United Community Banks, Inc. Reports First Quarter Results

Source: Nasdaq GlobeNewswire / 19 Apr 2022 15:30:01 America/Chicago

GREENVILLE, S.C., April 19, 2022 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the first quarter was $48.0 million and pre-tax, pre-provision income was $83.5 million. Diluted earnings per share of $0.43 for the quarter represented a decrease of $0.39 or 48%, from the first quarter of 2021, and represented a decrease of $0.12 or 22% from the fourth quarter of 2021. The quarter was highlighted by strong 9% annualized core loan growth, 7% annualized deposit growth, 16 basis points of net interest margin expansion, a reserve build to 1.02% of loans and an improvement in the efficiency ratio to 57.4%, or 53.1% on an operating basis, which excludes the effect of merger-related and other charges.

A primary driver of the reduced earnings on a GAAP basis relative to prior quarters was a higher credit loss provision, as the acquisition of Reliant in the current quarter necessitated the establishment of an allowance for credit losses, often referred to as a “double dip” under CECL, as well as the wind down of the PPP program that resulted in significantly less fee accretion, which was down $8.7 million year over year. Excluding these items, our operating trends continue to improve with strong pre-tax, pre-provision income for the quarter of $83.5 million which was $17.9 million, or 27% higher, than the fourth quarter of 2021, and $1.9 million, or 2% greater, than the first quarter of 2021.

United’s first quarter return on assets (ROA) was 0.78% and return on common equity was 6.80%. On an operating basis, United’s ROA was 0.89% and its return on tangible common equity was 11.0%. On a pre-tax, pre-provision basis, operating ROA was 1.52% for the quarter.

Total loans increased by $2.6 billion during the quarter including $2.3 billion of loans acquired in the Reliant acquisition. Excluding the effect of PPP and the acquired Reliant loans, core organic loan growth was 9% annualized. Excluding deposits received from the Reliant acquisition, deposits grew by 7% annualized. United’s cost of deposits was flat at 0.06%.

Chairman and CEO Lynn Harton stated, “Core performance measures continue to be strong for the company. Organic loan and deposit growth were excellent. Mortgage production remained strong and comparable to fourth quarter levels and our SBA business also performed well in the quarter.” Harton continued, “From a strategic perspective, we are excited to have completed the acquisition of Reliant on January 1 and are proud to welcome their outstanding team of great bankers to the United franchise. Nashville is a dynamic market and we look forward to the growth and opportunities it will bring for years to come.”

Mr. Harton continued “We have a very positive outlook for 2022 for United, supported by strong business growth across our markets and a balance sheet that is well-positioned for increasing interest rates. Additionally, we believe we have a balanced business mix with a focus on credit quality and risk management that will sustain our performance through economic and business cycles.”

Harton concluded “We are proud to announce we have once again ranked Highest in Customer Satisfaction in Retail Banking in the Southeast in 2022 according to J.D. Power. Our customers have given us this recognition for eight of the last nine years, and the third consecutive year. Service is at the core of our culture and the main focus and mission of our outstanding employees. Congratulations to each of them for this outstanding recognition!”

First Quarter 2022 Financial Highlights:

Net income of $48.0 million and pre-tax, pre-provision income of $83.5 million
EPS decreased by 48% compared to last year on a GAAP basis and 40% on an operating basis; compared to fourth quarter 2021, EPS decreased by 22% on both a GAAP and an operating basis
Return on assets of 0.78%, or 0.89% on an operating basis
Pre-tax, pre-provision return on assets of 1.37%, or 1.52% on an operating basis
Return on common equity of 6.80%
Return on tangible common equity of 11.00% on an operating basis
A provision for credit losses of $23.1 million, $18.3 million of which was attributable to the establishment of an initial allowance for credit losses for acquired Reliant loans, increased the allowance for credit losses to 1.02% of loans from 0.97% in the fourth quarter
Net charge-offs of $2.98 million, or 8 basis points as a percentage of average loans, up 7 basis points from the fourth quarter
Loan production of $1.3 billion, resulting in annualized core loan growth of 9%, for the quarter, excluding the sale of $45.6 million in Reliant loans classified as held for sale on the acquisition date
Core transaction deposits, excluding Reliant, were up $478 million, which represents a 13% annualized growth rate for the quarter
Net interest margin of 2.97% was up 16 basis points from the fourth quarter, mainly due to the impact of the Reliant acquisition and the deployment of cash into securities
Mortgage closings of $462 million and mortgage rate locks of $757 million, compared to $666 million and $993 million, respectively, a year ago
Noninterest income was up $1.8 million on a linked quarter basis, primarily driven by a $6.4 million increase in the MSR valuation in the first quarter compared with a $775,000 increase in the fourth quarter
Noninterest expenses increased by $10.1 million compared to the fourth quarter, mostly due to an increase in salaries and employee benefits related to the acquisition of Reliant
Efficiency ratio of 57.4%, or 53.1% on an operating basis
Nonperforming assets of 0.17% of total assets, an increase of 0.01% from December 31, 2021
Quarterly common shareholder dividend of $0.21 per share declared during the quarter, an increase of 11% year-over-year

Conference Call

United will hold a conference call on Wednesday, April 20, 2022, 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/10165183/f22437931b. 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 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
*(in thousands, except per share data)*
		2022			2021											First Quarter 2022 - 2021 Change
	First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter			First Quarter 2022 - 2021 Change
INCOME SUMMARY
Interest revenue	$	171,059		$	143,768		$	147,675		$	145,809		$	141,542
Interest expense		7,267			6,213			6,636			7,433			9,478
Net interest revenue		163,792			137,555			141,039			138,376			132,064		24	%
Provision for (release of) credit losses		23,086			(647	)		(11,034	)		(13,588	)		(12,281	)
Noninterest income		38,973			37,177			40,095			35,841			44,705		(13	)
Total revenue		179,679			175,379			192,168			187,805			189,050		(5	)
Noninterest expenses		119,275			109,156			96,749			95,540			95,194		25
Income before income tax expense		60,404			66,223			95,419			92,265			93,856		(36	)
Income tax expense		12,385			14,204			21,603			22,005			20,150		(39	)
Net income		48,019			52,019			73,816			70,260			73,706		(35	)
Merger-related and other charges		9,016			9,912			1,437			1,078			1,543
Income tax benefit of merger-related and other charges		(1,963	)		(2,265	)		(328	)		(246	)		(335	)
Net income - operating⁽¹⁾	$	55,072		$	59,666		$	74,925		$	71,092		$	74,914		(26	)
Pre-tax pre-provision income ⁽⁵⁾	$	83,490		$	65,576		$	84,385		$	78,677		$	81,575		2
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.43		$	0.55		$	0.82		$	0.78		$	0.82		(48	)
Diluted net income - operating ⁽¹⁾		0.50			0.64			0.83			0.79			0.83		(40	)
Cash dividends declared		0.21			0.20			0.20			0.19			0.19		11
Book value		24.38			23.63			23.25			22.81			22.15		10
Tangible book value⁽³⁾		17.08			18.42			18.68			18.49			17.83		(4	)
Key performance ratios:
Return on common equity - GAAP ⁽²⁾⁽⁴⁾		6.80	%		9.32	%		14.26	%		14.08	%		15.37	%
Return on common equity - operating ^(1)(2)(4)		7.83			10.74			14.48			14.25			15.63
Return on tangible common equity - operating ^(1)(2)(3)(4)		11.00			13.93			18.23			17.81			19.68
Return on assets - GAAP ⁽⁴⁾		0.78			0.96			1.48			1.46			1.62
Return on assets - operating ⁽¹⁾⁽⁴⁾		0.89			1.10			1.50			1.48			1.65
Return on assets - pre-tax pre-provision ⁽⁴⁾⁽⁵⁾		1.37			1.21			1.70			1.64			1.80
Return on assets - pre-tax pre-provision, excluding merger- related and other charges ^(1)(4)(5)		1.52			1.40			1.73			1.67			1.83
Net interest margin (fully taxable equivalent) ⁽⁴⁾		2.97			2.81			3.12			3.19			3.22
Efficiency ratio - GAAP		57.43			62.12			53.11			54.53			53.55
Efficiency ratio - operating ⁽¹⁾		53.09			56.48			52.33			53.92			52.68
Equity to total assets		11.06			10.61			10.89			11.04			10.95
Tangible common equity to tangible assets ⁽³⁾		7.72			8.09			8.53			8.71			8.57
ASSET QUALITY
Nonperforming assets ("NPAs")		40,816			32,855			45,335			46,347			56,496		(28	)
Allowance for credit losses - loans		132,805			102,532			99,620			111,616			126,866		5
Allowance for credit losses - total		146,369			113,524			110,875			122,460			135,592
Net charge-offs		2,978			248			551			(456	)		(305	)
Allowance for credit losses - loans to loans		0.93	%		0.87	%		0.89	%		0.98	%		1.09	%
Allowance for credit losses - total to loans		1.02			0.97			0.99			1.08			1.16
Net charge-offs to average loans ⁽⁴⁾		0.08			0.01			0.02			(0.02	)		(0.01	)
NPAs to total assets		0.17			0.16			0.23			0.25			0.30
AT PERIOD END ($ in millions)
Loans	$	14,316		$	11,760		$	11,191		$	11,391		$	11,679		23
Investment securities		6,410			5,653			5,335			4,928			4,332		48
Total assets		24,374			20,947			19,481			18,896			18,557		31
Deposits		21,056			18,241			16,865			16,328			15,993		32
Shareholders’ equity		2,695			2,222			2,122			2,086			2,031		33
Common shares outstanding (thousands)		106,025			89,350			86,559			86,665			86,777		22

⁽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)*
		2022			2021
	First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter

Noninterest expense reconciliation
Noninterest expenses (GAAP)	$	119,275		$	109,156		$	96,749		$	95,540		$	95,194
Merger-related and other charges		(9,016	)		(9,912	)		(1,437	)		(1,078	)		(1,543	)
Noninterest expenses - operating	$	110,259		$	99,244		$	95,312		$	94,462		$	93,651

Net income reconciliation
Net income (GAAP)	$	48,019		$	52,019		$	73,816		$	70,260		$	73,706
Merger-related and other charges		9,016			9,912			1,437			1,078			1,543
Income tax benefit of merger-related and other charges		(1,963	)		(2,265	)		(328	)		(246	)		(335	)
Net income - operating	$	55,072		$	59,666		$	74,925		$	71,092		$	74,914

Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)	$	48,019		$	52,019		$	73,816		$	70,260		$	73,706
Income tax expense		12,385			14,204			21,603			22,005			20,150
Provision for (release of) credit losses		23,086			(647	)		(11,034	)		(13,588	)		(12,281	)
Pre-tax pre-provision income	$	83,490		$	65,576		$	84,385		$	78,677		$	81,575

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.43		$	0.55		$	0.82		$	0.78		$	0.82
Merger-related and other charges, net of tax		0.07			0.09			0.01			0.01			0.01
Diluted income per common share - operating	$	0.50		$	0.64		$	0.83		$	0.79		$	0.83

Book value per common share reconciliation
Book value per common share (GAAP)	$	24.38		$	23.63		$	23.25		$	22.81		$	22.15
Effect of goodwill and other intangibles		(7.30	)		(5.21	)		(4.57	)		(4.32	)		(4.32	)
Tangible book value per common share	$	17.08		$	18.42		$	18.68		$	18.49		$	17.83

Return on tangible common equity reconciliation
Return on common equity (GAAP)		6.80	%		9.32	%		14.26	%		14.08	%		15.37	%
Merger-related and other charges, net of tax		1.03			1.42			0.22			0.17			0.26
Return on common equity - operating		7.83			10.74			14.48			14.25			15.63
Effect of goodwill and other intangibles		3.17			3.19			3.75			3.56			4.05
Return on tangible common equity - operating		11.00	%		13.93	%		18.23	%		17.81	%		19.68	%

Return on assets reconciliation
Return on assets (GAAP)		0.78	%		0.96	%		1.48	%		1.46	%		1.62	%
Merger-related and other charges, net of tax		0.11			0.14			0.02			0.02			0.03
Return on assets - operating		0.89	%		1.10	%		1.50	%		1.48	%		1.65	%

Return on assets to return on assets- pre-tax pre-provision reconciliation
Return on assets (GAAP)		0.78	%		0.96	%		1.48	%		1.46	%		1.62	%
Income tax expense		0.20			0.26			0.45			0.47			0.46
(Release of) provision for credit losses		0.39			(0.01	)		(0.23	)		(0.29	)		(0.28	)
Return on assets - pre-tax, pre-provision		1.37			1.21			1.70			1.64			1.80
Merger-related and other charges		0.15			0.19			0.03			0.03			0.03
Return on assets - pre-tax pre-provision, excluding merger-related and other charges		1.52	%		1.40	%		1.73	%		1.67	%		1.83	%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		57.43	%		62.12	%		53.11	%		54.53	%		53.55	%
Merger-related and other charges		(4.34	)		(5.64	)		(0.78	)		(0.61	)		(0.87	)
Efficiency ratio - operating		53.09	%		56.48	%		52.33	%		53.92	%		52.68	%

Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)		11.06	%		10.61	%		10.89	%		11.04	%		10.95	%
Effect of goodwill and other intangibles		(2.94	)		(2.06	)		(1.87	)		(1.82	)		(1.86	)
Effect of preferred equity		(0.40	)		(0.46	)		(0.49	)		(0.51	)		(0.52	)
Tangible common equity to tangible assets		7.72	%		8.09	%		8.53	%		8.71	%		8.57	%

Allowance for credit losses - loans to loans reconciliation
Allowance for credit losses - loans to loans (GAAP)		1.02	%		0.97	%		0.99	%		1.08	%		1.16	%
Effect of PPP loans		—			—			0.01			0.04			0.10
Allowance for credit losses - loans to loans, excluding PPP loans		1.02	%		0.97	%		1.00	%		1.12	%		1.26	%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
	2022			2021							Linked Quarter Change			Year over Year Change
(in millions)	First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Linked Quarter Change			Year over Year Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	2,638	$	2,322	$	2,149	$	2,149	$	2,107	$	316		$	531
Income producing commercial RE		3,328		2,601		2,542		2,550		2,599		727			729
Commercial & industrial		2,302		1,822		1,729		1,762		1,760		480			542
Paycheck protection program		34		88		150		472		883		(54	)		(849	)
Commercial construction		1,482		1,015		947		927		960		467			522
Equipment financing		1,148		1,083		1,017		969		913		65			235
Total commercial		10,932		8,931		8,534		8,829		9,222		2,001			1,710
Residential mortgage		1,826		1,638		1,533		1,473		1,362		188			464
Home equity lines of credit		778		694		661		661		679		84			99
Residential construction		368		359		321		289		272		9			96
Manufactured housing		269		—		—		—		—		269			269
Consumer		143		138		142		139		144		5			(1	)
Total loans	$	14,316	$	11,760	$	11,191	$	11,391	$	11,679	$	2,556		$	2,637

LOANS BY MARKET
Georgia	$	3,879	$	3,778	$	3,732	$	3,729	$	3,754	$	101		$	125
South Carolina		2,323		2,235		2,145		2,107		1,997		88			326
North Carolina		1,879		1,895		1,427		1,374		1,326		(16	)		553
Tennessee		2,661		373		383		394		398		2,288			2,263
Florida		1,208		1,148		1,113		1,141		1,160		60			48
Commercial Banking Solutions		2,366		2,331		2,391		2,646		3,044		35			(678	)
Total loans	$	14,316	$	11,760	$	11,191	$	11,391	$	11,679	$	2,556		$	2,637

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
	2022			2021
	First Quarter		Fourth Quarter		Third Quarter
NONACCRUAL LOANS
Owner occupied RE	$	4,590	$	2,714	$	4,945
Income producing RE		7,220		7,588		13,462
Commercial & industrial		6,227		5,429		8,507
Commercial construction		401		343		1,202
Equipment financing		2,540		1,741		1,845
Total commercial		20,978		17,815		29,961
Residential mortgage		13,024		13,313		13,222
Home equity lines of credit		1,183		1,212		1,364
Residential construction		212		420		260
Manufactured housing		2,507		—		—
Consumer		40		52		116
Total nonaccrual loans held for investment		37,944		32,812		44,923
Nonaccrual loans held for sale		2,033		—		—
OREO and repossessed assets		839		43		412
Total NPAs	$	40,816	$	32,855	$	45,335

		2022					2021
	First Quarter					Fourth Quarter					Third 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	$	(45	)	(0.01)%		$	(255	)	(0.04)%		$	(93	)	(0.02)%
Income producing RE		(290	)	(0.04	)		(98	)	(0.01	)		45		0.01
Commercial & industrial		2,929		0.51			339		0.07			(91	)	(0.02	)
Commercial construction		(373	)	(0.10	)		(354	)	(0.14	)		(123	)	(0.05	)
Equipment financing		267		0.10			781		0.29			512		0.21
Total commercial		2,488		0.09			413		0.02			250		0.01
Residential mortgage		(97	)	(0.02	)		(169	)	(0.04	)		51		0.01
Home equity lines of credit		(81	)	(0.04	)		(118	)	(0.07	)		(102	)	(0.06	)
Residential construction		(23	)	(0.03	)		(17	)	(0.02	)		(37	)	(0.05	)
Manufactured housing		164		0.25			—		—			—		—
Consumer		527		1.48			139		0.39			389		1.11
Total	$	2,978		0.08		$	248		0.01		$	551		0.02

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)	March 31, 2022			December 31, 2021
ASSETS
Cash and due from banks	$	175,175		$	144,244
Interest-bearing deposits in banks		1,729,607			2,147,266
Federal funds and other short-term investments		1,882			27,000
Cash and cash equivalents		1,906,664			2,318,510
Debt securities available-for-sale		3,909,114			4,496,824
Debt securities held-to-maturity (fair value $2,351,873 and $1,148,804)		2,500,983			1,156,098
Loans held for sale (includes $39,118 and $44,109 at fair value)		75,191			44,109
Loans and leases held for investment		14,316,205			11,760,346
Less allowance for credit losses - loans and leases		(132,805	)		(102,532	)
Loans and leases, net		14,183,400			11,657,814
Premises and equipment, net		283,561			245,296
Bank owned life insurance		297,220			217,713
Goodwill and other intangible assets, net		784,280			472,407
Other assets		433,787			338,000
Total assets	$	24,374,200		$	20,946,771
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	7,946,049		$	6,956,981
NOW and interest-bearing demand		4,650,997			4,252,209
Money market		5,075,525			4,183,354
Savings		1,479,833			1,215,779
Time		1,704,657			1,442,498
Brokered		199,092			190,358
Total deposits		21,056,153			18,241,179
Long-term debt		324,230			247,360
Accrued expenses and other liabilities		298,802			235,987
Total liabilities		21,679,185			18,724,526
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, 106,025,210 and 89,349,826 shares issued and outstanding, respectively		106,025			89,350
Common stock issuable; 574,139 and 595,705 shares		11,311			11,288
Capital surplus		2,302,189			1,721,007
Retained earnings		354,409			330,654
Accumulated other comprehensive loss		(175,341	)		(26,476	)
Total shareholders' equity		2,695,015			2,222,245
Total liabilities and shareholders' equity	$	24,374,200		$	20,946,771

UNITED COMMUNITY BANKS, INC.

Consolidated Statements of Income (Unaudited)

	Three Months Ended March 31,
(in thousands, except per share data)		2022			2021
Interest revenue:
Loans, including fees	$	146,741		$	125,726
Investment securities, including tax exempt of $2,655 and $2,150, respectively		23,665			15,448
Deposits in banks and short-term investments		653			368
Total interest revenue		171,059			141,542

Interest expense:
Deposits:
NOW and interest-bearing demand		1,469			1,486
Money market		1,012			1,804
Savings		72			49
Time		578			1,880
Deposits		3,131			5,219
Short-term borrowings		—			2
Long-term debt		4,136			4,257
Total interest expense		7,267			9,478
Net interest revenue		163,792			132,064
Provision for (release of) credit losses		23,086			(12,281	)
Net interest revenue after provision for credit losses		140,706			144,345

Noninterest income:
Service charges and fees		9,070			7,570
Mortgage loan gains and other related fees		16,152			22,572
Wealth management fees		5,895			3,505
Gains from sales of other loans, net		3,198			1,030
Lending and loan servicing fees		2,986			2,160
Securities losses, net		(3,734	)		—
Other		5,406			7,868
Total noninterest income		38,973			44,705
Total revenue		179,679			189,050

Noninterest expenses:
Salaries and employee benefits		71,006			60,585
Communications and equipment		9,248			7,203
Occupancy		9,378			6,956
Advertising and public relations		1,488			1,199
Postage, printing and supplies		2,119			1,822
Professional fees		4,447			4,234
Lending and loan servicing expense		2,366			2,877
Outside services - electronic banking		2,523			2,218
FDIC assessments and other regulatory charges		2,173			1,896
Amortization of intangibles		1,793			985
Merger-related and other charges		9,016			1,543
Other		3,718			3,676
Total noninterest expenses		119,275			95,194
Income before income taxes		60,404			93,856
Income tax expense		12,385			20,150
Net income		48,019			73,706
Preferred stock dividends		1,719			1,719
Earnings allocated to participating securities		238			462
Net income available to common shareholders	$	46,062		$	71,525

Net income per common share:
Basic	$	0.43		$	0.82
Diluted		0.43			0.82
Weighted average common shares outstanding:
Basic		106,550			87,322
Diluted		106,677			87,466

Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended March 31,

		2022							2021
*(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⁾	$	14,234,026		$	146,637	4.18	%	$	11,432,908		$	125,122	4.44	%
Taxable securities⁽³⁾		5,848,976			21,010	1.44			3,686,405			13,298	1.44
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		510,954			3,566	2.79			304,983			2,888	3.79
Federal funds sold and other interest-earning assets		1,910,411			1,020	0.22			1,357,890			1,222	0.36
Total interest-earning assets (FTE)		22,504,367			172,233	3.10			16,782,186			142,530	3.44

Noninterest-earning assets:
Allowance for credit losses		(113,254	)						(143,703	)
Cash and due from banks		166,005							140,292
Premises and equipment		277,216							221,411
Other assets ⁽³⁾		1,369,301							1,023,275
Total assets	$	24,203,635						$	18,023,461

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	4,667,098			1,469	0.13		$	3,331,043			1,486	0.18
Money market		5,110,817			1,012	0.08			3,732,988			1,804	0.20
Savings		1,436,881			72	0.02			989,584			49	0.02
Time		1,758,895			534	0.12			1,642,423			1,588	0.39
Brokered time deposits		79,092			44	0.23			75,259			292	1.57
Total interest-bearing deposits		13,052,783			3,131	0.10			9,771,297			5,219	0.22
Federal funds purchased and other borrowings		611			—	—			12			—	—
Federal Home Loan Bank advances		—			—	—			3,333			2	0.24
Long-term debt		318,995			4,136	5.26			317,172			4,257	5.44
Total borrowed funds		319,606			4,136	5.25			320,517			4,259	5.39
Total interest-bearing liabilities		13,372,389			7,267	0.22			10,091,814			9,478	0.38

Noninterest-bearing liabilities:
Noninterest-bearing deposits		7,666,635							5,594,394
Other liabilities		378,327							312,610
Total liabilities		21,417,351							15,998,818
Shareholders' equity		2,786,284							2,024,643
Total liabilities and shareholders' equity	$	24,203,635						$	18,023,461

Net interest revenue (FTE)				$	164,966						$	133,052
Net interest-rate spread (FTE)						2.88	%						3.06	%
Net interest margin (FTE) ⁽⁴⁾						2.97	%						3.22	%

⁽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 losses of $81.2 million in 2022 and pretax unrealized gains of $58.3 million in 2021 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. At March 31, 2022, United had $24.4 billion in assets and 198 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary. In 2022, J.D. Power ranked United highest in customer satisfaction with consumer banking in the Southeast, marking eight out of the last nine years United earned the coveted award. United was also named one of the "Best Banks to Work For" by American Banker in 2021 for the fifth consecutive year based on employee satisfaction. Forbes recognized United as one of the top ten World’s Best Banks in 2022. Forbes also included United on its 2022 list of the 100 Best Banks in America for the ninth consecutive year. United also received ten (10) Greenwich Excellence Awards in 2021 for excellence in Small Business Banking and Middle Market Banking, including national awards for Overall Satisfaction and Likelihood to Recommend. 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.

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 the accretive value of each of the Reliant acquisition to United’s earnings. 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 Reliant acquisition 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 the Reliant acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Reliant may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisition of Reliant, (5) the risks relating to the integration of Reliant’s 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, (6) the risk of potential litigation or regulatory action related to the acquisition of Reliant. 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, 2021, 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

United Community Banks, Inc. Reports First Quarter Results

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