(0.04

)

(151

)

(0.09

)

Residential construction

(33

)

(0.05

)

(60

)

(0.09

)

(47

)

(0.07

)

Consumer

131

0.37

205

0.58

(27

)

(0.07

)

Total

$

(456

)

(0.02

)

$

(305

)

(0.01

)

$

1,515

0.05

(1) Annualized.


UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheets (Unaudited)


(in thousands, except share and per share data)

June 30,
2021

December 31,
2020

ASSETS

Cash and due from banks

$

121,589

$

148,896

Interest-bearing deposits in banks

1,297,808

1,459,723

Cash and cash equivalents

1,419,397

1,608,619

Debt securities available-for-sale

4,075,781

3,224,721

Debt securities held-to-maturity (fair value $861,488 and $437,193)

852,404

420,361

Loans held for sale at fair value

98,194

105,433

Loans and leases held for investment

11,390,746

11,370,815

Less allowance for credit losses - loans and leases

(111,616

)

(137,010

)

Loans and leases, net

11,279,130

11,233,805

Premises and equipment, net

224,980

218,489

Bank owned life insurance

203,449

201,969

Accrued interest receivable

43,521

47,672

Net deferred tax asset

32,918

38,411

Derivative financial instruments

58,489

86,666

Goodwill and other intangible assets, net

379,909

381,823

Other assets

227,551

226,405

Total assets

$

18,895,723

$

17,794,374

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing demand

$

6,260,756

$

5,390,291

NOW and interest-bearing demand

3,518,686

3,346,490

Money market

3,766,645

3,550,335

Savings

1,097,663

950,854

Time

1,500,049

1,704,290

Brokered

183,968

290,098

Total deposits

16,327,767

15,232,358

Long-term debt

261,919

326,956

Derivative financial instruments

27,089

29,003

Accrued expenses and other liabilities

192,662

198,527

Total liabilities

16,809,437

15,786,844

Shareholders' equity:

Preferred stock; $1 par value; 10,000,000 shares authorized;
Series I, $25,000 per share liquidation preference; 4,000 shares issued and outstanding

96,422

96,422

Common stock, $1 par value; 200,000,000 shares authorized;
86,664,894 and 86,675,279 shares issued and outstanding

86,665

86,675

Common stock issuable; 571,580 and 600,834 shares

10,650

10,855

Capital surplus

1,636,875

1,638,999

Retained earnings

244,006

136,869

Accumulated other comprehensive income

11,668

37,710

Total shareholders' equity

2,086,286

2,007,530

Total liabilities and shareholders' equity

$

18,895,723

$

17,794,374


UNITED COMMUNITY BANKS, INC.

Consolidated Statements of Income (Unaudited)


Three Months Ended
June 30,

Six Months Ended
June 30,

(in thousands, except per share data)

2021

2020

2021

2020

Interest revenue:

Loans, including fees

$

128,058

$

107,862

$

253,784

$

225,925

Investment securities, including tax exempt of $2,255 and $1,570 and $4,405 and $3,093, respectively

17,542

15,615

32,990

33,009

Deposits in banks and short-term investments

209

128

577

1,218

Total interest revenue

145,809

123,605

287,351

260,152

Interest expense:

Deposits:

NOW and interest-bearing demand

1,382

1,628

2,868

4,606

Money market

1,355

3,421

3,159

7,952

Savings

53

39

102

74

Time

830

6,183

2,710

13,714

Deposits

3,620

11,271

8,839

26,346

Short-term borrowings

—

—

—

1

Federal Home Loan Bank advances

—

—

2

1

Long-term debt

3,813

3,030

8,070

5,894

Total interest expense

7,433

14,301

16,911

32,242

Net interest revenue

138,376

109,304

270,440

227,910

(Release of) provision for credit losses

(13,588

)

33,543

(25,869

)

55,734

Net interest revenue after provision for credit losses

151,964

75,761

296,309

172,176

Noninterest income:

Service charges and fees

8,335

6,995

15,905

15,633

Mortgage loan gains and other related fees

11,136

23,659

33,708

31,969

Wealth management fees

3,822

1,324

7,327

2,964

Gains from sales of other loans, net

4,123

1,040

5,153

2,714

Securities gains, net

41

—

41

—

Other

8,384

7,220

18,412

12,772

Total noninterest income

35,841

40,238

80,546

66,052

Total revenue

187,805

115,999

376,855

238,228

Noninterest expenses:

Salaries and employee benefits

59,414

51,811

119,999

103,169

Communications and equipment

7,408

6,556

14,611

12,502

Occupancy

7,078

5,945

14,034

11,659

Advertising and public relations

1,493

2,260

2,692

3,534

Postage, printing and supplies

1,618

1,613

3,440

3,283

Professional fees

4,928

4,823

9,162

8,920

Lending and loan servicing expense

3,181

3,189

6,058

5,482

Outside services - electronic banking

2,285

1,796

4,503

3,628

FDIC assessments and other regulatory charges

1,901

1,558

3,797

3,042

Amortization of intangibles

929

987

1,914

2,027

Merger-related and other charges

1,078

397

2,621

1,205

Other

4,227

3,045

7,903

7,067

Total noninterest expenses

95,540

83,980

190,734

165,518

Net income before income taxes

92,265

32,019

186,121

72,710

Income tax expense

22,005

6,923

42,155

15,730

Net income

70,260

25,096

143,966

56,980

Preferred stock dividends

1,719

—

3,438

—

Undistributed earnings allocated to participating securities

432

183

894

426

Net income available to common shareholders

$

68,109

$

24,913

$

139,634

$

56,554

Net income per common share:

Basic

$

0.78

$

0.32

$

1.60

$

0.71

Diluted

0.78

0.32

1.60

0.71

Weighted average common shares outstanding:

Basic

87,289

78,920

87,306

79,130

Diluted

87,421

78,924

87,443

79,186


Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended June 30,


2021

2020

(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)

$

11,616,802

$

127,458

4.40

%

$

9,772,703

$

107,398

4.42

%

Taxable securities (3)

4,242,297

15,287

1.44

2,229,371

14,045

2.52

Tax-exempt securities (FTE) (1)(3)

388,609

3,030

3.12

178,903

2,110

4.72

Federal funds sold and other interest-earning assets

1,292,026

1,055

0.33

776,776

857

0.44

Total interest-earning assets (FTE)

17,539,734

146,830

3.36

12,957,753

124,410

3.86

Noninterest-earning assets:

Allowance for credit losses

(128,073

)

(89,992

)

Cash and due from banks

152,443

138,842

Premises and equipment

225,017

217,096

Other assets (3)

1,002,634

949,201

Total assets

$

18,791,755

$

14,172,900

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Interest-bearing deposits:

NOW and interest-bearing demand

$

3,428,009

1,382

0.16

$

2,444,895

1,628

0.27

Money market

3,814,960

1,355

0.14

2,541,805

3,421

0.54

Savings

1,080,267

53

0.02

788,247

39

0.02

Time

1,548,487

899

0.23

1,805,671

6,058

1.35

Brokered time deposits

64,332

(69

)

(0.43

)

130,556

125

0.39

Total interest-bearing deposits

9,936,055

3,620

0.15

7,711,174

11,271

0.59

Federal funds purchased and other borrowings

111

—

—

1

—

—

Federal Home Loan Bank advances

—

—

—

—

—

—

Long-term debt

285,389

3,813

5.36

228,096

3,030

5.34

Total borrowed funds

285,500

3,813

5.36

228,097

3,030

5.34

Total interest-bearing liabilities

10,221,555

7,433

0.29

7,939,271

14,301

0.72

Noninterest-bearing liabilities:

Noninterest-bearing deposits

6,196,045

4,360,095

Other liabilities

314,130

187,375

Total liabilities

16,731,730

12,486,741

Shareholders' equity

2,060,025

1,686,159

Total liabilities and shareholders' equity

$

18,791,755

$

14,172,900

Net interest revenue (FTE)

$

139,397

$

110,109

Net interest-rate spread (FTE)

3.07

%

3.14

%

Net interest margin (FTE) (4)

3.19

%

3.42

%

(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) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $28.6 million and $66.3 million in 2021 and 2020, respectively, 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 Six Months Ended June 30,


2021

2020

(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)

$

11,525,363

$

252,580

4.42

%

$

9,300,792

$

225,194

4.87

%

Taxable securities (3)

3,932,545

28,585

1.45

2,293,502

29,916

2.61

Tax-exempt securities (FTE) (1)(3)

380,370

5,918

3.11

170,578

4,155

4.87

Federal funds sold and other interest-earning assets

1,324,776

2,277

0.34

612,776

2,489

0.81

Total interest-earning assets (FTE)

17,163,054

289,360

3.40

12,377,648

261,754

4.25

Non-interest-earning assets:

Allowance for loan losses

(135,845

)

(79,885

)

Cash and due from banks

146,401

133,548

Premises and equipment

223,224

218,170

Other assets (3)

1,012,896

908,828

Total assets

$

18,409,730

$

13,558,309

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Interest-bearing deposits:

NOW and interest-bearing demand

$

3,379,794

2,868

0.17

$

2,428,815

4,606

0.38

Money market

3,774,201

3,159

0.17

2,441,264

7,952

0.66

Savings

1,035,176

102

0.02

750,179

74

0.02

Time

1,595,196

2,487

0.31

1,823,612

13,308

1.47

Brokered time deposits

69,765

223

0.64

105,689

406

0.77

Total interest-bearing deposits

9,854,132

8,839

0.18

7,549,559

26,346

0.70

Federal funds purchased and other borrowings

62

—

—

199

1

1.01

Federal Home Loan Bank advances

1,657

2

0.24

83

1

2.42

Long-term debt

301,193

8,070

5.40

220,429

5,894

5.38

Total borrowed funds

302,912

8,072

5.37

220,711

5,896

5.37

Total interest-bearing liabilities

10,157,044

16,911

0.34

7,770,270

32,242

0.83

Noninterest-bearing liabilities:

Noninterest-bearing deposits

5,896,882

3,943,740

Other liabilities

313,374

174,781

Total liabilities

16,367,300

11,888,791

Shareholders' equity

2,042,430

1,669,518

Total liabilities and shareholders' equity

$

18,409,730

$

13,558,309

Net interest revenue (FTE)

$

272,449

$

229,512

Net interest-rate spread (FTE)

3.06

%

3.42

%

Net interest margin (FTE) (4)

3.20

%

3.73

%

(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) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $43.4 million and $59.6 million in 2021 and 2020, respectively, 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. (NASDAQGS: UCBI) provides a full range of banking, wealth management and mortgage services for relationship-oriented consumers and business owners. The company, known as “The Bank That SERVICE Built,” has been recognized nationally for delivering award-winning service. United has $18.9 billion in assets and 162 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee along with a national SBA lending franchise and a national equipment lending subsidiary. In 2021, J.D. Power ranked United highest in customer satisfaction with retail banking in the Southeast, marking seven out of the last eight years United earned the coveted award. United was also named one of the "Best Banks to Work For" by American Banker in 2020 for the fourth year in a row based on employee satisfaction. Forbes included United in its inaugural list of the World’s Best Banks in 2019 and again in 2020. Forbes also recognized United on its 2021 list of the 100 Best Banks in America for the eighth consecutive year. United also received five Greenwich Excellence Awards in 2020 for excellence in Small Business Banking, including a national award for Overall Satisfaction. Additional information about United can be found at www.ucbi.com.

Non-GAAP Financial Measures

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

For more information:

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


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