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United Community Banks, Inc. Reports Second Quarter Results

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United Community Banks, Inc. (NASDAQ: UCBI) reported Q2 2024 net income of $66.6 million and pre-tax, pre-provision income of $98.2 million. Diluted EPS rose to $0.54, a 2% YoY increase. On an operating basis, EPS was $0.58, up 5% YoY. The rise was driven by higher net interest income and a lower provision for credit losses. Return on assets was 0.97% and return on equity was 7.53%.

Tangible common equity to tangible assets rose to 8.78%. Net interest margin increased by 17 basis points to 3.37%. Net charge-offs were $11.6 million or 0.26% of average loans. Nonperforming assets were 0.43% of total assets.

United plans to sell its investment in FinTrust Capital Advisors by Q3 2024 to focus on Private Banking, Retail, and Trust businesses. CEO Lynn Harton cited economic and election uncertainties affecting loan growth but expressed confidence in United’s strategic direction and shareholder value delivery.

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Strong Margin Expansion Drives Growth in Net Income

GREENVILLE, S.C., July 24, 2024 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the 2024 second quarter was $66.6 million and pre-tax, pre-provision income was $98.2 million. Diluted earnings per share of $0.54 for the quarter represented an increase of $0.01, or 2%, from the second quarter a year ago and an increase of $0.03, or 6%, from the first quarter of 2024.

On an operating basis, United’s diluted earnings per share of $0.58 was up 5% from the year-ago quarter. The primary drivers of the increased earnings per share year-over-year were higher net interest income and a lower provision for credit losses. The linked-quarter increase in earnings per share was primarily driven by higher net interest income. United’s return on assets was 0.97%, or 1.04% on an operating basis. Return on equity was 7.53% and return on tangible common equity was 11.68%. On a pre-tax, pre-provision basis, operating return on assets was 1.54% for the quarter. At quarter end, tangible common equity to tangible assets was 8.78%, up 29 basis points from the first quarter of 2024.

Chairman and CEO Lynn Harton stated, “Our second quarter results showed solid improvement, driven by healthy net interest margin expansion and disciplined expense control. We achieved these results by remaining sharply focused on loan and deposit pricing even if that meant accepting slower growth in the near term. Compared with the first quarter, we saw decreases in both loans and deposits, yet our pricing discipline led to a $9.55 million increase in net interest income. We expect loan growth to be weaker in the near term as customers appear to be taking a conservative approach to economic and election uncertainty.” Harton continued, “On the strategic front, after an evaluation of our entire wealth management business, we made the decision to sell our investment in our Registered Investment Advisor, FinTrust Capital Advisors, LLC (FinTrust), while setting a more aggressive growth course for our Private Banking, Retail, and Trust businesses. We view the Private Banking, Retail and Trust as more attractive in the medium to long term, and decided to focus our Wealth resources in these businesses. We expect the FinTrust transaction to close in the third quarter.”

United’s net interest margin increased by 17 basis points to 3.37% from the first quarter. The average yield on United’s interest-earning assets was up 20 basis points to 5.59%, while its cost of deposits increased only three basis points to 2.35%, leading to expansion in the net interest margin. Net charge-offs were $11.6 million or 0.26% of average loans during the quarter, down two basis points compared to the first quarter of 2024, and NPAs were 43 basis points relative to total assets, up four basis points from the previous quarter.

Mr. Harton concluded, “Our second quarter results give me tremendous confidence that 2024 will be a great year for United. We remain focused on being a great partner for our clients and communities; growing our business and remaining disciplined in the face of any challenges that lie ahead. We are steadfast in our commitment to service as well as delivering exceptional value to our shareholders.”

Second Quarter 2024 Financial Highlights:

  • Net income of $66.6 million and pre-tax, pre-provision income of $98.2 million
  • EPS up 2% compared to second quarter 2023 on a GAAP basis and up 5% on an operating basis; compared to first quarter 2024, EPS up 6% on a GAAP basis and 12% on an operating basis
  • Return on assets of 0.97%, or 1.04% on an operating basis
  • Pre-tax, pre-provision return on assets of 1.54% on an operating basis
  • Return on common equity of 7.53%
  • Return on tangible common equity of 11.68% on an operating basis
  • A provision for credit losses of $12.2 million, which increased the allowance for credit losses-loans to 1.17% of loans from 1.15% in the first quarter.
  • Loan production of $989 million, up from $881 million in the first quarter
  • Customer deposits were down $339 million for the quarter, as seasonal public funds deposit outflow combined with more conservative public funds deposit pricing
  • Net interest margin of 3.37% increased by 17 basis points from the first quarter mostly due to focus on pricing discipline on loans and deposits
  • Mortgage closings of $215 million compared to $263 million a year ago; mortgage rate locks of $295 million compared to $305 million a year ago
  • Noninterest income was down $3.0 million on a linked quarter basis, primarily driven by the absence of a $2.4 million gain in the first quarter from terminating an office space lease
  • Noninterest expenses increased by $2.0 million compared to the first quarter on a GAAP basis and were flat on an operating basis
  • Efficiency ratio of 59.7%, or 57.1% on an operating basis
  • Net charge-offs of $11.6 million, or 26 basis points as a percent of average loans, down 2 basis points from the net charge-offs level experienced in the first quarter
  • Nonperforming assets of 0.43% of total assets, up four basis points compared to March 31, 2024
  • Quarterly common shareholder dividend of $0.23 per share declared during the quarter, unchanged year-over-year
  • We reached an agreement to sell FinTrust and recognized a $5.1 million loss related to the sale in the form of a goodwill impairment charge. The transaction is expected to close in the third quarter.

Conference Call
United will hold a conference call on Wednesday, July 24, 2024 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/10190532/fcfa86e478. 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)  
   2024   2023  Second
Quarter
2024 -
2023
Change
 For the Six Months Ended June 30, YTD
2024 -
2023
Change
  Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
   2024   2023  
INCOME SUMMARY                  
Interest revenue $346,965  $336,728  $338,698  $323,147  $295,775    $683,693  $575,262   
Interest expense  138,265   137,579   135,245   120,591   95,489     275,844   163,506   
Net interest revenue  208,700   199,149   203,453   202,556   200,286  4%  407,849   411,756  (1)%
Provision for credit losses  12,235   12,899   14,626   30,268   22,753     25,134   44,536   
Noninterest income  36,556   39,587   (23,090)  31,977   36,387     76,143   66,596  14 
Total revenue  233,021   225,837   165,737   204,265   213,920  9   458,858   433,816  6 
Noninterest expenses  147,044   145,002   154,587   144,474   132,407  11   292,046   272,212  7 
Income before income tax expense  85,977   80,835   11,150   59,791   81,513  5   166,812   161,604  3 
Income tax expense  19,362   18,204   (2,940)  11,925   18,225  6   37,566   36,016  4 
Net income  66,615   62,631   14,090   47,866   63,288  5   129,246   125,588  3 
Non-operating items  6,493   2,187   67,450   9,168   3,645     8,680   12,276   
Income tax benefit of non-operating items  (1,462)  (493)  (16,714)  (2,000)  (820)    (1,955)  (2,775)  
Net income - operating (1) $71,646  $64,325  $64,826  $55,034  $66,113  8  $135,971  $135,089  1 
Pre-tax pre-provision income (5) $98,212  $93,734  $25,776  $90,059  $104,266  (6) $191,946  $206,140  (7)
PERFORMANCE MEASURES                  
Per common share:                  
Diluted net income - GAAP $0.54  $0.51  $0.11  $0.39  $0.53  2  $1.05  $1.05   
Diluted net income - operating (1)  0.58   0.52   0.53   0.45   0.55  5   1.10   1.13  (3)
Cash dividends declared  0.23   0.23   0.23   0.23   0.23     0.46   0.46   
Book value  27.18   26.83   26.52   25.87   25.98  5   27.18   25.98  5 
Tangible book value (3)  19.13   18.71   18.39   17.70   17.83  7   19.13   17.83  7 
Key performance ratios:                  
Return on common equity - GAAP (2)(4)  7.53%  7.14%  1.44%  5.32%  7.47%    7.34%  7.41%  
Return on common equity - operating (1)(2)(4)  8.12   7.34   7.27   6.14   7.82     7.73   7.98   
Return on tangible common equity - operating (1)(2)(3)(4)  11.68   10.68   10.58   9.03   11.35     11.18   11.49   
Return on assets - GAAP (4)  0.97   0.90   0.18   0.68   0.95     0.94   0.95   
Return on assets - operating (1)(4)  1.04   0.93   0.92   0.79   1.00     0.99   1.03   
Return on assets - pre-tax pre-provision - operating(1)(4)(5)  1.54   1.40   1.33   1.44   1.65     1.47   1.68   
Net interest margin (fully taxable equivalent) (4)  3.37   3.20   3.19   3.24   3.37     3.28   3.49   
Efficiency ratio - GAAP  59.70   60.47   66.33   61.32   55.71     60.08   56.46   
Efficiency ratio - operating (1)  57.06   59.15   59.57   57.43   54.17     58.08   53.92   
Equity to total assets  12.35   12.06   11.95   11.85   11.89     12.35   11.89   
Tangible common equity to tangible assets (3)  8.78   8.49   8.36   8.18   8.21     8.78   8.21   
ASSET QUALITY                  
Nonperforming assets ("NPAs") $116,722  $107,230  $92,877  $90,883  $103,737  13  $116,722  $103,737  13 
Allowance for credit losses - loans  213,022   210,934   208,071   201,557   190,705  12   213,022   190,705  12 
Allowance for credit losses - total  224,740   224,119   224,128   219,624   212,277  6   224,740   212,277  6 
Net charge-offs  11,614   12,908   10,122   26,638   8,399     24,522   15,483   
Allowance for credit losses - loans to loans  1.17%  1.15%  1.14%  1.11%  1.10%    1.17%  1.10%  
Allowance for credit losses - total to loans  1.23   1.22   1.22   1.21   1.22     1.23   1.22   
Net charge-offs to average loans (4)  0.26   0.28   0.22   0.59   0.20     0.27   0.18   
NPAs to total assets  0.43   0.39   0.34   0.34   0.40     0.43   0.40   
AT PERIOD END ($ in millions)                  
Loans $18,211  $18,375  $18,319  $18,203  $17,395  5  $18,211  $17,395  5 
Investment securities  6,038   5,859   5,822   5,701   5,914  2   6,038   5,914  2 
Total assets  27,057   27,365   27,297   26,869   26,120  4   27,057   26,120  4 
Deposits  22,982   23,332   23,311   22,858   22,252  3   22,982   22,252  3 
Shareholders’ equity  3,343   3,300   3,262   3,184   3,106  8   3,343   3,106  8 
Common shares outstanding (thousands)  119,175   119,137   119,010   118,976   115,266  3   119,175   115,266  3 

(1) Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on next page. (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
(in thousands, except per share data)
   2024   2023  For the Six Months Ended June 30,
  Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
  2024   2023 
               
Noninterest expense reconciliation              
Noninterest expenses (GAAP) $147,044  $145,002  $154,587  $144,474  $132,407  $292,046  $272,212 
Loss on FinTrust (goodwill impairment)  (5,100)              (5,100)   
FDIC special assessment  764   (2,500)  (9,995)        (1,736)   
Merger-related and other charges  (2,157)  (2,087)  (5,766)  (9,168)  (3,645)  (4,244)  (12,276)
Noninterest expenses - operating $140,551  $140,415  $138,826  $135,306  $128,762  $280,966  $259,936 
               
Net income to operating income reconciliation              
Net income (GAAP) $66,615  $62,631  $14,090  $47,866  $63,288  $129,246  $125,588 
Bond portfolio restructuring loss        51,689             
Gain on lease termination     (2,400)           (2,400)   
Loss on FinTrust (goodwill impairment)  5,100               5,100    
FDIC special assessment  (764)  2,500   9,995         1,736    
Merger-related and other charges  2,157   2,087   5,766   9,168   3,645   4,244   12,276 
Income tax benefit of non-operating items  (1,462)  (493)  (16,714)  (2,000)  (820)  (1,955)  (2,775)
Net income - operating $71,646  $64,325  $64,826  $55,034  $66,113  $135,971  $135,089 
               
Net income to pre-tax pre-provision income reconciliation              
Net income (GAAP) $66,615  $62,631  $14,090  $47,866  $63,288  $129,246  $125,588 
Income tax expense  19,362   18,204   (2,940)  11,925   18,225   37,566   36,016 
Provision for credit losses  12,235   12,899   14,626   30,268   22,753   25,134   44,536 
Pre-tax pre-provision income $98,212  $93,734  $25,776  $90,059  $104,266  $191,946  $206,140 
               
Diluted income per common share reconciliation              
Diluted income per common share (GAAP) $0.54  $0.51  $0.11  $0.39  $0.53  $1.05  $1.05 
Bond portfolio restructuring loss        0.32             
Gain on lease termination     (0.02)           (0.02)   
Loss on FinTrust (goodwill impairment)  0.03               0.03    
FDIC special assessment     0.02   0.06         0.02    
Merger-related and other charges  0.01   0.01   0.04   0.06   0.02   0.02   0.08 
Diluted income per common share - operating $0.58  $0.52  $0.53  $0.45  $0.55  $1.10  $1.13 
               
Book value per common share reconciliation              
Book value per common share (GAAP) $27.18  $26.83  $26.52  $25.87  $25.98  $27.18  $25.98 
Effect of goodwill and other intangibles  (8.05)  (8.12)  (8.13)  (8.17)  (8.15)  (8.05)  (8.15)
Tangible book value per common share $19.13  $18.71  $18.39  $17.70  $17.83  $19.13  $17.83 
               
Return on tangible common equity reconciliation              
Return on common equity (GAAP)  7.53%  7.14%  1.44%  5.32%  7.47%  7.34%  7.41%
Bond portfolio restructuring loss        4.47             
Gain on lease termination     (0.22)           (0.11)   
Loss on FinTrust (goodwill impairment)  0.46               0.23    
FDIC special assessment  (0.07)  0.23   0.86         0.08    
Merger-related and other charges  0.20   0.19   0.50   0.82   0.35   0.19   0.57 
Return on common equity - operating  8.12   7.34   7.27   6.14   7.82   7.73   7.98 
Effect of goodwill and other intangibles  3.56   3.34   3.31   2.89   3.53   3.45   3.51 
Return on tangible common equity - operating  11.68%  10.68%  10.58%  9.03%  11.35%  11.18%  11.49%
               
Return on assets reconciliation              
Return on assets (GAAP)  0.97%  0.90%  0.18%  0.68%  0.95%  0.94%  0.95%
Bond portfolio restructuring loss        0.57             
Gain on lease termination     (0.03)           (0.01)   
Loss on FinTrust (goodwill impairment)  0.06               0.03    
FDIC special assessment  (0.01)  0.03   0.11         0.01    
Merger-related and other charges  0.02   0.03   0.06   0.11   0.05   0.02   0.08 
Return on assets - operating  1.04%  0.93%  0.92%  0.79%  1.00%  0.99%  1.03%
               
Return on assets to return on assets- pre-tax pre-provision reconciliation              
Return on assets (GAAP)  0.97%  0.90%  0.18%  0.68%  0.95%  0.94%  0.95%
Income tax (benefit) expense  0.29   0.27   (0.04)  0.18   0.29   0.28   0.28 
Provision for credit losses  0.18   0.19   0.21   0.45   0.35   0.19   0.35 
Bond portfolio restructuring loss        0.75             
Gain on lease termination     (0.04)           (0.02)   
Loss on FinTrust (goodwill impairment)  0.08               0.04    
FDIC special assessment  (0.01)  0.04   0.15         0.01    
Merger-related and other charges  0.03   0.04   0.08   0.13   0.06   0.03   0.10 
Return on assets - pre-tax pre-provision - operating  1.54%  1.40%  1.33%  1.44%  1.65%  1.47%  1.68%
               
Efficiency ratio reconciliation              
Efficiency ratio (GAAP)  59.70%  60.47%  66.33%  61.32%  55.71%  60.08%  56.46%
Gain on lease termination     0.60            0.29    
Loss on FinTrust (goodwill impairment)  (2.07)              (1.05)   
FDIC special assessment  0.31   (1.05)  (4.29)        (0.36)   
Merger-related and other charges  (0.88)  (0.87)  (2.47)  (3.89)  (1.54)  (0.88)  (2.54)
Efficiency ratio - operating  57.06%  59.15%  59.57%  57.43%  54.17%  58.08%  53.92%
               
Tangible common equity to tangible assets reconciliation              
Equity to total assets (GAAP)  12.35%  12.06%  11.95%  11.85%  11.89%  12.35%  11.89%
Effect of goodwill and other intangibles  (3.24)  (3.25)  (3.27)  (3.33)  (3.31)  (3.24)  (3.31)
Effect of preferred equity  (0.33)  (0.32)  (0.32)  (0.34)  (0.37)  (0.33)  (0.37)
Tangible common equity to tangible assets  8.78%  8.49%  8.36%  8.18%  8.21%  8.78%  8.21%


UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
  2024  2023 Linked
Quarter
Change

 Year over
Year
Change

(in millions)Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
  
LOANS BY CATEGORY             
Owner occupied commercial RE$3,297  $3,310  $3,264  $3,279  $3,111  $(13) $186 
Income producing commercial RE 4,058   4,206   4,264   4,130   3,670   (148)  388 
Commercial & industrial 2,299   2,405   2,411   2,504   2,550   (106)  (251)
Commercial construction 2,014   1,936   1,860   1,850   1,739   78   275 
Equipment financing 1,581   1,544   1,541   1,534   1,510   37   71 
Total commercial 13,249   13,401   13,340   13,297   12,580   (152)  669 
Residential mortgage 3,266   3,240   3,199   3,043   2,905   26   361 
Home equity 985   969   959   941   927   16   58 
Residential construction 211   257   302   399   463   (46)  (252)
Manufactured housing 321   328   336   343   340   (7)  (19)
Consumer 183   180   181   180   180   3   3 
Fair value hedge basis adjustment (4)     2         (4)  (4)
Total loans$18,211  $18,375  $18,319  $18,203  $17,395  $(164) $816 
              
LOANS BY MARKET             
Georgia$4,411  $4,356  $4,357  $4,321  $4,281  $55  $130 
South Carolina 2,779   2,804   2,780   2,801   2,750   (25)  29 
North Carolina 2,591   2,566   2,492   2,445   2,355   25   236 
Tennessee 2,144   2,209   2,244   2,314   2,387   (65)  (243)
Florida 2,407   2,443   2,442   2,318   1,708   (36)  699 
Alabama 1,021   1,068   1,082   1,070   1,062   (47)  (41)
Commercial Banking Solutions 2,858   2,929   2,922   2,934   2,852   (71)  6 
Total loans$18,211  $18,375  $18,319  $18,203  $17,395  $(164) $816 


UNITED COMMUNITY BANKS, INC. 
Financial Highlights 
Credit Quality 
(in thousands) 
   2024  2023  
  Second
Quarter
 First
Quarter
 Fourth
Quarter
 
NONACCRUAL LOANS       
Owner occupied RE $4,820  $2,310  $3,094  
Income producing RE  34,285   29,186   30,128  
Commercial & industrial  17,335   20,134   13,467  
Commercial construction  6,854   1,862   1,878  
Equipment financing  8,341   8,829   8,505  
Total commercial  71,635   62,321   57,072  
Residential mortgage  18,473   16,569   13,944  
Home equity  3,779   4,984   3,772  
Residential construction  163   1,244   944  
Manufactured housing  20,356   19,797   15,861  
Consumer  72   54   94  
Total nonaccrual loans  114,478   104,969   91,687  
OREO and repossessed assets  2,244   2,261   1,190  
Total NPAs $116,722  $107,230  $92,877  


   2024   2023 
  Second Quarter First Quarter Fourth Quarter
(in thousands) Net Charge-
Offs
 Net Charge-
Offs to
Average
Loans
(1)
 Net Charge-
Offs
 Net Charge-
Offs to
Average
Loans
(1)
 Net Charge-
Offs
 Net Charge-
Offs to
Average
Loans
(1)
NET CHARGE-OFFS (RECOVERIES) BY CATEGORY            
Owner occupied RE $163  0.02% $202  0.02% $35  %
Income producing RE  2,968  0.29   205  0.02   (562) (0.05)
Commercial & industrial  1,281  0.22   3,906  0.65   547  0.09 
Commercial construction  (48) (0.01)  20     33  0.01 
Equipment financing  5,502  1.42   6,362  1.66   7,926  2.05 
Total commercial  9,866  0.30   10,695  0.32   7,979  0.24 
Residential mortgage  (107) (0.01)  (16)    12   
Home equity  (27) (0.01)  (54) (0.02)  (68) (0.03)
Residential construction  26  0.04   119  0.17   (13) (0.01)
Manufactured housing  1,150  1.43   1,569  1.90   1,444  1.69 
Consumer  706  1.57   595  1.33   768  1.70 
Total $11,614  0.26  $12,908  0.28  $10,122  0.22 
             
(1) Annualized.            


     
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
    
     
(in thousands, except share and per share data) June 30,
2024
 December 31,
2023
ASSETS    
Cash and due from banks $198,234  $200,781 
Interest-bearing deposits in banks  364,629   803,094 
Cash and cash equivalents  562,863   1,003,875 
Debt securities available-for-sale  3,604,769   3,331,084 
Debt securities held-to-maturity (fair value $2,004,427 and $2,095,620, respectively)  2,432,941   2,490,848 
Loans held for sale  49,315   33,008 
Loans and leases held for investment  18,211,193   18,318,755 
Allowance for credit losses - loans and leases  (213,022)  (208,071)
Loans and leases, net  17,998,171   18,110,684 
Premises and equipment, net  395,202   378,421 
Bank owned life insurance  344,162   345,371 
Goodwill and other intangible assets, net  978,645   990,087 
Other assets  691,133   613,873 
Total assets $27,057,201  $27,297,251 
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities:    
Deposits:    
Noninterest-bearing demand $6,291,124  $6,534,307 
NOW and interest-bearing demand  5,794,085   6,155,193 
Money market  6,077,129   5,600,587 
Savings  1,144,696   1,207,807 
Time  3,510,917   3,649,498 
Brokered  164,171   163,219 
Total deposits  22,982,122   23,310,611 
Long-term debt  324,887   324,823 
Accrued expenses and other liabilities  407,559   400,292 
Total liabilities  23,714,568   24,035,726 
Shareholders' equity:    
Preferred stock; $1 par value; 10,000,000 shares authorized; 3,662 shares Series I issued and
outstanding; $25,000 per share liquidation preference
  88,266   88,266 
Common stock, $1 par value; 200,000,000 shares authorized,
119,174,803 and 119,010,319 shares issued and outstanding, respectively
  119,175   119,010 
Common stock issuable; 568,985 and 620,108 shares, respectively  12,145   13,110 
Capital surplus  2,705,345   2,699,112 
Retained earnings  652,239   581,219 
Accumulated other comprehensive loss  (234,537)  (239,192)
Total shareholders' equity  3,342,633   3,261,525 
Total liabilities and shareholders' equity $27,057,201  $27,297,251 


 
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
 
  Three Months Ended
June 30,
 Six Months Ended
June 30,
(in thousands, except per share data)  2024  2023  2024  2023 
Interest revenue:        
Loans, including fees $291,595 $250,484 $575,578 $486,915 
Investment securities, including tax exempt of $1,699, $1,731, $3,420 and $3,841, respectively  50,063  41,060  96,499  81,046 
Deposits in banks and short-term investments  5,307  4,231  11,616  7,301 
Total interest revenue  346,965  295,775  683,693  575,262 
         
Interest expense:        
Deposits:        
NOW and interest-bearing demand  43,910  27,597  90,121  45,196 
Money market  53,531  33,480  104,009  58,546 
Savings  687  702  1,393  1,240 
Time  36,334  27,438  72,723  42,096 
Deposits  134,462  89,217  268,246  147,078 
Short-term borrowings  60  1,849  60  2,997 
Federal Home Loan Bank advances    649    5,761 
Long-term debt  3,743  3,774  7,538  7,670 
Total interest expense  138,265  95,489  275,844  163,506 
Net interest revenue  208,700  200,286  407,849  411,756 
Provision for credit losses  12,235  22,753  25,134  44,536 
Net interest revenue after provision for credit losses  196,465  177,533  382,715  367,220 
         
Noninterest income:        
Service charges and fees  10,620  9,777  19,884  18,476 
Mortgage loan gains and other related fees  6,799  6,584  14,310  11,105 
Wealth management fees  6,386  5,600  12,699  11,324 
Gains from sales of other loans  1,296  2,305  2,833  4,221 
Lending and loan servicing fees  3,328  2,978  7,538  6,994 
Securities losses, net        (1,644)
Other  8,127  9,143  18,879  16,120 
Total noninterest income  36,556  36,387  76,143  66,596 
Total revenue  233,021  213,920  458,858  433,816 
         
Noninterest expenses:        
Salaries and employee benefits  85,818  76,250  170,803  154,948 
Communications and equipment  11,988  10,744  23,908  20,752 
Occupancy  11,056  10,194  22,155  20,083 
Advertising and public relations  2,459  2,314  4,360  4,663 
Postage, printing and supplies  2,251  2,382  4,899  4,919 
Professional fees  6,044  6,592  12,032  12,664 
Lending and loan servicing expense  2,014  2,530  3,841  4,849 
Outside services - electronic banking  2,812  2,660  5,730  6,085 
FDIC assessments and other regulatory charges  4,467  4,142  12,033  8,143 
Amortization of intangibles  3,794  3,421  7,681  6,949 
Merger-related and other charges  2,157  3,645  4,244  12,276 
Other  12,184  7,533  20,360  15,881 
Total noninterest expenses  147,044  132,407  292,046  272,212 
Income before income taxes  85,977  81,513  166,812  161,604 
Income tax expense  19,362  18,225  37,566  36,016 
Net income  66,615  63,288  129,246  125,588 
Preferred stock dividends  1,573  1,719  3,146  3,438 
Earnings allocated to participating securities  368  342  713  680 
Net income available to common shareholders $64,674 $61,227 $125,387 $121,470 
         
Net income per common share:        
Basic $0.54 $0.53 $1.05 $1.05 
Diluted  0.54  0.53  1.05  1.05 
Weighted average common shares outstanding:        
Basic  119,726  115,774  119,694  115,614 
Diluted  119,785  115,869  119,763  115,795 


 
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
 
   2024   2023 
(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) $18,213,384  $291,378  6.43% $17,166,129  $250,472  5.85%
Taxable securities (3)  5,952,414   48,364  3.25   5,956,193   39,329  2.64 
Tax-exempt securities (FTE) (1)(3)  363,393   2,273  2.50   369,364   2,323  2.52 
Federal funds sold and other interest-earning assets  499,565   6,011  4.84   461,022   4,658  4.05 
Total interest-earning assets (FTE)  25,028,756   348,026  5.59   23,952,708   296,782  4.97 
             
Noninterest-earning assets:            
Allowance for credit losses  (215,104)      (181,769)    
Cash and due from banks  204,792       251,691     
Premises and equipment  392,325       345,771     
Other assets (3)  1,605,558       1,500,827     
Total assets $27,016,327      $25,869,228     
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $5,866,038   43,910  3.01  $4,879,591   27,597  2.27 
Money market  6,068,530   53,531  3.55   5,197,789   33,480  2.58 
Savings  1,160,708   687  0.24   1,306,394   702  0.22 
Time  3,544,327   35,695  4.05   2,976,482   22,471  3.03 
Brokered time deposits  50,323   639  5.11   423,536   4,967  4.70 
Total interest-bearing deposits  16,689,926   134,462  3.24   14,783,792   89,217  2.42 
Federal funds purchased and other borrowings  4,093   60  5.90   145,233   1,849  5.11 
Federal Home Loan Bank advances          50,989   649  5.11 
Long-term debt  324,870   3,743  4.63   324,740   3,774  4.66 
Total borrowed funds  328,963   3,803  4.65   520,962   6,272  4.83 
Total interest-bearing liabilities  17,018,889   138,265  3.27   15,304,754   95,489  2.50 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  6,283,487       7,072,760     
Other liabilities  400,974       385,324     
Total liabilities  23,703,350       22,762,838     
Shareholders' equity  3,312,977       3,106,390     
Total liabilities and shareholders' equity $27,016,327      $25,869,228     
             
Net interest revenue (FTE)   $209,761      $201,293   
Net interest-rate spread (FTE)     2.32%     2.47%
Net interest margin (FTE) (4)     3.37%     3.37%


(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 25% in 2024 and 26% in 2023, 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 AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $344 million in 2024 and $389 million in 2023 are included in other assets for purposes of this presentation.
(4)Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets.


 
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,
 
   2024   2023 
(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) $18,256,562  $575,338  6.34% $17,032,493  $487,002  5.77%
Taxable securities (3)  5,890,408   93,079  3.16   6,007,471   77,205  2.57 
Tax-exempt securities (FTE) (1)(3)  364,873   4,584  2.51   395,827   5,157  2.61 
Federal funds sold and other interest-earning assets  587,080   12,816  4.39   466,642   8,010  3.46 
Total interest-earning assets (FTE)  25,098,923   685,817  5.49   23,902,433   577,374  4.87 
             
Non-interest-earning assets:            
Allowance for loan losses  (214,050)      (174,716)    
Cash and due from banks  212,998       261,397     
Premises and equipment  389,173       337,499     
Other assets (3)  1,611,928       1,492,926     
Total assets $27,098,972      $25,819,539     
             
Liabilities and Shareholders' Equity:            
Interest-bearing liabilities:            
Interest-bearing deposits:            
NOW and interest-bearing demand $5,972,065   90,121  3.03  $4,690,798   45,196  1.94 
Money market  5,966,374   104,009  3.51   5,210,457   58,546  2.27 
Savings  1,176,768   1,393  0.24   1,361,357   1,240  0.18 
Time  3,570,407   71,639  4.03   2,664,269   34,784  2.63 
Brokered time deposits  50,333   1,084  4.33   316,470   7,312  4.66 
Total interest-bearing deposits  16,735,947   268,246  3.22   14,243,351   147,078  2.08 
Federal funds purchased and other borrowings  2,054   60  5.87   126,697   2,997  4.77 
Federal Home Loan Bank advances  2        250,912   5,761  4.63 
Long-term debt  324,854   7,538  4.67   324,721   7,670  4.76 
Total borrowed funds  326,910   7,598  4.67   702,330   16,428  4.72 
Total interest-bearing liabilities  17,062,857   275,844  3.25   14,945,681   163,506  2.21 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  6,340,783       7,383,575     
Other liabilities  395,713       371,422     
Total liabilities  23,799,353       22,700,678     
Shareholders' equity  3,299,619       3,118,861     
Total liabilities and shareholders' equity $27,098,972      $25,819,539     
             
Net interest revenue (FTE)   $409,973      $413,868   
Net interest-rate spread (FTE)     2.24%     2.66%
Net interest margin (FTE) (4)     3.28%     3.49%
             


(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 25% in 2024 and 26% in 2023, 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 AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $333 million in 2024 and $404 million in 2023 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. (NASDAQ: UCBI) is the financial holding company for United Community, a top 100 U.S. financial institution that is committed to improving the financial health and well-being of its customers and the communities it serves. United Community provides a full range of banking, wealth management and mortgage services. As of June 30, 2024, United Community Banks, Inc. had $27.1 billion in assets, 203 offices across Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, as well as a national SBA lending franchise and a national equipment lending subsidiary. In 2024, United Community became a 10-time winner of J.D. Power’s award for best customer satisfaction among consumer banks in the Southeast region and was recognized as the most trusted bank in the Southeast. In 2023, United Community was named by American Banker as one of the “Best Banks to Work For” for the seventh consecutive year and was recognized in the Greenwich Excellence and Best Brands Awards, receiving 15 awards that included national honors for overall satisfaction in small business banking and middle market banking. Forbes has also consistently listed United Community as one of the World’s Best Banks and one of America’s Best Banks. 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 “noninterest expense - operating”, “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 - operating,” “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. 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 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, 2023, 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


FAQ

What were United Community Banks' Q2 2024 net income and EPS?

United Community Banks reported Q2 2024 net income of $66.6 million and a diluted EPS of $0.54.

How did United Community Banks' net interest margin perform in Q2 2024?

United Community Banks' net interest margin increased by 17 basis points to 3.37% in Q2 2024.

What is the expected closure date for United Community Banks' FinTrust sale?

The sale of FinTrust Capital Advisors is expected to close in the third quarter of 2024.

What did United Community Banks' return on equity and tangible common equity percentage stand at for Q2 2024?

United Community Banks' return on equity was 7.53% and return on tangible common equity was 11.68% for Q2 2024.

How did United Community Banks perform in terms of net charge-offs and nonperforming assets in Q2 2024?

Net charge-offs were $11.6 million or 0.26% of average loans, and nonperforming assets were 0.43% of total assets in Q2 2024.

What strategic change did United Community Banks announce regarding its wealth management business?

United Community Banks announced the sale of its investment in FinTrust Capital Advisors to focus on its Private Banking, Retail, and Trust businesses.

United Community Banks Inc.

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