United Community Banks, Inc. Reports Third Quarter Results

Source: Nasdaq GlobeNewswire / 19 Oct 2021 15:30:01 America/Chicago

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			Third Quarter 2021 - 2020 Change		2021				2020				YTD 2021 - 2020 Change
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		Linked Quarter Change			Year over Year Change
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		(322		)	(1,167		)
Commercial construction	947		927		960		967		987		20			(40		)
Equipment financing	1,017		969		913		864		823		48			194
Total commercial	8,534		8,829		9,222		8,961		9,417		(295		)	(883		)
Residential mortgage	1,533		1,473		1,362		1,285		1,270		60			263
Home equity lines of credit	661		661		679		697		707		—			(46		)
Residential construction	321		289		272		281		257		32			64
Consumer	142		139		144		147		148		3			(6		)
Total loans	$	11,191	$	11,391	$	11,679	$	11,371	$	11,799	$	(200	)	$	(608	)

LOANS BY MARKET⁽¹⁾
North Georgia	$	961	$	962	$	982	$	955	$	945	$	(1	)	$	16
Atlanta	1,930		1,938		1,953		1,889		1,853		(8		)	77
North Carolina	1,427		1,374		1,326		1,281		1,246		53			181
Coastal Georgia	621		605		597		617		614		16			7
Gainesville	220		224		222		224		229		(4		)	(9		)
East Tennessee	383		394		398		415		420		(11		)	(37		)
South Carolina	2,145		2,107		1,997		1,947		1,870		38			275
Florida	1,113		1,141		1,160		1,435		1,453		(28		)	(340		)
Commercial Banking Solutions	2,391		2,646		3,044		2,608		3,169		(255		)	(778		)
Total loans	$	11,191	$	11,391	$	11,679	$	11,371	$	11,799	$	(200	)	$	(608	)

⁽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
(in thousands)	Third Quarter		Second Quarter		First Quarter
NONACCRUAL LOANS
Owner occupied RE	$	4,945	$	6,128	$	7,908
Income producing RE	13,462		13,100		13,740
Commercial & industrial	8,507		8,563		13,864
Commercial construction	1,202		1,229		1,984
Equipment financing	1,845		1,771		2,171
Total commercial	29,961		30,791		39,667
Residential mortgage	13,222		13,485		14,050
Home equity lines of credit	1,364		1,433		1,707
Residential construction	260		307		322
Consumer	116		107		154
Total	$	44,923	$	46,123	$	55,900

	2021
	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 BY CATEGORY
Owner occupied RE	$	(93	)	(0.02	)%	$	(103	)	(0.02	)%	$	767		0.15	%
Income producing RE	45			0.01		(213		)	(0.03	)	37			0.01
Commercial & industrial	(91		)	(0.02	)	60			0.01		(2,806		)	(0.45	)
Commercial construction	(123		)	(0.05	)	(293		)	(0.12	)	22			0.01
Equipment financing	512			0.21		301			0.13		1,511			0.70
Total commercial	250			0.01		(248		)	(0.01	)	(469		)	(0.02	)
Residential mortgage	51			0.01		(194		)	(0.05	)	92			0.03
Home equity lines of credit	(102		)	(0.06	)	(112		)	(0.07	)	(73		)	(0.04	)
Residential construction	(37		)	(0.05	)	(33		)	(0.05	)	(60		)	(0.09	)
Consumer	389			1.11		131			0.37		205			0.58
Total	$	551		0.02		$	(456	)	(0.02	)	$	(305	)	(0.01	)

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)	September 30, 2021			December 31, 2020
ASSETS
Cash and due from banks	$	131,785		$	148,896
Interest-bearing deposits in banks	1,686,008			1,459,723
Cash and cash equivalents	1,817,793			1,608,619
Debt securities available-for-sale	4,251,436			3,224,721
Debt securities held-to-maturity (fair value $1,079,925 and $437,193)	1,083,324			420,361
Loans held for sale at fair value	68,424			105,433
Loans and leases held for investment	11,191,037			11,370,815
Less allowance for credit losses - loans and leases	(99,620		)	(137,010		)
Loans and leases, net	11,091,417			11,233,805
Premises and equipment, net	225,350			218,489
Bank owned life insurance	204,282			201,969
Accrued interest receivable	41,561			47,672
Net deferred tax asset	37,617			38,411
Derivative financial instruments	53,296			86,666
Goodwill and other intangible assets, net	400,994			381,823
Other assets	205,663			226,405
Total assets	$	19,481,157		$	17,794,374
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	6,492,519		$	5,390,291
NOW and interest-bearing demand	3,699,951			3,346,490
Money market	3,904,927			3,550,335
Savings	1,144,065			950,854
Time	1,440,160			1,704,290
Brokered	183,795			290,098
Total deposits	16,865,417			15,232,358
Long-term debt	247,139			326,956
Derivative financial instruments	26,065			29,003
Accrued expenses and other liabilities	220,178			198,527
Total liabilities	17,358,799			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 and 150,000,000 shares authorized, respectively; 86,558,647 and 86,675,279 shares issued and outstanding, respectively	86,559			86,675
Common stock issuable; 588,258 and 600,834 shares	11,098			10,855
Capital surplus	1,631,709			1,638,999
Retained earnings	298,503			136,869
Accumulated other comprehensive (loss) income	(1,933		)	37,710
Total shareholders' equity	2,122,358			2,007,530
Total liabilities and shareholders' equity	$	19,481,157		$	17,794,374

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)	2021			2020		2021			2020
Interest revenue:
Loans, including fees	$	128,477		$	126,936	$	382,261		$	352,861
Investment securities, including tax exempt of $2,280 and $1,895 and $6,685 and $4,988, respectively	18,540			14,558		51,530			47,567
Deposits in banks and short-term investments	658			279		1,235			1,497
Total interest revenue	147,675			141,773		435,026			401,925

Interest expense:
Deposits:
NOW and interest-bearing demand	1,290			1,634		4,158			6,240
Money market	1,119			3,017		4,278			10,969
Savings	55			47		157			121
Time	678			4,300		3,388			18,014
Deposits	3,142			8,998		11,981			35,344
Short-term borrowings	—			29		2			31
Long-term debt	3,494			4,292		11,564			10,186
Total interest expense	6,636			13,319		23,547			45,561
Net interest revenue	141,039			128,454		411,479			356,364
(Release of) provision for credit losses	(11,034		)	21,793		(36,903		)	77,527
Net interest revenue after provision for credit losses	152,073			106,661		448,382			278,837

Noninterest income:
Service charges and fees	9,350			8,260		25,255			23,893
Mortgage loan gains and other related fees	13,828			25,144		47,536			57,113
Wealth management fees	5,554			3,055		12,881			6,019
Gains from sales of other loans, net	2,353			1,175		7,506			3,889
Securities gains, net	—			746		41			746
Other	9,010			10,302		27,422			23,074
Total noninterest income	40,095			48,682		120,641			114,734
Total revenue	192,168			155,343		569,023			393,571

Noninterest expenses:
Salaries and employee benefits	60,458			59,067		180,457			162,236
Communications and equipment	7,368			6,960		21,979			19,462
Occupancy	7,096			7,050		21,130			18,709
Advertising and public relations	1,458			1,778		4,150			5,312
Postage, printing and supplies	1,731			1,703		5,171			4,986
Professional fees	5,347			5,083		14,509			14,003
Lending and loan servicing expense	2,450			3,043		8,508			8,525
Outside services - electronic banking	2,308			1,888		6,811			5,516
FDIC assessments and other regulatory charges	1,723			1,346		5,520			4,388
Amortization of intangibles	1,028			1,099		2,942			3,126
Merger-related and other charges	1,437			3,361		4,058			4,566
Other	4,345			3,603		12,248			10,670
Total noninterest expenses	96,749			95,981		287,483			261,499
Income before income taxes	95,419			59,362		281,540			132,072
Income tax expense	21,603			11,755		63,758			27,485
Net income	73,816			47,607		217,782			104,587
Preferred stock dividends	1,719			1,814		5,157			1,814
Undistributed earnings allocated to participating securities	448			356		1,342			779
Net income available to common shareholders	$	71,649		$	45,437	$	211,283		$	101,994

Net income per common share:
Basic	$	0.82		$	0.52	$	2.42		$	1.25
Diluted	0.82			0.52		2.42			1.25
Weighted average common shares outstanding:
Basic	87,211			87,129		87,274			81,815
Diluted	87,355			87,205		87,413			81,876

Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 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⁾	$	11,204,653		$	128,185	4.54	%	$	11,644,202		$	126,342	4.32	%
Taxable securities⁽³⁾	4,738,860			16,260		1.37		2,499,649			12,663		2.03
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾	383,196			3,061		3.20		249,959			2,544		4.07
Federal funds sold and other interest-earning assets	1,751,222			1,185		0.27		1,321,445			1,132		0.34
Total interest-earning assets (FTE)	18,077,931			148,691		3.27		15,715,255			142,681		3.61

Noninterest-earning assets:
Allowance for credit losses	(111,952		)					(128,581		)
Cash and due from banks	124,360							135,949
Premises and equipment	228,556							216,326
Other assets ⁽³⁾	1,002,810							1,074,529
Total assets	$	19,321,705						$	17,013,478

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	3,594,670		1,290		0.14		$	2,890,735		1,634		0.22
Money market	4,010,720			1,119		0.11		3,501,781			3,017		0.34
Savings	1,120,843			55		0.02		864,849			47		0.02
Time	1,466,821			609		0.16		1,933,764			4,127		0.85
Brokered time deposits	63,917			69		0.43		96,198			173		0.72
Total interest-bearing deposits	10,256,971			3,142		0.12		9,287,327			8,998		0.39
Federal funds purchased and other borrowings	—			—		—		4,405			2		0.18
Federal Home Loan Bank advances	54			—		—		2,818			27		3.81
Long-term debt	257,139			3,494		5.39		327,017			4,292		5.22
Total borrowed funds	257,193			3,494		5.39		334,240			4,321		5.14
Total interest-bearing liabilities	10,514,164			6,636		0.25		9,621,567			13,319		0.55

Noninterest-bearing liabilities:
Noninterest-bearing deposits	6,379,969							5,172,999
Other liabilities	308,551							270,451
Total liabilities	17,202,684							15,065,017
Shareholders' equity	2,119,021							1,948,461
Total liabilities and shareholders' equity	$	19,321,705						$	17,013,478

Net interest revenue (FTE)				$	142,055						$	129,362
Net interest-rate spread (FTE)						3.02	%						3.06	%
Net interest margin (FTE) ⁽⁴⁾						3.12	%						3.27	%

(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 $39.6 million and $77.0 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 Nine Months Ended September 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⁾	$	11,417,285		$	380,765	4.46	%	$	10,087,630		$	351,536	4.65	%
Taxable securities ⁽³⁾	4,206,099			44,845		1.42		2,362,674			42,579		2.40
Tax-exempt securities (FTE)⁽¹⁾⁽³⁾	381,323			8,979		3.14		197,231			6,699		4.53
Federal funds sold and other interest-earning assets	1,468,487			3,462		0.31		850,722			3,621		0.57
Total interest-earning assets (FTE)	17,473,194			438,051		3.35		13,498,257			404,435		4.00

Non-interest-earning assets:
Allowance for loan losses	(127,793		)					(96,235		)
Cash and due from banks	138,973							134,354
Premises and equipment	225,021							217,551
Other assets ⁽³⁾	1,007,669							964,511
Total assets	$	18,717,064						$	14,718,438

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	3,452,206		4,158		0.16		$	2,583,911		6,240		0.32
Money market	3,853,907			4,278		0.15		2,797,350			10,969		0.52
Savings	1,064,045			157		0.02		788,681			121		0.02
Time	1,551,934			3,096		0.27		1,860,597			17,435		1.25
Brokered time deposits	67,794			292		0.58		102,502			579		0.75
Total interest-bearing deposits	9,989,886			11,981		0.16		8,133,041			35,344		0.58
Federal funds purchased and other borrowings	41			—		—		1,611			3		0.25
Federal Home Loan Bank advances	1,117			2		0.24		1,001			28		3.74
Long-term debt	286,347			11,564		5.40		256,218			10,186		5.31
Total borrowed funds	287,505			11,566		5.38		258,830			10,217		5.27
Total interest-bearing liabilities	10,277,391			23,547		0.31		8,391,871			45,561		0.73

Noninterest-bearing liabilities:
Noninterest-bearing deposits	6,059,680							4,356,484
Other liabilities	311,749							206,904
Total liabilities	16,648,820							12,955,259
Shareholders' equity	2,068,244							1,763,179
Total liabilities and shareholders' equity	$	18,717,064						$	14,718,438

Net interest revenue (FTE)				$	414,504						$	358,874
Net interest-rate spread (FTE)						3.04	%						3.27	%
Net interest margin (FTE) ⁽⁴⁾						3.17	%						3.55	%

(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 $40.3 million and $65.5 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. At September 30, 2021, United had $19.5 billion in assets and 171 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee along with a national SBA lending franchise and a national equipment lending subsidiary. Through its October 1, 2021 acquisition of Aquesta and its wholly-owned banking subsidiary, Aquesta Bank, United added $754 million in assets and nine banking offices in high growth markets in North Carolina. 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.

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 expected completion date of the Reliant acquisition and the accretive value of each of the Aquesta and Reliant acquisitions 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 Aquesta and Reliant 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 the Aquesta and Reliant acquisitions, (3) the occurrence of any event, change or other circumstances that could give rise to a delay in closing the Reliant acquisition or the termination of the merger agreement, (4) the failure to obtain the necessary approval by the shareholders of Reliant, (5) the possibility that the costs, fees, expenses and charges related to the acquisitions of Aquesta and Reliant may be greater than anticipated, (6) the ability of United to obtain required governmental approvals of the Reliant acquisition, (7) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisitions of Aquesta and Reliant, (8) the failure of the closing conditions in the Reliant merger agreement to be satisfied, or any unexpected delay in closing the acquisition, (9) the risks relating to the integration of Aquesta’s and 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, (10) the risk of potential litigation or regulatory action related to the acquisitions of Aquesta and Reliant, (11) the risks associated with United’s pursuit of future acquisitions, (12) the risk of expansion into new geographic or product markets, (13) the dilution caused by United’s issuance of additional shares of its common stock in the acquisitions of Aquesta and Reliant, and (14) general competitive, economic, political 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, 2020, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).

Many of these factors are beyond United’s (and in the case of the prospective acquisition of Reliant, Reliant’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 or Reliant to predict their occurrence or how they will affect United or Reliant.

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

IMPORTANT INFORMATION FOR SHAREHOLDERS AND INVESTORS

In connection with the prospective acquisition of Reliant, United has filed with the SEC a registration statement on Form S-4 that includes a proxy statement of Reliant to be sent to Reliant’s shareholders seeking their approval of the merger agreement and merger with United. The registration statement also will contain the prospectus of United to register the shares of United common stock to be issued in connection with the Reliant acquisition. INVESTORS AND SHAREHOLDERS OF RELIANT ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT WILL BE A PART OF THE REGISTRATION STATEMENT WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED BY UNITED OR RELIANT WITH THE SEC, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS TO THE REGISTRATION STATEMENT AND THOSE OTHER DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT UNITED, RELIANT AND THE MERGER OF RELIANT AND UNITED.

The registration statement and other documents filed with the SEC may be obtained for free at the SEC’s website (www.sec.gov). You will also be able to obtain these documents, free of charge, from United at the “Investor Relations” section of United’s website at www.ucbi.com or from Reliant at the “Investor Relations” section of Reliant’s website at www.reliantbank.com. Copies of the definitive proxy statement/prospectus will also be made available, free of charge, by contacting United Community Banks, Inc., P.O. Box 398, Blairsville, GA 30514, Attn: Jefferson Harralson, Telephone: (864) 240-6208, or Reliant Bancorp, Inc., 6100 Tower Circle, Suite 120, Franklin, TN 37067, Attn: Jerry Cooksey, Telephone: (615) 221-2020.

This communication is for informational purposes only and does not constitute an offer to sell, the solicitation of an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This communication is also not a solicitation of any vote or approval with respect to the proposed merger of Reliant with United or otherwise.

PARTICIPANTS IN THE TRANSACTION

United and Reliant, and certain of their respective directors and executive officers, under the rules of the SEC may be deemed to be participants in the solicitation of proxies from Reliant’s shareholders in favor of the approval of the merger agreement and the merger of Reliant and United. Information about the directors and officers of United and their ownership of United common stock can be found in United’s definitive proxy statement in connection with its 2021 annual meeting of shareholders, as filed with the SEC on March 30, 2021, and other documents subsequently filed by United with the SEC. Information about the directors and executive officers of Reliant and their ownership of Reliant’s common stock can be found in Reliant’s definitive proxy statement for its 2021 annual meeting of shareholders, filed with the SEC on April 8, 2021, and other documents subsequently filed by Reliant with the SEC. Additional information regarding the interests of these participants also will be included in the proxy statement/prospectus pertaining to the transaction that is described above. Free copies of this document may be obtained as described above.

For more information:

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

United Community Banks, Inc. Reports Third Quarter Results

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