United Community Banks, Inc. Reports Third Quarter Results

Source: Nasdaq GlobeNewswire / 18 Oct 2022 16:30:01 America/New_York

GREENVILLE, S.C., Oct. 18, 2022 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) announced today that net income for the third quarter was $81.2 million with pre-tax, pre-provision income of $118.9 million. Diluted earnings per share was $0.74 for the quarter, which represented an increase of $0.13 or 21% from the second quarter of 2022, and a decrease of $0.08 or 10% from the third quarter a year ago. The year-over-year decrease is largely attributable to an $11.0 million provision release in the third quarter of 2021 compared to a $15.4 million provision expense in this quarter. Other highlights of the quarter include 9.4% annualized loan growth, 38 basis points of net interest margin expansion, a reserve build to 1.12% of loans and an improvement in the efficiency ratio to 48.4%, or 47.7% on an operating basis, which excludes the effect of merger-related and other charges.

United’s third-quarter return on assets (ROA) was 1.32%, and return on common equity was 11.02%. On an operating basis, United’s ROA was 1.34%, and its return on tangible common equity was 15.60%. Also, on an operating basis, United’s pre-tax, pre-provision ROA was 1.97% for the quarter.

Total loans increased by $341 million during the quarter, resulting in loan growth of 9.4% on an annualized basis. Deposits decreased by $552 million or 11% annualized. A large portion of this decrease was driven by a seasonal decrease in public deposits, which were down by $278 million. United’s cost of deposits increased 11 basis points from the second quarter to 0.19% while the average yield on interest-earning assets was up 49 basis points to 3.83%.

Chairman and CEO Lynn Harton stated, “This was a great quarter on multiple fronts for United as our businesses and our markets continue to provide solid growth opportunities. Loan growth and an expanding net interest margin propelled our pre-tax, pre-provision ROA and our efficiency ratio to record levels for the company. Deposits fell as anticipated due to higher-yielding market alternatives provided by increasing interest rates, however our core deposit base continues to provide strong liquidity for the company.”

Harton continued, “From a strategic perspective, we continued to strengthen our Board of Directors with the appointment of George Bell, an experienced information technology executive who has more than 35 years in large financial institutions, with a specific emphasis on Customer Information Management. He brings an incredible depth of knowledge in leveraging technology to improve products and services, enhancing customer experience, and increasing organizational productivity. We are excited to have George join United as we continue to grow and expand our capabilities.”

Harton concluded, “Finally, our thoughts are with the people, communities and businesses in Florida who are recovering from the devastating impact of Hurricane Ian. We are fortunate to report that United sustained no loss of life or property.”

Third Quarter 2022 Financial Highlights:

Net income of $81.2 million and pre-tax, pre-provision income of $118.9 million
EPS decreased by 10% compared to third quarter 2021 on a GAAP basis and on an operating basis; compared to second quarter of 2022, EPS increased by 21% on a GAAP basis and increased 14% on an operating basis
Return on assets of 1.32%, or 1.34% on an operating basis
Pre-tax, pre-provision return on assets of 1.94%, or 1.97% on an operating basis
Return on common equity of 11.02%
Return on tangible common equity of 15.60% on an operating basis
A provision for credit losses of $15.4 million, which increased the allowance for loan losses to 1.12% of loans from 1.05% in the second quarter
Loan production of $1.6 billion, resulting in loan growth of 9.4% annualized for the quarter
Core transaction deposits were down $225 million, which represents a decline of 5% annualized for the quarter
Net interest margin of 3.57% was up 38 basis points from the second quarter, due to the effect of higher interest rates
Mortgage closings were $317 million compared to $568 million a year ago; mortgage rate locks were $456 million compared to $731 million a year ago
Noninterest income was down $1.5 million on a linked quarter basis, primarily driven by lower lock volume driven by higher interest rates
Noninterest expenses decreased by $8.0 million compared to the second quarter on a GAAP basis and by $2.6 million on an operating basis, primarily driven by lower merger-related charges as the second quarter included costs for the Reliant systems conversion
Efficiency ratio improved to historically low levels of 48.4%, or 47.7% on an operating basis
Net charge-offs were $1.1 million or 3 basis points as a percent of average loans, up 6 basis points from the net recoveries experienced in the second quarter
Nonperforming assets were 0.15% of total assets, an increase of 1 basis point compared to June 30, 2022
Quarterly common shareholder dividend was $0.22 per share declared during the quarter, an increase of 10% year-over-year

Conference Call

United will hold a conference call on Wednesday, October 19, 2022, at 11:00 am EST 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/10171644/f49bf32028. Those without internet access or 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 can be accessed by selecting “Events and Presentations” under “News and Events” within the Investor Relations section of the company's website, www.ucbi.com.

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
*(in thousands, except per share data)*
		2022									2021					Third Quarter 2022 - 2021 Change		For the Nine Months Ended September 30,						YTD 2022 - 2021 Change
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Third Quarter 2022 - 2021 Change			2022			2021		YTD 2022 - 2021 Change
INCOME SUMMARY
Interest revenue	$	213,887		$	187,378		$	171,059		$	143,768		$	147,675				$	572,324		$	435,026
Interest expense		14,113			8,475			7,267			6,213			6,636					29,855			23,547
Net interest revenue		199,774			178,903			163,792			137,555			141,039		42	%		542,469			411,479		32	%
Provision for (release of) credit losses		15,392			5,604			23,086			(647	)		(11,034	)				44,082			(36,903	)
Noninterest income		31,922			33,458			38,973			37,177			40,095		(20	)		104,353			120,641		(14	)
Total revenue		216,304			206,757			179,679			175,379			192,168		13			602,740			569,023		6
Noninterest expenses		112,755			120,790			119,275			109,156			96,749		17			352,820			287,483		23
Income before income tax expense		103,549			85,967			60,404			66,223			95,419		9			249,920			281,540		(11	)
Income tax expense		22,388			19,125			12,385			14,204			21,603		4			53,898			63,758		(15	)
Net income		81,161			66,842			48,019			52,019			73,816		10			196,022			217,782		(10	)
Merger-related and other charges		1,746			7,143			9,016			9,912			1,437					17,905			4,058
Income tax benefit of merger-related and other charges		(385	)		(1,575	)		(1,963	)		(2,265	)		(328	)				(3,923	)		(909	)
Net income - operating⁽¹⁾	$	82,522		$	72,410		$	55,072		$	59,666		$	74,925		10		$	210,004		$	220,931		(5	)
Pre-tax pre-provision income ⁽⁵⁾	$	118,941		$	91,571		$	83,490		$	65,576		$	84,385		41		$	294,002		$	244,637		20
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP	$	0.74		$	0.61		$	0.43		$	0.55		$	0.82		(10	)	$	1.78		$	2.42		(26	)
Diluted net income - operating ⁽¹⁾		0.75			0.66			0.50			0.64			0.83		(10	)		1.91			2.45		(22	)
Cash dividends declared		0.22			0.21			0.21			0.20			0.20		10			0.64			0.58		10
Book value		23.78			23.96			24.38			23.63			23.25		2			23.78			23.25		2
Tangible book value⁽³⁾		16.52			16.68			17.08			18.42			18.68		(12	)		16.52			18.68		(12	)
Key performance ratios:
Return on common equity - GAAP ⁽²⁾⁽⁴⁾		11.02	%		9.31	%		6.80	%		9.32	%		14.26	%				9.08	%		14.55	%
Return on common equity - operating ^(1)(2)(4)		11.21			10.10			7.83			10.74			14.48					9.75			14.77
Return on tangible common equity - operating ^(1)(2)(3)(4)		15.60			14.20			11.00			13.93			18.23					13.64			18.55
Return on assets - GAAP ⁽⁴⁾		1.32			1.08			0.78			0.96			1.48					1.06			1.52
Return on assets - operating ⁽¹⁾⁽⁴⁾		1.34			1.17			0.89			1.10			1.50					1.13			1.54
Return on assets - pre-tax pre-provision ⁽⁴⁾⁽⁵⁾		1.94			1.49			1.37			1.21			1.70					1.60			1.71
Return on assets - pre-tax pre-provision, excluding merger- related and other charges ^(1)(4)(5)		1.97			1.60			1.52			1.40			1.73					1.70			1.74
Net interest margin (fully taxable equivalent) ⁽⁴⁾		3.57			3.19			2.97			2.81			3.12					3.25			3.17
Efficiency ratio - GAAP		48.41			56.58			57.43			62.12			53.11					53.94			53.72
Efficiency ratio - operating ⁽¹⁾		47.66			53.23			53.09			56.48			52.33					51.20			52.97
Equity to total assets		11.12			10.95			11.06			10.61			10.89					11.12			10.89
Tangible common equity to tangible assets ⁽³⁾		7.70			7.59			7.72			8.09			8.53					7.70			8.53
ASSET QUALITY
Nonperforming assets ("NPAs")	$	35,511		$	34,428		$	40,816		$	32,855		$	45,335		(22	)	$	35,511		$	45,335		(22	)
Allowance for credit losses - loans		148,502			136,925			132,805			102,532			99,620		49			148,502			99,620		49
Allowance for credit losses - total		167,300			153,042			146,369			113,524			110,875					167,300			110,875
Net charge-offs (recoveries)		1,134			(1,069	)		2,978			248			551					3,043			(210	)
Allowance for credit losses - loans to loans		1.00	%		0.94	%		0.93	%		0.87	%		0.89	%				1.00	%		0.89	%
Allowance for credit losses - total to loans		1.12			1.05			1.02			0.97			0.99					1.12			0.99
Net charge-offs to average loans ⁽⁴⁾		0.03			(0.03	)		0.08			0.01			0.02					0.03			—
NPAs to total assets		0.15			0.14			0.17			0.16			0.23					0.15			0.23
AT PERIOD END ($ in millions)
Loans	$	14,882		$	14,541		$	14,316		$	11,760		$	11,191		33		$	14,882		$	11,191		33
Investment securities		6,539			6,683			6,410			5,653			5,335		23			6,539			5,335		23
Total assets		23,688			24,213			24,374			20,947			19,481		22			23,688			19,481		22
Deposits		20,321			20,873			21,056			18,241			16,865		20			20,321			16,865		20
Shareholders’ equity		2,635			2,651			2,695			2,222			2,122		24			2,635			2,122		24
Common shares outstanding (thousands)		106,163			106,034			106,025			89,350			86,559		23			106,163			86,559		23

⁽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					For the Nine Months Ended September 30,
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter				2022			2021

Noninterest expense reconciliation
Noninterest expenses (GAAP)	$	112,755		$	120,790		$	119,275		$	109,156		$	96,749		$	352,820		$	287,483
Merger-related and other charges		(1,746	)		(7,143	)		(9,016	)		(9,912	)		(1,437	)		(17,905	)		(4,058	)
Noninterest expenses - operating	$	111,009		$	113,647		$	110,259		$	99,244		$	95,312		$	334,915		$	283,425

Net income reconciliation
Net income (GAAP)	$	81,161		$	66,842		$	48,019		$	52,019		$	73,816		$	196,022		$	217,782
Merger-related and other charges		1,746			7,143			9,016			9,912			1,437			17,905			4,058
Income tax benefit of merger-related and other charges		(385	)		(1,575	)		(1,963	)		(2,265	)		(328	)		(3,923	)		(909	)
Net income - operating	$	82,522		$	72,410		$	55,072		$	59,666		$	74,925		$	210,004		$	220,931

Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)	$	81,161		$	66,842		$	48,019		$	52,019		$	73,816		$	196,022		$	217,782
Income tax expense		22,388			19,125			12,385			14,204			21,603			53,898			63,758
Provision for (release of) credit losses		15,392			5,604			23,086			(647	)		(11,034	)		44,082			(36,903	)
Pre-tax pre-provision income	$	118,941		$	91,571		$	83,490		$	65,576		$	84,385		$	294,002		$	244,637

Diluted income per common share reconciliation
Diluted income per common share (GAAP)	$	0.74		$	0.61		$	0.43		$	0.55		$	0.82		$	1.78		$	2.42
Merger-related and other charges, net of tax		0.01			0.05			0.07			0.09			0.01			0.13			0.03
Diluted income per common share - operating	$	0.75		$	0.66		$	0.50		$	0.64		$	0.83		$	1.91		$	2.45

Book value per common share reconciliation
Book value per common share (GAAP)	$	23.78		$	23.96		$	24.38		$	23.63		$	23.25		$	23.78		$	23.25
Effect of goodwill and other intangibles		(7.26	)		(7.28	)		(7.30	)		(5.21	)		(4.57	)		(7.26	)		(4.57	)
Tangible book value per common share	$	16.52		$	16.68		$	17.08		$	18.42		$	18.68		$	16.52		$	18.68

Return on tangible common equity reconciliation
Return on common equity (GAAP)		11.02	%		9.31	%		6.80	%		9.32	%		14.26	%		9.08	%		14.55	%
Merger-related and other charges, net of tax		0.19			0.79			1.03			1.42			0.22			0.67			0.22
Return on common equity - operating		11.21			10.10			7.83			10.74			14.48			9.75			14.77
Effect of goodwill and other intangibles		4.39			4.10			3.17			3.19			3.75			3.89			3.78
Return on tangible common equity - operating		15.60	%		14.20	%		11.00	%		13.93	%		18.23	%		13.64	%		18.55	%

Return on assets reconciliation
Return on assets (GAAP)		1.32	%		1.08	%		0.78	%		0.96	%		1.48	%		1.06	%		1.52	%
Merger-related and other charges, net of tax		0.02			0.09			0.11			0.14			0.02			0.07			0.02
Return on assets - operating		1.34	%		1.17	%		0.89	%		1.10	%		1.50	%		1.13	%		1.54	%

Return on assets to return on assets- pre-tax pre-provision reconciliation
Return on assets (GAAP)		1.32	%		1.08	%		0.78	%		0.96	%		1.48	%		1.06	%		1.52	%
Income tax expense		0.37			0.32			0.20			0.26			0.45			0.30			0.45
(Release of) provision for credit losses		0.25			0.09			0.39			(0.01	)		(0.23	)		0.24			(0.26	)
Return on assets - pre-tax, pre-provision		1.94			1.49			1.37			1.21			1.70			1.60			1.71
Merger-related and other charges		0.03			0.11			0.15			0.19			0.03			0.10			0.03
Return on assets - pre-tax pre-provision, excluding merger-related and other charges		1.97	%		1.60	%		1.52	%		1.40	%		1.73	%		1.70	%		1.74	%

Efficiency ratio reconciliation
Efficiency ratio (GAAP)		48.41	%		56.58	%		57.43	%		62.12	%		53.11	%		53.94	%		53.72	%
Merger-related and other charges		(0.75	)		(3.35	)		(4.34	)		(5.64	)		(0.78	)		(2.74	)		(0.75	)
Efficiency ratio - operating		47.66	%		53.23	%		53.09	%		56.48	%		52.33	%		51.20	%		52.97	%

Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)		11.12	%		10.95	%		11.06	%		10.61	%		10.89	%		11.12	%		10.89	%
Effect of goodwill and other intangibles		—			(2.96	)		(2.94	)		(2.06	)		(1.87	)		—			(1.87	)
Effect of preferred equity		(3.42	)		(0.40	)		(0.40	)		(0.46	)		(0.49	)		(3.42	)		(0.49	)
Tangible common equity to tangible assets		7.70	%		7.59	%		7.72	%		8.09	%		8.53	%		7.70	%		8.53	%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
		2022						2021			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	$	2,700	$	2,681	$	2,638	$	2,322	$	2,149	$	19		$	551
Income producing commercial RE		3,299		3,273		3,328		2,601		2,542		26			757
Commercial & industrial		2,236		2,243		2,302		1,822		1,729		(7	)		507
Paycheck protection program		2		10		34		88		150		(8	)		(148	)
Commercial construction		1,514		1,514		1,482		1,015		947		—			567
Equipment financing		1,281		1,211		1,148		1,083		1,017		70			264
Total commercial		11,032		10,932		10,932		8,931		8,534		100			2,498
Residential mortgage		2,149		1,997		1,826		1,638		1,533		152			616
Home equity lines of credit		832		801		778		694		661		31			171
Residential construction		423		381		368		359		321		42			102
Manufactured housing		301		287		269		—		—		14			301
Consumer		145		143		143		138		142		2			3
Total loans	$	14,882	$	14,541	$	14,316	$	11,760	$	11,191	$	341		$	3,691

LOANS BY MARKET
Georgia	$	4,003	$	3,960	$	3,879	$	3,778	$	3,732	$	43		$	271
South Carolina		2,516		2,377		2,323		2,235		2,145		139			371
North Carolina		2,117		2,006		1,879		1,895		1,427		111			690
Tennessee		2,536		2,621		2,661		373		383		(85	)		2,153
Florida		1,259		1,235		1,208		1,148		1,113		24			146
Commercial Banking Solutions		2,451		2,342		2,366		2,331		2,391		109			60
Total loans	$	14,882	$	14,541	$	14,316	$	11,760	$	11,191	$	341		$	3,691

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
	2022
	Third Quarter		Second Quarter		First Quarter
NONACCRUAL LOANS
Owner occupied RE	$	877	$	1,876	$	4,590
Income producing RE		2,663		7,074		7,220
Commercial & industrial		11,108		4,548		6,227
Commercial construction		150		208		401
Equipment financing		3,198		3,249		2,540
Total commercial		17,996		16,955		20,978
Residential mortgage		10,424		12,228		13,024
Home equity lines of credit		1,151		933		1,183
Residential construction		104		198		212
Manufactured housing		4,187		2,804		2,507
Consumer		17		25		40
Total nonaccrual loans held for investment		33,879		33,143		37,944
Nonaccrual loans held for sale		316		317		2,033
OREO and repossessed assets		1,316		968		839
Total NPAs	$	35,511	$	34,428	$	40,816

		2022
	Third Quarter					Second Quarter					First Quarter
(in thousands)	Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾		Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾		Net Charge-Offs			Net Charge-Offs to Average Loans⁽¹⁾
NET CHARGE-OFFS (RECOVERIES) BY CATEGORY
Owner occupied RE	$	(90	)	(0.01	)%	$	(1,496	)	(0.23	)%	$	(45	)	(0.01	)%
Income producing RE		176		0.02			(116	)	(0.01	)		(290	)	(0.04	)
Commercial & industrial		(744	)	(0.13	)		(302	)	(0.05	)		2,929		0.51
Commercial construction		10		—			(144	)	(0.04	)		(373	)	(0.10	)
Equipment financing		1,121		0.36			907		0.31			267		0.10
Total commercial		473		0.02			(1,151	)	(0.04	)		2,488		0.09
Residential mortgage		(66	)	(0.01	)		(51	)	(0.01	)		(97	)	(0.02	)
Home equity lines of credit		(102	)	(0.05	)		(346	)	(0.18	)		(81	)	(0.04	)
Residential construction		(109	)	(0.11	)		(76	)	(0.08	)		(23	)	(0.03	)
Manufactured housing		220		0.30			135		0.20			164		0.25
Consumer		718		1.98			420		1.18			527		1.48
Total	$	1,134		0.03		$	(1,069	)	(0.03	)	$	2,978		0.08

⁽¹⁾ Annualized.

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



(in thousands, except share and per share data)	September 30, 2022			December 31, 2021
ASSETS
Cash and due from banks	$	222,524		$	144,244
Interest-bearing deposits in banks		216,496			2,147,266
Federal funds and other short-term investments		45,000			27,000
Cash and cash equivalents		484,020			2,318,510
Debt securities available-for-sale		3,862,886			4,496,824
Debt securities held-to-maturity (fair value $2,241,160 and $1,148,804, respectively)		2,676,405			1,156,098
Loans held for sale		21,967			44,109
Loans and leases held for investment		14,882,484			11,760,346
Less allowance for credit losses - loans and leases		(148,502	)		(102,532	)
Loans and leases, net		14,733,982			11,657,814
Premises and equipment, net		288,597			245,296
Bank owned life insurance		300,365			217,713
Goodwill and other intangible assets, net		780,868			472,407
Other assets		538,765			338,000
Total assets	$	23,687,855		$	20,946,771
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	8,198,129		$	6,956,981
NOW and interest-bearing demand		4,208,731			4,252,209
Money market		4,638,509			4,183,354
Savings		1,508,557			1,215,779
Time		1,622,608			1,442,498
Brokered		144,608			190,358
Total deposits		20,321,142			18,241,179
Long-term debt		324,515			247,360
Accrued expenses and other liabilities		407,488			235,987
Total liabilities		21,053,145			18,724,526
Shareholders' equity:
Preferred stock; $1 par value; 10,000,000 shares authorized; 4,000 shares Series I issued and outstanding, $25,000 per share liquidation preference		96,422			96,422
Common stock, $1 par value; 200,000,000 shares authorized, 106,162,861 and 89,349,826 shares issued and outstanding, respectively		106,163			89,350
Common stock issuable; 596,365 and 595,705 shares, respectively		11,966			11,288
Capital surplus		2,304,514			1,721,007
Retained earnings		452,788			330,654
Accumulated other comprehensive loss		(337,143	)		(26,476	)
Total shareholders' equity		2,634,710			2,222,245
Total liabilities and shareholders' equity	$	23,687,855		$	20,946,771

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)		2022		2021			2022			2021
Interest revenue:
Loans, including fees	$	174,065	$	128,477		$	476,072		$	382,261
Investment securities, including tax exempt of $2,568, $2,280, $7,762 and $6,685, respectively		36,953		18,540			91,043			51,530
Deposits in banks and short-term investments		2,869		658			5,209			1,235
Total interest revenue		213,887		147,675			572,324			435,026

Interest expense:
Deposits:
NOW and interest-bearing demand		3,992		1,290			7,624			4,158
Money market		4,503		1,119			7,030			4,278
Savings		178		55			337			157
Time		1,207		678			2,322			3,388
Deposits		9,880		3,142			17,313			11,981
Short-term borrowings		27		—			27			2
Long-term debt		4,206		3,494			12,515			11,564
Total interest expense		14,113		6,636			29,855			23,547
Net interest revenue		199,774		141,039			542,469			411,479
Provision for (release of) credit losses		15,392		(11,034	)		44,082			(36,903	)
Net interest revenue after provision for credit losses		184,382		152,073			498,387			448,382

Noninterest income:
Service charges and fees		9,569		9,350			28,644			25,255
Mortgage loan gains and other related fees		6,297		13,828			29,420			47,536
Wealth management fees		5,879		5,554			17,759			12,881
Gains from sales of other loans, net		2,228		2,353			9,226			7,506
Lending and loan servicing fees		2,946		2,825			7,518			7,070
Securities gains (losses), net		—		—			(3,688	)		41
Other		5,003		6,185			15,474			20,352
Total noninterest income		31,922		40,095			104,353			120,641
Total revenue		216,304		192,168			602,740			569,023

Noninterest expenses:
Salaries and employee benefits		67,823		60,458			208,062			180,457
Communications and equipment		8,795		7,368			27,718			21,979
Occupancy		9,138		7,096			27,381			21,130
Advertising and public relations		2,544		1,458			6,332			4,150
Postage, printing and supplies		2,190		1,731			6,308			5,171
Professional fees		4,821		5,347			14,670			14,509
Lending and loan servicing expense		2,333		2,450			7,746			8,508
Outside services - electronic banking		3,159		2,308			8,629			6,811
FDIC assessments and other regulatory charges		2,356		1,723			6,796			5,520
Amortization of intangibles		1,678		1,028			5,207			2,942
Merger-related and other charges		1,746		1,437			17,905			4,058
Other		6,172		4,345			16,066			12,248
Total noninterest expenses		112,755		96,749			352,820			287,483
Income before income taxes		103,549		95,419			249,920			281,540
Income tax expense		22,388		21,603			53,898			63,758
Net income		81,161		73,816			196,022			217,782
Preferred stock dividends		1,719		1,719			5,157			5,157
Earnings allocated to participating securities		407		448			1,007			1,342
Net income available to common shareholders	$	79,035	$	71,649		$	189,858		$	211,283

Net income per common share:
Basic	$	0.74	$	0.82		$	1.78		$	2.42
Diluted		0.74		0.82			1.78			2.42
Weighted average common shares outstanding:
Basic		106,687		87,211			106,616			87,274
Diluted		106,800		87,355			106,732			87,413

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

		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⁾	$	14,658,397		$	174,168	4.71	%	$	11,204,653		$	128,185	4.54	%
Taxable securities⁽³⁾		6,539,615			34,385	2.10			4,738,860			16,260	1.37
Tax-exempt securities (FTE) ⁽¹⁾⁽³⁾		493,115			3,449	2.80			383,196			3,061	3.20
Federal funds sold and other interest-earning assets		614,755			3,106	2.00			1,751,222			1,185	0.27
Total interest-earning assets (FTE)		22,305,882			215,108	3.83			18,077,931			148,691	3.27

Noninterest-earning assets:
Allowance for credit losses		(138,907	)						(111,952	)
Cash and due from banks		231,376							124,360
Premises and equipment		290,768							228,556
Other assets ⁽³⁾		1,261,236							1,002,810
Total assets	$	23,950,355						$	19,321,705

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	4,335,619			3,992	0.37		$	3,594,670			1,290	0.14
Money market		4,849,705			4,503	0.37			4,010,720			1,119	0.11
Savings		1,515,350			178	0.05			1,120,843			55	0.02
Time		1,635,580			984	0.24			1,466,821			609	0.16
Brokered time deposits		51,530			223	1.72			63,917			69	0.43
Total interest-bearing deposits		12,387,784			9,880	0.32			10,256,971			3,142	0.12
Federal funds purchased and other borrowings		3,442			27	3.11			—			—	—
Federal Home Loan Bank advances		—			—	—			54			—	—
Long-term debt		324,444			4,206	5.14			257,139			3,494	5.39
Total borrowed funds		327,886			4,233	5.12			257,193			3,494	5.39
Total interest-bearing liabilities		12,715,670			14,113	0.44			10,514,164			6,636	0.25

Noninterest-bearing liabilities:
Noninterest-bearing deposits		8,176,987							6,379,969
Other liabilities		349,647							308,551
Total liabilities		21,242,304							17,202,684
Shareholders' equity		2,708,051							2,119,021
Total liabilities and shareholders' equity	$	23,950,355						$	19,321,705

Net interest revenue (FTE)				$	200,995						$	142,055
Net interest-rate spread (FTE)						3.39	%						3.02	%
Net interest margin (FTE) ⁽⁴⁾						3.57	%						3.12	%

_⁽¹⁾	_{Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.}
_⁽²⁾	_{Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.}
_⁽³⁾	_{Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $318 million in 2022 and pretax unrealized gains of $39.6 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.}

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

		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⁾	$	14,426,470		$	475,989	4.41	%	$	11,417,285		$	380,765	4.46	%
Taxable securities ⁽³⁾		6,274,230			83,281	1.77			4,206,099			44,845	1.42
Tax-exempt securities (FTE)⁽¹⁾⁽³⁾		498,177			10,425	2.79			381,323			8,979	3.14
Federal funds sold and other interest-earning assets		1,271,287			6,192	0.65			1,468,487			3,462	0.31
Total interest-earning assets (FTE)		22,470,164			575,887	3.43			17,473,194			438,051	3.35

Non-interest-earning assets:
Allowance for loan losses		(129,278	)						(127,793	)
Cash and due from banks		200,463							138,973
Premises and equipment		284,850							225,021
Other assets ⁽³⁾		1,308,647							1,007,669
Total assets	$	24,134,846						$	18,717,064

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand	$	4,520,079			7,624	0.23		$	3,452,206			4,158	0.16
Money market		4,992,357			7,030	0.19			3,853,907			4,278	0.15
Savings		1,483,169			337	0.03			1,064,045			157	0.02
Time		1,688,250			2,009	0.16			1,551,934			3,096	0.27
Brokered time deposits		65,133			313	0.64			67,794			292	0.58
Total interest-bearing deposits		12,748,988			17,313	0.18			9,989,886			11,981	0.16
Federal funds purchased and other borrowings		1,383			27	2.61			41			—	—
Federal Home Loan Bank advances		—			—	—			1,117			2	0.24
Long-term debt		322,600			12,515	5.19			286,347			11,564	5.40
Total borrowed funds		323,983			12,542	5.18			287,505			11,566	5.38
Total interest-bearing liabilities		13,072,971			29,855	0.31			10,277,391			23,547	0.31

Noninterest-bearing liabilities:
Noninterest-bearing deposits		7,958,392							6,059,680
Other liabilities		375,182							311,749
Total liabilities		21,406,545							16,648,820
Shareholders' equity		2,728,301							2,068,244
Total liabilities and shareholders' equity	$	24,134,846						$	18,717,064

Net interest revenue (FTE)				$	546,032						$	414,504
Net interest-rate spread (FTE)						3.12	%						3.04	%
Net interest margin (FTE) ⁽⁴⁾						3.25	%						3.17	%

_⁽¹⁾	_{Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.}
_⁽²⁾	_{Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.}
_⁽³⁾	_{Unrealized gains and losses on securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $221 million in 2022 and pretax unrealized gains of $40.3 million in 2021, 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. As of September 30, 2022, United had $23.7 billion in assets and 193 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary. The company, known as “The Bank That SERVICE Built,” has been recognized nationally for delivering award-winning service. 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. 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 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. 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. 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, which excludes merger-related and other charges that are not considered part of recurring operations, includes performance measures 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

United Community Banks, Inc. Reports Third Quarter Results

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